Air Products and Chemicals, Inc.

Good morning and welcome to Air Products' fourth quarter earnings release conference call. Today's call is being recorded at the request of Air Products. Please note that this presentation and the comments made on behalf of Air Products are subject to copyright by Air Products and all rights are reserved. Beginning today's call is Mr. Eric Guder. Please go ahead, sir.

Thank you, Jessica. Good morning, everyone. Welcome to Air Products' fourth quarter 2024 earnings results teleconference. This is Eric Guter, Vice President of Investor Relations. I'm pleased today to be joined by Safi Ghasemi, our Chairman, President, and CEO, Melissa Schaefer, our Chief Financial Officer, and Sean Major, our Executive Vice President, General Counsel, and Secretary. After our comments, we will be pleased to take your questions. Our earnings release and the slides for this call are available on our website at www.airproducts.com. Today's discussion contains forward-looking statements, including those about earnings and capital expenditure guidance, business outlook, and investment opportunities. Please refer to the cautionary note regarding forward-looking statements that is provided in our earnings release and on slide number two. Additionally, throughout today's discussion, we will refer to various financial measures, including earnings per share, operating income, operating margin, EBITDA, EBITDA margin, the effective tax rate, and ROCE, either on a total company or segment basis. lest we specifically state otherwise, statements regarding these measures refer to our adjusted non-GAAP financial measures. Reconciliations of these measures to our most directly comparable GAAP financial measures can be found on our website in the relevant earnings release section. Now, I'm pleased to turn the call over to Sefi.

Thank you, Eric, and good day to everyone. Thank you for taking time from your busy schedules to join our call today. Please turn to slide number four of the material we have posted on our website for this call. Ten years ago, we set a goal for air products to be the safest, most diverse, and most profitable industrial gas company in the world, delivering excellent service to our customers. I am very proud to say that thanks to the outstanding efforts of all of our talented, dedicated, and committed people at Air Products, we are today the safest and most profitable industrial gas company in the world. We have achieved what we set out to do, and now we are ready to move forward. On slide number five, I'd like to point to our safety track record, which is our number one priority. We have made significant progress on both our employee lost time injury rate and recordable injury rate since 2014. We are very proud of this improvement. We will continue to strive to achieve zero accidents and zero incidents as the ultimate goal. We believe that all incidents and accidents are preventable. Now please turn to slide number six for a look at our fourth quarter results. Our fourth quarter adjusted earnings per share of $3.56 was at the upper end of our guidance range of $3.33 to $3.63, up 13% over last year, driven by our three largest reporting segments. Both productivity and pricing actions contributed positively this quarter. We successfully completed the $1.8 billion sale of our LNG process technology and equipment business to Honeywell at the end of September. The LNG business was part of our full fiscal year 2024 results, but with the sale, it will no longer contribute to our earnings going forward. Our adjusted EBITDA margin was up 460 basis points, and our adjusted operating margin increased 350 basis points versus prior year. Please turn to slide number seven for our fiscal year 2025 outlook, which is 2.5% higher than last year. We expect our ongoing business, which excludes the LNG business, to deliver adjusted earnings per share of $12.70 to $13, demonstrating an improvement of 6% to 9% over last year. We expect our first quarter adjusted earnings per share to be in the range of 275 to 285, which is flat to up to 4% when considering the LNG divestiture. As you know, our first quarter is typically our weakest quarter impacted by seasonality. In addition, we are not forecasting any significant growth for this quarter due to our concerns about the economic activity in China. It is possible that economic activity in China might improve with actions that the Chinese government might take in the future, but we have not included that in our forecast. We are proud of our results this quarter, and I would like to thank the talented and dedicated people at Air Products for helping us to deliver these strong results. Working together, I am confident that we can achieve what we have put forth in our guidance for fiscal year 2025. Now, please turn to slide number eight, where you can see our strong, sustained performance over the long term. We have achieved a 10% annual growth rate in our adjusted earning per share since 2014. We have delivered consistent results throughout significant ups and downs in the world economy. And as I just mentioned, we expect to continue that trajectory in fiscal year 2025 with adjusted EPS growth ranging from 6% to 9% on a like-for-like basis. Now, please turn to slide number nine. Another top priority for us is to consistently return cash to our shareholders. Our sustained growth has enabled us to achieve a 9% annual growth rate in our dividend since 2014, and we plan to return about $1.6 billion of cash to our shareholders in dividend payments this year alone. We are proud of our record of increasing our quarterly dividend payments for 42 consecutive years. We take a balanced approach to determine our dividend, and we are confident that our sustained performance will enable us to continue rewarding shareholders through increased dividend while also meeting the cash needs of our growth strategy. Now, please turn to slide number 10, which is my favorite slide. again demonstrating on long-term performance. Our adjusted EBITDA margin has expanded by almost 2,000 basis points over the last 10 years. We are now at a 44% adjusted EBITDA margin. We lead the industry when it comes to adjusted EBITDA margin and this track record demonstrates our focus on effectively running our base industrial gases business. Now, I would like to turn the call over to Melissa Schaefer, our Chief Financial Officer, to discuss our quarter four results. Melissa?