Air Products and Chemicals, Inc.

Good morning and welcome to Air Products' first 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 Megan Britt.

Hello and welcome to the first quarter fiscal 2026 earnings conference call for Air Products. Our prepared remarks today will be led by Eduardo Menezes, Chief Executive Officer, and Melissa Schaefer, Chief Financial Officer. We have prepared presentation slides to supplement our remarks during the call, which are posted on the investor relations section of the Air Products website. During this call, we will make forward-looking statements, which are our expectations about the future. These statements are based on current expectations and assumptions that are subject to various risks and uncertainties. Our actual results could materially differ from these statements due to these risks and uncertainties, including but not limited to those discussed on this call and in the forward-looking statements and risk factors section of our reports filed with or furnished to the SEC. We do not undertake any duty to update any forward-looking statements. Please note that today's presentation will refer to various financial measures, including earnings per share, capital expenditures, operating income, operating margin, the effective tax rate, ROC, and net debt to EBITDA, either on a total company or segment basis. Unless 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 investor website in the relevant earnings release section. It's now my pleasure to turn the call over to Eduardo.

Thank you, Megan. Hello, and thank you for joining our call today. Please turn to slide three. Earlier today, we reported results for the first quarter of fiscal 2026. We delivered 12% improvement in adjusted operating income that was broad-based across our reporting segments. Earnings per share were $3.16, up 10% relative to the prior year on stronger productivity despite weak economic conditions. Our operating margin of 24.4% was also up, while return on capital of 11% was slightly lower than last year, but remained stable sequentially. I'm pleased with the progress that our global team is making to improve our bottom line results, and the first quarter represents a solid start to our fiscal year. I have now been at Air Products for a full year. In that time, we have taken significant actions to refocus on the core industrial gas business, including project cancellations, headcount optimization, and asset rationalization that are showing up in our results. Moving to slide four, we have focused on three key priorities for 2026, consistent with the longer-term strategy that we shared last year. One, unlock earnings growth. Two, optimize large projects. and three, maintain capital discipline. On unlocking earnings growth, we are affirming our full-year earnings guidance, which implies an improvement of 7% to 9% at the midpoint for the full fiscal year. EPS growth is expected to be achieved primarily through continued focus on pricing actions and productivity and new assets contribution. We are on track to deliver in line with these expectations, despite continuing headwinds in a sluggish macroeconomic environment that will limit volume growth for the fiscal year. Despite these headwinds, we see pockets of resilience from key sectors, including refining, electronics, and aerospace. For example, earlier this week, we announced our latest supply contracts with NASA to provide liquid hydrogen to multiple U.S. facilities. On our second priority, we continue to make strides to optimize our large project portfolio. Coming into our products, I prioritize de-scoping and de-risking our clean energy project portfolio. Along this path, in December, we announced that we are in advanced negotiations with FIARA International on the low-emission ammonia projects in Saudi Arabia and the U.S. I will share more detail about our next steps in a minute. Finally, on our third priority, we continue to take actions to drive discipline in our capital allocation to improve our balance sheet position while at the same time investing in strong base business growth and returning cash to shareholders. As we have previously indicated, we expect to reduce our capital expenditures by approximately $1 billion in fiscal 2026 and remain on track on that objective. Fiscal 2026 and the first part of 2027 are heavy capex periods for the clean energy products in Canada and the Netherlands, and we expect capex to decline significantly after these products go on stream. On return of cash to shareholders, We announced earlier this week that our board has authorized an increase in our dividend, marking our 44th consecutive year of dividend increases. We remain committed to disciplined capital allocation that ensures that we are well-positioned to continue our strong track record of returning cash to our shareholders. Please turn to slide five. In December, Air Products issued a joint press release with FIARA International announcing that we are in advanced negotiations for the low-emission ammonia projects in the U.S. and Saudi Arabia. We believe that the potential collaboration provides a strong strategic fee based on complementary capabilities. The collaboration would connect the global industrial gas expertise of Air Products with the global ammonia supply network and world leading crop nutrition and ammonia expertise of Yara. In Saudi Arabia, we are in advanced negotiations on a marketing and distribution agreement where Yara would distribute and commercialize all the renewable ammonia that is now used by our products to produce green hydrogen in Europe. We expect to have that agreement finalized in the first half of 2026. For the U.S. project in Louisiana, our goal is to have a traditional industrial gas project scope and return for our products. To that end, we are in negotiations for Yaro to acquire the ammonia production distribution assets from our Louisiana project and execute a 25-year hydrogen and nitrogen supply agreement for an industrial gas facility that we would build and own and operate by our products. Moving to slide six, I want to be very clear that we have set a high bar for moving forward with the Louisiana project, which aligns with our discipline capital location strategy. Already, we have taken action to find a world-class partner for the ammonia production. In this way, we would have traditional industrial gas company scope with a long-term uptake agreement to supply hydrogen and nitrogen together. We also require a partner for the carbon capture and sequestration scope prior to taking a fine investment decision. We have already launched an RFP process for the CO2 transport and storage scope and are in active discussions with several key sequestration service providers. More importantly, we must have a highly reliable capital cost estimate based on agreements with reputable EPCs that meet our return requirements. A TFID requirement for our products is having a project return on the go forward capital significantly higher than our traditional hardware rates. We expect to have full clarity on the project cost in the next few months. Overall, the project has many positive economic aspects, including location and the ability to receive 45 cube tax credits, which drives significantly higher returns per share for the project during the first 12 years of operation. We are monitoring recent reports related to fertilizer C-band tariffs in Europe. C-band came into effect in January 1st, 2026, and proposals to modify the current scheme would need to be discussed and approved by the EU. Any change in the C-band rules would have an indirect effect on our potential Louisiana project as only gray ammonia imports are subject to significant C-band tariffs. YARA bears the regulatory risk related to C-band changes if the project goes wrong. We're following this subject closely with YARA and continue to work on the cost estimate. Please be assured that the Air Products Managing Team and Board will take the time needed and drive a very high level of diligence on the capital cost before we reach our own FIT. Now, I will turn the call over to Melissa to discuss our financial results in great depth and review our 2026 outlook. Melissa.