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| Lehigh Valley, Pennsylvania

Air Products Reports Fiscal 2018 Full-Year GAAP EPS of $6.59, Up 28 Percent, and Record Adjusted Full-Year EPS of $7.45*, Up 18 Percent

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Fiscal 2018 (all from continuing operations; comparisons versus prior year):

Q4 FY18 (all from continuing operations; comparisons versus prior year):

Fiscal 2018 Highlights


*The results and guidance in this release, including in the highlights above, include references to non-GAAP continuing operations measures. These exclude discontinued operations and are identified by the word “adjusted” preceding the measure. A reconciliation of GAAP to non-GAAP results can be found below.

Air Products (NYSE:APD) today reported GAAP net income from continuing operations of $1.5 billion and GAAP diluted EPS from continuing operations of $6.59, both up 28 percent, for its fiscal year ended September 30, 2018.

For the year, on a non-GAAP basis, record adjusted diluted EPS from continuing operations of $7.45 was up 18 percent, the fourth consecutive year of double-digit annual growth.

Full-year sales of $8.9 billion increased nine percent on six percent higher volumes, one percent higher pricing and two percent favorable currency. Volumes were higher across all three regions, partially offset by lower activity from the Jazan project; excluding Jazan, volumes for the year were up 10 percent. The higher pricing was driven by the China and Europe merchant businesses.

Adjusted EBITDA of $3.1 billion for the year increased 11 percent, led by strong volume growth, positive pricing, currency and equity affiliate income, partially offset by higher costs. Record adjusted EBITDA margin of 34.9 percent for the year increased 70 basis points.

Fourth Quarter Results (Q4 FY18)

Air Products reported GAAP net income from continuing operations of $453 million and GAAP diluted EPS from continuing operations of $2.05 for its fiscal fourth quarter ended September 30, 2018. These results include a net $0.05 EPS benefit from tax reform items, a pension settlement, and a change in an inventory accounting policy resulting in a valuation change.

For the quarter, on a non-GAAP basis, adjusted net income from continuing operations of $442 million and record diluted adjusted EPS from continuing operations of $2.00 both increased 14 percent over the prior year.

Fourth quarter sales of $2.3 billion increased four percent from the prior year on three percent higher volumes, one percent higher pricing and one percent favorable energy pass-through, partially offset by one percent unfavorable currency. Volumes were higher in the Americas and Asia, partially offset by lower activity from the Jazan project; excluding Jazan, volumes were up six percent. Pricing increased one percent, driven primarily by the China merchant business.

For the quarter, adjusted EBITDA of $822 million increased seven percent over the prior year, driven by the higher volumes and higher equity affiliate income, partially offset by higher costs. Adjusted EBITDA margin of 35.8 percent increased 90 basis points over the prior year.

Commenting on the results, Seifi Ghasemi, chairman, president and chief executive officer, said, "The talented and focused team at Air Products has again delivered the strongest safety and financial performance in the industry, all while successfully executing some of the largest and most complex industrial gas projects in the world. Our significant cash generation and strong balance sheet enabled us to invest in new projects while returning nearly $900 million to our shareholders this year via dividends. From this position of strength, we continue to execute on our gasification strategy and win profitable projects, enabling us to commit significant capital to grow Air Products."

Fourth Quarter Results by Business Segment


Ghasemi said, "With our safety, productivity and operating performance as the foundation, I remain very confident in our ability to deliver on our commitments. We continue to deploy capital into value-creating projects in our industrial gas business; in fact, we have already committed over $7 billion. While we cannot predict or control political or economic developments, we do have control over the operational performance and growth of Air Products. Our fiscal 2019 guidance demonstrates our commitment to delivering at least 10 percent annual EPS growth over the long term. Our strategic Five-Point Plan is the roadmap for driving safety, inclusion, profitability and sustainability as we grow."

Air Products expects full-year fiscal 2019 adjusted EPS of $8.05 to $8.30 per share, up 10 percent at midpoint over prior year. For the fiscal 2019 first quarter, Air Products expects adjusted EPS of $1.85 to 1.90 per share, up five percent at midpoint over the fiscal 2018 first quarter.

The capital expenditure forecast for fiscal year 2019 is expected to be in the range of $2.3 to $2.5 billion.

Management has provided adjusted EPS and adjusted tax rate guidance on a continuing operations basis. While Air Products might have additional impacts from the U.S. Tax Cuts and Jobs Act adopted in late 2017, or incur additional costs for items such as cost reduction actions and pension settlements in future periods, it is not possible, without unreasonable efforts, to identify the amount or significance of these events or the potential for other transactions that may impact future GAAP EPS or the effective tax rate. Management does not believe these items to be representative of underlying business performance. Accordingly, management is unable to reconcile, without unreasonable effort, the Company’s forecasted range of adjusted EPS or the impact of the adjusted tax rate to a comparable GAAP range.

Earnings Teleconference
Access the Q4 earnings teleconference scheduled for 10:00 a.m. Eastern Time on November 6 by calling 323-994-2093 and entering passcode 7681063, or access the Event Details page on Air Products’ Investor Relations web site.

View entire earnings release with all financial tables.

About Air Products


This release contains “forward-looking statements” within the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, including statements about earnings guidance, business outlook and investment opportunities. These forward-looking statements are based on management’s expectations and assumptions as of the date of this release and are not guarantees of future performance. While forward-looking statements are made in good faith and based on assumptions, expectations and projections that management believes are reasonable based on currently available information, actual performance and financial results may differ materially from projections and estimates expressed in the forward-looking statements because of many factors, including, without limitation: changes in global or regional economic conditions, supply and demand dynamics in market segments we serve, or in the financial markets; risks associated with having extensive international operations, including political risks, risks associated with unanticipated government actions and risks of investing in developing markets; project delays, contract terminations or customer cancellations or postponement of projects and sales; future financial and operating performance of major customers and joint venture partners; our ability to develop, implement, and operate new technologies, or to execute the projects in our backlog; tariffs, economic sanctions and regulatory activities in jurisdictions in which we and our affiliates and joint ventures operate; the impact of environmental, tax or other legislation, as well as regulations affecting our business and related compliance requirements, including regulations related to global climate change; changes in tax rates and other changes in tax law; the timing, impact and other uncertainties relating to acquisitions and divestitures, including our ability to integrate acquisitions and separate divested businesses, respectively; risks relating to cybersecurity incidents, including risks from the interruption, failure or compromise of our information systems; catastrophic events, such as natural disasters, acts of war, or terrorism; the impact of price fluctuations in natural gas and disruptions in markets and the economy due to oil price volatility; costs and outcomes of legal or regulatory proceedings and investigations; asset impairments due to economic conditions or specific events; significant fluctuations in interest rates and foreign currency exchange rates from those currently anticipated; damage to facilities, pipelines or delivery systems, including those we own or operate for third parties; availability and cost of raw materials; the success of productivity and operational improvement programs; and other risk factors described in the Company’s Form 10-K for its fiscal year ended September 30, 2017. Except as required by law, the Company disclaims any obligation or undertaking to update or revise any forward-looking statements contained herein to reflect any change in the assumptions, beliefs, or expectations or any change in events, conditions, or circumstances upon which any such forward-looking statements are based.