View entire earnings release with all financial tables.
Fiscal 2020 (comparisons versus prior year):
Q4 FY20 (comparisons versus prior year):
Fiscal 2020 Highlights
#Earnings per share is calculated and presented on a diluted basis from continuing operations and attributable to Air Products.
*Certain results in this release, including in the highlights above, include references to non-GAAP financial measures on a consolidated, continuing operations basis and a segment basis. Additional information regarding these measures and a reconciliation of GAAP to non-GAAP historical results can be found below.
Air Products (NYSE:APD) today reported fiscal year 2020 results, including GAAP EPS from continuing operations of $8.55, up eight percent over the prior year, as higher pricing helped to overcome an estimated $0.60-$0.65 per share negative impact from COVID-19. GAAP net income of $1,931 million was up seven percent on higher pricing. GAAP net income margin of 21.8 percent was up 150 basis points.
For the year, on a non-GAAP basis, adjusted EPS from continuing operations of $8.38 increased two percent over the prior year, as higher pricing helped to overcome an estimated $0.60-$0.65 per share negative impact from COVID-19. Adjusted EBITDA of $3.6 billion was up four percent on higher pricing, and adjusted EBITDA margin of 40.9 percent was up 200 basis points.
Full-year sales of $8.9 billion decreased one percent from the prior year, as three percent higher pricing and two percent higher volumes were more than offset by four percent unfavorable energy pass-through, one percent unfavorable currency and one percent from a contract modification to a tolling agreement in India. The volume growth was primarily driven by acquisitions and higher sale-of-equipment activities, which more than offset the negative impact from COVID-19.
For its fiscal fourth quarter ended September 30, 2020, Air Products reported GAAP EPS from continuing operations of $2.19, down four percent; GAAP net income of $495 million, down five percent, primarily driven by lower volumes; and GAAP net income margin of 21.3 percent, down 140 basis points, each versus prior year.
For the fiscal fourth quarter, on a non-GAAP basis, adjusted EPS from continuing operations of $2.19 was down four percent; adjusted EBITDA of $938 million was down two percent, primarily driven by lower volumes; and adjusted EBITDA margin of 40.4 percent was down 150 basis points, each versus prior year.
Fourth quarter sales of $2.3 billion increased two percent, as two percent higher pricing and one percent favorable currency more than offset one percent lower energy pass-through.
Commenting on the results, Air Products' Chairman, President and Chief Executive Officer Seifi Ghasemi said, "Despite the challenging COVID-19 environment, the Air Products team around the world demonstrated its commitment by keeping our plants running, supplying customers with essential products, and improving our profitability. Meanwhile, our existing on-site business—which represents more than half of our sales—continued to deliver stable cash flow. I would like to thank all of our more than 19,000 employees for their unwavering commitment to keep Air Products operating successfully during these difficult times, which we expect to continue during 2021. We were proud to announce landmark gasification and hydrogen for mobility megaprojects to meet the world’s increasing energy needs and move us all towards a better future. With our continued focus on creating shareholder value, we also increased our dividend for the 38th consecutive year, representing the largest per-share dividend increase in Air Products’ 80-year history.”
Ghasemi added, “Despite significant uncertainty in the global economy and ongoing challenges from COVID-19, we continue to deliver value through our stable business model, financial position, exciting growth opportunities, and the unwavering commitment and discipline of our people. Around the world, the energy transition is a focus for economic recovery, and our expertise, technology and people put Air Products at the heart of providing sustainable energy and environmental solutions. As we put our higher purpose into action, including our focus on sustainability and diversity, we continue to stand together and work together to make a difference.”
New Accounting Guidance
Effective October 1, 2019, Air Products adopted accounting standards pertaining to leases and hedging activities. In accordance with the new lease guidance, we recorded lease liabilities and right-of-use assets on our consolidated balance sheets for operating leases where we are the lessee. In adopting the new hedging guidance, we presented the impacts of excluded components from our cash flow hedges on intercompany loans in other non-operating income (expense), net. In the prior year, these impacts were included in interest expense. The adoption of these accounting standards did not have a significant impact on the Company’s net income in fiscal 2020 or the fourth quarter of fiscal 2020.
Access the Q4 earnings teleconference scheduled for 10:00 a.m. Eastern Time on November 11, 2020 by calling 323-794-2093 and entering passcode 5106187 or access the Event Details page on Air Products’ Investor Relations website.
Air Products (NYSE:APD) is a world-leading industrial gases company in operation for 80 years. Focused on serving energy, environment and emerging markets, the Company provides essential industrial gases, related equipment and applications expertise to customers in dozens of industries, including refining, chemical, metals, electronics, manufacturing, and food and beverage. Air Products is also the global leader in the supply of liquefied natural gas process technology and equipment. The Company develops, engineers, builds, owns and operates some of the world's largest industrial gas projects, including: gasification projects that sustainably convert abundant natural resources into syngas for the production of high-value power, fuels and chemicals; carbon capture projects; and world-scale carbon-free hydrogen projects supporting global transportation and the energy transition.
The Company had fiscal 2020 sales of $8.9 billion from operations in 50 countries and has a current market capitalization of about $65 billion, making it the largest American chemical company by market capitalization. More than 19,000 passionate, talented and committed employees from diverse backgrounds are driven by Air Products’ higher purpose to create innovative solutions that benefit the environment, enhance sustainability and address the challenges facing customers, communities, and the world. For more information, visit airproducts.com or follow us on LinkedIn, Twitter, Facebook or Instagram.
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: the duration and impacts of the novel coronavirus (“COVID-19”) global pandemic and efforts to contain its transmission, including the effect of these factors on our business, our customers, economic conditions and markets generally; changes in global or regional economic conditions, supply and demand dynamics in market segments we serve, or in the financial markets that may affect the availability and terms on which we may obtain financing; 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; our ability to execute the projects in our backlog; our ability to develop and operate large scale and technically complex projects, including gasification projects; 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 legislation or 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, public health crises, acts of war, or terrorism; the impact on our business and customers of price fluctuations in oil and natural gas and disruptions in markets and the economy due to oil and natural gas 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, 2019 and Quarterly Report on Form 10-Q for the period ended June 30, 2020. 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.