Earnings call transcript Q3 2023

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good morning, and welcome to Air Products' Third 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. Sidd Manjeshwar. ahead. go Please

Sidd Manjeshwar

pleased Good quarter Sharon. Manjeshwar, Welcome Air President Treasurer. to President Seifi today Thank our Ghasemi, earnings morning, results third Chairman, I'm Corporate and XXXX Investor Sidd be teleconference. Products' joined of by you, will and Relations everyone. President, Operating our to This CEO; Vice Financial Major, Sean Officer; Chief Schaeffer, pleased General and Senior After Officer; be Vice Secretary. Counsel Samir we your Dr. our Vice take our comments, and our Melissa Serhan, questions. President Chief to Executive and is

Our are earnings website release and on airproducts.com. the slides for this at available call our

that forward-looking contains provided release earnings on opportunities. discussion expenditure refer in guidance, Slide about outlook and number statements, Today's statements earnings Please and note capital is including those cautionary to our investment and the X. business forward-looking regarding

throughout otherwise, referring adjusted measures Reconciliations financial specifically company margin, tax found are measures. to a our be both discussion, including income, we EBITDA on financial to earnings measures the to rate margin, these Additionally, will in operating earnings refer Unless release financial regarding we relevant operating statements website effective measures segment basis. the ROCE EBITDA, share, various today's and and per total GAAP non-GAAP most of these our on our can section. directly state comparable measures

pleased I'm Seifi. call turn to to Now, over the

Seifi Ghasemi

everyone. you on taking for Thank to time busy day good today. call our be and schedule your Sidd, to you, Thank from

We what in make sustainable. their of is and are and supply Customers of At on The of Products, outstanding by strong demonstrating excellent products our a dedicated an and gas the foundation growth, industries. committed to of driven the our we quarter resilient Air that of results organic who processes and efficient expertise depend this would and business. industrial people more customers people's have we set stability delivered Products, we dozens business, and Air sales another strength do.

profitable XX last Board, continue outstanding this we in We be do for all to have years, gas the can service customers. to most will the and been doing industrial and company we our safest to providing the

are hydrogen. But our our Board's of implement strength, using zero-carbon low all at the and time, megaprojects leading and world. industry the same a competencies core financial We'll supplier future as around around the comes hydrogen it experience, we the When and cleaner of transportation we scale. larger to heavy at with now, world, to decarbonizing generating the want heavy-duty way, lead very clean hydrogen

success the growth I and This make thank and we it continuous quarters the profitable growth possible. this combination Products, our years is our in to and forward Air team at is the and strategy, of come. talented hardworking for path all to want

number our please safety Now priority. turn X, Slide is performance, highest our always to which

but do since significant drive to strive better. We XXXX, we and to progress have even hard realize worked always

Our is incidents achieve goal to zero and zero accidents.

to which X, turn management number summarizes our please Slide Now, philosophy.

in the time in We basic we cannot guide These our our these future. have I slide But the an slides. principles call. actions earning you to commitment this shown enough principles have every emphasize will delineated that

please number Slide Now turn to X.

or Both quarter. share for guidance again price positive. Our earnings and end were of $X.XX per third-quarter of XX% top our year $X.XX adjusted the exceeded the last and volume improved versus

XX hydrogen demonstrate have onstream. we and significant strong by to We quarter, performance, over our ninth onsite continued Americas for new driven demand pricing consecutive that in assets while volume improved improved strength the including brought

new in projects add announced the of of anticipate we significantly and to gas-to-syngas natural will equipment the sale recently LNG our future Uzbekistan Additionally, the billion acquisition $X earnings. facility

earnings average per average years. the an growth of can we As slide, this of rate last on you cumulative see in delivered share have XX% nine

X. turn number Slide Now to please

and dividend We by providing investors return to our committed to healthy a rewarding them. are cash

more of XX record proud dividend than years are of of consecutive our increases. We

We have XXXX we nine by in demonstrates our and than to this an that dividend also more of expect slide shareholders last in billion increased years. the our $X.X to average dividend return of XX%

X, to graph Slide and is EBITDA be Products. honor of to years of margin. shows turn chart. which had President, significant clearly I Air This CEO continues the our as favorite This compared number my our self-explanatory of the privilege when demonstrates becoming margins ago and to please Chairman, nine Now improve and the

fundamental growth to X. Slide I number strategy. highlight pillars please like two turn our again would to Now the of

quarter, to our core every mega per share business growth industrial projects, projects earnings each the blue we and in business were sustainability. zero-carbon transportation sector and gas resilient industrial the existing to help double-digit running able deliver low-and our hydrogen Our economy. by By we heavy advance the efficiency projects the to continue eight decarbonize our hydrogen And of the and last of quarters. underpinned green

to to We add future. world-scale stream significantly expect the these already hydrogen our green project strong in profit

to Schaeffer, Melissa Now Officer. Chief it pleasure over to Melissa? call Financial our turn is my the

Melissa Schaeffer

Seifi. you, Thank

the said, world. and our X%, resilience for at difficult has and Seifi continued up quarter. customers environment. to Air Thanks profit year display X% was our people all were As metrics double-digits a your around on in again of of business the gained and commitment to last full Price Products serving the this respectively, consistency volume over

successively close largest Green finance a demonstration project joint of our financing non-recourse financial We leaders. The was joint hydrogen in are XX this two The $X over facility NEOM over-subscribed, confidence proud achieved venture, green global Hydrogen billion clear world's project venture secured from times May. project. the of in over production that

last In our our quarter of price was driven business. primarily third across Merchant all company, positive to the year, please consecutive pricing by seventh This results. X% price increases. to for comparison view XX% regions. to with the X%, last equates turn higher compared Now Slide on-site our X, increased for gain double-digit total a to year, volume of quarter

on but impact in against dollar. The gas impact overall sales was had modest natural on-site decline particularly reduce no energy XX% however, Asian currency and unfavorable and our weaker impact cost to This the in contributed to profit costs Declining U.S. currency impact of Europe Americas currencies were positive a on slightly margins. the pass-through customers. had

lower EBITDA improved XX%, income, in costs. of closed the basis basis affiliate more jumped steadily that energy second passthrough, points, margin contribution offset from and EBITDA equity XX%, January, two-thirds XXX progressed margin year. project, strong which last almost as higher higher accounting the for reach with to including Jazan than phase XXX than price the ROCE cost of is the a improvement. points

expect further XX.X% this We cash, for to new have as projects bring to on work. balance ROCE would and quarter. been our Adjusting continue we sheet to onstream cash put the improve ROCE our

price points. volume cost variable margin, by drove of pass costs to improvement benefited EBITDA XXX basis and favorable net also and EBITDA about margin Sequentially, through EBITDA the lower energy

to XX earnings of Now Slide our please share. for discussion per a turn

Our per third EPS GAAP share. impacted negatively by earnings quarter $X.XX that items per of $X.XX together included share two non-GAAP

for business recorded we charge $X.XX a asset and First, action.

defined a Second, in $X.XX last components of a gain resulted non-service the benefit year. this year our plan versus $X.XX cost

this our net income. our costs volume Excluding per - to third last and $X.XX quarter third share earnings. an quarter was affiliate Price, $X.XX of pricing volume added up by and higher adjusted these or equity year, $X.XX $X.XX quarter, and strong improvement and earnings Price to costs non-GAAP items, contributed driven adjusted contributed additional variable XX% compared $X.XX.

strategy, the Equity assets as in phase unconsolidated support from contribution our other and income ventures inflation, $X.XX, as unfavorable due second joint higher bringing by to efforts the good the was stream. our Americas on including to well of our Jazan ongoing project, growth bringing were Costs Europe. new new $X.XX affiliates' of results and driven

had together The interest and remaining impact. minus expense, $X.XX items, non-controlling including non-operating expense a interest, income negative and

We expect approximately XXXX rate fiscal to XX% tax our to year effective be XX%.

to turn XX. please Slide Now

in steadily to and is stability hallmark strength underpins of our ability divided capital programs. cash challenging a the and flow, of Our grow our and conditions, distributable deployment especially businesses

flow generated billion Over of XX - roughly $X.X $X.X prioritized over still per last about invest We of $X.X our share. cash have to over to months, for XX% about or $XX having billion the shareholders, while as or billion dividends we growth. distributable

to turn please XX. Now Slide

committing to well of XXXX, in have a horizon. our estimated XX-year We timeframe. energy to time the have capacity strategy extends or since revised to the in deploying our beyond show investable available XXXX, XXXX We Because rolling our most slide developing significant this related XXXX transition made capital progress

not calculations. have or changed any other assumptions We

We energy investing the to debt an backlog leverage, our additional flow to current work estimate projects on we Today, high that in over maintaining is years. shareholder our strong committed targeted return and believe $XX best put way $XX projects we transition. focused we remain have cash value. AAX more create the XX can rating billion We that billion with long-term with to next the $XX than of billion these

Now our Business to begin of segment results. review the

Serhan. call turn over I'll Dr. to the

Samir Serhan

Melissa. you, Thank

year, Results we regional the quarter, broad-based trend businesses, by around positive of in improved third productivity our strong world. despite the each fiscal previous from our During saw price, versus challenging conditions our strong driven across the quarters. operating improvements last actions, extending again volume, segments

the our on provide major discuss projects. I region, update each results would Before brief I like a of to

Slide to turning First, XX.

projects. we key You and visibility. major energy projects, and our provide will offtake nature and a We clear backlog have that, amounts, in the format investment overview project agreements, we related transition near-term see provides of long-term this specifying how present highlighting the enhanced of our clarifying projects believe new the long-term

Jiutai gasification say project Slide to turn to is please in Now XX. the I'm operation. pleased that

midst the COVID lockdown months in supply during Our period. of team the and disruption, several of lockdowns including start-up executed the project chain severe

workers this without - outstanding safety time budget. The a X,XXX over for come able completed million would job in during incident. project team XX the I thank We hours done. to complete, nearly to a of peak construction were under well with and complex like team performance lost

execute and lost ammonia million incident. X,XXX also peak hours overcome over without workers Coast the time during had nearly completed challenges the a America many in team construction Our to Gulf project, a which has X

facility a to to our The month. pipeline begin we is hydrogen in this system expect delivering start-up and currently

we work, Finally, natural following the gas-to-syngas hard of of Uzbekistan. many the in billion $X announced plant years acquisition

the plants most part world. advanced in the energy As one of of

auto-thermal our in same ATR zero technology short our driven further our POX, technology, is partial the enhance in own net leading This by hydrogen we're largest in P-O-X. oxidation acquisition include This This two complex world will in reformer Edmonton, energy the short the deploying production Canada. ATR. capabilities industry

we complex many GE are POX clean efficient in which This decades. This is syngas Louisiana deploying for our for the several proven a energy mainstay ago. from in has generation we technology been technology, years acquired have

will operate at POX for a production and which largest. of each two the multiple blue hydrogen. Louisiana the world's facility, are processes units the leading the will We of POX be ATR

and low in carbon extend leadership a use hydrogen at scale world technology our the capability leading further the hydrogen both flexibility production. to blue produce to Having will

please Now XX. turn to Slide

XX% driven volume. up including segment's higher which For grew the of demand Americas to improved improvement XX%, corresponded X%, results. driven year, price price last review and hydrogen. Americas by by X% Volume was our to a for on-site overall. Compared EBITDA for strong region Merchant

points EBITDA improvement. more by variable XX%, margin and Sequentially, costs price, on mainly than through, costs EBITDA basis roughly costs. three margin also jumped hydrogen about Lower pass driven pass around the lower quarters better increased of X,XXX drove two-thirds drove energy of which improvement. margin strong lower through energy volume the

to of for Slide turn Asia's our please results. Now segment review a XX

Our currency Asia and a year, recovery more region. energy costs. negative XX% volume last Positive impact. despite up improved China results than higher in and offset the in despite for EBITDA higher price Compared costs was currency headwinds X% to across the

improved than offset of X%, the year. more X% variable new the higher Merchant Volume assets primarily past to in XX which including addition better costs. price over onsite, increased

Our projects. of calendar new [indiscernible] sector robust the many for activities the in electronics accounting

X%, Year the other following glass, We in and was also the New holidays. chemical, up Sequentially, applications. Lunar projects added volume

Please Europe now for review Slide turn to of a our results. XX segment

double-digit our hard consecutive Our the seventh Compared Merchant equates year This more for to for by price Europe region. actions. than increased a team is for positive to improved X% of XX%, price has in merchant towards pricing of gains the the worked EBITDA - maintain quarter driven XX%, gain last the which momentum. region. impact overall

by particularly is EBITDA products. This driven margin and offset was for modestly, merchant improvement Lower included impact by cost more margin the basis lower points offset margin Sequentially, points. benefited EBITDA EBITDA region's benefited is price. costs also which basis in higher better hydrogen. energy about weaker demand on steady, basis XXX points. by as XXX energy pass-through, the Volume This up XXX was held favorable energy of onsite. about than the lower costs pass-through around

income. the Now for impacted review East year, increased please pushed of Middle our results. Compared negatively operating merchant costs turn volume higher, India but a and to Slide sales to segment and XX price our last

of income, phase region's Jazan our has project expected, it project, drove year mid-January Jazan second added results. as overall contributed which we the our and in affiliate of The The the this to with we equity commitment. consistent closed

sale the support addition robust May. do discussions continue is for strategy. project to to for segment our activities centrally and We were But our well The functions businesses, and and with higher sales segment now have announced includes project equipment Please NextDecade. our equipment growth quarter Slide costs. ongoing interested LNG turn this of segment other wins and sale Corporate sale XX to profit to resulting managed results. and of as announce from equipment with however customers I'm our and technology in as to in two due significant This wins our in equipment. cost Qatargas pleased of this lower two corporate This lower for

Florida plan results. Seifi and this We Echoing activities mentioned to our improve the of LNG commitment of around would increasing outstanding and have project resilience acknowledge production world. work again in the and expand the showed what hard earlier, results our teams like I also our expect quarter facility segment again to and the businesses. to people the Melissa our

turn I call to would now the back his remarks. provide to Seifi to like closing

Seifi Ghasemi

Serhan. Dr. Thank you,

please Now turn Slide to number XX.

quarter our results guidance. third previous Our exceeded

conditions However, the remain for economic around the outlook uncertain. world

provided CapEx guidance year again $X.XX, X% to the to raised the earnings we up of our XXXX $XX.XX versus year fiscal is about by earnings be our the We last year the over $X billion. per For quarter per $X.XX the fiscal quarter year. to fourth see XX% share share have $X.XX year XXXX, at $X.X for $XX.XX, of $XX.XX We $XX.XX to billion guidance midpoint to still for last our had

bring commitment core we solve industrial plants global and people enter we economic Products, result see Now as even we Air Air working to energy future please environmental continued gases And to motivation onstream. of Products phase here a will our transition more a business, makes performance. helping are This and significant we what larger-scale and great drive turn number Their continues resiliency of of excited energy continue additional projects that bring soft are XX. and online strength to passionate our and being about movement. where us that, to Slide about a all for a of The the demonstrating and the challenges. against very is new part backdrop. In

this questions. we answer will At time, be to delighted your Operator?

Operator

with [Operator Instructions] We'll Please take our first question from go Christopher Mizuho. Parkinson ahead.

Christopher Parkinson

of XX so Great. Thank emerging favorite Seifi, is one it's slides you what much. for my Slide worth.

few Or really the allocation be process? next so Specifically on years of the U.S. situation, fluid projects how help is Thank much about lines, you IRA? Can help around will coming allocated of the the along can capital oriented you with years. believe you I us but this us future much. capacity understand could those to in allocate just just - to you the or the think kind what estimated can projects thought something very terms process a to that you in

Seifi Ghasemi

Thank you Chris. very much,

projects there you is asking We to very this are view as to You can a wanted now. of and we future XX-year that obviously situation get a provide different good provided the a strategy a slide in appreciate the as of dynamic a parts are clear right We view question. we about at very we world. because long-term give investors different

the to is today. I'd on we comment based So that I like say, make what know that

But of commit $XX go of the opportunities and IRA of in investments and projects will creates say different I States, up that a as that, the right that significant we people billion and in States a United with part is participate all that, investment different that we coming will committed the be have that to or that But that I obviously, would think going for be Board developing a the as we part United in those. Based is on already and now we us. forward. result the significant to of

Okay, Chris?

Christopher Parkinson

quick inclusive a Thank very questions. quick just is think, three between believe the That's as the I'll holders, And buy Jazan just there Gulf on give can obviously Coast much. side Ammonia follow-up, very X obviously, in that of longer-term brief just that all you very just a you with - ramp, the I overview, update started Jiutai, those a in-line - January I basically us fantastic. and your expectations. take so trending

those compartmentalize we're as about thinking Thank you to fiscal trying much. Just so year names 'XX.

Seifi Ghasemi

just I the I'm because to sure question that make sound wasn't understood your good. trying

Christopher Parkinson

expected? performing as Yes. Is Jazan

Seifi Ghasemi

Serhan like is run him have to the Jazan, so turn it the answer Dr. to Chairman that Company, to would have to we I'd the like question. formed - I to of over

Samir Serhan

the Yes, Chris, to product as And grid putting really to everything the planned assets. We've and products to refinery took to power is over been the also and on-stream. them, like it since we going hydrogen supplying commissioning group the steam. supplying them really

going to really this we're XXX So that project. fortunate doing a I running people that - with things facility. strong well really are mean, very have

Christopher Parkinson

you. Thank

Seifi Ghasemi

Thank Serhan. you, Dr.

Christopher Parkinson

you. Thank

Operator

We'll from move to Deutsche our Wong Bank. ahead. next go question Please David with

David Wong

those Europe. margins you levels, should margin forward? quarter those we going then strong sustainable Hi. are think I guess have about in very how this How

Seifi Ghasemi

for what for view, Well, my Obviously, not a well, of as thank that very hope but achieved, We know comment on, on have comment is I as the we obviously, long-time. from pricing. you tell. point We the pricing. comment forward matter forward a But on you do sustainable time question. of we don't policy pricing very it will

it much make as any goal don't value possible that high our is maintain our to create predictions. for our as I to But shareholders. - So as is and want margins

on you have any Serhan, Dr. additional do that? comments

Samir Serhan

job. deal our the But low years. some - is it's chemical-defining of we're there, Europe there. improvement to output are last we with segments in Europe mean, package monitoring. helps about the But activity. pricing, industrial doing all. an in no gradual picking-up is make cost not all team compared about we a still business outstanding fluctuation. it, been the of the Europe I about mean, see that some that we I with mean, really challenge has some the definitely at to that gas war, I than challenges a the is in support in mean, The and business I energy of the electronics, doubt previous customers of better fertilizer challenging We see year. is really down still which Construction natural growing

again costs. measured So,

David Wong

thank from Okay, loss in quarter, much you. was then was And much corporate then lower costs And how increased your this equipment investment sales? increase the spending? for how from

Seifi Ghasemi

that to like over turn Melissa? to I'd answer. to Melissa

Melissa Schaeffer

very thank Seifi. you So, much,

So question, you're sure to equipment. what the was from understand contribution I of our your just asking make sale additional

David Wong

prior the then Just costs I quarter? spending And it's than your from was how overall, much how guess, from corporate year. lower this higher was sales? equipment investment much increased

Melissa Schaeffer

Yes. Thank you very much.

a I just perhaps question within across focus will cost, segment, and organization. corporate on our but our think you asked I great So not

our of as across are our costs variable associated organization, portion our really positively. a So We good our with in program come our pay results increased results.

feel the wage we of organizations, continue inflation burden most like organization. Additionally, the the to across

without several the plans, to our plants. the support the invoicing onstream is preparation for contribution commissioning will are a or that from from cost notable we that another phases. which This - of obviously plans those those program headcount adds stack period, for in for Finally, add our of the to fact pre-onstream have

organization. So see increase the those where is cost combined you across really the three

David Wong

Okay. Thanks.

Seifi Ghasemi

Okay. Thank you.

Operator

our next to Please Steve America. from ahead. Byrne go Bank question of with We'll move

Steve Byrne

you. thank Yes,

legacy And carbon some from you for customers are in in just generate seeing or this of pipelines your increased is Your from the justify customers capture to you're customers? hydrogen, fuel? those some curious hydrogen your refining any near your those demand renewable would which these seeing of that and are that blue installing term

Seifi Ghasemi

that? want Dr. Serhan, you answer to

Samir Serhan

biggest fully for for significant. us, we really really it's for - renewable refinery. the demand have world there I utilized. question. the and really the network in good business main in And that, we there have We supply. Steve, for the because for demand you more we driver see the is hydrogen than Coast. hydrogen, diesel U.S. really demand I mean, Gulf That's also lower the can our know mean, is Yes. definitely, carbon

the we same we it's some robust, thing our really see So very also California. also in there. hydrogen been pipeline in Canada, see system up, it activity Rotterdam picking The

for So it's low-carbon overall mean demand for hydrogen the really with been buckets that robust, also some hydrogen.

Steve Byrne

With you been reassessed you announced I'm three might yes. - were now It's in NEOM? curious you years ammonia. to NEOM, that some green downstream invest to to you that not where be time from downstream pipeline you. thinking build Thank able a just capacity the distribution? need since for Okay, need green you would whether you to have hydrogen view or have Yes. sell project you and that you at Do respect of

Seifi Ghasemi

very Europe, Yes, a green. - has being we and not right it, for they to see is do. it And finalized years Europe, We that of Germany we I have announced the product now. two policies decided with that on in finalized because has some ago. Europe in elaborate been most that it significant especially were go can basically clear of Europe, demand even that that

in for three plan in those industrial it that, additional one or associated the Hamburg, Rotterdam, we Immingham of As ports, One mobility England, to in a applications. to bring and into terminals ammonia - then build their add one and in least sell at We product Europe. might result terminals. in and

of United for demand, hydrogen is terms demand In because in the that, we conversion in the are in low-emission make vehicles. California, green And the we addition hydrogen regulations very might put been to have that in making and place, the to that a in United State of green other that States. there States of a potential

that. we There update world this as you. is another demand we significant is Therefore, also in is all around the being it for generated being terminal and and It but But is as will but regulations you That and we we California. changing. Korea. hydrogen is current how plan, today. in the the demand continue our update blue that forward, develops, of obviously a go will dynamic obviously that in the possibility And Japan see situation, discussed

Steve Byrne

you. Thank

Seifi Ghasemi

Okay?

Steve Byrne

Yes. Thank you.

Operator

John next Credit We'll go our from question Please with move Roberts to ahead. Suisse.

John Roberts

When Thank get first you of from Seifi. just hydrogen ask we'll you. think Hi, the do existing conversion gray here. question an I'll blue? one U.S. plant to

Seifi Ghasemi

of John, and excellent it definitely can as too we predict us anybody that. to have we on and question. not working IRA them significant that want COX, the we States have schedule that number with know in the these COX, time I for talk sensitive, And the things we are from interested and an is an confirm because the demand, But want higher people exact SMRs I that. as are generate of that do to opportunity hydrogen, to on that do And talking and much. help that. else, the willing better really a and don't possible. in is as capturing significant very are many blue pay the United to we they of than are about you will and prices customers

you make additional Serhan, do that? on Dr. any comments to want

Samir Serhan

Nothing add. to fine. it's No,

Seifi Ghasemi

Thanks.

John Roberts

you. Thank Right.

Seifi Ghasemi

Okay, John?

John Roberts

you. Thank

Operator

John with BMO Please Our Capital McNulty next question Markets. go comes from ahead.

John McNulty

I to morning, - wanted Hi, good Seifi.

Seifi Ghasemi

Good are you morning, John. How doing?

John McNulty

relatively how the about the Can on some comes also you so those think to you help ask I I at guess because as to that guess, And couple well. you the XXXX? bringing you're looks you for Hopefully, to Uzbek know I returns I'm on. also like timing but understand point that it? expect for you you also plus on EPS us risk Wanted early that return, understand, contribution as look help on in look adjust it of to know of us XX% well. are great. give, project, tied great. that. And it as guess can it questions 'XX, you I -- but to yes, then I project, you I'm the a do a - to

should for we guess, project? how that about be I Uzbek So, thinking the

Seifi Ghasemi

expect Dr. very it project Well, I'll will a the has then more I some But over in happy of and ATRs good is turn general Serhan comments kind we - mentioned, make to world that it we to and own detail. even largest elaborate the which Serhan project, to project in Dr. now. as I'll very are that

XXXX that - from year project in XXXX. our contribution bottom line in expect our fiscal in sure We for

exact but of terms order the of magnitude, give share about number, order can't you obviously, of a expect exact $X.XX I least. number, In per the of we contribution magnitude at

like Dr. would to So comment. Serhan you

Samir Serhan

It starts acquisition. with is in really included this really what

also in scale the year for and is now There So why it unit built, day. really be in is XXXX a would the it's ATRs numbers commissioned right the units next earnings is largest separation world process in XXXX. see two fully being we a XX,XXX that's it going world. tonne be to our this the and set around hydrogen per is a plant of through air large already The

us hydrogen technology in really positioning optimize blue and proud with really to in how Again, Haldor the lots about is we're give going project those future. of the our really very ATRs Topsoe operating know-how of to

Seifi Ghasemi

John? Okay,

John McNulty

project for year. No, or just hydrogen project picking Edmonton Got Perfect. up? coming in And the like the that at the locked on project the maybe as sold got It for Is you've the then it. color. the Alberta clean this contracts based thanks demand region. is you've out does that point on up follow-up, next seem

Seifi Ghasemi

it. have a contract it with to Oil, sell is we signing we that very visibility details where have the and you John, part which clear to of Exxon, Imperial we given what have rest of announced, going we on of front, of the are long-term that. The

when fact sold it be means and contracts going think I feel that So finalized it's sold the say out. matter a we that that been for semantics to you out, have of signed that is

sell we So of that that. feel need all we strongly that might we will actually product than and very more

I'd this like thing some comments color. and we to have Dr. about additional are Serhan to any where make on

Samir Serhan

we respective feeding our closely system anchor And project. a IOL customer this Thanks, hydrogen into onstream. be anchor mobility customer. this because with bring go existing we use for will with together Canada. working systems, working our to this also very which the also going facilities have our I products building a very they will Seifi. for are the Edmonton, of It's hydrogen out pipeline We're is customers low-carbon mobility. for IOL, IOL Please as note project well. them mean, the and have fueling to station in

Seifi Ghasemi

Okay, John?

John McNulty

Thanks for color. Thanks. it. the Got very much

Seifi Ghasemi

you. Thank

Operator

Wells Fargo. comes question from Please ahead. next Mike with Sison Our go

Mike Sison

think year. get Hi, growth, good go morning have backlog you are this such some How big on-stream. of guys. because year growth projects next when next or XXXX question, of much projects. that you you about And a CapEx Yes, just up earnings coming one

Seifi Ghasemi

of ahead ourselves. this today terms That - in I based would year and our there, as of don't $X.X want appreciate I will patience obviously. you we But is know expectation that next be the year. what $X CapEx, we our our to to get In and on of is billion terms billion, approximately CapEx today. will same end at if have disclose some that to comes of what from in you - the I October, XXXX,

Okay, Mike?

Mike Sison

Yes, Understood. Thanks. you. thank

Seifi Ghasemi

Thank you.

Operator

with Spector Josh comes Please go Our next ahead. question UBS. from

Josh Spector

for Yes. taking my Hi. Thanks question.

less there. project, has with that expect XXXX, has Canada Blue relatively And timing same slide you of in you the the the that out that discreet timing you moved guys I there? SAP or changed the Just first or from the on just anything fiscal maybe bit Hydrogen to guess, still little unchanged? backlog, has is on XXXX a updated a XXXX, 'XX and thing elements for project, Do

Seifi Ghasemi

to are as to we project it supply Well just hydrogen process Serhan - Canada, - and that like respect I'd the IOL. comes in onstream, said, to with Dr. committed to when project

onstream. that, we when to do So can only we in hydrogen, demand have plant addition have pipeline, their and comes we their for do customers, But that hydrogen. increasing existing do would are our who they use

that have we option into our the So of pipeline. putting

lot going help we're So of of to we deal different in have how options a that. - we with terms

comments? make want you Serhan Dr. to additional

Samir Serhan

No, over the year.

Seifi Ghasemi

Yes.

You're okay this? with

Samir Serhan

Yes.

Seifi Ghasemi

So we're that. where with that's

Okay?

Josh Spector

being as the you post just about Canada follow-up, I I guess three-year the number. there just And about the plant? SaaS Yes. guess, be are how would my grant looking on returns

What So of? $X.X basically off the returns or billion are $X.X you billion.

Seifi Ghasemi

the the you The government. that that minus the we the we XXX disclosed get given we is that CAD million number will includes net Canadian project That costs brand. - Correct. that have from have means

gross you given We the have number.

Josh Spector

minus The $XXX million. the $X.X billion

Seifi Ghasemi

with then when plant Sat - permit Sat on and the are to mercy the plant, at are is working exactly that. issued. get respect we of And the It Exactly. the in will California we

project. all have the that, we we getting working the of construction and permit working air then on We now that are so start can but that actual permit on

have subject actually comments we Again, estimate have the is can but that we state to permit start on California or dates Serhan, that the you best this additional is at time, the construction. any we that? of the when given that of The by Dr. issuance

Samir Serhan

California. we again, by visibility and depend the the expect have, will and the But permits. really the will The that we we construction end year, of it get state that of the officials on

Okay.

Josh Spector

the of on asking what just returns what project Canada the are I was was basis more But the Thanks. off. Yes.

the return, net gross is based on XX% number? or So number the the that pretax

Seifi Ghasemi

to answer do that? It's want you - Melissa,

Melissa Schaeffer

Absolutely.

thank yes, question. you the for So

components two the grant. there's of So

first from The is we are that component getting a government. grant capital the

where question rate listed is the credit. should return, the The on X.X net have CAD billion component to our side. normal of number, project it's around we associated you production for But take around the that expect specific your second to run a

Seifi Ghasemi

Okay.

Josh Spector

Thank you.

Seifi Ghasemi

Sure.

Operator

Our Barclays. with next from ahead. question Mike comes Please Leithead go

Mike Leithead

guys. Great. Seifi, just one Thanks. question… Good morning,

Seifi Ghasemi

Good morning.

Mike Leithead

ammonia the their they offtake basically cost as clean two agreements projects? and fertilizer they're hoping paused speak costs to a thought. to factors, coming blue could downstream I fast related develop as On facility, was those applications your seeing as it in if you higher your saying ammonia large last and night not project, company are

Seifi Ghasemi

and cannot I scope are Louisiana, develop project all Well, in what Mike, obviously, that that. we things ammonia in building saying. there exact that on comment of that options we terms with of are are final many the considering as other the markets of project, people different are blue The

well that hydrogen. make million day You know very standard XXX of cubic going we a that, feet are project, to

of of of all put and to of That hydrogen of we ammonia. we and how is are much much to us obviously, the obviously in how and to finalizing are these makes cost our general because not One and because statement for of difference terms the convert going I to put are of probably of going to that capital people expected issues our labor pipeline, hydrogen projects shortages a that in cost that. want total that, do dispute inflation, higher be the than that. of going all

to ourselves that at this will make because definition the we do that. the still the is talk do to yet, It a we would somebody. sequestration, But, about sequestration. subcontracted whether sequestration want our under how But not be stage anything we have scope do difference that we or is finalized

parts. make Dr. turn to is I'd there additional to some it to of But a moving Serhan lot comments. like So over

Samir Serhan

mean, chain definitely that the on rate, ammonia that shortages Coast economy, Jiutai. you think that closed Seifi. showed XXX deliver. and on soft disruptions, during bought were Thanks, I the definitely about bar Jazan, at record period. and context stream don't the them many global inflation on in mean, show really materials, sure the on COVID we we projects I that I We of we supply of showed hear it COVID Gulf too in pandemic, global we labor can

we I think, things. and So we delivered are the that basically we show these walking again, to talk on managed

where commitment, EBITDA execution, the XX% But the any With basically see we're we something deliver during the on these really and challenges the going like our that but challenges subsiding is which assets. having life exist, not it's slowing do of inflation - these contractual down. the managing

Seifi Ghasemi

help, the but comment. make one additional like comment. can't just make I'd I to

I ammonia, that really As done before. to others start about, on green based journey without do comment understanding of general want and don't saying. ammonia a of like a what envelope what comment are they're they lot back because to But talking on blue I make it the never people have sometimes said, this of I on things

up defining doing project, actually when they the As Then they start looks that get then complexities, out surprised. a pretty the result, attractive. numbers they with come their scope finding and

that the that more lot surprised than projects wouldn't many transition if in think. lot some So, come It of this energy I who more. the they realization, these complex have on a are with future, would takes of people up a embarked be

of hydrogen a in blue participate who everybody not of and life or hydrogen can supplier And in become green never has their the a made pound energy transition.

we general We have we But couldn't that about. think been anyway, but for help, We in years. business XX make are talking comment. know I what just this

Okay.

Mike Leithead

you so Thank enough. much. Fair

Seifi Ghasemi

you. Thank

Operator

Duffy go Sachs. Our Goldman with Fischer next from Please question ahead. comes

Duffy Fischer

you out year if how interested maybe Europe the few be you've quite macro Seifi, playing this seen from so business cycles standpoint? of - a pontificate morning. a in Good of could, kind into next Yes. you if particular, bit see you'd I'd China, rest a year little and

Seifi Ghasemi

question, what Thank now, to use future. way, in adjective and for our the it's in material that now, China that significant I continue the - is seeing see business. a to slowdown. right pontificate, difficult have It be fact some appreciate you you that our seen the really China, we in business but way is and are a not things Europe. right the very developing in doing, affecting we because it I affecting But because the is -

dependent Chinese our good terms business. future like to very But on a it, something of to is on-site XX% a business stimulus will we in to or react predict. is government significant the kind of that decides part is what very any do thing much obviously, And hard of of not. the China, That in is The that.

of So there. lot stability there a is

In way, it depends energy to on this put cost. Europe, hate terms but the really the of it weather I and

costs That is with less the up, significant energy the the little as of we weather a stay bit it will will then effect. company, overall, they very a it Because they are and if If become energy significantly unpredictable year, situation. and we, this, becomes way were last is on be like an core go we have focused is But lucky productivity. effect low. why the cost deal a will

heard And to turn are taking and have rosy we to additional prepared this? and out, do make of we that are charge as productivity, some things saw order Dr. taken Serhan not just you as a any on you be sure in people predicting. case Melissa in as for and actions in color that are as we terms Melissa, explained,

Samir Serhan

Europe be have the region mean, where one of regions. will is have It business merchant, we I one other we versus significant amount or the

on but up full is So see going some signs picking there. in keeping saw economy. We to they're really there still definitely, see to what this growing concern. it's down. recovery, incentives the we it don't Europe is type steam. industrial again, I we not I out, eye mean, an China, but a and but up, some picking mean the of it really have slowing we're incentivize of

Melissa Schaeffer

Yes.

just I'll add specific So one Europe. comment to

situation where have strong now the are lapped we So, a in pricing we momentum.

are seeing So that sequentially, have we very still strong slight we Europe. although a decrease in pricing

the I very pricing need is but tougher, And are think lapping it comps in still that strong so we Europe. remember to just

Europe. to returns hold show need to in to on we strong the So that, to continue

Duffy Fischer

- to do offer. How of you much Europe, do talking just and see kind folks next over so blue green you're question, it and both to is the will hydrogen you level maybe a How And at have reduced, out? how years? hydrogen? three, Great. hydrogen Europe kind lot you use can How you in of switch care, to there, think obviously, back green the five four the you see will be blue do mandated out much of that or COX playing playing

Seifi Ghasemi

transitional Duffy, that to argument are the very question. that - that they our Europe green. blue thing. based good That Right customers, is is committed that very is best a is now, with is hydrogen on information a discussions much

to to the through channel blue go go go and green. - why then So

European You use therefore, the of I'm know, example, Tyson for for €X.X therefore, the approved to, let's hydrogen. clearly that you with that announcements leap. Commission some make respect green for we're the to approved the sure green, of going was Group, And billion seen go have is

the direction Europe. is that we in So see

us United at be In is for but both, United see, their the will Japan, significant hydrogen towards in interested to the talking the to or be it but think seed decarbonizing that we it in all whether used that hydrogen. seeing we going because plants. news be people oriented on that, States, good Korea, to the now in discussion companies United is that I are And beginning chemical. as the it for to a very States, products are is States, have more it's are blue in we green make U.S. in the blue who predicted, not the Right in power would

Duffy Fischer

Great. Thank you, guys.

Samir Serhan

you. Thank

Seifi Ghasemi

Thank you, Duffy.

Operator

with Please go Zekauskas next JPMorgan. comes Our from ahead. question Jeff

Jeff Zekauskas

Thanks very two parts. one question much. have I with

your your look volumes down X%, at first up up at in your X% when Can their higher And X%. the it phenomenon? rate like growing are a different are prices are that I are in higher and X%. seems The volumes volumes prices your reflect it's you at Denbury, than competitor regions, rate yours. on maybe I at than think are I is, it's were results, growing look up When your theirs prices general and a

how general us view than able Products explain a quickly And have layman's XX%, because more you dissociate to people you're which then claims you just hydrogen sort to ammonia. crack to to process. of secondly, in the rather is XX% loss Air of the have a rate energy efficient Can the need at terms that

Seifi Ghasemi

I Jeff. respect strategy us to And you you. - morning, a on comparison, different with a so to good don't comparing comment to want results. Jeff good, and company which are their has to Very different a

year, pricing than our was are year-to-year last other people. You because the better comparing significantly

because show year, we very they year, not as increase, this as going to are year-to-year, low better. last much year-to-year, it a an looks So if had performance

that the increase. think main I reason price is the for

are very that is on we growth focused general that. But overall, company. a so green energy on And being my comment much

an industrial at We and the are company same time. gas

we smaller in share are talking future, investing other strategy, people the think are beat know winning that than have our because be I growth have I you and and the trend before. a up, share than to been even our will will continue on our volumes different The better fact volume totally the we projects this are or we talked pursuing of So is that we about. are as people

market holding market own. result, are because obviously And thing as that Pricing, difference growth pricing a shares key it volume shares if are will on. we in stable. we're There staying the is our So significant change. the the focused was no the is

that So have, the I first that one. question is

second have in of conventional we list of that that that of efficiency that. you think we crackers the versus have the XX% XX% On terms the use you question to the

that. about but this is talked to a It about some person Samir? a day-to-day him developing we basis who comments like have Dr. make is I the We thing. that and technology doing on have been is Serhan

Samir Serhan

XX mean over crackers, the I I had safely it but you really goes is really looked what mean know-how the not we in years ammonia are - is We ago. we developed at this to last really that years producing challenge the we there before. what mentioned a efficiency acceptable. hydrogen. it's few this saw I market, mean that

on lots team what expert details. this. is efficient. basically, mean. of product. to have we our a And we again, very, valuable wasting developed And I mean, that's very we single-digit I really without loss. put giving product And where feel up end more You of we a the

Seifi Ghasemi

good you is as just having on developed I'm is just news. we very we very this good to hydrogen. conversion Serhan We have okay a more going but And forward digits, Dr. All will he's this I that Well, do of people, Jeff? single technology. which Jeff, if of talking saying not and But up advantage be you and they proud competitive summarize, to have ammonia team. were XX% this information, end gave go our may

Jeff Zekauskas

much. very you Thank

Seifi Ghasemi

have go for please ahead. we question? time one Thank you. And more Do

Operator

go Vincent question last comes with Andrews Morgan Our Stanley. Please from ahead.

Steve Haynes

squeezing is Steve the on for in. for me quarter Haynes quick thanks Vincent. fourth on This Hi, guide. one just a Maybe

XQ there about bit I steps causing kind think just you XQ and bit else China there some little in usually that's more ramp? of have anything what but know muted more in? in is you Thanks. I a baked a talked seasonally up uncertainty Europe, the than in of macro

Seifi Ghasemi

can we together you it there our what adjusted deliver. that your much seems results question. do I previous of you can best to give you that we we look for is it a seasonally fourth agree quarter, When as would as we is judgment that terms the not our Well, we of compared When years, think about touch you thank what you with expect. jump at put of guidance, in see in

than So but on judgment are of But bit that that can best tell hope some because totally are being is our do little you that obviously, economies. that about we And can us we we at we maybe that. time. front, being certainly a uncertain better are cautious, cautious this I the

Okay?

Steve Haynes

it. you. Thank Appreciate

Seifi Ghasemi

with your again That safe. we Well, And a I good summer our next everyone for quarter. and to soon. to you And our joining you Take you. discussing look your really thank like session. thank would much. great Stay appreciate you forward very questions. We again to call and concludes results Have talk care. interest our today. Thank

Operator

call. today's Thank you participation. concludes your This for again

may You now great day. disconnect, and have a

Air Products and Chemicals (APD) 3 Aug 232023 Q3 Earnings call transcript