Air Products and Chemicals (APD) 5 Feb 242024 Q1 Earnings call transcript

Company Profile

Participants

Siddharth Manjeshwar	executive
Seifollah Ghasemi	executive
Melissa Schaeffer	executive
Samir Serhan	executive
Jeffrey Zekauskas	analyst
Michael Harrison	analyst
John Roberts	analyst
Steve Byrne	analyst
John McNulty	analyst
Vincent Andrews	analyst
Joshua Spector	analyst
Marc Bianchi	analyst
Michael Leithead	analyst
Patrick Fischer	analyst
Kevin McCarthy	analyst
Patrick Cunningham	analyst
Michael Sison	analyst
Daniel Rizzo	analyst
Laurent Favre	analyst
Sebastian Bray	analyst

Call transcript

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Operator

Good morning, and welcome to the 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 Mr. Sid Manjeshwar. ahead. go Please

Siddharth Manjeshwar

I our Good Quarter Seifi Jennifer. Sid Welcome and Air Corporate Melissa Samir Executive Officer; President to and Vice our be Thank Earnings morning, Vice Major, Results Secretary. our Chief Financial President, joined Serhan, Ghasemi, First Treasurer. and CEO; Chief Relations Counsel our XXXX of said pleased today Teleconference. Product's Chairman, to by President you, Sean General Investor Operating everyone. am Schaeffer, This Manjeshwar, Dr. Officer; has and

After your our to comments, we will be questions. pleased take

Our to on are guidance, those expenditure earnings Today's cautionary Slide statements forward-looking the and about website provided release discussion and on airproducts.com. refer capital and business the note our #X. slides regarding outlook for this at earnings is including release earnings that available and call contains investment in statements, forward-looking Please our opportunities.

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

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

Seifollah Ghasemi

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

share than employee a XXXX. #X industry. I'm record was at #X, best is the to in recorded would safety I Slide was injury priority very that lost performance, in Air XX% injury employee our like rate quarter rate always, at the our As our roll first Products. And in time our pleased to with which begin

be zero zero will accidents incidents. goal Our and ultimate always

manage how remain and These which Now our management grow #X, to please turn company. summarizes fundamental philosophy. we principles to Slide our

results quarter. turn few Slide this for like I take discuss #X. to please would to a Now the minutes to

Our than first share earnings $X.XX of year. X% higher adjusted per quarter was last

forward. margins, and business and to conversion income activities Our well were in robust strong this are several and contributions on-site that globally. result There higher quality included: Americas we positive Europe affiliate performed moving

Despite just the were that year-to-year to from several given I that due the our mentioned, we improvement not diverged first our results factored you guidance in XXXX outlook. items quarter have

last forecast. our you were volume X% the delivering number again, economic given China. are We a than the performance weak that I'd optimistic too we are higher less year. have than we forecast factors from But one, These growth in China. We that in to express headwinds and larger-than-anticipated affected are, about like guidance

impact would world. for I of the like we is -- across project had in mention lower stays of Argentine's in electronics, our and a the especially demand one the lower devaluation. experienced and But a was pricing Second to we -- is we high expected. robust. helium have But currency than sale There volume stable higher that costs equipment very helium very

sale our helium supported new always several reflects and is as I year share per that our new and in Asia and range by to developments adjusted contributions business continuing year This in range which continued equipment and LNG volumes. expected improvement well of to let be events this, expect we the on-site productivity from positive volume geopolitical as of evolving plants uncertainties now guidance discussed. weakness revised $XX.XX me the just pursue. cost talk We It turn full full reflects about #X. Slide earnings quarter Please first With in to range. $XX.XX, also

to fiscal quarter For $X.XX. guidance $X.XX per earnings is our adjusted of share XXXX, year second the

billion in and $X We fiscal be XXXX. continue year to expect $X.X our billion between to CapEx

please Now #X. to Slide turn

We the for would and are earnings. years consecutive last of we XXXX, delivered dedication to have these more per XX improvement our every made time and the us on like basis of a world work to hard possible our our growth which for proud thank the I commitment, in their around one adjusted and share than since to it for employees each and results. earnings excellent XX% annual has deliver take

to turn #X. please Now Slide

In paying we value to share per In XX again record cash consecutive our of our projects, raised dividend believe directly quarter, shareholder includes investing creating by to our in them. dividend January, a $X.XX dividend addition extending high-return we returning to of years per healthy quarterly to investors increase.

$X.X ] We expect allow clean credit hard XXXX their our our and meet while needs journey us support and their return in drive hydrogen This maintaining that will capital allocation projects industrial rating. our continuing to to AA execute gas transition. balanced in billion energy shareholders to approximately while approach customers return to [ to our sustainability

EBITDA which to trend our Now margin Slide shows XXXX. please turn #X, since

XXXX. they margins roughly Our XX% strength our business of point year margins second continued X,XXX reflect of XXXX, the the improvement returned half our basis are fiscal And versus a industry leading since going to have model. margins and

Now it's you Schaeffer, the of Melissa? first results. summary call quarter my to pleasure our give Financial over a Chief Officer, XXXX turn to Melissa our to

Melissa Schaeffer

Seifi. you, Thank

a results. Now to review XX our please of for first turn quarter Slide

we pass-through business in particularly partially North with for despite Declining price helium, higher America fundamentals new XX% up last from natural margins. for to improved strong costs cost prices to contributions company offset quarter Europe the the in by our X% volume had regions. impact Volume driven continue across price. contributed and resulted are to sales lower for and positive strong. volume, both stated, hydrogen year, Overall, This energy but lower energy gas In Asia. including was underlying comparison demand on and in weaker demand by higher profit but overall. assets show for no and most Seifi growth on-site As

ROCE cost driven maintenance activities net power lower price EBITDA margin more pass-through offset inflation. more basis of energy volume XX.X% of costs XXX than by and favorable higher planned income affiliate as X% improved and jumped points higher equity X/X and remained contributing EBITDA costs with for primarily the than of steady ROCE about about would in sale seasonality improvement. our have of about XX%. Americas due been unfavorable and were cash, to headwinds equipment to results our Adjusting in XX%. Sequentially, at segment. this corporate

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

offset compared Our net in to Americas higher volume, driven by contributed partially first $X.XX costs costs. efforts segment. and our was Costs X% quarter maintenance and favorable pricing offset quarter inflation and lower of $X.XX actions our and up unfavorable or strategy. the to costs. this income, and adjusted corporate an of $X.XX, Asia than unfavorable Europe, to which Price, last due share, year per support costs, equity by improvements planned $X.XX earnings higher at variable driven affiliate pricing impact due by $X.XX both was Volume in power to shortfalls more growth

Accretive negative of lower expense positive affiliate from X% the had interest across project second impact. joint results our to tax together and of phase and nonoperating remaining ventures income was $X.XX the higher rate, most modest unconsolidated Jazan due including items, a expense higher other The contribution regions.

I them strategy. Products as their Before execute would I proud turn Air like to continue our for also commitment company. the people working we to to the Serhan, am to of call Dr. alongside to thank I the be

turn call to Dr. results, begin review segment to our Now the to Serhan. I'll business

Samir Serhan

affiliate, this Melissa. price year, a you, results. of turn X% to for due represents This partially increase Adverse Please last EBITDA maintenance were by hydrogen. XX drove grew X%, higher Thank to equity segment was price demand review our and overall. as region contribution volume volume improvement. of Compared offset a planned X% favorable merchant costs. X%, together by Slide Americas strong as and improvement to driven the X%. price Volume for price up margin well strong while up for

energy XXX basis Sequentially, was cash the up seasonality driven flow. EBITDA mainly points, maintenance X% cost and lower margin during moderated almost winter. backed up as to mostly decreased due demand EBITDA activities by by

our turn the market weak on put review challenging China Slide XX to electronics for economic please continued in and the a segment results. to Now conditions The of region. Asia pressure

last as primarily to stayed previous results as Price over higher margin unfavorable lower focus costs. demand. price EBITDA on Third for to our higher on-site volumes the unfavorable year, Sequentially, X% to the due improved and region flat to were down in the were continue the EBITDA helium volumes we and volume. quarter. up relative offset mix activity helium business

compensated from the our up decline year, which up than due more by which dollar, points better over EBITDA and to energy on-site relative remained cost. X,XXX to driven U.S. Please merchant improvement. improved the against increased currencies was segment turn energy costs, including price, volume, in Uzbekistan. results stronger favorable for to XX% new Sequentially, was maintenance the and to was planned margin favorable benefiting due lower costs about activities. X%, a Compared higher, review in volume by power driven Slide to costs the contributing activities, Volumes half XX results. of lower cost Europe of stable of last EBITDA pass-through. project pricing impact margin for were and basis to inflation

East lower volume, to in of of India to a the due year. mid-January second segment turn of sales completion Slide the to our Compared to Jazan Middle results. EBITDA phase due please last review and XX of year, Now for decreased the improved project last

includes segment for sale XX LNG costs. Seifi our now equipment higher our to well mentioned corporate our from sales businesses and Please EBITDA sale non-LNG other business, our Despite as of functions Slide costs of declined due centrally higher before. as results. This in equipment turn as segment and corporate managed to activity,

the Our to technology activities are and related robust. LNG business equipment

are moving have offerings, customers expect to who our the our we to improve conversations corporate projects constructive LNG-related continue segment in with We and forward. interested

are moment, around their for also the overcome the this and world our thank effort I At challenges like teams facing. their determination we demonstrating to to would

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

Seifollah Ghasemi

Dr. Thank Serhan. you,

Now please #XX. to Slide turn

to of is our motivation our are always forward. people. business existing are action short-term our change commitment in do I The our very proud competitive compelling proud the As prospects not I'm we Air strong commitment, we issues of people. advantage of moving our Products. dedication discussed and and I every am of The have and long-term say, that fundamentals and the day real in company, see motivation

a first the of and gases world. as sustainability as strategy green underpinning both help second X them energy Air with Products and enables hydrogen as environmental our to fulfill our and is higher growth pursuing industrial is in purpose. to That strategy pillars us our blue first-mover highest purpose projects in our our pillar. pillar company, Executing core our which challenges is with these significant business solve the a

other in solutions dozens business emissions, technology the with industrial production, increase energy on reducing words, First, yield, make and customers more gases to environment. and while improve help consumption impact across our less, industries of the reduce lower

needs Second, Products, with zero transportation the for to be long-term low substantial and scale experience, can At contribute everybody. the the believe decade-long energy world projects. a more we Products bonds industry, in generating and execute to leveraging return world. and the position, to first-mover demonstrating both in a hydrogen decarbonizing lower and producing We cleaner meaningfully leadership deliver we that UG and future are enduring for Air value energy our heavy will that of delivered ability shareholder the By hydrogen competencies, terms our at technologies and of core delivering carbon world-scale Air core goal advantage footprint. and carbon

your now questions. are more happy than we take to that, With

Operator

[Operator JPMorgan. Jeff Instructions] we'll go And first from Zekauskas to

Jeffrey Zekauskas

is income When stream a ammonia Coast for did And come that the you? one? projects Gulf meaningful

Seifollah Ghasemi

consist that is on we plant comment on is don't other can other one sale actual on and the ammonia and if plant make necessary. ammonia because of a the I stream hydrogen X owners that because statement and want I producing different to hydrogen gas revenue. own allow is to one Coast it's the of we it's that that, facility own the that part, on comment And Gulf and don't the the parts, plant. is

Jeffrey Zekauskas

improvement, expectations materially higher would In -- yes, Is the the program, particular the on that In your the line. expense be quarter, of for for large maybe for a year-over-year cost-cutting was have smaller, XXXX, that changed? is you things was significant case you have there quarter, sale thank that. or losses there room equipment

Seifollah Ghasemi

to in the In quarter, we is issue absolutely the that the because are our that you the cost would That be our go you of I that costs equipment mentioned. as first mentioned we before. not higher Jeff, case. forward, were sale will had of And you repeated, therefore, be and as -- lower, expect year-to-year right.

Operator

Research Seaport from next We'll Mike to go Partners. Harrison

Michael Harrison

was business. what's struggling have where you within that situation to exposure the issue, a an regions this are mostly that on in a hoping little or bit get demand is you where biggest you to helium It guys Asia least which I the that could Is the give helium on lower volumes seems situation And more a need? of detail the is first like also helium? quarter. at going

Seifollah Ghasemi

Thank the helium for do and have question question. having molecules you excellent not for Number an with sale. issues we one, that's any

We are -- been actually it. has the people delivered the always helium have when best need supplier to we that they

significant a have have production world. We tavern, around we facilities the

supplier we been. and reliable always very are have we So

value operate particularly the helium on the with is selling. demand are issue other board is that, electronics that for we in is we as the one, the want China Asia. lower thing that, The that in we across I And and number especially basis said, product in and

of a the lot have some market a we delivering part significant world. have of terms the said, And that. helium, other we that too, as possible. definitely we no is of on in demand see, w use and held Air the pricing in is -- helium not weakness of have lost the Asia in might across Products, product the I share, but obviously, regions volumes, But So whether is It's issues but Asia biggest one. a terms

Michael Harrison

have in expecting you year second to question a so. versus guidance expecting something All to like bridge us half the much EPS second visibility right. you're half. gives maybe you half, of in helpful. That's or looks And then improvement very guidance. that better talk $X is $X.XX Can you about is confidence implied first around and the closer my you're the that It the on the that half? second maybe first help the that And half second $X.XX in related the for the your

Seifollah Ghasemi

this that's the XX%, guidance first half question. XX% what right? at around But point, consistently delivered excellent the the can't and we you an when year the in second about at Well, We the during in half. Obviously, is results XX%, we Products, foresee our of events. look is fundamentally, Air the best estimate world delivered years XX%

quarter So half strongest because the second is seasonality. of usually our

should into you So take that account.

are And strongly, the a is the on-site we then half we and expecting will the that as be to by that our in higher some income $X thing giving the be in the turn, right world the second other that from we those. But will that the why you now, of That have gap half. is deliver $X.XX versus therefore, are that the the have is will able very see. year, estimate first we bridge we of guidance, of we running today. how of But how we'll the will projects

Operator

We'll Roberts go John next Mizuho. to from

John Roberts

could separate also Seifi, is the maybe you on-site. business from other China in on-site weakness And the related operations? to gasifier

Seifollah Ghasemi

is well I for in in China. of hope our on-site all, with and is no your weakness you you. first question, thank John, There

any is the pay the take and world, merchant there. don't therefore people across everybody on-site as think. on call economic business just side to is robust caution is see like issue China we The in related as fundamental the to on issues might situation the that is activity. economic and the helium Our not that I'd or

we used know, are make products instantaneously. you As that

really part not that the are things of world. And indicator. leading great a are We exciting that

Operator

from go Bank to America. next of Byrne We'll Steve

Steve Byrne

I do risks XXX to on okay location Yemen. to I going ask, you a right of the plant? just it was is any see this access of in and just now? of everything looking recent be issue there at strikes of labor at Or or to few these wanted seems the Jazan, miles quite within And

Seifollah Ghasemi

None we on Well, up so first have directed now, have not missiles seen at been any of all, to incidents. these facility. of and the

I can't to up refinery issues. mean, running has been future. fully. I So now, any not But the The predict is there

of great. very our Our I'm there investment is performance our I proud people. -- mean,

we which the are the for And syngas. world things producing the largest We despite are gasifying XX worse, for working are bottom gasifiers, of refinery. and are operating those actually the in predictions the

the that Saudi megawatts supplying are to We making to delivered grid. is are we the to hydrogen X,XXX power of and close refinery

is So fine. up to now, everything

Steve Byrne

provide more Texas the the $X this billion highlight curious year, good. what list? with And on target moving you are in billion. any $X.X you for the can the within just that detail largest North project Very CapEx just was Can to whether you're projects year. the I forward

Seifollah Ghasemi

there we $X to a the mainly our billion $X.X of going facility, doing be million, operations is our the of hundred process sustainable a facility engineering. $X.X did preliminary expenditure spent permit other and in and of a our is Texas but hydrogen that blue will in substantial and significant $X hydrogen few for in continuing it of amount NEOM billion on facility to amount part the our airline not is $X.X billion fuel billion, money not our in hydrogen it the because Arabia to obviously, But the and Canada getting in for facility in Saudi Los a be on we blue are now, go will Angeles. billion. substantial in amount project then the green The spend Right significant

we then spend about talk don't maintenance gas obviously, we on CapEx business investments, like don't about other our have billion $X usually and do our year they And is our and everybody small around billion, is small about how $XXX $XXX because And releases $X that like else. many million, too. million. press projects CapEx in out a it we maintenance that about that industrial any we day-to-day projects put won But

rest big is projects. So then $X.X it of for the the billion is those and

Operator

McNulty Markets. BMO Capital We'll from go to John next

John McNulty

you there of comfort is modest smaller concern as Or of hike is I there that? any kind with And It hike from, the some in is we've kind is guys we it's -- a guess it as Products. would strikes earlier. why question as think And question that that? guess around change is, what on us than, rating the from say, seen your we So the been? announced had should about I guess, that capital Air agencies past dividend the spending? I why the how be

Seifollah Ghasemi

X.X% be Well, dividend guidance always for a stock I and the had about that have personally given stock doing believe of that. with a pay it the we telling price are or target, and we it's we the our now than X people But people of is, years, should $X, now were as talking percentage that where that more past I dividend we X been significantly stock than price. And that. you price, that higher about

So I should the the don't when dividend price where stock it see significantly increase is. why is we

we and -- at related Because cash the then getting is price, but guaranteed shareholders also stock but my we who are we XX% return almost increase so least X.X% shouldn't obviously, flow and no dividend. the But friend. are very respect our that believe happen pay or to directly from to will more than dividend then buy to the a growth, becomes never stock the stock. the rate There and have with on, XX.X% of it if is they any reduce cash the investors never going issue

John McNulty

Got it.

Okay.

growth necessarily about or yield, that. earnings anything more like not the it's the So

Seifollah Ghasemi

Exactly.

John McNulty

the be half more running first question, a earlier as up little a we of second it running you would that first or know I in you fully of on. but half model aren't us year, versus bit of just running follow-up so in I be of the there's projects map will kind can -- out just a second coming be harder, half, bunch should in the can out that better? necessarily remind or little kind what then that year guess, a of projects just And Okay. your mentioned half

Seifollah Ghasemi

of customers, I the have Well, I'm operational get disclosing don't we because going not -- and agreements the to of that have. I'm one doing our into privilege details the that confidentiality of then

in question ring cannot you I answer me that give if So detail. a [ ],

about Sorry that.

Operator

go to next Andrews Stanley. Vincent from We'll Morgan

Vincent Andrews

ask the just aspect the something Is electronic on equation? was sort with it of in the in the or what's surprise quarter is point start comfortable particular there Like is what If on those it piece that side at that, that economy has the could with? helium, we customers? I could Maybe level we changing decelerating? you're the out electronics really the flattened of so with you're are a at the there. it And just in comfortable that

Seifollah Ghasemi

with that that during which year so the used the know I the thanks the question. good strongly run the is make third then and industry, all on calendar they slower. the chips that electronics chip is of than buy going happens the what for very usually do, quarter is of quarter general Vincent, the toys this Christmas. you are of over, for and and everything That period for better Usually, year fourth to all for makers thing. is people to are when the And the

I And am dynamics and the of then seeing, to the that. have like in all tell you you we what expert terms in to lot are I industry, electronics but that of that addition of of might the chip conserve helium would is it for economic slowing that, to a an is do not people people that, other the in down. as being are helium the can significantly try the that thing uses. high, at then prices as these manufacturing be affects that they other facilities much play conditions And to operational

of disruption, demand bit a little a be might there So too.

Vincent Andrews

going you have as associated in or off plants that that? turned being another weather from then we preparation to area. Are some fiscal that follow-up, in winter going had to downtime some downtime obviously second for you're And Okay. freeze Our customers Gulf storm anticipating the the in just a event? with are quarter have winter Coast

Seifollah Ghasemi

quite question I case, very predict I Vincent. honestly. that, the difficult want That don't That's to answer, might but a know. be don't to

Vincent Andrews

happened Is Well, in in? I just that meant storm already what the January. baked happened, has that already

Seifollah Ghasemi

to you have do Dr. Yes. to that? anything add Serhan,

Samir Serhan

see during still even very strong We hydrogen that happened. phase. that demand really issue Minor

Operator

Deutsche to We'll Bank. from David go Begleiter next

Unknown Analyst

helium full decline? helium, staying of profit terms impact of the quantify decline Just year-over-year Can you in and your expectations the on QX year in for the helium profit

Seifollah Ghasemi

have David, business competitive a really of And understand for sure you're reasons. that. question that we performance never answered, never disclosed the details of our you we I'm is, helium that have the asking

look exactly. So ahead. that -- compare when if explain last when we we you the delivered you compare But versus the I are do to to are difference not is to what What at between guidance. want to year, year, we we still trying last

Versus that the the fiscal we second we year, materialized. last are and did allowing fourth has -- might the the it it still in year? But mean, ahead. don't the for of not But for sure. -- fact quarter way Would be we we in our expected guidance reasons is we continue helium we second, one and quarter third that are in And seen. expect know lowered Remains to because the it of weakness the I our third continue.

Unknown Analyst

do think have now just within earnings on early throughout project that year? of the ramping how next that you XX calendar Alberta we up start-up, 'XX contribution should Alberta? for hopefully it's the about And the year timing Understood. months of And project

Seifollah Ghasemi

understand to. David, up. you which were project you I referring broke didn't

Unknown Analyst

next think When start-up will on it project. cadence how early the we stream? about Alberta the The year? earnings should And post come

Seifollah Ghasemi

Serhan Dr. have Sure. Serhan? Dr. Excellent. that. I'll answer

Samir Serhan

with also stream phase in no fiscal the the you right 'XX, already. to now. first hydrogen We blue bring question. about the net the capital our line incredibly year construction our project customary it government in We excited on in in and we deployed Thank to updates regard incentive, that look provided for plans. are There remain that's zero

customer to and really and again, ]. this committed going IOL aligned well we're with are our things So asset fully we're [

Unknown Analyst

this online Will for fiscal year? it be

Samir Serhan

It's year 'XX, renewable half. second in fiscal is in alignment the with This the mean, refinery. I really planned in

Seifollah Ghasemi

So is now. that up well for going basically, everything to

Operator

UBS. Josh to next Spector go We'll from

Joshua Spector

to So when second up guidance in you demand, to the markets and half, today quo hit guess, there? are I on Or do need second about what improvement half? assuming is your China helium online the you expectations just coming to et I cetera, Or ask get and talk follow wanted you are uncertainty specifically, improve? to for your the plus and any see enough what to status challenges maybe

Seifollah Ghasemi

don't I in hope correct. we any we world are that's to we developments. No, things board they economy. the improvement be get that geopolitical things way expect because just No, not of factoring the any worse expect improvement, significant are. don't But

Joshua Spector

sale Okay. And just helpful. on equipment. That's the of

talk unique projects increase LNG when cost is. you execute, a about that contract? some issue, a the one-off And about how you your there, So about when in talk those is or is wins thinking the cost is think and you've need that we specific coming that material or to a been other cost that talking about some to online or contracts more couple in issue? sales next of with risk years, underwater about of Just

Seifollah Ghasemi

thing, we won. the you're already that answer which the expect under and execution talking projects about second the are -- part, the projects LNG may I have are If we

costing So that, all is thing, is we money. sale what of equipment the inflation on the that low. With us is in and that to and delays about execution risk of respect talking are

Okay?

Operator

go from Bianchi Cowen. to TD Marc over We'll

Marc Bianchi

large X asked the blue components question had projects The hydrogen about CapEx, of was earlier the mentioned and NEOM, and you SAF.

an update X. Alberta the You on now. provided just us update if status of curious you the on I'm could other

Seifollah Ghasemi

report than have before. the anything other other substantial told on have X what we don't Well, to you we

with as So them things going of right are now. okay

So that yet. have we material happened you to has report do anything to not

Marc Bianchi

SAF? us remind Louisiana just and for expectation the NEOM, start-up you Could Okay.

Seifollah Ghasemi

somewhere of XXXX. it fiscal have all us getting is -- December NEOM, to around year we now year what permits that XX, mean, And said XXXX, I with we are up need. expecting SAF, Louisiana, we has depending on XXXX. been fiscal the

line like projects.. So said it's -- those sorry, for XXXX. -- I I 'XX. approximately write that That's the think 'XX to time I'd said but I'm I to

Marc Bianchi

Okay.

reports The some occurring what view have could other about that meaningful. be natural and I'm question you there so that have curious and hydrogen, news if of been stories any your is lately I had was quite involvement. naturally hydrogen deposits

Seifollah Ghasemi

are in come and answer, zero at bit involvement not not get you just need cost. of And because the that you hydrogen any to it sky that's any going do are we out a I have sitting in that that, do in that. We not don't that to a scientific we think not pie like in give but little involved that that a is a involved [indiscernible] But reality. to there there's will and projects we want

Operator

next from Leithead Barclays. go We'll Mike to

Michael Leithead

blue ongoing formalize you offtake expect update believe year? state startup your later to to and it's those? ammonia until you of some this Or announcements us offtake? we Could of discussions still some for green maybe on project closer better the potential to wait Should do

Seifollah Ghasemi

Well, rising on an excellent that, you're point.

basically told not X.X believe people closer main comply onstream. that product have the come has And that companies product, think our year coming that expect about commercial of a that have realize any it there or offtake to people higher will the today. are that the reason that many rules, to the onstream years we any be for the deadlines, the is value certainly plants that environmental they before is that facilities get therefore, than would with new not rear about We what do until as announcement we

might But announcements investors going I a to any long-term the and agreements. So soon, okay? contract to hurry would the us invent wants the we in time. are act that gives at somebody expect, sooner. we a sign that meantime, prices think any is to We are to sooner not our announce contract we there demand so in -- expect if take a we the But

Michael Leithead

that similar tax came green That makes Treasury And hydrogen the credit. makes guidance with a around sense. recently That's That then maybe believe note, department sense. great. the out I on

I with this are Air fairly concerns about I although do aligned plans interpretation Or Products? to most you Products' Bigger strict it as viewed it limiting do ability take pretty also strict, think advantageous people off? you industry's Air well believe as for have guidance. U.S. see actually picture, the the any

Seifollah Ghasemi

are thing. out pillars limiting. facilities. X people part mean, of single that point can view the committing disagree of billions the it with are We has build these complying No, we put how every what with same do we limiting? to absolutely of dollars Other Treasury the is this that I and department is

Some the green the electricity use atmosphere believe you people be strongly very that we That production use. that. coal believe to get just you're hydrogen trying replace We going pollute from to in Otherwise, needs don't for additional. X that power means are government continuing use the by of to any and money that pillars. to to

has it to So be additional.

grid it second somebody all and hourly. when no then middle has is The to night that plants there the coal-fired power thing, hydrogen, in from sun, to of replaced green from of the makes drawing you're has and again the Because otherwise be be if that.

network. And and the it so additionality, hourly then be thing that is same on the has to other

supportive pollution them something rich, into but people applaud And the department their should designed make to allow of IRA not We the to environment. the was to what to to their Treasury they not sticking the get not for subsidies are put if principles reduce that like save fully has companies doing I'd this atmosphere. out, was designed are to IRA some

is with Congress not principles right of again, by is that that. principles, we IRA handout. the why execute all the out, those we their put we supportive of to fully that And improve I'd are and I dollars. fully hope And keep nerve that those like spending rules they billions are really line stress it, are to a in designed, environment, and And approved should are The abide Therefore, that Treasury The is we that. IRA those because the

complying We think the they right are we right executing now with even rules and out, rules because rules, okay? projects are those come those -- before

Operator

We'll to Goldman Fisher next Sachs. . Duffy go from

Patrick Fischer

double quarter, roughly or I first Would was cash was cash flow level least flow was operating to even expect that the same Will the the if EPS could. flow, earnings cash cash down flow at in At down year? on digits throughout this operating of Question invert up. you grow though year?

Seifollah Ghasemi

But of to to the person details. of cash Duffy, it's cash. we our going up. we our is this but I'll through answer explain the that? cash you details, get get the is accounting EBITDA think qualify to the we but Melissa, question actual different the book friend, Melissa going EBITDA my I'm our is glad and the going it's timing into asked this, have accounting because up, then company it, the the is But go coming up. are If What reporting don't please would number best We want because I I affiliates. equity report to you because

Melissa Schaeffer

Yes, absolutely. Thank you, Seifi.

EBITDA and positive. So investment cash both first of eversion distributable are so stable cash all, our our flow is Duffy,

EBITDA in with line year-over-year improvement. our So that's

all We so we in cash this very strong. see quarter. incremental industry-leading to have an flow did our DSO, Additionally, operating reduction EBITDA

it's process component timing. equity There timing Again, this, our our attribute operating obviously, of are large manage we just our chain helium we'll derisk and attribute cash, one an so issue supply our really namely few second has items inventory, to and the but And for distributions a to then that we moving forward. helium are earnings which look obviously to related is some profit, not building with offset to of affiliate. do to an

Seifollah Ghasemi

Duffy? Okay,

Patrick Fischer

that just up announcement Louisiana? sequestration to Louisiana was bet. state explain and deal Roughly, then the will relationship you COX of permits think the and the state EPA given might can that there quickly with you You authority how how to is And your there. the on speed when the for kind with get process we the the of

Seifollah Ghasemi

I'm Duffy, that you glad asked question.

that. very are We about excited

of the I year with excellent relationship. getting And an time line cut we well. think Class it's that do a State we it about X was think permit the us but right relationship on the Louisiana, -- decision for will the have the and the not of about

Class the than less that. State review wells with deal X gain Louisiana do State EPA. time by going the are We Louisiana having will right to thing the have because to of We

just of a distributing thing workload done they Louisiana would federal it's fewer faster the that. project and the our now right by year did State government of and they approve can by applications, matter the the So a have Therefore, about than therefore, will have the workload.

very the more permit is get confidence to and why very helpful it. terms we it Class if in that need is our of So X impactful lot and gives ability us a

Operator

Research We'll McCarthy Kevin from go to Vertical Partners.

Kevin McCarthy

status dynamics. you in Or supply witnessed wanted heard operating material question project I to market you such any market demand have cited in the come a side. of on shortfall of is, in Russia? to is quarter? of comments as [ changes on Seifi, it Amur terms demand side Gazprom's strictly My function the I the that the your ] of helium the the global volume the back

Seifollah Ghasemi

is theoretically of good in therefore sanctions that. there Amur global getting that increasing into whatever Theoretically, therefore it and into illegally the supply question. helium, I that It is detailed getting that laws be are. And is other case. sanctions that could buying dynamics and from want But I But sure. interpreting that. people? not That, is the very Is is produces the Well, to on people the suggesting on am are why Russia, supposed the a possibility. not you be are market. to all and be what a of market don't

We into that. are looking

case. see haven't but the might significant yet, it it don't that yet, from least we any seen factor We and be at

Kevin McCarthy

Melissa. few Okay. sort possibly of And I That's helpful. had then for questions secondly, a housekeeping

cost issues in some quarter? the about devaluation I think project. sale the the those the overrun Can impact of quantify and you equipment talked peso of from the you Argentine of of we mentioned

Seifollah Ghasemi

it is was I on easy of for of that the our line, them, about every the currency don't details about to Argentine the easy. currency $X.XX. answer one lot for effect bottom is think but I'll we want Argentine Melissa, a quantify million $XX that, make

Kevin McCarthy

no SOE, on the And that comment one? Okay.

Seifollah Ghasemi

much No, don't competitive giving much slowdown want break was too information, the very of China because down don't the sale was it, in was how and then of mind. how will we helium, we you much to how rest the much equipment you be if

Operator

Cunningham Citi. to go next Patrick We'll from

Patrick Cunningham

these price direction how maybe on you Europe, comment going sustainable forward? margins of Could are in the

Seifollah Ghasemi

frankly, quite we better than one areas did where of Well, we -- is expected. did that we the

terms results on basis energy are their of But I'm done on. is so Serhan excellent, our to successful. this during in job prices points, develop and have Our sure business to happens are the proud will price depends terms was pricing the the have that been the performance and the and that as European down. our what in we because on margins in hanging of And did How very going good future they Europe making of a are prices maintain up obviously well X,XXX Dr. while saying, quarter. people energy very in people and

Patrick Cunningham

performing volume How How throughout have $X.XX you year? your what project. should about related expectations? Uzbekistan we on share. contribution then of up talked maybe previously follow-up much relative Uzbekistan? And Great. was just a the on Uzbekistan per know to And I is sort the

Seifollah Ghasemi

Dr. Serhan, would you like to answer that?

Samir Serhan

units, reformers to you those are in use And world, the which from to the development. technology I It Products remind largest to ] the [ is desire bought really the for want great a and thermal which we hydrogen, by reformer. BAX has saying Air world's GE project this country's or leverages just start fit Yes. energy the and produce to blue need to largest gasification. socioeconomic our use both need you auto for just includes core are and everybody, Uzbekistan. auto-thermal been competencies This independence project [indiscernible], address and the ATRs,

onstream ATRs. brought operating excited large was are synergies the in about technological operational by The 'XX. these asset We and October

the that We around year. for contribute X.XX expect full to

Seifollah Ghasemi

Okay.

Operator

We'll Fargo. go from Sison to Wells Mike

Michael Sison

other of I of projects And that the guess to you do with in between X% those on the you slide, projects, before come is my noted XX% the to about X% nothing Are you've growth that the they contribute headwinds? first what recently of 'XX guess that's the terms now in that stuff sort talked follow-up onstream question the I delta more the contributing thought fiscal EPS growth XXXX? to has growth, the in would

Seifollah Ghasemi

the China had thing these because meantime the going the is that have of don't going I projects you're answer down, up then in are in only general it's is give and the if course. helium we headwinds, and that that Well, lower the other is volumes to -- year-on-year some sense a you contributing, of like reason are up

contributing, leave going other okay? So that's are you, would is still up. yes. Therefore, the products the way I it to Negative with like

Michael Sison

of or 'XX, in look EPS when sort XXXX, think change of beyond changes growth about those think then you doesn't of terms growth? 'XX, And maybe we great. that's as longer-term a do Yes, out years you the 'XX, how view, more of algorithm

Seifollah Ghasemi

Products And that. have be the going to we year, XX%. will of before. goal. deliver That's an we're to one we we will year average expect EPS we Air our be to that growth delivered, and X%, going deliver on And on But we XX% promised have think that we one delivered trend. that might ago, I overall, I continue fully years continue XX are that the

Operator

Laurence go from We'll Alexander to Jefferies.

Daniel Rizzo

of I the to make sure listed This next the XX, one Rizzo under going Page online in that's Laurence. to want come just one that Alberta, for on correct? execution projects the that's is on Dan is Canada,

Seifollah Ghasemi

that Yes. is is Serhan be to Alberta, come year expect onstream. XXXX. fiscal we next which And going the to said, one, in Dr. Canada as

Daniel Rizzo

delays? like there trying this come I Are the and on there, question, the just other be will coming these as to projects are be, behind will I'm don't my second think that? Or know, of online. should right cadence year Or

Seifollah Ghasemi

will have hopefully the Saudi -- of that, the have project year will other The Arabia, have will in year in project fiscal after -- we our of have end by Louisiana. will we will 'XX, blue we projects we after 'XX, hydrogen after the by we announce. hydrogen our in calendar that end that, year that, will green we 'XX Well, have And

Operator

Favre go BNP. to next Laurent from We'll

Laurent Favre

SAF the actually. I'd like to back to go project,

last I guess, think projects be of you would just you up mentioned startup in that 'XX. still had be In part that And I should was group start-up by in, August, XXXX. running May it XXXX. of the the year, in in and for

talk it guess, this is Is are what I delay. it execution specific if year Or customer side? side? more than could reasons for you I the X your the wondering So on was about,

Seifollah Ghasemi

plant you it California, in know building California. this to related is long in we it And fact to takes time a Well, permits. the usually get that are

on dependent plant a final, that be timing when about definite that you we then we for have going is give of ruling facility. permit, able to is on construction Once onstream. final for a it So the the the will permits come date to

Laurent Favre

Are the [ that initially size billion potential $X.X us on ] a you the could cost a for of we difference? top talking was And of material slated? about run

Seifollah Ghasemi

I question. sure not understood the I'm

Unknown Executive

No.

We on capital, capital think the any we that won't anticipate the update the on of project. one, capital I earn there. the Laurence, return

Seifollah Ghasemi

return project The on is fixed. the

We are return we that going no capital the on matter what the to get a is. spent, capital

Operator

Bray take our we'll question Sebastian last from Berenberg. from And

Sebastian Bray

has is to but this My Has pricing merchant double it stands first it as to one be it or check. started up? on it I today. U.S.? Europe the Or wanted Is to decline? So stable, to in stable started go seems

growth hold second for guided My they of as for on assuming one EPS the the rates the is when guidance. Are 'XX rate just dollar setting stand today we the rest year?

APD clean what say, that hedge My see out to turns hydrogen the project be to pricing. for from desire the to reaction need higher and try the it longer clean out third industry to comes? for wait changed offtake 'XX, subsidies with and IRA and a that and the i.e., clean question to Is agreements more economic fewer philosophical pricing out for a out subsidies Is maybe one shakes ammonia on wait approach clean is risk if the industry shake well, we'll available? projects hydrogen

Seifollah Ghasemi

projects. would Well, first like good I tell question that to you're mover asking the very very, these are you and a we in

we mover. We if risk, investors. being money they for returns that try of just amount which first rewarded and a -- building mover to be the took obviously, with had before by is these contracts, standard were the return significant not one maximize thing. should projects rewarded and investing And get but higher are job we have we we say, have my as We the return. the That's first the facilities

a we place, people and the be in the of where that is significant will making trying we with are the get product. in will these industries we demand people projects, make, many a in the lot thing have already that that we then comply that XXXX, we we And closer second generally believe to use products are as By Europe to that product especially. to the have rules in don't see which

Obviously, not case, following. give the can, it that we job the maximize to we best in is get we in our philosophy away. for that a profit So company, is and to are hurry are that the that

concerns you the not because other is It things of no. that mentioned, about

the before been day it's so action. are I it Europe, taking on well with IRA. to Japan, by that the was Recently established, it Every the goes subsidies see think going U.S. has you that and governments get enacted.

direction forward every strategy, in of advantage want maximum the as strategy our events that. take points right hopefully you So that is to the we go and day

Samir Serhan

eventually the that XXXX been of come Agency has only Actually announced projects Energy onstream Seifi, the will to X% hydrogen of by there XXXX. for International from onstream, by indicated out all come green [indiscernible] that

Seifollah Ghasemi

Okay.

Sorry, long we your hope I issue. answer, you a addressed but we gave

Sebastian Bray

the No, it's of merchant the on pricing the for rest short-term appreciated, a . and question Seifi. FX more year And assumption on the tactical or basis.

Seifollah Ghasemi

question. Yes. don't Well, We that's -- again make you our Melissa, a very good why answer that? estimate

Melissa Schaeffer

Yes.

me let merchant. the an So answer give you

pricing up slightly. was So merchant-on-merchant

by the had some we partially stronger and small decrease pricing merchant-merchant in So Europe. offset in Americas which was Asia,

Europe, the so I margin want that conversion our faster maintain -- power mention However, margin than conversion because stayed our decreased X rate the to cost at strong strong all a in in do regions.

Seifollah Ghasemi

give give today. you exchange on based estimate, to estimate an as FX, rates respect you with we of when an And we the

assuming not change significant rate. we -- exchange any So are the that is in

to . other results and forward look for months. joining interest everybody listening. much. and I Products, appreciate there that. really thank you best, Operator, with the in are very you for to in appreciate very you we X our would We Thank Air discussing again questions, today. Okay. your I since like call thank our no All

Operator

you today's conclude Thank conference. does your That participation. for

now disconnect. may You

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