Air Products and Chemicals (APD) 30 Apr 242024 Q2 Earnings call transcript

Company Profile

Participants

Siddharth Manjeshwar	executive
Seifollah Ghasemi	executive
Melissa Schaeffer	executive
Samir Serhan	executive
John McNulty	analyst
Jeffrey Zekauskas	analyst
Steve Byrne	analyst
David Begleiter	analyst
Patrick Fischer	analyst
Michael Leithead	analyst
Marc Bianchi	analyst
Vincent Andrews	analyst
Kevin McCarthy	analyst
Patrick Cunningham	analyst
Christopher Parkinson	analyst
Joshua Spector	analyst
Laurence Alexander	analyst
Michael Sison	analyst
John Ezekiel Roberts	analyst

Call transcript

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Operator

Good morning, and welcome to Air Products' Second 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, please go ahead.

Siddharth Manjeshwar

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

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

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

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

Seifollah Ghasemi

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

in move lowest Products. in the rates #X were at our injury employee rates X includes We As XXXX you injury levels XXXX. first know, priority and #X be Both I since and always XX Products our fiscal start will year forward recordable with Slide these top at we past lost safety, which half in their but is principles, best believe Air of done our outlines rate of time the to and as X progress, have like our great accidents goal ultimate is we the philosophy. us This will guide industry. continue in these years. Air they strongly management always incidents. Slide and the

Now #X. please turn to Slide

range X% quarter end earnings to Europe. improved in year and last $X.XX share the and previous per adjusted results second of exceeded compared Americas upper strong Our guidance of our on

our We simultaneously our business current effectively continue growth to projects. manage executing while

We are costs in inflationary pricing on this environment. reducing improving and focused

business to gases sustainability, and cleaner projects future generating broad hydrogen our are industrial driving scale enabling Our low-carbon decarbonize and for world. customers a

and Now Slide please a turn to guidance. for of full quarter third review our year #X

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

half fiscal earnings Our are second higher the in year. of our generally

full share monitor maintaining are electronic to economic to We our as economy activities and per year Asia. uncertainties, of guidance including industry we continue China's the $XX.XX $XX.XX throughout in

of We to be billion continue the range year to billion our CapEx in $X.X $X in fiscal expect to XXXX.

Slide turn #X. to Now please

we adjusted XXXX, annually trend earnings per improved an than XX% a Our committed average continue. since to more share of has are

extending our Slide turn take increase. yield, please including January, for balanced our We per dividend payout record A/AX growth determine and and to investing per we considering our Now of quarter, approach rating. XX share In benchmarks years $X.XX credit maintaining factors a to various #X. dividend our again while to consecutive peer of increased dividend,

We shows EBITDA our expect billion to to return our trend, always dividends my shareholders favorite approximately in XXXX. Slide margin through $X.X #X slide.

shareholders I on in gas we and leading we years Air my Air again CEO as of this have would climbed that above first most have profitable Chairman delivered the the that. creating that industrial promised industry margins XX shareholder Products, commitment company Products call safest on and world, Our make point, and you and to I ago, XX%, almost like the At reflecting our value. our to remind would

we as promised years per by share have Slide every earnings on that the year. delivered XX call the And X, on On for I XX% the would last years. average XX see our same we also ago, increase too on you

to the safest, growth So Air and, set want next goal profitable as deliver XX on continue per will done Products I average years. at the company before, earnings to per we most the the the have of industrial least diverse next XX share world for gas be XX% for in the today, and most year years.

bold people done want of their dedication. have of to for have hard want to shareholders. the total I and will Products dedicated, the it strategy We this, to and I of forward-looking I'm in part talented, and and we our I again. execute before, do commitment very deliver proud team. significant and work, ability one thank confidence I and stress them motivated be confidence, our total to have of it value every committed Air to this

would call Financial to turn I Chief over about quarter. like to Melissa, Now make to remarks the the Officer, our Melissa? second

Melissa Schaeffer

Seifi. you, Thank

driven pass-through than favorable the slowdown in Year higher seasonal was improved point on for profit demand costs declining lower for cost of in resulted lower improvement. second higher but Now merchant our nearly our lower gas the products. across of the please results pricing natural XX The for new assets. impact combined contributions and Price contributed in prices turn by X%. and driven to no as half basis XX%, about has income. impact Europe relatively results. despite North ROCE been cost costs energy maintenance to Lunar and strong which outages. down exceeded primarily lower regions Adjusted and of planned have lower New power due X% lower robust resulted costs activities were flat. X% most a more Slide contribution XX% contribution contributed lower of in pass-through, America affiliate and The volume contributing and ROCE quarter Asia energy margin cash, offset margins. demand The higher about due last pricing improved margin would review year, XXX with for Sequentially, margins. EBITDA hydrogen was XX%. by to to to from on-site Compared EBITDA primarily

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

was earnings share included GAAP quarter for per actions. $X.XX a $X.XX, productivity which second Our charge

due earnings pricing help unfavorable, from our driven and we Currency $X.XX pricing offset the $X.XX, and $X.XX Chinese $X.XX equity in in billion partially favorable Middle was contributions issued in variable higher compared affiliates to growth RMB. fund primarily X% quarter $X.X Equity lower income. Overall, of offset affiliate debt This actions commitment lower demand share additional merchant this by income Europe February East, maintenance was partially due lower by a income by by projects. $X.XX power bonds support contributed rate higher successfully the up for Air was driven and green and to America. We of negative to and together to company. adjusted the positive costs interest to net $X.XX. items, expense their statement, to commitment our demonstrating had cost Our to impact team's $X.XX, unfavorable nonoperating both favorable, while echo the of contributed $X.XX costs. outages. I The tax affiliate a growth and favorable volume like to Products would team noncontrolling costs, appreciation volume weaker expense Seifi's my remaining planned down entire interests, impact. To including $X.XX our managing Other to per costs, year, were was or Price, on mainly to strategy. last continue express

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

Samir Serhan

positive and strong results. XX a a for hydrogen to grew EBITDA more to lower volume. the X% pass-through. half Volumes X% the Compared XX% than the price to volume as affiliates' improvement Sequentially, together price, Of price basis were Merchant price Slide offset X% corresponded X%. EBITDA to mainly volume merchant review pricing was improvement which was was turn due segment up higher, Please X,XXX weaker demand EBITDA our equity margin, underlying roughly Americas Melissa. higher, X% region. for overall higher energy higher affiliate by of sales last and point year, income. and income. equity with up you, a attributable to for cost Thank driven was to

lower results. merchant volumes as to Now price last for on-site to our XX roughly stable. while please were of by offset a new were demand for turn segment Compared including Asia products year, volumes, flat assets higher Slide remained review

mentioned, see Seifi As in China. conditions continue to challenging we economic

market. potential to due the and X% margin the the driven were EBITDA beginning EBITDA by are see Year lower electronics -- up to RMB. were we business primarily Lunar Chinese primarily weaker unfavorable, to However, slowdown. X% some were attributable Currencies unfavorable, was improvement mix. New in volume Sequentially,

Sales due energy was declined Merchant from stable, last EBITDA Weaker a XX% half maintenance was equity planned energy points. the of volume outage half volume, our lower was results partially offset and demand and volume of Approximately lower to margin. contributing lower project. cost, shortfall for it as flat combined about planned was cost cost lower pass-through. results. over and to merchant affiliate more and as pass-through as improved our stable EBITDA pricing maintenance XX up and Slide margin higher equity income. the margin contribution offset However, by contribution favorable each a declining drove X% with and affiliate than cost Uzbekistan the to contribution compared lower result lower income. Please were segment Europe review with XXX year lower cost of cost improved of for equity impact this EBITDA margin turn total. Sequentially, affiliate the power of and basis compensated improved impacts drove contribution income.

segment primarily functions other results. as lower Corporate our activities. review joint a Despite includes Middle costs. of the centrally down East our sales to affiliate lower volume, and improved turn as Slide to from corporate operating sale due Sales income India costs. and Slide please interest our for and results. of Equity now Other equipment compared lower due to to managed operating to venture costs. Please Now was last due were well and non-LNG This segment turn higher for businesses income XX our equipment sale to lower of year XX Jazan segment

cost resulted in a lower and from However, LNG EBITDA. stable contribution

expect to related our LNG-related results business are of equipment we to activities forward. moving and LNG segment the the improve projects technology this and Our robust,

We're would thanks call our the results. the I to I Before our Seifi, to like back improve to to turn around teams say also world. continuing

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

Seifollah Ghasemi

Thank Serhan. you, Dr.

Air turn business Now to Slide Products position from of #XX, to financial strength. a please operate a great and model has continues

agile. to productivity and who can the continue earn Products' service and people motivating contributing are the deliver dedicated continue the On Air bottom success to growth of who that our the that action as our continuously improves execute this remain challenging reduces safety and a macroeconomic our committed daily costs flexible employees must simplifies changing bold so and we geopolitical taking in performance, appreciate to and grow and people leadership people. together basis, strategy. We to developing we our all environment, to our the pursue our we While work in are organization and line strategy right our

always say, be delivering working questions. for team I answer obviously strategy. At is the as competitive As advantage to we focus this motivation on company. long-term in we will we degree and your near-term am honored of of every I delighted commitment people growth this point, the be are our real our to questions. Operator, executing the while results day ready alongside

Operator

Instructions] McNulty to We'll go Capital first John Markets. BMO [Operator with

John McNulty

cadence some drives you and that for year? So fourth what help can just about one of really Corporate or as is a the you're think the below for, on think makes looking XQ the line through off, the ramp you ramp, steep were of bit guess, can to earnings of kind coming the the I quarter. us progresses to I guess, in which think help for little maybe it what it's about first I a cadence pretty the we solidly, whether us the the year. Obviously, came in XQ, how Street thinking the about projects

Seifollah Ghasemi

would John, way. it in like excellent question. I to following the answer

little lower guidance is First States about have would quarter, a for to our a maintenance do on our quarter have And major that given guidance the have that people is is of lower in -- quarter. all, costs turnarounds expect. for the than than why United the do. that the bit what we some we the what and for The there we Europe that we driving because is question guidance liked to a have our and plants in is

quarter. that third So is for the -- the

we last we plants smaller to stake will hardly the -- committed the them a in that of because the number ], we and about expect [ in fourth significant contribute. year, onstream although brought it in first number to as XX We've like far As have of to the looks of in expect clients onstream. a coming are bring half, quarter, --

in fourth better that quarter. taken have result should productivity numbers we Secondly, for significantly the actions

know, about fourth LNG we ramp every And performance quarter. strong thing our is lot up the very strongest you business as seeing are the by business is our in is just In seasonal, a addition, quarter a that fourth of will and quarter. the and year fourth that our

So those are that hope answers your reasons, question. fundamental I the John,

John McNulty

Yes, then should your Yes. -- if there's us there. and and helps there the guess, of or things some last help I No, the actually And to some to amount. to about that reduction you I that. you thinking think cost definitely taking of gave we actions it's And that can side. margin about you're second that, guess to that's maybe specific any prepared the hugely bridge starting how just be as reasonable you and the in you follow-up alluded answer, division or is intimated -- on help actions it helpful. help remarks my that some maybe a in question, in were to had

Seifollah Ghasemi

We costs. look And the mean efficient are more a that across more -- you many number the have as with way, we the or try to board. that of action company trying simplified and means more things we that you don't It productivity do with people. less that to by at just is in we have normal same which people the That with for means is productivity. less do

are those actions taken. So specific we have the

Operator

next Jeff go We'll with to JPMorgan. Zekauskas

Jeffrey Zekauskas

you'll of million In the ammonia. bring Louisiana project, X.X on tons

that by only is consultants think tons of the Some market X ammonia million XXXX. Japanese

comes plant XXXX, come And in ammonia? there demand is procuring where from? begun have to million blue it X.X volume. your tons Your memorandum of understanding When on of and competitors for might have

Seifollah Ghasemi

the case. of that we question that that at turned take be produce first good will into very of Jeff, is plant, we of not that you're ammonia, That number as all, that hydrogen usual. of tons X.X that blue the Jeff, the will all the assumes million we ammonia. all saying, deep produce hydrogen necessarily

hydrogen, that we way blue the used the amount they we goes of a the have significant blue Gulf is United pipeline real hydrogen, demand to across expect because therefore, blue for huge know, we And will of a we need significant produce hydrogen. serve customers fake our you be Coast hydrogen As all States. not pipeline that. would hydrogen as through of There the for that that the be in have

hydrogen breakdown yet. So ammonia is of finalized the the and not

make million X.X installing are We to tons of capacity ammonia.

will So depending the maximum be what of amount hydrogen. might make is than the that But making. we that less ammonia we on that with we do

even all the don't ammonia, use a product, But is who There a that of who you have then have going have the announcing okay, X.X is intent used? million, are selling where and So to that. question be you people understand are that is of it -- people whatever making make, letters XX% is, I real it. -- for that it blue of blue at ammonia, to we people COX making don't taken. real

We project real. our have a place to is sequester that. Therefore,

tax if therefore, are for is of the project an demand signs is matter from, familiar another we months, the that But timing ships. said think no for Japan be going actually go, believe ship some ammonia of in XXXX, where is to fuel starting a we And emissions they plant the pay as to you're in having is significant imaginary going product. Where their like starts carbon And power gets that released that a a in I commissioned they there to since just be that Korea. and thing real, have to have that them I'd that goes ammonia there will that of in for believe are fuel, ammonia interest this X on in being fuel is fully strongly people this and that terms direct that in of XXXX. We port it to ordered here. check to a we Europe, Louisiana will the that, and water of ships. said port and significant that can every always it as origin. demand for sure it generate plants is developed, not Europe, on amounts decarbonization January I'm in have a onstream in a left mainly going other be they not to will go our will that We it significant ships already use stress, fake of or have you XXXX. And as

Okay, Jeff?

Jeffrey Zekauskas

that's for Okay. was there follow-up, talk in costs the equity the in onetime was that? And of European event. And in down script, And if Mid-East. up volume and it's if change. interest And it a if you Mid-East. was income on to that in in Europe on X% X%. what seems in previous was comment you my in touch the or the the what a difficult think the that's higher the and affiliates' -- event then quarter caused the weakness can I sustainable know And some Could quarter, maybe surprising in quarter, maybe

Seifollah Ghasemi

will answer the have -- the like question and I Melissa Serhan second Melissa excited, to But Dr. first I'd got the answer question. voice, I I lost to try Melissa? Jeff. Okay. to my answer

Melissa Schaeffer

Yes. Seifi. Thank you,

of of affiliate interest previous we the item for quarter. is you're in in venture. is really So a higher Jazan did bit joint decline little equity income and from a onetime seeing expense a timing, Jeff, what our year a but This bit this some see

issue. and an timing, primarily a onetime not issue it's underlying business again, So prior year

Samir Serhan

amount on on some delivering I mean, on continue lower outage because to be seasonality SMR it mean, in for will second planned is really comes project Europe, in units an the Jazan quarter there is Rotterdam had depending $X.XX I the again, annual for and to basis. this in share, area. and per And we expect the outage air and maintenance. When we of earnings just following volume up to deliver maintenance a significant cost, the volume our separation the operating Jazan, the

that the and the area. liquids. The So volume volumes weaker we really Uzbekistan this continue especially what before, definitely also and in to the merchant highlighted in general, helped that down up, project drove ramp

So...

Operator

sorry. Morgan Bank next Vincent Byrne to with America. of We'll We'll I'm to next Steve with Stanley. go Andrews go

Steve Byrne

in that that the on the about curious Asia. provide the was Just unfavorable to of is in, coming product in outlook business Was going source And your mix in can how in you an Are helium? business adjusting you Russian next that update primarily quarters? Asia? couple

Seifollah Ghasemi

Thank you question. the for

-- adjusting word. are We I that's very good think a

We to -- the conditions stabilized, stable adjusting that are expect business situation China. condition year. and the balance situation a helium on that for in the we of has And

Steve Byrne

And a late sometime you volume hydrogen say XXXX? provide you up there expecting up to that the any curious, start you now committed? Can Are would And been still that? project. Alberta just much about has project update question of on in how that the plant of blue

Seifollah Ghasemi

part The like would part answer that's to second about that I your yes. the is -- it. to of is your of question And all just say, first

Steve Byrne

contracts have Seifi? that, on you And

Seifollah Ghasemi

be We all ] [ okay? believe sold that have Thank we'll up. you. We do it,

Operator

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

David Begleiter

NEOM, for signed you any the from that project? portion on of agreements have Seifi, production offtake any

Seifollah Ghasemi

announce that are signed project in that not yet. have any we no, we David, for position a contracts to

David Begleiter

Understood. for same And portion contracted that Louisiana. for? contract the been any Has of question

Seifollah Ghasemi

been is not design. That That by have Not is thing. specific we accident. about by very this yet. And

projects of X We can until are price we the the to we get that that any for X we not these stage going contract expect. to get sign either

green going which vanilla, and deserve unit. the risk first separation building than area this returns We plain air of more blue, an the and in of have we are taken therefore, and mover being a

right we So going until price. we to are the can extract wait

Operator

to Fischer Sachs. next go Goldman We'll with Duffy

Patrick Fischer

of the impact on your Europe excluding between First us Europe. and know what business? question, take Could that weak the merchant just turnarounds out volumes split you And just then and let number what Uzbek that? the in did was

Seifollah Ghasemi

it a and question disclose. Duffy, what he over see detailed you Dr. turn competitively. to to that know that's very to But right. I'll very All wants Serhan sensitive

Samir Serhan

details. Seifi. mentioned, to would I not emphasize what you would like I mean... into really those We Yes. get

Seifollah Ghasemi

Absolutely. Thank you. right That's the answer.

Sorry, Duffy.

question... Another

Samir Serhan

the around really before is of year highlighted we've per But that to expected Uzbekistan project produce $X.XX earnings.

Patrick Fischer

charges Okay. And called and asset to are call as are business what non-GAAP, out $X.XX and Can number? those bigger there's few that then between the out actions. detail a of items of difference you exactly that GAAP the and

Seifollah Ghasemi

you do answer that? to Melissa, want

Melissa Schaeffer

will. sure Seifi, Sure,

for the So thanks question.

asset we So in productivity action have focus cost item. we and to that reflected continue mentioned, actions taken our and are as that discrete on line business

is of that $XX for these, that vast year rate the severance savings we're million. full the just awareness, about in For majority run your is recognizing $X.XX. costs that And of that

Operator

We'll Barclays. go next to Michael Leithead with

Michael Leithead

Great.

for question First Seifi.

winning auction. the Commission I bids hydrogen green subsidy announced the think European for first this their morning,

does expected with bidding outcome I of were kilo expected? is think that most bids? have $X.XX Would activity at you roughly you of the just I the under winning Or subsidy bids all? -- higher have consistent that surprise per hydrogen. would guess, you

Seifollah Ghasemi

you about is I have XX-kilowatt costs. even your to make To hydrogen, excluding a unit need XX no hydrogen. power make and at It capital to cost you power, of that's $X.XX, the terms for excluding your $X.XX. costs to -- of you're idea running in at of and kilogram hours $X talking least -- the make have have you hydrogen, about what impossible hydrogen, must $X.XX

familiar you referring are not that number. know I'm So with what to. don't I

Michael Leithead

per Bank different the what European kilogram in the Apologies. bid I kind prices of to referring was awarded were Union's morning, auction of projects that results referring But under to this they European $X.XX to were X subsidy. of Hydrogen terms awarded again...

Seifollah Ghasemi

sorry. I'm I'm sorry,

hydrogen. understood are buying for that your question. giving Yes. I price, -- are that they use at hydrogen sorry, that. people about are subsidies They They to those are Now not

kilogram. a $X.XX giving are countries Some

$X subsidies terms were and welcomed subsidies hydrogen in encourages giving on as My No, yes. those the and which of It it's kilogram. depends $X.XX. buying it high give, beginning, the no, that. at But they apologies that country, tranche they on because depends are Some of that use. at whatever thought countries a -- are as all I

Michael Leithead

again, this No worries. it out morning. came Then

it's quick... know a I So

Seifollah Ghasemi

Yes.

Michael Leithead

just But the And question about the remind EPS receiving remind just you from Melissa. to Jazan, impact? cash think you how per with us, Can venture maybe related to for are you talked about your the joint portion, earnings share? impact. should second the commensurate you've can cash again, EPS the cash then us relative Or we on

Seifollah Ghasemi

to that? go and you ahead answer want Melissa,

Melissa Schaeffer

I sure will, Seifi. Yes,

we yes, regular the dividends in with do So get commensurate from venture earnings. joint the

in getting flow see will bit yes, when statements, do timing occur. the our are those as expected. absolutely, Sometimes cash a dividends we you of little But of distributions

Operator

We'll go next to Marc Bianchi with TD Cowen.

Marc Bianchi

On the we earlier cannibalize discussion network. Investors about into pipeline how that of around gray Louisiana, the you market should asked there'll dynamic? volumes. that your for Seifi, think be you have mentioned about Can a if that some talk blue hydrogen your could hydrogen existing

Seifollah Ghasemi

eventually be years will I mean, using hydrogen. XX think from using that blue will I eventually, be don't now, everybody it Well, gray think, because hydrogen. will anybody I cannibalize

system but more are is is, any quarter -- volumes, as And our we that thing volumes out. had could So sold the if saw we pipeline even we on it. hydrogen totally this to you expect today, we sell grow. The

in are long expect mean, now, pipeline. in running. only we be blue we to years is there will So the significant what SMRs And XX have will in not hydrogen. to I addition any from the growth going make term, that we

Marc Bianchi

and outlook. by being prepared how It us the back understand your I on Okay. better. maybe could you a And are comment like Dr. that. electronics about held that looking bit a Serhan help your expand remarks earnings little market sounded was maybe in much made hoping

what recovers of we uplift sort market electronics EPS the once So expect? in should

Seifollah Ghasemi

to that? want comment you Serhan, Dr. on

Samir Serhan

counting for see Yes. picking of We half businesses the on of upside we're not of really, year. the electronic second do any signs our up, that outlook the but in

Asia, But our regard. argon, their helium. I nitrogen, in do across conservative being we're helium, up are major customers, especially with volumes picking So in we mean, this -- especially

Operator

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

Vincent Andrews

I I call before. And the fell off apologize.

asked, the move wanted So if Seifi, quarter. second you you, in did ask to please on. I better been this has

power, on of that was You lower It coming of were X the months seems nat high gas little bit that guidance. you costs a a function maybe above to than in maybe and the side, maybe end what your ago. me thought

could have is Just you we've two, a given the many despite go-forward whether seen expected one, or deflationary just be up. those back was the go costs environment. But can than happen So because down, case? And that not. cause obviously, thinking come to on about more indeed things price that those you how then basis? are that nicely costs sticky it And

go do reflation. be So you be a to if reprice there if think let's bit they for could a do we do some assume should we say, the you'll that back back next, up, see able Or months of XX just over give it? little

Seifollah Ghasemi

in in we Vincent, the thing were expected was is volumes -- comment obviously seeing that for are the second not and U.S. taken because what we we your which out better is Europe. about expected. us U.S. than quarter, our quarter better we coming have and Europe very strong

the taking actions. addition are that that was is news. The good cost So we

in that index it of now, sure price that consumer years. think is, attention XX% terms is I'm is X everybody inflation with I paying last the In right way the pricing, the up

to So to higher the merchant pricing ask go year. quarter giving ability customers and you for U.S., the and of as the are serious inflation, having that up saw And versus prices. the us was is our X% we quarter in in last

very the obviously -- you executing are -- things: us the we as we Vincent, XX remarks, prepared that said and our results in on two always years, our we have cost, affects to know focus environment. always in have last pricing. is So the Those my reacted projects. But well, things short-term I've our

agile. to that's the said I is in adapt. be the very As when about. We my can And organization what prepared remarks, these Air needs are times Products

mean, but died. They they big, they extinct. were very not big, and were not say, as adapt. are are dinosaurs We we agile can very the they but I

going we survive ones So what. the are hopefully, for matter term, no to are who the agile long

Operator

next Kevin go Research Vertical We'll McCarthy Partners. to with

Kevin McCarthy

or the changed so congratulations the that that forward. trading growth results Seifi, one the over the months for you last moving to is and multiple goal Unfortunately, nice XX% over outlined it's EBITDA. XX see last of thing earnings has Products' Air decade,

business for in consider, when And so value hydrogen Products through then that something establishing company's an around weighing IPO a its from if I'm the and/or project multiple, that on various for not hydrogen a move would anxiety XXXX perhaps interested investor in the flows to may be market closer today, we and example? that issue spin-off, projects the 'XX might Air you to startups? be extent wondering, sustaining or cash Is the

Seifollah Ghasemi

deliver are This about time. reality doing that and business, producers own our of the business XX-year, now And don't and in and can I our all to executing And the X is to Kevin, the has is to goal we that at per is produces to our time short-term is the time only the at that, billion blue investors and, trying not be because investor one all contracts Air EBITDA kind and have $XX anxiety try returns of once for expectations time, underway. that think we financial our of We same of increase XX-year have of continue hydrogen involved hydrogen what we and those any year the right the Products XX% things. results green and disappeared and not when signed people. once kind doing. management should a projects significantly the talk that becomes of engineering to this would do distracting projects. that meet that big

price put people. what green all assumption is the to hydrogen. business, value the on trying and blue of the it now, right hydrogen price talk any to And you on of on depends hydrogen So

concerned around competitors hydrogen these people our obviously, have "Well, green people there and same is blue say saying, for I you And things in some Some the will that? say worth and demand distraction like no other a how $XX, people, thing. is hydrogen because would of the the it running $X, we especially value it's would any team. that anyway." So management effort business with be very that direction about cause the

by this. for time a memo say, that time So there way on financial Products. doing obviously as the And that. thoughtful on This engineering everything. of they read for your is Air kind the I did Appreciate not is

Kevin McCarthy

hence may. But the will my and long-term the to greater into on be I plan alleviated, timing, with though the understand as counterparties if the It sounds future multiple to game contracts reference is regarding saying. clarity and what perhaps feedback the you're terms, appreciate I multi-decade perhaps to follow-up And on enter as I pressure on logic, years.

And forth or that guess of have these would follow-up so timeline period Is a and XX months your time? it disclosure or agreements the veil what in starting sort process? put How is be, I mind to that the about you the Street? would some months lift to X you think other of

Seifollah Ghasemi

the on this Kevin, something fluid would I so can situation. -- that run time. It any Well, a It as go be our to is announce up stock and is depends very criteria not said, $XX.

then we'll this demand, for The now." being the months the Our is demand. secure real is that not into but the that point Air onstream value at that. XX now. criteria. And -- and it is only forward real no we If going there this is "Gee, the need now, say, there from to desperately Products until paying it from business regulation. buy That next we is from can tell that who XXXX, of and somebody to because is We'll criteria how taxes deserve I'm the years? demand. demand. The these somebody is confidently I before tomorrow contract months extract These want months steps projects sign made. me, do our else not XXXX, for is XX in a now there and And is I XX do are start if There is investors, to products issue it, have in not XXXX want stuff to what Do I X believe clients coming does and part in do XXXX. it I company only going

from a the you being We a the the a being of than hasn't Therefore, in real is market having this X I now and to hydrogen the green of on project about the, of better a company is, can have going where wind product, we taken losing But around when changed. we of panic that trying years are multiple has the value have and projects Arabia running it? fact EPS. it because picture get people else need built. to risk installed. Nobody they Saudi that. show deserve the risk, the lot value Therefore, as these we XXx taken instead our return you said, EPS, our XXx turbines

base else. anybody is the business business Our most profitable the than with highest margin

And There people regulations a demand. these worried Japan, is Korea. at that Europe, a are So trading are trading take big regulations take Please now XXx, should projects. -- that, if demand. look about regulations in be anybody's is at in the ours at There is business California, coming too. at

neck job on great the a create obviously shareholders, take pressure, I my heat is is think it out basis. and long-term willing not try my a absolutely I So to for panic of value deal to stick am because to short-term but

the to long your answer Sorry question. for

Operator

to next with Patrick Citi. go We'll Cunningham

Patrick Cunningham

Europe of Americas and and margin You turnarounds you volume cited dragging major the turnarounds what give there? XQ. Can are sense on potentially us those and in a impact

Seifollah Ghasemi

want you take to Serhan, that? Dr.

Samir Serhan

the repeat mind... you please again, you Can if question don't

Patrick Cunningham

Yes, on Americas in and Europe. the major turnarounds

Samir Serhan

You're significant like talking turnarounds I why a quarter? for finishing major turnaround these for basically we Europe, major in the And in significant. also our to third hydrogen And our mainly costs that's plants... to maintenance quarter. is basically that's third they're going the contribute maintenance in mean, the And pretty for increase also are really about the quarter expense Americas X have Yes. third quarter. in the

Patrick Cunningham

Texas and when Got North it. have permitting And project? do do there? an And you update engineering anticipate you for on preliminary the FID then

Seifollah Ghasemi

I'd to take that. like

controversy for you North of But There impact. Texas not thing, rules finalized engineering know, are a project. on amount commitment And commit until of We about we FID by project way the significant been and are we finalized to the done as will July. stated, not the of significant FID. they are is how was is implementation with make expect finalized. the But have are wait. the yet us. IRA amount that But a be they going have on that significant we And rules on a there interpreted. Currently, would we to those final fine be June, rules if should those to

is on one of of make going We books green what project the can count not on the tax basis are the on definition credit. that hydrogen is rules to those until which on final FID and

Operator

We'll go with Parkinson Research. next to Chris Wolfe

Christopher Parkinson

quickly global for operating on just happening kind merchant are take the you with what's hearing in Can what of terms those the seeing? a a us takes you're varying of and rates think Great. I economy. trip the around Street few on the world

to love we'd hear So yours.

Seifollah Ghasemi

very you If Thank Right I first in just Chris. weak for terms, general may been much, is the half. has stock. -- in China us there now,

the stock evidence economy seen yet. is actions there in will that haven't any taken that half. and China's But We indicate might second some improve

America Chris. not I bit And as that, to Latin to we material see little a European is on few in to doing you waiting than is that -- any looking Europe, economy Europe better are the were to business. our what the compared no included have We improvement it I not we growing is Actually, expected, than economy as we said hope then change covers our in and better that quarters. forecast. When for, last gets is the U.S. And before. expected.

Christopher Parkinson

you've characterize in or how follow-up, in versus that potential sure puts X, next mixed your that your whether just being during they've partner over should own? very industry Exxon affects been on -- or commentary X Or of just of do it years, terms a lot I'm terms a And potential and appearances, of or in been had, think of the projects? competitors public Total, Sure. a these let's initiatives X, you lot rhetoric of day present given offtakers it's on Aramco seen, positioning interpret all takes, the your but just of their choice the and your peers, a many various as quick saying a you've comments we Shell

Seifollah Ghasemi

that areas those potential X have be people the to talking NDA, we don't to we to shipping, hydrogen users all of eventually we and ammonia sectors very And offtakers are for refineries, are for anything talking to Chris, for will hydrogen Those green in will sectors. the X product. to the ships the under green in that We And announce But or any that anybody, details. for going give using are obviously are those fuel we we products cannot announce. are anything mobility. green Europe are the therefore, if requirements as are we hydrogen. using make, stringent the the meet -- steelmaking,

pipeline using is to I way as be the it blue Gulf as significant blue blue decarbonizing refineries that hydrogen developments, coal the -- a are and mentioned the also in use the as of chemical are to. will for power before, see, talking think I will fuel be decarbonize blue operations the a I And still Coast. sectors used ships. be On hydrogen Blue Those a our used for fuel along we using plants. as -- hydrogen to can hydrogen side, replacement hydrogen

Operator

We'll to go Spector next with UBS. Josh

Joshua Spector

of follow-ups. Just a couple quick

maintenance -- for and up since as mean, Just the in half? it, item the called on think out size side that bridging you there's heavier impact that EPS And turnaround a year follow characterize we're second on to you of XQ would you able are turnarounds as you a to maybe going but today. time are versus the this as normal? year talking maintenance much them typically obviously, we about not as all I

Seifollah Ghasemi

Serhan, do to that? want take you

Samir Serhan

our comes our high Canada. we our maintaining really Yes. -- the -- portfolio do turnaround. a you in This you at Sure, major a with to really definitely, around record Coast, is when years in X U.S. in Gulf mentioning especially assets year, need specific have Seifi. to maintain have number, amount more a basically units of it more I it years, without our every assets hydrogen hydrogen our mean, for expense which our plant these to X getting Basically, California, and is again, U.S. of like a significant facilities.

also So in we our Europe. for -- our in X-year major Rotterdam coincided facilities year, and this have -- also turnaround we

So...

Joshua Spector

Or pricing and Okay. it lowering I is All Has you call Where But you just I on stabilized regaining any Has then have with sorry. volume, last ask stabilized. about were volumes? right. -- talking specifically, regained margins helium And played earlier or you think if that? it the from regaining Asia could that that out? lower? commented

Seifollah Ghasemi

to We order have the stabilize lowered prices situation. in

Operator

Jefferies. Laurence We'll go next with to Alexander

Laurence Alexander

quick ones. very two Just

pricing -- secondly, North you're where America, And in gray how across merchant is pricing? on invested end is currently? board? Just hydrogen Or pricing any market in you then mix do this have the in seeing X% quirkiness the the capital much there

Seifollah Ghasemi

Serhan that the second first Dr. answer And sure to detail. I would in disclose to the want not like I'm question. we have question,

Samir Serhan

I mean, inflationary when we nitrogen, really mean, really I the It's it this It's merchant, across oxygen, comes the board board. pricing environment. discipline that have in there it's argon, to it's -- helium. the across really

time for -- to -- mean activities. continue highlight in I we volume Americas, on-site refining because to mentioned doing the that helping very well. going the and the that's it And we've want just again some So extended in I been on-site also I hydrogen -- this mean, has the for of see prepared before and comments the amount of really year.

Operator

next Sison go Fargo. to We'll Mike with Wells

Michael Sison

Nice quarter.

volume us have? lot what range you In growth a to terms know of the you to that the going X -- type X quarters. or any reasons why volume of a lot growth it's stronger of on the quarter, need than be do gave prior different you thoughts I need? hit you But fourth what

Seifollah Ghasemi

But not really -- new growth not we it will have most have -- on onstream. on volume yes, plants business. But coming the based volume of base growth, We sir.

Michael Sison

a offtake? Got -- you at price, the Is that certain follow-up to really -- look yes, you're us NEOM it. it But that standpoint? way just return from I us know a the just what can't and a premium then what tell on to for at or sign for want to And is but sorry. there your yes, quick looking Louisiana.

Seifollah Ghasemi

why as get. return? with disclose we return. that that, a Because satisfied but has, we be kind I, not -- a we obviously, a of specific want to can should have high And product nobody then any As if else do

have people to to are that We makes going that we a today. onstream is that Nobody are product need. going product come --

of maximum calculated that. are people is out that and to the you is cost is what that? the therefore, this The for somebody ground price what my is that all the need, we do So When have is go for Middle price extract East the capital, this paying return, taking you not in on that of gas the barrel. the pay the oil and for The the we $X station gas a price. We station. basis

saying, down should If gas. it calculate But the you on based sit a people and "I return, for $X.XX gallon there we are sitting it. paying be have

day." You need another be return. it. might it It's $XX products or price another we So based from be pricing today. another our might on are $XXX It not day basing the

We significant are to that blue that. have give diesel the significant a where it value to bring if what is premium basing you for make the you deep of now, that investor. Right they renewable somebody market it on get there can can can is out sell the for because hydrogen we in there California, we to market

it. So at look we how that's

Samir Serhan

And premium allow years major just Seifi, for already X we to contracts a product. I with if highlight, on-site XX-plus wanted blue you today, blue me, for have the hydrogen

Seifollah Ghasemi

the Then Then don't Products. is [ to CEO going what we "This of a sit investors, get is just if can Obviously, $XX the matter was the Air of and is this to on is need it marketplace, that some haven't to our you million know we return And anybody a do yet. saying, return XX% in of Right. is down. that. But maximum my our to goal and somebody ]." pay be not investment this and disclosed price for

Operator

We'll Mizuho. with Roberts to next John go

John Ezekiel Roberts

years running? average from without SMRs? any Air left running capture? have Products did useful Or talk Seifi, mean the -- say Did the on carbon SMRs life not not about can you now, will XX you you

Seifollah Ghasemi

running up clarified we bringing I the is correct. carbon Yes. SMRs that glad have very you much mentioned should will have That you I'm appreciate not capture. point. any that. without I

John Ezekiel Roberts

I besides a Is immaterial guess, natural efficiency is also those the benefit that you less now? for headwind? worth cost of hydrogen, meaningful right get think to that efficiency low. On improvements. gas Or margin, are the when on a And the impact lot is gas lower key pass-through feedstock improvements, I

Seifollah Ghasemi

is Well, picking at I cubic on it natural wouldn't gas really I hit, feet, up a want meaningful, When a those is bonuses is it's you appreciate to and say significant. X,XXX right. $XX price That but are exactly that.

Now the bonus the become $X, smaller. natural a gas lot is has $X.X,

Operator

At like this to or our in additional over time, speakers queue. turn call remarks. there any are the no to questions back for I'd additional closing

Seifollah Ghasemi

discussing Air questions And appreciate I everyone would all very Please quarter. again everybody. safe you today. for with your Products, and our we in and to stay appreciate you interest healthy, again call and thank next like joining results really forward to We much. Well, today, look very you our We good the thank for that. thank your best.

Operator

conclude will call. appreciate your today's That Thank participation. We you.

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