On this page of StockholderLetter.com we present the latest annual shareholder letter from Air Products & Chemicals, Inc. — ticker symbol APD. Reading current and past APD letters to shareholders can bring important insights into the investment thesis.

 •  12/3/2024 Letter Continued (Full PDF)
 •  12/8/2023 APD Stockholder Letter
 •  More "Specialty Chemicals" Category Stockholder Letters
 •  APD Benford's Law Stock Score = 100

APD Shareholder/Stockholder Letter Transcript:

2024
ANNUAL REPORT


Our Businesses
Air Products (NYSE:APD) is a world-leading industrial gases
company that has been in operation for over 80 years. The
Company focuses on serving energy, environmental, and
emerging markets, aiming to generate a cleaner future.
The Company supplies essential industrial gases, related equipment and applications expertise to customers in
dozens of industries, including refining, chemicals, metals, electronics, manufacturing, medical and food. As the
leading global supplier of hydrogen, Air Products also develops, engineers, builds, owns and operates some of the
world's largest clean hydrogen projects, supporting the transition to low- and zero-carbon energy in the industrial
and heavy-duty transportation sectors. Through its sale of equipment businesses, the Company also provides
turbomachinery, membrane systems and cryogenic containers globally.
Air Products reported    scal year 2024 results under    ve segments:



Americas;
Asia;
Europe;
Middle East and India; and
Corporate and other.
The regional industrial gases segments produce and sell atmospheric gases such as oxygen, nitrogen, and argon;
process gases such as hydrogen, helium, carbon dioxide, carbon monoxide, and syngas (a mixture of hydrogen and
carbon monoxide); and specialty gases. The on-site business serves large-volume customers with relatively constant
demand by constructing or acquiring a plant on or near the customer   s facility or delivering product from one of its
pipelines. The merchant business delivers liquid or gaseous bulk supply either by tanker or tube trailer and for smaller
customers, delivers packaged gases in either cylinders or dewars.
The Corporate and other segment includes sales of turbo machinery equipment and services, cryogenic and gas
processing equipment for air separation, and helium and hydrogen transport and storage containers. Additionally,
through the end of    scal year 2024, this segment included the lique   ed natural gas (   LNG   ) process technology and
equipment business that the Company sold to Honeywell International Inc. on 30 September 2024. The Corporate and
other segment also re   ects costs for corporate support functions and global management activities that bene   t all
segments, as well as other income and expenses not directly associated with the regional segments, such as foreign
exchange gains and losses.
I

Financial Highlights
APD Global Presence
FY24 Sales = $12.1 billion
Europe,
Middle East*,
India, Africa
43%
26%
16%
China
11%
U.S./Canada
4%
Asia
Latin
America
excluding
China
*Results of the Jazan Integrated Gasification and Power Company joint venture equity affiliate are not reported in sales.
Millions of U.S. Dollars, except for per share data
2024
2023
Change
FOR THE FISCAL YEAR ENDED 30 SEPTEMBER (from continuing operations, unless otherwise indicated)
GAAP
Sales
$12,101
$12,600
(4%)
Net income margin(A)(B)
31.9%
18.6%
1,330 bp
Operating margin(B)
36.9%
19.8%
1,710 bp
Return on capital employed (   ROCE   ) (GAAP Basis)(A)(B)
10.8%
7.9%
290 bp
(C)
Cash used for investing activities
$4,919
$5,916
(17%)
NON-GAAP
Adjusted EBITDA margin(D)
41.7%
37.3%
440 bp
Adjusted operating margin(D)
24.4%
21.7%
270 bp
12.0%
(70) bp
ROCE (Non-GAAP Basis)
(D)
Capital expenditures(D)
11.3%
$5,152
$5,224
(1%)
$17.24
$10.30
67%
$12.43
$11.51
8%
$7.06
$6.87
3%
PER SHARE
GAAP diluted earnings per share (   EPS   )(B)
Adjusted diluted EPS
(D)
Dividends declared per common share
(A)
(B)
(C)
(D)
Periods presented include impacts from discontinued operations.
Increase versus prior year driven by a gain of $1.6 billion ($1.2 billion after tax, or $5.38 per share) recognized upon the sale of the Company   s former LNG business
on 30 September 2024.
Cash used for investing activities in fiscal year 2024 includes a cash inflow of approximately $1.8 billion for the sale of the LNG business.
Amounts are non-GAAP financial measures. See pages III-VI for reconciliation to the comparable GAAP measures.
Air Products | 2024 Annual Report
II

Reconciliations of Non-GAAP Financial Measures
(Millions of U.S. Dollars unless otherwise indicated, except for per share data)
Adjusted EBITDA Margin
We define adjusted EBITDA as net income less income or loss from discontinued operations, net of tax, and excluding non-GAAP
adjustments, which we do not believe to be indicative of underlying business trends, before interest expense, other non-operating
income (expense), net, income tax provision, and depreciation and amortization expense. Adjusted EBITDA and adjusted EBITDA margin
provide useful metrics for management to assess operating performance. Margins are calculated independently for each period by
dividing each line item by consolidated sales for the respective period and may not sum to total margin due to rounding.
The tables below present consolidated sales and a reconciliation of net income on a GAAP basis to adjusted EBITDA and net income
margin on a GAAP basis to adjusted EBITDA margin:
2023
2024
Fiscal Year Ended 30 September
Sales
Net income and net income margin


Margin
Margin
$12,600.0
$12,100.6
3,862.4
31.9%
2,338.6
18.6%
Less: (Loss) Income from discontinued operations, net of tax
(13.9)
(0.1%)
7.4
0.1%
Add: Interest expense
218.8
1.8%
177.5
1.4%
Less: Other non-operating income (expense), net
(73.8)
(0.6%)
(39.0)
(0.3%)
944.9
7.8%
551.2
4.4%
Add: Depreciation and amortization
1,451.1
12.0%
1,358.3
10.8%
Less: Gain on sale of business
1,575.6
13.0%


Add: Income tax provision
Add: Business and asset actions
Adjusted EBITDA and adjusted EBITDA margin
57.0
0.5%
244.6
1.9%
$5,046.3
41.7%
$4,701.8
37.3%
Net income margin change
1,330 bp
Adjusted EBITDA margin change
440 bp
Adjusted Operating Margin
The table below reconciles operating margin on a GAAP basis to adjusted operating margin. Operating margin and adjusted operating
margin are calculated by dividing operating income and adjusted operating income, respectively, by consolidated sales for each period.
The adjusted measures exclude the impact of certain items that we do not believe are indicative of underlying business performance.
Fiscal Year Ended 30 September
Sales
Operating income
Operating margin
2024
2023
$12,100.6
$12,600.0
4,466.1
2,494.6
36.9%
19.8%
Change
1,710 bp
Reconciliation of GAAP to Non-GAAP:
Operating income
Gain on sale of business
Business and asset actions
Adjusted operating income
Adjusted operating margin
$4,466.1
(1,575.6)
$2,494.6

57.0
244.6
$2,947.5
$2,739.2
24.4%
21.7%
270 bp
III



 12/3/2024 Letter Continued (Full PDF)