Technology Watch — Semiconductor Support — Air Products — Q4 2018 Earnings Conference Call

Air Products and Chemicals, Inc. (APD) Q4 FY2018 Earnings Conference Call November 6, 2018, at 10:00 a.m. Eastern Time Company Participants Simon R. Moore – Air Products and Chemicals, Inc. Seifollah Ghasemi – Air Products and Chemicals, Inc. Michael Scott Crocco – Air Products and Chemicals, Inc. Seifollah Ghasemi: This quarter and this year, our talented, dedicated, and proactive team once again delivered outstanding and safe financial results. Our full-year adjusted earnings per share (EPS) amounted to $7.45, representing an 18% increase year-over-year. This marks the highest annual EPS in the company’s history and our fourth consecutive year of double-digit growth. We recorded quarterly adjusted EPS of $2.00—up $0.14 versus the prior-year quarter. This represents our 18th consecutive quarter of net EPS growth. We remain the world’s safest and most profitable industrial gas company, with an EBITDA margin of approximately 35%. We also possess the strongest financial position in the industry—enabling us to continue investing heavily to expand Air Products into the future. This year, our distributable cash flow per share exceeded $10, and we returned approximately 40%—nearly $900 million—to shareholders via dividends. Our team successfully completed major projects in India, Saudi Arabia, China, and the United States, further demonstrating its capability to execute the largest and most complex projects in industry history. Most importantly, the company is supported by a talented, dedicated team focused daily on serving customers and creating value for shareholders. We continue to improve safety: our lost-time incident rate declined by 75%, and our recordable injury rate dropped by 50%. Achieving such results is only possible when all 15,000 of our global employees are committed to safety and continuous improvement. Our goal is to make Air Products the world’s safest, most diversified, and most profitable industrial gas company—delivering superior service to our customers. We remain focused on shareholder value creation, capital allocation, and a decentralized, empowered organizational structure. We have updated the five-point plan announced last quarter. We continue to prioritize maintaining our leadership in safety and operational performance. Within our core industrial gases business—particularly in on-site operations—we see significant opportunities to deploy capital toward asset-based projects. In fiscal year 2018, we invested approximately $1.5 billion in growth initiatives—including mergers and acquisitions. Additionally, we have over $6 billion available for already-committed future investment opportunities. We are committed to managing our debt balance to maintain our current Aa2 credit rating. At this rating level, we estimate nearly $14 billion remains available for investment—including our current debt profile and projected free cash flow over the next four years. Thus, within the next five-year period beginning in FY2018 and extending through FY2022, we have already spent or committed roughly half of the $15 billion total.

Another $1 Billion! Air Products Again Targeted by Activist Investors

Activist investors share a common objective: pressuring Air Products to establish a clear succession plan for its 80-year-old CEO, Seifi Ghasemi—one of the oldest CEOs among S&P 500 companies. Former Olin CEO Scott Sutton is widely viewed as a leading candidate to succeed him. Air Products has undergone significant management upheaval this year: Chief Operating Officer (COO) Samir Serhan abruptly resigned in July. Concurrently, Air Products announced the formation of a new Management Committee, led by CEO Seifi Ghasemi. Unlike D.E. Shaw—which currently seeks only three board seats—Mantle Ridge adopts a more aggressive stance, aiming to gain control of the entire board through a proxy contest. Moreover, D.E. Shaw, Mantle Ridge, and numerous analysts have criticized Air Products’ compensation agreement with CEO Ghasemi as excessively generous—and pointed out the absence of any formal succession planning for his eventual retirement. Major Projects Lack “Offtake Agreements,” Entailing Significant Risk D.E. Shaw has also targeted several of Air Products’ large-scale transactions. It notes that Air Products has launched multi-billion-dollar hydrogen projects lacking “offtake agreements.” To mitigate risk on existing large-scale projects, D.E. Shaw recommends securing such agreements—and capping annual capital expenditures beyond 2026 at $2–$2.5 billion. D.E. Shaw contends that this departure from standard commercial and industry practice has caused Air Products’ total shareholder return to significantly underperform peers—including Linde and Air Liquide—across multiple time horizons. Although competitors like Linde have achieved success with low-risk, offtake-agreement-backed projects, Air Products’ CEO Ghasemi continues to defend his strategic approach. The company currently pursues a “dual-pillar growth strategy”: optimizing and expanding its core industrial gases business while advancing the energy transition through clean hydrogen. Yet, in another letter dated September, D.E. Shaw asserted that Air Products’ clean hydrogen strategy has eroded approximately $15 billion in equity value from its core industrial gases business.

Segall Bryant & Hamill LLC Makes New $1.28 Million Investment in Air Products and Chemicals, Inc. ($APD)

Aug 6, 2026

Segall Bryant & Hamill LLC initiated a $1.28 million investment in Air Products and Chemicals, purchasing 4,607 shares in Q1. The company recently reported stronger-than-expected quarterly EPS of $3.47 alongside a 4.6% year-over-year revenue increase.

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