Air products Chemicals Q3 2024 $APD (+1,13%)
Financial results
- Sales: Sales for the financial year 2024 amounted to USD 12.1 billion, a decrease of 4% compared to the previous year. This was mainly due to a 5% lower pass-through of energy costs, partially offset by a 1% price increase.
- Net income: GAAP net income increased 65% to $3.9 billion in FY2024, primarily due to an after-tax gain of $1.2 billion from the sale of the LNG business.
- Adjusted EBITDA: Adjusted EBITDA for the 2024 financial year amounted to USD 5.0 billion, an increase of 7% compared to the previous year. This increase was supported by positive price developments, a favorable business mix and improved productivity.
Balance sheet overview
- Total assets: As of September 30, 2024, total assets were $39.6 billion, an increase from $32.0 billion in the prior year.
- Total liabilities: Total liabilities amounted to USD 20.9 billion, an increase from USD 16.3 billion in the previous year.
- Shareholders' equity: Equity increased to $18.7 billion, up from $15.7 billion in the prior year.
Details of the income statement
- GAAP EPS: GAAP EPS from continuing operations for FY2024 was $17.24, an increase of 67% compared to the prior year.
- Adjusted EPS: Adjusted EPS for the 2024 financial year amounted to USD 12.43, an increase of 8% compared to the previous year.
Cash flow overview
- Operating cash flow: Cash flow from operating activities amounted to USD 3.6 billion, compared to USD 3.2 billion in the previous year.
- Investing activities: USD 4.9 billion was spent on investing activities, mainly for plant and equipment purchases.
- Financing activities: Financing activities generated USD 2.6 billion, mainly from cash inflows from long-term debt.
Key figures and profitability metrics
- Adjusted EBITDA margin: This improved to 41.7% for the 2024 financial year, an increase of 440 basis points compared to the previous year.
- Operating margin: The operating margin increased to 31.9%, an increase of 1,330 basis points, mainly due to the sale of the LNG business.
Segment information
- Americas: Sales amounted to USD 1.3 billion, a decrease of 3% compared to the previous year, with an operating margin of 34.2%.
- Asia: Sales increased by 7% to USD 861 million, with an operating margin of 28.4%.
- Europe: Sales increased by 3% to USD 731 million, with an operating margin of 28.3%.
Competitive position
Air Products is a leading global supplier of hydrogen and industrial gases, with a strong focus on clean hydrogen projects.
Forecasts and management comments
- Forecast for the financial year 2025: Adjusted EPS is forecast to be between $12.70 and $13.00; capital expenditures are expected to be between $4.5 billion and $5.0 billion.
Risks and opportunities
- Opportunities: Strong cash flow supports capital allocation and returns to shareholders; strategic divestment of LNG business fits with company's core focus.
- Risks: Potential impact of global economic conditions, inflation and supply chain disruptions.
Summary of results
Positives:
- Significant increase in GAAP net income and EPS due to the sale of the LNG business.
- Improved adjusted EBITDA and margins indicating strong operating performance.
- Successful strategic divestment of the LNG business in line with the company's core focus.
- Strong cash flow supports capital allocation and returns to shareholders.
- Positive price developments and favorable business mix contributed to financial growth.
Negative aspects:
- Decline in overall sales due to lower pass through of energy costs.
- Decline in sales in the Americas due to lower pass-through of energy costs and currency factors.
- Higher costs in the Middle East and India impacted EBITDA.
- Increased liabilities, especially long-term debt.
- Cash flow from investing activities exceeded cash flow from operating activities.