01—Abstract
Summary
Summary of the 10-K filed November 18, 2021. Cited figures are marked; the original filing is the authoritative source.
Air Products & Chemicals, Inc. (APD) reported strong sales growth of 17% to $10.3 billiona for fiscal year 2021, driven by higher energy cost pass-throughs, increased volumes, favorable currency impacts, and positive pricing.
Despite a slight decrease in operating margin due to higher operating costs and energy cost pass-throughs, the company achieved a 10% increase in net income to $2.1 billionb, demonstrating resilient performance amidst global challenges. The company's strategic focus on serving energy, environment, and emerging markets, particularly in hydrogen and gasification projects aimed at supporting the energy transition, positions it for future growth.
Significant investments in new projects, including the Jazan gasification project, are underway. APD also continued its commitment to shareholder returns by increasing its quarterly dividend for the 39th consecutive year, reflecting confidence in its long-term financial health and growth prospects.
02—Key points
Key Highlights
- Sales increased by 17% to $10.3 billion in fiscal year 2021, driven by higher energy cost pass-throughs, volumes, currency, and pricing.
- Net income rose by 10% to $2.1 billion, demonstrating robust profitability.
- The company continues to invest in future growth, announcing several new gasification, carbon capture, and hydrogen projects aligned with the energy transition.
- APD increased its quarterly dividend by 12% to $1.50 per share, marking the 39th consecutive annual dividend increase.
- Operating income saw a modest increase of 2% to $2.3 billion, though operating margin decreased due to higher operating costs and energy cost pass-throughs.
- Adjusted EBITDA increased by 7% to $3.9 billion, reflecting operational performance.
- Capital expenditures were $2.55 billion, with a forward-looking guidance of $4.5-$5 billion for fiscal year 2022, indicating significant investment in growth opportunities, including the Jazan project.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2021, Air Products & Chemicals, Inc. kept $0.20.
- Revenue$10.32B100.0%
- Cost of revenue−$7.19B69.6%
- Gross profit$3.14B30.4%
- Operating costs−$855.5M8.3%
- Operating income$2.28B22.1%
- Interest, other & tax−$182.3M1.8%
- Net income$2.10B20.3%
Where FY2021 revenue went
$10.32B- Cost of revenue: $7.19B, 70% of revenue
- Net income: $2.10B, 20% of revenue
- R&D: $93.5M, 0.9% of revenue
- SG&A: $828.4M, 8.0% of revenue
- Interest, other & tax: $182.3M, 1.8% of revenue
Kept 20% as net incomeR&D $93.5M · 0.9%
Full revenue history →04—Financials
Financial Highlights
Figures from 10-KFY2021filed November 18, 2021Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $10.32B$8.86B | +16.6% |
| Cost of Revenue | $7.19B$5.86B | +22.7% |
| Gross Profit | $3.14B$3.00B | +4.6% |
| R&D Expenses | $93.50M$83.90M | +11.4% |
| SG&A Expenses | $828.40M$775.90M | +6.8% |
| Operating Income | $2.28B$2.24B | +2.0% |
| Interest Expense | $141.80M$109.30M | +29.7% |
| Net Income | $2.10B$1.89B | +11.3% |
| EPS (Basic) | $9.47$8.53 | +11.0% |
| EPS (Diluted) | $9.43$8.49 | +11.1% |
| Shares Outstanding (Basic) | 221.60M221.20M | +0.2% |
| Shares Outstanding (Diluted) | 222.50M222.30M | +0.1% |
05—Questions
Frequently Asked Questions
What were the key drivers of Air Products' sales growth in fiscal year 2021?
Sales growth was primarily driven by higher energy and natural gas cost pass-throughs to customers (6%), increased volumes (5%), favorable currency impacts (4%), and positive pricing (2%). Contractual provisions for on-site businesses allowed for the pass-through of rising energy costs.
How is Air Products positioned for future growth, particularly concerning the energy transition?
Air Products is actively investing in projects related to the energy transition, including gasification, carbon capture, and hydrogen for mobility. The company highlighted its world-scale Jazan gasification project with Aramco and ACWA Power as a key initiative expected to contribute to results in fiscal year 2022. APD sees significant opportunities in these areas.
What is the company's outlook for capital expenditures?
Air Products expects capital expenditures for fiscal year 2022 to be approximately $4.5 to $5 billion. This includes a significant initial investment in the Jazan gasification and power project.
How did the company manage cost increases, such as energy and raw materials?
APD utilizes contractual provisions such as pricing formulas, surcharges, and cost pass-through arrangements to mitigate the impact of rising energy and natural gas costs. While these pass-throughs contributed to sales, they negatively impacted operating margins.
06—Continue