10-QPeriod: Q3 FY2021

Air Products & Chemicals, Inc. Quarterly Report for Q3 Ended Jun 30, 2021

Filed August 9, 2021For Securities:APD

Summary

Air Products & Chemicals, Inc. (APD) reported solid performance for the nine months ended June 30, 2021, with a notable increase in sales driven by higher volumes, favorable currency movements, and effective pricing strategies. The company demonstrated resilience, with sales up 14% year-over-year to $7.48 billion. Net income attributable to Air Products rose by 4% to $1.49 billion. The company also continued its commitment to shareholders, increasing its quarterly dividend by 12%, marking the 39th consecutive year of dividend increases, underscoring a strong focus on shareholder returns. The company navigated a dynamic operating environment, including the ongoing impacts of the COVID-19 pandemic and Winter Storm Uri. Despite some cost pressures and unfavorable volume mix in certain segments, APD's diversified business model and strategic pricing actions helped mitigate these challenges. The company also completed a significant joint venture transaction, resulting in a gain, and maintained a strong balance sheet with a manageable debt-to-capitalization ratio.

Financial Highlights

57 data points
Beta

Revenue

$2.60B

30.8% Gross Margin

Net Income

$533.60M

20.5% Net Margin

EPS (Diluted)

$2.40

Total Assets

$26.25B

Cash & Equivalents

$4.29B

Free Cash Flow

$308.60M

Financial Statements
Beta
Revenue$2.60B
Cost of Revenue$1.80B
Gross Profit$802.80M
R&D Expenses$23.20M
SG&A Expenses$213.30M
Operating Income$577.10M
Interest Expense$35.60M
Net Income$533.60M
EPS (Basic)$2.41
EPS (Diluted)$2.40
Shares Outstanding (Basic)221.60M
Shares Outstanding (Diluted)222.50M

Key Highlights

  • 1Sales increased by 14% to $7.48 billion for the nine months ended June 30, 2021, driven by volume, energy cost pass-through, currency, and pricing.
  • 2Net income attributable to Air Products increased by 4% to $1.49 billion for the nine months ended June 30, 2021.
  • 3Diluted EPS from continuing operations grew to $6.61 for the nine months ended June 30, 2021, up from $6.36 in the prior year.
  • 4The company declared a quarterly dividend of $1.50 per share, a 12% increase, marking 39 consecutive years of dividend increases.
  • 5A gain of $36.8 million was recognized from an exchange with a joint venture partner in the EMEA segment.
  • 6The company maintained a strong liquidity position with $2.5 billion in revolving credit facilities, though none were drawn.
  • 7Adjusted EBITDA increased by 6% to $2.84 billion for the nine months, reflecting operational improvements despite some margin compression.

Frequently Asked Questions

For the nine months ended June 30, 2021, Air Products reported a 14% increase in sales, reaching $7.48 billion, up from $6.54 billion in the same period last year. This growth was attributed to higher volumes, increased energy and natural gas cost pass-throughs, favorable currency movements, and positive pricing actions across its segments.

In the second quarter of fiscal year 2021, Air Products completed an exchange with a joint venture partner in Germany. This transaction resulted in a gain of $36.8 million (pre-tax, $27.3 million after-tax), which is reflected in the nine-month results as 'Gain on exchange with joint venture partner'. This gain included revaluation of a previously held equity interest and proceeds from the sale of an equity interest.

Air Products maintained a strong liquidity position, ending June 30, 2021, with $4.29 billion in cash and cash items. The company has a $2.5 billion revolving credit facility, which remained undrawn. Total debt decreased from $7.91 billion at September 30, 2020, to $7.67 billion at June 30, 2021, primarily due to a Eurobond repayment. The company's debt-to-capitalization ratio remained conservative at 36.2% as of June 30, 2021.

Air Products demonstrated a continued commitment to returning capital to shareholders by increasing its quarterly dividend by 12% to $1.50 per share. This marks the 39th consecutive year of dividend increases, highlighting the company's consistent financial strength and shareholder-friendly policies.