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air products & chemicals 5 December 2007 Citi Basic Materials
1. Paul Huck, SVP & CFO
2007 Citi Basic Materials Symposium
New York City
December 5, 2007
2. Forward-Looking Statements
NOTE: This presentation contains “forward-looking statements” within the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. These forward-looking statements are based on
management’s reasonable expectations and assumptions as of the date of this presentation regarding
important risk factors. Actual performance and financial results may differ materially from projections and
estimates expressed in the forward-looking statements because of many factors, including, without limitation,
overall economic and business conditions different than those currently anticipated; future financial and
operating performance of major customers and industries served by Air Products; the impact of competitive
products and pricing; interruption in ordinary sources of supply of raw materials; the ability to recover
unanticipated increased energy and raw material costs from customers; costs and outcomes of litigation or
regulatory activities; consequences of acts of war or terrorism impacting the United States’ and other markets;
the effects of a pandemic or epidemic or a natural disaster; charges related to portfolio management and cost
reduction actions; the success of implementing cost reduction programs and achieving anticipated acquisition
synergies; the timing, impact and other uncertainties of future acquisitions or divestitures or unanticipated
contract terminations; significant fluctuations in interest rates and foreign currencies from that currently
anticipated; the impact of new or changed tax and other legislation and regulations in jurisdictions in which Air
Products and its affiliates operate; the impact of new or changed financial accounting standards; and the
timing and rate at which tax credits can be utilized. The company disclaims any obligation or undertaking to
disseminate any updates or revisions to any forward-looking statements contained in this presentation to
reflect any change in the company’s assumptions, beliefs or expectations or any change in events, conditions
or circumstances upon which any such forward-looking statements are based.
2
3. Air Products
At a glance
$10B in sales FY’07
Diverse markets and geographies
Positioned for continued long-term value creation
FY07 Geographic Sales
FY07 Segment Sales
ROW (2%)
Tonnage
Asia
Merchant Gases
(17%)
Gases (26%)
(32%)
United
States
Equipment & (44%)
Energy
Healthcare (6%)
(6%) Europe
(32%)
Electronics &
Chemicals
Performance
(10%)
(9%) Canada/Latin
Materials America (5%)
(21%)
(22%)
3
4. Value Proposition
Profitable Growth
Stability
– Long term contracts
– Consistent and predictable
cash flows
– Strong balance sheet
Earnings growth
– New projects
– Margin improvement
– Productivity
Improving returns
– Good progress
– Continued opportunity
4
5. Supply Modes
Durable Business Models
10, 15 and 20-year contracts
Take-or-pay minimum volumes
Contractual energy pass-through Equipment &
Formula escalation Services 19%
Onsite/Pipeline
34%
3-5 year contracts Package Gases &
Liquid/Bulk
Regional business Specialty Materials
21%
Cost pass-through/surcharges 26%
% of consolidated revenues
5
(excludes Chemicals segment)
7. Equity Affiliate Income >$100M
FY07 Revenues 100% basis ~$1.6B
Italy
$470M
India
Mexico
$85M
Thailand
$515M
$80M
South Africa
$130M
7
8. Merchant Gases
Drive a Local Business on a Global Chassis
$3.2 billion in FY’07 sales
Liquid/Bulk, cylinder and small onsite
gases to diverse industrial markets
Global business model
– Marketing Local
Business
– Application development
Regional
– Supply chain Global Roles/Global
Differentiators
Collaboration
Local execution
– Logistics
– Sales and pricing Margin
Improvement
– Customer service & Growth
Future opportunities
– Improve margins
– Eastern Europe & Asia growth
8
9. Merchant Gases
Strong Growth & Performance
$MM $MM
Operating Income & Margin
Sales 700 20.0%
3500
12% CAGR
600
3000
18.0%
500
2500
16.0%
400
2000
300
1500 14.0%
200
1000
12.0%
100
500
0 10.0%
0
2004 2005 2006 2007
2004 2005 2006 2007
•
Revenue by region ($, FY07)
Continue delivering double-digit
Europe LB
growth
- Explosive growth in Asia
Europe PG
North America
- Expanding in Eastern/Central
Europe
Asia
- New offerings success
Equipment ROW
• Achieve 20% operating margins
9
10. Tonnage Gases
Market Leader in Refinery Hydrogen
H2 Plant Operating Years
Global #1 HyCO Position
Onstream 2007
APD . . .
APD Widening Gap
(1940MMscfd)
Comp Z
Comp X
Comp Y
2000 2005
1995
APD Comp. X Comp. Y Others
4,600 Million SCFD
10
11. Tonnage Gases
High Growth Segment
$MM $MM
Operating Income & Margin
Sales 450 20.0%
3000
18% CAGR 400
2500 18.0%
350
300
2000
16.0%
250
1500
200
14.0%
150
1000
100 12.0%
500
50
10.0%
0
0
2004 2005 2006 2007
2004 2005 2006 2007
• Significant profit growth and
Investment by Region
improvement in returns on capital
North America
while bringing on new investments
• Significant large plant bidding
opportunities (both H2 & O2)
continue
Europe &
Middle East
• Anticipate continued 10%-15% H2
Asia
growth
11
12. Strong Hydrogen Pipeline Positions
Sarnia
Canada 40
Baton Rouge 40
Edmonton, Suncor
Louisiana
IL
RA
Canada
Plaquemine
CN
Air Products
Canada
40
Geismar Shell
Refinery
Geismar
16
16
10
Lake ST.
16
Cosmar 16
Pontchartrain CLAIR
RIVER
Petro-Canada
Convent
Imperial Oil
Nola
New Orleans
Taft Sherwood Corunna
Park 21
21
14
14 630
630
Chalmette
Rotterdam
14
14
Europoort
Pernis
Dominguez
Southern
SF Bay Channel
Refineries 91
California
405 Zwijndrecht
Botlek
Tarragona
190th
Refinery
St.
710
To Moerdijk
Carson H2
Long
110
VAN NESS Beach Lake Charles
AVE. Arpt. Beaumont
BP
Sepulveda
Texas
Blvd Carson
Mont Belvieu
405
69
APD HyCO facilities
10
Shell City of Houston Battleground
Conoco Phillips 73
Wilmington
H2 pipeline
Carson
1 Port Arthur
10
CO pipeline
Anaheim Valero Baytown 2
Street 610
Wilmington
Syngas pipeline
Conoco Phillips
Wilmington Wilmington H2 225
110
45
LaPorte
Pasadena Bayport
Clear Lake
Texas City
12
13. Tonnage Gases
Leading the Way on Gasification
A leading O2 supplier to
gasification facilities
Designed, built, own, and
operate units for syngas, H2
and CO for pipeline
systems:
O2 for Gasification/ ATR Customers
– NG-based POX units
(TPD)
– Syngas cleanup/separation 25,000
facilities from POX unit
20,000
Recent wins:
15,000
– Eastman Gasifier in Texas 10,000
– Wison II in China 5,000
– BP Clean Power in 0
California APD Comp X Comp Y Comp Z
13
14. Hydrogen from Eastman Gasifier
Project vs. “Off-Gas” Facilities
Typical “Off-Gas” Facility
Ethylene, etc
Raw Chemical
Materials Hydrogen
plant H2 purification
~ 85% - 95% O/S
Eastman facility
APD O2
Spare
Hydrogen to
#3
Pet Coke Air Products
>99% O/S
#2
Methanol
Gasifier
Syngas
#1 Ammonia
14
15. Equipment and Energy
Positioned for continued growth
$.6 billion in FY’07 sales
Broad customer base
– Oil & gas, utilities, chemicals and
metals
Products
– LNG heat exchangers, large air
separation units, hydrocarbon
separators, helium containers,
hydrogen fueling systems…
Strategy
– Leverage existing relationships
– Develop energy projects
– Leverage engineering technology
and products to grow gases
businesses
15
16. LNG Heat Exchangers
Market Leadership
US Natural Gas Gap
APD world leader in LNG
equipment technology Consumption
Sustainable competitive 25%
advantage with AP-X® Net Imports
BCFD
technology 15%
Production
US import terminals
– 6 constructed; 7 bcfd
US NG Imports 2006 & 2020
– 22 approved; 37 bcfd
– 27 proposed; 25 bcfd
Anticipate 2-3 LNG orders
BCFD
per year over next 5 years
2020
2006
16
17. Electronics & Performance Materials:
A natural extension of what Air Products
does best
$2.1B segment underpinned
by technology, innovation
Franchise positions / global
leadership
Strategic positions with
leading customers
Operationally excellent global
supply chain
Leading edge applied
technology, new products
17
18. Electronics & Performance Materials
Strong Performance
$MM $MM
Operating Income & Margin
Sales 250 15.0%
2500
10% CAGR
200 12.0%
2000
150 9.0%
1500
100 6.0%
1000
50 3.0%
500
0 0.0%
0
2004 2005 2006 2007E
2004 2005 2006 2007E
• Excellent profit and return
Revenue by region ($, FY07F)
improvement driven largely by
Asia
Electronics turn around
(40%)
• Continue delivering double-digit
North America
(40%)
growth
Latin America
• Achieve 15% operating margins
(2%)
Europe
(18%)
18
19. Fiscal Year 2007:
Fourth Year of Double-Digit Growth
Continuing Operations *
Growth vs. PY
$∆ %∆
FY06 FY07
($Millions)
Sales $8,753 $10,038 $1,285 15%
Operating Income 1,128 1,390 262 23%
Net Income 792 976 184 23%
EPS ($/share) 3.49 4.37 0.88 25%
ORONA (%) 11.4% 12.5% 110bp
$567 million in shares repurchased
Additional $1B authorization announced
Continued to improve the portfolio
19 * Comparison is non-GAAP, see appendix for reconciliation
21. 2008 and Beyond
Sustainable Double-Digit Growth
at Superior Returns
Targeting EPS growth between 10-15%
11 large ($25MM+) projects on stream in ‘08
New geographies
New applications/products/markets
Cost reduction/productivity
ROCE well above our cost of capital +3-5%
More Focused, Less Cyclical,
Higher Growth, Higher Returns
21