Air Products and Chemicals (APD) Q4 2024 earnings summary

Executive summary

• Q4 adjusted EPS was $3.56, up 13% year-over-year, at the upper end of guidance, driven by strong performance in Americas, Europe, and Asia segments.

• Fiscal 2024 GAAP EPS rose 67% to $17.24, driven by a $1.2B after-tax gain from the $1.8B LNG business sale; adjusted EPS up 8% to $12.43.

• Completed LNG business divestiture on September 30, 2024, impacting future results and guidance, with focus shifting to core industrial gases and clean hydrogen.

• Maintained focus on pricing, productivity, and strategic capital allocation, supporting long-term shareholder value.

• Signed a 15-year green hydrogen supply agreement with TotalEnergies and announced major hydrogen infrastructure investments.

Financial highlights

• Q4 FY24 sales were $3.2B; adjusted EBITDA $1.4B (+12% YoY); adjusted EBITDA margin 44.1% (+460bp YoY); adjusted operating margin 26.6% (+350bp YoY).

• Full-year FY24 adjusted EPS $12.43 (+8% YoY); adjusted EBITDA $5.0B (+7% YoY); adjusted EBITDA margin 41.7% (+440bp YoY).

• Distributable cash flow for FY24 was $3.36B, with $1.6B paid in dividends.

• Fiscal 2024 sales were $12.1B, down 4% year-over-year due to lower energy cost pass-through, partially offset by higher pricing.

• GAAP net income for FY24 was $3.9B, up 65%; Q4 net income was $2.0B, up 181%.

Outlook and guidance

• Fiscal 2025 adjusted EPS guidance is $12.70–$13.00, up 2–5% YoY (6–9% YoY excluding LNG headwind); Q1 FY25 adjusted EPS guidance is $2.75–$2.85.

• FY25 capital expenditures expected at $4.5B–$5.0B.

• LNG business will not contribute to FY25 results following its divestiture.

• Expect positive net cash and meaningful declines in net debt/EBITDA ratio starting FY27.

• Long-term EPS growth target of at least 10% annually, with potential for higher growth as clean energy projects come online.