Air Products and Chemicals (APD) 4 Feb 212021 Q1 Earnings call transcript

Good morning, and welcome to Air Products and Chemicals First Quarter Earnings Release Conference Call. Today's call is being recorded at the request of Air Products. Please note, that this presentation and the comments made on behalf of Air Products are subject to copyright by Air Products, and all rights are reserved. Beginning today's call is Mr. Simon Moore, Vice President of Investor Relations.

LeAnn. you, Thank everyone. Good morning, Air Products earnings to quarter first teleconference. results Welcome XXXX of Moore, Corporate Simon is Investor Vice This President Relations, Sustainability. Relations and I'm Financial General Officer; Counsel by today Sean Major, and our be Secretary. Vice our and Vice to President, Executive Executive Chief President Crocco, CEO; Seifi and President and our Chairman, Scott pleased Ghasemi, joined After our questions. your we comments, will take be pleased to

Please on refer slides release our and two. the in earnings the for contains this forward-looking are found discussion release disclosure statements. at website and statement available to airproducts.com. forward-looking number be that This Our call on can slide earnings our

share, addition, In adjusted measures adjusted margin both are on website measures otherwise discussion, return state when relevant Reconciliations our to section. refer we capital measures, employed. segment referring earnings a refer to financial earnings companywide in and various ROCE directly and non-GAAP GAAP EBITDA, most per per and will margin basis, on release EBITDA financial adjusted our on throughout be to found we Unless our comparable these EBITDA EBITDA, of the specifically adjusted to can today's measures. we earnings financial we share,

Seifi. to Now, call I'm turn over pleased to the

you, taking Thank thank our on good busy everyone. schedule be you to time We and Simon, day for to your from call today.

learned all challenging, my more work the around together challenges. We time business, problems, we no goal. solved the stay against all working that common than I important we virus can most The only can our significant to immediate already are virus ravage focused if and and a be In in fight is how taken global faces stay and globe. continues to united. communities at and battle if deadly deadly matter living XX humanity many years that has one the united when this have and We lives

to as I and Air around every acknowledge our efforts extraordinary customers. Products to working committed team of in the the it talented, work a products all of of want and They is this people spirit critical the services hard that provide world. together So, united resilient to day and

energy Our people world ones possible who quarter, it facilities made to crisis. during ones working possible this to have solve our who future. help us in making which pushing determined it company, forward a they XXX good environmental people help for a day see their our with projects ensure purpose higher ones They world-class and humanity, are around sustainable this are to move way us bring to keep the -- solidarity to They we results are is growth are to in who developing through together operating give are a the and in as and challenges. in the major executing for every the meaning our deliver way forward the unprecedented working and actions and the

stand of Our our them. and the am with to soul very proud people are I company,

three. slide Now, please to number turn

the six, our They future. These improvement you follow our forward. moving It's Products. drove safely, important five-point our conditions, always, management protect plan us challenging all goal, goal our continues our safe our every protocols of the can to people As and focus incidents. philosophy team zero our again slides the principles focus and see and be to on to and the our our customers help four, the our past COVID-XX Air always at moral a is for guide performance most accidents communities. safety responsibility to will strict day. working Despite us keep will following in themselves, that On and and five continue are we for in

our delivering past. and in the deal seven. highlighted the Air I to have bridge repeat through on see Products While always would to the the great future prefer the like I the have accomplished number the I I you you we of of because six transforming prepare superior history a them shared performance, past focus of dreams future with again. slide which on future before, can years,

and Our the of the safest, most future to be dream is company world. profitable in industrial gas diverse most the

American be of is dream measured to future by market as Our the largest the chemical capitalization. company

environmental in this challenges. Our Products to work a day. that beyond sustainable is solutions benefit dream deliver customers drive superior what delivering believe be the Air together energy significant to world's the future providing the has and higher And people results, leader and of purpose is to our us solutions together we financial world; bringing and our every

proud turn to we I'm these XX eight. to slide months, please a making that past the reality. progress number have in say made during dreams significant Now,

We have safety significantly improved our record.

our growth our highest including consistent per the remain cap market share goals. drive over opportunities the They positive helped growth XXXX over six with higher XX% in average margins improving on our the negative reduction by Our carbon earning diversity by goals, sustainability EPS new despite in our of These are We impact industry. and increase years pandemic. announced and our purpose. last with COVID-XX intensity

meet their to and for energy solutions. needs help and continued have and win We growing projects create environmental customers that cleaner countries

Mexico These our our these the progress LNG scale year, to heat last share earlier we on world projects important project in me we already are strategy. Qatargas mega of won over the projects this few and continue four contributing to of examples projects large that We including for exchanger announced them complete line a the demonstrate Let project as customers. week. bottom that a our

hydrogen country's methanol reliance the We on reduce to a further by US national support the announced and Ammonia We fuel California the of our as customer Coast PBF and will in Coast transition States. leadership Indonesian categorized in our and the Gulf assets project imports. the billion These Gulf in have United project to Delaware. projects $X the development strategic a coal executing hydrogen acquired position are project and enhance government energy

of green NEOM the We the hydrogen, announced Arabia to with to also that to provide in energy world Saudi the future. innovative the is carbon-free, a resource roadmap transition project

slide Now, said, please also work higher delivering people I they the do our performance. day. number supporting turn financial purpose superior know in to every We nine. they the committed remain are And to as

of industrial and Our work to skills gas of and dozen industries world enterprise together from is critical projects of scope mega variety as different with the the one a talented and to our people success of complexity parts team. the backgrounds require

to the together keep is -- the proud day. our and innovative team energy and environmental experiences develop diverse and collaborate backgrounds challenges that in significant drives That are higher to We purpose and solutions these people bring our world. some of every most from inspires us for

which key gasification XX, highlights Now, please to turn projects. slide our number

We and are pursuing gasification around projects exciting strategy to our are the world. committed

we do future. gasification best the We refinery and more into sustainable continue gasification like bottoms feedstock high-value position have to are as with convert see low-value help We them economies They announce sustainable the projects benefit countries their to in manner. and to solutions companies people. way use driving products. coke resources abundant identified in additional large them in low-value and to their a expect the work And best to that and deliver pet better coal,

discussed like update call. which last give during you two would specifically, earning gasification Now, I an our on the to I largest projects,

last toward made Aramco. our XX, arrange financial the months than transaction of Saudi call still on investors close. I to Saudi we the gasifier to Jazan work final and forward. XXXX, Since positive power Aramco $XX in We move obviously from our our plant the billion three last First, Aramco have this of financing project senior have I was to discussions have would and by especially the with but this more to do the months, steps like the finalize to I'm contracts, three management we acquisition thank conclusion, am and very continued bring significant ago. encouraged move all Saudi for to have I taken a progress optimistic with November they the the

Lu'An. project the earning we second was on The call discussed last

extend reduce monthly length improves return. our the reduced during December. November fee months the fixed We us for October, have of agreement is the fee Lu'An to Lu'An time to contract, shut and which the with and the that our agreed monthly the reached pay an did plant has down, Lu'An of temporarily

We continue year. to believe fiscal this that will be the restarted during plant

for our slide to $X.XX continue This supports is to this to substantial a turn develop significant of annual of opportunities, increase, dividend increase, we margin. year consecutive finally, our slide growth Air while XXth number we cash Products. our that And EBITDA have please XX, shows per dividend share which that dividend the flow increase number a recently increase $X XX exciting XX% reminder Now, an share. announced dividend our quarterly reflects rate for raising

margin it basis who the of since is XX% shows always, over our up proud EBITDA slide despite challenges favorite very my the deliver quarter As I for continue us. where X,XXX facing nearly margins to of points the am that team XXXX.

Officer, Now, overview. call Crocco, over the Executive Scott to our Scott? Vice turn I Mr. Chief provide and would to to like the President Financial financial

Seifi. you, Thank

this As Seifi the the delivering stated and challenges quarter resilience, pandemic. demonstrate of earlier, our both despite company higher sales continued EBITDA to

stable Our conditions continued difficult is in-spite around about business, cash which the to flow deliver world. half the on-site, continuing of

contribution continued is price, price higher more of was were be and compared equipment more of Sales and offset Volume plants, volume all to of that Lu'An sale to year negatively to in quarter overall relatively for offset $X.XX COVID-XX to continue due We regions. up X% seasonality, quarter X%, basis COVID-XX for $X X% EPS slide was XX Lu'An by our favorable reduced as consecutive pandemic about lower impacted gain. step-up of improved an in sales by that by activities. than plants, equipment about focus by outages. lower, XXX than the of results. new was a three weaker denominator sale of additional volume and on particularly actions the year. the and as higher the strong impact the business. the as EBITDA negatively and EBITDA $XXX points by the brief basis prior This Lu'An driven of currency impact Seifi positive America lower, in energy new costs was XXX price, X% higher area than to and planned last costs, higher depreciation PBF lower pass-through million of more a the impact. North was plants due acquisitions the please turn primarily were while mentioned. last increased price discussion increased compared impacts Operating lower including largely hydrogen equity that X% we by driven income maintenance and affiliate Now, stable, impact. to and maintenance down from our volumes, higher XXth reduced $X.XX. primarily debt. Sequentially, income year, of and billion by billion X% positive first year-over-year was ROCE $X.X margin about acquired up driven Price to currency estimate the us activities points to EBITDA planned of additions offset declined

were up was However, positive higher volume sales by as favorable this offset price. more than pass-through and overall currency, sequentially energy lower

turn to XX. please slide Now,

year plants. Our unfavorable last the in in COVID-XX. all Price, was projects resources to for new impacts first of $X.XX. net The adjusted growth. acquisition quarter added unfavorable costs, impact variable Volume of in EPS $X.XX offset as due new $X.XX Lu'An the regions. and to business was EPS increases planned was and $X.XX mix. sales, contributed unfavorable of of COVID-XX nearly we future more negative executed to than Cost was negative comparable $X.XX maintenance Volume PBF and but with $X.XX, flat despite

supply strong non-controlling US the due the primarily also the a we ventures of contributed underlying appreciation Lu'An. in from exchange on $X.XX Chinese interest $X.XX, benefited RMB euro was For $X.XX to relative and quarter, of primarily favorable contract. while our and Equity affiliate settlement income foreign also this Currency dollar. due to consolidated joint to due lower results, to profits added business

debt. rate XX% venture and cost a XXX% of As majority expense The of unfavorable our XX% partner's remaining the associated ownership favorable around effective to rate. points a of interest line. was impact 'XX. XX% year given prior pension from interest deduct Interest a still tax down consolidate with expect tax year. favorable in to joint results, rate basis be was We additional includes effective $X the non-controlling the in impact tax XX.X% we due to from our lower Lu'An's our and $X.XX $X.XX $X.XX The XX a reminder, billion of the $X.XX fiscal XX%

slide XX. to turn please Now,

the underscoring flow, cash business. strong our generate stability to continued of We

almost CapEx generated we have return and high billion, about billion share. and create usual, over capital a or per spending value through taxes even enables by over $X.X or as From to $X.X EBITDA we we Slide the industrial gas our $X.X paid maintenance billion investments. last distributable our flow, interest, capital. dividends times, paid additional over shareholder the on still increasing $XX.XX us available cash shareholders cash XX% provides Over Note, XX months, details This strong our for distributable part $X.X driven higher uncertain continue on headquarters. little about corporate XX dividends new of number than and to in maintenance cash of to our billion deployment. capital deployment. flow in is From our flow,

capacity have continue investment substantial to remaining. We

FY available five-year $X flow $XX the through 'XX 'XX. billion now about already FY over As of billion of you see, and from available about over additional includes we 'XX today, debt $XX cash capacity $X.X can The of capacity and about of spent. end and billion investable cash investment FY period the expect billion $X between billion

cash of spending the we in as will our 'XX. projects generate and Additionally, capacity beyond come extends and borrowing FY stream, on some backlog more

for We later in you reframe this expect XXXX. potential to

to will coming projects stream, remaining new total maintain on to them. continue to and balance about $XX with few managing spend signed We and focus $XX.X slightly some With rating. current billion A/AX to on debt M&A targeted our a increased commitments on billion, project our our

the we capacity here. show already XX% see have we and So, committed spent you of XX% almost can already

the to Seifi. results, turn Now, to back business segment review of over the I'll begin our call

Thank you, Scott.

favorable X% please turn X%. energy contributed particularly volumes. that impact price X% was while Volumes kept more despite number Asia in and lower, our merchant Lu'An, Taiwan price Compared in we Now plants quarter. by was remained X% increase a than margin like Despite EBITDA for represents with stable. results. EBITDA and currencies lower for the positive down relatively strong across were EBITDA countries weaker at for slide business which of pricing for volumes, to the offset consecutive currency, kept XXX key almost the XX% a sales X% stable. points -- basis increased up while favorable and Overall driven weaker the last volumes lower Currency currencies X% Lu'An. region, resulted strong favorable currency favorable year, products. the from the you than X% sales XX volumes. more price mostly of primarily rose the to Korea in primarily merchant XXth costs, negative by pass-through and offset to Sequentially, driven with were offsetting by Asia volumes. I'd for weaker increase lower remind EBITDA impact quarter most new this

call Now, to our over I would talk like back Scott to results. Americas the to about turn

major consecutive pass-through to again lines. increase product for merchant. review region to turn Sales X% Please XX and of the all price Seifi. by for you, Higher results. shortfall was to the was equivalent our X% XXth quarter across acquisition. a of volume PBF were improvement. down X% of level, due the to offset impact costs. COVID-XX, price the but last maintenance acquisition the better of by Volume and EBITDA is and as the price year's primarily higher by PBF million $XXX Price for energy flat Thank were compared slide Americas This was volumes. was better partially were year. below offset last lower offset The year-on-year

and largely point was is XX For consistent what other although by higher margin negative basis Americas energy expect in including was than with price QX. it the higher a factors, acquisitions. the pass-through, we offset cost with impact favorable XX points maintenance dipped quarter, impact planned unfavorable last from while EBITDA basis year,

some Price basis about pass-through to higher our lines, make due volume weaker X% I'll sequential down overcame Margin negative seasonality. which on while offset better X% energy pass-through, positive higher product weaker, a primarily as Sales was price. major up had comments by energy XXX results. increased and as Now, declined was EBITDA price impact. primarily all point was on volume. was partially across volume

segments. turn Simon? our Simon I'd Now, over discuss to to to the other like back call

Scott. Thank you,

to review our for results. XX turn East region Now, please Europe, and Africa Middle a slide of

results Our Volumes price XXX and our XXth and sales currency all X%, year surged sales improvement. profits by strength XX% the and the supported Sequentially, region and merchant, were for about delivered the million, consecutive due sequentially and EBITDA both X%, grew to the higher principally of team to and improved major across of and improvement was favorable quarter. to most grew basis and outstanding on-site last were which merchant acquisitions volumes, US points. adverse currency the favorable due COVID-XX was improvement quarter business. $XXX COVID-XX-related primarily this growth. EBITDA acquisitions is with Both last higher versus than and This Currencies flat. quarter. Price, our modest XX% X% for to EMEA EBITDA a acquisitions. driven compared year-on-year offset year-on-year contributed margins predominantly more volume impact in remained up volume euro sub-regions. dollar. the increased by increases, gas product in Price and lines X% packaged favorable also price margin recovery on-site volumes. business, to double-digit

which to as and sale mix to central profit non-LNG turn activity, of business was higher please spending. equipment XX, slide projects increased our well global business product includes due equipment Now, due to sale costs. higher as lower but gases, of development Sales

and we as year, the including project profits LNG prior Golden well Mozambique, quarter, multiple We driven and costs. continued Qatargas both our to corporate, year. contract, projects. prior in were contribute of corporate and down complete to percent LNG also on were a activity which other primarily were Sales to this offset and this XX, the also massive turn the last versus LNG as benefited due versus project quarter. began earlier, Pass businesses timing slide excited supply the the to the by includes higher last year. from announce profits execute Energia mentioned gains for represents which Please Costa LNG Azul of As settlement in in projects, activities Mexico. another activities announced project to quarter project the as fourth new project export LNG earlier we and Ensenada, large this This terminal week Sales we've

Now, I will turn to to call the thoughts, provide additional back over some Seifi.

you, Simon. Thank

to go slide please Now, number XX.

not to the do of on impact expect unfortunately, crisis of will operate. to forward, continue the look This economies a we we the anytime negative countries have global COVID-XX soon. As most moderate we

help have will the the is We in earlier the stages but hard to of pace confidence vaccine is that to predict. rollout reverse vaccination course, and still the

continue the result, make very we guidance or world. CapEx EPS the not around any of to are we to find guidance economic a As difficult providing activity projections about it reasonable course Therefore, for uncertain so, two hope XXXX our at or to the April. quarter outlook look less providing guidance you will in for time. fiscal forward this And then. be We year if we

share With which are slightly time before the our merchant year, were same to Representing as we the Asia, in January in this want virus you is that business, sales, is merchant our down today far of volumes of February. and what so about and our I versus where month with has stable continue. been this half quarter, last we they seeing However, on-site to expect began. are of the respect crisis to business in our at

I have to packaged business Americas, we following pre-crisis In remained season, business to impact have levels. volumes do and our merchant continue the North are In volumes see the So, packaged not the in that start, like remind we liquid to again bulk a down, a weaker holiday larger Europe, almost you on business. America. a gas gases reached and off would versus

opportunities sustainable invest in for mobility for sustainable to to ahead and As our cleaner countries' and to to meet providing in and come. drive help carbon needs we we strong gasification, solutions portfolio, move we drive to capture for develop decades hydrogen energy. our see meet to strategic committed We remain growth more executing the great world With cleaner and and continue our we opportunity solutions. able growth customers' its are increasing forward, strategy, for

continued I'm the always, success As we -- continued -- after sorry.

continued at the Products. of rooted we is strategy always, have the As of team the success this Air great and in motivation commitment

economic than resilient world understand they facilities that XXX and and critical Our development. operating role focused social executing around in safely more play scale people world, the the projects support

have to our Indeed, strengthen world. customers to during not Products, our these salary the opportunities. or say continued organization staff people pandemic. I the resources by of am pursue this our unlike the proud Air have we work together deliver and that great will other many As to we to we solutions adding reduced to necessary reduced to companies,

all continue In around proud dedicated despite times. closing world to We every am working have like to be of them deliver thank I today, by people and to stood single would I people. our our with day. these who challenging hardworking the

your Now, we are answer pleased questions. to

Instructions] we'll you. with Fischer And take from Thank Duffy [Operator Barclays. our first question

on Yes. of your guys. questions projects. morning, big two Good Two

one First Lu'An. on

back With once is plant around up solar the segment, then And one second when the start, change see we ammonia you goes see see tied wind and of the of already renegotiation the think kind running? equipment the at that about should will of should by And farm then other? the project? NEOM. the start on we what's relative see and we ground there, so when do that, the then those just economics ordered just have you on breaking one, we of maybe the when and when the the contract, start? the timing time And will to NEOM each last plant long If kind lead one for electrolyzer the all

said, morning, we of has during question. extend to we -- negotiated plant the to is fixed you Duffy. down, Good agreed contract. have Lu'An time the shut I fee your Thank but reduction the With a respect Lu'An, for as

a on once little the will overall stream, return back plant be comes bit better our before. So, than

and long-term that, it to all that. hope is, of respect finalizing in very we May, the you some pre-engineering days. We in NEOM, And agreements in and -- know few sometime items, we is that the process second ordered to of of June doing ground all that we a in timeframe. The are of with doing have are next and thing how the break the

Great.

expect, as forward in stream then on XXXX. everything for we obviously, we to startup And go come

Terrific. Thanks, guys.

Okay, Duffy?

Thank bet. You you.

we'll take Vertical Partners. Research with McCarthy And our Kevin from question next

was consider Seifi, China morning. do in with second or I you your projects much. What then projects? you the equipment affecting as you evaluate lower of as premium very quantify future impact rate well, based think sale on helpful. also you in future from a would Good quarter, Yes. that mentioned had Lu'An in you question experience sovereign volume And be the I Lu'An, hurdle volume. increasing the your on quarter? could a Thank impact from you anticipate an And if it as

Kevin. you, Thank

-- Lu'An I asking as way it mean, you case. of the is question are that -- about specific First I is you all, something Lu'An the mean, a

fact of projects We do gasification through is no happening. We what -- because operating, with the terms customer you sign four a there are Lu'An, with been -- plant is years issue, trying that work And with is down a China, to opportunities. they have to in to have other new few past and continue while a for decrease the gone of that plenty have continue we we we in is the there shut that. being agreed we lot is the paid that are

our no in is investing China. about there change in view So,

an We have excellent had experience.

hesitant us economy do, XX%. you contract for With that. a sale want of with would see the I'm That really hope terms what do pass to ignore that to give and because you equipment, short-sighted. significant very is two the those us the opportunities. I to EBITDA Lu'An on and be be of is we and country tell continue with exactly of conditions are have We we to will future, having and quantifying not that. -- we to therefore, that numbers it And, exactly do way our of respect before. We that been we you to then the wise are are margins committed to that

Okay, fair enough. Thank you.

Kevin. you, Thank you. Thank

And Stanley. from take we'll Morgan next Vincent Andrews question with our

in just everyone. the be Thank or you go for I it we period we Is have Thank it risks through the parts COVID, you correct in start go about you, sounds could ask shouldn't of harder that maybe first we're into think concerns you. that quarters of could and some morning, we're going is as being as a like impact time be about lapping coming see to If and where to what that good outlook? some Seifi, still as of that would there other a questions. you that. my the or tailwind things So, so

good cases in all cases summer don't got I when but vaccine is the then another come idea down hope morning, is to down, be and know but that and no now I what of XXX,XXX your bringing there what there of there's you very happen. still work, wants is is have the number everybody first are I the had of optimistic were day know day. number all so people still a for has the X,XXX I saw going of deaths down, all. the optimistic, will Vincent, Thank that a whether -- be of be -- number of you will to been optimistic, there dying, very on. variant will question. tough that us another cases have round, and happened. be wanting to

normal believe of I to world, responsible us else and with to we everybody everything more States us our be lives, I'm -- for of are ourselves. ahead the that and know anybody this but everybody balanced especially get So, giving that tell than just ahead what to America. United go done we down. a is don't ourselves the I The love volumes would back me, of actually run investors is is want which expect COVID part of rosy. and The want view don't to problem of and giving

better accuse a we for if But I maybe may have want out, -- work to it can shape. will then you So, better, are, how conservative, Vincent. it know view, but of being in just does are we balanced us but the just don't we a we

fair of That's that this planned just and thinking come? expense next was There to about And should over we follow-up. the as that done quarters? is there or maintenance you the more with be elevated enough. quarter quarter. a How Are couple prior

see -- one, all took become the we turnarounds. a go I and would have that maintenance the the under advantage A people thing was that our of lot by the control. of our to say because lot you forward refinery higher that. should as driven On of shutdowns better not COVID of That's numbers

numbers So, will those we I'm hoping better as look forward. go that

Okay, much. very thank you

Thank you, Vincent.

take our Bob next question Koort we'll with Sachs. And from Goldman

Seifi. Good morning,

Good Bob. you are this morning, morning? How

But Europe. don't thank a business, your well, I and I'm confused little was the source COVID about punishing pressure you yet that the business commentary that was US packaged have you note where in in you. of COVID a gas

causing in it So, from something us a you more be to the do may color refining trouble what a end industry particular markets Americas? is COVID you with little on standpoint give the or could

activity people of People surgeries, to sell machines helium and not are MRI of down. a parties not balloons is elective doing and We are general the Helium. having to lot and down many and the that. volumes of helium all is

being So, not driving but one the people on activity, overall also of that it refineries is the are volumes is down, much. some hydrogen as because down, is the of pipeline shut thing. And our

trouble. has the causing So, us those things are that been

rallied the has haven't the helpful. Thank gives seem there Lu'An, ask as That's reluctant may more you're that you more like comfort knowing restarted specifics, be coal then why It a confidence on maybe but and may exactly And competitive, happens I have in do would you much to provide and be maybe they oil when little as it color [ph] has sometime? gasification that it would helpful. you.

have the company respect new With the we in. re-organization restart there them you about company reflection But have resolve the want want plant that, to the confident has with them. different -- accommodating put of to we that arrangement Lu'An lot why situation different to don't participate a to lot that I itself, all did and talk want it they are is I in Lu'An, and are a of because of publicly of a the and plant that us, about is can on management don't that down, the that shut on accommodating and cases underway projects will come the and be that we negative several

So, we we I'm be, to but of what as Lu'An we the seem our you see know not worried to as reporting report we about time wait are you. need to and to that and investors as

Perfect, thanks.

Thank you.

Roberts John And our next we'll from question with UBS. take

began their last Jazan starting Seifi, the they ramp process in up think. of quarter, are up? I Where Thanks.

the of know been Saudi officially question be we should introduced very I'm towards that They to exact commission productive as are the still commissioning large the the people facility. them. But different said, team number, the don't the I we not crude facility. -- units people and start have obviously that XXX with into to helping but directed Aramco. Saudi are helping the working them stream facility has believe way a of number up I we a close I in overall, sure have, and almost that's

And there take to a need under we quarters then their is industry look on generally at the customers anything refining terms your the contracts? a their several contracts? over refining integrity years, secondly, couple they next as restructure the in of here for out or minimum Are of of And pressure. is lot of

pipeline taking as much to in volume I take The volumes doing Gulf mean, California, as used our than, About customers I very are it's of different different world the is the example, pipeline for you, contracts, before the that but as regional. in in integrity the a of Coast parts fact not okay. is they is our fact, down, our the no. are told

So, that overall people region on an refining know are, it I. impact therefore than driving depends there question that but which and there much are is not on as is industry the you better that you no

Thank you.

Thank John. you,

Zekauskas with JP Jeff And we'll Morgan. question take next from our

morning, Seifi. Good

How Jeff? are you, morning. Good

Sorry.

and in order do In trying what is, the negotiation? closed and get of might a terms how earlier resolution take? That what's that deal you're work issues Jazan, you are why to out think it the issue to to the the wasn't long in

that to Today, the rate as higher contract than we expected lower I initially the have we things interest that the actual interest told discuss Jeff, that when is, billion one you we a finance. was because Aramco, for of before, fact significantly the we of Saudi Well, the negotiated $X.X the have to condition, debt are with market obviously that. rates

that of goes we that, basically each of amount who the so that it. lower. now Therefore, assuming to but negotiate much have interest, is that's partner, that of have had saving it how issue how benefit it. were X much is to and and -- I mean, the gets we So, of the it negotiated we

issue in negotiation. was that terms one So, of

of of thing that arrange not terms, task a that. is of lot we debt. all to banks conditions is with that second -- That involved and billion trying and and easy that, an $X.X The are the all of

are the we need to two those issues that work So, out.

June, changes think will long In -- thing banks the Saudi the it takes, by geopolitical it is the of This view There done day, terms every Aramco day. of a unpredictable. takes I'm changes with a factors. May, is time I view thing. be The how we of of but is hoping lot and every it this that

not issue So, get working I I'm I'm actually are will pessimistic, on. some the point thing the we at we are But that issues time. two those this optimistic, in think done --

have we worked one them, on. of think I

have what in we think Aramco of the do the terms devil are I senior is going but in with of understanding the in sharing we the to details. of of terms management profit, an

the has has actual arranged. be to language into contract and to this translated debt All of be

is So, taking that's what time.

second that. my like either or would of to operating thought EBITDA the guess, then when -- thank business, reviewing say you income My the were Scott, Americas the first? And a the for you the second question in Scott. Okay. you question look quarter I is, that clarification -- did you the

please that, Scott, I don't --? remember answer would you

when Jeff, terms the regarding those the customers question, by mentioned, Yes, turnarounds, for Happy planned it. spending. was are maintenance appreciate I as And Thanks, driven yes. take to. turnarounds. Sure. And our Seifi my comment, that

and see term quarter, incur, And the we'll the comment in the is of So, that my for kind expenses it's spending we level be there it's the that a here. of not that same in maintenance technical saw lumpy. the on of surprised we second if sort And first quarter.

Okay, great. you so Thank much.

You're welcome.

Thank you, Jeff.

from our Citi. take PJ Juvekar question we'll with next And

Yes. Good morning, Seifi.

are this PJ. morning, How morning? Good you

Doing well. well. Doing

So, question on Lu'An.

that gasifiers You that have in other running China. are mentioned you three

looks is company is -- just it the can that? it it's is coal specific, Is that what on shed issue light and the just current process it with that price -- is Lu'An? wondering, issue, it an profitable is underlying downstream fuels like not So, some that it's at you into or

gasify is has think with of as to are because kind would PJ, specific -- I projects that say confusion to -- a -- people number need anything don't a to it that much one, region, want little to to be do, we there bit have issue need it other They as economic -- is Lu'An. the there. related convert of and I said, management like careful a I I implying that gasification as four I me working. to into And

more but but into chemical and anything have keeping they all all economically all just that -- decided the you shut of for do new people time that. lot and the fact in significantly than it's because assess the has a That of make basically one trying the want that. parent facilities They options of down people company fact taking can that in their consolidate state of plant of that. and look of are of the prices everything But the coal their of that is to sell months to at I options. to facility. look China coal, said our the all to higher and the Shanxi new last And and have reason is the a winter management few can mean, those theoretical So at argument,

for Okay, that. thank you

Thank Okay. you.

quickly And on then EMEA. your just

in packaged a have the You Would that most upside will Thank business that Europe. you. gas down have you that post-COVID business recovery? say

that They that The wonderful job. very it will. it produced keep act good. absolutely. But results -- last there, have there the are if in is Yes, away, significant Europe job. the very By they there our Yes, a say have doing what's is pushing is I quarter they doing will. on going COVID their have a good yes, goes upside considering and very, team to pricing they together,

Bank. with Begleiter And we'll take Deutsche our next question from David

you? How Good morning, are Seifi.

inches being XX fine. I'm you? snow, Hey, under David. How are Other -- than of until buried perfectly

deals soon you? and issue online just resolved Are are the is the How well, after doing thank project contract you. on I'm is Jazan. the and come the can completed, Seifi, signed start-up?

a that do the we tier online you seating other is close, as theory are the or online. we day the not, The refinery financial deals. Whether now is our fixed like

our line. the So, the next of the financial the on we day that will see the EPS closing, do day bottom we benefit

Understood.

look for close. Yes? about announcement the So need financial the you to

potential on new for Is on them. Okay. on working another potential green projects, And hydrogen? I announcements you're there just know green hydrogen this year

projects projects. things I those for me and on would go all be working very that. that I But mean, other to are be big going idea. there. David, to are have no we be -- and I'm responsible not not would of specific

too. other on that, need give working do to specific, that I are be We can't a projects, to me pass that but you on

Understood. Thank you.

David. you, Thank

our Sison And question next Fargo. we'll Mike from with Wells take

Seifi. I'm in Cleveland, Hey, in well terms of… snow buried in as but

Hi, Mike.

of basis. doing? that built In to -- give XXXX. an generate the are to you to in a nice be but growth seems able model some how can't on annualized in any job do know did Can you In be specifics, you I growth, 'XX? still EPS terms EPS you

at So, the in think longer-term you algorithm terms of all could of what then you do changed has in EPS growth terms growth?

way years, happen, average or on is will we deliver and that No. view the we'll years. will make believe make That the We our and same last in still changed we done that. hasn't five six had happen. it we on in next My that XX%, best the that to about do our goal the six

Great.

structural fundamental reason [Indiscernible] that ahead. yes, -- go

Yes.

of on to your terms comments 'XX grow? any Just ability in

Jazan on the we not if close if at reasonable It Lu'An increase frankly much and subsides, COIVD time, be a Well, a starts should XX% -- problem. quite too in of then depends. 'XX,

Got it.

only not an have can these big guidance, of because any giving because these of but not -- also are We COVID, two effect. things

see of little lot Products, patient a need very bit as the optimistic to a Air December for know. you and bought of So, But works to that's out. future about why how everything we just I we in obviously, sure, shares be I'm

give -- I'm picture I'm a So, personally, but you to here. we have optimistic, very balanced

it. Thank Got you.

Thank you.

of Bank And next our take with Steve question Byrne America. from we'll

Seifi, of just just view slowed, your Products diesel have to you. a globe whether hear expansion curious, potential longer-term per per is and bit -- California, but opportunity in here diesel and Air has California firm. that on than meaningfully is the renewable or of unit mentioned renewable on that a different? net of opportunity you an was kind nationwide refineries to of use hydrotreaters pipeline is rather if there diesel whether of whether versus thank diesel of a you the is unit Yes, potentially some there that wanted hydrogen an end of difference, market it just over Gulf in California, the remains your their I hydrocrackers to renewable hydrogen US converting

what Steve, an you're good your saying really talk can observation. a don't That's I all Yes. But us. good actually it all We be business. and very that for things fundamentally, statements. are insight. correct that with very you to that -- upside about are the a have not too much want of because of saying you is agree our

Okay. I correctly, that to or crude? -- and was XX. you and, we've a back, those wonder, were discussions in number believe going a I much given trying years the I lot reconsidered being seeing idled remember projects lower considered and gasification those over crude was in year, than recovery And that that or if not forward kind past comment -- of of just just of any of a have been pickup activity whether Seifi, this a now and the whether seen number, recall I more may about you're I couple made

of pulled and time are back know see by, and gasification. about well are capital everybody Indonesia. think as projects also you in are we consideration, I in -- do gasification most the India so significant China, with activity. coal we goes only in as Those But of very -- on. the we we under not number optimistic There And but terms expenditure that COVID, expected places

position a is products We if project their that. very will are we of frankly, the in there. another get have bet strong world, leader. we market very, by there Quite And XX% far gasification would the you I

be to optimistic continue about we that think I So, that.

Okay, thank you.

Thank you.

And we'll take our next Markets. BMO McNulty question John with from Capital

for Thanks my question. taking Yes.

original guess, when is be sounds on anything like the of Is on that? one points think sticking the at or So, you just changed else were least Jazan. much that like first terms your or does your as to the the line It profitability that the -- fair based has on like would overall of discussion finish I sounds expecting when you kind what line soon anything get this it are, with you as that thing pretty about expectations.

will statement the secondly, of in kind all, as bottom as on good we First is accurate. your totally line line, That see with well. would soon this you're done, thing is morning, our of that And means impact Hope you expect. John. what

you're where the then, guess, on confused kind to Got it. the kind declines in at admittedly, regard COVID Americas, bit June seeing of kind the were of I the Perfect. the we weakness, as And quarter. guess, I of with a heat same saw you little volume of

the look has I gotten macro, improved. better? things So, guess, Like haven't we it like it looks at when why

from So, function maybe -- guess, point? of of, quarter-to-quarter-to-quarter this don't a kind at just and reason Americas to maybe blame? at of I of the is that's why the that, part isn't whatever better seasonality guess, understand the getting I quite refining it the I least that's getting

would maintenance like biggest he John, provide that answer I wants. the are impacts you to I'll an Scott comment then costs. But if on and

impact great I talking don't that lower things, the ground, mean, the are about have the Those and is significant helium on slowed bit. friend. still impact struggling, is US but that -- down is volumes. is that is see yet. third my the refineries rosy And we these a that second economy The the everybody fourth one

reasons. those So, want the four Scott, you further any are to make comments?

remarks a I is point you underlying COVID to there's the like I No, Seifi, said there on seasonality as prepared And some mentioned, that situation. But that. the with the basis. also out, sequential agree economy, in just helium there's

agree just with you I said. what So,

color. much Thanks for the very

lumpy, -- differently, different steady otherwise, to but as a there when increase. improvement we as as in to expect forth things the the All act and see is restart economy, and opposed businesses COVID so a will

Got thanks a lot enough, Fair guys. it.

Yes.

John. Thank you,

question with take Parkinson we'll Chris next And from Credit our Suisse.

doing great Good just have morning, ones. I all brief you're Seifi. It's well. to two hear

brief as any Just your and potentially just update pertains your opportunities, addressable carbon work do internal tech on anything perspective have it projects you a first could with third also market, you on how capture to given the expertise? parties just

is all, carbon of first capturing to one help being good well. Chris, but right capture even Well, are carbon because before driven, is the environment morning, a push than rosier Chris. now. and that, significant look Hope there you're the things all thing opportunities of

a to hydrogen. people will going that for last especially their COX There investors making blue hydrogen grey be that and demand called the hydrogen As for And, is last in the so-called ammonia year directly economy power capture is plants. the half the significant to to years, into now that thinking generated, I and you ammonia that transition therefore, Japan last, decarbonize. about two boilers where and take make and And the they that it blue how hydrogen then ammonia their is a to then you hydrogen. the then then wants blow the is are hydrogen, talked are blue green

blue So, conversations that. so-called there hydrogen ammonia blue demand, a lot about and of all of is significant and

on capture. We working are carbon

it progress And announce or develop projects. is carbon in size to continue -- in we to I've takes six takes years this you work making We for appropriate that of these four are on It show just about NEOM, like three, meaningful to talking to will said, something on five projects capture. thing. as I time we been This years. you

news will are and the some hopefully years So, you them on working have come. to we in we for

that We'll lot just of that forward on lot half, be the and to Can certainly you you're of the some much. the opportunities actively the already expectations of very like fronts? reporting India and our bidding more of are you've bid? constructive rough more question, And brief or we which Thank news. something we've in expect look just local to heard already second given 'XX that. still methodical those a fiscal the very on potentially kind media speak you in second of a on seems magnitude with projects, latter and just it Indonesia possibly those Is and timeline, year should we could balanced obviously in

experience, your question. you things of Chris, thank very that the one Chris, life Well, for much in learn the is does one that you from past right.

see and deal a you hot have gotten have of we [ph] because before a now done lot Jazan announced We quarter to was it every we explain.

So, we obviously in gasification in talking are Indonesia. Indonesia, about projects

that that been We we is past four anything ago. met years telling the announce-able doing done X.X the been But have I there have you for haven't years. we yet. ministers

and and actions why course be are you of the we and to the people, Chris. every discussions. lot when some to will but with to memorandum real And of depends import and rather be we of get project. quarter that of have think come understanding have us, to going again, very of be project don't complex then are we It all seen going and than want responsible to a it changes to significant patience say, the all reports, have impacts These of of There talked on those explain reports, have signed a on hope government just all we and complex. some I who projects to don't importing now anything, I talked just have didn't it's I've have of It read Jazan announce people who about we ourselves. just a we the projects want that, and product. a something we We want product, those It's very all agencies. not are of become ahead countries. of like do to oh,

you certainly very I for will. color. the Thank much

you, you. Thank Thank sir.

And question Oxgaard we'll our from next take Jonas with Bernstein.

guys. morning, Good

are How Good you? morning.

a a was day. I course. here. more every going bit I to bit the -- Living scab to the pick little little at going pick dream was of Lu'An

you signed of that going agreement Is you happens but it doesn't? your it's the confidence if management And So, that there mentioned with high have a is part there? restart, to that new what negotiations?

talking you're starts? about so, the -- plant never we if never what if Well,

Yes.

We with have reduced a agreed fee.

will restart court or We -- come wait will we they say, then as enforce takes we never a going But to go have not. contract. another and whether to it a as they start long we plant, for see quarters this few contract, if and to our are

that. if go never relationship contract shuts we very is thing prematurely know our court and about clear outcome want of Our very has are very the with is enforcing we that permanently. destroy defendable to because this that But don't to what is customer about the down. customer. clear, the and are down want start they didn't didn't And It it customer very to -- happens told we we what shutting confident us

haven't So, started yet that a then and I -- they it's court next time, enforce with patient a contract. they to send at customer. go mothball and us plant, year mean, they of letter are to and is this being even we and the working going our it your matter

you. thank Okay,

Okay, Jon?

mind, Second hydrogen. on question, if you don't

approaching companies competitors even really are considered aren't Your hydrogen competitors more much guess, who, I right. and tentatively,

their megawatt going to your talk first from project the -- week, you're say, Can inaugurated competitors that reason how step X.X you mega so XX I first rest? gigs this do in you the to well, why what, and Your swoop. but without fell this zero, of zero one electrolyzer like, from, baby wouldn't about you close are but one you're different last can -- confident or

to is gasification and Jonas. reason thing put we different competitive way But and position is what use the in green doing we same the be we Well, hydrogen. that competitive main want that our to we are customers a everything, doing with are the are

building that cannot X.X, big ton we that those not. we technological no oh at but as do X gigawatts and my if that up mean, are what Then The are XXX day a You small we we them doing And we taking are everybody megawatt at take XX put it's if you going building, as not electrolyzers. that you are are together. are X are scale gigawatts, things of is known technology, -- scale. risk, we of wind and a said solar. to it's doing doing god, NEOM? deal. That's XX yes, says, I that, yes, how are We

million risk there. no is plant ammonia ammonia plants there then the place. the X we And all ton in So, building are over a

thing terms doing. ones and It's the in decision, a took people risk, their That work big is. but the no the first first, do of who the and scale of then and out the the project, So, can That's get what is taking developed we the the confidence. in these being that the that benefit mean, scale. number source difference first the customers any is they those where green you, mega But is to a want are my economically we gearbox, and buses risks, product the are of plans, project, to so they Volkswagen economy is we make to not the is the And GM to know are mean, the number I technological right. are, infrastructure, spending is GM have order we in you it's to be everybody electric it's are that in is convert fleet. one, when that where Then people move technological of main have thing look different doing mega of motor going are going somebody is one. the said, announcing them. electricity confidence not So, if and anytime. that being point what how this their the what I don't a people it's what who that I are and an car, the have big a on this is somebody electricity. to second creating projects to the that bigger make going we creating are like don't I to an commitment because are out it and advantage source your doing green make these a of you we of hydrogen and is to because you doing and fuel when make feasible. is the at going you makes but are it deal, not stock green get put big not are billion, There infrastructure. Well, to go assurance stock Tesla not build economical Francisco, what a significant look And god, first you San a are number you have you here, for convert is big GM what guys if a vehicles us two, unless convert. and went not to comparisons billion them then mover you mean, to to making have what's to $X But cell $X at converting? own at will look we well,

I comment I we So, day. besides when smart ton have yourself about want hydrogen, about what like things. that what at doesn't for know a are doing is on any really no doing. don't XX economy sure question hope doing ton are and very them what will green XX comment a are people, a real competitors we and and we people opportunity I sure, these are are go them. -- but of go we to are you are we for That what things they They know, for make not doing scale, is scale and our not are doing, and are have the those produce toy what that, But doing. what we -- I'm they they and doing

day a We a in Arthur. ton are plant XX Port building hydrogen

XX building other the tons world. of hydrogen plant are in parts We

So, that's future. mega is scale not a big deal, but the the

Jon? Okay,

Thank you. Absolutely.

very Sure. Thank that. Appreciate much. you

like And to I currently to over at queue Seifi no call there additional questions remarks. any the turn in are would other for the back time. this

for to our We being quarter. call. look your discussing once like on our for next results forward and Well, thank thanks Thanks and again, everybody interest, listening our good would again to appreciate we for questions. presentation, to with you I your

And As you, and safe the Thank said and to best of families. all stay I your healthy. all again. you earlier, please

for today's conclude conference. does that participation. Thank you And your

now may disconnect. You