Air Products and Chemicals (APD) 5 May 222022 Q2 Earnings call transcript

Good morning and welcome to the Air Products’ Second 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. sir. ahead, go Please

Secretary. I Good earnings Welcome Simon results Investor our and President Jess. today be second Seifi by Moore, Air quarter of Ghasemi, and we our Sustainability. Vice and Officer; Sean Relations be Corporate XXXX our teleconference. President Executive Samir and Relations, Officer; take pleased Schaeffer, Financial CEO; morning, you, Serhan, your Dr. comments, our to to Chief Melissa General joined everyone. Chairman, Products’ After Counsel pleased to and President, Operating will Chief Vice Senior our am Thank This Vice President questions. is Major,

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

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

to turn pleased am over Seifi. I call Now, to the

a Air to want situation to Eastern on your call I Thank everyone. Europe. by you current to very saying you, Thank from taking busy for and schedule few the our Products’ Simon time be in to regarding good today. response words begin day

condemn impact by aggression in We this peace. the the that and We world. human the tragedy are conflict all encourage for has deeply efforts on this and Ukraine concerned

we affected out go hearts those region. support to in employees to this are and continuing Our our

Committee International to the Cross humanitarian of we Foundation. from support, are the a including Air providing company, Products the As assistance Fund Red

to Our responded supporting colleagues employees also and making have with relief out to organizations and contributions efforts. generosity, their affected reaching care various

is a the million in and of separation about Our sales small unit presence development we with last year air suspended have the in in Ukraine fiscal country. $X minimum

small, Our Russia last $XX less is than in business also fiscal very in with sales million year.

of that We country. in the are stop in business process and Russia exiting doing will

Now, significant conditions delivered get each supply COVID-XX effects results the quarter, year. our $X.XX, caused inflation which the very our serving to the people customers. before chain dedication around the lingering to strong disruptions difficult war, the and by higher earnings per details, and virus, I every share hard costs, commitment into previous of to their despite an about Last XX,XXX in for is we want excellence thank work, and employees one world XX% with of than energy and operational

our dedication and always, move is advantage our commitment competitive we people’s As as forward.

at #X, highest look our on is which safety, please Now, focusing Slide priority.

second year. similar but quarter performance to quarter, safety last last still Our was behind

area not over proud we past years, are significant is the that result we the in this Although made of few have acceptable. fact this progress

we and purpose come and accidents work. have we goal, zero we what also achieving slide zero And organization. moving to #X to #X the forward. remains and our everyday we goal do trying when explain management are goal include that Our are across committed to our to Slides philosophy included to for five higher incidents our plans our

they as as follow always guide many everyday the our have to have shared forward. continue emphasize principles before, we point part them times to will that these we slides will We the us but are with that and of package investors these move we

based to explained for on strategy is our in forward moving past, have the our investors we two As pillars.

existing our and gases for running with absolute industrial pricing maintain improve The market greatest and inflation. That to and in is business. our invest the share, productivity, operate to first compensate efficiency is excellence

strong that challenging since confirm very we delivering strategy, results difficult under have Our just announced results circumstances. successfully implementing that are and are we we this

the of pillar technologies to our worldwide is to in player second a unique our future The strategy take of energy. the to for transition be expertise advantage significant to effort meaningful and clean

executing content almost for on in Specifically billion are produce focused the of $XX sustainable this fuels projects and world. that confirm area, we bloom more the and to to quarter we ‘XX, of In backlog we a these strategic this these second projects other of come. and have developing the mega way hydrogen green the summary, there projects commitment and are our significant two pillars. In that in announced in year fiscal of projects our explains to

business, our investment semiconductor billion two base in electronic projects are in the we you see $X.X can some First, manufacturers real #X, announced largest in on take-or-pay of contracts as for Slide the with world. long-term These mega projects industry. major of with the

executing these that our position in semiconductor be to proud projects are We confirm the industry. significant

for facility of facility related we sustainable California to we on XXX fuel pillar convert convert oil, use such to will these approximately conventional a cooking that raw to substantial to are per material use in be materials Slide The that material plant capacity to second amount As Southern its million the as #X, aviation of fats, a the one hydrogen gallons as strategy, base animal of building refinery see can SAF. year. as you will airplanes. produces this announced fuel raw called total and renewed our $X This etcetera billion organic

are in private emissions there decarbonize. of world was is travel. sustainable in airlines X big a world reason the the generated on yield. with reducing encourage Although in our gallons. with the are XXX to that world The consumption this move incentives ago partnership focused Major this strategy leading fuel looking carbon jet airline fundamental to Energy, towards significant their pursue sounds We corporations XXXX, the producer years This fuel. a airlines are aviation opportunity. is developing place currently this the than business started to more World already billion sustainable like by aligned project company in number, And

is that agreement Energy Energy that the a World and own and Products will has commitment an Air also engineer, pay material. project Air ensures will build product provide the and World to sell Our at – acceptable fee contractual Products will the the on investment. facility return raw fixed Products Air

can since California. and We uses about in our are of projects significant a established also very these we extensive from that hydrogen hydrogen Southern excited pipeline amount supply it

partner in World company. is private a Our this project, Energy,

that domain. and is there know I them available information fully little the about public appreciate So in

That the on to disclose principles information, following of This to and We Slide $XXX the work information #XX. out profitability $XX just profit. that delighted on the project. the of be the self-explanatory found which are sales World can converting million refinery are great just sales that with I’d have included the company of products bottom of today. we numbers, Paramount this Energy million #XX out Energy like we that point permission and and World for to Slide on from we is is have sells

bio-diesel. produce in numbers disclosed. in Energy I has gallons to year those America of also The not want that, of sales million Canada other plants report already their key XXX and capacity XXXX. make number in World we are addition to and to a profitability the to that Slide to stream expect mega good the building on progress we stream have #XX that you bringing bring major to in on we at projects announced. this time and that continue projects highlights In

shows board, slide. we Slide we as past over like moment first Slide And Air please of reflect the I growth year earnings shared you deliver and the our would our X can years. per President per as can cost performance dividend move EBITDA the to is Chairman, of long-term on our promised share. And margin have to to to X last growth take EBITDA with the CEO our our to still goal years. positive On XXXX, quarter energy, the goal the future the cumulative points we continue that to favorite investors X ago. during for increase promised X,XXX forward. you have Air shareholders per years chain my turn Despite call with in margin XX% past average that delivered significant all the results see X turmoil XXXX. and year a almost in in was Products see XX, our I was On since deliver In average than last It XXXX. July basis similar Now, the my XX, over Products, on conference more inflation finally, years, than that for disruptions, a over XX% #XX, we and supply Slide higher our what investors

turn results to over more discuss in pleasure my Melissa? details. it’s Now, call to Melissa to our the

Thank you, Seifi.

same we earlier, and executing are supporting growth at our mentioned our base the strategy time. Seifi As business

per large long-term consistent venture the results. of delivering a on to full that projects quarter $X.XX a up expect year second our share continues Jazan businesses our base $X.XX our full quarter near-term joint Both started QX benefit, The contribute base commitment projects large We to and to results. during business provided of growth, with basis. drive fiscal while our

I variable of we to was Our team outperformance with want most thanks and execution significant a this experienced noteworthy pricing their where the actions speed my cost express also done. the in exceeding well increases pressure. Europe, cost gains contributed The for particularly quarter. to job energy

Sequentially, billion compared X%, higher volume, rates to more in of volumes Operating equity basis than declined equity primarily negative and was the the affiliate more prices third overall, this Pricing EBITDA quarter to down by margins income. Volume XXX favorable company strong, affiliate pass-through XX% translating Now, This of response total combined, our for price merchant accounting the the segments, increased in to and new please teams costs was our the Slide hydrogen income higher from X%, last merchant second year. were the elevated impact actions for to most X% and basis increased search. actions costs XX% of consecutive as is recovery, EBITDA sales strong lowered And quarter customer as volume favorable income offset energy specific due increase our our increases the quarter driven turn were operational results. XXX margin to across all points. business. implement up up Higher sales also of significant our Energy remained business. volumes quarter. than price costs. equipment double-digit assets, XX%, higher leaner lower in exceeding increase consecutive by higher up The gain and on the XX increasing pass-through for in price activity. demand about $X year price prior energy by X% continue merchant driven costs. mark X% unprecedented [indiscernible]. offset points second

However, XX.X%. benefit which [indiscernible] Adjusting ROCE of quarter. have income EBITDA on was primarily net support joint down XX.X%. X% projects sheet, have to was was X%, our and this We last announced. major been the balance ROCE previous the was finalization due up the will to venture, cash, the have our we would which for currently significant cash related our Jazan-ASU

We the expect ROCE improve deploy cash on to current the in we environment as stream.

Slide Now, please XX. to turn

than adjusted resilience model. price quarter price $X.XX the our of and second testament $X.XX is XX% revenue $X.XX energy business at growth stability, more of or double-digital quarter cost was our variable consecutive net increases. last cost Our the unprecedented as was above of and actions the was which and year, EPS a favorable year-over-year growth offset fourth Volume $X.XX, to

before For price against contributed variable netting actions alone the $X.XX. cost quarter, around our

expect Our significant helium invested external maintenance investment globally. have and supply One in growth, increased investment due provide future example to future. factors. we customers our higher our reliable generate storage This but to investment cost for value this the we now, of combination are other caverns from in help to costs planned our is the that helium to

bringing We also prior increased on cost projects we as see stream. resources higher to

to region. ensure primarily the full its half for cost For of our on it to example, this of gasifier complex we the roughly on We remaining have operating actions comes strategic across year. joint will the productivity driving first to continues quarter. across deliver attributable once the These for total responsible venture responsible next chain long-term external The purposeful The be stream focused half success people, GTL company or begin Jazan remain inflation our hired business. factors results quarter who expected. increased approximately and was contributed and as supply challenges [indiscernible]

slightly an equity this share we and the last different is from be projects, Our than are updated income quarter, results for to quarter as entirely realized I difference this this and of the going is we reflected we forward. EPS. our but profit. affiliate of interpretation forward. project moving joint in for the $X.XX it’s continues accounting will affiliate believe approach income expected. clearer the no higher investors The the to Overall, There share line our by ventures quarter, was be bottom will deliver equity discussed driven

of Our favorable second was rate year, basis XX.X% including quarter than effective lower points tax the Jazan. impact to last XXX

tax this income remainder for is of to rate and expense. year. higher pension XX% the expect our We driven Non-operating between be $X.XX fiscal lower by XX%

Now XX. to please environment. despite turn generate flow The our the cash to to geopolitical us challenging business and Slide of stability strong allow continues energy

our distributable taxes interest, we paid to that maintenance for to on cash on in our [indiscernible], per enables billion than level. usual strong deployment. continue spending value XX nearly as our uncertain which high to nearly increasing capital share complete. dividends shareholder and over the Over a EBITDA our returns or create generated driven XX higher expenditures. distributable $X.X Slide flow, This from through capital $XX.XX capital $X.X capital an XX% new months, we billion and $X from global over is of times, provides flow, around billion $X.X maintenance Note our even update available last little have the in or over of dividends about From deployment. is flow and cash million higher us still cash shareholders

announcing great markets. major on and progress continue our growth We to developing, make in executing

greater assay show investment we significantly than In the see opportunities here. potential fact, we

As filing of we capital potential which and XXXX the billion $X XXXX. is still $XX flow for billion by you billion given debt billion fiscal includes expect additional see, available can deployment $XX growth, potential taxes. billion additional available cash We and capacity would additional and $XX already our EBITDA about to for over over is generate be of additional almost cash $XX believe conservative capacity spent. this today,

We will managing targeted balance continue debt our to current our maintain focus to [indiscernible]. on

XX% So already committed XX% said capacity you can of we see the already here. show updated have our in we

made capacity our way to still continually project. the return way back results, the and shareholders. We of our over have have to remain the business entrusted [indiscernible] progress investment and available We use us in levels high substantial evaluate in determine by great We Seifi? run. to believe investing our cash shareholder that value the call the in the in To create is these to turn begin projects best will review long Seifi. segment I high-return business best

Thank Melissa. you,

up China but business. results. across compared increase please for on Now gas Asia were year, on overall volume up new Price last stream #XX turn higher to control of of a for about improvement variety this X% traditional region. to plants was parts our merchant as industrial equals Slide has primarily have positive. price came the again X% Sales X% a X% region to for the China’s The better dual price was restrictions eased, in was more policy Year COVID than quarter, impacted higher modestly unfavorable favorable, Costs needed new and due plant our due resources to X% X% and increased costs. our to Melissa to and that support offset the impacted declined inflation start-ups, as mentioned. sequentially. customer efficiency as and costs. EBITDA Price are last Compared demand. Lunar primarily supply They chain project primarily lower to also X% volumes holiday. New volume

China’s last government power allow This compared relaxed costs resulted As has in mentioned has approach our tariff costs fluctuate. last program during earnings quarter. call, power to local to market-oriented to power its higher

supply were However, better due efficiencies. lower chain costs to and our overall operating

margin than lower sequentially, offset unfavorable volume basis was and decreased as and more XX points EBITDA costs. X% price the Our EBITDA down

impact in second are the planned year, the of the COVID-related the maintenance very higher fiscal concerned expect and we potential about half of do For restrictions China, we activities.

the Now I talk call would European about turn to results. to Simon? to over Simon the like

Seifi. Thank you,

and moved Xx were Xx Now stayed costs please in power Europe while in more up peaked higher gas almost turn yet began XX. Natural in higher. significantly January to but Slide then moderating costs quarter year a Energy ago than the the March. than highest costs

of also business than in power covered which significant on-site passed by the business, implemented on-site ASU our our more our mentioned, are contractual natural not has impacted higher prices. our Melissa merchant price In through gas business. so costs, As higher Higher directly pass-through costs are the we higher power team quarter. actions, costs this

In this job great quarter’s and the the recovered fact, QX. Again, from team. unrecovered our we about costs a higher costs half of by

working to improvement. vigilant However, and are further we drive remain

Now Slide please all volumes. but business. was accounted two-thirds X% results. region, for lines Price Prices which income currency, for and net XX% as across Europe separate sales the cost agents. XX% major higher better sales EBITDA pass-through, than than product not turn unfavorable and increase. of prior to the other increased translates the year, on were sales to of XX%. to down more the a for were Compared X% more increases offset up which up review volume negative XX merchant were Volume Energy costs. equity affiliate our profits costs and merchant of variable higher higher by favorable price mix was for

persistent, chain For the supply caused plants efficiencies. cost significant both the quarter, energy operating the negatively increases distribution and impacting by disruptions

XXX merchant merchant due quarter, equity of actions. last mix, than the mostly to inflation to the EBITDA X%, to due reduced price X% offset higher prepare we new allowed on also improved up sequentially, margin costs the This volume to offset to while continue by than further for prior partially an the lower stream. costs projects demand customer-specific by energy We lower, already Compared driven jumped Volume significant and and EBITDA higher higher the energy compensated the was strong costs. was was hydrogen higher pricing pass-through strong XXX price the margin lower equates more and income. increase. costs The non-energy-related points higher increase negative as remainder equity operating from EBITDA more improved basis X% and XX% for decline points to on to due volume. was points was coming which business. saw quarter, XXX income us affiliate basis basis strong performance lower on about most

Dr. would discussion I other the our over to for turn Now of brief to a call segments. like Serhan

Thank you, Simon.

Sales results. year. our were please XX%. a last to XX% for and review turn Now up XX price Slide versus Americas of together increased Volume

Americas last prices levels. to region a excellent this positive to team Our price compared cover in region. Price, an primarily energy improved year job for the higher key gain see the also demand in recovery costs for all grew we to the Prices equivalent pre-COVID XX% the did Volume also was were lines raising variable also is The last due demands. and costs X% up sequentially. quarter. in hydrogen hydrogen merchant increase better of over X%, general, and business. year to our net the In merchant product

Although outages. quarter hydro planned volumes the were by this impacted

third decreased Americas then a recover due gases lower as fully at expect we reduced The Meanwhile, to continue oxygen level COVID volume into expect income. the demand planned to volume for cases XXXX. demand affiliate quarter medical declined. high move of also in equity to was medical weaker We America outages as for our South merchant

equity affiliate improved to by to higher challenges, to costs. price better as EBITDA income and year expected, by driver price points inflation as mix by due are equity by XXX was positive and broadly was negative planned income. more price. flat were shortages unfavorable Operating reduced Costs affiliate income, lower partially costs was was costs, but was this strong impacting to offset lower previous chain-related EBITDA down due basis we lower due mix also was income. due than costs. affiliate maintenance which As maintenance was equity margin that including than up higher volume the income it this Operating the volume unfavorable industry. impacted higher additionally planned offset covered volume EBITDA impacted Sequentially, were outages. quarter the and and lower maintenance primarily supply primarily increased partially quarter.

are our segment India modest XX, in including Now please operating Jazan our our includes Middle turn in in to this Middle India. and segment, East, East income India businesses are since wholly and the which Middle joint in smaller owned venture operations Sales East size. the Slide and

report includes in venture, venture joint AB. the for However, Jazan significantly the India venture equity with income due equity million as EBITDA previously up of the joint rest the start-up the and and to to of team segment’s increase Jazan items carbon pleased of related lower ventures. joint started affiliate our planned. included stake successfully previous our The gasifier to profit affiliate quarter one that our number the joint full $XX the Melissa continuing share steam the was positive Phase a NAX units, X affiliate Sequentially, income I’m and that discussed. the income finalization Jazan is of the ASU quarter net related non-recurring in to

our to segment. which of centrally costs. corporate and as sale addresses Now as XX, functions our Slide includes please well corporate managed equipment This businesses turn segment our

our Over years, now grown equipment of few the of responsible profit the have considerably increases – sale are the for this most and sales reasonably past quarter. and businesses non-LNG

increases. LNG contributed these remained and Our activities also robust project to

our projects. major until Seifi? it the this to comments. back to develop, customers’ translates this LNG projects As call But take like increased into significantly. for closing have will time projects new to I provide to his interest since some return point, expected, Seifi time At inquiries would potential be over

you, Thank Dr. Serhan.

friendly security of the brought that transition, has consequences and clear, and national we are the conflict organic will issue sustainable our the an desire emphasizing aviation fuse positive situation in reducing Air Gasification the nature allowing own projects of around environmentally are energy, including their renewable fuel way, to the the are of far to LNG diesel utilize forefront, the and in countries future, the leading Although critical their air and a energy us the imports countries skills the to Products’ again Meanwhile, large to Ukraine LNG will customers of these strategy faster projects. in reliance allows evolving as the technologies, for world. experience products their competencies the their has fuels. from highly sustainable energy from chemicals. critical once valued benefit resources development Furthermore, equipment Products green leader countries be supply and additional and reduce technology drive transition. for resources, energy Air a allow also fuel, on and will provider diversified including energy and encourage for hydrogen renewable in independence

Our industry-leading gasification kind technologies project is NEOM Hydrogen the are suitable Green can largest feeder of world. create for stocks, various the types which project of in hydrogen. The net-zero its

investing high-return for new the now in we Therefore, and is Products is be rather security Our and significantly our for replacement LNG in in all The the integral of transition and reduce heat gas and in for conventional fuel. new liquid an way opportunities a project exchanges, The carbon footprint focus can profitable which growth the significant creating LNG believe to aviation to on right forward an continued natural appropriate drop is return to facility California in the buyback projects. our direct future. projects that support jet convert transition to sustainable modification. Air fuel energy equipment energy firmly energy without investors. industry are share part It any than produced aviation

Slide I of model, Air confident Now our please turn Products’ execution. our remain resilient and to highly #XX. strategy business

economic fiscal to energy per these last constraints, and supply the with $X.XX last share higher our opening and continued impact quarter. about COVID challenges, $X.XX, year guidance $X.XX almost driven XXXX, year concerns Even costs. up by inflation some chain challenges, have to do for backdrop, the over XX% XX% than is I quarter of three However,

$XX.XX per For last XXXX, unchanged than share which better at year. to to fiscal $XX.XX, is earnings our guidance remains XX% year XX%

project. We billion more believe not $X.X cleaner, like energy. Jazan forms exclusive. continue for and directly our transition sustainable approximately around ‘XX $X billion, to mutually X a CapEx the carbon $X.X security of previously to for #XX. sources are billion The including needs. The these drive this needs At to strategy Phase to more energy Slide you see I’d in world of to invested point, future divest turn our of addresses be to and We the lower energy

the drive dedicated clean the accelerate to we the key dedication We unfortunately, need, people people world, talent our the reality. As progress. toward this to and of are help making and vision have energy a talented us

commitment As competitive and hard say, is of the I people. our success. motivation contribution and work ensure our advantage always long-term will our Their

So to at my very questions. and we will this comments, be Operator, would answer point, for questions. I ready like to end are we delighted

you. Thank Morgan with Vincent Andrews first Instructions] from question will come Our [Operator Stanley.

Please Your go line is open. ahead.

and are good Thank you morning, how Seifi, you?

Hi, good, to Vincent. Great hear from you.

in Europe for inflation corporates you. sort off to that about thank in how seeing consumer bit given the you’re and the for general, volume European a customer I’m the and just just and wondering if little you of talk the some much start else financial decline other could Okay, anything more and environment obviously of to operating challenges? or with maintenance versus of was related how conditions sort macro of the

Sure.

decided Our for in business small overall, But who of decline. feedstock to our the their the gas [indiscernible] change high related specific volume one kind customer specifically do but because to natural decline of we prices. gasifiers see Europe a in

is I think reality But energy the And that effect cause prices. we it cause is we of volumes there said in are sequentially X%. energy That our that about high those were the is very prices down of Europe obviously it concern, but a is is significant have a it demand. dramatic a – is and but of deal. affecting not to it not high

help such there. in costs on out we come from doing the begin you a Okay, think there what sort you’re be have investments, that in that to But them to the incremental going follow-up, of thank those called you be to year-over-year is of and costs plateaued issue? investment as more they will a obviously, whether do won’t Or quarters? basis, understand coming sort understand you. lap us future now other And could easy you

in Europe example, penny. fact are our in energy Europe, that order green it to are to need infrastructure [indiscernible] build But crack we building that for green obviously, costs we related Europe. to that increases, supply Well, to the and bring every into our the cost ammonia

And days trying of have equipment because started buying by starting need XXXX, renting to they start then early our that building need but new properties – that ready expect and to and it sell is that. up it get to So expenditure infrastructure. the customers and the ‘XX, that, ammonia because that the in to engineering and bring is the we and the all we all and plants requires of customers, process. green are they us and world, And to and around do people

things, forward. costs, move those the of where they So very be don’t growth. for now, expect little than on us would are see But those bit they the than in we our should overall costs maintain scheme as you focused as software if right But a and significant uptick be. related to I is Vincent. higher costs are to going see been more a it, necessary are We’ve justified you that

That’s you on. I exactly very Seifi. I what Thank wanted much know. it to will pass

you. Thank Yes.

from Kevin next Research McCarthy Partners. of comes Our question Vertical

ahead. go Please open. is line Your

the Year relates on thus And region? any seen the can much current versus pricing of on volume? sequential the And modestly maybe as in you it lagged? on for volume, us you to of the that far basis. How Cory quarter help COVID? understand Lunar Kevin. is why for impact to In then have related in the in has This was a pricing Asia, Asia COVID impact context And New the declined it

is so going significant justifies Fine. reason there the us that to prices. With in and inflation up Asia that no to the the prices customers haven’t Asia much is respect increasing pricing, because energy in gone

on this what progress is of they we much current because restrictions So the It New almost Lunar see volumes to impossible effect the COVID impact to decrease dynamics. the restrictions. relaxed And in it mainly have actually do But put that on or The in restrictions due how quarter, because in on in is March, would depends are be increased it the effect. predict fundamental COVID. more to of the depending that the as Year. beginning government are some are we starting Chinese has clients

and carefully So swing because watching in way. very forth situation we it can a are significant that back

Understood.

Cory? Okay,

curious great on the and rising context you. projects? In need potentially follow-up. interest forward and that’s for rates, the you think about ROIC higher deployment I’m Yes, of Thank a how going future quick capital

Rising have Was if or pay a to need interest we point not we currently, do market interest did in to cash, obviously, now, new more lot we I capital, raise rates, on that. have right that? we are miss that that. But and the to your of

as the target about structurally I guess you. you broadly, target, would that returns raise think you about you that how on? of you Thank XX% project the sort you I and generally meant more take think would

goes do. your up bid completely, up. as going capital new project if capital. course, understand of consider a I has we interest we of that a on of to question now or the but view consider our across No, the I gone project, will are we cost mean, bodies it new Obviously, in

thank Okay, you.

Thank you.

at next Bank. Deutsche comes Our David question Begleiter from

Your go line Please ahead. is open.

morning. up year-over-year on is do merchant Dave there? was Europe second Asia, in X% you Anthony year-over-year? for believe, good then to you earnings half? be to slowing Hi, It up This pricing in think Begleiter. And just, is [indiscernible] I in the expect regards Would

recover prices increase the are to last have if that up. I prices the will go hope performance demonstrates question our the see very what we do of and ability of that second your depends costs much I quarters Merchant in costs costs I in the Asia that. energy energy Well, the costs on going increase certainly first half all, our up, going may we are if all energy that, pricing think, ask second two and If that first. we up, in to

we increased versus power when As Melissa is prices year, XX% in mentioned, Europe, last have justified. significant pricing it

So, we will that. do

you As for for quarter of not higher that any and will second the year, for be half that. guidance don’t far conclude earnings a given I like expecting the as the the than are you we we to want whether make that from predictions Europe our have year, forward can in the decline. before, But

versus the will fine we our – that forecast. meet only expect year. We That’s we can do last way why that’s

$XX entire equity Middle Is East just in it was million. income yes, here. from the increase more Jazan? And it I and follow-up you. maybe one think the – Thank all Is Okay. India of as

doing Most too. operations that? do of any you of well, India on Serhan, Jazan, to most joint Jazan. is comment in it very make venture But is is Dr. that our from from want

also Yes. Definitely, Jazan very is the to in second INOX comes quarter. doing the in main our XX-XX venture, AP driver for when the well. results India, But again, joint that’s it

plants are and number in for basically gas industrial around India, significant XX We They basically are company executing India. a on the new one are they currently growth.

that more contribution going in anticipate are that. the future from we we to So, get

Thank Great. you.

Sure.

of question comes Mike next Leithead from Our Barclays.

Your open. Please line ahead. is go

Thanks. morning. Great. Good

morning. Good

early on projects First Slide ‘XX, on got you I appreciate I we I XXXX have there. still wanted over $X XX bit starting are projects, in of think to but your a the billion up ask

close, net the you in how help accretive ramp, Jazan think immediately roughly should know need we maybe to ‘XX? level just EPS all how just So, should other set about that contribution I should upon we could roughly together be here? projects might

Well, it laid we dollar of for every we should you income. operating that. tax we and say in have know that rate then all get I And spend out $X.XX that because you us our think

have, are projects stream on we capital, those given ‘XX, how will the So, line about that come make to them we is and have make small. it not guess all going contribution – beginning you not a bottom good the much not the can at you projects of our of but to

industry understanding the on just the that for as my and sustainable maybe about. on SAF customer been And you talk it. about pricing rightly is SAF tremendous economics then the still But fuel, I Okay. aviation think ultimately interest has constraints some what and is feedstock means secondly, questions Great. for projects, there in there obviously behind

So, obviously, and you $X SAF million. to a very tremendously from, backing say, $XXX million investing are growing company

the So, just get with I economics supply you feedstock behind do that? questions how of the guess and comfortable

for providing the both years. have and been responsible buying because they energy been, since feedstock who for been XXXX. are the has or They around the in Well, have XX people past the confidence facilities company That have we coming business up of with in feedstock.

feel very to and that dropping. people to then fact fuel diligence, their due in that they bought fuel they Everybody we REG trying Chevron this and all do like aviation company the is very world are you trying as confident of refineries feedstock. know, is sustainable convert our can get and that. have a confident it’s We great sustainable is why of a that’s thing, the done thing is that the because about the airline future. The fuel direct Everybody to the

airline companies, right their now, companies – it, and is is now, You I by not of XX the want that solution believe also But Obviously, that ones don’t everybody will wants fueled planes, or engine sustainable the short-haul world but these especially need that meantime, change the fuel years plane SAF to in only the the the the travel. credit the of that. for most we they hydrogen. to in of some from biggest airlines, anything like take think business be decarbonizing

is demand high very the So, that. on

project. We excited are that very about

Thank you. Great.

you. Thank

will Research We to Mike Partners. go Seaport at next Harrison

is go Your Please ahead. open. line

Hi. Good morning.

morning are Good you? Mike. How

Seifi. Thanks well. Doing

exchangers increases given in gas could the into the sense of LNG that of about a of seen next have LNG how Europe, many equipment natural the think you years? obviously, inquiries You in couple the about how contribution inquiries, as guess, you I can And turn we maybe sales? situation us of give think heat we these noted should

let contribution make to Dr. But Serhan, inquiries. Dr. additional am significant comment. the him are mentioned business I to on a projects. to to… he runs Serhan to the they you answer would day-to-day going the like basis. question going Dr. these that because not disclose are turn But obviously, But Serhan of this Well, we seeing I will

Yes. Seifi. Thanks Yes.

you, demand to we word of are executing currently I now that we to be projects are the see than right is basically developing and for XX because future. And and lots for getting coming tell can are scale LNG. now, exchange customers earlier this going in the well. our customers, we with projects And actually, they right Everything of our seven is is our under from We large going execution. of are more supply projects pressure this pipeline

do flow out really So, in steady a good our income expect of we very business. LNG very position. and It’s

you. a seeing that’s And that Alright. business. to And in much bit about great. market we a a bit what business Talk what expect talk having what ask to in then are little wanted question both about Okay. the the now? and are the half little helium that’s I you earnings and how you contribution about should compared second from Thank to pricing? helium seeing And maybe

helium great contribution don’t terms that, the – but our It’s talk we in much all that Mike, about and business business, of it’s of usually of a details business. a how that.

negative plants six a therefore, train. explosion they in one the And would in is later, world helium, negative then large We in that. the one put stream Russia, it those the in projects was price in that matter explosion and had The In an starting expectation. have produce on XXXX. are they of Project would the that market. And the a in months the fact leader up helium – Russia, pricing. effect expected on Amur very of on be train, lot would world the That second will that that called had

So, nothing repair out units fact of out helium the come have on of came came you that XXXX – of it the yet, now Russia now, they of sanctions and was of the to on done, in have in no that XXXX, but because issue Russia. nothing the has those damage top

considering that bring the bring to how sanctions. the market, am they even they So, to that material are on sure not the when it market much of ready I can

see. of result the be that for all a little that, we helium market you as would So, and would what of is bit expect a that tight,

Okay?

much. Thanks Excellent. very

Mike. Thank you,

Josh next move to UBS. will We Spector with

question. my Good Yes. Thanks for morning. taking

you outlook the anything more at two if for than expected looking guys on are recovery, of implying year, could challenging you cost XX%-ish the the a drivers your else, step-up Wondering particularly next I perhaps of guidance. full volume next first quarters. there guide guess Just sequentially and about between previously? the light you break down in price each volume quarter or

forecast, you a our very that look results, feel because each you so going at the confident if like quarter and delivered it second The first Seasonally, it Well, EPS we reason show out up. XX% that pretty about laid that second happy a stronger. I does in XX% historically, the XX%, half XX%, that half the one, of number our of half. is am robust it that is result about we our that in is XX%

is that one So, reason.

can increasing that The are prices. second we with deal the we that fact very about confident cost reason energy is by and increases inflation

So, we that one people our results, products that. results, part the products that that our things the we that of our of have and the our notice investors And I that And need a at think that because a can only do the to capacity that is about some I hope is cost. the reason significant we most have customers our do are ability comfort important that and customers’ not capability. and looking result our as get hope about I

much. increased that the to with prices, the the customer So, product are we the price not increasing market sells of the that final

So, to the recover ability we have that.

pent-up – we optimistic some Europe, going – at the are least don’t volumes, in demand but will that happen volumes. now at least better are know what’s we is that easing the we optimistic see see to and in Asia, I COVID therefore, U.S. out, we and with then and the because that – therefore of will So, in

with projects, could as guess I some the some guess infrastructure you contemplated on in hydrogen a Thanks. I announced of spent That’s hub to project, hub a hydrogen for And Arizona with that With $X The that extent. infrastructure is billion just helpful. there. that SAF, that. truck hydrogen announced part different be of Is those I spent or guys about Okay. very that the to Rotterdam it just Neon And along you talked language some applications? plant, well. commercial second being question, an you is $X had you some billion logistics. of think be there

Neon. is billion related $X to The just

things about additional $X costs you billion. that are to The that other talking are

you. Thank Okay.

Sure.

go will Jefferies. next We Alexander with to Laurence

go Please open. line is Your ahead.

is for taking This Rizzo question. morning. you Thank Good Dan on for my Laurence.

vertically in mix over contribution how think to from do you to want profit time, long-term? of is the it should and we think a Just integrated about over packaged, JVs terms think the merchant on-site, what relative good

understood question your I I make on correctly? just sure that to focus it May

I long-term mix from it break want how packages, to just know should over should from JVs, on-site, from the out? about think and how we merchant

it JVs publicly, Well, think Simon, publicly. disclose disclosed up so you if now, can of we I that our right? add right the sales our we JVs, do mention I that,

Correct.

Yes.

billion. Our JVs $X.X close sales than to from is more getting

in a So, good we our growth see JVs. very

major Our in Italy an [ph]. Safilo are called JVs company excellent that we had

in these And venture significant India. consolidated. Those and and outstanding going we – a an four because they in have in have companies, JV are they We companies, very some But Thailand, are XX in are economies we a new JV as great doing fully very construction. Dr. plants company and Mexico. established well. very fast a mentioned, doing well with those that of Taiwan good then they long joint obviously, Serhan are JVs, had under And all we and

right merchant our XX you XX% I our now, merchant – we XX% years our with look if the shrinking. we that then up mean about business doesn’t would of might to to it from continue of business, about are grow. I mean be But all end we think on-site business. business, about those business XX that on-site So, doing, our at grow that now, XX%, big – is our that it our And expect projects expect XX%, of And we is to portfolio. XX% that

Our company come much become grow. will merchant a to The down company. should will percentage the continue business bigger whole because

same? as I is the follow-up, for with income, the you I And think have just does the I from That’s income was equity very rest XX% the then EPS. wondering that. helpful. just if really affiliates appreciate one it relatively the company? mentioned the XX%, seasonality same of

the all of usual. are But different for wouldn’t most I way it countries, half because dynamics characterize people that. usually, different the those second of that and stronger year is

much. Alright. very you Thank

Thank you.

Next, with Capital Markets. John McNulty BMO

go Please ahead. is line open. Your

Seifi. Hi taking Yes. my Thanks question. for

relative and in to we bit the difficult look, about of can down it lockdowns April But going I the guess fiscal excuse we China levels, your a of kind baseline think guess a a how are understand predict to, there I or set kind So, me, was about – think first say, is then throughout the way little much forward. so just XQ quarter? changes to how

while it’s was I the morning, let John. totally all say know if Yes, John. But it it. it me just middle me start But results of in compared on that worse kind general we talking don’t April, just Chinese authorities it’s I does think hope let little – depends number it of The of in March since March. improved. the of put disclosing that of situation right. I that I COVID, hasn’t are the quarter the for good John, about than the know of the that a month bit of improve. First month even in terms way. and the to unpredictable, of spread cases April

Got it.

a kind just housekeeping then And of Okay. question.

breakdown earnings So, Slide of there XX, a kind contributions. where of the was in

$X.XX But is Jazan from I $X.XX income. be when annualize quite is You supposed bulk $X.XX Jazan. to had doesn’t that that assuming to And I of that it of to that, equity the get affiliate contribution giving. am about kind

of we I have kind you thinking about that? start-up missing or to we a should what another about I something you, up of they whether when am like, guess fiscal have think there characterize kind XQ does moving fiscal how is or that be So, step issue or from XQ would this, on

Melissa with quarter second respect Jazan, her specific saw that it a good give think what until – mean pretty in what do this to answer will quarter the representation on the Phase But will a turn about to question. over X to stream. is every no I is I the you before there step-up. of is I thing to comes

to taking they think I you had if say now where and that should we the the annualizing, are get So, contribution $X.XX, have we that that. can is

would to comments any make Melissa, on get that you But that. like this? will I to mentioned think Melissa it

Yes.

Seifi. So, thank you,

some prior So Just clear, year. saying right, of to have be there we take clear, if in year, are did prior the medical ventures, you because IGCC, But versus of oxygen. around other it’s a to that joint is analyzing have are to venture $X.XX specifically this yes, the quarter. you COVID is from sales But some be the – that you has lockdown joint for that portion headwind our headwinds Mexican $X.XX reduced

it. Got

color. sense. Thanks I Okay. it. That for the makes appreciate

Yes. Absolutely.

We will next Mizuho. with to Chris Parkinson

Your line is open. Please go ahead.

This morning. Good on Kieran Hi. Chris. for is

Hi.

traditional I was current, about speak just project wondering let’s say, on-site bit little if you can your backlog. a

You an benefits we are should quarter. more into Thank getting end in the contributions chemical in markets? seem throughout how ‘XX? opportunities, in energy think a maybe particularly to uptick or long-term about of maybe and the that year terms balance seeing this But of Asia from some be guess picture, business or you in I you. And electronics of

Sure.

regard. are doing We well that very in

traditional more share are which market. so-called our projects the than getting are of We

very are the We in successful electronic industry.

you market. certainly we things saw the of that plants projects nitrogen and And on are are we the projects the we our As announced other generators that announced. some oxygen winning there haven’t so on, and share have in and like

we at the and certainly generators than generators. high-purity electronic at look you so-called XX%, depending gases is I winning XX%, traditional if think, more worldwide oxygen look of – at So, share, industrial in the are market generator, about, terms business and that it, XX% our look nitrogen hydrogen you which

are are pleased We and fine there, doing very we that. with

a challenges. logistics just maybe follow-up quick in then terms really And Great. of the Americas

quarter. just mentioned in into your trucking April thoughts bit a a you. half drag of be you have seen just of into of helpful. of or preliminary thoughts it’s whether the terms thoughts May, the think and back Any the I what being Thank throughout would that improving, you terms in year

that that we know our the quarter that had developing open about – you Sure. have in cannot positions are I United mind obviously now delivering you XXX I of customers. have telling company big in get. we that mean for right the don’t drivers very we a our to product these last all is challenge trucking because States truck trucks we

shortage work compensate our a have despite And our so overtime So, on. two, significant number have hire of in are But increased. to to we amounts to that what that costs product you delivering Number and have. to drivers. for of means, more one, drivers customers we the that that, to lot means we know the order people offer that

an included of creating has in And that the us two quarters. that that second us, last our So, but line is the for issue is bottom effect with been the quarter. in on

don’t I in think the get I think quarters, what So, the will we But describe the owe challenges situation next it worse. few to are.

Thank you very Great. much.

Sure.

with will Byrne to go Steve Bank We of America. next

Your ahead. line is open Steve. Please go

And This Hi. World contracts SAF? pricing is needs oil any for Byrne. Hoffman question Steve Energy have regarding first for Rob SAF does if fuel. And so, project, is so an to the than My first long-term future? be the SMR the will to in required or technology aviation COX conventional with a hydrogen competitive ACR enable as POX plant be capture rather if then

have California, will your the COX you the capturing The have we do can but we will SMRs. the it. in I plants part one, the Southern COX thing you on capture when regular what with question. comes answer do future, second challenge now put Number of a that be But of it in supplying screen, Okay. those, hydrogen this on

that making hydrogen deliver to Los hydrogen, with can pipeline to our bring and facility plan long-term, try Our the supply green in different the is from Angeles to green in which use plants we long-term, that. to our

is that de-carbonize. So, super we would how

but there airline, that LCFS, fuel pricing, terms fuel as the amount, the carbon get. low new you know, sustainable incentives, the airline is you subsidies In the then an them charge certain cell to of price, competitive low a people

which theoretically as fuel $X a sell carbon gallon tradable a right that, which commodity is subsidy, the $X then on is the you $X, price thing. or to – can of So, now. $X can one the conventional more depending it’s me you sometimes for pay than aviation about get But intensity sustainable that a for or

will result for you if the result, be a gallon or as as So, $X it end a these are $XX selling days.

Therefore, it that is going. very So, is competitive.

A you. opportunity recovery the was this? what just is hydrogen more it. there of Americas? follow-up, source for in quick Thank And the Got

because source the of demand the that the The is running recovery gasoline up. gone has hydrogen are fact harder for basically refineries

Got it.

Thank Okay. you, Seifi.

Yes. you. Thank

for no the comments. closing with or will other back And I conference any questions holding, turn additional

you we forward three much. months the Thank about to talking our I to We call. questions and day. Well, very your you like thank their you to much. In look our in everybody would a a take and good safe wonderful about meantime, appreciate third moment stay participation very quarter thank and in for have results.

call. and that thank gentlemen We your participation. today’s Ladies for will conclude you

time. You at may disconnect this