11.02.15
Air Products reported net income of $397 million, up 11% versus prior year, and diluted earnings per share (EPS) of $1.82, up 10% versus prior year for its fiscal fourth quarter ended Sept. 30, 2015.
On a GAAP basis, net income and diluted EPS from continuing operations were $345 million and $1.58, respectively, for the quarter.
Fourth quarter sales of $2,449 million decreased 9% from the prior year on 7% unfavorable currency and 3% lower energy pass-through. Volumes were unchanged as Industrial Gases – Asia growth continued and the LNG business posted another solid quarter, while Materials Technologies and Industrial Gases – Americas volumes were lower.
Operating income of $515 million increased 9% versus prior year, and operating margin of 21% improved 340 basis points, driven by higher pricing and good cost performance. Adjusted EBITDA of $785 million increased 2% over prior year, and EBITDA margin of 32.1% improved 350 basis points, reflecting strong operating leverage.
For fiscal 2015, sales of $9.9 billion decreased 5% versus prior year. Underlying sales increased by 3% on 2% higher volumes, driven by Industrial Gases – Asia and Materials Technologies, and 1% higher pricing. Operating income of $1.9 billion increased 14%, and operating margin of 19% improved 310 basis points. Adjusted EBITDA of $3.0 billion improved 8% and EBITDA margin of 30.1% improved 360 basis points. ROCE of 11.3% was up 150 basis points.
“The people of Air Products excelled again this quarter, delivering significant profit improvement in spite of increasingly challenging economic conditions around the globe,” said Seifi Ghasemi, chairman, president and CEO. “Compared to last year, EPS in the fourth quarter increased 10%, EBITDA margins were up 350 basis points to 32.1%, and operating margin of 21% was another record. For the year, EPS of $6.57 was above the top of our original guidance despite a significant currency headwind of about 40 cents.
“We delivered this performance while improving safety, completing the most significant organizational change in Air Products’ 75-year history, winning a number of important projects with major customers around the world, and announcing the separation of our Materials Technologies business,” added Ghasemi. “We made significant progress on our five-point plan this year, and this strong performance is a testament to our people’s hard work and their commitment to move Air Products forward.”
Materials Technologies sales of $490 million decreased 13% versus the prior year as positive pricing of 2% was more than offset by 11% lower volumes, and 4% unfavorable currency. Electronics Materials underlying sales declined 9% from the prior year on significantly lower delivery systems. Excluding delivery systems, Electronics Materials underlying sales would have been up 15% versus prior year. Performance Materials underlying sales decreased 8% from the prior year on lower volumes. Operating income was $116 million, and operating margin of 23.8% was up 160 basis points. Adjusted EBITDA was $140 million, and EBITDA margin of 28.5% was up 130 basis points. For the fiscal year, Materials Technologies sales of $2,087 million were up 1%, adjusted EBITDA of $572 million was up 19%, and EBITDA margin of 27.4% was up 410 basis points.
On a GAAP basis, net income and diluted EPS from continuing operations were $345 million and $1.58, respectively, for the quarter.
Fourth quarter sales of $2,449 million decreased 9% from the prior year on 7% unfavorable currency and 3% lower energy pass-through. Volumes were unchanged as Industrial Gases – Asia growth continued and the LNG business posted another solid quarter, while Materials Technologies and Industrial Gases – Americas volumes were lower.
Operating income of $515 million increased 9% versus prior year, and operating margin of 21% improved 340 basis points, driven by higher pricing and good cost performance. Adjusted EBITDA of $785 million increased 2% over prior year, and EBITDA margin of 32.1% improved 350 basis points, reflecting strong operating leverage.
For fiscal 2015, sales of $9.9 billion decreased 5% versus prior year. Underlying sales increased by 3% on 2% higher volumes, driven by Industrial Gases – Asia and Materials Technologies, and 1% higher pricing. Operating income of $1.9 billion increased 14%, and operating margin of 19% improved 310 basis points. Adjusted EBITDA of $3.0 billion improved 8% and EBITDA margin of 30.1% improved 360 basis points. ROCE of 11.3% was up 150 basis points.
“The people of Air Products excelled again this quarter, delivering significant profit improvement in spite of increasingly challenging economic conditions around the globe,” said Seifi Ghasemi, chairman, president and CEO. “Compared to last year, EPS in the fourth quarter increased 10%, EBITDA margins were up 350 basis points to 32.1%, and operating margin of 21% was another record. For the year, EPS of $6.57 was above the top of our original guidance despite a significant currency headwind of about 40 cents.
“We delivered this performance while improving safety, completing the most significant organizational change in Air Products’ 75-year history, winning a number of important projects with major customers around the world, and announcing the separation of our Materials Technologies business,” added Ghasemi. “We made significant progress on our five-point plan this year, and this strong performance is a testament to our people’s hard work and their commitment to move Air Products forward.”
Materials Technologies sales of $490 million decreased 13% versus the prior year as positive pricing of 2% was more than offset by 11% lower volumes, and 4% unfavorable currency. Electronics Materials underlying sales declined 9% from the prior year on significantly lower delivery systems. Excluding delivery systems, Electronics Materials underlying sales would have been up 15% versus prior year. Performance Materials underlying sales decreased 8% from the prior year on lower volumes. Operating income was $116 million, and operating margin of 23.8% was up 160 basis points. Adjusted EBITDA was $140 million, and EBITDA margin of 28.5% was up 130 basis points. For the fiscal year, Materials Technologies sales of $2,087 million were up 1%, adjusted EBITDA of $572 million was up 19%, and EBITDA margin of 27.4% was up 410 basis points.