In the first quarter earnings release conference call for Air Products, Eric Guter, Vice President of Investor Relations, welcomes participants and introduces key individuals, including Melissa Schaeffer, Sean Major, and Air Products' Chairman of the Board, Wayne Smith. Wayne Smith discusses the recent Air Products Annual Meeting of Shareholders where five new directors were elected, and he was chosen as Chairman of the Board. He highlights his background in the chemicals industry and announces Dennis Reilley as Vice Chairman. Reilley previously led Praxair as CEO. Lastly, Smith introduces Eduardo Menezes as the new CEO of Air Products, effective February 7, 2025.

Eduardo Menezes, with over 35 years of international experience in industrial gases, is joining Air Products as CEO after serving as EVP at Linde. He takes over responsibilities of operations in a vast region involving significant sales and numerous employees. Having interacted with major shareholders to understand their needs, Eduardo will start meeting with employees and partners to advance Air Products. Though he won't take questions on this call, he plans to reveal his priorities and present quarterly results soon. Wayne Smith thanks Air Products' employees and previous leader Seifi Ghasemi for their dedication and contributions, noting that the call's focus remains on quarterly results and future outlook.

The paragraph is part of a financial earnings call, where several company representatives discuss their recent financial results and future outlook. It starts by asking participants to focus their questions on the just released financial results and outlook for the rest of the year. Eric Guter mentions that the earnings release and slides are available online and highlights that the discussion contains forward-looking statements. The conversation will involve several financial measures, which are mostly adjusted non-GAAP figures, with detailed reconciliations available on their website. Melissa Schaeffer then takes over, emphasizing the company's commitment to safety and noting their efforts toward achieving zero accidents. She also reports that their first-quarter adjusted earnings per share were $2.86, slightly above their guidance range, with growth driven by performance in the Americas.

The company experienced an improvement in earnings per share despite selling its LNG process technology and equipment business at the end of fiscal 2024, which contributed $0.08 to first-quarter earnings. Adjusted EBITDA and operating margins increased compared to the previous year. For fiscal 2025, the company is maintaining its full-year guidance and is cautious about potential impacts from a strong U.S. dollar, tariffs, and the global helium market. They aim to enhance productivity by reducing costs and improving customer services. Second-quarter adjusted earnings per share are projected to be between $2.75 and $2.85, reflecting a 1% to 4% increase post-divestiture. Volume decreased due to the LNG divestment, but there was pricing strength in the Americas and Europe. Adjusted EBITDA grew by 1% because of better pricing despite higher costs and lower income from affiliates.

In the first quarter, the company reported an adjusted earnings per share of $2.86, a $0.04 increase despite a prior $0.08 contribution from its sold LNG business. Price improvements, particularly in the Americas and Europe, and cost management offset additional costs from inflation and incentives. In business segments, the Americas saw a 2% price increase and 3% volume growth due to a major helium sale, leading to a 6% rise in adjusted EBITDA. Asia experienced a 2% volume rise from new assets and a 7% adjusted EBITDA growth. Europe improved pricing by 1% but faced a 5% volume drop, resulting in a 3% decrease in adjusted EBITDA. The company anticipates its Uzbekistan project's upgrades to conclude and operations to normalize by the third fiscal quarter of 2025.

The company faces challenges in its Middle-East and India segment due to lower merchant volume affecting sales and adjusted EBITDA, along with unfavorable equity affiliate income and costs. In the Corporate and Other segment, sales and profits have declined mainly because of the sale of their LNG business. During the Q&A, Chris Parkinson from Wolfe Research inquires about the impact of economic conditions in Asia, particularly China, on the company's helium business and electronics recovery. Melissa Schaeffer responds by stating that China’s market remains challenging with no significant improvement, and the company is focusing on productivity. She also notes that there are no new updates on the Alberta project at this time.

In a Q&A session, Duffy Fischer from Goldman Sachs inquires about the differences in earnings per share between the first and second halves of the year, specifically asking about seasonality and other factors like the Uzbekistan plant and one-off items such as helium sales. Melissa Schaeffer explains that the variance largely follows historical patterns, with factors like the Lunar New Year affecting early-year results. She identifies planned maintenance outages and pricing actions, including Uzbekistan's operational return and productivity initiatives, as key factors for the second half. They are also monitoring tariffs, currency fluctuations, and overall economic conditions. Fischer also asks about pricing and volume in the Americas, excluding a helium sale, and Schaeffer notes strong pricing and volume, particularly in their HEICO's business and merchant improvements.

In this paragraph, Steve Byrne from Bank of America inquires about the capital expenditure (CapEx) forecast and project allocation for the fiscal year, which is expected to be $4.5 billion to $5 billion. Melissa Schaeffer responds that most of the CapEx will go to large projects, with $750 million for ongoing maintenance and $1 billion for the traditional industrial gas business. She also mentions that the World Energy permitting project is on hold. Jeff Zekauskas from JPMorgan asks about the helium EBITDA contribution, to which Melissa responds that they have not broken out helium figures, but from a non-recurring Americas sale, there was a $0.10 EPS contribution.

In the paragraph, Melissa Schaeffer discusses the current state of the helium market, noting that it is stable but experiencing fluctuations due to helium supplies from Russian assets entering the Asian market. Despite these changes, the company continues to optimize its helium business and maintain reliable supply to its customers. She also mentions that in the Americas, strong merchant volumes and the strong performance of the HEICO business, particularly along the Gulf Coast, offset any negative impact from helium. In response to a question about the Middle East and India, Melissa explains that the decline in equity affiliate income was primarily due to fluctuations in their Jazan joint venture but expects contributions from the project to stabilize and meet expectations in 2024.

In the paragraph, Melissa Schaeffer discusses the second-quarter outlook, mentioning headwinds from Uzbekistan but improved volumes in the Americas and a focus on pricing in Europe due to high power costs. Productivity programs are expected to start showing results. Mike Leithead confirms that the full-year guidance does not account for the Alberta project. Patrick Cunningham inquires about tariff impacts, to which Melissa responds that, while tariffs are a concern, the localized nature of their industrial gas model should minimize supply chain impacts, though projects may see moderate effects.

The paragraph discusses a global diversified supply chain's role in mitigating tariff exposure and its impact on customers. Patrick Cunningham inquires about the unexpected lower interest expenses, with Melissa Schaeffer explaining that capitalized interest from projects like NEOM is a factor, but there's no other significant influence. They aim to maximize capitalized interest on large projects as they acquire new debt. Josh Spector from UBS follows up with a question about pricing strategies in response to increased energy costs, particularly in Europe. Schaeffer confirms these rising costs and hints at potential pricing actions to address them in the second half of the fiscal year.

The paragraph discusses the challenges and strategies related to adjusting pricing in response to increased power costs, noting that there is usually a delay of up to a quarter before such adjustments can take effect. Melissa Schaeffer explains that there was a $0.07 headwind in the recent quarter due to inflation and incentive compensation accruals, which were adjusted following last year's tougher results. She mentions that productivity actions are expected to have a more significant impact in the second half of the fiscal year. The dialogue also shifts to Wayne Smith, who acknowledges ongoing changes and the Board's collaborative efforts. Additionally, John Roberts congratulates Eduardo and Dennis on their new roles.

In the paragraph, Melissa Schaeffer addresses questions from John Roberts and Daniel Rizzo regarding the Uzbekistan plant and their outlook for industrial activity. She mentions that the Uzbekistan plant is undergoing planned maintenance to bring it up to Air Products' standards and will be back on stream in Q3. In terms of global industrial activity, Schaeffer does not anticipate significant improvement, noting only about a 2% average increase globally. She also says she will follow up on a question about the impact of tariffs in 2017 and 2018 since she was not the CFO at that time.

In the paragraph, Kevin McCarthy from Vertical Research Partners inquires about updates on a blue hydrogen project in Louisiana, particularly regarding potential partnerships for equity and blue ammonia offtake. Melissa Schaeffer responds, stating that the project is proceeding as planned, and active discussions for partnerships are ongoing, particularly in Asia with countries like Japan and Korea. She also confirms that the company aims to be net cash-flow positive by fiscal year 2027, aligning with previous forecasts.

The paragraph discusses the company's strategy regarding pricing and project financing. They are actively focusing on pricing across different regions, including the Americas and Asia, in response to increased energy costs. A question about the capital intensity of an upgrade in Uzbekistan was addressed by clarifying that these upgrades were included in the acquisition price, implying no additional capital investment beyond what's already been accounted for in the $100 million outstanding acquisition cost.

In the discussion, John McNulty from BMO Capital Markets asks about the cost-cutting and restructuring initiatives by Air Products, seeking clarification on the expected benefits in 2025 and their timeline. Melissa Schaeffer responds, noting two major cost productivity actions that have reduced the workforce by about 5%, resulting in approximately $75 million savings annually. However, she mentions that inflation and wage increases may offset some of these savings. Schaeffer anticipates the cost productivity benefits will become more significant in the latter half of the fiscal year. McNulty also inquires about the expected contribution from Uzbekistan to the earnings per share (EPS), originally projected to add $0.35 to $0.36 annually, and asks for expectations for 2025 amidst ongoing turnaround work.

In the paragraph, Melissa Schaeffer mentions that Air Products will be fully ramped up by the third quarter, with Q3 and Q4 seeing full contributions. Q1 had 1.5 months of contributions, and Q2 will experience a decline. She expresses gratitude to the participants for joining the call and looks forward to discussing future results. The operator then concludes the call, thanking participants and wishing them a great day.

This summary was generated with AI and may contain some inaccuracies.