gasworld Business Intelligence provides you with the latest analysis of Air Products’ Q3 2015 earnings report.
Headlines
- Total reported sales again down -7% at $2.45bn YoY, after nearly three years of growth from early 2012.
- Operating income growth also slipped, but at +9% remained solidly positive.
- Operating margin continued improving trend of recent quarters, and was up over 300bp YoY and reached 21%, its highest rate in over 25 years. Mainly driven by cost reductions, but helped by top line impact of lower energy cost pass-through (around 40bp impact).
- Equity affiliates income (highest amongst peers) down YoY in Q3, due to global business, with all core gases regions flat or higher.
- Selling and admin costs down -18% YoY, reflecting recent actions – while cost of sales were down over -12%.
- Further charge of $69m for restructuring actions and business separation – completed actions for first $300m overhead reductions, but further actions for similar saving targeted.
- Renewed focus on EBITDA reflected in +2% growth YoY in CYQ3, and 350bp improvement in EBITDA margin to over 32% of sales.
- Free cash flow again solidly positive in Q3, with lower capex more than offset by lower cash taxes.
- EPS up +10% YoY, bringing FY2015 rise in EPS to +14% in line with target, despite global economy and negative currency impact.
- New organisation structure in place with decentralised structure and over 40 profit centres.
- Announced intent to spin off Materials Technologies business during FY2016.
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