Air Products and Chemicals Inc Q3 2025 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: John Roberts - Mizuho Securities USA LLC - Analyst : Thank you. Could you give us an update on the plan to use third parties at Darrow for both ammonia and the carbon capture and sequestration?

Question: John Roberts - Mizuho Securities USA LLC - Analyst : Thank you.

Question: Jeffrey Zekauskas - JPMorgan Chase & Co - Analyst : Thanks very much. A two-part question. Your average prices year over year were up 1%. If you took out the drag from helium, how much would your average prices have been up? And then secondly, the -- in the past, Air Products used to say that it could dissociate hydrogen from ammonia with a 10% loss, is that a claim that Air Products still wants to make or is the dissociation characteristics different? And do you have to build an infrastructure in Europe in order to fulfill the Total contract in 2030?

Question: Jeffrey Zekauskas - JPMorgan Chase & Co - Analyst : Thank you.

Question: John Mcnulty - Bank of Montreal - Analyst : Good morning. Thanks for taking my questions. Maybe digging in a little bit more into the -- I believe you said it was $175 million to $185 million cost opportunities. I guess, two questions around that. One, is that in addition to the $100 million opportunity that you would -- that Air Products had previously outlined and expected to come in a bit this year and a bit next year? And then can you speak to the heavy lifting of it? It sounds like a lot of it is going to be around digital and energy management and how long or how much effort is this going to take to -- is it just kind of a simple drop in or is there some real heavy lifting here?

Question: John Mcnulty - Bank of Montreal - Analyst : Got it. Thanks very much for the color.

Question: Steven Haynes - Morgan Stanley - Analyst : Hey, good morning. This is Steve Haynes on for Vincent. I wanted to ask a question on the volume performance in Americas. Would it be possible to just get a bit more color on the the 6% decline there. I guess, how that compared to your original expectation? And I guess if you could just break it out between base volumes versus any impact from, I guess, some of the project exits? Thank you.

Question: Steven Haynes - Morgan Stanley - Analyst : Thank you.

Question: Joshua Spector - UBS AG - Analyst : Hey, hi. Good morning. I actually wanted to follow up on that same question. So I guess if the World Energy is the main project exit, I don't know what percent we should assume that is in volume declines? I guess the two pieces there that should we expect kind of a 2%, 3% volume headwind over the next two to three quarters as a result of that? And is there any income associated with that or is this just a top line change? Thanks.

Question: Joshua Spector - UBS AG - Analyst : That's clear. I'll leave it there. Thank you.

Question: Patrick Cunningham - Citi - Analyst : Hi, good morning. Thanks for taking my question. So Eduardo, you alluded to some of the larger project announcements in the Gulf Coast for blue ammonia. Does this change the dynamic at all for Air Products? I know you mentioned Darrow is cost competitive, but are there now fewer logical equity partners for you and the market is well served or do you see it differently?

Question: Matthew DeYoe - Bank of America - Analyst : Thank you. On slide 4, just -- look, within the improved the core/refocus and then kind of achieve potential, right? So you have NEOM as kind of a key driver in 2030 for offsetting underperforming projects and I assume a decent amount of that is the Total agreement starting in 2030. But NEOM is expected to start up in 2027. So I'm just wondering why that is more of a consideration for the 2030 profile?

Question: Duffy Fischer - Goldman Sachs Group Inc - Analyst : Yes. Good morning, guys, and thanks for the details on helium for this year. But just on that subject of water, you've tracked helium for a lot of years. How do you see the cycle for helium playing out over the next couple of years? How much -- just at the current levels, when do we anniversary the level we're at today, like how much is the headwind next year? And do you think this is still kind of a multiyear down cycle or can we stabilize as we get into 2026?

Question: Duffy Fischer - Goldman Sachs Group Inc - Analyst : Perfect. Thank you for that.

Question: Kevin McCarthy - Vertical Research Partners LLC - Analyst : Thank you and good morning. Eduardo, you've set forth a long-term return on capital employed goal in the mid- to high-teens. And I was wondering if you could speak to the trajectory from today's level of 10% to that goal? Obviously, there's some short-term friction or volatility as you reshape the portfolio. But when do you think we might turn the corner? And how might you rank order the most important drivers to get those returns higher over the next several years?

Question: Daniel Rizzo - Jefferies LLC - Analyst : Hi, this is Dan Rizzo on for Lawrence. In your opening remarks, you mentioned inflation being somewhat of a headwind. I was just wondering what exactly that is and what you expect going forward in terms of costs?