# To our shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_APD_2019/NYSE_APD_2019.mmd` · pages 9-15_

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To our shareholders \( ^{*} \) 

## My fellow shareholders,

In my first letter to you five years ago, I described a strategic Five-Point Plan to substantially reposition Air Products and make it the best performing industrial gas company in the world.

The key points were:

1. Restructure Air Products' portfolio by selling non-core assets and focusing on our core business—industrial gases.

2. Substantially change and simplify the organizational structure to make us more efficient, improve decision making, eliminate unnecessary layers of management, and make us more responsive to our customers.

3. Focus on changing Air Products' culture by emphasizing safety, simplicity, speed, and self-confidence.

4. Focus on cash generation by improving productivity, reducing debt and controlling capital expenditures.

5. Change the incentive compensation system to ensure that it is directly related to performance by each unit around the globe, with a focus on cash generation and profitability.

We have successfully implemented this Plan, and as you can see from these charts, the results speak for themselves.

Adjusted earnings per share

![](images/9_1.jpg)

Adjusted EBITDA margin trend
Up almost 1700 basis points

![](images/9_2.jpg)

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# "But I do not want to focus on past performance, because I like the dreams of the future more than the history of the past."

Our dream of the future is to make sure Air Products will continue to be the safest, most diverse and most profitable industrial gas company in the world, providing excellent service to our customers.

Our dream of the future is for Air Products to become the largest American chemical company as measured by market capitalization.

Our dream of the future is for Air Products to be the leader in providing solutions to the world's environmental challenges through:

• Gasification of coal, petcoke, and refinery residues;

• Developing solutions to capture  \( CO_{2} \)  from gasifiers and hydrogen plants; and

• Further developing technologies and making Air Products the leader in providing hydrogen for transportation around the world.
Our dream of the future is to be a company that has a higher purpose beyond just creating value for shareholders through improved financial performance...

... a company where people from all walks of life and nationalities come together, work together, and feel that they belong and that their contributions matter and are appreciated...

... a company that is focused on innovation to solve the substantial environmental issues facing all humanity...

... a company that is compassionate and contributes to the well-being of all the communities in which we operate around the globe...

... a global company that brings people from all over the world together, to collaborate, improve understanding and prevent conflicts that arise from misunderstanding.

We will work hard to realize our dreams of the future by executing on our current Five-Point Plan.

## Five Point Plan: Moving Forward

Sustain the lead

Safest, most diverse, and most profitable

Best-in-class performance

Productivity

Deploy capital

Strategically
invest significant
available capacity

Win profitable
growth projects
globally

Evolve portfolio

Grow onsite
portion

Energy,
environment and
emerging markets

4S

4S
Committed and
motivated

Positive attitudes and open minds
Inclusion

Enjoyable work environment

Proud to innovate and solve challenges

challenges

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## Fiscal 2019 Performance

Our fiscal 2019 financial performance is detailed in the accompanying Annual Report on Form 10-K, and I would encourage you to also see the investor slides on our web site, which highlight our achievements and plans for the future. One specific area I do want to mention is that I am not satisfied with our safety performance in 2019. Safety is our #1 priority and a moral responsibility; the only acceptable goal is zero accidents and zero incidents. Although we have improved our lost-time injury rate by 63 percent and our recordable injury rate by 22 percent since 2014, our safety performance in fiscal 2019 was not acceptable. Our people are redoubling their efforts in this area so that we can move forward toward our ultimate goal of an accident- and incident-free work environment.

## Sustainable Growth for a Sustainable Future

Gasification "Today"

![](images/11_0.jpg)

As we move forward, we see significant opportunities to solve sustainability challenges through gasification, carbon capture technology solutions, and hydrogen for mobility. Gasification enables an environmentally friendly way to use plentiful, lower value feedstocks, and technology strength is key in this area. Completing the acquisition of GE's gasification technology this year, and with our other capabilities, we can provide a complete solution to our customers, including development, technology, engineering, construction, and operation of large syngas projects.

![](images/11_1.jpg)

## CO \( _{2} \)  Capture "Tomorrow"

![](images/11_2.jpg)

Importantly, the carbon dioxide  \( \left(\mathrm{CO}_{2}\right) \)  stream from gasification is capture ready. We see significant opportunities to capture  \( CO_{2} \)  from gasifiers and hydrogen plants for use in enhanced oil recovery, sequestration and dry reforming. We have experience and technology strengths and are continuing to innovate. We are also a leader in hydrogen fueling systems and infrastructure, and we see great potential in the years ahead to extend our leadership.

Together, our gasification, carbon capture and hydrogen for mobility efforts will continue to transform the contributions we are making to solve the urgent environmental issues of our world.

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## Acknowledgments

As I do each year, in closing, I want to sincerely thank those who have supported us and helped us achieve our success.

To our customers . . . In serving you, we serve our higher purpose, supplying products that benefit the environment and help you be more efficient and sustainable. Providing you with innovative products and excellent service is the reason Air Products exists and underpins everything we do. Thank you for trusting us and giving us your business.

To our employees . . . It is an honor and privilege to work with the great team at Air Products. Thank you for never being satisfied in executing against our Five-Point Plan. Being the biggest industrial gas company in the world was never our end goal; being the best has always been. We have a unique opportunity to continue our drive forward with our focused strategy and take Air Products to a benchmark level of success.

To our shareholders . . . Thank you for your confidence and trust in Air Products. Our priority remains creating superior value for you.

As a final note, I want to assure our shareholders that all of us at Air Products fully appreciate that the world is ever-changing. That has been the case throughout history. We are committed to transform our company and adapt to this changing world so we can maintain our leadership positions, grow, and create value for our shareholders, customers, employees and communities.

![](images/12_0.jpg)

Seifi Ghasemi
Chairman, President and
Chief Executive Officer of Air Products