# To our shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_APD_2020/NYSE_APD_2020.mmd` · pages 9-15_

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To our shareholders

## My fellow shareholders:

Over the past six years, we have transformed Air Products into the best performing industrial gas company in the world. By executing our strategic Five-Point Plan, we are creating sustainable growth opportunities that deliver value to our shareholders, customers, employees and communities around the world.

In 2020, the world faced unprecedented challenges due to the COVID-19 pandemic. I am very proud of the dedicated team of more than 19,000 employees at Air Products who kept our 750+ plants running, supplied our customers with essential products, executed significant projects and improved our profitability, all under very challenging conditions.

Despite the challenges, we delivered strong financial results, as you can see below. Our on-site business—which represents about half of our sales—continued to deliver stable cash flow. Our business model supports and enables our strong financial position. We continued to execute on our gasification, carbon capture and hydrogen for mobility growth strategy, and we successfully raised about $5 billion of debt to ensure we are ready for even more profitable growth opportunities. Meanwhile, we returned about $1.1 billion to our shareholders through our dividend, which we increased for the 38th consecutive year.

## Adjusted earnings per share trend \( ^{*} \) 

![](images/9_1.jpg)

## Adjusted EBITDA margin trend \( ^{*} \) 
Up over 1,500 basis points

![](images/9_2.jpg)

* Amounts are non-GAAP financial measures. See reconciliation to GAAP results on pages III-VII.

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## Fiscal 2020 Performance

Our fiscal 2020 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 website, which highlight our achievements and plans for the future.

One specific area I want to highlight is safety, which is always our highest priority. Although our safety record improved in fiscal 2020, with a 63 percent improvement in the employee lost-time injury rate and 31 percent improvement in the employee recordable injury rate since fiscal 2014, we did not achieve our ultimate goal: zero incidents and accidents.

Safety is a moral responsibility, and our people know that the challenges of COVID-19 cannot distract us from that ultimate goal.

## Making Our Dream a Reality

I do not like 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.
I am proud to say that we have continued to create and win projects that help customers and countries meet their growing needs for cleaner energy and environmental solutions. In doing so, we are making our dream a reality.

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# Making Our Dream a Reality in Fiscal 2020

![](images/11_0.jpg)

$7 billion NEOM project | Announced the NEOM project, which will enable Air Products to supply carbon-free hydrogen to power buses and trucks by 2025 and eliminate three million tons-per-year of  \( CO_{2} \)  emissions and smog-forming emissions and other pollutants from the equivalent of more than 700,000 cars.

![](images/11_1.jpg)

H-C-O-H
$2 billion Indonesia project |
Signed a long-term on-site contract for a world-scale coal-to-methanol production facility in Indonesia, supporting energy independence and enabling the production of nearly two million tons-per-year of methanol.

![](images/11_2.jpg)

Largest-ever U.S. investment (Texas) | Announced our largest-ever U.S. investment for the Gulf Coast Ammonia project in Texas.

![](images/11_3.jpg)

Acquisition of 5 operating U.S. hydrogen plants | Completed the acquisition of five operating U.S. hydrogen plants and supplied hydrogen to PBF Energy in California and Delaware.

## Higher Purpose

We obviously are committed to delivering superior financial performance, but our people also know they are supporting a higher purpose in the work they do every day. Our higher purpose at Air Products is to bring people around the world together, so that they can, in an open environment, collaborate and innovate solutions to some of the most significant energy and environmental challenges we all face.

As we deploy these sustainable solutions alongside our customers, we also continue to make commitments to further improve our own sustainability performance. We announced our "Third by '30" carbon intensity reduction goal, focused on reducing carbon dioxide emissions relative to the amount of energy that we are delivering to the world. The goal is fully aligned with our business strategy, is near-term and measurable, and holds us accountable for delivering.
Multiple on-site projects for electronics customers | Completed multiple on-site projects for electronics manufacturers in China and Malaysia.

Construction of 3 nitrogen plants (The Netherlands) | Began construction of three nitrogen plants to condition imported natural gas for Gasunie supporting a national energy project in Groningen, Netherlands.

![](images/11_4.jpg)

Steam methane reformer and cold box (Louisiana) | Brought onstream a steam methane reformer and cold box to supply products to our U.S. Gulf Coast pipeline in Louisiana.

LNG World-leading LNG process technology | Selected to supply our world-leading LNG process technology and equipment for Mozambique's first onshore LNG project; Qatargas' massive LNG production expansion project in Ras Laffan, State of Qatar; and Sonatrach's GLIZ LNG facility in Arzew, Algeria.

We also announced new goals to further drive diversity and build our culture where people feel they belong and matter. We will aim to achieve at least 28 percent female representation globally, and at least 20 percent minority representation in the U.S. in our professional and managerial population by 2025. Our growth projects give us a unique opportunity to bring diverse talent into our company. As we measure our progress, we will continually stretch and drive for further improvement.

## Our Higher Purpose:

Bringing people together to collaborate and innovate solutions to the world's most significant energy and environmental sustainability challenges.

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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 innovating alongside you, we serve our higher purpose – supplying products that benefit the environment and help you be more efficient and sustainable. Thank you for your continued confidence and trust in us.

To our employees . . . Through your dedication and commitment, you continue to play a critical role and make a difference to the world every day, and especially during these challenging times.

To our shareholders . . . As always, thank you for your confidence and trust in Air Products. Our priority remains creating superior value for you.

Despite significant uncertainty in the global economy and ongoing challenges from COVID-19, we continue to deliver value through our stable business model, financial position, exciting growth opportunities, and most importantly, our continuing commitment and dedication to stand together and work together to make a difference for our world.

![](images/12_0.jpg)

Seif Ghasemi

Chairman, President and
Chief Executive Officer of Air Products