For the quarter, on a non-GAAP basis, adjusted net income from continuing operations of $425m and adjusted diluted EPS from continuing operations of $1.92 increased 13% and 12% over the prior year.
Q2 sales of $2.2bn increased 1% over the prior year. Volumes and pricing both increased 3%.
For the quarter, adjusted EBITDA of $825m increased 12% over the prior year, driven by the higher volumes and positive pricing, partially offset by unfavourable currency and higher costs.
Commenting on the results, Seifi Ghasemi, Air Products’ Chairman, President and CEO, said, “The committed and motivated team at Air Products continues to generate superior performance, delivering our 20th consecutive quarter of adjusted EPS growth despite unfavourable currency. The team also drove us to a new record adjusted quarterly EBITDA margin, which is up more than 1,200 basis points from five years ago when we first began our journey to be the safest, most diverse and most profitable industrial gas company in the world.”
“We have a differentiated position of financial strength and technology that enables us to continue deploying capital into strategic, high-return, value-creating projects while also continuing to return cash to shareholders through our dividend.”
Results by region
Industrial Gases – Americas
Sales of $992m increased 9% over the prior year. Volumes increased 5% and pricing and high energy pass-through each contributed 3%, partially offset by 2% unfavourable currency. Adjusted EBITDA of $398m increased 10% over the prior year, primarily driven by higher volumes and pricing. Adjusted EBITDA margin of 40.2% increased 60 basis points from the prior year; excluding the impact of high energy pass-through, adjusted EBITDA margin increased 150 basis points.
Industrial Gases – EMEA
Sales of $494m decreased 12% from the prior year. Strong pricing contributed 3%, volumes were stale, and higher energy pass-through added 1%. The results were offset by 7% unfavourable currency and a 9% decrease from the India contract modification. Adjusted EBITDA of $182m increased 2% over the prior year; on a constant currency basis, adjusted EBITDA increased 9%. Adjusted EBITDA margin of 32.3% decreased 320 basis points from the prior year; excluding the impact of high energy pass through and high natural gas prices in India, margins were roughly flat.
Industrial Gases – Asia
Sales of $625m increased 12% over the prior year. Volumes increased 12% driven primarily by new projects including the Lu’An project; pricing increased 5%; and a currency was negative 5%. Adjusted EBITDA of $298m increased 32%, and record adjusted EBITDA margin of 47.7% was up 700 basis points over the prior year.
Outlook
“Our results this quarter show how focused our people are on the day-to-day operational performance of our business. Additionally, we are forging a new path for growth through successful execution of world-scale projects. As a result, we remain confident that we will continue to deliver on our commitments,” Ghasemi commented.
Air Products is increasing full-year fiscal 2019 adjusted EPS guidance from a previous range of $8.05 to $8.30 to a new range of $8.15 to $8.30 per share, which is up 10% over the prior year at midpoint.
Air Products is increasing its expected capital expenditures to a range of $2.4bn to $2.5bn for full-year fiscal 2019.