LEHIGH VALLEY, Pa. - Air Products (NYSE:APD), a global industrial gases company with a market capitalization of $63 billion, today reaffirmed its commitment to a deliberate CEO succession process and the superiority of its board candidates in the face of criticism from activist investors Mantle Ridge and D.E. Shaw. According to InvestingPro data, the company maintains a "GOOD" overall financial health score, suggesting strong operational fundamentals. The company's Board of Directors announced that a structured plan for CEO succession is in place, with the intention to name a new President and outline the CEO transition timeline by March 31, 2025.
The board expressed confidence in its approach, contrasting it with Mantle Ridge's recent actions, which Air Products characterizes as an attempt to undermine the reputation of the current CEO, Seifi Ghasemi, through misinformation. Mantle Ridge's advocacy for CEO succession and board changes was described as motivated by relationships and a short-term agenda, rather than merit. The company highlighted concerns about one of Mantle Ridge's nominees, Dennis Reilley, citing reports of his alleged mishandling of confidential information at other public company boards.
Air Products also defended its financial reporting practices against what it calls manipulative claims by Mantle Ridge, asserting that the company's profitability metrics are in line with industry standards and facilitate comparison with historical performance. The company pointed to its industry-leading margins, $44 billion in shareholder value creation, and an 11% Adjusted EPS Compound Annual Growth Rate (CAGR) since 2014 as evidence of its strong financial results. InvestingPro analysis reveals the stock trades at a P/E ratio of 16.4x and has maintained dividend payments for 55 consecutive years, demonstrating long-term financial stability. Get access to more detailed financial insights and exclusive ProTips with an InvestingPro subscription.
In an appeal to its shareholders, the Air Products Board recommended voting for its own nominees at the 2025 Annual Meeting of Shareholders and to disregard proxy materials from Mantle Ridge.
The company, which has been in operation for over 80 years, specializes in supplying industrial gases and equipment to various sectors, including energy and environmental markets. With fiscal 2024 sales of $12.1 billion and operations in around 50 countries, Air Products has a market capitalization exceeding $65 billion and employs approximately 23,000 people worldwide. InvestingPro data shows the stock offers a 2.5% dividend yield and generally trades with low price volatility, making it potentially attractive for income-focused investors. Discover comprehensive analysis and more ProTips by accessing the detailed Pro Research Report, available exclusively to InvestingPro subscribers.
This news article is based on a press release statement from Air Products. The company's financial measures, such as adjusted EPS and adjusted EBITDA margin, are non-GAAP metrics, with reconciliations to GAAP measures available on their investor relations website.
In other recent news, Air Products and Chemicals (NYSE:APD), Inc. has been the focus of substantial corporate developments. The company reported a 13% year-over-year increase in adjusted earnings per share for Q4 2024, meeting their guidance. For fiscal year 2025, Air Products anticipates EPS growth of 6% to 9%, despite the sale of its LNG business to Honeywell (NASDAQ:HON).
Investment firms D.E. Shaw and Mantle Ridge LP have expressed dissatisfaction with the company's governance, specifically criticizing the handling of CEO succession planning. Both firms have proposed changes in the board's composition at the upcoming 2025 Annual Meeting.
Analysts at Mizuho (NYSE:MFG) and BMO Capital have maintained their Outperform ratings on Air Products, adjusting their price targets to $385 and $350 respectively, following the strong Q4 results and fiscal year guidance.
In addition, Air Products continues to focus on the emerging clean hydrogen market, with multiple projects in progress, including a 15-year contract to provide TotalEnergies (EPA:TTEF) with green hydrogen starting in 2030. The company's construction-in-progress currently stands at $11 billion, signaling a significant increase in ongoing projects. These are recent developments in the company's operations.
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