Air Products Files Investor Presentation Highlighting Successful Two-Pillar Strategy to Deliver Superior Shareholder Value

Air Products (NYSE:APD) Board of Directors today announced that it has posted an investor presentation and mailed a letter to shareholders in connection with its upcoming 2025 Annual Meeting of Shareholders (the “Annual Meeting”), which will be held at 8:30 a.m. U.S. Eastern Time on January 23, 2025. All Air Products shareholders of record as of the close of business on November 27, 2024 will be entitled to vote at the Annual Meeting. The presentation and letter are both available at voteairproducts.com.  

The full text of the letter summarizing the presentation follows:

Dear Fellow Shareholder,  

The Air Products Annual Meeting is fast approaching, and you have an important opportunity to protect the value of your investment and the meaningful results the Company has delivered and anticipates continuing to deliver – as we have for the past 10 years. Under the supervision of our Board, management is executing a long-term strategy to grow our core industrial gas business, while leveraging decades of relevant expertise to capitalize on our important first-mover position in the clean hydrogen market to deliver maximized value for our shareholders.  

We ask that you please visit our Annual Meeting website at voteairproducts.com or the Company Investor Relations page to find a new investor presentation that we filed today, entitled “Creating Superior Shareholder Value Through Disciplined Investment in Clean Hydrogen,” where we go through, in greater detail, why our long-term growth strategy is the right one, why Air Products’ Nominees are the necessary leaders to move Air Products forward, and why shareholders should not support Mantle Ridge’s nominees.

We recommend you vote your shares “FOR” ONLY Air Products’ Nominees – Tonit M. Calaway, Charles Cogut, Lisa A. Davis, Seifollah Ghasemi, Jessica Trocchi Graziano, Edward L. Monser, Bhavesh V. (“Bob”) Patel, Wayne T. Smith and Alfred Stern – on the Company’s WHITE proxy card. 

OVER THE PAST DECADE UNDER THE LEADERSHIP OF OUR CHIEF EXECUTIVE OFFICER, SEIFI GHASEMI,
AIR PRODUCTS HAS CREATED OVER $44 BILLION IN SHAREHOLDER VALUE²

Since Mr. Ghasemi became CEO in 2014, he has spearheaded the transformation of Air Products into the most profitable industrial gas business in the world based on adjusted EBITDA margin, growing the business at GDP-plus rates. This strong cash generation has allowed Air Products to invest in our core industrial gas business, while expanding into clean hydrogen – a tremendous growth opportunity now and well into the future.

Our strong performance has directly benefitted shareholders through $11.5 billion in cash returned since 2014. In addition, our dividend per share has increased for 42 consecutive years and grown at a ~9% CAGR for the past 10 years, demonstrating our commitment to sharing with our investors the value we create. Including dividends, Air Products has delivered over $44 billion in total shareholder value³ over the last decade under Mr. Ghasemi’s leadership.   

During Mr. Ghasemi’s tenure, the Company has delivered the following key financial outcomes:

✔ Expanded adjusted EBITDA margin⁴ by +1,400 bps

✔ Achieved ~11% adjusted EPS CAGR⁵

✔ Significant pricing and volume gains

✔ Sales have grown at a ~4% CAGR – higher than each public peer⁶

Under Mr. Ghasemi’s direction, the Company has continuously pushed for profitability improvements and has been increasing its price-cost spread. This has been accomplished through favorable contract modifications over time, resulting in an increased contribution of stable on-site revenues. Further improvement and growth of the core industrial gas business are ongoing, and the Board and management team remain focused on maximizing value over the long-term.   

AIR PRODUCTS IS SUCCESSFULLY EXECUTING A TWO-PILLAR GROWTH STRATEGY 
TO CONTINUE DRIVING VALUE CREATION INTO THE FUTURE 

We remain focused on investing in, and growing, our core industrial gas business, which delivers industry-leading profitability based on adjusted EBITDA margin,⁷ while advancing our first-mover advantage in the clean hydrogen market. We have allocated more than 50% of our total capital expenditures for FY 2023-2025 to our core business, underscoring our commitment to its continued growth. We have already launched multiple projects in recent years aimed at improving capacity, increasing efficiencies and reaching new industrial gas markets.

In tandem with these investments, Air Products is positioning the core business to capture opportunities for growth in expanding market segments. For instance, we have accumulated a critical mass of infrastructure strategically placed next to global electronics providers’ fabrication facilities, orienting our core industrial gas business to benefit from data center, AI and CHIPS Act tailwinds. 

As a result of this approach, we have achieved significant tangible benefits to the business. Our on-site core capabilities model is driving resilience through a balanced mix of on-site and merchant sales. We are more heavily weighted toward the stable, infrastructure-like on-site business model than our peers, strengthening the durability of our business. 

At the same time, we are expanding into clean hydrogen, a market with immense long-term potential: 

• Today, 80% of the global energy market is fossil fuel-based,⁸ with clean hydrogen poised to play a major role in diversifying the mix of energy sources. 
• Clean hydrogen can be a source of energy like oil or gas but releases no climate-warming carbon dioxide, making it an ideal fuel for the future amid a global push to decarbonize emissions. 
• To grow long-term volumes, satisfy global decarbonization regulation, effectively serve evolving customer needs, and remain competitive, the industrial gases sector must invest in clean hydrogen capabilities.

According to independent experts, the clean hydrogen market is expected to be worth more than $600 billion by 2030 and exceed $1 trillion by 2050.⁹ Clean hydrogen may contribute up to 20% of total global abatement needed by 2050.¹⁰ Clean hydrogen is anticipated to have applications across a diverse array of end markets including road transport, shipping, iron, aluminum and steel, chemicals and petrochemicals, and power generation.

No company is better positioned than Air Products – with more than 65 years of hydrogen experience – to meet the growing demand in this space, by serving global customers across industries working to improve efficiency and reliability while reducing emissions. Initially capturing even a small portion of the clean hydrogen market would provide incredible value for shareholders. 

FIRST-MOVER ADVANTAGE IS ABSOLUTELY CRITICAL TO SUCCESS 
IN THE CLEAN HYDROGEN MARKET – AND WE ARE SEEING EARLY RESULTS

There are four key elements that make being the first mover in clean hydrogen incredibly crucial, and where Air Products has an edge:

• Land scarcity: Access to ample resources such as sun and wind are critical to produce green hydrogen; and the right geology, large land plots, low-cost natural gas for carbon sequestration, and skilled labor are essential for blue hydrogen production. 
• Limited supply chain partners: Supply chain logistics are complex, and the necessary intellectual property and partners are limited.
• Securing best-in-class customer agreements: We have the best seat at the table to negotiate offtake agreements with customers.
• Obtaining highest-quality financing partners: Meaningful capital investment is needed to secure the backing of financing partners with the proper scale and industry expertise. 

Underpinning our advantage in these four important areas are the critical developments of proprietary knowledge and intellectual property, which enable a first-mover advantage to transition into a world-leading position.

Capturing a small portion of market share now will compound as the market continues to expand. 

Because of our foresight and strategic investment, Air Products has achieved several early successes in clean hydrogen to date:

✔ We announced a pioneering supply agreement in June 2024, a 15-year take-or-pay agreement to supply 70,000 tons of green hydrogen annually to decarbonize TotalEnergies’ Northern European refineries starting in 2030. We are also in discussions for green hydrogen supply to its other EU refineries. 
✔ 60% of capacity for our Canada Net-Zero Hydrogen Energy Project is already committed, and negotiations for the remainder of the capacity are underway. 
✔ We are the primary EPC contractor and system integrator of the NEOM Green Hydrogen Complex, the largest green-hydrogen-based ammonia production facility that will serve as a key solution for transportation and industrial sectors globally. Air Products is the exclusive off-taker of the green hydrogen produced in the form of green ammonia at the facility. 
✔ We support Daimler’s European Hydrogen Refueling Network project to develop permanent and commercial scale hydrogen refueling stations and have announced networks are being built in California in addition to Canada and Europe. 

These important achievements are underpinned by the Board’s relentless focus on disciplined capital allocation and risk management controls. We remain focused on delivering on the onstream dates we have outlined and are securing more contracted offtake. The Company expects to generate positive net cash starting in FY2027.

AIR PRODUCTS’ BOARD IS REFRESHED, INDEPENDENT AND FIT-FOR-PURPOSE – 
MANTLE RIDGE’S PROPOSED NOMINEES WOULD REMOVE SIGNIFICANT AND RELEVANT EXPERIENCE AND
EXPERTISE FROM THE BOARD 

Our Board is committed to strong governance practices, including regular Board refreshment. This is demonstrated through our diverse and continuously enhanced Board composition. With Air Products shareholders supporting our nominations of Mr. Patel and Mr. Stern at the 2025 Annual Meeting, six out of nine Directors will have been first elected in the last five years. Our Board is world-class with expertise across a full range of disciplines, from operations and supply chain optimization to corporate governance and regulations. It consists of individuals with high-caliber executive and leadership experience in chemicals, industrial manufacturing and renewables as well as public company board experience. 

Mantle Ridge is seeking to replace four directors who are integral to our Board: Seifollah (Seifi) Ghasemi, Edward L. Monser, Charles Cogut and Lisa A. Davis. If successful, Mantle Ridge’s nominees would eliminate significant and relevant expertise brought by these current directors and disrupt the significant progress the Company has made.

MANTLE RIDGE’S PROPOSED EXECUTIVE CHAIRMAN CANDIDATE APPEARS ALARMINGLY UNFIT TO LEAD
AIR PRODUCTS OR ANY PUBLIC COMPANY

The core pillar of Mantle Ridge’s efforts is the replacement of the Board’s lead independent director, Ed Monser, as well as our Chairman and CEO, Seifi Ghasemi, with its hand-picked successors, Dennis Reilley and Eduardo Menezes. As you consider changes which would upend the leadership at Air Products and derail our momentum, we believe it is important that you are aware of the following facts relating to Mr. Reilley that the Board became aware of during its thorough evaluation of Mantle Ridge’s nominees:

• In February 2019, a purported friend of Mr. Reilley, John Davidson, signed a plea agreement with the United States, admitting to making a false statement to the FBI that he had never received from “D.R.” any non-public information, which “D.R.” had acquired as a result of his position on the boards of Marathon Oil, DowDuPont, or Covidien.¹⁵ The plea agreement used the initials “D.R.” only when referring to the director in question. We note that Mr. Reilley was not named directly in the complaint by the United States.

• Shortly thereafter, the media reported on the charges brought against Mr. Davidson, and noted clearly that the charges stemmed from the FBI’s investigation into Dennis Reilley and whether insider information was provided about the impending merger of Covidien PLC, with its rival, Medtronic Inc. The media noted that Mr. Reilley was a director at Covidien.¹⁶

• In December 2019, an associate of Mr. Davidson, John Special, was found liable and ordered to pay nearly $3 million in an SEC enforcement action,¹⁷ for allegedly trading on the basis of the information leaked by Mr. Davidson, who had received material, non-public information from a “Director” who served on the boards of Covidien, Marathon Oil and DowDuPont, including, in the case of Covidien, about a proposed transaction between Covidien and Medtronic. We note that Mr. Reilley was not named directly in the SEC’s complaint.

• Notably, before news of the plea agreement and SEC enforcement action became publicly known, in December 2018 and January 2019, Mr. Reilley resigned as director of CSX (to which he had been appointed by Mantle Ridge) and DowDupont (both in December 2018), and as director and chairman of Marathon Oil (in February 2019), respectively. Mr. Reilley has not served on a public company board since these resignations. 

A portion of the transcript from the hearing in which Mr. Davidson pled guilty to lying to the FBI regarding who he received information in connection with the Covidien/Medtronic’s merger is pasted below. If true, the statements are deeply concerning, as they show the director in question leaked board confidences regularly with his friend:

In a statement Mantle Ridge issued on December 13 in response to another media report on the matter, it stated, “To be clear, Mr. Reilley in no way acted inappropriately, and has never been accused of or charged with any impropriety or wrongdoing in connection with the matter.” Mantle Ridge also claimed in its response that Mr. Davidson’s testimony was “false”.

While Mr. Reilley was never formally charged by the FBI or the SEC for any wrongdoing, the information revealed in Mr. Davidson’s plea agreement and the SEC’s complaint against Mr. Special, if true, raises grave concerns about Mr. Reilley’s trustworthiness and ability to comply with his basic duty of confidentiality as a director. Mantle Ridge has offered no reasonable explanation to shareholders regarding this matter, other than to claim the testimony obtained under oath is false.

These circumstances not only call into question Mantle Ridge’s judgment in putting Mr. Reilley forward, but also the credibility of the entire Mantle Ridge slate and campaign. In the Board’s view, this matter should disqualify Mr. Reilley from ever again serving on a public company board. 

MANTLE RIDGE’S PREFERRED CEO CANDIDATE IS INSUFFICIENTLY QUALIFIED

In addition, Mantle Ridge’s proposed CEO candidate, Eduardo Menezes, lacks public company CEO or board experience – two key criteria for Air Products’ next CEO that the Board established months ago. By proposing a CEO candidate like Mr. Menezes who would require substantial on-the-job training and chaperoning at a pivotal moment for the Company, Mantle Ridge has clearly demonstrated that it is not interested in a thoughtful succession process that would benefit all shareholders and is instead only concerned about its own interests. Mr. Menezes is insufficiently experienced and lacks the basic qualifications our Board is looking for in CEO candidates. 

In contrast to Mantle Ridge’s inadequate CEO candidate who fails to meet the Board’s previously communicated search criteria, Air Products is advancing with a CEO succession process to find an excellent candidate suited to lead the Company in this next stage of growth. This process was announced in August 2024, prior to D.E. Shaw’s, or Mantle Ridge’s involvement. The Board has committed to providing an announcement of a new President and related timeline for CEO succession no later than March 31, 2025.

Mr. Hilal and Mantle Ridge have run the same failed playbook in each of its three activist campaigns since its founding. Each case forced major changes, including replacing the CEOs, and have failed to create long-term value for shareholders relative to the S&P 500. Since its founding, Mantle Ridge has never run an activist campaign or made a CEO change that has driven outperformance.

Mantle Ridge’s stale, recycled playbook has failed before, and, if implemented at Air Products, would fail again. Mantle Ridge’s substandard Chairman and CEO candidates and lack of any credible plan leave us highly concerned that, if successful with its campaign, its actions would derail our clean hydrogen strategy and destroy shareholder value. 

SAFEGUARD THE VALUE OF YOUR INVESTMENT IN AIR PRODUCTS BY VOTING “FOR” THE ELECTION OF ALL
OF AIR PRODUCTS’ NINE NOMINEES ON THE WHITE PROXY CARD

The Board understands its responsibility to deliver value to ALL shareholders. The Board also, with the support of its leadership advisory firm, considered Mantle Ridge’s revised slate and unanimously determined these nominees still do not offer qualifications superior to Air Products’ well-balanced slate of nominees with the proper skills and experience to lead the Company through its next phase of growth.

• Tonit M. Calaway, Independent – Executive Vice President, Chief Administrative Officer, General Counsel and Secretary of BorgWarner Inc.
• Charles “Casey” Cogut, Independent – Retired Partner, Simpson Thacher & Bartlett LLP
• Lisa A. Davis, Independent – Former Member of the Managing Board and CEO of Gas and Power for Siemens AG
• Seifollah “Seifi” Ghasemi, Chairman, President, and CEO 
• Jessica Trocchi Graziano, Independent – Senior Vice President and Chief Financial Officer of United States Steel Corporation
• Edward L. Monser, Independent, Lead Director – Retired President and Chief Operating Officer of Emerson Electric Co.
• Bhavesh V. (“Bob”) Patel, Independent, New Nominee – Former President of Standard Industries
• Wayne T. Smith, Independent – Retired Chairman and Chief Executive Officer of BASF Corporation
• Alfred Stern, Independent, New Nominee – Chief Executive Officer and Chairman of the Executive Board of OMV Aktiengesellschaft

We strongly urge that you vote your shares “FOR” ONLY Air Products’ Nominees. Please discard any blue proxy card you may receive from Mantle Ridge.

Thank you for your ongoing support.

Sincerely,

The Air Products Board of Directors

For more information regarding our Board nominees and strategy, please visit: www.voteairproducts.com. 

YOUR VOTE IS IMPORTANT. Whether or not you plan to virtually attend the 2025 Annual Meeting, please take a few minutes now to vote by Internet or by telephone by following the instructions on the WHITE proxy card, or to sign, date and return the enclosed WHITE proxy card in the enclosed postage-paid envelope provided. Regardless of the number of Company shares you own, your presence by proxy is helpful to establish a quorum and your vote is important.

OUR BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE “FOR” ONLY AIR PRODUCTS’ NINE
NOMINEES AND PROPOSALS ON THE ENCLOSED WHITE PROXY CARD.

¹Based on $25.2B market capitalization on June 30, 2014 (one day prior to first day as CEO) and December 13, 2024
²Based on $25.2B market capitalization on June 30, 2014 (one day prior to Seifi Ghasemi’s first day as CEO) and December 13, 2024
³Based on $25.2B market capitalization on June 30, 2014 (one day prior to Seifi Ghasemi’s first day as CEO) and December 13, 2024
⁴Non-GAAP financial measure. Visit investors.airproducts.com for reconciliation.
⁵Non-GAAP financial measure. Visit investors.airproducts.com for reconciliation.
⁶Peers include Air Liquide, Linde and Nippon Sanso. Air Products based on GAAP sales CAGR from 9/30/14 to 9/30/24 as reclassified to give effect to divestitures of the PMD and EMD businesses. Air Liquide based on CAGR from 12/31/14 to 12/31/24(E) and is adjusted for its acquisition of Airgas. Linde based on CAGR from 12/31/16 to 12/31/24(E) and is adjusted for its combination with Praxair. Nippon Sanso based on CAGR from 3/31/18 to 3/31/25(E) and is adjusted for its acquisition of Praxair European Assets. Starting revenue data-point is converted to USD at historical FX rate
⁷Non-GAAP financial measure. Visit investors.airproducts.com for reconciliation.
⁸Source: International Energy Agency World Energy Outlook 2022
⁹Source: Deloitte 2023 Global Green Hydrogen Outlook
¹⁰Science Direct – Direct 2021; Emerging carbon abatement technologies to mitigate energy-carbon footprint- a review
¹¹Ownership value based on APD share price as of 12/13/2024
¹²Based on $25.2B market capitalization on June 30, 2014 (one day prior to first day as CEO) and December 13, 2024
¹³Permission to use quote neither sought nor obtained
¹⁴TSR Reflects dividend-adjusted total return percentage over tenure or as of 12/13/2024 for current positions
¹⁵United States of America v. John Kenneth Davidson, Case No. 19-cr-56, filed on February 25, 2019. Transcript Dated March 5, 2019.
¹⁶Nolan Clay, The Oklahoman, February 27, 2019, “FBI insider trading probe results in criminal charge in Oklahoma City federal court“
¹⁷Securities and Exchange Commission v. Special et al, Case No. 19-cv-1152, filed on December 12, 2019.