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Air Products & Chemicals Inc. (NYSE:APD)

This company has been moved to the archive! The financial data has not been updated since August 9, 2021.

Common-Size Income Statement

Air Products & Chemicals Inc., common-size consolidated income statement

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12 months ended: Sep 30, 2020 Sep 30, 2019 Sep 30, 2018 Sep 30, 2017 Sep 30, 2016 Sep 30, 2015
Sales 100.00 100.00 100.00 100.00 100.00 100.00
Cost of sales -66.15 -67.00 -69.31 -70.27 -67.22 -70.18
Facility closure 0.00 -0.33 0.00 0.00 0.00 0.00
Gross profit 33.85% 32.68% 30.69% 29.73% 32.78% 29.82%
Selling and administrative -8.76 -8.41 -8.52 -8.74 -8.92 -9.52
Research and development -0.95 -0.82 -0.72 -0.71 -1.39 -1.40
Business separation costs 0.00 0.00 0.00 -0.37 -0.55 -0.08
Cost reduction actions 0.00 -0.29 0.00 -1.85 -0.36 -2.10
Pension settlement loss 0.00 0.00 0.00 -0.13 -0.07 -0.21
Goodwill and intangible asset impairment charge 0.00 0.00 0.00 -1.98 0.00 0.00
Gain on exchange of equity affiliate investments 0.00 0.33 0.00 0.00 0.00 0.18
Company headquarters relocation income 0.38 0.00 0.00 0.00 0.00 0.00
Other income (expense), net 0.74 0.55 0.56 1.48 0.61 0.48
Operating income 25.27% 24.04% 22.01% 17.44% 22.11% 17.17%
Equity affiliates’ income 2.99 2.42 1.96 0.98 1.56 1.56
Interest expense -1.23 -1.54 -1.46 -1.47 -1.21 -1.05
Other non-operating income (expense), net 0.35 0.75 0.06 0.35 0.00 0.00
Loss on extinguishment of debt 0.00 0.00 0.00 0.00 -0.07 -0.17
Income from continuing operations before taxes 27.37% 25.67% 22.56% 17.30% 22.39% 17.52%
Income tax provision -5.40 -5.38 -5.87 -3.19 -6.16 -4.20
Income from continuing operations 21.97% 20.29% 16.69% 14.11% 16.23% 13.32%
Income (loss) from discontinued operations, net of tax -0.16 0.00 0.47 22.79 -9.28 0.00
Net income 21.80% 20.29% 17.17% 36.90% 6.95% 13.32%
Net income attributable to noncontrolling interests -0.50 -0.55 -0.39 -0.25 -0.32 -0.40
Net income attributable to Air Products 21.30% 19.73% 16.77% 36.65% 6.63% 12.91%

Based on: 10-K (reporting date: 2020-09-30), 10-K (reporting date: 2019-09-30), 10-K (reporting date: 2018-09-30), 10-K (reporting date: 2017-09-30), 10-K (reporting date: 2016-09-30), 10-K (reporting date: 2015-09-30).

The financial performance between 2015 and 2020 is characterized by a consistent expansion of operating margins and an improvement in core profitability, despite significant volatility in net income due to non-recurring items.

Gross Profitability and Cost Management
A steady improvement in gross profit margins is observed, rising from 29.82% in 2015 to 33.85% in 2020. This trend is driven by a reduction in the cost of sales, which declined from 70.18% of sales in 2015 to 66.15% by 2020, suggesting enhanced production efficiency or more favorable pricing power.
Operating Expense Trends
Selling and administrative expenses remained relatively stable, with a slight downward trend from 9.52% in 2015 to 8.76% in 2020. Research and development spending as a percentage of sales saw a notable decrease after 2016, dropping from 1.39% to a range between 0.71% and 0.95% for the remainder of the period. Additionally, one-time costs such as facility closures and business separation costs appeared sporadically, with their impact diminishing over time.
Operating Income Growth
Operating income as a percentage of sales demonstrated strong growth, increasing from 17.17% in 2015 to 25.27% in 2020. This expansion reflects the combined effect of rising gross margins and disciplined control over operating expenses.
Non-Operating Performance
Income from equity affiliates showed a positive upward trend, contributing 1.56% of sales in 2015 and increasing to 2.99% by 2020. Interest expenses remained relatively contained, fluctuating between 1.05% and 1.54% of sales, which indicates a stable debt service burden relative to revenue.
Net Income Volatility
Net income attributable to the company exhibited extreme fluctuations primarily due to discontinued operations. A significant loss of 9.28% in 2016 was followed by a substantial gain of 22.79% in 2017, leading to a peak net income attributable to Air Products of 36.65% that year. In the absence of these volatile discontinued operations, the underlying income from continuing operations showed a healthy and consistent climb from 13.32% in 2015 to 21.97% in 2020.

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