James Hooper

James Hooper asked about the space opportunity, including recent NASA contracts, engagement with commercial space providers, business performance, and growth outlook. He also inquired if the 5% year-on-year volume increase in Europe indicates a recovery or if caution is still warranted.

Answer

Eduardo Menezes, Chief Executive Officer, highlighted the aerospace segment as important, contributing over 2% of total sales, and noted the changing market with more commercial launches. Melissa Schaeffer, Chief Financial Officer, estimated Air Products holds 40-50% of the U.S. space market share with a projected 6-7% annual sales growth. Eduardo Menezes advised caution on Europe, attributing volume increases partly to lacking prior year turnarounds, and noted the integrated nature of their European business.

James Hooper inquired about the opportunity in the space segment, including recent contracts with NASA, engagement with commercial space providers, current business performance, and future growth outlook. He also asked if the 5% year-on-year volume growth in Europe indicates a recovery or if caution regarding European volumes is still warranted.

Answer

Eduardo Menezes, Chief Executive Officer, highlighted the space segment as a 'very hot' and important market for Air Products, contributing over 2% of total sales across various products. Melissa Schaeffer, Chief Financial Officer, estimated Air Products holds 40-50% of the total U.S. space market share, projecting 6-7% annual sales growth. Regarding Europe, Eduardo Menezes advised caution, noting that the volume increase was partly due to fewer turnarounds compared to the prior year, and that the European market remains complex, though Air Products' integrated business model and experienced team help extract good results.

James Hooper from AB Bernstein requested an update on the status of other major projects in Edmonton, Rotterdam, and Arizona, and asked if they could be delayed.

Answer

CEO Eduardo Menezes noted that since these are long-duration projects, their capital and schedule forecasts have not changed in the last three months. CFO Melissa Schaeffer added a key distinction, clarifying that the Edmonton and Rotterdam projects are underpinned by customer contracts, giving them a different risk profile than the larger merchant-based projects in NEOM and Louisiana.

James Hooper asked for more details on the drivers behind PPG's Auto OEM share gains, including the role of China positioning, customer share gains, and technology offerings.

Answer

Chairman and CEO Tim Knavish explained that share gains are a combination of customer mix (a recovering customer with a large share of wallet), new technology (lower cure products, new electrocoat for productivity and sustainability), strong performance in automotive parts, and partnerships with a large EV manufacturer in China. Senior Vice President and CFO Vince Morales added that significant share gains in South America from a competitor's exit were fully realized in Q4 2025 and will carry over into H1 2026, with additional share wins from late 2025 launching throughout 2026.

James Hooper asked for more details on the drivers behind PPG's Auto OEM share gains, specifically if they relate to positioning in China, customer market share gains, or new technology offerings.

Answer

Chairman and CEO Tim Knavish attributed Auto OEM share gains to a combination of customer mix (recovering customers), new technology introductions (lower cure products, new electric coat product), strong performance in automotive parts, and partnerships with successful EV manufacturers in China. Senior Vice President and CFO Vince Morales added that significant share gains in South America (due to a competitor exit) contributed to Q4 results and will carry over into H1 2026, with additional share wins from late 2025 launching throughout 2026.

James Hooper asked if PPG is observing a more competitive volume environment, particularly in refinish where a competitor reported share gains, and if increased pressure is expected across businesses in 2026.

Answer

Chairman and CEO Tim Knavish stated that he doesn't see fundamental changes in competitive structure, except in China. In refinish, he noted that PPG and its main competitor are both gaining share from smaller players due to superior productivity solutions, which are even more critical in tough times. He expressed confidence in PPG's continued share gains through new digital and chemistry productivity tools. CFO Vince Morales emphasized that PPG's value proposition is validated by higher volume and positive pricing.

James Hooper from Bernstein asked about the competitive volume environment, noting that many coatings players, including PPG's competitors, are reporting share gains, and whether PPG anticipates increased pressure across its businesses in 2026.

Answer

Chairman and CEO Tim Knavish stated that he doesn't see fundamental changes in competitive structure, except for China. He acknowledged that in refinish, PPG and a key competitor both gain share from smaller players, especially during tough times when productivity solutions are crucial. Knavish emphasized PPG's continuous introduction of new digital and chemistry productivity tools, driving share gains and attracting new sizable customers. CFO Vince Morales added that PPG's value proposition is validated by gaining share with positive pricing.

James Hooper from AB Bernstein inquired about the profitability of the recent market share gains, asking if they came at segment-average margins and if those margins could expand over time.

Answer

CEO Timothy Knavish explained that the share gains are expected to have segment-average gross margins. However, he anticipates that the increased volume will drive net margin expansion through fixed cost leverage and improved manufacturing efficiencies, with the benefits becoming more apparent in the second half of the year.

James Hooper from AB Bernstein inquired whether the recent share gains have affected incremental margins and if those margins are expected to improve as the new business is consolidated.

Answer

Chairman & CEO Timothy Knavish explained that the new business is being won at approximately segment-average gross margins. However, he expects net margins to expand as the increased volume provides fixed cost leverage and manufacturing efficiencies. This dynamic is expected to drive both top-line growth and net margin expansion in the second half of the year.

James Hooper from Sanford C. Bernstein & Co. LLC inquired about EMEA margins, noting the impressive 36% but a 200 basis point year-over-year decline (excluding pass-through), asking if margins are reaching terminal velocity and what levers Linde will pull for continued growth without volume recovery.

Answer

CFO Matt White explained that negative volumes and positive price in EMEA create strong margin contribution. He noted that while onsite customers below MTOP provide a boost, their recovery might lead to minor margin dilution due to power costs. Base merchant and package recovery would be margin accretive. He added that margin expansion tends to be greater in difficult times due to higher contribution from margin-accretive management actions.

James Hooper asked about EMEA margins, noting the impressive 36% but a 200 basis point year-over-year decline (excluding pass-through), questioning if terminal velocity is being reached and what levers Linde can pull to continue growth without volume recovery.

Answer

Matt White, CFO, explained that negative volumes and positive pricing in EMEA are driving strong margin contribution. He noted that while onsite customers below MTOP levels boost margins, recovery might lead to minor dilution due to power costs. Base merchant and package recovery would be margin accretive. He stated that margin expansion is typically greater in difficult times due to management actions, shifting to more volume-driven growth (with less margin expansion) during recovery periods. EMEA is performing as expected by aligning price with inflation, maintaining fixed contracts, and managing costs.

James Hooper of AB Bernstein asked about the energy transition opportunity in Europe for Linde's backlog, noting competitors have been winning low-carbon hydrogen projects in the region.

Answer

CEO Sanjiv Lamba acknowledged a move towards more pragmatism in Europe's energy transition goals, which could benefit economically sound projects. However, he cautioned that regulatory and implementation processes in Europe take significant time. He believes it will be a while before this translates into cost-competitive hydrogen and a meaningful number of contracted projects.