Albemarle Corporation · NYSE:ALB
Albemarle — 2018 Seaport Global Chemicals & Basic Materials Conference
27 slides from Albemarle's conference presentation, Sep 11, 2018
Slide 1: Albemarle Corporation Investor Presentation and Non-GAAP Reconciliations
Albemarle Corporation Investor Presentation and Non-GAAP Reconciliations September 2018
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation, the webcast and discussions that follow, including, without limitation, statements with respect to product development, changes in productivity, market trends, price, expected growth and earnings, input costs, surchar
Slide 3: Non-GAAP Financial Measures
Non-GAAP Financial Measures It should be noted that Adjusted net income attributable to Albemarle Corporation (“Adjusted earnings”), Adjusted net income from continuing operations, Adjusted diluted earnings per share attributable to Albemarle Corporation, Adjusted diluted earnings per share from con
Slide 4: Albemarle Snapshot
Albemarle Snapshot Founded 1887 Financial Highlights4 Trailing Twelve Months Ended June 30, 2018 Global Employees ~5,400 Net Sales $3.3B Net Income5 $335M Countries1 ~100 Adj. EBITDA6,7 $962M Dividend Yield2 1.4% Adj. EBITDA Margin7,8 29% Net Sales by Segment4 Market Cap3 $10.6B Trailing Twelve Mont
Slide 5: Albemarle Path to Achieve Growth
Albemarle Path to Achieve Growth 2016 2021 Diversified Lithium Wave I & II: Expand current • 165,000 MT LCE annual capacity resources and BG conversion capacity specialty • New Lithium resources in chemical development with goal of 265,000 Lithium Wave III: Explore new resources MT LCE capacity mid-
Slide 6: Segment Quarterly Highlights
Segment Quarterly Highlights TTM1 Pro-forma Net Sales2 ($ in millions) TTM1 Pro-forma Adj. EBITDA2,3 and ($ in millions) Adj. EBITDA Margin2,3 $3,250 $1,000 30% $900 29% $3,000 28% $800 $2,750 27% $700 26% $2,500 $600 25% $2,250 2Q17 3Q17 4Q17 1Q18 2Q18 2,3 2Q17 3Q17 4Q17 1Q18 2Q18 Pro-forma Adjuste
Slide 7: Leadership Across Businesses Is Driven By Core Strengths
Leadership Across Businesses Is Driven By Core Strengths Lithium Bromine Specialties Catalysts2 Global Ranking #1 #2 #2 TTM Adj. EBITDA1 $504M $268M $290M TTM Adj. EBITDA Margin1 43% 30% 26% Key Competitors Globally Diversified, Low Leading Technology and Cost Resources; Leading Globally Diversified
Slide 8: Bromine Specialties Snapshot
Bromine Specialties Snapshot TTM Financials Characteristics Twelve Months Ended June 30, 2018 • Mineral extraction and processing Net Sales $878M • Low-cost position on global cost curve Adj. EBITDA1 $268M • Vertically integrated Adj. EBITDA Margin1 30% • Stable and sustainable cash flow Application
Slide 9: Catalysts Snapshot
Catalysts Snapshot TTM Financials Characteristics Twelve Months Ended June 30, 2018 • Leading positions in FCC and HPC catalysts Net Sales $1,101M • Technology and applications knowledge Adj. EBITDA1 $290M • Focused on value creation for refiners • Long-term, collaborative customer relationships Adj
Slide 10: Lithium Snapshot
Lithium Snapshot TTM Financials Characteristics Twelve Months Ended June 30, 2018 • Mining and specialty chemicals capability Net Sales $1,174M • Vertically integrated from natural resource to Adj. EBITDA1 $504M specialty performance products Adj. EBITDA Margin1 43% • Low cost position globally Appl
Slide 11: Battery Markets Continue to Accelerate Lithium Demand
Battery Markets Continue to Accelerate Lithium Demand 2025 EV and Lithium Outlook1 Demand Buildup by Application 20% 2017 ’17 – ’25 2025 Applications Demand CAGR Demand Transportation 50 35% 550 ALB Outlook Consumer Electronics2 60 8% 110 15% EV Penetration All Other/Industrial 110 3 – 4% 140 Total
Slide 12: Long-term Relationships Required for EV Growth
Long-term Relationships Required for EV Growth Recent VW Announcement Lithium Producer Battery Manufacture Auto Manufacture Volume 140 kT LCE 150 GWh 3 Million EVs Expansion $2 – $3 billion $9 – $12 billion $20 – $25 billion Investment 3 – 5 year contracts with Standard Customer cathode manufactures
Slide 13: Albemarle the Partner of Choice in EV Battery Markets
Albemarle the Partner of Choice in EV Battery Markets Deep relationships Long-term Contracts Value-added Sale • Leading • Minimum volumes • Chemical, physical cathode/battery that escalate each and purity producers largely year characteristics based in Asia • Pricing floor with requiring specialized
Slide 14: Expanding Lithium Conversion Capacity in High Quality Resources
Expanding Lithium Conversion Capacity in High Quality Resources All figures in kt LCE and represent only lithium nameplate conversion capacity Hydroxide 265 60 Carbonate 40 Hydroxide 165 40 Carbonate 40 Hydroxide 65 20 2 2017 Nameplate Xinyu II La Negra III / IV Kemerton I / II Wave I Chile V / VI K
Slide 15: Cash Flow and Net Debt
Cash Flow and Net Debt Six Months Ended June 30 Selected Financial Metrics ($ in millions) ($ in millions) (as of 06/30/2018) 2018 2017 Dividends Paid: $72 Net Cash from Operations $224 ($54) Dividend Growth (Y/Y)3: 5% Less: Capital Expenditures (281) (98) Cash Balance: $908 Gross Debt4: $1,615 Add
Slide 16: Disciplined Capital Allocation Strategy – Our Priorities
Disciplined Capital Allocation Strategy – Our Priorities Invest for Invest for Maintain Fund Growth in Investment Dividend Growth, High Return Grade Rating Growth Maintain Projects • Long-term Net • Increase dividend Debt to Adjusted annually: 24 • Strategically grow Flexibility Lithium EBITDA1,2 Ta
Slide 17: Continued Portfolio Assessment to Drive Value
Continued Portfolio Assessment to Drive Value 2014 2018 Acquired Rockwood (‘15) Acquired Jiangxi Jiangli New Materials (‘16) Entered high growth Chinese lithium conversion lithium market capacity Divested AOX (‘14) and Divested Minerals, Metal Divested Polyolefin Catalysts exited Phosphorus (‘12) Su
Slide 18: Albemarle Is Well Positioned to Maximize Long-Term Shareholder Value Creation
Albemarle Is Well Positioned to Maximize Long-Term Shareholder Value Creation 1 Multi-year journey has resulted in a more focused and growth-oriented portfolio underpinned by energy efficiency macro drivers 2 Clear strategy with the people, cash generation and resources necessary to ….execute the st
Slide 19: www.albemarle.com
‘\ ALBEMARLE’ NYSE www.albemarle.com 19
Slide 20: Appendix A
Appendix A Guidance as per Q2 2018 Earnings Released August 7th, 2018
Slide 21: Full Year 2018 Business Guidance vs 2017
Full Year 2018 Business Guidance vs 2017 Business Prior Updated Business Environment Unit Outlook Outlook • FY 2018 Adj. EBITDA1 expected to increase low-to-mid 20’s on % basis vs prior year • Expect 1H 2018 to be similar to 2H 2018; Q3 similar to Q1 and Q4 similar to Q2 Lithium • Favorable outlook
Slide 22: Full Year 2018 Guidance
Full Year 2018 Guidance Prior Updated Updated 2018 Guidance FY 2017 FY 2017 FY 2018 FY 2018 vs Pro Forma3 Guidance4 Guidance4 FY 2017 Pro-Forma3 Net Sales $3.07B $3.00B $3.2 – $3.4B ▲ $3.3 – $3.5B 10% – 17% Adjusted EBITDA 1 $885M $859M $955 – $1,005M ▲ $990 – $1,020M 15% – 19% Adjusted EBITDA Margi
Slide 23: Appendix B
Appendix B Non-GAAP Reconciliations and Supplemental Information
Slide 24: Adjusted EBITDA - Continuing Operations (twelve months ended)
Adjusted EBITDA - Continuing Operations (twelve months ended) Twelve Months Ended ($ in thousands) Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 Continuing Operations Net income attributable to Albemarle Corporation $ 884,856 $ 875,306 $ 54,850 $ 135,397 $ 334,525 Depreciation and
Slide 25: Adjusted EBITDA - by Segment (three months ended June 30)
Adjusted EBITDA - by Segment (three months ended June 30) Reportable ($ in thousands) Lithium Bromine Specialties Catalysts Segments Total All Other Corporate Consolidated Total Three months ended June 30, 2018: Net income (loss) attributable to Albemarle Corporation $ 117,292 $ 59,673 $ 280,887 $ 4
Slide 26: Adjusted EBITDA - by Segment (twelve months ended)
Adjusted EBITDA - by Segment (twelve months ended) Twelve Months Ended ($ in thousands) Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 Lithium Net income attributable to Albemarle Corporation $ 271,810 $ 314,707 $ 342,992 $ 373,712 $ 409,185 Depreciation and amortization 85,882 86,
Slide 27: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 Twelve Months ($ in thousands) Ended Three Months Ended Jun 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Adjusted EBITDA $ 962,443 $ 258,562 $ 248,718 $ 245,780 $ 209,383 Net income attributable to noncontrolling interests 38,208 8,225 7,165 11,295 11,52
Albemarle — 2018 Seaport Global Chemicals & Basic Materials Conference on 6ix