Albemarle Corporation · NYSE:ALB
Albemarle — Q4 2019 Earnings Presentation
35 slides from Albemarle's earnings presentation, Feb 20, 2020
Slide 1: Fourth Quarter 2019 Earnings Conference Call/Webcast
Albemarle Corporation Fourth Quarter 2019 Earnings Conference Call/Webcast Thursday, February 20th, 2019 9:00am ET
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation, the conference call and discussions that follow, including, without limitation, statements with respect to product development, market trends, price, expected growth and earnings, demand for our products, capital proj
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 diluted earnings per share attributable to Albemarle Corporation, Adjusted effective income tax rates, segment operating profit, segment income, pro-forma net
Slide 4: Fourth Quarter and Full Year 2019 Financial Summary
Fourth Quarter and Full Year 2019 Financial Summary (In millions, except per share amounts) Q4 2019 Q4 2018 Variance FY 2019 FY 2018 Variance Net Sales $993 $922 8% $3,589 $3,375 6% Net income attributable to Albemarle Corporation1 $90 $130 -30% $533 $694 -23% Adjusted EBITDA $295 $264 12% $1,037 $1
Slide 5: 2019 Financial Highlights – Fourth Quarter and Full Year
2019 Financial Highlights – Fourth Quarter and Full Year ($ in millions except EPS) ($ in millions) TTM1 Pro-forma Net Sales2 4Q vs Prior FY FY vs Prior $3,600 2019 Year 2019 2018 Year (Pro-forma2) (Pro-forma2) $3,400 Net Sales $993 8% $3,589 $3,348 7% $3,200 Adjusted 4Q18 1Q19 2Q19 3Q19 4Q19 $295 1
Slide 6: 2019 Strategic Accomplishments Moving Toward 2024 Targets
2019 Strategic Accomplishments Moving Toward 2024 Targets Grow Maximize • Increased Lithium LCE volume by 14%, • Initiated program to reach $100 million in maintained flat pricing run rate cost savings by the end of 2021 • Record production • Operational Excellence • Generated strong free cash flow
Slide 7: 2020 Critical Milestones
2020 Critical Milestones Grow Maximize • Continue operational excellence • Achieve $50 million cost reduction in initiatives across our organization 2020; Position for annual run rate • Capital projects remain on track for savings of over $100MM by end of 2021 2021: • La Negra 3/4 startup in Q1 2021
Slide 8: Results of Our Materiality Assessment Led to Our Sustainability Framework
Results of Our Materiality Assessment Led to Our Sustainability Framework Financials Safety Sustainable Our People & Business Ethics & Business Model Regulatory Compliance Workplace Inclusive & Diverse Foster a sustainable Workplace Promote an inclusive and business model that creates Customers & di
Slide 9: Fourth Quarter 2019 Adjusted EBITDA Bridge
Fourth Quarter 2019 Adjusted EBITDA Bridge 12% YOY Net of FX ($ in millions) $300 24 295 264 3 10 $260 <1 7 $220 $180 Q4 2018 FX Impact Lithium Bromine Catalysts Corporate & Other Q4 2019 Specialties Net of FX Note: Bridge numbers may not reconcile due to rounding. 9
Slide 10: Full Year 2019 Adjusted EBITDA Bridge
Full Year 2019 Adjusted EBITDA Bridge 3% YOY Net of FX ($ in millions) $1,050 28 1,037 1,007 8 46 $1,000 996 11 27 $950 15 $900 FY 2018 PO Catalysts Pro Forma FX Impact Lithium Bromine Catalysts Corporate & FY 2019 as reported & FY 2018 Specialties Other as reported Components Net of FX Note: Bridge
Slide 11: Bromine Specialties
Bromine Specialties Q4 and FY 2019 Performance Historical Trend (TTM) 4Q ∆ 4Q FY ∆ FY $350 40% ($ in millions) 2019 2018 2019 2018 Net Sales $243 2% $1,004 9% $300 30% Net Sales ex FX1 $244 2% $1,013 10% $250 Adj. EBITDA $80 14% $328 14% 20% $200 Adj. EBITDA ex FX1 $80 14% $334 16% Adj. EBITDA Margi
Slide 12: Catalysts
Catalysts Q4 and FY 2019 Performance Historical Trend (TTM) 4Q ∆ 4Q FY ∆ FY ($ in millions) $300 30% 2019 2018 2019 2018 Pro-forma2 Net Sales $283 -7% $1,062 -1% $250 25% Net Sales ex FX1 $286 -6% $1,079 0% $200 Adj. EBITDA $77 -3% $271 -1% 20% $150 Adj. EBITDA ex FX1 $79 0% $282 3% Adj. EBITDA Marg
Slide 13: Lithium
Lithium Q4 and FY 2019 Performance Historical Trend (TTM) 4Q ∆ 4Q FY ∆ FY $600 50% ($ in millions) 2019 2018 2019 2018 Net Sales $411 20% $1,358 11% $500 40% Net Sales ex FX1 $418 22% $1,381 12% $400 Adj. EBITDA $140 -3% $525 -1% 30% $300 Adj. EBITDA ex FX1 $138 -5% $516 -3% Adj. EBITDA Margin 34% (
Slide 14: Cash Flow and Net Debt
Cash Flow and Net Debt Twelve Months Ended 12/31/19 Selected Financial Metrics ($ in millions) ($ in millions) (as of 12/31/2019) 2019 2018 Dividends Paid (YTD) $152 Net Cash from Operations $719 $546 Dividend Growth (Y/Y)1 10% Less: Capital Expenditures (852) (700) Cash Balance $613 Add Back: Pensi
Slide 15: Full Year 2020 Business Guidance vs 2019
Full Year 2020 Business Guidance vs 2019 As of February 19, 2020 Business Updated Business Environment Unit Outlook • Adj. EBITDA expected to be down in the range of 20% • Volume to be slightly up and offset by downward pricing Lithium • Expect stronger second half than the first • Expect adj. EBITD
Slide 16: Coronavirus Update
Coronavirus Update As of February 19, 2020 Business Area Assessment • Zero confirmed cases among our employees • Actively managing situation to protect employees and communities General • Complying with all government and health agency recommendations and requirements • To date, have experienced min
Slide 17: Full Year 2020 Guidance vs 2019
Full Year 2020 Guidance vs 2019 As of February 19, 2020 2020 Guidance FY 2020 FY 2019 vs Guidance FY 2019 Net Sales $3.6B $3.48B – $3.53B -2% to -3% Adj. EBITDA $1,037M $880M – $930M -10% to -15% Adj. EBITDA Margin 29% 25.4% – 26.5% Adj. Diluted EPS $6.04 $4.80 – $5.10 -16% to -21% Net Cash from Ope
Slide 18: Additional Inputs for Full Year 2020 Guidance
Additional Inputs for Full Year 2020 Guidance As of February 19, 2020 ($ in millions) FY 2020 Estimate Depreciation and amortization $200 – $215 Adjusted effective income tax rate 18.5% – 19.5% Corporate Costs $135 – $145 Interest and financing expenses $50 – $55 Weighted-average common shares outst
Slide 19: Upcoming Investor Events
Upcoming Investor Events First Quarter 2020 Investor Relations Events Date Event Location March 10th J.P. Morgan Industrials Conference New York City March 24th 2020 Goldman Sachs Chemicals Intensity Days Conference New Orleans March 26th New York Non-Deal Roadshow New York City March 27th Boston No
Slide 20: www.albemarle.com
.\ ALBEMARLE’ NYSE www.albemarle.com 20
Slide 21: Appendix: Non-GAAP Reconciliations and Supplemental Information
Appendix Non-GAAP Reconciliations and Supplemental Information
Slide 22: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures Non-GAAP Measure Description Adjusted net income Net income attributable to Albemarle Corporation before non-recurring, other unusual and non-operating pension and OPEB. Pro-forma adjusted net income Net income attributable to Albemarle Corporation before non-recurri
Slide 23: Adjusted Net Income
Adjusted Net Income Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2019 2018 2019 2018 Net income attributable to Albemarle Corporation $ 90,391 $ 129,596 $ 533,228 $ 693,562 Add back: Non-operating pension and OPEB items (net of tax) 20,453 8,829 18,648 3,234 Non-recurring
Slide 24: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2019 2018 2019 2018 Net income attributable to Albemarle Corporation $ 90,391 $ 129,596 $ 533,228 $ 693,562 Add back: Interest and financing expenses 22,400 12,571 57,695 52,405 Income tax (benefit) e
Slide 25: Adjusted EBITDA - by Segment (three months ended Dec 31)
Adjusted EBITDA - by Segment (three months ended Dec 31) Reportable ($ in thousands) Lithium Bromine Specialties Catalysts Segments Total All Other Corporate Consolidated Total Three months ended December 31, 2019: Net income (loss) attributable to Albemarle Corporation $ 29,158 $ 67,625 $ 63,358 $
Slide 26: Adjusted EBITDA - Margin by Segment (three months ended Dec 31)
Adjusted EBITDA - Margin by Segment (three months ended Dec 31) Reportable ($ in thousands) Lithium Bromine Specialties Catalysts Segments Total All Other Consolidated Total Three months ended December 31, 2019: Net sales $ 411,140 $ 243,464 $ 282,522 $ 937,126 $ 55,438 $ 992,564 Net income (loss) a
Slide 27: EBITDA - by Segment (twelve months ended Dec 31)
EBITDA - by Segment (twelve months ended Dec 31) Bromine Reportable Consolidated ($ in thousands) Lithium Specialties Catalysts Segments Total All Other Corporate Total Year ended December 31, 2019: Net income (loss) attributable to Albemarle Corporation $ 341,767 $ 279,945 $ 219,686 $ 841,398 $ 41,
Slide 28: EBITDA - Margin by Segment (twelve months ended Dec 31)
EBITDA - Margin by Segment (twelve months ended Dec 31) Bromine Reportable Consolidated ($ in thousands) Lithium Specialties Catalysts Segments Total All Other Total Year ended December 31, 2019: Net sales $ 1,358,170 $ 1,004,216 $ 1,061,817 $ 3,424,203 $ 165,224 $ 3,589,427 Net income (loss) attrib
Slide 29: Adjusted EBITDA - (twelve months ended)
Adjusted EBITDA - (twelve months ended) Twelve Months Ended ($ in thousands) Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Net income attributable to Albemarle Corporation $ 533,228 $ 572,433 $ 547,108 $ 695,371 $ 693,562 Depreciation and amortization 213,484 206,905 202,125 199,6
Slide 30: Adjusted EBITDA - by Segment (twelve months ended)
Adjusted EBITDA - by Segment (twelve months ended) Twelve Months Ended ($ in thousands) Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Dec 31, 2018 Lithium Net income attributable to Albemarle Corporation $ 341,766 $ 424,881 $ 413,058 $ 413,047 $ 428,212 Depreciation and amortization 99,424 95,
Slide 31: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 Twelve Months ($ in thousands) Ended Three Months Ended Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Adjusted EBITDA $ 1,036,781 $ 294,663 $ 254,351 $ 261,900 $ 225,867 Net income attributable to noncontrolling interests 71,129 15,852 16,548 20,772 1
Slide 32: Diluted EPS
Diluted EPS Three Months Ended Year Ended December 31, December 31, 2019 2018 2019 2018 Diluted earnings per share $ 0.85 $ 1.21 $ 5.02 $ 6.34 Add back: Non-operating pension and OPEB items (net of tax) 0.19 0.08 0.18 0.03 Non-recurring and other unusual items (net of tax) Restructuring and other —
Slide 33: Effective Tax Rate
Effective Tax Rate Income before income taxes and equity in net income of Income tax (benefit) ($ in thousands) unconsolidated investments expense Effective income tax rate Three months ended December 31, 2019: As reported $ 78,297 $ (5,105) (6.5)% Non-recurring, other unusual and non-operating pens
Slide 34: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Three Months Ended December 31, Year Ended December 31, 2019 2018 2019 2018 Noncontrolling Noncontrolling Noncontrolling Noncontrolling ($ in thousands) Equity Income Interest Equity Income Interest Equity Income Interest Equity Income Interest Lithium $ 14,
Slide 35: www.albemarle.com
‘\ALBEMARLE” NYSE www.albemarle.com