Albemarle Corporation · NYSE:ALB
Albemarle — JPMorgan Aviation, Transportation and Industrials Conference 2018
29 slides from Albemarle's conference presentation, Mar 13, 2018
Slide 1: Investor Presentation and Non-GAAP Reconciliations
Albemarle Corporation Investor Presentation and Non-GAAP Reconciliations March 2018 Proprietary Information of Albemarle Corporation
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 Full Year 2017 Financial Highlights Founded 1887 Net Sales $3.1B Global Employees ~5,000 Adj. EPS4,5 $4.59 Countries1 ~100 Adj. EBITDA4,5 $885M Dividend Yield2 1.3% Adj. EBITDA Margin5,6 29% Market Cap3 $11.4B Full Year 2017 Net Sales by Segment 4% Lithium 33% 35% Bromine Specialt
Slide 5: Leadership Across Businesses Is Driven By Core Strengths
Leadership Across Businesses Is Driven By Core Strengths Lithium Bromine Specialties Catalysts Global Ranking #1 #2 #2 Full Year 2017 $447M $259M $284M Adj. EBITDA1 Full Year 2017 44% 30% 27% Adj. EBITDA Margin2 Key Competitors Globally Diversified, Low Globally Diversified, Low Leading Technology a
Slide 6: 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 7: Battery Markets Continue to Accelerate Lithium Demand
Battery Markets Continue to Accelerate Lithium Demand Transportation (EV, Trucks/Buses) CAGR (2016-21): 32 – 35% LCE Content: 40 – 100 kgs EV Sales grew 58% in 2017 Consumer Electronics (CE) CAGR (2016-21): ~8% LCE Content: < 0.1 kgs Battery Market Grid Storage (ESS) CAGR (2016-21): > 40% Expectatio
Slide 8: Demand Outlook – Thoughtful & Comprehensive Approach
Demand Outlook – Thoughtful & Comprehensive Approach 2025 EV and Lithium Outlook1 Demand Buildup by Application Demand in kt LCE 20% 2017 ’17 – ’25 2025 Application Demand CAGR Demand ALB Outlook Transportation 50 35% 550 15% EV Penetration Consumer Electronics2 60 8% 110 All Other/Industrial 110 3
Slide 9: Supply to Remain Relatively Balanced versus Demand
Supply to Remain Relatively Balanced versus Demand Established majors have strong incentive to commission capacity as demand warrants • Relative size of lithium profit generation and resulting equity valuation • Duration of resource quotas and time to earn returns on capital deployed New brine proje
Slide 10: 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 2017 Nameplate Xinyu II La Negra III Australia Phase Wave I Conversion for Austra
Slide 11: 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 12: 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 13: 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 Divesting Polyolefin Catalysts exited Phosphorus (‘12) S
Slide 14: 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 15: www.albemarle.com
www.albemarle.com Proprietary Information of Albemarle Corporation 15
Slide 16: Appendix: 2018 Guidance and Business Snapshots
Appendix 2018 Guidance and Business Snapshots Proprietary Information of Albemarle Corporation
Slide 17: Full Year 2018 Guidance
Full Year 2018 Guidance 2018 Guidance FY 2017 FY 2018 FY 2017 vs FY 2017 Pro Forma3 Guidance4 Pro-Forma3 Net Sales $3.07B $3.00B $3.2 – $3.4B 7% – 15% Adjusted EBITDA 1 $885M $859M $955 – $1,005M 11% – 17% Adjusted EBITDA Margin 1 29% 29% 29% – 30% 1 Adjusted Diluted EPS $4.59 $4.40 $5.00 – $5.40 14
Slide 18: Full Year 2018 Business Guidance vs 2017
Full Year 2018 Business Guidance vs 2017 GBU Outlook Business Environment • FY 2018 Adj. EBITDA1 expected to increase by greater than 20% compared to 2017 • Favorable outlook driven by strong volume and price improvements, primarily in battery grade Lithium product portfolio • Wave I expansion proje
Slide 19: Lithium Snapshot
Lithium Snapshot Full Year 2017 Financials Characteristics Net Sales $1,019M • Mining and specialty chemicals capability Adj. EBITDA1 $447M • Vertically integrated from natural resource to specialty performance products Adj. EBITDA Margin2 44% • Low cost position globally Applications Business Envir
Slide 20: Bromine Specialties Snapshot
Bromine Specialties Snapshot Full Year 2017 Financials Characteristics Net Sales $855M • Mineral extraction and processing • Low-cost position on global cost curve Adj. EBITDA1 $259M • Vertically integrated Adj. EBITDA Margin2 30% • Stable and sustainable cash flow Applications Business Environment
Slide 21: Catalysts Snapshot
Catalysts Snapshot Full Year 2017 Financials Characteristics • Leading positions in FCC and HPC catalysts Net Sales $1,068M • Technology and applications knowledge • Focused on value creation for refiners Adj. EBITDA1 $284M • Long-term, collaborative customer relationships Adj. EBITDA Margin2 27% •
Slide 22: Appendix: Non-GAAP Reconciliations and Supplemental Information
Appendix Non-GAAP Reconciliations and Supplemental Information Proprietary Information of Albemarle Corporation
Slide 23: New Reporting Structure: Net Sales and Adjusted EBITDA
New Reporting Structure: Net Sales and Adjusted EBITDA New reporting structure starting 1Q 2018: Renaming Refining Solutions GBU to Catalysts; PCS and Refining Solutions net sales and adjusted EBITDA to be reported under the Catalysts GBU; renaming Lithium & Advanced Materials GBU to Lithium Three m
Slide 24: New Reporting Structure: Adjusted EBITDA
New Reporting Structure: Adjusted EBITDA New reporting structure starting 1Q 2018: Renaming Refining Solutions GBU to Catalysts; PCS and Refining Solutions net sales and adjusted EBITDA to be reported under the Catalysts GBU; renaming Lithium & Advanced Materials GBU to Lithium Bromine Reportable Li
Slide 25: Net Income
Net Income Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2017 2016 2017 2016 Net (loss) income attributable to Albemarle Corporation $ (218,366) $ 602,090 $ 54,850 $ 643,675 Add back: Income from discontinued operations (net of tax) — (559,974) — (202,131) Earnings from co
Slide 26: EBITDA
EBITDA Three Months Ended Year Ended December 31, December 31, ($ in thousands) 2017 2016 2017 2016 Net (loss) income attributable to Albemarle Corporation $ (218,366) $ 602,090 $ 54,850 $ 643,675 Add back: Income from discontinued operations (net of tax) — (559,974) — (202,131) Interest and financi
Slide 27: EBITDA - Continuing Operations (Twelve Months Ended)
EBITDA - Continuing Operations (Twelve Months Ended) Twelve Months Ended ($ in thousands) Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Mar 31, 2017 Dec 31, 2016 Continuing Operations Net income attributable to Albemarle Corporation $ 54,850 $ 875,306 $ 884,856 $ 466,702 $ 643,675 Depreciation and amortiza
Slide 28: Diluted EPS
Diluted EPS Three Months Ended Year Ended December 31, December 31, 2017 2016 2017 2016 Diluted (loss) earnings per share attributable to Albemarle Corporation $ (1.95) $ 5.30 $ 0.49 $ 5.68 Add back: Non-operating pension and OPEB items (0.08) 0.16 (0.09) 0.16 Non-recurring and other unusual items f
Slide 29: www.albemarle.com
www.albemarle.com Proprietary Information of Albemarle Corporation 29
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