Albemarle Corporation · NYSE:ALB
Albemarle — Investor Presentation (February 2015)
32 slides from Albemarle's investor presentation, Feb 11, 2015
Slide 1: Albemarle Corporation Investor Presentation
Exhibit 99.1 Albemarle Corporation Investor Presentation February 2015
Slide 2: Forward Looking Statements
Forward Looking Statements Someof the information presentedin this presentationand the conferencecall and discussionsthat follow, including,without limitation, statements with respect to the transaction with Rockwoodand the anticipated consequencesand benefits of the transaction,product development,
Slide 3: Albemarle Acquisition of Rockwood: A Compelling Transaction
Albemarle Acquisition of Rockwood: A Compelling Transaction • Creates a premier specialty chemicals company with leading positions in attractive end markets around the world • Accelerates Albemarle’s strategy of bringing lithium and bromine together • Strengthens growth potential across four, high-m
Slide 4: Transaction Summary
Transaction Summary • Combined company will be a leading specialty chemical company with industry-leading growth and EBITDA margins • Accelerates Albemarle’s growth and enhances its margin profile • Creates the potential for more consistent and predictable earnings growth for ALB shareholders • Crea
Slide 5: Leadership Across Four Highly Attractive Growth Segments
Leadership Across Four Highly Attractive Growth Segments Lithium(2) Performance Chemicals Catalyst Solutions Surface Treatment (2) Global Ranking #1 #1/2 #1/2 #2 2014A Sales $474 $1,352 $1,094 $940 Adj. EBITDA (1) $199 $337 $300 $220 % Margin (1) 42% 25% 27% 23% 2.0x – 3.0x 1.0x – 1.5x 1.0x – 2.0x 1
Slide 6: Lithium and Bromine Fit Accelerates Synergy Capture
Lithium and Bromine Fit Accelerates Synergy Capture Low Cost Sourcing and Processing • Best sourcing and most diverse locations in the world due to long term reserves and highest concentration levels • Chile, Australia, Nevada and Arkansas for lithium • Arkansas and the Dead Sea for Bromine • Chile,
Slide 7: New Organizational Structure
New Organizational Structure Legacy ALB and ROC Structure New Structure Effective 1Q2015 Reporting to include lithium and bromine details Catalyst Performance Lithium Chemetall Refining Chemetall Performance Solutions Chemicals Surface Solutions Surface Chemicals Treatment Treatment * FCS–FineChemis
Slide 8: Divest Non-core Assets to Focus on Core Growth
Divest Non-core Assets to Focus on Core Growth • Robust & differentiated portfolio of mineral flame retardants – products used in wire and cable, electronic and electrical components and non-FRs product used • The three businesses in aggregate, Minerals in building materials, mass transportation,pai
Slide 9: Integration Update
Integration Update • Achieved $30 million of annualized synergies on Day 1 and on track to achieve $50 million by the end of year 1 with the remaining $50 million by the end of year 2 • Announced new organizational structure that will drive efficiency and effectiveness under a three GBU structure –
Slide 10: Full Year 2015 Outlook
Full Year 2015 Outlook Initial Division Performance Drivers Outlook Refining Solutions Heavy Oil Upgrading • Volume growth on increased transportation fuel demand Clean Fuel Technologies • Flat to down on timing and product mix with a potential for costs of crudes and/or extension of change-outs imp
Slide 11: 2015 Adjusted EBITDA Outlook
2015 Adjusted EBITDA Outlook • The original 2015 forecast was completed in July 2014 and pre-oil price decline • Short-term impact of oil and foreign exchange negatively Adjusted EBITDA* impacting free cash flow for 2015 » Currency impact accounting for $40 - $50 million » Business outlook driving $
Slide 12: 2015 FCF Outlook
2015 FCF Outlook Free Cash Flow* • 2015 FCF Key Assumptions and Impacts: $600M -$900M » Tax rate of ~25% $70M -$150M » Interest Expense ~$145 million » CAPEX less than 6% of revenue $40M -$50M » One time costs ~$200 million associated with acquisition and $450M -$550M integration costs » One time ta
Slide 13: Strong Leadership with Substantial Industry Experience
Strong Leadership with Substantial Industry Experience Luther C. “Luke” Kissam D. Michael Wilson Joris Merckx Silvio Ghyoot President Senior Vice President & President, President, & Chief Executive Officer President of Performance Chemicals Chemetall Surface Treatment Refining Solutions Karen G. Nar
Slide 14: Appendix
Appendix A ALBEMARLE
Slide 15: Catalyst Solutions Overview
Catalyst Solutions Overview Growth Drivers • Rising fuel consumption • More stringent air quality mandates • Investments in conversion capacity • Infrastructure spending • Growing middle class wealth • Prospective PE/PP capacity additions in North America Customers • FCC: Global oil refiners (e.g. E
Slide 16: Market Position
Market Position Market Segment Position Core Strengths FCC Catalysts 2 • Deep customer understanding Heavy Oil Max Propylene 1 Upgrading • Heavy investment in R&D Resid 2 • Global footprint Distillates 1 • Unparalleled network of Clean Fuels Technologies Vacuum Gas Oil 2 partnerships and alliances R
Slide 17: Global Catalyst Market – Our View
Global Catalyst Market – Our View SSC PP We provide refinery and polymer catalyst solutions where we are competitively advantaged based on our technology or cost position 17
Slide 18: Catalyst Solutions Throughout the Refinery
Catalyst Solutions Throughout the Refinery Heavy Oil Upgrading (FCC) Clean Fuels Technologies (HPC) Albemarle provides the global refining industry with a wide range of catalyst solutions to convert crude oil into high value finished products 18
Slide 19: Performance Chemicals Overview
Performance Chemicals Overview Growth Drivers • Energy demand & increased deep water drilling driving completion fluids • Clean air regulations bolstering mercury control • Demand for process R&D and rapid commercialization services • Surging data traffic requiring high-end servers • Automotive elec
Slide 20: Strong Core of Bromine & Derivatives with High Value
Strong Core of Bromine & Derivatives with High Value Diverse Bromine and Bromine Delivering Attractive High Derivatives Offering Value Margins Gross Profit from Bromine-based Products Relative Contribution/Kg Bromine Utilized (2013) 20
Slide 21: Leading Bromine Sourcing Position
Leading Bromine Sourcing Position ALB & ICL 2014 Global Capacity Competitive ALB & CHMT Noncompetitive Closed in 2006 Closed UK plant in 2003. Closed France plant in 2005. (ppm) Only producer with access to the two best sources of bromine 21
Slide 22: Well-positioned to Capitalize on New Demand for FRs
Well-positioned to Capitalize on New Demand for FRs Best product portfolio for widest range of electrical and electronic applications across all markets 22
Slide 23: Lithium Is Positioned to Benefit From Growth
Lithium Is Positioned to Benefit From Growth Growth Drivers • Energy storage market • Adoption of non-conventional transportation vehicles • Growth for conventional end markets including ** pharmaceutical, agrochemicals, rubber, greases, building products, and other applications Customers • Syngenta
Slide 24: Key Upstream & Downstream Products & Applications
Key Upstream & Downstream Products & Applications 24
Slide 25: Potential Lithium Demand Delivers Significant Upside
Potential Lithium Demand Delivers Significant Upside Albemarle expects to capture 50% of Lithium growth Source: Rockwood Lithium estimates and market surveys from BCG, Bloomberg, Avicenne, Roland Berger, Pike Research, Frauenhofer IST, Deutsche Bank Research, McKinsey, CTI, Anderman, JD Powers 25
Slide 26: Chemetall Surface Treatment Grows With Innovation, Service and Global Reach
Chemetall Surface Treatment Grows With Innovation, Service and Global Reach Growth Drivers • Growth in aerospace, automotive, and general industries • Differentiated service and innovation • Expanded value chain at existing customers and continued market share acquisition for new customers • Global
Slide 27: Focused Approach Enabled Chemetall Surface Treatment to Grow
Focused Approach Enabled Chemetall Surface Treatment to Grow Estimated Market Share 2007 2013 Market Share by Segment Estimated • #2 provider globally of surface treatment Sales Total Market Chemetall Net products and services • Automotive $ 800 million $ 136 million • The only global supplier of su
Slide 28: Surface Treatment Markets
Surface Treatment Markets Automotive OEM Globally harmonized technologies available for NDT products, inhibitors, conversion coatings, cleaners, coolants, activating and passivating agents and maintenance chemicals. General Industry Broad portfolio of metal pretreatment technologies for all kinds of
Slide 29: Non-GAAP Reconciliations Appendix
* * Non-GAAP Reconciliations Appendix 29
Slide 30: EBITDA supplemental - Legacy ALB
EBITDA supplemental - Legacy ALB ($ in thousands) Performance Catalyst Corporate Chemicals Solutions & Other Consolidated Year ended December 31, 2014: Operating profit $ 306,616 $ 224,407 $ (259,725) $ 271,298 Depreciation and amortization 48,233 49,622 2,552 100,407 Other expenses, net — — (16,761
Slide 31: EBITDA – Legacy Rockwood
EBITDA – Legacy Rockwood Surface ($ in millions) Lithium Treatment Twelve months ended December 31, 2014 Income (loss) from continuing operations before taxes $ 130.7 $ 154.4 Interest (income) expense, net (1.9) 11.8 Depreciation and amortization 46.6 35.1 Restructuring and other severance costs 3.9
Slide 32: www.albemarle.com
ALB NYSE www.albemarle.com