Albemarle Corporation · NYSE:ALB
Albemarle — Q4 2023 Earnings Presentation
33 slides from Albemarle's earnings presentation, Feb 15, 2024
Slide 1: Albemarle Q4 and FY 2023 Earnings
Albemarle Q4 and FY 2023 Earnings Feb 15, 2024 9:00am ET
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation, conference call and discussions that follow contain statements concerning our expectations, anticipations and beliefs regarding the future, which constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act o
Slide 3: Non-GAAP Measures
Non-GAAP Measures It should be noted that adjusted net (loss) income attributable to Albemarle Corporation, adjusted diluted earnings per share (“EPS”), non-operating pension and other post-employment benefit (“OPEB”) items per diluted share, non-recurring and other unusual items per diluted share,
Slide 4: 2023 marks highest full-year net sales and 2nd highest earnings in company history
YoY net sales growth of 31%, including YoY volume growth of 21%; Energy Storage sales volumes up 35% YoY 2023 marks highest FY 2023 adj. EBITDA of $2.8B, or $3.4B excluding the lower of cost or net realizable value (LCM) charge, in-line with previous outlook1 full-year net sales and 2nd highest Anno
Slide 5: Q4 and FY 2023 Financial Summary
Q4 and FY 2023 Financial Summary (in millions, except per share amounts) Q4 2023 Q4 2022 Variance FY 2023 FY 2022 Variance Net Sales $2,356 $2,621 -10% $9,617 $7,320 +31% Net Income Attributable to Albemarle ($618) $1,132 -155% $1,573 $2,690 -42% Corporation Adjusted EBITDA1 ($315) $1,244 -125% $2,7
Slide 6: Q4 2023 and FY Adjusted EBITDA Bridge
Q4 2023 and FY Adjusted EBITDA1 Bridge ($ in millions) Q4 FY Note: Numbers may not reconcile due to rounding. 1 See appendix for non-GAAP reconciliations. 6
Slide 7: Updated Adj. EBITDA Definition Reflects the Value of Strategic Investment in Talison
Updated Adj. EBITDA Definition Reflects the Value of Strategic Investment in Talison ▪ Change effective 2024 FY 2023 + Talison JV = FY2023 ▪ Definition includes Previous Definition Income Tax2 Updated Definition3 Albemarle’s share of the pre-tax earnings of the Talison joint venture Energy Storage A
Slide 8: Energy Storage Market Price Scenarios
Energy Storage Market Price Scenarios1 FY 2024E Assumptions: Avg Lithium Market Price (US$/kg LCE)2 Energy Storage ranges based FY 2023 avg. YE 2023 Q4 2023 avg. H2 2023 avg. on projected volume increase of $40 $15 $20 $25 10 to 20% Y/Y in 2024 Energy Storage Energy Storage FY 2023A FY 2024E Current
Slide 9: Specialties, Ketjen, and Corporate Outlook Considerations
Specialties, Ketjen, and Corporate Outlook Considerations FY 2023A FY 2024E Segments as of February 14, 2024 Specialties Net Sales $1.5B $1.3B – $1.5B Specialties Adj. EBITDA $300M $270M – $330M Ketjen Net Sales $1.1B $1.0B – $1.2B Ketjen Adj. EBITDA $104M $130M – $150M Other Corporate Capital Expen
Slide 10: Total Company Outlook Considerations - Including Energy Storage Scenarios
Total Company Outlook Considerations - Including Energy Storage Scenarios1 Avg Lithium Market Price (US$/kg LCE)2 ▪ Albemarle does not provide FY 2023 avg. YE 2023 Q4 2023 avg. H2 2023 avg. forecasts of lithium price $40 $15 $20 $25 ▪ Ranges based on recent observed lithium market pricing Albemarle
Slide 11: FY 2024E Commentary by Segment
FY 2024E Commentary by Segment STORAGE ▪ ~2/3 of 2024E volumes sold on index referenced, variable priced contracts; average 2-5 years duration; typically 3-month lag, some with floors and ceilings, specifics vary by contract ▪ ~1/3 of 2024E volumes sold on short-term purchase agreements; additional
Slide 12: Maintaining Strategy to Deliver Volumetric Growth
Maintaining Strategy to Deliver Volumetric Growth Expected Lithium Sales Volumes1 350 (kt LCE) MinRes Share Potential Tolling 300 Technical Grade Spodumene ▪ Assumes ~2 years to ramp a Lithium Carbonate +/- new conversion plant 250 Lithium Hydroxide Expected 2024 volume +/- ▪ Includes expansions at
Slide 13: Vertical Integration to Greenbushes a Significant Competitive Advantage
Vertical Integration to Greenbushes a Significant Competitive Advantage $6,000 ▪ LCM smooths inventory compression ▪ We recognize profit associated with Margins benefitted partner offtake immediately $5,000 from lower spodumene Spodumene Price ($/mt SC6.0) price in COGS, higher ▪ H1 2024 margins exp
Slide 14: Committed to Maintaining Investment Grade Credit Rating
Committed to Maintaining Investment Grade Credit Rating1 Capital Structure Total Liquidity: $1.8B ▪ $890M cash and cash $100 Other Credit Lines Revolver and $620 equivalents Commercial Paper ▪ $4.2B total debt $4.2B Other Debt $3,550 Total Debt ▪ YE 2023 net debt to adjusted $880 Revolver EBITDA is
Slide 15: Adapting to Changing Market Conditions While Maintaining Growth
Adapting to Changing Market Conditions While Maintaining Growth Capital Portfolio Working Costs Expenditures Management Capital ▪ Re-phasing of large ▪ Reducing operating ▪ Evaluating the sale of ▪ Harvesting cash from projects to focus on costs by approximately non-core investments working capital
Slide 16: Re-phasing Growth Investments to Optimize Cash Flow
Re-phasing Growth Investments to Optimize Cash Flow 2024 planned capital expenditures include: Capital Expenditures ▪ Continuing critical health, safety, environmental $2.5 ($ billions) and site maintenance projects $2.1B Conversion Technology ▪ Commissioning the Meishan, China lithium $2.0 $1.6B -
Slide 17: Our Operating Model: How We Execute & Accelerate Our Strategy
Our Operating Model: How We Execute & Accelerate Our Strategy Significantly exceeded 2023 productivity target with over $300M in benefits On track to exceed $280M in productivity benefits in 2024: ▪ Manufacturing - target of $80M in 2024, via: ─ Increased utilization, OEE1 improvements The ─ Project
Slide 18: Realigning Capital Allocation Priorities to Current Environment
Realigning Capital Allocation Priorities to Current Environment 1 High-Return Growth 2 Financial Flexibility 3 Shareholder Remuneration 4 Portfolio Management ▪ Strategically grow ▪ Committed to ▪ Continue to support our ▪ Pursue suite of organic Energy Storage and Investment Grade credit dividend;
Slide 19: Lithium Market Demand Outlook: 2.5x Growth 2024-2030
Lithium Market Demand Outlook: 2.5x Growth 2024-2030 Global EV Outlook Lithium Demand 2030E lithium demand down ~10% vs previous forecast due to: Battery Size (Global EV Average)1 Production / by Application2 ▪ OEM announcements (kWh per EV) Market Penetration1 (MMt LCE) 2024-2030 2024-2030 ▪ Modera
Slide 20: Resilient Competitive Strengths to Navigate Market Conditions
Resilient Competitive Strengths to Navigate Market Conditions ▪ Diversified portfolio of best-in-class assets and resources around the globe World-Class Resources ▪ Low-cost position with vertical integration into large, high-grade resources ▪ Deep technical and operational know-how to transform ess
Slide 21: Strong value proposition
A global leader with vertical integration strength, world-class assets and a diversified product portfolio Capitalizing on long-term secular growth opportunities in the clean energy transition and beyond – mobility, connectivity, health Strong value proposition Taking action to preserve long-term gr
Slide 22: Q1 2024 Investor Relations Events
Q1 2024 Investor Relations Events Feb 26-27 BMO Global Metals, Mining & Critical Minerals Conference Meredith Bandy, CFA VP, Investor Relations & Sustainability meredith.bandy@albemarle.com +1 980.999.5168 Mar 11 Loop Capital Markets Conference Eran del Castillo Senior Manager, Investor Relations Ma
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Slide 24: 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. Adjusted Diluted EPS Diluted EPS before non-recurring, other unusual and non-operating pension an
Slide 25: 2024 Adj. EBITDA Definition
2024 Adj. EBITDA Definition Net income attributable to Albemarle Corporation 1,5 , 1,5 , epreciation and amorti ation 9,9 9,9 nterest and financing expenses 11 , 11 , ncome tax expense , , Proportionate share of indfield oldings income tax expense 5, Gain on sale of business/interest in properties,
Slide 26: Adjusted Net Income
Adjusted Net Income Net (loss) income attributable to Albemarle Corporation ( 1 , ) 1,1 , 5 1,5 , , 9, 1 Add back: Non operating pension and OPEB items (net of tax) ( ,1 ) ( ,1 ) ( ,9 ) ( ,1 9) Non recurring and other unusual items (net of tax) 1 , ( 5, ) , 5 ( 1, ) Adjusted net (loss) income attrib
Slide 27: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA Net (loss) income attributable to Albemarle Corporation ( 1 , ) 1,1 , 5 1,5 , , 9, 1 Add back: nterest and financing expenses , , 9 11 , 1 ,9 ncome tax expense 11 , ,1 , 9 ,5 epreciation and amorti ation 1 ,1 5,5 1 9,9 , 1 ( , ) 1, ,1 ,5 9, 9 ,5 , 1 Non operating pension a
Slide 28: Adjusted EBITDA – Continuing Operations (twelve months ended)
Adjusted EBITDA – Continuing Operations (twelve months ended) Net income attributable to Albemarle Corporation 1,5 , , , 1 ,91 , , 5, 1 , 9, 1 epreciation and amorti ation 9,9 1, , 1,5 , 1 Non recurring and other unusual items (excluding items associated with interest expense) , , 9 19 , 1 (1 , 91)
Slide 29: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 Equity in net income of unconsolidated investments (net of tax) (1, 5 , ) ( ,5 ) ( , ) (551, 51) ( 9 ,1 ) Equity in pre tax indfield oldings income , 19, 1 ,59 5, 1 9,919 55 , ividends received from non indfield oldings unconsolidated investments 1 , 5, ,1 , 1, 9 indfie
Slide 30: Diluted EPS
Diluted EPS iluted (loss) earnings per share (5. ) 9. 1 . . Add back: Non operating pension and OPEB items (net of tax) ( . ) ( . ) ( . ) ( . ) Non recurring and other unusual items (net of tax) Acquisition and integration related costs . . 5 .1 .11 Goodwill impairment . 5 . 5 Gain on sale of busine
Slide 31: Effective Tax Rate
Effective Tax Rate As reported (9 ,951) 11 , (1 .9) Non recurring, other unusual and non operating pension and OPEB items 5, ( , 9) As adjusted (915, 5) 11 , 9 (1 . ) As reported , 9 ,1 . Non recurring, other unusual and non operating pension and OPEB items ( , 9 ) 9 ,1 As adjusted , 95 11 , 1 . As
Slide 32: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Energy Storage 1, , 9 1, , , Specialties (1 ,111) ( ,91 ) (9 , 5 ) (1 ,9 ) etjen ,1 1 5 , 9 1,9 Corporate ( , ) ( ) (1 , ) ( 1) 1 ,99 ( 1 ) , 9 ( 5 ) Total Company ,5 (1 , ) , 99 ( 9, 1) 1, 5 , (9 , ) , 5 (1 5, 15) Note: Corporate equity income relates to fo
Slide 33: www.albemarle.com
NYSE www.albemarle.com \ Albemarle®