Albemarle Corporation · NYSE:ALB
Albemarle — 2022 J.P. Morgan Industrials Conference
22 slides from Albemarle's conference presentation, Mar 16, 2022
Slide 1: Albemarle Investor Presentation
Albemarle Investor Presentation J.P. Morgan Industrials Conference
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation 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 projects, tax rates, stoc
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: Diverse Portfolio Generating Significant Cash
Diverse Portfolio Generating Significant Cash Business Overview Global ~6,000 Employees1 Lithium Bromine Catalysts Countries1 ~75 Dividend 28th consecutive year Increases ~42% ~35% ~23% of Net Sales5 of Net Sales5 of Net Sales5 Financial Highlights2 Net Sales $3.3B Net Income3 $124M A global market
Slide 5: Global Footprint – Strong Presence in Major Markets
Global Footprint1 – Strong Presence in Major Markets Amsterdam, Pasadena, TX, Kings Mountain, Netherlands U.S. NC, U.S. Langelsheim, Silver Peak, Magnolia, Germany S NV, U.S. AR, U.S. Zhangjiagang, Chengdu, China3 China Safi, Meishan, Xinyu, Jordan JV China3 China JV Business Unit: Niihama, Japan Li
Slide 6: Solid 2021: Exceeded Expectations, Progressed Expansion Plans
Solid 2021: Exceeded Expectations, Progressed Expansion Plans FY 2021 net sales Project Updates: $3.3B +11% ▪ La Negra III/IV is in commercial Y/Y2 qualification ▪ Kemerton I is mechanically complete; construction team now dedicated to FY 2021 adj. EBITDA1 Kemerton II $871M +13% ▪ Signed non-binding
Slide 7: Lithium EBITDA Margin at or Above Mid-cycle Expectations
Lithium EBITDA Margin1 at or Above Mid-cycle Expectations ~$100M fixed costs from new plants Pricing absorbed as +40-45% Y/Y production Less ~$200M less CORFO base ramps JV equity Add back Commission income tax ~$35M JV included in equity income 44 - 49% Adj. EBITDA tax included in Adj. EBITDA 2022
Slide 8: Potential Upside to Pricing if Current Conditions Persist
Potential Upside to Pricing if Current Conditions Persist Commitment to LTAs is Unchanged Battery Grade Revenues ▪ 70%+ of battery grade sales on multi-year commitments to support aggressive expansion ▪ 10% spot (moves with China spot pricing, no lag) ▪ Minimum returns of >1X WACC at trough pricing;
Slide 9: Accelerating Lithium Supply Growth
Accelerating Lithium Supply Growth Global EV Lithium Demand Cumulative Sales by Year1 Production / ALB Projections3 by Application3 (M units) Market Penetration2 3.5 (Mt LCE) (Mt LCE) 6.0 3.2Mt 39.0% 3.0 2021 vs. 2020-2025 3.2Mt 2020-2025 5.0 2020: CAGR: 40.6 2.5 2030 CAGR: +111% ~45% ~25% 4.0 22.0%
Slide 10: Well-Positioned to Drive Sustainable Growth
Well-Positioned to Drive Sustainable Growth • Complete Wave 2 expansions (YE 2022 lithium capacity 175ktpa) Grow • Achieve 50% capacity in new plants within 1 year of start-up Profitably • Increase 2022 adjusted EBITDA by 35% to 55% versus 2021 • Achieve procurement cost benefit of $80M on a run rat
Slide 11: Wave 3 Projects Defined and Accelerated to Meet Customer Needs
Wave 3 Projects Defined and Accelerated to Meet Customer Needs Estimated Lithium Nameplate Conversion Capacity (approx.) JV Nameplate Conversion Capacity Wave 3 Projects (3-5 years) Carbonate figures on ktpa LCE basis, hydroxide Potential Nameplate Capacity Range ▪ Qinzhou, China (acquisition) figur
Slide 12: Strategic Execution and the Albemarle Way of Excellence (AWE)
Strategic Execution and the Albemarle Way of Excellence (AWE) Purpose Making the world safe and sustainable by powering potential Operating Model: Values AWE How We Care • Curiosity • Courage • Collaboration Execute & Humility • Integrity • Transparency Accelerate Our Strategy Strategy Grow • Maximi
Slide 13: Prioritizing Capital Allocation to Support Growth Strategy
Prioritizing Capital Allocation to Support Growth Strategy Invest to Grow Portfolio Maintain Financial Limited Share Profitably Management Flexibility Dividends Repurchases • Strategically grow lithium • Actively assess portfolio; • Committed to • Continue to support our • Limited cash flow and brom
Slide 14: Our Initial Environmental Targets
Our Initial Environmental Targets Next two years 2030 2050 Build Reduce Grow Achieve the infrastructure to the carbon-intensity of the intensity of our Lithium business net zero carbon assess, measure and our Catalysts and freshwater usage by in a carbon-intensity emissions by 2050 track progress to
Slide 15: Accelerating Growth to Meet Increasing Customer Demand
Accelerating Growth to Meet Increasing Customer Demand A global market leader with durable competitive advantages Track record of strong financial and operational performance Significant growth expected by 2026: ~$6-7B in revenue (>2x 2021); ~$2-3B in adj. EBITDA (>3x 2021); ~$2B in net cash from op
Slide 16: Investor Relations Contacts
Investor Relations Contacts Meredith Bandy, CFA David Burke Katie Pyfer, PhD Vice President Director Manager Investor Relations and Sustainability Investor Relations Investor Relations Meredith.Bandy@albemarle.com David.Burke@albemarle.com Katheryne.Pyfer@albemarle.com +1 980-999-5168 +1 980-299-553
Slide 17: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations 17
Slide 18: 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 19: Adjusted EBITDA (twelve months ended)
Adjusted EBITDA (twelve months ended) See above for a reconciliation of adjusted EBITDA , the non-GAAP financial measures, to Net income attributable to Albemarle 19 Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP.
Slide 20: Adjusted EBITDA - by Segment (twelve months ended)
Adjusted EBITDA - by Segment (twelve months ended) See above for a reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measures, to Net income attributable to 20 Albemarle Corporation (“earnings”), the most directly comparable financial measure calculated and reporting in ac
Slide 21: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 1 This supplemental is for net-debt-to-adjusted EBITDA ratio based on the bank covenant definition. 21
Slide 22: www.albemarle.com
NYSE www.albemarle.com MAKING THE WORLD SAFE AND SUSTAINABLE A\ALBEMARLE’