Slide 1: Albemarle Q2 2022 Earnings
Albemarle Q2 2022 Earnings Conference Call/Webcast Thursday, August 4, 2022 9:00am ET
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation, the press release, the conference call and discussions that follow, including, without limitation, information related to the timing of active and proposed projects, production capacity, committed volumes, pricing, fi
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: Delivering EBITDA Growth and Free Cash Flow
Delivering EBITDA Growth and Free Cash Flow Q2 2022 net sales Q2 2022 adj. EBITDA1 $1.5B +91% $610M +214% vs prior year vs prior year With revised guidance, expect to be free cash flow positive in 2022 Raising FY 2022 Kemerton I lithium conversion plant in Western Australia outlook 2022 adj. EBITDA
Slide 5: Q2 2022 Financial Summary
Q2 2022 Financial Summary (in millions, except per share amounts) Q2 2022 Q2 2021 Variance Net Sales $1,480 $774 +91% Net income attributable to Albemarle Corporation $407 $425 -4.2% Adjusted EBITDA1 $610 $195 +214% Adjusted EBITDA Margin1 41% 25% Diluted EPS $3.46 $3.62 -4.4% Non-operating pension
Slide 6: Q2 2022 Adjusted EBITDA Bridge
Q2 2022 Adjusted EBITDA1 Bridge ($ in millions) +214% 2 Net of FX Note: Numbers may not reconcile due to rounding. 1 See appendix for non-GAAP reconciliations. 2 Fine Chemistry Services business was sold in June 2021. 6
Slide 7: Further Raising 2022 Guidance On Continued Lithium Pricing Momentum
Further Raising 2022 Guidance On Continued Lithium Pricing Momentum Previous Revised 2022 Revised FY 2022 Guidance FY 2022 Guidance FY 2021 As of Aug 3, 2022 (as of May 23, 2022) Guidance vs FY 2021 Net Sales $3.3B $5.8B – $6.2B $7.1B – $7.5B +115 to 125% Adj. EBITDA $871M1 $2.2B – $2.5B $3.2B – $3.
Slide 8: FY 2022: Improved Outlook for Lithium and Bromine
FY 2022: Improved Outlook for Lithium and Bromine • Lithium FY 2022 adj. EBITDA expected to be up 500-550% Y/Y, up from previous outlook • Average realized pricing now expected to be up 225-250% Y/Y on renegotiated contracts and increased market pricing • FY 2022 volume now expected to be up 20-30%
Slide 9: Revised Lithium Contracts Offer Leverage to Strong Market Prices
Revised Lithium Contracts Offer Leverage to Strong Market Prices Battery Grade Revenues Contracting Approach Continues to Evolve ▪ ~15% spot (at the time of purchase order) ▪ Strategically segmenting customers and selecting long-term ▪ ~65% index-referenced, variable-priced (typically partnerships 3
Slide 10: Executing Our Strategy to Deliver Volumetric Growth
Executing Our Strategy to Deliver Volumetric Growth 250 Potential Tolling Technical Grade Spodumene Lithium Carbonate +/- ▪ Volume increases reflect Lithium Hydroxide +/- 200 expansions at Silver Peak, La 2022 volume +/- Negra, Kemerton, and Qinzhou +20-30% Y/Y 150 ▪ Technical-grade spodumene sales
Slide 11: Strong Financial Position and Ample Liquidity
Strong Financial Position and Ample Liquidity (As of 6/30/22, $M) FY 2022E NET CASH FROM OPERATIONS $1.4-1.7B LEVERAGE1 (x) CAPITAL EXPENDITURES ($M) $3,500 2.3x • Expect to be free cash flow positive in $3,000 $1.3 -$1.5B 2022 $2,500 • Recent $1.7B debt issuance strengthens liquidity and reduces $2
Slide 12: Prioritizing Capital Allocation to Support Growth Strategy
Prioritizing Capital Allocation to Support Growth Strategy Invest to Grow Portfolio Maintain Financial Dividends & Share Profitably Management Flexibility Repurchases • Strategically grow lithium • Actively assess portfolio; • Committed to Investment • Continue to support our and bromine capacity to
Slide 13: Effectively Managing Costs in a Turbulent Macro Environment
Effectively Managing Costs in a CASE STUDY Turbulent Macro Environment Implementing our Operating Model 2022E Forecast Cost In 2021, targeted $90M FY 2022 value creation by Breakdown: Materials enhancing our procurement strategy… ▪ Nearly 20% company-owned spodumene ▪ Other major inputs include BPA,
Slide 14: Building Conversion Capacity to Leverage World-class Resources
Building Conversion Capacity to Leverage World-class Resources 450-500 ktpa Estimated Lithium Nameplate Conversion Capacity1 100% basis, Carbonate figures on ktpa LCE basis, hydroxide figures on ktpa LiOH basis Zhangjiagang Other APAC Expansions North American Conversion EU Conversion Meishan I/II K
Slide 15: Current Expansions Support Long-term Growth Strategy
Current Expansions Support Long-term Growth Strategy Expanding global lithium conversion capacity… Australia/Asia Resource & Conversion ▪ Qinzhou acquisition expected to close H2 2022; designed to Resource produce 25ktpa LCE with expansion potential Conversion ▪ Kemerton I achieved first product in
Slide 16: Expanding Our Western Footprint to Address Growing Demand
Expanding Our Western Footprint to Address Growing Demand Kings Mountain, North Carolina Lithium Resource Southeastern U.S.-based Lithium Conversion Facility (location: TBD) + • Mine operated 1940s-1980s • Site selection & design efforts in progress for a Mega-Flex site: • 700-acre site atop a top t
Slide 17: Key Takeaways
Significant FY 22 Growth Expected: ~$7.1-7.5B in Revenue (>2x 2021); ~$3.2-3.5B in Adj. EBITDA (>3x 2021); ~$1.4-1.7B in Cash from Operations (>4x 2021) Financial flexibility to deliver profitable growth, maintain Investment Grade credit rating, and support our dividend Key Leveraging our operating
Slide 18: Lithium Overview
Lithium Overview Y/Y Q2 Performance Drivers Q2 2022 Performance • Net sales up 178% (price3 +160%, volume +18%); adjusted EBITDA +353% • Increased sales due to renegotiated fixed and index-referenced variable price contracts and (in millions) Q2 2022 Y/Y increased market pricing Net Sales $892 +178%
Slide 19: Bromine Overview
Bromine Overview Y/Y Q2 Performance Drivers Q2 2022 Performance • Net sales up 35% (price3 +31%, volume +4%); adjusted EBITDA +46% • Favorable pricing driven by robust demand and tight market conditions (in millions) Q2 2022 Y/Y • Increase in net sales partially offset by higher costs for raw materi
Slide 20: Catalysts Overview
Catalysts Overview Y/Y Q2 Performance Drivers Q2 2022 Performance • Net sales up 42% (price3 5%, volume 37%); adjusted EBITDA down 54% • Adjusted EBITDA declined as sales were offset by cost pressures including natural gas (in millions) Q2 2022 Y/Y and raw materials Net Sales $210 +42% Net Sales ex
Slide 21: Q3 2022 Investor Relations Events
Q3 2022 Investor Relations Events Aug 4-5 Q2 2022 Earnings Meredith Bandy, CFA VP, Investor Relations & Sustainability meredith.bandy@albemarle.com Sept 7 Kings Mountain Tour Hosted by Citi +1 980.999.5168 Brook Wootton, IRC Sept 13 RBC Global Industrials Conference Senior Director, Investor Relatio
Slide 22: Appendix
Appendix Non-GAAP Reconciliations 22
Slide 23: 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 24: Adjusted Net Income
Adjusted Net Income See above for a reconciliation of adjusted net income, the non-GAAP financial measures, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP. 24
Slide 25: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA See above for a reconciliation of EBITDA, adjusted EBITDA and the non-GAAP financial measures, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP. 25
Slide 26: Adjusted EBITDA – by Segment (three months ended)
Adjusted EBITDA – by Segment (three months ended) See above for a reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measure, to Net income attributable to Albemarle Corporation (“earnings”), the most directly comparable financial measure calculated and reporting in accorda
Slide 27: Adjusted EBITDA - Margin by Segment (three months ended June 30)
Adjusted EBITDA - Margin by Segment (three months ended June 30) See above for adjusted EBITDA margin, a non-GAAP financial measure defined as adjusted EBITDA divided by net sales. See previous slide for the related reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measure
Slide 28: Adjusted EBITDA - (twelve months ended)
Adjusted EBITDA - (twelve months ended) See above for a reconciliation of adjusted EBITDA and pro-forma adjusted EBITDA, the non-GAAP financial measures, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAA
Slide 29: 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 Albemarle Corporation (“earnings”), the most directly comparable financial measure calculated and reporting in accor
Slide 30: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 1 This supplemental is for net-debt-to-adjusted EBITDA ratio based on the bank covenant definition. 30
Slide 31: Diluted EPS
Diluted EPS 1Totals may not add due to rounding. 31
Slide 32: Effective Tax Rate
Effective Tax Rate See above for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reporting in accordance with GAAP. 32
Slide 33: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Note: Corporate equity income relates to foreign exchange gains or losses of our Talison joint venture. 33
Slide 34: www.albemarle.com
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