Albemarle Corporation · NYSE:ALB
Albemarle — Q1 2023 Earnings Presentation
33 slides from Albemarle's earnings presentation, May 4, 2023
Slide 1: Albemarle Q1 2023 Earnings
Albemarle Q1 2023 Earnings May 4, 2023 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 Financial Measures
Non-GAAP Financial 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 dilut
Slide 4: Excellent Q1 Results Supporting Growth
Excellent Q1 Results Supporting Growth $2.6B +129% $1.6B +269% Q1 2023 NET SALES VS PRIOR YEAR Q1 2023 ADJ. EBITDA1 VS PRIOR YEAR ▪ Selected location for U.S. lithium processing facility in Richburg, South Carolina ▪ Announced restructure of MARBL JV in Australia and separate investment by Mineral R
Slide 5: Q1 2023 Financial Summary
Q1 2023 Financial Summary (in millions, except per share amounts) Q1 2023 Q1 2022 Variance Net Sales $2,580 $1,128 +129% Net Income Attributable to Albemarle Corporation $1,239 $253 +389% Adjusted EBITDA1 $1,596 $432 +269% Adjusted EBITDA Margin1 62% 38% +2400 bps Diluted EPS $10.51 $2.15 +389% Non-
Slide 6: Q1 2023 Adjusted EBITDA Bridge
Q1 2023 Adjusted EBITDA1 Bridge ($ in millions) +269% Net of FX Note: Numbers may not reconcile due to rounding. 1 See appendix for non-GAAP reconciliations. 6
Slide 7: Adjusting FY 2023 Outlook to Reflect Recent Lithium Market Prices
Adjusting FY 2023 Outlook to Reflect Recent Lithium Market Prices Revised 2023 Revised Other Inputs for 2023: Previous FY 2023 FY 2022 Guidance FY 2023 Guidance Guidance2 • Depreciation and As of May 3, 2023 vs FY 20222 Amortization $420M - $460M Net Sales $7.3B $11.3B – $12.9B $9.8B – $11.5B 35% to
Slide 8: Adjusting FY 2023 Outlook to Reflect Recent Lithium Market Prices
Adjusting FY 2023 Outlook to Reflect Recent Lithium Market Prices As of May 3, 2023 • Energy Storage FY 2023 adj. EBITDA expected to be roughly flat Y/Y, as higher net sales are offset by timing impacts of higher price spodumene inventories; change from previous outlook reflects recent lithium marke
Slide 9: Updated Contract Pricing Reflects Changes in Market Price
Updated Contract Pricing Reflects Changes in Market Price Energy Storage Net Sales1 Leverage to Continued Strong Market Prices (by Contract Type) ▪ Majority of volumes sold under long-term contracts (typically 2-5 years duration) with strategic customers Spot ~10% ▪ Partnerships across the value cha
Slide 10: Maintaining Strategy to Deliver Volumetric Growth
Maintaining Strategy to Deliver Volumetric Growth Expected Lithium Sales Volumes (kt LCE) ▪ Assumes ~2 years to ramp a new 350 conversion plant Potential Tolling 300 Technical Grade Spodumene ▪ Includes expansions at Silver Peak, Lithium Carbonate +/- Lithium Hydroxide La Negra, Kemerton, Qinzhou, a
Slide 11: Energy Storage Adjusted EBITDA Margin Bridge – 2022 vs 2023 forecast
Energy Storage Adjusted EBITDA Margin Bridge – 2022 vs 2023 forecast Talison JV Tax Impact 7% ~5% Pre-Tax Adj. EBITDA Margin ~20% ~5% ~5% ~6% 72% EBITDA Margin Pre-Tax Adj. 65% ~46% ~40% 2022 Adj. EBITDA Price Spodumene MARBL JV Acct'g Other 2023 Adj. EBITDA Margin1 Inventory Lag Margin 2023 margins
Slide 12: Disciplined Capital Allocation to Support Growth Strategy
Disciplined Capital Allocation to Support Growth Strategy Invest in Portfolio Maintain Financial Dividends & Share High-Return Growth Management Flexibility Repurchases ▪ Growth remains the primary ▪ Actively assess portfolio; ▪ Committed to Investment ▪ Continue to support our capital allocation pr
Slide 13: Global EV Demand Outlook Remains Robust
Global EV Demand Outlook Remains Robust ‘20-’23 Global EV Sales: Cumulative YTD1 Global EV Sales: Monthly Actuals1 20 1.5 Monthly EV Sales (millions) Cumulative EV Sales (millions) 2023 LEV 15 15.3M Production2 1.0 10 10.5M 6.4M 0.5 5 2.9M 0 0.0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov 2020 2
Slide 14: Strengthening Global Footprint in Resources and Conversion
Strengthening Global Footprint in Resources and Conversion Americas/EU Resource & Conversion Expanding global lithium conversion capacity… Kings Mountain, NC, U.S. ▪ Richburg, South Carolina selected as site for U.S. lithium processing Silver Peak, facility, construction expected to begin late in 20
Slide 15: Strengthening Global Footprint in Resources and Conversion
Strengthening Global Footprint in Resources and Conversion Expanding global lithium conversion capacity… Australia/Asia Resource & Conversion ▪ Kemerton I is operating and producing lithium hydroxide, which remains Chengdu, subject to customer qualification China ▪ Kemerton II is progressing through
Slide 16: Committed to Building a Resilient World
Committed to Building a Resilient World New in the 2022 Sustainability Report Initial TCFD reporting June 5 Albemarle's 2022 Continued progress on environmental and DEI goals Sustainability Report Updated targets reflecting new GBU structure New goals around scope 3 and air quality June 20 Sustainab
Slide 17: Key Takeaways
Continuing to expect growth in 2023, adjusting guidance with net sales +35-55% YoY A global leader with world-class assets and a diversified product portfolio; long-term supply with reliable, consistent quality Key Capitalizing on tremendous growth opportunities in electric vehicles and Takeaways be
Slide 18: Energy Storage Overview
Energy Storage Overview Y/Y Q1 Performance Drivers Q1 2023 Performance • Net sales up 319% (price3 +301%, volume +18%); adjusted EBITDA up 393% (in millions) Q1 2023 Y/Y • Increased sales due to renegotiated contracts and increased market pricing Net Sales $1,944 319% • Adjusted EBITDA benefited fro
Slide 19: Specialties Overview
Specialties Overview Y/Y Q1 Performance Drivers Q1 2023 Performance • Net sales down -6% (price3 +9%, volume -15%); adjusted EBITDA up 6% (in millions) Q1 2023 Y/Y • Volume down due to end-market demand weakness Net Sales $419 -6% • Adjusted EBITDA benefited by higher pricing and lower freight costs
Slide 20: Ketjen Overview
Ketjen Overview Y/Y Q1 Performance Drivers Q1 2023 Performance • Net sales flat (price3 +12%, volume -12%); adjusted EBITDA -14% (in millions) Q1 2023 Y/Y • Q1 adjusted EBITDA lower due to US freeze related downtime, timing of shipments, and Net Sales $218 0% unfavorable raw material cost Net Sales
Slide 21: Q2 2023 Investor Relations Events
Q2 2023 Investor Relations Events Meredith Bandy, CFA VP, Investor Relations & Sustainability June 6 TD Cowen Sustainability Week meredith.bandy@albemarle.com +1 980.999.5168 June 20 Sustainability Day Webcast Brook Wootton, IRC Senior Director, Investor Relations brook.wootton@albemarle.com June 21
Slide 22: Slide 22
Slide 23: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations
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. Pro-forma Adjusted Net Income Net income attributable to Albemarle Corporation before non-recurri
Slide 25: Adjusted Net Income
Adjusted Net Income Three onths Ended Year Ended arch 3 December 3 2023 2022 2022 Net income attributable to Albemarle Corporation 1, ,5 5 , , 9, 1 Add back Non operating pension and OPEB items (net of tax) 7 ( ,1 9) ( ,1 9) Non recurring and other unusual items (net of tax) ( ,77 ) ,9 ( 1, 77) Adju
Slide 26: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA Three onths Ended Year Ended arch 3 December 3 2023 2022 2022 o net o net o net sales sales sales Net income attributable to Albemarle Corporation 1, ,5 . 5 , .5 , 9, 1 .7 Add back nterest and financing expenses ,777 1. 7, .5 1 ,97 1.7 ncome tax expense 7 ,9 1 .7 ,5 7.1 9
Slide 27: Adjusted EBITDA – Continuing Operations (twelve months ended)
Adjusted EBITDA – Continuing Operations (twelve months ended) Twelve onths Ended ar 3 2022 un 30 2022 Sep 30 2022 Dec 3 2022 ar 3 2023 Net income attributable to Albemarle Corporation 1, 7 ,551 1,55 ,5 7 , 9, 1 , 75, 1 epreciation and amorti ation 5 , 1 7, ,515 , 1 1,5 Non recurring and other unusua
Slide 28: Adjusted EBITDA – by Segment (twelve months ended)
Adjusted EBITDA – by Segment (twelve months ended) Twelve onths Ended ar 3 2022 un 30 2022 Sep 30 2022 Dec 3 2022 ar 3 2023 Energy Storage Net income attributable to Albemarle Corporation 99, 7 9 , 1, ,15 , 7,5 ,959,7 epreciation and amorti ation 1 , 1 1 9,7 9 15 ,9 175,7 7 19 , 5 Non recurring and
Slide 29: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 Twelve onths Ended Three onths Ended ar 3 2023 ar 3 2023 Dec 3 2022 Sep 30 2022 un 30 2022 d usted E TD 3 2 3 2 0 20 Net income attributable to noncontrolling interests 1 5, 7 ,1 9, 1 ,991 , 19 Equity in net income of unconsolidated investments (net of tax) (1,1 , 7) (
Slide 30: Adjusted Diluted EPS
Adjusted Diluted EPS Three onths Ended arch 3 2023 2022 iluted earnings per share attributable to Albemarle Corporation 1 .51 .15 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 . . 1 Loss o
Slide 31: Adjusted Effective Tax Rate
Adjusted Effective Tax Rate ncome be ore income taxes and e uity in net income o unconsolidated ncome tax bene it E ective income tax investments expense rate Three months ended arch 3 2023 As reported 1,157, 7 7 ,9 .9 Non recurring, other unusual and non operating pension and OPEB items ( , 7 ) (11
Slide 32: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Three onths Ended arch 3 2023 2022 oncontrolling oncontrolling E uity ncome nterest E uity ncome nterest Energy Storage 7 , 59 1, 7 Specialties ( , ) ( , 19) etjen , 9 5, Corporate 1 , 1 9 ( , ) 55 Total Company 9 ,1 ( ,1 ) , ( ,1 ) Note: Corporate equity in
Slide 33: www.albemarle.com
NYSE www.albemarle.com