Albemarle Corporation · NYSE:ALB
Albemarle — TD Cowen Sustainability Week 2023
41 slides from Albemarle's conference presentation, Jun 6, 2023
Slide 1: Albemarle Investor Presentation
Albemarle Investor Presentation June 2023
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: Albemarle leads the world in transforming essential resources
Albemarle leads the world in transforming essential resources into critical ingredients for mobility, energy, connectivity and health. We partner to pioneer new ways to move, power, connect and protect with people and planet in mind. We are committed to building a more resilient world. 4
Slide 5: Leading the World in Transforming Essential Resources
Leading the World in Transforming Essential Resources 2022 Net Sales Albemarle by the Numbers1 FY 2022 Financial Highlights Ketjen 12% Employees2 ~7,400 Net Sales $7.3B Customers ~1,900 Net Income3 $2.7B Albemarle Specialties 24% Albemarle Countries ~70 Adj. EBITDA4 $3.5B Energy Storage Active Paten
Slide 6: Diverse and Dedicated Leadership Team Focused on Delivering Shareholder Value
Diverse and Dedicated Leadership Team Focused on Delivering Shareholder Value Kent Masters Scott Tozier Eric Norris Netha Johnson Raphael Crawford Chairman & CEO Chief Financial Officer President, Energy Storage President, Specialties President, Ketjen Experience: 30+ years Experience: 30+ years Exp
Slide 7: Engaged, Diverse, and Accountable Board of Directors
Engaged, Diverse, and Accountable Board of Directors Racial Diversity Black White 20% 70% Hispanic 10% Laurie Brlas Glenda Minor Ralf Cramer Diarmuid O’Connell Kent Masters Former EVP & CFO, Former SVP & CFO, Former President and CEO, Former VP, Corp & Chairman & CEO, Newmont Mining Evraz North Amer
Slide 8: Durable Competitive Advantages Differentiate Albemarle as an Industry Leader
Durable Competitive Advantages Differentiate Albemarle as an Industry Leader DEVELOPING Customer-centric R&D expertise for next collaboration generation materials Capital project Enhanced sustainability Comprehensive operating model execution expertise performance to achieve operational excellence D
Slide 9: Transforming Essential Resources to Better Serve People and Planet
Transforming Essential Resources to Better Serve People and Planet Our Operating Model Purpose To enable a more resilient world The Albemarle Strategy Grow • Maximize • Invest • Sustain Way of Excellence Colleagues, Customers, People Company, Community 9
Slide 10: Clear Strategy to Deliver Enduring Value
Clear Strategy to Deliver Enduring Value Grow Maximize Invest Advance Profitably Productivity with Discipline Sustainability ▪ Expand capacity to ▪ Deploy operating ▪ Allocate capital and ▪ Build competitive meet customer needs model to build a manage portfolio to advantage through and generate valu
Slide 11: Providing Critical Ingredients for Mobility, Energy, Connectivity and Health
Providing Critical Ingredients for Mobility, Energy, Connectivity and Health Advancing the future of movement by being the leading provider Powering the energy transition to meet the rising needs so we MOBILITY of materials that make mobility better and cleaner. ENERGY can ensure the world has criti
Slide 12: Sustainability Framework Aligns with Strategy
Sustainability Framework Aligns with Strategy Sustainability is not just doing the right thing, but doing it the right way Natural Resource People, Workplace Management & Community Responsibly manage Build an inclusive and our use of resources diverse workplace and materials focused on safety, mutua
Slide 13: Committed to Building a More Resilient World
Committed to Building a More Resilient World CEO Water Mandate New New New New in 2022 IRMA third-party audit at in 2022 CDP Reporting: in 2022 Eight Responsible Care in 2022 Signatory Salar de Atacama; First year scored Awards, including two Self-assessments at Climate (B) and Water (C) Sustainabil
Slide 14: Strong Track Record of Financial and Operating Performance
Strong Track Record of Financial and Operating Performance Deliberate, transformational steps to position for growth (in billions) Nameplate Conversion Capacity (in ktpa LCE) Net Sales1 Adj. EBITDA & Margin1,2 Lithium Conversion Capacity % Adj. EBITDA Margin $8.00 500 - 600 $9.8 - $11.5 $7.00 $6.00
Slide 15: Strong Financial Position and Ample Liquidity
Strong Financial Position and Ample Liquidity (As of 3/31/23, $M) NET CASH FROM CAPITAL EXPENDITURES OPERATIONS LEVERAGE1 (x) ($M) $4,000 $1.7 - $1.9B • Committed to maintaining Investment Grade credit rating $3,000 0.5x • $1.7B debt issuance in 2022 0.3x – 0.5x strengthens liquidity and reduces $2,
Slide 16: Continued Growth in a Turbulent Macro Environment
Economic Conditions Vary By Segment Continued Growth in a Turbulent Macro Environment Energy Storage • Expect continued secular growth related to the shift to clean transportation supported by OEM EV investments and public policy 2023E Forecast Cost • Key economic indicators include global EV produc
Slide 17: 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 18: Financial Flexibility to Execute Growth Strategy
Financial Flexibility to Execute Growth Strategy High-return organic growth and potential M&A to complement existing portfolio ▪ Build and maintain world-class resource base ▪ Specialized, next-gen technology and/or materials ▪ Customer partnerships to accelerate growth, improve sustainability, and
Slide 19: Key Takeaways
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 Capitalizing on tremendous growth opportunities in electric vehicles and be
Slide 20: 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 21: Expanding Global Footprint – Strong Presence in Major Markets
Expanding Global Footprint – Strong Presence in Major Markets1 Chengdu, China Kings Mountain, NC, U.S. Silver Peak, Meishan, Xinyu, NV, U.S. China Magnolia, 50% JV2 China AR, U.S. EU Mega-Flex, TBD Qinzhou, Richburg, China 50% JV2 SC, U.S. APAC Conversion, TBD La Negra, Chile Salar de Wodgina, Ataca
Slide 22: Established Processes for Conventional Resources
Established Processes for Conventional Resources Continuous improvement through optimization, efficiency, technology advancements Resource Extraction Lithium Conversion Lithium Products Battery and Technical Grade Hard Rock 6% Li2O Concentrate Lithium Hydroxide 0.5- 2.5% Li2O Xinyu, Chengdu, Qinzhou
Slide 23: Increasing Our Lithium Market Demand Outlook: 5x Growth by 2030
Increasing Our Lithium Market Demand Outlook: 5x Growth by 2030 Global EV Lithium Demand Cumulative Sales by Year1 Production / ALB Projections3 by Application3 (M units) Market Penetration2 (MMt LCE) (MMt LCE) 12 2022 vs. 2021: 2022-2027 2022-2027 +64% CAGR: 25-30% CAGR: 25-30% 4.0 3.7MMt 2030 3.7M
Slide 24: Leveraging Our Low-Cost Resources as Projects Trend Towards Higher Cost
Leveraging Our Low-Cost Resources as 2030E Mined Supply 2030E Demand Projects Trend Towards Higher Cost 2.9 MMT LCE 3.7 MMT LCE ~$20/kg 800 kt Supply Deficit Net of Recycling 20% of Demand Cost1 ALB Average 2030E Cost Cumulative Supply (kT LCE) Prices >$20/kg required over next decade to support >10
Slide 25: Diversified Portfolio of World-Class Resources in Multiple Jurisdictions
Diversified Portfolio of World-Class Resources in Multiple Jurisdictions Estimated Lithium Resource, Nameplate Capacity1 Highlights 100% basis, ktpa LCE basis ~400-650 ▪ Strong resource position enables ktpa capital-efficient expansions, profitability through cycle ▪ Greenbushes has significant long
Slide 26: Potential to Triple Lithium Conversion Capacity by 2030
Potential to Triple Lithium Conversion Capacity by 2030 Estimated Lithium Conversion Nameplate Capacity1 Highlights 100% basis, ktpa LCE basis 500-600 ▪ Globally diversified portfolio of ktpa vertically integrated lithium Magnolia conversion assets EU Mega-Flex La Negra Expansion ▪ Building from Alb
Slide 27: Executing Our Strategy to Deliver Volumetric Growth
Executing Our 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,
Slide 28: 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 29: Industry-Leading Technology Innovations from Mine to Market
Industry-Leading Technology Innovations from Mine to Market Resource and Conversion Battery Materials Customer Alignment ▪ Maximizing recovery at the ▪ Developing differentiated lithium ▪ Breakthrough OEM opportunities wellhead, pond, and conversion for safer, higher performance for >50% more EV ran
Slide 30: Specialties Overview
Specialties Overview Y/Y Q1 Performance Drivers Q1 2023 Performance Q1 2023 Y/Y • Net sales down -6% (price3 +9%, volume -15%); adjusted EBITDA up 6% (in millions) • Volume down due to end-market demand weakness Net Sales $419 -6% • Adjusted EBITDA benefited by higher pricing and lower freight costs
Slide 31: Albemarle Specialties – Strong Presence in Major Markets
Albemarle Specialties – Strong Presence in Major Markets1 Langelsheim, Germany Twinsburg, OH Safi, Jordan (Joint Venture) Magnolia, AR Taichung, Taiwan New Johnsonville, TN Baton Rouge, LA (Research Facility) = Production = Resource 1 Map is representative of Albemarle’s global reach; not inclusive
Slide 32: Access to Highly Concentrated Bromine is a Low-Cost Advantage
Access to Highly Concentrated Bromine is a Low-Cost Advantage Bromine Concentration2 Albemarle Operates from Two (ppm) World-Class Bromine Resources: Dead Sea Concentrate Arkansas India Concentrate Dead Sea, Jordan China Seawater Jordan Bromine Company1 (JBC) - operated 0 1000 2000 3000 4000 5000 60
Slide 33: Operational Discipline: Manufacturing Excellence & Capital Project Execution
Operational Discipline: Track Record of Delivering Manufacturing Excellence & Innovative Expansion Capital Project Execution 2022 Plant Expansion - Magnolia, AR ▪ On-time and on-budget expansion of the flagship fire safety solutions ▪ Dedicated Manufacturing Excellence product line program (higher v
Slide 34: Competitive Capabilities: Diverse and Healthy New Product Pipeline
Competitive Capabilities: Diverse and Healthy New Product Pipeline Research & Technology MercLok™ ▪ Remediates mercury in contaminated soils and sediments New Product Innovation ▪ Large market opportunity (~$200M in the US alone) ▪ Multiple field pilots completed ▪ Market research driven ▪ Commercia
Slide 35: 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 36: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations
Slide 37: 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 38: Adjusted EBITDA - (twelve months ended)
Adjusted EBITDA - (twelve months ended) ear ended De em er Net income attributable to Albemarle Corporation 5 , 75,7 1 , 7 , 9, 1 epreciation and amorti ation 1 , 1,9 5 ,000 00, 1 Non recurring and other unusual items (excluding items associated with interest expense) 117, ,7 1 1,19 , 71 nterest and
Slide 39: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 welve Mont s nded ree Mont s nded Mar Mar De Se un d usted BI D Net income attributable to noncontrolling interests 1 5, 7 ,1 9, 1 ,991 , 19 Equity in net income of unconsolidated investments (net of tax) (1,10 ,0 7) ( 9 ,1 ) ( ,799) ( 5 , ) (1 ,15 ) ividends received f
Slide 40: www.albemarle.com
NYSE www.albemarle.com ANVALBEMARLE 40
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