Albemarle Corporation · NYSE:ALB
Albemarle — Investor Presentation (October 2023)
43 slides from Albemarle's investor presentation, October 2023
Slide 1: Albemarle Investor Presentation
Albemarle Investor Presentation October 2023
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains 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 of 1995. These forward-looking statements, wh
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 Ketjen Albemarle by the Numbers1 FY 2022 Financial Highlights 12% Employees2 ~7,400 Net Sales $7.3B Albemarle Customers ~1,900 Net Income3 $2.7B Specialties 24% Albemarle Countries ~70 Adj. EBITDA4 $3.5B Energy Storage 64% Active P
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 Chairman & CEO Chief Financial Officer President, Energy Storage President, Specialties Experience: 30+ years Experience: 30+ years Experience: 25+ years Experience: 25+
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: Our Operating Model: How We Execute & Accelerate Our Strategy
Our Operating Model: FEATURED PILLAR How We Execute & Accelerate Our Strategy Operational Discipline ▪ Embrace LEAN principles and continuous improvement ▪ Drive manufacturing, business and capital execution excellence On track to exceed $250M in productivity benefits: ▪ Manufacturing - target of $1
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 Ten Responsible Care New in 2022 ALB Salar de Atacama: First in 2023 CDP Reporting: in 2022 in 2023 Signatory Awards, recognized for our lithium producer to First year scored leadership in safety and complete third-party audi
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 $8.00 % Adj. EBITDA Margin $10.4 - $11.5 $7.00 500 - 600 $6.00
Slide 15: Continued Growth in a Turbulent Macro Environment
Continued Growth in a Economic Conditions Vary by Segment 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 Materials / Services ▪ Key economic indicators inc
Slide 16: 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 17: 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 18: Overview of Proposed Transaction to Acquire Liontown
Overview of Proposed Transaction to Acquire Liontown ▪ Cash offer of A$3.00 per share ▪ Albemarle’s offer unanimously recommended by the Liontown Board, in the absence of a superior proposal, and Transaction subject to the parties entering into a binding scheme implementation deed and an independent
Slide 19: Proposed Transaction Represents a Compelling Value to Albemarle Shareholders
Proposed Transaction Represents a Compelling Value to Albemarle Shareholders Estimated and subject to further refinement based on diligence Illustrative Lithium Prices Required at Each Targeted Albemarle WACC 1x WACC 2x WACC 3x WACC Implied LiOH price ~$15 – $20 ~$25 – $30 ~$40 – $45 (US$/kg) Implie
Slide 20: Committed to Maintaining Investment Grade Credit Ratings
Committed to Maintaining Investment Grade Credit Ratings As of Q2 2023 Albemarle Pro Forma Proposed Liontown Acquisition ✓ Balance sheet capacity to finance transaction through incremental debt ✓ Financing options include a combination of bonds, prepayable debt, and available cash on balance sheet 0
Slide 21: Key Takeaways
Continuing to expect growth in 2023, increasing guidance with net sales +40-55% 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 b
Slide 22: Energy Storage Overview
Energy Storage Overview Q2 2023 Performance Y/Y Q2 Performance Drivers (in millions) Q2 2023 Y/Y ▪ Net sales up 120% (price3 +87%, volume +36%); adjusted EBITDA up 93% Net Sales $1,763 120% ▪ Increased sales due to higher prices reflecting tight market conditions, primarily in battery- Net Sales ex
Slide 23: 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, China AR, U.S. EU Mega-Flex, TBD Qinzhou, Richburg, China SC, U.S. APAC Conversion, TBD La Negra, Chile Salar de Wodgina, Atacama, Chile Austra
Slide 24: 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 25: 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 26: 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 27: 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 28: 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 29: Maintaining Strategy to Deliver Volumetric Growth
Maintaining Strategy to Deliver Volumetric Growth Expected Lithium Sales Volumes ▪ Assumes ~2 years to ramp a 350 (kt LCE) new conversion plant Potential Tolling ▪ Includes expansions at Silver Technical Grade Spodumene 300 Lithium Carbonate +/- Peak, La Negra, Kemerton, Lithium Hydroxide Qinzhou, a
Slide 30: Contract Pricing Reflects Changes in Lithium Market Prices
Contract Pricing Reflects Changes in Lithium Market Prices Energy Storage Net Sales1 (by Contract Type) Leverage to Continued Strong Market Prices Spot ▪ Majority of volumes sold under long-term contracts Purchase order-based price negotiations, heavily ~20% (typically 2-5 years duration) with strat
Slide 31: 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 32: Specialties Overview
Specialties Overview Q2 2023 Performance Y/Y Q2 Performance Drivers ▪ Net sales down -20% (price3 -5%, volume -15%); adjusted EBITDA down 59% (in millions) Q2 2023 Y/Y ▪ Both volumes and prices were impacted by weaker demand, particularly for consumer Net Sales $371 -20% electronics Net Sales ex FX1
Slide 33: 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 34: Access to Highly Concentrated Bromine is a Low-Cost Advantage
Access to Highly Concentrated Bromine is a Low-Cost Advantage Bromine Concentration2 (ppm) Albemarle Operates from Two World- Dead Sea Concentrate Class Bromine Resources: Arkansas India Concentrate China Dead Sea, Jordan Seawater Jordan Bromine Company1 (JBC) - operated 0 1000 2000 3000 4000 5000 6
Slide 35: 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 ▪ Dedicated Manufacturing Excellence solutions product line program (higher v
Slide 36: 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 37: Ketjen Overview
Ketjen Overview Q2 2023 Performance Y/Y Q2 Performance Drivers (in millions) Q2 2023 Y/Y ▪ Net sales up 12% (price3 +11%, volume +1%); adjusted EBITDA up 337% Net Sales $236 12% ▪ Increased sales due to higher prices primarily from fluid catalytic cracking and clean Net Sales ex FX1 $236 12% fuel te
Slide 38: Appendix: Non-GAAP Reconciliations
Appendix: Non-GAAP Reconciliations
Slide 39: 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 40: Adjusted EBITDA – Continuing Operations (twelve months ended)
Adjusted EBITDA – Continuing Operations (twelve months ended) el e on nded un e De ar un Net income attributable to Albemarle Corporation ,551 1,55 ,5 7 , 9, 1 , 75,01 ,91 , epreciation and amorti ation 7, ,515 00, 1 1,5 , 0 Non recurring and other unusual items (excluding items associated with inte
Slide 41: Adjusted EBITDA Supplemental
Adjusted EBITDA Supplemental1 el e on nded ree on nded un un ar De e d u ed B D Net income attributable to noncontrolling interests 1 7, 51 , 9 ,1 9, 1 ,991 E uity in net income of unconsolidated investments (net of tax) (1,5 ,9 ) (551,051) ( 9 ,1 ) ( ,799) ( 5 , ) ividends received from unconsolida
Slide 42: www.albemarle.com
NYSE www.albemarle.com
Slide 43: Slide 43