Slide 1: Second Quarter 2018 Earnings and Non-GAAP Reconciliations
Albemarle Corporation Second Quarter 2018 Earnings and Non-GAAP Reconciliations Conference Call/Webcast Wednesday, August 8th, 2018 9:00am ET
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation, the conference call 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 proj
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: Key Messages
Key Messages Q2 2018 Adjusted EBITDA1 up double digits in all three businesses Lithium growth continues with volume and pricing up double digits Raising FY 2018 net sales, adjusted EBITDA1 and adjusted EPS1 guidance Initiating another $250 million accelerated share repurchase program, subject to mar
Slide 5: Second Quarter 2018 Financial Highlights
Second Quarter 2018 Financial Highlights vs Prior Year Q2 2018 Results Pro-forma2 Net Sales $854 million +20% Adjusted $259 million +24% EBITDA1 Adjusted $1.36 +28% Diluted EPS1 Results driven by double digit Adjusted EBITDA1 growth in Lithium, Bromine and Catalysts 1Non-GAAP measure. See Non-GAAP r
Slide 6: Segment Quarterly Highlights
Segment Quarterly Highlights TTM1 Pro-forma Net Sales2 ($ in millions) TTM1 Pro-forma Adj. EBITDA2,3 and ($ in millions) Adj. EBITDA Margin2,3 $3,250 $1,000 30% $900 29% $3,000 28% $800 $2,750 27% $700 26% $2,500 $600 25% $2,250 2Q17 3Q17 4Q17 1Q18 2Q18 2,3 2Q17 3Q17 4Q17 1Q18 2Q18 Pro-forma Adjuste
Slide 7: Second Quarter 2018 Adjusted EBITDA Bridge
Second Quarter 2018 Adjusted EBITDA1 Bridge Q2 2018: Adjusted EBITDA1 growth2 of $50 million, 24% yoy ($ in millions) $280 17 259 $260 1 5 $240 26 $220 219 3 209 10 $200 $180 $160 Q2 2017 Divested Pro-Forma FX Impact Lithium Bromine Catalysts Corporate & Q2 2018 Business 2 Q2 2017 Specialties Other
Slide 8: Lithium
Lithium Q2 2018 Performance Historical Trend (TTM) ($ in millions) Q2 2018 Q2 2017 ∆ $600 50% Net Sales $318 $244 30% $500 40% Net Sales ex FX1 $310 27% $400 Adj. EBITDA2 $142 $115 23% 30% $300 Adj. EBITDA ex FX1 $141 22% Adj. EBITDA Margin2 45% 47% (265 bps) $200 20% 2Q17 3Q17 4Q17 1Q18 2Q18 Adj. E
Slide 9: Bromine Specialties
Bromine Specialties Q2 2018 Performance Historical Trend (TTM) ($ in millions) Q2 2018 Q2 2017 ∆ $300 40% Net Sales $221 $204 8% $250 30% Net Sales ex FX1 $217 7% $200 Adj. EBITDA2 $69 $62 12% 20% $150 Adj. EBITDA ex FX1 $67 7% Adj. EBITDA Margin2 31% 30% 102 bps $100 10% 2Q17 3Q17 4Q17 1Q18 2Q18 Ad
Slide 10: Catalysts
Catalysts Q2 2018 Performance Historical Trend (TTM) ∆ vs $300 40% ($ in millions) Pro-forma3 Pro-forma3 Q2 2018 Q2 2017 Q2 2017 Q2 2017 $250 Net Sales $285 $258 $233 23% 30% Net Sales ex FX1 $280 20% $200 Adj. EBITDA2 $75 $67 $58 30% 20% $150 Adj. EBITDA ex FX1 $75 30% Adj. EBITDA Margin2 26% 26% 2
Slide 11: Cash Flow and Net Debt
Cash Flow and Net Debt Six Months Ended June 30 Selected Financial Metrics ($ in millions) ($ in millions) (as of 06/30/2018) 2018 2017 Dividends Paid: $72 Net Cash from Operations $224 ($54) Dividend Growth (Y/Y)3: 5% Less: Capital Expenditures (281) (98) Cash Balance: $908 Gross Debt4: $1,615 Add
Slide 12: Full Year 2018 Business Guidance vs 2017
Full Year 2018 Business Guidance vs 2017 Business Prior Updated Business Environment Unit Outlook Outlook • FY 2018 Adj. EBITDA1 expected to increase low-to-mid 20’s on % basis vs prior year • Expect 1H 2018 to be similar to 2H 2018; Q3 similar to Q1 and Q4 similar to Q2 Lithium • Favorable outlook
Slide 13: Full Year 2018 Guidance
Full Year 2018 Guidance Prior Updated Updated 2018 Guidance FY 2017 FY 2017 FY 2018 FY 2018 vs Pro Forma3 Guidance4 Guidance4 FY 2017 Pro-Forma3 Net Sales $3.07B $3.00B $3.2 – $3.4B ▲ $3.3 – $3.5B 10% – 17% Adjusted EBITDA 1 $885M $859M $955 – $1,005M ▲ $990 – $1,020M 15% – 19% Adjusted EBITDA Margi
Slide 14: www.albemarle.com
‘\ ALBEMARLE’ NYSE www.albemarle.com 14
Slide 15: Appendix
Appendix Non-GAAP Reconciliations and Supplemental Information
Slide 16: Adjusted Net Income - Pro-forma
Adjusted Net Income - Pro-forma Three Months Ended June 30, ($ in thousands) 2018 2017 Net income attributable to Albemarle Corporation $ 302,461 $ 103,333 Add back: Non-operating pension and OPEB items (net of tax) (1,873) (589) Non-recurring and other unusual items (net of tax) (150,618) 23,738 Ad
Slide 17: EBITDA and Adjusted EBITDA - Pro-forma
EBITDA and Adjusted EBITDA - Pro-forma Three Months Ended June 30, ($ in thousands) 2018 2017 Net income attributable to Albemarle Corporation $ 302,461 $ 103,333 Add back: Interest and financing expenses 13,308 14,590 Income tax expense 80,102 23,130 Depreciation and amortization 50,474 49,122 EBIT
Slide 18: Adjusted EBITDA - by Segment (three months ended June 30)
Adjusted EBITDA - by Segment (three months ended June 30) Reportable ($ in thousands) Lithium Bromine Specialties Catalysts Segments Total All Other Corporate Consolidated Total Three months ended June 30, 2018: Net income (loss) attributable to Albemarle Corporation $ 117,292 $ 59,673 $ 280,887 $ 4
Slide 19: Adjusted EBITDA - Margin by Segment (three months ended June 30)
Adjusted EBITDA - Margin by Segment (three months ended June 30) Bromine Reportable ($ in thousands) Lithium Specialties Catalysts Segments Total All Other Consolidated Total Three months ended June 30, 2018: Net sales $ 317,563 $ 220,514 $ 284,966 $ 823,043 $ 30,748 $ 853,874 Net income (loss) attr
Slide 20: Adjusted EBITDA - Continuing Operations (twelve months ended)
Adjusted EBITDA - Continuing Operations (twelve months ended) Twelve Months Ended ($ in thousands) Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 Continuing Operations Net income attributable to Albemarle Corporation $ 884,856 $ 875,306 $ 54,850 $ 135,397 $ 334,525 Depreciation and
Slide 21: Adjusted EBITDA - by Segment (twelve months ended)
Adjusted EBITDA - by Segment (twelve months ended) Twelve Months Ended ($ in thousands) Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Jun 30, 2018 Lithium Net income attributable to Albemarle Corporation $ 271,810 $ 314,707 $ 342,992 $ 373,712 $ 409,185 Depreciation and amortization 85,882 86,
Slide 22: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 Twelve Months ($ in thousands) Ended Three Months Ended Jun 30, 2018 Jun 30, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Adjusted EBITDA $ 962,443 $ 258,562 $ 248,718 $ 245,780 $ 209,383 Net income attributable to noncontrolling interests 38,208 8,225 7,165 11,295 11,52
Slide 23: Diluted EPS
Diluted EPS Three Months Ended June 30, 2018 2017 Diluted earnings per share attributable to Albemarle Corporation $ 2.73 $ 0.92 Add back: Non-operating pension and OPEB items (net of tax) (0.02) (0.01) Non-recurring and other unusual items (net of tax) Utilization of inventory markup — 0.08 Restruc
Slide 24: Effective Tax Rate
Effective Tax Rate Income before income taxes and equity in net income of ($ in thousands) unconsolidated investments Income tax expense Effective income tax rate Three months ended June 30, 2018: As reported $ 371,819 $ 80,102 21.5% Non-recurring, other unusual and non-operating pension and OPEB it
Slide 25: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Three Months Ended June 30, Six Months Ended June 30, 2018 2017 2018 2017 Noncontrolling Noncontrolling Noncontrolling Noncontrolling ($ in thousands) Equity Income Interest Equity Income Interest Equity Income Interest Equity Income Interest Lithium $ 14,72
Slide 26: www.albemarle.com
‘\ ALBEMARLE’ NYSE www.albemarle.com 26