Albemarle Corporation · NYSE:ALB
Albemarle — Q4 2024 Earnings Presentation
36 slides from Albemarle's earnings presentation, Feb 13, 2025
Slide 1: Q4 and FY 2024 Earnings
Q4 and FY 2024 Earnings February 13, 2025 8:00am 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 Measures
Non-GAAP Measures It should be noted that adjusted net income (loss) attributable to Albemarle Corporation, adjusted net income (loss) attributable to Albemarle Corporation common shareholders, adjusted diluted (loss) earnings per share attributable to common shareholders, non-operating pension and
Slide 4: Maintaining Long-term Competitiveness
Solid operational execution, demonstrated by Q4 2024 results: ▪ Net sales of $1.2B; record production at La Negra and Meishan ▪ Adj. EBITDA1 of $251M; up Y/Y in all businesses (Energy Storage +$290M, Specialties +$43M, Ketjen +$4M) ▪ Net debt to adjusted EBITDA of 2.6x, well below Q4 covenant limit
Slide 5: Q4 and FY 2024 Financial Summary
Q4 and FY 2024 Financial Summary (in millions, except per share amounts) Q4 2024 Q4 2023 Variance FY 2024 FY 2023 Variance Net Sales $1,232 $2,356 -48% $5,368 $9,617 -44% Net Income (Loss) $75 ($618) NM ($1,179) $1,573 -175% Attributable to Albemarle Corporation Adjusted EBITDA1 $251 ($135) NM $1,14
Slide 6: Q4 Y/Y Adjusted EBITDA Bridges
Q4 Y/Y Adjusted EBITDA1 Bridges ($ in millions) $800 $1,400 Y/Y – by Driver $600 $400 Q4 2024 vs 2023 $142 $200 ($135) $216 $250 ▪ Favorable volumes, $0 ($558) productivity, and lower COGS ($200) more than offset lower prices ($400) and reduced equity earnings ($600) driven by ongoing soft market ($
Slide 7: Introducing FY 2025E Energy Storage Market Price Scenarios
Introducing FY 2025E Energy Storage Market Price Scenarios1 Albemarle does not provide forecasts of lithium price Observed Lithium FY 2024A YE 2024 H1 2024 range Q4 2023 avg. Market Price Scenarios: Scenarios based on recent (US$/kg LCE)2 $12 $9 $12-15 $20 observed lithium market pricing FY 2024A FY
Slide 8: Specialties, Ketjen, and Corporate FY 2025E Outlook Considerations
Specialties, Ketjen, and Corporate FY 2025E Outlook Considerations FY 2025E Segments FY 2024A as of February 12, 2025 Specialties Net Sales $1.3B $1.3B – $1.5B Specialties Adj. EBITDA $228M $210M – $280M Ketjen Net Sales $1.0B $1.0B – $1.1B Ketjen Adj. EBITDA $131M $120M – $150M Other Corporate Capi
Slide 9: Total Company 2025E Outlook Considerations
Total Company 2025E Outlook Considerations1 Observed Lithium FY 2024A YE 2024 H1 2024 range Q4 2023 avg. Market Price Scenarios: (US$/kg LCE)2 $12 $9 $12-15 $20 Ranges driven by variation in sales volume and mix FY 2024A FY 2025E FY 2024A includes adj. EBITDA benefit of ~$100M in Q2 from Net Sales $
Slide 10: 2025 Commentary by Segment
2025 Commentary by Segment1 ENERGY STORAGE ▪ Q4 2024 sales volumes of 49 kT LCE, FY 2024 sales volumes of 203 kT LCE2 ▪ Volume growth expected between 0% and 10% Y/Y; decreased reliance on tolling and absorbing fixed costs with ramp of Meishan, Kemerton ▪ Majority of sales are on contracts, with ~50
Slide 11: Financial and Operational Actions Provide Flexibility
Our Financial and Operational Actions Have Provided the Flexibility to Navigate Dynamic Business Conditions Capital Structure1 Total Liquidity: $2.8B1 $100 Other Credit Lines $3,520 Total Debt ▪ ~$1.2B of cash & cash equivalents1 ▪ Full commercial paper capacity available for liquidity ($1.5B) $1,50
Slide 12: Strong Focus on Cash Improvements Yielding Results
Strong Focus on Cash Improvements Yielding Results ▪ FY 2025E operating cash conversion expected to be >80%, well above historical average1, driven by: Operating Cash Flow 1. $350M customer prepayment in Energy Storage secured in January Conversion1 2. Ongoing working capital improvements, including
Slide 13: Near-Term Market Is Dynamic, Long-Term Lithium Demand Drivers Intact
Near-Term Market Is Dynamic, Long-Term Lithium Demand Drivers Intact Demand Supply ▪ Lithium remains critical to the energy transition ▪ Recent additional supply curtailments both upstream and downstream ▪ EV registrations up 25% Y/Y in 20241; strong growth in China partly offset by slower expansion
Slide 14: Global EV Demand Growth +25% Y/Y in 2024, Led by China
Global EV Demand Growth +25% Y/Y in 2024, Led by China Global EV Sales1 China EV Sales1 Europe EV Sales1 North America EV Sales1 20 (in millions) +25% 20 20 20 2024 Y/Y 65% 20% 10% 15 15 +37% 15 15 of Global 2024 Y/Y of Global of Global 10 10 10 10 0% 5 5 5 2024 Y/Y 5 +14% 2024 Y/Y 0 0 0 0 Oct Mar N
Slide 15: Executing Actions from Comprehensive Review of Our Cost and Operating Structure
Q4 2024 EARNINGS Executing Actions from Comprehensive Review of Our Cost and Operating Structure 15
Slide 16: Broad Set of Actions Underway to Maintain our Long-term Competitive Position
Broad Set of Actions Underway to Maintain our Long-term Competitive Position Optimizing Improving Reducing Enhancing Conversion Network Costs and Efficiency Capital Expenditures Financial Flexibility Actions • Significantly reduced footprint at • Announced proactive measures to • Re-phased capex to
Slide 17: Optimizing our Global Network
Optimizing our Global Network Project Developments Optimizing Leveraging High Flexible Global Portfolio Conversion Footprint Quality Resource Base of Conversion Assets Record production at La Negra in FY Preserving and maximizing the value of Extensive tolling network provides 2024 our advantaged, l
Slide 18: Focus on Executing Cost and Capital Reductions
Focus on Executing Cost and Capital Reductions to Remain Competitive at the Bottom of the Cycle On Track to Realize $300-400M Further $100M Reduction to Cost and Productivity Benefits 2025 Capital Expenditures $150-250M in non-manufacturing cost opportunity: ▪ Further optimization of 2025 after deta
Slide 19: Maintaining Our Competitive Position and Driving Long-term Value Creation
Q4 2024 EARNINGS Maintaining Our Competitive Position and Driving Long-term Value Creation 19
Slide 20: Albemarle's Strategic Framework
Albemarle’s Strategic Framework Albemarle leads the world in transforming essential resources into the critical ingredients for modern living with people and planet in mind. Defining Our Performance Ambition Lead with Impact Purpose-Driven Growth Partner of Choice Stakeholder Value Providing Essenti
Slide 21: Harnessing Our Resilient Competitive Strengths
Harnessing Our Resilient Competitive Strengths to Navigate Market Conditions ▪ Diverse global portfolio of world-class resources, with vertical integration World-Class Resources ▪ Access to multiple large-scale, high-grade lithium and bromine resources ▪ Deep technical and operational know-how to tr
Slide 22: Our Strategic Framework is Unchanged; Adapting Execution
Our Strategic Framework is Unchanged; Adapting Execution Customer-Centric Innovation ▪ Developing next-generation polymeric flame retardants ▪ Optimizing conversion facilities to meet changing market needs at minimal capital expense Preserve Resource Advantage ▪ Salar Yield Improvement Project achie
Slide 23: Maintaining Long-term Competitiveness
FY 2024 adj. EBITDA1 of $1.1B, in-line with outlook, due to productivity and cost improvements, higher volumes, and contract performance Introduced FY 2025 total company outlook considerations and provided cash flow considerations; driving to breakeven free cash flow in 2025 Maintaining Long-term Co
Slide 24: Q1 2025 Investor Relations Events
Q1 2025 Investor Relations Events Feb 24-25 BMO Global Metals, Mining, & Critical Minerals Conference Meredith Bandy, CFA VP, Investor Relations & Sustainability meredith.bandy@albemarle.com +1 980.999.5168 Feb 26 BofA Global Agriculture & Materials Conference Eran del Castillo Senior Manager, Inves
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Slide 26: Appendix
\ Albemarle* Appendix
Slide 27: Illustrative Calculation of FY 2025E Adj. EPS at $9/kg Scenario
Illustrative Calculation of FY 2025E Adj. EPS at $9/kg Scenario FY 2025E $9/kg Scenario (in millions, except per share amounts) Low High Adjusted EBITDA1 $800 $1,000 - Pre-Tax Equity Income $290 $430 Assuming 30% AU tax rate - Interest Expenses $180 $210 - Depreciation and Amortization $630 $670 Pre
Slide 28: Proactively Extended & Re-Shaped Existing Covenant Waiver
Proactively Extended & Re-Shaped Existing Covenant Waiver to Bolster Financial Flexibility ▪ FY 2024 leverage remained below waiver limits, even as lithium market prices decreased further, due to Covenant Waiver Leverage Limits1 execution on operational and financial levers 5.75x 5.5x 5.5x ▪ Financi
Slide 29: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures NON-GAAP MEASURE DESCRIPTION Adjusted Net Income Attributable to Net income after mandatory convertible preferred stock dividends before non-recurring, other unusual and non-operating pension and OPEB. Common Shareholders Adjusted Diluted EPS Attributable to Diluted
Slide 30: Adjusted Net Income
Adjusted Net Income See above for a reconciliation of adjusted net income, the non-GAAP financial measure, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP. 30
Slide 31: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA ree o t s e ear e ecember ecember Net income (loss) attributable to Albemarle Corporation 5,293 ( 1 , 0) (1,1 9,449) 1,5 3,4 Add back: nterest and financing expenses 44, 03 34,3 1 5, 19 11 ,0 2 ncome tax expense 10, 13 11 , ,0 5 430,2 epreciation and amortization 1 3,10 14
Slide 32: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 wel e o t s e ree o t s e ec ec Se ar A ste A E uity in net income of unconsolidated investments (net of tax) (22,4 ) (4,9 2) (1, 92) ( , 3) ( , 21) ividends received from non indfield oldings unconsolidated investments 24,2 4 10,5 2,4 2 9,4 0 1, 5 o soli ate i iel A st
Slide 33: Diluted EPS
Diluted EPS ree o t s e ear e ecember ecember iluted earnings (loss) per share 0.29 (5.2 ) (11.20) 13.3 Add back: Non operating pension and OPEB items (net of tax) (0.0 ) (0.0 ) (0.0 ) (0.0 ) Non recurring and other unusual items (net of tax) Ac uisition and integration related costs 0.01 0.03 0.04
Slide 34: Effective Tax Rate
Effective Tax Rate come loss be ore i come ta es a e it i et i come o co soli ate come ta e e se ecti e i come ta i estme ts be e it rate ree mo t s e e ecember As reported , 2 10, 13 13. % Non recurring, other unusual and non operating pension and OPEB items (49,232) 112,2 2 As adjusted 2 ,495 122,
Slide 35: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest ree o t s e ecember ear e ecember o co trolli g o co trolli g o co trolli g o co trolli g it come terest it come terest it come terest it come terest Energy Storage 45,12 441,44 05,3 1, 22, 20 Specialties (9, 5) (14,111) (43,253) (9 , 50) etjen 4,9 2 2,121 2
Slide 36: www.albemarle.com
NYSE www.albemarle.com \ Albemarle®