Albemarle Corporation · NYSE:ALB
Albemarle — Q2 2021 Earnings Presentation
28 slides from Albemarle's earnings presentation, Aug 5, 2021
Slide 1: Albemarle Corporation Second Quarter 2021 Earnings
Albemarle Corporation Second Quarter 2021 Earnings Conference Call/Webcast Thursday, August 5, 2021 9:00am ET 1
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 pr
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: Recent Accomplishments Support Long-term Growth
Recent Accomplishments Support Long-term Growth Q2 2021 net sales $774M, up 1% Y/Y; adj. EBITDA $195M, up 5% Y/Y Pro forma adjusted for the sale of FCS, Q2 2021 net sales up 5% Y/Y; adj. EBITDA up 13% Y/Y FY 2021 guidance revised; updated to reflect the sale of FCS (closed June 1, 2021) La Negra III
Slide 5: Operating Model | The Albemarle Way of Excellence (AWE)
Operating Model | The Albemarle Way of Excellence (AWE) Responsibly manage our Industry-leading focus on natural resources health, and safety Engage with our people and Foster an agile, engaged, communities to create long-term values-based culture sustainable value High- Sustainable Performance Appr
Slide 6: Kemerton I / II On Track to Deliver Wave Commercial Volume in 2022
On Track to Deliver Wave 2 Commercial Volume in 2022 La Negra III / IV • Conversion of low-cost, high-quality Chilean brine • 40ktpa nameplate capacity – lithium carbonate • 100% owned and 100% marketed by ALB • Construction complete, progressing ~6-month commissioning and qualification process; com
Slide 7: Q2 2021 Financial Summary
Q2 2021 Financial Summary (in millions, except per share amounts) Q2 2021 Q2 2020 Variance Net Sales $774 $764 1% Net income attributable to Albemarle Corporation $425 $86 396% Adjusted EBITDA $195 $185 5% Adjusted EBITDA Margin 25% 24% Diluted EPS $3.62 $0.80 353% Non-operating pension and OPEB ite
Slide 8: Q2 2021 Adjusted EBITDA Bridge
Q2 2021 Adjusted EBITDA Bridge 16 7 $200 195 185 1 188 19 4 8 166 19 $150 +13% $100 $50 Q2 2020 FCS Impact Q2 2020 Lithium Bromine Catalysts Corporate FX Q2 2021 FCS Impact Q2 2021 Pro Forma Specialties & Other Pro Forma ex FX 8
Slide 9: Financial Flexibility to Execute Growth Strategy
Financial Flexibility to Execute Growth Strategy Net Debt to Adjusted EBITDA1 Selected Financial Metrics ($ in millions) (as of 6/30/2021) 3.4x 3.2x 3.2x 2.5x Dividends Paid (TTM) $169 Target Long-term Dividend Growth (TTM Y/Y) 6.8% 1.7x Leverage 1.5x 2.0x Range Cash Balance $824 Gross Debt2 $2,044
Slide 10: FY 2021 Guidance Revised; Updated for FCS Sale
FY 2021 Guidance Revised; Updated for FCS Sale Revised FCS Impact1 Pro Forma Revised 2021 Guidance Jun 1 – Dec 31, 2021 2021 Guidance Net Sales $3.3 - $3.4B $95 - $105M $3.2 - $3.3B Adj. EBITDA $810 - $860M $35 - $45M $775 - $815M Adj. EBITDA Margin 24% - 25% 24% - 25% Adj. Diluted EPS $3.60 - $4.00
Slide 11: FY 2021: Outlook for Lithium Improves
FY 2021: Outlook for Lithium Improves As of August 4, 2021 • Lithium FY 2021 adj. EBITDA expected to be up 10-15% Y/Y, above previous guidance • FY 2021 volume growth expected to be in the mid-teens Y/Y due to higher volumes • Average realized pricing expected to increase sequentially during the yea
Slide 12: Well-Positioned to Drive Sustainable Growth
Well-Positioned to Drive Sustainable Growth 2021 OBJECTIVES Updates • Complete LAN III/IV (mid-2021) and KEM I/II (late 2021) ✓ LAN III/IV construction complete Grow • KEM I on track; KEM II end of Q1 2022 – Profitably • Investment decisions on new expansion projects in Lithium and Bromine COVID-19
Slide 13: Lithium Overview
Lithium Overview As of August 4, 2021 YoY Q2 Performance Drivers Q2 2021 PERFORMANCE • Net sales up 13% (price -4%, volume +17%); adjusted EBITDA up 16% ($M) Q2 2021 ΔQ2 2020 • Stronger volumes as customers accelerated orders, drew down inventory to meet demand, plus initial delivery of tolling volu
Slide 14: Catalysts Overview
Catalysts Overview As of August 4, 2021 YoY Q2 Performance Drivers Q2 2021 PERFORMANCE • Net sales down 25% (price 0%, volume -25%); adjusted EBITDA down 7% ($M) Q2 2021 ΔQ2 2020 • CFT volume down Y/Y due to timing; FCC volume down slightly Y/Y • Previous year Q2 results were understated by $12 mill
Slide 15: Bromine Specialties Overview
Bromine Specialties Overview As of August 4, 2021 YoY Q2 Performance Drivers Q2 2021 PERFORMANCE • Net sales up 20% (price +9%, volume +11%); adjusted EBITDA up 27% ($M) Q2 2021 ΔQ2 2020 • Robust market demand across majority of product portfolio • Additional draw down of inventory during the quarte
Slide 16: Upcoming Investor Events
Upcoming Investor Events Third Quarter 2021 Investor Relations Events Date Event – All Virtual September 10th Investor Day September 13th – 15th Non-deal Roadshow Meredith Bandy David Burke VP, Investor Relations & Sustainability Director, Investor Relations meredith.bandy@albemarle.com david.burke@
Slide 17: Appendix: Non-GAAP Reconciliations
Appendix Non-GAAP Reconciliations
Slide 18: 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 19: Adjusted Net Income
Adjusted Net Income See above for a reconciliation of adjusted net income, the non-GAAP financial measures, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP. 19
Slide 20: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA See above for a reconciliation of EBITDA, adjusted EBITDA and the non-GAAP financial measures, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAAP. 20
Slide 21: Adjusted EBITDA – by Segment (three months ended)
Adjusted EBITDA – by Segment (three months ended) See above for a reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measure, to Net income attributable to Albemarle Corporation (“earnings”), the most directly comparable financial measure calculated and reporting in accorda
Slide 22: Adjusted EBITDA – Margin by Segment (three months ended)
Adjusted EBITDA – Margin by Segment (three months ended) See above for adjusted EBITDA margin, a non-GAAP financial measure defined as adjusted EBITDA divided by net sales. See previous slide for the related reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measure, to Net
Slide 23: Adjusted EBITDA – by Segment (twelve months ended)
Adjusted EBITDA – by Segment (twelve months ended) See above for a reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measures, to Net income attributable to Albemarle Corporation (“earnings”), the most directly comparable financial measure calculated and reporting in accor
Slide 24: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 1 This supplemental is for net-debt-to-adjusted EBITDA ratio based on the bank covenant definition. 24
Slide 25: Diluted EPS
Diluted EPS 1Totals may not add due to rounding 25
Slide 26: Effective Tax Rate
Effective Tax Rate See above for a reconciliation of the adjusted effective income tax rate, the non-GAAP financial measure, to the effective income tax rate, the most directly comparable financial measure calculated and reporting in accordance with GAAP. 26
Slide 27: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest 27
Slide 28: www.albemarle.com
\ ALBEMARLE’ NYSE www.albemarle.com