Albemarle Corporation · NYSE:ALB
Albemarle — JP Morgan Industrials Conference 2020
27 slides from Albemarle's conference presentation, Mar 10, 2020
Slide 1: Albemarle Corporation Investor Presentation
Albemarle Corporation Investor Presentation JP Morgan Industrials Conference March 10th, 2020
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation including, without limitation, information related to outlook and guidance, conversion capacity, production volumes, joint ventures, market trends, pricing, expected growth, earnings and demand for our products, tax ra
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: An Industry Leader with Significant Opportunity Ahead
An Industry Leader with Significant Opportunity Ahead 01 Industry-leading, competitively advantaged positions across our portfolio, which we believe will expand in the future 02 Strong secular trends support long-term growth 03 Focus on product quality, talent, low-cost operations, and effective man
Slide 5: Diversified Portfolio with Above-Market Margin
Diversified Portfolio with Above-Market Margin KEY STATS BUSINESS OVERVIEW 1887 Making the World Safe and Sustainable by Powering the Potential of People Founded 132 years Lithium Catalysts Bromine Specialties Global Employees1 ~5,600 Countries ~75 38% 30% 28% of Total of Total of Total Revenue Reve
Slide 6: Agile, Long-term Strategy that Responds to Changing Market Conditions
Agile, Long-term Strategy that Responds to Changing Market Conditions • Demand outlook remains robust for Lithium Grow Invest in growth and focus on cash generation in Lithium • Continue to strengthen balance sheet to provide capacity for future options for lithium conversion assets needed to meet c
Slide 7: Results of Our Materiality Assessment Led to Our Sustainability Framework
Results of Our Materiality Assessment Led to Our Sustainability Framework Financials Safety Sustainable Our People & Business Ethics & Business Model Regulatory Compliance Workplace Inclusive & Diverse Foster a sustainable Workplace Promote an inclusive and business model that creates Customers & di
Slide 8: 2020 Cost Savings Initiative Underway
2020 Cost Savings Initiative Underway Transforming Our Business Model • Identified 100+ discrete projects, assigned project ownership, and instituted a tracking dashboard • Top projects include Lithium site operational excellence and company-wide reductions in consulting and outside service costs Th
Slide 9: Coronavirus Update
Coronavirus Update As of March 9, 2020 Business Area Current Assessment • Zero confirmed cases among our employees • Actively managing situation to protect employees and communities General • Employee travel restrictions in place • Complying with all government and health agency recommendations and
Slide 10: Bromine Specialties Snapshot
Bromine Specialties Snapshot Financials | TTM 2019 Business Environment2 $1.0B $328M 33% Flame Retardants 5-year CAGR: 2% Net Sales Adj. EBITDA1 Adj. EBITDA Margin1 Clear Completion Fluids 5-year CAGR: 3% Segment Characteristics Strong Applications Demand Pharma/Ag • Mineral extraction and processin
Slide 11: Catalysts Snapshot
Catalysts Snapshot Financials | TTM 2019 including PCS Fluid Cracking Catalysts (FCC) FCC Catalysts $1.1B $271M 25% • Cracks oil feedstock into gasoline and chemicals • FCC market leadership in 1) Net Sales Adj. EBITDA1 Adj. EBITDA Margin1 bottoms cracking; 2) olefins output; and 3) emerging markets
Slide 12: Lithium Snapshot
Lithium Snapshot Financials | TTM 2019 Applications $1.4B $525M 39% 20% Net Sales Adj. EBITDA1 Adj. EBITDA Margin1 20% 60% Segment Characteristics Business Environment • Leading market positions in Hydroxide, Carbonate, • Volume growth driven by energy storage Lithium Metal, and Organometallics • Hi
Slide 13: Energy Storage Continues to Drive Lithium Demand
Energy Storage Continues to Drive Lithium Demand Demand by Application 2018 2019 ’19 – ’25 2025 Total Lithium Market Demand (kT LCE) Estimate Estimate CAGR Forecast 1,400 kT LCE Albemarle Estimates Electric Vehicles 59 93 38% 650 Other Mobility 25 26 7% 40 1,200 Consumer Electronics 36 38 11% 70 201
Slide 14: Lithium Strategy: Strong Foundation / Resilient to Market Dynamics
Lithium Strategy: Strong Foundation / Resilient to Market Dynamics Manage Expand Drive Cost and Sustain World’s Best Capacity with Operational Premium Value Resources Discipline Excellence Proposition • Spodumene capacity: 270 kTa • Reduced capital intensity • Lean, low-cost manufacturing • Long-ter
Slide 15: Lithium: Our Growth Engine
Lithium: Our Growth Engine Key Takeaways • Broadest range of resources, manufacturing capabilities, products, and customer relationships in the Lithium industry • Global Lithium demand is on track to reach 1 million MT LCE by 2025, a 20%+ CAGR driven by EV penetration of new car sales • We anticipat
Slide 16: Full Year 2020 Guidance vs 2019 and 2024 Targets
Full Year 2020 Guidance vs 2019 and 2024 Targets As of February 19, 2020 for 2020 Guidance and December 12, 2019 for 2024 Targets FY 2020 2020 Guidance 2024 Assumptions for FY 2019 vs Targets Guidance FY 2019 2024 Targets Net Sales $3.6B $3.48B – $3.53B -2% to -3% 6% - 9% • 5% annual dividend Revenu
Slide 17: Balanced Approach to Capital Allocation
Balanced Approach to Capital Allocation Grow Dividend 1 2 Maintain Financial Flexibility • 25 years of consecutive dividend increases • Maintain Investment Grade rating • Targeting median specialty chemical payout ratio • Shorter-term Net Debt to Adj. EBITDA Target: 1.0x - 1.5x to increase growth fl
Slide 18: An Industry Leader with Significant Opportunity Ahead
An Industry Leader with Significant Opportunity Ahead 01 Industry-leading, competitively advantaged positions across our portfolio, which we believe will expand in the future 02 Strong secular trends support long-term growth 03 Focus on product quality, talent, low-cost operations, and effective man
Slide 19: Appendix A: Lithium Global Footprint & Capacity
Appendix A Lithium Global Footprint & Capacity
Slide 20: Integrated Global Footprint for Lithium Chemical Conversion
Integrated Global Footprint for Lithium Chemical Conversion HQ Kings Mountain, C C Langelsheim, NC, U.S. S S Germany Silver Peak, C S Taichung, NV, U.S. R Taiwan New Johnsonville, TN, U.S. S R Wodgina, Australia R C C C R R Resources C Conversion to Battery and Technical Grade S Specialties Salar de
Slide 21: Large and Diverse Resources Positioned for at Least the Next Decade
Large and Diverse Resources Positioned for at Least the Next Decade 2019 Operating Available Resource % Albemarle Resource Capacity Capability Utilization (kTa LCE) (kTa LCE) Atacama CORFO Lease 40 100 40% 50% Greenbushes Interest1 40 120 33% Wodgina2 0 100 0% Silver Peak 5 10 50% Kings Mountain - 5
Slide 22: Disciplined and Measured Plan to Expanding Conversion Capacity
Disciplined and Measured Plan to Expanding Conversion Capacity Our plan through 2024 only utilize ~60% of available resources All figures in kT LCE and represent estimates of lithium nameplate conversion capacity Reducing Capital Intensity 350 • Deploying standard process flow and 300 equipment in e
Slide 23: Appendix B: Non-GAAP Reconciliations and Supplemental Information
Appendix B Non-GAAP Reconciliations and Supplemental Information
Slide 24: EBITDA - by Segment (twelve months ended Dec 31)
EBITDA - by Segment (twelve months ended Dec 31) Bromine Reportable Consolidated ($ in thousands) Lithium Specialties Catalysts Segments Total All Other Corporate Total Year ended December 31, 2019: Net income (loss) attributable to Albemarle Corporation $ 341,767 $ 279,945 $ 219,686 $ 841,398 $ 41,
Slide 25: EBITDA - Margin by Segment (twelve months ended Dec 31)
EBITDA - Margin by Segment (twelve months ended Dec 31) Bromine Reportable Consolidated ($ in thousands) Lithium Specialties Catalysts Segments Total All Other Total Year ended December 31, 2019: Net sales $ 1,358,170 $ 1,004,216 $ 1,061,817 $ 3,424,203 $ 165,224 $ 3,589,427 Net income (loss) attrib
Slide 26: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 Twelve Months ($ in thousands) Ended Three Months Ended Dec 31, 2019 Dec 31, 2019 Sep 30, 2019 Jun 30, 2019 Mar 31, 2019 Adjusted EBITDA $ 1,036,781 $ 294,663 $ 254,351 $ 261,900 $ 225,867 Net income attributable to noncontrolling interests 71,129 15,852 16,548 20,772 1
Slide 27: www.albemarle.com
\ ALBEMARLE’ NYSE www.albemarle.com 27