Albemarle Corporation · NYSE:ALB
Albemarle — Q1 2022 Earnings Presentation
33 slides from Albemarle's earnings presentation, May 5, 2022
Slide 1: Albemarle Q1 2022 Earnings
Albemarle Q1 2022 Earnings Conference Call/Webcast Thursday, May 5, 2022 9:00am ET
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this press release, the conference call and discussions that follow, including, without limitation, information related to the timing of active and proposed projects, production capacity, committed volumes, pricing, financial flexibilit
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: Strategic Focus and Effective Response to Challenges
Strategic Focus and Effective Response to Challenges Q1 2022 net sales Q1 2022 adj. EBITDA1 $1.1B +44% $432M +107% vs prior year2 vs prior year2 Raising FY 2022 MARBL JV accelerated the start of the second train at the Wodgina Lithium Mine in Australia outlook 2022 adj. EBITDA -B to reflect continue
Slide 5: Q1 2022 Financial Summary
Q1 2022 Financial Summary (in millions, except per share amounts) Q1 2022 Q1 20212 Variance Net Sales $1,128 $829 +36% Net income attributable to Albemarle Corporation $253 $96 165% Adjusted EBITDA1 $432 $230 +88% Adjusted EBITDA Margin1 38% 28% Diluted EPS $2.15 $0.84 156% Non-operating pension and
Slide 6: Q1 2022 Adjusted EBITDA Bridge
Q1 2022 Adjusted EBITDA1 Bridge ($ in millions) +107% 2 Net of FX Note: Numbers may not reconcile due to rounding. 1 See appendix for non-GAAP reconciliations. 2 Excluding Q1 2021 FCS adjusted EBITDA of $21M. 6
Slide 7: Raising 2022 Guidance to Reflect Lithium Pricing Momentum
Raising 2022 Guidance to Reflect Lithium Pricing Momentum Revised 2022 Revised Previous FY 2022 Guidance FY 2021 FY 2022 Guidance Guidance As of May 4, 2022 vs FY 20212 Net Sales $3.3B $4.2B – $4.5B $5.2B – $5.6B +60 to +70% Adj. EBITDA $871M1 $1.15B – $1.3B $1.7B – $2.0B +100 to +140% Adj. EBITDA M
Slide 8: FY 2022: Improved Outlook for Lithium and Bromine
FY 2022: Improved Outlook for Lithium and Bromine • Lithium FY 2022 adj. EBITDA expected to be +200-225% Y/Y, up from previous outlook • Average realized pricing now expected to be up ~100% Y/Y on the implementation of index-referenced variable price contracts and increased market pricing • FY 2022
Slide 9: Lithium Revenue Mix Updated for Current Market Prices
Lithium Revenue Mix Updated for Current Market Prices Battery Grade Revenues Contracting Approach Continues to Evolve ▪ ~20% spot (at the time of purchase order) ▪ Strategically segmenting customers by key requirement ▪ ~50% index-referenced variable price (~3-6 month (Price, Performance, Security)
Slide 10: FY Lithium EBITDA Margin At or Above Mid-cycle Expectations
FY Lithium EBITDA Margin1 At or Above Mid-cycle Expectations Fixed costs from new plants absorbed as Less JV equity production income tax base ramps included in Pricing Adj. EBITDA Add back JV +100% Y/Y equity income less CORFO ~55 - 60% tax included in Commission Adj. EBITDA ~45 - 50% 35% 2022 38%
Slide 11: Lithium Conversion Expected to Be > 200ktpa in 2025
Lithium Conversion Expected to Be > 200ktpa in 2025 Ramp of Current Facilities & Facilities Under Construction2 ~200 kt 200 Additional upside 180 opportunities include: 160 ▪ Technical-grade spodumene 1 Lithium Conversion (kt) 140 sales (10 ktpa) 120 ▪ Tolling volumes (0-20 ktpa) 100 88 kt 80 ▪ Addi
Slide 12: Strong Financial Position and Ample Liquidity
Strong Financial Position and Ample Liquidity (As of 3/31/22, $M) NET CASH FROM OPERATIONS ($M) LEVERAGE1 (x) CAPITAL EXPENDITURES ($M) $1,200 2.3x $1,000 $1.3 -$1.5B • $463M cash and cash equivalents2 $800 • Net debt to adjusted EBITDA is 1.9x2 1.5x – 1.9x $600 • Target long-term average leverage r
Slide 13: Expansions Support Long-term Growth Strategy
Expansions Support Long-term Growth Strategy Expanding global lithium conversion capacity… Australia/Asia Resource & Conversion ▪ Qinzhou acquisition expected to close H2 2022; designed to produce Resource 25ktpa LCE with expansion potential Conversion ▪ Kemerton I in commissioning; expected to achi
Slide 14: Global Lithium Projects Accelerated to Meet Customer Needs
Global Lithium Projects Accelerated to Meet Customer Needs Estimated Lithium Nameplate Conversion Capacity (approx.) Wave 3 Projects (3-5 years) JV Nameplate Conversion Capacity Carbonate figures on ktpa LCE basis, hydroxide figures on ktpa LiOH basis Potential Nameplate Capacity Range • Silver Peak
Slide 15: Global Project Pipeline Offers Diversity, Scale & Optionality
Global Project Pipeline Offers Diversity, Scale & Optionality 2021 2022 2023 2024 2025 2026 • Expansion supports ability to leverage Jordan Tetrabrom V growing markets for electronics, telecom, automotive • Salar Yield Improvement project Salar Yield Chile La Negra III / IV Ex Ex supports La Negra’s
Slide 16: Committed to Industry-leading Sustainability Performance
Committed to Industry-leading Sustainability Performance New in 2021 Sustainability Report Next Steps • Full (scored) CDP disclosure in 2022 • Report progress on existing GHG & freshwater targets • TCFD to be completed this year, publish in 2023 Natural Resource • Initial Scope 3 GHG assessment • Ad
Slide 17: Lithium Overview
Lithium Overview As of May 4, 2022 Y/Y Q1 Performance Drivers Q1 2022 Performance • Net sales up 97% (price3 +66%, volume +31%); adjusted EBITDA up 190% • Increased sales due to higher pricing and the benefit of a one-time sale of spodumene from (in millions) Q1 2022 Y/Y the initial start of Wodgina
Slide 18: Bromine Overview
Bromine Overview As of May 4, 2022 Y/Y Q1 Performance Drivers Q1 2022 Performance • Net sales up 28% (price3 +25%, volume +3%); adjusted EBITDA up 37% • Favorable pricing driven by robust demand and tight market conditions (in millions) Q1 2022 Y/Y • Increase in net sales partially offset by higher
Slide 19: Catalysts Overview
Catalysts Overview As of May 4, 2022 Y/Y Q1 Performance Drivers Q1 2022 Performance • Net sales slightly down -1% (price3 +1%, volume -2%); adjusted EBITDA down -34% • Adjusted EBITDA declined as sales were offset by cost pressures from increasing (in millions) Q1 2022 Y/Y natural gas prices Net Sal
Slide 20: Q2 2022 Investor Relations Events
Q2 2022 Investor Relations Events May 5-6 Q2 2022 Earnings Meredith Bandy, CFA VP, Investor Relations & Sustainability meredith.bandy@albemarle.com +1 980.999.5168 May 10-12 Goldman Sachs Industrials Conference Katie Pyfer, PhD May 24-25 Jefferies Renewable Energy Conference Manager, Investor Relati
Slide 21: Appendix
Appendix Non-GAAP Reconciliations 21
Slide 22: 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 23: 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. 23
Slide 24: 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. 24
Slide 25: 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 26: Adjusted EBITDA - Margin by Segment (three months ended March 31)
Adjusted EBITDA - Margin by Segment (three months ended March 31) 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 measur
Slide 27: Adjusted EBITDA - (twelve months ended)
Adjusted EBITDA - (twelve months ended) See above for a reconciliation of adjusted EBITDA and pro-forma adjusted EBITDA, the non-GAAP financial measures, to Net income attributable to Albemarle Corporation, the most directly comparable financial measure calculated and reported in accordance with GAA
Slide 28: 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 29: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 1 This supplemental is for net-debt-to-adjusted EBITDA ratio based on the bank covenant definition. 29
Slide 30: Diluted EPS
Diluted EPS 1Totals may not add due to rounding. 30
Slide 31: 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. 31
Slide 32: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Note: Corporate equity income relates to foreign exchange gains or losses of our Talison joint venture. 32
Slide 33: www.albemarle.com
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