Albemarle Corporation · NYSE:ALB
Albemarle — Q1 2018 Earnings Presentation
27 slides from Albemarle's earnings presentation, May 10, 2018
Slide 1: First Quarter 2018 Earnings and Non-GAAP Reconciliations
Albemarle Corporation First Quarter 2018 Earnings and Non-GAAP Reconciliations Conference Call/Webcast Thursday, May 10th, 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, changes in productivity, market trends, price, expected growth and earnings, demand for o
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 1Q18 year-over-year profit growth driven by 38% Lithium sales growth Completed sale of Polyolefin Catalyst & Components for $416 million on April 3, 2018 Intent to buy back $250 million in shares via Accelerated Share Repurchase Program Wave I lithium expansion projects remain on schedu
Slide 5: First Quarter 2018 Financial Highlights
First Quarter 2018 Financial Highlights Q1 2018 Results vs Prior Year Net Sales $822 million +14% Adjusted $249 million +18% EBITDA1 Adjusted $1.30 +24% Diluted EPS1 Growth driven by volume and price growth in Lithium, lower corporate costs and favorable currency impact 1 Non-GAAP measure. See Non-G
Slide 6: Expanding Lithium Conversion Capacity in High Quality Resources
Expanding Lithium Conversion Capacity in High Quality Resources All figures in kt LCE and represent only lithium nameplate conversion capacity Hydroxide 265 60 Carbonate 40 Hydroxide 165 40 Carbonate 40 Hydroxide 65 20 2 2017 Nameplate Xinyu II La Negra III / IV Kemerton I / II Wave I Chile V / VI K
Slide 7: Lithium Demand Outlook – Thoughtful & Comprehensive Approach
Lithium Demand Outlook – Thoughtful & Comprehensive Approach 2025 EV and Lithium Outlook1 Demand Buildup by Application 20% 2017 ’17 – ’25 2025 Applications Demand CAGR Demand Transportation 50 35% 550 ALB Outlook Consumer Electronics2 60 8% 110 15% All Other/Industrial 110 3 – 4% 140 EV Penetration
Slide 8: Segment Quarterly Highlights
Segment Quarterly Highlights TTM1 Net Sales ($ in millions) TTM1 Adj. EBITDA2 and ($ in millions) $1,000 Adj. EBITDA Margin2 30% $3,250 28% $900 $3,000 25% $800 $2,750 23% $700 20% $2,500 1Q17 2Q17 3Q17 4Q17 1Q18 2 1Q17 2Q17 3Q17 4Q17 1Q18 Adjusted EBITDA Adjusted EBITDA Margin 2 Core Business Lithi
Slide 9: First Quarter 2018 Adjusted EBITDA Bridge
First Quarter 2018 Adjusted EBITDA1 Bridge Q1 2018: Adjusted EBITDA1 growth of $37 million, 18% yoy ($ in millions) $260 7 31 1 249 $240 2 $220 211 $200 $180 $160 1Q 2017 Lithium Bromine Specialties Catalysts Corporate & Other 1Q 2018 1 Non-GAAP measure. See Non-GAAP reconciliations in Appendix. Bri
Slide 10: Lithium
Lithium Q1 2018 Performance Historical Trend (TTM) ($ in millions) Q1 2018 Q1 2017 ∆ $500 50% Net Sales $298 $216 38% $400 40% Net Sales ex FX1 $287 33% Adj. EBITDA2 $131 $100 31% $300 30% Adj. EBITDA ex FX1 $130 30% $200 20% Adj. EBITDA Margin2 44% 46% (222 bps) 1Q17 2Q17 3Q17 4Q17 1Q18 Adj. EBITDA
Slide 11: Bromine Specialties
Bromine Specialties Q1 2018 Performance Historical Trend (TTM) ($ in millions) Q1 2018 Q1 2017 ∆ $300 35% Net Sales $226 $219 3% $250 30% Net Sales ex FX1 $221 1% $200 25% Adj. EBITDA2 $70 $68 2% $150 20% Adj. EBITDA ex FX1 $66 (3%) Adj. EBITDA Margin2 31% 31% (24 bps) $100 15% 1Q17 2Q17 3Q17 4Q17 1
Slide 12: Catalysts
Catalysts Q1 2018 Performance Historical Trend (TTM) ($ in millions) Q1 2018 Q1 2017 ∆ $350 35% 30% Net Sales $261 $254 3% $300 25% Net Sales ex FX1 $256 1% 20% Adj. EBITDA2 $68 $70 (3%) $250 15% Adj. EBITDA ex FX1 $69 (2%) $200 10% Adj. EBITDA Margin2 26% 28% (149 bps) 1Q17 2Q17 3Q17 4Q17 1Q18 Adj.
Slide 13: Cash Flow and Net Debt
Cash Flow and Net Debt Three Months Ended March 31 Selected Financial Metrics ($ in millions) ($ in millions) (as of 03/31/2018) 2018 2017 Dividends Paid: $35 Net Cash from Operations $122 $83 Dividend Growth (Y/Y)2: 5% Less: Capital Expenditures Cash Balance: $692 (132) (54) Gross Debt3: $1,476 Add
Slide 14: Full Year 2018 Business Guidance vs 2017
Full Year 2018 Business Guidance vs 2017 Prior Updated GBU Business Environment Outlook Outlook • FY 2018 Adj. EBITDA1 expected to increase by greater than 20% compared to 2017 • Expect 1H 2018 to be similar to 2H 2018; 3Q 2018 possibly lower than 4Q due to La Lithium Negra expansion tie-in • Favora
Slide 15: www.albemarle.com
‘\ ALBEMARLE’ NYSE www.albemarle.com 15
Slide 16: Appendix
Appendix Non-GAAP Reconciliations and Supplemental Information
Slide 17: Adjusted Net Income Attributable to Albemarle Corporation
Adjusted Net Income Attributable to Albemarle Corporation Three Months Ended March 31, ($ in thousands) 2018 2017 Net income attributable to Albemarle Corporation $ 131,760 $ 51,213 Add back: Non-operating pension and OPEB items (net of tax) (1,866) (810) Non-recurring and other unusual items (net o
Slide 18: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA Three Months Ended March 31, ($ in thousands) 2018 2017 Net income attributable to Albemarle Corporation $ 131,760 $ 51,213 Add back: Interest and financing expenses 13,538 68,513 Income tax expense 20,361 11,971 Depreciation and amortization 50,330 45,070 EBITDA 215,989 1
Slide 19: Adjusted EBITDA - by Segment (three months ended March 31)
Adjusted EBITDA - by Segment (three months ended March 31) Reportable ($ in thousands) Lithium Bromine Specialties Catalysts Segments Total All Other Corporate Consolidated Total Three months ended March 31, 2018: Net income (loss) attributable to Albemarle Corporation $ 108,334 $ 59,536 $ 55,660 $
Slide 20: Adjusted EBITDA - Margin by Segment (three months ended March 31)
Adjusted EBITDA - Margin by Segment (three months ended March 31) Reportable ($ in thousands) Lithium Bromine Specialties Catalysts Segments Total All Other Consolidated Total Three months ended March 31, 2018: Net sales $ 298,032 $ 225,639 $ 260,717 $ 784,388 $ 37,165 $ 821,629 Net income (loss) at
Slide 21: Adjusted EBITDA - Continuing Operations (twelve months ended)
Adjusted EBITDA - Continuing Operations (twelve months ended) Twelve Months Ended ($ in thousands) Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Continuing Operations Net income attributable to Albemarle Corporation $ 466,702 $ 884,856 $ 875,306 $ 54,850 $ 135,397 Depreciation and
Slide 22: Adjusted EBITDA - by Segment (twelve months ended)
Adjusted EBITDA - by Segment (twelve months ended) Twelve Months Ended ($ in thousands) Mar 31, 2017 Jun 30, 2017 Sep 30, 2017 Dec 31, 2017 Mar 31, 2018 Lithium Net income attributable to Albemarle Corporation $ 232,120 $ 271,810 $ 314,707 $ 342,992 $ 373,712 Depreciation and amortization 86,439 85,
Slide 23: EBITDA supplemental
EBITDA supplemental1 Twelve Months ($ in thousands) Ended Three Months Ended Mar 31, 2018 Mar 31, 2018 Dec 31, 2017 Sep 30, 2017 Jun 30, 2017 Adjusted EBITDA $ 922,822 $ 248,718 $ 245,780 $ 209,383 $ 218,941 Net income attributable to noncontrolling interests 40,339 7,165 11,295 11,523 10,356 Equity
Slide 24: Diluted EPS
Diluted EPS Three Months Ended March 31, 2018 2017 Diluted earnings per share attributable to Albemarle Corporation $ 1.18 $ 0.45 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 Restru
Slide 25: 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 March 31, 2018: As reported $ 138,609 $ 20,361 14.7% Non-recurring, other unusual and non-operating pension and OPEB i
Slide 26: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest Three Months Ended March 31, 2018 2017 Noncontrolling Noncontrolling ($ in thousands) Equity Income Interest Equity Income Interest Lithium $ 16,190 $ — $ 14,257 $ — Bromine Specialties — (7,149) — (11,424) Catalysts 4,487 — 6,914 — Corporate — (16) (20) Tot
Slide 27: www.albemarle.com
‘\ ALBEMARLE’ NYSE www.albemarle.com 27