Slide 1: Albemarle Q3 2022 Earnings
Albemarle Q3 2022 Earnings Conference Call/Webcast Thursday, November 3, 2022 9:00am ET 1
Slide 2: Forward-Looking Statements
Forward-Looking Statements Some of the information presented in this presentation, the 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, fi
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: Delivering EBITDA Growth and Free Cash Flow
Delivering EBITDA Growth and Free Cash Flow Q3 2022 net sales Q3 2022 adj. EBITDA1 $2.1B +152% $1.2B +447% vs prior year vs prior year • Completed acquisition of the Qinzhou lithium conversion plant • Kemerton II lithium conversion plant achieved mechanical completion 2022 adj. EBITDA • Realigning c
Slide 5: Q3 2022 Financial Summary
Q3 2022 Financial Summary (in millions, except per share amounts) Q3 2022 Q3 2021 Variance Net Sales $2,092 $831 +152% Net income attributable to Albemarle Corporation $897 $(393) Adjusted EBITDA1 $1,190 $218 +447% Adjusted EBITDA Margin1 57% 26% Diluted EPS $7.61 $(3.36) Non-operating pension and O
Slide 6: Q3 2022 Adjusted EBITDA Bridge
Q3 2022 Adjusted EBITDA1 Bridge ($ in millions) +447% Net of FX Note: Numbers may not reconcile due to rounding. 1 See appendix for non-GAAP reconciliations. 6
Slide 7: Tightening 2022 Guidance
Tightening 2022 Guidance Previous Revised Revised FY 2022 FY 2022 Guidance FY 2022 Guidance FY 2021 As of Nov 2, 2022 (as of August 3, 2022) Guidance vs FY 2021 Net Sales $3.3B $7.1B – $7.5B $7.1B – $7.4B +115 to 125% Adj. EBITDA $871M1 $3.2B – $3.5B $3.3B – $3.5B +280 to 300% Adj. EBITDA Margin 26.
Slide 8: FY 2022: Outlook by GBU
FY 2022: Outlook by GBU • Reaffirming Lithium outlook: o Lithium FY 2022 adj. EBITDA expected to be up 500-550% Y/Y o Average realized pricing growth is expected to be 225-250% Y/Y resulting from previously renegotiated contracts and increased market pricing o FY 2022 volume growth is expected to be
Slide 9: Lithium Contracts Offer Leverage to Strong Market Prices
Lithium Contracts Offer Leverage to Strong Market Prices Contracting Approach Continues to Evolve 2 Battery Grade Revenues ~15% spot (at the time of purchase order) Majority of volumes sold under long-term contracts (typically 2-5 years duration) with strategic customers ~65% index-referenced,
Slide 10: Executing Our Strategy to Deliver Volumetric Growth
Executing Our Strategy to Deliver Volumetric Growth 250 Potential Tolling Technical Grade Spodumene Lithium Carbonate +/- Volume increases reflect Lithium Hydroxide +/- 200 expansions at Silver Peak, La 2022 volume +/- Negra, Kemerton, and Qinzhou +20-30% Y/Y 150 Technical-grade spodumene sales
Slide 11: Strong Financial Position and Ample Liquidity
Strong Financial Position and Ample Liquidity (As of 9/30/22,$M) FY 2022E NET CASH FROM CAPITAL EXPENDITURES OPERATIONS $1.45-1.65B LEVERAGE1 (x) ($M) $4,000 2.3x • Committed to maintaining Investment $1.3 -$1.4B Grade credit rating $3,000 • Recent $1.7B debt issuance strengthens liquidity and reduc
Slide 12: Continued Growth in a Turbulent Macro Environment
Continued Growth in a Turbulent Economic Conditions Vary By Segment Macro Environment Lithium • Expect continued secular growth related to the shift to clean transportation supported by OEM EV investments and public policy 2022E Forecast Cost • Key economic indicators include global EV production Br
Slide 13: Prioritizing Capital Allocation to Support Growth Strategy
Prioritizing Capital Allocation to Support Growth Strategy Invest to Grow Portfolio Maintain Financial Dividends & Share Profitably Management Flexibility Repurchases • Strategically grow lithium • Actively assess portfolio; • Committed to Investment • Continue to support our and bromine capacity to
Slide 14: Catalysts Strategic Review Decision & Reshaping Core Portfolio
Catalysts Strategic Review Decision & Reshaping Core Portfolio Catalysts Update New Core Portfolio Segmentation Strategic review concluded Reshaping core portfolio with a stronger Albemarle to retain the business as a focus on multiple growth opportunities wholly owned subsidiary Combination
Slide 15: Building Conversion Capacity to Leverage World-class Resources
Building Conversion Capacity to Leverage World-class Resources 450-500 ktpa Estimated Lithium Nameplate Conversion Capacity1 100% basis, Carbonate figures on ktpa LCE basis, hydroxide figures on ktpa LiOH basis Zhangjiagang Other APAC Expansions North American Conversion EU Conversion Meishan I/II K
Slide 16: Albemarle Well-Positioned to Provide US Lithium Supply
Albemarle Well-Positioned to Provide US Lithium Supply 2030 US EV Li Demand @50% EV Penetration1 Inflation Reduction Act (IRA) encourages domestic EV 600 supply chain investment Credits for sourcing of critical 400kt minerals extracted or processed in 400 Gap US Megaflex U.S. / Free Trade Agreemen
Slide 17: Key Takeaways
Significant FY 22 Growth Expected: ~$7.1-7.4B in Revenue (>2x 2021); ~$3.3-3.5B in Adj. EBITDA (3.7x 2021); ~$1.45-1.65B in Cash from Operations (>4x 2021) Financial flexibility to deliver profitable growth, maintain Investment Grade credit rating, and support our dividend Key Positioned for continu
Slide 18: Lithium Overview
Lithium Overview Y/Y Q3 Performance Drivers Q3 2022 Performance • Net sales up 318% (price1 +298%, volume +20%); adjusted EBITDA +786% • Increased sales due to renegotiated fixed and index-referenced variable price contracts and (in millions) Q3 2022 Y/Y increased market pricing Net Sales $1,501 +31
Slide 19: Bromine Overview
Bromine Overview Y/Y Q3 Performance Drivers Q3 2022 Performance • Net sales up 28% (price1 +18%, volume +10%); adjusted EBITDA +24% • Favorable pricing driven by robust demand and tight market conditions (in millions) Q3 2022 Y/Y • Increase in net sales partially offset by higher costs for raw mater
Slide 20: Catalysts Overview
Catalysts Overview Y/Y Q3 Performance Drivers Q3 2022 Performance • Net sales up 22% (price1 5%, volume 17%); adjusted EBITDA down 86% • Adjusted EBITDA declined as increased sales were offset by cost pressures including (in millions) Q3 2022 Y/Y natural gas and raw materials Net Sales $236 +22% Net
Slide 21: Q4 2022 Investor Relations Events
Q4 2022 Investor Relations Events Nov 9 Baird Global Industrials Conference Meredith Bandy, CFA VP, Investor Relations & Sustainability meredith.bandy@albemarle.com Dec 6 BMO Growth & ESG Conference +1 980.999.5168 Brook Wootton, IRC Dec 7 Deutsche Bank Lithium & Battery Materials Conference Senior
Slide 22: Appendix
Appendix Non-GAAP Reconciliations 22
Slide 23: 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 24: 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. 24
Slide 25: 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. 25
Slide 26: Adjusted EBITDA – by Segment (three months ended September 30)
Adjusted EBITDA – by Segment (three months ended September 30) 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 reporti
Slide 27: Adjusted EBITDA - Margin by Segment (three months ended September 30)
Adjusted EBITDA - Margin by Segment (three months ended September 30) 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 me
Slide 28: Adjusted EBITDA - Continuing Operations (twelve months ended)
Adjusted EBITDA - Continuing Operations (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
Slide 29: 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 30: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 1 This supplemental is for net-debt-to-adjusted EBITDA ratio based on the bank covenant definition. 30
Slide 31: Diluted EPS
Diluted EPS 1Totals may not add due to rounding. 31
Slide 32: 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. 32
Slide 33: 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. 33
Slide 34: www.albemarle.com
NALBEMARLE’ NYSE www.albemarle.com