Albemarle Corporation · NYSE:ALB
Albemarle — Morgan Stanley Global Chemicals Conference 2010
28 slides from Albemarle's conference presentation, Nov 11, 2010
Slide 1: Morgan Stanley Global Chemicals Conference
Albemarle Morgan Stanley Global Chemicals Conference November 11, 2010 Mark Rohr Rohr, Chairman & CEO Luke Kissam, President Sandra Rodriguez, VP Investor Relations 1
Slide 2: Forward Looking Statement
Forward Looking Statement Portions of this presentation constitute forward-looking statements within the meaning g of the Private Securities Litigation g Reform Act of 1995. Although g Albemarle Corporation believes its expectations reflected in the presentation are based on reasonable assumptions w
Slide 3: Chemistry Solution Provider
Chemistry Solution Provider Global developer, manufacturer and marketer of highly-engineered specialty chemicals Serving Diverse End Markets Catalysts Food Safety Flame Retardants Mercury Emissions Reductions Pharmaceuticals Transportation Global Reach: Over 4,000 employees, 3,400 customers world-wi
Slide 4: Scale and Scope
S l and Scale d Scope S Amsterdam, The Netherlands Bergheim, Germany St. Jakob/Breitenau, Austria Beijing, China Moscow, Russia A Avonmouth, th UK Weifang South Haven, MI, USA City, China Seoul, Korea Louvain-la-Neuve, Belgium Yeosu, Sou Twinsburg, OH, USA th Korea Budapest, Hungary Tokyo, Japan Mag
Slide 5: Technological Advantage differentiates us from the pack
Technological Advantage….differentiates us from the pack What differentiates us from the pack? • Research and process development expertise that allow us to bring innovative technologies to the market more quickly and at a lower capital cost than our competitors • Ability to optimize multi-purpose a
Slide 6: 3 Strong Business Segments
3 Strong g Business Segments g Nine months ended September 30, 2010 Fine Chemistry Polymer Solutions Catalysts 24% 39% 37% • Bromine & Derivatives • Flame Retardants: • Hydroprocessing Brominated, Mineral, P Catalysts – HPC • Pharmaceuticals hosphorus • Fluidized Catalytic • Crop Protection • Antiox
Slide 7: Fine Chemistry
Fine Chemistry % of Sales, YTD Growth Drivers Net Sales • Expanding p g and diversifying y g uses of bromine continues 36% globally (Ex. food safety, mercury removal 64% products) $MM • Well positioned to capitalize on new crop protection products – flexible asset Performance Chemicals Fine Chemistr
Slide 8: Leading Bromine Position
Leading Bromine Position Tight Global Bromine Balance Driving Value 750,000 700 000 700,000 El Elemental t l Capacity C it Globally Positioned…. Positioned 650,000 • Arkansas 600,000 • Jordan-Dead Sea: JBC JV MT 550,000 500,000 Bromine Derivative g • Integrated Player y in the Chinese 450,000 Demand
Slide 9: Basics of Bromine
Basics of Bromine • Valuable Natural Resource – Very reactive, never found in elemental form – R Recovery iis capital i l and d energy intensive i i • Derivative production near Bromine supply – Presence of a waste or recycle stream – Transportation cost is high – product stewardship aspects Sources
Slide 10: Mercury Sorbents and B-PAC
Mercury Sorbents and B-PAC • Albemarle Sorbent has developed patented products for control of mercury emissions based on treatment of powdered activated carbon (PAC) with elemental bromine: Br2 + PAC B-PAC® • These products are injected into the flue gas system to oxidize/adsorb elemental mercury
Slide 11: Polymer Solutions
Polymer Solutions % of Sales, YTD Growth Drivers Net Sales • Current and sustained end-market recovery 24% • Continuing positive fire safety and electronic product d t design d i trends t d $MM 76% • Flame Retardant industry Stabilizers and Curatives Fire Safety structure rationalization Segment Inc
Slide 12: Fire Safety Solutions
Fire Safety Solutions Global FR Market Current Market Conditions $4 2 Billi $4.2 Billion Tight supply of bromine derivatives; sold-out position in some products Global focus on capacity rationalization Others in mineral flame retardants market shift to more economic resins Chlorinated Brominat
Slide 13: New Generation of Albemarle Sustainable Solutions
AN New GGeneration ti off Alb Albemarle l Sustainable Solutions First Earthwise Product • Non-Bioaccumulative • Non-Toxic • Decreased Waste Generation • Minimized Carbon Footprint “Saving g Lives, Protecting g the Planet” 12 13
Slide 14: Stabilizers and Curatives: Lead Position in China
Stabilizers and Curatives….. Lead Position in China Leader in Polymer Antioxidants – Est 50M MTs of Antioxidant Consumption by 2014, 0 , Focused ocused tec technical ca manufacturing a u actu g tea team,, Opt Optimal a pproduct oduct mix Leader in Lubricant Antioxidants – China Automotive and Heavy
Slide 15: Catalysts
Catalysts % of Sales, YTD Growth Drivers Net Sales • Lead merchant supplier to 25% fast growth single site/ metallocene polymers • Drive high margin additive solutions for refinery 75% environmental & niche $MM performance controls • Uniquely positioned to Polymer Catalysts Refinery Catalysts respon
Slide 16: Albemarle - A World Leading Catalysts Company
Albemarle - A World Leading Catalysts Company Total Catalysts Industry ~$15 Billion Worldwide Other Environmental Chemical 35% 25% Refinery Catalysts 19% 21% Polymer Catalysts ALB, Worlds Largest Supplier Worlds largest Merchant Supplier of Aluminum Leader in ultra-low sulfur & bio-diesel Alkyls, La
Slide 17: Refinery Catalysts Market
Refinery Catalysts Market • Refinery Output Decline From 2008-2009 Global Oil Demand Growth 2008-2010 Lead To Weakened Fundamentals: Global Utilizations Below 80%, Refinery Cl Closures; Margins M i To T < $1/bbl Customer’s Extending HPC Cycles To Limit • Nonetheless, Our Value Based Catalyst y S
Slide 18: FCC – Value Driven Technology
FCC – Value Driven Technology FCC Catalysts y p y 15 MM BBLS/Day FCC Capacity: y $1.1B Market 455 FCC Units WW • 1-3% / yr market growth • Primary Pi conversion i unit it for f many Albemarle refineries 27% • Cracks heavy oil fractions to lighter Others 18% products • Major contributor to refinery g
Slide 19: Setting the Stage in Refining
S i the Setting h Stage S in i Refining R fi i North North American Crude America Crude RunsRuns vs. versus Capacity Capacity, (MMB/D) MMB/D 21 20 Capacity USGC Refinery Net Margin 19 Forecast in Constant 2010 Dollars per Barrel 12 18 Crude Runs USGC Composite p Net Margin g 10 17 16 8 2000 2004 200
Slide 20: FCC: Increasing Refiner Margin by Improving Product Uplift
FCC IIncreasing FCC: i R Refiner fi M Margin i bby IImproving i P Product d tU Uplift lift Gas LPG Crude Crude distille C Oil Example: E l Naphtha • Major N America Refiner Gasoline • FCC On Resid Stream Middle er Distillate Goals: G l Kerosene • Min Low Value Bottoms • Max Gasoline Diesel • Max Lig
Slide 21: HPC – Covering Broad Range of Refining Needs
HPC – Covering Broad Range of Refining Needs HPC Catalysts HPC Capacity: 45 MM BBLS/Day $0.9B Market 2000 HPC Units WW • 33- % / yr market k t growth th • Primarily used to remove impurities Albemarle • Batch catalyst process –cycle length 1-3 yrs 32% • ALB’s focus on continuous product and Others p
Slide 22: HPC Catalysts – Cover a Huge World of Diversity
HPC Catalysts – Cover a Huge World of Diversity Gas LPG Crude Crrude distiller Oil Naphtha HPC Reform ULSG Gasoline Upgraded Heavy Oils Middle HPC ISOM HPC Di till t Distillate HPC Kerosene CCU ALKY ULSD Diesel Va Vacuum HPC FCC acuum distilller G Oil Gas “VGO” Fuel oil HPC HC* Albemarle HPC Inside
Slide 23: Catalysts for Biofuels: Step-out Opportunity
Catalysts for Biofuels: Step Step-out out Opportunity The US Renewable Fuels Standard (RFS) Other advanced biofuels (butanol, 40 biogas ethanol from wastes) biogas, • Gov’t mandates driving g demand Cellulosic Biofuel 36.0 • Pulling technology development 35 Biodiesel • The more desirable the feed s
Slide 24: Catalysts for Alternative / Bio Fuels
Catalysts for Alternative / Bio Fuels Molecule Feedstock Technologies Trans Esterification Esterification, Vegetable oils Hydroprocessing Cellulose Hydroprocessing, * Pyrolysis More Complex To Process Hemi cellulose Pyrolysis * Lignin Pyrolysis, Gasification Gasification Coal Liquefaction 24 * Also
Slide 25: Strong Financial Performance: Record Quarterly Profits 3rd Qtr 2010
Strong Financial Performance…. Record Quarterly Profits 3rd Qtr 2010 Revenues EBITDA* $ MM Diluted EPS* Cash & Cash Equivalents, Dec 31 *Amounts exclude special items and non-recurring tax adjustments 25
Slide 26: High Level Of Cash Generation
High Le Level el Of Cash Generation $425 million in cash and equivalents q as of September p 30, 2010 • Net debt to cap ratio of 19% • Roughly $350 million of liquidity under low-cost bank revolver • No significant debt maturities until 2013 Uses off C Cash Growth opportunities: Return to Shareholde
Slide 27: Vision 2012
Vision 2012 Segment Income Areas of Margin Targets Focus • New bromine applications in emerging markets (ex. mercury removal, food safety) Fine Chemistry 17-19% • Success in China strategy • Continued growth in FCS pipeline • Structural & strategic productivity improvements Polymer Solutions 17-19%
Slide 28: Albemarle ALB NYSE
R\WALBEMARLE® ALB NYSE
Albemarle — Morgan Stanley Global Chemicals Conference 2010 on 6ix