Slide 1: Q3 2024 Earnings
Q3 2024 Earnings November 7, 2024 8:00am ET
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation, conference call and discussions that follow contain statements concerning our expectations, anticipations and beliefs regarding the future, which constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act o
Slide 3: Non-GAAP Measures
Non-GAAP Measures It should be noted that adjusted net income attributable to Albemarle Corporation common shareholders, adjusted diluted earnings per share attributable to common shareholders (“EPS”), non-operating pension and other post-employment benefit (“OPEB”) items per diluted share, non-recu
Slide 4: Q3 2024 results and key messages
Solid operational execution, demonstrated by Q3 2024 results: ▪ Net sales of $1.4B; volume growth Y/Y in Energy Storage (+16%) & Specialties (+4%) ▪ Adj. EBITDA1 of $211M; Y/Y growth in Specialties (+22%) and Ketjen (+134%) ▪ Cash from ops. of $241M; op. cash conversion of >100%2 ▪ Net debt to adjus
Slide 5: Q3 2024 Financial Summary
Q3 2024 Financial Summary (in millions, except per share amounts) Q3 2024 Q3 2023 Variance Net Sales $1,355 $2,311 -41% Net (Loss) Income Attributable to Albemarle Corporation ($1,069) $303 -453% Adjusted EBITDA1 $211 $653 -68% Adjusted EBITDA Margin1 16% 28% -1,200 bps Diluted EPS Attributable to C
Slide 6: Q3 Y/Y Adjusted EBITDA Bridges
Q3 Y/Y Adjusted EBITDA1 Bridges ($ in millions) $800 Q3 2024 vs 2023 Y/Y - Driver $600 $400 ▪ Favorable volumes and $653 $200 productivity more than offset ($346) $211 by lower prices and reduced $0 equity earnings due to soft ($200) market fundamentals, ($400) ($1,081) particularly in the lithium v
Slide 7: Maintaining Total Company 2024E Outlook Considerations
Maintaining Total Company 2024E Outlook Considerations1 The $12-15/kg scenario is expected to apply assuming current market prices persist for the balance Recent pricing Q4 2023 avg. H2 2023 avg. Observed Lithium Market Price Scenarios: of the year due to: (US$/kg LCE)2 $12-15 $20 $25 ▪ Enterprise-w
Slide 8: 2024 Commentary by Segment
2024 Commentary by Segment1 T O TA L C O M PA N Y ▪ FY 2024 net sales expected to be at the lower-end of the $12-15/kg outlook range due to lower lithium market pricing offset by contract performance ▪ Adj. EBITDA expected to be towards the middle of the $12-15/kg outlook range, driven by productivi
Slide 9: Financial and Operational Actions Provide Flexibility
Our Financial and Operational Actions Have Provided the Flexibility to Navigate Dynamic Business Conditions Capital Structure1 Total Liquidity: $3.4B1 $220 Other Credit Lines $3,570 Total Debt ▪ ~$1.7B of cash & cash equivalents1 $1,500 Revolver ▪ Full commercial paper capacity available for liquidi
Slide 10: Extended and Re-Shaped Covenant Waiver
Proactively Extended & Re-Shaped Existing Covenant Waiver to Bolster Financial Flexibility ▪ FY 2024 leverage expected to remain below waiver limits, even as lithium market prices decreased Covenant Waiver Leverage Limits1 further, due to execution on operational and financial levers 5.75x 5.5x 5.5x
Slide 11: Strong Focus on Cash Improvements Yielding Results
Strong Focus on Cash Operating Cash Flow Improvements Yielding Results Conversion1 ▪ Q3 operating cash flow conversion of >100%, driven by working capital 114% management ▪ FY 2024E cash conversion expected to be ~50%, at the high end of 94% historical average1, driven by: 1. Talison dividends, prim
Slide 12: Near-Term Market Conditions Remain Dynamic
Near-Term Market Conditions Remain Dynamic, Requiring Operational Agility Supply Demand ▪ Recent additional supply ▪ Grid demand outperforming, +36% curtailments both upstream and Y/Y YTD1, driven by installations in downstream US and China ▪ Non-integrated hard rock ▪ Battery costs nearing $100/kWh
Slide 13: Global EV Demand Growth +23% YTD, Led by China
Global EV Demand Growth +23% YTD, Led by China Global EV Sales1 China EV Sales1 Europe EV Sales1 North America EV Sales1 (in millions) 15 15 15 15 +23% 60% 20% 10% YTD 10 10 of Global +34% 10 of Global 10 of Global YTD 5 5 5 -1% 5 YTD +13% YTD 0 0 0 0 Jan Mar May Jul Sep Nov Jan Mar May Jul Sep Nov
Slide 14: Long-Term Lithium Demand Drivers Remain Intact
Long-Term Lithium Lithium-ion Battery Pack Price1 Lithium Demand Demand Drivers ($/kilowatt-hour, real 2023) by Application2 (MMt LCE) Remain Intact 2015-2030 2024-2030 500 Demand 450 3.3 ▪ Projected lithium demand CAGR 400 of 15-20% from 2024 to 2030 350 ▪ Battery technology evolving for Global avg
Slide 15: Progressing Comprehensive Review of Our Cost and Operating Structure
Q3 2024 Earnings Progressing Comprehensive Review of Our Cost and Operating Structure 15
Slide 16: New Operating Structure Drives Agility, Cost-Out & Competitiveness
New Operating Structure Drives Agility, Cost-Out & Long-Term Competitiveness Melissa Anderson Stacy Grant Netha Johnson Cynthia Lima Chief People and General Counsel, Chief Operations Officer Chief External Affairs and Transformation Officer Corporate Secretary and Communications Officer Leads globa
Slide 17: Broad Set of Actions Underway to Maintain Competitive Position
Broad Set of Actions Underway to Maintain our Long-term Competitive Position Optimizing Improving Reducing Enhancing Conversion Network Costs and Efficiency Capital Expenditures Financial Flexibility Actions Taken • Ramped in-flight projects to deliver • In January, announced proactive • Re-phased c
Slide 18: Ongoing Cost Efforts Enhance Competitiveness and Flexibility
Ongoing Cost Efforts Enhance Competitiveness and Flexibility January 2024 July 2024 October/November 2024 Initial actions to reduce cost Further asset and cost actions to Comprehensive review of cost and optimize cash flow enhance competitiveness and operating structure Capex reduction of On track S
Slide 19: Cost Structure Review Identified $300-400M of Cost Opportunity
Cost Structure Review Identified Robust Benchmarking of $300-400M of Cost Opportunity Non-Manufacturing Cost Benchmarked vs. peers in lithium, Non-Manufacturing specialty chemicals and integrated Manufacturing Cost Opportunity extraction industries Cost Opportunity Key levers Key levers Cost savings
Slide 20: Disciplined Capital Allocation to Maintain Core Assets
Disciplined Capital Allocation to Maintain Core, Industry-Leading Assets & Resources Driving Capital Expenditures Down >$800M Y/Y FY 2025E capital expenditures assume: $2.5 Other Growth Conversion Growth ▪ Continuing critical health, safety, environmental $2.1B Resources and site maintenance project
Slide 21: Maintaining Our Competitive Position and Driving Long-term Value Creation
Q3 2024 Earnings Maintaining Our Competitive Position and Driving Long-term Value Creation 21
Slide 22: Albemarle's Strategic Framework
Albemarle’s Strategic Framework Albemarle leads the world in transforming essential resources into the critical ingredients for modern living with people and planet in mind. Defining Our Performance Ambition Lead with Impact Purpose-Driven Growth Partner of Choice Stakeholder Value Providing Essenti
Slide 23: Harnessing Our Resilient Competitive Strengths
Harnessing Our Resilient Competitive Strengths to Navigate Market Conditions ▪ Diverse global portfolio of world-class resources, with vertical integration World-Class Resources ▪ Access to multiple large-scale, high-grade lithium and bromine resources ▪ Deep technical and operational know-how to tr
Slide 24: Solid Q3 results and summary
Solid Q3 results, including double-digit volume growth, Adj. EBITDA1 of $211M and op. cash conversion of >100% Maintaining FY 2024 total company outlook considerations due to enterprise-wide cost improvements, higher volumes project ramps, and contract performance Maintaining Long-term Continuing pr
Slide 25: Q4 2024 Investor Relations Events
Q4 2024 Investor Relations Events Nov 18-20 East Coast NDR Meredith Bandy, CFA VP, Investor Relations & Sustainability meredith.bandy@albemarle.com +1 980.999.5168 Dec 4-5 West Coast NDR Eran del Castillo Senior Manager, Investor Relations Dec 4 Deutsche Bank Lithium Conference eran.delcastillo@albe
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Slide 27: Appendix
\ Albemarle* Appendix
Slide 28: Specialties, Ketjen and Corporate Outlook Considerations
Specialties, Ketjen and Corporate Outlook Considerations FY 2024E Change vs Segments as of July 31, 2024 Previous Outlook Specialties Net Sales $1.3B – $1.5B ▬ Specialties Adj. EBITDA $210M – $260M ▬ Ketjen Net Sales $1.0B – $1.2B ▬ Ketjen Adj. EBITDA $130M – $150M ▬ Other Corporate Capital Expendit
Slide 29: Energy Storage Market Price Scenarios, FY 2024E
Energy Storage Market Price Scenarios, FY 2024E1 FY 2024E Assumptions: Avg Lithium Market Price (US$/kg LCE)2 Energy Storage ranges based Recent pricing Q4 2023 avg. H2 2023 avg. on projected volume increase of $12-15 $20 $25 20% to 25% Y/Y in 2024 Net Sales $3.2B - $3.4B $3.8B - $4.1B $4.5B - $4.9B
Slide 30: Illustrative Calculation of FY 2024E Adj. EPS
Illustrative Calculation of FY 2024E Adj. EPS at $12-15/kg Scenario $12-15/kg Scenario Low High Adjusted EBITDA1 $0.9B $1.2B - Pre-Tax Equity Income $1.1B $1.3B Assuming 30% AU tax rate - Interest Expenses $0.1B $0.2B - Depreciation and Amortization $0.6B $0.6B Pre-Tax (Loss) Income $(1.0)B $(0.9)B
Slide 31: Definitions of Non-GAAP Measures
Definitions of Non-GAAP Measures NON-GAAP MEASURE DESCRIPTION Adjusted Net Income Attributable to Net income after mandatory convertible preferred stock dividends before non-recurring, other unusual and non-operating pension and OPEB. Common Shareholders Adjusted Diluted EPS Attributable to Diluted
Slide 32: Adjusted Net Income
Adjusted Net Income ree o t s e Se tember Net (loss) income attributable to Albemarle Corporation (1, 8,99 ) ,5 Add back: Non operating pension and OPEB items (net of tax) ( ) 8 Non recurring and other unusual items (net of tax) 9 8, 1 19, Adjusted net (loss) income attributable to Albemarle Corpora
Slide 33: EBITDA and Adjusted EBITDA
EBITDA and Adjusted EBITDA ree o t s e Se tember o et o et sales sales Net income attributable to Albemarle Corporation (1, 8,99 ) ( 8.9) ,5 1 .1 Add back: nterest and financing expenses , .5 9, 1. ncome tax (benefit) expense 11 ,85 8. (8,551) ( . ) epreciation and amorti ation 1 ,5 1 .1 1 5, 5 . A
Slide 34: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 wel e o t s e ree o t s e Se Se ar ec A ste A E uity in net income of non indfield oldings unconsolidated investments (net of tax) (19, 1 ) (1, 9 ) ( ,88 ) ( ,8 1) ( ,1 1) ividends received from non indfield oldings unconsolidated investments 18,9 5 , 9, 1, 5 5, 8 o sol
Slide 35: Diluted EPS
Diluted EPS ree o t s e Se tember iluted (loss) earnings per share attributable to Albemarle Corporation common shareholders (9. 5) .5 Add back: Non operating pension and OPEB items (net of tax) Non recurring and other unusual items (net of tax) Restructuring charges and asset write offs .91 . 1 Ac
Slide 36: Effective Tax Rate
Effective Tax Rate oss come be ore i come ta es a e it i et i come o co soli ate come ta e e se ecti e i come ta i estme ts be e it rate ree mo t s e e Se tember As reported (1,1 8,8 ) 11 ,85 (9. ) Non recurring, other unusual and non operating pension and OPEB items 858,85 ( 9,5 5) As adjusted ( 19
Slide 37: Equity Income and Noncontrolling Interest
Equity Income and Noncontrolling Interest ree o t s e Se tember o co trolli g o co trolli g it come terest it come terest Energy Storage 1 , 9 ,51 Specialties (8, 1) (18,15 ) etjen 1, 9 , 51 Corporate 1 ,58 1 5, 8 ( ) Total Company 9, 58 (8, 51) , (18,1 ) Note: Corporate equity income relates to for
Slide 38: www.albemarle.com
NYSE www.albemarle.com \ Albemarle®