Slide 1: Albemarle Q4 2021 Earnings
Albemarle Q4 2021 Earnings Conference Call/Webcast Thursday, February 17, 2021 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, market trends, price, expected growth and earnings, demand for our products, capital proj
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 FY 2021 adj. EBITDA1 FY 2021 net sales $3.3B +11% $871M exceeded the high-end +13% in-line with Y/Y2 Y/Y2 of previous outlook previous outlook La Negra III/IV is in commercial qualification Improved FY 2022 outlook 2022 adj. EBITDA1,2 Kemerton I i
Slide 5: Met & Exceeded Strategic Objectives
Met & Exceeded Strategic Objectives 2021 OBJECTIVES UPDATES ✓ LAN III/IV and KEM I construction complete X KEM II on track for completion in H2 2022 Grow • Complete LAN III/IV (mid-2021) and KEM I/II (late 2021) ✓ Announced new Li expansion projects Profitably • Investment decisions on new expansion
Slide 6: Our Focus on Sustainability Has Earned Recognition
Our Focus on Sustainability Has Earned Recognition UN Global New Materiality New CDP Reporting: New Upgraded by New in 2021 in 2021 in 2021 in 2021 Compact Assessment Climate and Sustainalytics Signatory Aligned to UN SDGs Water 6th 4th 3rd 3rd Straight Straight Straight Straight Year Year Year Year
Slide 7: Pressure From Auto Industry to Accelerate Lithium Supply Growth
Pressure From Auto Industry to Accelerate Lithium Supply Growth Global EV Lithium Demand Cumulative Sales by Year1 Production / ALB Projections3 by Application3 (M units) Market Penetration2 (Mt LCE) (Mt LCE) 2021 vs. 2020: 2020-2025 CAGR: ~45% 3.5 2020-2025 6.0 +111% 3.2Mt 39.0% CAGR: ~25% 3.0 3.2M
Slide 8: Delivering Wave 2 Lithium Expansions in 2022
Delivering Wave 2 Lithium Expansions in 2022 La Negra III / IV Kemerton I / II ▪ Conversion of low-cost, high-quality Chilean brine ▪ Conversion of low-cost, high-quality Australian spodumene ▪ 40ktpa nameplate capacity – lithium carbonate ▪ 50ktpa nameplate capacity – lithium hydroxide ▪ 100% owned
Slide 9: Wave 3 Projects Defined and Accelerated to Meet Customer Needs
Wave 3 Projects Defined and 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 • Qinzhou
Slide 10: Wave 3 Projects Well-Aligned with Long-term Growth Strategy
Wave 3 Projects Well-Aligned with Long-term Growth Strategy Australia/Asia Resource & Conversion Qinzhou acquisition expected to close H1 2022: Resource ▪ Conversion plant designed to produce 25ktpa LCE JV Conversion ▪ Potential to expand to 50ktpa Chengdu New site ▪ Currently tolling to assist with
Slide 11: Leveraging Bromine Capital Project Excellence to Capture Growth
Leveraging Bromine Capital Project Excellence to Capture Growth Expansions driven by new product innovation, process development, and application testing facility Twinsburg, OH in Baton Rouge, LA ▪ +10% of annual revenue anticipated to be generated from new products by 2025 Magnolia, AR ▪ First comm
Slide 12: Q4 and FY 2021 Financial Summary
Q4 and FY 2021 Financial Summary (in millions, except per share amounts) Q4 2021 Q4 2020 Variance FY 2021 FY 2020 Variance Net Sales $894 $879 +2% $3,328 $3,129 +6% Net income attributable to Albemarle Corporation -$4 $85 -105% $124 $376 -67% Adjusted EBITDA1 $229 $221 +3% $871 $819 +6% Adjusted EBI
Slide 13: 2021 Adjusted EBITDA Bridge
2021 Adjusted EBITDA1 Bridge ($ in millions) <1 Q4 +12% 2 Net of FX FY +13% 3 4 Net of FX Note: Numbers may not reconcile due to rounding. 1 See appendix for non-GAAP reconciliations. 2 Excluding Q4 2020 FCS adjusted EBITDA of $17M 3 Excluding FY 2020 FCS adjusted EBITDA of $76M 4 Excluding FY2021 F
Slide 14: 2022 Guidance vs 2021
2022 Guidance vs 2021 Expect healthy double digit adj. EBITDA growth in all quarters 2022 Guidance FY 2022 FY 2021 vs • Q1 expected to be strongest Guidance As of February 17, 2022 FY 20212 adj. EBITDA quarter of the year Net Sales $3.3B $4.2B – $4.5B +30% to +40% • All three GBU’s benefit in Q1 fro
Slide 15: FY 2022: Strong Outlook Across Our Businesses
FY 2022: Strong Outlook Across Our Businesses As of February 17, 2022 • Lithium FY 2022 adj. EBITDA expected to be up 65%-85% Y/Y, improved from previous outlook • FY 2022 volume growth expected to be up 20-30% Y/Y due primarily to new capacity coming online from La Negra, Kemerton, and China, as we
Slide 16: Production Expected to Reach Full 200ktpa Capacity by H1 2025
Production Expected to Reach Full 200ktpa Capacity by H1 2025 250 Lithium Production1 (kt) ▪ Ramp includes Kings Mountain, Silver Lithium Carbonate Peak, Xinyu, Chengdu, La Negra, ~200 kt 200 Lithium Hydroxide Qinzhou, and Kemerton production ▪ Excludes potential production from China greenfields 15
Slide 17: Prioritizing Capital Allocation to Support Growth Strategy
Prioritizing Capital Allocation to Support Growth Strategy Invest to Grow Portfolio Maintain Financial Limited Share Profitably Management Flexibility Dividends Repurchases • Strategically grow lithium • Actively assess portfolio; • Committed to Investment • Continue to support our • Limited cash fl
Slide 18: Well-Positioned to Drive Sustainable Growth
Well-Positioned to Drive Sustainable Growth • Complete Wave 2 expansions & Qinzhou acquisition; year-end lithium nameplate capacity 200ktpa Grow • Achieve 50% capacity in new plants within 1 year of start-up Profitably • Increase 2022 adjusted EBITDA by 35% to 55% versus 2021 • Achieve procurement c
Slide 19: Lithium Overview
Lithium Overview As of February 17, 2022 Y/Y Q4 Performance Drivers Q4 2021 Performance • Net sales up 13% (price3 +18%, volume -5%); adjusted EBITDA up 13% (in millions) Q4 2021 Y/Y • Adjusted EBITDA benefited from favorable pricing Net Sales $405 13% • Sales volumes decreased primarily related to
Slide 20: Catalysts Overview
Catalysts Overview As of February 17, 2022 Y/Y Q4 Performance Drivers Q4 2021 Performance • Net sales up 2% (price3 +3%, volume -1%); adjusted EBITDA up 24% (in millions) Q4 2021 Y/Y • Adjusted EBITDA impacted by increased sales, partially offset by cost pressures Net Sales $199 2% • Higher input co
Slide 21: Bromine Overview
Bromine Overview As of February 17, 2022 Y/Y Q4 Performance Drivers Q4 2021 Performance • Net sales up 10% (price3 +16%, volume -6%); adjusted EBITDA flat Y/Y (in millions) Q4 2021 Y/Y • Favorable pricing driven by robust demand and tight market conditions Net Sales $290 10% • Increase in net sales
Slide 22: Q1 2022 Investor Relations Events
Q1 2022 Investor Relations Events Meredith Bandy, CFA VP, Investor Relations & Sustainability February 22-23 Baird Sustainability Conference meredith.bandy@albemarle.com +1 980.999.5168 March 8-9 RBC Chemical and Packaging Conference David Burke Director, Investor Relations david.burke@albemarle.com
Slide 23: Appendix
Appendix Non-GAAP Reconciliations 23
Slide 24: 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 25: 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.
Slide 26: 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.
Slide 27: 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 28: Adjusted EBITDA - Margin by Segment (three months ended December 31)
Adjusted EBITDA - Margin by Segment (three months ended December 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 mea
Slide 29: 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 30: 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 31: Adjusted EBITDA supplemental
Adjusted EBITDA supplemental1 1 This supplemental is for net-debt-to-adjusted EBITDA ratio based on the bank covenant definition.
Slide 32: Diluted EPS
Diluted EPS Totals may not add due to rounding
Slide 33: 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.
Slide 34: 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.
Slide 35: www.albemarle.com
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