News
Albemarle Reports First-Quarter Sales Growth of 36%, Raising Guidance
May 4, 2022
First-Quarter 2022 and Recent Highlights
(Unless otherwise stated, all percentage changes represent year-over-year comparisons)
- Net sales of
$1.13 billion , an increase of 36%; Net sales increased 44% excluding Fine Chemistry Services (FCS) business sold inJune 2021 - Net income of
$253.4 million , or$2.15 per diluted share; Adjusted diluted EPS of$2.38 , an increase of 116% - Adjusted EBITDA of
$432 million , an increase of 88%; Adjusted EBITDA increased 107% excludingFCS business sold inJune 2021 - MARBL Lithium Joint Venture (MARBL) to start operation of the second train at MARBL Wodgina Lithium mine with first spodumene concentrate production expected in
July 2022 - Guidance for 2022 revised upward on increased prices in Lithium and Bromine businesses; Net sales are now expected to increase approximately 60-70% year over year and adjusted EBITDA now expected to increase approximately 100-140% year over year
"We achieved a strong start to the year by focusing on execution and building on the momentum we created in the second half of 2021," said Albemarle CEO
Outlook
Albemarle's outlook for 2022 has improved based on expectations of continued demand growth and tightness in the markets it serves. Net sales guidance was revised upward primarily due to continued strength in pricing in its Lithium and Bromine businesses. Adjusted EBITDA guidance is higher based on pricing expectations partially offset by inflationary cost pressures, particularly for natural gas in
FY 2022 Guidance |
||||||||||||
Net sales |
||||||||||||
Adjusted EBITDA |
||||||||||||
Adjusted EBITDA Margin |
33% - 36% |
|||||||||||
Adjusted Diluted EPS |
||||||||||||
Capital Expenditures |
First-Quarter Results
In millions, except per share amounts |
Q1 2022 |
Q1 2021 |
$ Change |
% Change |
|||||
Net sales |
$ 1,127.7 |
$ 829.3 |
$ 298.4 |
36.0% |
|||||
Net income attributable to |
$ 253.4 |
$ 95.7 |
$ 157.7 |
164.8% |
|||||
Adjusted EBITDA(a) |
$ 431.9 |
$ 230.1 |
$ 201.9 |
87.8% |
|||||
Diluted earnings per share |
$ 2.15 |
$ 0.84 |
$ 1.31 |
156.0% |
|||||
Non-operating pension and OPEB items(a) |
(0.04) |
(0.04) |
|||||||
Non-recurring and other unusual items(a) |
0.26 |
0.29 |
|||||||
Adjusted diluted earnings per share(a)(b) |
$ 2.38 |
$ 1.10 |
$ 1.28 |
116.4% |
(a) See Non-GAAP Reconciliations for further details. |
(b) Totals may not add due to rounding. |
Net sales of
Net income attributable to Albemarle of
Adjusted EBITDA of
The effective income tax rate for the first quarter of 2022 was 26.9% compared to 17.9% in the same period of 2021. The difference is largely due to global intangible low-taxed income and the geographic mix of earnings. On an adjusted basis, the effective income tax rates were 18.9% and 17.5% for the first quarter of 2022 and 2021, respectively.
Business Segment Results
Lithium Results
In millions |
Q1 2022 |
Q1 2021 |
$ Change |
% Change |
|||
$ 550.3 |
$ 279.0 |
$ 271.3 |
97.2% |
||||
Adjusted EBITDA |
$ 308.6 |
$ 106.4 |
$ 202.2 |
190.0% |
Lithium net sales of
Lithium Outlook
Adjusted EBITDA for the full year 2022 is expected to grow approximately 200-225% year over year, up from the previous outlook. Average realized pricing is now expected to be up approximately 100% year over year resulting from the renegotiated index-referenced variable price contracts and increased market pricing. Full-year 2022 volume is expected to be up +20-30% year over year (unchanged) primarily due to new capacity coming online. The revised outlook assumes the company's Q2 realized selling price remains constant for the remainder of the year. There is potential upside if market pricing remains at historically strong levels or if current contract renegotiations result in additional index-referenced, variable pricing. There is potential downside in the event of a material correction in lithium market pricing or potential volume shortfalls (e.g., delays in acquisitions or expansion projects).
Albemarle continues to progress the expansion of its global portfolio of conversion capacity and utilization of its world-class resource portfolio:
- La Negra III/IV conversion plant started up and is in commercial qualification; operations are progressing to plan
- Kemerton I conversion plant is in commissioning and is expected to achieve first product in May
- Kemerton II conversion plant remains on track for mechanical completion in the second half of 2022
- First production of spodumene concentrate from the first train at the MARBL Lithium Wodgina mine expected in May
- The start of the second train at Wodgina has been accelerated with first production of spodumene concentrate expected in July
- Acquisition of Qinzhou conversion plant continues to progress through the regulatory approval process and now is expected to close in the second half of this year
- Site preparation and early construction works have started at the Meishan greenfield project site, ahead of schedule
- Zhangjiagang greenfield project is in the engineering phase
- New wells and expansion projects at Silver Peak continue to progress ahead of schedule
Bromine Results
In millions |
Q1 2022 |
Q1 2021 |
$ Change |
% Change |
|||
$ 359.6 |
$ 280.4 |
$ 79.1 |
28.2% |
||||
Adjusted EBITDA |
$ 129.2 |
$ 94.6 |
$ 34.6 |
36.6% |
Bromine net sales of
Bromine Outlook
Adjusted EBITDA for the full year 2022 is expected to grow approximately 15-20% from 2021 based on higher volumes and pricing as a result of strength in demand for fire safety solutions in diverse end markets. Successful execution of growth projects in 2021 is expected to contribute to higher volumes in full-year 2022. Bromine's ongoing cost savings initiatives and favorable pricing are expected to offset higher freight and raw material costs.
Catalysts Results
In millions |
Q1 2022 |
Q1 2021 |
$ Change |
% Change |
|||
$ 217.9 |
$ 220.2 |
$ (2.4) |
(1.1)% |
||||
Adjusted EBITDA |
$ 16.9 |
$ 25.4 |
$ (8.5) |
(33.5)% |
Catalysts net sales of
Catalysts Outlook
Albemarle expects full-year 2022 adjusted EBITDA to be flat to down 65% year over year, down from the previous outlook due to continued volatility of natural gas pricing in
The strategic review of the Catalysts business is ongoing. The company expects to provide an update in the second quarter.
All Other
In millions |
Q1 2022 |
Q1 2021 |
$ Change |
% Change |
|||
$ — |
$ 49.6 |
$ (49.6) |
(100.0)% |
||||
Adjusted EBITDA |
$ — |
$ 21.5 |
$ (21.5) |
(100.0)% |
Other operations represent the
Balance Sheet and Liquidity
As of
Cash Flow and Capital Deployment
Cash from operations for the three months ended
Albemarle's primary capital allocation priorities are to invest in organic and inorganic opportunities to drive profitable growth, maintain its financial flexibility and Investment Grade credit rating, and fund its dividend.
The company expects to publish its 2021 sustainability report on
Earnings Call
Date: |
|
Time: |
|
Dial-in ( |
844-200-6205 |
Dial-in (International): |
929-526-1599 |
Passcode: |
277103 |
The company's earnings presentation and supporting material are available on Albemarle's website at https://investors.albemarle.com.
About Albemarle
Albemarle regularly posts information to www.albemarle.com, including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations,
Forward-Looking Statements
Some of the information presented in this 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, financial flexibility, expected growth, anticipated return on opportunities, earnings and demand for its products, productivity improvements, tax rates, stock repurchases, dividends, cash flow generation, costs and cost synergies, capital projects, future acquisition and divestiture transactions including statements with respect to timing, expected benefits from proposed transactions, market and economic trends, statements with respect to 2022 outlook and all other information relating to matters that are not historical facts may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Actual results could differ materially from the views expressed. Factors that could cause Albemarle's actual results to differ materially from the outlook expressed or implied in any forward-looking statement include, without limitation: changes in economic and business conditions; changes in financial and operating performance of its major customers and industries and markets served by it; the timing of orders received from customers; the gain or loss of significant customers; market correction in lithium market pricing; changes with respect to contract renegotiations; potential production volume shortfalls; competition from other manufacturers; changes in the demand for its products or the end-user markets in which its products are sold; limitations or prohibitions on the manufacture and sale of its products; availability of raw materials; increases in the cost of raw materials and energy, and its ability to pass through such increases to its customers; technological change and development, changes in its markets in general; fluctuations in foreign currencies; changes in laws and government regulation impacting its operations or its products; the occurrence of regulatory actions, proceedings, claims or litigation (including with respect to the
Consolidated Statements of Income (In Thousands Except Per Share Amounts) (Unaudited) |
|||
Three Months Ended |
|||
2022 |
2021 |
||
Net sales |
$ 829,291 |
||
Cost of goods sold |
678,698 |
565,604 |
|
Gross profit |
449,030 |
263,687 |
|
Selling, general and administrative expenses |
112,568 |
93,187 |
|
Research and development expenses |
16,083 |
14,636 |
|
Loss on sale of interest in properties |
8,400 |
— |
|
Operating profit |
311,979 |
155,864 |
|
Interest and financing expenses |
(27,834) |
(43,882) |
|
Other expense, net |
15,496 |
11,312 |
|
Income before income taxes and equity in net income of unconsolidated investments |
299,641 |
123,294 |
|
Income tax expense |
80,530 |
22,107 |
|
Income before equity in net income of unconsolidated investments |
219,111 |
101,187 |
|
Equity in net income of unconsolidated investments (net of tax) |
62,436 |
16,511 |
|
Net income |
281,547 |
117,698 |
|
Net income attributable to noncontrolling interests |
(28,164) |
(22,021) |
|
Net income attributable to |
$ 253,383 |
$ 95,677 |
|
Basic earnings per share |
$ 2.16 |
$ 0.85 |
|
Diluted earnings per share |
$ 2.15 |
$ 0.84 |
|
Weighted-average common shares outstanding – basic |
117,066 |
112,592 |
|
Weighted-average common shares outstanding – diluted |
117,653 |
113,330 |
Condensed Consolidated Balance Sheets (In Thousands) (Unaudited) |
|||
2022 |
2021 |
||
ASSETS |
|||
Current assets: |
|||
Cash and cash equivalents |
$ 463,325 |
$ 439,272 |
|
Trade accounts receivable |
658,733 |
556,922 |
|
Other accounts receivable |
71,225 |
66,184 |
|
Inventories |
1,013,793 |
812,920 |
|
Other current assets |
129,407 |
132,683 |
|
Total current assets |
2,336,483 |
2,007,981 |
|
Property, plant and equipment |
8,238,317 |
8,074,746 |
|
Less accumulated depreciation and amortization |
2,209,664 |
2,165,130 |
|
Net property, plant and equipment |
6,028,653 |
5,909,616 |
|
Investments |
937,619 |
897,708 |
|
Other assets |
240,279 |
252,239 |
|
1,575,617 |
1,597,627 |
||
Other intangibles, net of amortization |
297,407 |
308,947 |
|
Total assets |
$ 11,416,058 |
$ 10,974,118 |
|
LIABILITIES AND EQUITY |
|||
Current liabilities: |
|||
Accounts payable |
$ 845,710 |
$ 647,986 |
|
Accrued expenses |
667,610 |
763,293 |
|
Current portion of long-term debt |
503,795 |
389,920 |
|
Dividends payable |
46,091 |
45,469 |
|
Income taxes payable |
40,132 |
27,667 |
|
Total current liabilities |
2,103,338 |
1,874,335 |
|
Long-term debt |
1,985,696 |
2,004,319 |
|
Postretirement benefits |
43,397 |
43,693 |
|
Pension benefits |
217,820 |
229,187 |
|
Other noncurrent liabilities |
649,878 |
663,698 |
|
Deferred income taxes |
380,877 |
353,279 |
|
Commitments and contingencies |
|||
Equity: |
|||
Common stock |
1,171 |
1,170 |
|
Additional paid-in capital |
2,915,387 |
2,920,007 |
|
Accumulated other comprehensive loss |
(393,619) |
(392,450) |
|
Retained earnings |
3,303,661 |
3,096,539 |
|
Total |
5,826,600 |
5,625,266 |
|
Noncontrolling interests |
208,452 |
180,341 |
|
Total equity |
6,035,052 |
5,805,607 |
|
Total liabilities and equity |
$ 11,416,058 |
$ 10,974,118 |
Selected Consolidated Cash Flow Data (In Thousands) (Unaudited) |
|||
Three Months Ended |
|||
2022 |
2021 |
||
Cash and cash equivalents at beginning of year |
$ 439,272 |
$ 746,724 |
|
Cash flows from operating activities: |
|||
Net income |
281,547 |
117,698 |
|
Adjustments to reconcile net income to cash flows from operating activities: |
|||
Depreciation and amortization |
66,574 |
62,260 |
|
Loss on sale of interest in properties |
8,400 |
— |
|
Stock-based compensation and other |
4,245 |
2,560 |
|
Equity in net income of unconsolidated investments (net of tax) |
(62,436) |
(16,511) |
|
Dividends received from unconsolidated investments and nonmarketable |
39,168 |
4,950 |
|
Pension and postretirement benefit |
(4,250) |
(4,226) |
|
Pension and postretirement contributions |
(3,890) |
(15,329) |
|
Unrealized gain on investments in marketable securities |
1,469 |
(1,762) |
|
Loss on early extinguishment of debt |
— |
27,798 |
|
Deferred income taxes |
27,747 |
(19,384) |
|
Working capital changes |
(219,397) |
(49,185) |
|
Non-cash transfer of 40% value of construction in progress of Kemerton plant |
65,100 |
43,223 |
|
Other, net |
1,899 |
5,857 |
|
Net cash provided by operating activities |
206,176 |
157,949 |
|
Cash flows from investing activities: |
|||
Capital expenditures |
(231,698) |
(179,683) |
|
Sales of marketable securities, net |
3,751 |
5,245 |
|
Investments in equity and other corporate investments |
(146) |
(286) |
|
Net cash used in investing activities |
(228,093) |
(174,724) |
|
Cash flows from financing activities: |
|||
Proceeds from issuance of common stock |
— |
1,453,888 |
|
Repayments of long-term debt and credit agreements |
— |
(1,174,980) |
|
Proceeds from borrowings of credit agreements |
280,000 |
— |
|
Other debt repayments, net |
(166,615) |
(325,159) |
|
Fees related to early extinguishment of debt |
— |
(23,719) |
|
Dividends paid to shareholders |
(45,637) |
(41,130) |
|
Dividends paid to noncontrolling interests |
— |
(26,219) |
|
Proceeds from exercise of stock options |
419 |
1,183 |
|
Withholding taxes paid on stock-based compensation award distributions |
(10,422) |
(6,860) |
|
Other |
(126) |
(253) |
|
Net cash provided by (used in) financing activities |
57,619 |
(143,249) |
|
Net effect of foreign exchange on cash and cash equivalents |
(11,649) |
(16,841) |
|
Increase (decrease) in cash and cash equivalents |
24,053 |
(176,865) |
|
Cash and cash equivalents at end of period |
$ 463,325 |
$ 569,859 |
Consolidated Summary of Segment Results (In Thousands) (Unaudited) |
|||
Three Months Ended |
|||
2022 |
2021 |
||
Net sales: |
|||
Lithium |
$ 550,272 |
$ 278,976 |
|
Bromine |
359,579 |
280,447 |
|
Catalysts |
217,877 |
220,243 |
|
All Other |
— |
49,625 |
|
Total net sales |
$ 829,291 |
||
Adjusted EBITDA: |
|||
Lithium |
$ 308,615 |
$ 106,436 |
|
Bromine |
129,234 |
94,640 |
|
Catalysts |
16,910 |
25,427 |
|
All Other |
— |
21,479 |
|
Corporate |
(22,829) |
(17,928) |
|
Total adjusted EBITDA |
$ 431,930 |
$ 230,054 |
See accompanying non-GAAP reconciliations below.
Additional Information
It should be noted that adjusted net income attributable to
A description of other non-GAAP financial measures that Albemarle uses to evaluate its operations and financial performance, and reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP can be found on the following pages of this press release, which is also is available on Albemarle's website at https://investors.albemarle.com. The company does not provide a reconciliation of forward-looking non-GAAP financial measures to the most directly comparable financial measures calculated and reported in accordance with GAAP, as the company is unable to estimate significant non-recurring or unusual items without unreasonable effort. The amounts and timing of these items are uncertain and could be material to the company's results calculated in accordance with GAAP.
ALBEMARLE CORPORATION AND SUBSIDIARIES
Non-GAAP Reconciliations
(Unaudited)
See below for a reconciliation of adjusted net income attributable to
Three Months Ended |
|||
In thousands, except percentages and per share amounts |
2022 |
2021 |
|
Net income attributable to |
$ 253,383 |
$ 95,677 |
|
Add back: |
|||
Non-operating pension and OPEB items (net of tax) |
(4,139) |
(4,267) |
|
Non-recurring and other unusual items (net of tax) |
30,903 |
32,761 |
|
Adjusted net income attributable to |
$ 280,147 |
$ 124,171 |
|
Adjusted diluted earnings per share |
$ 2.38 |
$ 1.10 |
|
Weighted-average common shares outstanding – diluted |
117,653 |
113,330 |
|
Net income attributable to |
$ 253,383 |
$ 95,677 |
|
Add back: |
|||
Interest and financing expenses |
27,834 |
43,882 |
|
Income tax expense |
80,530 |
22,107 |
|
Depreciation and amortization |
66,574 |
62,260 |
|
EBITDA |
428,321 |
223,926 |
|
Non-operating pension and OPEB items |
(5,280) |
(5,465) |
|
Non-recurring and other unusual items (excluding items associated with interest expense) |
8,889 |
11,593 |
|
Adjusted EBITDA |
$ 431,930 |
$ 230,054 |
|
Net sales |
$ 1,127,728 |
$ 829,291 |
|
EBITDA margin |
38.0% |
27.0% |
|
Adjusted EBITDA margin |
38.3% |
27.7% |
See below for a reconciliation of adjusted EBITDA on a segment basis, the non-GAAP financial measure, to Net income attributable to
Lithium |
Bromine |
Catalysts |
Reportable |
All |
Corporate |
Consolidated |
% of |
||||||||
Three months ended |
|||||||||||||||
Net income (loss) attributable to |
$ 3,989 |
$ — |
22.5% |
||||||||||||
Depreciation and amortization |
38,526 |
12,673 |
12,921 |
64,120 |
— |
2,454 |
66,574 |
5.9% |
|||||||
Non-recurring and other unusual items |
8,400 |
— |
— |
8,400 |
— |
489 |
8,889 |
0.8% |
|||||||
Interest and financing expenses |
— |
— |
— |
— |
— |
27,834 |
27,834 |
2.5% |
|||||||
Income tax expense |
— |
— |
— |
— |
— |
80,530 |
80,530 |
7.1% |
|||||||
Non-operating pension and OPEB items |
— |
— |
— |
— |
— |
(5,280) |
(5,280) |
(0.5)% |
|||||||
Adjusted EBITDA |
$ 16,910 |
$ — |
$ (22,829) |
38.3% |
|||||||||||
Three months ended |
|||||||||||||||
Net income (loss) attributable to |
$ 74,630 |
$ 82,113 |
$ 12,916 |
$ 20,016 |
$ (93,998) |
$ 95,677 |
11.5% |
||||||||
Depreciation and amortization |
31,806 |
12,527 |
12,511 |
56,844 |
1,463 |
3,953 |
62,260 |
7.5% |
|||||||
Non-recurring and other unusual items |
— |
— |
— |
— |
— |
11,593 |
11,593 |
1.4% |
|||||||
Interest and financing expenses |
— |
— |
— |
— |
— |
43,882 |
43,882 |
5.3% |
|||||||
Income tax expense |
— |
— |
— |
— |
— |
22,107 |
22,107 |
2.7% |
|||||||
Non-operating pension and OPEB items |
— |
— |
— |
— |
— |
(5,465) |
(5,465) |
(0.7)% |
|||||||
Adjusted EBITDA |
$ 94,640 |
$ 25,427 |
$ 21,479 |
$ (17,928) |
27.7% |
Non-operating pension and OPEB items, consisting of mark-to-market actuarial gains/losses, settlements/curtailments, interest cost and expected return on assets, are not allocated to Albemarle's operating segments and are included in the Corporate category. In addition, the company believes that these components of pension cost are mainly driven by market performance, and the company manages these separately from the operational performance of the company's businesses. In accordance with GAAP, these non-operating pension and OPEB items are included in Other income (expenses), net. Non-operating pension and OPEB items were as follows (in thousands):
Three Months Ended |
|||
2022 |
2021 |
||
Interest cost |
$ 5,932 |
$ 5,428 |
|
Expected return on assets |
(11,212) |
(10,893) |
|
Total |
$ (5,280) |
$ (5,465) |
In addition to the non-operating pension and OPEB items disclosed above, the company has identified certain other items and excluded them from Albemarle's adjusted net income calculation for the periods presented. A listing of these items, as well as a detailed description of each follows below (per diluted share):
Three Months Ended |
|||
2022 |
2021 |
||
Acquisition and integration related costs(1) |
$ 0.01 |
$ 0.02 |
|
Loss on sale of interest in properties(2) |
0.07 |
— |
|
Loss on early extinguishment of debt(3) |
— |
0.20 |
|
Other(4) |
(0.01) |
0.06 |
|
Tax related items(5) |
0.19 |
0.01 |
|
Total non-recurring and other unusual items |
$ 0.26 |
$ 0.29 |
(1) |
Costs related to the acquisition, integration and divestitures for various significant projects, recorded in Selling, general and administrative expenses for the three months ended |
(2) |
Included in Loss on sale of interest in properties for the three months ended |
(3) |
Included in Interest and financing expenses for the three months ended |
(4) |
Other adjustments for the three months ended |
• Selling, general and administrative expenses - |
|
• Other income, net - |
|
Other adjustments for the three months ended |
|
• Selling, general and administrative expenses - |
|
• Other income, net - |
|
(5) |
Included in Income tax expense for the three months ended |
Included in Income tax expense for the three months ended |
See below 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 reported in accordance with GAAP (in thousands, except percentages).
Income before |
Income tax expense |
Effective income tax |
|||
Three months ended |
|||||
As reported |
$ 299,641 |
$ 80,530 |
26.9% |
||
Non-recurring, other unusual and non-operating pension and OPEB |
3,609 |
(23,155) |
|||
As adjusted |
$ 303,250 |
$ 57,375 |
18.9% |
||
Three months ended |
|||||
As reported |
$ 123,294 |
$ 22,107 |
17.9% |
||
Non-recurring, other unusual and non-operating pension and OPEB |
33,926 |
5,432 |
|||
As adjusted |
$ 157,220 |
$ 27,539 |
17.5% |
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SOURCE
Meredith Bandy, 980.999.5168
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