No bad stock

Albemarle Corporation
CEO : Mr. Jerry Kent Masters Jr.

Quarterly earnings growth(YoY,%)

Scott Tozier says,

Q4 2022 Performance

• Net sales for Q4 2022 increased by 193% YoY, primarily driven by Lithium segment with increases in bromine as well.
• Net income attributable to Albemarle was $1.1 billion for Q4 2022, while diluted EPS was a record $9.60, beating the previous full year EPS record in 2018.
• Adjusted EBITDA for Q4 2022 was over $1.2 billion, up almost 5.5 times YoY, primarily driven by higher lithium prices and increased volumes.

Full Year 2023 Guidance

• Expected strong sequential sales growth in 2023.
• Adjusted EBITDA is expected to be approximately 20% to 45% higher than 2022, with positive trends in all three businesses.
• Net cash from operations is expected to rise between 10% and 25% over 2022, with the company expected to remain free cash flow positive.
• All three business segments are looking at healthy growth rates during the year.

Margins

• Energy Storage EBITDA margins were 65% in 2022 and expected to normalize to around 46% to 47% in 2023.
• Accounting treatment of the MARBL joint venture impacts reported margins.
• EBITDA margins are impacted by tax expense at the Talison joint venture.

Capital Expenditures Outlook

• Capital investment expected to increase from about $1.7 billion to $1.9 billion in 2023 to about $4 billion to $4.4 billion in 2027.
• About half the increase in capital expense relates to geographic diversification to support customer demand for regional lithium conversion and supply.
• Expect to invest more in technology to produce advanced energy storage materials for next-generation batteries.
• Expect to invest in additional resource development.

Market Update and Closing Remarks

• Expect to see net sales increase sequentially quarter-to-quarter as volumes ramp up.
• Anticipate that margin rates will moderate as they progress through the year.
• Investments are expected to generate strong returns, allowing the company to continue to invest to support customers while generating significant free cash flow.

Kent Masters says,

Expected Robust Demand for EVs in China

• Expectation of 40% YoY growth in EV sales in China, an increase of nearly 3 million vehicles
• Phasing out of subsidies expected to have limited impact on demand
• Continued municipal incentives and consumer preferences support a strong demand outlook for EVs
• Contract customers are not slowing down their ordering patterns
• Early indications are that cathode and battery inventory in China are decreasing, which is a good sign for lithium sales

Disciplined Growth Strategy

• Managing the tremendous growth opportunity that is in front of Albemarle
• Leveraging durable competitive advantages like world-class resources, global asset portfolio, and technical know-how to continue to grow
• Disciplined approach to building leadership position, particularly when it comes to scaling lithium production and conversion
• Intend to accelerate growth profitably and in ways that align with customer needs

Leadership Opportunities in Four Key Areas

• Albemarle’s strength in transforming resources into essential elements gives outstanding leadership opportunities in four key areas: mobility, energy, connectivity, and health
• Customer-focused innovations and sustainability are essential to Albemarle’s future
• Working to fulfill the purpose of enabling a more resilient world

Q & A sessions,

Qinzhou Operations and Expansion

• The Qinzhou facility is currently operating and will ramp up over the next year to reach full capacity (25,000 tons)
• Make rights need to be done, which will require taking the facility down temporarily
• There is potential for expansion at Qinzhou, but it is not currently being executed

Kemerton Projects

• Kemerton Train 1 is currently operating and making product
• Kemerton Train 2 is not yet operational and is approximately six months behind Train 1
• The commissioning and implementation of the Kemerton projects have been sequenced due to labor challenges during the pandemic
• The projects are planned to ramp from start-up to full capacity over a two-year period
• The company is currently seeking qualification from customers before selling the products made at Kemerton