Albemarle (ALB) Q4 2023 earnings summary

Executive summary

• FY 2023 net sales reached a record $9.6B, up 31% YoY, with sales volumes up 21%; adjusted EBITDA was $2.766B, or $3.370B excluding the $604M LCM charge.

• Cost, working-capital and investment measures were expected to unlock more than $750M in near-term cash flow while preserving long-term growth capacity.

Financial highlights

• Q4 net sales were $2.356B, down 10% YoY; net loss attributable to the corporation was $618M versus $1.132B net income in Q4 2022.

• Q4 adjusted EBITDA was a loss of $315M, or $289M excluding the $604M LCM charge; adjusted diluted EPS was a loss of $5.19, or $1.85 excluding LCM and the China tax valuation allowance.

• FY net income was $1.573B, down 42% YoY; adjusted diluted EPS was $15.22, or $22.25 excluding LCM and the China tax valuation allowance.

• FY cash from operations was $1.3B, down $748M YoY; capital expenditures were $2.1B, up $888M.

Outlook and guidance

• FY 2024 total sales and adjusted EBITDA scenarios: at $15/kg LCE, $5.5B–$6.2B and $0.9B–$1.2B; at $20/kg, $6.1B–$6.8B and $1.6B–$1.8B; at $25/kg, $6.9B–$7.6B and $2.3B–$2.6B.

• Energy Storage FY 2024 volumes are expected to rise 10%–20%; scenarios assume flat pricing through the current contract book and spodumene at 10% of LCE pricing.

• FY 2024 Energy Storage margins are expected to return to ~30%, with ~60% of segment sales in H2 as expansions ramp; H1 faces reduced Talison JV sales.

• FY 2024 outlook: capex $1.6B–$1.8B, adjusted tax rate 27%–28%, and interest and financing expense $180M–$220M.

• FY 2024 Specialties outlook is $1.3B–$1.5B sales and $270M–$330M adjusted EBITDA; Ketjen outlook is $1.0B–$1.2B sales and $130M–$150M adjusted EBITDA.