Overview

Albemarle Corporation is a world leader in transforming essential resources into critical ingredients for mobility, energy, connectivity, and health. The company’s purpose is to enable a more resilient world by partnering to pioneer new ways to move, power, connect, and protect. Albemarle serves end markets including grid storage, automotive, aerospace, conventional energy, electronics, construction, agriculture, pharmaceuticals, and medical devices.

Albemarle believes its world-class resources, leading process chemistry, high-impact innovation, customer focus, and commitment to people and the planet will enable it to maintain a leading position in the industries it operates in. Secular trends like the growth of electric vehicles and renewable energy are driving strong demand in Albemarle’s end markets, which the company is well-positioned to capitalize on.

First Quarter 2025 Highlights

• Albemarle’s board declared a quarterly dividend of $0.405 per share in February 2025.
• The company received a $350 million prepayment from a customer for future deliveries of spodumene and lithium salts.
• Net sales were $1.1 billion, with Specialties volumes growing 11% year-over-year and improved adjusted EBITDA in Specialties and Ketjen.
• Cash flows from operations increased 457% to $545.4 million compared to the prior year.

Outlook

Albemarle sees a diverse set of opportunities and challenges in the markets it serves. The global market for lithium batteries and energy storage, particularly for electric vehicles, remains strong, providing opportunities to develop innovative products. Other markets present various opportunities for value and growth as Albemarle manages the impact of factors like trade policies, global growth, currency volatility, and environmental regulations.

Despite recent downward pressure on lithium prices, Albemarle believes its long-term business fundamentals are sound and that it is strategically well-positioned. The company has taken actions to optimize its cost structure and strengthen financial flexibility, including restructuring activities and reducing capital expenditures.

Segment Performance

Energy Storage

• Net sales decreased 35% year-over-year due to lower lithium carbonate and hydroxide market pricing.
• Adjusted EBITDA decreased 6% due to unfavorable pricing impacts, partially offset by savings from restructuring and productivity improvements.
• Albemarle has stopped construction of Kemerton Trains 3 and 4 and put Kemerton Train 2 and the Chengdu, China conversion facilities into care and maintenance.

Specialties

• Net sales increased 2% due to higher sales volumes, partially offset by unfavorable pricing impacts and currency translation.
• Adjusted EBITDA increased 30% due to higher sales volumes, lower input costs, and savings from restructuring and productivity improvements.

Ketjen

• Net sales decreased 5% due to lower sales volume, partially offset by favorable pricing impacts.
• Adjusted EBITDA increased 76% due to favorable product mix, primarily in the clean fuel technologies business, and lower manufacturing costs.

Corporate

• Adjusted EBITDA decreased 163% due to unfavorable currency exchange impacts and reduced expenses from cost reduction efforts.

Financial Condition and Liquidity

Albemarle’s principal uses of cash include capital investments, working capital, debt service, pension contributions, dividends, and share repurchases. The company anticipates that cash on hand, cash from operations, proceeds from divestitures, and borrowings will be sufficient to fund its needs for the foreseeable future.

During the first quarter of 2025, Albemarle generated $545.4 million in cash flows from operations, a 457% increase from the prior year. This was primarily due to the $350 million customer prepayment and improved earnings in Specialties and Ketjen, partially offset by decreased earnings in Energy Storage.

Capital expenditures were $182.6 million in the first quarter and are expected to be $700-$800 million for the full year 2025, down from $1.7 billion in 2024. The lower capital spending reflects Albemarle’s efforts to unlock cash flow and enhance financial flexibility.

Albemarle had $1.5 billion in cash and cash equivalents as of March 31, 2025, with $1.0 billion held by foreign subsidiaries. The company believes it has the financial flexibility to fund future growth initiatives, with access to cash on hand, operating cash flows, and additional debt or equity financing as needed.

Risks and Challenges

Albemarle faces several risks and challenges, including:

• Changes in monetary policies, inflation, or interest rates that could impact its ability to raise capital or increase costs.
• Volatility and uncertainties in debt and equity markets.
• Technology or intellectual property infringement, including cybersecurity breaches.
• Future acquisitions and divestitures, which could incur additional indebtedness.
• The impact of pandemics, geopolitical conflicts, and the global response to them.
• Performance of partners in joint ventures and other projects.
• Changes in credit ratings.

The company is actively monitoring these risks and taking steps to mitigate their potential impact on its business.

Conclusion

Albemarle is a leading global specialty chemicals company serving diverse end markets. The company’s focus on innovation, sustainability, and operational excellence positions it well to capitalize on favorable market trends, particularly in the growing electric vehicle and renewable energy sectors.

Despite near-term challenges like lower lithium prices, Albemarle has taken proactive measures to optimize its cost structure and strengthen its financial flexibility. With a strong balance sheet, diversified business portfolio, and commitment to serving its customers and shareholders, Albemarle appears well-positioned for long-term success.