Exhibit 99.1
Albemarle To Acquire Akzo Refinery Catalysts
A New Global
Chemicals
Leader Emerges
Mark C. Rohr, President & CEO
May 4, 2004
Chicago
Caution Statement
Some of the information presented in the pages of this presentation constitutes forward-looking comments within the meaning of the Private Securities Litigation Reform Act of 1995. Although Albemarle Corporation believes its expectations are based on reasonable assumptions within the bounds of its knowledge of its business and operations, there can be no assurance that actual results will not differ materially from its expectations.
Factors which could cause actual results to differ from expectations include, without limitation, the timing of orders received from customers, the gain or loss of significant customers, competition from other manufacturers, changes in demand for the Company’s products, increases in the cost of the product, changes in the market in general, fluctuations in foreign currencies, and significant changes in new product introduction resulting in an increase in capital project requests and approvals leading to capital spending.
Such statements also include, but are not limited to, statements about the proposed acquisition by Albemarle Corporation of Akzo Nobel’s refinery catalyst business, including financial and operating results, the parties’ plans, beliefs, expectations and intentions and other statements that are not historical facts. Such statements are based upon the current beliefs and expectations of management and are subject to significant risks and uncertainties. Actual results may vary materially from those set forth in the forward-looking statements. The following factors, among others, could affect the consummation of the proposed transaction: execution of a definitive sale and purchase agreement, the advice from Akzo Nobel’s Works Council, the expiration or termination of any applicable waiting period under the Hart-Scott-Rodino Act and the receipt of other competition law clearances. The following factors, among others, could affect the anticipated results: consummation of the financing on terms favorable to the Company, the ability to integrate successfully the acquired business within the expected timeframes or at all, and ongoing operations of the business.
Additional factors that could cause Albemarle’s results to differ materially from those described in the forward-looking statements can be found in Albemarle’s Annual Report on Form 10-K for the year ended December 31, 2003.
1
Today’s Objectives
• Describe Albemarle’s background
• Present the strategy driving our growth
• Discuss the rationale for the acquisition & related financing plan
• Describe our ability to execute in a changing environment
• Provide a detailed review of our business
• Provide insight into our financial discipline
• Provide detailed review of refinery catalyst business
2
Albemarle-Akzo Refinery Catalysts
• To acquire refinery catalyst business of Akzo Nobel
• Cash purchase consideration—~ $750 million
• 8.9x Akzo’s 2003 EBITDA of $84 million, including JV’s
• Closing in 2nd Quarter
• Financing—refinance:
•$ 300 million 5-year Revolver
•$ 400 million 5-year amortizing Term Loan A
•$ 500 bridge loan
• Refinance with combination of debt and equity
• Investment grade corporate/enterprise credit ratings objective
3
Albemarle-Akzo Refinery Catalysts
Akzo Nobel Catalysts – 2003 Revenue
Excluding Joint Venture Revenues $406 million
FCC 53%
Specialty 9%
HPC 38%
Including Joint Venture Revenues $571 million
FCC 46%
Specialty 6%
HPC 48%
* Based on exchange rate $1.17/€
Akzo sales information from Dutch GAAP statements.
4
Albemarle-Akzo Refinery Catalysts
• Significantly broadens portfolio—specialty chemicals/service solutions
• Current $80MM catalyst business + Akzo’s = strong third segment
2003 Albemarle
Fine Chem 43%
Polymer Cat/Add 57%
Total Sales $1.1B
2004 Albemarle Estimate
Refinery Cat/Add 37%
Polymer Cat/Add 37%
Fine Chem 26%
Total Sales (w/JVs) $1.8B
5
Specialty Chemical Position
Pro-Forma Albemarle
Net Sales—2003
EBITDA Margin %—2003
* Lubrizol has announced its acquisition of Noveon – Source FactSet, as of April 17, 2004
6
Overview of Albemarle Corporation
A New Global Chemicals Leader Emerges
7
Albemarle History
1887—Albemarle Paper Manufacturing Company opens with a handful of employees producing Kraft and blotting paper.
1921—The antiknock properties of tetraethyl lead (TEL) as a gasoline additive are discovered after a lengthy search by a team of General Motors research chemists. TEL is to be the principal product of Ethyl Corporation for more than 40 years.
1942—Ethyl Gasoline Corporation changes its name to Ethyl Corporation to characterize a broader interest than just gasoline products.
1962—Albemarle Paper Manufacturing Company borrows $200 million and purchases Ethyl Corporation (Delaware), a corporation 13 times its size, and Ethyl Corporation (Virginia) is formed. Floyd D. Gottwald becomes Chairman of the Board.
1976—Ethyl leaves paper manufacturing with the sale of Oxford Paper. Ethyl opens a chemical plant in Feluy, Belgium to make aluminum alkyls.
1987—Ethyl acquires Dow Chemical’s bromine chemicals business and its Magnolia, Arkansas, plant.
1994—Ethyl spins off its chemical businesses to create an independent, publicly traded company named Albemarle Corporation
1996—Albemarle sells its alpha olefins, polyalphaolefins and synthetic alcohols businesses to Amoco for about $500 million.
1998—Albemarle energizes M&A effort to grow the company based on longstanding foundation technologies of bromine and organometallic chemistry, supported by exceptional skill in process technology.
8
Forbes 400 Best Big Companies 2004
• Top-10 Performance in 5-Year Average Return on Capital
Praxair
Ecolab
Airgas
Cabot
Sigma—Aldrich
Albemarle
Engelhard
S&P500
Cytec
Valspar
PPG
• Top-10 Performance in 12-Month Return on Capital
• Top-10 Performance 5-Year Average Sales Growth
• Top-10 Performance 12-Month Sales Growth
• Top-10 Performance Profit Margin
• Top-10 Performance Total Return – 5-Year Annualized
• Top-10 ISS Rating 1/1/04 (98.2%)
9
Current Business Segments
Polymer Chemicals
• Flame Retardants
• Polyolefin Catalysts
• Other Polymer Additives
– Net Sales $629.9 million (2003)
– Operating $ 70.3 million Profit (2003)
Fine Chemicals
• Pharmaceuticals & Agrichemicals
• Fine Chemistry Services
• Bromine, Bromine Derivatives and Specialty Aluminas
– Net Sales $480.4 million (2003)
– Operating $ 49.0 million Profit (2003)
10
Flame Retardants
Catalysts Ag
Pharma
Additives
Performance Chemicals
Technology Relationships Innovation
Bromine
Process Development
Aluminum Alkyls
#1 Producer of Bromine-based Flame Retardants
#1 Producer of Mineral Flame Retardants
#1 Producer of Alkyl-based polyolefin catalysts
#1 Producer of Metallocene Co-Catalysts
#1 Producer of Ibuprofen
#1 Producer of alkylated anilines
#2 Producer of Bromine
11
Key Markets
• Diversity – Balance Across Markets
• Strategic Account Management – Work With Winners
• World Market Knowledge – Direct Sales and Other Effective Channels
• Portfolio improvements fit focus
46%
35%
19%
2003
Markets Served Growth
Rate
Construction 15% 5%
Carpet /Fabric, Roofing,
Insulation, PVC stabilizers
Consumer Electronics 30% 8 -10%
Printed Circuit Boards,
Electronic Enclosures
Pharma/Ag 20% 6 -10%
Analgesics, Active Ingredients,
Intermediate Ingredients, Pre-
Emergent Herbicides
Auto/Transport 10% 3-5%
Wire & Cable, Polyurethane
Body Panels, Polishing
compounds, Brake linings
Packaging 10% 3-5%
Plastic films, Polymer
compounds, Paper and
pigments
Industrial 5% 2-4%
Water treatment, Oilfield
fluids, Polishing compounds,
Photo-graphic, Specialty glass
(TV)
Other 10%
12
Albemarle’s Global Reach
Bergheim, Germany
Teesport, UK Avonmouth, UK
Louvain-la-Neuve, Belgium
St. Jakob/Breitenau, Austria (JV)
Seoul, Korea
Beijing, China Shanghai, China
Tokyo, Japan Takaishi City, Osaka, Japan, (NAA JV)
Ninghai County, Zhejiang Province, China Jin Shan District, Shanghai, China (JVs)
Singapore
Safi, Jordan (JBC JV)
Thann, France Port-de-Bouc, France
Feluy, Belgium (lease)
Magnolia, AR, USA
Pasadena, TX, US
Baton Rouge, LA, USA
Orangeburg, SC, USA
Richmond, VA, USA
Dayton, OH, USA
Tyrone, PA, USA
Headquarters
Regional marketing; sales offices
Research and development facility
Manufacturing facility
13
Albemarle Strategic Overview
• Specialty Chemicals experience natural rotation through market maturity and technology innovation
• Winners successfully manage rotation by providing innovative solutions of tangible value to their customers
• Opportunities Identification: Innovate, Acquire, Integrate and Manage new businesses and new assets
• Past 5 years — acquisition program added $57 million EBITDA + > $300 million of sales, offsetting rotation in our “foundation” business
• Successful business execution has created strong cash flow—permitting acquisitions to accelerate growth
Akzo Refinery Catalysts fit Albemarle’s acquisition model and further complement the existing business
14
Smart Execution Yields Growth
27% of 2003 Revenue from Recent Acquisitions
1999
Tender Offer For A&W; Created Cash Gain
Formed Jordan Br Co; Started Project for ‘02 Startup
2000
Acquired Ferro BrPS FR Bus
Took ownership In Jinhai Polymer & Expanded 2X
2001
Acquired Martinswerk—Largest mineral-based Global FR Business
Acquired ChemFirst Fine Chemicals; Integrated with ALB to form ALB Fine Chemistry Services
2002
Formed Stannica JV with Atofina
Announced China Trading Company
2003
Acquired lube and fuel anti-oxidants of Ethyl
Acquired Phosphorus Flame Retardants of Rhodia
Acquired Atofina S.A. Bromine Fine Chemicals
2004
Acquired assets of Korean distributor of Albemarle; other products
Acquiring petroleum refining catalyst business of Akzo Nobel
15
General Business Overview
A New Global Chemicals Leader Emerges
16
Fine Chemicals
A New Global Chemicals Leader Emerges
17
Fine Chemicals 2003
Life Sciences
40% of FC Sales
Maximize Value Of Our 4 Actives
Serve Market w/ Broad FCSI Capabilities:
• Intermediates
• Contract Research
• Custom Manufacture
Industrial Specialties
25% of FC Sales
Manage for Cash
Bromine Chemicals
35% of FC Sales
#1 Bromine Company In The World
18
World-Class Bromine Position
Other 14%
Pharma 3%
Water Treatment 7%
Ag 12%
CCF 24%
Flame Retardants 40%
Albemarle’s production capturing market growth with premier, low cost domestic reserves and augmented by new production on the Dead Sea through joint venture Jordan Bromine Company
Bromine-Industry Usage—2002 USGS/Mining Engineering June 2003
Albemarle holds strong positions in each of the key areas of the world’s bromine-using industries.
Albemarle Bromine Production
19
Fine Chemistry Services Successes
27
Pre-Clinical
15
Phase
13
Phase II
13
Phase III
13
Patent Protected
4
Generic
85 products in pipeline
Inquiries for Custom Production Quotes
20
Fine Chemistry Services Model
Customer Needs & Opportunities
Fine Chemistry Services & Intermediates
45%
Ag
ALB Intermediates Custom Mfr Contract Research
15%
Other Markets
Personal Care Photo Chems Flavors / Fragrances Etc.
45%
Pharma
ALB Intermediates Custom Mfr Contract Research
ALB Actives
Methyl Bromide
ALB Actives (APIs)
Ibuprofen, Naproxen
21
Life Sciences – Pharmaceutical and Agrichemicals Strengths
• Competitive Situation
• #1 in Aniline-Based Intermediates
• Fine Chemistry Services and Intermediates Provides Contract Research Strength
• Market Situation
• Outsourcing Continues
• Strong Competition from off-shore
• Excess Capacity
• Outlook
• Pharmaceuticals Strong
• Agrichemicals Flat
• Global Expansion Focus
• New Products
• Broad Opportunities
22
Fine Chemicals Revenue Flat Year-to-Year
Revenue $MM
480
2003
26.5
Bromine
24
Atofina Fine Chem
10
FCS
6
Other
(16.5)
Ag
(35)
Zeolites
495
2004E
23
Polymer Chemicals
A New Global Chemicals Leader Emerges
24
Polymer Chemicals Today
FR $400MM
Cat & Add $230MM
Polymer Chemicals Sales – 2003
Who We Are
• 2003 Sales – $630 million
• 22% Av. Gross Margin
• International Sales—Approx. 60%
• Leading market positions in BRFR, min. FR, AA, Single Site Catalysis, AOX 330
• Success built on innovation, strong customer relationships, and aggressive acquisition/JV program
25
Polymer Chemicals Growth 2004
Revenue $MM
470
2001
552
2002
630
2003
109
Flame Retardants
26
Additives
15
Catalysts
>750
2004E
Expect Sales Growth Across All Polymer Chem Business Units
• Major Drivers to Hit 2004
_ New Product rollout
_ Polymer volume growth in FRs
_ Full year of Polyurethane FRs HP3010, BEM, & New Lube Antioxidants
_ Successful S-8010 & NCenDX growth strategies
_ New Catalysts commercialization
_ Regain lost market share from GLK for E-330
_ General recovery in PVC & Electronics Markets
26
Profile: Successful Polymer Acquisition
<$35 million Cash Purchase Price + Assumed Liabilities
Net Sales Op Profit
Index Index
2002 Index Year 100 100
2003 120 143
2004 Estimate 142 204
Reason for success:
• Globalization of sales
• Diversified FR portfolio
• Cost reductions offset raw materials inflation
27
Flame Retardant Market
Market Size: $2.4 billion
Phosphorus 29%
Antimony 8%
Bromine 36%
Other 10%
Mineral 17%
Key FR Chemistries Leadership
• # 1 Brominated FR Marketer In World
• # 1 Mineral FR Marketer In World
• # 2/3 Phosphorus FR Marketer in World
Innovations In 1990’s
• Stream Of Successful New FR’s
• Widest FR Technical Service Breadth (Halogen, Phos. Mineral)
Best Cost/Quality/Service In Industry
• Major FR Quality Upgrades Introduced
• Multiple Customer Awards
• Bromine Cost Improvements – Jordan, USA
28
Historic and Future Catalyst and Additive Strength
• Competitive Position
• #1 Organometallic Co-Catalysts
• #1 Metallocene Co-Catalysts
• Process Technology and global footprint
• Developing PO SS Catalyst Systems
• Niche Technology Player in Additives and intermediates
• Market Situation
• Polyolefins Recovery
• New market opportunities
• Stannica JV
• Lube/Fuel Entry
29
Polymer Additive Objectives
•$ 1.0 billion by 2008
• Expand into Asia: Manufacturing & Marketing: PFR & Mineral FR
• Acquire flame retardants for textiles and coatings
• New products: polyurethane, nylon (high flow), enclosures, printed wiring board (high flow), HBCD and pentabrom alternatives
• Anticipate needs with Customer Applications Development
• Advocacy for flame retardancy and specific standards
• Supply reliability worldwide
• Improve Profitability
• Drive Costs down:
• Avonmouth, Orangeburg, Baton Rouge & Port du Bouc, Asset Productivity
• Raw Material, Freight and Warehousing Costs
• Drive Price
• Sales and Marketing Capabilities: Pricing, Competitive Offerings, Bundling, Proprietary Products
• Expand Business and Technical Presence in Asia
30
Consolidated Current Albemarle
A New Global Chemicals Leader Emerges
31
Innovation Momentum
1998 1999 2000 2001 2002 2003 2004 E
New Products 1st Year Sales
32
Revenue
($ in milliions)
$846 397 449 1999
$918 417 501 2000
$942 463 479 2001
$1,008 456 552 2002
$1,110 480 630 2003
$1,250+ 2004 E
Polymer Chem Fine Chem
* Total Revenue includes Corp Unallocated – Not Graphed
**Freight has been removed from the Net Sales calculation to total distribution and freight.
33
Akzo Catalysts Overview
A New Global Chemicals Leader Emerges
34
The Market for Catalysts
2002 Global Catalyst Market ($10 billion)
Environmental 27%
Polymers 22%
Petrochemicals 20%
Petroleum refining 21%
Fine chemicals and intermediates 10%
35
Our Primary Market: Petroleum Refining
2002 Petroleum Refining Catalyst Market ($2.1 billion)
Reforming catalyst $120 million
Other $400 million
FCC Catalyst $800 million
FCC additives $105 million
Hydroprocessing Catalyst $660 million
36
Refining – Two Basic Functions
Petroleum refining
Objective
Clean
Remove impurities from crude oil and other petroleum streams/products
Product slate
Allows refiners to produce a desired product mix from crude oil
Examples of key processes
HPC pretreatment
HPC post-treatment
Resid hydrotreating
Fluidized cat cracking (FCC)
Hydrocracking
Isomerization
37
Tighter Fuel Quality Specifications
Gasoline Sulfur Specifications (wt ppm)
Europe
Japan
USA
Diesel Sulfur Specifications (wt ppm)
Europe
Japan
USA
Source: Oil and Gas Journal
38
Tightening Specifications Will Drive Expansion of Hydrotreating Capacity
“The projected desulfurization expansion requirements are unprecedented in the history of the worldwide refining industry”
Hart Downstream Energy Services – World Fuels and Refining Analysis 2002
Global Hydrotreating Capacity (1990–2015)
Source: Hart analysis and forecast based on EIA and IEA data
39
…Supplied by Petroleum Refineries: our Primary Customer
Global Crude Oil Demand (1985–2015) units
Actual Estimated
Source: Hart analysis and forecast based on EIA data
40
Manufacturing
Pasadena, TX, USA
Capacity (tonnes) FCC: 72,000 HPC: 7,000
Capacity (tonnes) FCC: 50,000 HPC: 13,000
Amsterdam, The Netherlands
41
Joint Ventures – Strategic Advantage in a Global Market
Capacity: 10,000 HPC t/yr
Capacity: 32,500 FCC t/yr
• Leverages technology and R&D – single global program
• Extends the reach of our business
• Provides regional advantage – knowledge of local industry culture, market needs and regulatory environment
• Enhances diversity in the organization
• Broadens our service offering
• Part of the technology family of Akzo
42
Fluidized Catalytic Cracking – FCC
• 445 FCC units worldwide
• Primary conversion unit for many refineries
• Cracks heavy oil fractions into lighter, more valuable products
• Major contributor to the refinery gasoline pool
• Continuous catalyst addition
• Technical service is key
43
HPC Business
• More than 2,000 units worldwide
• Batch process – typical cycle length, 1 to 2 years
• Unit taken out of service during catalyst change
• Catalyst loading tailored to individual units
• Joint venture support
44
Competing Strongly for the Overall Number One Position
€ million
Petroleum Refining Catalyst Suppliers – 2002 Revenues
Isomerization
Reforming
FCC additives
HPC/HC sales
FCC catalyst
45
Strong Market Share in Two Main Businesses
2002 Global Hydroprocessing Catalyst Revenues ($700 million)
Other 25%
Criterion 25%
Grace/ART 18%
Akzo Nobel/NK 32%
2002 Global FCC Catalyst Revenues ($900 million)
CCIC 5%
Chinese suppliers (2) 13%
Engelhard 20%
Akzo Nobel FCC-SA 27%
Grace 35%
46
Global Assets and Resources
Houston, USA
Pasadena, USA
Amsterdam, Netherlands
Amersfoort, Netherlands
La Voulte, France (Eurecat JV)
Santa Cruz, Brazil (FCC-SA JV)
Singapore
Niihama, Japan (Nippon Ketjen JV)
Headquarters
Research and development facility*
Catalyst services
Regional marketing centre
Manufacturing facility
(*)S.A. R&D carried out by Petrobras
47
Commitment to Technology
• 5–6% of sales revenue allocated to R&D
• 168 R&D personnel (total employees 827)
• Technology integral to sales and marketing
• Global R&D network aligned with manufacturing and marketing
• FCC – Amsterdam, Pasadena, Brazil (Petrobras)
• HPC – Amsterdam, Japan (Nippon Ketjen)
• New catalysts and advanced materials –Amsterdam
• Collaboration
48
Product and Process Innovation
• 20 new patents filed in 2001 and 2002
• 1,000 patents and applications filed worldwide
• 31 know-how packages completed in 2001/2002
• Over 40% of revenues are generated by products introduced in the last five years
• Next generation products ready to leave the development pipeline
• High throughput experimentation
49
Generations of Hydroprocessing Technology: “Three S-Curves”
Nebula
STARS
Traditional catalysts
1950 1960 1970 1980 1990 2000 2010
Year
50
Albemarle’s New Business
A New Global Chemicals Leader Emerges
51
The New ALB Catalyst Opportunities
Essential to Global Markets $10 Billion Catalyst Industry
• 3—5% industry growth annually
•$ 200 to $300 million annual growth opportunity
• Refinery Catalysts grew at about 4% annually over the last 4 years
Environmental 27%
Chemical 20%
Akzo Strength
Refinery 21%
Albemarle Strength
Polyolefin 22%
Other 10%
Source: Akzo Catalysts
52
Global Customer Support and Technical Service
Bergheim, Germany
Teesport, UK Avonmouth, UK
Tyrone, PA, USA
Amsterdam, The Netherlands
Louvain-la-Neuve, Belgium
St. Jakob/Breitenau, Austria (JV)
Seoul, Korea
Beijing, China Shanghai, China
Tokyo, Japan Takaishi City, Osaka, Japan, (NAA JV) Niihama, Japan (Nippon Ketjen JV)
Ninghai County, Zhejiang Province, China Jin Shan District, Shanghai, China (JVs)
Singapore Singapore
Safi, Jordan (JBC JV)
La Voulte, France Thann, France Port-de-Bouc, France
Magnolia, AR, USA
Santa Cruz, Brazil (FCC-SA JV)
Pasadena, TX, USA Pasadena, TX, USA Houston, TX, USA
Baton Rouge, LA, USA
Orangeburg, SC, USA
Richmond, VA, USA
Dayton, OH, USA
Feluy, Belgium (lease)
Headquarters
Research and development facility
Regional marketing; sales offices
Manufacturing facility red denotes Akzo location
53
Technology Overlap – Catalysts, Additives & Fine Chemicals Resources
Albemarle
• 239 Employees
• 83 PhDs (34.7%)
Yields:
• #1 flame retardant company
• #1 analgesic producer –ibuprofen
• #2 bromine and derivatives
• #1 metallocene catalysts
• Active New Product Portfolio
Technology Leverage
• Alumina
• Silica
• Zeolites
• Clays
• Pelletizing
• Combinatorial Chemistry
• Metal Deposition
• Precious Metals
• Morphology
• Forming
Serving 90% of Chemical Processes
• Additives
• Adsorbents
• Biocides
• Fine Chemicals
• Coatings
• Carriers
• Desiccants
• Intermediates
• Flame Retardants
• Fillers
• Catalysts
Akzo Foundation
• 191 Employees
• 60 PhDs (31.4%)
Yields:
• #1 HPC catalyst position
• #2 FCC catalyst position
• #1 heavy resid cracking
• Active New Product Portfolio
54
Balanced, Technology-Based
Portfolio: “Top-Tier” Performance Status
Additives 37%
• Bromine integration
• #1 or #2 positions in major flame retardant chemistries
• Additives niches
• Global scope and reputation
Fine Chemicals 26%
• Bromine Franchise
• >$200 million in life sciences
• New product pipeline approaching 100
Catalysts 37%
• #1 or #2 positions in refinery and metallocene catalysts
• History of innovation
• Strong customer relationships
• Global scope and reputation
55
Key Growth Drivers
“Top-Tier” Performance Status
Polymer Additives
$10 billion market
Fire Safety Standards
Consumer Electronics
Specialty Polymers
$200 million Market Growth ALB-Akzo/Yr.
Fine Chemicals
$40 billion market
Pharmaceutical Innovators
Bromine Franchise
Generic Pharma & Ag Chemicals
Catalysts
$10 billion market
Tightening Global Fuel Specs
Growth from Heavy/Sour Crudes
Polyolefins, Metallocenes; Single-Site
$200 million Market Growth ALB-Akzo/Yr.
Exploring and Developing Foundation Technologies to Deliver Innovative Solutions to Customers
56
Timetable for Success
First 3 Months
• Receive credit ratings
• Works Council advice
• Regulatory approval
• Close in second quarter
• Plan transition (underway)
3 Months to 12 months
• Focus on Customer, Technical Service
• Form new Catalyst Division
• Issue equity and senior notes
• Capture synergies
• Complete transition
Future
• Achieve global leadership in Catalysts
– Refinery Catalysts
– Polyolefin Single-Site Catalysts
– Chemical Catalysts
– Fine Chemical Catalysts
• Grow Globally
57
Synergy Focus
($ in millions)
Near Term Scope
Raw material synergy $3
Self produce select intermediates 1
Information system / SAP 1
Fuel antioxidant volume growth 2
EMA site rationalization 2
Americas site rationalization 1
Manufacturing Manpower 5
$ 15
Near-term synergies assumed to be $5 million in Year 2 projections
Target $5—$10 million
Longer Term (Mining Opportunities)
Technology – Hydrotalcite FR’s
China catalyst JV
Global sales reach
EMA site rationalization
New catalyst business (Fine Chem & Chemical Catalyst)
Capital efficiency
Bolt on acquisitions (Intercat or smaller HPC players)
Zeolite or alumina sales
Longer-term synergies to be $10 million or greater
Target $10—$20 million
58
Transition Team
Transition Committee
• J. Steitz, SVP Operations
• R. Hurley, Pres., Akzo Catalysts
• J. Harsh, VP Alliance Services
• P. Rocheleau, SVP & CFO
• L. Kissam, IV, VP & General Counsel
• G. Newbill, SVP Manufacturing
Transition Oversight
Opportunistic Synergy Identification
Steering Committee
J. Harsh, ALB VP Alliance Svcs
S. LcClef, ALB Alliance Svcs (EMA)
M. Devillier, ALB Alliance Svcs (US)
L. Maas, Akzo Controller
H. Scheepstea, Akzo Manager, EUM EA
Systems Integration
Minimize Disruption
Maximize Benefits
Completing Transition
Catalyst Division Mgt Team
• R. Hurley, Akzo VP Catalyst Division
• H. Scheepstea, Akzo HPC Global Business Leader
• F. Cannon, Akzo FCC Global Business Leader
• P. Grant, ALB Polyolefin Global Business Leader
• K. van der Wiele, Akzo Director, R&D
• TBD, ALB Manufacturing Director
Short distance between ALB’s EMA HQ and Akzo Catalyst’s HQ
Louvain-la-Neuve Albemarle EMA
Headquarters
Amsterdam R&D
Amersfoort Headquarters
59
Summary: ALB & Akzo Catalysts
• Creating 3rd segment and expanding foundation Catalysis Technology
• Favorable business attributes:
Sustainable, high margin
Strong share in growing markets
Technology-driven, with excellent global footprint
High quality management and R&D
Global energy demand – regulatory growth driver
• Reasonable purchase price – 8.9X LTM EBITDA (12/31/03)
Prudent transition planning
• Designing conservative financial structure to maintain financial flexibility
60
ALB’s Stable Operating Cash Flow
• EBITDA – earnings before interest, taxes, depreciation and amortization – reconciliation on www.albemarle.com Investor Information
61
Acquisition Financing
$1.2 Billion Commitment Investment Grade Target
Term A with Bridge
REVOLVER $300 M
TERM A $400 M
BRIDGE $500 M
12 Month Protection
Combination of debt and equity
Libor + 100 bps area Plus Standby Fee
2.5% All-In
Libor + 100 bps area
• Unsecured
• Key Covenants: Debt / Capital & Fixed Charge Test
62
Creating Value in the Chemicals Sector
• Technology breadth, geographic profile, and discipline provides the framework to capture and create value
• Portfolio generates high EBITDA margins over a sustained period of time. Historically, “excess” cash flow for share repurchase and acquisitions creates significant value
• Cost reduction, acceleration of product development and M&A activity meets rise of global competition, with acquisitions playing a key role in expanding foundation technologies and market access
63
