LTHM - Earnings call transcript Q3 2018

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Operator

Good morning, and welcome to the Third Quarter 2018 Earnings Release Conference Call for the Livent Corporation. Phone lines will be placed on a listen-only mode throughout the conference. After the speakers' presentation, there will be a question-and-answer period. I will now turn the conference over to Mr. Rasmus Gerdeman, Chief Strategy and Investor Relations Officer for the Livent Corporation. Mr. begin. may you Gerdeman,

Rasmus Gerdeman

Good earnings and call. Greg. Corporation's to third quarter morning you, welcome everyone, Livent Thank

intend are call release, Officer. remarks with then available about in our Tom Joining results. select be President the to am. Gilberto after the Gilberto Officer; accompanies Financial will and that note today outlook The earnings on our to to Chief will minutes, will our me third Web X:XX XX are XXXX we the results, outlook which an quarter your call. our Paul Executive slide Gilberto join Paul for site, XXXX begin then includes made Antoniazzi, presentation complete fourth FMC's from and and provide prepared address quarter our today's Schneberger, the financial at Officer, performance, Please third to Graves earnings will and and call today's Paul Operating promptly along allow provides and review Chief quarter. discussion questions. Chief of available that overview

results today's me Paul. that, as to you our are in EPS release financial begin, concerning call best earnings on let Securities now of the risks A Information Web and to definition represents factors, based based other all our Commission. the uncertainties upon reconciliation these call will presented include risks and well turn refer not provided subject to remind site. that we discussion our to identified vary judgment we that various may terms terms and on uncertainties. over will and today's references. non-GAAP today's as specific With but during filings which these for focus with including, I conference Today's income statement will forward-looking adjusted those and may Before Actual factors statements limited discussion are in information. our and Exchange on

Paul Graves

IPO pleased I'm under Livent's ticker market good as business began are on you, public earnings morning call October XX. standalone Thank our to of appreciate Livent, everyone. a since LTHM We've first the to trading welcome and been from Rasmus, of completed you for volatile which you FMC the the that day, owners we of those show recognized of support Livent. who that and now conditions have overall company.

products, I know-how I would to producers revisit discuss of the leading and believe and quarter, fact significant investment. Livent one lithium-based products world's is Before the obtained an that six business has performance Livent's by lithium experience compelling so the third and during make as developing decades. we Livent high-performance of like over producing

lithium one we purity few performance are of products only high We manufacturing lithium lithium operate and hydroxide, we regions of the sell compound butyllithium, a integrated and have fully all in a We global offering complete a manufacturers. which of network, metal world.

positioned as our with installed well lithium rely grow our customers who are to We of network much our as assets. global on expertise

carbonate of the Argentina. of to our are resource brine in We world-class and due world lithium lithium lowest-cost one the producers in chloride

capacity rate production and carbonate customer intend expansion needs volume first global phases our years, process online started growing the of of XX majority therefore over intend lithium to we've of our same and in expand hydroxide, broadly consume to XXXX. to capabilities coming for the this the at serve carbonate asset this the operated We in hydroxide production lithium tripling lithium the major in base. lithium of end have the our production with XXXX, We the of by multiple

our geographies. footprint production as While China, expands we to hydroxide have currently and other battery in to capacity we intend the lithium United States lithium-ion grow

to product market. as our can new to lithium are to patterns new we existing customers' able models lithium working we finally, that test several expected Our means match reliably hydroxide our complement And proven come quickly products with offering to demand performance. ability install improve capacity are battery further to electric customers, and beginning vehicle lithium-ion

You demand lithium by by migrate us. towards to to a a performance as driven Livent of on higher XXXX. EV XXXX million market, our the XXX,XXX once-in-a-generation around batteries in we technologies. the tons content transformation This continues positioned see is shift an of of vehicles; LCE industry products compounds includes demand ahead total towards one hydroxide be understand demand our auto a forecast compounds lithium well company leader demand for of why can basis over for increasingly we with nickel believe multi-decade electric growth by cathode significant lithium tons

I exactly what So slide explain results earnings our slide let and four, financial our to the on three before are. turn discuss of numbers basis me

in FMC, are today during an owned QX We owned Livent was unusual by and XXX% situation, XX% approximately remains FMC. by

as its we will we EBITDA, standalone did incurred. includes last three, XX. the FMC any by September as results reporting FMC costs quarter This first will As company. for today's when of a Pro standalone EBITDA nine discontinued reference in guidance. months Livent used FMC methodology we'll QX. with fourth that QX, a X, calculated but fact Livent standalone forma in materials It out reports the same results cost associated year, EBITDA XXXX slide of Livent carve EBITDA incur this costs incur remain is next costs result, segment reported accounting in excludes in is FMC August segment we as quarter operating reported the ended and during we operations basis be of year. in its on actual standalone during FMC referenced the a is the Segment course using night. adjusted standalone

that Livent the the costs double-counts quarter, to expect understates the fourth what two believe costs standalone full-year had incurred in our QX, third we been by actual XXXX quarter. we been for independent full-year For we guidance it incur the would our the and million standalone to essentially in EBITDA XXXX, includes EBITDA dollars. three adjusted in standalone Since have

XX% reported quarter $XXX slide to third XX% the by driven a increase a revenue China, by customers. and third sales quarter previously business which million. degree, expanding year-on-year the turning was higher increase lithium of was guidance, in volume revenue. million, X% ahead price the same largely now income expansion to performed was our last XXXX to butyllithium the from in smaller revenue contributed period the year. of Livent four, quarter prior by completed hydroxide than Net of of third of Improved driven mix certain $XX timing in for the sales. So

difficulty] price EBITDA same is last $XX.X forma prior improvement now $X guidance. both basis came Moving last third on measure of EBITDA million year million the million year. higher XX% higher this as $X slide of the came [Technical to mix, pro than from quarter was the volumes. same from five, and of period

incurred million. exchange by million costs $XX.X contributed million further segment and accounting of brings further EBITDA the last of as FMC the out and Foreign bridge reported million $X FMC us the of standalone $X adjustments carve night, standalone adjusted by $X EBITDA A to reduced Livent of $XX.X to costs $X million. quarter benefit results in complete higher million of

EBITDA Livent a full-year range for guidance million revenue slide All is on quarter the both and million, $XXX million is is in our our we expected share to Livent's are $XXX full-year in of to segment XXXX, $X.XX earnings tightened and revenue to range FMC million. are EBITDA adjusted costs. have six, of approximately per standalone $XXX and including full-year $XXX adjusted estimated per million, is FMC expected million $XX million. equivalent Turning $X.XX of standalone $XXX million million, all is standalone $X.XX to adjusted and costs range Full-year segment EBITDA to quarter million EBITDA $X guidance Fourth FMC's expected midpoint. Full-year guidance the standalone the of of to per earnings $XXX $X.XX in share. guidance full-year Livent $XXX to EBITDA share prior of the share. $XXX Fourth guidance segment to of quarter to adjusted million million to $XX fourth XXXX per at guidance $XXX inclusive

bottoms-up I and and slide assume the Livent providing adoption, performing update are against spend turn of that XXXX, lithium start seven, a metric At by some backdrop. to this XXXX million this XXXX, me vehicle to some view tons in on want of our reflects how key Let factors as electric million FMC is forecast driving today, demand sold and forecasted that industry EVs total globally. of pace be of X.X the to the will an time our

total As EV million. X.X end year September, of of approximately sales reached the the for

year-to-date is seen as of our the sales we EV likely electric continue while forecast, EV auto forecast that been Given vehicle is in higher actual on the well sales XXXX historically experts. with be to that note, China it most in industry strong, It to EV quarter, last China, important also the has have period sales up and same exceed will over data sales that negative XX% as broader there in XXXX. sales

promoting have battery increase. the driving ranges. to average Chinese pack with We of incentives resulted shift starting EVs see a has in begun in longer to This impact sizes

The of smaller We which accelerate in market. by as the available increases and Europe ranges reduces during lithium summer technologies. carbonate the was subsidies and batteries. in China for that towards and in market months a their with driven performance shifted program also customers higher believe to adoption inventory larger cathode experienced production demand higher This consumed that the in EVs EVs shift the slowdown will China subsidy changes performance continue regulatory subsidies available for revised

lithium expect relatively lithium and prices head hydroxide prices on signs that constant have we a currency both quality contract We during be basis average year, we now the as unchanged production. seeing is into are and battery once rising been of contract XXXX. carbonate and multiyear to again for sufficient demand higher Annual modestly for

As and from during lithium Australia XXXX. increased America South expected, supply

to see once both producers reduced is volume back been to However, half the capacity able of increases basis. of the actually announcing announced capacity has look achieved. XXXX, come and on again, or seen they're product bring was existing When announced in less delayed and at been new go to what than we entrants market. online that produced have LCE an actually this We that we've

developments we throughout our Regarding with portfolio. pleased are recent product Livent,

tons proceed We in XX,XXX lithium of expect hydroxide over to XXXX.

slightly offices rate higher ahead tons The at the hydroxide our year, metric Our now rates not nameplate of producing expectations. at of but than reliably newly-installed design. are XX,XXX annualized network only that have per lithium original operated approximately an is are operated

significant is we XXXX, early these at on lithium recent projects on favorable contract a will structure offset including applications. demand we production anticipate in XX,XXX to China of of LCE expect tons although and to majority remainder carbonate third In second increasing LCEs the adding production tons to lithium and in see carbonate production XX,XXX resulting XXXX movements XX,XXX of in unfavorable around meet quarter of tons XX,XXX terms pricing leaving see produce RMB. against completed butyllithium, In we tons total be is demand. And some internally. incrementally price nameplate year, to nearly this we begin volatility. another the strong to is we we in capacity us The prices Argentina, commercial be year. of for sale capacity. summary, will this continue by see The a In which, add to in In stable year. increased de-bottlenecking will track local line the imbalanced overall Argentina capacity currency carbonate our between currency hydroxide expect to gains operating start polymer continue this basis next And of Of that in consumed chloride. capacity be protect the

more of capital the total we on little investments expansions. capacity the $XX announced expansion previously associated and spend be Argentina. we million in let roughly Finally, de-bottlenecking in a projects Argentina, detail give expect during significant projects to with commenced executed The in our de-bottlenecking as most me XXXX XXXX, our

add We carbonate first also the capacity. began projects XXX,XXX to expansion tons lithium of

required this camps, pipelines be to XXXX. This support employee and in been All $XXX project in water phases to first required future secured expansion range. spending early expansion includes $XXX of as have roads, to million infrastructure such the utilities. expansion for government to begin million approvals We expect stage total construction

to bringing producing of mid-XXXX capacity by in our around XXXX, expect hydroxide, be phase China and expected During are carbonate XX,XXX XXXX. our global XXXX. Argentina shipped will also line second-half of In to we end and the constructions XXXX modules XX,XXX expansion the the from to late in complete in the four completed processing tons installed by China facilities. nameplate capacity in to be first-half be prefabricated we of plan expected begin China XXXX, nameplate The to be to to first-half to of tons. lithium This beginning accommodate mechanically and is

North In addition, be lithium year, and commence total XXXX. second-half next we the expect two just will second of of a of additional we plan in $XX,XXX operational million. line construction this Carolina facility over to spending these hydroxide be in anticipate units to on Overall,

We through turn a in overview detail. detail. expansion financial the anticipated production on discuss our XXXX. next find to and carbonate lithium hydroxide summary have the both But Gilberto and and walked over to two over you'll for call of volumes now I'll eight, results in more in years capacity plans slide our XXXX lithium the

Gilberto Antoniazzi

Thanks, Paul.

standalone during independent particularly company. providing a the an road to Livent, update of XXXX Before external show, $XX requirements. costs on C-suite, Board on costs of your an approximately as Livent consists anticipate which recent all of reporting we fees, and company-related standalone million, of turning slide Directors, start communications still in publicly-traded as In primarily let impact such full-year SEC me nine, again by audit

Moving through year-to-date. and adjustments, related difficulty] Livent the cash generated of nine, certain million balance sheet, now from reflecting cash slide flow operations [technical $XX on and adjusted to

net expense. for Looking adjusted facility credit we to we million respect XXXX, we tax on million are and cash updated projected we we this this the a to the meaningfully on around balance a With in $XXX revolving our Touching rate completed to you our expecting of net a sheet, standalone from XX%. briefly year a $XXX taxes, will in as operations full-year with $XXX IPO to company. place. draw expect range in When interest facility, XX% keep cash

of a for to $XX Moving million half full-year being in spent that over with XXXX, to range million Livent anticipates QX. capital of spending, $XX around the

XX,XXX we of two-thirds capital commenced In as [indiscernible], tons of directed on expansions China $XXX Singapore. earlier, year's in hydroxide spending spending As expect have plans in well carbonate the we to Paul to metric as a our will nearly where and facility related to our lithium Argentina, new million by of research spending triple XXXX. towards approximately our in be mentioned this Argentina, capacity funding development capacity XXXX,

that Livent via announced over We period. all fund expansions continue of expect to will the generation cash free its flow capacity announced expansion

share back million outstanding, on to from total with I'll XXXX underwriters mainly XXX additional the million Lastly, million exercises or we green [ph] to our With an on expect Paul. approximately option to to exit option XXX purchase the depending shares call whether that, shoe over over-allotment their three our IPO. turn

Paul Graves

Gilberto. Thank you,

in Given the early pricing, we call, XXXX February. to and upcoming earnings in importance our guidance volumes of provide in detailed for expect the XXXX quarter finalizing our

capabilities. will relationships, on we objective best, in remain focused view We of maintaining focused relationships our with We supply for with important at with specifically tight favorable, XXXX. building hydroxide the continue of growing base, to see the capacity our advantage legacy, poised and that customer and production lithium our We our is, the for add mostly will marketplace. in given balanced, we believe and industry significantly base, increasing industry and In as throughout particular. our that in our conditions demand growth well somewhat longer-term lithium remain customers growth, our significant of supporting that on most today demand we're new likely market of technology and result take that to objective the additions placed summary, is and a

we begin publicly-traded marks ambitions to IPO now our I into the the can was beginning questions. Rasmus your in the so company, will the a a separating only business. answering call for step it back turn key standalone While first of

Rasmus Gerdeman

now may Q&A. Thank Operator, you, begin Paul. the you

Operator

Your comes Thank first you. from Aleksey ahead. of [Operator from Instructions] the question Please go line Yefremov Nomura.

Aleksey Yefremov

this in you, or What and in deceleration? sequential was Good price morning. effect there purely was Is any XX% Pricing and on and congratulations Thank second up causes third mix? mix, in spinoff. decline and quarter. base X% completing the price the year-over-year up quarter was the

Paul Graves

Thanks, Aleksey.

take be IPO point. clear, but But the the your we is to spinoff haven't done. finished Just we quite yet,

is on point basis. you think, an look made of pricing we've at past, have really to that segment annual the -- in FMC, business as a the a Now, I our

get And length think reflect quarter-to-quarter customer the product prices will past about mix, of at we've We movements in that in we there. on timing and shipments. that both reasons, told fact that based some I have, the different largely historical do are contracts

first-half the And this about said we it a customer the earlier also, expanded. talked the year year so a even as And being year always basis. I particularly think, mix out we would rich of on

seeing. you're pricing. driven -- all by customer earlier quarters. pricing to underlying of not really largely that's mix It's It's relative So an reflection

I the remains XXXX or more average, higher that, coming past basis, on think see a we've full-year average be we out where sort of than to expect stated XXXX the on basis. on pricing XX% in full-year a that XXXX we and

Aleksey Yefremov

you. thank pricing Is then you enter year the in XXXX. about are the the as being reflective of modestly pricing? And in you point comment, of on you this talking early Paul, higher full-year a made Understood, or just XXXX time

Paul Graves

Yes, we of XX% 'XX, into revenue, be of set pricing well as QX our the go will in contracts. north

lithium set to we be do have nor will see, can prices less history, we, the it expect as compared the will for lot to market be especially so 'XX. on sell those during basis, opportunistic into you full-year. don't carbonate a have year, selling that readjust of in the spare an we even We And to

So and make you pricing for comment XXXX XXXX. can about any reflecting for full-year we the pricing really look us at

Aleksey Yefremov

Thank you. Understood.

Operator

ahead. go Please comes question from Capital line Kapsch of next from the Markets. Loop Your Chris

Chris Kapsch

and Yes, good congrats IPO. morning, on the

characterized you carbonate expected also the curious just capacity customers I'm we exceed in most as around and terms my your growth. that is wondering translating just I'm how about growth, obviously, the your given opportunity your how important exceed market look into sort the the of exceed that. as of industry And and decide overall the and growth, thinking how allocating negotiations commitment marketplace. question I to, that about hydroxide at contract that is but guess these focuses had you're 'XX growth then to beyond? comments that capacity, you So, for in

Paul Graves

There's a touch so it. that in try question, Chris. on and lot let Thanks, me

those and amongst the think is, talked about I we've our key relationship with. deep had focus lot, long historically is first a clearly we've point that as customers either the a customers

very that then grease world evolves customers, even EV in we're anybody, clearly high so serve cathode frankly, space, whether to focus all XXX, the in XXX content or nickel continue to they're hydroxide nor customers space. [ph] we -- We we've have is the related, the be in important of entire NCA watching to the remain with that how some driving have, as not do for pretty are capacity We metal or space. to a have that going NCA important space, space Within deep, critically and relationships will and customers, high be clearly us EV market. close does and lithium the know, butyllithium and customers, In you long-lasting, the market. nickel recognized They to content the some ours.

industry areas. and that establish industry, looking an a geographic cathodes. different those capacity about how we're China Korea, what industry of have how relationships at and to sure frankly I and XXXX we're commitment customers' those very our actually a on want We in believe constraint that and we when think build is focused increase that comes. those Frankly, biggest and And high really Japan, that time, thinking there beyond capacity that customers add we add XXXX and this to absolutely that XXXX, period ex capability production. true looking a in those we're contracts. It looking and the quickly to much how a content there that's But will regions, about have be China we European make We're in 'XX meet nickel points when be the real develops is both can demand center think to made a will over also to about context in we needs. when is, because all we're of much around

Chris Kapsch

is if comments and and products? Okay. could that that I resuming order narrative you've trends I for then Is And China for appreciate with the seen there. place, on the in follow-up. retooling patterns your hydroxide in consistent some your taken having what just your evidence demand demand

Paul Graves

and impacted Yes, other way de-stocking meaningful not book it our customers order is. any We did had any our -- product more shifts hydroxide in But and our There's in no provided in see XXXX. with products doubt evidence. data see period. that this frankly with was we than saw that demand in anecdotal particular any carbonate have for demand in meaningful didn't heard XXXX. We some certainly certainly lithium in others customers shift

Chris Kapsch

Okay.

Rasmus Gerdeman

can question? before Operator, question, additional Okay. the we just we next poll for

Operator

[Operator to go Suisse. Credit Next, the Parkinson ahead. we'll go from Instructions] Please line of Christopher

Christopher Parkinson

Paul, bit. on this you a hit thanks. little Great,

dive factors to can what's Is While solely to think can of just of just next regarding the mean hit you battery your startups the further? mentioned, specs Thank already broad investors bit. are little carbonate it said, hydroxide what on other bit just best I modest the the a grade on about arising year, way continue are terms the you current But of you factors price or a insight As around in us little the host for give just I if production variables contract on this two? new years? a you Chinese that this little to in considerations? over actual negotiations? some Just focus year the from everything outer you. volatility

Paul Graves

the for this to have product own of own getting of products OEMs. qualified their themselves their get continue busy customers auto customers are a obviously for is bunch that Their -- some to pretty Look, basic. OEMs customers qualified actually is we What largely the customers. Chris. Thanks, look this their -- their

evolving and have different technologies. we maturing is between various degree have creating that's of rapid is fluidity we evolution move So relatively such technologies a slowly we chain And a forward. as that of that what

They balance customers in options as say make that. They And sure as they sure are am simple supply. also hydroxide. short up to not that not frankly. to of tightening it does up -- need in make really their that way content the to to quite world, certainty the in but high part end specification the they do so, and It's the boil procurement these as that, that all of the I place, want our lithium meaningfully producers. move going Then right product right nickel applications of looking down such to quality requirements a of

product the and increasingly to requirements And for that's quality so, of the us going 'XX that there actually on that going 'XX a work we there form further they focus is of through as in up who they these our yet as the challenge are those specification and in to actually our right out. customers us investments see is is produce sorting really head factor And a more we need. significant that proven this ramp is and more Perhaps improve additional on another in can this who right willing of make customers and to be you can that speak to product and produce today volume to product, think market in the of have further. I those in

the show of 'XX demand and acceleration their of own 'XX 'XX, pattern half as half a significant of back for and So half requirements the second lithium the of first hydroxide. to you get

conversations look they XXXX, that while focused again, and see 'XX the in on once at So remain challenge when the 'XX meeting they real supply. years

with multivariable are having pretty a we conversation it's So, them.

Christopher Parkinson

been higher for mean again so as the you next but interactions regarding drive concerns? in were just to Livent do a positive what And you. you level, larger process, your respond the that the some and believe it. how the team team light investors time, from just you do view business over year same the exactly during in about IPO Got broader have do much Thank this your I obviously just what investor to or essentially needs to does? to a surprises

Paul Graves

a people also in what about nuisance at grades? really do will that because the all homogenized/commoditized I actual concerns IPO think to industry we is always going over that that you world me more. that barely the where of eye is I need a is differentiate, be maybe we The ultimately tug needed a that all of form demand demand we of a Or say start I side and in bit about I sell. is think the have and little to important have lithium be. frankly what think just challenged there war I base over important thinking will our of industry in side, multiple bit little Road a not it demand cast the all. it the is LCE And what to specialties is speaking equation that the generally level I was continue critical demand the think I if time? what Show of would on saw And but

more may by to push to on look think a inaccurate business and common industry as differences encourage down time carbonate, not to that attempting conversation and helping supply spend think if an spend frankly we time frankly of single hydroxide to has lead have that, to simplifies markets to don't meaningful metals, our and and whatever this denominator false on overly are within tug chloride, frankly investors. understand I the supply flip we carbonate my between rather the the think product and demand take to also this LCEs investors don't that I more typically it investors view many by even war side, well, at be. meaningful is conclusions if only or there product but of need the continue and it of and at not investors I that, than in hydroxide continue least BuLi, to differences They

Christopher Parkinson

thank you. it, Got

Operator

next line ahead. the Citi. from of Please go from P.J. Juvekar Your comes question

P.J. Juvekar

Good morning.

Paul Graves

Good morning, P.J.

P.J. Juvekar

several in it's view? in today significant hydroxide at or dollars. I and [indiscernible] lithium the converse they a think thousand future see premium carbonate would Paul, is your carbonate, Do hydroxide you to

Paul Graves

So and really products. understand sit to question, like trying I that it's a model important the when two you're

a me maybe give back and try little you step and of perspective. Let a bit

over even reason I range FMC just think that one is one may market -- isn't and and surprise of people, for for this than customer we historically on and it's but and what we we've fair carbonate there carbonate frankly premium specification. are previously prices lot depending is to the at so there Livent wide within a typically seen have received say that of a carbonate just isn't there at lithium and carbonate hydroxide

think you carbonate seeing are shorter you I see in lithium out typically prices trades term there grade small are what largely markets. non-battery when

the out make am entirely so that of of data first convinced prices not are. would I that any the what point representative you actual the there really I see is that And is truly

was between you and for The that draw parallels, hydroxide are of second hydroxide, longer not and will nickel the we once is you That do is prices produced have hydroxide convert will applications. in hydroxide us those second directly from more the and EV input in to be hydroxide shift technologies. a go start assume understand being why especially it then there. the and be would carbonate into move would there point carbonate is two see between that simply the so carbonate content, to be substitute them of the carbonate increasingly hydroxide, is dynamic and that case connected. high the people two and carbonate to could I this option one That no so connections will an It will that case cost just would to make many increasingly you that conversation as less spodumene historically be that thing I people LFP that important to as

the a So is two have will a too. comment I'll you're make maybe going Perhaps of and world - market the China the I'll I make to think different more. I final next is to disconnect. rest The comment make

for the or have or lithium market I other I a the that's carbonate inside China, hydroxide VAT Livent, pricing at capturing incentives volatile us outside China think inside And export certainly is structurally view to the multiple that -- lithium rebate policies prefer really structures through market over that way bring we we point that and China and price think they the inside or in is different that both I and import is then restrictions of you will so in have speak whether for want I'll final contract most hydroxide years. our future. be think stability don't

will carbonate carbonate. year-to-year, sold you that by between a fixed into largely price relative and hydroxide contracts that quarter-to-quarter, volume getting driven find most gap multi-year expands market fact the price to be relatively contracts may So

I think that will pure So a you do find harder trend, form pattern connection. that to

will over I think time. the correlation diminish

P.J. Juvekar

announced And have the in seen Livent rules NAVs for that, in detailed orders Okay. China ahead answer. as recently you XXXX then any Thank you hearing rush any you about new XXXX? XQ NAVs of for subsidy China what in in are

Paul Graves

to speak I'm Tom, going question. let pass that that to and to over Tom

Tom Schneberger

I the will NAVs. Tom, we think, to also causing be increasingly and dynamics folks I is guess, That, but manufactured additional to XXXX, is some to see ramp there's for XXXX this in before all of that the be P.J. it is a that subsidies couple Hi, XXXX. there's seems go expectation expectation yes, away XX% vehicles there requirement an of for

So on technologies the of some we that's some rush LFP or seen. the before yet to be for recently technology XXXX, at are potential lower of specifically very end looking nickel the

P.J. Juvekar

Thank you.

Operator

go the question Robert ahead. of Please comes Court next Sachs. Your from line Goldman from

Robert Court

I more a different Paul, morning, they see to ask the two maybe maybe standard about your having strategy talked on when approach think I or they a without and in you be in going think I and the think that's can necessarily market you hydroxide identifying had or good to that wanted do of approach pricing, those evolving, contracting recently customers well-harmonized pricing, announced, guys to you of how you sort Thanks, deals, three taken us you maybe sort hydroxide towards market customers. and your a approaches, you guys. have marquee competitors markets? do dichotomy customer of your approach continue know with tell about longer-term

Paul Graves

Bob. morning, Good thanks. Yes,

a is, on of is you I from a of your no and kind immature new evolve The relatively continue the market. is there underlying to doubt, chain this think relatively supply dynamics touched question stage.

multiple to supply mine, there think how from I to are chain as and will look models play. when will the OEM where entire who through they play you

in and though, today view conversations Our of and been pricing. will there of this reflected be a our really with of certainty most is is certainty longer-term that preference for contracts volume,

of needed contracts [ph] volume increase in to to you Now think Reliability really between think of or to this is is quality supply, would escalation, think or go that when meet in wouldn't underestimate about what an both contracts hydroxide commitments, I and that of with about on multiple challenges good that factors Muerto needed you is single the drive Hombre chain make lithium demand have those an wrap this customers, to I certainty of time. that layered in whether supply, is puts flat objectives and upstream conversations. of so bring rapid or the of what there that rate hydroxide when will going those by of supply a consumers customers be processing. volume capacity, in period be product you our available volume high have on frankly the of certainty to prefer increasingly And which more to to brine downstream as growth year-to-year. when trust incredibly a short believe and EV supplier continue growth

price of than slight that majority slight think are likely majority, of look I degree the bit supply the probably and or a a implies. maybe though to certainty more higher for

contracts if hydroxide fixed of become and tight bands So, not actually in the some space. pricing more form to relatively me what common multi-year

Robert Court

Thanks for that.

highlighted and there industry explosive the that You getting some done neighbors of to notorious down and important, producers is expansions there even troubles capacity the is superiority is biggest also, your incumbent you time, you amongst the growth -- these and in having on fact going pretty confronting the challenge for seems be supplies it are on South America.

us So, about you'll ones to the on how the comfort can you your what some gone expansions, brine expansions on get carbonate be how the sense hydroxide particular, give confidence? but well, able have you you in obviously that of gives execute

Paul Graves

Sure.

volumes, see our demand, let he I'm get -- you with exactly more is year to as going done over bigger to the expansions him say, to single the to first some XXXX focus pass transitional and me of for making confident. time up our why all, nothing we for I'm engineering nothing today. is is industry that day us. it in and hydroxide for XXXX, color a Tom, a important in expansions going to likely speak sure ramp there as So much of us over very -- I Livent on than let all is you every about to to and who probably give

Tom Schneberger

Yes. Hi, Bob.

think first that we've us a following So while, for been of that all, you've you've for years I this project. of couple on been working now seen expansion a

Phase phases, then the the I that more working also is especially And terms team to think of and are eliminate surprises multiple already early, you've would it X this as finally for thing them up I phases talking ramping makes so could very the we with started keep and identify in government out ahead seen way. us we that by on breaking of us. the get with into execution, and we way, pure manageable that look say that the

and on is in that got need we my everyday, very are Paul we we've fact deliver. So process-oriented, to our eyes office

Robert Court

Got it, thanks much. very

Rasmus Gerdeman

one we question. think I for more have Operator, time

Operator

Okay.

Your today Research. go line of ahead. from comes from McCarthy final Kevin Please question Vertical the

Kevin McCarthy

Good morning.

Just how spend, can the you to speak resident fixed And the flows in the the and trying follow-up Argentina, tend the that your you answer how to cost around to on your expansion just to are also, China? intervals vary confidence next budget of versus variable, financials the contractors, much of years? interact be by with through what region, how projects, does future get U.S., a couple might of over sense

Tom Schneberger

Yes. Thank you.

thing So one the the confidence, we same lot in run. technology a there, in are we just expanding there of and exactly to more actually add terms is

we So, what exactly whether or it's know to manufacturers operational are equipment we readiness, installing. looking

than of there contracting, In a project. more know, typical the it's complex terms little you bit

Paul modularly in know, you to and and feet, XX,XXX at the China in up that fact had it in are that mentioned we're moving We building Argentina. script

both So, different number modules use a we different there and are contracting approaches. And then of size. on contracts, in of mix the the construction the themselves of

potential right XXX% a fixed combination we like if but clearly well. risk go think change here that overrun of So orders of it's the two. project and on for level T&E, because in not a XXX% And fixed there or I a this, the XXX% taken as that you a have is even

an risk. we're taking So educated managing the approach in

Paul Graves

with we to or It's carbonate will reiterate do replicating a really That difference these understand have that's this said. deliver of important risk, Tom just huge proven just proven me have we process today; to Let whether processes no point, we ability technology are to confidence design replicate. that your we hydroxide, what we projects. regard degree makes a have what we to no risk,

Kevin McCarthy

embedded in And of mix the lithium then and versus of put shaken mix price the X%, underlying third in price positive comment or the that may, you. speak in sales base have thank to might of perhaps how helpful, you second differently That's in your a one quarter, on you if I would number. could the performance contribution terms versus mix that out

Paul Graves

contract more without different mix than customers, quarter, that I customer without is certainly guess, answer So and a it's HX would we and sensitive. our so concentration of did a less the that than getting to complex and continue that the probably the very you was and details said, that longstanding in of driver current biggest was less of we prices volumes it a migrate QX, have minutes think frankly reflects more more one into towards really can biggest be hydroxide of always but and rich historical relatively commercially scheduled customers a which and HX. large two anyway most do will has in and driver prices, between I difference took the and -- one, I was had frankly as mix in to comprising, more to data term We what question without

Kevin McCarthy

much. very you Thank

Paul Graves

you. Thank

Rasmus Gerdeman

That's you, call available all call I'm we day. Thank may good time questions for any have Kevin. and the a the additional have today. address following you to the Thanks, have.

Operator

AT&T conclude for your for gentlemen, you for Ladies and executive today. that and does teleconference. your using Thank conference participation

disconnect. now may You

Livent (LTHM) 6 Nov 182018 Q3 Earnings call transcript