ALB - Earnings call transcript Q3 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Hello, and welcome to the Albemarle Corporation's Q3 2024 Earnings Call. [Operator Instructions] As a reminder, this conference is being recorded today. I will now turn the call over to Meredith Bandy, Vice President of Investor Relations and Sustainability.

Meredith Bandy

Thank you, and welcome, everyone, to Albemarle's Third Quarter 2024 Earnings Conference Call.

Our earnings were released after the market yesterday, and you'll find the press release and earnings presentation posted to our website under the Investors section at albemarle.com.

Joining me on the call today are Kent Masters, Chief Executive Officer; and Neal Sheorey, Chief Financial Officer; Netha Johnson, Chief Operations Officer; and Eric Norris, Chief Commercial Officer, are also available for Q&A.

of guidance, made strategic expected constitute statements. some including this initiatives reminder, forward-looking outlook, our company a the during statements call, may As performance and our language applies also this call. statements Please presentation, to about the and earnings cautionary contained note in press release which forward-looking Please that our some comments non-GAAP refer to also measures. note financial of today I'll over to call Reconciliations found can the in be our turn earnings materials. And now Kent.

Jerry Masters

Thank Meredith. you,

storage over volumetric and Albemarle quarter, to solid growth continued in in delivering and below cash energy leverage year-over-year During strong the third well specialties specialties, operational demonstrate covenant growth XXX% EBITDA operating execution, limits. metrics our Kitchen, conversion and of

continued facilities ramp We progress improvement cost our to and plans, volumes. new higher further also deliver our

driving corporate give a moments, our today results to the that designed a cost we As on competitiveness. a result structure, with and a to result, and financial detail operating we more review, and are taking few addressing focus the functional are quarter XXXX considerations. Neal actions few past outlook maintaining performance, will integrated preserve we cost our of flexibility. My significant In this year our months. third on new comprehensive a over the review are progressed transitioning structure to implementing long-term operating are deliver key we fully be model we In will now as outcomes full savings conjunction maintain

X% nearly but have In cost. roles, further savings necessary $XXX difficult X%. our of layers to $XXX we cost announced productivity the part manufacturing this are We X,XXX reducing actions total, eliminated an workforce million by reduce in to to year. including are eliminating These million management all additional global improvements and targeting to and decision optimizing due the by redundancies,

$XXX and maintenance critical driving disciplined phased a and safety, our environmental approach to XX%. And or by capital XXXX expenditures world-class now full site resource at health, We a focus in reduction on year maintaining million our year-over-year least about are also with a base.

right the I to over and conditions have Neal the pursuing during the serving We productivity while are value cost-out quarter. creation. it more our to to to now discuss our market call. I'll steps later on adapt hand will plans are to our financial these confident customers say about and actions long-term results

Neal Sheorey

on particularly Thanks, Kent, everyone. sales recorded and decline net principally performance. to I prior summarize a quarter, $X.X driven compared good the quarter for billion morning, our lithium. X, Beginning third of will Slide billion XX% lower pricing, of in year by $X.X We

recorded and Albemarle loss we the $X.XX. per loss $X.X per diluted was to quarter, attributable of loss share billion share a $X.XX. During a of diluted Adjusted

of included a $XXX at million write-offs million charge in about maintenance, cash of to results call X the GAAP billion. initial outflow Our into earnings X Kemerton which charge care asset to was and putting is of capital below $X.X and we on XX% $XXX second provided last the Kemerton This half of year. estimate related that pretax project the our

Slide to Turning X.

period, year storage of stronger and Other pricing. to projects reduced quarter offset was include This partially of demand. primarily to also in lower lower volumes positives primarily of market sold was to in higher cost prior to growth third specialties spodumene lower than adjusted EBITDA pricing. million the lithium goods Our end our delivery energy related $XXX due by related related

productivity efficiency than also more and offset provided which initiatives benefits, Our cost inflation.

during better to the EBITDA EBITDA execute year-over-year we quarter. demand. operating adjusted improvements our specialties improved year-over-year improved we continue Ketjen in turnaround market and at end productivity as profitability segment, by to Looking also saw due plan

X. Moving to Slide

and sales outlook the volumes productivity improvements, and growth, and maintaining JV full in continued volume year contract are execution considerations, of performance our higher storage. XXXX Talison strong we cost thanks mentioned, our including to Kent at energy our As

these including and prices ex-China pricing China relevant represent As a market pricing blend and are on a of market hydroxide. reminder, and based lithium both lithium observed for historically scenarios lithium carbonate

on X Slide additional outlook. to Turning for commentary

XX% net end per thanks to due expected volumes, XXXX cost kilogram of and of are goods sequentially, continued primarily our modeling sales of we benefit the ramp. have as in as year year that expected we of fourth and continue modest fixed volumes expected to our of slightly pricing benefit cost-cutting Full growth middle reduced to new be in be the conditions sequential to to higher demand, in Please considerations and planned thanks market full slides full energy to lower-priced to corporate both EBITDA facilities. to be be and due appendix offsets second the outages. Margins for more quarter, end sequentially spodumene unabsorbed adjusted ramps specialties continue same down and successful expect expect in scenario better particularly $XX Ketjen, for offset now $XX to solid be timing enterprise. impact lower by plants spodumene deck storage, the sales to of productivity the benefits. from Fourth near to scenario, refer weaker XXXX new of than our to At the costs we across productivity expect are the and improvements. In year tolling contract improvements quarter year-over-year sold to additional to range, China lithium, ongoing volume performance. the We half primarily is as

outcome the operational cash ended have have costs QX we sheet financial reduce metrics actions We liquidity to and billion liquidity Thanks efficiency equivalents $X.X billion and our provided the cash we the quarter conditions, cost enhanced optimize is proactively $X.X action $X.X navigate measures Moving flexibility. shown operating of October, took debt In to flexibility financial To XX. the quarter with balance enhance waiver improve reshaped We to of on structure adjusted turns flow. our through Slide in we of of to actions. structure third and and below under cash to waiver. The the successful proactive X to billion, taken our our market also needed EBITDA and we on X.Xx quarter in limit including covenant net third the reduction covenant our cost our we actions or available covenant new The quarter. ended execute with have ensure the our XXXX X. full Slide our as and it available around of and revolver. extended

as and to well actions. operational remains and our execution XXXX. Slide discipline these XX result of operational continued improvement goal our stay forward, is the as flow which cash by have our limits execution shown in solid demonstrated we operating through Moving management financial highlights throughout within focus, a cash

operating primarily percent conversion, EBITDA management in cash was to of Our greater flow capital. third quarter, defined cash working operating of flow XXX% and timing the due as as than a adjusted

We well timing recent be expect workforce the our to inventory with quarter higher at of outflows including expect to part a year on JV the across end Talison our significant above cash to driven volumes continue and conversion dividends. to we the our the higher This beginning cash full sales cash operations. This fourth increased of the than working historical and associated range cash expectations at approximately as Greenbushes, XX%. year. operating dividends conversion announced with due of And be at as in quarters means that reductions we capital today focus lower by is and improvements, management

in dividends XX% account via the JV As cash Therefore, in flows for a equity our impact reminder, Talison method. we interest the to the is received.

the our As dividends completes see into mine. I'm improve X CGP that operating said to normal are at XXXX and results. project to as this efforts Talison we before, year cash the Greenbushes to we conversion yielding have expect flow than be lower capital pleased

of management, cost out other We bidding free cash and will continue flow improvements. breakeven new inventory capacity, productivity cash measures events, driving our conversion ongoing toward through ramp and

positive conditions, Turning to on shown I XX. signs. current have market lithium few a will comments which Slide some provide

loss. announced On at curtailments, resource side, and downstream been XX% a at is unprofitable, the producers least unprofitable of the or is integrated there supply estimate are several We pressure. rock conversion operating that cost have and hard under larger global nonintegrated curve upstream

also strong year-to-date demand continued breaks region. down to by XX by represents demand registrations China. the ahead electric growth in EV demand market surprise XX%, digits. Slide the more by grid XX% growth U.S. and up the storage Global XX% growth EV initial year-to-date led double China up is side, On and demand of with to global United overall led are demand than of continues installations up XX% to the China, in year-to-date, States expectations. of slightly upside, line vehicle the in

affordability. and cuts in sales of battery EVs up where increased range-extended plug-in demand In conditions. seen sales subsidies back headlines. EVs drive towards growth plug-in have opportunities and plug-in XXXX. North hybrids demand economic year-to-date have U.S. battery region the terms in stronger sizes EU hybrids. Meanwhile, XX% represent American slightly model sales vehicles rebound more targets China Potential is between hybrid the battery is mix, Europe, far of by reduced balanced subsidies EV and Chinese recent due from year-to-date, weaker EV than include the growth are availability price and traditional to current suggested we globally as between with somewhere stronger trends plug-in hybrids. emission are in strengthened sales softest the and in year, half down benefiting

the price the transition The trends reinforce Kent. expect supply From lithium from not I'll industry expand Longer Overall, XXXX. XXXX continue long-term EVs advancements. potential technological behind. are to growth of to kilowatt Looking of global Slide surpassed global an where belief the far the the to that, energy world at industry. With perspective, has supported and likely track parity on hour to to now X.Xx it purchase on preferences consumer back achieve remains with affordability vehicles. chain target that point, to hand per well is continue with by underway, government our further XX. tipping The out term, $XXX these we demand by ICE the growth rest in policies critical EV Chinese

Jerry Masters

Thanks, Neal.

actions rebaseline taking our significant Turning XX. will we to to necessary cost structure. cover Slide are the I yet

maintain preserve us allowing While future to position our growth. and leadership

operating XX. with structure Slide on start me Let our new

Over have models, organizational months, we with the balancing an multiple cost approach. evaluated go-to-market past agile several

reporting financial we cost long-term operating across role report a Following structure. to energy perspective, [ shows Ketjen changes competitiveness. This reflect new structure, our X deliver we new savings maintain several title and this From segments integrated a our to announced functional and and slide storage, specialties leadership continue of will our ]. a our significant to to with review, transitioning model team fully

our Our flex leadership complexities in to position. our strengthen fully our of integrated a maintain is and to capabilities to core cost-effective organizational way structure markets designed with the

to continues our It's for have expenditures navigate we urgently as Slide and X steps important to optimizing current self-help conversion capital of business series improving environment. enhancing in latest XX. Albemarle we cost our been financial the network, to put months reducing of and act actions flexibility. Turning progressing context several across areas: key the efficiency,

maintain are of pivot face, to I'm ability competitive potential ready as to conditions. the we these the market adding broad-based that to that list improvements we Slide in in continue advantage based are always long-term to of actions team's our Our light dynamic highlight are designed necessary. our date. We our to And deliver actions environment to and performance given so confident on XX. on we

plan, this initiatives summary well is on these July additional savings execute. execution cost cash track programs we're are the as flow operational are flow our actions of All sharp proven demonstrating January and and as on focus a in ability of the and and January of introduced to in initiatives today. announcing and our or Here progress actions on ahead the -- efficiency cost year July

to XX% $XXX improvements achieve of million Regarding cost the we to by a this to end run million expect announced of we XX% the $XXX rate today, year.

and Additionally, to to million savings. was involved XX% to to and our got through between million, targets reduce CapEx combination estimate a down we rigorous peer cost-out versus XXXX. XXXX CapEx robust and target bottoms-up $XXX How of $XXX we analytics benchmarking about that plan planning these project

analyzed costs, specifically we costs spend R&D, quarter, across nonmanufacturing and expenditures. manufacturing categories: capital the and SG&A X Over

cost and on manufacturing Our savings Slide deliver are detailed the levers productivity to and nonmanufacturing XX.

through November to cost-out of cost yield follows with assistance areas. peers management We specialty and benchmarking other and $XXX total optimizing plant million approximately includes and rents, activities like driver reductions $XXX low-cost in to work, Our reduce and lithium X model jurisdiction and in The hubs million leveraging opportunity volume biggest and split include maintenance savings and energy million reduce activities established to mining. manufacturing technology consolidate increased improvements operating efficiencies opportunity million us to allows evaluated between is other robust these $XXX more a drivers layers shifting $XXX structure increasing consultant. made improvement structure. and effective related of duplicative of nonmanufacturing $XXX cost manual of work. industries chemicals efficiency. Other we and against The our to cost analyzed nonmanufacturing The nonmanufacturing review key million like to the third-party like-sized and to a integrated our change

maintenance We leveraging progress by of program will XX down and the our actions through which in continue allocation, historical execute. Slide site help, are and resource in to manner. Through have an work, sustaining capital of Though base pulled our a will internally laser-focused sales, breaks which targeting CapEx projects. $XXX we our third track performance will our will million to XXXX. critical capital specialty we Overall, management the invest net in we of reduction our maintain line down office, we initiatives on of environmental XXXX to leg spending, disciplined with safety, and these averages. be versus ability X% is phased expenditures and chemical than X% our our to continue more established industry-leading

Additional growth primarily brownfield and limited high-return will expansions to productivity capital improvements. be

are designed maintain framework are advantages to XX. by Moving taking creation, which XX. is for and long-term actions value encapsulated competitive us The significant strategic Slide position to Slide our on shown we Albemarle's

is pace we will pivot with to we strategy adjust execution always, as Our our the and markets serve. dynamic but unchanged,

in we play highlighted growth compelling the allow we resources strengths more us role into ingredients. Our strategic with to operate profile transforming have world will The we a resources Albemarle to Slide framework environment, provide in and competitive areas guide critical detail long-term on navigate critical continues we as the central a that how lead XX. in

Jordan the best grade large scale, First, with grade storage, therefore, access in some to in in States. have Australia and United are globally Brian our assets. In highest bromine low-cost we world-class in Hard producer high only resources specialties, and Similarly, the X with resources Chile. to arguably the both of resources in Tier we are Rock access industry in energy the both and, the

is evaluated extraction achieving solutions. lithium Magnolia, range the options know-how direct sustainably. chemistry improvements, both process we and further safely Salar a leading key piloting and our and wide and Second, to of cost productivity At have our

Third, we a of bromine solutions pipeline have innovative and in lithium. both high-impact

customers. leading segments to Promoter our companies. choice good increasingly Our businesses research, in we and and long-standing competitors. with Both partner requirements. Fourth, that testing our Reflecting with Germany participate with partnerships in have Carolina, pioneering allow high industry the to recognized facilities major the is our a good Net North differentiated do of our piloting Scores through significantly is iconic and support doing. us we are Louisiana customer-specific and positive high-margin Albemarle's demonstrated gaps position relationships for relative And successful work work as

another in the maintained creating Slide performance solid thanks as higher EBITDA best and named energy demonstrating the world's enterprise-wide and to recently energy delivered improvements, world were of we specialties XXXX example, resilient time, Ketjen. one the Albemarle For storage summary, year our advancing project commitment companies our to contract in of specialties by on including storage in customers. In performance. improvements XX, sustainability for more a our objectives quarter, and year-over-year outlook and We've part adjusted ramps strong considerations, volumes full third and in cost

portfolio turn the control here and competitive taking leader Q&A call XX. And to on control actions vertical I steps forward operator am are to cycle. Albemarle and a we in I'd ensure we incredible our the right on our to long-term are on I with some across to strength. the face-to-face over broad-based taking focused We what global a with competitive capitalize confident you events look that, the to we maintain can proactive Slide integration at remains are the like back seeing begin to listed portion. markets. of the and to opportunity upcoming position world-class

Operator

first [Operator is Yefremov Instructions] question from KeyBanc. Our from Aleksey

Aleksey Yefremov

change? expect if next Was least you you Can flat some at cost an do increase decline? keep prices volume lower fixed year don't EBITDA or and your growth. Or

Jerry Masters

okay. -- So

question into we that's 'XX a go So it. as

give give kind on you some to off that? puts So we Neal, 'XX take we're this, of 'XX. you and can want clear, of going be just but to for an do not to outlook takes

Neal Sheorey

just right through outlook our Aleksey, yes, sure. XXXX now. Yes, -- so obviously working we're

So you earnings about We'll on next for that. takes give about little it's just puts a talk talk couple that a to and call. premature the to us But of here.

market So that's today, XXXX. is range obviously, have something achieved to probably observe. in where end XX% our of XX% the is today, the that to can lower that average guidance pricing you below And relative pricing we're we

point roll of that that build of terms today's year, And for next a -- kind what so in can thought by remember the of in build from our if JV JV. in a unusually gives a the at you into for to in to because Talison kind assume our we prices you you of QX, pricing. I'd you we headwind had that earnings up also an equity bump had offtake partner high

don't we uplift had second million quarter. the in repeat And well. expect I to as $XXX so XXXX in that about And

to Now on cost, is, should come our today, announced our expect that costs are actions you and that cost as the going side we've had actions. We've the fixed million million down. fixed productivity the $XXX of $XXX mentioned, opposite of you to

at XX% this at end that to year be we'll of We run the expect that rate. XX%

of can our you through build go start the XXXX. we course, plants, year. to also in that ramping especially we're build on of And as savings savings then, continue business. course, is that So to still the into those we'll And lithium

assets to our to going we continue XXXX. through expect should fixed you are so ramp go as And that

XXXX. you a just takes and to through puts things few So about think as go

Aleksey Yefremov

volume 'XX. provide point, if and affecting about lithium? last next the year you your in it volumes growth you any cut How on up CapEx follow year is can to for then next comments And your

Jerry Masters

the I -- cuts we're doing will CapEx impact mean, don't now volume. I Yes.

us Our volume next forecast CapEx and just out on that's for year. Those -- for our program. getting further then tighter

-- So we talked through 'XX. I look previously think -- at we've we're still growth XX% about

of CapEx through some CAGR 'XX. we've and the XX% out, Some cuts probably volume done that's taking

little So -- not it's much in a so It's it's term. longer but 'XX.

Neal Sheorey

Yes. I'm assets pile and the is to that driven that maybe ramp. And XXXX already growth are Aleksey, to obviously for just continuing to about built by talking that, on

Meishan like the project, China, improvement yield Salar Australia. Kemerton in So in

have to are those 'XX. XXXX, things continue ramp that So ramping and in been in we'll

Operator

from is John with Mizuho. question next Our Roberts

John Ezekiel Roberts

that fourth storage. in X, fourth XXXX Slide XXXX. in And for CapEx for On improved assuming for equity the and income the Talison quarter? are energy you guidance What quarter margin what's Talison

Neal Sheorey

Yes.

So John, this is Neal again.

So when equity basically think think into next flattish spot third your if pricing income for about I should pretty fourth quarter, has be, I you at been you look assumption mean, quarter. quarter

So kind being all repeat of of that equal. in quarter, should think experienced the question, I third you And you we've about think then the something again? what to second things think I part can your similar

John Ezekiel Roberts

for what CapEx Budget do XXXX at. And comes you their XXXX in yet? think

Neal Sheorey

Yes.

is it for premature CapEx me the about So definitely budget to for talk XXXX.

that sure, budget and working it the up as starting actually to continue to an JV JV and the XXXX. in asset be right with to need with we're asset. continues built. will X spend John, CGP That's Talison the be that there with literally finished towards XXXX, up of is get capital to the the we through For will end But partners expect regards now. be It the to we

the speak earnings premature next should little it's for We that. call. to a to say to So more me on have

John Ezekiel Roberts

did you get to or have agree to revised covenants. what to financial pay in And order the

Neal Sheorey

Yes. amount. but it a you exact John, was very I small won't number, the give

less being million. it You should about think than far $X

Operator

with is next Deckelbaum David from Our question Cowen.

David Deckelbaum

below beyond, $XXX you've is capital? that the this profile. Or questions review, think you if of growth should we million, approximately where get your impact into The a bit through strategic of as on we some the see those CapEx million, levels? curious cuts we $XXX that go reduction and was I 'XX received numbers quite of as on long-term maintenance could

Jerry Masters

Yes.

we're of range normalized targeting look, -- we're of at a down and to getting capital, level. revenue tightening So X% on we're -- X% maintenance we're a

a above that see us think normalized little this we a bit because level. pricing you'll is year below So

but to And high paybacks. in then So which and type type projects, we're productivity projects, also working quick see above brownfield we're that a expansions, capital up. growth for are you little that, tighten there high-return return

that. a built that's and into ahead work maintenance X% little we're a we'll normalized capital continue from be the we'll we that It of So in range year. to that of that for got trying have, standpoint, on we're million, but and how depends that continue on But focus. what to opportunities this $XXX we're next to $XXX kind for we've year. Or million, of to basis, on X% a

Sorry.

David Deckelbaum

working for helps preservation. And that management just quarter, cash of balance the then capital with conversion just continuing What's the there the conversion? several that in quarters Obviously, sheet. next and terms fortify of theme was of outlook kind the cash really this helped some

several of So here. us I'm you next ahead curious think how about quarters the

Jerry Masters

Yes.

So Neal we're But can give us very some specifics on it. on focused that.

key that is Some around cash metrics of conversion. our

everything on flow, that that, cash cash is we're key metric So conversion. around a management but focused

quarter. this we number big a saw can't repeat that. We obviously You --

come that. where we're we've above So it up. Neal, number driving to historic off comment? operated make on levels but want that any conversion you do focused that specific historically, will We're

Neal Sheorey

Yes.

add to to that, Kent. Just

focus obviously and we got center. on in working have cash I'll in a we're future. work internally very Kent on quarter double much breakeven Several very flight this. continuing we've things to absolutely, capital cash is obviously on And flow conversion strong driving generation, said and management what front every So the that is free cash down that that point to

cost the we're are obviously, already more But doing. today, announced have We even we we've that that and doing. productivity

to drive we that. so And on continue

about dividends off think the our flow The venture. is of Talison how important the coming other joint be cash will piece that very for generation overall we

dividends the lower is reasons quarter the we down. we deck our mentioned to those that fourth quarter, think in the get fourth into the cash to work JV it XXXX be we in venture as partners. at the Right going in is JV, they'll joint be of that the very see things that coming One dividends be conversion the from through moment, that is our throw with important as now, through the can and But of we zero. we back will as the Talison obviously, assumption

Operator

next is Scotia Capital. Ben Isaacson from question Our with

Unknown Analyst

is [indiscernible] on This for Ben.

-- spread Is is discussed for Xx covenants any question kind that QX. of those you my can of thought leverage through in you've provide So limits so on shape there XXXX. a buffer. that providing color they substantial you your as evolve We the

at Moving covenant 'XX QX kind specifically QX X.XXx. lever to and limit of rises that the where

there? color any So

Jerry Masters

Yes, [indiscernible].

So covenant -- shaping the EBITDA. essentially, of recall XX-month on trailing that covenant that waiver follows a sort of calculated is our waiver

And as this of so on that we've can at you we've the far we the generated how imagine XXXX EBITDA of kind so that shaped backwards based shape well. the in look

that's So go we then shape accordingly. through as might thought look XX forward months covenant trailing the and the how how really we've like waiver

Operator

is question Steve America. with next Bank from Byrne Our of

Rock Hoffman Blasko

the And Rob the shift market lithium pricing meaningful in relative Hoffman come quarters. Byrne. with to Steve at for prior any of lag versus on lower Was In energy apartment percent for? percent a has quarter pricing pricing for pricing us. of and X in contractors what XQ, prices. has realized QX premium the figure there contract seemingly storage

Jerry Masters

Yes.

contracts -- change no really in off that I the quarter. rolled during there's So the don't

about So that a the changed. that so than sure little the view think contracts I haven't really that's -- I'm they But way not different it. is

don't say the that we're we is taken mix than to floors the moves. your price the -- volume how where we and it's contracts anything more I we're going said that And are have So and average before of think customers about gets have. those where

about -- and it to hasn't we're So But going we've contract some on X/X it of others have don't. got and but volume ceilings not changed. and floors

Eric Norris

and -- a we did higher of than quarter, of this to as see fourth our the timing date I quarter could add sales sales, and and any A during that Eric, mix in due spodumene we'll just of has. that that be will spot the well. was the lot would the see quarter which bias to volumes highest is quarter

contract mean basis that consistent full I target, a think something That's and wash noting be effect I reflection that on a mix that guidance. So on there's our year out you're is not of a would with there.

Rock Hoffman Blasko

follow-up, XX% as given cutting market volume? consider the you just a CAGR tighten to than near-term rates pricing And sense. operating the lower forementioned Makes sustained, guided rather being growth in might

Jerry Masters

where -- we demand look little we -- see but to the the it what most we to makes what a where produce sense growing It's everything. at for mix Philip, Yes, volumes effectively. our us customer about is, probably about less bit tightening market it's and cost

at So the our about -- tightening including about it growth but the look but plants, rates mix the we're looking at market. it's more at thinking operating customers, about really we of everything, demand -- than is

Operator

with next question Our Morgan Andrews is from Vincent Stanley.

Vincent Andrews

range would What by ask for year, next of and the million you're XX% what make but I guess, to off you a the then I going to such $XXX XX% million? on you would year. it $XXX could call by $XXX make end wide it in million Neal, -- this a to run rate the what million gives of $XXX end

Neal Sheorey

and things that that's around -- we're of think through the -- I just we're it's that range working a that. giving mean, some I it's

So out. not completely all it's detailed

a around there's as So that and go. dynamic we

some it's around it of of productivity that plant. we're around things is operating Some doing cost improvements overhead, and at

a So a be more the and because breathing would a of upper sophisticated would there's end it's than fairly think I a lower give that. conservative -- range the room to of little us bit any stretch. bit don't end we're be

Vincent Andrews

ahead, into to cycle you we something ask last we're and at be Board it kent bottom or cycle to if back get what And going you your the reversion look a doing of back How out lithium if do do? up let's is about you're go not go down obviously assume be conversion sort a clean buy $XX,XXX And you, sheet where to are make want to enough. forward? as and Fair thinking you to Albemarle's and the how strategy you is strategically company when want turns, and issues. Or you? up to the the things cycle, could we balance going ton prices a for just number, to be? where there What assume of were to wants different? are the resources you going the going Is going

Jerry Masters

Yes.

So strategy in executing that but the changed, has we've said not it actually prepared has. remarks against our said and we're way our

So react if market. when -- and to the we'll

-- going that. come going honest, prices sure be a around So stay we're be there conservative shift we to that to think back our to little before they plans make I are to

we'll of to be So up not on making we're to to through structure we'll sure think going cost be we're in right the we're stay I in cycle, they're we able we're now, just we the the trying sure changed if move we're -- not but cycle. sure that it place cycle really to just bottom want focused up to conservative create the that up market pivot make they -- and returns, in if put flexibility a another a to make compete to going and be to the and and little

Operator

Kevin with Research is Vertical from McCarthy Partners. question next Our

Matthew Hettwer

McCarthy. This Hettwer is Kevin Matt on for

of and it difference? group. to there's gap cost implement identify a nonmanufacturing And structure benchmarking do you lithium peers? new your a plan costs between what looks that source how On processes the those review, from Albemarle peer that of as at at did Albemarle? current you did Slide XX, your During you learn median What like

Jerry Masters

take on benchmarking, I'll that. So the

room. phone going in we Sorry, off got the a

our heavy operating benchmark, about processes structure, from but more cost big global was the any not it where overhead sure corporate less cost lithium on type new people the and we that a -- like about peers, and it's any about I'm process of were sure with benchmarking from learn it's I'm lithium peers that those -- ours, not very people we footprint just changes peers. manufacturing, pieces. have with up bit picked a not we looks broad that our learned So

I standpoint doing. took a we think other it's about the saw what more based just on cost we savings from corporates aspiration

Neal Sheorey

Neal. is this -- maybe And

again, and of now model we as organization organization. that And cost-focused Just announced. for to obviously this model a to to moving add the functional standpoint, we're Look, that things. couple growth positioned for were is historically. more works that of in new Time a environment, an we

that there you to And think a to strict model is what key achieve functional standpoint. of X from things so I we ways that are saw the need

that's be And we and thing out running offices. as naturally to much So can especially up company, the more back key in model simplification use is well those too of then And that are things the we opportunities. efficiently, as to other areas point and that there functionalized a very running are going I'll the cost well. and have X functionalize we

just So a those of examples. are couple

I think well. those really slide, cost as areas are You see XX we But of the are finding it's on opportunities. core some where them out

Matthew Hettwer

given momentum in been And or significant then could and think Africa China to you recent comment taken you XX% do movement see of downward curve you've so of in a supply curtailments the there why on the it's significant long Has supply? any that supply estimate supply seen? you be that downward some lepidolite out unprofitable, to of

Eric Norris

Eric. is This Yes.

during seen coming care some largest able maintenance, brownfield announced and of that out get to clear the China growth We We've in it was lepidolite corroboration that, down significant more the taking of some it been lepidolite, that's always still in some summary. of all -- in on get on the pushed lepidolite isn't also serving had there's into delays in capacity sites -- but in been speaking China. -- Australia greenfield continued out. Brian supply shutdowns but have that's coming China, But were quick since gone of expansions detail, quarter, although more and offline. seen of in suppliers Where the market replacing can the market. the Obviously, that's and or one So we've a projects has the the either been have some we've Western Africa. out lot in been or of the modulations a some lepidolite cases, growing

to operate, today. more may as cash their a market And can continue project. for They is do has to young raise is market Chinese long you presence an it's -- balance come a As a sole to don't not reason fragmented it alternative. a they have out, a they so, have sheets. as is companies puzzling. will a whose existing on lithium they And is where It it's have why of with lot market. little significant It

to So pricing we're about that it's talked cycle little on going a for take that maybe the which longer, be when I all is longer and is is think lower our today. potentially, such this the actions have these to through we market maturity it's putting taking view reflected that and out in need our driving across competitive --

Operator

from Jackson Markets. question is from Joel next BMO Capital Our

Joel Jackson

supply, real some prices Just Or to that come now, real get to do just Would point. years it be Don't for market, agree? first demand. prices happen following Because rock, my be needs that this supply seems you It's recover? to can't now for of spodumene, more get of the real brine out market out needs at got you the like to not real question. like but think to it what you projects to think going? supply on hard up

Jerry Masters

storage quarters. we Well, had And I more needs persist, prices little volumes of picked It's bit and it over up both. to matter as then and supply. And to expect stronger long been in a at think supply but still takes. few -- to little -- the it's these by it levels. fixed it more A how It's is out, some demand it's we come a will we demand prices both, need out. both right? strong, right? these So supply come of pretty we come anticipated, the do than we think it is and do at out. It's And last

Joel Jackson

in stake it a at the had few have whether sales, maybe or months in the publicly I a retraction at about speculation sales? maybe be any generally in media, you'd just selling the looking media you're report Could got you also a stake your considering [indiscernible]. in if your asset Talison, you the looking Albemarle be talk asset think or in lot refuted last stories from of Greenbushes in which retraction There made media some about but been that

Jerry Masters

looking a from at we're But portfolio perspective. always

not about that's rumors we're we noncore -- but -- So that I is Greenbushes, And that, -- on to we when that. talked we said example But we've are we're did selling. around sell. that clarify an but speculate wouldn't about that we asset a Ketjen thinking look mean not Greenbushes, of something and

Operator

from Sison is Fargo. next Our from Michael question Wells

Unknown Analyst

This is for Mike. Abdul on

to ask like wanted of costs in plans of the anything terms or any that? about Just status Kings Mountain, there's if or update

Jerry Masters

So Kings project is push in. to continue invest Mountain and a we

necessary And and from there's number of a the it's long would permitting a that time going process that, track. point, is we're process continue those. standpoint. it's at through that on secure that And that pretty a say are this permits track, we process. pursue to is of So I for all permitting frame But to on

Operator

is Wolf Parkinson Christopher question with next Our from Research.

Unknown Analyst

venue. This your implications be is and you're environment. it would to on thoughts the the you're and election, tariffs thinking from some that how subsidies one, first kind strategy the -- for helpful my how Harris maybe adopting of hear EV about of for

Jerry Masters

Yes.

And strategy We'll do. do. energy they've -- about. say in America. we So have kind and that might it and probably we to adjust were to I -- transition around see. -- early that. across energy a talk is And happening. a second contacts is think we've have do. and may around We what is by pivot prices of do have they economics we North pretty wants that been want We've and of that We'll It's that. But on I driven the the been that have what to administration do. to the speculate kind just really China, happening our worked global is Europe, off there. they administration that, phenomenon had but what now talked aisle know well, have backed what talked But largest see it administration market, about to positioned Trump is take wait to first the do, little to this that what what advantage of I in and and in what but in we're had to know we well wait they don't globe Trump about, Trump then still are and the will have see to the this We we a transition chain and building hope U.S. a We it's supply global -- see to a the to market will West, wait given so west. that to low

Unknown Analyst

table you Slide what's I more. to detail a maybe Anything productivity intensity in more as then you the even upside to capital potential reducing little that Got provide it. That's what actions, right XX, helpful. And mentioned for might second my one, as accelerating entail? now? share you could on and guess can

Jerry Masters

-- it overhead this, we I we're being aggressive before, we're R&D, look, pretty range to as we've said base. So we working given and think our that through and manufacturing from and -- around because a of covers everything and that, part

cost opportunities of some out to there's take there. So

to to to that the do want those. know it. we don't We I we'll back come speculate then and work on need So

be to time. anything that out don't against want we'll to then in we execute I'm narrowing and go new hopefully, see, this. range you'll of first think in have I report, I And not we'll But that. front the we upside do through to the as if get --

Operator

with Joshua is UBS. Spector Our next question from

Christopher Perrella

contract on had Perrella are follow-up outlook lithium year. on Chris then follow I contract in to expectations fourth the use What of for wanted this It's in for know up next your I mix year. I the And it's for under quarter. on XXXX? Josh. cash the for a X/X

Jerry Masters

have at a volumes. current our of the a come through So with than be may as I not other guess, contract, that won't we under -- the but And contracts. floors as of probably not we're it would change fact that we the this, so same lot will materially in the spot be on mix it growth level our go --

volume if mix, will, So spot it's the contracts per the change contracts that we or more so that not come spot on basis, sell is kind new you reflective a existing a -- on additional really it's growth that creates market. those but either ones, se, of the the of in

Christopher Perrella

large. or quite standpoint upon the from you in the going is quarter? is for guess just use out quarter operational cash I of in from cash fourth fourth an what cash operational Could or expand be then size an the the And outflow use the to Neal, of bucket standpoint

Neal Sheorey

Yes.

things of you Let think a about. to me maybe give couple

first from a of not now expecting fourth Q&A, we're dividend all, Talison quarter, mentioned JV. a the on the So in as right I previous

you kind what in was If the $XX $XX million did probably you'd look we back million quarter, in let's the, in of that third dividend call go we got the at what that, quarter. or range third and find to in third quarter the it,

quarter. piece And we're on we not fourth the that -- X expecting so that's won't in that's

remarks, mentioned performance that The other prepared we -- our in capital things behind the as the X in we the are working there quarter. of X piece reasons is, third

the an in was first, said and to point The our on we end of driving the some still items management, reduced into we're third which the quarter. working in But that capital what And inventories also the by quarter, is efficient year. that we those timing was A-Pay talked We working the we had moved about capital. from much very fourth of happened. quarter specifically focused

exact number And but millions here, obviously that's can be in tens that, won't have give payments. eventually I to you dollars. those you of of the imagine we'll to make So going the

we announced we to that today. actions payments. up As those the then the last the And X finish reduction is payments related cost

million to If and that time you if in it's kind outflow know that well. don't range to look as $XX but of queue, our kind of and at $XX in we you've had I go look million breadbox cash that,

key So cash few that maybe about gives from a operating you to an think flow buckets perspective.

Operator

is Patrick question next Citi. from Cunningham Our

Unknown Analyst

for on Zhang Eric is This Patrick.

care consideration into guys On you is there assets guide, could actions and what that CapEx down maintenance. through taken the contemplated under are have us to go potentially any walk CapEx and you and the bring XXXX can

Jerry Masters

the first. okay, capital So me let do

across growth And I'm of think and -- a -- some the rigorous. capital. we part said into doing bigger taken cost back payback we've level we've revenue projects, then question, forecast ahead those. on we've we capital tightened that still out and that, we're projects, out got future for the prices. investment So maintenance second a the which we before, taken standpoint, projects on for we've a again, we've and below whether and what what got little 'XX we're improvement a then -- a the short And a we've payback we're basis. that's range not normalized projects or we're short those X% in, maintenance doing little they're in lithium on of tighter capital, -- have and on the And because that projects, were of to little be our growth organization, pretty there is minimum for that would normalized of larger need we're given type for why from we maintenance more is sorry? kept you around the capital, revenue a And targeting We've just help additional pulled up growth as a -- me think that out we had we projects bit. some looked X% can this others of high-return, gotten because But that we product we planned. And either that

Unknown Analyst

so -- question the we. On

Jerry Masters

Yes.

-- I So we've it. got yes, done

Sorry.

we a decisions are So and that. the we've care we made in depending X at resource and And done go, assets, conversion not look look from that It's portfolio. Kemerton train We've prices that both maintenance. we the will will at where other at. across on around something standpoint --

decisions those well. some JV acquire are like of as And

it's is venture our where agree we're deciding that partner. something about joint with to Wodgina but the So Wodgina, have we we at number operate trains X of

Operator

time back we remarks. pass for closing now questions. you. Thank Masters all to it for will That's have I the Kent

Jerry Masters

drive performance, Okay. stay today, Albemarle growth continues to Jimmy. advantage across solid take reduce end the well to joining operational for our our deliver you, we long-term cost underway opportunities and to markets. please due proactive execution Thank safe. steps us With company. across you positioned to of Thank the results and are

Operator

for Thank call. participation. This you today's conference your concludes

may You now disconnect.

Albemarle (ALB) 7 Nov 242024 Q3 Earnings call transcript