Q1 2020 Earnings Presentation 5.11.20
Safe HarborStatement Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: Certain statements in this presentation are forward-looking statements. In some cases, you can identify these statements by forward- looking words such as “may,” “might,” “will,” “will continue to,” "will likely result," “should,” “expect,” “expects,” “intends,” “plans,” “anticipates,” “believe,” “believes,” “estimates,” “predic ts, ” “potential,” “continue,” “could,” “forecast,” “is confident that,” “plans,” or “projects,” the negative of these terms and other comparable terminolog y. These forward-looking statements, which are subject to risks, uncertainties and assumptions about Livent, may include projections of Livent’s future financial performance, Livent’s anticipated growth strategies and anticipated trends in Livent’s business. These statements are only predictions based on Livent’s current expectations and projections about future events. There are important factors that could cause Livent’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements. Currently, one of the most significant factors is the potential adverse effect of the current coronavirus ("COVID- 19") pandemic on the financial condition, results of operations, cash flows and performance of the company, which is substantially influenced by the potential adverse effect of the pandemic on Livent’s customers and suppliers and the global economy and financial markets. The extent to which COVID-19 impacts us will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the scope, severity and duration of the pandemic, the actions taken to contain the pandemic or mitigate its impact, and the direct and indirect economic effects of the pandemic and containment measures, among others. Additional factors that could cause Livent’s actual results, level of activity, performance or achievements to differ materially from the results, level of activity, performance or achievements expressed or implied by the forward-looking statements include a decline in the growth in demand for electric vehicles; volatility in the price for performance lithium compounds; adverse global economic conditions; competition; quarterly and annual fluctuations of our operating results; risks relating to Livent’s planned production expansion and related capital expenditures, including any temporary suspension of our expansion efforts; the potential development and adoption of battery technologies that do not rely on performance lithium compounds as an input; liquidity and access to credit; reduced customer demand, or delays in growth of customer demand, for higher performance lithium compounds, the potential development and adoption of battery technologies that do not rely on performance lithium compounds as an input; the success of Livent’s research and development efforts; risks inherent in international operations and sales, including political, financial and operational risks specific to Argentina, China and other countries where Livent has active operations; customer concentration and the possible loss of, or significant reduction in orders from, large customers; failure to satisfy customer quality standards; fluctuations in the price of energy and certain raw materials; employee attraction and retention; union relations; cybersecurity breaches; our ability to protect our intellectual property rights; the lack of proven reserves; legal and regulatory proceedings; including any shareholder lawsuits; compliance with environmental, health and safety laws; changes in tax laws; risks related to our separation from FMC Corporation; risks related to ownership of our common stock, including price fluctuations and lack of dividends; as well as the other factors described under the caption entitled “Risk Factors” in Livent’s 2019 Form 10-K filed with the Securities and Exchange Commission on February 28, 2020 and in our Current Report on Form 8-K filed with the Securities and Exchange Commission on April 6, 2020. Although Livent believes the expectations reflected in the forward-looking statements are reasonable, Livent cannot guarantee future results, level of activity, performance or achievements. Moreover, neither Livent nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. Livent is under no duty to update any of these forward-looking statements after the date of this presentation to conform its prior statements to actual results or revised expectations. Non-GAAP FinancialTerms In these slides, Livent uses the financial measures adjusted EPS, Adjusted EBITDA, adjusted cash from operations and capital spending. These terms are not calculated in accordance with generally accepted accounting principles (GAAP). Definitions of these terms, as well as a reconciliation to the most directly comparable financial measure calculated and presented in accordance with GAAP, are provided on our website 2 ir.livent.com.
Livent Operational Response to COVID-19 • Formed Asia pandemic response team in early Feb, followed by global response team • Developed strict operating protocols and additional measures on a site-by-site basis • Worked closely with Argentina authorities to implement plan to resume operations safely and quickly • Expanded engagement and support of local communities All production facilities currently online and operating 3
COVID-19 Impact on Lithium Industry • Reduced 2020 visibility as auto industry disrupted • Differing impact on a regional basis • Has forced delays on multiple lithium expansion projects • Increased focus on cash / balance sheet management • Significant reassessment of future projected supply 4
Reported Financial Results Q1 2020 Q4 2019 Q1'20 vs. Q4'19 Q1 2019 Q1'20 vs. Q1'19 Revenue $69 $78 (13%) $98 (30%) GAAP ($2) $0 NM $17 (111%) Net Income (Loss) Adjusted $9 $16 (41%) $28 (66%) EBITDA (1) GAAP (1¢) 0¢ NM 12¢ (108%) EPS Adjusted 2¢ 5¢ (60%) 12¢ (83%) EPS (1) Note: Amounts in millions of USD, except earnings per diluted share. (1) Denotes non-GAAP financial term. 5
Q1 2020 vs. Q4 2019 Financial Bridges Revenue Adjusted EBITDA $78 $0 $16 $69 ($3) ($7) ($1) $2 $9 ($1) ($7) Revenue Volume Price / F/X Revenue Adj. Volume Price / Cost F/X Adj. EBITDA Mix & Other EBITDA Q4 2019 Mix Q1 2020 (1) (1) Q4 2019 Q1 2020 Note: Amounts in millions of USD; numbers may not tie due to rounding. (1) Denotes non-GAAP financial term. 6
Reduced Capital Spending Through Q1 Outlook 2020 2019 '20 vs. '19 2020 Cash From Operations (GAAP) ($5) ($1) ($4) Adjusted Cash from Operations (1) ($3) $22 ($25) Withdrawn Capital Spending (1)(2) ($56) ($25) ($31) (~$115) Of which: Growth ($50) ($21) ($29) (~$90) Maintenance ($6) ($4) ($2) (~$25) 2020 projected capital spending cut by half Note: Amounts in millions of USD; numbers may not tie due to rounding. (1) Denotes non-GAAP financial term. 7 (2) Includes capital expenditures and other investing activities.
Enhanced Liquidity Profile • Expect ample liquidity under revolver facility maturing 2023 • Net leverage limit increased to 6.0x EBITDA through 2020 (from 3.5x) • Working with lenders to evaluate alternative debt structures 8
Longer-Term Market Outlook • No change to long-term auto electrification story • No evidence of reduced commitment to electrification from OEMs • Shift to lithium hydroxide continues • Greater uncertainty on where lithium supply will come from 9
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