Q3 2019 Earnings Presentation 11.6.19 1
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,” “should,” “expects,” “intends,” “plans,” “anticipates,” “believes,” “estimates,” “predicts,” “potential,” or “continue,” the negative of these ter ms and other comparable terminology. 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 co uld 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, including a decline in the growth in demand for electric vehicles; adverse global economic conditions; the success of Livent’s research and development efforts; volatility in the price for performance lithiu m compounds; risks relating to Livent’s planned production expansion and related capital expenditures; reduced customer demand, or delays in gro wth 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; 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; failure to achieve the expected benefits of Livent’s separation from FMC as well as the other factors describe d under the caption entitled “Risk Factors” in Livent’s 2018 Form 10 -K filed with the Securities and Exchange Commission on February 28, 2019, the first quarter 2019 Form 10-Q filed with the Securities and Exchange Commission on May 8, 2019, and the second quarter 2019 Form 10-Q filed with the Securities and Exchange Commission on August 7, 2019. 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 we nor any other person assumes responsibility for the accuracy and completeness of any of these forward-looking statements. We are under no duty to update any of these forward-looking statements after the date of this presentation to conform our prior statements to actual results or revisedexpectations. Non-GAAP FinancialTerms These slides contain certain non-GAAP financial terms. We have provided on our website at www.livent.com reconciliations of non-GAAP terms to the most directly comparable GAAP term, including adjusted earnings per share, Adjusted EBITDA and adjusted cash from operations. Although we provide forecasts for adjusted earnings per share, Adjusted EBITDA and adjusted cash from operations, we are not able to forecast the most directly comparable measures calculated and presented in accordance with GAAP. Certain elements of the composition of the GAAP amounts are not predictable, making it impractical for us to forecast such GAAP measures or to reconcile corresponding non-GAAP financial measures to such GAAP measures without unreasonable efforts. For the same reason, we are unable to address the probable significance of the unavailable information. Such elements include, but are not limited to restructuring, transaction related charges and related cash activity. As a result, no GAAP outlook is provided. 2
Highlights • Meets Third Quarter Adjusted EPS (1) and Adjusted EBITDA (1) Guidance • Announces MoU for Multi-year Supply of Lithium Hydroxide to LG • Provides First Look at Expected 2020 Volumes • Reinforces Commitment to Existing Expansion Plans 3 (1) Denotes non-GAAP financial term.
Current Market Conditions Lithium EVs • • Pricing pressure New EV launches continue to be announced • Continued oversupply • Supportive government policies • Spodumene miners reducing reaffirmed (China, EU) production • High nickel cathode shift • Cancelled and delayed capacity accelerating expansions • Supply chain becoming clearer • Rising hydroxide demand; slowing carbonate growth 4
Reported Financial Results Q3 2019 Q2 2019 Q3 2018 Q3'19 vs. Q3'18 Revenue $98 $114 $112 (13%) Adjusted $28 $28 $42 (33%) EBITDA (1) GAAP $18 $16 $30 (40%) Net Income Q3’19 vs. Q3’18 Revenue Bridge: Volume: (4%) F/X: (1%) Price/Mix: (8%) Note: Amounts in millions of USD. 5 (1) Denotes non-GAAP financial term.
Q3 Adj. EBITDA (1) Bridge Year over Year Quarter over Quarter $41.8 ($0.4) $7.5 $28.2 $28.0 $28.2 ($9.4) ($3.2) ($0.4) ($0.6) $0.0 ($6.9) Adj. EBITDA Volume Price / Cost F/X Adj. EBITDA Adj. EBITDA Volume Price / Cost F/X Adj. EBITDA Q3 2018 (1) Mix & Other Q3 2019 (1) Q2 2019 (1) Mix & Other Q3 2019 (1) Note: Amounts in millions of USD. 6 (1) Denotes non-GAAP financial term.
Q4 and Full Year 2019 Outlook YTD (Sept 30) Q4 2019E Full Year 2019E Revenue $310 $90 - $100 $400 - $410 Adj. EBITDA (1) $84 $21 - $26 $105 - $110 Adj. EPS (1)(2) 36¢ 8¢ - 11¢ 44¢ - 47¢ Note: Amounts in millions of USD. (1) Denotes non-GAAP financial term. 7 (2) Adjusted EPS calculated using approximately 146.5 million shares outstanding.
Q4 2019 Compared to Q3 2019 Driver EBITDA Impact Commentary / Expectations • Carrying up to 4,000 metric tons of hydroxide inventory into 2020 to meet customer Volume Decrease commitments, resulting in lower Q4 sales versus Q3 • Improved customer / product mix • Decline in carbonate sales price Price / Mix, Cost & Other Flat • FX headwinds 8
Cash Flow and Capital Spending YTD (Sept 30) Full Year 2019 2018 '19 vs. '18 2019 Outlook Cash From Operations (GAAP) $65 $63 $2 Adjusted Cash from Operations (1) $93 $68 $25 $80 - $90 Capital Spending (1)(2) ($125) ($47) ($78) ($210) - ($240) Of which: Argentina ($84) ($25) ($59) (~$165) Hydroxide expansion & other ($41) ($22) ($19) (~$60) Note: Amounts in millions of USD. (1) Denotes non-GAAP financial term. 9 (2) Includes capital expenditures and other investing activities.
2020 Volume Outlook (Hydroxide & Carbonate Only) Production Sales 2019E 2020E 2019E 2020E (000 product tons) (000 product tons) Carbonate (Argentina) ~17 ~18.5 Carbonate ~2 < 1 Hydroxide (US / China) ~21 ~22 Hydroxide ~17 25 - 26 Note: 1 product ton of hydroxide is equivalent to c.0.9 product tons of carbonate. 10
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