Albemarle Corporation

Good morning and welcome to the Q2 2021 Albemarle Corporation Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question and answer session and instructions will follow at that time. If anyone should require assistance during the conference, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I will now like to turn the conference over to your host, Meredith Bandy, Vice President of Sustainability and Investor Relations. Please go ahead.

Thanks, Operator, and welcome everyone to Albemarle's second quarter 2021 earnings conference call. Our earnings were released after the close of market yesterday, and you will find the press release, earnings presentation, and non-GAAP reconciliations on our website under the Investor Relations section at albemarle.com. Joining me on the call today are Kent Masters, Chief Executive Officer of and Scott Tozier, Chief Financial Officer. Raphael Crawford, President Catalyst, Natha Johnson, President Brumine Specialties, and Eric Norris, President Lithium, are also available for Q&A. As a reminder, some of the statements made during this call, including outlook, guidance, expected company performance, and timing of expansion projects may constitute forward-looking statements within the meaning of federal securities laws. Please note the cautionary language about forward-looking statements contained in our press release and earnings presentation. That same language applies to this call. Also note that some of our comments today refer to non-GAAP financial measures. Reconciliation to GAAP financial measures can be found in our earnings release and the appendix of the presentation, both of which are posted on the website. And finally, as a reminder, Albemarle will be hosting our 2021 Investor Day the morning of Friday, September 10th, webcast live from our Charlotte offices. Registration for the webcast is also available on the investor relations section of our website. And now I'll turn the call over to Kent.

Good morning, and thank you all for joining us today. On today's call, I'll highlight quarterly results and our recent strategic achievements. I'll also introduce the new operating model we are implementing to support Albemarle's growth strategy. Scott will give you more detail on our results, outlook, and guidance. Our businesses continue to execute well as global markets improve. Second quarter net sales were $774 million and adjusted EBITDA was $195 million, both of which marked a slight improvement compared to the second quarter of last year. Note that we closed the divestiture of FCS on June 1st, so second quarter 2021 included only two months of FCS results. Excluding FCS, net sales increased 5%, and adjusted EBITDA was up 13% compared to last year. In our financial release issued yesterday after the close, we revised our guidance for the year in part to reflect higher lithium performance, but also supply chain disruptions for our bromine business. We've also updated full-year guidance to reflect the sale of FCS. Scott will walk you through those changes in more detail in just a few minutes. We continue to execute on our next wave of growth projects to capitalize on attractive long-term fundamentals in the markets we serve. We recently completed construction of La Negra III and IV as planned, and we are progressing through the commissioning stage. Finally, I want to briefly describe the operating model we are launching to drive greater value, improve performance, and deliver exceptional customer service. And you see that on slide five. Our operating model, which we call the Albemarle Way of Excellence, or AWE, serves as a framework for how we execute, deliver, and ultimately accelerate our strategy. AWE is based on four pillars. Sustainable approach includes responsibly managing our natural resourcing and engaging with our stakeholders. High performance culture includes focusing on safety leadership and fostering an agile, engaged corporate culture. Competitive capabilities means we are ensuring we have the right talent, resources, and technologies. And finally, operational discipline is about embracing lean principles and operational excellence across the organization. The operating model helps us connect our strategy with day-to-day initiatives, prioritize projects, clarify resource allocation, ensure accountability, and drive efficient and profitable execution. We will discuss the operating model in more detail at our upcoming investor day on September 10th. Now turning to slide six, we've completed construction of Leningrad three and four in Chile and are in the commissioning stage. We expect commercial production from these two trains beginning in the first half of next year, ramping to 40,000 tons of lithium carbonate per year by 2024. This brownfield project allows us to increase existing capacity and leverage our world-class brine resource in Chile, just one of the avenues of growth that we have as an established lithium producer with a global footprint. We also continue to progress our Kimmerton conversion facility in Western Australia. To mitigate risk related to the tight labor market and COVID-related travel restrictions in Western Australia, we have modified our execution strategy to prioritize Kimmerton 1 over Kimmerton 2. Kimmerton 1 remains on track for construction completion by the end of the year. We now anticipate completion of Kimmerton 2 by the end of the first quarter next year, a delay of about three months. These delays and higher labor rates have also increased capital costs. It's been a difficult situation in a labor market that was already tight, but we have been able to maintain the schedule for Kimmerton 1 with only a three-month delay for Kimmerton 2. We continue to expect commercial production for both Kimmerton 1 and 2 during 2022. Importantly, we are making progress on our Wave 3 lithium projects, and we'll provide further details at Investor Day in September. Site selection is underway, and we are negotiating with the authorities to include investment agreements. We're also expediting investments in bromine to meet increasing demand. We completed the first well at Magnolia ahead of schedule and under budget. Unfortunately, we're unable to take advantage of that additional capacity in the second half due to shortages of chlorine in the supply chain. We also have two projects in Arkansas that are currently in the select phase. These projects are designed to increase production capacity of clear brine fluids and hydrobromic acid. A third project to increase the capacity of our brominated flame retardants is in the evaluate stage. I'll now hand the call over to Scott, who will provide an overview of our financial results for the quarter.