Livent Corporation

Good afternoon and welcome to the third quarter 2020 earnings release conference call for Livent Corporation. All lines will be placed on this in only mode throughout the conference. After this speaker's presentation, there will be a question and answer period. I will now turn the conference over to Mr. Daniel Rosen, Investor Relations and Strategy for Livent Corporation. Mr. Rosen, you may begin.

Thank you, Simon. Good evening, everyone, and welcome to LiveIn's third quarter 2020 earnings call. Joining me today are Paul Graves, President and Chief Executive Officer, and Gilberto Antoniaz, Chief Financial Officer. The slide presentation that accompanies our results, along with our earnings, can be found in the investor relations section of our website. The prepared remarks from today's discussion will be made available after the call. Following our prepared remarks, Paul and Roberta will be available to address your questions. We would ask that any questions be limited to two per caller. We would be happy to address any additional questions after the call. Before we begin, let me remind you that today's discussion will include forward-looking statements that are subject to various risks and uncertainties concerning specific factors, including but not limited to those factors identified in our release and in our filings with the Securities and Exchange Commission. Information presented represents our best judgment based on today's information. Actual results may vary based upon these risks and uncertainties. Today's discussion will include references to various non-GAAP financial metrics, definitions of these terms, as well as a reconciliation to the most directly comparable financial measure calculated and presented in accordance with GAAP provided on our industrial relations website. And with that, I'll turn the call over to Paul.

Thank you, Dan, and good evening to everyone. First, I'd like to take a brief moment to thank all our employees who continue to effectively manage through the ongoing challenges facing all of us in this difficult environment. When you take all of the distractions that our employees face today and look at the performance of our operating assets, it really speaks to the professionalism and the commitment to the live and workforce. We have a lot to talk about today, including the broad EV trends that are driving optimism for accelerating demand growth, Lyman's participation in a new world-class lithium project in Canada, and, of course, the near-term challenges that we continue to face as an industry. I will address the current lithium market to give some context for Lyman's third quarter performance. we will discuss how, despite the significant near-term uncertainty that our industry is operating in, electric vehicle demand growth is accelerating and excitement for the long-term prospects of electrification are as strong as ever. Also, how the widely reported expansion of charges in the lithium industry are creating a looming supply deficit for all forms of lithium chemicals, whether that's carbonate, hydroxide, or even metal in the longer term. And most importantly, we will discuss what Livent is doing to strengthen its market position over the coming years. The lithium market has been weak through most of 2020, with China being impacted in Q1, and the rest of the world rapidly feeling the effects starting in early March of this year. Despite the reopening of many of our end markets following shutdowns in Q2, the pace of recovery has been gradual and uneven, with a lack of real visibility into how the end consumer is going to behave. and therefore limited confidence as to the shape and strength of the recovery, many customers continue to be focused on managing costs, reducing inventory, and minimizing order volumes beyond what is needed on a short-term basis. This dynamic has resulted in lower demand across all lithium products and end markets, from high-growth energy storage to various other industrial markets we serve. Despite this environment, we still expect total demand for lithium chemicals on an LTE basis to be flat in 2020 versus 2019, which speaks loudly to the underlying growth dynamics in demand for lithium. There have been some particularly impressive electric vehicle sales data around the world in the midst of this broad economic slowdown. In China, which is further along in its COVID-19 recovery than most other countries, passenger electric vehicle sales were up nearly 70% year-over-year in September. This marked the highest number of monthly EV sales since June of 2019, the last month before the Chinese government reduced subsidies. This is a very important achievement. Moving from subsidy-driven sales to a more sustainable sales trend is a critical step in the evolution of EV adoption. EV sales also climbed, increasing nearly 70% month-over-month in September, or 170% year-over-year. And even in the U.S., which is lagging both regions with respect to EV adoption. September marked the strongest EV sales month year-to-day and the first positive year-over-year month in 2020. Putting all of this together, 2020 total EV sales are on pace to be higher versus 2019, despite what will in all likelihood be a down year for the overall global passenger vehicle market. Demand growth is key to the return to sustainable profitability for the lithium industry. and even more importantly, if we're going to create the conditions necessary for expansionary investments. As we have previously discussed, the lithium industry entered 2020 in a state of oversupply, albeit with a wide range of quality capabilities on the supply side. The recent upturn has been positive in one sense, in that it's helped to get more agreement on projecting the point at which supply and demand will return to balance for certain key products. However, it will take time for lithium demand to fully ramp back up, for visibility and confidence to be restored with customers, and for OEMs to take the steps necessary to secure long-term lithium supply commitments. I will now turn the call over to Gilberto to discuss our financial results and provide a business update.