Albemarle Corporation — Third Quarter 2026 Earnings Summary

Financial Performance

• Net sales reached $1.6 billion for the quarter, a 19% year-over-year increase driven by higher pricing in Energy Storage (+68%) and higher pricing (+10%) and volumes (+3%) in Specialties.
• Net income attributable to common shareholders was $297 million ($2.15 per diluted share), compared to a net loss of $160.7 million ($1.72 per diluted share) in the prior-year quarter.
• Adjusted net income was $354 million ($2.58 per diluted share), excluding restructuring and other related charges.
• Adjusted EBITDA totaled $646 million, up 186% year-over-year, primarily due to higher pricing in Energy Storage, increased pricing and volumes in Specialties, and cost and productivity improvements.
• Cash from operating activities was $406 million, with free cash flow of $325 million; operating cash flow conversion was 63%, supported by a cash dividend from the Talison joint venture.
• Year-to-date operating cash flow for the first nine months of 2026 was $1.5 billion, a $568 million increase compared to the prior-year period, with year-to-date free cash flow of $1.2 billion.
• Capital expenditures for the first nine months of 2026 were $251 million, a decrease of $184 million versus the prior-year period.
• Total debt was $1.9 billion as of September 30, 2026, resulting in a net debt to adjusted EBITDA ratio of approximately 0.3.
• The effective income tax rate for the quarter was 16.4%, or 5.8% on an adjusted basis.

Guidance and Future Outlook

• Full-year 2026 Specialties adjusted EBITDA outlook was raised to $350-$375 million from the previous $275-$325 million range, driven by cost and productivity improvements.
• Full-year 2026 capital expenditure forecast was reduced to $300-$350 million from approximately $500 million, reflecting capital efficiency improvements and resequencing of early-stage projects.
• Total corporate net sales for 2026 are projected between $4.1-$4.3 billion under a ~$10/kg LCE price scenario, $5.7-$6.0 billion under a ~$20/kg LCE scenario, and $7.5-$7.8 billion under a ~$30/kg LCE scenario.
• Total corporate adjusted EBITDA for 2026 is projected between $0.9-$1.0 billion, $2.4-$2.6 billion, and $4.2-$4.4 billion under the respective lithium price scenarios.
• Energy Storage production volumes are expected to increase year-over-year in 2026, with total sales volumes expected between 225 to 235 kilotons lithium carbonate equivalent (LCE).
• Fourth quarter 2026 net sales and adjusted EBITDA are expected to decrease sequentially due to lower market pricing and the consumption of higher-cost spodumene inventory.
• Specialties adjusted EBITDA outlook for 2026 is $350-$375 million, assuming steady demand in the bromine market and accounting for the impact of the Middle East conflict.
• Corporate adjusted EBITDA (including FX, Ketjen equity income, and PCS) is expected to be between ($20) million and $20 million for 2026.
• Depreciation and amortization for 2026 is expected to be $660-$680 million.
• Interest and financing expenses for 2026 are expected to be $120-$140 million.

Business Segments and Product Lines

• Energy Storage: Net sales were $1.1 billion (up 58%), driven by higher pricing; average realized price was $20.02/kg LCE compared to $10.28/kg LCE in the prior year. Adjusted EBITDA was $560 million (up 351%). Sales volume declined 19% to 56kT LCE due to timing events in the prior year, including inventory destocking and high spodumene shipments.
• Specialties: Net sales were $389 million (up 13%), driven by higher pricing (+10%) and volumes (+3%). Adjusted EBITDA was $99 million (up 31%), supported by favorable pricing in bromine and derivatives, productivity improvements, and the Jordan Bromine Company (JBC) joint venture achieving record quarterly production.
• Talison: Chemical Grade Plant 3 (CGP3) achieved 30 days of nameplate performance in September.
• Ketjen: Following the sale of a 51% stake in March 2026, refining catalyst business earnings are classified as equity income and included in Corporate; adjusted EBITDA and equity income contributions from these businesses are expected to be immaterial post-transaction.

Market and Competitive Landscape

• Global lithium demand was up 48% year-to-date through August, driven by electric vehicles and energy storage.
• Outlook scenarios assume flat market pricing flowing through Energy Storage's current contract book, which includes approximately 40% of salts volume (or one-third of total volumes) on long-term agreements.
• Spodumene pricing is assumed to average 10% of the lithium carbonate equivalent (LCE) price in outlook scenarios.
• Specialties demand is led by semiconductors, oil and gas, flame retardants, and pharmaceuticals, with steady demand in automotive and petrochemical markets.

Risks and Challenges

• A fire occurred on June 9, causing a delay in the Talison CGP3 ramp.
• Supply chain cost escalations driven by the conflict in the Middle East are impacting Specialties, though cost and productivity improvements have offset these impacts.
• Fourth quarter margins are expected to decrease sequentially due to the consumption of higher-cost spodumene inventory purchased in prior periods.
• Forward-looking statements are subject to risks including changes in economic conditions, trade policies, tariffs, lithium market pricing fluctuations, production volume shortfalls, geopolitical conflicts, and regulatory actions.

Management Commentary and Tone

• Kent Masters, Chairman and CEO, described the quarter as "solid," reflecting "disciplined execution across the enterprise."
• Management noted that improved pricing and sustained progress on cost and productivity initiatives in Specialties support an increased outlook for the year.
• Management expressed confidence in the long-term industry outlook, citing the 48% year-to-date increase in global lithium demand.
• The company plans to continue prioritizing high-return organic growth by leveraging its resource base, capital spending efficiency, and financial flexibility.

Other Key Points

• The company delivered more than $150 million in year-to-date run-rate cost and productivity improvements, achieving the high end of its full-year target.
• The company sold a 51% stake in Ketjen's refining catalyst solutions business on March 2, 2026.
• The company completed a $1.3 billion debt tender and redemption in the first quarter of 2026, resulting in a gain on early extinguishment of debt.
• As of September 30, 2026, estimated liquidity was approximately $3.4 billion, including $1.8 billion in cash and cash equivalents, $1.5 billion available under the revolver, and $79 million under other credit lines.
• The company recorded restructuring charges and asset write-offs of $8.0 million for the quarter, including charges related to placing Kemerton Train 1 into care and maintenance.
• Mandatory convertible preferred stock dividends were $41.7 million for the quarter.