Hello and welcome to Albemarle Corporation’s Fourth Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. I will now hand it over to Meredith Bandy, Vice President of Investor Relations and Sustainability.

Thank you. And welcome everyone to Albemarle’s fourth quarter and full year 2023 earnings conference call. Our earnings were released after the close of the market yesterday, and you’ll find the press release and earnings presentation posted to our website under the Investor Section at albemarle.com. Joining me on the call today are Kent Masters, Chief Executive Officer; and Neal Sheorey, Chief Financial Officer. Netha Johnson, President of Specialties; and Eric Norris, President of Energy Storage are also available for Q&A. As a reminder, some of the statements made during this call, including our outlook considerations, guidance, expected company performance and timing of expansion projects, may constitute forward-looking statements. Please note the cautionary language about forward-looking statements contained in our press release and earnings presentation that also applies to this call. Please also note that some of our comments today refer to non-GAAP financial measures. Reconciliations can be found in our earnings materials. And now, I’ll turn the call over to Kent.

Thank you, Meredith. Now, starting on slide four, our full year results show continued strong volumetric growth, with 2023 marking the highest net sales and second highest EPS in Albemarle’s history. This highlights the focus and ability of our global team to succeed in a macro environment that remains challenging. We ended the year with net sales of $9.6 billion, up 31% compared to 2022, of which 21% was related to volume growth. Energy Storage delivered 35% volumetric growth in 2023. For the full year of 2023, Albemarle’s adjusted EBITDA was $2.8 billion or $3.4 billion excluding a lower cost or market charge recorded in the fourth quarter. Excluding this non-cash charge, adjusted EBITDA was in line with our previous expectations. In January, we announced a series of proactive measures to re-phase our organic growth investments and optimize our cost structure. These disciplined actions should allow us to unlock more than $750 million of incremental cash, advance near-term growth, and preserve future opportunities. Today, we will provide our initial thoughts on our full year 2024 earnings. To help investors model Albemarle in the current environment, we will introduce scenarios based on recently observed lithium market prices. Neal will provide more details on this in a few minutes. We remain as confident as ever in the future of Albemarle and ongoing demand for the essential elements we provide to support modern infrastructure, including mobility, energy, connectivity, and health. The secular trends of clean energy, electrification, and digitalization continue to drive growth. We are uniquely positioned to capitalize on the opportunities in our end markets, particularly lithium demand. Over the past year, we have further strengthened Albemarle’s position and are committed to navigating the near-term dynamics in a disciplined manner to both support and capitalize on these global trends. I’ll now hand it over to Neal to discuss our financial results.

Thanks, Kent, and good morning, everyone. It’s a pleasure to join my first earnings call with Albemarle. I’ve hit the ground running, and in the coming weeks, I’ll be on the road meeting with our shareholders and analysts. I’m looking forward to reconnecting with many of you and building new relationships with those of you I haven’t yet met. Moving to slide five, I’ll start with a review of our fourth quarter and full year 2023 performance. In Q4, we reported net sales of $2.4 billion, down 10% compared to last year, as lower lithium market pricing was partially offset by increased volumes in Energy Storage and higher volumes and pricing in Ketjen. As Kent mentioned, we recorded two charges in Q4 that impacted results. The first was a lower of cost or market charge of $604 million and the second was a tax valuation allowance in China of $223 million. These charges were fundamentally related to the fact that in the second half of 2023, lithium market prices fell over a relatively short period of time. In the case of the LCM charge, market prices reached a level such that our cost of inventory, especially spodumene, which we purchased at a market price from our Talison JV, was above the market price of the final lithium salts, which resulted in us writing down the value of our inventory in accordance with GAAP. Similarly, in the case of the tax valuation allowance, the rapid decline in market prices led us to recognize losses in China as we process the higher cost spodumene in inventory. In China, we are only allowed a five-year carry-forward period to utilize these losses. In accordance with GAAP, we recognize the valuation allowance against the losses. The company’s full year results excluding those charges met our previously announced expectations. Net sales of $9.6 billion were up 31%, primarily driven by volume growth. Adjusted diluted EPS, excluding both charges, was $22.25, roughly flat year-over-year. Looking at slide six, fourth quarter adjusted EBITDA was $289 million, excluding the lower of cost or market charge. This primarily reflects a decrease in Energy Storage adjusted EBITDA, driven by a lower lithium market pricing, which more than offset higher volumes. In Specialties, adjusted EBITDA declined $64 million, primarily due to lower sales volumes and pricing, reflecting ongoing demand weakness in key end markets. Ketjen adjusted EBITDA increased $34 million, as higher sales and higher pricing more than offset increased raw materials costs. Turning to slide seven, before I transition to forward-looking information, I want to take a moment to review our adjusted EBITDA definition and share an update that we plan to make. Effective with Q1 2024, we are updating our definition of adjusted EBITDA to include Albemarle’s share of the pre-tax earnings of our Talison joint venture. There are a few important reasons for this change. First, the updated definition better reflects our vertical integration with Talison’s Greenbushes mine, one of the world’s largest, highest grade, and lowest cost lithium resources. Second, it smooths the impact of price variations in inventory timing that obscure the underlying profitability of our full-chain integration. And finally, this definition is consistent with the amendment to our revolving credit facility, which I’ll discuss later on the call. As a reference point, on this slide, we’ve given you both the Energy Storage and Albemarle full year 2023 adjusted EBITDA under the previous and updated adjusted EBITDA definition. We will report under the updated definition in 2024. Therefore, all of our comments and numbers regarding 2024 modeling considerations are based on this new definition.

Thanks, Neal. And now turning to slide 15. In markets as dynamic as ours, growth companies must be able to pivot and pace with disciplined decision-making and focused execution. This is especially true for Albemarle as a trusted leader in the markets we serve. At Albemarle, disciplined growth means carefully prioritizing CapEx timelines when pricing moves higher and re-phasing when the market shifts. As we look to 2024 and the current market dynamics, we’ve identified certain strategic investments and projects across the enterprise that do not need to grow as fast in the short-term. In short, the returns for new projects are not there at these prices, which we believe are well below reinvestment levels. As a result, we are reducing our CapEx in 2024 by $300 million to $500 million versus 2023 by refocusing our energy on the large, high return projects that are significantly progressed, near completion, or in startup. Additionally, we are aligning our OpEx to a slower pace of investment. We are taking action to reduce costs by nearly $100 million, and we expect to realize more than $50 million of these savings in 2024. Our actions include reducing headcount and lowering spending on contracted services. We also continue to evaluate and execute the sale of non-core investments. For example, we recently monetized our Liontown holdings, given our decision to withdraw our non-binding offer. At the same time, we’re pursuing additional cash management actions, including optimizing our working capital. This includes initiatives focused on shortening the time from the mine to the customer in our supply chain. These measures together are expected to unlock more than $750 million of cash flow in the near term. This disciplined approach to managing the current market downturn reflects the actions that we must take to preserve our financial flexibility and re-pace our investments. The actions we are taking today will position Albemarle to emerge stronger for the benefit of our shareholders, partners, employees, and the communities in which we operate.

Thanks, Kent. First, I want to clarify for Stephen about the sales volumes in Q1 2024. We haven’t provided specific volume numbers for each quarter in 2024, but we expect overall growth for the year between 10% and 20%. The volume growth trajectory will depend on the ramp-up of our existing assets. On the topic of the Atacama, we’ve successfully reached capacity with ongoing expansions at La Negra that require brine from the Salar to optimize production. We’re in the commissioning phase of the Salar Yield Project to facilitate even more growth. As for how that relates to volume guidance, Eric might want to add further context.

Thank you, Neal. Just to clarify on the timelines, the overall capacity from the Salar Yield Project will enable growth that feeds the La Negra plant. We’re currently tracking a six-month lag between commissioning and fully operational status for the additional brine resources which will enhance production output.

Can you talk a little bit about what you’re looking for as triggers for either Salar and re-accelerating some of the CapEx investments for the rest of the year?

To be blunt, that’s going to be driven by the pricing levels we see going forward. We see strong demand, and as volume growth occurs in the industry, we'll evaluate every project on an individual basis based on resource availability, the cost position, and other specifics. There isn’t one pricing number that triggers all projects simultaneously; we need a coherent long-term pricing strategy to justify heavy investments.

The inventory build-up and drawdown we've seen are primarily at the final product levels, such as battery modules and EVs, and less visible at upstream levels. The normalization at the consumer level is harder to predict, but we estimate there could be a couple of months of excess inventory that might affect apparent demand this year.

It’s important to note that we are not experiencing a glut in spodumene inventory levels; in fact, there are ongoing projects at various stages of hesitance, with certain sources in Canada and Australia being monitored closely. The slowdown in aggressive capital allocation is a consequence of current pricing realities.

If pricing remains where it is, we will start to see production drop-off and project deferrals. Our aim is to find stability in prices to support sustainable investments.

Energy Storage EBITDA guidance, if you were to mark-to-market that guidance to current prices, how much lower would your EBITDA guidance be for Energy Storage?

You can interpolate the numbers from our provided range based on the current pricing dynamics, while being mindful that our contracts may incorporate pricing floors, affecting the average selling price. Our focus remains on adapting to these fluctuations throughout 2024.

The future pricing scenario needs to provide enough incentive for new greenfield investments; otherwise, we risk re-entering a period of volatility in the future.

Lastly, our long-term goal continues to be aligning our CapEx with returns that at least double the cost of capital at mid-cycle prices, and we will remain vigilant to the market signals to guide our investments going forward.

Thank you all for joining us today. Albemarle is a global leader in transforming essential resources into the critical ingredients for modern living, with people and planet in mind. Our strategy and path to capitalize on the opportunities of electrification over the coming years is clear, and we will continue to operate with a disciplined operating model to scale and innovate, deliver profitable growth, and advance sustainability. We continue to work to be the partner of choice for our customers and the investment of choice for both the present and the future. Thank you for joining us.

This concludes today’s conference call. Thank you for your participation. You may now disconnect.