Albemarle(ALB) - 2025 Q4 - Annual Results

Financial Performance - Fourth quarter net sales reached $1.4 billion, a 16% increase year-over-year, driven by volume growth in Energy Storage (up 17%) and Ketjen (up 13%) [4] - The fourth quarter net loss was $414 million, or ($3.87) per diluted share, primarily due to tax-related items and asset write-downs; adjusted diluted loss per share improved to ($0.53) [4] - Adjusted EBITDA for the fourth quarter was $269 million, up 7% year-over-year, led by Energy Storage (+25%) and Ketjen (+39%) [4] - For the year ended December 31, 2025, the total net sales were $5,142,733, a decrease of 4.4% compared to $5,377,526 in 2024 [37] - The Energy Storage segment reported net sales of $2,710,035, down from $3,015,121 in the previous year, reflecting a decline of 10.1% [37] - Adjusted EBITDA for the total segments was $1,097,993, slightly down from $1,139,778 in 2024, indicating a decrease of 3.7% [37] - The company reported a net loss of $(465,210) for the year, an improvement from a net loss of $(1,135,477) in 2024 [36] - Adjusted EBITDA for the year ended December 31, 2025, was $1.10 billion, representing a 21.4% increase compared to $1.14 billion in 2024 [43] Cash Flow and Liquidity - Full year cash from operations totaled $1.3 billion, representing over 100% operating cash flow conversion, supported by cost improvements and working capital management [4] - As of December 31, 2025, the company had estimated liquidity of approximately $3.2 billion, including $1.6 billion in cash and equivalents [26] - Total free cash flow for the year ended December 31, 2025, was $692.5 million, with net cash provided by operating activities at $1.28 billion [52] - The operating cash flow conversion rate was 117% for the year ended December 31, 2025, calculated as net cash provided by operating activities divided by adjusted EBITDA [52] Cost Management and Productivity - The company achieved approximately $450 million in cost and productivity improvements, exceeding the initial target of $300 to $400 million [4] - Capital expenditures for the year were $(589,801), significantly lower than $(1,680,529) in 2024, indicating a reduction of 64.9% [36] - The company anticipates capital expenditures to influence future cash flow positively, although specific amounts were not disclosed [31] Future Projections - For 2026, net sales are projected between $4.1 billion and $4.3 billion, with adjusted EBITDA expected to range from $0.9 billion to $1.0 billion based on lithium market price scenarios [15] - Energy Storage net sales for 2026 are estimated between $2.5 billion and $2.6 billion, with adjusted EBITDA projected at $0.7 billion to $0.8 billion [17] - Specialties segment net sales for 2026 are expected to be between $1.2 billion and $1.4 billion, with adjusted EBITDA ranging from $170 million to $230 million [21] - Capital expenditures for 2026 are anticipated to be flat year-over-year, in the range of $550 million to $600 million [23] Asset Management - The company plans to sell a controlling stake in Ketjen, with expected proceeds to impact cash flow positively [31] - Albemarle's total assets decreased to $16.37 billion in 2025 from $16.61 billion in 2024 [34] - Total current assets increased to $4.01 billion in 2025 from $3.84 billion in 2024 [34] - Total liabilities decreased to $6.92 billion in 2025 from $7.08 billion in 2024 [34] Research and Development - Research and development expenses decreased to $12.18 million in Q4 2025 from $20.02 million in Q4 2024 [33] Tax and Other Charges - The company reported discrete net tax expenses of $86.2 million for the three months ended December 31, 2025, or $0.73 per share [49] - For the year ended December 31, 2024, the company recorded discrete net tax benefits of $111.4 million, or $0.95 per share [49] - The effective income tax rate for the year ended December 31, 2025, was reported at (28.4)%, with an adjusted effective income tax rate of (131.1)% [51] - The company recorded restructuring charges and asset write-offs of $2.0 million for the three months ended December 31, 2025, and $7.7 million for the year ended December 31, 2025 [44] - A non-cash goodwill impairment charge of $181.1 million was recorded during the year ended December 31, 2025, related to the Refining Solutions business [44] - Long-lived asset impairment charges of $245.6 million were recorded during the three months and year ended December 31, 2025, to reduce the carrying value of the Refining Solutions business [44] Shareholder Information - Adjusted net loss attributable to common shareholders for the three months ended December 31, 2025, was $62.1 million, or $0.53 per diluted share, compared to a loss of $127.9 million, or $1.09 per diluted share in the same period of 2024 [43] - The weighted-average common shares outstanding for basic earnings were 117.70 million in Q4 2025, slightly up from 117.55 million in Q4 2024 [33]