PHILADELPHIA and PERTH, Australia, Sept. 19,
2024 /PRNewswire/ --
- Underscores unique position as a vertically integrated,
diversified global producer of lithium chemicals with low-cost and
high-quality assets
- Details ongoing expansion programs expected to more than
double total sales volumes by 2028 across multiple products and
regions
- Outlines path to Adjusted EBITDA1 of
$1.3 billion by 2028 supported by
strong and flexible balance sheet with peak net leverage of
2.1x1,2
- Reaffirms significant expansion potential of one of the
largest and most diverse resource bases in the industry
- Accelerating plan to deliver $125
million of merger-related cost savings roughly two years
ahead of initial target
- Executed Memorandum of Understanding (MoU) with Toyota
Tsusho in key step to unlocking further synergies
Arcadium Lithium plc (NYSE: ALTM, ASX: LTM, "Arcadium
Lithium" or the "Company"), a leading global
lithium chemicals producer, today provided a number of strategic
updates at its inaugural 2024 Investor Day. During the event,
the Company reviewed its operating, commercial and growth
strategies while reinforcing its commitment to sustainability
leadership. The Company also discussed its plans for
disciplined volume expansion and provided a long-term financial
view.
"We have a clear and compelling plan to deliver
significant growth over the coming years, leveraging the size and
quality of our portfolio of assets and expansion projects," said
Arcadium Lithium president and chief executive officer Paul Graves. "Our vertically integrated
operating network, broad range of high-performance lithium
products, and deep technical know-how allow us to maximize the
value of each unit of lithium we deliver to customers. This is
complemented by a disciplined commercial strategy that provides
greater visibility and profitability throughout market cycles and
allows us to confidently invest to meet the growing long-term
demand needs of our customers. This plan has the potential to
double our sales volumes by 2028 while reaching an expected
$1.3 billion in Adjusted EBITDA based
on analyst consensus pricing forecasts. I am excited by the
opportunities ahead and the highly experienced team we have in
place to execute our long-term vision."
Multi-Year Volume Growth
Arcadium Lithium expects 25%
higher combined lithium carbonate and lithium hydroxide volumes in
2024 and 2025 from expansion projects at Fénix and Olaroz that have
already been completed, are in operation and have no further
capital requirements. Beyond this, the Company continues to develop
its world class portfolio of resources and is doing so on a
timeline supported by the market and its customers.
Arcadium Lithium outlined two waves of expansions across
its large, high-quality and low-cost assets in Argentina and Canada. The first wave of four existing
projects at various stages of advancement is expected to be fully
completed, in stages, by 2028 and more than double sales volumes
from today.
The second wave of projects are at the development and
planning stage and this wave offers the Company the opportunity to
increase production capacity beyond 2028 by a further 125,000
metric tons (LCE3) to 295,000 metric tons
(LCE3) total. The size and quality of Arcadium Lithium's
portfolio of resources means it is not constrained in its ability
to continue to grow organically.
Earnings Growth Supported by Flexible Balance
Sheet
Arcadium Lithium outlined a path to an
expected $1.3 billion in Adjusted
EBITDA1 by 2028, subject to certain assumptions, with
margins continuing to be supported by low-cost positions and
multi-year customer agreements. This growth is underpinned by
higher volumes from expansion, and by consensus expectations for
pricing to move higher than current levels towards prices that are
needed to incentivize industry supply growth4. It is
supported by a strong balance sheet, with peak net leverage not
expected to exceed 2.1x1,2. The Company believes it has
attractive internal and external funding alternatives that provide
flexibility to promptly adapt to evolving market conditions as
needed.
Accelerating Cost Savings
Since the January 2024 merger of Allkem and Livent creating
Arcadium Lithium, the Company has taken actions to drive cost
reductions throughout the organization. The benefits of these
actions are already being seen, with post-merger cost savings
coming in higher and quicker than initial forecasts.
Beyond expected cost savings of up to $80 million in 2024, the Company now expects to
deliver close to its initial run-rate savings target of
$125 million by the end of 2025,
roughly two years ahead of plan. These savings are driven primarily
by organizational restructuring, operational and supply chain
synergies and a reduction in third-party and other services across
the two legacy companies. The Company also believes the total
longer-term savings opportunity to be greater than $125 million.
Toyota Tsusho Memorandum of Understanding
Arcadium
Lithium announced the recent signing of a Memorandum of
Understanding (MoU) with its long-time partner Toyota Tsusho
Corporation (TTC), a key initial step in providing greater
flexibility for Arcadium Lithium to optimize its global integrated
operating network and to contribute its production expertise to
Naraha. This includes using technical grade lithium carbonate
produced at Olaroz to feed the Company's existing downstream
lithium hydroxide network, thus allowing more battery grade lithium
carbonate produced at Fénix to be sold directly to customers.
This is expected to have a positive impact on the Company's
earnings and to be achievable as early as 2026.
Event Replay Information
A full replay of Arcadium Lithium's Investor Day is available on
the Company's Investor Relations website. For further details
and access to the webcast replay and presentation materials, visit
ir.arcadiumlithium.com.
- Denotes non-GAAP financial term. Although Arcadium Lithium
provides estimates, the Company is not able to do so for the most
directly comparable measure calculated and presented in accordance
with GAAP. Certain elements of the composition of the GAAP amount
are not predictable, making it impractical for the Company to
provide an outlook for such GAAP measure or to reconcile
corresponding non-GAAP financial measure to such GAAP measure
without unreasonable efforts. For the same reason, the
Company is unable to address the probable significance of the
unavailable information. As a result, no GAAP equivalent outlook is
provided for these metrics.
- Adjusted Net Debt / Adjusted EBITDA. Debt includes amounts
outstanding under revolving credit facility, project loan
facilities and convertible notes and excludes customer prepayment
obligations and affiliate loans. Cash excludes Nemaska
Lithium.
- Lithium Carbonate Equivalents.
- Based on consensus price expectations using analyst research as
of 9/11/2024.
Arcadium Lithium Contacts
Investors:
Daniel Rosen
+1 215 299 6208
daniel.rosen@arcadiumlithium.com
Phoebe Lee +61 413 557 780
phoebe.lee@arcadiumlithium.com
Media:
Karen Vizental
+54 9 114 414 4702
karen.vizental@arcadiumlithium.com
Supplemental
Information In this press release, Arcadium
Lithium uses the financial measures Adjusted EBITDA and Adjusted
Net Debt. These terms are not calculated in accordance with
generally accepted accounting principles (GAAP). Definitions
of these terms, as well as a reconciliation to the most directly
comparable financial measure calculated and presented in accordance
with GAAP, are provided on our website: ir.arcadiumlithium.com and
elsewhere in this press release or the financial tables that
accompany this press release.
About Arcadium Lithium
Arcadium Lithium is a leading global lithium chemicals producer
committed to safely and responsibly harnessing the power of lithium
to improve people's lives and accelerate the transition to a clean
energy future. We collaborate with our customers to drive
innovation and power a more sustainable world in which lithium
enables exciting possibilities for renewable energy, electric
transportation and modern life. Arcadium Lithium is vertically
integrated, with industry-leading capabilities across lithium
extraction processes, including hard-rock mining, conventional
brine extraction and direct lithium extraction (DLE), and in
lithium chemicals manufacturing for high performance applications.
We have operations around the world, with facilities and
projects in Argentina,
Australia, Canada, China, Japan,
the United Kingdom and
the United States. For more
information, please visit us at www.ArcadiumLithium.com.
Important Information and Legal Disclaimer:
Safe
Harbor Statement under the Private Securities Litigation Reform Act
of 1995: Certain statements in this news release are
forward-looking statements. In some cases, we have identified
forward-looking statements by such words or phrases as "will likely
result," "is confident that," "expect," "expects," "should,"
"could," "may," "will continue to," "believe," "believes,"
"anticipates," "predicts," "forecasts," "estimates," "projects,"
"potential," "intends" or similar expressions identifying
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, including the negative of
those words and phrases. Such forward-looking statements are based
on our current views and assumptions regarding future events,
future business conditions and the outlook for Arcadium Lithium
based on currently available information. There are important
factors that could cause Arcadium Lithium's actual results, level
of activity, performance or achievements to differ materially from
the results, level of activity, performance or achievements
expressed or implied by the forward-looking statements, including a
failure to reach a binding agreement with TTC pursuant to the MoU,
the supply and demand in the market for our products as well as
pricing for lithium and high-performance lithium compounds; our
ability to realize the anticipated benefits of the integration of
the businesses of Livent and Allkem or of any future acquisitions;
our ability to acquire or develop additional reserves that are
economically viable; the existence, availability and profitability
of mineral resources and mineral and ore reserves; the success of
our production expansion efforts, research and development efforts
and the development of our facilities; our ability to retain
existing customers; the competition that we face in our business;
the development and adoption of new battery technologies;
additional funding or capital that may be required for our
operations and expansion plans; political, financial and
operational risks that our lithium extraction and production
operations, particularly in Argentina, expose us to; physical and other
risks that our operations and suppliers are subject to; our ability
to satisfy customer qualification processes or customer or
government quality standards; global economic conditions, including
inflation, fluctuations in the price of energy and certain raw
materials; the ability of our joint ventures, affiliated entities
and contract manufacturers to operate according to their business
plans and to fulfill their obligations; severe weather events and
the effects of climate change; extensive and dynamic environmental
and other laws and regulations; our ability to obtain and comply
with required licenses, permits and other approvals; and other
factors described under the caption entitled "Risk Factors" in
Arcadium Lithium's 2023 Form 10-K filed with the Securities and
Exchange Commission ("SEC") on February 29,
2024, as well as Arcadium Lithium's other SEC filings and
public communications. Although Arcadium Lithium believes the
expectations reflected in the forward-looking statements are
reasonable, Arcadium Lithium cannot guarantee future results, level
of activity, performance or achievements. Moreover, neither
Arcadium Lithium nor any other person assumes responsibility for
the accuracy and completeness of any of these forward-looking
statements. Arcadium Lithium is under no duty to update any of
these forward-looking statements after the date of this news
release to conform its prior statements to actual results or
revised expectations.
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SOURCE Arcadium Lithium PLC