Core Insights - Orion (OEC) reported quarterly earnings of $0.41 per share, missing the Zacks Consensus Estimate of $0.59 per share, and down from $0.53 per share a year ago, representing an earnings surprise of -30.51% [1] - The company posted revenues of $477 million for the quarter ended June 2024, missing the Zacks Consensus Estimate by 3.94%, but up from $458.8 million year-over-year [2] - Orion shares have declined approximately 11.2% year-to-date, contrasting with the S&P 500's gain of 15.8% [3] Earnings Outlook - The current consensus EPS estimate for the upcoming quarter is $0.54 on revenues of $503.78 million, and for the current fiscal year, it is $2.13 on revenues of $1.98 billion [7] - The estimate revisions trend for Orion is currently favorable, leading to a Zacks Rank 2 (Buy) for the stock, indicating expected outperformance in the near future [6] Industry Context - The Chemical - Specialty industry, to which Orion belongs, is currently ranked in the top 30% of over 250 Zacks industries, suggesting a positive outlook for stocks within this sector [8]

Financial Performance - Net sales for Q1 2024 increased by $2.2 million, or 0.4%, to $502.9 million compared to Q1 2023, driven by higher volume in both segments [83]. - Gross profit for Q1 2024 decreased by $14.2 million, or 10.4%, to $122.2 million year over year, primarily due to higher fixed costs and lower cogeneration pricing in Europe [86]. - Adjusted EBITDA for Q1 2024 decreased by $15.8 million, or 15.6%, to $85.3 million compared to Q1 2023, influenced by higher fixed costs and lower cogeneration pricing [92]. - Gross profit per metric ton decreased by 15.8% to $491.9 in Q1 2024, driven by lower margins in both segments [86]. - Net income for Q1 2024 decreased by $15.6 million, or 36.9%, to $26.7 million compared to Q1 2023 [82]. - Specialty Carbon Black segment net sales increased by $8.9 million, or 5.5%, to $170.9 million in Q1 2024 [94]. - Rubber Carbon Black segment net sales decreased by $6.7 million, or 2.0%, to $332.0 million in Q1 2024 [94]. Volume and Sales Growth - Volume for Q1 2024 increased by 14.9 kmt to 248.4 kmt year over year, primarily due to higher volume in both segments [84]. - Net sales for the three months ended March 31, 2024, increased by $8.9 million, or 5.5%, year over year, to $170.9 million, driven by higher volume [96]. - Volume for the same period increased by 10.3 kmt, or 19.4%, year over year, to 63.3 kmt, due to recovery across all regions and end markets [96]. Operating Expenses and Cash Flow - Selling, general and administrative expenses increased by $3.8 million, or 6.6%, to $61.5 million in Q1 2024 due to higher personnel costs [87]. - Net cash provided by operating activities was $32.4 million for the three months ended March 31, 2024, down from $108.1 million in the same period of 2023 [105][106]. - Net cash used in investing activities amounted to $33.1 million for the three months ended March 31, 2024, primarily for safety and maintenance investments [107]. Liquidity and Debt - Total liquidity as of March 31, 2024, was $261.7 million, including cash and equivalents of $43.9 million [115]. - Net working capital increased from $344.4 million as of December 31, 2023, to $363.4 million as of March 31, 2024, driven by higher accounts receivable [118][120]. - Net debt as of March 31, 2024, was $773.1 million, with a net leverage ratio of 2.44x [115]. Stock Repurchase and Legal Matters - The company has approved a new stock repurchase program allowing the purchase of up to approximately 6.9 million shares through June 2027, supplementing an existing program authorizing $50 million in stock repurchases [132]. - No shares of common stock were repurchased during the three months ended March 31, 2024 [134]. - The company is involved in various legal proceedings, but believes the aggregate results will not materially affect its financial condition [129]. Risk Factors - There have been no material changes to risk factors associated with the business as previously disclosed in the Annual Report for the year ended December 31, 2023 [131]. - The company faces risks from geopolitical events, including the Russia-Ukraine war and the Hamas-Israel conflict, which may impact energy costs and raw material availability [21]. - The company is exposed to fluctuations in foreign currency exchange and interest rates, which could affect its financial performance [21]. - The company is subject to environmental, health, and safety laws, which may incur compliance costs and liabilities [21]. - The company has not reported any defaults upon senior securities [135]. - The company is committed to maintaining adequate insurance coverage to mitigate potential risks [21].

Financial Performance - Net sales for Q1 2024 were $502.9 million, an increase of $2.2 million or 0.4% year over year[4] - Adjusted EBITDA for Q1 2024 was $85.3 million, down 15.6% from $101.1 million in Q1 2023[4] - Net income decreased to $26.7 million, a decline of $15.6 million or 36.9% year over year[4] - Gross profit decreased to $122.2 million in Q1 2024 from $136.4 million in Q1 2023, resulting in a gross profit per metric ton of $491.9, down from $584.2[42] - Net income for Q1 2024 was $26.7 million, a decrease from $42.3 million in Q1 2023, leading to diluted EPS of $0.45, down from $0.70[44] - Adjusted net income for Q1 2024 was $30.8 million, compared to $45.1 million in Q1 2023, reflecting the impact of various adjustments[44] - Net income for the three months ended March 31, 2024, was $26.7 million, a decrease of 37.0% compared to $42.3 million for the same period in 2023[54] Sales and Volume - Volume increased by 14.9 kmt, or 6.4%, year over year, primarily due to higher volume in both segments[6] - Specialty Carbon Black segment net sales rose by $8.9 million, or 5.5%, to $170.9 million year over year[14] - Rubber Carbon Black segment net sales declined by $6.7 million, or 2.0%, to $332.0 million year over year[18] - Net sales for the first quarter of 2024 were $502.9 million, a slight increase from $500.7 million in the same period of 2023[47] Debt and Equity - The company's net debt as of March 31, 2024, was $773.1 million, down $8 million from the end of 2023[22] - Total debt as of March 31, 2024, was $813.5 million, resulting in net debt of $773.1 million after accounting for cash and cash equivalents[42] - Long-term debt, net, decreased slightly to $668.7 million from $677.3 million, a reduction of 1.3%[52] - Total stockholders' equity increased to $492.2 million, up from $478.5 million, representing a growth of 2.7%[52] Cash Flow and Assets - Cash and cash equivalents at the end of the period were $43.9 million, down from $76.8 million a year earlier, reflecting a decrease of 42.9%[54] - Net cash provided by operating activities decreased to $32.4 million for Q1 2024, down 70.0% from $108.1 million in Q1 2023[54] - Total assets increased to $1,874.6 million as of March 31, 2024, up from $1,833.4 million at December 31, 2023, representing a growth of 2.3%[52] - Total current liabilities rose to $468.8 million, an increase of 6.5% from $440.3 million at the end of 2023[52] Investments and Future Outlook - The company expects 2024 Adjusted EBITDA to be in the range of $340 million to $360 million, representing over 5% growth at the midpoint compared to 2023[23] - The projected full year 2024 Adjusted Diluted EPS is between $2.05 and $2.20 per share, indicating over 11% growth at the midpoint[23] - The company celebrated the groundbreaking for a new acetylene-based conductive additives facility in La Porte, Texas, expected to be commissioned in 2025[3] - Research and development costs increased to $6.6 million in Q1 2024 from $6.2 million in Q1 2023, indicating ongoing investment in new product development[47] Operational Performance - The company reported a decrease in income from operations to $52.8 million in Q1 2024, down from $73.5 million in Q1 2023[47] - The weighted-average shares outstanding decreased to 58,640 thousand in Q1 2024 from 60,287 thousand in Q1 2023, impacting per-share metrics[47] - The company reported a decrease in inventories to $277.5 million from $287.1 million, a decline of 3.0%[52] Risks and Challenges - The company highlighted potential risks including geopolitical events and economic conditions that could affect future performance[30]

Financial Performance - In 2023, net sales decreased by $137.0 million, or 6.7%, to $1,893.9 million from $2,030.9 million in 2022, primarily due to declining oil prices and lower volume [203]. - Adjusted EBITDA increased by $20.0 million, or 6.4%, from $312.3 million in 2022 to $332.3 million in 2023, driven by improved contractual pricing [209]. - Gross profit increased by $2.2 million, or 0.5%, to $451.0 million in 2023, with gross profit per metric ton rising by 3.8% to $483.9 [205]. - Net income for 2023 was $103.5 million, a decrease of $2.7 million, or 2.5%, from $106.2 million in 2022 [202]. - Comprehensive income decreased by $66.1 million, from $142.2 million in 2022 to $76.1 million in 2023 [211]. - Selling, general and administrative expenses decreased by $5.2 million, or 2.3%, to $221.9 million in 2023, attributed to lower freight costs [206]. - Interest and other financial expenses increased to $50.9 million in 2023 from $39.9 million in 2022, representing a rise of 27.5% [277]. - Cash paid for interest increased to $38.9 million in 2023 from $33.5 million in 2022 [286]. - Net cash provided by operating activities significantly increased to $345.9 million in 2023 from $81.0 million in 2022 [286]. Segment Performance - Specialty Carbon Black Segment Adjusted EBITDA was $110.7 million with an Adjusted EBITDA Margin of 18.1%, while Rubber Carbon Black Segment Adjusted EBITDA was $221.6 million with a margin of 17.3% [196]. - Specialty Carbon Black segment net sales decreased by $64.8 million, or 9.6%, from $675.4 million in 2022 to $610.6 million in 2023, primarily due to declining oil prices [214]. - Volume for the Specialty Carbon Black segment decreased by 2.9 kmt, or 1.3%, from 224.3 kmt in 2022 to 221.4 kmt in 2023, attributed to weakness across most geographies [214]. - Gross profit for the Specialty Carbon Black segment fell by $40.4 million, or 20.1%, from $200.7 million in 2022 to $160.3 million in 2023, driven by lower demand and unfavorable product mix [215]. - Adjusted EBITDA for the Specialty Carbon Black segment decreased by $33.2 million, or 23.1%, from $143.9 million in 2022 to $110.7 million in 2023, influenced by geographic and product mix issues [216]. - Rubber Carbon Black segment net sales decreased by $72.2 million, or 5.3%, from $1,355.5 million in 2022 to $1,283.3 million in 2023, mainly due to declining oil prices and lower volume [217]. - Volume for the Rubber Carbon Black segment decreased by 27.9 kmt, or 3.8%, from 738.6 kmt in 2022 to 710.7 kmt in 2023, primarily due to lower demand in the Americas and EMEA region [218]. - Gross profit for the Rubber Carbon Black segment increased by $42.6 million, or 17.2%, from $248.1 million in 2022 to $290.7 million in 2023, driven by improved contractual pricing [218]. - Adjusted EBITDA for the Rubber Carbon Black segment increased by $53.2 million, or 31.6%, from $168.4 million in 2022 to $221.6 million in 2023, primarily due to improved contractual pricing [219]. Liquidity and Capital Structure - As of December 31, 2023, the company had liquidity of $279.3 million, including cash and equivalents of $37.5 million and $221.6 million available under the revolving credit facility [230]. - Net Working Capital decreased to $344.4 million as of December 31, 2023, compared to $461.6 million as of December 31, 2022, primarily due to improved payment terms and factoring of accounts receivable [232]. - Total current liabilities decreased to $440.3 million in 2023 from $552.8 million in 2022, a reduction of 20.3% [283]. - Long-term debt increased slightly to $677.3 million in 2023 from $657.0 million in 2022, an increase of 3.5% [283]. - Stockholders' equity rose to $478.5 million in 2023, up from $459.4 million in 2022, reflecting an increase of 4.5% [283]. - The company repurchased 2,895,664 shares of common stock for $65.6 million under its Stock Repurchase Program in 2023 [289]. Assets and Liabilities - Total assets decreased to $1,833.4 million in 2023 from $1,888.7 million in 2022, a decline of approximately 2.9% [283]. - Cash and cash equivalents at the end of 2023 were $37.5 million, down from $60.8 million in 2022, representing a decrease of 38.2% [286]. - Accounts receivable as of December 31, 2023, totaled $242.2 million, down from $370.4 million in 2022, with net accounts receivable after expected credit losses at $241.0 million compared to $367.8 million in 2022 [354]. - The total inventory as of December 31, 2023, was $287.1 million, an increase from $277.9 million in 2022, with inventory reserves rising to approximately $25.4 million from $21.4 million [356]. - Total debt and other obligations decreased to $814.3 million in 2023 from $915.3 million in 2022 [372]. Accounting and Reporting - The consolidated financial statements are prepared in accordance with U.S. GAAP, including accounts of Orion S.A. and its subsidiaries [295]. - Revenue is recognized when control of goods is transferred to customers, typically upon shipment or delivery [326]. - The company plans to adopt new accounting standards related to segment reporting and income taxes, effective after December 15, 2023, which will require additional disclosures but is not expected to materially impact the financial statements [352]. - The allowance for credit losses as of December 31, 2023, was $1.2 million, down from $2.6 million in 2022, indicating improved credit loss management [354]. Debt and Interest Rates - The Euro-denominated Term Loan interest rate increased to 5.60% in 2023 from 2.80% in 2022, while the U.S. dollar Term Loan rate rose to 7.41% from 4.11% [378]. - The company received a 10 basis point interest rate reduction on its sustainability-linked Term Loan due to meeting its 2022 emissions target [376]. - The revolving credit facility (RCF) was amended to extend maturity to September 2028 and borrowing capacity was reduced from €350 million to €300 million [383]. - The weighted average interest rate on the RCF increased to 6.2% as of December 31, 2023, up from 4.8% in 2022 [387]. - The net leverage ratio as of December 31, 2023, was 2.63x, corresponding to an interest margin of 2.30 for both USD and Euro denominated borrowings [388].

Financial Performance - Q3 2023 - Adjusted EBITDA was $77 million[3], a decrease of 4% year-over-year (YoY)[23] - Adjusted diluted EPS was $049[3], compared to $057 in 3Q22[23] - Revenue decreased by 142% YoY to $4662 million[23] due to lower oil price pass-through[26] - Volume increased slightly by 08% YoY to 2452 kmt[23], with growth in China offset by declines in EMEA and the Americas[6] Financial Performance - Year-to-Date (YTD) - Adjusted EBITDA increased by 75% YoY to $266 million[16, 48] - Adjusted diluted EPS increased to $176[16] from $170[112] - Revenue decreased by 91% YoY to $14257 million[112] - Volume decreased by 56% YoY to 7060 kmt[112] Business Segment Performance - **Rubber Business:** Adjusted EBITDA decreased by 161% YoY to $261 million[27], with volume up 145%[27] - **Specialty Business:** Adjusted EBITDA increased by 36% YoY to $512 million[84], with volume down 3%[84] Cash Flow and Capital Allocation - The company expects discretionary cash flow of $170-$190 million and free cash flow of $90-$125 million for the full year 2023[57] - The company has reduced net debt by $102 million YTD to $756 million[100] - The company has repurchased nearly 5% of outstanding stock for approximately $63 million[100] Forward Guidance and Assumptions - The company anticipates adjusted EPS of $200-$210 per share for FY23[53] - Capital expenditures are projected to be $175 million - $200 million[53] - The company estimates cash debt service of approximately $50 million[53]

Financial Data and Key Metrics Changes - The company reported third quarter adjusted EBITDA of $77 million and adjusted diluted EPS of $0.49, marking the second highest results for both figures in the third quarter [5] - Year-to-date adjusted EBITDA reached a record $266 million, up 7.5%, with adjusted diluted EPS of $1.76, just $1 million short of the entire 12-month adjusted EBITDA from two years ago [5][11] - The trailing 12-month return on capital employed (ROCE) stands at 17%, significantly exceeding the weighted average cost of capital [10] Business Line Data and Key Metrics Changes - Specialty business faced challenges with lower gross profit per ton due to startup impacts and reduced cogeneration profitability, but overall performance remains strong [6][11] - In rubber, the company noted industry restructuring and expanding tire capacity in the Americas and Europe, which is tightening the market [8] - Gross profit per ton for Q3 was $386, lower than previous quarters but above the Q3 2022 level of $364, with expectations to revert above $400 in Q4 [23] Market Data and Key Metrics Changes - The company experienced flat volume in the third quarter, with increased specialty demand from the new plant in China offset by lower volumes in EMEA and the Americas [145] - Demand conditions in the U.S. and Europe are subdued, with rubber demand slightly stronger in North America compared to Europe, while specialty demand is weak in both regions [102][103] Company Strategy and Development Direction - The company is focused on ramping up its greenfield facility in Huaibei, China, and completing air emission upgrades in the U.S. [16][53] - The launch of new products, such as PRINTEX Kappa 10, aims to address growing demand in the electric vehicle market [18] - The company is positioning its specialty business for further growth through various initiatives, including customer qualifications and facility upgrades [27][28] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving another year of earnings growth despite lower demand compared to 2022, with a strong position heading into 2024 [26][28] - The company anticipates that destocking will be a headwind into the second half of 2024, but remains optimistic about its resilience [51] - Management highlighted the importance of being agile in response to market changes and emphasized the ongoing restructuring in the rubber market [25][66] Other Important Information - The company reduced its net debt by $102 million in the first nine months of 2023, with a debt to EBITDA ratio now at 2.29 times, down from nearly three times in mid-2022 [13] - The company has repurchased $63 million worth of shares since late Q4 2022, representing nearly 5% of outstanding stock [13][140] - The company secured funding for developing a climate-neutral process for producing carbon black from alternative sources [141] Q&A Session Summary Question: Contract pricing progress for next year - Management indicated that while they are making progress, they do not expect to provide specific metrics at this time due to commercial sensitivity [31] Question: Drivers of lower price/mix benefit in rubber contracts - The startup in China and associated issues impacted the price/mix benefit, which would have been higher without these factors [32] Question: EBITDA impact from startups in rubber and specialty segments - The estimated EBITDA impact from startups was approximately $20 in rubber and about $70 in specialty [33] Question: Expectations for the trajectory of the Specialty segment - Management noted that the trajectory will depend on market conditions and the performance of premium products [40] Question: Impact of UAW on Q4 - Management stated that the UAW impact is included in their guidance, which anticipates a strong Q4 [80] Question: Comparison of demand conditions in the U.S. and Europe - Demand is currently weak across both regions, with rubber being slightly stronger in North America [102][103]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 Table of Contents FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 2023 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File Number: 001-36563 ORION S.A. (Exact name of registrant as specified in its charter) Grand Duchy of ...

Orion Engineered Carbons S.A. (NYSE:OEC) Q2 2023 Earnings Conference Call August 10, 2023 8:30 AM ET Company Participants Wendy Wilson - Head of IR Corning Painter - CEO Jeff Glajch - CFO Conference Call Participants Chris Kapsch - Loop Capital Markets Jon Tanwanteng - CJS Securities John Roberts - Credit Suisse Josh Spector - UBS Jeff Zekauskas - JPMorgan Operator Greetings, and welcome to the Orion SA Second Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. A ...

| --- | --- | --- | --- | --- | --- | |---------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | 2Q 2023 Earnings | | | | | | | Conference Call August 10, 2023 | | | | | | | | | | | | | Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include those factors detailed under the captions "Cautionary Statement for Purposes of the "Safe Harbor" Provisions of ...

Table of Contents UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2023 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _______________ to _______________ Commission File Number: 001-36563 ORION S.A. (Exact name of registrant as specified in its charter) Grand Duchy of Lu ...