Orion S.a. · NYSE:OEC
Orion — Orion Engineered Carbons — Baird 2019 Global Industrial Conference
18 slides from Orion's conference presentation, Nov 6, 2019
Slide 1: Baird 2019 Global Industrial Conference
INVESTOR PRESENTATION BAIRD 2019 GLOBAL INDUSTRIAL CONFERENCE NOVEMBER 6, 2019 1
Slide 2: Note Regarding Forward-Looking Statements; Non-GAAP Measures
Note Regarding Forward-Looking Statements; Non-GAAP Measures This presentation contains and refers to certain forward-looking statements with respect to our financial condition, results of operations and business. These statements constitute forward-looking statements within the meaning of Section 2
Slide 3: Orion Appoints Chief Financial Officer
Orion Appoints Chief Financial Officer Lorin Crenshaw • Brings 20+ years of diversified financial experience in positions of increasing responsibility to Orion • Most recently held the position of Vice President and CFO for Albemarle Corporation’s Global Lithium business unit • Also served as Treasu
Slide 4: The Leader in Carbon Black Technology
The Leader in Carbon Black Technology… OEC is a leading producer of highly customized and diverse carbon black products. Production Technologies and Applications Furnace Thermal After Gas Black Lamp Black Acetylene Black Black Treating Tires Tires MRG MRG MRG MRG MRG Plastics Plastics Plastics Plast
Slide 5: Growth and Innovation
Growth and Innovation Conductive High Jetness Black Business models Carbon Black 5
Slide 6: Strengthening Competitiveness
Strengthening Competitiveness High Performance “Orion Design” Reactors Organization Initiative Procurement Excellence and Energy Recovery and Cultural Transformation 6
Slide 7: Q3 2019 Overview and Full Year
Q3 2019 Overview and Full Year Strong cash generation and realized Rubber Carbon Black pricing. Maintaining quality in Specialty Carbon Black. Strong cash generation despite trading conditions at weaker end of our expectations Q3 Adjusted EBITDA of $68.1 million. Adjusted for FX versus prior yea
Slide 8: Orion Q3 2019 Development versus Prior Year
Orion Q3 2019 Development versus Prior Year Resilience in challenging economy validates quality of franchise Q3 2019 to Q3 2018 Comparison In million $ Q3 2018 Adjusted 72.6 EBITDA • Realized pricing gains principally in Rubber Base Price and Mix 11.6 • Volume softness in all regions in Specialty as
Slide 9: Strong Net Cash Provided by Operating Activities
Strong Net Cash Provided by Operating Activities Cash Roadmap Lower End of Upper End of Actual FY 2019 FY 2019 YTD 2019 1) 1) ($millions) Guidance Guidance Adjusted EBITDA 204 265 275 Change in Cash before EPA Capex 2) +68 +106 +113 and Dividend Less: EPA Capex -29 -50 -55 Change in Cash before Divi
Slide 10: Commitment to Maintain Cash Dividend
Commitment to Maintain Cash Dividend: Management and Board are committed to maintaining our current dividend level (@ $0.80 per share)*, representing currently about a 6% yield We currently expect to generate approximately of $50m free cash flow before paying dividends in 2019 and 2020, consistent w
Slide 11: Capital Allocation
Capital Allocation Measured and efficient capital allocation remains top priority 1) • Leverage target of 2.0 to 2.5x ratio • Modest Cash Interest and Debt Service of $25 million per annum • Maintain Stable Dividend 2014 2015 2016 2017 2018 YTD (EURO 2019 EURO USD USD USD USD millions/$millions) USD
Slide 12: Questions
orion QUESTIONS
Slide 13: Specialty Business Results and Expectations
Specialty Business Results and Expectations Q3 2019 to Q3 2018 Comparison In million $ Q3 2018 Adjusted 34.7 • Some improvement in mix EBITDA • Volumes reflect current trading environment Base Price and Mix 3.2 • Stronger US Dollar drives negative translation FX impact Volume Impacts -4.4 • Unfavora
Slide 14: Rubber Business Results and Expectations
Rubber Business Results and Expectations Q3 2019 to Q3 2018 Comparison In million $ Q3 2018 Adjusted 37.9 • Price increases realized EBITDA Base Price and Mix 8.4 • Stronger US Dollar drives negative translation FX impact Volume Impacts -2.3 • Increased negative feedstock differentials Foreign Excha
Slide 15: Historical Non-GAAP Metrics Reconciliation
Historical Non-GAAP Metrics Reconciliation Historical Non-GAAP Metrics Reconciliation ($million unless otherwise stated) Three Months Ended September 30, 2018 2019 Revenue 394 370 (1) Variable costs -251 -235 Contribution Margin 143 135 Sales volume (in kmt) 267 256 Contribution Margin per Metric To
Slide 16: Historical Non-GAAP Metrics Reconciliation
Historical Non-GAAP Metrics Reconciliation Historical Non-GAAP Metrics Reconciliation ($million unless otherwise stated) Nine Months Ended September 30, 2018 2019 Revenue 1192 1154 Variable costs (1) -744 -739 Contribution Margin 448 415 Sales volume (in kmt) 828 780 Contribution Margin per Metric T
Slide 17: Non-US GAAP Metric Definitions
Non-US GAAP Metric Definitions In this presentation we refer to Adjusted EBITDA, Contribution Margin, Contribution Margin per ton, Net Working Capital, Capital Expenditures and Adjusted EPS, which are financial measures that have not been prepared in accordance with Generally Accepted Accounting Sta
Slide 18: Investor Relations Contact Details
INVESTOR RELATIONS CONTACT DETAILS DIANA DOWNEY INVESTOR- RELATIONS@ORIONCARBONS.COM 18
Orion Engineered Carbons — Baird 2019 Global Industrial Conference on 6ix