Orion S.a. · NYSE:OEC
Orion — Q1 2024 Earnings Presentation
27 slides from Orion's earnings presentation, May 3, 2024
Slide 1: 1Q Earnings Conference Call
2024 1Q Earnings Conference Call May 3, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looking Statements 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 21E of t
Slide 3: 1Q Highlights
First Quarter Results • Adjusted EBITDA $85 million • Adjusted diluted EPS $0.52 • Rubber margins up versus prior year average reflecting pricing gains despite challenging regional mix • Strong sequential improvement in Specialty gross profit margins 1Q Highlights Reaffirming 2024 Guidance • Adjuste
Slide 4: LaPorte Plant Groundbreaking
LaPorte Plant Groundbreaking • Will be the only facility in the North America producing acetylene-based conductive additives to support the global shift to electrification • Facility start-up expected in the second quarter of 2025 • Dramatically reduced CO2 footprint than traditional conductive grad
Slide 5: 1Q Performance
1Q Performance ($ in millions) Key Drivers Metric (1) 1Q24 1Q23 Y/Y 4Q23 Seq Volume (kmt) 248.4 233.5 6.4% 226.2 9.8% • Volume increased year-over-year in both segments, primarily in Europe and China Revenue $502.9 $500.7 0.4% $468.2 7.4% Gross Profit $122.2 $136.4 (10.4)% $87.3 40.0% • Gross Profit
Slide 6: Key Financial Metrics
Key Financial Adjusted EBITDA Metrics ($ in millions) 22.3 3.8 1Q 2024 Key Performance Drivers 101.1 Costs 2.0 Co-gen • Volume improvement reflects increased demand in most regions and applications 85.3 0.7 • Price/mix increase driven by contractual price improvements in rubber, offset by regional m
Slide 7: Rubber Business Results
Rubber Metric 1Q 24 1Q 23 Y/Y 4Q 23 Seq Business Volume (kmt) Revenue 185.1 180.5 2.5% 171.3 8.1% Results $332.0 $338.7 (2.0)% $319.5 3.9% Gross Profit $80.5 $84.3 (4.5)% $60.3 33.5% Gross Profit/ton (1) $434.9 $467.0 (6.9)% $352.0 23.5% 1Q Key Performance Drivers Adj. EBITDA $57.4 $63.8 (10.0)% $49
Slide 8: Rubber Business Results
Rubber Business Adjusted EBITDA - Rubber ($ in millions) Results 63.8 5.8 Costs 6.0 Co-gen 4.9 1Q Key Performance Drivers 57.4 0.5 • Improved contract pricing was primarily offset by lower North American volume and higher costs • Costs were impacted by lower cogeneration pricing and higher fixed cos
Slide 9: Specialty Business Results
Specialty Metric 1Q 24 1Q 23 Y/Y 4Q 23 Seq Business Volume (kmt) Revenue 63.3 $170.9 53.0 $162.0 19.4% 5.5% 54.9 $148.7 15.3% 14.9% Results Gross Profit Gross Profit/ton (1) $41.7 658.8 $52.1 $983.0 (20.0)% (33.0)% $27.0 $491.8 54.4% 33.9% Adj. EBITDA $27.9 $37.3 (25.2)% $17.4 60.3% 1Q Key Performan
Slide 10: Specialty Business Results
Specialty Business Adjusted EBITDA - Specialty ($ in millions) Results 1.1 16.5 8.0 Costs 1Q Key Performance Drivers 37.3 Co-gen • Volume increased across all regions, and markets 27.9 0.2 • Costs increased due to favorable timing and non-repeating items last year combined with adverse timing this y
Slide 11: Cash Generation
HIGHLIGHTS Sources & Uses 1Q 2024 ($ in millions) Operating Activities Adjusted EBITDA 85 • Net working capital (NWC) increased due Change in NWC -26 to higher volumes Change in Provision -3 Cash Cash Paid for Interest -9 • Capital expenditures were lower in Q1 Generation Cash Income Taxes Other -10
Slide 12: Cashflow/Usage Expectation
FY2024 ($ in millions) Adjusted EBITDA $340 – 360 Interest (40) 2024 Taxes (50) Cashflow/ Maintenance capex (90) Usage Discretionary Cash Flow $160 – 180 Dividends (5) Expectation Total growth capex (inc. LaPorte) (110) Free Cash Flow $45-65 12
Slide 13: Financial Guidance and Assumptions
Guidance Adjusted EBITDA Total $340M-$360M Adjusted EPS $2.05 per share - $2.20 per share Capital Expenditures ~$200M Depreciation & Amortization $115M - $125M 2024 Effective Tax Rate Cash Debt Service(1) ~30% ~$50M Financial Current Basic Share Count at March 31, 2024 58.0M Guidance and Select Assu
Slide 14: Appendix
Appendix 14
Slide 15: Focus On Growth Investments
Capital Spending Outlook ($ in millions) Capital Spending Priorities $233 Focus On $215 HIGH RETURN $200 OPPORTUNITIES $81 $59 Growth $171 $160-180 New Kappa Plant $145 $44 $110 High Return Growth Investments $29 $95 $67 $20 $29 Investments MAINTENANCE $61 CAP EX $90 $90 Reliability and Productivity
Slide 16: Mid-Cycle Capacity Assumptions
• At mid-cycle, we would expect economic indicators in the markets we serve to be at pre-COVID levels. We would also expect pricing required to maintain our margins Mid-Cycle Capacity • At mid-cycle capacity, expect our consolidated plant Assumptions utilization to return to the upper 80 percent ran
Slide 17: Path To $500 Million Adjusted EBITDA Capacity
Mid-Cycle Adj. EBITDA Capacity ($ in millions) $500 $50 $30 Path To $500 $70 Million Adjusted EBITDA Capacity $340-$360 $332 2023 2024F Mid-Cycle Margin Kappa 2025F Adj. Adj. EBITDA Adj. EBITDA Volume Conductives EBITDA 17
Slide 18: 2025 Rubber Mid-Cycle Capacity Target
Rubber Segment Mid-Cycle Capacity ($ in millions) $10 - 15 $35 - 40 2025 Rubber Mid‐Cycle Capacity Target $230-250 $275-305 $222 18
Slide 19: 2025 Specialty Mid-Cycle Capacity Target
Specialty Segment Mid-Cycle Capacity ($ in millions) $ 50 $15 - $25 2025 Specialty $ 20 - $40 Mid‐Cycle $190 - $230 Capacity Target $111 $105-$115 19
Slide 20: Historical Non-GAAP Metrics Reconciliation
Historical Non-GAAP Metrics Reconciliation ($ million unless otherwise stated) Three Months Ended Three Months Ended March 31, Q1 2024 Q4 2023 Q1 2023 2024 2023 2022 Net sales 503 468 501 503 501 485 Cost of Sales 381 381 365 381 365 367 Gross Profit 122 87 136 122 136 118 Historical Sales volume (i
Slide 21: Reconciliation of FCF and Discretionary CF
Reconciliation of FCF and Discretionary CF ($million) Historical 2023 Twelve Months Ended December 31, 2022 2021 Non-GAAP Adjusted EBITDA Maintenance & EPA CAPEX $332 (108) $312 (152) $268 (156) Metrics Interest payments (39) (34) (23) Cash paid for taxes (56) (24) (38) Discretionary Cash Flow $129
Slide 22: Historical Adjusted Diluted EPS Reconciliation
Historical Non-GAAP Metrics Reconciliation in $ per share Historical Adjusted diluted EPS Diluted EPS Q1 2024 $0.45 Three Months Ended Q4 2023 $0.08 Q1 2023 $0.70 Three Months Ended March 31, 2024 $0.45 2023 $0.70 Non-GAAP Long Term Incentive Plan Other Adjustments including restructuring 0.06 — 0.1
Slide 23: Historical Adjusted Net Income Reconciliation
Historical Non-GAAP Metrics Reconciliation ($million) Historical Adjusted Net Income Q1 2024 Three Months Ended Q4 2023 Q1 2023 Three Months Ended March 31, 2024 2023 Non-GAAP Net income add back long-term incentive plan add back other adjustment items $ 26.7 $ 3.5 — 4.9 $ 7.1 — 42.3 2.1 (0.3) $ 26.
Slide 24: Capital Employed and Adjusted EBIT Reconciliation
Historical Non-GAAP Metrics Reconciliation ($ million unless otherwise stated) Capital Employed 2024 2023 2022 2021 2020 2019 Q1 2024 YTD Q1 2023 YTD Total Assets 1,874.6 1,888.8 1,833.4 1,888.7 1,631.0 1,389.8 1,257.4 LESS: Current Liabilities -468.8 -530.8 -440.3 -552.8 -448.7 -324.7 -285.2 Capita
Slide 25: Historical Net Debt and Debt Ratio
Historical Non-GAAP Metrics Reconciliation ($million) Historical Net Debt and Debt ratio Current portion of long term debt and other financial liabilities $ March 31, 2024 144.8 Non-GAAP Long-term debt, net Total debt as per Consolidated Balance Sheets 668.7 813.5 Metrics Add: Deferred debt issuance
Slide 26: Non-GAAP Financial Measures
Non-GAAP Financial Measures Non-GAAP Financial Measures We present certain financial measures that are not prepared in accordance with GAAP or the accounting standards of any other jurisdiction and may not be comparable to other similarly titled measures of other companies. For a reconciliation of t
Slide 27: Investor Relations Contact Details
Investor Relations Contact Details Wendy Wilson wendy.wilson@orioncarbons.com 27
Orion S.A. Common Shares — Q1 2024 Earnings Presentation on 6ix