Orion S.a. · NYSE:OEC
Orion — Q3 2024 Earnings Presentation
26 slides from Orion's earnings presentation, Nov 8, 2024
Slide 1: 2024 3Q Earnings Conference Call
OfIOR s.. 2024 3Q Earnings Conference Call November 8, 2024
Slide 2: Forward-Looking Statements
Forward-Looking Statements Forward-Looki ment: 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 the Secu
Slide 3: Third Quarter Results and Highlights
Third Quarter Results * Adjusted EBITDA $80.1 million, up 4% YoY and 7% sequentially; Adjusted diluted EPS $0.47 * Second best 3Q ever, just $0.4M below 2022, ° ° despite 11% YoY Rubber segment decline (20kt) 30 H Ig a | IQ hts * Current U.S. tire builds 20% below “Mid-Cycle” * Costs, productivity i
Slide 4: Market Commentary
Market Commentary Exiting 2024 Replacement Tire (Auto) Demand Stable, Underscored by Miles Driven Data However, Western Production Levels Soft — Impacted by Imports Department of Commerce investigation concludes: 12-48% duty recommendation for Thai imports (largest exporter to US) Passenger Car and
Slide 5: 2025 Early Look
2025 Early Look Industry Supply/Demand in Western Regions o European CB capacity — higher utilization o U.S. effective capacity diminished, due to EPA investments Rubber Contract Negotiations Nearing Completion o Volume growth, even ina flat market o Gross profit/ton comparable to 2024 o Upside if t
Slide 6: Capital Needs
Capital Needs Diminishing Over Next 2 years La Porte Project On Track for Completion in 2025 Maintenance Capex to Enhance Returns - Reliability, Asset Productivity Improved FCF Should Enable Additional Return of Capital to Shareholders (1) EPAspend completed in 2023 (2) Greenfield project for acetyl
Slide 7: 3Q Performance
3Q Performance Key Drivers * Volumes declined 8% YoY, on softer Rubber demand (volumes down 11%); Specialty flat * Gross profit/ton improved YoY, primarily driven by Rubber segment contractual pricing, better fixed cost absorption and regional Specialty mix * EBITDA improvement YoY driven by Rubber
Slide 8: Key Financial Metrics: Adjusted EBITDA
Key Fi nN a n C a | Adjusted EBITDA Metrics (Sin millions) . Hl Cogen Forward Sale 3Q 2024 Key Performance Drivers Te ~~. a —H--—— —iE}- Co * Specialties volume improvement in — higher margin regions offset by reduced Rubber demand from lower tire production * Favorable annual Rubber pricing 757 agr
Slide 9: Rubber Business Results
Rubber Business Results 3Q Key Performance Drivers ° Underlying demand incrementally softer in Western markets; Consumer trade down and higher tire imports remain a headwind to customer mix * Volume softness more pronounced in North America than Europe, reflecting contractual commitments. * Sequenti
Slide 10: Rubber Business Results: Adjusted EBITDA
Rubber Business Results 3Q Key Performance Drivers * Softer demand from global tire manufacturers, particularly in Americas * Favorable pricing from customer agreements across Western regions * Costs benefit from better fixed costs absorption and timing, partially offset by inventory revaluation and
Slide 11: Specialty Business Results
Specialty Business Results 3Q Key Performance Drivers . Volume recovery slowed, but regional mix was favorable . Gross profit benefit from regional mix was more than offset by oil-price driven inventory revaluation and lower co-gen . GP/ton closer to ~$650, if not for transient revaluation effect .
Slide 12: Specialty Business Results: Adjusted EBITDA
Specialty Business Results 3Q Key Performance Drivers * Volume contributed favorably, thanks to regional mix * Favorable mix from sales into coating applications * Higher costs reflected inventory revaluation, personnel costs and lower Cogen Adjusted EBITDA - Specialty ($ in millions) HB Cogen Forwa
Slide 13: 2024 Free Cash Flow
2024 Free Cash Flow Operating Activities * Working capital poised to benefit seasonally, and from lower oil prices * Operating Cash Flow impacted by higher cash tax timing Cash Utilization * Capex still on track for $200M, as La Porte and debottlenecking projects progress Net Debt/Adj.EBITDA, TTM *
Slide 14: Updated Financial Guidance
Updated Guidance Adjusted EBITDA Total: $305M-$315M Adjusted EPS $1.65 per share - $1.75 per share Capital Expenditures $200M (unchanged) Depreciation & Amortization ~$120M F Y2 4 _ Effective Tax Rate ~30% Free Cash Flow (before impact of fraud event) ~($35M) Financial Guidance Adjusted EBITDA Total
Slide 15: Appendix
Appendix
Slide 16: FY24 Select Assumptions and Sensitivities
and Sens‘ ies F Y24 _ Select Assumpt' + $10/bbl change in average feedstock price changes NWC over 3- to 4- F j al a Nn C j a | Wnenig Gopitel month period by ~$25M ewe eo,e FX * 1% change in EUR/USD amounts to ~$2M EBITDA FY impact Sensitivities + $1/bbl change in avg. feedstock cost over 12-month
Slide 17: Mid-Cycle Capacity
Mid-Cycle Capacity Assumptions Tz . iS) ° iS At mid-cycle, we would expect economic indicators in the markets we serve to be at pre-COVID levels (2017-18). We would also expect pricing required to maintain our margins At mid-cycle capacity, expect our consolidated plant utilization to return to the
Slide 18: Historical Non-GAAP Metrics Reconciliation
Historical Non-GAAP Metrics Reconciliation (§ million unless otherwise stated) Three Months Ended Nine Months Ended September 30, Q3 2024 Q2 2024 Q3 2023 2024 2023 2022 — — Sie) We Cost ofSales _ _ _ 7 7 _ _ 1217 Gross Profit 110 352 Sales volume (in kmt) 225 233 245 748 CE . . . —— Sus GeA) 62D Gra
Slide 19: Historical Non-GAAP Metrics Reconciliation
Historical Non- GAAP Metrics Reconciliation Reconciliati ‘Twelve Months Ended December 31, 2023 2022 2021 Adjusted EBITDA $332 $312 $268 Maintenance & EPA CAPEX (108) (152) (156) Interest payments. (39) (34) (23) Cash paid for taxes (56) (24) (38) Discretionary Cash Flow $129 $102 $51 Dividend payme
Slide 20: Historical Non-GAAP Metrics Reconciliation: Adjusted Diluted EPS
Historical Non- GAAP Metrics Reconciliation Adjusted diluted EPS Three Months Ended Nine Months Ended September 30, Q3 2024 Q2 2024 Q3 2023 2024 2023 Diluted EPS $(0.35) $0.35 $0.44 $0.46 $1.65 Long Term Incentive Plan 0.08 0.05 0.06 0.19 0.14 Misappropriation of assets, net 101 - - 1.00 - Professio
Slide 21: Historical Non-GAAP Metrics Reconciliation: Adjusted Net Income
Historical Non- GAAP Metrics Reconciliation Adjusted Net Income Three Months Ended Nine Months Ended September 30, Q3 2024 Q2 2024 Q3 2023 2024 2023 Net income (loss) (20.2) $ 20.5 $ 26.2 $ 27.0 $ 98.6 add back long-term incentive plan 48 3.0 3.6 3 83 ‘add back loss due to misappropriation of assets
Slide 22: Historical Non-GAAP Metrics Reconciliation: Return on Capital Employed
ical Non-GAAP Metrics Recon n unless otherwise stated) Capital Employed 2024 2023 2022 2021 2020 2019 Q32024YTD Q3 2023 YTD Total Assets 1,996.3 1,833.7 1,833.4 1,888.7 1,631.0 1,389.8 1,257.4 LESS: Current Liabilities, 577.9 449.3 4403 5528 448.7 3247 =285.2 Capital Employed 1,418.4 1,384.4 1,393.1
Slide 23: Net Debt and Debt Ratio
Historical Non- GAAP Metrics Reconciliation Net Debt and Debt ratio September 30, 2024 Current portion of long term debt and other financial liabilities $ 2938 Long-term debt, net 676.7 Total debt as per Consolidated Balance Sheets 9705 ‘Add: Deferred debt issuance costs- Term loans 3.2 Less: Cash a
Slide 24: Historical Non-GAAP Metrics Reconciliation: Quarterly
Historical Non- GAAP Metrics Reconciliation 4 2021 Q1 2022 02.2022 3 2022 04 2022 Q1 2023 2.2023, 3 2023 4 2023 Q1 2024 2.2024 03 2024 Quarterly Setiant_Gnnaons) Grothrfont_ t= 1633 35.7 598 396 187.6 603 656 576 1917 59.2 597 606 191.0 696 306 523 448 853 168.4 59.0 336 46.7 377 895 1805 843 372 53
Slide 25: 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 these non-GAAP financial meas
Slide 26: Investor Relations
Investor Relations Contact Details Christopher Kapsch christopher.kapsch@orioncarbons.com
Orion S.A. Common Shares — Q3 2024 Earnings Presentation on 6ix