Orion S.a. · NYSE:OEC
Orion — Orion Engineered Carbons — Investor Day (June 2022)
99 slides from Orion's investor day presentation, Jun 8, 2022
Slide 1: Investor Day June 8, 2022
a | Nn ENGINEERED CARBONS Investor Day JUNE 8, 2022
Slide 2: Wendy Wilson, Head of Investor Relations
Wendy Wilson Head of Investor Relations
Slide 3: Forward-Looking Statements
Forward-Looking Statements Forward-Looking ment This presentation contains and refers to certain forwardtooking statements with respect to our financial condition, results ofoperations and business. These statements constitute forward-looking statements within the meaning of Section 21E of the Secur
Slide 4: Open & Introduction agenda
OPEN & INTRODUCTION Wendy Wilson, Head of Investor Relations THE VALUE CREATION OPPORTUNITY Corning Painter, Chief Executive Officer WORLD SCALE INNOVATION PLATFORM David Deters, Senior Vice President, Innovation SPECIALTY ENGINEERED CARBON Sandra Niewiem, Senior Vice President, Global Specialty Car
Slide 5: Corning Painter, Chief Executive Officer
Corning Painter Chief Executive Officer
Slide 6: Global specialty and rubber carbon black markets
GLOBAL SPECIALTY GLOBAL RUBBER CARBON BLACK MARKET CARBON BLACK MARKET 90% Market OEC Competition OEC Competition Leadership Orion Engineered Carbons 2022
Slide 7: Global carbon black market and Orion segment volumes
GLOBAL CARBON BLACK ORION’S CARBON BLACK MARKET SEGMENT VOLUMES SEGMENT VOLUMES Specialty ™ Rubber Specialty ™ Rubber Orion Engineered Carbons 2022
Slide 8: Strategic Strengths: Differentiated Production Capabilities
Strategic Strengths Differentiated Production Capabilities aa Furnace Blak — |. }e———_l ae Gas Black tom Lamp Black Thermal Black Kappa Conductives Proprietary surface aftertreatments applied for some premium grades Differentiated Production Capabilities cb Proprietary Aftertreatments VY >580M EBITD
Slide 9: Strong Leadership Team
Strong Leadership Team Corning F. Painter David Deters Sandra Niewiem Pedro Riveros Jeffrey Glajch Chief Executive Officer, Orion Senior Vice President, Innovation Senior Vice President Senior Vice President Chief Financial Officer Engineered Carbons S.A. Global Specialty Carbon Global Rubber Carbon
Slide 10: Engineered Carbons are Ubiquitous
Engineered Carbons are Ubiquitous Optimize Physical, Electrical and Optical Properties Versatile & Customizable
Slide 11: Sustainability
Sustainability Growing Consumer Demand Impact + Electrification * Circular economy *Tire recycling * Ethical shopping * Aspirational purchases * Personal transportation Conductive additive demand Tire derived carbon blacks EV demand Prestige materials & packaging OEM demand and mileage Global Megatr
Slide 12: The Specialty Opportunity
= The Specialty === Opportunity orion
Slide 13: The Specialty Opportunity
The Specialty Opportunity Look carefully — comprised of many individual markets Need the best product for each application Orion Engineered Carbons 2022Investor Day 13
Slide 14: The Specialty Opportunity
The Specialty Opportunity Specialty is differentiated Unique inlets and harbors create differentiated and protected areas: gas black
Slide 15: The Conductivity Opportunity
The Specialty Opportunity Large specialty markets can emerge: The Conductivity Opportunity
Slide 16: The Conductivity Opportunity
The Conductivity Opportunity What looks like one, can really be two: Optimize lithium battery performance with two types of conductive carbons Kappa conductives & CNTs
Slide 17: Sustainability & The Innovation Framework
Sustainability & The Innovation Framework Objectives Aligned 000, ENABLING a CARBONS j RECYCLED OEC CARBONS INNOVATION PILLARS RENEWABLE CARBONS
Slide 18: Strategic Roadmap
Strategic Roadmap ALLOCATE CAPITAL FOR GROWTH EXPAND THE CONDUCTIVES BUSINESS STARTING WITH KAPPA LEAD SUSTAINABLE TRANSFORMATION OF RUBBER
Slide 19: Strategic Roadmap: Conductive Carbons
Strategic Roadmap: ENERGY Many STORAGE CARBON MANUFACTURERS C O al d U ct i ve NANOTUBES * Technical barriers to entry ELECTRIFICATION Carbons & rea * Technical barriers to entry GRID 3-DIMENSIONAL * Supply chain barriers ENHANCEMENTS KAPPA toentry Orion Engineered Carbons 2022InvestorDay 19
Slide 20: Strategic Roadmap: Rubber
MARKET NEED * OEM's want sustainable content * Tire customers want end-of-life tire solutions Strategic Roadmap: Rubber SOLUTION * Circular & renewable solutions ACTION * Modified furnace technology * Differentiated product offerings Orion Engineered Carbons 20: 20
Slide 21: Operational Roadmap
STRATEGIC PRICING Operational Roadmap
Slide 22: Maintenance Roadmap
Improvement Focus Maintenance Roadmap OrionEngineered Carbons 2022Investor Day 22
Slide 23: Strategic Roadmap: Pricing
VALUE PRICING MINDSET Roadmap: Pricing COMMITMENT TO VALUE CREATION Strateg ic Ge TRAINING AND DEVELOPMENT ® 8 ALIGNED SALES INCENTIVES ee HIGHLY FAVORABLE MARKET CONDITIONS Orion Engineered Carbons 2022InvestorDay 28
Slide 24: Value Creation Mindset
Value Creation Mindset PRINCIPLES Risk adjusted return on investment Balancing strategic growth with cash return to investors DECISION FRAMEWORK Kappa conductive carbons High return & confidence Growing regardless of economy Strategic timing Orion Engineered Carbons 2022 Investor Day
Slide 25: Growth Outlook
Mid-Cycle Adj. EBITDA Capacity ($ in millions) Growth Outlook 2021 Adj. 2022F Adj. Kappa Conductive Other Capacity Price / Mix 2025F Adj. EBITDA EBITDA Capacity Expansion EBITDA (1) Guidance mid-point CAGR: compound annual growth rate Orion Engineered Carbons 2022 Investor Day 25
Slide 26: Growth Threshold
Growth Threshold Global megatrends are driving our opportunity Integrated R&D platform and customer relationships key to success
Slide 27: Dave Deters, SVP Innovation
Dave Deters Senior Vice President, Innovation
Slide 28: Essential Chemistry for Today's and Tomorrow's World
Essential Chemistry For Today’s and Tomorrow's World Advantages of ‘ Engineered Carbons * Reinforcing or strengthening agent ° Protective coatings * Enhances functionality of pigments & adhesives * Electrical conductivity SS 8 Conductivity | me ay 28
Slide 29: Strategic Strengths: Broadest Production Capabilities
Strategic Strengths Broadest Production Capabilities, Technology and Product Portfolio 25% i GLOBAL SPECIALTY CARBON BLACK MARKET 75% =OEC = Competition 10% # 3 GLOBAL RUBBER CARBON BLACK MARKET 90% mOEC Competition Process Methodology Applications Competitor Access to Technology PRODUCTION TECHNOLO
Slide 30: Strategic Strengths: Leading-Edge After-Treatments
Strategic Strengths Broadest Production Capabilities, Technology and Product Portfolio PROVIDER OF LEADING-EDGE AFTER-TREATMENTS AFTER TREATMENT SURFACE MODIFICATION oo. * Enhances functionality and performance * Exclusive or preferred provider * Can command premium margin PROCESS APPLICATIONS COMPE
Slide 31: Strong Innovation Capabilities
Strong Innovation Capabilities Advanced, Integrated R&D Platform with Locations Around the World
Slide 32: World Scale Innovation Platform
World Scale Innovation Platform State of the Art Equipment Dispersion Testing lay 32
Slide 33: World Scale Innovation Platform
@ Pilot Plant ™@ Research Plant @ Technical Center World Scale Innovation Platform Integrated R&D platform encompasses: Research laboratories Technical support centers Test, pilot and mini plants Day 33
Slide 34: R&D Project Acceleration Capability
World Scale Innovation Platform R&D Project Acceleration Capability PILOT PLANT ° Modular and highly flexible set-up enables testing and analysis of varying product formulations and operating conditions ° Facilitates development of targeted solutions MINI PLANT * Small batch production for internal
Slide 35: Innovation Initiatives: R&D Priorities
Innovation Initiatives R&D Priorities CONDUCTIVITY CIRCULARITY OPERATIONS EXCELLENCE Develop conductive carbons for Leveraging end of life tires Drive production efficiencies via batteries and conductive applications and organic carbon sources improved yield and capacity utilization Orion Engineered
Slide 36: TEM images
Auftrags-Nr.: A060008068 Auftrags- A100018573 Nr.: TEM-Abbildung TEM-Abbildung TEM-Abbildung Bildnummer: 29331 Bildnummer: 64618 Datenträgerkennung: TEM_DB3_595XV847_0_0 Bildnummer:78647 Datenträgerkennung TEM_DB6_7X5RU8Y6_0_0 14119 Datenträgerkennung: TEM_DB6_7X5RU8Y6_0_0 : 3829 16994 Bearbeiter: K
Slide 37: Innovation Initiatives: Enabling Carbons
Innovation Initiatives: Enabling Carbons OPTIMIZING PERFORMANCE REQUIRES A MIX OF CONDUCTIVE CARBON FORMS Conductivity Easy to Low disperse moisture IDEAL BATTERY GRADE Low grit/metal impurity APPLICATIONS — CONDUCTIVITY SOMES aw BATTERIES Orion Engineered Carbons ay 37
Slide 38: Innovation Initiatives: Enabling Carbons
Innovation Initiatives: Enabling Carbons OPTIMIZING PERFORMANCE REQUIRES MIX OF CONDUCTIVE CARBON FORMS @ {2PPa conductive (at low joading) { CNTs(atlowloading) @ Cathode active material (non-conductive) Short range: kappa crosslinks CNT and provides intimate contact with active material High number
Slide 39: Innovation Initiatives: Recyclable Carbons
RESPONDING TO CUSTOMER-DRIVEN FOCUS ON THE CIRCULAR TIRE OPPORTUNITY Innovation Initiatives: | na Recyclable ~_— Carbons “one noe ensue CARBON BLACKS CARBON BLACKS BLACK BLENDS Leveraging R&D leadership to identify multiple pathways to circularity
Slide 40: Innovation Initiatives: Renewable Carbons
Innovation Initiatives: Renewable Carbons Developing Organic Feedstocks FOCUSED ON DEVELOPING AND IMPROVING METHODS TO CONVERT RENEWABLE RESOURCES INTO PRODUCTS
Slide 41: Sustainability & Innovation Objectives Aligned
Sustainability & Innovation Objectives Aligned ENABLING CARBONS PRODUCTS e-Mobility: Kappa conductives; enabling lithium-ion batteries New Processing Technologies: Emissions reduction RECYCLED CARBONS PRODUCTS ELT Pyrolysis Oil as Feedstock: Circular carbon black ELT Recycled Carbon Black: Recover a
Slide 42: Innovation Initiatives: Operations Excellence
Innovation Initiatives: Operations Excellence Driving Operating Productivity OPTIMIZE OPERATIONS BY ENHANCING YIELD AND CAPACITY UTILIZATION
Slide 43: Broadest Production Capability, Technology & Product Portfolio
KA eN Broadest Production Capability, Technology & Product Portfolio /
Slide 44: Minute Break
10 Minute Break
Slide 45: Sandra Niewiem, SVP Global Specialty Carbon Black & EMEA
Sandra Niewiem Senior Vice President, Global Specialty Carbon Black & EMEA
Slide 46: Run Video
Run Video Orion Engineered Carbons 2022 |nvestor Day 46
Slide 47: Competitive Positioning
Competitive Positioning GLOBAL SPECIALTY CARBON BLACK MARKET #1 m™OEC = Competition sy) Leading global producer ORION SPECIALTY 2021 SALES by Region m EMEA = Americas mAsia Diverse range of products and applications Orion Engineered Carbons 202 ORION SPECIALTY 2021 VOLUMES 263 kmt ™ Polymer (non-aut
Slide 48: Specialty is Special
Specialty is Special Serve multiple, high-value market segments Differentiated portfolio including conductive additives Close to our customers
Slide 49: Specialty's Growing Contribution
Specialty's Growing Contribution Strong Platform For Growth SALES VOLUMES GROSS PROFIT ADJ. EBITDA ($ in millions) (in kmt) ($ in millions) ($in millions) $800 - $850 $757-$796 263 54-267 $751 g14g. $146- $162 $679 $641 $208 - $225 $598 251 5198 $122 $509 $170 $110 $445, $149 232 2019 2020». 2021-—«
Slide 50: Strategic Strengths
© STRATEGIC FOCUS Strategic Strengths Proven Strengths in Key Enablers of Success Fea) DIFFERENTIATED PORTFOLIO oe GLOBAL NETWORK INNOVATION CAPABILITIES tev yrr CUSTOMER RELATIONSHIPS Orion Engineered Carbons 2022InvestorDay 50
Slide 51: Customer Testimonial Video
Run Customer Testimonial Video
Slide 52: Growth Outlook: Favorable Megatrends
GROWING CONSUMER DEMAND Industrial and deco coatings Synthetic fibers Pressure pipes Packaging ink Growth Outlook Favorable Megatrends MOBILITY Engineered plastics Adhesives and sealants Automotive coatings SUSTAINABILITY Electric vehicles, Lithium-ion batteries High and medium voltage cables OrionE
Slide 53: Growth Outlook: Demand growth across regions
Growth Outlook Demand growth across World Regions 317 2021 FAVORABLE MEGATRENDS UNDERPIN GROWTH OUTLOOK SPECIALTY CARBON BLACK DEMAND (in KT) 241 2026 2021 += 2026 2021 2026 GLOBAL DEMAND (KT) DEMAND GROWTH BY SEGMENT (CAGR 2021-26) Batteries pithiumion A Powder Coatings eostings Polymers Wire & cab
Slide 54: Capturing the Growth Opportunity
Capturing the Growth Opportunity CONDUCTIVITY / SUSTAINABILITY TARGETED CAPACITY EXPANSION EBITDA GROWTH
Slide 55: Capturing the Growth Opportunity
a Tl Ay ae al BERRE L'ETANG, FRANCE - "I aa a Capturing the : , et Growth Opportunity Premium, conductivity and capacity expansion ‘ ‘ 5 STRATEGIC FOCUS CONDUCTIVITY/SUSTAINABILITY ey * Kappa conductive additive family * Favorable environmental profile ® ee 8 Attractive markets Differentiated and ta
Slide 56: The Conductivity Opportunity: Lithium-Ion Battery Demand
The Conductivity Opportunity Lithium-lon Battery Demand Actuals/Projections (GWh) 2,246 A\(A 19% }{ 23% CAGR/ \ CAGR 1,043 2020 2025 2030 mAvicienne Consulting ™ McKinsey Consulting Exponential Demand underpinned by Conductive additive lithium-ion battery megatrends demand growth above demand growth
Slide 57: The Conductivity Opportunity
The Conductivity Opportunity Leading producer of acetylene based conductive additives pr Quadruple current capacities with announced greenfield facility in Texas O#f.0 BOs = ion = on Leverage EV megatrend, high- end cable market growth and other sustainable markets Prepare for further portfolio and
Slide 58: The Conductivity Opportunity
The Conductivity Opportunity Enhanced battery performance by kappa conductive additives OEC kappa series for lithium-ion batteries, high-end cables Acetylene and furnace based conductive additives Expanding innovation capabilities Strong underlying growth outlook Manufacturing facilities with favora
Slide 59: Premium Growth and Expansion
Premium Growth and Expansion SELECTED INITIATIVES Kappa Expansion Gas Black Expansion New Post Treatment Units Reactor Upgrades New Huabei Site ° Well established, unique grade portfolio * Excellent application performance * +15-20% volume growth over next 5-7 years +$8-$11millions EBITDA Orion Engi
Slide 60: Specialty Segment Mid-Cycle Capacity
Specialty Segment Mid-Cycle Capacity ($ in millions) $245-$275 146-$162 Outlook sao S155 +611 =saereien I F 2021 Adj. 2022F Adj. = | Kappa =~ — Other Capacity Price / Mix 2025F Adj. EBITDA EBITDA Conductive Capacity Expansion EBITDA Orion Engineered Carbons 2022 Investor Day 60
Slide 61: Specialty is Special
Specialty is Special DIVERSE RANGE OF PRODUCTS AND APPLICATIONS SIGNIFICANT GROWTH OPPORTUNITY
Slide 62: Pedro Riveros, SVP Rubber Carbon Black & Americas
Pedro Riveros Senior Vice President, Rubber Carbon Black & Americas
Slide 63: Run Video
Run Video Orion Engineered Carbons 2022Investor Day 63
Slide 64: Rubber Segment's Essential Role
Rubber Segment’s Essential Role Market leader with global scale and operations Solid foundation for growth Positioned to thrive in changing market
Slide 65: Competitive Positioning
Competitive Positioning GLOBAL RUBBER ORION RUBBER CARBON BLACK MARKET 2021 VOLUME 701 kmt #3 10% 90% mOEC mReplacement Tire = Competition OEM Tire = MRG Leading market position: 34 largest global producer by volume ayee Strong customer relationships aD zB ORION RUBBER 2021SALES by area of world mEM
Slide 66: Rubber's Solid Foundation
Rubber's Solid Foundation Solid and Sustaining Contributor to Results SALES ($ in millions) $1,356 - $1,411 $968 $948 $691 2019 2020 2021 2022F VOLUMES jo. 727-757 2019 2020 2021 GROSS PROFIT ($ in millions) 330-$360 $284 $252-$262 $219 $189 $144 2019 2020 2021 2022F MEE Gross Profit ——GP Per Ton AD
Slide 67: Growth Drivers
GROWTH DRIVERS TRADITIONAL > bl © B MILES DRIVEN TIRE PRODUCTION VEHICLE PRODUCTION EMERGING SUSTAINABILITY 6+ EV MOBILITY (®) TIRE DESIGN
Slide 68: Growth Outlook by Area of the World
Growth Outlook By Area Of The World GLOBAL RUBBER DEMAND Global Rubber Demand North America 2021 2026 Total 2026 (&) Market, 2021 G Brazil | I Source: Notch Consulting April 2022 CAGR: Compound Annual Growth Rate Market Complexity & Dynamics Global Capacity / demand Supply chain “in-sourcing” trends
Slide 69: Capacity / Demand Imbalance
Growth Outlook Capacity / Demand Imbalance 2,200 2,000 1,800 1,600 1,400 NORTH AMERICA DEMAND VS. CAPACITY (in kmt) 2016 2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F —90% Effective Capacity © ——Total Demand EUROPE DEMAND VS. CAPACITY (Excluding Russia) (in kmt) 2016 2017 2018 2019 2020 2021 202
Slide 70: Capturing the Growth Opportunity
(0) OPTIMIZING PORTFOLIO Ca ptu ri Nn g dal e OPERATIONS EXCELLENCE Growth Opportunity Strategies Tailored by Geography SUSTAINABLE SOLUTIONS
Slide 71: Growth Opportunity: Americas
Growth Opportunity: Americas STRATEGIC FOCUS Optimize price and mix to capture capacity/demand imbalance opportunity Drive efficiencies and incrementally debottleneck capacity Innovate and deploy sustainable solutions Orion Engineered Carbons 20;
Slide 72: Growth Opportunity: EMEA
Growth Opportunity: EMEA STRATEGIC FOCUS Address supply/demand imbalance Drive efficiencies and incrementally debottleneck capacity Innovate and deploy sustainable solutions Advance strategic relationship model Orion Engineered Carbons 2022 |nvestor Day 72
Slide 73: Growth Opportunity: Asia
Growth Opportunity: Asia STRATEGIC FOCUS Targeted capacity expansion Optimize mix between specialty and rubber Drive efficiencies and incrementally debottleneck capacity Orion Engineered Carbons 2022
Slide 74: Sustainable Solutions
Sustainable Solutions Circularity is a key focus of many customers Expect recyclable/renewable carbon use in tires will be 10% of market by 2030
Slide 75: Aligned with Sustainability Objectives
Aligned with Sustainability Objectives ENABLING CARBONS Develop sustainable solutions for customers RECYCLED CARBONS Advance the circular economy: tire circularity RENEWABLE CARBONS Leverage renewable resources OEC INNOVATION PILLARS Orion Engineered Carbons 2022Investor Day 75
Slide 76: Sustainable Solutions: Multiple Pathways to Circularity
MULTIPLE PATHWAYS TO CIRCULARITY Sustainable Solutions Impurity Removal Leveraging R&D leadership to identify best pathways RENEWABLE CIRCULAR RECOVERED CARBON Learn and collaborate to CARBON BLACKS CARBON BLACKS BLACK BLENDS capitalize on industry developments Orion Engineered Carbons 2022Investor
Slide 77: Customer Testimonial Video
Run Customer Testimonial Video
Slide 78: Sustainable Solutions
Sustainable Solutions COMPETITIVE STRENGTHS Leading R&D platform Understand customer requirements Range and scale of production capabilities CUSTOMER BENEFITS Portfolio of solutions Concept to market speed
Slide 79: Rubber Segment Mid-Cycle Capacity
Rubber Segment Mid-Cycle Capacity ($ in millions) $230-$260 Growth . $164-$178 $120 2021 Adj. 2022F Adj. Other | Price / Mix 2025F Adj. EBITDA EBITDA Capacity EBITDA Expansion Orion Engineered Carbons 2022 Investor Day 79
Slide 80: Rubber Segment's Essential Role
Rubber Segment’s Essential Role ey SOLID FOUNDATION FOR GROWTH iw: all POSITIONED TO THRIVE
Slide 81: Jeff Glajch, Chief Financial Officer
Jeff Glajch Chief Financial Officer
Slide 82: Strategic Roadmap
Slide 83: Strong Foundation
Slide 84: Pivot Toward Growth
Slide 85: Segment Mid-Cycle Capacity
Slide 86: Growth Outlook
Slide 87: Value Creation Mindset
Slide 88: Value Creation Mindset: Discretionary Free Cash Flow
Slide 89: • • • • •
• • • • •
Slide 90: Strategic Roadmap
Slide 91: Q&A
Slide 92: Positioned to Thrive
Slide 93: Slide 93
Slide 94: Appendix
Slide 95: Non-GAAP Financial Measures
Slide 96: Non-GAAP Metrics Reconciliation: FY22 Financial Guidance
Slide 97: Non-GAAP Metrics Reconciliation
Slide 98: Non-GAAP Metrics Reconciliation: Segment Gross Profit
Slide 99: Non-GAAP Metrics Reconciliation