Business
Orion S.A. Announces Financial Results For The Full Year Ended December 31, 2024
HOUSTON, February 19, 2025--Orion S.A. (NYSE: OEC), a specialty chemical company, today announced financial results for the fourth quarter and full year of 2024.
About this update from Orion S.a.
HOUSTON, February 19, 2025 --( BUSINESS WIRE )--Orion S.A. (NYSE: OEC), a specialty chemical company, today announced financial results for the fourth quarter and full year of 2024. Fourth Quarter 2024 Financial Highlights Full Year 2024 Financial Highlights Other Highlights "Orion delivered more than $300 million of Adjusted EBITDA for the third consecutive year in 2024, but we are not satisfied by these results. Soft Western tire production levels – and consequently lower than expected Rubber demand – was Orion’s single largest obstacle in 2024, and we addressed this partly through commercial strategy coming into 2025. This will blunt impact from the distorted tire industry trade flows, should they persist," stated Corning Painter, Orion’s Chief Executive Officer. "Despite lingering end-market softness, foreign exchange headwinds reflecting the Dollar’s recent strength and uncertainty around the new administration’s broader policies, we expect growth in 2025 on a constant currency basis, underpinned by the new Rubber supply agreements, debottlenecked Specialty production lines and other factors in our control." "Of potentially greater interest to our investors," continued Painter, "may be the multi-year inflection in our free cash flow generation. Higher Adjusted EBITDA and reduced capex are key levers here. With available capacity in Rubber and premium Specialty products, we are positioned to achieve higher earnings levels over several years without additional growth capital. Considering the improving cash flow and our stock’s current valuation, we continue to see opportunistic share repurchases as an attractive allocation of capital." Jeff Glajch, Orion’s Chief Financial Officer, added, "We finished 2024 with net leverage down modestly from the third quarter, even as we continued buybacks at a sensible pace during the fourth quarter. In just over two years, we have reduced our net outstanding shares by approximately 6%, including nearly $20 million of repurchases in the second half of 2024. At the end of December, we still had nearly 5 million shares on our current authorization." Fourth Quarter 2024 Overview: Volume increased marginally by 1.9 kmt, or 0.8%, year over year, primarily due to higher volume in the Specialty Carbon Black segment. Net sales decreased by $34.0 million, or 7.3%, year over year, primarily driven by the pass-through effect of lower oil prices, lower Rubber Carbon Black segment volume and unfavorable foreign currency translation impact, partially offset by broad-based recovery in the Specialty Carbon Black segment across all regions. Gross profit increased by $2.0 million, or 2.3%, year over year, primarily driven by favorable Rubber Carbon Black segment pricing, partially offset by less favorable mix, lower Rubber Carbon Black segment volume and lower cogeneration. Adjusted EBITDA decreased by $4.9 million, or 7.4%, to $61.7 million, year over year. The decrease was primarily due to higher selling, general and administrative expenses, lower Rubber Carbon Black segment volume and lower cogeneration. Those were partially offset by higher margin generated from the Specialty Carbon Black segment. Quarterly Business Segment Results Volume increased by 5.0 kmt, or 9.1%, year over year, reflecting growth across all regions. Net sales decreased marginally by $1.3 million, or 0.9%, to $147.4 million, year over year. Adjusted EBITDA increased by $7.6 million, or 43.7%, to $25.0 million, year over year, primarily due to higher volume, partially offset by less favorable product mix. Volume declined by 3.1 kmt, or 1.8%, year over year. The decrease was primarily due to lower demand in the Americas region. Net sales decreased by $32.7 million, or 10.2%, to $286.8 million, year over year. The decrease was primarily due to lower volume, the pass-through effect of lower oil prices, partially offset by favorable price. Adjusted EBITDA decreased by $12.5 million, or 25.4%, to $36.7 million, year over year. The decrease was primarily due to lower demand in Americas region, lower cogeneration, higher fixed costs and higher selling, general and administrative expense. Those were partially offset by favorable price. Full Year 2024 Overview: Volume increased marginally by 2.7 kmt, or 0.3%, to 934.8 kmt, year-over-year primarily due to higher Specialty Carbon Black segment volume, partially offset by lower Rubber Carbon Black segment volume. Net sales decreased marginally by $16.4 million, or 0.9%, to $1,877.5 million, driven primarily by the pass-through effect of lower oil prices, lower Rubber Carbon Black segment volume and unfavorable foreign currency translation impact, partially offset by broad-based recovery in the Specialty Carbon Black segment across all regions. Gross profit decreased by $22.2 million or 4.9%, to $428.8 million, primarily driven by higher fixed costs, unfavorable impact from pass-through of raw material costs and lower cogeneration. During the third quarter of 2024, we were the target of a criminal scheme that resulted in multiple fraudulently induced outbound wire transfers to accounts controlled by unknown third parties aggregating to $55.7 million, net of recoveries. In addition, we incurred $3.6 million of professional fees in connection with our investigations. Adjusted EBITDA decreased by $30.1 million, or 9.1%, from $332.3 million in 2023 to $302.2 million in 2024. The decrease was primarily due to higher selling, general and administrative expenses, lower Rubber Carbon Black segment volume and lower cogeneration. Those were partially offset by higher volume in the Specialty Carbon Black segment. Full Year 2024 Segment Results Volume of the Specialty Carbon Black segment increased by 24.4 kmt, or 11.0%, to 245.8 kmt., primarily due to demand recovery across all regions and end markets. Net sales of the Specialty Carbon Black segment increased by $35.7 million, or 5.8%, to $646.3 million. The net sales increase in 2024 was primarily due to higher volume across all regions, partially offset by unfavorable product mix and unfavorable foreign currency translation impact. Adjusted EBITDA of the Specialty Carbon Black segment decreased by $2.6 million, or 2.3%, to $108.1 million. The decrease was primarily due to higher fixed costs and lower cogeneration. Those were partially offset by higher volume. Volume of the Rubber Carbon Black segment decreased by 21.7 kmt, or 3.1%, to 689.0 kmt. The decrease was primarily due to lower demand in the Americas region. Net sales of the Rubber Carbon Black segment decreased by $52.1 million, or 4.1%, to $1,231.2 million. The decrease was primarily due to lower volume and the pass-through effect of lower oil prices, partially offset by favorable price. Adjusted EBITDA of the Rubber Carbon Black segment decreased by $27.5 million, or 12.4%, to $194.1 million. The decrease was primarily due to lower volume in Americas region, lower cogeneration and higher fixed costs. Those were partially offset by favorable price. Outlook "Orion is establishing a full year 2025 Adjusted EBITDA guidance range of $290 million – $330 million, implying a mid single digit year-over-year improvement at the midpoint, after factoring foreign exchange headwinds. Our Adjusted EPS guidance range is $1.45 – $1.90," Painter added. "Looking forward, the confluence of additional Rubber mandates, debottlenecked high-value Specialty grades, driving new qualifications, cost actions, plant modernization and completing our conductive carbons investment this year positions Orion for another step change in free cash flow in 2026." Conference Call As previously announced, Orion will hold a conference call tomorrow, Thursday, February 20, 2025, at 8:30 a.m. (EST). The dial-in details for the live conference call are as follow: A replay of the conference call may be accessed by phone at the following numbers through March 6, 2025: Additionally, an archived webcast of the conference call will be available on the Investor Relations section of the company’s website at www.orioncarbons.com . To learn more about Orion, visit the company’s website at www.orioncarbons.com , where we regularly post information including notification of events, news, financial performance, investor presentations and webcasts, non-GAAP reconciliations, SEC filings and other information regarding our company, its businesses and the markets it serves. About Orion S.A. Orion S.A. (NYSE: OEC) is a leading global supplier of carbon black, a solid form of carbon produced as powder or pellets. The material is made to customers’ exacting specifications for tires, coatings, ink, batteries, plastics and numerous other specialties, high-performance applications. Carbon black is used to tint, colorize, provide reinforcement, conduct electricity, increase durability and add UV protection. Orion has innovation centers on three continents and 14 plants worldwide, offering the most diverse variety of production processes in the industry. The company’s corporate lineage goes back more than 160 years to Germany, where it operates the world’s longest-running carbon black plant. Orion is a leading innovator, applying a deep understanding of customers’ needs to deliver sustainable solutions. For more information, please visit orioncarbons.com. Cautionary Statement for the Purposes of the "Safe Harbor" Provisions of the Private Securities Litigation Reform Act of 1995 This document contains and refers to certain forward-looking statements with respect to our financial condition, results of operations and business, including those in the "Outlook" section above. These statements constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"). Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. You should not place undue reliance on forward-looking statements. Forward-looking statements include, among others, statements concerning the potential exposure to market risks, statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions and statements that are not limited to statements of historical or present facts or conditions. Forward-looking statements are typically identified by words such as "anticipate," "assume," "assure," "believe," "confident," "could," "estimate," "expect," "intend," "may," "plan," "objectives," "outlook," "probably," "project," "will," "seek," "target," "to be" and other words of similar meaning. These forward-looking statements include, without limitation, statements about the following matters: All these forward-looking statements are based on estimates and assumptions that, although believed to be reasonable, are inherently uncertain. Therefore, undue reliance should not be placed upon any forward-looking statements. There are important factors that could cause actual results to differ materially from those contemplated by such forward-looking statements. These factors include, among others: 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 the Private Securities Litigation Reform Act of 1995" and "Risk Factors" in our Annual Report in Form 10-K for the year ended December 31, 2024 and in Note Q. Commitments and Contingencies to our audited Consolidated Financial Statements regarding contingent liabilities, including litigation. It is not possible for our management to predict all risk factors and uncertainties, nor can we assess the impact of all factors on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement - including those in the "Outlook" and "Quarterly Business Segment Results" sections above - as a result of new information, future events or other information, other than as required by applicable law. Reconciliation of 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 measures to their nearest comparable GAAP measures, see section Reconciliation of Non-GAAP Financial Measures below. These non-GAAP measures include, but are not limited to Adjusted EBITDA. We define Adjusted EBITDA as Income from operations before depreciation and amortization, stock-based compensation, and non-recurring items (such as, restructuring expenses, legal settlement gain, etc.) plus Earnings in affiliated companies, net of tax. Our operations are managed by senior executives who report to our Chief Executive Officer ("CEO"), the chief operating decision maker ("CODM"). Adjusted EBITDA is used by our CODM to evaluate our operating performance and to make decisions regarding allocation of capital, because it excludes the effects of items that have less bearing on the performance of our underlying core business. We use this measure, together with other measures of performance under GAAP, to compare the relative performance of operations in planning, budgeting and reviewing our business. By eliminating potential differences in results of operations between periods caused by factors such as depreciation and amortization, historic cost and age of assets, financing and capital structures and taxation positions or regimes, we believe that Adjusted EBITDA provides a useful additional basis for evaluating and comparing the current performance of the underlying operations. We believe our non-GAAP measures are useful measures of financial performance in addition to Net income, Income from operations and other profitability measures under GAAP, because they facilitate operating performance comparisons from period to period. In addition, we believe these non-GAAP measures aid investors by providing additional insight into our operational performance and help clarify trends affecting our business. Other companies and analysts may calculate non-GAAP financial measures differently, so making comparisons among companies on this basis should be done carefully. Non-GAAP measures are not performance measures under GAAP and should not be considered in isolation or construed as substitutes for Net sales, Net income, Income from operations, Gross profit and other GAAP measures as an indicator of our operations in accordance with GAAP. With respect to Adjusted EBITDA and Adjusted Diluted EPS outlook for 2024, we are not able to reconcile the forward-looking non-GAAP financial measures to the closest corresponding GAAP measure without unreasonable efforts because we are unable to predict the ultimate outcome of certain significant items. These items include, but are not limited to, significant legal settlements, tax and regulatory reserve changes, restructuring costs and acquisition and financing related impacts. View source version on businesswire.com: https://www.businesswire.com/news/home/20250219644034/en/ Contacts Christopher Kapsch Vice President of Investor Relations +1 281-318-4413 [email protected]