Orion S.A. Reports First Quarter 2025 Financial Results

Orion S.A. (NYSE:OEC), a specialty chemical company, today announced financial results for the period ended March 31, 2025 as follows:

First Quarter 2025 Highlights

• Net sales of $477.7 million, down $25.2 million year over year

• Net income of $9.1 million, down $17.6 million year over year

• Diluted EPS of $0.16, down $0.29 year over year

• Adjusted EBITDA¹ of $66.2 million, down 22% year over year

• Adjusted Diluted EPS¹ of $0.22, down $0.30 year over year

"First quarter results were affected by costs from unplanned plant downtime, as well as timing items including raw material pass-throughs. Collectively, these factors masked an otherwise much stronger underlying business performance. The normalization of timing items coupled with ongoing operational improvements set up for a sequentially better second quarter, absent any pronounced deterioration in the macro backdrop," said Corning Painter, Chief Executive Officer.

Painter continued, "We continue to expect prospective net benefit from auto sector tariffs and their impact on imported replacement tires, insomuch as relieving market share pressure on U.S. tire manufacturing. That said, should broader tariffs precipitate a pronounced global economic slowdown, we would not be immune. Regardless, we believe we are well positioned to navigate the evolving backdrop and deliver on our cash flow goals.

CFO Jeff Glajch added, "Despite the considerable macro uncertainty, we have good visibility regarding expected free cash flow improvement and we continue to view both 2025 and 2026 as important inflection years for Orion on this important metric. Given reduced capex spending, we remain comfortable with our previously conveyed free cash flow guidance range."

First Quarter 2025 Overview:

1. The reconciliations of Non-U.S. GAAP ("GAAP") measures to the respective most comparable GAAP measures are provided in the section titled Reconciliation of Non-GAAP Financial Measures below.

Volume increased by 3.3 kmt, year over year, due to higher volume in the Rubber Carbon Black segment. Net sales decreased by $25.2 million, or 5.0%, year over year, driven primarily by lower oil price and unfavorable foreign exchange rate impact. Those were partially offset by higher volume in Rubber Carbon Black segment. Gross profit decreased by $24.1 million, or 19.7%, year over year, to $98.1 million. The decrease was driven primarily by unplanned downtime, unfavorable timing from the pass-through of raw material costs and unfavorable foreign exchange rate impact.

Income (loss) from operations decreased by $21.6 million, or 40.9%, year over year, to $31.2 million. The decrease was driven primarily by lower Net sales. Adjusted EBITDA decreased by $19.1 million, or 22.4%, year over year, to $66.2 million. The decrease was driven by unplanned downtime and unfavorable timing from the pass-through of raw material costs.

Quarterly Business Segment Results

Specialty Carbon Black segment volume declined by 1.4 kmt, or 2.2%, year over year, primarily due to lower demand in the Americas region. Net sales decreased by $10.2 million, or 6.0%, year over year, to $160.7 million, primarily due to lower oil price and unfavorable foreign exchange impact. Adjusted EBITDA declined by $2.5 million, or 9.0%, year over year, to $25.4 million. The decrease was primarily due to lower volume.

Rubber Carbon Black segment volume increased by 4.7 kmt, or 2.5%, year over year, due to higher demand in the Americas and Asia Pacific regions. Net sales declined by $15.0 million, or 4.5%, year over year, to $317.0 million, primarily due to lower oil price and unfavorable foreign exchange impact. Adjusted EBITDA declined by $16.6 million, or 28.9%, year over year, to $40.8 million, driven primarily by unplanned downtime, unfavorable timing from the pass-through of raw material costs and customer and regional mix.

Outlook

We are adjusting our guidance ranges slightly, to factor in first quarter results. Our revised Adjusted EBITDA range is $270 million – $310 million and the corresponding Adjusted EPS range is $1.20 – $1.70. We are reaffirming our prior free cash flow guidance range at $40 million – $70 million." Mr. Painter concluded.

As previously announced, Orion will hold a conference call tomorrow, Thursday, May 8, 2025, at 8:30 a.m. (EDT). The dial-in details for the live conference call are as follows:

A replay of the conference call may be accessed by phone at the following numbers to Thursday, May 15, 2025:

Additionally, an archived webcast of the conference call will be available on the investor section of the company's website at www.orioncarbons.com.

To learn more about Orion S.A., visit the company's investor 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 specialty, 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 produces carbon black at 14 plants worldwide, excluding the under-construction facility at La Porte, Texas, 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 www.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 our potential exposure to market risks, macroeconomic conditions including tariffs, expected plant uptime, market conditions, anticipated customer demand, expected impacts of operational improvements and foreign exchange, expectations regarding capital expenditures, working capital and free cash flow, our outlook for 2025, and other 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.

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: • possible negative or uncertain worldwide economic conditions and developments; • the volatility and cyclicality of the industries in which we operate; • the operational risks inherent in chemicals manufacturing, including disruptions due to technical facilities, severe weather conditions or natural disasters; • our dependence on major customers and suppliers; • unanticipated fluctuations in demand for our products, including due to factors beyond our control; • changes in the geopolitical environment or government policy, including related to tariffs, counter-tariffs and other trade barriers; • our ability to compete in the industries and markets in which we operate; • changes in the nature of transportation in the future, which may impact our customers and our business; • our ability to successfully develop new products and technologies; • the availability of substitutes for our products; • our ability to implement our business strategies; • our ability to respond to changes in feedstock prices and quality; • our ability to realize benefits from investments, joint ventures, acquisitions or alliances; our ability to negotiate satisfactory terms with counterparties, the satisfactory performance by such counterparties of their obligations to us, as well as our ability to meet our performance obligations towards such counterparties; • our ability to realize benefits from planned plant capacity expansions and planned and current site development projects, including our conductive additives facility at La Porte, Texas, and the impacts of potential delays to such expansions and development projects; • any information technology systems failures, network disruptions and breaches of data security; • our relationships with our workforce, including negotiations with labor unions, strikes and work stoppages; • our ability to recruit or retain key management and personnel; • our exposure to political or country risks inherent in doing business globally; • any and all impacts from the Russia-Ukraine war and the Hamas-Israel conflict and/or any escalation thereof related energy costs, raw material availability or other economic disruptions; • geopolitical events in the United States ("U.S."), Middle-East, European Union ("EU") and China, relations amongst Western countries and their neighbors as well as future relations between the U.S., EU, China and other countries and organizations; • all environmental, health and safety laws and regulations, including nanomaterial and greenhouse gas emissions regulations, and the related costs of maintaining compliance and addressing liabilities; • any possible future investigations and enforcement actions by governmental, supranational agencies or other organizations; • our operations as a company in the chemical sector, including the related risks of leaks, fires and toxic releases as well as other accidents; • any market and regulatory changes that may affect our ability to sell or otherwise benefit from co-generated energy; • any litigation or legal proceedings, including product liability, environmental or asbestos related claims; • our ability to protect our intellectual property rights and know-how; • our ability to generate the funds required to service our debt and finance our operations; • any fluctuations in foreign currency exchange and interest rates; • the availability and efficiency of hedging; • any changes in international and local economic conditions, dislocations in credit and capital markets and inflation or deflation; • any potential impairments or write-offs of certain assets; • any required increases in our pension fund or retirement-related contributions; • the adequacy of our insurance coverage; • any changes in our jurisdictional earnings mix or in the tax laws or accepted interpretations of tax laws in those jurisdictions; • any challenges to our decisions and assumptions in assessing and complying with our tax obligations; • the potential difficulty in obtaining or enforcing judgments or bringing legal actions against Orion S.A. (a Luxembourg incorporated entity) in the U.S. or elsewhere outside Luxembourg; and • any current or future changes to disclosure requirements and obligations, including but not limited to new ESG-related disclosures, related audit requirements and our ability to comply with such obligations and requirements.

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 and in Note J. Commitments and Contingencies to our unaudited Consolidated Financial Statements Form 10-Q for the period ended March 31, 2025. 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 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 Net Income, Adjusted EBITDA and Adjusted Diluted EPS.

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 chief operating decision maker ("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, diluted EPS 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 2025, 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.

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Christopher Kapsch

Vice President of Investor Relations

+1 281-318-4413

[email protected]