Orion Engineered Carbons S.A. Q4 FY2025 earnings call

• Introduced new CFO Jeffrey F. Glajch who joined in early December. - Finished 2025 with better Q4 results than contemplated early in November due to higher volumes, especially in Specialty segment. - Near record year for employee safety with only three incidents across global plants, performance about nine times better than broader chemicals space. - Relentlessly focused on managing costs, taking additional actions for $20,000,000 in productivity, efficiency, and headcount savings; sharply reducing CapEx; rationalizing 3 - 5 production lines and closed some; operational initiatives building momentum with North American plants' reliability improving over 200 basis points in 2025. - Pivoted to win - with - customer strategy to maintain share; successfully negotiated amendment to credit agreement. - Highlighted underlying carbon black indicators improving, like import levels subsiding, export data from key tire manufacturing countries trending favorably, potential positive outcomes from trade deal changes

Rubber segment: Full year adjusted EBITDA was $155,000,000. Impacted by lower tire production rates in key Western markets due to elevated lower - tier tire imports and soft freight industry conditions; volumes increased 4% mainly in South America and APAC, partially offset by lower demand in EMEA; net sales decreased 3% on lower pricing; adjusted EBITDA decreased 20% due to adverse customer and regional mix and pass - through of lower oil prices. Specialty segment: Full year adjusted EBITDA was $94,000,000. Affected by soft global industrial activity, particularly in transportation and polymer markets, and macro uncertainty; volumes decreased 5%; net sales decreased 4% on lower volumes and pass - through pricing, partially offset by favorable foreign currency translation; adjusted EBITDA decreased 14% due to lower demand.

Full year 2026 adjusted EBITDA expected between $160,000,000 and $200,000,000; first half adjusted EBITDA between $90,000,000 and $110,000,000. Free cash flow expected between $25,000,000 and $50,000,000 in 2026. CapEx expected $90,000,000 in 2026, down $70,000,000 from 2025 levels

Surge in tire imports was a pain point. Soft demand conditions including weak PMI, broad uncertainty discouraging investment, encouraging lean inventories, and weighing on consumer confidence were significant factors in challenging contract negotiations. Downturn in truck and bus category due to freight activity being a drag for a few years was a headwind

Q: Josh Spector with UBS asked about guidance and Rubber, including if the $60,000,000 impact was from contract outcomes and how customers approached the outcome.

A: Corning F. Painter said they pivoted to hold share, volumes will be down with industry but not more than industry, and expected to get some back in 2027.

Q: Dan Rizzo with Jefferies asked about free cash flow at the bottom of the cycle and how to think about improvement.

A: Jeffrey F. Glajch said free cash flow range for 2026 is 25 - 50 due to active management of working capital and CapEx.

Q: Jonathan E. Tanwanteng with CJS Securities asked about closed lines and tax item.

A: Corning F. Painter and Jeffrey F. Glajch answered about closed lines and tax item including goodwill impairment charge.

Q: John Roberts with JPMorgan asked about accounts payable and La Porte plant.

A: Jeffrey F. Glajch and Corning F. Painter answered about working capital management and La Porte plant start - up.

Q: Josh Spector with UBS asked about cost and La Porte plant start - up.

A: Corning F. Painter answered about cost and La Porte plant start - up in 2027