Orion Engineered Carbons S.A. Q1 FY2026 earnings call

• High-level comments on first quarter results, adjusted EBITDA ahead of expectations despite slow start, demand improving in March and persisting into April and May. - Broader context of geopolitical turbulence affecting supply chains, Orion poised to benefit from local manufacturing footprint. - Actions taken to support customers, protect business, create margin opportunity, including leveraging diverse reactor process technologies, cost reduction initiatives, and optimizing working capital. - Positive tire industry trade flow data and potential catalysts for future demand.

Specialty segment: adjusted EBITDA improved 7% year-over-year to $27 million, with 3% higher volumes, favorable mix and foreign currency contributing. Rubber segment: adjusted EBITDA declined 53% year-over-year to $19 million, affected by annual pricing outcome, adverse regional mix, and pass-through effects of lower oil prices. Overall adjusted EBITDA was $46 million, ahead of internal expectations.

• Raising full-year adjusted EBITDA guidance range by $10 million to $170 - $210 million, earnings split roughly 50-50 between first and second half due to shift in European emission credits issuance. - Expecting full-year free cash outflow between $25 - $50 million based on oil price assumptions. - Second quarter cash flow consistent with first quarter, improving in third quarter and turning positive in fourth quarter.

• Geopolitical turbulence in Middle East impacting supply chains and creating uncertainty. - Oil price volatility affecting working capital and business operations. - Limited visibility on demand beyond second quarter due to unknown course and impact of Middle East conflict.

• Q: Inquiry about extent to which recent order strength is driven by supply securing vs true demand growth.

A: Divided into rubber (tire manufacturers making more tires) and specialty (pre-buying and direct customer orders). - Q: Curiosity if Q1 could be trough for rubber and pricing/cost trend.

A: Pricing set annually, 2027 expected to have stronger environment. - Q: Differentiation between specialties markets.

A: Across the board stronger activity. - Q: Thoughts on South Korea affected by Persian Gulf conflict.

A: Negative for business activity in Korea, positive for US and Europe manufacturing. - Q: Unpacking rubber bridge.

A: Pricing impact larger than expected, volume and market factors involved. - Q: Specialty margins pricing and trend.

A: Had to raise prices again in May due to natural gas movement.