Orion S.a. · NYSE:OEC
Orion — Orion Engineered Carbons — Q1 2016 Earnings Presentation
16 slides from Orion's earnings presentation, May 6, 2016
Slide 1: 1Q 2016 Earnings Call
1Q 2016 Earnings Call May 6, 2016
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements with respect to our financial condition, results of operations and business. These statements constitute forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934 as amended. Forward-lo
Slide 3: Agenda
Agenda Jack Clem • 1Q 2016 Highlights & Business Review CEO • Financial Review • 2016 Economic & Market Outlook • 2016 Guidance Charles Herlinger • 2016 Operational Priorities CFO • Q&A 3
Slide 4: 1Q 2016 Highlights
1Q 2016 Highlights • Strong volume gains from Y-o-Y both Specialty and Rubber 1Q16 1Q15 Comparison • Organic volume growth Total volume (excluding acquisition) a solid 277.8 252.9 9.9% 4.9 % (kmt) (1) • Strong Adjusted EBITDA Adjusted EBITDA performance 54.0 53.9 0.1% (EUR/Millions) • Voluntary debt
Slide 5: 1Q 2016 Highlights
1Q 2016 Highlights Specialty Business Continues to Demonstrate the Successful Move to High Value Products (1) Volume By Volume Mix Adjusted EBITDA Producing Location 1Q16 1Q16 1Q16 Other 1% Specialty Rubber Specialty Rubber Africa 4% Carbon Carbon Carbon Carbon 100% China 5% Black Black (1) Black Bl
Slide 6: Rubber Carbon Black Business
Rubber Carbon Black Business Strong Volume Growth but Weaker Gross Profits Due to Impact of Raw Materials Growth in all regions at or above market Y-o-Y 1Q16 1Q15 Comparison demand, before impact of newly acquired Volume (kmt) 218.7 201.8 +8.4% facility in Qingdao, China (OECQ) Revenue (EUR/Millions
Slide 7: Specialty Carbon Black Business
Specialty Carbon Black Business Continued Volume and Profit Growth Due to Increased Sales Penetration, Price Management and Successful Product Development Above market growth in all regions Y-o-Y 1Q16 1Q15 Comparison Strong auto build globally as well as polymer Volume (kmt) 59.2 51.1 +15.7% market
Slide 8: 1Q 2016 Consolidated Operating Results
1Q 2016 Consolidated Operating Results (1) High Margin Specialty and Technical Rubber Not to scale Grades (e.g. MRG) Offset Commodity Grades €M Contribution Margin Variance 10.3 (2.8) (3.0) (0.1) 114.2 109.8 Y-o-Y 1Q16 1Q15 Comparison Volume (kmt) 277.8 252.9 9.9% 1Q15 Volume Differential FX Other 1
Slide 9: 2015 Cash Flow and Balance Sheet Highlights
2015 Cash Flow and Balance Sheet Highlights Continued Strong Cash Flow due to Capex Discipline and Balance Sheet Strengthening 2016 YTD Cash Flow Generation Balance Sheet Highlights €M As of In EUR/Millions March 31, 2016 60.1 -23.1 Voluntary Cash & Cash Equivalents 57.0 (4) Debt Payment Net Working
Slide 10: 2016 GDP Growth Expectations
2016 GDP Growth Expectations Specialty Black Demand Historically Exceeds GDP North America Europe ++ 2.3 2.3%% + 1.8 % Continued North American economic Recovery in the EU is expected to growth expected continue Brazil Asia Pacific -3.8 % -3.8 % + 6.4 % Overall Asian economic growth will slow Brazil
Slide 11: Auto Build – 2016 Outlook
Auto Build – 2016 Outlook Generally Slower Growth in Auto Build Expected with Continued Decline in South America North America Europe + 2.4 % + 2.7 % NAFTA automotive sales grow Some decline in Eastern Europe offset by moderately strong growth in Western Europe South America Asia Pacific -6.0 % + 4.
Slide 12: 2016 Guidance and Cash Analysis
2016 Guidance and Cash Analysis Continued Strong Cash Conversion Expected Given Limited Maintenance Capex Needs and Reduced Interest Payments 2016 Guidance Base Business Annual Cash Requirements Adjusted EBITDA: EUR 205 to 225 million (EUR/Millions) Maintenance Capex 30 Forecast assumptions: Mandato
Slide 13: 2016 Operational Priorities
2016 Operational Priorities Drive stronger growth of higher value added technical carbon black grades – Continue building momentum in Specialty Carbon Black – Expand specialty and technical grade mix at OECQ – Deepen penetration in underserved specialty markets Address imbalance between rubber feeds
Slide 14: Appendix
Appendix
Slide 15: Historical Non-IFRS Metrics Reconciliation
Historical Non-IFRS Metrics Reconciliation Historical Non-IFRS Metrics Reconciliation (€million unless otherwise stated) Three Months Ended March 31, 2015 2016 Revenue 290 246 Variable costs (1) -180 -132 Contribution Margin 110 114 Sales volume (in kmt) 253 278 Contribution Margin per Metric Ton 43
Slide 16: Investor Relations Contact Details
Investor Relations Contact Details: Diana Downey +1 832-445-3865 [email protected]
Orion Engineered Carbons — Q1 2016 Earnings Presentation on 6ix