Orion S.a. · NYSE:OEC
Orion — Orion Engineered Carbons — Investor Day (June 2022)
94 slides from Orion's investor day presentation, Jun 8, 2022
Slide 1: Investor Day June 8, 2022
ENGINEERED CARBONS Investor Day JUNE 8, 2022
Slide 2: Wendy Wilson, Head of Investor Relations
Wendy Wilson Head of Investor Relations orion
Slide 3: Forward-Looking Statements
Forward-Looking Statements This presentation contains and refers to 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
Slide 4: Agenda
OPEN & INTRODUCTION Wendy Wilson, Head of Investor Relations THE VALUE CREATION OPPORTUNITY Corning Painter, Chief Executive Officer WORLD SCALE INNOVATION PLATFORM David Deters, Senior Vice President, Innovation BREAK SPECIALTY ENGINEERED CARBON Sandra Niewiem, Senior Vice President, Global Special
Slide 5: Corning Painter, Chief Executive Officer
Corning Painter Chief Executive Officer orion
Slide 6: Global Specialty and Rubber Carbon Black Markets
GLOBAL SPECIALTY GLOBAL RUBBER CARBON BLACK MARKET CARBON BLACK MARKET 90% Market OEC mCompetition OEC mCompetition Leadership Orion Engines
Slide 7: Global Carbon Black Market and Orion Segment Volumes
GLOBAL CARBON BLACK ORION’S CARBON BLACK MARKET SEGMENT VOLUMES SEGMENT VOLUMES Market Focus Specialty m Rubber Specialty ™ Rubber Orion Engines
Slide 8: Strategic Strengths
Strategic Strengths Differentiated Production Capabilities £ ra) » Furnace Black aaa 7 Gas Black © s_ Lamp Black Thermal Black | os Kappa Conductives 2} Proprietary surface aftertreatments applied for some premium grades Differentiated Production Capabilities as Proprietary Aftertreatments VY >580M
Slide 9: Strong Leadership Team
Strong Leadership Team Corning F. Painter David Deters Sandra Niewiem Pedro Riveros Jeffrey Glajch Chief Executive Officer, Orion Senior Vice President, Innovation Senior Vice President Senior Vice President Chief Financial Officer Engineered Carbons S.A. Global Specialty Carbon Global Rubber Carbon
Slide 10: Engineered Carbons are Ubiquitous
Engineered Carbons are Ubiquitous Optimize Physical, Electrical and Optical Properties Versatile & Customizable
Slide 11: Global Megatrends Impact Result
Megatrend Impact Result jes * Conductive additive demand +Power storage “Grid 2.0 + Enhanced tire wear Global Megatrends
Slide 12: Orion Engineered Carbons
Orion Engineered Carbons
Slide 13: The Specialty Opportunity
The Specialty Opportunity Look carefully - comprised of many individual markets Need the best product for each application Orion Engineered Carbons 2022 Investor Day 13
Slide 14: The Specialty Opportunity
The Specialty Opportunity Specialty is differentiated Unique inlets and harbors create differentiated and protected areas: gas black y «4
Slide 15: The Specialty Opportunity
al y The Specialty —_ Opportunity Large specialty markets can emerge: The Conductivity Opportunity
Slide 16: The Conductivity Opportunity
The Conductivity Opportunity What looks like one, can really be two: Optimize lithium battery performance with two types of conductive carbons Kappa conductives & CNTs
Slide 17: Sustainability & The Innovation Framework
Sustainability & The Innovation Framework Objectives Aligned ENABLING Wy CARBONS S : RECYCLED OEC CARBONS INNOVATION PILLARS RENEWABLE CARBONS
Slide 18: Strategic Roadmap
Strategic Roadmap ALLOCATE CAPITAL FOR GROWTH EXPAND THE CONDUCTIVES BUSINESS STARTING WITH KAPPA LEAD SUSTAINABLE TRANSFORMATION OF RUBBER Orion Engineered Carbons 2022 investor Day 18
Slide 19: Strategic Roadmap: Conductive Carbons
Strategic Roadmap: Conductive Carbons ENERGY STORAGE ELECTRIFICATION GRID ENHANCEMENTS ©) SS MANY Ba CARBON » EAR SCUCBIES NANOTUBES + Technical barriers to entry vs) 3-DIMENSIONAL KAPPA FEW PLAYERS * Technical barriers to entry * Supply chain barriers toentry Orion Engineered Carbons 2022 investor
Slide 20: Strategic Roadmap: Rubber
Strategic Roadmap Rubber MARKET NEED OEM's want sustainable content Tire customers want end-of-life tire solutions SOLUTION Circular & renewable solutions ACTION Modified furnace technology Differentiated product offerings Orion Engineered Carbons 2022 inves y 20
Slide 21: Operational Roadmap
Operational Roadmap STRATEGIC PRICING yw
Slide 22: Operational Roadmap
Improvement Focus aintenance Efficiency Reliability Operational Roadmap Orion Engineered Carbons 2022Investor Day 22
Slide 23: Strategic Roadmap: Pricing
Strategic Roadmap: Pricing VALUE PRICING MINDSET TRAINING AND DEVELOPMENT COMMITMENT TO VALUE CREATION ALIGNED SALES INCENTIVES HIGHLY FAVORABLE MARKET CONDITIONS Orion Engineered Carbons 202: 2investor Day 23
Slide 24: Value Creation Mindset
Value Creation Mindset PRINCIPLES Risk adjusted return on investment Balancing strategic growth with cash return to investors DECISION FRAMEWORK Kappa conductive carbons High return & confidence Growing regardless of economy Strategic timing Orion Engineered Carbons 24
Slide 25: Mid-Cycle Adj. EBITDA Capacity
Mid-Cycle Adj. EBITDA Capacity ($ in millions) cAGh CAGR Growth Outlook = 2021 Adj. 2022F Adj. Kappa Conductive Other Capacity Price / Mix 2025F Adj. EBITDA EBITDA Capacity Expansion EBITDA ance mid AGR: compou alg e Orion Engineered Carbons 2022 investor Day 25
Slide 26: Growth Threshold
Growth Threshold Global megatrends are driving our opportunity Integrated R&D platform and customer relationships key to success
Slide 27: Dave Deters, SVP Innovation
Dave Deters Senior Vice President, Innovation orion
Slide 28: Essential Chemistry For Today's and Tomorrow's World
; ‘Synthetic Fibers Essential Chemistry Sox For Today's and Tomorrow’s World Advantages of Engineered Carbons + Reinforcing or strengthening agent + Protective coatings » Enhances functionality of pigments & adhesives * Electrical conductivity J : Fe et es Conductivity Y - ee Orion Engineered Carbon
Slide 29: Strategic Strengths: Production Capabilities
Strategic Strengths Broadest Production Capabilities, Technology and Product Portfolio 25% #1 GLOBAL SPECIALTY CARBON BLACK MARKET 75% mOEC mCompetition 10% #3 GLOBAL RUBBER CARBON BLACK MARKET 90% =OEC ™ Competition Process Methodology Applications Competitor Access to Technology PRODUCTION TECHNOL
Slide 30: Strategic Strengths: After-Treatments
Strategic Strengths Broadest Production Capabilities, Technology and Product Portfolio PROVIDER OF LEADING-EDGE AFTER-TREATMENTS * Enhances functionality and performance AFTER TREATMENT SURFACE MODIFICATION + Exclusive or preferred provider * Can command premium margin Agent Lord PROCESS APPLICATION
Slide 31: Strong Innovation Capabilities
Strong Innovation Capabilities Advanced, Integrated R&D Platform with Locations Around the World
Slide 32: World Scale Innovation Platform
Torte . World Scale Tore : Innovation Platform = State of the Art Equipment - Injection Molding # é. Dispersion Testing Orion Engineered Carbons
Slide 33: World Scale Innovation Platform
@ Pilot Plant ™ Research Plant @ Technical Center World Scale Innovation Platform Integrated R&D platform encompasses: Research laboratories Technical support centers Test, pilot and mini plants 33
Slide 34: R&D Project Acceleration Capability
World Scale Innovation Platform R&D Project Acceleration Capability PILOT PLANT * Modular and highly flexible set-up enables testing and analysis of varying product formulations and operating conditions ° Facilitates development of targeted solutions MINI PLANT * Small batch production for internal
Slide 35: Innovation Initiatives: R&D Priorities
Innovation Initiatives R&D Priorities CONDUCTIVITY CIRCULARITY OPERATIONS EXCELLENCE Develop conductive carbons for Leveraging end of life tires Drive production efficiencies via batteries and conductive applications and organic carbon sources improved yield and capacity utilization Orion Engineered
Slide 36: Innovation Initiatives: Enabling Carbons
Innovation Initiatives: Enabling Carbons BROADEST RANGE OF PRODUCTION TECHNOLOGIES Easy to alter surface area/structure in a wide range particles and high structure and slightly oxidized surface FOR CONDUCTIVE CARBONS FURNACE BLACK GAS BLACK LAMP BLACK ACETYLENE GAS PROCESS PROCESS PROCESS PROCESS |
Slide 37: Optimizing Performance with Conductive Carbon Forms
Innovation Initiatives: Enabling Carbons OPTIMIZING PERFORMANCE REQUIRES A MIX OF CONDUCTIVE CARBON FORMS Conductivity Low moisture Easy to disperse IDEAL BATTERY GRADE Low grit/metal impurity APPLICATIONS = CONDUCTIVITY SYSTEMS AND BATTERIES ar Orion Engineered Carbons ve y 37
Slide 38: Kappa and CNT Synergistic Effect
Innovation Initiatives: Enabling Carbons OPTIMIZING PERFORMANCE REQUIRES MIX OF CONDUCTIVE CARBON FORMS e Kappa conductive (at low loading) Short range: kappa crosslinks |§ ————S>) CNT and provides intimate } contact with active material { CNTs (atlow loading) —@ Cathode active material (non-conduct
Slide 39: Innovation Initiatives: Recyclable Carbons
Innovation Initiatives: Recyclable Carbons RESPONDING TO CUSTOMER-DRIVEN FOCUS ON THE CIRCULAR TIRE OPPORTUNITY covereg G, “6, Impurity Removal Tire Pyrolysis is 08 RENEWABLE CIRCULAR RECOVERED CARBON CARBON BLACKS CARBON BLACKS BLACK BLENDS Leveraging R&D leadership to identify multiple pathways to
Slide 40: Innovation Initiatives: Renewable Carbons
Innovation Initiatives: Renewable Carbons Developing Organic Feedstocks FOCUSED ON DEVELOPING AND IMPROVING METHODS TO CONVERT RENEWABLE RESOURCES INTO PRODUCTS Orion Engineered Carbons 40
Slide 41: Sustainability & Innovation Objectives Aligned
Sustainability & Innovation Objectives Aligned ENABLING CARBONS PRODUCTS e-Mobility: Kappa conductives; enabling lithium-ion batteries New Processing Technologies: Emissions reduction RECYCLED CARBONS PRODUCTS ELT Pyrolysis Oil as Feedstock: Circular carbon black ELT Recycled Carbon Black: Recover a
Slide 42: Innovation Initiatives: Operations Excellence
Innovation Initiatives: Operations Excellence Driving Operating Productivity OPTIMIZE OPERATIONS BY ENHANCING YIELD AND CAPACITY UTILIZATION Orion Engineered Carbons y 42
Slide 43: Broadest Production Capability, World Scale Innovation Platform
KA uN Broadest Production Capability, Innovation \ Technology & Product / \ \ Portfolio J Platform Ee — World Scale fey Innovating for a Circular Economy Orion Engineered Carbons Fe 4B
Slide 44: Sandra Niewiem, SVP Specialty Carbon Black & EMEA
Sandra Niewiem Senior Vice President, Global Specialty Carbon Black & EMEA orion
Slide 45: Global Specialty Carbon Black Market
GLOBAL SPECIALTY ORION SPECIALTY ORION SPECIALTY CARBON BLACK 2021 SALES 2021 VOLUMES MARKET by Region 263 kmt Competitive : vs Poca =Competition m Americas m Printing & Coatings (non-auto) iti i mAsia m Automotive O S | | O Nn | Nn g ™ Special Apps (non-auto) oO Leading global Diverse range produce
Slide 46: Specialty is Special
Specialty is Special Serve multiple, high-value market segments Differentiated portfolio including conductive additives Close to our customers
Slide 47: Specialty's Growing Contribution
Specialty's Growing Contribution Strong Platform For Growth SALES ($ in millions) $598 $509 $445 2019 = 20202021 $757 - $796 2022F 251 2019 VOLUMES (in kmt) 263 254 - 267 232 2020. 2021. = 2022F GROSS PROFIT ($ in millions) $800 - $850 SS eae $751 sey sony Ss-s05 $198 $170 $149 2019 2020. 2021_-—S 2
Slide 48: Strategic Strengths: Key Enablers of Success
Strategic Strengths Proven Strengths in Key Enablers of Success © STRATEGIC INNOVATION CAPABILITIES DIFFERENTIATED PORTFOLIO wee CUSTOMER RELATIONSHIPS GLOBAL NETWORK Orion Engineered Carbons 2022 investor Day
Slide 49: Growth Outlook: Favorable Megatrends
Growth Outlook Favorable Megatrends GROWING CONSUMER DEMAND Industrial and deco coatings Synthetic fibers Pressure pipes Packaging ink MOBILITY Engineered plastics Adhesives and sealants Automotive coatings SUSTAINABILITY Electric vehicles, Lithium-ion batteries High and medium voltage cables Orion
Slide 50: Growth Outlook: Demand Growth Across Regions
Growth Outlook Demand growth across World Regions AMERICAS js CAGR. 372 317 2021 FAVORABLE MEGATRENDS UNDERPIN GROWTH OUTLOOK SPECIALTY CARBON BLACK DEMAND (in KT) 287 241 2026 2021 + 2026 2021 2026 GLOBAL DEMAND (kT) 2021 2026 DEMAND GROWTH BY SEGMENT (CAGR 2021-26) Batteries 15% Coatings 5.6% Poly
Slide 51: Capturing the Growth Opportunity
Capturing the Growth Opportunity YX TARGETED CAPACITY EXPANSION EBITDA GROWTH
Slide 52: Capturing the Growth Opportunity
Capturing the Growth Opportunity Premium, conductivity and capacity expansion STRATEGIC FOCUS CONDUCTIVITY/SUSTAINABILITY oF * Kappa conductive additive family » * Favorable environmental profile ® A PREMIUM GROWTH abe cull * Attractive markets / * Differentiated and tailor-made grades ° E BITD. A G
Slide 53: The Conductivity Opportunity: Battery Demand
The Conductivity Opportunity Lithium-lon Battery Demand Actuals/Projections (GWh) 2,246 A\/A 19% }{ 23% CAGR/ \CAGR 1,043 2020 2025 2030 mAvicienne Consulting ™ McKinsey Consulting Exponential Demand underpinned by Conductive additive lithium-ion battery megatrends demand growth above demand growth
Slide 54: The Conductivity Opportunity
The Conductivity Opportunity Leading producer of acetylene based conductive additives pw Quadruple current capacities with announced greenfield facility in Texas és CHES) iO) uo “YZ Leverage EV Prepare for further megatrend, high- portfolio and end cable market capacity expansion growth and other su
Slide 55: The Conductivity Opportunity
The Conductivity Opportunity Enhanced battery performance by kappa conductive additives OEC kappa series for lithium-ion batteries, high-end cables Acetylene and furnace based conductive additives Expanding innovation capabilities Strong underlying growth outlook Manufacturing facilities with favora
Slide 56: Premium Growth and Expansion
Premium Growth and Expansion SELECTED INITIATIVES Kappa Expansion Gas Black Expansion New Post Treatment Units Reactor Upgrades New Huabei Site + Well established, unique grade portfolio * Excellent application performance * +15-20% volume growth over next 5-7 years +$8-$11millions EBITDA Orion Engi
Slide 57: Specialty Segment Mid-Cycle Capacity
Growth Outlook Specialty Segment Mid-Cycle Capacity ($ in millions) $245-$275 $15 146-$162 $148 g g 2021 Adj. 2022F Adj. Kappa Other Capacity Price / Mix 2025F Adj. EBITDA EBITDA Conductive Capacity Expansion EBITDA Orion Engineered Carbons 2022 investor Day 57
Slide 58: Specialty is Special
Specialty is Special © LEADING GLOBAL PRODUCER DIVERSE RANGE OF PRODUCTS AND APPLICATIONS SIGNIFICANT GROWTH OPPORTUNITY Orion Engineered Carbons
Slide 59: Pedro Riveros, SVP Rubber Carbon Black & Americas
Pedro Riveros Senior Vice President, Rubber Carbon Black & Americas orion
Slide 60: Rubber Segment's Essential Role
Rubber Segment’s Essential Role Market leader with global scale and operations Solid foundation for growth Positioned to thrive in changing market
Slide 61: Competitive Positioning
Competitive Positioning GLOBAL RUBBER ORION RUBBER CARBON BLACK MARKET 2021 VOLUME 43 701 kmt mOEC mReplacement Tire Competition mOEM Tire =MRG Leading market position: 3'4 largest global producer by volume Strong customer relationships @ ORION RUBBER 2021SALES by area of world mEMEA m Americas wAsi
Slide 62: Rubber's Solid Foundation
Rubber's Solid Foundation Solid and Sustaining Contributor to Results SALES ($ in millions) $1,356 -$1,411 $968 $948 $691 2019 2020 2021 2022F 772 VOLUMES (in kmt) 701 727-757 635 2019 2020 2021 2022F GROSS PROFIT ($ in millions) 2019 2020 2021 = 2022F mmm Gross Profit | ——GP Per Ton ADJ. EBITDA ($
Slide 63: Growth Drivers
GROWTH DRIVERS TRADITIONAL EMERGING MILES 62S prIvEN SUSTAINABILITY <)) TIRE = PRODUCTION ae Aad S VEHICLE (®) PRODUCTION gee) UG Orion Engineered Carbons 2022 investor D: ay 6B
Slide 64: Global Rubber Demand Growth Outlook
GLOBAL RUBBER DEMAND Global Rubber Demand North ll I America Growth il = Outlook . I Brazil By Area Of The World Fea Market Complexity & Dynamics Global Capacity / demand Supply chain “in-sourcing" trends imbalance disruption Orion Engineered Carbons 2022 investor Day
Slide 65: Capacity / Demand Imbalance Outlook
NORTH AMERICA DEMAND VS. CAPACITY 2,200 (in kmt) 2,000 1,800 1,600 1,400 ( rowt h 2016 «2017 2018 2019 2020 2021F 2022F 2023F 2024F 2025F ——90% Effective Capacity ©——Total Demand U t | O O k EUROPE DEMAND VS. CAPACITY (Excluding Russia) Capacity / Demand ie) (in kmt) Imbalance comm 2016 2017 2018 20
Slide 66: Capturing the Growth Opportunity
Capturing the Growth Opportunity S Strategies Tailored by Geography STRATEGIC PRICING RAZ @) SUSTAINABLE SOLUTIONS
Slide 67: Growth Opportunity: Americas
Growth Opportunity: Americas STRATEGIC FOCUS Optimize price and mix to capture capacity/demand imbalance opportunity Drive efficiencies and incrementally debottleneck capacity Innovate and deploy sustainable solutions Orion Engineered Carbons e 67
Slide 68: Growth Opportunity: EMEA
Growth Opportunity: EMEA STRATEGIC FOCUS Address supply/demand imbalance Drive efficiencies and incrementally debottleneck capacity Innovate and deploy sustainable solutions Advance strategic relationship model Orion Engineered Carbons
Slide 69: Growth Opportunity: Asia
Growth Opportunity: Asia STRATEGIC FOCUS Targeted capacity expansion Optimize mix between specialty and rubber Drive efficiencies and incrementally debottleneck capacity Orion Engineered Carbons 69
Slide 70: Sustainable Solutions
Sustainable Solutions Circularity is a key focus of many customers Expect recyclable/renewable carbon use in tires will be 10% of market by 2030 Orion Engineered Carbons 70
Slide 71: Aligned with Sustainability Objectives
Aligned with Sustainability Objectives ENABLING CARBONS Develop sustainable solutions for customers RECYCLED CARBONS Advance the circular economy: tire circularity RENEWABLE CARBONS Leverage renewable resources OEC INNOVATION PILLARS Orion Engineered Carbons 2022investorDay 71
Slide 72: Multiple Pathways to Circularity
MULTIPLE PATHWAYS TO CIRCULARITY gxcular Co, Gp Furnace Process Impurity Removal Tire Pyrolysis RENEWABLE CIRCULAR RECOVERED CARBON CARBON BLACKS CARBON BLACKS BLACK BLENDS Sustainable Solutions Leveraging R&D leadership to identify best pathways Learn and collaborate to capitalize on industry devel
Slide 73: Sustainable Solutions
Sustainable Solutions Leading R&D platform Understand customer requirements Range and scale of production capabilities \Y, Portfolio of solutions Concept to market speed 2B
Slide 74: Rubber Segment Mid-Cycle Capacity
Rubber Segment Mid-Cycle Capacity ($ in millions) $230-$260 $35 Growth gies | os | $120 2021 Adj. 2022F Adj. Other Price / Mix 2025F Adj. EBITDA EBITDA Capacity EBITDA Expansion Orion Engineered Carbons 2022 investor Day 74
Slide 75: Rubber Segment's Essential Role
Rubber Segment’s Essential Role a5) LEADING GLOBAL PRODUCER Ly SOLID FOUNDATION FOR GROWTH Bae all POSITIONED TO THRIVE
Slide 76: Jeff Glajch, Chief Financial Officer
Jeff Glajch Chief Financial Officer orion
Slide 77: Value Creation Mindset: Strategic Roadmap
VALUE CREATION MINDSET Strategic Roadmap
Slide 78: Strong Foundation
Strong Foundation Delivered Resilient Results in Challenging Environment Total Sales ($ in billions) $2.1-$2.2 $1.5 $1.5 $14 = 2019 2020 2021 2022F mRubber m Specialty Total Volume (in kmt) 1,023 981- 1,024 2019 2020 2021 2022F mRubber m™ Specialty Adjusted EBITDA ($ in millions) $325" $267 $268 $20
Slide 79: Pivot Toward Growth
Pivot Toward Growth Constrained capital allocation due to EPA- mandated capital expenditures @ Value creation mindset MOVING AWAY FROM Maintenance capital expenditures focused on short- Focus on managing term fixed cost vs. long-term for liquidity cost of ownership MOVING TOWARD ml © Investing Stren
Slide 80: Mid-Cycle Capacity by Segment
Specialty Segment ($ in millions) $15 245 - $275 $40 $ $ $148 $146 - $162 nat a) 2021 Adj. 2022F Adj. Kappa Conductive Other Capacity Price / Mix 2025F Adj. M | d -( YC | e EBITDA EBITDA Capacity Expansion EBITDA Rubber Segment Capacity er $35 E=a sics-si7a $120 2021 Adj. 2022F Adj. Other Capacity P
Slide 81: Mid-Cycle Adj. EBITDA Capacity
Slide 82: Investing in Growth
Slide 83: Mid-Cycle Discretionary Free Cash Flow
Slide 84: Capital Spending Priorities and Outlook
Slide 85: Strategic Roadmap
Slide 86: Q&A
Slide 87: Positioned to Thrive
Slide 88: Investor Day June 8, 2022
Slide 89: Appendix
Slide 90: Non-GAAP Financial Measures
Slide 91: FY22 Financial Guidance and Assumptions
Slide 92: Non-GAAP Metrics Reconciliation
Slide 93: Segment Gross Profit & Gross Profit per ton Reconciliation
Slide 94: Discretionary Free Cash Flow Reconciliation