Orion S.a. · NYSE:OEC
Orion — Orion Engineered Carbons — Q3 2015 Earnings Presentation
19 slides from Orion's earnings presentation, Oct 29, 2015
Slide 1: Q3 2015 Earnings Call
Q3 2015 Earnings Call October 29, 2015
Slide 2: Disclaimer
Disclaimer This presentation contains certain forward-looking statements with respect to our financial condition, results of operations and business. Forward-looking statements are statements of future expectations that are based on management's current expectations and assumptions and involve known
Slide 3: Q3 2015 Highlights
Q3 2015 Highlights Adjusted EBITDA of €48.0 million and Adjusted EPS of €0.32 Cash totaled €105.9 million after dividend payments year to date of €30.0 million, which represents a build of €65.3 million (up 93%) in cash during 2015 prior to dividend payments Volumes increased to 258.3 kmt, or 4.8%,
Slide 4: Specialty Carbon Black Business Results
Specialty Carbon Black Business Results Record volume growth leading to strong performance Q3 2015 Performance Q3 2015 Q3 2014 Y-o-Y Comparison Volume (kmt) 55.6 51.0 9.1% Revenue €95.6m €101.0m -5.4% Gross Profit €36.9m €34.1m 8.2% Gross Profit / ton €662.9 €668.2 -0.8% Adjusted EBITDA €28.0m €26.9
Slide 5: Rubber Carbon Black Business Results
Rubber Carbon Black Business Results Continued efficiency improvements and volume growth not able to offset feedstock impacts Q3 2015 Performance Q3 2015 Q3 2014 Y-o-Y Comparison Volume (kmt) 202.7 195.4 3.7% Revenue €183.1m €228.8m -20.0% Gross Profit €37.3m €43.3m -13.9% Gross Profit / ton €184.0
Slide 6: Q3 2015 Consolidated Operating Results
Q3 2015 Consolidated Operating Results Increased volumes in both segments, positive trends in Specialty offset by feedstock cost challenges in Rubber Q3 2015 Performance Q3 2015 Q3 2014 Y-o-Y Comparison Volume (kmt) 258.3 246.4 4.8% Revenue €278.7m €329.8m -15.5% Contribution Margin €103.5m €106.1m
Slide 7: Nine Month 2015 Consolidated Operating Results
Nine Month 2015 Consolidated Operating Results Increased volumes in both segments, positive trends in Specialty offset by feedstock cost challenges in Rubber Nine Month 2015 Performance 9 Month 2015 9 Month 2014 Y-o-Y Comparison Volume (kmt) 771.7 751.6 2.7% Revenue €851.4m €1,001.6m -15.0% Contribu
Slide 8: Balance Sheet & Cash Flow Update
Balance Sheet & Cash Flow Update Solid free cash flow generation 3 months ended Cash inflows from operations of €30.1 million In € million September 30, 2015 Cash capital expenditures at €9.5 million for improvements Net Income 12.1 and maintenance projects comfortably covered by cash flow Plus: Dep
Slide 9: Capital Allocation
Capital Allocation Expect to continue to generate strong free cash flows, which should result in significant further growth in cash to December 31, 2015. Year to date cash increase of 92% before dividend payments of €30.0 million Improved overall inventory and cash management initiatives will contin
Slide 10: OEC has acquired the majority share in Qingdao Carbon Black joint venture
OEC has acquired the majority share in Qingdao Carbon Black joint venture Acquisition Summary QECC was a joint venture established by Evonik, DEG and Jiaozhou Finance Investment Center (JFIC) in 1994 based in Qingdao (Shandong Province), China Two step acquisition: Initial acquisition of 67% Evonik
Slide 11: GDP growth in 2015 is expected to be driven by North America and Asia
GDP growth in 2015 is expected to be driven by North America and Asia with some recovery in Europe Real 2015 GDP growth expectation by region - IMF North America Europe + 2.4% + 1.8% Solid North American economic growth is Recovery in the EU is expected to continue expected for 2015 with slightly hi
Slide 12: North America Automotive very strong and good recovery in Europe, but reduction of growth in APAC
North America Automotive very strong and good recovery in Europe, but reduction of growth in APAC 2015/Q3: Data on Tire Demand and Auto Build - 2015 Outlook North America Europe Automotive Passenger / LT Tire Automotive Passenger / LT Tire OEM Replacement OEM Replacement + 4.3% + 4% +1% + 6.3% + 6%
Slide 13: 2015 Full Year Outlook
2015 Full Year Outlook • Expect 2015 Full Year Adjusted EBITDA to be in the range of €203 million to €210 million • Key Assumptions: • Volume growth in line with current GDP expectations • Reasonable stability in oil prices and exchange rates based on current levels • Strong Year-End cash balance •
Slide 14: Appendix
Appendix
Slide 15: OEC Frequently Asked Questions
OEC Frequently Asked Questions Q: What was the overall impact on Adjusted EBITDA of foreign exchange impacts, feedstock windfall changes and negative feedstock cost developments in Q3 2015? A: Favorable foreign exchange impacts in the third quarter of 2015 compared to the quarter a year earlier prim
Slide 16: OEC Frequently Asked Questions
OEC Frequently Asked Questions Q: Can you give an update of the latest development in the EPA 114 proceedings based on certain alleged Clean Air Act violations at the U.S. at the four US facilities currently operated by Orion? A: The nature of the claims made by the EPA as well as the current status
Slide 17: Historical Non-IFRS Metrics Reconciliation
Historical Non-IFRS Metrics Reconciliation Historical Non-IFRS Metrics Reconciliation (€million unless otherwise stated) Three Months Ended September 30, 2014 2015 Revenue 330 279 Variable costs (1) -224 -175 Contribution Margin 106 104 Sales volume (in kmt) 246 258 Contribution Margin per Metric To
Slide 18: Historical Non-IFRS Metrics Reconciliation
Historical Non-IFRS Metrics Reconciliation Historical Non-IFRS Metrics Reconciliation (€million unless otherwise stated) Nine Months Ended September 30, 2014 2015 Revenue 1,002 851 Variable costs (1) -685 -523 Contribution Margin 316 329 Sales volume (in kmt) 752 772 Contribution Margin per Metric T
Slide 19: Investor Relations Contact Details
Investor Relations Contact Details: Diana Downey +1 832-445-3865 [email protected]
Orion Engineered Carbons — Q3 2015 Earnings Presentation on 6ix