Orion S.A. Announces Financial Results For The Full Year Ended December 31, 2024

Orion S.A. (NYSE: OEC), a specialty chemical company, today announced financial results for the fourth quarter and full year of 2024.

Fourth Quarter 2024 Financial Highlights

• Net sales of $434.2 million, down $34.0 million, year over year
• Net income of $17.2 million, up $12.3 million, year over year.
• Diluted EPS of $0.30 up $0.22, year over year.
• Adjusted Diluted EPS¹ of $0.35, up $0.18, year over year.
• Adjusted EBITDA¹ of $61.7 million, down $4.9 million, year over year

Full Year 2024 Financial Highlights

• Net sales of $1,877.5 million, down $16.4 million, year over year.
• Net income of $44.2 million, down $59.3 million, year over year.
• Diluted EPS of $0.76 down $0.97, year over year.
• Adjusted Diluted EPS¹ of $1.76, down $0.16, year over year.
• Adjusted EBITDA¹ of $302.2 million, down $30.1 million, year over year.

Other Highlights

• Rubber profitability maintained, despite soft demand backdrop in our key markets.
• Specialty recovery continued in 2024, underscored by 11% year over year volume growth, including 9% in the fourth quarter.
• Strengthened industry leading position in circularity; Commercial sales in 2025.
• Repurchased ~2% of shares outstanding in 2024 (~$20 million last year).

“Orion delivered more than $300 million of Adjusted EBITDA for the third consecutive year in 2024, but we are not satisfied by these results. Soft Western tire production levels – and consequently lower than expected Rubber demand – was Orion’s single largest obstacle in 2024, and we addressed this partly through commercial strategy coming into 2025. This will blunt impact from the distorted tire industry trade flows, should they persist,” stated Corning Painter, Orion’s Chief Executive Officer. “Despite lingering end-market softness, foreign exchange headwinds reflecting the Dollar’s recent strength and uncertainty around the new administration’s broader policies, we expect growth in 2025 on a constant currency basis, underpinned by the new Rubber supply agreements, debottlenecked Specialty production lines and other factors in our control.”

“Of potentially greater interest to our investors,” continued Painter, “may be the multi-year inflection in our free cash flow generation. Higher Adjusted EBITDA and reduced capex are key levers here. With available capacity in Rubber and premium Specialty products, we are positioned to achieve higher earnings levels over several years without additional growth capital. Considering the improving cash flow and our stock’s current valuation, we continue to see opportunistic share repurchases as an attractive allocation of capital.”

Jeff Glajch, Orion’s Chief Financial Officer, added, “We finished 2024 with net leverage down modestly from the third quarter, even as we continued buybacks at a sensible pace during the fourth quarter. In just over two years, we have reduced our net outstanding shares by approximately 6%, including nearly $20 million of repurchases in the second half of 2024. At the end of December, we still had nearly 5 million shares on our current authorization.”

Fourth Quarter 2024 Overview:

Volume increased marginally by 1.9 kmt, or 0.8%, year over year, primarily due to higher volume in the Specialty Carbon Black segment. Net sales decreased by $34.0 million, or 7.3%, year over year, primarily driven by the pass-through effect of lower oil prices, lower Rubber Carbon Black segment volume and unfavorable foreign currency translation impact, partially offset by broad-based recovery in the Specialty Carbon Black segment across all regions. Gross profit increased by $2.0 million, or 2.3%, year over year, primarily driven by favorable Rubber Carbon Black segment pricing, partially offset by less favorable mix, lower Rubber Carbon Black segment volume and lower cogeneration.

Adjusted EBITDA decreased by $4.9 million, or 7.4%, to $61.7 million, year over year. The decrease was primarily due to higher selling, general and administrative expenses, lower Rubber Carbon Black segment volume and lower cogeneration. Those were partially offset by higher margin generated from the Specialty Carbon Black segment.

Quarterly Business Segment Results

Volume increased by 5.0 kmt, or 9.1%, year over year, reflecting growth across all regions. Net sales decreased marginally by $1.3 million, or 0.9%, to $147.4 million, year over year. Adjusted EBITDA increased by $7.6 million, or 43.7%, to $25.0 million, year over year, primarily due to higher volume, partially offset by less favorable product mix.

Volume declined by 3.1 kmt, or 1.8%, year over year. The decrease was primarily due to lower demand in the Americas region. Net sales decreased by $32.7 million, or 10.2%, to $286.8 million, year over year. The decrease was primarily due to lower volume, the pass-through effect of lower oil prices, partially offset by favorable price. Adjusted EBITDA decreased by $12.5 million, or 25.4%, to $36.7 million, year over year. The decrease was primarily due to lower demand in Americas region, lower cogeneration, higher fixed costs and higher selling, general and administrative expense. Those were partially offset by favorable price.

Full Year 2024 Overview:

Volume increased marginally by 2.7 kmt, or 0.3%, to 934.8 kmt, year-over-year primarily due to higher Specialty Carbon Black segment volume, partially offset by lower Rubber Carbon Black segment volume. Net sales decreased marginally by $16.4 million, or 0.9%, to $1,877.5 million, driven primarily by the pass-through effect of lower oil prices, lower Rubber Carbon Black segment volume and unfavorable foreign currency translation impact, partially offset by broad-based recovery in the Specialty Carbon Black segment across all regions. Gross profit decreased by $22.2 million or 4.9%, to $428.8 million, primarily driven by higher fixed costs, unfavorable impact from pass-through of raw material costs and lower cogeneration.

During the third quarter of 2024, we were the target of a criminal scheme that resulted in multiple fraudulently induced outbound wire transfers to accounts controlled by unknown third parties aggregating to $55.7 million, net of recoveries. In addition, we incurred $3.6 million of professional fees in connection with our investigations.

Adjusted EBITDA decreased by $30.1 million, or 9.1%, from $332.3 million in 2023 to $302.2 million in 2024. The decrease was primarily due to higher selling, general and administrative expenses, lower Rubber Carbon Black segment volume and lower cogeneration. Those were partially offset by higher volume in the Specialty Carbon Black segment.

Full Year 2024 Segment Results

Volume of the Specialty Carbon Black segment increased by 24.4 kmt, or 11.0%, to 245.8 kmt., primarily due to demand recovery across all regions and end markets. Net sales of the Specialty Carbon Black segment increased by $35.7 million, or 5.8%, to $646.3 million. The net sales increase in 2024 was primarily due to higher volume across all regions, partially offset by unfavorable product mix and unfavorable foreign currency translation impact. Adjusted EBITDA of the Specialty Carbon Black segment decreased by $2.6 million, or 2.3%, to $108.1 million. The decrease was primarily due to higher fixed costs and lower cogeneration. Those were partially offset by higher volume.

Volume of the Rubber Carbon Black segment decreased by 21.7 kmt, or 3.1%, to 689.0 kmt. The decrease was primarily due to lower demand in the Americas region. Net sales of the Rubber Carbon Black segment decreased by $52.1 million, or 4.1%, to $1,231.2 million. The decrease was primarily due to lower volume and the pass-through effect of lower oil prices, partially offset by favorable price. Adjusted EBITDA of the Rubber Carbon Black segment decreased by $27.5 million, or 12.4%, to $194.1 million. The decrease was primarily due to lower volume in Americas region, lower cogeneration and higher fixed costs. Those were partially offset by favorable price.

Outlook

“Orion is establishing a full year 2025 Adjusted EBITDA guidance range of $290 million – $330 million, implying a mid single digit year-over-year improvement at the midpoint, after factoring foreign exchange headwinds. Our Adjusted EPS guidance range is $1.45 – $1.90,” Painter added.

“Looking forward, the confluence of additional Rubber mandates, debottlenecked high-value Specialty grades, driving new qualifications, cost actions, plant modernization and completing our conductive carbons investment this year positions Orion for another step change in free cash flow in 2026.”

Conference Call

As previously announced, Orion will hold a conference call tomorrow, Thursday, February 20, 2025, at 8:30 a.m. (EST). The dial-in details for the live conference call are as follow:

A replay of the conference call may be accessed by phone at the following numbers through March 6, 2025:

Additionally, an archived webcast of the conference call will be available on the Investor Relations section of the company’s website at www.orioncarbons.com.

Source: Orion S.A.