Earnings call transcript Q2 2023

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Operator

Greetings, and welcome to the Orion SA Second Quarter 2023 Earnings Conference Call. At this time all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded.

It is now my pleasure to introduce your host, Wendy Wilson, Head of Investor Relations. may you ma'am, you, begin. Thank

Wendy Wilson

of Good Thank of Chief Orion's results. and Chief to Financial the And market release we the Head to issued press everyone. Officer. call presentation Jeff you, Glajch, Officer a yesterday I'm are slide to and We our Painter, Wilson, financial Kyle. conference XXXX discuss welcome Investor quarter With closed after we Executive morning, website. our portion Corning Relations. Investor Wendy say, our second Relations also posted

the We will presentation this be referencing call. during

Before SEC, from of as subject uncertainties we begin, our and described I'd to are like today's those are to may call. our during and the remind risks described you actual results in the that made forward-looking some the statements the comments statements. company's differ These call with on filings

as forward-looking on August obligated update any made In forward-looking is revised addition, The are are not based of all company circumstances expectation. to today, statements statements XX. new

this non-GAAP release. directly table press measures our All financial in to attached call discussed GAAP are measures comparable the the most to reconciled during

turn now Corning Painter. call will I over the to

Corning Painter

Thank you, morning, welcome and our conference Wendy. call. everyone earnings to Good

the had for As on see Slide only X, naturally record quarter excellent you quarter second we to first half can first making another performance.

hard and on returns investment Our team to deserve. the customers' demand the the of results fundamentally reflect providing Orion that work products, transform the industry-leading company, investors

marketplace in continues our broader still the restructuring We've point key passed a now that been build. been has tipping building to aided is in years markets, the has for in by and

we record track for the few to profitability of this chemical a XXXX. to on compared be companies continue one We year. stronger XXXX expect And specialty

earnings $X.XX. and quarter the $XX increase year, $XXX resulted year year X% for EBITDA record approximately million on diluted This adjusted year of in share first earnings diluted million, of We XX% per half $X.XX. on a per adjusted record of adjusted approximately share second EBITDA delivered and adjusted increase of a

also our our cash quarter strong buyback. starting flow, also while completing million delivered $XX buyback new second and reduced We the operating share debt level, on

We flow this conversion expect reflecting huge us further. Jeff XX%. which will expect discretionary over This rate to million up of step a a discuss to is more we $XXX generate cash for than year, maintain. of this

carbon. As have Report. time XXXX recently the that highly in example highly to high as a take A conductive, conductive are is ultra is in limited we a and additives you read mode central manifests sustainability it streams. availability acetylene-base production economy. seen, circular and strategy. clean, published gas clean our concrete Sustainability acetylene our rubber you there our They to the volume is of specialty, I of this conductive In this from recommend

plant We acetylene-based additive continue on our in progress conductive of construction La make Porte. the to

additional to responsible strategy Beyond a to to North three to stakeholders. capacity and next our in fruition, the continue on bringing to that the expect Europe, five all operate Congratulations citizen team we who's America in entire we corporate as coming add as to stream years.

reflecting to the demand end preserved we've maintaining slow. is see and an strong. qualifications our as this segment manufacturing we push value the specialty operations On profitability. -- are Meanwhile, opportunity by value our per broader upgrade front, the have things while and preserved business of economy plants customer We underlying ton

for schedules. deserve, we pricing. a to in is XXXX we'll past our we as are price demand remains industry The XX% with late-stage negotiations that ahead capital, expect well our and committed are driving volume supply I the pick at currently positive points. industry restructuring negotiations results continue. mentioned about underway, simple. well up the invested as or in commitment we on America's of as get evident The our that you dynamics, company In to And situation is reset rubber, we return earlier, have of coupled In XXXX. pricing balanced believe shareholders to outlook more our a

A couple of items.

for care in we're this not about market is you that are for and remind in XXXX tightens deferred that further XXXX have negotiating the year's demand XXXX supplemental negotiating slow beyond, context, year's we demand one actually next supplemental that demand. I for. And First, demand except the

carbon tire there markets be capacity growing in is a and key or at. continues balance Second, to our black

costs, with producers. black supply maintenance, carbon Fourth, starting their growing in content Third, ban European controls in emission with carbon rebound and improvements the our five further in drivers it's positive prices. investments EU replacement a combined are demand, our black concern tire expected demand And OEM These the next higher all largely of us. structural in markets Russian July, they chain abatement Russian reliability and for benefits fifth, the tailwind.

suppliers. Beyond customers all that strong, want healthy

are States. abatement, the projects air we carbon have the only in United of Thinking to emission control completed black producer three

have more we us entering to one have to behind go which plan expect We XXXX.

talk tire retailer Eventually, let's important We tire the and and starting who's Now to supply retailers. tire a de-stocking large sells most the player here. manufacturers, the tire about customer supply dealers with deferring, rubber. they end

last bottom the passenger owners year. driving truck Slide see you are On and more of the X car can light than

to getting top of their will term worn of slide, I are replacement see they replaced. deferred because the buying those deferring, tires tires. the the be need and On use can you

Just look gas at driven. the and miles

replacement that they're a loads hence sense. fewer tires decline companies, makes seeing Trucking in buying and

of look PMI at manufacturing you where forward, is Going understanding to that headed. an get should

miles driven Now on data, gasoline, Europe. kilometers fast all good based have is this we U.S. in or don't like data or

believe we the However there's similar. picture

less inventory here. There's distributors the and key. manufacturers, levels, of also tire visibility each dealers question There's

correctly this, are low competence in end little On forecast relatively and there's interest their top However, the until understanding demand in our up. restocking our customer limited picks express is inventories customers accuracy. demand of

again, serve there's low But here them. little general, In inventories markets. to and who they in end dozens specialty, large and restocking. interest Switching of add customers by we want

for until specialty, holidays and wisely both For value extended and XXXX customers use manufacturers not defer destroy preparing chasing purchases of XXXX will start take We and in to winter. summer to and rubber volume. this we this end the expect by time turn

Jeff, perhaps some financial that, you color With provide more results. on our could

Jeff Glajch

X%. Thank X, path with XXXX. here, the can our of you headwinds profitability, X% we year continued to shown is expect EBIT markets. versus at expected in see On even XXXX the In not to end you, the to EPS the grow Slide growing full grow Corning. And while at midpoint

near volume Our pricing business portfolio have more which is is rubber our and price is which near from its the that to high products. facing But business the XXXX, of too XX% and respectable Specialty growth. offset term EBITDA volume first allowed the is us QX benefiting rubber, the headwinds. combination growth a plus has challenges earnings deliver specialty term of stable with add in half kept increases in value than in

our of stands weighted ROCE few in we see as aligned years stewards time during at progress This emission keeps of sustainability cost can substantial focusing continued XX%. excess capital level over the a you of ROCE our company. the us metric control key with air long-term are of and on made the The achieved significantly investments. past ROCE capital. Below, average we their our shareholders

EBITDA as details. The year-over-year the and in the price better the more months six a in cogeneration increase On second rubber adjusted of contractual of outweigh quarter, in the some improvements as lower rubber. of Slide quarter. volume revenue. our first XXXX result both Now second results The XX% the consolidated X% well lower X, in for businesses are of direct pricing

combination despite went second EBITDA that You quarter, a down adjusted the I'm last quarter items the of rate EPS adjusted and -- the which is tax adjustments is year. to may a in the couple This in income, opposite of higher net in EBITDA note increase to the sorry.

where EPS provides All power results rates, based XXXX. of these record of $XX expect XXXX are or expect do this XX% what income we power up reduced and has in when for $X half put co-gen volatility per and in for and they forward. despite year European which achieved a net months. X is that adjusted year-to-date Slide the going both next XX% We XX%. up shared we drop If impact to six quarter $X on for we that last now, additional are million price are rates certain about million We million EBITDA adjusted impact. a expire. Adjusted hold three $XX annual place levels first million, the quarter diluted hedges

On Slide X, the volume fully offset the improvement pricing in decline rubber QX. in

markets Our view rubber will price the shift a year. the due in the while to declines volume reverse to that is next structural are improvements

last volumes On per at ton in year. the an Gross looking extraordinary specialty in manufacturing QX compared with decreased markets, decreased X, in level profit sector. weakness Slide QX, the reflecting most

in per levels negatively, Our above ton discussed. not is we business. trailing the We ton per XX-month XXXX. to then the previously for but ton rather average per $XXX $XXX near also range this view our And down is expected quarter range this GP it have do profit but gross

we mix that pricing Importantly, for of the stable. sold in our remained the products quarter,

We by dropping have prices. volume not chased

the with EBITDA adjusted specialty factors key shows last XX year. affecting the Slide compared for business

margins as last earlier, reflects on noted was cost market us strength We despite significant, noted this revenue. As the I reduction proposition. absorption the affected our volume were lower slide, of the was the But pricing cogeneration value conditions. and for stable by believe fixed

was million, and or that is million $XX volume the prices. XX% XX, profitability or up The improvements up Turning half QX to oil and price was the generating lower first lower headline despite EBITDA metrics Slide strong EBITDA $XX XX%. rubber

improvements. was Gross in from driven $XXX price by profit per ton the $XXX to up quarter

levels You should similar of expect for XXXX. the be remainder GP to at the ton per

geographic Slide key less lower business. affecting XX factors price Strong the driver looks advantageous EBITDA is at the and base mix. volume the offsetting for key rubber adjusted clearly

and volume volume the while clarification, For regions. higher gained saw regions decreased in margin we margin [ph], lower we

like stock outstanding buybacks we With On debt in buyback update million the an flow our in Slide shares. program the half, level and on first cash our $XX $XX since X% and million started in and share cash I'd the in we to year-to-date represents This QX strong impact funded XX, flow on $XX provide million quarter, XXXX. buyback. of

our program during we buyback the initial discussed toward an the QX mid-May. purchased in million as in shares share our new of We expected, in completed additional our rest $XX As buyback program million quarter. call, $X

long flow. our as shares buyback pace or look a will stay free profit We cash growth the to debt of we to in And and to with plan near our continue first. as slower range, opportunistically target enhancing program portion we and projects new repurchase prioritize

We to reduced million. million of in half our $XXX million XXXX debt first additional net in $XX the an QX, $XX

this Our now debt-to-EBITDA and times times down from December, at X.XX point last three nearly ratio times at in stands X.XX year.

little a expect across I is where increase near level As rest XXXX. lower is since XXXX, benefited stay backend-loaded CapEx our will from the of the in our year. and I We of look half in now the -- this debt near forward CapEx it may first

gives projects, growth Slide discretionary projects. debt I profitability the our much dramatic flexibility to reduce expect XX% the years. stepped see in XX, in can buyback flow up to us nearly conversion EPA plus opportunistically pass in Corning, conversion as On cash have invest back before call shares. increase XXXX our that we to our you in our the have completed I coming This we more continue and the rate and

turn call the to Corning guidance. discuss XXXX that, I'll back our With to

Corning Painter

Jeff. Thanks,

XX. Slide to Turning

record both continue to we said another we believe As year. will earlier, record we

demand believe already with about of our also strong a essentially going position into XXXX robber and in Americas that XX% committed. we're EMEA We

expect we and destocking purchase continue any QX. into For year, deferral this QX customer to and

We in to Europe the continue to power prevail. lower prices also expect

is Taking our million X% our $XXX $XXX at over the adjust the up guidance upgrading million to -- EBITDA adjusted excuse me, that to consideration, we which into are range, midpoint. updating,

per at adjusted up $X to Our year-over-year the guidance midpoint. range EPS of X% $X.XX share, and

manufacturing In specialty are first, well. businesses you would doing volumes closing, when remind down. activity is Naturally, that I is our down

customer in our the future margin Porte business conductive driving advancing is many holding strength we're additive of levels. reflecting unit growth across qualifications and However, La at our plant Meanwhile, markets. by high our our progressing

a at believe we in pricing we and up rubber our which Second, level is will from sustainable grow. step the necessary

our gasoline tires replacement specialty sustainable. and Third, has its higher to disconnect driven margins, will recovery. tires miles businesses not be the replaced. drives begun Those the MRG consumption need Also, OEM and which between current is market

as have profitable we and foundation an embarked provide taken great a we exceptional returns for company have dramatically. air investment. us Orion nearly see profitability and a and has U.S. The upon growth, our a cash great with spending for higher steps shareholders. improved cash flow strategy free to future and sustained emissions conversion Fourth, behind flow I continue for our as the the

Thank you. Kyle, questions. please open the for line

Operator

Thank you.

Capital a Our Chris will be with question Kapsch Loop session. from go Instructions] comes We ahead. LLC. question-and-answer Please now conducting Markets [Operator first

Chris Kapsch

morning. thanks. Good Hey,

beyond? the So percentage for or magnitude next in the geography, existing already are the you agreements And that now. characterizing details already those And that too? been thank baked there you us curious negotiations baked multiyear agreements already deals? in remind contract like about what multiyear to alluded for year in resolved year. you in to does this there's way pricing any being ongoing the have increment around the tire that characterize helpful pricing had to was, of place your How where Could if contracts of by to for that'd next be compared an

Corning Painter

Hi, Chris.

your Appreciate all, thanks for of question. it. So first

it. into So volume about XX% contract going our we had of under

'XX but up we because that we the that better It's days, I okay had a signed between getting I'm with of year. think thing. expectation. said, the sort prepared than it's to my I commitments of from we're this do you contracts allocation As early will And risk 'XX. that's to that, better going companies do that and in a with those that contracts expect new we step

for I industry. think the development good that's overall, a

say quickly about or was America general, because the more Russian the there's the to America for North contract which market. probably South of in interest with capacity, just -- that Europe of and people now, right I'd there XX% get upset versus in

was their we coming as Some estimated carbon much as half customers, Russia. from as black of

that. people quite who interested certainly in are some there's So

Chris? I there, miss anything Did

Chris Kapsch

No, covers way demand incremental destocking helpful. latent would represents year. And the I That's then follow the like you presumably or characterized be, up the it. that current no, deferred for demand, next

its runs and let's by de-stocking this trends there's year. normalization and calendar course, year, say that assuming next just So demand then

industry would of there characterize think rubber the sort by that way region and Thank the what be any core specialty utilization area? to black rates you Is in capacity you.

Corning Painter

Sure.

it's customer I'm I just think, not one stop a going So day whenever deferring. clarify, to to decides, okay,

we'll think impact turning things. see will got think January, because the quarter. don't on and in that of see fourth quarter, company I kind holiday the the that you've in I shutdowns fourth as we that until just the

deferral. kind a it's been of I that think long timeframe a relatively

will can think I us, then basically forward, be means it very where be at. What at for going And Europe capacity in rubber people will is that levels. operate that high

say would I So high-XXs, low-XXs.

also again, demand. demand. We of America utilization supply just to North back because I will levels think more of be very run-rate a get high industry normal in

I think, capacity in both areas will be tight.

not EPA We will year. capacity us. major in impact America At or demand work will have behind North they our least one go so when that'll an for right, it next through have competitor probably

Chris Kapsch

Helpful, thank you.

Operator

Tanwanteng Securities. with question next Jon comes CJS go Our from ahead. Please

Jon Tanwanteng

drawing this where they before little a down critical at my I or color taking in their your could question. for keep levels be us more demand inventories kind of the have put on reach actually bit was how thanks business if a compared wondering that customers, to risk. Hi, long you can levels and would give environment normally they they

actually when down? you're us customers told in on of things come specifically Or get you what's that your just on research your they're that end clarity will more you market? and drawing confidence the Have they giving kind the on is will? what seeing help Just based more back that

Corning Painter

Sure.

many across many. different things in course, express Those there. many, in customers channel. the of Number many, is competence one, cutting always exactly downstream rubber, So tremendous let's in what all say specialty two don't is in customers

tires, really just question we So data driven tell in demand can which deferring of I the versus the that's there, you, customer replacement end gasoline see in de-stocking. think you best this think and have. I know miles that everybody's I I'll and interested

dropped when to So you now up If these a inventory about, buy low that level. demand they they If talked lower, bit think more. it end a more we're anecdotally, guys, will to more a right, be be inventory they have little talk steps might a bit very might little that than down. then they draw yes, at to they able little would bit, need, customer

it never will I you, levels, low tell get they're can't worse. think I

couldn't at they levels, up these unbalanced low reluctant very a in but they But So when express is more. they talk make view inventory to we and guys, they're step all express, our destock to inventory. that

is oil may thing of people one rise of we in prices, that The see the may this with see in some month specialty. front in we buying

Okay, don't significant. that'll I those very help August or September, see

Jon Tanwanteng

Okay. it. And Got then--

Corning Painter

little you some, a about, across have the uncomfort the they're and you But thing, other talked that one that's really a again, have of who like look stock balance have whole their just Maybe guys industry. below safety to bit level. few

Jon Tanwanteng

understood. Okay,

customers get generally stays you the negotiated when rest leverage I demand tire assuming give As New Year, your is. where that you for to these ahead also I enter a contracts Year? as you it lot inventory guys capacity does start the mean, and limited are New levels, roughly that of on of the especially create as you, remains critical you pricing to the some down time, know much for restock. enter leverage but better in your business, how

Corning Painter

XXXX. well. Jon. need is, XXXX, cycle plays But a this you out good What negotiating saying, no, no, the in price. give thing no, demands way game for in for to right buyers annual And are no, as it not need we're That's load me now yeah, saying, an we're we're rubber. you to negotiating the obvious for works the specialty

value. selling key is point solution. We're a in the we're here specialty, selling But

what's to to conditions. an new need yeah, buyer, get But looking where think a our intelligent looking right. see price specialty, not up year. current mean, So the and I to our in We're I happen move keep be to fair to market products conditions be they nor victim, a basically market we're next can it we take advantage to and going qualified agnostic the and of

Jon Tanwanteng

more great. been business? Kind what has been the just the impact your can from thing, that then specifically that of cogeneration? piece And expectation? the you of change break out I the in of Okay, guess, what outlook has there, one just And

Corning Painter

might at has can a we let thought really right Europe, to when end go actually they we stay rates guidance just just in were are, pick Jeff time. Sure, I our of up more. happened. that power say last And But at looking them the which were QX, not to expected a gave at we they this summer bit that where what

in it of last think every the move that was $XX part I my it's I script And be when XX% And said of about million. quarter, for XX% would down. about moved about

So you get Jeff an add how that? that of you mentioned. XX to anything annual Jeff, want But, to run-rate that's to

Jeff Glajch

XX% yeah million Sure. reduction range somewhere in would Corning's points, prices profitability you, the from in get a getting Jon, to $XX standpoint. the power

If you key markets. look now in right the

down think about year-over-year. were I looking a perhaps if XX%, it's Germany, you at

If a Italy, up power it's the not very There's been you in a XX. been step hot it's step costs. even look closer in There's there. in summertime not maybe up though to summertime,

we're, this expecting we're ago. lower is which level lower been four our months three on, remain to So expectation goes or the as year had what than

quarter fourth had impact in So quarter levels these first the bigger little where bit remain and than the second a a little the and we quarter, more third at. they're the and if bit expect impact

Corning Painter

help ultimately this going to Europeans in everybody. the [ph] is going a Europe. demand to stronger. my It's is consumer It's for Like to just give mean fuel And positive net you note. economy

was last of of year. extend, will at team. did It to end things our good energy expire this One the timing. hedges hedge congratulations understand is that the to Those we calendar very year,

headwind us So of that's year give a $XX going about next to million.

Jon Tanwanteng

I'll jump back you. queue. Thank guys. thanks, in Great,

Operator

Credit Please comes question with Roberts next from Suisse. go Our ahead. John

John Roberts

speciality the Slide XX bridge chemical the EBITDA. year-over-year Thank you. for has

If like? look to on that sequential were relatively what The quarterly you're a volumes basis, actually sequentially. going build slide would it flat

Corning Painter

to that. take Yeah, look at would so have I quick a

our on quarter look has do shifted quarter-on-quarter Jeff, volume. I how think we mix time that not on dramatically quarter? price

Jeff Glajch

-- bit a versus I think might volume little be down

John Roberts

It stayed quarter-over-quarter speakers] give on right-hand the [multiple the column to

Corning Painter

I'm X. slides sorry, about it. counter I'm looking at Different Slide

these comparing with then would question two, particular, your sorry, in you I'm want? what So

John Roberts

was volume Yeah, sequential stable. decline? Because

Sounds like significantly was price negative sequentially. mixed

Corning Painter

was mix Yeah,

Jeff Glajch

I QX. significantly. QX piece the little Yeah, absorptions. looking We as yeah, cogeneration well. that talked QX, volume, a you asking hits lower fixed to specialty were thought to And forward pretty was a John. about cost there with about to QX a bit was mix more down

you kind And all So it basket. see gross it's line. of really, you profit a in a throw can

Corning Painter

a that's Plus, we specialty was in time so of $XXX and last specialty that high GP in was per shared QX. EBITDA for some benefited onetime lot have that And million the of partially effects. ton timing in

the the of take a things, those going quarter absence So as down profit quarter just well. bit to we're little on

Jeff Glajch

a that third reduction. Yeah, is probably of alone the

John Roberts

operations Okay. how your are China And then doing?

Corning Painter

So a there, of we a were volume plant. where positive, startup new

weak That market now. for I think, China is is sure. a

keep I a mind us XXX think rubber, that market one is thing are we on X,XXX-X,XXX to like KT, market. in for volume

ways find product our with busy associated to we're the us to was for tough easier fighting startup than place but otherwise, that. market, out. So maybe very We're bit But folks. it by other little and a everything

Operator

with question Spector Please next ahead. comes from go Josh Our UBS.

Josh Spector

thanks Hi, question. taking for Yeah. my

First, maybe million I've co-gen thinking like there's sequential to make correctly, stable-ish cadence from understand sure the it the guess, these about far, lower step a levels. down how I the so of pieces. energy the sounds heard like X seems Seems I at through demand dynamic. I moving rest of what you're year because the and want

mean, XX% I you're that else would in your end-ish to gets maybe otherwise the be typically range high guidance. for guess to volume low-XXs me the So parts their I or or the XQ, lower so? is consider? moving roughly in XQ of what

Corning Painter

And Jeff. So, general I'll just let a couple make of comments. I'll

around saw also a volume. it. competitor, is mid-quarter dynamic and say, made some we a I both you It just about we announcements So time. specifics Jeff But go and into try for fairly would how

over things some about in the industry, can the we I But time. out had for were surprised, as think themselves things meaning example, the positive guys these volumes. trucking QX Jeff? just balance tire happen And

Jeff Glajch

not QX thought think too I on Josh, Sure. process off. probably far is your

our I you some thought by little customers. maybe a Corning see shutdowns And so QX, think about is shutdowns mentioned normal. than perhaps earlier, typically the as longer

impact. that's think probably a I meaningful

think the volume. about, drop got cogeneration, midpoint a customers We do typically would kind in-line our see of you out QX process perhaps last what QX, a and thought inventory looked view our at look you QX to off drop benefit our levels, QX saw a than of look of the impact mentioned, on I lower we get pricing we've a of if at in are could is guidance, that market of perhaps we our off with QX like last if look one guidance, at in QX year. rubber dynamics If but of as suggest it we staying year's the in way And that Obviously, you going QX the QX. the with XXXX. similar see XXXX in and and

Josh Spector

talked if seeing black CapEx? at delaying of long-term, of I also investments. but and some demand maybe makes pricing guess, some of term you're your some moment. and near that and describe unsettling bit you're timing competitor of just don't carbon curious within there, you little notice your more your growth some what a And anything conductive sense. I'm pricing if demand. And just I trimmed in could about you the those pressure the market Okay, -- some know

curious Just driver the on Thanks. there.

Corning Painter

more for on we capital timing looking and our at certain execution is them. in and the No, are hi. the around projects Yeah, where change

project. advance to acetylene the We continue

market, other We LSP, also for agree, price differentiation batteries, the also that out that that is, so materials that and we opportunity. at needs are there China some as more different price their and What in add better at. used that also would for of there's they a to the is and market for different of And that challenging see forth. kinds some we're an looking is products work points I'd

multiple of overall as market, to our So opportunity ability tiers in and size we an this one offerings for see the going that forward. have gives us us, given basically that

Josh Spector

Okay, thank you.

Operator

Our next go Jefferies. question ahead. Laurence Alexander from comes with Please

Unidentified Analyst

this on Hi, Lawrence. [Indiscernible] is Dan for

black have I either was you rubber make would to to the capacity change that adding Greenfield would of what if if and that mentioned tightness, You demand or supply brownfield consider not, viable. wondering kind

Corning Painter

or about investment, what's about you to that the means the When have rate. about what's business means model. right about that, model, most I a very used a be, one short bit little few the capital, to by but term customers And all think hurdle right, have than three now business more do making which Sure. think current still contract. mean And you return have you And years. one-three longer it to of it's you to an years. think to think And than

think puts capacity. around in risk you I adding a position certain that

course, lower direction. parties. So rate. that willing if the forward personally, a we And would industry. think would commitment really two to I the hurdle surety, is They accept be term us we'll this that move And looking be just for see mutual of of more we'd for a longer between in can give more surety. way And we with a that

Unidentified Analyst

a more we're don't thinking seen of XX-year So that akin is a, commitment industrial I think to we could describe it like probably that something know, kind gases I co-building where and there's what as about? we've

Corning Painter

Yeah, yeah.

gas come industry. I the from So industrial

a two business where to approach, there's merchant think models tend those there's I dedicated XX-year more little also five years, more a there, there's flexibility. which of is have more capacity, like agreement. a There's

something in view what to think I capacity. our That's add is of sense those it. make could areas

Unidentified Analyst

more Okay. one And there's question.

be I wondering ticking region it's to region. causes, just know maybe additives in maybe you better think building I fluctuations would rethink carbon or the new better, mentioned to in the if having was that into capacity Europe. in energy I don't export adding that, that

Corning Painter

the years, capacity in in that said North and Europe. we clear, be let's we So see adding three five ourselves America in next to

There's think a large will growing already market China. be I those pretty markets. in

fabs I spread batteries out and geographically. and concerns think everything all things to these more there's And that become of speak, to so Giga trade geopolitical going else. see we're democratic, about about

typically using black, be we be that So conductive in a not there's Based carbon being But we're byproduct going interested demand in assembling making think each on sorry, our our for there. material. will I'm you, we space. to remind

look something not to But that out. we would that will So investment, see clear, isn't if that. balance on that's how good there return a be do we to

Unidentified Analyst

Thank you very much.

Operator

Our next question comes ahead. JPMorgan. from Jeff Please with Zekauskas go

Corning Painter

Jeff. on Maybe there? morning. Are Good you mute?

Jeff Zekauskas

now? hear you me Can Sorry.

Corning Painter

Yeah. Good morning, Jeff.

Jeff Zekauskas

Yep. In were area, XX% that really that. signed. or year you in is that morning. market? reflecting about all of or said the Sorry next Europe good black your that the for rubber contracts large Is shape number European Good

Jeff Glajch

and let's the just let's Americas EMEA is that be So clear, combined?

Jeff Zekauskas

Americas and how in they're But much Right. very EMEA. if Because is is you how markets? it much strip in and like different out, No?

Jeff Glajch

similar, think percent for is people EMEA of last it's though, a now, to chose last was year, going going ended ratio the, take. when year our we be a to volume half higher quickly just the right that that. in about did because with But committed us, we little bit on more maybe little the contract we that's I are

Americas split that EMEA. pretty between So and well was

Jeff Zekauskas

black a to than So, in lower listening some your you in companies to And carbon that some to your a say, simply your contentious companies negotiation. what price Are so raise of all rubber prices the historically? prices. fair room point characterization? Is have that more more black carbon different make black, competitors,

Corning Painter

is said, exactly my what out course, that very know don't scenario, Jeff. on lay of who customers, feedback from The prices the we only you competitors' to get are. our I So likely just are

anything pricing else. is, idea what no is, or pricing policy have I what their So their

America airline who situation it's let's imagine kind know. And XXX only like, bit only of There's the across don't of Europe various North I a is, how let's there's imagine, the is. little route. want kind That's there's is say people an there's I'd but airlines, how seats, and XXX seats. of

So matter. Because real seats going you can't discount out business. doesn't a a our a the lakers up at you lease be free if left new fill like airline discount, someone's offering, there left, to business, And not just it fact. selling is it's his right, It's what's then can like plan. airplane,

closed is getting why that my pricing This think also like know that it's is I to but closed return prices this our is This This important in the in America, be. prices pricing. think to industry People high. company why plant XXXX. North are as I where opinion. in needs are in, or to on capital don't like,

When kind I in Orion had first I people giving and getting you round words, a low, extraordinarily this very But It's because to too the change out But years anything from I like me France high buying pricing my of did this is back balanced and in get it with ago. to need two maintain. closed just reliable and the it's if customers. harsh we're place in or don't were else. people XXXX, change. plants there want company why? view. so to you plant got, and joined that I have supply was a think Yeah, invested my that's Russia, the

I think to reset what's normality. happening is a

Jeff Zekauskas

the finally, in talk can future are where what those trends guess And are about returns the you specialty lower, higher? is? I of And pricing? they moving they they're going, moving

Corning Painter

yet amongst get prices proposition we those with So isn't energy in in what down coatings we we're not places. say, fundamentally to for looking high work But enough up a a And us. end to and return markets can move hard have them. different impact value our for

soft to our I when demand looking time think our is, this at is not that by volume lowering we're price. what chase is the view position

like is once when not comes was. it and business good the as market So as the turns then is volume back, your damaged

GDP per just ton the power, a diminished, now. things because on right is demand this like going on must fluctuation is still of a to in should our see we're is is providing Our not we're view little slower space, solution value, in you overall price product we to unit that but that our say, maintain value the, are our customers, providing mix I view

Jeff Zekauskas

Thank you great. so Okay, much.

Operator

Please follow a Tanwanteng from Jon go CJS up with ahead. securities. is question Next

Jon Tanwanteng

Hi, I little was just a color wondering if on you could give your buyback. the plans for more bit

going rank to to well? and little said pay you're and your you compared does a if million think more you've But I you're less aggressive, that I investments as the down the $XX CapEx uses measured debt with cash other lower, that prices spent. considering future go mean, bit already of be compared that how to share

Jeff Glajch

Hey, Jon. This is Jeff.

little then a buyback, at million $XX by think that And million month you that assume shares mid-May. bit. down aggressive mid-May, at million probably took your per bought If to about since first approximately we $XX our get pace we be buyback, back $XX our less to we'd and that are prices a looking But aggressive a little were it to lower were if is I point, think we fair this little if more opportunistically, prices higher.

not model. it's a static So

perhaps there lower. little is bit more be we prices a will process thought aggressive Our dynamic and are very if

Jon Tanwanteng

you. Okay, thank

Operator

time. comments. back for this I'd Corning to no closing There further to the questions Painter like call are over turn at

Corning Painter

our company our Okay. industry. very I'd you really Thank our support. excellent an And for time time and we exciting like today. for appreciate thank is your for to This investors continued the much. questions analysts and the

to York very look good Have going conferences out the And be day. fall. forward Houston welcome other of two the soon. New We're by to up in you. heat for escaping this coming road Thanks opportunities We're we We again. a meet in seeing you in to September.

Operator

This concludes today's teleconference.

participation. lines You your you this Thank time. may disconnect your at for

Orion Engineered Carbons (OEC) 10 Aug 232023 Q2 Earnings call transcript