Summary of OEC Q4 2025 Earnings Call

1Key Financial Results and Metrics

Full Year EBITDA: $248 million, exceeding expectations due to better-than-anticipated Q4 volumes, particularly in the Specialty segment.

Rubber Segment EBITDA: $155 million, impacted by lower tire production rates and elevated imports.

Specialty Segment EBITDA: $94 million, reflecting a 14% decrease due to soft global industrial activity.

Free Cash Flow: $55 million for the year, driven by working capital efficiencies and lower CapEx.

Net Debt: $920 million with a leverage ratio of 3.7x, down from 3.8x in Q3.

2026 Guidance: Expected adjusted EBITDA between $160 million and $200 million and free cash flow between $25 million and $50 million.

2Strategic Updates and Business Highlights

Leadership Change: Introduction of Jon Puckett as the new CFO, bringing extensive experience in the chemical industry.

Operational Improvements: Focus on cost management, with $20 million in productivity and efficiency savings targeted.

Production Line Rationalization: Closure of 3 to 5 production lines to enhance operational efficiency.

Safety Performance: Achieved near-record safety metrics with only 3 incidents reported in 2025.

Customer Relationships: Shifted strategy to prioritize maintaining market share through collaboration with customers during challenging negotiations.

3Forward Guidance and Outlook

2026 Outlook: Anticipates subdued tire build rates and contract pricing already set, with expectations of flat to slightly lower volumes.

Potential Upsides: Positive shifts in trade flows, reshoring activities, and a recovery in the freight industry could enhance performance in 2026 and beyond.

CapEx Reduction: Projected CapEx of $90 million in 2026, down $70 million from 2025 levels.

4Bad News, Challenges, or Points of Concern

Market Headwinds: Continued challenges from elevated tire imports and soft demand in the freight industry, impacting the Rubber segment.

Contract Negotiation Difficulties: Difficulties in securing favorable contract terms due to market conditions, with expectations of a $60 million negative impact from contract outcomes.

Economic Uncertainty: Ongoing macroeconomic uncertainties and weak PMI readings affecting demand in the Specialty segment.

5Notable Q&A Insights

Customer Pricing Strategy: Management indicated that they did not sacrifice significant volume for pricing but aimed to maintain share during tough negotiations.

Free Cash Flow Expectations: The $25 million to $50 million free cash flow guidance reflects active management of working capital and CapEx.

Capacity Management: Slightly lower contracted capacity compared to normal years, with a focus on maintaining competitive loading.

La Porte Plant Update: The startup of the La Porte plant has been delayed to 2027, aligning better with market demand.

Accounts Payable Management: Increased accounts payable is being actively managed, with no immediate need for reduction. This summary encapsulates the key points from the earnings call, highlighting both the achievements and challenges faced by Orion SA as they navigate a complex market environment.