OEC Q2 2026 Earnings Call Summary

1Key Financial Results and Metrics

Adjusted EBITDA:: $58 million, a 26% sequential increase but down 15% year-over-year, primarily due to lower Rubber segment pricing.

Specialty Segment Performance:: Adjusted EBITDA of $39 million, up 96% year-over-year, driven by a 5% increase in volumes and effective pricing actions.

Rubber Segment Performance:: Adjusted EBITDA of $19 million, down 61% year-over-year but stable sequentially.

Free Cash Flow:: Generated $2 million in Q2, with a positive outlook for the full year, now expecting slightly positive free cash flow.

Net Debt:: $961 million, with a net debt to adjusted EBITDA ratio of 4.4x, below credit agreement limits.

Liquidity:: Ended the quarter with $178 million in liquidity.

2Strategic Updates and Business Highlights

Strong execution in the Specialty segment, with broad-based volume gains across end markets.

Focus on safety and operational excellence, achieving only one injury year-to-date, significantly better than industry norms.

Ongoing improvements in plant reliability and working capital initiatives have positively impacted cash flow.

Favorable trade dynamics, including European antidumping duties on Chinese tire exports, are expected to support local production and demand.

3Forward Guidance and Outlook

Full Year Adjusted EBITDA Guidance:: Reaffirmed at $170 million to $210 million.

Free Cash Flow Outlook:: Increased to $5 million at the midpoint, assuming crude oil prices average $80 per barrel in H2 2026.

Anticipated seasonal softness in the Specialty segment in Q3 due to European holiday impacts, but overall demand remains strong.

4Bad News, Challenges, or Points of Concern

Rubber segment pricing agreements for 2026 have led to a significant year-over-year EBITDA decline.

Ongoing global economic uncertainty and oil price volatility present headwinds.

Limited visibility into customer forecasts and order volumes for the second half of the year.

The overall tire production rates remain below historical norms, which could impact future performance.

5Notable Q&A Insights

Contract negotiations are underway, with a more favorable setup due to regulatory actions and tightness in spot markets.

Specialty segment outlook for Q3 may face headwinds from higher raw material costs, with seasonality expected to impact performance.

The company plans to maintain favorable payment terms established during the quarter.

EU emissions credits are expected to impact P&L and cash flow in Q3, with timing still subject to change. Overall, Orion's Q2 2026 results reflect strong execution in the Specialty segment and improvements in cash flow, despite challenges in the Rubber segment and broader economic uncertainties. The company remains optimistic about its strategic positioning and outlook for the remainder of the year.