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1. Company Snapshot

1.a. Company Description

Orion Engineered Carbons S.A., together with its subsidiaries, manufactures and sells carbon black products in Germany, the United States, South Korea, Brazil, China, South Africa, the rest of Europe, and internationally.It operates in two segments, Specialty Carbon Black and Rubber Carbon Black.The company offers post-treated specialty carbon black grades for coatings and printing applications; high purity carbon black grades for the fiber industry; and conductive carbon black grades for polymers, coatings, and battery electrodes.


It also provides rubber carbon black products for applications in mechanical rubber goods under the PUREX brand, as well as in tires under the ECORAX brand name.The company was formerly known as Orion Engineered Carbons S.à r.l. and changed its name to Orion Engineered Carbons S.A. in July 2014.Orion Engineered Carbons S.A. was founded in 1862 and is headquartered in Senningerberg, Luxembourg.

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1.b. Last Insights on OEC

The recent 3-month performance of Orion Engineered Carbons S.A. was negatively impacted by a decline in net sales, which decreased by $34.0 million year-over-year in the fourth quarter of 2024. Adjusted EBITDA also declined by $4.9 million year-over-year, indicating a decrease in profitability. The company's diluted EPS increased by $0.22 year-over-year, but this was largely due to a reduction in share count. Additionally, the company's agreement with Contec S.A. for the supply of TPO may not have had a significant impact on its recent performance, as the agreement was announced in February 2025, and the company's Q4 2024 earnings were released in February 2025.

1.c. Company Highlights

2. Orion Engineered Carbons S.A. Posts Mixed Q4 2025 Results Amidst Challenging Industry Backdrop

Orion Engineered Carbons S.A. reported a better-than-anticipated Q4 2025, driven by higher-than-forecast volumes, particularly in the Specialty segment. The company's full-year EBITDA reached $248 million, exceeding the most recent outlook. However, the actual EPS came out at -$0.34, relative to estimates at -$0.08. The company's revenue growth is expected to be around 3.1% next year, according to analysts' estimates.

Publication Date: Mar -08

📋 Highlights
  • Q4 Outperformed Expectations: Higher-than-forecast volumes in the Specialty segment drove better-than-expected Q4 results.
  • 2025 EBITDA Performance: Full-year EBITDA reached $248 million, with Rubber and Specialty segments contributing $155 million and $94 million, respectively.
  • 2026 Free Cash Flow Guidance: Anticipated $25–50 million in free cash flow, supported by cost management and reduced capital expenditures ($90 million, down $70 million from 2025).
  • Industry Outlook: Signs of recovery in tire and truck/bus markets, with trade-up trends reversing and freight activity improving, despite ongoing industry challenges.
  • Global Safety Record: Near-record employee safety performance in 2025, reflecting the company’s focus on operational resilience and core values.

Segmental Performance

The Rubber segment generated adjusted EBITDA of $155 million, while the Specialty segment delivered adjusted EBITDA of $94 million. The company's free cash flow results were notable, with $55 million generated in 2025 and expected to continue in 2026. Jeffrey F. Glajch explained that this is due to active management of the business, working capital, and capital expenditures.

Guidance and Outlook

Orion provided 2026 guidance, expecting to generate between $160 million and $200 million of adjusted EBITDA, and between $25 million and $50 million in free cash flow. The company expects $90 million of capital expenditures in 2026, down $70 million from 2025 levels. Corning F. Painter stated that despite the current industry difficulties, the company did not significantly absorb volume loss, and their volumes will be down, but not more than the overall industry.

Valuation and Metrics

Looking at the company's valuation metrics, the P/E Ratio stands at -3.96, while the P/B Ratio is 0.72. The EV/EBITDA ratio is 7.89, and the Free Cash Flow Yield is 18.59%. These metrics suggest that the market is pricing in a challenging environment for the company, but the expected free cash flow generation could provide some support to the stock.

Industry Trends and Company Response

The industry has endured a difficult backdrop, including elevated imports of tires and truck and bus category downturn. However, indicators suggest an inflection could be at hand, with industry trade journals reporting a trade-up trend reversing and freight activity showing signs of improvement. Corning F. Painter stated that the company's customers had a tough year last year and are sharing some of the pain, but he expects to get some of that back in 2027.

Operational Initiatives

The company has taken actions to ensure resilience in challenging conditions, including cost management, reducing capital expenditures, and implementing operational initiatives. Corning F. Painter provided an update on the La Porte plant, stating that the conductive carbons market is dynamic, and the company has slowed down the project timeline to better align with end-market demand.

3. NewsRoom

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Orion (NYSE:OEC) and Westaim (OTCMKTS:WEDXF) Head to Head Review

Mar -29

Source: defenseworld.net

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Orion S.A. to Participate in Upcoming Investor Conference

Mar -16

Source: businesswire.com

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Orion S.A. to Increase Prices, Introduce a Variable Surcharge for Specialty Carbon Black

Mar -13

Source: businesswire.com

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Orion S.A. Earns Platinum Sustainability Rating From EcoVadis

Mar -09

Source: businesswire.com

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Analyzing Novozymes A/S (OTCMKTS:NVZMY) & Orion (NYSE:OEC)

Mar -08

Source: defenseworld.net

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Orion S.A. Announces its 2026 Annual General Meeting Date and Record Date

Mar -06

Source: businesswire.com

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Orion S.A.: Cyclical Downturn Or Post-Pandemic Normalization?

Feb -24

Source: seekingalpha.com

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Orion S.A. (OEC) Q4 2025 Earnings Call Transcript

Feb -17

Source: seekingalpha.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.82%)

6. Segments

Rubber

Expected Growth: 5.5%

Orion Engineered Carbons S.A.'s 5.5% growth in Rubber segment is driven by increasing demand from tire manufacturers, growing adoption in non-tire applications, and rising prices due to supply chain constraints. Additionally, the company's focus on specialty rubber products and expansion in emerging markets contribute to its growth momentum.

Specialty

Expected Growth: 6.5%

Orion Engineered Carbons' Specialty segment growth of 6.5% is driven by increasing demand for high-performance tires, growth in electric vehicle adoption, and rising use of specialty carbon black in coatings, inks, and plastics. Additionally, Orion's focus on innovation, customer relationships, and operational efficiency also contribute to the segment's growth.

7. Detailed Products

Specialty Carbon Blacks

High-performance carbon blacks used in coatings, plastics, and other specialty applications

Rubber Carbon Blacks

Carbon blacks used in tire manufacturing and other rubber applications

Plastic Carbon Blacks

Carbon blacks used in plastic compounds and masterbatches

Inkjet Colorants

Specialty carbon blacks used in inkjet printing inks

Laser Marking Carbon Blacks

Specialty carbon blacks used in laser marking and engraving applications

8. Orion Engineered Carbons S.A.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Orion Engineered Carbons S.A. is medium due to the availability of alternative products and technologies that can replace carbon black in certain applications.

Bargaining Power Of Customers

The bargaining power of customers is low due to the specialized nature of Orion Engineered Carbons S.A.'s products and the lack of alternative suppliers.

Bargaining Power Of Suppliers

The bargaining power of suppliers is medium due to the presence of multiple suppliers of raw materials and the company's ability to negotiate prices.

Threat Of New Entrants

The threat of new entrants is low due to the high barriers to entry in the carbon black industry, including the need for significant capital investment and technical expertise.

Intensity Of Rivalry

The intensity of rivalry is high due to the competitive nature of the carbon black industry, with multiple players competing for market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.34%
Debt Cost 8.31%
Equity Weight 36.66%
Equity Cost 12.03%
WACC 9.68%
Leverage 172.81%

11. Quality Control: Orion Engineered Carbons S.A. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Stock-Card
Uzin Utz

A-Score: 6.0/10

Value: 7.2

Growth: 5.0

Quality: 6.5

Yield: 4.4

Momentum: 8.5

Volatility: 4.3

1-Year Total Return ->

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Stock-Card
Victrex

A-Score: 4.6/10

Value: 5.2

Growth: 2.2

Quality: 6.4

Yield: 8.1

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Elementis

A-Score: 4.1/10

Value: 5.0

Growth: 1.7

Quality: 3.8

Yield: 1.2

Momentum: 6.5

Volatility: 6.7

1-Year Total Return ->

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Stock-Card
Zotefoams

A-Score: 4.1/10

Value: 4.0

Growth: 5.4

Quality: 3.8

Yield: 3.8

Momentum: 6.5

Volatility: 1.0

1-Year Total Return ->

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Stock-Card
Essentra

A-Score: 3.6/10

Value: 4.4

Growth: 1.3

Quality: 3.9

Yield: 6.2

Momentum: 1.0

Volatility: 4.7

1-Year Total Return ->

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Stock-Card
Orion Engineered Carbons

A-Score: 2.9/10

Value: 9.6

Growth: 3.2

Quality: 2.5

Yield: 1.2

Momentum: 0.0

Volatility: 1.0

1-Year Total Return ->

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

6.38$

Current Price

6.38$

Potential

-0.00%

Expected Cash-Flows