HOUSTON – Orion S.A. (NYSE: OEC), a specialty chemical company, today reported First Quarter 2026 Net sales of $460 million, a 4% decrease from the prior year, consisting of a 11% reduction in price, predominantly from the pass-through effect of lower year-over-year oil prices, and 1% adverse mix, which was partly offset by 2% higher volumes and 6% favorable foreign currency translation. Our first quarter results improved as the quarter progressed, despite a slow start in January and February which our Rubber segment’s customers attributed to winter weather conditions. Demand picked up considerably during the month of March across both segments, particularly in our Specialty business.
For the quarter, Orion generated a consolidated Net loss of $10 million, and Adjusted EBITDA of $46 million. Working capital utilization is typically the highest in our first quarter, resulting in an Operating cash use of $12 million and free cash outflow of $48 million. Orion responded quickly to the March surge in energy prices by accelerating cost actions and further optimizing working capital, while implementing targeted price increases and surcharges to protect margins in non-formula pass-through business.
Other Highlights
- Contractual formula pricing pass-through mechanisms performing as expected, helping mitigate feedstock cost and earnings volatility
- Strong demand uptick late in Q1 reflects customer proclivity to secure local supply
- Cost saving efforts accruing favorably to results
- Working capital initiatives contributed to leaner inventories
- Successful re-qualification of Specialty grades in China
- Net debt-to-trailing twelve–month (“TTM”) Adjusted EBITDA ratio of 4.2x at quarter end
“We are pleased with our first quarter results, including Adjusted EBITDA of $46 million which was ahead of internal expectations. This was despite Rubber segment volumes which reflected continued sluggish Western Hemisphere tire build rates to start the year. The dynamic backdrop resulting from the Middle East conflict is a test of Orion’s agility, and I am proud of our team’s responsiveness – executing price increases and surcharges, flexing our supply chain to meet higher demand, and judiciously managing inventories,” stated Corning Painter, Chief Executive Officer.
“Despite uncertainties associated with the conflict, including its impact on energy prices and the global economy, our business’s resilience and asset footprint have enabled us to support customers during these dynamic times,” continued Painter. “Orion’s products are essential, we are competitively positioned, and our customer relationships are enduring. Our healthy order book underscores the value of Orion’s local supply network.”
“In addition to normal first quarter seasonality, we experienced incremental working capital headwinds during the month of March due to higher crude oil prices,” added Jon Puckett, Chief Financial Officer. “Contrary to the upward bias in EBITDA, working capital is pressured during periods of higher oil prices. Oil price volatility affects the timing of cash conversion but does not alter the long-term cash generation fundamentals of the business. Accordingly, we are amplifying efforts to mitigate the effects on working capital. Generating positive cash flow remains our number one financial priority,” continued Puckett.
First Quarter 2026 Overview:
- The reconciliations of these non-GAAP measures to the respective most comparable GAAP measures are provided in the section titled Reconciliation of Non-GAAP Financial Measures.
Specialty Carbon Black
Specialty segment demand picked up considerably late in the first quarter, as supply chain uncertainty precipitated higher demand across most end-markets. Segment volumes increased 3% year over year, led by growth in the Americas, along with Europe, Middle East and Africa (“EMEA”) more than offsetting slightly lower year-over-year demand in Asia Pacific (“APAC”). Net sales increased by $9 million, or 6%, year over year to $170 million, primarily due to higher volume, positive mix, and favorable foreign currency exchange impacts, more than offsetting unfavorable price, predominantly the pass-through effect of lower year-over-year oil prices. Segment Adjusted EBITDA increased 7%, driven primarily by higher volumes, positive product mix and favorable foreign currency impact, partially offset by lower fixed cost absorption related to an inventory draw.
Rubber Carbon Black
Rubber segment results were consistent with expectations, affected by calendar 2026 pricing agreements, as well as soft demand conditions in North America. Tire build rates were down in North America because of sluggish channel sell-through early in the year, partly related to adverse winter weather, in addition to lingering tire channel inventories resulting from the 2025 increase in low-value tire imports. Volume increased 1% year over year during the quarter, primarily due to higher demand in EMEA and APAC. Net sales decreased by 9% year over year on lower pricing, predominantly the pass-through effect of lower year-over-year oil prices, and adverse regional mix, only partly offset by higher volumes and favorable foreign currency translation. The segment’s Adjusted EBITDA decrease was driven primarily by the pricing outcome of calendar 2026 supply agreements, adverse impact from the pass-through effect of lower year-over-year raw material costs, and unfavorable regional mix, partially offset by higher volumes and favorable foreign currency translation.
Cash Flow and Balance Sheet
First Quarter 2026 operating cash use was $12 million on the seasonal working capital impacts of $54 million. After $36 million of capital expenditures, first quarter free cash outflow was $48 million. We finished the quarter with net debt of $965 million, and a net debt-to-Adjusted EBITDA ratio of 4.2x.
Outlook
“The earnings resilience of our business is enhanced during periods of higher oil prices. This characteristic, coupled with our strong order trends, gives us confidence to increase our 2026 Adjusted EBITDA guidance range, which is now $170 to $210 million, up from $160 to $200 million. We do contemplate some moderation in both oil prices and demand in the second half of 2026,” Painter said.
About Orion S.A.
Orion S.A. (NYSE: OEC) is a leading global supplier of carbon black, a solid form of carbon produced as powder or pellets. The material is made to customers’ exacting specifications for tires, coatings, ink, batteries, plastics and numerous other specialty, high-performance applications. Carbon black is used to tint, colorize, provide reinforcement, conduct electricity, increase durability and add UV protection. Orion has four innovation centers and produces carbon black at 15 plants worldwide, offering the most diverse variety of production processes in the industry. The company’s corporate lineage goes back more than 160 years to Germany, where it operates the world’s longest-running carbon black plant. Orion is a leading innovator, applying a deep understanding of customers’ needs to deliver sustainable solutions. For more information, please visit orioncarbons.com.
Forward-Looking Statements
This document contains certain forward-looking statements within the meaning of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements of future expectations that are based on current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. You should not place undue reliance on forward-looking statements. Each forward-looking statement speaks only as of the date of the particular statement. New risk factors and uncertainties emerge from time to time and it is not possible to predict all risk factors and uncertainties, nor can we assess the extent to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking statements. We undertake no obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information, other than as required by applicable law.
Contact:
William Foreman
Orion S.A.
Director of Corporate Communications and Government Affairs
william.foreman@orioncarbons.com
Direct: +1 832-445-3305
Christopher Kapsch
Orion S.A.
Vice President of Investor Relations
christopher.kapsch@orioncarbons.com
Direct: +1 281-318-4413
