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Item 2. Management’s Discussion and Analysis

2023-08-09 compared with 2023-05-04 · 128 added, 81 removed, 202 unchanged (51% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three months ended March 31, 2023 and 2022 and should be read in conjunction with the information included under Item 1.

The following discussion and analysis summarizes the significant factors affecting our results of operations and financial condition during the three and six months ended June 30, 2023 and 2022 and should be read in conjunction with the information included under Item 1.

Financial Statements and Supplementary Data (Unaudited) elsewhere in this report.

4 unchanged sentences

For a reconciliation of these non-GAAP financial measures to their nearest comparable GAAP measures, see section Reconciliation of Non-GAAP Financial Measures below.

These non-GAAP measures include, but are not limited to, Gross profit per metric ton, Adjusted EBITDA, Net Working Capital, Capital Expenditures and Segment Adjusted EBITDA Margin (in percentage).

These non-GAAP measures include, but are not limited to, Gross profit per metric ton, Adjusted EBITDA, Net working capital, Capital expenditures, Segment Adjusted EBITDA margin (in percentage), Net debt and Net leverage..

• Gross profit per metric ton —Gross profit divided by volume measured in metric tons.

3 unchanged sentences

• Segment Adjusted EBITDA margin (in percentage )—Segment Adjusted EBITDA divided by segment Revenue.

• Net debt —Current portion of long-term debt and other financial liabilities plus Long-term debt, net plus Deferred debt issuance costs less Cash and cash equivalents.

• Net leverage —Net debt divided by trailing twelve months Adjusted EBITDA.

Adjusted EBITDA is used by our chief operating decision maker (“CODM”) to evaluate our operating performance and to make decisions regarding allocation of capital, because it excludes the effects of items that have less bearing on the performance of our underlying core business.

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Non-GAAP measures are not performance measures under GAAP and should not be considered in isolation or construed as substitutes for Net sales, Net income, Income from operations, Gross profit and other GAAP measures as an indicator of our operations in accordance with GAAP.

Orion Engineered Carbons S.A.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

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Reconciliation of Gross profit per metric ton:

Three Months Ended March 31,

2023 2022 Delta

(In millions) %

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 Delta 2023 2022 Delta

(In millions) % (In millions) %

Net sales $ 458.8 $ 541.2 $ (82.4) (15.2) $ 959.5 $ 1,025.7 $ (66.2) (6.5)

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Reconciliation of Net income to Adjusted EBITDA:

Three Months Ended March 31,

2023 2022 Delta

(In millions) %

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 Delta 2023 2022 Delta

(In millions) % (In millions) %

Net income $ 30.1 $ 29.7 $ 0.4 1.3 $ 72.4 $ 62.2 $ 10.2 16.4

15 unchanged sentences

$ 57.4 $ 38.0 $ 19.4 51.1 $ 121.2 $ 78.7 $ 42.5 54.0

Orion Engineered Carbons S.A.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

1 unchanged sentence

The table below presents our historical results derived from our Condensed Consolidated Financial Statements for the periods indicated.

Three Months Ended March 31, Year-Over Year

Three Months Ended June 30, Year-Over Year

2023 2022 Delta

19 unchanged sentences

Comprehensive income $ 23.0 $ 19.5 $ 3.5 17.9

Net sales increased by $16.2 million, or 3.3%, in the first quarter of 2023 to $500.7 million, compared to the first quarter of 2022, primarily driven by strong improvements in 2023 negotiated Rubber carbon black price.

Specialty carbon black product mix was favorable.

Those gains were partially offset by lower volume.

Volume in both segments decreased in aggregate by 19.7 kmt in the first quarter of 2023 to 233.5 kmt, compared to the first quarter of 2022.

The decrease in Specialty carbon black was due to the economic slowdown in our lower profitability end markets, while a smaller reduction in Rubber carbon black volume was due to short-term demand and customer turnarounds.

Net sales decreased by $82.4 million, or 15.2%, in the second quarter of 2023 to $458.8 million, compared to the second quarter of 2022, primarily driven by the pass-through effect of declining oil prices and lower volume in both segments.

Those were partially offset by improved contractual Rubber carbon black pricing.

Volume in both segments decreased in aggregate by 24.1 kmt in the second quarter of 2023 to 227.3 kmt, compared to the second quarter of 2022.

The global economic slowdown impacted both segments.

Cost of sales

Cost of sales decreased by $2.3 million, or 0.6%, to $364.3 million in the first quarter of 2023, compared to the first quarter of 2022, primarily due to lower volume and production-associated costs.

Gross profit increased by $18.5 million, or 15.7%, to $136.4 million and gross profit per metric ton increased by 25.5% to $584.2, year over year.

The increase was primarily driven by improved contractual Rubber carbon black price and favorable Specialty carbon black mix and timing benefits.

Those were partially offset by lower volume in both segments.

Higher margins per ton resulted from price increases in Rubber carbon black to recover environmental and reliability-related capital expenditures and an improved mix in Specialty carbon black.

Cost of sales decreased by $79.7 million, or 18.9%, to $341.7 million in the second quarter of 2023, compared to the second quarter of 2022 primarily due to lower volume and the effect of declining oil prices.

Gross profit decreased by $2.7 million, or 2.3%, to $117.1 million, year over year.

The decrease was primarily driven by lower volume in both segments, partially offset by improved contractual Rubber carbon black pricing.

Gross profit per metric ton increased by 8.1% to $515.2, year over year, driven by improved contractual Rubber carbon black pricing.

Selling, general and administrative expenses

Selling, general and administrative expenses remained flat in the first quarter of 2023 compared to the first quarter of 2022.

Selling, general and administrative expenses decreased by $4.7 million or 7.9% to $55.0 million in the second quarter of 2023 compared to the second quarter of 2022, primarily driven by lower freight costs due to lower volume in both segments.

Provision for income taxes

For the three months ended March 31, 2023, the Company recognized Income before earnings in affiliated companies and income taxes of $60.5 million, compared to $46.2 million in the three months ended March 31, 2022.

The provision for income taxes was an expense of $18.3 million and $13.8 million for the three months ended March 31, 2023 and 2022, respectively.

The effective tax rate for the three months ended March 31, 2023, was flat, as compared to the three months ended March 31, 2022.

Orion Engineered Carbons S.A.

For the three months ended June 30, 2023, the Company recognized Income before earnings in affiliated companies and income taxes of $47.7 million, compared to $42.4 million in the three months ended June 30, 2022.

The provision for income taxes was an expense of $17.8 million and $12.8 million for the three months ended June 30, 2023 and 2022, respectively.

The effective tax rate for the three months ended June 30, 2023, was 37.3%, as compared to 30.1% for the three months ended June 30, 2022.

The increase in our effective tax rate for three months ended June 30, 2023, as compared to the three months ended June 30, 2022, was primarily attributable to the

Management’s Discussion and Analysis of Financial Condition and Results of Operation

projected earnings mix by geography and tax jurisdiction as compared to the prior period.

Adjusted EBITDA (A Non-GAAP Financial Measure)

Adjusted EBITDA increased in the first quarter of 2023 by $17.9 million, or 21.5%, to $101.1 million, year over year.

The increase was driven by improved Rubber carbon black price and favorable Specialty carbon black product mix, partially offset by lower volume in both segments.

Adjusted EBITDA increased in the second quarter of 2023 by $3.9 million, or 4.7%, to $87.3 million, year over year.

The increase was driven by favorable pricing and product mix in Rubber Carbon Black segment, partially offset by lower volume in both segments and decreased cogeneration revenue, a byproduct.

Comprehensive Income

Comprehensive income decreased by $25.6 million in the first quarter of 2023 compared to the first quarter of 2022.

Comprehensive income increased by $3.5 million in the second quarter of 2023 compared to the second quarter of 2022.

The activities from the components of Comprehensive income are discussed below:

• $19.1 million of net unfavorable impacts of unrealized changes in foreign currency translation adjustments primarily due to the weakening of the U.S.

dollar relative to the euro.

• $13.6 million of net favorable impacts of unrealized changes in foreign currency translation adjustments.

• $8.9 million of net unfavorable impacts related to financial derivative instruments primarily driven by net periodic changes in cross currency and interest rate swaps, and

• $1.6 million of net unfavorable changes in defined pension and other post-retirement benefits.

These decreases were partially offset by $9.8 million of higher net income in the first quarter of 2023 compared to the first quarter of 2022.

Additionally, Net income increased by $0.4 million in the second quarter of 2023 compared to the second quarter of 2022.

For the six months ended June 30, 2023 compared to six months ended June 30, 2022

Condensed Consolidated Statement of Operations Data Six Months Ended June 30, Year-Over Year

2023 2022 Delta

(In millions) %

Net sales $ 959.5 $ 1,025.7 $ (66.2) (6.5)

Cost of sales 706.0 788.0 (82.0) (10.4)

Gross profit 253.5 237.7 15.8 6.6

Selling, general and administrative expenses 112.7 117.2 (4.5) (3.8)

Research and development costs 12.1 11.4 0.7 6.1

Other (income) expenses, net (3.7) 1.6 (5.3) (331.3)

Income from operations 132.4 107.5 24.9 23.2

Interest and other financial expense, net 28.7 18.9 9.8 51.9

Reclassification of actuarial gain from AOCI (4.5) — (4.5) N/A

Income before earnings in affiliated companies and income taxes 108.2 88.6 19.6 22.1

Income tax expense 36.1 26.6 9.5 35.7

Earnings in affiliated companies, net of tax 0.3 0.2 0.1 50.0

Net income 72.4 62.2 10.2 16.4

Other comprehensive income (loss), net of tax

Foreign currency translation adjustments (12.5) (7.0) (5.5) 78.6

Net gains (losses) on derivatives (2.2) 21.5 (23.7) (110.2)

Defined benefit plans, net (2.9) 0.2 (3.1) (1,550.0)

Total other comprehensive (loss) income, net of tax (17.6) 14.7 (32.3) (219.7)

Comprehensive income $ 54.8 $ 76.9 $ (22.1) (28.7)

Net sales decreased by $66.2 million, or 6.5%, in the six months ended June 30, 2023 to $959.5 million, year over year, driven primarily by lower volume, the pass-through effect of declining oil prices and unfavorable foreign currency translation adjustments.

Those were partially offset by favorable product mix in both segments and improved contractual Rubber carbon black price.

Volume decreased by 43.8 kmt to 460.8 kmt compared to the six months ended June 30, 2022.

The global economic slowdown impacted both segments.

Cost of sales

Cost of sales decreased by $82.0 million, or 10.4%, to $706.0 million and in the six months ended June 30, 2023 compared to the six

Management’s Discussion and Analysis of Financial Condition and Results of Operation

months ended June 30, 2022, primarily due to lower volume and the effect of declining oil prices.

Gross profit increased by $15.8 million, or 6.6%, to $253.5 million, and gross profit per metric ton increased by 16.8% to $550.1 year over year.

The increase was primarily driven by favorable product mix in both segments and improved contractual Rubber carbon black price, partially offset by lower volume in both segments.

Selling, general and administrative expenses

Selling, general and administrative expenses decreased by $4.5 million, or 3.8%, to $112.7 million in the six months ended June 30, 2023 compared to the six months ended June 30, 2022, primarily driven by lower freight costs due to lower volume in both segments.

Provision for income taxes

For the six months ended June 30, 2023, the Company recognized Income before earnings in affiliated companies and income taxes of $108.2 million, compared to $88.6 million in the six months ended June 30, 2022.

The provision for income taxes was an expense of $36.1 million for the six months ended June 30, 2023, and $26.6 million for the six months ended June 30, 2022.

The effective tax rate for the six months ended June 30, 2023, was 33.4%, as compared to 30.0% for the six months ended June 30, 2022.

The increase in our effective tax rate for the six months ended June 30, 2023, as compared to the six months ended June 30, 2022, was primarily attributable to the projected earnings mix by geography and tax jurisdiction as compared to the prior period.

Adjusted EBITDA (A Non-GAAP Financial Measure)

Adjusted EBITDA increased by $21.8 million, or 13.1%, from $166.6 million in the six months ended June 30, 2022 to $188.4 million in the six months ended June 30, 2023.

The increase was primarily due to favorable product mix in both segments and improved contractual Rubber carbon black price.

Those were partially offset by lower volume in both segments.

Comprehensive Income

Comprehensive income decreased by $22.1 million in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

The activities from the components of Comprehensive income are discussed below:

• $5.5 million of net unfavorable impacts of unrealized changes in foreign currency translation adjustments.

• $23.7 million of net unfavorable impacts related to financial derivative instruments primarily driven by net periodic changes in cross currency and interest rate swaps, and

• $3.1 million of net unfavorable changes in defined pension and other post-retirement benefits.

These decreases were partially offset by $10.2 million of higher net income in the six months ended June 30, 2023 compared to the six months ended June 30, 2022.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Segment Discussion

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The table below presents our segment results derived from our unaudited Condensed Consolidated Financial Statements for the periods indicated.

Three Months Ended March 31,

2023 2022 Delta

(In millions) %

Three Months Ended June 30, Six Months Ended June 30,

2023 2022 Delta 2023 2022 Delta

(In millions) % (In millions) %

Specialty Carbon Black

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Specialty Carbon Black

Net sales decreased by $15.6 million, or 8.8%, year over year, to $162.0 million for the three months ended March 31, 2023.

The net sales decrease was primarily driven by reduced sales volume in low end markets, partially offset by favorable product mix.

Volume decreased by 12.6 kmt, or 19.2%, year over year, to 53.0 kmt for the three months ended March 31, 2023.

Volumes were lower primarily due to the economic slowdown in all major ends markets and price competition.

Gross profit, for the three months ended March 31, 2023, decreased by $5.5 million, or 9.5%, year over year, to $52.1 million, primarily due to improved price, favorable timing benefits and product mix, partially offset by lower sales volume.

Year over year, Adjusted EBITDA for the three months ended March 31, 2023 decreased by $5.2 million, or 12.2%, to $37.3 million, primarily driven by volume reduction, partially offset by improved gross profit margins.

Orion Engineered Carbons S.A.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

For the three months ended March 31, 2023, Adjusted EBITDA margin decreased by 90 basis points, year over year, to 23.0%.

Net sales decreased by $32.4 million, or 17.8%, year over year, to $149.5 million and decreased by $48.0 million, or 13.4%, year over year, to $311.5 million for the three and six months ended June 30, 2023, respectively.

The net sales decrease in both comparative periods was primarily driven by reduced volume and oil prices.

Volume decreased by 6.1 kmt, or 10.2%, year over year, to 53.6 kmt and decreased by 18.7 kmt, or 14.9% year over year, to 106.6 kmt for the three and six months ended June 30, 2023, respectively.

Volumes in both comparative periods were lower primarily due to weakness in most end-markets.

Gross profit decreased by $18.0 million, or 29.7%, year over year, to $42.6 million, and decreased by $23.5 million, or 19.9%, year over year, to $94.7 million for the three and six months ended June 30, 2023, respectively.

The gross profit decrease in both comparative periods was primarily driven by the global economic slowdown, which resulted in lower volume.

Adjusted EBITDA decreased by $15.5 million, or 34.1%, year over year, to $29.9 million, and decreased by $20.7 million, or 23.5%, year over year, to $67.2 million for the three and six months ended June 30, 2023, respectively.

The decrease in both comparative periods was primarily due to the global economic slowdown, which resulted in lower volume, product mix and decreased cogeneration revenue, a byproduct.

End-market pricing was stable.

Adjusted EBITDA margin decreased by 500 basis points, year over year, to 20.0% and by 290 basis points, year over year, to 21.6% for the three and six months ended June 30, 2023, respectively.

Rubber Carbon Black

Net sales increased by $31.8 million, or 10.4%, year over year, to $338.7 million for the three months ended March 31, 2023.

The increase was primarily due to contractual price increases, partially offset by the lower volume.

Volume decreased by 7.1 kmt, or 3.8%, year over year, to 180.5 kmt for the three months ended March 31, 2023 due to timing of customer shutdowns.

Gross profit increased by $24.0 million, or 39.8%, year over year, to $84.3 million for the three months ended March 31, 2023.

The increase was primarily driven by improved contractual price and favorable product mix, partially offset by lower volume.

Higher margins resulted from price increases to recover environmental and reliability-related Capital expenditures.

Adjusted EBITDA increased by $23.1 million, or 56.8%, year over year, to $63.8 million for the three months ended March 31, 2023.

The increase was primarily due to contractual price improvement, which resulted in improved gross profit margins, partially offset by lower volume.

For the three months ended March 31, 2023, Adjusted EBITDA margin rose 550 basis points to 18.8%, year over year.

Net sales decreased by $50.0 million, or 13.9%, year over year, to $309.3 million and decreased by $18.2 million, or 2.7%, year over year, to $648.0 million for the three and six months ended June 30, 2023, respectively.

The decrease in both comparative periods was primarily due to lower volume and oil prices, partially offset by improved contractual Rubber carbon black price and favorable product mix.

Volume decreased by 18.0 kmt, or 9.4%, year over year, to 173.7 kmt and decreased by 25.1 kmt, or 6.6%, year over year, to 354.2 kmt, for

Management’s Discussion and Analysis of Financial Condition and Results of Operation

the three and six months ended June 30, 2023, respectively due to the global economy slowdown in both comparative periods.

Gross profit increased by $15.3 million, or 25.8%, year over year, to $74.5 million, and increased by $39.3 million, or 32.9%, to $158.8 million for the three and six months ended June 30, 2023, respectively.

The increase in both comparative periods was primarily due to improved contractual price and favorable product mix.

Adjusted EBITDA increased by $19.4 million, or 51.1%, year over year, to $57.4 million, and increased by $42.5 million, or 54.0%, to $121.2 million for the three and six months ended June 30, 2023.

The increase was primarily due to contractual base price improvement, which resulted in improved gross profit margins, partially offset by lower volume and decreased cogeneration revenue, a byproduct.

For the three and six months ended June 30, 2023, Adjusted EBITDA margin rose 800 basis points to 18.6%, year over year, and 690 basis points to 18.7%, year over year, respectively.

Liquidity and Capital Resources

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The tables below present our historical cash flows derived from our unaudited Condensed Consolidated Financial Statements for the periods indicated.

Three Months Ended March 31,

Six Months Ended June 30,

(In millions)

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Net cash provided by (used in) financing activities (120.7) 138.1

Net cash provided by operating activities during the three months ended March 31, 2023 was $108.1 million.

Net cash provided by operating activities during the six months ended June 30, 2023 was $206.2 million.

The cash provided by operating activities primarily reflects changes in working capital and higher Net income.

Change in working capital includes $68.9 million sale of certain accounts receivables, discussed in Note D.

Change in working capital includes $194.1 million sale of certain accounts receivables during 2023, discussed in Note D.

Debt and Other Obligations.

Net cash used in investing activities in the three months ended March 31, 2023 amounted to $30.5 million.

Net cash used in investing activities in the six months ended June 30, 2023 amounted to $69.1 million.

These expenditures were composed of a combination of safety, maintenance-related and growth investments, as well as $19.4 million of expenditures associated with our ongoing efforts to install emissions reduction technology to meet EPA requirements in the U.S.

Net cash used in financing activities during the three months ended March 31, 2023 amounted to $62.5 million.

These outflows primarily consisted of $32.9 million related to repayment of our ancillary credit facilities and $29.3 million for repurchase of common stock under the Stock Repurchase Program.

Net cash used in operating activities for the three months ended March 31, 2022, amounted to $27.8 million.

The cash used in operating activities primarily reflects changes in working capital, partially offset by higher net income.

Net cash used in investing activities for the three months ended March 31, 2022, amounted to $48.8 million.

Net cash used in financing activities during the six months ended June 30, 2023 amounted to $120.7 million.

These outflows primarily consisted of $62.8 million related to the reduction of other short-term debt, $49.5 million for repurchase of common stock under the Stock Repurchase Program and $12.0 million, net related to repayment of our ancillary credit facilities.

Net cash used in operating activities for the six months ended June 30, 2022, amounted to $50.9 million.

The cash used in operating activities primarily reflects changes in working capital and lower Net income.

Net cash used in investing activities for the six months ended June 30, 2022, amounted to $108.7 million.

These expenditures were comprised of a combination of safety, maintenance-related, and growth investments, as well as expenditures associated with our ongoing efforts to install emissions reduction technology to meet EPA requirements in the U.S.

Net cash provided by financing activities for the three months ended March 31, 2022, amounted to $51.4 million.

Cash inflows during the three months of $52.5 million were primarily related to net drawings under our senior secured revolving credit facilities (“RCF”), partially offset by scheduled debt repayments.

Orion Engineered Carbons S.A.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

Net cash provided by financing activities for the six months ended June 30, 2022, amounted to $138.1 million.

Cash inflows during the six months of $126.1 million were primarily related to net drawings under our senior secured revolving credit facilities (“RCF”), $17.2 million borrowings to partially finance our Huaibei facility in China from Bank of China and $7.7 million of short-term working capital borrowings in Korea, partially offset by scheduled debt repayments.

Sources of Liquidity

Our principal sources of liquidity are the net cash generated (i) from operating activities, primarily driven by our operating results and changes in working capital requirements and (ii) from financing activities, primarily driven by borrowing amounts available under our committed multicurrency, senior secured RCF and related ancillary facilities, various uncommitted local credit lines, and, from time to time, term loan borrowings and Accounts receivable factoring.

We believe our anticipated future operating cash flow, the capacity under our existing credit facilities and uncommitted bilateral lines of credit, along with access to surety bonds, will be sufficient to finance our planned capital expenditures, settle our commitments and contingencies, and address our normal anticipated working capital needs for the foreseeable future.

As of March 31, 2023, the company had total liquidity of $344.0 million, including cash and equivalents of $76.8 million, $196.8 million availability under our revolving credit facility, including ancillary lines, $23.2 million undrawn on the Term-loan for Huaibei, China, and $47.2 million of capacity under other available credit lines.

Management’s Discussion and Analysis of Financial Condition and Results of Operation

We believe our anticipated future operating cash flows, the capacity under our existing credit facilities and uncommitted bilateral lines of credit, along with access to surety bonds, will be sufficient to finance our planned Capital expenditures, settle our commitments and contingencies, and address our normal anticipated working capital needs for the foreseeable future.

As of June 30, 2023, the company had total liquidity of $339.6 million, including cash and equivalents of $77.3 million, $205.0 million availability under our revolving credit facility, including ancillary lines, $16.2 million undrawn on the Term-loan for Huaibei, China, and $41.1 million of capacity under other available credit lines.

Net debt was $782.7 million, and Net leverage was 2.34x.

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The following table sets forth the principal components of our Net working capital as of the dates indicated.

March 31, 2023 December 31, 2022

June 30, 2023 December 31, 2022

(In millions)

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Conversely, decreases in the cost of raw materials lead to a decrease in our Net working capital requirements over the same period of time.

Our Net working capital decreased from $461.6 million as of December 31, 2022, to $421.8 million as of March 31, 2023.

The components of working capital were:

Our Net working capital decreased from $461.6 million as of December 31, 2022, to $367.9 million as of June 30, 2023.

The drivers of the changes in working capital over the periods were:

• Accounts receivable, net —Improved payment terms and accounts receivables factoring of certain customers.

Debt and Other Obligations to the accompanying Condensed Consolidated Financial Statements for further information related to the Company’s factoring agreements.

• Inventories, net —Lower oil prices and decrease in production to due to lower demand.

• Accounts payable —Remained flat.

• Inventories, net —Lower oil prices and a decrease in production due to lower demand.

• Accounts payable —Lower oil prices was the primary driver.

Capital expenditures (A Non-GAAP Financial Measure)

We define Capital expenditures as cash paid for the acquisition of property, plant and equipment.

We plan to finance our capital expenditures with cash generated by our operating activities and/or utilizing existing debt capacity.

We plan to finance our Capital expenditures with cash generated by our operating activities and/or by utilizing existing debt capacity.

We currently do not have any material commitments to make Capital expenditures and do not plan to make Capital expenditures outside the ordinary course of our business.

Off-Balance Sheet Arrangements

As of March 31, 2023, we did not have any off-balance sheet arrangements.

Orion Engineered Carbons S.A.

As of June 30, 2023, we did not have any off-balance sheet arrangements.

Cautionary Statement for the Purposes of the “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995

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• our expectation that the markets we serve will continue to remain stable or grow.

• our ability to mitigate the impacts of the outbreak of COVID-19 and variances thereof.

All these forward-looking statements are based on estimates and assumptions that, although believed to be reasonable, are inherently uncertain.

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• our ability to negotiate with counterparties on terms satisfactory to us, the satisfactory performance by such counterparties of their obligations to us, as well as our ability to meet our performance obligations towards such counterparties;

Orion Engineered Carbons S.A.

• our ability to realize benefits from planned plant capacity expansions and site development projects and impacts of potential delays to such expansions and projects;

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• any changes in international and local economic conditions, including with regard to the dollar and the euro, dislocations in credit and capital markets and inflation or deflation;

• the effects of the COVID-19 pandemic on our business and results of operations;

• the potential impairments or write-offs of certain assets;

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• any challenges to our decisions and assumptions in assessing and complying with our tax obligations;

• the potential difficulty in obtaining or enforcing judgments or bringing legal actions against Orion Engineered Carbons S.A.

• the potential difficulty in obtaining or enforcing judgments or bringing legal actions against Orion S.A.

(a Luxembourg incorporated entity) in the U.S.

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Quantitative and Qualitative Disclosures About Market Risk

Information about market risks for the period ended March 31, 2023 does not differ materially from that discussed under “ Item 7A” in our 2022 Form 10-K.

Information about market risks for the period ended June 30, 2023 does not differ materially from that discussed under “ Item 7A” in our 2022 Form 10-K.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis