Orion S.A. 10-Q

Item 1A. Risk Factors The risk factors set forth below update, and should be read together with, the risk factors described in our Annual Report in Form 10-K for the year ended December 31, 2022. Risks Related to Our Business Our business, financial condition and results of operations have been and could in the future be adversely affected by disruptions in the carbon black oil and natural gas supplies, including disruptions caused by the ongoing conflicts between Russia and Ukraine and Israel and Hamas. The impacts of war and other geopolitical events, including but not limited to Russia’s invasion of Ukraine and Hamas’ attack on Israel and the resulting war, are difficult to predict. For example, the conflict in Ukraine has previously caused, and may continue to cause, volatility in crude oil and natural gas prices. The responses of countries and political bodies to Russia’s actions in Ukraine, the larger overarching tensions, and Ukraine’s military defenses and the potential for wider conflict may generally increase energy market volatility, have severe adverse effects on regional and global economic markets and cause volatility in energy and other product prices. The sanctions, shipping disruptions, collateral war damage, and the potential continuation or expansion of the conflict between Russia and Ukraine, or the conflict between Hamas and Israel, could further disrupt the availability of crude oil and natural gas supplies. These conflicts could also have other impacts on our operations, including due to increased cyberattacks, which governmental and non-governmental entities have warned, have become more frequent as part of the Russia-Ukraine conflict. Furthermore, global supply chains, already disrupted by COVID-19 pandemic, may suffer further damage if the conflicts continue or escalate . The extent or length of any adverse effects of the war in Ukraine or the Hamas-Israel conflict on the supply of oil and natural gas and the quality and availability of carbon black oil is difficult to quantify. The continuation or escalation of events like the war in Russia-Ukraine war or the Hamas-Israel conflict could decrease our production volumes and margins and may adversely impact our business operations, financial condition and results of operations. The war in Ukraine has caused and may continue to cause curtailed or delayed spending by our customers’ customers, particularly in the automotive industry, and increases the risk of customer defaults or delays in payments. The Hamas-Israel conflict could adversely impact our margins. Risks Related to Indebtedness, Currency Exposure and Other Financial Matters Disruptions in credit and capital markets may make it more difficult for us and our suppliers and customers to borrow money or raise capital. Disruptions in the credit markets may result in less credit being made available by banks and other lending institutions. In 2023, the Federal Deposit Insurance Corporation (the “FDIC”) took control and was appointed receiver of certain banks in the United States, after those banks were unable to continue their operations. The banking issues in the United States also led to concerns about certain international bank groups. Although we do not hold any of our funds at these banks, if the financial institutions with which we do business enter receivership or become insolvent in the future, there is no guarantee that we would be able to access our existing cash, cash equivalents and investments, that we would be able to maintain any required letters of credit or other credit support arrangements, or that we would be able to adequately fund our business for a prolonged period of time or at all. Similarly, we cannot predict the impact that the high market volatility and instability of the banking sector more broadly could have on economic activity and our business in particular. The failure of other banks and financial institutions, and measures taken, or not taken, by governments, businesses and other organizations in response to these events could have an adverse impact on our ability to obtain financing for our business and acquisitions or to pursue other business plans or make necessary investments, which could have a material adverse effect on our business, financial condition, results of operations and cash flows. 26 Table of Contents Orion S.A. Furthermore, the inability of our customers to obtain credit facilities or capital market financing, or to access their funds, could adversely impact their ability to fund their respective businesses and perform their obligations to us, which in turn could have an adverse impact on our business, financial condition and results of operations. Additionally, recent volatility in the banking market may adversely affect our business by reducing our sales and increasing our exposure to bad debt, while the inability of our suppliers to access adequate financing may adversely affect our business by increasing prices for raw materials, energy and transportation.