Orion S.A. Common Shares

Operator assistance during the conference, please press star and zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Wendy Wilson, Head of Investor Relations. Please go ahead.

Thank you, Ryan. Good morning, everyone, and welcome to Orion's conference call to discuss our first quarter 2024 financial results. I'm Wendy Wilson, Head of Investor Relations. With me today are Corning Painter, our Chief Executive Officer, and Jeff Gleick, our Chief Financial Officer. We issued our press release after the market closed yesterday, and we also posted a slide presentation to the investor relations portion of our website. We will be referencing this presentation during the call. Before we begin, I'd like to remind you that some of the comments made on today's call are forward-looking statements. These statements are subject to the risks and uncertainties as described in the company's filings with the SEC, and our actual results may differ from those described during the call. In addition, all forward-looking statements are made of today, May 3rd, 2024. The company is not obligated to update any forward-looking statements based on our new circumstances or revised expectations. All non-GAAP financial measures discussed during this call are reconciled to the most directly comparable GAAP measures in the table attached to our press release. I'll now turn the call over to Corning Painter.

Thank you, Wendy. Good morning, everyone, and thank you for joining our call today. We started 2024 on a strong footing with adjusted EBITDA of $85 million, our second-best Q1 behind only last year's results. More importantly, we saw underlying improvement in the business. Our specialty volume grew 19% compared with last year. At the same time, we increased our gross profit per ton from $492 in Q4 to $659 to a level more in line with normal margin levels. rubber gross profit margins of $435 per ton were well above last year's average of $409 per ton. Prior to 2022, our rubber gross profit margins typically ran in the $200 to $300 per ton range. These results clearly showed that our key markets continue to restructure, and this is the new normal from which we can build. As a result of our progress in both markets, we continue to expect 2024 to be another year of growth leading to record EBITDA. In summary, we're on track to outperform expectations in specialty and to exceed per ton margins in rubber, despite a more challenging geographic mix in both markets. Digging deeper into rubber, we expect strong demand in Europe, but weaker than expected demand in the Americas. We are confident that we can adapt to these changes with agility and remain committed to our guidance range of adjusted EBITDA at $340 to $360 million, and adjusted diluted EPS of $2.05 to $2.20 per share, up 5 and 11 percent respectively. In sustainability, we were recently notified that our EcoVidice rating has been raised from gold to platinum, the highest possible distinction. That means we are in a place amongst the top 1% of companies assessed by EcoVidice, one of the world's largest providers of business sustainability ratings. This ranking is quite prestigious, with a well-respected NGO validating our tremendous progress. A huge congratulations to the whole Orion team on this accomplishment. Thank you and well done. Looking at our two business units and starting with rubber, our customers are gaining confidence looking towards 2025. This, combined with the EU ban on Russian carbon black, which begins in less than two months, shipping challenges from Asia to Europe, the seeming end of the US trucking recession, and the industry restructuring in our value chain all makes for a very promising 2025 pricing cycle. We see customers already gearing up for the negotiations, perhaps preferring to wrap things up before the market strengthens further. Some are essentially kicking off the negotiations now, while others are in the framing stage, defining parameters for the 2025 negotiations. In terms of framing, for our part, we are open to starting early, but we want to avoid holding volume for a customer and then being left at the altar at the last moment. So, we will be stricter in enforcing time-bounded offers, utilizing volume rebates, and consider shifting production towards our specialty business to support the strengthening polymer market. In our specialty business, we advanced two significant products in Q1. First, last quarter we shared that we achieved technical milestones related to the ongoing de-bottlenecking of our high-performance and unique surface-treated gas black braids for the coatings and ink markets. I am happy to report that technical marketing and customer uptake of the additional capacity is going well, exceeding expectations. Second, last month we also announced the introduction of TAPA 10, a new conductive carbon aimed at batteries with more of a cost-based value proposition. Here, I'm happy to say this product has been qualified by a leading player in the lithium ion battery space, and commercial sales have begun. Turning to slide four. With the EPA spending behind us, we will now focus our capital allocation on more financial and shareholder rewarding ways. I see capital allocation as management's top responsibility after safety. One priority for us is strategic and profitable growth. Here, we recently celebrated the groundbreaking of our new plant in La Porte, Texas that is scheduled to be online in mid-2025. When completed, this will be the only facility in North America producing high purity, settling-based conductive additives to support the global shift to electrification. This site will produce conductive additives with about one-tenth the carbon footprint compared with alternative conductive carbon technology. As we've communicated in the past, this not only supports formulations for lithium-ion batteries, but is also an essential material in the high-voltage cables that are needed to build out electric grids around the world. With that, I would ask Jeff to provide additional insights into our financial results. Thank you, Gordon.