LUXEMBOURG--(BUSINESS WIRE)--Orion Engineered Carbons S.A. (“Orion” or the “Company”) (NYSE: OEC), a
worldwide supplier of specialty and high-performance carbon black, today
announced results for its third quarter of 2017. “Our two carbon black
businesses performed well this quarter even in the face of the Gulf
Coast storm and some currency headwinds. Our specialty business
continued to grow, further penetrating regional markets and expanding
its global market share, registering yet another double-digit volume
gain in the period. For our rubber business, the quarter was highlighted
by a double digit volume gain in China, although our overall volume
declined, as expected, due to the closure of our French facility in late
2016, the ongoing conversion of capacity in South Korea from more common
rubber grades to specialties and technical Rubber grades, and the impact
of hurricane Harvey on our operations as well as those of our customers.
Our Adjusted EBITDA remained healthy, coming in at €54.5 million, with
the gain in specialty, not offsetting the drop in rubber, reflecting the
negative impacts previously mentioned, some FX headwinds with the
strengthening of the euro and an unfavorable feedstock mix in the
quarter,” said Jack Clem, Orion’s Chief Executive Officer.
“Our cash flow remained robust as both the balance sheet and operating
expenses were managed well. In addition, after the close of the third
quarter, we successfully refinanced our debt,” continued Mr. Clem.
“Despite a working capital headwind caused by higher oil prices in the
quarter, cash flow from operations totaled €36 million, sufficient to
fund our ongoing capex needs, cover our strong dividend and pay our
interest expenses.”
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ORION ENGINEERED CARBONS
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Q3 2017
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|
Q3 2016
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|
Y-o-Y Comparison
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Volume (in kmt)
|
|
|
272.9
|
|
|
277.1
|
|
|
|
(4.2
|
)
|
Revenue (EUR/Millions)
|
|
|
285.1
|
|
|
259.7
|
|
|
|
25.4
|
|
Contribution Margin (EUR/Millions)
|
|
|
112.2
|
|
|
115.9
|
|
|
|
(3.7
|
)
|
Contribution Margin per Metric Ton (EUR)
|
|
|
411.3
|
|
|
418.1
|
|
|
|
(6.9
|
)
|
Operating Result/EBIT (EUR/Millions)
|
|
|
28.4
|
|
|
3.4
|
|
|
|
25.0
|
|
Adjusted EBITDA (EUR/Millions)
|
|
|
54.5
|
|
|
55.4
|
|
|
|
(0.9
|
)
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Profit for the Period/Net Income (EUR/Millions)
|
|
|
13.0
|
|
|
(3.8
|
)
|
|
|
16.8
|
|
EPS (EUR) (1)
|
|
|
0.22
|
|
|
(0.06
|
)
|
|
|
0.28
|
|
Adjusted EPS (EUR) (2)
|
|
|
0.34
|
|
|
0.33
|
|
|
|
0.01
|
|
|
Notes:
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|
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(1)
|
|
EPS calculated using profit or (loss) for the period (Net Income)
and weighted number of shares outstanding in the respective quarter.
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|
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(2)
|
|
Adjusted EPS calculated using profit (Net Income) for the respective
quarter adjusted for amortization of acquired intangible assets,
amortization of transaction costs and foreign currency effects
impacting financial results and other adjustment items and
restructuring expenses (all adjustments on a net of tax basis
assuming group tax rate) and weighted number of shares outstanding
in the respective quarter.
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Third Quarter 2017 Overview
Volumes decreased by 4.2 kmt resulting in total volume of 272.9 kmt in
the third quarter of 2017 compared to 277.1 kmt in the third quarter of
2016. This 1.5% decrease reflected stronger volumes in the Specialty
Carbon Black business, offset by lower Rubber Carbon Black volumes in
part as a result of the closure of our manufacturing facility in France,
the impact of hurricane Harvey and the ongoing conversion of capacity in
South Korea.
While volumes in the quarter declined, revenue increased by €25.4
million, or 9.8%, to €285.1 million in the third quarter of 2017 from
€259.7 million in the third quarter of 2016, reflecting mainly the pass
through of higher feedstock costs to customers with agreements that link
price to the cost of feedstock, price increases in the segments, strong
growth in the higher priced specialty segment, offset by negative
foreign exchange rate translation impacts.
Contribution Margin decreased by €3.7 million, or 3.1%, to €112.2
million in the third quarter of 2017 from €115.9 million in the third
quarter of 2016, reflecting the impact of an unfavorable feedstock mix
in Rubber and foreign exchange translation effects partially offset by
the increase in Specialty Carbon Black volumes.
Gross Profit decreased by €1.9 million to €80.9 million in the third
quarter 2017 from €82.8 million in the third quarter of 2016, consistent
with the development of the Contribution Margin, offset by positive
foreign exchange translation effects on fixed costs.
Adjusted EBITDA decreased by €0.9 million to €54.5 million in the third
quarter of 2017, or 1.7%, from €55.4 million in the third quarter of
2016, consistent with the development in Gross Profit offset by positive
foreign exchange rate translation effects relating to below margin fixed
costs.
Quarterly Business Results
SPECIALTY CARBON BLACK
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Q3 2017
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Q3 2016
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Y-o-Y Comparison
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Volume (kmt)
|
|
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66.6
|
|
|
|
59.7
|
|
|
|
11.4
|
%
|
Revenue (EUR/Millions)
|
|
|
106.5
|
|
|
|
94.7
|
|
|
|
12.4
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%
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Gross Profit (EUR/Millions)
|
|
|
44.3
|
|
|
|
43.4
|
|
|
|
2.1
|
%
|
Gross Profit/metric ton (EUR)
|
|
|
666.2
|
|
|
|
727.0
|
|
|
|
(8.4
|
)%
|
Adjusted EBITDA (EUR/Millions)
|
|
|
34.3
|
|
|
|
33.2
|
|
|
|
3.2
|
%
|
Adjusted EBITDA/metric ton (EUR)
|
|
|
515.8
|
|
|
|
556.4
|
|
|
|
(7.3
|
)%
|
Adjusted EBITDA Margin
|
|
|
32.2
|
%
|
|
|
35.1
|
%
|
|
|
|
|
|
|
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|
|
|
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|
Volumes for the Specialty Carbon Black business increased by 11.4% to
66.6 kmt in the third quarter of 2017 from 59.7 kmt in the third quarter
of 2016, mainly as a result of strong growth in Europe and North America
as well as the expansion of sales of Specialty products from our
facility in Qingdao, China. The Specialty business continues to benefit
from increased global demand and further penetration of markets, with
all regions showing strength.
Revenue of the business increased by €11.8 million, or 12.4%, to €106.5
million in the third quarter of 2017 from €94.7 million in the third
quarter of 2016, which reflects the higher volume growth and base price
increases, offset in part by a negative foreign exchange translation
impact and regionally related product mix.
Gross Profit increased by €0.9 million, or 2.1%, to €44.3 million in the
third quarter of 2017 from €43.4 million in the third quarter of 2016,
reflecting the higher volume growth partially offset by a delay in
recovering the impact of rising feedstock costs and a negative foreign
exchange rate translation impact.
Adjusted EBITDA increased by 3.2% to €34.3 million in the third quarter
of 2017 from €33.2 million in the third quarter of 2016, reflecting the
development of Gross Profit and below margin costs. Adjusted EBITDA
margin was 32.2% in the third quarter of 2017 compared to 35.1% in the
third quarter of 2016.
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RUBBER CARBON BLACK
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Q3 2017
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Q3 2016
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Y-o-Y Comparison
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Volume (kmt)
|
|
|
206.3
|
|
|
|
217.3
|
|
|
|
(5.1
|
)%
|
Revenue (EUR/Millions)
|
|
|
178.6
|
|
|
|
165.0
|
|
|
|
8.3
|
%
|
Gross Profit (EUR/Millions)
|
|
|
36.5
|
|
|
|
39.3
|
|
|
|
(7.1
|
)%
|
Gross Profit/metric ton (EUR)
|
|
|
177.0
|
|
|
|
180.9
|
|
|
|
(2.2
|
)%
|
Adjusted EBITDA (EUR/Millions)
|
|
|
20.2
|
|
|
|
22.2
|
|
|
|
(9.1
|
)%
|
Adjusted EBITDA/metric ton (EUR)
|
|
|
97.7
|
|
|
|
102.1
|
|
|
|
(4.3
|
)%
|
Adjusted EBITDA Margin
|
|
|
11.3
|
%
|
|
|
13.4
|
%
|
|
|
|
|
|
|
|
|
|
|
|
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|
Rubber industry demand remained strong during the quarter but as a
result of the closure of our manufacturing facility in France, the
impact of hurricane Harvey and the ongoing conversion of capacity in
South Korea, our volumes declined by 5.1% to 206.3 kmt in the third
quarter of 2017 from 217.3 kmt in the third quarter of 2016.
Revenue increased by €13.6 million, or 8.3%, to €178.6 million in the
third quarter of 2017 from €165.0 million in the third quarter of 2016,
as a result of the pass through of higher feedstock costs to customers
on indexed price agreements, base price increases which offset the
decline in volumes and negative foreign exchange rate translation
effects.
Gross profit decreased by €2.8 million, or 7.1%, to €36.5 million in the
third quarter of 2017 from €39.3 million in the third quarter of 2016,
as a result of an unfavorable feedstock mix, lower volumes partly
related to hurricane Harvey and some negative foreign exchange rate
translation impacts.
Adjusted EBITDA decreased by €2.0 million, or 9.1% to €20.2 million in
the third quarter of 2017 from €22.2 million in the third quarter of
2016, in line with gross profit offset by decreased below margin costs
associated with positive foreign exchange rate translation impacts on
below margin fixed costs, positive effects on costs as a result of
closing the Ambès France facility and an ongoing focus on managing
expenses. Adjusted EBITDA margin was 11.3% in the third quarter of 2017
compared to 13.4% in the third quarter of 2016 reflecting the impact of
the pass through of higher feedstock costs on revenues as well as the
Adjusted EBITDA development.
Balance Sheet and Cash Flow
The Company’s non-current indebtedness as of September 30, 2017 was
€571.3 million composed of the non-current portion of term loan
liabilities of €561.0 million (€569.1 million gross term loan
liabilities reduced by capitalized transaction costs of €8.1 million),
plus local non-current bank loans of €7.7 million and €2.6 million
non-current debt from financial derivatives.
Cash and cash equivalents amounted to €55.8 million, and less €7.0
million current portion of term loan liabilities, comprise our net cash
of €48.8 million.
Accordingly, net indebtedness was €528.0 million comprising non-current
indebtedness excluding capitalized transaction costs and excluding
non-current debt from financial derivatives (both of which are
disregarded in computing net debt under our lending agreements), less
net cash.
This represents a 2.32 times LTM Adjusted EBITDA multiple down from 2.37
times in the previous quarter and down from 2.50 times at the end of
2016. Cash inflows from operating activities in the third quarter of
2017 amounted to €35.9 million, primarily consisting of a consolidated
profit for the period of €13.0 million, adjusted for depreciation and
amortization of €20.4 million and the exclusion of finance costs, net of
€8.4 million affecting net income. Net working capital increased as a
result of higher oil prices and totaled €204.1 million as of September
30, 2017 as compared to €181.9 million as of December 31, 2016.
Cash outflows from investing activities in the third quarter of 2017
amounted to €17.2 million composed of capital expenditures for
improvements primarily in the manufacturing network throughout the
production system.
Cash outflows for financing activities in the third quarter of 2017
amounted to €10.6 million, consisting of a dividend payment of €10.0
million, regular interest payments of €6.4 million and regular debt
repayment of €1.7 million, offset by net cash inflows from other
financing activities.
2017 Full Year Outlook
“Both of our business segments have executed well in spite of the
challenges presented by currency headwinds and the impact of a very
serious storm in the U.S. which caused us property damage, serious
delays and cancelled orders. We are expecting to recover some of the
negative hurricane Harvey impacts in the fourth quarter of this year as
the related supply issues and the logistic problems of the third quarter
appear to be behind us now. Demand remains stable to good in our
regions, particularly in Europe and a recovering South America,” stated
Mr. Clem.
“We have been maintaining our Adjusted EBITDA guidance range through the
year while keeping a close watch on key external developments in our
markets, most notably oil price volatility and currency fluctuations
which if they had remained at expected levels would position us at the
midpoint of guidance. While underlying performance remains consistent
with previous expectations, currency effects have moved negatively since
our last guidance and are now expected to impact our full year
projections versus initial guidance by approximately €4 million. Taking
this into account and considering that we are otherwise performing
consistent with expectations, we are tightening our outlook for full
year Adjusted EBITDA to between €225 million and €230 million for 2017,
with a mid-point assumption based on stable volumes and the current
headwinds in oil prices and exchange rates. We see achieving the high
end of this guidance range if the above assumptions hold and our Rubber
business is able to make up the majority of the ground lost associated
directly and indirectly with hurricane Harvey.”
“We are pleased with the execution of our two business segments during
this past year and most recently while facing the challenges of the Gulf
Coast Storm. Furthermore, we see mostly positive signs regarding
supply/demand dynamics as we move into 2018. Improving economies are
pushing up demand, new tire building capacity is coming online in our
key regions, while carbon black supply remains constrained. Our
consolidation project in South Korea will start to be an upside for the
business in 2018 much as we have seen play out with our consolidation
project in Europe. We have been encouraged by the positive developments
in negotiations for the 2018 contracts with our major rubber customers.
These began somewhat earlier than normal this year and are close to
being finalized. Our specialty segment is planning yet another strong
year of above market growth based on our strategy of penetrating
regional markets while expanding our portfolio of advanced and premium
products. And with our new debt package, we are well positioned to
support the needs of our business.”
Other guidance metrics for 2017, also mostly unchanged, include shares
outstanding of 59.3 million, an underlying tax rate of about 35% on
pre-tax income, and capital expenditures reflecting an operating run
rate consistent with the past of approximately €60 million but depending
on the timing of certain expenditures potentially rising to
approximately €75 million due to the expenditures associated with the
consolidation of our plants in South Korea. Depreciation is estimated to
be approximately €60 million, and amortization is estimated to be
approximately €20 million (including amortization of acquired
intangibles of about €13 million) in 2017.
Conference Call
As previously announced, Orion will hold a conference call tomorrow,
Friday, November 3, 2017, at 8:30 a.m. (EDT). The dial-in details for
the live conference call are as follow:
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U.S. Toll Free:
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1-877-407-4018
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International:
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1-201-689-8471
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U.K. Toll Free:
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0 800 756 3429
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Germany Toll Free:
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0 800 182 0040
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Luxembourg Toll Free:
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800 28 522
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Luxembourg Local:
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352 2786 0689
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A replay of the conference call may be accessed by phone at the
following numbers through November 10, 2017:
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U.S. Toll Free:
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1-844-512-2921
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International:
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1-412-317-6671
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Conference ID:
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13669708
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The webcast can be accessed on the Investor Relations section of the
company’s website at: www.orioncarbons.com.
An archived recording will be available there following the webcast.
To learn more about Orion, visit the company’s website at www.orioncarbons.com.
Orion uses its website as a channel of distribution for material Company
information. Financial and other material information regarding Orion is
routinely posted on the Company’s website and is readily accessible.
About Orion Engineered Carbons
Orion is a worldwide supplier of Carbon Black. We produce a broad range
of Carbon Blacks that include high-performance Specialty Gas Blacks,
Furnace Blacks, Lamp Blacks, Thermal Blacks and other Carbon Blacks that
tint, colorize and enhance the performance of polymers, plastics, paints
and coatings, inks and toners, textile fibers, adhesives and sealants,
tires, and mechanical rubber goods such as automotive belts and hoses.
Orion runs 14 global production sites and four Applied Technology
Centers. The group has approximately 1,463 employees worldwide. For more
information visit our website www.orioncarbons.com.
Forward Looking Statements
This document contains certain forward-looking statements with respect
to our financial condition, results of operations and business,
including those in the “2017 Full Year Outlook” and “Quarterly Business
Results” sections above. These statements constitute forward-looking
statements within the meaning of Section 21E of the Securities Exchange
Act of 1934, as amended. Forward-looking statements are statements of
future expectations that are based on management’s 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.
Forward-looking statements include, among others, statements concerning
the potential exposure to market risks, statements expressing
management’s expectations, beliefs, estimates, forecasts, projections
and assumptions and statements that are not limited to statements of
historical or present facts or conditions. Some of these statements can
be identified by terms and phrases such as “anticipate,” “believe,”
“intend,” “estimate,” “expect,” “continue,” “could,” “should,” “may,”
“plan,” “project,” “predict” and similar expressions. Factors that could
cause our actual results to differ materially from those expressed or
implied in such forward-looking statements include those factors
detailed under the captions “Note Regarding Forward-Looking Statements”
and “Risk Factors” in our Annual Report on Form 20-F for the year ended
December 31, 2016 and in Note 10 to our audited consolidated financial
statements regarding contingent liabilities, including litigation. 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 for our management to predict all risk factors
and uncertainties, nor can we assess the impact of all factors on our
business or 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 - including those in the
“2017 Full Year Outlook” section above - as a result of new information,
future events or other information, other than as required by applicable
law.
Reconciliation of Non-IFRS Financial Measures
In this release we refer to Adjusted EBITDA, Contribution Margin and
Adjusted EPS, which are financial measures that have not been prepared
in accordance with International Financial Reporting Standards as issued
by the International Accounting Standards Board (“IFRS”) or the
accounting standards of any other jurisdiction and may not be comparable
to other similarly titled measures of other companies. Adjusted EBITDA
is defined as operating result (EBIT) before depreciation and
amortization, adjusted for acquisition related expenses, restructuring
expenses, consulting fees related to group strategy, share of profit or
loss of joint venture and certain other items. Adjusted EBITDA is used
by our management to evaluate our operating performance and make
decisions regarding allocation of capital because it excludes the
effects of certain items that have less bearing on the performance of
our underlying core business. Our use of Adjusted EBITDA has limitations
as an analytical tool, and you should not consider it in isolation or as
a substitute for analysis of our financial results as reported under
IFRS. Some of these limitations are: (a) although Adjusted EBITDA
excludes the impact of depreciation and amortization, the assets being
depreciated and amortized may have to be replaced in the future and thus
the cost of replacing assets or acquiring new assets, which will affect
our operating results over time, is not reflected; (b) Adjusted EBITDA
does not reflect interest or certain other costs that we will continue
to incur over time and will adversely affect our profit or loss, which
is the ultimate measure of our financial performance and (c) other
companies, including companies in our industry, may calculate Adjusted
EBITDA or similarly titled measures differently. Because of these and
other limitations, you should consider Adjusted EBITDA alongside our
other IFRS-based financial performance measures, such as consolidated
profit or loss for the period.
Contribution Margin is calculated by subtracting variable costs (such as
raw materials, packaging, utilities and distribution costs) from our
revenue. We believe that Contribution Margin and Contribution Margin per
Metric Ton are useful because we see these measures as indicating the
portion of revenue that is not consumed by such variable costs and
therefore contributes to the coverage of all other costs and profits.
Adjusted EPS is defined as profit or loss for the period adjusted for
acquisition related expenses, restructuring expenses, consulting fees
related to group strategy, certain other items (such as amortization
expenses related to intangible assets acquired from our predecessor and
foreign currency revaluation impacts) and assumed taxes, divided by the
weighted number of shares outstanding. Adjusted EPS provides guidance
with respect to our underlying business performance without regard to
the effects of (a) foreign currency fluctuations, (b) the amortization
of intangible assets which other companies may record as goodwill having
an indefinite lifetime and thus no amortization and (c) our start-up and
initial public offering costs. Other companies may use a similarly
titled financial measure that is calculated differently from the way we
calculate Adjusted EPS.
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|
|
Interim condensed consolidated income statements
|
of Orion Engineered Carbons S.A. for the three and nine months
ended September 30, 2017 and 2016 - unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
Sep 30, 2017
|
|
Three Months
Ended
Sep 30, 2016
|
|
Nine Months
Ended
Sep 30, 2017
|
|
Nine Months
Ended
Sep 30, 2016
|
|
|
|
|
In EUR k
|
|
In EUR k
|
|
In EUR k
|
|
In EUR k
|
Revenue
|
|
|
|
285,071
|
|
|
259,682
|
|
|
888,716
|
|
|
753,818
|
|
Cost of sales
|
|
|
|
(204,220
|
)
|
|
(176,929
|
)
|
|
(633,851
|
)
|
|
(502,532
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Gross profit
|
|
|
|
80,851
|
|
|
82,753
|
|
|
254,865
|
|
|
251,286
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling expenses
|
|
|
|
(28,648
|
)
|
|
(28,601
|
)
|
|
(87,226
|
)
|
|
(83,879
|
)
|
Research and development costs
|
|
|
|
(3,966
|
)
|
|
(3,654
|
)
|
|
(11,949
|
)
|
|
(10,718
|
)
|
General and administrative expenses
|
|
|
|
(15,991
|
)
|
|
(17,187
|
)
|
|
(51,431
|
)
|
|
(50,803
|
)
|
Other operating income
|
|
|
|
521
|
|
|
533
|
|
|
2,576
|
|
|
1,602
|
|
Other operating expenses
|
|
|
|
(3,581
|
)
|
|
(2,533
|
)
|
|
(7,560
|
)
|
|
(11,490
|
)
|
Restructuring expenses
|
|
|
|
(810
|
)
|
|
(27,900
|
)
|
|
(1,477
|
)
|
|
(27,900
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Operating result (EBIT)
|
|
|
|
28,376
|
|
|
3,411
|
|
|
97,798
|
|
|
68,098
|
|
|
|
|
|
|
|
|
|
|
|
|
Finance income
|
|
|
|
10,442
|
|
|
6,214
|
|
|
30,794
|
|
|
19,036
|
|
Finance costs
|
|
|
|
(18,863
|
)
|
|
(15,609
|
)
|
|
(58,865
|
)
|
|
(46,080
|
)
|
Share of profit or loss of joint ventures
|
|
|
|
121
|
|
|
121
|
|
|
363
|
|
|
298
|
|
|
|
|
|
|
|
|
|
|
|
|
Financial result
|
|
|
|
(8,300
|
)
|
|
(9,274
|
)
|
|
(27,708
|
)
|
|
(26,746
|
)
|
|
|
|
|
|
|
|
|
|
|
|
Profit before income taxes
|
|
|
|
20,076
|
|
|
(5,863
|
)
|
|
70,090
|
|
|
41,352
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
|
(7,052
|
)
|
|
2,023
|
|
|
(24,410
|
)
|
|
(15,337
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit for the period
|
|
|
|
13,024
|
|
|
(3,840
|
)
|
|
45,680
|
|
|
26,015
|
|
Earnings per Share (EUR per share), basic
|
|
|
|
0.22
|
|
|
(0.06
|
)
|
|
0.77
|
|
|
0.44
|
|
Weighted average number of ordinary shares (in thousands)
|
|
|
|
59,320
|
|
|
59,320
|
|
|
59,320
|
|
|
59,364
|
|
Earnings per Share (EUR per share), diluted
|
|
|
|
0.21
|
|
|
(0.06
|
)
|
|
0.75
|
|
|
0.43
|
|
Weighted average number of diluted ordinary shares (in thousands)
|
|
|
|
60,830
|
|
|
59,775
|
|
|
60,587
|
|
|
59,819
|
|
|
|
|
|
|
|
|
Interim condensed consolidated statement of financial position
|
of Orion Engineered Carbons S.A. as at September 30, 2017 and
December 31, 2016 – unaudited
|
|
|
|
|
|
|
|
|
|
|
Sep 30, 2017
|
|
|
Dec 31, 2016
|
ASSETS
|
|
|
In EUR k
|
|
|
In EUR k
|
Non-current assets
|
|
|
|
|
|
|
Goodwill
|
|
|
48,512
|
|
|
|
48,512
|
|
Other intangible assets
|
|
|
62,828
|
|
|
|
77,984
|
|
Property, plant and equipment
|
|
|
364,128
|
|
|
|
387,727
|
|
Investment in joint ventures
|
|
|
4,536
|
|
|
|
4,657
|
|
Other financial assets
|
|
|
1,123
|
|
|
|
2,178
|
|
Other assets
|
|
|
3,324
|
|
|
|
2,858
|
|
Deferred tax assets
|
|
|
42,320
|
|
|
|
60,955
|
|
|
|
|
526,771
|
|
|
|
584,871
|
|
Current assets
|
|
|
|
|
|
|
Inventories
|
|
|
116,561
|
|
|
|
114,351
|
|
Trade receivables
|
|
|
195,657
|
|
|
|
190,503
|
|
Other financial assets
|
|
|
3,172
|
|
|
|
5,264
|
|
Other assets
|
|
|
25,754
|
|
|
|
21,985
|
|
Income tax receivables
|
|
|
3,495
|
|
|
|
7,704
|
|
Cash and cash equivalents
|
|
|
55,763
|
|
|
|
73,907
|
|
|
|
|
400,402
|
|
|
|
413,714
|
|
|
|
|
927,173
|
|
|
|
998,585
|
|
|
|
|
|
|
|
|
|
|
|
Sep 30, 2017
|
|
|
Dec 31, 2016
|
EQUITY AND LIABILITIES
|
|
|
In EUR k
|
|
|
In EUR k
|
Equity
|
|
|
|
|
|
|
Subscribed capital
|
|
|
59,635
|
|
|
|
59,635
|
|
Treasury shares
|
|
|
(3,415
|
)
|
|
|
(3,415
|
)
|
Reserves
|
|
|
(38,047
|
)
|
|
|
(47,964
|
)
|
Profit or loss for the period
|
|
|
45,680
|
|
|
|
44,626
|
|
|
|
|
63,853
|
|
|
|
52,882
|
|
Non-current liabilities
|
|
|
|
|
|
|
Pension provisions
|
|
|
54,393
|
|
|
|
54,736
|
|
Other provisions
|
|
|
11,802
|
|
|
|
13,747
|
|
Financial liabilities
|
|
|
571,338
|
|
|
|
613,659
|
|
Other liabilities
|
|
|
94
|
|
|
|
425
|
|
Deferred tax liabilities
|
|
|
32,890
|
|
|
|
44,557
|
|
|
|
|
670,517
|
|
|
|
727,124
|
|
Current liabilities
|
|
|
|
|
|
|
Other provisions
|
|
|
44,262
|
|
|
|
60,056
|
|
Liabilities to local banks
|
|
|
—
|
|
|
|
—
|
|
Trade payables
|
|
|
108,163
|
|
|
|
122,913
|
|
Other financial liabilities
|
|
|
4,794
|
|
|
|
5,465
|
|
Income tax liabilities
|
|
|
17,547
|
|
|
|
16,759
|
|
Other liabilities
|
|
|
18,037
|
|
|
|
13,386
|
|
|
|
|
192,803
|
|
|
|
218,579
|
|
|
|
|
927,173
|
|
|
|
998,585
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Interim condensed consolidated statements of cash flows of
|
Orion Engineered Carbons S.A. for the three and nine months ended
September 30, 2017 and 2016 – unaudited
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months
Ended
Sep 30, 2017
|
|
|
Three Months
Ended
Sep 30, 2016
|
|
|
Nine Months
Ended
Sep 30, 2017
|
|
|
Nine Months
Ended
Sep 30, 2016
|
|
|
|
In EUR k
|
|
|
In EUR k
|
|
|
In EUR k
|
|
|
In EUR k
|
Profit for the period
|
|
|
13,024
|
|
|
|
(3,840
|
)
|
|
|
45,680
|
|
|
|
26,015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
7,052
|
|
|
|
(2,023
|
)
|
|
|
24,410
|
|
|
|
15,337
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Profit before income taxes
|
|
|
20,076
|
|
|
|
(5,863
|
)
|
|
|
70,090
|
|
|
|
41,352
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization of intangible assets and property,
plant and equipment
|
|
|
20,376
|
|
|
|
30,724
|
|
|
|
63,096
|
|
|
|
70,276
|
|
Other non-cash expenses
|
|
|
2,649
|
|
|
|
1,426
|
|
|
|
5,885
|
|
|
|
1,740
|
|
(Increase) in trade receivables
|
|
|
3,305
|
|
|
|
(7,177
|
)
|
|
|
(15,986
|
)
|
|
|
(4,681
|
)
|
(Increase) in inventories
|
|
|
5,557
|
|
|
|
(10,101
|
)
|
|
|
(9,026
|
)
|
|
|
(4,081
|
)
|
Increase/(decrease) in trade payables
|
|
|
(18,914
|
)
|
|
|
8,050
|
|
|
|
(8,379
|
)
|
|
|
12,319
|
|
Increase/(decrease) in provisions
|
|
|
3,359
|
|
|
|
21,456
|
|
|
|
(16,814
|
)
|
|
|
15,517
|
|
Increase/decrease in other assets and liabilities that cannot be
allocated to investing or financing activities
|
|
|
(4,460
|
)
|
|
|
3,369
|
|
|
|
(3,850
|
)
|
|
|
5,331
|
|
Finance income
|
|
|
(10,442
|
)
|
|
|
(6,214
|
)
|
|
|
(30,794
|
)
|
|
|
(19,036
|
)
|
Finance costs
|
|
|
18,863
|
|
|
|
15,609
|
|
|
|
58,865
|
|
|
|
46,080
|
|
Cash paid for income taxes
|
|
|
(4,511
|
)
|
|
|
(6,426
|
)
|
|
|
(16,073
|
)
|
|
|
(17,128
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from operating activities
|
|
|
35,858
|
|
|
|
44,853
|
|
|
|
97,014
|
|
|
|
147,689
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash paid for the acquisition of intangible assets and property,
plant and equipment
|
|
|
(17,191
|
)
|
|
|
(10,151
|
)
|
|
|
(51,579
|
)
|
|
|
(48,167
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
(17,191
|
)
|
|
|
(10,151
|
)
|
|
|
(51,579
|
)
|
|
|
(48,167
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share buyback
|
|
|
—
|
|
|
|
—
|
|
|
|
—
|
|
|
|
(3,415
|
)
|
Repayments of borrowings
|
|
|
(1,748
|
)
|
|
|
(21,796
|
)
|
|
|
(24,821
|
)
|
|
|
(45,404
|
)
|
Cash inflows related to current financial liabilities
|
|
|
8,219
|
|
|
|
6,779
|
|
|
|
18,542
|
|
|
|
7,139
|
|
Cash inflows or related to current financial liabilities
|
|
|
(4,229
|
)
|
|
|
—
|
|
|
|
(10,352
|
)
|
|
|
(394
|
)
|
Interest and similar expenses paid
|
|
|
(6,352
|
)
|
|
|
(11,827
|
)
|
|
|
(22,696
|
)
|
|
|
(30,726
|
)
|
Interest and similar income received
|
|
|
3,544
|
|
|
|
1,668
|
|
|
|
7,633
|
|
|
|
2,014
|
|
Dividends paid to shareholders
|
|
|
(10,000
|
)
|
|
|
(10,000
|
)
|
|
|
(30,000
|
)
|
|
|
(29,994
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
(10,566
|
)
|
|
|
(35,176
|
)
|
|
|
(61,694
|
)
|
|
|
(100,780
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash
|
|
|
8,101
|
|
|
|
(474
|
)
|
|
|
(16,259
|
)
|
|
|
(1,258
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Change in cash resulting from exchange rate differences
|
|
|
(884
|
)
|
|
|
270
|
|
|
|
(1,885
|
)
|
|
|
732
|
|
Cash and cash equivalents at the beginning of the period
|
|
|
48,546
|
|
|
|
64,939
|
|
|
|
73,907
|
|
|
|
65,261
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents at the end of the period
|
|
|
55,763
|
|
|
|
64,735
|
|
|
|
55,763
|
|
|
|
64,735
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
The following tables present a reconciliation of each of Adjusted EBITDA
and Adjusted EPS to the most directly comparable IFRS measure:
|
|
|
|
|
|
|
Reconciliation of profit or loss
|
|
|
In EUR k
|
|
|
In EUR k
|
|
|
|
For the Three Months Ended Sep 30,
|
|
|
For the For the Nine Months Ended Sep 30,
|
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Profit or (loss) for the period
|
|
|
13,024
|
|
|
(3,840
|
)
|
|
|
45,680
|
|
|
26,015
|
|
Add back Income taxes
|
|
|
7,052
|
|
|
(2,023
|
)
|
|
|
24,410
|
|
|
15,337
|
|
Profit or (loss) before taxes
|
|
|
20,076
|
|
|
(5,863
|
)
|
|
|
70,090
|
|
|
41,352
|
|
Add back finance costs
|
|
|
18,863
|
|
|
15,609
|
|
|
|
58,865
|
|
|
46,080
|
|
Deduction share of profit of joint ventures
|
|
|
(121
|
)
|
|
(121
|
)
|
|
|
(363
|
)
|
|
(298
|
)
|
Deduction other finance income
|
|
|
(10,442
|
)
|
|
(6,214
|
)
|
|
|
(30,794
|
)
|
|
(19,036
|
)
|
Earnings before taxes and finance income/costs (operating result
(EBIT))
|
|
|
28,376
|
|
|
3,411
|
|
|
|
97,798
|
|
|
68,098
|
|
Add back depreciation, amortization and impairment of intangible
assets and property, plant and equipment (1)
|
|
|
20,376
|
|
|
30,724
|
|
|
|
63,096
|
|
|
70,276
|
|
EBITDA
|
|
|
48,752
|
|
|
34,135
|
|
|
|
160,894
|
|
|
138,374
|
|
Add back share of profit of joint venture
|
|
|
121
|
|
|
121
|
|
|
|
363
|
|
|
298
|
|
Add back restructuring expenses (2)
|
|
|
810
|
|
|
17,603
|
|
|
|
1,477
|
|
|
17,603
|
|
Add back consulting fees related to Group strategy (3)
|
|
|
918
|
|
|
297
|
|
|
|
1,887
|
|
|
2,063
|
|
Add back long term incentive plan
|
|
|
2,649
|
|
|
1,297
|
|
|
|
5,634
|
|
|
2,212
|
|
Add back other adjustments (4)
|
|
|
1,228
|
|
|
1,972
|
|
|
|
1,402
|
|
|
6,578
|
|
Adjusted EBITDA
|
|
|
54,478
|
|
|
55,425
|
|
|
|
171,657
|
|
|
167,128
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes €10.3 million impairment of fixed assets at our Ambès,
France plant for the three and nine months ended September 30, 2016
following the decision to cease production by December 31, 2016.
|
(2) Reflecting the cost in connection with our global rubber
footprint restructuring.
|
(3) Consulting fees related to the Group strategy include external
consulting fees from establishing and implementing our operating,
tax and organizational strategies.
|
(4) Other adjustments (for items with less bearing on the underlying
performance of the Company's core business) in the three months
ended September 30, 2017 mainly relate to hurricane Harvey flooding
in our Kingwood, Texas office and Orange, Texas plant of €0.8
million and costs in connection with our EPA enforcement action of
€0.4 million. Other adjustments in the nine months ended September
30, 2017 include costs in connection with our EPA enforcement action
of €1.6 million and hurricane Harvey flooding in our Kingwood, Texas
office and Orange, Texas plant of €0.8 million, partially offset by
a reimbursement following a successful objection against reassessed
real estate transfer taxes in Germany of €1.3 million. Other
adjustments (for items with less bearing on the underlying
performance of the Company's core business) in the three months
ended September 30, 2016 primarily relate to costs of €0.7 million
in connection with our EPA enforcement action and cost of €0.5
million associated with the integration OECQ, which was acquired in
the last quarter of 2015. Another €0.6 million are related to cost
incurred during a production disruption in the Ambès, France plant.
Other adjustments in the nine months ended September 30, 2016
primarily relate to costs of €3.5 million associated with our EPA
enforcement action (including accrued expenses for penalties and
mitigation projects), €1.6 million in connection with the OECQ
integration as well as €0.5 million related to expenses recorded for
the deductible of insurance claims arising from the flooding in our
Orange, Texas plant. Another €0.6 million of expenses are related to
cost incurred during a production disruption in the Ambès, France
plant.
|
|
|
|
|
|
|
|
Reconciliation of Adjusted EPS to EPS
|
|
|
|
|
|
|
|
Adjusted EPS
|
|
|
Three Months Ended Sep 30,
|
|
|
For the Nine Months Ended Sep 30,
|
in EUR k
|
|
|
2017
|
|
2016
|
|
|
2017
|
|
2016
|
Profit for the period
|
|
|
13,024
|
|
|
(3,840
|
)
|
|
|
45,680
|
|
|
26,015
|
|
Long Term Incentive Plan (LTIP)
|
|
|
2,649
|
|
|
1,297
|
|
|
|
5,634
|
|
|
2,212
|
|
Add back consulting fees, restructuring expenses and other
adjustments
|
|
|
2,956
|
|
|
30,169
|
|
|
|
4,766
|
|
|
36,541
|
|
Add back amortization of acquired intangible assets
|
|
|
3,277
|
|
|
3,271
|
|
|
|
9,832
|
|
|
9,794
|
|
Add back foreign exchange rate impacts to financial result
|
|
|
836
|
|
|
117
|
|
|
|
3,401
|
|
|
(3,986
|
)
|
Amortization of transaction costs
|
|
|
1,147
|
|
|
750
|
|
|
|
3,008
|
|
|
2,250
|
|
Release of transaction costs due to repayment
|
|
|
—
|
|
|
378
|
|
|
|
389
|
|
|
675
|
|
Tax effect on add back items at 35% estimated tax rate
|
|
|
(3,803
|
)
|
|
(12,593
|
)
|
|
|
(9,461
|
)
|
|
(16,620
|
)
|
Adjusted profit or loss for the period
|
|
|
20,087
|
|
|
19,548
|
|
|
|
63,250
|
|
|
56,881
|
|
Adjusted EPS
1
|
|
|
0.34
|
|
|
0.33
|
|
|
|
1.07
|
|
|
0.96
|
|
|
|
|
|
|
|
|
|
|
|
|
Total add back items
|
|
|
7,063
|
|
|
23,388
|
|
|
|
17,570
|
|
|
30,866
|
|
|
|
|
|
|
|
|
|
|
|
|
Impact add back items per share
|
|
|
0.12
|
|
|
0.39
|
|
|
|
0.30
|
|
|
0.52
|
|
+ Earnings per Share (EUR per share)
|
|
|
0.22
|
|
|
(0.06
|
)
|
|
|
0.77
|
|
|
0.44
|
|
= Adjusted EPS
1
|
|
|
0.34
|
|
|
0.33
|
|
|
|
1.07
|
|
|
0.96
|
|
|
1) Based upon weighted number of shares outstanding,
which was 59,320k for the three and nine months ended September 30,
2017 and for the three months ended September 30, 2016 and 59,364k
for the nine months ended September 30, 2016.
|
|
Forward-looking Adjusted EBITDA and Adjusted EPS included in this
release are not reconcilable to their respective most directly
comparable IFRS measure without unreasonable efforts, because we are not
able to predict with reasonable certainty the ultimate amount or nature
of adjustment items in the remainder of the fiscal year. These items are
uncertain, depend on many factors and could have a material impact on
our IFRS reported results for the guidance period.