Second Quarter 2017
Highlights
- Volumes decreased 8.8% to 266.6 kmt
compared to 292.4 kmt in the second quarter of 2016 with an
increase in Specialty of 2.9% offset by a decline in Rubber of
12.1% in part due to the plant closure of Ambès, France in December
2016
- Revenue in the second quarter of
2017 increased to €299.3 million compared to €247.9 million
in the second quarter of 2016 as higher feedstock costs were passed
along to customers via indexed pricing agreements and certain price
increases
- Profit (Net Income) increased to
€16.8 million compared to €16.5 million profit in the second
quarter of 2016
- Adjusted EBITDA1
increased by 1.1% to €58.4 million compared to €57.7 million in
the prior year second quarter
- Adjusted EPS1 rose to
€0.37 compared to €0.35 in the second quarter of 2016
- Specialty Carbon Black Adjusted
EBITDA decreased by 10.0% to €34.8 million in the second quarter of
2017 from a very strong level in the prior year second
quarter
- Rubber Carbon Black continued to
improve, raising Adjusted EBITDA by 23.6% from second quarter of
last year to €23.6 million
- Strong cash flow from operating
activities totaled €43.6 million
- Term Loan debt service costs were
reduced further via a renewed repricing of term loan B
debt.
1) See below for a reconciliation of non-IFRS
financial measures to the most directly comparable IFRS
measures
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 second quarter of 2017. “We
continue to execute very well in both our Specialty and Rubber
Carbon Black businesses. Our end markets have maintained a
reasonable amount of stability and are increasingly signaling
growth in our major segments. Accordingly, I am pleased to report
near-record Adjusted EBITDA of €58.4 million for our second quarter
of 2017,” said Jack Clem, Orion’s Chief Executive Officer. “I am
especially pleased with the performance of our rubber business,
which benefited from stable demand, an improving portfolio of
higher margin technical grades and the improvements in cost as a
result of our internal initiatives, including the shuttering of
capacity in France. Adjusted EBITDA for rubber grew by €4.5 million
or 23.6% in the period, more than offsetting the margin pressure we
experienced in our specialty business, which also had a very good
quarter but was up against the tough comparable of an exceptionally
strong and record breaking second quarter last year.”
“Our cash flow remains robust,” continued Mr. Clem. “Cash flow
from operations in the quarter was over €43 million, well ahead of
our ongoing capex needs, dividend coverage and interest expenses.
Moreover, we reduced our ongoing interest costs in the quarter
following the repricing of our term loans with significantly lower
rates locked in for the next several years. Finally, as planned, we
further deleveraged our balance sheet in the quarter, bringing our
net debt/LTM Adjusted EBITDA ratio down to an all-time low of
2.37x.”
ORION ENGINEERED CARBONS Q2 2017
Q2 2016 Y-o-Y Comparison Volume (in
kmt) 266.6 292.4 (25.8 ) Revenue
(EUR/Millions) 299.3 247.9 51.4 Contribution Margin (EUR/Millions)
117.9 121.4 (3.5 ) Contribution Margin per Metric Ton (EUR) (1)
442.2 415.1 27.1 Operating Result/EBIT (EUR/Millions) 34.6 34.2 0.4
Adjusted EBITDA (EUR/Millions) 58.4 57.7 0.7 Profit for the
Period/Net Income (EUR/Millions) 16.8 16.5 0.3 EPS (EUR) (2) 0.28
0.28 0.00 Adjusted EPS (EUR) (3)
0.37 0.35 0.02 Notes: (1) The change in Contribution
Margin per Metric Ton (CM/mT) between Q2 2017 and Q2 2016 reflects
the impact of certain price increases, improved mix in the
Specialty Carbon Black segment as well as a continuation in the
shift of total group volumes towards specialty and technical rubber
grades. (2) EPS calculated using profit or (loss) for the period
(Net Income) and weighted number of shares outstanding in the
respective quarter. (3) 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.
Second Quarter 2017 Overview
Volumes decreased by 25.8 kmt resulting in total volume of 266.6
kmt in the second quarter of 2017 compared to 292.4 kmt in the
second quarter of 2016. This 8.8% 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, a prolonged maintenance
turnaround on one of our facilities in the US and the earlier
referenced conversion of rubber capacity in Korea to specialty
production.
While volumes in the quarter declined, revenue increased by
€51.4 million, or 20.8%, to €299.3 million in the second quarter of
2017 from €247.9 million in the second quarter of 2016, reflecting
mainly the pass through of higher feedstock costs to customers with
agreements that link price to the cost of feedstock. Improvements
in price and mix were offset by lower volumes.
Contribution Margin decreased by €3.5 million, or 2.9%, to
€117.9 million in the second quarter of 2017 from €121.4 million in
the second quarter of 2016, reflecting the impact of lower volumes
and the continued impact of negative feedstock differentials among
other factors.
Gross Profit decreased by €2.6 million to €84.3 million in the
second quarter 2017 from €86.9 million in the second quarter of
2016, in line with the development of the contribution margin.
Adjusted EBITDA increased by €0.7 million to €58.4 million in
the second quarter of 2017, or 1.1%, from €57.7 million in the
second quarter of 2016, reflecting the improvements in our cost
structure.
Quarterly Business Results
SPECIALTY CARBON BLACK
Q2 2017 Q2 2016
Y-o-Y Comparison Volume (kmt)
65.3 63.4
2.9% Revenue (EUR/Millions) 111.1 98.0 13.3%
Gross Profit (EUR/Millions) 45.0 48.8 (7.9)% Gross Profit/metric
ton (EUR) 688.8 769.8 (10.5)% Adjusted EBITDA (EUR/Millions) 34.8
38.7 (10.0)% Adjusted EBITDA/metric ton (EUR)
533.2 609.6
(12.5)% Adjusted EBITDA Margin 31.3% 39.4%
Volumes for the Specialty Carbon Black business increased by
2.9% to 65.3 kmt in the second quarter of 2017 from 63.4 kmt in the
second quarter of 2016, mainly as a result of strong growth in
Europe and the extension of sales of Specialty products from our
facility in Qingdao, China ("OECQ"). The Specialty business
continues to benefit from increased global demand and further
penetration of markets, with all segments showing strength.
Revenue of the business increased by €13.1 million, or 13.3%, to
€111.1 million in the second quarter of 2017 from €98.0 million in
the second quarter of 2016, which reflects the pass through of
higher feedstock costs, volume growth, and a stronger mix.
Gross Profit decreased by €3.8 million, or 7.9%, to €45.0
million in the second quarter of 2017 from €48.8 million in the
second quarter of 2016, reflecting higher raw material costs
partially offset by stronger volumes and a favorable product mix.
Compared to the first quarter of 2017 Gross Profit increased by
€1.3 million or 3%.
Adjusted EBITDA decreased by 10.0% to €34.8 million in the
second quarter of 2017 from €38.7 million in the second quarter of
2016, reflecting the development of Gross Profit. Adjusted EBITDA
margin was 31.3% in the second quarter of 2017 compared to 39.4% in
the second quarter of 2016, which primarily reflects higher
revenues associated with the pass through of increased feedstock
costs as well as Adjusted EBITDA development.
RUBBER CARBON BLACK Q2
2017 Q2 2016
Y-o-Y Comparison Volume (kmt)
201.3 229.0
(12.1)% Revenue (EUR/Millions) 188.3 149.9 25.6%
Gross Profit (EUR/Millions) 39.3 38.1 3.2% Gross Profit/metric ton
(EUR) 195.4 166.5 17.4% Adjusted EBITDA (EUR/Millions) 23.6 19.1
23.6% Adjusted EBITDA/metric ton (EUR)
117.1 83.3
40.6% Adjusted EBITDA Margin 12.5% 12.7%
Volumes for the Rubber Carbon Black business decreased by 12.1%
to 201.3 kmt in the second quarter of 2017 from 229.0 kmt in the
second quarter of 2016, largely as a result of the closure of the
production facility in France, an extended maintenance period at
one of our US facilities and the allocation of rubber capacity to
specialty in Asia.
Revenue increased by €38.4 million, or 25.6%, to €188.3 million
in the second quarter of 2017 from €149.9 million in the second
quarter of 2016, despite the volume decline as a result of the pass
through of higher feedstock costs to customers on indexed price
agreements, favorable foreign exchange impacts and some pricing
improvements.
Gross profit increased by €1.2 million, or 3.2%, to €39.3
million in the second quarter of 2017 from €38.1 million in the
second quarter of 2016 as a result of improved margins and
operational cost efficiency.
Adjusted EBITDA increased by €4.5 million, or 23.6%
to €23.6 million in the second quarter of 2017 from €19.1
million in the second quarter of 2016, reflecting the development
of Gross Profit and improvement in selling, general &
administration costs.
Balance Sheet and Cash Flow
As of June 30, 2017, the company had net cash of €44.3
million (comprising cash and equivalents of €48.5 million less
liabilities to local banks of €4.2 million) which was essentially
unchanged from the end of the prior quarter.
The Company’s non-current indebtedness as of June 30, 2017 was
€571.8 million composed of the non-current portion of term loan
liabilities (€579.2 million less transaction costs of €9.1 million
and €1.6 million long term debt from financial derivatives). Net
indebtedness comprising the non-current portion of term loan
liabilities of €579.2 million, €7.1 million current portion of term
loan liabilities, less net cash of €44.3 million, was €542.0
million. This represents a 2.37 times LTM Adjusted EBITDA multiple
down from 2.46 times in the previous quarter and down from 2.50
times at the end of 2016.
Cash inflows from operating activities in the second quarter of
2017 amounted to €43.6 million, primarily consisting of a
consolidated profit for the period of €16.8 million, adjusted for
depreciation and amortization of €21.8 million and the exclusion of
finance costs, net of €9.9 million affecting net income. Net
working capital increased slightly as a result of higher oil prices
during the first half of the year and totaled €200.1
million as of June 30, 2017 as compared to €181.9 million
as of December 31, 2016.
Cash outflows from investing activities in the second quarter of
2017 amounted to €17.1 million composed of capital expenditures for
improvements primarily in the manufacturing network throughout the
production system.
Cash outflows for financing activities in the second quarter of
2017 amounted to €21.1 million, consisting of a dividend payment of
€10.0 million, regular interest payments of €6.5 million and
regular debt repayment of €1.8 million as well as cash outflow from
short term financing activities.
2017 Full Year Outlook
“As we enter the year's second half, we continue to see
relatively stable to improving supply and demand dynamics in our
end markets for both the rubber and specialty businesses. There has
been some recent volatility in oil prices and a strengthening of
the euro against the dollar. As a result, we remain a bit cautious
about the impacts on our business by these kinds of moves,” stated
Mr. Clem. “Taking all of this into account, we are maintaining our
outlook for full year Adjusted EBITDA of between €220 million and
€240 million for 2017, with a mid-point assumption based on volume
growth along the current trajectory, and that oil prices, exchange
rates and feedstock impacts will be consistent with that seen
during the second quarter of 2017. We expect our cash generation to
remain robust and more than sufficient to support our capital
program and dividend policy.”
Other guidance metrics for 2017, also 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 over €80 million due to the expenditures associated with the
consolidation of the Company’s plants in 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, August 4, 2017, at 8:30 a.m. (EDT). The dial-in
details for the live conference call are as follow:
U.S. Toll Free: 1-877-407-4018 International:
1-201-689-8471 U.K. Toll Free: 0 800 756 3429 Germany Toll Free: 0
800 182 0040 Luxembourg Toll Free: 800 28 522 Luxembourg Local: 352
2786 0689
A replay of the conference call may be accessed by phone at the
following numbers through August 11, 2017:
U.S. Toll Free: 1-844-512-2921 International:
1-412-317-6671 Conference ID: 13662993
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 1,440 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 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 Outlook” and “Quarterly Business Results” sections 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.
Interim condensed consolidated income statements
of Orion Engineered Carbons S.A. for the three and six months
ended June 30, 2017 and 2016 - unaudited
Three Months Ended Jun
30, 2017
Three Months Ended Jun
30, 2016
Six Months Ended Jun 30,
2017
Six Months Ended Jun 30,
2016
In EUR k In EUR k In EUR k In EUR k
Revenue 299,333
247,886 603,645 494,136 Cost of sales
(215,043 ) (160,937 ) (429,631
) (325,603 ) Gross profit
84,290 86,949 174,014 168,533
Selling expenses (29,702 ) (28,432 ) (58,578 ) (55,278 ) Research
and development costs (4,050 ) (3,499 ) (7,983 ) (7,064 ) General
and administrative expenses (16,534 ) (16,664 ) (35,440 ) (33,616 )
Other operating income 1,917 13 2,055 1,069 Other operating
expenses (1,275 ) (4,189 ) (4,646 ) (8,957 )
Operating
result (EBIT) 34,646 34,178 69,422
64,687 Finance income 6,117 4,498 18,981 12,822
Finance costs (16,033 ) (13,215 ) (38,631 ) (30,471 ) Share of
profit or loss of joint ventures 121 56 242 177
Financial
result (9,795 ) (8,661 )
(19,408 ) (17,472 ) Profit
before income taxes 24,851 25,517 50,014
47,215 Income taxes (8,033 ) (9,027 ) (17,358 )
(17,360 )
Profit for the period 16,818 16,490
32,656 29,855 Earnings per Share (EUR per share),
basic 0.28 0.28 0.55 0.50 Weighted average number of ordinary
shares (in thousands) 59,320 59,320 59,320 59,386 Earnings per
Share (EUR per share), diluted 0.28 0.28 0.54 0.50 Weighted average
number of diluted ordinary shares (in thousands) 60,460 59,775
60,462 59,841
Interim condensed consolidated statement of
financial position
of Orion Engineered Carbons S.A. as at
June 30, 2017 and December 31, 2016 – unaudited
Jun 30, 2017 Dec 31, 2016
A S S E T S In EUR k In EUR k Non-current
assets Goodwill 48,512 48,512 Other intangible assets 67,301 77,984
Property, plant and equipment 370,243 387,727 Investment in joint
ventures 4,899 4,657 Other financial assets 1,292 2,178 Other
assets 3,366 2,858 Deferred tax assets 46,072 60,955
541,685 584,871 Current assets Inventories 125,216
114,351 Trade receivables 202,315 190,503 Other financial assets
4,490 5,264 Other assets 20,262 21,985 Income tax receivables 3,483
7,704 Cash and cash equivalents 48,546 73,907 404,312
413,714
945,997 998,585
Jun 30, 2017 Dec 31, 2016 E Q U I T Y A N D
L I A B I L I T I E S In EUR k In EUR k Equity
Subscribed capital 59,635 59,635 Treasury shares (3,415 ) (3,415 )
Reserves (25,521 ) (47,964 ) Profit or loss for the period 32,656
44,626 63,355 52,882 Non-current
liabilities Pension provisions 54,057 54,736 Other provisions
12,504 13,747 Financial liabilities 571,835 613,659 Other
liabilities 96 425 Deferred tax liabilities 34,229 44,557
672,721 727,124 Current liabilities Other
provisions 40,447 60,056 Liabilities to local banks 4,229
-
Trade payables 127,452 122,913 Other financial liabilities 4,162
5,465 Income tax liabilities 16,850 16,759 Other liabilities 16,781
13,386 209,921 218,579
945,997
998,585
Interim condensed consolidated statements
of cash flows of Orion Engineered Carbons S.A. for the three
and six months ended June 30, 2017 and 2016 – unaudited
Three Months Ended Jun
30, 2017
Three Months Ended Jun
30, 2016
Six Months Ended Jun 30,
2017
Six Months Ended Jun 30,
2016
In EUR k In EUR k In EUR k In EUR k
Profit for the period 16,818 16,490
32,656 29,855 Income taxes 8,033
9,027 17,358 17,360 Profit before
income taxes 24,851 25,517 50,014
47,215 Depreciation and amortization of intangible
assets and property, plant and equipment 21,832 19,975 42,720
39,552 Other non-cash expenses 1,462 401 3,236 314
(Increase)/decrease in trade receivables (3,867 ) (6,877 ) (19,291
) 2,496 (Increase)/decrease in inventories (2,656 ) (10,352 )
(14,583 ) 6,020 Increase in trade payables 6,189 13,138 10,535
4,269 Increase/(decrease) in provisions (1,531 ) 2,582 (20,173 )
(5,939 ) Increase/decrease in other assets and liabilities that
cannot be allocated to investing or financing activities (4,271 )
(1,796 ) 610 1,962 Finance income (11,115 ) (4,498 ) (18,981 )
(12,822 ) Finance costs 21,031 13,215 38,631 30,471 Cash paid for
income taxes (8,300 ) (8,550 ) (11,562 ) (10,702 )
Cash
flows from operating activities 43,625 42,755
61,156 102,836 Cash paid for the acquisition
of intangible assets and property, plant and equipment (17,053 )
(14,945 ) (34,388 ) (38,016 )
Cash flows from investing
activities (17,053 ) (14,945 )
(34,388 ) (38,016 )
Share buyback
-
-
-
(3,415 ) Repayments of borrowings (1,786 ) (1,810 ) (23,073 )
(23,608 ) Cash inflows related to current financial liabilities
4,602 360 10,323 360 Cash outflows related to current financial
liabilities (6,123 ) (127 ) (6,123 ) (394 ) Interest and similar
expenses paid (10,224 ) (9,702 ) (16,344 ) (18,899 ) Interest and
similar income received 2,446 83 4,089 346 Dividends paid to
shareholders (10,000 ) (10,000 ) (20,000 ) (19,994 )
Cash flows from
financing activities (21,085 ) (21,196
) (51,128 ) (65,604 )
Change in cash 5,487 6,614 (24,360
) (784 ) Change in cash resulting from
exchange rate differences (2,311 ) 1,320 (1,001 ) 462 Cash and cash
equivalents at the beginning of the period 45,370 57,005 73,907
65,261
Cash and cash equivalents at the end of the
period 48,546 64,939 48,546 64,939
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 MonthsEnded Jun 30,
For the Six MonthsEnded Jun 30,
2017 2016 2017 2016
Profit or (loss) for the period 16,818 16,490
32,656 29,855 Add back Income taxes 8,033 9,027
17,358 17,360
Profit before taxes 24,851
25,517 50,014 47,215 Add back finance costs
16,033 13,215 38,631 30,471 Add back share of profit of joint
ventures (121 ) (56 ) (242 ) (177 ) Add back other finance income
(6,117 ) (4,498 ) (18,981 ) (12,822 )
Earnings before taxes and
finance income/costs (operating result (EBIT)) 34,646
34,178 69,422 64,687 Add back depreciation,
amortization and impairment of intangible assets and property,
plant and equipment 21,832 19,975 42,720 39,552
EBITDA
56,478 54,153 112,142 104,239 Add back
share of profit of joint venture 121 56 242 177 Add back
restructuring expenses 289
-
667
-
Add back consulting fees related to Group strategy (1) 745 1,517
969 1,766 Add back long term incentive plan 1,462 400 2,985 915 Add
back other adjustments (2) (726 ) 1,608 174 4,606
Adjusted
EBITDA 58,369 57,734 117,179
111,703
(1) Consulting fees related to the Group strategy include
external consulting fees from establishing and implementing our
operating, tax and organizational strategies.
(2) Other adjustments include income in the three months ended
June 30, 2017 related to a reimbursement following a successful
objection against reassessed real estate transfer taxes in Germany
of EUR 1.3 million, primarily offset by costs in association with
our EPA enforcement action of EUR 0.4 million. In addition to the
real estate transfer tax reimbursement of EUR 1.3 million other
adjustments in the six months ended June 30, 2017 include costs in
association with our EPA enforcement action of EUR 1.2 million.
Other adjustments in the three months ended June 30, 2016 primarily
relate to costs of EUR 0.9 million in association with the OECQ
integration and costs of EUR 0.5 million in connection with our EPA
enforcement action. Other adjustments in the six months ended June
30, 2016 primarily relate to costs of EUR 2.8 million in
association with our EPA enforcement action, EUR 1.1 million in
connection with the OECQ integration as well as EUR 0.5 million
related to expenses recorded for the deductible of insurance claims
arising from the flooding in our Orange, Texas plant.
Reconciliation of Adjusted EPS to
EPS
Adjusted EPS Three Months EndedJun 30, Six Months
EndedJun 30, in EUR k 2017 2016 2017
2016 Profit for the period 16,818 16,490 32,656
29,855 Long Term Incentive Plan (LTIP) 1,462 400 2,985 915 Add back
consulting fees, restructuring expenses and other adjustments 308
3,125 1,810 6,372 Add back amortization of acquired intangible
assets 3,277 3,261 6,555 6,523 Add back foreign exchange rate
impacts to financial result 1,757 (830 ) 2,565 (4,103 )
Amortization of transaction costs 1,142 750 1,861 1,500 Release of
transaction costs due to repayment
-
36 389 297 Tax effect on add back items at 35% estimated tax rate
(2,781 ) (2,360 ) (5,658 ) (4,027 ) Adjusted profit or loss for the
period 21,983 20,872 43,163 37,333
Adjusted EPS 1
0.37 0.35 0.73 0.63 Total add
back items 5,165 4,382 10,507 7,478 Impact add back items
per share 0.09 0.07 0.18 0.13
+ Earnings per Share (EUR per
share), basic 0.28 0.28
0.55 0.50
= Adjusted EPS 1 0.37
0.35 0.73
0.63
1) Based upon weighted number of shares outstanding, which was
59,320k for the three and six months ended June 30, 2017 and
for the three months ended June 30, 2016 and 59,386k for the
six months ended June 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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20170803006523/en/
Orion Engineered Carbons S.A.Diana Downey, +1
832-445-3865Investor Relations
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