Orion Tightens 2026 Adjusted EBITDA Range After Third-Quarter Cash

The Tip Desk · November 4, 2026 · 3 min read

The carbon black maker generated $46 million of free cash flow in the third quarter and lifted its full-year Adjusted EBITDA midpoint.

Orion S.A. (OEC) tightened its 2026 Adjusted EBITDA outlook to $190 million to $200 million and raised the midpoint after a third quarter in which working capital and a lower capital-expenditure run rate produced $46 million of free cash flow.

The specialty chemical company reported third-quarter net sales of $472.8 million, a 5% increase from a year earlier, after a 7% year-over-year rise in the second quarter. The company said the gain was driven primarily by a 13% favorable pass-through from higher oil prices, partly offset by 5% lower volumes and 2% lower pricing, mainly on annual contracts in Rubber Carbon Black.

Consolidated Adjusted EBITDA was $66.8 million, up from $58.2 million in the second quarter. The company said the quarter included an approximate $17 million net benefit from the timing of annual European emission allowances that were finalized and issued during the period, largely offsetting accruals recognized earlier in the year. Year-to-date Adjusted EBITDA reached $171 million, which Orion said kept it on track for a full-year outlook that already contemplated those allowances and accruals.

Specialty Carbon Black net sales were $166.4 million, down from $184.8 million in the second quarter. The company said Western demand moderated after a strong second quarter, particularly in the polymers end market, where customers destocked. Segment Adjusted EBITDA was $25.4 million, down from $39.0 million, after that unit had posted 44% higher Adjusted EBITDA versus the first quarter. The company attributed the year-over-year EBITDA increase of $3.8 million, or 18%, to European emission-allowance timing and a $6.1 million raw-material pass-through, plus $4.6 million of improved product and customer mix, partly offset by $8.5 million from reduced volumes in EMEA and the Americas.

Rubber Carbon Black net sales were $306.4 million. The company said the 5% year-over-year increase reflected a 16% oil-price pass-through, partly offset by 4% lower volumes in the Americas and Asia Pacific, 4% lower pricing on 2026 annual contracts and 3% unfavorable customer mix. Rubber Adjusted EBITDA was $41.4 million, up from $19.2 million in the second quarter. Orion said the year-over-year increase of $5.3 million, or 15%, came from emission-allowance timing and a $21.3 million raw-material pass-through, partly offset by $10.6 million of lower pricing and $7.9 million of adverse regional mix.

Operating cash flow was $58 million, versus $27 million in the second quarter, as working-capital initiatives generated $28 million of cash despite higher feedstock costs. Capital expenditures were $12 million, a $14 million sequential reduction. Orion said it expects to reduce full-year capital expenditures by $70 million. Net debt was $918 million, with a net debt-to-trailing twelve-month Adjusted EBITDA ratio of 4.1x and liquidity of $193 million, versus a 4.4x ratio and $178 million of liquidity at the end of the second quarter.

Chief Executive Officer Corning Painter said third-quarter Adjusted EBITDA of $67 million and free cash flow of $46 million were encouraging given the macro backdrop and feedstock-cost volatility, and that the company is on track to deliver on its full-year earnings outlook even though moderating tire imports have not yet produced a tangible recovery in local tire manufacturing in key North American and European regions. The company said it is evaluating its production network, with a focus on underperforming assets.

Painter said that although global oil prices have not yet moderated as anticipated, the company still expects to generate positive free cash flow for the full year. While early in 2027 budgeting and with Rubber contract negotiations still progressing, Orion said it anticipates improved Adjusted EBITDA next year, which, coupled with an approximate $20 million capex reduction, is expected to drive positive free cash flow again in 2027.