# Dear Fellow
Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_OEC_2021/NYSE_OEC_2021.mmd` · pages 3-9_

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Dear Fellow
Shareholders

Corning Painter – Chief Executive Officer

Despite challenges that continued throughout the year and into 2022, such as supply chain issues, rising raw materials costs and shifting demand for our products, the team never wavered and ensured that we did not let our key stakeholders down. We did it for ourselves, our families, our customers, and for you, our shareholders.

## INVESTING FOR GROWTH

We are at an inflection point. We have set the stage to increase capacity in growth markets, with an emphasis on higher margin, differentiated products. We are also at a point where, as our EPA investments are winding down, we will generate discretionary cash flow in amounts to support investments in our growth projects, maintain our plants, and provide returns to shareholders within our capital allocation framework.

The largest growth in demand for carbon black in the coming years is widely projected to be in Asia. To fulfill that demand, we announced the groundbreaking of an additional Chinese facility in Huaibei in the eastern province of Anhui. The facility, which is expected to be completed in 2023, is projected to have an initial production capacity of 65-70 kilotons per year and provide supply for specialty and high-end rubber grades of products.

We also completed the 25-kiloton expansion at our Ravenna, Italy facility in late 2021. This unique expansion in western Europe supports both growth in our specialty markets and begins to support our customers' growing desire to leverage local, environmentally compliant capacity.

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Revenue, up from $1.1B in 2020

$134.7M

Net Income, up from $18.2M in 2020

$2.22

Basic EPS, up from \(0.30 basic EPS in 2020

## INVESTING FOR A SUSTAINABLE FUTURE

We view sustainability as all-encompassing and key to our success as a corporation. Investing in sustainability is core to our growth strategy. Beyond completing our most complicated and expensive air emissions project to date, as well as additional cogeneration projects, we continued to invest in our communities and employees. When disasters struck, we were there to financially support the communities where we operate, as well as our employees and their families. From hurricanes and historic freezes, to record floods, as a responsible corporate citizen, we stepped up to help.

Importantly, in 2021, we issued a sustainability-linked term loan, which was one of the first loans of its type issued in the U.S., clearly aligning the commitments we have made to our stakeholders with the financing costs of the company. The transaction was well received by the investor communities in both European and U.S. markets, reflecting confidence in our financial strength, future business performance and long-term strategy.

Our customers are clear that they are looking for partners to collaborate with to help them achieve their sustainability goals. Among several collaborations, we are the only carbon black producer that is part of the EU-funded BlackCycle project, a public-private partnership seeking a way to save the environment from billions of tons of waste by recycling the 1.6 billion tires that are discarded every year worldwide. The Michelin-led initiative is researching ways to produce new tires with sustainable carbon black produced by using circular feedstock from pyrolyzed old tires. In late 2021, the consortium announced it produced the world's first sustainable carbon black for tires with a carbon black furnace reactor using oils derived from the end-of-life pyrolysis process. We believe the advent of a circular economy is a strategic opportunity for our industry, and we plan to be the innovation partner leading the way to support our customers' and our own sustainability success.

We also initiated a project with the European Union-funded HiQ-CARB project to design and scale up innovative battery materials – including Orion's high-purity, conductive acetylene black – with very low carbon footprints to meet rapidly expanding market demands. The project's overarching mission is to combat climate change by achieving  \( CO_{2} \)  neutrality. Reaching this target by 2050 requires dedicated innovation and transition across a number of industries, of which energy and mobility are expected to advance faster than others. Combined with our global footprint, ability to innovate and deep customer relationships, we are the right partner to enable our customers' sustainable future.

Our investments in high-margin growth projects and innovative, sustainable solutions in our industry will result in a fundamentally higher earnings capacity and intrinsic shareholder value.

## LOOKING FORWARD

Bottom line, we continue to remain agile during a period of evolving global conditions. We are committed to investing in capacity expansions and other projects to increase profitability. At the same time, we will operate with a keen understanding that we are a responsible global corporate citizen operating for the future success of all the stakeholders we serve.

Sincerely,

![](images/4_0.jpg)

Corning Painter
Chief Executive Officer