Orion S.A. (OEC) Earnings Call Transcript & Summary

Welcome, everyone. Back to the Credit Suisse 35th Annual Specialties and Basics Conference. I'm John Roberts from Credit Suisse. I run the U.S. Chemical Group. With us today, we have Orion Carbons, Orion Engineered Carbons, excuse me, for the fireside chat. And we have with us Corning Painter, CEO; and Jeffrey Glajch, CFO; Corning has been with Orion Carbon since 2018. And many of you will know him. He was Head of Industrial Gases at Air Products prior to that. And then Jeff has recently become CFO at Orion Engineered Carbons and was previously CFO at Graham, a leading manufacturer of heat transfer equipment. I'd like to say there are a lot of parallels between the industrial gas industry in the carbon black industry. And oftentimes, people miss that. So carbon black is not as light as air, but it's one of the least dense chemical products that we deal with and has similar local, regional, oligopolistic type structure to it. You also have large on-site customers and smaller specialty customers as well. And Corning, I think, over time is we'll talk a little bit about maybe the contracting nature of the business maybe migrates a little bit towards the industrial gas area. But let's start with any opening comments that you'd like to make Corning on either the current business conditions or addressing the group here, and then I'll get into some specific questions.

Well, first of all, I'd just like to thank you for organizing this. For those of us who don't know John really well that you would be one of the first ones out with an in-person session does not surprise me. Also we have run into each other at certain investor situations and great to see you. The only thing I would say is your logo for this I mean, elements 25, 26, you could have gone lighter in the periodic table, maybe element 6.

Yes, overrepresenting metals.

Yes. yes. Here we are. Carbon chemicals. So -- Matt. So I'd say though, if we think about the current environment right now, I think it's a very attractive time for us. I think we're at an inflection point. So we all, in my industry, had to do certain things for the EPA in terms of air emission upgrades. And the reality is we've had like zero free cash flow for several years. But this year, we've taken a step up in EBITDA. That would be the best way to improve your cash flow. And we could see ourselves coming down to the end of the EPA expenditures. We announced in our last quarterly release, there's about $50 million left, about half this year, half next year. That will be a really positive development for us. And then you layer on to that, the pricing cycle we're in right now, which is really very positive. So here I'm speaking mainly about the rubber environment. I think we'll be one of the few companies in a position to have an improvement next year over this year. And both in North America and Europe, South America, I see it as really a strong environment for us. And then our Investor Day, we laid out a pathway to earnings capacity by 2025 of about $500 million of EBITDA, pretty clear step changes in what we need to do to get from here to there. And participating in connectivity and EVs and lithium-ion batteries being, I think, a pretty exciting part of that story. I feel for Orion, like it's a really exciting time and a time of change for us. And I'm looking forward to breaking out of our current valuation and the multiple we're receiving, and I think we're sort of on the verge of something.

So I mentioned in the introduction that this is a regional business, at least on the rubber black side. Economic conditions are very different in the U.S. than Europe. And I don't know if your Korean operations are substantially impacted by China being here by, but give us a little bit more regional granularity on business conditions.

Sure. So if we turn out on rubber kind of a highlight in North America, it's just that for years, people have been onshoring tire capacity. And you could see it even most recently, there was an announcement from Hankook and from Bridgestone. We will see that demand for years, but there were ones and years past, and there's increasing demand. And basically, nobody has expanded rubber carbon black production in North America. The only thing out there is this new technology that got attracted to DoE loan guarantees, $1.04 billion, I believe. Wall Street Journal, I think, characterized it is probably about a $1.4 billion investment to get about 180KT, 180,000 tons of carbon black capacity, which the market can easily absorb. But we showed that in '25. I think Wall Street Journal suggested '26 . So a bit of an overhang there and I think it discourages investment. But all in all, if we just look at this intervening time, very, very tight supply-demand balance in North America, we disclosed at the last earnings release that we had thus far this year at that time, turned down about 15 kilotons of demand. And I think the total -- the shortfall is larger than that. So just an ongoing of the story that's been out there for several years of just the tightening market in the U.S. And then in Europe, a more complicated story. And look, it involves an element of an upside from the war in Ukraine. And I don't want to be like counting money as this horrible thing plays out. But the reality is, it has some benefits for us. So the European market was pretty heavily reliant on carbon black coming in from Europe -- I'm sorry, coming in from Russia. So let's think of about 1/3, probably about 600 kilotons of Carbon Black coming into a market of about 2,000. The interesting thing is the Russian rubber carbon black, it's still flowing. Hard to say exactly if it's the same amount as before but still largely flowing into Europe. But it's a very uncertain supply chain, as you can imagine, right? And if you're a buyer, like your biggest nightmare is you shut down your factories. So is Putin going to cut it off? Is the EU going to demand it stop? Is it going to become end consumer, unpalatable, who knows. So that the customers in Europe are highly motivated to switch. OE is down like 30% in Western Europe. I think it will recover, though clearly, in the current economic environment, underlying demand has got to be weakening also. But I still think that the European supply of rubber carbon black is going to be the supply of first choice for manufacturers in Europe. So that's a real positive for us. If we go to China, right now, I mean -- so I think China, in general, is a weak environment. And I think COVID-zero policy has just been very challenging. When you and I were let out of lockdown like we were free, but nobody really feels free in China. Probably right now, 10% of our workforce in Shanghai is locked down, right? Your apartment, somebody gets sick. You're all locked down. Chengdu, beautiful city, large city, locked down. So you don't have that same euphoria where people then went out and spent money. And now there's these issues in real estate. So I think China is got a lot of challenges. Interestingly, OE is probably one of the better segments in China. In Korea, it's not so much import or export from China back and forth. But I would say Korea probably somewhat suffers from some of the malaise that you see hanging around from the China environment. If you move to the specialty side of our business, we're not going to be immune to the business cycle. So I think we can expect a recession was going to be scored as underway at this point in Europe, you see retail sales down, that kind of thing. We'll be impacted by that. In China, I'd say, same thing that with all the zero-COVID, weaker customer demand, that will play out. Interestingly, right now, North America is probably one of the strongest end markets -- but I think you can see there's certainly a lot of things in the economy there.

Just to summarize, you'd say specialty is probably more exposed to a recession than rubber black. We wouldn't normally think of that.

Yes, yes. So I think we're going to prove this cycle in this environment that rubber is going to be a really strong foundation for us in part because right now, we're locking in price. The challenge in materials in a weak environment is people fight -- the volume goes down, people then fight for the remaining volume, pricing goes down, right? You get the worst of both things playing out. We'll lock in pricing right now. And again, I think there's just supply and demand in North America is sufficient to weather through this. And that in Europe, we're going to be the supply chain of choice.

Okay. And do we have imbalances in specialty black in Europe or especially black in Asia, that can be exported longer distances. So in addition to the demand sensitivity of a potential recession, is there a supply competitiveness issue going on as well?

I'd say with specialty, so the more premium grades are very easy to ship around the world. So like our acetylene facility in France, like hardly any of that's used in France or even Europe at this point. Most of that is exported into Asia. No problem with that. Some of the lower-end specialty products that are a little less differentiated. They don't travel as well. It's just margin versus transportation costs. So less of a dislocation, I guess, you'd say on that front. We do export some products into China right now. One of the advantages of the facility that we'll be completing later this year would just allow us to make more specialty in China for China going forward.

Great. So let's switch a little bit and talk about energy intensity here of this. So carbon black is one of the most energy-intensive chemical products out there. What's your overall earnings sensitivity to oil and gas prices. And you've got a little bit of complexity about how the exhaust gas is used in the business in terms of how your energy impact is. So tell us a little bit about the impact of higher or lower oil because oil is obviously still in. I would say, a relatively high level, but come on its way down.

Right, right So Jeff, why don't we bring you in for this?

Sure. So energy prices, as we've talked about before, have - we have a pass-through of those costs to our customers. So when they move or not, we're fully protected. We do have a little bit of overrecovery as they go up. And as you've noted, they're coming down a little bit now. So we'll have a little bit of give back there. But it's not particularly substantial. I think the bigger thought process around is energy availability. And one of the things that we talked about on our last earnings call was that there's a concern within Europe, obviously, with natural gas availability. And we tried to bracket the impact that it would have to Orion if we had to cut back our natural gas usage. So we looked and said, if the natural gas cutback was 20% across Europe, the impact to our business would be relatively small, between $0 and $1 million per month of EBITDA. If that reduction was 40% then it would be a little more substantial, certainly, it would be somewhere between $3 million and $5 million a month of EBITDA. Our expectation is that could occur, but we don't think it occurs for quite a while, probably until you get into the winter time. And perhaps it's just a few months as opposed to being an ongoing situation. But that's probably more of an issue for us than the actual level of oil or gas prices.

And it's -- obviously, it's different between rubber blacks. Rubber blacks a formulaic. Can you talk about the pass-through on the specialty black side.

Sure. So the rubber blacks, as you mentioned, our formula. On the specialty side, about 40% of our business is formulating. The other 60%, we -- is not formulaic, so we need to go to our customers and adjust our prices as energy costs change. We've been very successful doing that this year. Sometimes we'll do it as frequently as monthly and even more frequently than that. So we've been able to pass those through on those customers that are not on formulas.

And talk about the relative difference in pricing from rubber blacks, the range that's there. And then the range in specialty blacks is very wide. I don't know. I would guess like the mean and the median would be very different, right?

So if you looked at our -- so first of all, I would say to people should look at our profit per ton. The fact that we can pass through energy cost is a good thing. It's a strength about this business. But it does mean as energy costs go up, it's dilutive to our margins, if you think about margin per sales dollar. If you think about it per ton, so first of all, specialty is much more profitable. This last quarter, we showed over $1,000 per ton for specialty. We suggested people to focus more on the TTM figure, right? Where we're in the $800 range. If you think back into the rubber carbon black, so I think we were like 318. So much more profitable in there. And the range of profitability is much higher in the specialty. And so we -- you can think about it, we price to the value we create -- and in some of our grades, think about coatings, think about inks, like you were defining the product. The product is the look of it, right? Well, you're really defining that. So you're creating a lot you can get some of that value, things like lithium-ion batteries, very attractive in terms of the margins that you can attract there a little bit on the just supply-demand basis. So a much wider range, I'd say, in that area.

So there's almost a $500 per ton difference between rubber black profitability per ton and specialty black. The price range would also be in that $500 million? Or would price range differential be much more?

So much wider. So in specialty, it really depends upon the end market. The value we create. We have a number of different reactor technologies we use to make the material. We've got different raw materials. So our value proposition there is really quite different. Now at the lower end of specialty and the upper end of rubber, there can be some overlap, especially with the kind of pricing momentum that we see in rubber right now. But by and large, specialty is a very long tail on it with some pretty big bumps in the tail.

What would be our highest priced products?

So the highest priced products will be products where you're really defining it. So if you're going to think about inks, well inks are dead, who buys a newspaper. But you know what, there are food grade inks out there for pack food labeling. And if you have that in an inkjet cartridge, well, that's a pretty attractive margin. If we think about coatings. So like automotive, top coat, water-based, solvent-based refinish areas in that, that's a high area for us. Some of the connectivities are a very high area for us where you're bringing something special to the mix. So even in -- I use the example of grains of sand on our Investor Day, the point is in all of these different markets, there are niches, there are areas where there's just an opportunity to add value. I mean and I think that's kind of what specialty chemicals are about, right? They are almost by definition, always looking at smaller markets caring about them and investing time and effort to do it. You made the comparison to industrial gases before. Industrial gases are elements. Where does differentiation come from? It comes from application know-how, knowing what the customer is doing and designing something for them. Here, I mean it's even easier. It's only a lot element, carbon. It's a lot of different structures of the carbon and figuring out which structure is going to solve the need and chose for that particular customer. And I think that's another real analogy between the businesses.

It's a good place to segment to the EV opportunity in electronic grade carbon black. So I assume that would be priced at the or high end of what's here. So talk about the opportunity there. What's your activities today.

Sure. So just in summary, right? When you are a kid, you might have built an electric battery and you have a little copper plate and you put it in the electrolyte. So you can't have a plate of lithium, right? If you get exposed to air, you're going to have a fire, it's going to be big safety issue. So that's always bound up typically with carbon. And then in the electrodes, you're going to need conductive additives just to get the electrons too low. So what we're making is a conductive particle that's going into the electrode or the electrode pace that's going to form the electrode. That's what we do. We see the need for that proceeding through solid state, silicon, all these various things. So where are we in that? So in 2018, we bought from LyondellBasell in France, a plant that takes a settling and converts it into a solid carbon, a conductive carbon. Really for them to destroying steadily. And as long as these guys were in the black, that's what they did. We got the plant, not on a multiple of EBITDA. We bought it for basically what it was going to cost to build a plant like this. Obviously, we got a fair amount of know-how. We have then worked hard over the last couple of years to upgrade that plant like we have, for example, approximately triple the laboratory space in that plant. And along the way, gotten our cells qualified by lithium-ion battery makers. And then with actually the same supplier, LyondellBasell, we've announced a new project in La Porte, so the Houston Shipping canary just like really dense with chemical industry participants. Where we'll take pipeline of settling from them there as we do in France, and we'll convert that into the same conductive carbon material. And that, though, will like triple or quadruple our capacity from what we have, which I think will be a real positive for us because we have to be relevant to be able to grow with the EV market.

Is all EV, carbon black and settling black?

No. So let's talk about lithium-ion batteries. So I would say there's 2 kinds of conductive carbons that are going into them in the first place. First of all, there's carbon nanotubes and there's 3 dimensional particles. And just about all the battery manufacturers would tell you, I believe that they see a synergy in having both. In part because CNTs have more metals, ours are cleaner, CNTs are a little more conductive than we are. We have less moisture typically, we cost less than they do, blah, blah, blah, all these various straight-off. But if you also just sort of like try to picture this in your mind, having a mixture of 3-dimensional particles and a bunch of essentially 1-dimensional particles. You could see how like certain ones are going to be better for bridging certain gaps and that kind of thing. So first of all, those are in there. I don't see them in really much competition. And I think it's one where everybody gets to eat dinner. If we then think about the conductive the particle business, really, there's a Japanese player who does the high end of settling. A lot of their business is in Japan and Korea, I'd say. There's a different European player who has a conductive carbon that's in a number of the Chinese battery makers. And so really, we're an entrant into that space with this high purity of ethylene material.

What any financial expectations you'd like to give investors about the potential for the business?

Right. So we quantified when we announced the new investment that it would be about $120 million to $140 million investment in the plant and that we expected to get $40 million to $45 million of EBITDA when it's loaded. Now typically, it would take a year or 2, right, to get through these qualifications for lithium-ion batteries. They do all kinds of charge, discharge cycles, all of that. So I think we may have to wait a little while for that. On the other hand, I'd say my experience is that when things are in short supply, right, qualifications can get accelerated. So we'll just have to see what the environment is like in 2024.

Your largest competitor has 2 adjacency businesses, plastics, Masterbatch and fumed silica. Do you see Orion is a much more focused company just on your carbon black operations. Do you see adjacencies in your future?

Well, so I'd say assembling was really an adjacency for us. It's a very different kind of process. It's exothermic versus endothermic. It's using a raw material that's C2. So it's a very clean triple bond between 2 carbons, whereas our normal raw material is like C20 to C70 and a lot of other stuff can kind of come along for the ride with those. So in that case, we chose, I'd say, a near adjacency in terms of our path forward. And I think I'm not a believer in transformational acquisitions, this sort of thing. We see a lot of opportunities in this space. Let's be clear, we've had like no free cash flow for years. We're now going to have it, but we're going to be disciplined about how we move forward. And I just don't see right now the need to take like a huge step out kind of risk.

You report industrial rubber black with the rubber blacks, but I think it's more of a specialty business. Could you just talk about that middle ground that's there. And kind of is it substantially better than traditional bulk rubber black? Or is it much more closer to the specialty business?

Right. So again, the upper end of rubber, I remember listening to Jack Clem on an earnings call before I to this company talking about the upper end of rudder, it can be better than the lower end of specialty. What was true then is true now. The up end of rubber tends to be what we refer to in our documents is mechanical rubber goods or MRG. So this is like belts, hoses, that weather stripping around the door of your car, the frame of your trunk, a belt, a car belt in a mine, this sort of thing, that typically carries a premium to other areas. In the car area, right? It's highly tied to new car production. So the interesting thing about that right now is it's like down in our mix because OE production is down so much with all the supply chain issues. If we move forward from here, I'd say -- so first of all, is it chips? Is it wire hire? They seem to be constantly finding the next little constraint in that space. 30% down in Western Europe OE production right now. Clearly -- that's supply chain driven, but clearly, consumer demand is going down at the same time. I think a lot of automotives talk about 5% to 10% increase next year off of these low numbers. We'll have to see. I think from our perspective, the key thing is we just need to be agile. So those remain interesting markets. They're an attractive thing. Even within rubber like we try to have not just ASTM-defined grades, but Orion-define grades and we see interest in that. And those 2 areas together, combine it with specialty, you're probably talking nearly 3/4 of our EBITDA at this point. But with the supply and demand dynamics, I think we're going to see just base rubber carbon black be pretty attractive.

And so we talked about battery opportunity in EVs. I think of the hoses and belts is something that loses out on EVs. Maybe if you roll it all together, Carbon Black per vehicle in EV versus ICE right there. How does that?

Yes. That's an excellent question. So one element is, okay, the tires wear out more quickly, right, because it weighs more with a battery in there. And you've ever driven one of these cars like they're fun to drive because the acceleration is great. And so an electric motor from a dead stop accelerating always going to be a more rapid acceleration. So between the weight and the acceleration, you get tire wear. In terms of, let's say, mechanical rubber goods, so I agree. I think we'll see a little bit less hose in belts. You do currently oftentimes see the batteries are set on a rubber mat for vibration, that kind of thing. We initially thought we'd be a drop-off in MRG. It would be one significance. So I think at this point, my personal view is probably still be a little bit negative, but I think not as large as it once appeared. And then the big opportunity, of course, is the battery itself.

We have a start-up competitor working on hydrothermal carbon that's there. So maybe tell us what hydrothermal carbon made. It's something you work on or worry about?

Right. So I think you're referring to Monolith. So Monolith has a plant up and running now in Nebraska, where they take used plasma as the energy input and they use that to prioritize hydrogen -- sorry, methane to basically separate methane into solid carbon and gaseous hydrogen. We know these guys well. They received a DoE loan guarantee of, I think, $1.04 billion is -- the Wall Street Journal reports that about $1.4 billion to build this plant, which is about 180 kt. So I think if you compare it to us, the way higher capital requirements and they'll have to earn a return on that capital, but they're going to have lower variable costs and that their costs are really electricity and natural gas. So that's kind of the advantage of that approach. I think for us, it's just a net positive. If we look at our Investor Day slides, we showed an uptick of North American capacity. We showed it in 2025. The Wall Street Journal suggested it wouldn't be all '26, we'll see whenever it is. But it's out there. And I think it creates kind of like an overhang in this market. I think it discourages other people from investing. And with all the tire capacity come on stream, we actually -- we need additional carbon black I think this is a fun as an engineer, it's an interesting way for this going forward. I think its application is mainly going to be in areas with lower cost natural gas.

And all tire black.

So my customers tell me they think it will be more in what we would call the soft carbon black range. Perhaps they can do the full range, we'll see. Theoretically, we'd really have to go to them to see if they can get that into specialty. Keep in mind, we have a number of different production techniques for specialty. And we would -- I would expect that if they can, they probably have a certain range that they can participate in it.

We have another startup that is taking situs basically to chemicals plus essentially brown coal that's there. And they believe they can calcine the brown coal to carbon black or activated carbon. Is that also something that you look at there?

Yes, we're in a project with Sweden funding, Swedish funding, where we take -- where they take byproducts of the forest products industry and then convert that to a raw material we are working on using to make carbon black. So I think in the current environment, so carbon black is such a big material it's always going to attract opportunities of new sources of supply, different ways of doing it. I think for ourselves as we look at sustainability, that's one possibility. We see more opportunity in a circular economy around tires. So right now, old tires, by and large, they get burned in cement kilns. And you talk to the tire industry, there's some industry, nobody sees this continuing. There's a document out there, which has got signed off by the 10 seasonal CEOs and the 10 largest tire companies and amongst their, let's say, joint sustainability projects or not projects of areas where they think the future is going. One is around a circular economy. We're active in that. So in Europe, we're a participant with Michelin in a funded program where old tires is like 7 players in this, old tires get collected, shredded, separated, pyrolysis. We take the oil from that and then we make virgin carbon black. We give that back to Michelin. We're also in discussions with other companies outside of that program to basically provide them with the same material. And tire companies are conservative. There's a real safety aspect to tires. We take them for granted but think about it, right? If they weren't reliable, that would be an issue. So this will start out slow with small numbers of tires made initially start getting miles on tires and maybe the older one fleet company who would want to be on a sustainability cutting edge. But that's something which we're quite interested in. I think these other ideas out there, they'll have to have their day in court, but none of them are going to recycle a tire. And that's ultimately what the industry wants and what I think society wants. Plastic gets a lot of attention but tires are an issue, too.

You started the presentation with capital spending requirements on environmental are coming down here, which is a really good thing. We just had the Inflation Reduction Act, which has sustainability or credits for environmental program. There's CO2 around your business. Is there anything in there that you think you might spend on environmental where you might actually get a return given the credit?

Right. So let me say, first of all, I expect to get a return on the air emission controls we've already done. You can argue we're getting the prices up because of supply and demand in North America. But I think the fact that everybody had to pouring so much money into these air emission controls it's only right we get that return. Everybody should earn return on their capital, should have pricing that reflects that. And I think the industry is moving in that direction. So I'm not -- I never surrendered the feat like we're not going to get a return on that capital. Certainly between that and other government funding in the U.S. and other places, there's opportunities for us. And until you land one, it's not really much you could say. I do get a lot of talk about carbon capture that might ultimately be an opportunity for us. But just to recognize the CO2 concentration in our effluent is not particularly concentrated. So that makes that a little less attractive for us than some other industries.

Yes. And then maybe a question for Jeff. But obviously, your cash flow availability is now. So what is getting higher? What's the capital deployment outlook that goes with that higher cash flow?

Sure. As we talked about at our Investor Day, we have a -- we believe over the next 3 years, we're going to have a very significant amount of discretionary cash flow. In aggregate $700 million, $800 million. And that would be after maintenance capital, after the $25 million of EPA spending. Our intention is to spend about $300 million of it is what we put out there for growth capital. The acetylene plant in La Porte, Texas will take up a meaningful portion of that over 2023 and part of 2024, but there's other growth opportunities that we have that will take us that we'll spend in 2024 and 2025 that will take us beyond the 2025 time frame. After subtracting that growth capital, we still believe we have $400 million to $500 million of free cash flow. What would we use that for? There's a number of options. And it's nice to be in a position today or going forward, where we'll have those options as opposed to being capital constrained. Certainly, we could use it to lower our debt level. Our debt level, we think, is very -- we're comfortable with it. But if it's a bit lower, that gives us some dry powder, should we find something interesting to do with it at some point in the future. We could also certainly consider returning some of it to shareholders in a buyback or a dividend scenario, more likely the former than the latter. And then finally, there's -- certainly could look at M&A opportunities. As Corning said, we're not fans of transformative acquisitions, but certainly having that amount of cash available would allow us to do something in that range, something at a smaller level. Importantly, very importantly, it's going to be nice to be in that cash position. We are going to be strong stewards of our capital. We're not going to spend it just because we have it. Again, if you can't find in one of those other reasons, you can always pay your debt down, and that's not a bad thing to do, puts you in a little less leverage scenario and again, give you that optionality going forward.

Questions from the audience, we're going to run out of time shortly, Charlie?

Quick question. I apologize.

No such thing, Charlie.

Would it ever make sense for carbon black player to converge with a lithium play?

The lithium and carbon black belong together.

And the only reason I bring it up is that are a lot of lithium players now and the price of lithium has gotten absolutely wide. Ever you want to say about it and the car companies once they're dripping over buying in. So to me, what's your conversions of these various, I would call activity, these EV activity under a broader umbrella?

Right. So allow me to repeat -- so the question is do lithium and carbon black converge in some way here as the EV market evolves.

And could we, I think beyond that, so combining the 2 businesses in 1. So it's an interesting idea, Charlie. I think it is challenging from the point of view that the customer, in my opinion, who's neither of those players, right? It's a guy making the battery. I think they tend to want to slice and dice and buy each component separately. I think it's going to also be a challenge of selling a blended CNTs and other and conductive carbons together in that these people want to control the formulation. This is why I certainly saw in the semiconductor area with Asian customers. They don't want to give up the power that you too much control, what's in their formulation. So I think that is unlikely to play out that way. But certainly, we always keep our antenna up, and we're interested in talking to people with same ideas.

[indiscernible] they bought Rockwood business.

Right. But they bought Rockwood's business and they run it as a separate line item. So could we buy one and run it as a totally separate Potentially, but look at what our -- to be honest, look at where our multiple is today and the multiple of lithium. We'd really have to bank on getting that multiple for our carbon business for that to work.

Great place to end is we're going to get Orion's multiple in parallel wherever we go. Thank you very much for the time.

Thank you for the time, and thanks for everyone's attention. Thank you.