Slide 1: September 2016 Analyst Conference Slides
TM September 2016 Analyst Conference Slides Exhibit 99.1
Slide 2: Forward-Looking Statements
Forward-Looking Statements 2 This communication includes forward-looking statements. These statements relate to analyses and other information that are based on management’s beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projecti
Slide 3: Olin Corporation Company Overview
All financial data are for the six months ended June 30, 2016. Data are presented in millions of U.S. dollars. Additional information is available at www.olin.com. Winchester Chlor Alkali Products and Vinyls YTD 2016 Revenue: $ 1,437 Adj. EBITDA: $ 304 Revenue: $ 2,712 Adjusted EBITDA: $ 395 Olin YT
Slide 4: Strategic Actions to Create Today's Olin
Strategic Actions to Create Today’s Olin Leading Chlor Alkali Assets Leading Winchester Business 2007 2008 2010 2011 2012 2015 • Winchester Relocation / Cost Reduction Initiative Announced • Announced Conversion/Closure of Mercury Cell Plants • First Hy-Pure® Bleach Plants Begin Operations • Purchas
Slide 5: Creates Unparalleled Scale, Geographic Reach, and Product Diversity
Creates Unparalleled Scale, Geographic Reach, and Product Diversity Olin is the Leading Chlor Alkali Supplier Globally • Chlor alkali producer • Seller of membrane grade caustic soda • Supplier of epoxy materials • Seller of chlorinated organics #1 Global • Seller of chlorine • Seller of industrial
Slide 6: Significantly Expanded Chlorine Use Diversity
Significantly Expanded Chlorine Use Diversity 3 Merchant HCI Bleach 19 Merchant HCI Bleach Ethylene Dichloride VCM Allyl Chloride Epichlorohydrin Liquid Epoxy Resin Vinylidene Chloride Perc Tric M1 M2 M3 Carbon Tetrachloride MDI Propylene Oxide Propylene Glycol Ag 5 Merchant HCI Bleach Ethylene Dich
Slide 7: Annual EBITDA Sensitivity
7 Product Price Change EBITDA Impact Chlorine $10/ton $10 million Caustic $10/ton $30 million EDC $.01/pound $20 million Annual EBITDA Sensitivity
Slide 8: Multi-Year View on Caustic Soda
Multi-Year View on Caustic Soda North American chlor alkali capacity reductions No major North American chlor alkali capacity additions announced Increasing North American caustic exports European mercury cell chlor alkali production sunset by the end of 2017 Growing caustic soda consumption coupled
Slide 9: EDC Pricing History 2000 – June 2016
0 25 50 75 100 0 5 10 15 20 25 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 2 0 0 5 2 0 0 6 2 0 0 7 2 0 0 8 2 0 0 9 2 0 1 0 2 0 1 1 2 0 1 2 2 0 1 3 2 0 1 4 2 0 1 5 2 0 1 6 EDC Pricing History 2000 – June 2016 EDC Spot Export Prices Ce n ts P er P o u n d Source: IHS EDC Pricing Distribution Percent of Ti
Slide 10: Global Chlorinated Organics Value Proposition
Global Chlorinated Organics Value Proposition 10 Sales of value-added products Differentiated product, service or market position Global footprint 1 Generate Caustic Soda sales Unbalanced user of chlorine Use low-cost chlorine and channel expertise to liberate caustic 2 Upgrade by- products
Slide 11: Epoxy has Access to Attractive High Growth End Uses
Epoxy has Access to Attractive High Growth End Uses Around the Globe Select Epoxy End Use Growth Rates(’13-’18)2 Composites Civil Engineering, Adhesives Industrial Coatings Electrical Laminates 2016 3,200 2015 3,000 2014 2,900 2013 2,750 2012 2,550 2011 2,600 Epoxy Resin Consumption1 3% CAGR (’13-’1
Slide 12: Epoxy Priorities for Success
Epoxy Priorities for Success 12 0 50 100 150 200 250 300 350 Epoxy Segment EBITDA ($ in millions) Upstream Midstream Downstream Continue driving productivity and cost improvements Utilize advantaged cost position to outgrow the market (“Sell out”) Upgrade mix to improve margin (“Sell up”) Continued
Slide 13: Upside Potential through Significant Realizable Synergies
Upside Potential through Significant Realizable Synergies $250 Logistics & Procurement Operational Efficiencies Asset Optimization Accessing New Segments & Customers Capital Investment Synergies Breakdown ($ in millions) 2016 2017 2018 2019 Projected Annual Impact 60 100-110 180-200 250 Projected Ye
Slide 14: Winchester Brands
Winchester Brands Hunters & Recreational Shooters Products Retail Distributors Mass Merchants Law Enforcement Military Industrial Rifle N/A Handgun N/A Rimfire Shotshell Components 14
Slide 15: Favorable Industry Trends: Growing Target Shooting Participation
Favorable Industry Trends: Growing Target Shooting Participation Female Participation is Increasing Target Shooters are on the Rise Handgun Shooting Tops the Chart New Shooters Are Younger Source: National Shooting Sports Foundation 15
Slide 16: Winchester Adjusted EBITDA Margin Improvement
25 36 42 78 73 49 69 158 144 134 0 20 40 60 80 100 120 140 160 180 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Winchester Adjusted EBITDA Margin Improvement 6.7% 8.3% 8.6% 13.7% 13.3% 8.6% 11.2% 20.3% 19.5% 18.9% 2006-2010 Average Adj. EBITDA margin: 10.1% 2013-2015 Average Adj. EBITDA margin:
Slide 17: Projected Third Quarter 2016 Adjusted EBITDA
Projected Third Quarter 2016 Adjusted EBITDA ($ in millions) 17 1: Olin anticipates third quarter net income in the range of $15 million to $35 million, or $0.10 to $0.20 per diluted share Second Quarter $180M + Caustic pricing + Epoxy earnings + Winchester earnings + Lower turnaround costs + Higher
Slide 18: Full Year 2016 Adjusted EBITDA Outlook
2Q $180 $395 $445 - $505 18 Full Year 2016 Adjusted EBITDA Outlook 1H16 2H16 FY16 $840 - $900 2H $445 – $505 1Q $215 ($ in millions) + Caustic pricing + Epoxy earnings + Winchester earnings + Lower turnaround costs + Higher synergy realization - Higher natural gas costs - Higher ethylene costs
Slide 19: 2016 Free Cash Flow After Dividend
Working Capital4 Adjusted EBITDA1 Free Cash Flow After Dividend Cash Tax Refund2 Capital Spending and Investments3 Free Cash Flow $870 $25 ($475) ($19) ($185) $391 ($132) $259 1: Mid-point of Olin’s estimated Adjusted EBITDA range of $840 to $900 million for full year 2016 2: Estimated using the mid
Slide 20: Adjusted EBITDA Potential: Mid-Cycle
$1.5 billion + FY 2016 Forecast $840 – $900 million Chlor Alkali Mid-Cycle EDC Price Recovery Continued Epoxy Improvement Synergies Adjusted EBITDA Potential: Mid-Cycle 20
Slide 21: Appendix
Appendix 21
Slide 22: The Chlorine Envelope
The Chlorine Envelope 22 Epoxy Brine (NaCl) Power Phenol Acetone Caustic Soda (NaOH) Chlorine (CI2) Bisphenol-A GCO (Perc/Tric/CMP/VDC) Epichlorohydrin Allyl Chloride EDC / VCM Chlor-Alkali Cumene Bleach HCl Merchant
Slide 23: Chlor Alkali Products and Vinyls Segment Performance
2Q16 1Q16 ∆ Q/Q Sales $733.0 $704.3 4.1% Adjusted EBITDA $134.1 $170.0 (21.1)% 2Q16 Performance Lower caustic pricing and unfavorable sales mix Increased raw material costs associated with ethylene and natural gas pricing Lower chlorinated organic volumes and pricing 3Q16 outlook – expecte
Slide 24: Chlor Alkali Products and Vinyls Pricing and Volume Comparisons
2Q16 versus 2Q15 1Q16 Chlorine Caustic Soda EDC N/A Bleach HCI Chlorinated Organics N/A Chlor Alkali Products and Vinyls Pricing and Volume Comparisons 2Q16 versus 2Q15 1Q16 Chlorine Caustic Soda N/A EDC N/A Bleach HCI Chlorinated Organics N/A Volume Comparison Pricing Comparison 24
Slide 25: Olin Caustic Soda Price Realization
Olin Caustic Soda Price Realization • A $10 per ton change in Olin’s caustic soda selling price changes annual Adjusted EBITDA by approximately $30 million Fundamental Principle Domestic Sales • A significant portion of domestic sales are linked to index prices • Index price changes typically occur
Slide 26: Epoxy Segment Performance
2Q16 1Q16 ∆ Q/Q Sales $450.0 $460.2 (2.2)% Adjusted EBITDA $23.0 $29.9 (23.1)% 2Q16 Performance Sales and Adjusted EBITDA lower primarily due to planned maintenance outages 3Q16 and 2H16 outlook – expect sequentially higher than 2Q16 and 1H16 Expect continued improvement in volumes Absence
Slide 27: Winchester Segment Performance
2Q16 Performance Adjusted EBITDA improvement reflects lower commodity, other material and manufacturing costs partially offset by lower commercial shipments 3Q16 outlook – expect sequential improvement from 2Q16 driven by stronger seasonal demand Full year 2016 earnings are expected to excee
Slide 28: Corporate & Other
Corporate & Other 28 2Q16 1Q16 Pension Income $12.6 $12.2 Environmental Expense $(2.4) $(2.7) Other Corporate and Unallocated Costs $(23.9) $(29.6) Restructuring Charges $(8.2) $(92.8) Acquisition-related Costs $(16.3) $(10.2) ($ in millions) Corporate and other unallocated costs are consistent wi
Slide 29: Guidance Assumptions Full Year 2016
Guidance Assumptions 29 Full Year 2016 Forecast Key Elements Capital Spending $250 to $290 Maintenance level of capital spending of $225M to $275M annually Synergy Capital & Investments $205 Synergy projects include chlorine loading, bleach capacity and low cost power investments Total $455 to $495
Slide 30: Advantaged Ethylene Arrangement
Advantaged Ethylene Arrangement •A series of three supply agreements with Dow •Pipeline supply without operating or start-up risk •Producer economics Tranche Effective Date Annual Volume (tons) Cost (millions) #1 Acquired at closing Up to 180,000 $433* #2 Available ~ 2H 2017 Up to 160,000 ~$210 #3 A
Slide 31: Non-GAAP Financial Measures – Adjusted EBITDA
Non-GAAP Financial Measures – Adjusted EBITDA (a) (a) Unaudited. (b) Restructuring charges for the three months ended June 30, 2016 and March 31, 2016 and for the six months ended June 30, 2016 were primarily associated with the closure of 433,000 tons of chlor alkali capacity across three separate
Slide 32: Non-GAAP Financial Measures – Net Income (loss) from Operations per share
Non-GAAP Financial Measures – Net Income (loss) from Operations per share (a) (a) Unaudited. (b) Restructuring charges for the three months ended June 30, 2016 and March 31, 2016 and for the six months ended June 30, 2016 were primarily associated with the closure of 433,000 tons of chlor alkali cap
Slide 33: Non-GAAP Financial Measures by Segment
Non-GAAP Financial Measures by Segment 33 (In millions) Income (loss) before Taxes Depreciation and Amortization Adjusted EBITDA Chlor Alkali Products and Vinyls 30.7$ 103.4$ 134.1$ Epoxy - 23.0 23.0 Winchester 31.2 4.5 35.7 (In millions) Income (loss) before Taxes Depreciation and Amortization Adju