Olin Corporation · NYSE:OLN
Olin — BB&T 2008 Manufacturing and Materials Conference
23 slides from Olin's conference presentation, Mar 18, 2008
Slide 1: BB&T 2008 Manufacturing and Materials Conference
Exhibit 99.1 BB&T 2008 Manufacturing and Materials Conference March 19, 2008 1
Slide 2: Olin Representatives
Olin Representatives Joseph D. Rupp Chairman, President & Chief Executive Officer John E. Fischer Vice President & Chief Financial Officer John L. McIntosh Vice President & President, Chlor-Alkali Products Larry P. Kromidas Assistant Treasurer & Director, Investor Relations lpkromidas@olin.com (618)
Slide 3: Olin Vision
Olin Vision To be a leading Basic Materials company delivering attractive, sustainable shareholder returns • Being low cost, high quality producer, and #1 or #2 supplier in the markets we serve • Providing excellent customer service and advanced technological solutions • Generating returns above the
Slide 4: Olin Corporate Strategy
Olin Corporate Strategy Olin Corporation Goal: Superior Shareholder Returns Total Return to Shareholders in Top Third of S&P Mid Cap 400 Return on Capital Employed Over Cost of Capital Through the Cycle 1. Build on current leadership positions in Chlor-Alkali and Ammunition • Improve operating effic
Slide 5: Impact of Strategic Actions: The New Olin
Impact of Strategic Actions The New Olin • Revenue is lower, but profits are expected to improve – During last four months of 2007, profit distribution from Pioneer exceeded full year Metals profit distributions – Gross Margin as a percent of Sales has improved about 100% • Overall net debt position
Slide 6: Olin's Chlor Alkali Strategy
Olin’s Chlor Alkali Strategy • Be the preferred supplier to merchant chlor alkali customers in addition to being the low cost producer • Goal is to increase the value of the Chlor Alkali Division to Olin through: – Optimizing capacity utilization – Higher margin downstream products – Cost reduction
Slide 7: Pioneer Acquisition
Pioneer Acquisition • Synergistic, bolt-on acquisition that enhances our chlor- alkali franchise: – #3 chlor-alkali producer in North America – #1 chlor-alkali merchant producer in North America – #1 in industrial bleach in North America – Enhances geographic coverage • Provides the opportunity for
Slide 8: Pioneer Acquisition (Continued)
Pioneer Acquisition (Continued) • Purchase price of $426 million • $5 million of synergies realized in Q4, expect to realize $20 million annual run rate by the end of Q2 2008, ahead of original schedule, and $35 million annually thereafter • Synergies will come from logistics, purchasing, operations
Slide 9: Pioneer's Acquisition moves Olin up to #3 Producer
Pioneer’s Acquisition moves Olin up to #3 Producer and… Chlorine Capacities 5,000 4,780 4,000 3,484 3,000 1,955 1,856 2,000 880 1,000 471 430 371 0 Dow Occidental Olin* PPG Formosa GGC Bayer AG Mexichem Diaphragm Membrane Mercury Other * Includes St.Gabriel expansion and Dalhousie shutdown Source: C
Slide 10: Enhances Olin's Operational and Geographical Platform
…Enhances ’s Operational and Geographical Olin Platform Plant Locations Location Chlorine Capacity (-000 Short Tons) Tacoma, WA McIntosh, AL 415 (1) Becancour, Becancour, Quebec 340 Quebec Niagara Falls, 286 Tracy, CA NY Charleston, 248 Niagara Falls, TN (2) NY St. Gabriel, LA 246 Henderson, NV McIn
Slide 11: ECU Netback Outlook
ECU Netback Outlook • Natural Gas prices and capacity reductions have created a more favorable long-term price outlook • $1 change in Natural Gas MMBTU increases the cost of Natural Gas-based producers by $25 to $35/ECU • Weaker US dollar and higher transportation costs have significantly reduced im
Slide 12: ECU Netback Outlook (continued)
ECU Netback Outlook (continued) • First quarter caustic price announcements totaling $80 per ECU are supported by tight caustic supply • Higher ECU netbacks are driven by caustic pricing: 2005 2006 2007 2007 Caustic Netback Netback Netback Announcements Q1 $485 $590 $500 $40 Com’l/$50 High Grade Q2
Slide 13: Capacity Rationalization
Capacity Rationalization North America Chlor Alkali Capacity North America Chlor Alkali Capacity Reductions 2000 Through 2005 Expansions 2000 Through 2005 Short Tons as Short Tons as Company Location Chlorine Company Location Chlorine Dow Plaquemine, LA 375,000 Vulcan C-A Geismer, LA 210,000 Oxy Vin
Slide 14: Announced Capacity Changes 2006 through 2010
Announced Capacity Changes 2006 through 2010 North America Chlor Alkali Capacity North America Chlor Alkali Capacity Announced Reductions Announced Expansions Short Tons Short Tons Company Location as Company Location as Chlorine Chlorine Dow (completed) Ft. Saskatchewan 526,000 AV Nackawic Nackawic
Slide 15: Chlor-Alkali's Two Tier Industrial Bleach Growth Strategy
Chlor-Alkali’s Two Tier Industrial Bleach Growth Strategy • Organic Growth – Bleach expansions began at Olin’s four existing chlor-alkali sites prior to Pioneer acquisition and have been completed • Acquisitions and Investments – Pioneer purchase increases bleach capacity by 145 million gallons or 9
Slide 16: Winchester's Strategy
Winchester’s Strategy • Leverage existing strengths – Seek new opportunities to leverage the legendary Winchester® brand name – Investments that maintain Winchester as the retail brand of choice and lower costs • Focus on product line growth – Continue to develop new product offerings 16
Slide 17: Winchester Products
Winchester Products Products End Uses Winchester ® sporting Hunters & recreational shooters, law ammunition -- shot- enforcement agencies shell, small caliber centerfire & rimfire ammunition Small caliber military Infantry and mounted weapons ammunition Industrial products -- 8 Maintenance applicati
Slide 18: Winchester
Winchester • Eleven price increases announced since beginning of 2004 to offset higher metal prices • Latest 5% to 20% price increase effective 1/1/2008 • Other U.S. manufacturers including, Remington and ATK, have implemented similar price increases • Continued expansion of military and law enforce
Slide 19: Financial Highlights
Financial Highlights • Ample liquidity with new five-year lines of credit totaling $375 million and cash of $333 million • Net proceeds from the sale of the Metals business used to redeem debt, strengthen balance sheet and provide funds for St. Gabriel expansion • Pioneer four-month contribution of
Slide 20: Financial Highlights (continued)
Financial Highlights (continued) • Improved Winchester results: – $26.4 million segment earnings are 67% higher than 2006 – Best year since 1994 • 2008 environmental charges are expected to be 25% lower than 2007 • Pension expense expected to be $25 million lower in 2008, offset by $6 million of hig
Slide 21: Investment Rationale
Investment Rationale • Continued strong performance based on: – Relatively high ECU prices – Pioneer acquisition – Cost reductions, price increases and increased U.S. military and law enforcement revenue in Winchester • Strong financial discipline • At recent price levels, common stock dividend yiel
Slide 22: Forward-Looking Statements
Forward-Looking Statements This presentation contains estimates of future performance, which are forward-looking statements and actual results could differ materially from those anticipated in the forward- looking statements. Some of the factors that could cause actual results to differ are describe
Slide 23: Slide 23
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