Olin Corporation · NYSE:OLN
Olin — Cowen and Company Global Metals, Mining and Materials Conference 2013
23 slides from Olin's conference presentation, Nov 12, 2013
Slide 1: Cowen and Company Global Metals, Mining and Materials Conference
1 Cowen and Company Global Metals, Mining and Materials Conference November 13, 2013 Exhibit 99.1
Slide 2: Company Overview
2 Company Overview All financial data are for the quarter and nine months ended September 30, 2013 and the year ended December 31, 2012. Data are presented in millions of U.S. dollars except for earnings per share. Chemical Distribution results for 2012 are for the period beginning August 22, 2012 (
Slide 3: Investment Rationale
3 Investment Rationale • Leading Positions In: Chlorine and Caustic Soda Industrial Bleach Burner Grade Hydrochloric Acid Small Caliber Ammunition • History of Successful Acquisitions and Delivering Synergies: Pioneer Companies – August 31, 2007 SunBelt – February 28, 2011 K. A. Steel Chemicals Inc.
Slide 4: Growing EBITDA
4 0 50 100 150 200 250 300 350 2006 2007 2008 2009 2010 2011 2012 2013 Est. Growing EBITDA • Olin has successfully completed the immediately accretive acquisitions of Pioneer, SunBelt and KA Steel • Downstream bleach and HCl growth have increased earnings and margins • Winchester is benefiting from
Slide 5: Chlor Alkali Process
5 Chlor Alkali Process ECU = Electrochemical Unit; a unit of measure reflecting the chlor alkali process outputs of 1 ton of chlorine, 1.13 tons of 100% caustic soda and .03 tons of hydrogen. North American Position Percent of 2012 Revenue #2 #1 Industrial #1 Merchant #1 Burner Grade 54% 11% 5% 8% 2
Slide 6: North American Chlor Alkali Producers & Technologies
6 North American Chlor Alkali Producers & Technologies Note: Red label indicates routine seller of merchant chlorine via rail car. 1 2 / 3 1 /1 2 N. A . Chlor ine P roduction C a pa c it y b y P roduc e r (0 0 0 S T ) 1 DOW 2 OXY 3 AXIALL (PPG/GGC) 4 OLIN 5 Shintech 6 Formosa 7 Bayer 8 Mexichem 9 We
Slide 7: Capital Projects and Growth Initiatives
7 • Winchester Centerfire Relocation – Decision made 11/3/2010 to relocate 1,000 jobs from E. Alton, IL to Oxford, MS; new 500,000 square foot facility opened within a year – Cost savings are expected to be $16 million in 2013 and $35 to $40 million annually upon completion of the relocation effort
Slide 8: Diverse Customer Base
8 Diverse Customer Base Chlorine Caustic Soda North American Industry Olin Corporation Source: IHS and Olin 2012 demand. Chlorine: “Inorganics” includes: Titanium dioxide and bromine. Caustic Soda: “Organics” includes: MDI, TDI, polycarbonates, synthetic glycerin, sodium formate, monosodium glutamat
Slide 9: Olin's Geographic Advantage
9 Olin’s Geographic Advantage Location 12/31/12 Chlorine Capacity (000s ST) McIntosh, AL 426 Diaphragm McIntosh, AL - SunBelt 352 Membrane Becancour, Quebec 297 Diaphragm 65 Membrane Niagara Falls, NY 300 Membrane Charleston, TN 190 Membrane St. Gabriel, LA 246 Membrane Henderson, NV 153 Diaphragm T
Slide 10: Industrial Bleach Initiative
10 Industrial Bleach Initiative • Why Industrial Bleach? – Bleach utilizes both chlorine and caustic soda in an ECU ratio – Demand is seasonal, but not cyclical – Bleach commands a premium price over an ECU • Why Olin? – Regional nature of the bleach business benefits Olin’s geographic profile – Oli
Slide 11: Bleach Growth is a Key Objective
11 26.4% CAGR Bleach Growth is a Key Objective • Olin bleach volumes have delivered steady growth since 2006 • Key bleach target segments include water treatment, consumer products, food, farming and pool chemicals • Our capacity to convert ECUs into higher margin bleach now exceeds 17% • Olin HyPur
Slide 12: Hydrochloric Acid
12 Hydrochloric Acid • Olin is the leading producer of Burner-grade HCl in North America with 5 manufacturing facilities in the United States and Canada • Currently 25% of HCl supply is “Burner-grade” or “on-purpose” HCl • By-product HCl accounts for 75% of the market supply, but availability is sub
Slide 13: Growing HCl Demand
13 Growing HCl Demand North American HCl Supply • Burner acid is the only growing HCl supply source • 75% of HCl is supplied through by-product producers • By-product HCl availability is less reliable than burner HCl • Olin is ideally positioned to serve the West & North through expanded distributio
Slide 14: KA Steel Acquisition
14 • KA Steel is one of the largest distributors of caustic soda in North America and manufactures and sells bleach in the Midwest • On August 22, 2012, we acquired privately held KA Steel for $312 million in cash, subject to certain post-closing adjustments • 2011 KA Steel sales were $435 million a
Slide 15: Complimentary Asset Footprints
15 Complimentary Asset Footprints • KA Steel caustic distribution infrastructure is a strong fit with Olin’s chlor alkali assets: • Mature supply relationships • 90,000 tons of storage capacity • Expanded geographic coverage • Logistical savings • Provides scale and flexibility • Access to new custo
Slide 16: KA Steel Synergies Update
16 KA Steel Synergies Update • Platform to expand Olin sales of industrial bleach, HCl and KOH • Optimizes use of KA Steel’s existing freight and logistics network to reduce Olin’s shipping expense • Provides platform to reduce freight and logistics costs • Expands presence in core caustic soda busi
Slide 17: Winchester Strategy
17 Winchester Winchester Strategy • Cost Reduction – Centerfire relocation – Once completed, we expect $35-$40 million of lower operating costs – Approximately $16 million of cost savings expected to be realized in 2013 • New Product Development – Continue to develop new product offerings – Maintain
Slide 18: Strong Correlation Between Firearm and Ammunition Sales
18 Strong Correlation Between Firearm and Ammunition Sales Data Correlations • NICS Checks & U.S. Firearms Production: +99% • U.S. Commercial Ammunition Mfr. Shipments & U.S. Firearms Production: +92% • U.S. Commercial Ammunition Mfr. Shipments & NICS Checks: +87% 1Estimated based on NSSF Trade Stat
Slide 19: Winchester Is Growing
19 0 20 40 60 80 100 120 140 2006 2007 2008 2009 2010 2011 2012 9Mo '13 49 Winchester Is Growing • The surge that began in Q4 2012 continues into 2013 resulting in record full year EBITDA through only nine months • Currently, sales are only limited by product availability • Commercial backlog at 9/3
Slide 20: Centerfire Relocation
20 Centerfire Relocation • The decision to relocate Winchester’s centerfire operations, including 1,000 jobs, was made on November 3, 2010 • The 500,000 square foot facility was opened in October 2011, the relocation of pistol ammunition manufacturing is complete, rifle manufacturing has been initia
Slide 21: Strong Balance Sheet
21 Strong Balance Sheet • Cash increased $142 million in Q3 2013 after funding the common dividend and repurchasing outstanding shares • The 9/30/13 cash balance of $290 million reflects: • $17 million increase in working capital during 2013; • $70 million of CAPEX in 2013, some for the Henderson, N
Slide 22: 2013 Outlook
22 • Full year 2013 forecasted EBITDA is expected to be a record • EBITDA growth in 2013 is driven by the successful completion of several strategic initiatives in 2012, the on-going bleach and HCl growth initiatives, KA Steel synergies, strong Winchester results and cost savings associated with the
Slide 23: Forward-Looking Statements
23 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 descri
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