Slide 1: Second Quarter 2016 Earnings Presentation
Second Quarter 2016 Earnings Presentation August 2, 2016 TM 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: Performance Highlights
Performance Highlights 3 3 Achieved Adjusted EBITDA of $180 million in the second quarter1 Full year 2016 Adjusted EBITDA guidance range of $840 million to $900 million Forecasting third quarter 2016 Adjusted EBITDA range of $220 million to $250 million2 Expect full-year cost synergy realization of
Slide 4: Projected Third Quarter 2016 Adjusted EBITDA
Projected Third Quarter 2016 Adjusted EBITDA1 ($ in millions) 4 1: Olin’s definition of “Adjusted EBITDA” (earnings before interest, taxes, depreciation and amortization) is net (loss) income plus an add-back for depreciation and amortization, interest expense (income), income tax expense (benefit),
Slide 5: 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 6: 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 7: 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 8: 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 9: 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 10: Full Year 2016 Adjusted EBITDA Outlook
2Q $180 $395 $445 - $505 10 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 11: 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 12: Chlorinated Organics Provides a Diverse Set of Chlorine Outlets
Chlorinated Organics Provides a Diverse Set of Chlorine Outlets 12 Feedstocks Products End Uses Value Drivers Low-Cost ECU Chlorinated By- Products (HCI, RCI) Hydrocarbons (Methanol etc.) Chlorinated Organics Low-cost energy and feedstocks Superior manufacturing technology and processes Breadth o
Slide 13: Upside Potential through Significant Realizable Synergies
Upside Potential through Significant Realizable Synergies $250 Logistics & Procurement Operational Efficiencies Asset Optimization Accessing New Segments & Customers Capital Investment Synergies Breakdown ($M) 2016 2017 2018 2019 Projected Annual Impact 60 100-110 180-200 250 Projected Year-End Run
Slide 14: 2016 Free Cash Flow Estimate
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 $900 million for full year 2016 2: Estimated using the mid
Slide 15: Appendix
Appendix 15
Slide 16: Non-GAAP Financial Measures – Adjusted EBITDA
Non-GAAP Financial Measures – Adjusted EBITDA (a) (a) Unaudited. (b) Restructuring charges for the three months ended June 30, 2016 and March 31, 2016 and for the six months ended June 30, 2016 were primarily associated with the closure of 433,000 tons of chlor alkali capacity across three separate
Slide 17: Non-GAAP Financial Measures – Net Income (loss) from Operations per share
Non-GAAP Financial Measures – Net Income (loss) from Operations per share (a) (a) Unaudited. (b) Restructuring charges for the three months ended June 30, 2016 and March 31, 2016 and for the six months ended June 30, 2016 were primarily associated with the closure of 433,000 tons of chlor alkali cap
Slide 18: Non-GAAP Financial Measures by Segment
Non-GAAP Financial Measures by Segment 18 (In millions) Income (loss) before Taxes Depreciation and Amortization Adjusted EBITDA Chlor Alkali Products and Vinyls 30.7$ 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
Slide 19: 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 19
Slide 20: Corporate & Other
Corporate & Other 20 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 21: Guidance Assumptions
Guidance Assumptions 21 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 22: End slide
End slide TM 22