Olin Corporation · NYSE:OLN
Olin — UBS SMID Cap 1x1 Conference 2015
26 slides from Olin's conference presentation, Aug 3, 2015
Slide 1: UBS SMID Cap 1x1 Conference
1 UBS SMID Cap 1x1 Conference Boston, MA August 4, 2015 Exhibit 99.1
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements 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: SEC Disclosure Rules: Additional Information and Where to Find It
3 SEC Disclosure Rules Additional Information and Where to Find It In connection with the proposed combination of Olin with the chlorine products business of The Dow Chemical Company (“TDCC”), Blue Cube Spinco Inc. (“Spinco”) has filed a registration statement on Form S-4 and Form S-1 containing a p
Slide 4: Olin to Acquire Dow's Chlorine Products: Transaction Overview
4 Olin to Acquire Dow’s Chlorine Products • Transaction Overview • Reverse Morris Trust structure • Total value of $5.2 billion, consisting of approximately: 1) $2.1 billion in common stock (assumes $24.50 OLN share price), 2) $2.0 billion in cash and cash equivalents, 3) $0.6 billion in assumed deb
Slide 5: Olin to Acquire Dow's Chlorine Products: Ownership and Closing
5 Olin to Acquire Dow’s Chlorine Products • Ownership • Electing Dow shareholders will receive approximately 87.5 million shares of Olin common stock • Olin shares outstanding post-close will be approximately 165 million • Electing Dow shareholders will own approximately 52.7% and existing Olin shar
Slide 6: Reverse Morris Trust Structure
6 Reverse Morris Trust Structure Non- electing S/Hs Electing Dow S/Hs Dow DCP DCP stock Olin S/Hs Olin DCP ~47.3% Dow ~52.7% Olin S/Hs Olin Merger sub DCP stock Dow DCP Olin stock Merge Non- electing S/Hs Dow stock Electing Dow S/Hs Non- electing S/Hs Electing Dow S/Hs Step 2: Merger Step 1: Split-o
Slide 7: Strategic Benefits
7 Strategic Benefits • Creates Leading Producer of Chlorine Derivatives and Caustic Soda • Leading global chlor alkali producer with 6.2 million tons of chlorine capacity • #1 global seller of membrane caustic soda and chlorinated organics • #1 global supplier of epoxy materials • #1 North American
Slide 8: Creates Chlorine-Based Products Leader
8 Creates Chlorine-Based Products Leader 8 6,191 4,320 3,430 2,363 2,249 2,249 1,871 1,886 1,719 Chlorine global capacity: ~90,000 kMT Source: CMAI 2014 average capacities in kMT 1 Includes 100% of Dow Mitsui Chlor Alkali joint venture chlorine capacity 2 Capacity in Brazil, Germany and Australia no
Slide 9: Diversified Geographic Footprint
9 Diversified Geographic Footprint Chlor–Alkali & Vinyl Epoxy Global Chlorinated Organics Supporting assets Zhangjiagang, China CER Gumi, South Korea CER Guaruja, Sao Paulo, Brazil LER, CER Pisticci, Italy CER Roberta, GA CER Rheinmünster, Germany CER Terneuzen, Netherlands Cumene Baltringen, German
Slide 10: Diversifies Olin's Business Mix
10 Diversifies Olin’s Business Mix Chlor Alkali & Vinyl 70% Epoxy 12% Global Chlorinated Organics 18% Chlor Alkali 59% Winchester 37% Chemical Distribution 4% Chlor-Alkali & Vinyl 66% Winchester 14% Global Chlorinated Organics 12% Epoxy 7% Chemical Distribution 1% ~$0.68 billion $0.34 billion ~$1.0
Slide 11: Top Tier Low Cost Structure
11 Top Tier Low Cost Structure • Stable and Low Cost Raw Materials • Electricity – 85% of the energy to generate electricity will come from natural gas and hydroelectric sources after the acquisition • Salt Brine – 80% of the brine requirements will be supplied from owned and operated mines that are
Slide 12: Significant Synergies
12 Increased procurement efficiencies Elimination of duplicate terminals and optimization of freight to terminals Reduction of net acquisition cost for purchased caustic Savings from trucking and rail fleet optimization COGS reduction opportunities Logistics & procurement SG&A Cost opt
Slide 13: Olin Stand Alone Performance
13 Olin Stand Alone Performance
Slide 14: Company Overview
14 Company Overview All financial data are for the 3 and 6 months ended June 30, 2015 and the 12 months ended December 31, 2014. Data are presented in millions of U.S. dollars. Winchester Chlor Alkali A Leading North American Producer of Chlorine and Caustic Soda Q2‘15 1H‘15 FY‘14 Revenue: $ 271 $ 5
Slide 15: Chlor Alkali Process
15 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 2014 Revenue #2 #1 Industrial #1 Merchant #1 Burner Grade 51% 13% 4% 11%
Slide 16: Growing EBITDA
16 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Growing EBITDA • Strategic Acquisitions − Pioneer, 2007 − SunBelt JV, 2011 − KA Steel, 2012 • Investments in less Cyclical Chlor Alkali Co-products − Sodium Hypochlorite (Bleach) − Hydrochloric Acid (HCl) −
Slide 17: Diverse Customer Base
17 Diverse Customer Base Chlorine Caustic Soda North American Industry Olin Corporation Source: IHS and Olin 2014 demand. Chlorine: “Inorganics” includes: Titanium dioxide and bromine. Caustic Soda: “Organics” includes: MDI, TDI, polycarbonates, synthetic glycerin, sodium formate, monosodium glutama
Slide 18: Bleach Growth is a Key Objective
18 2006 2007 2008 2009 2010 2011 2012 2013 2014 Olin Bleach Historical Sales Volume (DT) 22% CAGR Bleach Growth is a Key Objective • Bleach sells at a premium to the ECU and, while seasonal, is not cyclical • Olin bleach volumes have delivered steady growth since 2006 • We expect additional growth t
Slide 19: Growing HCl Volumes
19 2006 2007 2008 2009 2010 2011 2012 2013 2014 Olin HCl Historical Sales Volume (DT) Growing HCl Volumes • Olin is the leading producer of burner-grade HCl with 5 production locations in North America • Olin HCl volumes have grown steadily since 2006 • Distribution strategy is expected to increase
Slide 20: EBITDA Improvement: Higher Peaks and Higher Troughs
20 0 50 100 150 200 250 300 350 400 450 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 EBITDA Improvement • Olin Bleach, HCl and KOH initiatives have reduced the cyclicality of our business, and at the same time, increased profit margins • 2014 sales of co-products repres
Slide 21: Chemical Distribution
21 Chemical Distribution • KA Steel, purchased in August 2012, established Olin as the largest caustic distributor in the U.S. with an infrastructure that provides a strong fit with Olin’s chlor alkali assets: − Mature supply relationships − 90,000 tons of caustic storage in a network of 26 terminal
Slide 22: Winchester Strategy
22 Brands Winchester Strategy • Centerfire relocation: – $24 million of cost savings in 2014 – Expect $35 million of cost savings in 2015 – Expect $35-$40 million lower annual operating costs beginning in 2016 • New product development: – Continue to develop new product offerings – Maintain reputati
Slide 23: Strong Correlation Between Firearms & Ammunition Sales
23 Strong Correlation Between Firearms & Ammunition Sales Data Correlations • U.S. Commercial Ammunition Mfr. Shipments & NICS Checks: +93% (1999-2014) • U.S. Commercial Ammunition Mfr. Shipments & U.S. Firearms Production: +82% (1992-2013) • NICS Checks & U.S. Firearms Production: +96% (1999 – 2013
Slide 24: Growing Shooting Sports Participation Has Increased Installed Base
24 Growing Shooting Sports Participation Has Increased Installed Base
Slide 25: Winchester Is Growing
25 0 20 40 60 80 100 120 140 160 180 2006 2007 2008 2009 2010 2011 2012 2013 2014 1H '15 Winchester Is Growing • We expect Winchester’s 2015 earnings to exceed 2014 earnings as a result of: − Cost savings from the centerfire relocation to Oxford, MS − A significant increase in the number of sport sh
Slide 26: Profit Outlook
26 • Q2 2015 Adjusted EBITDA was $126.8 million • Full year 2015 Adjusted EBITDA is expected to be in the $330 to $360 million range • Chlor Alkali Products full year 2015 segment income is expected to decline compared to 2014 primarily due to weaker caustic soda demand • Chemical Distribution 2015