Olin Corporation · NYSE:OLN
Olin — Barclays Capital Chemical ROC Stars Conference 2012
23 slides from Olin's conference presentation, May 2, 2012
Slide 1: Barclays Capital Chemical ROC Stars Conference
Exhibit 99.1 Barclays Capital Chemical ROC Stars Conference May 3, 2012 1
Slide 2: Company Overview
Company Overview Olin Corporation Q1 2012 FY 2011 FY 2010 Revenue: $ 507 $ 1,961 $ 1,586 Pretax Income: $ 61 $ 380 $ 77 EPS (Diluted): $ .48 $ 2.99 $ .81 Chlor Alkali Winchester Third Largest North American Producer of A Leading North American Producer of Small Chlorine and Caustic Soda Caliber Ammu
Slide 3: Investment Rationale
Investment Rationale • Leading North American producer of Chlor-Alkali • Leading producer of industrial bleach with additional growth opportunities • Leading producer of burner grade hydrochloric acid • Favorable industry dynamics for both businesses • Winchester’s leading industry position • Signif
Slide 4: Improving EBITDA
Improving EBITDA • Since 2000, net chlor alkali capacity Olin Adjusted EBITDA has been reduced in North America by approximately 7% • The North American chlor alkali industry has consolidated • Olin’s acquisitions have been immediately accretive to earnings • Downstream bleach and HCl growth has inc
Slide 5: Chlor Alkali Process
Chlor Alkali Process Raw Materials BRINE + ELECTROLYSIS = PRODUCTS North Percent American of 2011 Position Revenue KOH - 1.59 Tons #2 9% KOH (Potassium or Hydroxide) Caustic Soda - 1.13 Tons #3 50% Caustic Soda (Sodium Hydroxide) Bleach #1 10% (Sodium Industrial Potassium Hypochlorite) Chlorideor Ch
Slide 6: Integrated Vinyls Producers
Integrated Vinyls Producers 6
Slide 7: Mercury Transition Plan
Mercury Transition Plan • Olin currently operates 2 mercury cell plants representing approximately 360,000 ECUs or 17% of our total capacity • By the end of 2012, Olin expects to convert 200,000 ECUs of mercury cell technology to membrane technology and will shutdown the remaining 160,000 ECUs • Thi
Slide 8: Favorable Industry Dynamics
Favorable Industry Dynamics Capacity Rationalization Industry Consolidation 17,300 Acquisition Position Date 16,040 Equa-Chlor 2011 • Acquired by PPG • 70,000 Short Tons ECU Capacity PolyOne 2011 • Olin acquired PolyOne’s 50% ownership in the SunBelt JV • 176,000 Short Tons ECU Capacity 1.26 million
Slide 9: Diverse Customer Base
Diverse Customer Base North American Industry Olin Corporation Chlorine Caustic Soda Source: CMAI and Olin 2011 demand. Includes sales of SunBelt. Chlorine: “Organics” includes: Propylene oxide, epichlorohydrin, MDI, TDI, polycarbonates. “Inorganics” includes: Titanium dioxide and bromine. 9 Caustic
Slide 10: Olin's Geographic Advantage
Olin’s Geographic Advantage Becancour, Tacoma, WA Quebec Chlorine Location Niagara Falls, NY (000sCapacity Short Tons) Tracy, CA McIntosh, AL 426 Diaphragm McIntosh, AL - SunBelt 352 Membrane Henderson, 297 Diaphragm NV Becancour, Quebec 65 Membrane Charleston, Santa Fe Springs, TN Niagara Falls, NY
Slide 11: Industrial Bleach
Industrial Bleach • Olin is the leading North American bleach producer with 18% market share and planned capacity additions will provide Olin the ability to double market share by 2013 • Bleach utilizes both chlorine and caustic soda in an ECU ratio • Bleach commands a premium price over an ECU • De
Slide 12: Bleach Growth is a Key Objective
Bleach Growth is a Key Objective OLIN HYPURE® BLEACH AND RAILCAR DELIVERY WILL IMPROVE ACCESS TO THE MARKET • Increased stability and shelf life • Reduced transportation costs • Olin bleach volume delivers steady growth • Larger shipping radius • Key bleach target segments include water treatment, c
Slide 13: Hydrochloric Acid
Hydrochloric Acid • HCl demand is strong, primarily from oil and gas exploration, resulting in Q1 2012 volumes up 10% over Q1 2011 levels • Demand for HCl is currently higher than supply • By-product HCl accounts for 75% of the market supply, but availability is subject to urethane and fluorocarbon
Slide 14: Growing HCl Demand
Growing HCl Demand Source: CEH 2009 North American HCl Supply North American HCl Demand • Burner acid is the only growing HCl supply source • Oil & Gas demand has outstripped supply • 75% of HCl is supplied by Gulf byproduct producers • U.S. steel industry demand is recovering • Byproduct HCl availa
Slide 15: Chlor-Alkali Outlook
Chlor-Alkali Outlook (1) • Q1 2012 ECU netbacks of $585 were down slightly from Q4 2011 levels • At this time, the success of the Q1 price announcements of $40 for chlorine and $45 for caustic soda remain uncertain • Q1 2012 operating rates increased to 80% and we expect our system operating rates t
Slide 16: Winchester Segment
Winchester Segment Hunters & Recreational Shooters Winchester Strategy Mass Law • Cost Reduction Products Retail Distributors Military Industrial Merchants Enforcement – Centerfire relocation Rifle ü ü ü ü ü N/A – Once complete, we expect $30 million Handgun ü ü ü ü ü N/A lower operating costs Rimfi
Slide 17: Strong Correlation Between Firearm and Ammunition Sales
Strong Correlation Between Firearm and Ammunition Sales Data Correlations •NICS Checks & U.S. Firearms Production: +94% •U.S. Commercial Ammunition Mfr. Shipments & U.S. Firearms Production: +94% •U.S. Commercial Ammunition Mfr. Shipments & NICS Checks: +88% U.S. Gun Sale Background Checks (NICS)1 U
Slide 18: Winchester
Winchester • Q1 2012 earnings down from Q1 2011 due to higher commodity and transition costs associated with the Oxford, MS relocation • Commercial sales were strong in Q1 2012 and commercial backlogs increased over $100 million during the quarter • During 2012, we expect that the relocation efforts
Slide 19: Centerfire Relocation
Centerfire Relocation • The decision to relocate Winchester’s centerfire operations, including 1,000 jobs, was made on November 3, 2010 • The controlled relocation process is expected to take up to 5 years to complete, assuring high quality product is available for our customers throughout the trans
Slide 20: Strong Balance Sheet
Strong Balance Sheet • The 3/31/12 cash balance of $255 million reflects: • Normal seasonal working capital growth of $71 million; • $76 million of capital spending associated with mercury conversion project, construction of 3 HyPure® bleach plants and the centerfire relocation to Oxford, MS; and •
Slide 21: Profit Outlook
Profit Outlook • Q1 2012 Chlor Alkali earnings were almost $75 million and Winchester earned almost $12 million contributing to the highest level of EBIDTA in the Company’s long history • Operating rates are projected to be in the mid-80% range in the Q2 reflecting the normal pick-up in bleach deman
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 described
Slide 23: Slide 23
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