Olin Corporation · NYSE:OLN
Olin — Barclays Select Series Chemical ROC Stars (May 2013)
24 slides from Olin's conference presentation, May 6, 2013
Slide 1: Barclays Select Series Chemical ROC Stars
1 Barclays Select Series Chemical ROC Stars May 7, 2013 Exhibit 99.1
Slide 2: Company Overview
2 Company Overview * 2011 results exclude a pretax gain of $181 million associated with the remeasurement of Olin’s SunBelt interest, or $1.30 per share. All financial data are for the quarter ended March 31, 2013 and the years ended December 31, 2012 and 2011. Data are presented in millions of U.S.
Slide 3: Investment Rationale
3 Investment Rationale • Leading Positions In: North American Chlor-Alkali Products 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 Che
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 Driving EBITDA Growth
7 • Mercury Free Chlor-alkali Products – Augusta, GA: facility discontinued production September 2012 – Charleston, TN: caustic cell room converted to membrane technology September 2012, potassium hydroxide converted to membrane technology October 2012, both operating at design rate • Bleach Initiat
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 bleach will exceed 17% by Q2 2013 • Olin HyPure®
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 by Gulf by-product producers • By-product HCl availability is less reliable than burner • Olin is ideally positioned to serve the West & North through expanded distribution ca
Slide 14: Key Chlor-Alkali Factors
14 Key Chlor-Alkali Factors • Q1 2013 ECU netback of $565 expected to improve slightly in Q2 2013 with the expectation that $10 to $30 of the Q1 2013 caustic price announcement will be reflected in Q3 2013 ECU netback • Q2 2013 earnings are expected to be down slightly from Q1 2013, the result of 3
Slide 15: KA Steel Acquisition
15 • 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 16: Complimentary Asset Footprints
16 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 17: KA Steel Synergies Update
17 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 18: Winchester Strategy
18 Winchester Winchester Strategy • Cost Reduction – Centerfire relocation – Once completed, we expect at least $30 million lower operating costs – At least $15 million of cost savings expected to be realized in 2013 • New Product Development – Continue to develop new product offerings – Maintain re
Slide 19: Strong Correlation Between Firearm and Ammunition Sales
19 Strong Correlation Between Firearm and Ammunition Sales Data Correlations • NICS Checks & U.S. Firearms Production: +97% • U.S. Commercial Ammunition Mfr. Shipments & U.S. Firearms Production: +91% • U.S. Commercial Ammunition Mfr. Shipments & NICS Checks: +86% 1Estimated based on NSSF Trade Stat
Slide 20: Winchester Is Growing
20 0 10 20 30 40 50 60 70 80 90 2006 2007 2008 2009 2010 2011 2012 3Mo '13 Winchester Is Growing • Surge that began in Q4 2012 continued into 2013 resulting in record quarterly EBITDA of $35 million • Currently, sales are only limited by product availability • Commercial backlog now exceeds $495 mil
Slide 21: Centerfire Relocation
21 Centerfire Relocation • The decision to relocate Winchester’s centerfire operations, including 1,000 jobs, was made on November 3, 2010 • The net project cost is estimated to be $80 million, of which approximately $50 million is related to capital expenditures • The project is on schedule and on
Slide 22: Strong Balance Sheet
22 Strong Balance Sheet • The 3/31/13 cash balance of $104 million reflects: • $83 million Q1 2013 increase in working capital includes higher Winchester receivables associated with surge level sales; • $30 million of CAPEX in Q1 2013 partly attributable to the Henderson, NV HyPure® bleach plant and
Slide 23: 2013 EBITDA Outlook
23 • 2013 EBITDA is expected to be in the $415 to $445 million range, or $40 to $70 million higher than record 2012 EBITDA • EBITDA growth in 2013 is driven by the successful completion of several strategic initiatives in 2012 and the on-going bleach and HCl growth initiatives, KA Steel synergies, s
Slide 24: Forward-Looking Statements
24 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
Olin — Barclays Select Series Chemical ROC Stars (May 2013) on 6ix