Slide 1: Third Quarter 2016 Earnings Presentation
Third Quarter 2016 Earnings Presentation November 1, 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 $222 million in the third quarter1 Forecasting fourth quarter 2016 Adjusted EBITDA range of $190 million to $220 million2 Expect full-year cost synergy realization of approximately $60 million Full year 2016 Adjusted EBITDA guidance range of $81
Slide 4: Full Year 2016 Adjusted EBITDA Original vs Current Forecast
2Q $180 $915 - $985 4 Full Year 2016 Adjusted EBITDA Original Forecast Current Forecast $810 - $840 4Q $190 – $220 1Q $215 ($ in millions) 3Q $222 - Lower caustic soda pricing ~$60 - Lower EDC pricing ~$40 - Weaker chlorinated organics volumes ~$40 1: Olin’s definition of “Adjusted EBITDA” (earnings
Slide 5: Chlor Alkali Products and Vinyls Segment Performance
3Q16 2Q16 ∆ Q/Q Sales $779.4 $733.0 6.3% Adjusted EBITDA $160.0 $134.1 19.3% 3Q16 Performance Higher caustic pricing and volumes Increased raw materials costs associated with natural gas and purchased ethylene Lower maintenance outage costs 4Q16 outlook – is expected to be slightly lower a
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 internal caustic soda consumptio
Slide 7: Epoxy Segment Performance
3Q16 2Q16 ∆ Q/Q Sales $470.1 $450.0 4.5% Adjusted EBITDA $32.9 $23.0 43.0% 3Q16 Performance Higher volumes and increased pricing Higher raw materials input costs associated with benzene and propylene Lower maintenance outage costs 4Q16 outlook – is expected to be similar as compared to 3Q1
Slide 8: Winchester Segment Performance
3Q16 Performance Higher volumes driven by seasonally stronger demand Results sequentially stronger than Q216 and improved over 3Q15 4Q16 outlook – expect lower earnings sequentially from seasonally strong Q3 demand, but forecast the quarter to improve over Q415 results Full year 2016 earni
Slide 9: 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 10: Adjusted EBITDA Potential: Mid-Cycle
$1.5 billion + FY 2016 Forecast $810 – $840 million Chlor Alkali Mid-Cycle EDC Price Recovery Continued Epoxy Improvement Synergies Adjusted EBITDA Potential: Mid-Cycle 10
Slide 11: 2016 Free Cash Flow Forecast
Working Capital4 Adjusted EBITDA1 Free Cash Flow After Dividend Cash Tax Refund2 Capital Spending and Investments3 Free Cash Flow $825 $25 ($455) ($29) ($190) $351 ($132) $219 1: Mid-point of Olin’s estimated Adjusted EBITDA range of $810 to $840 million for full year 2016 2: Estimated using the mid
Slide 12: Appendix
Appendix 12
Slide 13: Non-GAAP Financial Measures – Adjusted EBITDA
Non-GAAP Financial Measures – Adjusted EBITDA (a) (a) Unaudited. (b) Restructuring charges for the three months ended September 30, 2016 and June 30, 2016 and for the nine months ended September 30, 2016 were primarily associated with the closure of 433,000 tons of chlor alkali capacity across three
Slide 14: Non-GAAP Financial Measures – Net Income (loss) from Operations per share
Non-GAAP Financial Measures – Net Income (loss) from Operations per share (a) (a) Unaudited. (b) Restructuring charges for the three months ended September 30, 2016 and June 30, 2016 and for the nine months ended September 30, 2016 were primarily associated with the closure of 433,000 tons of chlor
Slide 15: Non-GAAP Financial Measures by Segment
Non-GAAP Financial Measures by Segment 15 (In millions) Income (loss) before Taxes Depreciation and Amortization Adjusted EBITDA Chlor Alkali Products and Vinyls 53.7$ 106.3$ 160.0$ Epoxy 10.3 22.6 32.9 Winchester 36.0 4.7 40.7 (In millions) Income (loss) before Taxes Depreciation and Amortization A
Slide 16: Chlor Alkali Products and Vinyls Pricing and Volume Comparisons
3Q16 versus 3Q15 2Q16 Chlorine Caustic Soda EDC N/A Bleach HCI Chlorinated Organics N/A Chlor Alkali Products and Vinyls Pricing and Volume Comparisons 3Q16 versus 3Q15 2Q16 Chlorine Caustic Soda N/A EDC N/A Bleach HCI Chlorinated Organics N/A Volume Comparison Pricing Comparison 16
Slide 17: Annual EBITDA Sensitivity
Product Price Change EBITDA Impact Chlorine $10/ton $10 million Caustic $10/ton $30 million EDC $.01/pound $20 million Annual EBITDA Sensitivity 17
Slide 18: 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 19: EDC Pricing History 2000 – September 2016
0 5 10 15 20 25 0 25 50 75 100 EDC Pricing History 2000 – September 2016 EDC Spot Export Prices C en ts P er P ou n d Source: IHS EDC Pricing Distribution Percent of Time in Price Range • A $0.01 change in Olin’s EDC sales price changes annual Adjusted EBITDA by $20 million • Current index EDC price
Slide 20: Corporate & Other
Corporate & Other 20 3Q16 2Q16 Pension Income $15.4 $12.6 Environmental Expense $(0.4) $(2.4) Other Corporate and Unallocated Costs $(28.2) $(23.9) Restructuring Charges $(5.2) $(8.2) Acquisition-related Costs $(13.1) $(16.3) ($ in millions) Corporate and other unallocated costs are consistent wit
Slide 21: Guidance Assumptions
Guidance Assumptions 21 Full Year 2016 Forecast Key Elements Capital Spending $240 to $260 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 $445 to $465
Slide 22: End slide
End slide TM 22