Olin Corporation · NYSE:OLN
Olin — Sidoti & Company Emerging Growth Research Institutional Investor Forum 2015
22 slides from Olin's conference presentation, Mar 16, 2015
Slide 1: Sidoti & Company Emerging Growth Research Institutional Investor Forum
1 Sidoti & Company Emerging Growth Research Institutional Investor Forum March 17, 2015 Exhibit 99.1
Slide 2: Company Overview
2 Company Overview All financial data are for the 12 months ended December 31, 2014 and December 31, 2013. Data are presented in millions of U.S. dollars except for earnings per share. Additional information is available at www.olin.com. Winchester Chlor Alkali A Leading North American Producer of C
Slide 3: Investment Rationale
3 Investment Rationale • Leading Positions In: Chlorine and Caustic Soda Industrial Bleach Burner Grade Hydrochloric Acid Small Caliber Ammunition • Compelling Financials: Positive Earnings Outlook - Earnings in all three segments are expected to improve in 2015 vs. 2014 Strong Free Cash Flow Fully
Slide 4: Growing EBITDA
4 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) − P
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 2014 Revenue #2 #1 Industrial #1 Merchant #1 Burner Grade 51% 13% 4% 11%
Slide 6: North American Chlor Alkali Producers & Technologies
6 North American Chlor Alkali Producers & Technologies 0 500 1,000 1,500 2,000 2,500 3,000 3,500 4,000 Dow Oxy Axiall Olin Shintech Formosa Westlake Bayer PMV U.S. Mag Canexus Iquisa Others N or th A m er ican C hlo ri ne P roduc ti on C apac it y by P roduce r ( 000 E C U ) Diaphragm Membrane Salt
Slide 7: Diverse Customer Base
7 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 glutamat
Slide 8: Olin's Geographic Footprint
8 Location 12/31/14 Chlorine Capacity (000s ST) McIntosh, AL 426 Diaphragm McIntosh, AL - SunBelt 352 Membrane Becancour, Quebec 175 Diaphragm Niagara Falls, NY 300 Membrane Charleston, TN 218 Membrane St. Gabriel, LA 246 Membrane Henderson, NV 153 Diaphragm Total 1,870 Membrane 60% Diaphragm 40% Ol
Slide 9: Industrial Bleach Initiative
9 Industrial Bleach Initiative • Appeal of Industrial Bleach – Bleach utilizes both chlorine and caustic soda in an ECU ratio – Growing demand is seasonal, but not cyclical – Bleach commands a premium price over an ECU • Olin Advantages – Regional nature of the bleach business benefits Olin’s geogra
Slide 10: Bleach Growth is a Key Objective
10 2006 2007 2008 2009 2010 2011 2012 2013 2014 Olin Bleach Historical Sales Volume (DT) 22% CAGR Bleach Growth is a Key Objective • Olin bleach volumes have delivered steady growth since 2006 • We expect additional growth to continue as bleach railcars extend our delivery range • In 2014, Olin conv
Slide 11: Hydrochloric Acid
11 Hydrochloric Acid • Olin is the leading producer of Burner-grade HCl in North America with 5 manufacturing locations in the United States and Canada • Currently, Olin estimates that 50% of HCl supply is “Burner-grade” or “on-purpose” HCl • By-product outages and seasonality can reduce supply by a
Slide 12: Growing HCl Volumes
12 2006 2007 2008 2009 2010 2011 2012 2013 2014 Olin HCl Historical Sales Volume (DT) Growing HCl Volumes • Olin HCl volumes have grown steadily since 2006 • We forecast that HCl volumes will continue to grow • HCl pricing continues to sell at a meaningful premium over chlorine • Olin currently has
Slide 13: Higher Peaks and Higher Troughs: Chlor Alkali EBITDA
13 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 • Capacity rationalization • Olin Bleach, HCl and KOH initiatives have reduced the cyclicality of the business, and at the same time, increased profit margins • 2014
Slide 14: Chemical Distribution
14 Chemical Distribution • KA Steel is a chemical distributor uniquely focused on selling the products produced by Olin’s Chlor Alkali business • Strategic Initiatives: − Grow the sales of Olin-produced bleach, HCl and KOH − Improve the returns on caustic soda sales • KA Steel has generated approxim
Slide 15: Chemical Distribution Network Fit
15 Chemical Distribution • KA Steel caustic distribution infrastructure provides a strong fit with Olin’s chlor alkali assets: − Mature supply relationships − 90,000 tons of caustic storage − Expanded geographic coverage − Logistical savings through truck and barge shipments instead of rail • Provid
Slide 16: Winchester Brands and Strategy
16 Winchester Brands Winchester Strategy • Centerfire relocation: – $24 million of cost savings in 2014 – Expect $30 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 – Mainta
Slide 17: U.S. Commercial Ammunition Manufacturer Shipments
17 U.S. Commercial Ammunition Manufacturer Shipments1 Increased Gun Control Concerns (Assault Weapons Ban/Brady Bill Enacted / Ammunition Shortage Rumors) Concerns of Y2K- related issues Increased participation & consumer stockpiling driven by: • Price increases • Caliber-specific shortages • Politi
Slide 18: Growing Shooting Sports Participation Has Increased Installed Base
18 Growing Shooting Sports Participation Has Increased Installed Base
Slide 19: Winchester Is Growing
19 0 20 40 60 80 100 120 140 160 180 2006 2007 2008 2009 2010 2011 2012 2013 2014 Winchester Is Growing • We expect 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 shooters • Pistol and
Slide 20: Strong Balance Sheet
20 Strong Balance Sheet • Year end 2014 cash balance of $257 million • $72 million of CAPEX in 2014 vs. D&A expense of $139 million • During 2014, $128 million distributed to shareholders in the form of common stock dividends and 2.5 million of common share repurchases • 2015 CAPEX is expected to be
Slide 21: Profit Outlook
21 • 2014 EBITDA was $344 million; 2015 EBITDA is expected to be in the $340 to $380 million range • Earnings improvements are expected in all three business segments in 2015 over 2014 results • Recent industry pricing initiatives on both chlorine and caustic soda • Chemical Distribution profit impr
Slide 22: Forward-Looking Statements
22 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
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