Olin Corporation · NYSE:OLN
Olin — Bank of America Merrill Lynch Industrials Conference 2011
20 slides from Olin's conference presentation, Dec 5, 2011
Slide 1: Bank of America Merrill Lynch Industrials Conference
Exhibit 99.1 Bank of America Merrill Lynch Industrials Conference December 6, 2011 1
Slide 2: Company Overview
Company Overview Olin Q3 2011 9Mos 2011 FY 2010 Revenue: $ 550 $ 1,515 $ 1,586 EBITDA: $ 103 $ 449 $ 188 Pretax Operating Inc.: $ 69 $ 353 $ 77 EPS (Diluted): $ .58 $ 2.76 $ .81 Chlor Alkali Winchester Third Largest North American Producer of A Leading North American Producer of Small Chlorine and C
Slide 3: Investment Rationale
Investment Rationale • Leading North American producer of Chlor-Alkali • Strategically positioned facilities • Diverse end customer base • Favorable industry dynamics • Leading producer of industrial bleach with additional growth opportunities • Pioneer and SunBelt acquisition synergies improved chl
Slide 4: Chlor Alkali Segment
Chlor Alkali Segment Chlor Alkali Manufacturing Process BRINE + ELECTROLYSIS = OUTPUTS North Percent American of 2010 1.8 Tons Salt & 2.8 Megawatts Position Revenue .5 Tons Water Electricity KOH - 1.59 Tons #2 11% KOH (Potassium or Hydroxide) Caustic Soda - 1.13 Tons #3 42% Caustic Soda (Sodium Hydr
Slide 5: Olin is #3 Chlor-alkali Producer
Olin is #3 Chlor-alkali Producer Oxy includes OxyVinyls, PPG excludes Equa-Chlor and Olin includes 100% of SunBelt. Source: CMAI/Olin - 2010 year-end figures 5
Slide 6: Mercury Transition Plan
Mercury Transition Plan • The North American Chlor Alkali industry has been moving away from manufacturing chlorine and caustic soda using mercury cell technology due to customer product de-selection and threats of potential legislation • Olin currently operates 2 mercury cell plants representing ap
Slide 7: Favorable Industry Dynamics
Favorable Industry Dynamics Capacity Rationalization Industry Consolidation mmMT Acquisition Target Position Date 15.6 • Acquired by PPG 14.2 Equa-Chlor 2011 • 70,000 Short Tons ECU Capacity • Olin acquired SunBelt interest 1.4 mm MT PolyOne 2011 • 176,000 Short Tons ECU Capacity net capacity reduct
Slide 8: Acquisition of PolyOne's Interest in SunBelt
Acquisition of PolyOne’s Interest in SunBelt • On February 28, 2011, Olin purchased PolyOne’s 50% interest in SunBelt for $132.3 million in cash plus the assumption of a PolyOne guarantee related to the SunBelt Partnership debt • Olin and PolyOne agreed to a three-year earn out based on the performa
Slide 9: SunBelt Acquisition Benefits
SunBelt Acquisition Benefits • Olin expects the acquisition to be accretive to both EBITDA and earnings in 2011 • SunBelt currently has the lowest cash manufacturing costs in the Olin system • SunBelt has a long-term contract for 250,000 tons of chlorine per year • During Q3 2011, SunBelt contribute
Slide 10: Diverse Customer Base
Diverse Customer Base North American Industry Olin Corporation Chlorine Caustic Soda Source: CMAI and Olin 2010 demand. Includes sales of SunBelt. Chlorine: “Organics” includes: Propylene oxide, epichlorohydrin, MDI, TDI, polycarbonates. “Inorganics” includes: Titanium dioxide and bromine. Caustic S
Slide 11: 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, 252 Diaphragm NV Becancour, Quebec 65 Membrane Charleston, Santa Fe Springs, TN Niagara Falls, NY
Slide 12: Why Industrial Bleach?
Why Industrial Bleach? • Olin is the leading North American bleach producer with 18% market share and current installed capacity to service 25% of the market with low-cost expansion opportunities • Bleach utilizes both chlorine and caustic soda in an ECU ratio • Bleach commands a premium price over
Slide 13: Chlor-Alkali Outlook
Chlor-Alkali Outlook • Q3 2011 ECU netbacks(1) of $590 are up sequentially for the eighth consecutive quarter and $40 higher than the prior quarter • Positive price momentum from 2010 has continued in 2011: Chlorine Caustic Soda 2010 Increases $ 50 $ 300 Q1 2011 $ 60 $ 100 April 2011 $ 50 June 2011
Slide 14: Winchester Segment
Winchester Segment Hunters & Recreational Shooters Winchester Strategy Mass Law • Leverage existing strengths Products Retail Distributors Military Industrial Merchants Enforcement – Seek new opportunities Rifle ü ü ü ü ü N/A to leverage the legendary Winchester® Handgun ü ü ü ü ü N/A brand name – I
Slide 15: Favorable Industry Dynamics
Favorable Industry Dynamics • Economic environment leading to personal security concerns • Fears of increased gun/ammunition control due to change in administration Commercial • New gun and ammunition products • Strong hunting activity in weak economy, driven by cost/benefit of hunting for food and
Slide 16: Winchester
Winchester • Q3 2011 segment earnings of $13.1 million include restructuring charges associated with the move of centerfire operations to Oxford, MS and higher commodity costs versus Q3 2010 • In response to higher metals costs, Olin and two other North American producers announced price increases t
Slide 17: 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. • Successful equipme
Slide 18: Financial Highlights
Financial Highlights • Strong Balance Sheet – The Q3 2011 cash balance of $390 million reflects the use of $132 million to acquire PolyOne’s 50% interest in SunBelt and approximately $71 million for working capital – Pension plans remain fully funded with no contributions expected until at least 201
Slide 19: 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 describe
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Olin — Bank of America Merrill Lynch Industrials Conference 2011 on 6ix