Olin Corporation · NYSE:OLN
Olin — UBS SMID Cap One-on-One Symposium 2013
24 slides from Olin's conference presentation, Feb 26, 2013
Slide 1: UBS SMID Cap One-on-One Symposium
1 UBS SMID Cap One-on-One Symposium February 26, 2013 Exhibit 99.1
Slide 2: Company Overview
2 Company Overview All financial data are for the years ended December 31, 2012 and December 31, 2011. Data are presented in millions of U.S. dollars except for earnings per share. 2011 results include a pretax gain of $181 million associated with the remeasurement of Olin’s SunBelt interest, or $1.
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 #3 #1 Industrial #1 Merchant #1 Burner Grade 54% 11% 5% 8
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: Chlor-alkali, bleach and HCl initiatives
7 • Mercury Free Chlor-alkali Products – Augusta, GA facility discontinued production September 2012 – Charleston, TN caustic cell room converted to membrane technology September 2012 and is operating at design rate – Charleston, TN potassium hydroxide cell room converted to membrane technology Octo
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 • HCl demand has strengthened, primarily due to its use as a lead chemical in oil and gas exploration • During 2012, demand for HCl exceeded supply leading to improved pricing as compared to 2011 • By-product HCl accounts for 75% of the market supply, but availability is subject
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 • ECU netback improved $20 to $580 in Q4 2012 from Q3 2012 levels and we expect to realize additional caustic pricing in Q2 2013 from the November 2012 caustic price announcement • Q4 EBITDA improved 8% year-over-year with upside in 2013 • Increased higher-margin bleach s
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 complete, we expect $30 million lower operating costs – Meaningful savings expected to begin in 2013 • New Product Development – Continue to develop new product offerings – Maintain reputation as a new product innovato
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 Winchester Is Growing • Surge beginning prior to the 2012 election drove Q4 record earnings • Currently, sales are only limited by product availability • Commercial backlog now exceeds $250 million • Centerfire relocation to MS will increase Winchester EBIT by $10 to $15 million in 2013 vs. a $5
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 12/31/12 cash balance of $177 million reflects: • $312 million for the acquisition of KA Steel; • $256 million of capital spending in 2012 associated with the exiting of mercury technology projects, construction of 3 HyPure® Bleach plants and the centerfire relocation t
Slide 23: 2013 outlook and summary
23 • 2012 EBITDA of $373 million is the highest level of EBITDA in the Company’s 100+ year history • Further EBITDA growth of $410 to $440 million 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 syne
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