Olin Corporation · NYSE:OLN
Olin — Wells Fargo Securities Industrial & Construction Conference 2014
24 slides from Olin's conference presentation, May 6, 2014
Slide 1: Wells Fargo Securities Industrial & Construction Conference
1 Wells Fargo Securities Industrial & Construction Conference May 7, 2014 Exhibit 99.1
Slide 2: Company Overview
2 Company Overview All financial data are for the 3 months ended March 31, 2014 and for the 12 months ended December 31, 2013 and 2012 except for 2012 Chemical Distribution results. Chemical Distribution results for 2012 are for the period beginning August 22, 2012 (acquisition date) through Decembe
Slide 3: Investment Rationale
3 Investment Rationale • Leading Positions In: Chlorine and Caustic Soda 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 Chemicals Inc.
Slide 4: Growing EBITDA
4 0.0 50.0 100.0 150.0 200.0 250.0 300.0 350.0 400.0 2006 2007 2008 2009 2010 2011 2012 2013 2014 Est 343 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 •
Slide 5: Bleach, HCl and Winchester initiatives
5 • Bleach Initiative – HyPure® plants in McIntosh, AL & Niagara Falls, NY were completed in 2012; and a Henderson, NV plant was completed in 2013; all are operating at full rate – We are capable of converting more than 17% of our chlor-alkali capacity into higher margin bleach – In 2013, bleach con
Slide 6: Chlor Alkali Process
6 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 2013 Revenue #2 #1 Industrial #1 Merchant #1 Burner Grade 54% 12% 4% 10%
Slide 7: North American Chlor Alkali Producers & Technologies
7 Note: Red label indicates routine seller of merchant chlorine via rail car. 1 2 / 3 1 /1 3 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 4 OLIN 5 Shintech 6 Formosa 7 Bayer 8 Mexichem 9 Westlake 11 Canexus Others 10 US Mag North American Chlor Alkali
Slide 8: Diverse Customer Base
8 Diverse Customer Base Chlorine Caustic Soda North American Industry Olin Corporation Source: IHS and Olin 2013 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 Location 12/31/13 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 208 Membrane St. Gabriel, LA 246 Membrane Henderson, NV 153 Diaphragm Total 2,047 Membrane 57% Diap
Slide 10: Industrial Bleach Initiative
10 Industrial Bleach Initiative • Appeal of 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 • Olin Advantages – Regional nature of the bleach business benefits Olin’s geographic pr
Slide 11: Bleach Growth is a Key Objective
11 23% CAGR Bleach Growth is a Key Objective • Olin bleach volumes have delivered steady growth since 2006 • Key bleach target segments include waste and drinking water treatment, consumer products, food, farming and pool chemicals • Our capacity to convert ECUs into higher margin bleach now exceeds
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 expansions represent the majority of new supply coming online, approaching 13% of 2014 capacity • Burner operating rates are higher than by- product, supplying approximately 25% of North American demand • By-product HCl availability is le
Slide 14: EBITDA Improvement: Higher Peaks and Higher Troughs
14 EBITDA Improvement 0 50 100 150 200 250 300 350 400 450 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 • Industry consolidation • Capacity rationalization • Olin Bleach and HCl initiatives have reduced the cyclicality of the business, and at the same time, increased profit
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 KA Steel for $312 million in cash, subject to post-closing adjustments, and created Chemical Distribution segment • The Section 338(h)(
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: Winchester Strategy
17 Winchester Winchester Strategy • Cost Reduction – Centerfire relocation – Once completed, we expect $35-$40 million of lower operating costs – $17 million of cost savings were realized in 2013 – Expect $22-$26 million of savings in 2014 • New Product Development – Continue to develop new product
Slide 18: Strong Correlation Between Firearms & Ammunition Sales
18 Data Correlations • U.S. Commercial Ammunition Mfr. Shipments & NICS Checks: +94% (1999-2013) • U.S. Commercial Ammunition Mfr. Shipments & U.S. Firearms Production: +71% (1992-2012) • NICS Checks & U.S. Firearms Production: +93% (1999 – 2012) Strong Correlation Between Firearms & Ammunition Sale
Slide 19: Growing Shooting Sports Participation Increases Installed Base
19 Growing Shooting Sports Participation Increases Installed Base
Slide 20: Winchester Is Growing
20 0 20 40 60 80 100 120 140 160 180 2006 2007 2008 2009 2010 2011 2012 2013 Q1 '14 Winchester Is Growing • The surge that began in Q4 2012 continued through 2013 resulting in record full year EBITDA • Currently, sales are limited by product availability • Commercial backlog at the end of Q1 2014 wa
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 500,000 square foot facility was opened in October 2011, the relocation of pistol ammunition manufacturing is complete, rifle manufacturing has been initia
Slide 22: Strong Balance Sheet
22 Strong Balance Sheet • Q1 2014 cash of $247 million reflects Q1 spending of: • $19 million on CAPEX; • $83 million of normal, seasonal working capital needs; and • $31 million distributed to shareholders in the form of common stock dividends and common share repurchases • No material debt maturit
Slide 23: Full Year 2014 EBITDA Outlook
23 • Full year 2014 EBITDA is expected to be $375 to $425 million • Record 2013 EBITDA was driven by the successful completion of several strategic initiatives in 2012, the on-going bleach and HCl growth initiatives, KA Steel synergies, strong Winchester results and cost savings associated with the
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
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