Olin Corp Q4 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Aleksey Yefremov - KeyBanc Capital Markets Inc. - Analyst : Ken, can you provide as much detail as possible about your volume outlook for Chlorovinyls in the first quarter. And also if you could comment whether you've lost any chlorine or other Chlor Alkali business in Q1 for the rest of the year on a contract basis where that step down in volume is more temporary and tactical, and we should expect volumes to rebound in coming quarters in '25. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 2:00PM, OLN.N - Q4 2024 Olin Corp Earnings Call

Question: Mike Leithead - Barclays - Analyst : Just two around guidance. First, on the fourth quarter, I think in mid-December, you said you'd be closer to 170 and then you ended up 20 million higher. So what happened in the last two weeks of the year. And then second, as we look through 2025, beyond the first quarter, I appreciate there's limited demand visibility. But are there Olin's specific earnings contributors we should think about as the year goes on to sort of build a bridge off of that 1Q?

Question: Hassan Ahmed - Alembic Global Advisors - Analyst : A quick question around supply. And I brought this up at the Analyst Day as well. I mean, look, one of the virtues, obviously, of the Chlor Alkali story historically had been the dearth of capacity additions. But it just seems that between certain TiO2 producers sort of announcing chlorine capacity additions, certain polyurethane producers out there sort of investing in infrastructure to potentially, sort of source chlorine from other vendors, there seems to be a creep in terms of supply. So could you sort of give us your near- and medium-term sort of outlook on maybe even numerically of what you think the supply picture looks like for Chlor Alkali?

Question: Jeff Zekauskas - JPMorgan - Analyst : So Ken, you've been CEO of Olin now for almost a year. When you look back on the year, and you compare your actions or your leadership direction to Scott Sutton, have there been any changes? Or do you see your tenure over the past year as a continuation of what Scott did? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 2:00PM, OLN.N - Q4 2024 Olin Corp Earnings Call

Question: Bhavesh Lodaya - BMO Capital Markets - Analyst : Good morning, Ken. Question on your Chlor Alkali strategy. So industry consultants are expecting higher operating rates sequentially in the first quarter. Now, expectations were that when the market improves when operating rates increase industry-wide, Olin gets a higher share of those volumes. It appears that you are not seeing that sort of a market or that sort of margins are actually restricting your participation because you expect lower volumes in the first quarter. So I guess the question is what needs to change for this trend to not continue as we go ahead into the year?

Question: Patrick Cunningham - Citi - Analyst : Just on the recent AMMO acquisition, can you provide some more color on the $40 million in synergies that you expect to achieve through economies of scale and if there's anything from a commercial standpoint that takes into that number?

Question: Duffy Fischer - Goldman Sachs - Analyst : Just a question around the potential change in trade flows from the tariffs and antidumping around Epoxy. What have you seen so far? Obviously, some of your customers are calling out higher epoxy prices already. But what do you think is going to happen if the REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. JANUARY 31, 2025 / 2:00PM, OLN.N - Q4 2024 Olin Corp Earnings Call ask that you guys have put forward happens, what do you think that will do to trade flows? And what do you think that will do from incremental pricing from here forward?

Question: Mike Sison - Wells Fargo Securities, LLC - Analyst : Most companies sort of have said that the outlook -- or the demand outlook for '25 doesn't look much better than '24. So if you think about -- if that does unfortunately unfold, how does your -- how do you improve EBITDA? And I know you don't give annual guidance, but how do you improve EBITDA this year, year-over-year? And when you think about the first quarter kind of low point, what sort of drives the improvement potentially sequentially into the later quarters?

Question: Steve Byrne - BofA Global Research - Analyst : Yes. Just a little bit about your new tolling agreement to convert some EDC in the PVC, how would you compare the variable margins that you make on your current sales of EDC versus what you expect to get on this PVC post the tolling and shipping costs? And I'm curious, who are you going to be selling to? Are you developing new customers with the new commercial organization such as selling direct to pipe producers? Or are you selling to your existing, say, EDC customers who then would use their own commercial organization? Just curious on your outlook for this business.

Question: Arun Viswanathan - RBC Capital Markets - Analyst : So I guess I wanted to get your thoughts, if I could, on maybe some preliminary thoughts on '25. So obviously, you're guiding to that 150 to 170 for Q1. If we look at '24 without Hurricane Beryl impacts here in the $1 billion or so range, assuming some synergies and growth in Winchester and maybe some recovery in the other segments. Should you be above that $1 billion range, maybe in the $1.1 billion to $1.2 billion range for the full year? Or how should we think about what you see in the cards for '25 EBITDA?

Question: David Begleiter - David Begleiter - Analyst : Ken, just on natural gas, can you discuss your hedging strategies for this year? And how should we think about the impact from higher natural gas prices on your earnings for the year?

Question: Peter Osterland - Truist Securities - Analyst : Within Winchester, is there an extensive pipeline of opportunities out there that you are considering or would consider for additional bolt-on M&A? At the current valuation, how do you weigh that option as a priority versus share repurchases?

Question: Kevin McCarthy - Vertical Research Partners - Analyst : Ken, I'd appreciate your updated thoughts on the dynamics in the Caustic soda export market coming out of the US Gulf Coast. I think you made a comment earlier on the call that you expect ECU values to trend flat sequentially into the first quarter. And I'm just wondering in that context, what you're thinking about directionally for spot export prices for Caustic soda? Do you think we're at bottom here? And do we need any sequential improvement over the next couple of months to achieve that flat level? Maybe you could just provide a little bit of context for us in that regard.

Question: John Roberts - Mizuho Securities USA - Analyst : Sometimes in the past, Olin has idled EDC because the margin was too low. And I don't think you're allowed to resell the ethylene. Will the new PVC strategy require you to keep EDC running even if margins on the rest of the merchant EDC market are unacceptable?

Question: Frank Mitsch - Fermium Research - Analyst : Todd, I was wondering if you could talk about the plans to tackle the $110 million that's due in June and when in the $80 million deferred international tax payment, so we're coming up on close to $200 million. What is your plan to attack? Will it be refinancing involved, et cetera? And then just a clarification, Ken. You indicated that the ECU value is expected to be flat in the first quarter relative to the fourth quarter. So is that -- should we read that the PCI index is going to be essentially flat 1Q to 4Q?

Question: Matthew Blair - Tudor Pickering & Co. Sec - Analyst : Is there any update regarding your thinking on potential growth projects? I think at the Investor Day, you talked about some opportunities with the bleach plant in California, the Radford AMMO bid and the expansion of the Quebec CAPV plant. As you stand today, could you rank those projects? And what's most attractive and what would be least attractive?

Question: Chris Perrella - UBS Equities - Analyst : It's Chris Perrella on for Josh. As I think about the Winchester business over the course of the year, I know sequentially weaker in the first quarter here, you have higher input costs on propellant and the metal. When do you think you outpace those costs with price increases? And does the second half for Winchester, does that look like the first half of 2024? Or does it have to build up over a longer time frame?

Question: Vincent Andrews - Morgan Stanley - Analyst : Ken, I actually have a follow-up to your last point, which is do you have any data on retail sales versus your sell into retail? I'm just trying to see if you have a really good sense of what -- obviously, your customers are destocking, but if your customer customers has been destocking? And are there any bends in those trends that are giving you the confidence about the back half of the year?