![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506081.jpg)
1
Bank of America
2008
BASics/Industrials Conference
May 7, 2008
2008
BASics/Industrials Conference
May 7, 2008
Exhibit 99.1
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506082.jpg)
2
Olin Representatives
Joseph D. Rupp
Chairman, President & Chief Executive Officer
John E. Fischer
Vice President & Chief Financial Officer
John L. McIntosh
Vice President & President, Chlor-Alkali Products
Larry P. Kromidas
Assistant Treasurer & Director, Investor Relations
lpkromidas@olin.com
(618) 258 - 3206
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506083.jpg)
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Investment Rationale
• Strong outlook based on:
– Relatively high ECU prices
– Benefits from the Pioneer acquisition
– Increasing profitability from Winchester
• Strong balance sheet with no debt maturities until
2011
2011
• Substantial cash flow supports 81+ year continuous
common dividend with above average yield
common dividend with above average yield
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506084.jpg)
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Olin Vision
To be a leading Basic Materials company delivering
attractive, sustainable shareholder returns
attractive, sustainable shareholder returns
• Being low cost, high quality producer, and #1 or
#2 supplier in the markets we serve
#2 supplier in the markets we serve
• Providing excellent customer service and
advanced technological solutions
advanced technological solutions
• Generating returns above the cost of capital over
the economic cycle
the economic cycle
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506085.jpg)
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Total Return to Shareholders in Top Third of S&P Mid Cap 400
Return on Capital Employed Over Cost of Capital Through the Cycle
Olin Corporation Goal: Superior Shareholder Returns
Olin Corporate Strategy
1. Build on current leadership positions in Chlor-Alkali
and Ammunition
and Ammunition
• Improve operating efficiency and profitability
• Integrate downstream selectively
2. Allocate resources to the businesses that can create the
most value
most value
3. Manage financial resources to satisfy legacy liabilities
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506086.jpg)
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Impact of Strategic Actions
“The New Olin”
“The New Olin”
• Improved profitability
• Improved product mix with increased value added
bleach and greater geographic diversity
bleach and greater geographic diversity
• Stronger balance sheet with reduced working capital
investment and volatility
investment and volatility
• $30 million per year lower legacy costs
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506087.jpg)
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Olin’s Chlor Alkali Strategy
• Be the preferred supplier to merchant chlor alkali
customers in addition to being the low cost producer
customers in addition to being the low cost producer
• Goal is to increase the value of the Chlor Alkali
Division to Olin through:
Division to Olin through:
– Optimizing capacity utilization
– Higher margin downstream products
– Cost reduction and financial discipline
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506088.jpg)
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Pioneer Acquisition
• Synergistic, bolt-on acquisition that enhances our
chlor-alkali franchise
chlor-alkali franchise
– Immediately accretive to earnings and cash flow that
remains highly accretive throughout the cycle
remains highly accretive throughout the cycle
– Improves profitability through synergies and capacity
optimization
optimization
– Provides platform for value added growth
• #1 supplier of industrial bleach in North America
• St. Gabriel conversion and expansion
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit990506089.jpg)
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Synergies & Cost Reductions
• $5.5 million of synergies realized in Q1
• Total synergy forecast increased from $35 million
annual rate to at least $40 million
annual rate to at least $40 million
• Synergies of $8 to $10 million annually expected to be
realized from Dalhousie plant closing
realized from Dalhousie plant closing
• St. Gabriel expansion/conversion expected to reduce
annual energy costs by approximately $25 million
annual energy costs by approximately $25 million
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060810.jpg)
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Pioneer
’
s Acquisition moves Olin up to #3 Producer and
…
Chlorine Capacities
Source: CMAI/Olin
0
1,000
2,000
3,000
4,000
5,000
Dow
Occidental
Olin*
PPG
Formosa
GGC
Bayer AG
Mexichem
Diaphragm
Membrane
Mercury
Other
4,780
3,484
1,955
1,856
880
471
430
371
* Includes
St.Gabriel
expansion and Dalhousie shutdown
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060811.jpg)
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…
Enhances Olin
’
s Operational and Geographical Platform
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Pioneer Chlorine Plants
Pioneer Bleach Plants
Source: /Olin
Tacoma, WA
Tracy, CA
Santa Fe Springs, CA
Henderson, NV
St. Gabriel, LA
McIntosh, AL
Augusta, GA
Charleston, TN
Niagara Falls, NY
Becancour
, Quebec
Olin Chlorine & Bleach Plants
1,955
Total
108
Augusta, GA
152
Henderson, NV
160
McIntosh, AL (50%
Sunbelt)
246
St. Gabriel, LA
(2)
248
Charleston, TN
286
Niagara Falls, NY
340
Becancour
, Quebec
(1)
415
McIntosh, AL
1,955
Total
108
Augusta, GA
152
Henderson, NV
160
Sunbelt)
246
St. Gabriel, LA
(2)
248
Charleston, TN
286
Niagara Falls, NY
340
Becancour
, Quebec
(1)
415
Chlorine Capacity
(
-
000 Short Tons)
Location
(1)
Pioneer
’
s
Becancour
Plant has 275,000 short tons
diaphragm and 65,000 short tons membrane capacity
(2)
Pioneer
’
s St. Gabriel plant includes the announced
49,000 short tons capacity expansion and conversion to
membrane cell
Plant Locations
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060812.jpg)
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• Industry pricing environment has improved through:
– Capacity Reductions
– Higher natural gas prices have increased
competitor manufacturing costs (Olin system uses
approximately 25% natural gas)
competitor manufacturing costs (Olin system uses
approximately 25% natural gas)
– Weaker US dollar and higher transportation costs
have significantly reduced caustic imports
have significantly reduced caustic imports
– A $10 ECU change equals a $17 million change in
pretax income at full capacity or $0.15/share at a
35% tax rate
pretax income at full capacity or $0.15/share at a
35% tax rate
ECU Netback Outlook
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060813.jpg)
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ECU Netback Outlook
• First quarter caustic price announcements totaling $80
per ECU are supported by tight caustic supply, expected
to be realized in Q2 and Q3
per ECU are supported by tight caustic supply, expected
to be realized in Q2 and Q3
• Second quarter caustic price announcement totaling $60
per ECU expected to be realized in Q4 and Q1 2009
per ECU expected to be realized in Q4 and Q1 2009
• Higher ECU netbacks are driven by caustic pricing
offsetting lower chlorine prices and higher freight costs:
offsetting lower chlorine prices and higher freight costs:
2006 2007 2008 2008 Caustic
Netback Netback Netback Announcements
Q1 $590 $500 $580 $80
Q2 $560 $510 $60
Q3 $540 $540
Q4 $520 $555
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060814.jpg)
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Capacity Rationalization
North America Chlor Alkali Capacity
Reductions 2000 Through 2010
Reductions 2000 Through 2010
North America Chlor Alkali Capacity
Expansions 2000 Through 2010
Expansions 2000 Through 2010
Company | Location | Short Tons as Chlorine |
Dow | Plaquemine, LA | (375,000) |
Oxy Vinyls LP | Deer Park, TX | (395,000) |
Formosa Plastics | Baton Rouge, LA | (201,000) |
Pioneer | Tacoma, WA | (214,000) |
Atofina | Portland, OR | (187,000) |
La Roche | Gramercy, LA | (198,000) |
OXY | Delaware City, DE | (145,000) |
Holtra Chem | Orrington, ME | (80,000) |
Holtra Chem | Acme, NC | (66,000) |
Cedar Chem | Vicksburg, MS | (40,000) |
Georgia Pacific | (3 locations) | (24,000) |
Oremet | Albany, OR | (5,000) |
Dow | Ft. Saskatchewan | (526,000) |
St. Anne Chem | Nackawic, NB | (8,000) |
Olin (KOH Cnv) | Charleston, TN | (110,000) |
Oxy (KOH Cnv ‘08) | Taft, LA | (213,000) |
Pioneer (Mb Cnv ‘09) | St. Gabriel, LA | (197,000) |
PPG (Mb Cnv ’08) | Lake Charles, LA | (280,000) |
Total Reductions | (3,264,000) |
Source: Olin Data
Reductions (3,264,000)
Expansions 2,441,000
Net Reductions (843,000)
Company | Location | Short Tons as Chlorine |
Vulcan | Geismer, LA | 210,000 |
Westlake | Calvert City, KY | 80,000 |
SunBelt | McIntosh, AL | 70,000 |
Oxy | Various Sites | 22,000 |
AV Nackawic | Nackawic, NB | 10,000 |
Equachlor | Longview, WA | 80,000 |
PPG | Lake Charles, LA | 280,000 |
Pioneer (‘09) | St. Gabriel | 246,000 |
Westlake (‘10) | Geismar, LA | 350,000 |
Shintech (‘08/‘09) | Plaquemine, LA | 543,000 |
Shintech (‘10)1 | Choc Bayou, TX | 550,000 |
Total Expansions | +2,441,000 |
1 There is speculation that Shintech’s Chocolate Bayou plant may not be built, given their new supply agreement with Dow.
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060815.jpg)
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Why Industrial Bleach
• Bleach commands a $100 to $200 price premium over
ECU selling prices
ECU selling prices
• Utilizes both chlorine and caustic soda
• Regional nature of bleach business benefits Olin
geographic diversity
geographic diversity
• Platform for future growth
• Current capacity of 250 million gallons or 160,000
equivalent ECU’s
equivalent ECU’s
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060816.jpg)
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Products
End Uses
Winchester ® sporting ammunition -- shot- shell, small caliber centerfire & rimfire ammunition | Hunters & recreational shooters, law enforcement agencies |
Small caliber military ammunition | Infantry and mounted weapons |
Industrial products -- 8 gauge loads & powder- actuated tool loads | Maintenance applications in power & concrete industries, powder-actuated tools in construction industry |
Winchester Products
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060817.jpg)
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Winchester’s Strategy
• Leverage existing strengths
– Seek new opportunities to leverage the
legendary Winchester® brand name
legendary Winchester® brand name
– Investments that maintain Winchester as the
retail brand of choice and lower costs
retail brand of choice and lower costs
• Focus on product line growth
– Continue to develop new product offerings
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060818.jpg)
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Winchester
• Twelve price increases announced since beginning of
2004 to offset higher metal prices
2004 to offset higher metal prices
• Other U.S. manufacturers including, Remington and
ATK, have implemented similar price increases
ATK, have implemented similar price increases
• Continued expansion of military and law enforcement
business now accounts for 25 - 30% of total revenue:
business now accounts for 25 - 30% of total revenue:
– Military awards of approximately $100 million in 2007
– FBI awards of $54 million each in 2007 and 2008
– 3rd and 4th deliveries of Second Source contract secured
totaling approximately $60 million
totaling approximately $60 million
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060819.jpg)
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Financial Highlights
• Strong Balance Sheet
– Net debt / EBITDA is less than 1x
– Ample liquidity with multi-year lines of credit
totaling $375 million and cash of $276 million
totaling $375 million and cash of $276 million
– Pension plan now over-funded
• Strong Profit Outlook
– ECU price trend is favorable due to strength of caustic
soda
soda
– Winchester performance continues to improve
– Significant reduction in legacy costs
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060820.jpg)
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• Strong outlook based on:
– Relatively high ECU prices
– Benefits from the Pioneer acquisition
– Increasing profitability from Winchester
• Strong balance sheet with no debt maturities until
2011
2011
• Substantial cash flow supports 81+ year continuous
common dividend with above average yield
common dividend with above average yield
Investment Rationale
![](https://capedge.com/proxy/8-K/0000074303-08-000036/boaslidesexhibit9905060821.jpg)
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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 described in the
business and outlook sections of Olin’s Form 10-
K for the year ended December 31, 2007 and in
Olin’s First Quarter 2008 Earnings Release. These
reports are filed with the U.S. Securities and
Exchange Commission.
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 described in the
business and outlook sections of Olin’s Form 10-
K for the year ended December 31, 2007 and in
Olin’s First Quarter 2008 Earnings Release. These
reports are filed with the U.S. Securities and
Exchange Commission.