OLN - Earnings call transcript Q1 2019

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Operator

Good morning, and welcome to the Olin Corporation First Quarter 2019 Earnings Conference Call. [Operator Instructions]. Please note, this event is being recorded. I would now like to turn the conference over to Logan Bonacorsi, Olin's Director of Investor Relations. Please go ahead.

Logan Bonacorsi

thank joining and today. everyone, morning, you us for Good

prepared that me along the Before that statements these our that Please let projected. statements results future you estimates question-and-answer will this of regarding following are and we begin, those note slides could remind differ presentation, performance. from include associated with session and forward-looking remarks, actual the materially

and Past and Jim risk differ and & factors Chairman, Fischer, factors earnings John are John Dawson, Executive The that press of Systems; and other of morning yesterday's limitations Chief could Operating from President, to our website Chief Press Slater, President Financial Vice will slides Events. Executive Pat the results without and in projections McIntosh, transcript available of available and Vice Olin's today's this recent Some in press earnings me Officer; Executive most on Releases. Officer. in actual the section our and under Vice Synergies copy Officer; International; data Form our Vice release described President are information Investors cause Varilek, Epoxy financial the Executive and With President be are release. XX-K A quarter first and President Todd Chief and under President, section

John? take Fischer. happy We John will will the begin with will over and your questions. to to I thereafter, our be prepared remarks, turn call we now

John Fischer

Thank you, Logan, and morning, good everyone.

and turn and with segments, for Olin's balance quarter year. During of business of by on of review discussing X. let's outlook key to near-term a each that, morning's the highlights from this I followed the longer-term Olin's I'll first will With call, the by dynamics, Slide begin our the close market view detailed

and chlorine EBITDA where EBITDA of represents level first caustic the of negatively first in of improvement period of quarter EBITDA acquisition million several the by Dow's over businesses. represents adjusted During products much was of year-over-year quarter EBITDA pricing $XX first highest during XXXX. soda adjusted This million, adjusted approximately decline adjusted overcoming first quarter, to Olin stronger compared XXXX, more XXXX challenges first soda a than the recorded period. quarter quarter $XXX.X a The level impacted since the pricing the caustic XX%

In due soda the Ship lower-than-expected addition experienced during delays Channel chlorine, dichloride first demand chlorinated we Houston we issues. shipment experienced to ethylene on organics quarter, for to merchant continued resins. the epoxy pressure caustic predominantly prices and in for caustic soda quarter, the also and Late the

of the actual from by quarter the The approximately doing On of additional for the first the adjusted $XX suggests roll performance. chlorine difference encouraging of year-over-year $XXX adjusted of improved cost side, positive from forward pricing EBITDA million to significantly a the first quarter of overall roll and and portfolio Caustic reduced XXXX the million. derivative EBITDA soda adjusted contribution simple lower businesses the EBITDA $XXX chlorine the chlorine performance and the cost XXXX and forward portfolio quarter $XX the chlorine was offsetting which lower improved from million, EBITDA is the of long million term. between $XX and approximately was adjusted XXXX turnaround Partially first $XXX expenses million. and a This the million. contribution derivative this was

of million. $XXX achieving which quarter, million target our puts $XXX we to million us debt, of to approximately reduction our XXXX $XX debt the During on repaid way

common addition, shares In Olin's we've $XX.X of XXX,XXX for million. repurchased stock

the more markets minutes. a second in year year, quarter discuss as our move Looking few ahead just of through our expect detail year. to primary we the the outlook the fundamentals balance balance to the in the to of I and improve we the plan in for

and Products Now with starting segments, Vinyls Slide business moving Alkali Chlor our X. to on

Chlor the Products for XXXX was Alkali Vinyls quarter million. adjusted segment and EBITDA $XXX.X First

While system. soda of most a Olin's from was impact soda pricing significantly the particular segment. was costs Products during adjusted lower adjusted for year-over-year improved derivatives spot the achieved in weaker Vinyls caustic demand Chlor nearly pricing first the markets, was period. Olin turnaround chlorine soda as year-over-year. the Ethylene pressure and flat quarter favorably maintenance for Offsetting chlorine year-over-year, EBITDA dichloride the in caustic Caustic pricing reflect and results Lower impacted than quarter EBITDA doubled we bright Alkali expected.

X. caustic at soda let's a take Now Slide pricing closer look on

quarter, declining The decline feel During XXXX. a bottom. largest export Olin's this soda pricing prices appears system soda was We continued in the of in to the caustic decline to pricing be part the sequentially caustic quarter market. first X% fourth with from that nearing

At begin improve of to year. we caustic expect seasonally half progresses, result price outages lingering to time, we maintenance short-term limit several to half should stronger. expect of be expect the further the during in to soda significant planned and demand year, the expect globe the supply pricing across in half over the pricing second Together, year. also available to the second same and the second the factors soda ease In second these dislocations the quarter as improvement We caustic the next we of demand months. of recovery

our to trends chlorinated XXXX. including of through pricing ethylene acid, organics, first We portfolio, chlorine, also continue the expect hydrochloric derivative balance the in merchant in the chlorine experienced bleach, and dichloride positive quarter

move segment, on the now X. Let's which Slide of performance is to Epoxy on our

favorable as XXXX, the resin with conjunction over raw $XX Olin's improvement by material volumes, to respectively. During raw driven demand quarter offset million, worked by customers end as than XX% Asian and maintenance automotive-related declined adjusted well weaker-than-anticipated lower States These United costs, a with use which in which the XXXX. generated more drivers and cost XX%, and epoxy positive prices, improvement materials, representing business propylene, declined during primarily quarter the Driving in customers costs. lower EBITDA significant Epoxy lower for lower first of quarter this were benzene the along first more the turnaround from

business, risks associated of to with uplift quarter roughly Houston Epoxy second seasonal and quarter. line expected results likely terminal be volume and the sales Higher costs the we in of the demand. in turnaround increases to offset the in with ITC will planned ongoing pricing in in product impact storage fire a positive the expect first XXXX ahead Looking

believe Finally, see we continue by year segment we improved in full from to Epoxy will costs the performance, turnaround driven XXXX. lower

which now Looking prices, resin the at epoxy X. Slide shown are on

in During prices primarily resins for input Global quarter, the a have modestly signs retraced costs, epoxy pricing declines first benzene of material and of result resin propylene. as recent raw shown liquid of in global an second supply, increases resin liquid tighten pricing. resulting improvement We XXXX. should modest epichlorohydrin with maintenance expected epoxy that during in believe during global the March improvement quarter turnarounds

chlor alkali and To demand not to sector, of the economics meet both been the of this is growing both sides epoxy our additions outlook in In Our alkali support the ECU. investments. prospects industry occurring chemical global is Current on growth chlor capacity mid-February. its that remains positive demand. of Olin alkali is markets additions chlor and we for of Investor the have businesses. Slide announcements capital date, X about at long-term presented minimal view there Day consistent and world-scale the do with on

upward momentum demand the growth additions. Epoxy will Similarly, steady landscape capacity balances and platform for continue me, and supply to and we businesses. minimal global caustic soda excuse chlorine This derivative a Olin's favorable tighten, business, see pressure for in business chemical As and a and chlorine result, pricing creating solid announced -- positive upward demand products. outlook provides Olin's

decline when segment a sales an factors less product These compared to in to lower The quarter level commercial were X. X% adjusted decline in the reflects were also offset more military same commodity the our sales Winchester contract in an due which for Lower Winchester costs. on XX% decline first quarter timing. and Moving quarter. experienced of business partially mix by last pricing EBITDA a favorable year, favorable on to to Slide the This contributed decline.

As the the stronger sales overall lead during improvement expect see an which and the should year. to volumes, we performance of both balance year a in military progresses, commercial to

XXXX. to We expect the year Winchester's in results full full approximate achieved year those for

the consumer term. in inventory remain demand we could to ahead believe pressure which Winchester, Looking intermediate levels commercial individual in near the elevated,

should consumer improving an solid, and However, to into usage appear which ammunition picture time. participation over be demand fundamentals translate

of already expected military majority and large are contract. note, the XXXX other under government and sales of addition Winchester's In

to our now Turning is on quarter second XX. Slide XXXX outlook, which

second XXXX EBITDA expect quarter lower achieved to in adjusted our indicated, that quarter we first be than As XXXX. the

second soda pricing XXXX. approximately quarter caustic decline first to $XXX prices expect quarter negatively expected we adjusted quarter than second the impact is First, million by XXXX quarter. caustic lower second compared be forecasted sequentially to of The the EBITDA in soda year-over-year to

quarter second the in costs Second, XXXX. approximately and sequentially Epoxy segments costs -- million we in expect turnaround combined the of higher Chlor Alkali of $XX

The schedule turnaround XXXX to year. of turnaround will also forecast second schedule quarter the have of to second reduce heaviest is serve The quarter production. the

the storage impacts ITC terminal lingering Houston in in Finally, the fire epoxy Ship impact quarter. Channel could the volumes of the

to now XX. outlook Slide our year Looking on full

pressures Before believe to soda I markets approaching. an anticipated, I the we over that while than the turn in longer Todd, is that persisted call inflection would say caustic to have like for point we

price taking XXXX As the adjusted to prices current a EBITDA between per quarter in Caustic other and forecast. of of first another caustic outlook -- full more our $XX reference, the for into year year variables. Olin's soda number second assumes second a average half point $XX of soda ton than account

with opportunities our and the derivatives for long Olin include confident overall continued including The and to fundamentals over other long-term and will all value products, chlorine volumes epoxy full soda, which chlorine performance. year substantial and We positive growth caustic cost in term. enable the meaningful pricing shareholders epoxy variables chlorine chemical demand provide and us supply products, for for generate derivatives, for remain

call Now I Slater, CFO. would turn like to to Olin's the Todd over

Todd Slater

John. Thanks,

investigatory action activities Before $XX to cause now forecast reserves Olin to will year. have our cash environmental, manufacturing regarding XXXX our remedial activities this increased investigatory XXXX legacy the year environmental remedial million. we our outlook, environmental, in site, us increase expects for agency for and XXXX and at which flow turning expenses full by

on to turn forecast, let's which cash flow Now our is XX. XXXX Slide

million generate to in of cash $XXX flow expect approximately XXXX. We

priority first ratio cash of At Olin's net quarter, debt for end flow Our top leverage the remains reduction. X.Xx. was the debt-to-EBITDA

in XXXX. waterfall the $XX of million total targeting debt on is payments. debt, As first prepaid Starting left which We full with million the of of the the estimated forecast, chart. $XX approximately year million prepayments we deduct $XXX far we and adjusted tax quarter to $XXX our in million John EBITDA of year, cash mentioned, are during

million, approximately forecasting We the that year. than are be XXXX as credit to were higher taxes $XXX our of investment multi-year reflects XXXX midpoint rate will be includes exhausted in information million. capital million X the carryforwards $XXX $XXX are the $XX by which our and with expected project forecast approximately tax for current the of Column Cash for spending million the our in created between and the Olin XX% range $XX technology million acquisition. cash of annual tax integration XXXX of maintenance has capital with spending associated

enterprise As new multi-year systems and we've the previously project to Olin began resource includes Dow we the required a XXXX, businesses. planning, infrastructure. implement heritage project and manufacturing in This technology acquired chlorine a discussed, products the across information engineering

fourth the to turning Now column.

increase variable about our project includes that column, of integration expecting These the are at rate, should the $XXX and duplicate In XXXX information million be we million interest interest million program, $XX costs we next sold have the lower forecasting The under include flow. XX% cash pretax $XX a of of sale We the from XXXX first currently IT being the costs we approximately experienced of forecasting of in working expense. debt restructuring transition. by as We I those next we than affiliate integration were column million level an in and of and partially lower items interest In during interest slightly are far estimate This capital for in costs our $XX nonconsolidated approximately incurred million. rates technology quarter. expect $XX in factoring our cash of receivables a an column, spoke costs. represents cash proceeds onetime IT the XXXX. investment offset costs are will a which higher just million $XX during of right approximately

dividends our approach will a returning sheet and balanced repurchases. the our in continue to capital balance through deleveraging allocation shareholders and investing We disciplined by share cash businesses, and to

consecutive on quarterly questions. now ready XXXX. $X.XX business company. we Thursday, Olin take of XX, on record shareholders XXXth close XX, the Finally, each declared of payable Olin's by dividend The of Board May on dividend XX, paid Directors is This are to April is June dividend XXXX, common the of share to to at on a stock. Operator, the of be

Operator

Instructions]. [Operator

with Our first Susquehanna Don Financial. comes question from Carson

Donald Carson

saw guidance, you percentage characterize past John, the in in currently? of to around upside terms downside ranges on put would some the you opportunities. your used you How as that what percentage and

John Fischer

more Well, upside. in probably I range. is I downside than to think we would X% the downside said the that say X%

Donald Carson

first Okay. IHS Or In second doesn't pricing time frame. the at until half. price ton Is your seeing half? just expect to $XX to you forecast you're be in versus half the any the said per you're know point the increases in that in in you increases is some increase October second have time? index in average I caustic assumption, their assuming the the that what $XX

John Fischer

half second That second is would expect above quarter our what we level. average in the to

Donald Carson

some outage constraints talked was availability. in raw terms logistical What expect what of delayed first the shipments second in Channel it And quantify the the both the overall and finally, Okay. of Can Ship material of quarter? to in the about impact quarter? out ITC be you around that you then, of you

John Fischer

It think have don't what I we approximately $X quarter. in first it the second in yet be idea might quarter. was the million an

Operator

next Kumar comes question with from Our Neel Stanley. Morgan

Neel Kumar

in in drop the Olin's X% little bit the of The to the sequential quarter the first a contract in decline caustic realized closer market. versus market spot price seems

oriented help last curious spot you So little the And years? if I over business the is understand was it the more. a bit just few market can me more to

James Varilek

any towards the orientation not market. there's No, more spot Jim. is this Neel,

fourth so say any side As you than wouldn't the and more thin. spot export reductions carryover market's contract consistent the through We directionally indexes know, that carried had of the quarter things. first the They and relatively the in that's between And of some forth. I the quarter.

Neel Kumar

of the you quarter itself and Houston that the that cash inventory noticed second a from in correct I first Was by closure And the million helpful. in that Ship $XX driven Channel flow build. negative That's had impact the quarter? should

John Fischer

the No, Winchester, in typically which of the it was year driven fall mostly to season. in early hunting sales mid-year advance by inventory support builds a

Operator

question Our Mitsch from Fermium Frank next with Research. comes

Frank Mitsch

and color on assumptions the the caustic. Appreciate

just quarter of while saw capacity down the obviously, of bit first ago. I saw we the Coast. is One the things had to in you our be prices you to that shut they And a a you caustic? caustic Europe East do export cell have the future? was curious you it particularly about might that, ability And impact surprising how thinking been guys. factor on in think that as are your How might may mercury raise to

James Varilek

is Frank, this Jim.

I to think really frees going Europe. and up bit so economies a on demand expect kind and We that's of had of we Obviously, product. they've -- not it forth, be weak would little it's in to representative that be the situation expect would of that trend. long-term not a

to time expect and fact, be importer, seen. over a we've Europe what that's we In net

through would in moved the that construction get think, they But a long-term that they not a as season the be got product to had it. some year additional trend. they I and I we've So dislocation, expect temporary early

Frank Mitsch

not anticipate we year you of Jim, anywhere this exports those half Europe? seeing the So that be in levels back of of near out would

James Varilek

correct. That's

Frank Mitsch

of know All a And class offer don't that? companies I'd that much you overhang any that this that right, in quarter, how do other be were you terms action I -- about part timing an X How terrific. of filed. first and the suit of on think can comments plaintiff seen might was guys there in any the of obviously, lawsuit.

John Fischer

antitrust, we to just very not the very we're assertions. the to committed would disagree including area offer all going and important compliance with with strongly We're laws, of generally that I say much.

Frank Mitsch

very All right. caustic down? on Did you helpful. your pricing in that year-over-year was down lastly, a terms number provide X% mentioned sequentially That's And realizations what caustic. you were of

John Fischer

We just was $XX pricing down million itself said that the year-over-year.

Operator

comes Our next question with Zekauskas JPMorgan. from Jeff

Jeffrey Zekauskas

any in prices key In caustic the upward movement any you second quarter, in areas? seen have

James Varilek

did We see here. pricing, the that on on point both the us seen Jeff, we're move the export Jim an to export this which again. gives low encouragement pricing of high actually is things. inflection side The movement some going and have

And United America And number States, for seeing in well. the is Demand tight in -- not reasons. improvement turned a in in America. demand and we're pricing also very the Latin Latin so but Latin America, the the as strong of markets is to moving in upside

Jeffrey Zekauskas

the then And how large export follow-up, gap as price my contract pricing domestic and caustic the now? is between

James Varilek

don't not specific -- we're to contract pricing... give going we any that think I

Jeffrey Zekauskas

for Or industry? Right. the

James Varilek

is that -- the And got Yes. pricing. showing What I I pricing to slide contract a in we've easiest contract downward there export I the is that some would the way say think downward export still say the to think still pricing. is and

earlier export above. have through So the pricing year. Obviously, last dynamics or changed was all the

is below. pricing export Now

inflection We that point. are bit seeing of an

frankly to So we start to would expect on movement see upward both sides.

Operator

McCarthy comes Kevin Our Vertical question from Partners. next Research with

Kevin McCarthy

On XX, And the versus EDC me quarter A question bit. that on you surprised pricing flat was of 'XX. quarter fourth it EDC. first indicate the a little Slide in

the of quarter seemed seem Some the external steady upward and first to your progress commentary indicate as progressed, constructive. vendors

So I your perception meant that. of you was of well the outlook assessment market pricing of as through wondering slide if if is sure pricing. reference talk the or your to for is What EDC? Not own kind could

James Varilek

we that mean, a at Well, it's say stayed -- the levels on more that's is I just quarter I first you were and fourth basis, have have on that, the to year-over-year they doubled. prices market think kind a step very that positive. than been general, The -- between have they in of been to EDC quarter and back fact positive.

And it's the -- it's different from EDC indicative around areas EDC demand, is pressure. of bit at broader requirement I a world of under that it's now. And of the been the that there's that that's has high the many indicative EDC and the fact coming fact held pricing think at. know, on you As it's levels

Kevin McCarthy

don't Okay. lock that flat? advance in cause that in prices would But you be to arrow

James Varilek

No.

Kevin McCarthy

effect then explosion second to do any impact a rather you if market. may, if know could question, talk just in business China And has I lasting wondering of opine any of through just on either in or I effect the that Dawson. a don't Asia. for epoxy on Mr. was was Okay. I epichlorohydrin, But whether you not and transitory as or in the I regions epoxy there's wondering other if kind regionally. on in ton just Jiangsu,

Pat Dawson

occurred was think, was March, capacity Kevin. That Yes, it close out We and in -- China. that explosion that think I in, XX%, back of was it the it XX% took significant. to

thing outside may is our into think of comes parts other Day world. recall other the material that really you epi of no of I that the Investors from quantity there's China

I a have So impact. think we'll big don't

demand the sluggish, in hand, On fact the epoxy here has other and the bigger China is I globally that automotive think, has been very been impact demand on sluggish. just very

that I here the little So think in on more a of quarter. has first pricing a bit probably put damper

rates operating the of turnarounds have of also and various China tightened events. to epi Although due outside

the ton of few the that increases reported for been go throughout epi best is in price bodes ICIS So by up been of we second tightening the and Tecnon, these has outside there probably here think a quarter. that that it's up, the $XXX to China $XXX, epi for reported what last about and fact weeks

Operator

Blair with Tudor, from comes Matthew Holt. question next Pickering, Our

Matthew Blair

hoping could as or that more and here. to things any you weak mentioned impacts other are pretty Is seeing paper you primarily and rolling areas expected seem textiles provide due Or there weaker caustic color where this than well? John, just pulp Alunorte like you're through? demand

James Varilek

this Matthew, is Jim.

pullback, of -- general, would and tendency of of that problems to there was lot quarter. it will, I that think, economic also think place, and a quarter. There river a and first took affected some a forth. customer to of the that lot things so you comment And has first say, if relative I an system the a during one-off is events I demand kind cause flooding were in the nature,

we a head where into So seeing pickup that's came an here improvement on that demand. we are really demand. And quarter in time, We're as the from. seeing demand since the weaker second

So first that was a comment. quarter

Matthew Blair

right Got areas and guess you're I I long it. net then in I force BPA And back epi, like think, in BPA majeure believe now. a circling there's and to epoxy,

So prices -- need would a you Epoxy there? any up would benefit liquid to as for that before resin or see that you you see tailwind do the move your realize business

Pat Dawson

Yes.

up. and think It's I the BPA BPA going of is course, China. -- is to on come benefit lot a capacity, here picking main of polycarbonate from the in China

BPA. think captively I a of of be better BPA to our on is momentum epoxy Most consumed seeing indicator that'll make liquid some So resin.

market a player we're merchant So in not BPA.

Operator

comes question Jim from next Sheehan SunTrust. with Our

James Sheehan

be ton from much your to that $XX per in $XX price of discounts? elimination On how second coming price the contractual realization the half, will of

John Fischer

Jim. of that, None

James Sheehan

you are benefit those have eliminating any to from So expecting discounts?

John Fischer

at Well, both our million benefits the we end the that in contractual change soda throughout in $XX chlorine the expected and we call of caustic year. said quarter from fourth to realize

James Sheehan

any shift Terrific. in the impacts, Channel you to into see due Houston Just on why the out you traffic. negative second of a Ship the Channel wondering traffic impact quarter second first still from the quarter And expecting quarter congestion? were the sales did of the Ship

John Fischer

they impact those The be the customers we we that delays of in terminals reason our that is can't -- get Deer area. terminals value customer. that some those to used, product a million. to of a had impacts way of some of have EBITDA And that don't we the to We were supply $X saw make about shipment use potential see Park

James Sheehan

And it. result issues inspection tighten did activity chain in the chlor explosion alkali the help safety Got in more in that on up that might China, Jiangsu China?

John Fischer

there April. just anything significant epoxy the month I amount done would inspections. in month formulation itself. alkali we chain tighten -- from just this you I tell has it of the has a chlor three plant it that an times have inspected aware not of to are we say would or I resin mean, up has that created been

Operator

from Byrne America. with Steve Bank comes question of next Our

Steve Byrne

and pricing? led down speculation EDC to Brazil some outage chlor has alkali tender have in any and/or recent comments could caustic of that, that strength large of a you there. think that out on that a Do drive There's

James Varilek

seen of we so and it's Well, Latin forth. all, America America Latin season in general in is strength demand ethanol strong have there's And -- improvement general. pulp first because and in paper

issues. temporary whether term, know in it's of EDC. just we But for you're seen don't request seeing thing And or of both heard long and yet. the we've terms same have We caustic that

Steve Byrne

And just presumably ago a about river you mentioned into Is few flooding quarter shipments. first to just that leading delayed second moments simply a from deferral quarter?

James Varilek

I think of more it's complication really of it's just business. a doing --

For our one to example, would ship months two get from took weeks normally terminal a take barges that of there. to plants location that over three

just it's So congestion.

some will I yes, carryover, it's material a So be amount but that of don't product. think there

Steve Byrne

American And On versus $XX second price order realized export North contract to that rally that achieve net price net to quarter, $XX realization more net this. increase? Okay. second realized spot such above pricing half this to in on would to just achieve price you one increase a benefit, expect

John Fischer

and I we expect in domestic is would think soda what would elements of expect caustic price, improvements all the export. we

Operator

question KeyBanc. Mike with next Sison from comes Our

Michael Sison

half of In terms XQ the assume no pricing X%, in X% does of from the in that to caustic downside levels? improvement scenario second

John Fischer

the where we X don't from we improvement I scenario caustic to will forecasting be. are No. there a quarter think where see soda second be

Michael Sison

think you little driven Okay. the a in versus then kind bit coming the or supply about when down of sequential price increase do think will for, by you're that be of outages demand And how improvement whatever? or you looking much

James Varilek

Yes.

be as there of there'll a time pricing will an of of inflection think most I the that confluence be is events. confluence a point

improving in particular, of seeing America, we also mentioned demand strong. We're is I improved seeing think that I as Latin side the are on export domestically. demand things. earlier,

So I demand think improving scenario. you've got an

the amount You offline. that capacity are in There's of a season. still has also midst turnaround been of significant

situation will turnarounds about to that's Some talked is Latin offline, the around There's phenomenon. of just a We America. America. global East Asia, and a the in continue in be in Middle world and number in the North and still offline

inflection combination So have it'll supply the limitations be that triggering a probably trigger point. and of demand that -- an will we

Operator

Our next question with Barclays. Mike from comes Leithead

Michael Leithead

a it half the EBITDA. on than if So I call based the it, If in environmental second And million $XXX embedded about of seems industry it, to full of prices in million bit guidance. a year better or imply up look your X question on look a at technical first half at I ethane $XX so half $XX should EBITDA, is second be half. assumptions, assuming is, and caustic I'm headwind is

So help million bridge to that me of short kind $XXX I'm half way can because you up coming there. second better

John Fischer

we could the look the X half last And the EBITDA of XX% you balance we've big a over the contributor typically the first and years, how performance significant second generate There is is in that Olin the kind the at roughly of half period second of half. XX% a first If the difference half our every year. to to step-up volume-wise half generated half. between which to time half first we've assets, in and is owned Dow of second

Michael Leithead

between you driven it's how do or mostly So mix about price evenly volume-driven. volume Is or think that? it and

John Fischer

of combination it's and price. say volume would a I

Just the impact. volume don't underestimate

Michael Leithead

bigger then And it. alkali... picture Got chlor just

John Fischer

Mike. Hold one second, on

Todd Slater

Remember, expect caustic chlorine would moving the isn't and Price pricing just soda. up. is We epoxy to chlorine pricing improve. continue derivatives to

I So expect other and chlorine number that of to caustic chlorine we know derivatives -- as a a about, the but soda there's talked out continue big we to improve there well. lot is would

Michael Leithead

And chlor question. picture maybe just a Okay. alkali then bigger

been people past wrong, to months, myself X over to prices expecting think and have the rise lot smart included. I X of caustic they've been a

is you turning triangulate they've wrong that conviction now think what you on? when the what So B, supply/demand been XQ balances point? A, over few past quarters, And gives you the the correct do

James Varilek

is This Jim.

Asia matter forward place that throughout to and demand timing thing difficult move to backdrop reinstill the Latin do Those so also was Industry of Brazil supplying that that I economic are worldwide the to do smart then in how lingering Standards of some the people. with out. onetime to of going picking forth. to are And events difficult and I call. process of -- movement took how think events, what the things have and any quickly a you was Alunorte. particular recertifications those mean, going relative is it's flows delayed India not additional a it's some But in you government when to Bureau the and quickly these trade things America, call have I'll

it's of I missed think the it's those and that factors, anybody mark. don't I So a think the fact combination

these events hard I it's think of that it's -- to some of predict have effect. a taken matter subsequently

Bureau steps forward Industry Now and on improving. and with demand are there Alunorte the Standards, is of things moved have positive

So forward, gives a we've and of quarter. the got inflection to second be expect and things indication it in when we prices occur, those us better the might point much moving moving

Operator

from question with next Eric Our Citi. Petrie comes

Eric Petrie

A see lighter market for market? intelligence be believe years? What's spot supposed your drivers a or a I on do soda in little So what for because of question demand to past than it's outages Jim. in caustic the latest you supply interruptions the couple pricing turnaround

James Varilek

of think in. different other a which period terms time matter of of the any that than I Yes. outages in that it's don't significantly whether they're it's month

taking difference turnarounds difference don't place. terms in of in of the I see that dramatic any a So are -- terms

Eric Petrie

and about $XX million per And gallon they've calculate the to $X.XX Okay. a in then, quarter headwind prices, ethane lower from first higher I trended secondly, range. low

in So do forecast the or impact will what care XXXX? quantify net be to you

Todd Slater

we forward. We volatile Todd. be to move expect This is ethane would as

If in be be range. -- expect it We to probably $X.XX, in ethane in would that would system range. year, cost. $X.XX stays low, obviously, averaged think our positive probably $X.XX this a year $X.XX, I last the for that

But so look think for full expect see. necessarily we we positive that that year-over-year ethane, we relatively a hedging the would spot maybe with to numbers slight I be as ethane now, won't you flat exactly we year. trend the are

Operator

Our Viswanathan RBC next from Capital comes question Arun with Markets.

Arun Viswanathan

Just a guidance. quick question on

So could year-on-year you chlorine from us benefits guess, as you're assuming, far the remind what I improvements in envelope? as

John Fischer

envelope. the specifically impact which say said both didn't that comes from was caustic contract million, rollover chlorine. $XX We chlorine We and

it's that the what pricing on the in chlorine derivative chlorine expect guidance any the we than given haven't other from significant. and the better we and in gave pricing We market remarks is, illustration chlorine benefits

Arun Viswanathan

half. EBITDA better below would Looks the in maybe or guess, opportunity I And $XXX I million to QX well. be of then the in that or seems chlorine like need there assuming $XXX is question, $XX the pricing the for as Okay. of some caustic asked million reason QX, it could more understand that is you just The assumption second QX.

get in of in that impact $XXX late would wanted EBITDA you that that it bridge million range? you to kind how results. And If think quarter, would quickly help that the to to level second you understand just million of half $XXX your

John Fischer

the in would in position late year we us the $XX got quarter, to be have that a full second we help to bridge If guidance.

Arun Viswanathan

and lastly And Okay, the margins there? is year, progressing kind have the great. weak pricing looks I through it mean, And would you then in that, improved? epoxy, -- I like do still the raws? given volume you margin I and spot characterize see on how guess of guess, how volume

Pat Dawson

I sluggish. Probably indicated volume demand. by the in Yes, spot very and the epoxy Asia brightest Arun, fundamentally moving gas. demand, on sideways issue U.S. kind here this is in China really is as being and the of and the big earlier, driven and around is is Europe general being oil the Listen, Pat.

materials in comments, said our raw came as down So lockstep. our prices we in in

So us and the getting half coatings into kicking we're second our that's market, seasonality to the the for mentioned improving in pricing the tractions, stable. the quarter. well going And item are here actually really as which some margins as are seeing is earlier, second in demand then help we here

Operator

next with question John Our comes UBS. Roberts from

Joshua Spector

Josh earlier basis be a for terms but call, caustic of expect you to sequentially on the into is this XQ in you've on price price XQ? you realization Spector what realization, have if in Apologize explicitly said delta This said John. the

John Fischer

we We year that soda said have $XXX caustic All the year this year-over-year from EBITDA not. was last on quarter the of million. quarter is about the impact adjusted second to second pricing

Todd Slater

down We to in from QX. expected caustic be QX

Joshua Spector

have sequentially. good I going a XQ, terms Yes. do what able in with I myself should that. to pretty view on and it's lag, of calculation you your to curious what or the amount so decline contract percent I'm guess not be dollar is obviously I provide guess the that structure

John Fischer

that. and No, not didn't going do to we that, we're do

Joshua Spector

then. One more Okay.

Epoxy, you segment between on can the turnaround rough CAV segments? Just the split costs between a the provide and

James Varilek

Slide appendix, the in That's Yes. XX.

Operator

question Ahmed next Hassan Alembic with Our comes from Global.

Hassan Ahmed

cash, downside seems have guidance one charts, You in will question $XXX around ample about in million guys the EBITDA you And risk My the down hit, million like free talked $XXX call get $XX to QX. a to transpire, it, $XXX XXXX. that even your in of million in debt you you roughly it you paid in pay $XX reiterating talked million scenario, commitment if down million. that to about it, does is that call

So is if in go down debt? that it and $XXX that assume downside still you'll fair $XXX transpire, million does million scenario to ahead pay to

John Fischer

good That very yes. a assumption, is

Hassan Ahmed

Okay, fair enough.

On to going $XXX things. chart helpful. Chlor the million going Alkali this down the On of million year. on to $XX to Products, of Epoxy, down $XX million. $XXX you of million side sort costs was going provided turnaround very turnaround Now peak-ish

of the post-XXXX what like to these run in costs environment. get of normalized would sense a wanted turnaround Just a rate sort look

John Fischer

I XXXX we would our had large is would say probably next once-every I because little XXXX, on have year a six year, that we a because outage high average say below on side VCM was turnaround. bit plant. XXXX Epoxy in a the

I say be would I you what wanted in steady in saw you're if a and So run somewhere 'XX. rate, what between see to you 'XX going would

Operator

with Nomura comes Our from next question Instinet. Yefremov Aleksey

Aleksey Yefremov

$XXX quarter in Chlor caustic the impact second soda million. trying bridge providing Alkali negative segment thinking of I'm to and year-over-year

But higher same $XX variance? think like minus million So EDC Should $XXX we positive if there are million, prices. offsets at well, be year start right, million year-over-year maintenance, and with about lower last Chlor sequentially. prices, lower the down ethane feels it we time, $XXX Alkali negative as maybe should about $XX EBITDA million some

trying just I'm views. So that? to reconcile those we think do you think about X How should

James Varilek

caustic soda. specific Turnarounds little level you overall are improvement. for in then plus haven't year of maybe slightly versus divisions. take minus talked $XXX million favorable, at each And million you and year, a bit. the had last this off you range, $XXX and think that you Aleksey, gets But $XX about by million $XXX-ish to high or very I provided million puts $XX a the guidance, We million. That

particular, year-over-year throughout QX in for not will in as nearly XXXX. -- it improving be EDC beneficial was remember, was improvement as because Now EDC

you I benefits chlorine derivatives. one made So some associated the comments of the with probably the were chlorine bridge think of overstating year-over-year in and change

Aleksey Yefremov

there or that fixed Is a year-over-year think about? costs Understood. we should impact freight other

James Varilek

that Freight that's freight costs continues to range. rate We've in rise. still increases XX% seen

Aleksey Yefremov

talked year, receivables a action about, this that driving this capital sold working to is reduce interest is this? the lower the something deliberate you or And costs else

James Varilek

No, it's cash intentionally expense. find reduce ways interest to

Operator

Our next Karl from comes question Blunden Goldman Sachs. with

Karl Blunden

optimism picking you there demand some you rest up the seasonal the mentioned get On of year. to the on epoxy as side,

your might it, like but to I channel that TiOX you think well the views help discuss starting we're I inventories which extent pass? may there seeing missed restock a with what did and as have to in on destock, destocking cycle

Pat Dawson

would there's QX. into helping, this the of of opportunity world. is coming say is of as a right is year. indicators be the And at of this go is thing of in helping of bottom anything front the of us the it have beginning and course, part China. that we a We that know market out epichlorohydrin Karl, big I any tight we of outside We definitely that that's of lot seasonality line that destock positive Pat. now this China. I don't other last and see could occurred thought year in destocking unless end don't

Karl Blunden

And to then early here. maybe Got little tell a you.

the environment anticipate On market as to changes that restructuring, plays any you the out? Hexion

Pat Dawson

think I assume too would it's change. I Right tell. now, early to no

Operator

Roger of America. from Our next with question Bank comes Spitz

Roger Spitz

last saw caustic What sales, notes, or I material it of the around know did past of once couple said. think was percent changed has in are I the you And it Is I the time your in of export -- you it you XX% quarters? QX? I over think,

James Varilek

XX% for to the said volume, in materially export changed, no. range is past is XX% what normal we've and not the it's

Roger Spitz

the Okay. to? that countries regions main export What you are or

James Varilek

very Well, industry we're But limited North moves what also Olin. lot -- there's a I would important we lane that in an becomes but from not be standpoint, a standpoint. a trade where America for Latin of America. to from would That say that that's significant export an product from Olin product is one that

Roger Spitz

One is importing that's know the last one U.S. that that that? into one others some had this Have seen it heard of we've or you and been Europe. and

James Varilek

to so, out into of XX more over is the -- Europe to would a that out out opposed And or X There I into has Europe. question, months but Yes. export that's of last the Europe U.S. of is primary think there earlier out Europe movement movement. And the some to the as been import there's of the of lot say I of been U.S.

primary yes. So that's been the channel,

Operator

to As I like there are further no our session. John to the closing turn Fischer questions, concludes this any remarks. question-and-answer conference for over would back

John Fischer

to about second a we in thank like Thank today, talking to few look I'd Yes. months. everybody quarter you our and results you. forward for participating to

Operator

now now Thank and has conference disconnect. for The attending may you concluded. presentation, today's you

Olin (OLN) 1 May 192019 Q1 Earnings call transcript