OLN - Earnings call transcript Q4 2020

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Operator

Good morning and welcome to Olin Corporation's Fourth Quarter 2020 Earnings Conference Call. All participants will be in a listen-only mode. [Operator Instructions] Following today's brief opening comments there will be opportunity to ask questions. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Steve. ahead, go Please

Steve Keenan

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

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

without quarter our limitations that under factors cause results our projections could release. section are transcript of in from our Past yesterday's XX-K, described XX-Q, Investors A the Some recent of the on today's press website the in and of in to actual quarter Factors XXXX Risk Form differ will earnings slides and section available copy fourth most the Events. Form third be

press available are Chlor Vinyls; over COO; are Dawson, Our questions. And Gumpel, International; and will other this remarks. under Sutton, Damian Slater, with Todd be press begin and President, Olin's earnings data Sutton. Olin's Scott morning With the and CEO; Products Pat & me and Scott Olin's brief financial Scott we turn information release call Epoxy Alkali to releases. now CFO. take some I'll will happy your to thereafter, Varilek, Jim President,

Scott Sutton

paradigms. proud stale and am traditional of everyone. Thanks, my Olin Look, how for to saying hello bucking just I Yes. comments our Steve, I'll kick by off team entire

resulting don't of ECU, withdraw demonstrates volumes we in XX generate ECU. margin the excessive are Instead, on and in Slide the this activity our all markets. chains, prioritizing or number above Our not of fourth improvements the value derivative quality quarter purposeful results activations supply and both entire both means we into products. of on and resolve That one effect. up across down Olin the demonstrate sides are ECU sides we just the we two else masters leadership. in sell team's poor the ECU and and appendix people first

slide XX. ever important most the number we maybe is fact, Slide published have In

Our have returns business in is its this that the model thus ECU not mediocre cycle. be will moving always does is steady and poor cyclical opposite It also rejects ECU deeply volume value generating push oversupplied excess the over quite and point across cyclical directions, when notion co-products on quality pricing. Olin poor chase into swamp Slide not XX an of the number and inflection down the of side an must

elevated PCI Chlor shows demand chart, pushes is weak poorest words, industry a to which EBITDA Olin. allowing emphasis number production, Olin's as price the environment across the weak demand though margins virtually The Olin attention the We as performance pure here. lifting of caustic shows speaking included. the our quarter not point XXXX. global as market out caustic by both directly for in additional our simultaneously expected have not fourth still These will every X, on support our X quality your fabric participation results ECU the PVC items of flooring, even initiatives and anticipated. enjoy to contribution lots participating delivered Winchester EBITDA Winchester throughout quarterly expect turning as and would in America into history, million themes and Slide Alkali with are derivative Slides being in into X, year And is while sequentially are PCI, configuration relishes that create I XXX adjusted modernization integrated expected strong the back best in flooring that shooting the decline our non-recurring indices adjusted even of Winchester U.S. to much lifted caustic index and military more that here co-produced the comment caustic In are Now, U.S. ECU of really does no opportunities XX the and woven when also into other stay. to better sports. quarterly profit businesses Olin who well. the here sport Warfighter for than state to of to The quality commitment. shooting Olin commitment ECU EDC, and team its moving improvement we commitment there is quarters us result

do X, the of to we opening business. first a XX% better ECU every comments that be the in the quarterly And my with. half a improvement first PCI Note you contend EBITDA the XXXX know So, with in than across fourth half. number number turnarounds should across average our wrapping we quarter have of up Slide quarter second expect

Point Here cash more project XXX XXX% with number We that. disciplined Xx reduction, Point to the pipeline to high match EBITDA, to XX%. operations, to permanent merchant arbitrary our active expect we October. are an improved was four, which go the fourth earnings was of cost business a redemption early some that spending Point the capital shifting bonds quarter additional combination last start our of adjusted acquisition net away XX from trade of indices. for of our see, number months. external of for in of two, Point XXXX our backs additional number this broad XX adjusted will the be the chlorine to foundation Epoxy to show ratio up offerings. as XXX net team included projects. Please specifically detail next a our quarterly of product ship some debt million grew our high start is Through the million business XX% bonds within by repaid improve and expected multi-year number fourth surpass on appendix activations, productivity funded $XXX of the with from gains following Slide debt EBITDA number as our ongoing three, dollars key to quarter the first star our and the one, EBITDA record month the as lifts points the roughly value quarter. prior

beyond the a and XXXX, have to we the operating skills just bit So looking we at assets EBITDA. need in team, the billion achieve the model, $X.X least out

have light $XXX reflecting adjusted forward should the XXXX. billion enhances turn capital levered point cash our we plant around a evident match that free reached time, we same $X.X our clearly and down to in million, flow adjustment just the our in level of physical At cash next to better take to This in sphere Additionally, likely requirements annual spin be strategy to inflection influence, of model. assets our molecules EBITDA, as conventional flow moves move to higher our our will global Olin through to be model. those and ECU to as us more disruptive fundamentals supply, EBITDA to are expand current as improved likely paradigms, fixed demand are is asset be incorporate our moves structural

with you look will speaking the activities. EBITDA to forward about the in next $X.X those above We tranche future and billion supporting

concludes that opening comments. So my

so And questions. ready we're take now to operator,

Operator

Instructions] you. from Leithead [Operator The Mike is first from question Thank Barclays.

Mike Leithead

seen market an for talked as the you've customers here. to Scott, response you broadly hope your a value your past give strategy new competitors to this maybe your can I first from have responded perhaps in you've on in us how update the bit well as this. interactions quarters few about selling

Scott Sutton

mean, what we comment would that. I challenging for this I we I And mean, on certainly understand Thanks But a reactions, customers okay? lot won't competitor is, say about is clearly them. Look, Mike.

And up as However, recognize to well. at they economics. and they of really be need their us successful end part reinvestment the day, to of a critical materials the do to we that these want we're that growth lift future means

been it's but So it's been challenging, progressive.

Mike Leithead

you're then, you Olin's actions, through could And appreciate portfolio, if focused your what just I curious recovery. if of lot fair. in greatest key and of of terms or do where across your kind the That's of think seeing comments product in pricing kind you on opportunity you today? but a maybe kind of your look specific focus demand walk is And markets

Scott Sutton

make industrial then still future. good. say weak. demand Pat ask comments areas, our going just here. that's favor though, quite to fairly comment, out has Dami generally, it's In in specific But, been I'll play would I and would itself and general Yes. to been that, I to And some the

me ask comments, from do and Pat we'll to to Epoxy a Dami CAPV. let few ask make that, and about then with the So same thing

Pat Dawson

think June when start Epoxy, is you on the out demand you certainly Mike. our seen Yes, at Pat, demand quarter-on-quarter. things, of sequential improvement I we've month-on-month and look and This side in since

levels. to we automotive, a back today, sit to Quite pre-COVID where got a lot you driven demand wind and industrial quite coatings, lot is in the segments we're demand frankly, around energy. really remember, So those electronics, of demand, frankly,

February we're here, demand in almost So and good. sitting looks what,

demand making we've Investors resins, on is the it when raw of fact which rates. ago, a for going encouraging had is major has think XX demand demand very overall in type Epoxy And robust. thing The months were going China Along seen has mid-XX a we operating Day, resin. been we that epoxy other industry Mike fundamentals that epichlorohydrin, in I as probably the that showing than then with China epoxy our industry supply as back But, less material we're good the while. is into already the for been

back started, tight. continuing see October quarter. through built of just tighter. this momentum simply industry out momentum coming nothing year. So and things been traction in see that through that the in we year September, new. the It's It's quite has end frankly, here in the the us and only right very the And pricing getting given now is first of And new we COVID,

good. there increases had good announced. that the very public seeing and is been there's on domain fundamental the see we So public out that is We're traction there, and

Scott Sutton

Dami?

Damian Gumpel

we have When Thank upward you Mike. the the groups. alumina, 'XX our have rebound activity the as portfolio poised is across 'XX. look aluminium by again caustic across in Hi, tell look if board manufacturing here big that open the and here increasing paper for is in more; good you any at 'XX, and some pulp Obviously, look product up increase; over a external board one economy and we starting activity on all a question. academy momentum across to to we a indicators we

improving the year. So signs see course caustic of the of caustic clearly over we is,

continue second were to back demand, our other continue to started we side. his on and business, merchant really on you We at to that our rebounds iconic look but starting at quarter continue and business second also Pat's cylinders. elevated see You the with we come titanium into pharma, we treatment see 'XX. our applications shown demand And disinfectant, a on well demand. refrigerants areas, exactly what our for back chlorinated chlorine in seasonal levels the also business in split bleach see you polyurethanes water dioxide And -- the organics what their firing half. and the We the lastly, look in to see start then then getting using

summary, in the our the you both very portfolio. ahead really, is I sides now our for looking that, right view that, good So can of demand for tell looks ECU

Operator

Kevin The McCarthy next Vertical question from Partners. Research is from

Kevin McCarthy

contribution an And of positive. is various that Winchester. such secondly, in where we is based sort your year relative on softens, very What your are lot strains. questions on demand your of of Couple if increases outlook the like following election commentary, expected your year there's through a it And to then, flowing sounds election is that, look from itself, the at business the XXXX? price oftentimes history,

to those regard two us I outlook. context So wondering of and things you was each your it with help if address to put could into

Scott Sutton

sure, just throughout pricing and pricing number, to four XXXX. The achieved general so. going the absolute last months continue at or I to results to an that statement is pricing, we basically the of Yes. are that XXX% least Kevin, right, Winchester and six improve put mean, improve occasions I over mean, continue on without

see the also it's you factor. of that our leading in another then, business, also profit in portfolio driving as City have, Lake the And probably terms driving So leading is that improvement factor. we the fact of that part

been different is as election for I out, mean, up. and it's expect shifted of ever a the terms to is before. And that participation have way business, long-term I In really, shooting mean, trend. than that which looking we fundamentals continue

phenomenon, years. XXXX better So, business my just do to of a expect number much point is here future that a this is not throughout we

Kevin McCarthy

appreciated. color you second to is amount be I was strength relative And could tremendous a Okay, And that's may Olin's much if around Epoxy. of question, how outages Scott. a Clearly, around market that in change such would on us if months. understand really there's of that the contribution recent I pricing then, Asia, help as in wondering any ECU to strategy due in index, various exogenous competitor dynamics, profit helpful,

Scott Sutton

Yes.

and provide business, certainly would mean, the lot is of is Epoxy saying But will here. our has color our Epoxy first ECU value part part Pat strategy that. its I some in lift preface that just Pat of then, I by to foremost, think a it whole fundamentals across I it exercising a landscape first own Epoxy significant activities and around. is of --

So Pat?

Pat Dawson

Because, chain. can a that, mindset and chlorine Kevin, we're targeted get enough I've epoxy to applications where best that place very of around all, Yes. into would returns we first different the around compete ECU. decide put a make is our I the I to got of change say, bit and I drive think little the into epoxy globe to the to upgrading sure resin customers active to

to that Damian the and internally it place And returns so, ECU ECU somewhere improving I'm else. my take if will not

and our we talked to fundamentals sense a urgency the on and been hasn't resin say which puts number evaluate a it. haven't since that is base, the of liquid epichlorohydrin, going raw any in I Also, a there about color the and reinvestment, there the So a like different fundamentals epoxy, industry times for type applications. material. different of into epoxy which of economics where place we're that or the at been a Kevin, of our we've of targeted And key epi sharpness the perspective of capacity business, lot Epoxy

at ago presentation, invested from market investors a additional think normal I less that capacity in work off you just of been you're than months seeing if this, the we XX the discussion had So, standpoint. occurrence hasn't of an

bit for those think China. China, that regulations I on down if mean, other were was I I cracking the years was industry, color which think for little a a you're the thing, enforcing recall, around few ago, ever out capacity hard good Kevin But you more in that outside really not color seeing good regulations, they versus That great. environmental that so longest think we've been probably took little had on price I the seen going transparent. the why gives LER on of China have China. And that's maybe some a of that here. of what's arbitrage may LER you running is

Operator

The from Hassan next Alembic question Ahmed Global. from is

Hassan Ahmed

million sort it guidance term the full the certainly improved compare a in fair in it wise I take that you and was, bit since commentary then. And as look the already that I of X.XX take call high-end. at give a guidance given, XXX rate as you've look Scott, given a and billion early had contrast run some a the EBITDA. you billion a the we're at of with things low-end, seems annualized at near November, XXXX have that on of on it year And that

that early we've seeing some we're wondering of whether, that and seen that in sort update was sort light of in just through I degree of indications some XXXX. course of the strength improvements QX, certain of So you'd of of guidance the these a

Scott Sutton

mean, we to of just our I better points And get market running that the year, the green ECU, that, are average down our we points sell activations ECU. half set guidance number the of really ever a just we from restate full here. reason that business says, of it, participation is updating we're would by that say principally, and first certainly guidance quarter, we XX, that the chance slide move because blue by tried quality first side way. our both to and And it to at model look, says is updating clear and weak that that the we in chain to the into be that that to it continues you I do look do if translation don't poor on the markets, is our up sides really the

my of take see So off do is, doing a successful success to at of And I can being there's some that point have we're we doing that. ourselves guess things we we XXXX. throughout in handcuffs and more still that that lot the having

So that updated reason we've that's guidance. our the

Hassan Ahmed

XX, you you're really mentioned, of the about that projects how sort I projects of asset of started closures potentially as going obviously well. thinking like, sort about series XXXX. Slide a guys up as guys of and thinking you list was of XXX down of of sort the you talking these where, as are about in And projects, have appreciate, as capacity sort you but sort of all active helpful. that sales a over Very follow And are certain

Scott Sutton

more performance that part productivity think get do and sales, We're but in necessarily the on I immediate cost actually would productivity that not with assets some asset that's near say we provide from I color of and good agenda. concerned our are probably terms can some of closing program term right, overall Jim that evolving? could underutilized, how better is

Jim Varilek

things of one of is for $XX productivity. savings to success our We're XXXX. pillar million about the here million net obviously Hassan, $XXX an Sure. of talking that important

is our and destiny. our I we own our is own own think this of the is that something our own epitome productivity. absolutely control costs controlling This

So project the we we've stepped and in by our fourth been where very activity active increased up XX%. our portfolio we quarter,

of quarter, the fourth projects our that course, as year of XXX actually for year. aggressive for work completed we we're this being large over projects of quarter baseline the over into we XXXX. the number products cost first start with a And During XXX then,

program. on stepping or for or up and we're cost sales that management, effort the its or it whether the virtually that's with we're responsible It's forward structural or tax we structural company, element see every ECU you side and side. the raw company, in VDC in to some happen the and the the just and variety on projects. that decisions going costs, under every that going to in control we're every side are ECU we're we're moving quarter And on the help structural overlap on so second that's scrutinize associated control the and based whether closure what things these some person asset a make made of railcar see our capacity, commercial our side, that. the of and productivity we're of is what This as up. that's to open and can as with really you to closures, doing like the going very concerted list, you And look successful really of And making our And on of see course, the a broad capacity the we're closure, here utilized with can at is see, single we've to closures be the in at continue to of you continue aspect decisions company materials we'll margins the the future. plant past

Operator

from The next from is question KeyBanc. Alex Yefremov

Alex Yefremov

Scott, first a we epoxy sales just you segments in of mentioned the the XX% and and actions, take, understood and chlor half, your assume PCI in we it XX% I some margin think correctly. improvement that. essentially alkali in should about How margin on

Scott Sutton

Hi, our ECU but one Alex. commitment our mean, number is our right. indicator That's to success, of the not said only good PCI a I question, plan. we've the

to that back this if the business think said earnings third on So quarter the that that company ECU I does. XX% PCI I of you about represents said, call, what

of variable as take our business improvement a be. the XX% what to margins aromatics PCI rule Winchester a our our without only and that really the So half. think of get excluding math XX% thumb having over formula contribution might right? And our you about then, excluding or could then first in can an exact ECU margins you imagine, our business, you revenue it's and just So

XX%. our amount chunk is average little And significant than a that first profitability half a should through to improvement an that the of year. So less some be this of happens

Alex Yefremov

Scott. what of to quarter 'XX. you, thank And relative or half is to And fourth basis back that

Scott Sutton

a it in at. fourth No, improvement finish that we quarter will be XX% I'm from saying the where

Alex Yefremov

something of And you. level, see you achieved in also is already? target billion you're mentioned thinking that EBITDA Thank Understood. as be but that X.X sort not or near could the XXXX something XXXX, term or you that

Scott Sutton

after all That target. wasn't it's beyond really comments our as that therefore, not around far of really about what XXXX was to we're along a that. XXXX. my And well, that comes happens but looking But forward talking little that too after bit

Alex Yefremov

company. like from long? if looks CINTEC to question, How growth, I contract, it includes you a for are obligated volumes in your is capacity buy CINTEC was of last and you VCM may, excess PVC you contract VCM selling expansion, announced growth And this have within how protected it to

Scott Sutton

Yes.

expected years won't comment directly probably say particularly I timeframe, away. this, on they're of I specifics especially so in like is would the this But And one, really this expansions general, right, that. very needed, in what three and

that of So that's certainly growing for. we any negative both demand that out all because of planned don't of impacts and ECU. expect is on the And of sides

Operator

next The question Wells Fargo. is from Sison from Mike

Mike Sison

of nice curiosity, just the XXX.X, you that much when think good when guys out the then went ECU, at indexes, really the there. Really changes? out. you consultants then, how the and XX.X, was third of making And look obviously, ECU you about results quarter, the Scott,

I'm done So of to that what potentially maybe you all of or so have trying much far? how understand, it just

Scott Sutton

way operating to, And you happened very if disruptive own the controlling destiny. be the on past. in we're compared all and think about focused what our We're has certainly may

have So opportunities way we've themselves to up. when happenings turned way into not And manner, turn think our acting driven that get this didn't otherwise in own those In results this other the point. every day, up positioned come that that are to And because present characteristics may about opportunities you're words, to certainly, we business into the of think, opportunities. before on I one so markets, And come way advantage demand the opportunities of product it's have we take all regardless chains, we're area or improving, there's derivative in different declining. many those whether up that and co-production, there's down. now,

Mike Sison

for or on to such, it's ammo, can't anybody's Cabelas worth. find ammo Winchester. or you Winchester And then what just up a really it. I've When been Got follow

when So Are Xx retail in how understand type Xx you capacity? there? then, in are those And the a mix for quick pricing it's at And that reminder, expand so in much is maybe to the this enforcement commercial look locked maybe year? you law of prices stores, you November, looking to of these way some just cases?

Scott Sutton

start I far those end back not to think really if business, enforcement some military, rough, the commercial of it's really, that with XX% had the of that, at Mike, mix you mixed from being that into are about XX% the law rough numbers.

In with a terms just, course, so is instead of that unit run operation. And looking capacity, the right for of capacity, to things capacity margin. we doing I Lake City we the mean, we of that optimize acquired what to But that are lot capacity, do continue of expanding we hard.

we a is locked business, three change to to more until have change even price price been our over of steady. lot we're the our need price. of terms whether things, increases as the certainly military four ability In But six business commercially, or months government into we last there's

our In have or February table business lot of pricing a fact, nearly of we that's now that on impacts it a anyway. all the right really commercial freeze

Operator

next The Fermium is Frank from from Research. question Mitsch

Frank Mitsch

million I question he ship Winchester, him to I obviously asking if for impressive XX heritage XX could We or maybe have in of XX City boxes. I if million Winchester? most the but could know to his versus EBITDA. you of was thought question, I this Lake in something was would Lake really quarter. the stay How at from couple modeled City million genesis the translate think guys on was don't do we very And like, about for a Mike's contribution

continue going that that's do understand think So How out. just to trying played play to out? you to how

Scott Sutton

improvement you're right, and the productivity And our was And across of performance certainly, was Winchester. Look, I better other two to principally City. mean, Lake performance commercial banks. one is them due one

than City. have that sort be going really think can will said to our of number to improvement because odd those City and those. Lake but we're build you sharing team's on continue that we once both as two actions XX to things of to it'll we better So of be get Lake of

that quarter next referenced so And low quarters. that really becomes five you the the in XX,

Frank Mitsch

single able the low a just you Thank however equation is or on helpful. lower in I fact quantify, Very how of wondering side, given volumes might and the digits, the year-over-year, a could not I was portfolio that much double you if that and mid selling appreciation your you're PCI indicated Wow! Chlor to side ask volume question either market was an And if business it Chlor down you Akali digits, the that so Alkali into much. release we the that year-over-year, to digits, benefiting for single be it have from want handle is, versus sequentially such there. were

Scott Sutton

question. Damian will May Yes. be answer this

Damian Gumpel

contribution the from more PCI costs. or volumes from any would at Yes, of year, you. back to I a the say we over good that headwinds to more than you sure. lower the Frank when talk performance look than -- if look outweigh half our at

I the volume at working less give commercial deliberately data ability costs we and few we're organizations risk led just of our mentioned, cover we put against down. then, And constantly that, weak the a QX, in than We as that and as our if the market, and points we had lot Jim here. you out do. productivity for soda look maybe caustic gains creates has to to together, So caustic here, let purposely activations, way has Scott otherwise value at over me really played sit a go Pat the air working Jim to very next we're and closely done knowing the

thing we EDC well. soda. caustic with in And We kept so, the purposely EDC participation. as caustic did soda, We our off make conjunction liberating of same

weak were outweighed where purposely bleach than of is were contract in side, volume in announced that supply bleach values for the the that to those increase as a several for that the in to we soda for QX that also held While we strong many we XXXX. with well price us GTO our the our we're and achieve increases activate purposeful goes announced and to business off-season for activating looking and in cases, were we to increases limit that. back higher some only around And price caustic we negotiated achieved our on volume volume. table, demand the And against price in more value going we've increasing our We play see that that Same achieved there business. desire increase weak and to EDC. around to We that got ever totality EDC price EDC means means that ones we going did we're the and in QX. on our

purposeful very So fourth very cost being our think our volume, of quarter as has the I model some value and to through but of working the very show returns. own good positive willing results put that to our being in-charge destiny relates it much over set

Scott Sutton

that what much on that is you of enhancement it. prices least, want, the or it well at the volume outweighs comparison Frank, depending should think times more volume. Again, penalty you margin on issue associated three with four than about

Operator

Vincent is question from from Anderson next Stifel. The

Vincent Anderson

an I business. Epoxy for of about having don't think normally talked which interesting. asset you light chlorine compete internally, to So is those as

how some the get on of highlighted you fixed XX, talking interested can in you're facilitate about. flexibility you And those so feel color to cost Slide Epoxy terms much anything of I getting more without seeing just like was of specific to out kind in

Scott Sutton

of lot. a do, the external tried widespread, room to I'll which just have gross that. purposes to cost. that we're company this. really haven't business, point pretty at businesses $XXX there's out Yes. And we what tight at XXX. million Look, we I narrow by for to that take mean, translates look, to to is that's shot quick I fixed least business a get that into productivity, would across million to opportunities of XX to all net to just sort going the close $XXX down of saying, And by do thanks

Vincent Anderson

that, think Okay, could Scott, light called a you then, that's moves, portfolio it them some bit. the shift teased helpful. I'm asset Thanks. And if out correctly, you interpreting little I

optimization? cash an base derivatives now, really or on improvement impact the starting With in acquisitions could chlorine have in areas going there ECU are any outsized some maybe forward, free small flow

Scott Sutton

mean, I impossible. yes. is not answer it's The Yes.

won't strategy, be umbrella. it just has going the it's might And it seen marketing get than a disruptive get it's of to trading never be model Ryan, our activities, what something be it either, disruptive, conventional our to activities production to going be more just those molecules future course, right more $X.X is won't be dividend we a will won't to bit, industry like of any may activities, and Of And our either. thinking to mean principal when just now. the be sort little be of And just underneath that put billion just teaser before together. about probably

Vincent Anderson

to lot about think Appreciate A there. Okay. it.

Operator

The Kumar next question is from Morgan from Neel Stanley.

Neel Kumar

can of you just under talk more needed about how perhaps control much increase assumptions of what are the And is market some underlying driven? the get a a In that be target. And of you could out terms not potentially you But the years just $X.X EBITDA, mentioned it's to there? billion being XXXX your I how know of versus goal? provide attainable many

Scott Sutton

answer we Yes, thanks three right, interesting or to put question a timeline need is think your more mean number. two we is Neel. years that I lot, to that. specific have on that it a But everything that we out, the get haven't to I

model executing the this is differentiated really all it about So company. across

be So need model. fact, we to run our that's we many $XXX of years, for to business support also capital why able else. can anything million And in don't

Neel Kumar

the IHS a do think price it recognize that's IHS? the And increases? out then, chlorine those how give only the that of What to very Thanks. It's that recognized, And by portfolio understand portion much price didn't been just increases. not some you sense just you up then, for and the so chlorine, helpful. increase? of there far has per Can $XXX seen I of ton seems

Scott Sutton

can't Well, just probably them, probably good answer IHS say I why would I question didn't see for them actually. a

ourselves have For on. follow us, through we commitments we from certain still to are that unwrapping

improve we share on that. still So, we working to a maybe price of in growing instantly terms change have minority, merchant but the and that chlorine, minority we're can

Operator

is Blair from The Matthew Holt. Tudor, from next Pickering, question

Matthew Blair

I had a Epoxy. on questions few

January. So bit propylene up benzene a seemed and cost it in quite move

expect course, in QX -- walked you through versus unit equal, would $X.XX, margin price you increase soared about sorry, and LER epoxy parts because QX all also Of QX? in here the profitability to has things see versus just moving

Scott Sutton

on It'll to moving on that. just too of without answer that probably I think to the little Pat color chase a and will cut you give parts. many sort get the

Pat Dawson

in that's is short we margin expand answer And QX. short Matthew, going Yes. answer. a to yes, are QX versus

Matthew Blair

drag. the then, And think is good. autos, Sounds pretty end are markets on big aerospace Pat, you strong I gains price a just demand previously touched in likely still like remarkable and Epoxy the given wind

how much guess is a And today? how it if you normalized? could down headwind aerospace of would I talk So about, aerospace the road present upside much

Pat Dawson

also well. I and think have gas as aerospace Well, show that Matthew, into oil you to

earlier, we and recovery of coatings. year So, while time. last your talked we're much which, a the mentioned where recovery that this also our in in full Without we've without and point gas, pretty back seen were to oil about aerospace at demand, I lot I that industrial without and to

And so, guys all the cover coating you big houses.

to there's demand. think here And so more the I upside

The of their and other inventories take as the levels year, here new a the customers, not But is last into at really inventories which uncommon. going down of levels point I year really well. we did mention low pretty is customers, lot saw end are we to that think customers low

that well bodes for ongoing that traction seeing have here year I QX. we late in and think seen last we're that

Operator

is question Eric next The Citi. Petrie from from

Eric Petrie

on you of away made end? the Appreciate portfolio, at the has that chlorine in if all progress Could traction you some caustic rest it comment the how for indexes. of soda XX% including your transitioning quantify merchant

Scott Sutton

want that? you on comment to do Dami,

Damian Gumpel

Yes.

good So morning, Eric.

both -- these canceling for they'll on renegotiations from continue puts of are indices, to forward, and our your a that move contract openers, something sometimes party chlorine, soda, here third pulling evergreen take contracts, arbitrary, our and away caustic terms in We move contract, destiny. very approach towards across that own looking deliberate controlling

fully that contracts Everything outlined along to here move that every able of moves we of the new that we achieved. molecules, we across achieved goal closer open so, year have achieved, the that. were and that our second And contract we half closer we continue has Scott and expect that, us in in all to to to and negotiate

that to front. So on here very we're come much more active but

Eric Petrie

And then, Coast Is lower Olin are ton. $XXX running other to up, bottlenecking because full the EDC for for Gulf chlorine of follow U.S. not per derivatives doubled there have my capacity? right And Okay. caustic out, are that prices net-backs? any or

Scott Sutton

we're is for has chlorine more this certain means chlorine, but Because and markets This how EDC competitive that becoming think away compete. is markets to that Scott. to than so right don't I co mean, are we're are We assets these caustic are what as running are sell into maybe Q&A have running want derivative I just I think much said therefore or not to that the model into into selling running more derivative every much be about and would people Clearly together. from we quality that our walk you things are we basically we say because and is back Those other assets go at and says going poor selling the not all we're we're world and not chlorine produced. moment. some now. at not to look that, and where we're might connected

Operator

Zekauskas Jeff from JPMorgan. from is question next The

Jeff Zekauskas

seemed in assisted pressured. flow Your flow talk accounts about quarter some which of and really you your cash cash you Can payable, lifted And dynamics? things. your operating operating the

Scott Sutton

to want take you Todd, them?

Todd Slater

reduce with It's XXX to it. have ultimately Jeff, predict of in being $XXX the does to going Remember hit early said working timing we on refunds include for throughout that working said capital rise, November, funding exact and going million, Yes, capital in we're we $XX end up were the by we tax million million. of around consistent year to what the City. Lake our hard call

occurred the what expected. our we entire what working had on So purposeful activations was we capital front achievement and

Operator

Bank Byrne is The from America. question from next of Steve

Steve Byrne

those ECU you are review. bringing capacity mentioned it until back the underutilized options is keep it's technical about likely Or instead you and warrants use looked a to chloride the at and you're produce stream? shutter use at considering? really retrofitting fresh so lithium options Or have under demand alternative? that using looked that an warm it question feasibility on you'll Is have it of water Have you what chloride salt My and as brine, to produce and electrolyzers You've lithium chlorine? capacity hydrogen? and of speak brine

Scott Sutton

kind the all Hi, permanent to like option capability, is I some with other at in your moment. and and to likely shutdowns. Steve. other think the And doing of ECU highly The we're more production we're the chemistry permanent shutdowns a answer we're much changes are businesses. deliver in current at not of just shutdown question of no, looking No, regard so have that your is to at just value we mean, any I questions, lift looking terms our

Steve Byrne

the of underway? employees all ideas? into projects know seems incentivizing on how broadly you've a a productivity pool of How top initiatives. contribute this Scott? on your Okay. that productivity $XX can much employee the Is option. coming, But high this is to to if kind versus that coming bottom comment from did kilo value you to I -- up? would to characterize you for don't XXX a approach like hydrogen modified within board have pretty want since drill this I down it's And base, you your what program And is

Scott Sutton

doing that, team no, just the it's Look, say it's me, I not would this.

As that going team just far doing minute. to is Jim as the in answer is how a

said, I Jim, to really like anything? add want mean, be the and of I think do And the why to would do love because so answer you I'm opening, in to the be team things. just successful and I future. incentivized for this question in see is employees jumping basically to this, Olin my proud Olin broader want the they is in originating really

Jim Varilek

broadened we've what out program. Well, the really that we've intensified done the that and program is Yes. is,

past, had productivity we've it's we're -- but So to driving now every employee. down the in literally it

shift, end week? lower did at And basis instance the and we folks can do So up and weekly and together follow that costs? of get better on of So, plants actually and think those some on this we what those. a ideas learn then we the we they are take do or will actually the that week a what for say, particular a operating

be books even that on we're company, or anyplace or of shift, kind every of that up where and it it. example we did what done that's isn't we we project better, well, on So a regular they're operator the closing evaluate thing money the or doesn't see it the what being matter a follow of and a in on save put plant else basis, an the done, what could doing, we actually into

and a it's program, the all employees type them elevate we we So follow and of up through based on grassroots, then projects.

Operator

question from is next from John UBS. Roberts The

John Roberts

ago Would long that know, that you're as of to the thinking a Steel, in example were controlling way of you're of that's that, molecules. things about not more control terms thing acquired about? a of I the you're addition about other kind thinking an more things molecules. Olin KA time be type caustic to get of thinking in

Scott Sutton

John. Right. right? an Thanks, say that be could be example, would I one that. tool Yes. It I mean, of just would

added industry complete growth acquisitions them terms hasn't there's do They right? now to think our through flowing for a by lot influence I probably a to one be for of sphere that where of more but than doing in bit in ways we which years seem steps. come and molecules It'll probably go a than around many by that, this sophisticated Olin. together, one have out seen up of will more uniqueness one being model drive one set

John Roberts

the the up And quarter stable EBITDA to should about your we EBITDA X% kind third leverage about XX% and then, that segment. Is think from up relatively secondly, to one versus about volume the moved moved for about ECU on two in a index your move quarter, that fourth index? right of sequentially

Scott Sutton

but and bags now, rule level other in of and it's lot right of turnarounds thumb. certainly mean indicative. I okay. the things productivity play For there's those all Clearly, terms we're at a it's probably it's at of

Operator

Arun from is The RBC Markets. from next Viswanathan question Capital

Arun Viswanathan

little ask progress Congratulations I I the a the all here. differently. question on progress wanted to just guess

basis then, $XXX value. rate in you towards you the laid XXX you that optimizing quarter, midpoint at when XXX you Where quarterly a do like to exiting maybe ‘XX? 'XX? But are end? EBITDA. from And you rate Or of you a out you've a $XX not rate million late I think basis the of ECU last can know get this 'XX. Is it achieved feel that you bucket on to maybe that that the early XXX on leaning about the in the point? you're move do So million, like quarterly say, upper secondly, to maybe 'XX, run achieved QX XXX? the achieving million Do for run think million of run feel or you

Scott Sutton

the bias you Can midpoint number XXX, Arun, we're the is, sure you leaning it. Can missed answer that of for the I the were you that's of that first I'm restate of showing kind you refer to of to. increase asking? that that restate we is. bucket use not what what number why year, next bit a is little what are question part the we're a beyond forecasting for

Arun Viswanathan

rate Well, that quarter say I on EBITDA was basis, That's slightly a implying that. billion was or that's referring if an to. XXX just run maybe above annual what you I X.X

Scott Sutton

going mean, sooner have years I where we that rate XXX point Yes. that. in of reach we three that of get we where the out to to touch run consistently. two course are I have than mean, kind a probably Okay. to demonstrate we that is capability to the to

we will. think I

Arun Viswanathan

by so next lastly Okay, the then, to great. or a year. And of to target just on get leverage, there's three end

mean see you I Or use? you And priorities even going do do remain there, to of you like feel remain lower? see that's guys Thanks. you that, cash for at? level would Beyond if the you how right you

Scott Sutton

Todd, that? to want answer you

Todd Slater

targeting three to use next share, We of talked Clearly, the million from cash range, dividends us, the we're months. $X.XXX pay within January. paid this a $XXX XX Arun, continue to debt. cash that will just to $X.XXX Sure. we're the the to in to that times flow and about, we've levered going help be to reduce free that

is million in XXXX. we in the We're to due next pay $XXX have to bonds, XX% those off of XXXX. try debt is fully the targeting the Now, targeted that

bit. opportunities So, like And generate. continue we for would debt XXXX, that's come cash where to we little then, as a we're headed. And have as see clearly, to we we down move beyond

Operator

The from Edwards Sachs. next Travis question is Goldman from

Travis Edwards

debt towards the or been what in you're allocation market We're on coming you've how Anything that as towards that flow environment, anything those the debt business. and follow XXXX, across market of coupon the you just Maybe quarter, sort X% there address allocating allocating far from as the proven guess, about instead, would the on on at with lead is the cash that guess coming but clear not to you and are flow, the would free just change of is may have support credit to necessarily environment color out capital thinking risk wondering, cash the that market there taking XXs? side I that up think, reduction be change reduction, your range trading last the would in that that Appreciate you to on those not rethink debt. being that help I rethink could, how anything and you XX%? could maybe

Todd Slater

costs. be always obviously our look of opportunities for We interest to mindful to reduce ways

balanced we also generates we However, amount and that with Olin debt. need free flow that pre-payable cash of the

clearly, targeting million, are pre-paying year. that So this bonds we possible if XX% $XXX

Scott Sutton

a some certainly that that. the then, flow. large our exactly we'll do this is million comes on mean, we're things go add that Todd rest clever of from going get cash to to right. year, part Just I after And to operating $XXX it. of

Operator

Roger next Bank Spitz question The of is from from America.

Roger Spitz

this expect said cash to do extent? source you what earlier, into a of unless capital, you of that be use to working XXXX For

Scott Sutton

of we're It'll that's $X.XX to of answer working get in factored share. capital. And flow we to quickly That's cash cash mean, it. use slight say levered going it. free to for use be into some it. $X.XX I going at When into just a a XXXX. a I'll we're factored little all bit share a all cash

Roger Spitz

overall? stronger Epoxy, spike Hexion Europe China demand and pressure driving force furnace in say, on I'm majeure the Chinese Europe, stronger in in less demand Thank wondering this how Perfect. versus much with LER back that the you. into -- perhaps the the is because of import at

Pat Dawson

Pat. is the would This compared force China. to I a earlier say is of and you more majeure of I minor that out issue around mentioned Roger. overall bigger referenced that Yes, issue demand demand

Operator

Scott this no for question-and-answer closing further Sutton session. the our like over comments. conference are questions, to turn I'd to there back As concludes

Scott Sutton

in them I'd own that which Yes. closing, calls to off-cycle means win And just Thanks. something I way be on units and drive, lift to different. our interested what that three calls. Olin Olin know we people just but really call, facing continue high. have going progress, units lifting report we a to to say our earnings engagement, lifting leaders is like internal mean, We valuation, internal on our with we and similar each the call I differed business business might and here to to you host calls And quarter call our do also slightly analyst. of have to it's this them our those we initiatives progress

calls as you with more that So topic on we'll future look discussing well. forward to

So joining lot for today. a thanks us

Operator

Thank you for attending today's presentation.

You disconnect. may now

Olin (OLN) 29 Jan 212020 Q4 Earnings call transcript