OLN - Earnings call transcript Q1 2022

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Operator

Good morning and welcome to the Olin Corporation's First Quarter 2022 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Following today's brief opening comments, we will give an 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 Rocco. 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 yesterday's our limitations that factors cause results under projections could and section are on be events. from our A XX-K described earnings slides the Some recent of the section available transcript past release. our of in to actual of Factors first Risk Form differ in today's website press Investors will copy most and quarter in the

and Corporate release available Schumacher, are Scott Our and are releases. me Vinyls; Gumpel, now data Damian Olin's we will Strategy; and Todd and CEO; financial to which other to your President, this take Products information Slater, happy With press the after will I'll call Epoxy Patrick Sutton, morning questions. CFO. begin press some under Chlor Scott. earnings over President, remarks, be and Alkali turn with brief Scott Olin's

Scott Sutton

to have expectations, first over Company We met quarter power major the we our Thanks, in substantially Mitsui Plaquemine drive value challenges XXXX, site Winchester our grow of market a said leading Yes. & Both Olin's CAPV with improving and our Steve. EBITDA an to participation joint to can Complementing to the now capability CAPV and liquidity a but announce business tremendous Epoxy absorbed will long-term both which existing continues asset and versus including number delivery blue absorb the deliver broad service pleased in global position, global control results and also global multi-month in and venture and our our Mitsui highest team that shutdown venture accomplishments XXXX global and face Olin in delivered joint to bring were a complete demonstrating better of quarterly in water Olin demand. shortfall. we the growth. demand That history. the more. delivered remarkable

There review Slide these X. remarks. main themes Olin that other beginning Olin our So are growth model thematic vectors. is with two and number in is I'll One winning our the

Here simple in expand global is to of all Olin. We're of story businesses and leadership. the the leader seek our our

cash levered it billion flow Our very $X.X annual and is is free repeatable.

we other that breaks the We have Olin words, value Olin them in winning every phenomenon, the we model. initiatives system a in vectors. model cycle growth unique business; And have call accretive

of respond with application winning inflicted the upon Olin itself. get that time. start theme a The X winning very results number Olin model prevents question on new to let's deeply cyclic the and all Slide So model we really that popular our historically

proposed the proof. Here's

rates for First our on from the year by at chemical close to XX% down, and deliver $X a entire epoxy, the are still shortfalls whole today global assets year. demand of utilization way, same the in absorb EBITDA we top like Olin could in left run doing portfolio that side billion and hand

the could that million recession right side, event still add so at of are bottom of and the to hand the the don't from in of get billion we up lose changes material we from least back a $X.X speaking So on of We $XXX EBITDA. XXXX. EBITDA in

billion deliver down same levered billion we of could flow demand our EBITDA, supply growth forecasted the cash of all $X businesses, across of materializing more to if that even larger we did all to So with be in fall but still recession way see free don't scenario than we $X.X year. growth than the

equity today's our price. understand. So on a at are high model recession mechanics number Olin the the important Continuing of winning and level model Slide of optionality theme the year to X, yield XX%

summarize we So day the to our model. tried have in operating a life of

First, side the stronger words, on chase our other side In broad weaker the we participation and of set participation weaker don't we forecasted to ECU. our we limit the market side. the

based we determine change which give to chlorine Second, derivative Olin their preference values. relative on

liquidity producing than imagine, executed of instead might the Third, in, And and the global for do from more how will really a The it is sophisticated far product. to across derivative chain culture participate. may operation we as clearly of is a of deep step, the we operation And decide make simple downstream the that you participate rational even market we the each as model in products sense summary. finally, fourth purchase the value.

next Now estimate the let's cost of broadening of and capital Slide both inflection words, other plan. X. we In to project world a vectors we one-third thematic combined currently growth facilitate to successful can options Greenfield of Olin in a Considering available an one. incrementally the could at number initiatives. beginning backstop We market. the move PVC Olin much to model. capability a the cross growth point number on to the our time back yield run Olin project shorter scale the our about model, with of on and sits now growth winning This get ton operation value the

growing market joint to announced to a fuel the facility, venture MOU Gabriel, from well. Olin. night, Power for sustainable sustainable X, for chlor-alkali market. signing Slide Last we opportunity is with to Plug hydrogen supply one smaller hydrogen of fuel cell as moving exclusively supplying the hydrogen St. untapped to our number cell already production have We our supply an facilities, an So the Louisiana of

by demand is previously on expand megatrends. Olin There with lighter will well. automobiles, two our demand, this production. Slide future are sustainable we turbines, to of X, current electrified vehicles epoxy methods. together wind Taken represent replacing relationship ECU construction technology X% growth namely option take of the giant closed cells pull hydrogen electrolysis these In global can electrolysis and epoxy, We supplies other driven specific cells robust to number clear water sites Olin as and more advantage positioning and independent about factors that its on have of

For Olin number a enabling Winchester each in vectors a the and these vectors, end Slide in developed the to commercial system arenas. product. solve has On from needed and already highly feature technical growth proprietary is of XX, benefits epoxy in materializing engaged both military

millions Next U.S. positive Squad Generation has to in development the new initiative wholesome kickoff at Shoot production sport. Plant. facility new exposing family also contract the sports awarded Missouri shooting participants of ammunition Our United Lake to this City, potential a friends fast and off weapon Winchester is growing been with recently of our Military’s of Ammunition the benefits

additionally be We expect to fundings manage multiple to Winchester a supply new to the rounds. clearly this millimeter X.X growth path. on effort Winchester and is to appropriated

ready So are Ahmed Instructions] Thank from that really And question you. Alembic take with Hassan first operator, Today’s concludes now [Operator Global. to ahead. my questions. go we opening comments. comes Please

Hassan Ahmed

you about, seems of and you’re sort them. allocation. Scott highlighting the around growth asset may these of My it, capital sounds changed? phrase is really talking is sort growth vectors use if the Has of I it question identifying From really appreciate light. the anything

how think about even historically. potential you’re to guys allocation, should is light about question, compared that talked “an asset on to buybacks about how M&A you forward thinking maybe we capital my strategy” I So a guess, go basis compared

Scott Sutton

than have Yes. mean, we far lot growth what here XX% across we wide. repurchase a a a more say identified price investment that to yield. we’re is equity the Hi, a today’s are full it’s will a using generating And right town. in of and case on is And allocation levered here that about capital right. best the absolute year, that the I cash, I very even recession of Olin you’re flow cash cash. XX% it’s vectors now Hassan. in the And free we’ve Yes. would look, capital so that Even be cash of equity. lot yield at And

makes it at in pricing. period So sense even today's that

it. book direction we're That's can the you going. So

Hassan Ahmed

whole the And especially alkali where I closed. very line talked you HXO intrigued was these a the chlor may about I to if for know seems hydrogen capacity hydrogen multiple electrolysis, who's the in electrolysis, thing I game know get mean, seems sexy anyone rerating. Very use deck, was it where well. clear. and you potential The you by guys in obviously, word slide Look, days to be,

if could flesh your ambitions mean, you hydrogen you out and just I – for thinking what you're the opportunity there? So about how

Scott Sutton

Yes. hydrogen. I value mean for getting today, right, we're that not

atmosphere. In strictly into of it exhausted the large fact, a part is

fuel is – with arrangements less part period. part say, coming another the end gas and part companies than value, I that over we at some have Another would

it's because the objective to take going monetize time application. first we're growing develop you essentially certainly is at carbon and the already real abatement So producing exact same into it what

step. the hydrogen to was So first the in two mean, the took – country the a cells it's produce. delivering largest of we And with have we this hydrogen actually amount now sites, I really Plug at very hydrogen strained step right we sites we're have that have will Power two just and we we of or moment. small producer electrolysis still the fuel

Hassan Ahmed

Thank Scott. helpful, you much. Very so

Scott Sutton

You bet. Sure.

Operator

Please from go comes our Fargo. with Mike next gentlemen, Wells ahead. and Ladies Sison question

Mike Sison

Hi, guys, nice quarter a and outlook.

you wanted of just on a the In in kind color to quarters? of little sort a of – of how I little that remarks is next curious of was that bit think over see bit performing Epoxy, couple just mentioned demand And terms I the and prepared you've soft. Epoxy get

Scott Sutton

comments right mean, first think give I in come in it this the history a now. even just us to sits And demand quarter a shortfall. of absorbed Damian, of clearer, fact, of view you Mike, demand the on And just sort yes, Epoxy that volume give couple demand has make I of can But business. where lowest was down. We've Hi, the Damian Yes. that. quarter

Damian Gumpel

demand good we meeting Mike, right three factors Sure. now. look Yes, morning. at

the obviously is on unfortunate Europe. situation First in going the situation –

a is get with China that would chain the the The That in here materials deep lockdowns first quarter. demand quarter quarter. than that the some. the other with better said, it area We epoxy And are demand the a All Automotive is are underway to first are little a then ongoing are clear second expect good. example factors is is meeting see there. with make the issues that making seasonality. normally seeing combined the those second we in we ongoing difficult to that supply third example, finished third area

more we seeing that come robust all continues set So We we to available LER with comment The customer a and for the don't our we last say epoxy now, demand have seeing able – demand that value us is point Olin to not absorb that on demand the is to shortfall of I'll – make point. of that's We and And that. off U.S. point continue – we're out value base. from that world good, is right said, our production based that, even LER. moderate there. that the continue we but kind to to are the our reinforces all to continue our

Mike Sison

get on – Slide to color Got a of I'd maybe it. thought little X and the on you couple partner, for your a Scott, needs And just And thoughts to vinyls of do you a finding then, over what happen years? next be I some reality for of this bit timing. think maybe to kind

Scott Sutton

look, Well, this way the make mean, all well to I up very to reality PVC. positioned I mean, we're a

world-scale economics all case is better put to probably partner something than the for with. There is we're with next together really, for looking right here sits here the Olin. no leader plant So

Mike Sison

you. Thank it. Got

Scott Sutton

Sure.

Operator

Aleksey And today with Markets. KeyBanc Yefremov comes from the go Capital ahead. next Please question

Aleksey Yefremov

everyone. Thanks. idea? on morning advanced Scott, sort partners of how discussions Good that up this you Can on question. your just are PVC following with potential describe

Scott Sutton

just would of think that we at point, I it here legs. but wouldn't we had had say possible a Well, we've if this it advertise discussions didn't lot

Aleksey Yefremov

in and Could outages much Plaquemine sort of or in how you CapEx terms those. quarter, perhaps it together? fixing makes One, could several aspects? terms Freeport maybe think then those across holding Freeport, It much for of costs? Thanks of you in two And outside back EBITDA how of cost Okay. sense. is capital you do second discuss the

Scott Sutton

think your for might a second expand just Aleksey, negatives the just you use question the merge lot happen where about I And of combination most bit together it's factors Yes, little on us. to quarter, were a now. if

that at short the we will negatives the we're on in there are Freeport fourth power running so, least through quarter. and And

affect will We the have a It's site almost and complete Plaquemine the shutdown shutdown. second of all multi-month quarter.

quarter that. the epoxy start And by not then and We demand have and shutdown, CAPV sell our of our upstream quarter. a essentially together is second And doing business, the we shortfall of as We're absorb with declared of poor all units out be move those all all first quarter our better Damian coming conditions going so that, completely up yet, we just system-wide quality the on in to will we've market that into as quarter. said. improve only of than and in force second majeure that, a our top likely second

In terms spend $XXX our capital $XXX year that and going we between so isn't capital. guidance a of to this where fixed million of have impact materially million forth, we and

Aleksey Yefremov

Scott. Thanks,

Scott Sutton

Sure.

Operator

And then Please comes next question from go our Vertical of Partners. ahead. McCarthy today Kevin Research

Kevin McCarthy

I'd updated and in prospects pricing your caustic. appreciate on Yes, good both view morning. chlorine Scott,

industry you that your the to opportunity seen they least With what the or over high near mean period, multi-month Plaquemine as the competitors the increase quarter. speak forth for Can site the at for some price might we've balances proposals and of supply-demand put aggressive down term? in very for are a second price

Scott Sutton

give will you And Patrick forward to quarterly quite demand and a on in certainly value on Olin. outstrips we supply a growth. us all even outlook, it just plays demonstrate color tight it's long-term makes growth that last would our that Well, call I been little even tighter. tried of by this tell

Patrick, So up. just do want that's bit? And setting expand to a little it you

Patrick Schumacher

say but Yes. in the all from prices market, moved in that of noted a up Asia a moving is some the the the quarter lull in businesses. just of as middle again. there was fourth bit you – market, the those in meaningfully for that quarter would notes, of of there caustic first I your quarter our prices are In in

reflection You prices guys a Europe that in saw for in quarter. globally. tightness for it market would just settled of contract That's caustic the second

So we momentum really pricing the board. see continuing across

Kevin McCarthy

that with trading follow-up ago. And for wide and venture companies formal or to call Scott, what of you to trading Mitsui partnership that, you Can a international the think several table you relationship a I there Olin with weeks as parlaying joint relative for as to a to business? it a announced speak just variety brings

Scott Sutton

able will does the in into way Yes. participate joint parties both I bringing expand to our are certainly it business global and Sure. been existing serve our in What dramatically trading. a before. that to venture, mean capability enhance is haven't liquidity globally ability to this and we

significant a to Olin it and Mitsui. to growth So effectively opportunity brings

Kevin McCarthy

Thank you.

Operator

question Capital Viswanathan our RBC ahead. Markets. And today Please next ladies Arun and go gentlemen, comes from with

Arun Viswanathan

taking for just I Thanks I – some my soft Great. to wanted question. noted guess you demand in Epoxy.

Winchester, focus if structurally QX. caustic you just in kind first, a guess, can do to if go different wanted just what markets – So how said see I Thanks. your epoxy let I ask know we there about could caustic some Asian seeing? you markets? I But bit, in I great. also speaking, And maybe your you end would know on be guess, chlorine, is weakness in and that you're little through of us

Scott Sutton

I a got from back. that bit generally mean, a just be better where has auto Damian we he that, everywhere level, a terms through, pointed second and quarter markets epoxy except of Damian's production in does for little was than fine, demand wind Asia, blade quarter of out mean and actually a the demand. look, bit are nature high went even that bit end fine looks comment come That first lull reasons that where I is Yes. slow Europe it in I stabilized a else. of mean, said

course, is also. supply tight Of quite

which it looks take this our demand haven't on yet we to about good. long-term business, If talked you call, Winchester

on into market. U.S., the the about the import to fact, largest the of war U.S. ammunition. In I the importer with they XX% Russia's ammunition for effectively fact, that all suspect at in of were is going And events with long continuing

the just for that's that So Winchester. looking enhances one more forward profile item demand

Arun Viswanathan

Okay. could question Thanks PVC another for that. general. market if vinyls ask I in Maybe the on and

for kind Is a are significant through amount a a PVC. of we've more where case value in returns on chlor-vinyls, near within that, more the a out expansion Greenfield of the it compelling you pricing of point within that brownfield you couple at also the So here gone kind a do you've supply bases proposition the laid partnership but into preserving to the a in field brown chlor-vinyls see years you committed of market even future? or lot and seem coming last expect in

Scott Sutton

Well, I don't hardly would say right you anything now, see announced.

going I though capacity for Olin be next looks additions, we've mean, to I years, have there's in the Look, already big good. capacity So four additions right. said to not mean, is a and that. player to five pretty

already using I have We look, global might to expand. by that going But liquidity to have other grow to yes, someone's exist. mean, ways

The is In yet. it the fact, exist come of pretty economics someone, already support just right. it's future, in is tight online need to number that than the just how to considering more plants growth that significant complete don't

to to to got a reinvestment economics profile. You've considering the lift risk more bit real get

Arun Viswanathan

Thanks.

Operator

America. And comes today, Byrne ladies from with Steve Bank our Please of ahead. and gentleman, go next question

Steve Byrne

Yes.

pathways Slide for sell and moving vinyls. I you So your isocyanate the phosgene is pathways the could you one some and just curious other Do downstream was isocyanate into possible that about into on was and you're epoxy polyurethanes. industry seems if would there you? curious consider be multiple might another that clearly path into I potential X and be

Scott Sutton

the the Slide of paths molecules into ones And a mean, on do the that well, lifted of a sense, either intermediates I right. it's trade Olin's Yes, that not case whatever considering effectively chlorine just could chains make is. Look, We as number The were question. value challenging to chains, today we're challenging. there's world, different especially that derivative put we of we for chains are already the that are we big thanks chlorine right. lots lot as move different mergers, in equity X supplier many considering possible ECU of where a or right. gets derivative impossible, at, And acquisitions, a today, always operate there's

Steve Byrne

green Gabriel, little And to the of paths. could just Plug it ask variety a produce with at wanted St. plan like the bit to about a hydrogen you seems go

or electrolyzer brain into the the just to the by that insulin existing electrolyzers. renewable change now just XX are Is could right power or planning you source megawatt production plan you add simply or hydrogen concentration? could XX You changing your

Scott Sutton

already produced produced. today of used It's right some into we Well, hydrogen, spit atmosphere value essentially, or the at just course being this It's being right. lower application.

doing essentially that and Plug cell all we're to it So their application service customers. centers, hydrogen is taking is then Power it liquefying fuel and hydrogen taking distribution

to as to So start soon definition achieved to to get RECs ways other need green, more abatement. A will, we use available RECs to there's we it operations. it's multiple for a If available it there as through which application, is we or market the from using we simple do Plug already appropriate on carbon do way their it. the

Steve Byrne

Thank you.

Scott Sutton

Perfect.

Operator

Jeff And J.P. the go Please ahead. Morgan. Zekauskas next today comes with from question

Jeff Zekauskas

Thanks very much.

to were were the second in and are the You quarter said first operational big they first. Why quarter business the quarter? the you've got, issues of in difficulties in the the in than expected in the operational first than given chlor-alkali more how in the that that less issues you earn your second is all that

Scott Sutton

quarter. more issues significant than quarter first the Hi the second the Jeff. are No, in operational

Jeff sort continue all to from but the when negative issues. In ECU the momentum. of of together ECU merge overwhelms enhancing has That those of fact, of that lot momentum continuing value and we're negatives derivatives it's path the the continuing a on the

just a out I has our the our plaque $XX we of of CAPV press to release, called direct business. negative earnings itself in think in that event million the

have all business momentum events those, The well, we the based have the in but as negatives we improve to of the that on overcome other value.

Jeff Zekauskas

view diminish, Winchester out out those your do business, Have sanctions? begin that I you how in shipments And you track shipments begun of can the Russia? ammunition Russia of exclusive that come shipments imagine Okay. to yet of of

Scott Sutton

a lag in to Jeff. there's Well, Yes. that, do able effect being

some have that there's maybe So is certainly to What we less of being we do some permits, of And also we our have level fact Euro-Asia that have in issued. next earnings shipments. permits don't be view to have as import zero some view actual complete come a of well. level to diminishing And view things all view as there the originating to better have down, we'll call. reductions on those what likely may import

Jeff Zekauskas

Thank Okay, much. so great. you

Scott Sutton

Sure.

Operator

And question comes go ladies today with Research. and next our from Wolfe gentlemen, Silverstein Please Josh ahead.

Josh Silverstein

about talked the more Thanks. into shift to would potentially your potential into opportunity, for into expansion thinking sell of chlor-alkali today more new plant supply or facility? be from Good morning, about this this guys. Scott, add as where be a would need the supply you market, PVC it you you're this supply the

Scott Sutton

would to ECU this. and do timing Yes. as there's well. not impacts have already we We capability No, it add some more production

the are materializes more that year this that we window in three project. on We scale of to two put

Josh Silverstein

Got going can you. capabilities facility differently two the the facilities? you're and Thanks fixed operational for how actually that. And repairs outages, then just when about any thinking the two of the are on repairs you improve facilities the to are the operate

Scott Sutton

I be that would we quality the And we in into be that won't we our is set those philosophy operating and underlay out our are certain poor model. in will selling a won't that change market And buying principles principles operating our effectively by market philosophy. the say instead cases. liquidity Well,

change won't it So that.

Josh Silverstein

guys. Thanks

Operator

and our Ladies Josh comes ahead. Spector go at UBS. from next gentlemen, today Please question

Josh Spector

recession Yes. Hi, scenario your analysis. follow thanks for up taking a had I on my just question.

that, comment if so at you're chlorine, gives pricing was you wondering to that assuming could back you pricing? it the being is where rates can that contractually going you the curious there you least confident able just like just down looks Thanks. you that you're Or could on in maintain guys? place set deselect something taking on are caustic your what side. you chlorine weakens? there on Is for operating that to side And well. assuming pricing Just what it assumption but on maintain I as locks

Scott Sutton

chicken right. I our would mean, pricing. chemicals a it's trying this to product your mean, complete hypothetical I pricing, egg course XX% case, of willing a whole the question, just for to the question. mean, really is the I global for that a take like to product go is a down to demonstrate assets to extent right. or utilization rate preserve year we're Thanks reason you preserve Yeah.

toward there our won't to you control it of positioned applications $X,XXX the low pharmaceuticals chlorine, ton you to with the destiny even treatment pricing are a we're Even of from. continue. those years a chlorine, treatment demands for own – recession many on and merchant have water do and that a and about things particularly we and So a like back agrichemicals in that and $XXX in wastewater on move priced case up ratchet we ton, recession, brought in a think merchant the that it's global when that sort left moving we're directionally

Josh Spector

Okay. Thank you.

Operator

And our Petrie ahead. next question today comes at from Please Eric go Citi.

Eric Petrie

Scott morning, Todd. good Hi, and

Scott Sutton

Hi.

Eric Petrie

end developed your you ambitions do see to from scalability and do about and the and markets much hydrogen green just business? would furthering of and talk how an that then take need to industrial uplift expect EBITDA timing you stationary You off that

Scott Sutton

we terms it hydrogen the to Thanks. the of quantify because hydrogen the timing, actually store biggest factors, here, reliable use EBITDA not but but limiting really hydrogen Yes. the I mean, molecules hardware one the of is necessarily much. is supply evolution the of in just didn't can't you uplift complete

venture going asset. probably of too next utilized, joint utilized time another period could Gabriel, a this it'll effectively to another with take to get XXX% be St. one we the is as soon just operational be develop as that XXX% it's So

opportunity going carbon mean, do think you imagine every So is I something a you that… do there's to applications. to that hydrogen abatement Todd, our months might six into to what an expand year,

Todd Slater

Remember, the we we this have Absolutely. plant, our with hydrogen. in joint X% venture of and only are another utilizing other application

we a forward. as move significant there's So opportunity

Eric Petrie

then ECU is just Okay. and then you cost could thinking refresh question chlor-vinyls And second on my curve. your

I billion new Asia. East chlor-vinyls think X Southeast the to there's a plan supply Greenfield Middle in

exporting centers? East exporting from Middle from the versus to So economics demand what's those U.S.

Scott Sutton

service Well, strategy. in that these going or say about consequential the I cost use are I ability be cost value making curves forward guess, I just The per to we're the and effective right at customers say would regions the in aren’t would irrelevant. player materials and to an Olin’s this time.

Eric Petrie

Thank you.

Operator

And our question at Pickering, Holt. Please next today go Blair Tudor, from comes Matthew ahead.

Matthew Blair

for taking my Good Thanks questions. morning.

your to due talk X% came Was what’s The in quarter. just the drivers outlook about you first the to just first Could for parlay Asia? prices down your caustic is that QX? And higher in on parlay there? then volumes volumes in

Scott Sutton

will need is, we Patrick the many to... I volumes of Well, that mean, just for this a on bit. Yeah. Yes. setup sort do want the as didn’t But expand parlay you quarter. in first

Patrick Schumacher

in would I mean, We say for Yes. EDC and Asia. particular. there always few about I talked available. looking was less we’re caustic a minutes ago caustic in prices

high those little marginal happening $XXX back into bit quarter that coming Europe. into had $XXX going. XXXs, And Asia, the or it the got That price plus the to the what’s supplier XXXs, the a that’s but it’s so in of Asia. And are earlier higher, Europe available is talk comment, low out a that’s million where that lower that prices extent gully is FOB, I Northeast key XXXs, of $X,XXX Asia $X,XXX, my it’s it started million. at on in index is in material of If Europe to went you maybe to look mentioned XXXs now

strong in less So prices available. move aggregate supply means, in

a tried, of auctions. we lost we So bunch

customers, by. but to tougher come for We’re our liquidity trying to it’s get

Matthew Blair

that But if And chain why Freeport? it’s already you then, you this. at you. units supply issues so like covered taking or long explain Thank Great. part sorry could the Is to availability? repair

Scott Sutton

six please but of two didn’t lead the details, on years. power significant them assets major we to there. time three new I And Yes, expand we mean, and recognize that has equipment failures have experienced of two generation

access new equipment, to we but parts and not them, them – get difficult have to access We’re after rebuilding even in.

small are these So projects. They’re large very projects.

Matthew Blair

for the color. Thanks Great.

Scott Sutton

Sure.

Operator

gentlemen, Castillo go Morgan with comes from Stanley. ahead. and Please question next Ladies our Angelo

Angelo Castillo

question. for Hi. Thanks my taking

get roughly to maybe two sense kind the little part of and give guess, was to where XX% in color And that, then today capacity operating on of of kind a out help look. also we rates parlaying down more And you are of buying I top of as about move understand better a operating that strategy I perhaps as us on maybe from terms Just Could rates some what you’ve of recession the think that is, discussion would the kind noting just us, been to here hoping market. guess, of the scenario. I the be. top bit parts.

could you your sense of scenario baked of that into inventories are to give maybe kind of kind so us And would And it’s if a that? those go in where today? also

Scott Sutton

I mean, color on shortfall demand what business in this we’re our I current share don’t we some normally will is, Olin today, shortfall. demand Yes. right? that epoxy a practicing been rates. There’s that you give But has operating absorbed

is our delivered off where yet will EBITDA $XXX in the rounding rate we doing conditions of the than And a That’s have million global in our And that, And we principles that of around the pretty above that deliver underpin plan. first see model. quarter put not that while. so for able assets quarter or the why previously number you by offline to somewhere is poor just $XXX data that one XX% under had not that back to years. and just type million take made business we’re we decision in the more

the is that larger in $X did more that thing our practical this the billion across had to mark. if we broadly maybe that hold that assets, of if think best the I a we recession case of saying that could EBITDA do example So around we

if I So that don’t helps. know

Todd, want to inconsequential. of probably comment inventory on you terms it’s do that? In

Todd Slater

did a where to bit compared that perspective dollar see the little FIFO. overseas ended in from being especially year. to quarter really inventories first But move relates a hydrocarbon You up with we costs, the on higher

statement. you that’s up in the why So inventory saw move financial

Angelo Castillo

just discussed. guess, of degree with pass-through opportunity they That’s structure agreements contract these of you I or maybe wanted it. And tend for cost, of it’s supply Part of on helpful. of just about some profitability Thank to then typical fixed or but usually the revisit, guess, you. kind that as fixed type I that some I the long-term partnership have, it, agreements I that kind think

you downstream model product from well ratchet desire the and to of kind the perhaps opportunity kind partnership that as another to could opportunity your model, winning do balance versus to how one flexibility strategy? the long-term So that this as of a with take pricing be have

Scott Sutton

And brings didn’t we for mean, to that just grow PVC looking things right in to us this is allow of keep power, be and the mean, that. from partner the the alkali the right? we a the ethylene, Well, is, essentially profitability well, we that need and EDC enter upstream What over all chlor we outlet the the possess vinyl, capability just just partner. expand grow I into wouldn’t plants, capability. from even time. as to VCM would mind, PVC incremental Olin the I something value

margin. a in not we’re something that yes, extreme to bring fixes that it So, capability having the end locked up use going we up to

Angelo Castillo

Very helpful. Thank the again quarter. And you. on congrats

Scott Sutton

Great.

Operator

with question Please next Mike comes go Leithead ahead. our And today from Barclays.

Mike Leithead

Thanks. with morning, the guys. Plug. announcement JV Great. Congrats Good on

spending think hammering of One, the of a part kind long-term. in CapEx structure much on how the you it I need then still Is how you expanding or Are JV? Olin you or ownership? this those of slide, quick sites XX-XX to that? two second, think about do And would Do capital talked Just have sense as should all you the details? improving economic about kind ones out we of that. of

Scott Sutton

venture What I’m you the Blue speaking joint hydrogen And were Plug? venture alliance Yes. joint it Water sorry. the Was with or about?

Mike Leithead

hydrogen Plug, venture. joint The

Scott Sutton

yes. Yes,

that’s as XX-XX be up going to venture set forward. I joint going Okay. mean,

Mike Leithead

sites, improved would capital that Olin rough to figure attribute for kind there or a projects? those expanded you improved And of is the the –

Scott Sutton

put Yes. all No, in out capital sorry. included plans. the and of didn’t We our forecast forward cost, but is this

Mike Leithead

just the you maybe tree And X lastly, the Okay. is super decision show where helpful. Slide

in at any which your Or look that best products balance have two? of kind different the you just when those flag derivative the chlorine you those pathways, fundamental products mind over Just or year of next exceptionally of those favorable?

Scott Sutton

we’re in level supply to untapped to able is growth, today the the we idle of have say materializing. vinyls, of and actually demand each down at epoxy with commented growth capability a we’re So already likely fact there, business that the lot sort megatrends running chain I right? would of every in on exceed expectations at We’ve

page space. Maybe there as fundamentals well. good chlorine pretty in fundamentals have you the merchant the best the So are on

Mike Leithead

Great. Thanks, guys.

Scott Sutton

Sure.

Operator

comes And next Bank with question ladies Roger and gentlemen, Spitz from ahead. our Please go of America.

Roger Spitz

Thank morning. you. Good

classic could for than VCM? So potentially if be shipping them partnering you is the good more global that EDC contract would for industry? And produce with the with presumably PVC you have rather player them, or you

Scott Sutton

we side parameters be whatever that through PVC. and complete at there, to have at the through would is We within participation go the do set it’s And options the Olin still that the ventures all weak I I all fall to and chlorine. Well, caustic, by stop of model to options have of caustic way the across all of market our these will byproduct say these with between or EDC, regard mean, the of going investments chains of to to to VCM stop Yes. right? and

So like on these kind see and X umbrella Slide of PVC of will of to number have that that umbrella under the the under things that you model fit they fit model. that venture

Roger Spitz

it. Got

$XXX million XXXX that debt due? of The when the you to August talk on that of appendix, assume simply repaying is Should address million in other we slide X.Xs the plan the $XXX reduction. thing due you debt about by

Todd Slater

repay that Yes. We debt. to August Roger, in expect this Todd. would is

Roger Spitz

much. very you Thank

Operator

conference our And back closing to session. ladies comments. over like turn Sutton for and the to gentlemen, this I’d concludes question-and-answer Scott

Scott Sutton

would everybody us else I today. just thanks today No, and thanks joining Yes. to for to say the for everybody questions

Operator

you for This call. thank today’s sir. We you, presentation. attending conference all concludes Thank today’s

and You your day. a may disconnect now lines have wonderful

Olin (OLN) 29 Apr 222022 Q1 Earnings call transcript