Olin (OLN) 27 Jan 232022 Q4 Earnings call transcript

Company Profile

Participants

Steve Keenan	Director, IR
Brett Flaugher	President, Winchester
Damian Gumpel	President, Epoxy
Patrick Schumacher	President, Chlor Alkali
Scott Sutton	CEO
Todd Slater	CFO
Angel Castillo	Morgan Stanley
Arun Viswanathan	RBC
Eric Petrie	Citi
Frank Mitsch	Fermium Research
Hassan Ahmed	Alembic Global
Jeffrey Zekauskas	JPMorgan
Josh Spector	UBS
Kevin McCarthy	Vertical Research Partners
Matthew Blair	TPH
Mike Leithead	Barclays
Mike Sison	Wells Fargo
Roger Spitz	Bank of America
Steve Byrne	Bank of America
Vincent Anderson	Stifel

Call transcript

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Operator

Good morning, and welcome to the Olin Corporation's Fourth Quarter 2022 Earnings Conference Call. [Operator Instructions] Please note this is being recorded. I would now like to turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead, Steve.

Steve Keenan

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

follows, you begin, and discussion, that regarding let performance. we of that or the include expectations estimates me session slides Before associated remind this future statements the along question-and-answer will with

Please statements that could are actual forward-looking those materially from projected. these note results that and differ

our XX-K of factors that the differ in are projections our limitations quarter the release. could in to earnings Form Some described Factors Risk most yesterday's fourth of section from and cause actual recent without press results

of A available section in transcript under copy our Investors today's be and slides the on will Past Events. website

financial press Our earnings other information are data releases. and available under press release and

President, morning With President, are the Slater, CFO. happy and call over after Flaugher, Scott Olin I'll me Todd Scott Patrick your Winchester; be we'll turn Gumpel, remarks, leadership to some this brief Schumacher, take make Alkali; questions. Sutton. team Chlor which will The CEO; Brett Olin Damian Sutton, President, to Epoxy; now

Scott Sutton

Thanks, flow, everyone. per by free our million. and debt levered XXXX, XX of share Olin generated cash $XX net Yes. morning more shares In and good $XXX million reduced than repurchased to Steve,

team levered XXXX. massive generating a was flow share of after It per free $X effort in cash

to we this expect in levered generate yet our flow approximately free of As head per free same markets year. on cash we XXXX, $X healthy, our cash the focus into are not and flow levered recession remains share

the XXXX. X/X of the EBITDA generate least expect X average we $X.X to in years to an billion the $X.X From we last trough billion range worked perspective, the is in at that that and

rectifying suspended blue epoxy due the early continuing idle a operation the For via transient to Olin, channel of commercial Europe, participation supply of largest ammunition our kicking lower to complete the include water... resin in global rate, XXXX in and regions Olin off consuming key fat China of the business demand features

Operator

with connect to we you. as the Please hold Thank main line. try speaker

Scott Sutton

I start we dropped. won't repeat off. I but part I'll I the where we understand dropped first comments, that think of my

So include China resin suspended transient business early XXXX Europe, for largest regions lower in rate, channel fat to off chlorine the of to business. rectifying complete chlor solid via participation Olin, to ammunition the world's kicking key supply demand Mitsui the operation a idle features in global consuming our our and of in the Bluewater epoxy due liquidity continuing pricing recognizing of and commercial much Olin the alkali with more manage lift alliance another in merchant

the it preserve already of of the slightly of drastic impactful possible negative a take are more product recoil the to part in toward may for that values further the a and have features latter these rebound quarter first of to XXXX action some quarter in way, While year. is subsequent still we

current hold quality In rating, XXXX, investment-grade footprint position, debt an a net story gain throughout for keep adjustment our to complete asset and expect prepare buying year, decisions XXXX. shares us in growth the our

and of Page XXXX we this focus is theme from our look presentation. This growing our also We've Olin, scorecard to updated a results on for XX ESG the forward showing progress area. the in

then XXXX Now accomplishments on additional comments and all XXXX brief situation make our will Damian, Brett with the businesses X on our initiatives a Patrick commentary and both each and across will few and Todd outlook. follow

Damian Gumpel

a to principally pull led Slide most XX but us challenging seasonal On the X, reflection morning. are our demand, that water QX which good and Scott, partly landscape years of deeply approach harmed the to disciplined resin otherwise Epoxy production would back results in you, have Thank landscape.

base, productivity, growth. enhancing our for profile we focus asset 'XX, of optimizing on half value-based back and the in improvement sustainability anticipating our While today positioning

mobility leadership seasoned our role Putting the epoxy Patrick in how last Schumacher calls to that alkali. way we a for portfolio point, commercialization. future in growth. chlor challenges translates and in to global into look turn new I sustainable business differentiated the energy, product during QX and I'll infrastructure addressing XXXX. over this of now systems supercharged Olin it sharing under plays On shareholder forward product on value

Patrick Schumacher

Thanks, Damian. XXXX of first second though continue the an brought all-time XXXX record Even year, we to into significant are the half challenges which was half of likely XXXX.

the and vinyls weak Olin rates. chain lower remains operating Pricing continues necessitate to in

pricing step our contracts end. chlorine through side, earnings show ratchet growth XXXX to in merchant up as and one has is positive we to Chlorine expect Bleach been XXXX. the to only continues turn products success both On substantial again story way. legacy expected another

Our Blue Water an for caustic largest Alliance Olin to and years it important part and an over now for Brett EDC creation the Winchester. of traders is of I'll be world's now one to value of on come. turn the update will

Brett Flaugher

XXXX. Thanks, throughout value Patrick. team The Winchester to maximize continued

However, from refilling half especially our to the our customer to to rate inventories And some inventories second during in the ammunition transition commercial business of inventories cases, depleted caliber rifle, high. we sales. became year, experience in the filling started small of a

manufacture customers. less preserve Olin value to to both and decided we So for sell and our

remain million nearly the the sports stronger recreational than past XX participants shooting over for believe leading ammunition we few entering Winchester With products historical our demand years, new will levels.

and with increased Army new Lake the well funding military see opportunities increases facility. segment military government from as within international modernize to customers as to continue current City We demand our

ammunition turn As ammunition for and our brand Todd. value we the #X focus be in growing over preserving to will manage through I the this you, on industry. it will transition, commercial

Todd Slater

levered free Brett. Throughout Olin the has Thanks, X flow. billion years, last $X.X generated cash of

period. debt the billion outstanding initially balance over reduced X-year was allocation capital focused the $X.X by sheet, on whereby we Our

totaling investment-grade free primarily levered billion cash years. towards balance repurchases sheet our we share $X.X remaining flow the X set, With last over deployed our

$X fact, approximately billion of our yield. trough from shares to we're cash which to despite In forecasting global XX%, challenging equates during a the economic cash level reduced all free cash In generate XXXX, outstanding by flow flow. we about free XXXX, approximately conditions, levered recessionary flow XX%

a unusual of flow items. XXXX includes couple Our cash

rate that be to cash expected a be $XX under of tax paid tax approximately payment Also, due approximately supply this normal million. long-term to year. to expecting forecast higher international than deferred contracts are peak is $XX we level our are payments of Our energy million

our Finally, deploy Olin now remarks. to sheet continue enable and of prepared should questions. flow to are substantial investment-grade flow take XXXX repurchases. share to cash we cash towards portion a concludes ready balance free our our And Anthony, levered That

Operator

Hassan [Operator Instructions] Alembic from Ahmed Global. will question Our with first come

Hassan Ahmed

a the $X billion. Got talking been you gave, billion guidance obviously guys line the guys range the $X.X of to trough have in you that around sort of with sort XXXX question about,

I pricing, the a they a guess business mean what quarter look as have of I on the I weak seems a alkali adjusted EBITDA, you and sort EBITDA So sort $XXX QX of doing. doing in it that to right? trough I XXXX your at guidance seasonally guys epoxy and being the as given. which adversity, the extreme tailwind the face obviously obviously, you the take the midpoint of And achieved a this get that, billion, massive destock, end most weak top is right? in was on QX I were, guys of million. chlor being have QX had you of and the squarely go-forward basis mean quarter. $X.XX only guys is it that, annualized look, I And markets of

just to things and it -- of the and alkali of sit and look, around the chlor pricing, up one on forever. I as may there say, and So some has been turn sort rising talk is can't dropping investors, hey, cynics of that EBITDA go

could what you're in way So crack. to the not camp, sort really looking, tell Again, any little to it alkali us that the looking may a going in I'm see but give confidence you even with that of price. more it's cracks chlor us not macro

Scott Sutton

think would equation. from here footing. that's we add as some Yes. you Olin solid summary. value some Thanks, can leader the pricing go And here, derivatives about here alkali, in on is from Olin's I But It's well. little that in the here urge chlor absolutely I effect footing up mean mean, they to Patrick and have ask no especially go Hassan. color and what's of I'll doubt right? down I a cause there. and I can good mean also the setting is the to a very

Patrick Schumacher

Thanks year a in maybe at caustic prices for or of at prices, for year It's see definitely down to records Sure. the baked in goes very, of have vinyls the Yes, million, question. weak as Hassan. possible, other for lower last been over could $XXX prices least you year. the least -- and Scott in We've weak locked but that to from run half said, very this lift side. going we're chlorine

a been prices uptick in recent there's there. So

up. tick to those maybe prices So start

coming lower a expect of maybe prices and we So mixture some this maybe year some higher prices.

Hassan Ahmed

all, the it certain of And mean there declines enough. with the trying are sense just regards sense where of the certain it, a it markets of of it on for you sort as inventories TiOX, sort trying I vinyl get side, of there the about a give just and lay how in to as to you Fair a guys, could as towards obviously, sort inventory. be the looking snapback follow-up, weak, XX%, producers, get end of And pointed us volume is demand. sort they're could land enough. guys, talking I you at of side if sort be I'm Fair at, right? sitting particularly being as that if TiOX So call industry? mean chlorovinyl a to a side. urethane of high be I'm restock, impressive for

Patrick Schumacher

Yes. take your that. Sure. word XX%, I'll for

volumes last the look been But well, definitely third and the the has year-over-year, down. talking side way chlorine quarter. business are at the -- the this of our would weak side ECU Chlorine up. because you been we've be of chlorine to guys definitely for If you the netbacks ECU are

offsetting side that and to the lifting of for netbacks, managing volumes. chlorine and side, weaker lower we're is is we're rates that ECU So which running weaker those that

Operator

Sison will next Wells with from come Fargo. Our question Mike

Mike Sison

the company second chlorine, been weaker your sees who a housing. Just the in big outlook curious year, couple on second for half in there's paint particularly one half -- the of

thoughts that So the how on affect just your that part ECU. would of

Scott Sutton

like way according And mean we we've resets Patrick side. participation market the it's that side as again, trends go when -- mentioned same Mike, to to I mean I well. thing. XXXX, you U.S. not we'll ECU -- trend million I And additional see change impossible a weak in of Scott. better conditions. looking the the just as contract already that something had we But coring, Patrick resets. that's beyond And merchant $XXX that Mike. year. expect all bad would Yes. has the which set great. fundamental we mean, that housing isn't it's the our Yes. said,

So very a chlorine nice has runway.

Mike Sison

then Got that of I Or the about the is you And it. for year? an there for sort assumption bit do operating think stay they the at rest of these of rates year, as unfolds? year your most guess when little a they improve would levels the

Operator

the give as Sorry, speaker a moment we main us line. reconnect

[Technical Difficulty]

Mike Sison

where they now? your question your are guidance, similar for operating based -- the my was, given guess the demand? rates on of you will do rest outlook I through think And year, the stay

Scott Sutton

Well, much really mean, would mean, we're running marketplace. into too are I to certainly we're volume our way of lows because continue that undervalued overall, situation those down certainly we're lower And find the look, capacity. you if just going rates. you'd XX% is the highlights went that running that all an into not operating I to resin, going epoxy say sell I below

right quarter, bit we that's because quite rates why that And got Winchester's a first will over improve we've way. fat in and well as quarter. channel fourth a adjust the the that's had the the supply fourth the trending to quarter, business In said bit

Operator

Arun will with Our next question Viswanathan RBC. come from

Arun Viswanathan

can operating on you rates, at year. X for XX% run first of So off, note that says it

Blue in think I time long rates -- have low had at a mean, as then we and much been Water while. do now little left a And that? couple does on I we've how well. questions hydrogen we how these of I that Are for last? year

Scott Sutton

of rate Yes. mean, we that was Yes, last case. our across the effectively year, at ran that deliver for Sure. pricing XX% whole recession middle year. levels still the company a the would established I If whole in

of Arun. quite standard, against a So left, there's bit room still that

Arun Viswanathan

control -- position And you impact is way and to amount can that of there I or impact least financial you'll a it. on supply industry know benefit Water, you? at the Blue to any that manage quantify greater we be noted a in the

that? start does when to how benefit? So translate seeing that And do EBITDA you

Scott Sutton

Olin. for keep mean I in that's consolidated Sure. joint Yes. venture a mind,

So make the a you'll direct of see. Todd will impact couple that comments on

Todd Slater

will Chlor to should into And results the In Yes. in Products you our up Thanks, the revenue impact. year, expect first Vinyls first to is the it will should come joint $XXX year, segment. that EBITDA overall Alkali you increase and million. million Arun. expect venture from It be $XXX consolidated minimal as

Arun Viswanathan

then any And we in for sustainable starting there? And EBITDA unit up, similarly how your it. get hydrogen the about think Got do activities with how And similarly, commercial is into flows contribution third to operation? expect from should you when benefit that Olin? that

Scott Sutton

into Yes. this Scott. today. the only I have arrangement is fuel we operating cell mean, mean, application one I hydrogen

starting make up. second to to under the and under at design the and in is the try venture will X our are to as that X% we of hydrogen. that these year new around started The get point one our hydrogen into San that I end saw this out you that wanted slides third one a Even is and of sectors. us is to only take Gabriel venture think our we're discussions the And we about construction, it first get

Operator

Anderson Stifel. Our with will from come next question Vincent

Vincent Anderson

it your to comments I just wanted clarify just Epoxy, clear. I on had

ask just are You naming reason. prices up the and global I markets resin is a but Europe holding because well. fairly Asia idling U.S. And still said only

assets really So epoxy all are resin first down in this the is going quarter?

Scott Sutton

now. level, would more at give a are I Damian been Well, I'll we've running on little those let where we say lower right color a but

Damian Gumpel

a said take globally crisis. Thanks, financial China in does Europe. on epoxy years the situation, Most is is this Epoxy, the Sure. consumption what that in in we've XX challenged worst Scott. that seen we've since Vince, of and place

impact And on greatest so landscape. that's the where we've the seen

been continue lower to here that's environment. us, result, going can already, still assets focus ourselves takes to we've we've value, go epoxy most. customers a preserve have further. rightsize value challenge as operate order production, to across Now us we to we under -- lot global of our at more on for do done still do participation And to it's now, for in to over our a as we taking it it's the And this question our a we've a that as long the our lot continue been a to market -- that are year to to frankly, led but We're opportunity that rates successfully portfolio. and our that this portfolio challenging of adjusting going

Vincent Anderson

kind And Okay. That's helpful. then Ocean]. just of returning to [Blue

always largest globally I had caustic the of kind markets penciled merchant as So EDC. in the in traded already participant for Olin and

table? any be detail at give looks to like Mitsui willing with is So there what around now you'd the more that

Scott Sutton

there. Well, was EDC. capability say the I of formed expanded just that was venture caustic Remember, would joint businesses and the X our that merger a in international way we've

So we've just there enhanced further. our capability

Vincent Anderson

a a the international in your about as not to you is change think being are. approach you're talk not And the markets about looking might I producer, Can position market assets benefit if even talk inventory involve sheet that. Does your a you be that situation. through more lighter than to right having significant where investment the storage want would otherwise to you in -- you'd capacity, run in builds capital balance think partner share But about I you self-explanatory. that the Can that how caught just pretty then dedicating to. Okay. expansion way

Scott Sutton

not Well, I a that, look, there. market say would it's just share gain

about you're capability. its what's business didn't trading X on, businesses out think is you emerge essentially and going If merging that existing going expanding

a be umbrella just sold will end produced the So It's today. are those than the that in and molecules future they different while the today, in future. up joint already more managing does under molecules venture it

Vincent Anderson

work I And your right. This said revenue, that million That's cost in big fine. one All minimal just of of one. quick million with $XXX Todd, Okay. you up into. that. then one ramping can $XXX some asset kind isn't to specifically. fixed we're impact EBITDA

EBITDA to out turns what So positive?

Todd Slater

this grow EBITDA that expect it continue and grow more You under its and continues we that revenue would then that should to would improve. will umbrella, molecules performance business it's expect to as

Operator

Vertical Kevin from Partners. come with will McCarthy question next Research Our

Kevin McCarthy

have that that overall U.S. the the months alkali XX% have? Scott, talk taking natural gas last you impact and Would you over prices would to vinyls on have business account about or the matter, X the expect chlor into company your in positions XX% plummeted that may perhaps hedge or you any for that

Scott Sutton

have right? Yes, mean, sure. bit a hedge just would always muted, I and is We impact we mean, I I say, look, the hedged. do

that. I see valleys -- see moderate don't we we So We the the that, because necessarily value either. And mean, necessarily peaks. the don't of

generally moderated. really it's us, for So

Kevin McCarthy

what you business, commercial military? would And versus for XXXX in Winchester the Okay. for of trends sort then volume anticipate

Scott Sutton

Well, mean, good Yes. to of military there, add taking color We're is military good the have out to slow I Brett? because a as going is start in start. are a going we business. in commercial of and Brett to off particularly bit actions adjustments place

Brett Flaugher

Scott change the that time. standpoint. better haven't a military slow. get from in some we've visibility little is quarter, in first bit a long still of the long military they U.S. customer, and fourth look It consistent we needs are visibility the had the from military, the our that probably some we benefit and it's slow very the about acquire experienced from to a the military, what have is fourth past. from on that demand that a have in customers international commercial starting off our we The in military From a see versus big that we'll will standpoint, correct start from we but runway -- one quarter

Operator

Our from will come Bank America. next of with question Byrne Steve

Steve Byrne

Yes.

power you'll previously can alter you project hydrogen units. that more to for hydrogen whether assume the i.e., And hydrogen just presumably natural into curious the consume gas production. the San concentration from of being the have units into that Gabriel, changing Just operations brine because to your ECU was wanted production, increase at drill just used running to I

Scott Sutton

look, that Yes. for our own all energy production. of necessarily not I used mean, hydrogen is

have we're We large way working gas a those. the and with arrangements of our companies, out of offtake lot

lot vented as a just well. also We

offsets So taking real absolutely no we're application, there's our Gabriel, for system. use. new What's part in and in most a is meaningful hydrogen no into happening San the anywhere

offsets That's are So this first penalty. is a -- corresponding these projects without generally way the set up. COX

Steve Byrne

EBITDA volume your commercial in not assume just you Is And have it and world, going military, question between towards more benefit. shift is significantly a fair given maybe another what's it's that may Winchester, different. on military that to And margins but the are fair? an on EBITDA

Scott Sutton

I the when on business, you on think the we some position Well, the look Winchester military are of side certainly, at overall side. right There something now. gained the challenges commercial

same have have may business relative in noticed do expect pricing we that the quarter. may in the third in fact, quarter to the to overall did the And You thing improve that in first quarter. fourth we

Operator

Please main connect give as the speaker us to a we moment line.

Scott Sutton

okay.

apologies the trend moment, reason, last brands do repeat always our able challenge pricing in to answer to Import the versus lower expect are I will to continue. everybody. the the pricing same the additional still, and the pricing were Winchester is thing than I'll line domestic at But leader the Sorry, quarter. in ammunition overall been keeps we that on the low. quarter, major mean, But to there Winchester lift imports. the third the just we dropping. we that actually And first faced pricing. has our some question for But and fourth quarter

Operator

Our from with Josh next Spector question will UBS. come

Josh Spector

the So follow-up chlorine side equation. of just pricing on the a

this renegotiate has of versus year, been has and just X, your through at flow we versus to look more So for those portfolio contracts? that you room how need through I you talk And to about of still negotiated ago? mix years going when much X as already of it how much today, it's mean pricing renegotiation

Scott Sutton

here. Yes. right I mean, Patrick answer will give the

it? You rate What's gave in the a $XXX the million XXXX XXXX. summary, rest right? of We've more implemented versus run

Patrick Schumacher

Yes.

in. million locked So that is $XXX

and there's So then that's this in not come to to locked negotiated a be more hope lift that's going year. already

going through in stuff lift for to opening said, substantial will in probably of peg but is new 'XX. Scott another As magnitude, negotiate that it, it's flow Order I'm to 'XX in it 'XX. not

Josh Spector

some paydown? changed And just on variable has your step-up rates, interest debt buybacks the versus calculations the in given cash any on deployment, in I of of mean,

Todd Slater

Josh, question. for thanks the

Our $XXX -- XXXX million. $XXX in interest be we and expense would to expect between million

XX% debt -- of rate. have our variable is You

our share for free to prioritize continue flow repurchase. will We cash

Operator

Frank next Mitsch Our Fermium from come question Research. with will

Frank Mitsch

supplier I midyear. wanted to Russia out came of Obviously, the follow-up Winchester. a on market as

I Russia they'll the So What been have far. supply the but market impact side been an of there. the been coming a expectation be while well. that out so thought that as has issue, of the obviously you've making market you've obviously, would the is out of adjustments wouldn't have for And seen

the down So that wouldn't line? bode well

Brett Flaugher

Brett. is this Frank,

the is, correct. You're since we're Russia. been last year, right What any we come should. It from May saw that imports think of country seeing I it's into now

we ammunition. However, of the of continue out calibers in to see inventory different that's couple a across marketplace some

expected, So bit sold than but that when benefit always gets we taken we do should a longer to through. It's anticipate we that through. sell little

Frank Mitsch

Got you. you. Got

if Okay. bit on be not profitability in alkali. the in pretty relatively upstream it you downstream, a was impressive quarter. And the -- well then a of the doing fourth terms doing that of chlor to well. third There so profitability-wise disconnect a the kept between seems flat in Obviously, quarter follow-up

wondering profitability outlook kind could fourth quarter was is. to in versus I your third of of near-term you and terms So walk quarter what through if downstream the the upstream

Chlor could fashion? If you parse segment in that the Alkali

Scott Sutton

vinyls. to I may to Yes. you close that add coordinated ECU upstream, we some mean downstream, Is when derivative mean you assume and of say organics and Scott mean the the chains and right? mean is this I Patrick like you it.

Frank Mitsch

correct. Correct,

Patrick Schumacher

Okay.

asked alkali really terminology use were because question, within So Epoxy business. when downstream the was talking don't thinking you as chlor our about that I the you we

that reframe I'll -- now have you can you're just So heading. the of what kind your direction question, I know

Frank Mitsch

that of so the you're chlorine profitability doing coordinated of that of understand merchant internally, the caustic some and there's analysis and the soda down. up you're profitability I organic, on probably do of molecules and that EDC assume and moving of although I profitability profitability

to I and But -- So the just how I'm can the was of part more caustic is and as you to the in curious profitability strength? ECU, bigger that chlorine that. speak downstream. my would stable the you the assumption the parse

Patrick Schumacher

operating we've I about quarters downstream That for, downstream that to in chlorine now, run and the because specifically things that to of been vinyls. improve. chain. set that that that in rates downstream weak. or rates our chlorine overall do VCM side as do think, that PVC talking of the -- vinyl Yes, set we weakness to to has X us And chain, we're EDC caused PVC And through in continue until weaker and ECU start to today, those been going Sure. chain. has

elemental talked one remain those chlorine, prices that very We've way chlorine. and ratchet strong. within Upstream goes about and

Operator

Our Zekauskas from question with come next Jeffrey will JP Morgan.

Jeffrey Zekauskas

at see It's for a to can look what's you When are Or they And in ton the been little from, November. move account today? caustic prices public Are you [$XXX] caustic in they at maybe movement. prices say, November to caustic reasons were hard data short a the prices, [$XXX]? where for today. for the

Scott Sutton

remember, future. this But flat. it's mean the it's between out general, in that ECU. I you been lines make of some see in product Scott, I Jeff. impossible the caustic value But X again, imbalances sides of like mean drift-off fairly -- we the not is

whether it's We take matter else. drifting, goes It in position to because doesn't won't it don't of either that a have up see know. I or We down, value almost likely somewhere down, go case. when right? coming So you

than of when our pricing business, was sort fact, that alkali of is actually in everybody EBITDA remind today. In delivered would higher I caustic quarterly we lower chlor much level a it

Jeffrey Zekauskas

you event Scott, the of beginning can a do expire? remind And 'XX and the that when me the company? Is for with Dow is contracts 'XX big secondly, or the of end

Scott Sutton

Jeff, specific or we arrangements. going really on customer supplier to Yes. comment weren't any

Jeffrey Zekauskas

just the Okay. in demand Well, then or than question. competition is up ask their because different expected was weaker Winchester, the because ammunition simply With volumes. ramp I'll a oversupply

Scott Sutton

you Yes. do to Brett, want in? jump

Brett Flaugher

but did outlook see some than yet half been. higher has historical what of in year, We the demand, the preview second lower or our much

to in got mentioned we customers rate As more were than the as selling pull back, we and I my not pipeline. oversupply we filling up -- shipping actually our When opening reduce that decided they to market. our were pipeline putting were full, a comments, run

others, have we're saying to what preserve as value.. concerned, you'd market those necessary take as were look in as a their going far at they're about to But business. As forward making adjustments far the

Operator

Our with from next question will Mike Leithead Barclays. come

Mike Leithead

First XQ to your can we through EBITDA full question, just basically can you It like to framework? guidance looks talk annualize levels year midpoint. get the

So is that flesh Just roughly out conditions year? hold for thinking quarter that. the what you're assuming that you're first how about

Scott Sutton

one trough XX months. the possible. could And a reserve called little that Look, might better basis, that XX-month a it we one we look when we're really that's the to early mean for chemicals that expecting it high as No, actions mean I as bit our sure lower any make in we've say we Yes. take just come, say target. whole credit. you certainly would that that's that in Winchester. as the that XXXX. that I quarter performance but have at good need I business, would keep right slightly I way next be the may I we in part when of And think we quarter XX-month to, don't as our need that out the that to to know that's not

Mike Leithead

ones for And just flow. sense. Todd, quick cash then it. X Makes Got second on

billion returned or gets it cash how that some of so know be in year. come through. it I shareholders then remarks, $X can First, think difficult million expect sounds $X prepared would this second, predict billion these on you Is the uses of that the like much when free But to or cash, correct? abnormal there's $XXX about And JV opportunities year? how of this I just to of

Todd Slater

that Thanks -- inflating Yes. slide. are number of cash Yes, on $XX that the onetime you're on taxes items. There Mike. million our the question, right the are basically for tax

a year. contracts normalized is percent And supply for level then of more is range. some So that power payments in this there XX-ish peak

you're on one-timers. right So on, the

think of investments probably When million. the are we less during those than $XX joint XXXX ventures,

that And you we about when so cash can think flow, deployed for therefore, really share be repurchases.

Operator

will next from question Blair with Matthew Our come TPH.

Matthew Blair

in $XXX just how a Do here, turnaround how the too. had you down think you breakout on and to parts about Your destocking, some would much QX was attribute activity, seasonality million. like have much EBITDA you moving I to by

So material? was that

Scott Sutton

as quit quarters. we mean calling activity sort leveled across a turnaround out we've Well, I of that

nonissue actions we mean, of a decline. Most make variability look, a earnings going It forward. set forward. most recession XX-month called of up sure decline and make that So big out coming the our of this out we well. that of own that it's trough you it the going that any from right was and is decline, result really get have can our we that shoulder highest to sure to I

really other drivers The demand of that. mentioned that are doesn't some look things just there's still of you But Yes, destocking. yes, level great.

still still suspended there's fact, in China really in Europe. demand and In

Todd Slater

in fourth were about about year-over-year significantly. If -- it, businesses the X all down you quarter, think I X volumes all release... know you think press if in the

Operator

reconnect we as the moments line. One speaker

Todd Slater

improved offsetting you in as are down big maybe quarter, again, [X%]. pricing the alkali, chlor off cut epoxy, the was look got the XX% XX% clearly, well, end volumes a But all if across to businesses. Winchester I all had fourth said that we will be time in it. the X X extent was board of sorry, Matthew, was What year-over-year at businesses, down fourth

Matthew Blair

Is pricing your on you demand And prices it. caustic volumes exports, characterize have for would just and some how for roll caustic started caustic Got over. U.S. U.S. into that and to export your Asia in so filtering yet caustic exports? spot

Scott Sutton

and mean, mean, from this demand it imbalances of isolated side demand forming. those great. mean, relative there's to I And would What course. Scott. I be not is not would I caustic going is and keep I I look, ECU. between on mean, of I the it's demand the cost. impacts place Yes. that, chlorine generally keep is, But say the strength in characterize

that. an direct demand though it's our come indicator down, that necessarily even So follow may results not

Operator

Angel from Stanley. Morgan come will with question Castillo next Our

Angel Castillo

think what just key whether metric get key well And about natural your for to EBITDA an ratchet Where or Just ton slides. we update MMBtu chlorine are guess, in as around caustic basis. we the just commodities, kind from on products wanted as give level gas. sensitivities key evolved, like chlorine Could to pricing sensitivities per and or your strategy has about -- dollar for your that as you it's inputs how you I world your per as those of us think set natural strategy used hedging gas. the both

Todd Slater

question. Angel, Todd. thanks is This for the

think about million the I MMBtu worth in plus America we've our historically, per North in or P&L. $X talked was annual to minus $XX

benefit think But good directionally, you to those high-priced we're of Scott XXXX, that gas, got as think won't you you running mentioned sort numbers the in still paired And you for here so because a some hedger, them. off a in a our of know we saw I in system. maybe those short that about. run, see immediately about metric is earlier dips very gas, during the didn't experience through we're hedger

Angel Castillo

caustic What and [Indiscernible]? and of kind chlorine very That's it. other helpful. about Got

Todd Slater

mean that on variability cost I at a was cost is Yes. our really all. -- model dependent or

especially impact fact wouldn't with I hedge. any the model gas, that from So we

Angel Castillo

a I'm sorry, in for pricing, the cost [Indiscernible]. meant vehicle the instance, change $X price, I like

Todd Slater

I I a quantify exactly public probably have a going No, think and change to certain might don't go appreciate on our of we're Yes. what commodity and price a line. index the through in question, difference bottom but

certainly -- going we is somewhere our don't all all, value index. of the follow of And business else. second getting doesn't down, all, something when we're First of normally the

Angel Castillo

around you've And worries. picture of just back the been and of seeing. demand the macro second some question, the No discussions what Understood. of some going to then

rebounds? vinyl You think versus levers abating? much just do of think, are Or And recovery some you think and of pull as overall is one, it quarter -- more how slide, in improving with troughing in those in about much noted, this as -- get here in I how curious, XXXX anything the in kind we outlook, of your parlay? of then macro to in comfortable it ability about kind that Is destocking you that, just confidence of you the gives first seeing the second the I in those was half. you that anything orders how epoxy factors?

Scott Sutton

to mean back But challenged mean we've on I we'll a epoxy. tried right it's course, do little as with now give to half. start I out. it's very lay of guidance you Damian, -- want

Damian Gumpel

we I look when mean back the demand. Sure. at the some factors in improved of seeing half, we're some

the our around profile a it's we're that also epoxies trends slumber. starting platforms electrification, our Those from as the see -- demand starting valued consuming largest epoxy, see some its that we I macro and But If pull as our we of looking with almost you see improved all emerging to mobility. are well. infrastructure, it's highlighted like are wind, said, customers. year-long other areas think that I to being news. region of growth already China,

of demand but platforms combination to a that of participation going the look more some recovery what second some in it's in in So are we to purposely, these the improved our landscape, see half. drive

Scott Sutton

vinyls running just the been there time, there. And pricing some And in has light of because I'll EDC answer. we're out improvement shortchange

thanks. So

Operator

next Our Petrie from Citi. come with will Eric question

Eric Petrie

What's terms caustic as in year, of consumption embedded of we last at in your earnings saw as and domestic well exports end outlook ramp-up of epoxy China and soda. the a in

export any So into XXXX impact on earnings? comments and those on levels

Scott Sutton

what's of muted, fairly better is and recovers. still year that No, of the half part Yes. stays for demand suspended the the first embedded then

even into the it is knowing certainly do it less conditions us China. reversed going by epoxy be in when is been didn't minimization the before trade some years. likely recovers, structural here us imports capacity footprint there. of that taught out adds of have than sort has But China amount we to trough there we taught more to what flows expect have actually that of China this still was But because in what worst work And has really there. Specifically XX

on working that. we're So

Eric Petrie

Helpful color.

buying decarbonization, the maximize on that about Scott, credit. renewable are these Can IRA does sequestration And impact decision hydrogen thinking, plants tree? how versus carbon power? out you building Secondly,

Scott Sutton

some Yes. Yes. today. largest credits us hydrogen. I mean, mean producer electrolysis in be look, hydrogen IRA I to for with I mean, are the there regard grade the we country could

So we'll goes. see where that

minimize Will to limited get most It's our we other and productivity COX us. own far efficiency are that impossible opportunities our recs more out sequestration for centered I programs. of activities not like slides, footprint, do called some our we in around COX we them are As future. in the more as those think

Operator

come John Our question will Roberts with Credit next from Suisse.

Unidentified Analyst

been Sharansky] any as finally made or at has [Matt such your So different operating lower is Epoxy than changes or on have operational base? has demand will you Epoxy structural with Scott, This customer while rates, returns, it John. for down when look previously?

Scott Sutton

we're now. Yes. in process going right that's analyzing more something trough I yes, that When The now. answer said footprint do completely is minimization we're work, to but

return focused does where little conditions. It's is going different. even when on systems So sloppy really going these we've demand business look a be yes, to through had staying that to recessionary more power

Unidentified Analyst

Lake been Got it. operating Winchester, in impact from The bit was That’s City started. margins volatile costs. a higher have what the little since rates And just describe in can the versus helpful. margins Todd, you to lower segment contract

out what the So normalized be? just trying to level would figure

A –Todd Slater

question. Yes. Thanks the for

to last in pullback been have been. over said, and [Fadison] the had you think that the a XX level in Overall, address, significant come you sales had margins would to of in saw the supply fourth supply had they months. saw the we higher quarter chain, military say, to of fourth chain volume significantly in compared the I where where quarter compared the Scott I’ll because what

affect there. margin margin, on So little that will the a bit average also lower slightly

Operator

will Our next come Roger of from with America. Spitz Bank question

Roger Spitz

was One as below-market how of legacy December much is, XXXX? on on merchant your can you contracts of or chlorine total sold comment

Scott Sutton

share won't now. turned say into number, that that's give We would specific I you a but the minority

uplift essentially a different are Olin we our index. almost of XXX% chlorine in the place XXXX an still that coming on likely have As Patrick said, standard, will chlorine

Roger Spitz

Got it.

one finished may little of second say if -- meaning cell you was seem sell -- The but much, late, this any, you can liquor, a how production versus as your how ECU product?

Scott Sutton

you we sold quantify won't in-state to merchant exactly what where by sure we the not some equipment, would transportation that. in we that. have may an I'm site mean fully product that be not and partners take But

Operator

question-and-answer to remarks. closing our like turn concludes would session. conference Scott This over Sutton the for back I to

Scott Sutton

No, just would for Yes. to I thanks everybody say joining.

Sorry, time, difficulties next many call. we the forward to Thanks. had this but looking so technical

Operator

today's Thank you for presentation. attending

You may now disconnect.

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