Olin Corporation Q3 FY2025 earnings call

• Delivered robust results in Chlor Alkali and Vinyls, partially offset by Epoxy and Winchester weakness. • Disciplined value-first commercial approach, safe and efficient asset operation. • Secured eligibility for Section 45V clean hydrogen production tax credits. • Dissolved Blue Water Alliance joint venture, focusing on longer-term EDC relationships. • Adjusted Winchester operating model to make-to-order, reducing working capital. • Beyond250 initiative with pillars of rightsizing assets, streamlining operations, and improving efficiencies.

Chlor Alkali Products and Vinyls: Third quarter ECU values remained stable with global caustic soda demand holding up, partially offset by pulp and paper weakness. Improved operating performance and lower costs. Epoxy: Global demand remained weak due to subsidized Asian imports, but formulated solutions volume improved. Winchester commercial ammunition: Ongoing weakness from high retail inventories, lower sales, falling prices; military business strong.

• Fourth quarter adjusted EBITDA expected $110M-$130M. • 2026-2028 expected annual 45V tax credit benefit $15M-$20M. • Net debt expected flat with 2024 by year-end 2025. • $70M-$90M run rate cost reductions expected from Beyond250 into 2026.

• Market demand recovery uncertainty. • Government payment delays impacting working capital. • Metal price headwinds affecting costs. • Continued competition from subsidized Asian imports in Epoxy.

Q: How much increment could be seen in 2026 via self-help and cost-cutting?

A: Ken Lane mentioned a $70M-$90M run rate coming out of 2025 into 2026, including benefits from Dow agreement and Beyond250. Todd Slater noted a VCM turnaround in first half of 2026 as a potential headwind.

Q: Why was there a big increase in working capital in Q3?

A: Kenneth Lane said it was due to inventory reduction actions, including a $40M EBITDA penalty in Q4 to free up cash, and delayed U.S. government payments for Lake City military business affecting Winchester working capital.

Q: Update on EDC supply agreements?

A: Ken Lane said they are working on structural term agreements, unwinding Blue Water Alliance joint venture to focus on more contracted EDC positions, still having some spot market exposure but less than before.

Q: Update on propellants contract bidding process?

A: Kenneth Lane said it's a slow government process, preliminary RFP issued, revised draft expected, with no decision likely until late 2026 or 2027.

Q: Thoughts on U.S. caustic soda market?

A: Kenneth Lane said caustic market stable, with alumina demand supporting, and seasonal factors like lower chlorine operating rates in Q4 expected to support caustic values.