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Gabelli Research 1 7 t h A n n u a l S p e c i a l t y C h e m i c a l s S y m p o s i u m M a r c h 1 9 , 2 0 2 6 2 Olin History Forward-looking Statements This presentation includes forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements relate to analyses and other information that are based on management's beliefs, certain assumptions made by management, forecasts of future results, and current expectations, estimates and projections about ...

Company Overview - Olin Corporation is a diversified chemicals and ammunition manufacturer with a significant presence in the specialty chemicals sector, generating revenue from both industrial chemical products and consumer ammunition [6][7] - The company operates an integrated manufacturing and distribution model, monetizing chemical production and ammunition sales through direct sales, industrial contracts, and retail channels [7] - As of February 17, 2026, Olin's revenue (TTM) is $6.78 billion, with a net income of -$100.5 million and a dividend yield of 3.3% [4] Recent Developments - Grizzlyrock Capital reduced its stake in Olin Corporation by 135,000 shares, resulting in an estimated transaction value of approximately $2.91 million [2] - The total position value in Olin declined by $4.07 million for the fourth quarter of 2025, reflecting both trading activity and stock price changes [2] - Olin shares were priced at $23.87 as of February 17, 2026, down 12.9% over the past year and underperforming the S&P 500 by 22.6 percentage points [6] Financial Performance - Olin reported a fourth quarter net loss of $85.7 million and adjusted EBITDA of $67.7 million, a significant decline from the prior year due to softened chlorine demand and compressed Winchester margins [9] - Full-year adjusted EBITDA was $651.8 million, with leverage increasing to 4.1 times net debt to EBITDA, up from 3.1 in 2024, indicating a tougher pricing environment [9] Legal and Market Challenges - The company disclosed a $75 million pre-tax charge related to litigation with Shintech and anticipates approximately $185 million in cash payments in the first half of 2026, adding near-term pressure [10] - Olin is navigating weak chlorine markets and customer destocking, which may impact its financial stability [10] Investment Considerations - For long-term investors, the focus is on whether Olin can maintain financial discipline, execute cost reductions, and preserve liquidity while the market cycle resets [11] - If demand stabilizes and leverage trends down, the current depressed sentiment may be viewed as temporary [11]

Group 1 - Olin Corporation's share price was $25.68 as of February 12th, with trailing and forward P/E ratios of 19.62 and 42.73 respectively [1] - The company projected adjusted EBITDA of approximately $67 million for Q4 2025, a 42% miss compared to prior expectations of $120 million, primarily due to issues in Chlor Alkali Products and Vinyls [2] - Operational disruptions at Freeport have been resolved, but temporary supply issues and maintenance are considered one-off events that do not impair Olin's long-term business model [3] Group 2 - Olin is now managing the cycle effectively, preserving pricing power and structural value, despite disappointing guidance [4] - The current weakness in the stock presents a potential buying opportunity for patient investors, supported by undervalued assets and disciplined management [5] - The company is positioned as a deep-value opportunity, trading below the replacement cost of its Gulf Coast assets and offering stability in a commoditized chemical market [4][6]

Core Insights - The U.S. rare earth landscape is heavily reliant on upstream activities, while REalloys operates firmly in the downstream sector, providing essential materials for defense applications [1][4][5] - Heavy rare earths, particularly dysprosium and terbium, are critical for modern military systems, including precision-guided missiles [2][3] Company Overview - REalloys is the only North American company producing defense-grade heavy rare earth metals and alloys, with a facility in Euclid, Ohio [4][5] - The company has secured long-term feedstock agreements from North America, Kazakhstan, Greenland, and Brazil, processing materials domestically to meet U.S. Department of Defense specifications [4][7][9] Production Capacity and Expansion - REalloys is expanding its facility to increase heavy rare earth processing capacity by 300% and light rare earth (NdPr) capacity by 50%, with production expected to begin in early 2027 [8] - The facility aims to produce up to 30 tonnes of dysprosium oxide, 15 tonnes of terbium oxide, and 400 tonnes of high-purity NdPr metal annually, increasing to 600 tonnes post-expansion [8] Strategic Importance - The U.S. military's reliance on REalloys for rare earth metals is crucial as sourcing rules change in 2027, making Chinese materials ineligible [3][4] - The ability to produce magnet materials domestically at scale is vital for U.S. military readiness and industrial capacity [5][6] Industry Context - The Center for Strategic and International Studies (CSIS) identifies rare-earth metallization and alloying as the most challenging capabilities to rebuild outside China, emphasizing the importance of REalloys' operational facility [16][17] - The U.S. is under pressure to rebuild its rare-earth supply chain amid strategic competition with China, highlighting the urgency of domestic production capabilities [14][19]

Core Insights - Gabelli Funds will host its 17th Annual Specialty Chemicals Symposium on March 19, 2026, in Midtown Manhattan, focusing on industry dynamics, current trends, and business fundamentals in the specialty chemicals sector [1][2]. Group 1: Event Details - The symposium will feature discussions with leading companies and organizations within the specialty chemicals ecosystem [1]. - Attendees will have the opportunity for one-on-one meetings with management teams, and a webcast option will be available for those unable to attend in person [2]. Group 2: Presenting Companies - The symposium will include presentations from notable companies such as Arq, Inc., Ashland Global, BASF SE, and The Chemours Company, among others [3]. - A total of 12 companies are listed as presenters, with some indicating virtual attendance options [3][4].

Financial Performance - Olin Corporation reported Q4 2025 sales of $1.67 billion, flat year over year, with a 10% decline in its largest segment, Chlor Alkali Products and Vinyls [2] - Adjusted EBITDA fell 65% year over year to $67.7 million, and the company reported a net loss of $85.7 million or $0.75 per share, compared to a net income of $10.7 million or $0.09 per share in the previous year [2] - The company expects first-quarter 2026 adjusted EBITDA to be lower than Q4 2025 levels due to ongoing cost pressures [3] Management Commentary - Ken Lane, President and CEO, noted headwinds from a trough market environment, customer destocking, and maintenance turnarounds [5] - He highlighted benefits from the Beyond250 initiative, which resulted in a $44 million reduction in structural costs in 2025 [6] Analyst Reactions - Deutsche Bank raised its target price on Olin Corporation from $23 to $26 while maintaining a Hold rating [1] - Other analysts, including BMO Capital, Citi, and RBC Capital, have lowered their price targets due to the softer results, with BMO reducing from $25 to $24 and Citi and RBC from $24 to $21 [6] Company Overview - Olin Corporation is a leading vertically integrated global manufacturer and distributor of chemical products, including chlorine, caustic soda, and vinyls, as well as a major U.S. manufacturer of ammunition [7]

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Financial Performance - Chlor Alkali Products and Vinyls segment represented 54% of 2025 sales, Epoxy segment 20%, and Winchester segment 26%[9] - The estimated backlog as of January 31, 2026, was approximately $1,331 million, with 81% expected to be fulfilled during 2026[51] - In 2025, approximately 59% of the Epoxy segment's sales were generated outside of the U.S.[47] - Olin's Chlor Alkali Products and Vinyls segment generated 31% of its sales outside the U.S. in 2025[47] - Winchester's contracts with the U.S. military accounted for approximately 13% of total sales in 2025[50] Operational Initiatives - Cost management initiatives focus on optimizing asset strategy and productivity to maximize returns to the Electrochemical Unit (ECU)[24] - The company aims to leverage its diverse chlor alkali derivatives portfolio to enhance value from the entire ECU[23] - The Epoxy segment aims to expand market participation in higher value add platform products[34] - Olin's Epoxy segment is focused on driving cost improvements across the supply chain to optimize EPI and LER cost positions in the Americas and Europe[33] Joint Ventures and Acquisitions - The joint venture Blue Water Alliance (BWA) with Mitsui began operations in 2023, but will end by the end of 2025 to focus on long-term structural opportunities[18] - A new joint venture, Hidrogenii, LLC, was launched in 2024 with Plug Power, focusing on hydrogen production, starting with a 15-ton-per-day liquefaction plant[19] - Olin acquired AMMO, Inc.'s small caliber ammunition manufacturing assets for $55.8 million on April 18, 2025[36] - On October 1, 2023, Olin acquired White Flyer Targets, LLC for $63.5 million, enhancing its position in the recreational shooting market[37] Employee Engagement and Development - As of December 31, 2025, Olin had a total of 7,849 employees, with 86% located in the United States[62] - In 2025, Olin employees volunteered over 56,000 hours to various organizations and causes[58] - The company provided over 4,500 recognition awards and 9,000 peer-to-peer recognitions in 2025[59] - Olin's commitment to employee development includes tuition assistance of up to $10,000 per year for eligible employees[61] Financial Risk Management - Olin's long-term borrowings as of December 31, 2025, totaled $2,827.3 million, with $1,060.8 million issued at variable rates[308] - The company maintained open positions on commodity contracts with a notional value of $218.6 million as of December 31, 2025[305] - A hypothetical 10% increase in commodity prices would lead to a $21.9 million increase in inventory costs, offset by related hedging instruments[306] - Unfavorable currency movements of 10% would negatively affect the fair values of derivatives by $13.4 million[307] - A hypothetical change of 100-basis points in the secured overnight financing rate (SOFR) would impact annual interest expense by $10.6 million, assuming no changes in the $1,060.8 million of variable-rate debt levels from December 31, 2025[309] - The company does not enter into any derivative financial instruments for speculative purposes, indicating a conservative approach to financial risk management[310] Environmental and Regulatory Considerations - The company is subject to environmental charges totaling $25.5 million for investigatory and remedial efforts in 2025[69] Forward-Looking Statements and Risks - Forward-looking statements in the report involve risks and uncertainties that could lead to actual outcomes differing materially from those expressed[311] - The company anticipates potential changes in its dividend policy, which will be determined by the Board of Directors based on current conditions, including earnings and financial conditions[312] - Risks and uncertainties affecting forward-looking statements include those discussed under Item 1A — "Risk Factors," which should be considered when evaluating the company's future performance[313]

Core Insights - Olin Corp. (NYSE:OLN) experienced a significant stock rally, increasing by 10.95% to close at $25.44, driven by strong sales performance in the previous year [1][8]. Financial Performance - In 2024, Olin's sales rose by 3.7% to $6.78 billion from $6.54 billion [1]. - However, in 2025, Olin reported an attributable net loss of $42.8 million, a stark contrast to the $108.6 million net income in 2024 [2]. - The fourth quarter of 2025 saw flat sales of $1.6 billion, with an attributable net loss of $85.7 million, reversing from a net income of $10.7 million in the same quarter of the previous year [2]. Operational Challenges - The company faced headwinds in the fourth quarter due to a challenging market environment, customer destocking, and both planned and unplanned maintenance events [3]. - Olin's management remains focused on strategic priorities, including cost reductions and cash generation, despite these challenges [3]. Future Outlook - Olin is cautious about its business outlook for the first quarter of 2026, anticipating lower results due to increased maintenance turnaround costs and raw material expenses [4][5]. - The Chemicals segment is expected to perform worse than the fourth quarter of 2025, while the Winchester business may see modest improvements as customer inventories normalize [5].