Olin Corporation (NYSE:OLN) Q2 2023 Earnings Call Transcript
Olin Corporation (NYSE:OLN) Q2 2023 Earnings Call Transcript July 28, 2023
Operator: Good morning, and welcome to Olin Corporation's Second Quarter 2023 Earnings Conference Call. All participants will be in listen-only mode. [Operator Instructions] Following today's brief opening comments, there will be an opportunity to ask questions. [Operator Instructions] Please note this event is being recorded. I now will turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead, Steve.
Steve Keenan: Thank you, Keith. Good morning, everyone, and thank you for joining us today. Before we begin, let me remind you that this discussion, along with the associated slides and the question-and-answer session that follows, will include statements regarding estimates or expectations of future performance. Please note, these are forward-looking statements and that actual results could differ materially from those projected. Some of the factors that could cause actual results to differ from our projections are described without limitations in the Risk Factors section of our most recent Form 10-K and in yesterday's second quarter earnings press release. A copy of today's transcript and slides will be available on our website under the Investors section under Past Events.
Our earnings press release and other financial data and information are available under press releases. With me this morning are Scott Sutton, Olin's CEO; and Todd Slater, Olin's CFO. I'll now turn the call over to Scott Sutton to make some brief remarks, after which, we'll be happy to take your questions.
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Scott Sutton: Thanks, Steve, and good morning, everybody. Global market conditions continue to be quite poor. Additionally, our performance in the second quarter was not up to expectations, partially due to the previously announced Freeport vinyl chloride monomer plant operating issues, but also due to excessive Asian Epoxy resin exports and our associated Epoxy asset right sizing activities. These factors will result in a lower trough expectation for 2023 adjusted EBITDA. The bright spot in the second quarter was our purchase of 2.5% of our outstanding shares while simultaneously reducing net debt compared to the first quarter. Since January 1, 2022, we have purchased 21% of our outstanding shares. In the third quarter, we expect Epoxy resins and system sales volumes to slightly improve relative to the second quarter.
However, inventory reduction efforts will lead the business in negative EBITDA territory. While Winchester's performance is expected to slightly improve in the third quarter, mainly due to international and domestic military growth, our Chlor Alkali and Vinyls business is expected to be slightly down, mainly due to execution of our leadership model as we see bottoming of ECU values in some geographies likely a positive sign for 2024. This is our time to be testing, and I am confident that the Olin team is up to that test. It should be clear from Slide number 4 that Olin believes running a value strategy with lots of built-in free options, delivers more total cash for shareholders versus any alternative strategy. Looking forward, we are working on numerous initiatives to make sure both future peaks and troughs from that value strategy are higher than our previous results.
Those initiatives are spelled out on Slide number 5. Keith, that concludes my opening remarks, and we can now proceed to questions.
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