Olin Corp. (NYSE:OLN) Q4 2018 Earnings Conference Call Transcript

Feb 05, 2019 • 09:00 am ET

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Olin Corp. (NYSE:OLN) Q4 2018 Earnings Conference Call Transcript

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Presentation
Operator
Operator

Good morning and welcome to the Olin Corporation Fourth Quarter and Full Year 2018 Earnings Conference Call. All participants will be in a listen-only mode. (Operator Instructions) Please note, this event is being recorded.

I would now like to turn the conference over to Larry Kromidas, Olin's Director of Investor Relations. Please go ahead, sir.

Executive
Larry Kromidas

Thank you, Cole. Good morning, everyone and thank you for joining us on our fourth quarter and full year 2018 earnings call.

Before we begin this morning, I want to remind everyone that this presentation, along with the associated slides and the question-and-answer session following our prepared remarks, will include statements regarding estimates of future performance. Please note that 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 fourth quarter earnings press release.

A copy of today's transcript and slides will be available on our website in the Investors section under calendar of events. The earnings press release and other financial data and information are available under press releases.

With me this morning are John Fischer, Olin's Chairman, President and Chief Executive Officer; Pat Dawson, Executive Vice President and President, Epoxy and International, Jim Varilek, Executive Vice President and President, Chlor Alkali Products and Vinyls and Services; and Todd Slater, Vice President and Chief Financial Officer.

Now I'd like to turn the call over to John Fischer. John?

Executive
John E. Fischer

Thank you, Larry. Good morning and thank you for joining us today. During this morning's call, I will begin by highlighting the key takeaways from a successful 2018, review Olin's solid performance in the fourth quarter and our forecast for 2019. I will finish with a more detailed discussion of each of our business segments and market dynamics.

Now let's turn to the Slide 3. As I mentioned, 2018 was a successful year for Olin. The company generated a record full-year adjusted EBITDA of $1.265 billion, which represents a 34% increase over 2017 adjusted EBITDA. Adjusted EBITDA has grown 50% over the past two years. Driving the 2018 growth was a 35% improvement in Chlor Alkali products and Vinyls adjusted EBITDA and an 88% increase in the Epoxy business adjusted EBITDA. Both businesses benefited from double-digit revenue growth during 2018.

During the first fourth quarter of 2018, we generated adjusted EBITDA of $301 million as we closed the year with strong December performances in our chemical businesses. Utilizing the cash flow generated by the businesses, we acquired 1.6 million shares of stock during the quarter, raising the total shares repurchased during 2018 to 2.1 million. In addition, we were able to pay down a $122 million of debt during the quarter, bringing our total debt repayments for the year to $376 million, which put the year-end net debt to EBITDA ratio at 2.4 times.

We remain committed to a balanced approach