Q1 2024 Olin Corporation Earnings Call
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Operator: Good morning everyone, and welcome to Olin Corporation's first quarter 2024 earnings conference call. All participants will be in a listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. Following today's brief opening comments, there will be an opportunity to ask questions. To ask a question, you may press star and one on a touch-tone telephone. To withdraw your question, you may press star and two. Please also note today's event is being recorded. At this time, I'd like to turn the floor over to Steve Keenan, Olin's Director of Investor Relations.
Speaker Change: Good morning, everyone and welcome to Olin Corporation's first quarter 2024 earnings conference call.
Speaker Change: All participants will be in a listen only mode should you need assistance. Please signal conference specialist by pressing the star key followed by zero.
Speaker Change: Following today's brief opening comments, there will be an opportunity to ask questions.
Speaker Change: To ask a question you May press star and one on a touchtone telephone.
Speaker Change: To withdraw your questions you May press star two.
Speaker Change: Please also note today's event is being recorded.
Speaker Change: At this time I'd like to turn the floor over to Steve Keenan Olin's director of Investor Relations.
Steve A. Keenan: Thank you, Operator. Good morning, everyone, and thank you for joining us today.
Steve A. Keenan: Please go ahead Steve.
Steve A. Keenan: Thank you operator.
Steve A. Keenan: Everyone and thank you for joining us today.
Steve A. Keenan: 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 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 first quarter earnings press release.
Steve A. Keenan: Before we begin let me remind you that this discussion along with the associated slides and the question and answer session that follows.
Steve A. Keenan: Statements regarding estimates or expectations of future performance.
Steve A. Keenan: Please note that these are forward looking statements and that actual results could differ materially from those projected.
Steve A. Keenan: 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.
Steve A. Keenan: And in yesterday's first quarter earnings press release.
Steve A. Keenan: A copy of today's transcript and slides will be available on our website in the investor section under past events. Our earnings press release and other financial data and information are available under the press release section. With me this morning are Ken Lane, Olin CEO, and Todd Slater, Olin CFO. We'll begin with our prepared remarks, and thereafter, we'll be happy to take your questions. I'll now turn the call over to Ken Lane.
Steve A. Keenan: A copy of today's transcript and slides will be available in our website in the investors section under past events.
Steve A. Keenan: Our earnings press release, and other financial data and information are.
Steve A. Keenan: Available under press releases.
Speaker Change: With me this morning are Ken Layne Levine CEO.
Speaker Change: And Todd Slater Olin's CFO will.
Speaker Change: We will begin with our prepared remarks, and thereafter, we'll be happy to take your questions.
Speaker Change: Now turn the call over to Kelly.
Kenneth Todd Lane: Thank you, Steve, and good morning, everyone. Let me start by saying I'm delighted to be part of Team Olin. Olin has a long and rich history with leading positions across its portfolio, and I'm looking forward to leading the company as we define the next phase of value creation for our shareholders and employees. Today, Olin is in great shape with an investment-grade balance sheet and a strong team. This company has incredible potential, and I look forward, together with our 7,000 Olin team members, to start building upon this foundation and writing the next chapter in Olin's success story. I do want to thank Scott Sutton for his leadership of a company that resulted in a step change to record results. Scott has been very gracious with his time and support during our transition.
Kelly: Thank you, Steve and good morning, everyone.
Kelly: Let me start by saying I'm delighted to be part of T. Bolus Olin has a long and rich history with leading positions across this portfolio.
Kelly: Looking forward to leading the company as we define the next phase of value creation for our shareholders and employees.
Kelly: Hey, Owen is in great shape, with an investment grade balance sheet and a strong team.
Kelly: This company has incredible potential and I look forward together with our 7000 Olin team members to start building. Upon this foundation writing the next chapter at all with the success story.
Kelly: I do want to thank Scott Sutton for his leadership of the company, which resulted in a step change of record results.
Scott McDougald Sutton: It's been very gracious with his time and support during our transition.
Kenneth Todd Lane: I'm a firm believer in our operating model, and I am absolutely committed to continuing Olin's value-focused commercial approach. The entire Olin team embraces the winning model, and that support runs deep, from senior leadership to front-line manufacturing. Now, I want to talk about my near-term priorities.
Scott McDougald Sutton: I'm a firm believer in our operating model I am absolutely committed to continuing OLED value focused commercial approach.
Scott McDougald Sutton: The entire Olin team embraces the winning model that support once deep from senior leadership to frontline manufacturing.
Speaker Change: Now I want to talk about my near term priorities.
Kenneth Todd Lane: First and foremost is always operating safely, keeping our people and our communities safe while running our assets efficiently and reliably. It is not a coincidence that the safest operators are the most reliable, and we are focused on being a leader with respect to our safety performance.
Speaker Change: First and foremost is always operating safely.
Speaker Change: Keeping our people and our communities safe, while running our assets efficiently and reliably.
Speaker Change: It is not a coincidence that the safest operators are the most reliable and we are focused on being a leader with respect to our safety performance.
Kenneth Todd Lane: Next, Olin is a coiled spring, and as our market demand recovers and customers seek to pull in more volume, we'll be ready to capture that significant value opportunity. I'll provide whatever support is needed to defend the gains we have achieved and continue our value generation as the industry leader that we are. Also, it's clear to me that investors appreciate Olin's consistently strong cash flow and share buybacks across the cycle. Delivering on our commitments is an imperative.
Speaker Change: Next Oh, where theres, a coiled spring and as our market demand recovers and customers seek to pull more volume, we'll be ready to capture that significant value opportunity.
Speaker Change: I'll provide whatever support is needed to defend the gains we have achieved.
Speaker Change: Can you our value generation as the industry leader that we are.
Speaker Change: Also it's clear to me that investors appreciate always consistently strong cash flow and share buybacks across the cycle deliver.
Speaker Change: Delivering on our commitments as an imperative.
Kenneth Todd Lane: We will continue our disciplined capital allocation strategy, and we'll be a steady buyer of our shares, focused on delivering above-average shareholder returns. Finally, I'm committed to providing Olin stakeholders with strategic transparency and a long-term roadmap for growth that we will share during a Capital Markets Day around year-end. More will be communicated on that in the near future.
Speaker Change: We'll continue our disciplined capital allocation strategy it will be a steady buyer of our shares focused on delivering above average shareholder returns.
Speaker Change: Finally, I'm committed to providing olin stakeholders with strategic transparency at a long term roadmap for growth and we will share during our capital markets day around year end and more will be communicated on that in the near future.
Kenneth Todd Lane: Now let's take a quick look at our poor, alkaline business on slide five. Olin took decisive actions during the fourth quarter to curb price erosion across our system. Early in the first quarter, our Value Accelerator Initiative continued to tighten Olin's supply, successfully advancing the inflection point and effectively stopping the value drop. During the first quarter, we saw improved chlorine volume being pulled by Olin customers at our value level across several key end uses, including agriculture, urethanes, titanium dioxide, and water treatment.
Speaker Change: Now, let's take a quick look at our Chlor alkali business and turn to slide five.
Speaker Change: Oh and took decisive actions during the fourth quarter to curb price erosion across our system.
Speaker Change: Early in the first quarter, our value accelerator initiatives continued to tightened OLED supply.
Speaker Change: Successfully advancing the inflection point and effectively stopping the value drop.
Speaker Change: During the first quarter, we saw improved flooring volume being pulled by Olin customers at our value level across several key end users, including agriculture, urethane titanium dioxide and water treatment.
Kenneth Todd Lane: As we look beyond the first quarter, we are seeing some seasonal demand increases for chlorine and caustic soda. However, in the United States, planned and unplanned outages and low supplier inventories have kept caustic availability tighter than expected.
As we look beyond the first quarter, we are seeing some seasonal demand increases for chlorine and caustic soda.
Speaker Change: In the United States planned and unplanned outages and low supplier inventories have kept caustic availability tighter than expected.
Kenneth Todd Lane: Trade publications confirm that domestic caustic is climbing up from a cycle bottom. Now, let's turn to our epoxy business on slide six. During the first quarter, our epoxy business continued to realize the benefits of our 2023 restructuring action. Our streamlined asset base will support the growth of our higher-margin epoxy systems demand while also reducing Olin's downside commodity exposure across the cycle. A recently announced U.S. anti-dumping initiative seeks to level the playing field.
Speaker Change: Trade publications confirm the domestic caustic is climbing up from a cycle bottom.
Speaker Change: Now, let's turn to our proxy business on slide six.
Speaker Change: During the first quarter, our AR Potsy business continued to realize the benefits of our 2023 restructuring actions.
Speaker Change: Our streamlined asset base will support the growth of our higher margin of Hoxie systems demand, while also reducing oldest downside commodity exposure across the cycle.
Our recently announced U S Antidumping initiative seeks to level the playing field.
Kenneth Todd Lane: The first quarter marks the beginning of the recovery for epoxy and the start of a gradual climb out of a very deep trough. As that building momentum continues into the second quarter, we will realize continued benefits from our restructuring and stronger focus on higher-margin formulated systems. Please turn to slide 7 for a Winchester recap. First quarter, commercial ammunition demand was good, and our military segment continues to be strong, delivering sequential, adjusted EBITDA growth for the fourth quarter. We are concerned that propellant shortages could limit commercial ammunition supply this year, and we're actively working on mitigation.
Speaker Change: The first quarter marks the beginning of the recovery for a policy and the start of a gradual climb out of a very deep trough.
Speaker Change: Is that building momentum continues into the second quarter, we will realize continued benefits from our restructuring and stronger focus on higher margin formulated systems.
Speaker Change: Please turn to slide seven for a Winchester recap.
Speaker Change: First quarter commercial ammunition demand was good in our military segment continues to be strong.
Speaker Change: Liberty sequential adjusted EBITDA growth for the fourth quarter.
Speaker Change: We are concerned the propeller shortages could limit commercial ammunition supply this year and we're actively working on mitigation.
Kenneth Todd Lane: Our integration of the White Flyer business has exceeded expectations and is a great addition to our Winchester business, the leading brand in the industry and a strong cash flow generator for Olin. During the second quarter... Olin expects to break ground on the Army's Next Generation Squad Weapon Ammunition. This will be the world's most transformational small-caliber ammunition plant ever built. This project will be designed, built, and operated by Winchester but funded and owned by the U.S. Army. Before I pass it to Todd to review our financials, I'll sum up by saying this: Ole's future is bright.
Speaker Change: Our integration of the Wi Fi business has exceeded expectation and is a great addition to our Winchester business, the leading brand in the industry and a strong cash flow generator for OLED.
Speaker Change: During the second quarter.
Speaker Change: Olin expects to break ground on the Army's next generation squad weapon ammunition plant.
Speaker Change: This will be the world's most transformational small caliber ammunition plant ever built.
This project will be designed built and operated by Winchester, but funded and owned by the U S Army.
Speaker Change: Before I pass it to Todd to review, our financials I'll sum up by saying this.
Speaker Change: <unk> future is bright, but we must remain disciplined in dedicated to extending our leadership position.
Kenneth Todd Lane: But we must remain disciplined and dedicated to extending our leadership position. Olin has led through the trough, ceding volume to maintain value. As demand recovers, we are well positioned to profitably capture the market recovery. We have reset the cycle, and we will continue to lead with discipline to ensure that this new normal remains durable. The Olin assets and operating model provide an extraordinary foundation to build upon. I've had the opportunity over the last month to visit many of our sites and meet with many of our team members. Olin is well run, well funded, and with a highly engaged and committed team, we will continue to generate differentiated shareholder value. I'll now pass it over to Todd for a few financial highlights.
Speaker Change: Olin has led through the trough seeding volume to maintain value as demand recovers, we are well positioned to profitably capture of the market recovery.
Todd A. Slater: We have reset the cycle and we will continue to lead with discipline to ensure that this new normal remains durable.
Todd A. Slater: The older assets and operating model provide an extraordinary foundation to build upon.
Todd A. Slater: Had the opportunity over the last month to visit many of our sites and meet with many of our team members OLED as well run well funded it with a highly engaged and committed team we will continue to generate differential shareholder value.
Todd A. Slater: I'll now pass it over to Todd for a few financial highlights.
Todd A. Slater: Olin was in great financial shape headed into this manufacturing recessionary environment we've been experiencing over the last year and a half. Our rock-solid financial foundation is a key pillar of Olin's winning model.
Thanks, Ken.
Todd A. Slater: One of them was in great financial shape headed into this manufacturing recessionary environment, we've been experiencing over the last year and a half.
Todd A. Slater: Our rock solid financial Foundation is a key pillar of old ones, winning model, we remain committed to maintaining our investment grade balance sheet and achieving additional investment grade credit ratings.
Todd A. Slater: We remain committed to maintaining our investment grade balance sheet and achieving additional investment grade credit ratings. On March 31, 2024, we ended the first quarter with $150.9 million of cash and cash equipment and approximately $1.2 billion of available liquidity. As we expected, our net debt increased by approximately $115 million from year-end, primarily due to the typical seasonal increase in working capital. Our quarter-end net debt-to-adjusted EBITDA ratio was 2.3x, which we expect to return to the 2x range later this year.
Todd A. Slater: On March 31, 2024, we ended the first quarter with $159 million of cash and cash equivalents and approximately $1 $2 billion of available liquidity.
Todd A. Slater: As we expected our net debt increased by approximately $115 million from year end, primarily due to the typical seasonal increase in working cap.
Todd A. Slater: Our quarter end net debt to adjusted EBITDA ratio was 2.3 times, which we expect to return to the two times range I later this year.
Todd A. Slater: Our 2024 cash flow projection anticipates a couple of unusual cash usage items totaling approximately $130 million. Our 2024 cash tax rate is forecast to be higher than normal due to deferred international tax payments of approximately $80 million that are forecast to be paid later this year. Also, we are expecting the final payments under long-term energy supply contracts of approximately $50 million. Excluding these one-time items, our 2024 levered free cash flow yield would currently equate to approximately 10%. Finally, our investment grade balance sheet and cash flow should enable Olin to continue to deploy a substantial portion of our 2024 levered free cash flow towards share repurchase. Operator, we are now ready to take questions.
Todd A. Slater: Our 2024 cash flow projection anticipates, a couple of unusual cash usage items totaling approximately $130 million.
Todd A. Slater: Our 2020 for cash tax rate is forecast to be higher than normal due to the deferred international tax payments of approximately $80 million that are forecast to be paid later this year.
Todd A. Slater: Also we are expecting the final payments under a long term energy supply contracts of approximately $50 million.
Todd A. Slater: Excluding these one time items, our 2024 Levered free cash flow yield currently would equate to approximately 10%.
Todd A. Slater: Yeah.
Todd A. Slater: Finally, our investment great balance sheet and cash flow should enable OLED to continue to deploy a substantial portion of our 2024 levered free cash flow towards share repurchases.
Speaker Change: Operator, we are now ready to take questions.
Operator: Ladies and gentlemen, we'll now begin the question and answer session. To ask a question, you may press star and one on your touchtone phone. If you are using a speakerphone, we do ask that you please pick up your handset prior to pressing the keys to ensure the best sound quality.
Speaker Change: Ladies and gentlemen, we will now begin the question and answer session.
Speaker Change: Ask a question you May press star and one on your Touchtone phones. If you are using a speaker phone. We do ask that you. Please pickup your handset prior to pressing the keys to ensure the best sound quality.
Operator: To withdraw your questions, you may press star and two. Again, that is star and then one to ask a question. We will pause momentarily to assemble the roster. And our first question today comes from Hassan Ahmed from Olympic Global. Please go ahead with your question.
Speaker Change: To withdraw your question you May press star into.
Speaker Change: Again that is star and then one to ask a question.
Speaker Change: We'll pause momentarily to assemble the roster.
Speaker Change: And our first question today comes from Hassan Ahmad Ahmed from Alembic Global. Please go ahead with your question.
Hassan I. Ahmed: Morning, Karen, and first of all, congratulations on the new role. My question is, first and foremost, on the 2024 initial guidance that you've provided. You're obviously guiding to north of $1.3 billion in EBITDA. I mean, if we were to sort of take Q1 reported EBITDA as, call it, a starting point, you know, $242 million, annualized at $970 million, right? And you're guiding to 2024 EBITDA north of $1.3 billion. So what gets us, what bridges us to that $1.3 billion, that incremental, call it, $340 million or so? I mean, my guess is, and I'd love to hear your views, that you guys had historically talked about the value accelerator initiative being maybe a $100 million quarterly penalty. Is it primarily that?
Speaker Change: Good morning, Ken first of all congratulations on the new product.
Speaker Change: Hum.
Speaker Change: Mike My question is first and foremost on the 'twenty 'twenty four initial guidance that you've provided you're obviously guiding to north of $1 3 billion in EBITDA.
Speaker Change: And if we were just sort of take Q1 reported EBITDA as call. It starting point you know the 242 million.
Speaker Change: Annualize that you're at 970 million right.
Speaker Change: Guiding to 'twenty 'twenty four EBITDA north of 1.3, so what gets us what bridges all stood at 1.3 billion that incremental call. It 240 million or so I mean, my guess is it.
Speaker Change: The views that you guys have historically talked about accelerator a nation state.
Speaker Change: Maybe 100 million fourthly penalty is it primarily that.
Kenneth Todd Lane: Hi Hassan, thank you. Congratulations.
Speaker Change: Hi, Hassan. Thank you. Thank you for that.
Speaker Change: Congratulation, yeah listen, but we have seen in the first quarter is we were successful in.
Kenneth Todd Lane: Listen, what we have seen in the first quarter is that we were successful in stopping the drop, at least in the Chlor-Alkali and product vinyls group. So that's a win for us. What we see happening now, though, is seasonal demand is coming back. So we are seeing good momentum. The other thing that I'll say is...
Speaker Change: Stopping the drop at least in the.
Speaker Change: Core alkali and all that Vinyls group.
Speaker Change: So that's a that's a win for us what we see happening now though is season.
Speaker Change: Seasonal demand is coming back.
Speaker Change: So we are seeing good momentum.
Speaker Change: The other thing that I'll say is.
Kenneth Todd Lane: When you think about the full year, what we've said previously is we're going to see better performance in the epoxy business as well as in Winchester, so let's not forget that. And as we see both of those businesses continue to improve year over year, fluoralkali is going to continue to improve as we go into the second half of the year. We are seeing some positive signs for demand in the back half of the year, with some requests for volume.
Speaker Change: When you think about the full year. What we've said previously is we're going to see better performance in the epoxy business as well as Winchester, So, let's let's not forget that.
Speaker Change: So as we see both of those businesses continued to improve.
Speaker Change: Year over year or alkali is going to continue to improve as we go into the second half of the year.
Speaker Change: We are seeing some positive signs for demand in the back half of the year with some requests for volume. So I think with with the higher results that we expect from our policy in Winchester and the momentum that we see for Chlor alkali, we should see that flat to slightly higher results for.
Kenneth Todd Lane: So, I think with the higher results that we expect from epoxy at Winchester and the momentum that we see from fluoralkali, we should see flat to slightly higher results for 2024. That's how we get there.
Speaker Change: For 2024 that that's how we get there.
Kenneth Todd Lane: And, you know, as a follow-up, you touched on improvement sequentially within the epoxy business. How should we think about, you know, the split between, call it, you know, further organic improvement over there? And, you know, maybe you could touch a bit on some of these sort of trade cases that you guys, as well as the industry, have brought about on the anti-dumping side.
Speaker Change: Understood understood and you know as a follow up you touched on the improvement sequentially.
Speaker Change: Then the box business.
Speaker Change: You know how should we think about you know the split between call. It you know further organic improvement over there.
Speaker Change: And you know maybe you could touch a bit on some of these sort of trade cases that you guys as well as the industry has brought about you know on the anti dumping side of things.
Kenneth Todd Lane: Yeah, so we are seeing the impact from the restructuring last year. You know, the team did a great job last year right-sizing the footprint.
Speaker Change: Yes. So we are seeing the impact from the restructuring last year you know the team did a great job last year right sizing the footprint.
Kenneth Todd Lane: We've got the asset footprint that we think is going to support the strategy around growing the higher margin business today, but we are seeing an influx over the last year or so of product that is being dumped into the United States. You know, first I'll say we're all for fair trade, free trade, but we're going to fight against unfair trade, and that's what you see here. We had our first hearings in Washington, D.C. this week.
Speaker Change: We've got the asset footprint that we think is going to support the strategy around growing the higher margin business today, but we are seeing an influx over the last year or so of product that is being dumped into the United States.
Speaker Change: First I'll say, we're all for fair trade free trade, but we're going to we're going to fight against unfair trade and that's what you see here. So we.
Speaker Change: We had the first hearings in Washington D. C. This week, it's early in that process.
Kenneth Todd Lane: It's early in that process, but we're going to continue to push that case. And, you know, we believe that there is a risk. Within the United States, having only two producers of epoxy resin is a risk for the future. We've got a very critical material here that we're producing, and it is under threat by unfair trade.
Speaker Change: But we're going to continue to push that that case.
Speaker Change: We believe that there is a risk within the United States, having only two producers of.
Speaker Change: Hoxie resin is as a risk for the future. We've we've got a very critical material here that we're producing and it is under threat by unfair trade.
Kenneth Todd Lane: Very helpful, Ken. Thank you so much.
Speaker Change: Very helpful. Thank you so much.
Kenneth Todd Lane: Okay, thank you, Hassan.
Speaker Change: Thank you Hassan.
Operator: Our next question comes from Aleksey Yefremov from KeyBank Capital. Please go ahead with your question.
Speaker Change: Our next question comes from Alexi, Yeah from off from Keybanc Capital. Please go ahead with your question.
Aleksey Yefremov: Thanks, good morning all, and again congratulations as well. I was just hoping to get some details, any specific details, really, on how you get into 1.3 billion EBITDA this year. In particular, are you assuming price increases in caustic soda, chlorine, EDC, any other major commodities, you know, chlorovinyls business, and how do they compare to the current CMA forecast? Is the current CMA forecast efficient, or do you need to get something more?
Alexi: Thanks, Good morning, all and congratulations as well I was just hoping to get some beach house any any specific details really on how you're getting to $1 3 billion EBITDA this year.
Alexi: There are you assuming pricing freezes caustic soda chlorine, we do you see any other major commodities chloro vinyls.
Alexi: Business and how do they compare to corn CMA forecast mascara, and CMA forecast sufficient or do you need to get something more than that.
Kenneth Todd Lane: Well, thank you, Aleksey. You know, going back to what I said to Hassan, let's not forget about the improvements that we're going to see in Winchester and Epoxy here. Both of those businesses are going to improve. You know, we're seeing very strong demand for Winchester. We're making good progress with our price initiatives there as well, even to offset some of the cost headwinds that we see. But overall, demand for Winchester is going to be up significantly versus last year. So I'll give you just one example.
Speaker Change: Well, thank you Alexia.
Speaker Change: You know going back to what I had said to Hassan.
Speaker Change: But let's not forget about the improvements that we're going to see in Winchester in a box a year over year both of those businesses are going to accrue.
Yeah, we're seeing very strong demand with Winchester were.
Speaker Change: We're making good progress with our with our price initiatives there as well.
Speaker Change: Even even though all set some of the cost headwinds that we see but overall the demand with Winchester is going to be up significantly versus last year. So I'll give you. Just one example international military we're looking at would be twice what it was last year. So there are there is good momentum in these businesses.
Kenneth Todd Lane: The international military We're looking at being twice what it was last year. So there is good momentum in these businesses. When you think about chloralcoli... You know, I'm not sure that I would put a lot of faith or confidence in CMA personally. But we look at our system and the value that we're looking for and the demand that we want to supply at that value level, and we're seeing good demand. I don't want to say any more than that in terms of what the indices are printing, but we're seeing some differential pricing there and demand coming back at the value levels that we want.
Speaker Change: When you think about Chlor alkali.
Speaker Change: I'm not sure that I would put a lot of.
Speaker Change: Faith or confidence in CMA personally, we look at our system and the value that we're looking for in.
Speaker Change: And the demand that we want to supply at that value level and we're seeing good demand.
Speaker Change: You know I don't want to I don't want to say anymore than that in terms of what the indices are printing but.
Speaker Change: We're seeing we're seeing some differential pricing there and demand coming back it's a value levels that we want.
Kenneth Todd Lane: Thank you, Ken. And on just annual cadence of quarters, I mean, clearly talking about a better second quarter, do you think that step up between Q1 and Q2 then sustained at about the same rate in the second half? Or is it improvement more second half weighted? Anything you can say about sort of relatively Q2 versus second half?
Speaker Change: Thank you Ken.
Ken Layne: On just E mail cadence of quarters, I mean, clearly you're talking about better second quarter do you think that step up between Q1 and Q2, then sustained at about the same rate in the second half or where is the improvement more second half weighted or anything you can say.
Ken Layne: [noise] about sort of relatively Q2 versus second half.
Kenneth Todd Lane: Yeah, so we're going to continue to see that step up. You know, we saw a step up from Q4 to Q1, and in Q2, you're going to see a similar, maybe a slightly better, step up from Q1 to Q2. And as I said earlier, we're going to start to see some demand come in at the back half of the year, just based on some of the requests that we're getting. That's baked into that view.
Speaker Change: Yeah. So we're going to continue to see that step up we saw a step up from Q4 to Q1 and Q2 youre going to see a similar maybe slightly better step up from Q1 to Q2 and as I said earlier.
Speaker Change: We're going to start to see in the back half half of the year some demand come in.
Speaker Change: Just based on some of the requests that we're getting.
Speaker Change: So that's.
Speaker Change: That's baked into that view, if you think about last year.
Kenneth Todd Lane: If you think about last year, you know, last year, the first half was relatively strong, and the second half was relatively weak. I'm definitely not saying the second half is going to look like the first half of this year. But we're going to start coming out of, And, you know, that's our expectation is that we'll start to see some of that recovery in the second half of this year. And the early indications are that we're seeing that demand start to come back.
Speaker Change: You know last year. The first half was was relatively strong in the second half was relatively weak I'm definitely not saying the second half is going to look like the first half of this year.
Speaker Change: But we're going to start coming out of this and you know.
Speaker Change: That's our expectation is it will start to see some of that recovery in the second half of this year and the early indications are that we're seeing that demand start to come back.
Operator: Thank you, Ken. Sure, thank you. Our next question comes from Patrick Cunningham from Citi. Please go ahead with your question.
Speaker Change: Thank you guys.
Speaker Change: Sure. Thank you.
Speaker Change: Our next question next question comes from Patrick Cunningham from Citi. Please go ahead with your question.
Patrick Duffy Fischer: Hi, good morning, and congratulations and welcome Ken Ken I, just wanted to get a sense on capital allocation priorities versus.
Patrick Duffy Fischer: Hi, good morning.
Kenneth Todd Lane: Well, thank you, Patrick. Like I said in the prepared comments, you know, we're going to communicate more on that at the back end of the year, and we'll be announcing the specifics around that shortly, but the way that I think about it is we have a core capability with our commercial strategy, and I don't see that changing, even with a new strategy. I think that is.
Patrick Duffy Fischer: That fourth pillar writing the next chapter of Olin success story, no. One has done a great job lifting the value of the easy you know how do you see you know.
Patrick Duffy Fischer: How do you see yourself positioning Olin for sort of the next stage of sustainable growth.
Ken: Well, thank you Patrick.
Speaker Change: Like I said in the prepared comments you know we're going to communicate more on that at the back end of the year and what we'll be announcing the specifics around that shortly.
Speaker Change: The way that I think about it is we've got we have a core capability with our commercial strategy and I don't see that changing even even with a new strategy I think that is.
Kenneth Todd Lane: That is a core part of our company now, and it's how we run our core businesses. We'll continue with that, but we're going to, as an executive team, step back and look at, you know, where we can go next. We're looking at the same data that you are, and we see the share price plateauing where it is, and we're not satisfied with that. We want to continue to drive differential shareholder returns, and we're going to work in the coming weeks and months to define a compelling strategy that we think is going to help make the next step change in the future.
Speaker Change: That is a core part of our of our company now.
Speaker Change: And it's it's how we run our core businesses will continue with that.
Speaker Change: But we're going to as an executive team stepped back and look at where can we go next we're looking at the same data that you are in and we see we see the share price flat, so even with that and we were not satisfied with that we want to continue to drive differential shareholder returns and we're going to work in the club.
Speaker Change: Ming weeks and months to define a compelling strategy that we think is going to help make the next step change in the future you know OLED.
Kenneth Todd Lane: You know, Olin is a company that has a tremendous history and a lot of legacy businesses, and they've proven that they can run many different businesses. But you look at where we are today, where we have arrived today. What we have built now is something that we believe is sustainable, and we're going to look for things that we can build around this model, this operating model that we have. We're not going to be looking at doing things that are very far from our core. That's all I'm going to say at this time, but I'll just say, "stay tuned."
Speaker Change: As a company that has a tremendous history and a lot of legacy businesses and they've proven.
Speaker Change: They can run many different businesses.
Speaker Change: You look at where we are today, where we have arrived today.
Speaker Change: What we have built now is something that we believe is sustainable and we're going to look for things that we can build around this model. This operating model that we have.
Speaker Change: We're not going to be looking at doing things that are very far from from our core.
Speaker Change: That's all I'm going to say at this time, but I'll just say stay tuned.
Operator: And our next question comes from Jeff Sukakis from J.P. Morgan. Please go ahead with your question.
Speaker Change: Great.
Speaker Change: And our next question comes from Jeff's Dukakis from J P. Morgan. Please go ahead with your question.
Jeffrey J. Zekauskas: Thanks very much. Were your utilization rates in the first quarter much different than they were in the fourth quarter? My memory is that you're close to 50% in chloralkali. Is that right? And where do you expect them to be in the second quarter?
Jeff Dukakis: Thanks very much.
Jeff Dukakis: Where are your utilization rates in the first quarter much different than they were in the fourth quarter.
My memory is.
Michael Joseph Sison: Maybe you're close to 50% in Chlor alkali is that right.
Michael Joseph Sison: And where do you expect them to be in the second quarter.
Kenneth Todd Lane: Hi Jeff. I hope you're doing well.
Speaker Change: Hi, Jeff I hope you're doing well.
Kenneth Todd Lane: Listen, we were a little bit above that. We were not at 50%. We were a little bit above that.
Speaker Change: Listen we are we were a little bit above that we were we were not a 50% we were a little bit above that in Q1 looked very similar to Q4, we were continuing in Q1 with the activation, we're going to see a slight step up in Q2 versus the utilization rates that we saw in Q1.
Kenneth Todd Lane: And, you know, Q1 looked very similar to Q4. We were continuing in Q1 with the activation. We're going to see a slight step up in Q2 versus the utilization rates that we saw in Q1. But again, we're going to operate our system to match the demand that we see. We're not going to be pushing volume into the market, and, you know, like I said earlier, we are seeing some volume step up in the normal seasonal uptick that you would see in the second quarter. We are starting to see that, and that's where we'll adjust our operating rates to meet it.
Speaker Change: But again, we're going to operate our system to match the demand that we see.
Where we're not going to be pushing volume into the market and you know like I said earlier, we are seeing we are seeing some volume step up than the normal seasonal uptick that you would see in the second quarter. We are starting to see that and that's our that's what we will adjust our operating rates to meet that.
Kenneth Todd Lane: Can you make a general comment on the rate of growth you're seeing or expect to see in chlorine versus caustic soda?
Speaker Change: Okay can you make a general comment on.
Speaker Change: The rate of growth, you're seeing or expect to see in chlorine versus caustic soda.
Kenneth Todd Lane: Well, I think we're seeing a moderately better seasonal improvement in chlorine, which you would normally expect, right? We're getting into the water treatment season, and bleach is coming back. So at this point in time, it's a little bit stronger in chlorine, but it's modest. You know, it's not anything that's going to change how we operate our model today. Okay.
Speaker Change: Well I think you were.
Speaker Change: Seeing.
Speaker Change: A moderately.
Speaker Change: Better seasonal improvement in flooring, which you would normally expect right. We're getting out of the water treatment BD season in bleach is coming back. So at this point in time, it's a little bit stronger and flooring, but it's modest it's not anything that that's going to change how we're operating our model.
Speaker Change: Today.
Kenneth Todd Lane: Okay, great. Thank you very much.
Speaker Change: Okay, great. Thank you very much thanks, Jeff.
Operator: And our next question comes from Steve Byrne from BOA. Please go ahead with your question.
Speaker Change: And our next question comes from Steve Byrne from Boa. Please go ahead with your question.
Steve Byrne: Yes, thank you. Maybe a, maybe a, a, uh, downstream strategy question for you, Ken, another year from now, the contract with Dow will come to a close. Are you more interested in shifting that capacity to other chlorine customers? Or what is your interest in moving downstream into vinyl?
Steve Byrne: Yeah. Thank you.
Steve Byrne: Maybe maybe Uh huh.
Steve Byrne: It's a downstream strategy question for you can another year from now the contract with Dow will come to a close.
Steve Byrne: Are you more interested in shifting that capacity to other Korean customers or what is your interest in moving downstream into vinyls.
Kenneth Todd Lane: Hi Steve. Listen, you know; it's too early for me to give you any comments. Of course, we've got ideas and things that we're going to look at. But like I said earlier, we're going to take our time to look at where we think we can deliver the highest value. And that's not something that I'm prepared to give you an answer on specifically today. I know that we've talked about that in the past, and so it will certainly be one of the options that we look at or that we will look at. But it's not anything right now that I'm willing to give you my view on.
Hi, Steve listed.
Steve: It's early for me to give you any any comments of course, we've got ideas and things that we're going to look at.
Speaker Change: But like I said earlier, we're going to take our time to look at where we think we can deliver the highest value.
Steve: And that's that's not something that I'm prepared to give you an answer on specifically today I know that we've talked about that in the past then.
Steve: So it will certainly be one of the options that we looked at that we will look at but it's not anything right now that I'm willing to give you a view on.
Kenneth Todd Lane: And on the propellant availability issue, was this driven by an outage? And what are your options to offset that shortage problem? Yeah, that is...
Steve: But on the propellant availability issue was this driven by an outage and what are your options to offset that the shortage problem.
Kenneth Todd Lane: Yeah, that is really a function of significantly higher demand, as you can imagine, like we had said earlier in the prepared remark. Commercial demand continues to be good, but military demand is significantly higher, and when you think about the supply chain for that propellant, there are very limited sources of that supply. Let's put it that way. And the demand for that propellant is not just for small ammunition, which is what we're in; it's also for artillery and other components that support the defense industry.
Speaker Change: Yeah that that is really a function of significantly higher demand as you can as you can imagine like like we said earlier in the prepared remarks.
Speaker Change: Commercial demand continues to be good but.
Speaker Change: Military demand is significantly higher than when you. When you think about the supply chain for that propel US there are very limited sources of fat supply, let's put it that way and they're being the demand for that propel us as not just for small ammunition, which is what we're in is also for artillery and other.
<unk> and other components that are supporting the defense industry. So we are positioning ourselves with the.
Kenneth Todd Lane: So, we are positioning ourselves with the scale that we have in terms of the pie to be able to secure some additional volumes, but it's still early. We're working on it very hard, but I can't sit here and tell you that there would not be some potential risk in the coming months based on the availability of material. Very good. Thank you. Our next question comes from David Begleiter from Deutsche Bank.
Speaker Change: With the scale that we have in terms of the pie.
Speaker Change: To be able to secure some additional volumes but.
Speaker Change: It's still early we're working that very hard but.
Speaker Change: But I can't I can't sit here and tell you that there would not be some some potential risk in the coming months.
Speaker Change: Based on that availability of material.
Speaker Change: Very good thank you.
Speaker Change: Our next question comes from David Begleiter from Deutsche Bank. Please go ahead with your question. Thank.
Operator: Our next question comes from David Begleiter from Deutsche Bank. Please go ahead with your question. Thank you, good morning, and Ken, congratulations as well on your new role.
David Begleiter: Thank you good morning, I can and congratulations as well on the new role.
David Begleiter: Okay, Firstly on customers as you've gone around and talk with them what has been the feedback and what's been as you know any source of consternation on their part and how you hope to improve that going forward.
David Begleiter: Well, thank you, Dave. Yeah, listen, I have talked to some customers. And, you know, I'm not new to the industry, you know. I know that there have been some things in the past that have created some tension in this industry over the last couple of years. But I'll be honest with you. There are things that needed to happen in order to adjust the value of the products that we have.
Speaker Change: Well, thank you, Dave Yeah, listen I I have talked to some customers and.
Speaker Change: I know that I'm not.
Speaker Change: I'm not new to the industry you know I know that there has been some are some things in the past that have created some tension in this in this industry over the last couple of years, but I'll be honest with you.
Speaker Change: Are there things that needed to happen in order to adjust the value of the products that we have and the reality is is it going forward, we're going to be focusing on.
David Begleiter: And the reality is that, going forward, we're going to be focusing on being able to continue to run our model and have good relationships with our customers. Even if we can't agree, we're going to continue to find ways to work together. So I'm absolutely committed to that, and so is the executive team. Very good.
Speaker Change: Being able to continue to run our model and have good relationships with our customers, even if we can't agree.
Speaker Change: We're going to continue to find ways to work together so.
Speaker Change: Absolutely committed to that.
Speaker Change: And so as the executive team.
Speaker Change: Very good and just on Winchester I know this is a tough question to answer but it's one of the best owner of the Winchester business.
Kenneth Todd Lane: And just on Winchester, I know this is a tough question to answer, but is Olin the best owner of the Winchester business? Well, Dave, I'll tell you, I am a very big fan of the Winchester business. I think that this is a brand that is that is undervalued today as part of our company. That's that's my view. So we're going to be taking a look at that as we go forward to find a way to get higher value for for having that that business as part of Olin, and that will be a.
Winchester: Well, Dave I'll tell you I am a very big fan of the Winchester business I think that this is a brand that is it is undervalued today as part of our company that that's my view.
Winchester: So we're gonna be taking a look at that as we go forward to find a way to get higher value for for having that that business is part of Olin and that will be a.
Kenneth Todd Lane: You know, the portfolio is always something that you're going to look at going forward, but we are very happy with the Winchester business and believe that it's something that we can find a path to get a higher value for, and we're committed to doing that.
Winchester: You know portfolio was always something that youre going to look at going forward, but we're very happy with the Winchester business and believe that it is something that.
Winchester: We can find the path to get a higher value for that and we're committed to doing that.
Speaker Change: Thank you.
Operator: Our next question comes from Duffy Fischer from Goldman Sachs. Please go ahead with your question.
Speaker Change: Our next question comes from Duffy Fischer from Goldman Sachs. Please go ahead with your question.
Patrick Duffy Fischer: Yeah, good morning. I was wondering if you could just give a little bit more clarity on the Q2 walk. So I think, Ken, you made a comment that you think that Delta will be roughly similar to, or maybe a little bit better than, the move from Q4 to Q1 that was $32 million. So just to put a number, like $285 million, is that about the right way to think about the over-under on where we're shooting for Q2?
Patrick Duffy Fischer: Yeah. Good morning, I was wondering if you could just give a little bit more clarity on the Q2 work. So I think can you you made a comment that you think that delta will be roughly the similar to maybe a little bit better than the move from Q4 to Q1 that was 32 million. So just to put a number like $285 million is that.
Patrick Duffy Fischer: It's about the right way to think about the over under on where we're shooting for Q2.
Kenneth Todd Lane: Yeah, so definitely, look, the walk is really that we're going to continue to see the price momentum that we saw coming out of Q1, that's going to continue into Q2 for chlorophyll ions, and those businesses will see seasonal demand upticks there as well. For Epoxy, we're looking at seeing improvement in terms of our mix and some volume improvement, but we will see an improvement in mix. We're also going to see continued positive impact from the restructuring in Q2.
Speaker Change: Yes, so definitely look the work is really we're going to continue to see the price momentum that we saw coming out of Q1, that's going to continue into Q2 for offline.
Speaker Change: And those businesses, we will see seasonal demand uptick there as well.
Speaker Change: Foxy, we're looking at seeing a improvement.
Speaker Change: Improvement in terms of our mix and in some volume improvement, but we will see an improvement in mix. We're also going to see continued.
Speaker Change: Positive impact from the restructuring in Q2, we're going to see that momentum continue.
Kenneth Todd Lane: We're going to see that momentum continue. And then with Winchester, like we had said previously in the remarks, we're expecting that to be relatively flat. So it's a combination of pricing and better mix in the second quarter versus the first quarter. But to range it, yeah, it's going to be about the same as a step up from Q4 to Q1, maybe a little bit better than that. That's the way I'd put it.
Speaker Change: And then with Winchester like we've said previously in the remarks, we're expecting that to be relatively flat. So.
Speaker Change: Combination of pricing better mix in the second quarter versus the first quarter.
Speaker Change: But to arrange it yes, it's going to be about the same as a step up from Q4 to Q1, maybe a little bit better than that and that's that's the way I put it.
Kenneth Todd Lane: Okay, thanks. And then just to clarify, if your 1-3 ends up being right this year, you guys do not need to pay down any more structural debt to keep your investment grade rating, and so therefore, all that excess cash can go to share buybacks. Did I hear that right?
Speaker Change: Okay. Thanks, and then just to clarify if your one three ends up being right. This year are you guys do not need to pay down any more structural debt to keep your investment grade rating and so therefore all of that excess cash go to share buybacks did I hear that right.
Todd A. Slater: Well, that's going to continue to be our priority. Yeah. I don't know Todd if you want to add anything to that.
Well, that's going to continue to be our priority yeah, I don't know Todd if you want to add anything to that.
Todd A. Slater: You know, we have an investment grade balance sheet today. We have one of the three rating agencies that rates us investment grade. You know, where our results are and are expected to be for the year, our debt level, as where we ended last year, is consistent with our expectation for the end of this year. So we don't need to have any structural debt repayment.
Speaker Change: Duffy.
Patrick Duffy Fischer: We have an investment grade balance sheet today, we have one of the three rating agencies that rate us investment grade where.
Patrick Duffy Fischer: Our results are expected to be for the year, our debt level as where we ended last year is consistent with our expectation for the end of this year. So we don't need to have any structural debt repay.
Operator: Our next question comes from Josh Spector from UBS. Please go ahead with your question.
Speaker Change: Great. Thank you guys.
Speaker Change: Our next question comes from Josh Spector from UBS. Please go ahead with your question.
Joshua David Spector: Hi. Thanks for taking my question, and I echo my congratulations, Ken.
Joshua David Spector: Yeah, Hi, Thanks for taking my question and I Echo My Congrats Ken.
Kenneth Todd Lane: So, I just wanted to follow up again on the guidance. So, you know, if we're talking about 2Q less than $300 million, I guess, to hit that range, you're going to need a quarter greater than $400 million, probably later in the year. I guess, I mean, your question, and your answer before was that you expected pricing to move up through the year to do that, but you've also talked about increasing demand. So, if you think about bridging that $100 million step up from, call it 2Q to, let's say, 4Q, how would you bracket that between assumptions on pricing versus volumes? Well, you know...
Joshua David Spector: So I just wanted to follow up again on the guidance. So if we're talking about two to less than 300 million. I guess, you can hit that range youre going to need a quarter greater than 400 million probably later in the year.
Joshua David Spector: I guess I mean, it seemed like your questions were answered before was that you expect pricing to move up through the year to do that but you've also talked about increasing demand. So.
Joshua David Spector: So if you think about bridging that hundred million step up from call. It two acute and lets say for Q, how would you bracket that between assumptions on pricing versus volumes.
Speaker Change: Well you know.
Kenneth Todd Lane: First, you're correct with your math. And I'm not giving you a specific number around Q2, so I want to be careful with that. I would put more of a... of a range that would say, again, it could be slightly better than the step-up from Q4. A lot of that is going to depend on the volume recovery that we see coming. You know, the mix between volume and price is probably a little bit more volume coming back in cap V, but we've got the momentum from pricing that we saw at the end of Q1. So that, combined with continued pricing step-ups, Cloralkali is going to be the biggest driver there. The bigger driver for epoxy is going to be mixed. It's going to be the improved.
Speaker Change: First you are correct with your math.
Speaker Change: And I'm not I'm, not giving you a specific number around Q2, so I want to be careful with that I would put it more of a.
Speaker Change: Of a range that would say again, it could be slightly better than the step up from Q4, a lot of that is going to depend on the volume recovery that we see coming.
Speaker Change: You know the mix between volume and price is is probably a little bit more volume.
Speaker Change: Volume coming back and Cat V, but we've got the momentum from pricing that we saw at the end of Q1, so that combined with continued pricing step ups.
Speaker Change: In Chlor alkali is going to be the biggest driver there are there.
Speaker Change: The bigger driver for apocope is going to be mix, it's going to be the improve.
Speaker Change: Margin with the portfolio that we're going to see in Q2.
Kenneth Todd Lane: Alright, thanks Kenneth. If I could just ask, there's been some comments in the news about the St. Graveyard ramp up and maybe some choppiness there. Does that have any headwind in 2Q that you call out, or in 1Q at all? No.
Speaker Change: Alright. Thanks.
Speaker Change: I could just ask I mean, there's been some comments in the news about the St. Great Bureau ramp up and maybe some choppiness. There does that have any headwinds and <unk> that you'd call out or in one queue at all.
Speaker Change: No. We yeah, we we've got a system, that's operating relatively low utilization rates and so we're able to flex our system to be able to make up for for any shortfalls.
Kenneth Todd Lane: No, we've got a system that's operating relatively low utilization rates, and so we're able to flex our system to be able to make up for any shortfalls at whatever sites may have an upset. We can adjust for that in our system, so I don't expect there to be anything to impact our Q2 results there.
Speaker Change: Whatever site. They may have an upset we could we can adjust for that in our system. So I don't expect there to be anything.
Speaker Change: To impact our Q2 results there.
Speaker Change: Okay. Thank you.
Speaker Change: Sure.
Operator: Our next question comes from Arun Viswanathan from RBC Capital Markets. Please go ahead with your question.
Our next question comes from Arun Viswanathan from RBC capital markets. Please go ahead with your question.
Arun Viswanathan: Great. Thanks, I just wanted to ask a couple questions Oh, maybe first on and congratulations I can that go to your voice again.
Arun Viswanathan: Great, thanks. I just wanted to ask a couple questions. Maybe first on, and congratulations, Ken. It's good to hear your voice again.
Arun Viswanathan: So just on the partly index that looks like that ticked down in the border was that mainly due to your own efforts of our you know selling into the market or was it maybe also an inflection point in volumes or how would you kind of characterize the parley activities.
Kenneth Todd Lane: So just on the Parley index, that looks like it ticked down in the quarter. Was that maybe due to your own efforts of, you know, selling into the market? Or was it maybe also an inflection point in volumes? Or how would you kind of characterize Parley activity?
Kenneth Todd Lane: Thanks. Thanks, Arun. I mean, listen, that's that's.
Arun Viswanathan: Yeah.
Kenneth Todd Lane: Thanks, Arun. I mean, listen, that's a reflection of what we have talked about, which is that the market around Caustic is tighter than people believe. I can tell you that our inventory levels are very low, and we believe that the industry's low as well. And so you're seeing a little bit of an adjustment there in those parlay volumes. Be careful with that because those volumes are going to move around based on things that are much more broad than just our portfolio moves, right? But we do see the market being tighter for caustic, and I think that's what you meant.
Speaker Change: Thanks, Arun I mean listen that's that's a reflection of what of what we have talked about which is the market around caustic is is tighter than people believe.
Speaker Change: I can tell you that our inventory levels are very low and we believe that the industry is low as well.
Speaker Change: And so you're seeing a little bit of an adjustment there those parlay volumes and b.
Speaker Change: Be careful with that because those volumes are going to move around.
Speaker Change: Based on things that are much more broad than just our portfolio moves right. So.
Speaker Change: But we do we do see the market being tighter for caustic and I think that's what you're seeing reflected in that partly volume.
Kenneth Todd Lane: And then just given the expectation that you will be exiting the second half, or maybe the second half EBITDA, you know, if you do hit that $1.3 billion plus, it will be on the order of, you know, $7 to $8 hundred million. Is that kind of a fair starting point for the first half next year? Would that really be an indication that volumes are approaching a more normal level? And I guess my only concern there would be, would that require epoxy also to get materially better, or can you get there with mainly chlorophyll?
Speaker Change: Great and then just.
Speaker Change: The expectation that.
Speaker Change: You will be exiting the second half or maybe the second half EBITDA.
Speaker Change: You hit that $1 3 billion plus will.
Speaker Change: It will be on the order of you know $7 million to $800 million.
Speaker Change: Is that kind of a fair starting point for first half next year.
Speaker Change: That really be an indication that volumes are approaching a more normal level and I guess my my my concern there would be would that require epoxy also to get materially better or or can you get there with mainly core alkali.
Kenneth Todd Lane: Yeah, thanks, Arun. Listen, I would say that to start talking about what's going to happen that far out with the amount of uncertainty in the world today would not be prudent, right? I mean, we've got a lot of things that are going to happen between now and even the fourth quarter. We need to see how that plays out and how the global economy develops. But again, in the short term, we are seeing improvement in demand. Beyond that, it's really too early to make any calls about what the first half of next year might look like.
Speaker Change: Yeah, I think so and listen I would say that it's you know to start talking about what's going to happen that far out with the amount of uncertainty in the world today would not be prudent right. I mean, we've got a lot of things that are going to happen between now and even the.
Speaker Change: The fourth quarter, we need to see how that plays out and how the global.
Speaker Change: Global economy develops but you know again in the in the short term we are seeing improvement in demand.
Speaker Change: Beyond that it's really too early to make any calls with the first half of next year might look like.
Kenneth Todd Lane: Okay, and then one quick one, if I could, just on shareholder returns, what's kind of a comfortable floor of buybacks that we should assume for this year, maybe in the five to six hundred million dollar range, or how should we frame that?
Speaker Change: Okay, and then one quick one if I could just on the.
Speaker Change: Shareholder returns.
Speaker Change: What's kind of a comfortable floor of buybacks that we should assume for this year, maybe in the $5 million to $600 million range or actually frame that thanks.
Kenneth Todd Lane: Well, I mean, what we've said previously is that we'll be a steady buyer of our shares. You know, I'm not going to give you any prediction now on the amount that we would purchase. Todd, do you want to add anything to that?
Speaker Change: Well I mean like what we've what we've said previously it will be a steady buyer of our shares.
Speaker Change: You know what I'm not I'm not going to give you any predictions now on all the amount that we would that we would purchase.
Speaker Change: Do you want to add anything to that.
Speaker Change:
Todd A. Slater: You saw the level of purchases we did in the first quarter, roughly $105 million, and given our leverage-free cash flow forecast, and we're a steady buyer, you can make your own assumptions, but that's really our primary use of leverage-free cash flow, other than a regular dividend that we pay. That's where you would expect that to be used.
Speaker Change: The level of purchases, we did in the in the first quarter roughly $105 million.
Speaker Change: Given our levered free cash flow forecast.
Speaker Change: We're a steady buyer you can make your own assumptions, but that's really our primary use of levered free cash flow you know other than a regular dividend that we pay.
Speaker Change: That's where you would expect that to be used to run.
Thanks.
Speaker Change: Thanks Ross.
Operator: Our next question comes from Mike Sison from Wells Fargo. Please go ahead with your question.
Speaker Change: Our next question comes from Mike Sison from Wells Fargo. Please go ahead with your question.
Michael Joseph Sison: Hey, nice start to the year, Ken. Welcome on board. Just curious, and I know it might be a little bit early to comment, but if you think about Olin's mid-cycle EBITDA potential and maybe peak EBITDA potential, do you have any thoughts of maybe where or how you sort of get there and what levels those EBITDA earnings could get to?
Speaker Change: Okay.
Michael Joseph Sison: Hey, nice start to the year, Ken Welcome on Board I'm, just curious and I know might be a little bit early to comment, but yeah. If you think about what all in mid cycle EBITDA potential and maybe Pete.
Michael Joseph Sison: EBITDA potential do you have any thoughts of maybe where or how you sort of get there and what levels. The those EBITDA or earnings could get to.
Kenneth Todd Lane: Well, thank you. Thank you, Mike.
Ken: Well. Thank you. Thank you Mike.
Kenneth Todd Lane: You know, listen, what I will say is that Olin has been very successful in resetting the cycle, which is great to see. You know, where we're at now in the trough is above the prior peak. We do believe that is durable. I don't have a view that I would give you right now.
Ken: Listen I was what I will say is that Olin has been very successful in.
Ken: And resetting the cycle, which is which is great to see.
Ken: You know where we're at now in the trough is above the prior peak and.
Ken: We do we do believe that is durable I don't have a view that I would give you right now in terms of a mid cycle level four.
Kenneth Todd Lane: Okay. Yeah, I'm looking forward to that annual stay in Cleveland, right?
For all when I don't.
Speaker Change: You know, maybe maybe we'll get to that when we have our investor day later this year, but nothing nothing really to elaborate on at this point.
Speaker Change: Yeah.
Kenneth Todd Lane: No, I'm joking. But sort of a follow-up in terms of the sort of setup for 2Q and the second half of the year. So it sounds, you know, if the step-up in 2Q versus 1Q is better than the fourth versus the first versus the fourth, it doesn't sound like you'll be above 300 million. I know you want specific guidance. But I guess the part of the question is, what operating rate do you need to get to in the second half to sort of get to that much higher EBITDA level to do 1.3 or so for the full year.
Speaker Change: Understood Yeah, looking forward to that analyst day in Cleveland, right now I'm Catherine but.
Speaker Change: So a follow up in terms of.
Speaker Change: So they set up for Q2 and second half of the year.
Speaker Change: So it sounds you know if the step up in Q2 versus why it came in better than the fourth person to person as the fourth you know it doesn't sound like you'll be above 300 million I know you like a specific guidance, but I guess the part of the question is what operating rate do you need to get to in the second half.
Speaker Change: It's sort of get to that much higher EBITDA level to do the one three or so for the full year.
Kenneth Todd Lane: Well, hey,
Kenneth Todd Lane: Well, again, you know, I know we want to focus on operating rates, but there's more than just the operating rates for chlorophyll that we need to think about. You know, there will be some increase in operating rates, obviously, as we see demand come back. But don't forget about the important role that our Winchester business is going to play. We're going to see that improve over the year. We're going to see epoxy continue to improve through the year.
Speaker Change: Well again, you know I I.
Speaker Change: I know, we want to focus on operating rates, but there's there's more than just the operating rates for chlor alkali that we need to think about you know there will be some increase in the operating rate obviously as we see the demand come back.
Speaker Change: But don't forget about the important role that our Winchester business is going to play we're going to see that improve through the year, we're going to see a pox. He continued to improve through the year. So it's more than just focusing on that operating rate, we will adjust the operating rate to.
Kenneth Todd Lane: So it's more than just focusing on that operating rate. We will adjust the operating rate to match the demand that we see. And obviously, if the demand is coming back with our inventories being low, operating rates will step up. But that's only one part of that equation to get to the higher level in the back half of the year.
Speaker Change: To match the demand that we see and obviously if the demand is coming back with our inventories being low.
Speaker Change: Operating rates will step up but that's only one part of that equation to get to the higher higher level in the back half of the year.
Speaker Change: Yes.
Speaker Change: Thank you sure. Thanks.
Operator: Our next question comes from Matthew Blair from TPH. Please go ahead with your question.
Speaker Change: Our next question comes from Matthew Blair from T. P. H. Please go ahead with your question.
Matthew Blair: Good morning, and congratulations, Ken. There's been a lot of commentary on just the positive demand trends that you're seeing. Could you provide any more color on which end markets are relatively stronger and which end markets are relatively weaker, just thinking about areas like pulp and paper, alumina, and then, I guess, more of the construction side? Yeah.
Matthew Blair: Good morning, and congrats Ken there's been a lot of commentary on just the positive trends that you're seeing could you provide any more color on which end markets are relatively stronger and which end markets are relatively weaker just thinking about areas like pulp and paper alumina and then I guess more of the.
Matthew Blair: <unk> side yeah.
Kenneth Todd Lane: Well, like we've said in the prepared remarks, we are seeing improving demand for agriculture, titanium dioxide, and polyurethanes, which go into a lot of different end markets. I would say, in general, the area that we're not seeing improvement yet is around construction. That's a very big driver for our businesses.
Ken: Well like we said in the prepared remarks, we are seeing improving demand in agriculture titanium dioxide.
Ken: You know polyurethane, which go into a lot of different end markets.
Ken: I would say in general the area that we're not seeing the improvement yet is around construction, that's a very big driver for our businesses.
Kenneth Todd Lane: You know, things like electronics and even wind energy. We're going to start to see some improvement there, but... But a big market for us is construction, and we're not seeing improvement in that market yet. And I'll just comment, related to that, on China and what we see happening in China. There have been some very small improvements that we see in China, but we're not seeing anything structural improved there yet. And for us to really see a global improvement in some of our commodity flows, That's still something we're watching very closely. What's happening in that market.
Ken: So.
Ken: You know things like electronics, and even wind energy, we're gonna start to see some improvement there but.
Ken: But a big a big market for US is construction and we're not seeing improvement in that market yet.
Ken: And I'll just comment related to that is is China, and what we see happening in China. There have been some very small improvements that we see in China, but we're not seeing anything structural improve there yet for us to really see a global improvement in some of our commodity flows we need.
Ken: To see China start start to grow more so that's that's still something we're watching very closely what's happening in that market.
Kenneth Todd Lane: Okay, and the tepid numbers in construction, does that help explain why spot EDC prices are a little bit lower in Q2 versus Q1, or are there other dynamics at play?
Okay M. B I guess, the tepid numbers in construction does that help explain why spot prices are a little bit lower in Q2 versus Q1 or are there other dynamics at play.
Kenneth Todd Lane: I'm sorry, you said spot. What prices?
M. B: I'm, sorry, you said spot what prices.
M. B: Spot E D C.
Kenneth Todd Lane: Spot EDC
Kenneth Todd Lane: ADC, okay, I'm sorry; I didn't follow what you were saying. Yeah, so I think what we saw in the first quarter was some volume getting pushed into the market just because of operating offsets. We actually saw some improvement in our portfolio and pricing there, but I think that is going to normalize as the assets that are producing get back to a normal level of operation and not try to adjust for an upswing that's not necessarily as strong as what was thought previously.
M. B: ADC, Okay, I'm, sorry, I didn't follow what you were saying, yes. So I think I think what we saw you know in the first quarter. There was some volume getting pushed into the market just because of operating upsets, we actually saw some improvement in our portfolio with pricing there, but I think that is going to normalize.
M. B: As a as the assets.
That are that are producing get back to a normal level of operations.
M. B: And not trying to adjust for an upswing that's not necessarily as strong as what was thought previously.
Kenneth Todd Lane: Great, thanks for your comments.
Speaker Change: Great. Thanks for your comments.
Kenneth Todd Lane: Sure. Thank you, Matt.
Speaker Change: Sure. Thank you Matthew.
Operator: Our next question comes from Kevin McCarthy from Vertical Research Partners. Please go ahead with your question.
Kevin Mccarthy: Our next question comes from Kevin Mccarthy from vertical Research partners. Please go ahead with your question.
Kevin Mccarthy: Thank you and good morning. And Ken, welcome. Good to hear your voice as well.
Kevin Mccarthy: Thank you and good morning, and Ken welcome good to hear your voice as well.
Kenneth Todd Lane: My question relates to energy. Obviously, natural gas prices have been very favorable lately, south of $2 per mm BTU. Can you talk about Olin's hedge positioning? To what degree have you locked in these low prices? Or might the exposure be more freely floating as we think about how ECU values or margins may trend moving forward?
Kevin Mccarthy: My question relates to energy, obviously natural gas prices have been very favorable lately sell since $2 per M. N V to you can you talk about olin's hedge positioning to to what degree have you have you locked in these low prices or you know my the exposure be more freely floating.
Kevin Mccarthy: As we think about you know how easy you values.
Kevin Mccarthy: Margins may trend moving forward.
Kenneth Todd Lane: Thank you, Kevin. Yeah, so we've talked about this before. Our hedge strategy is we tend to hedge a pretty high percentage in the current quarter, and then that will gradually step down in the next three quarters. So in the first quarter, we were very highly hedged in terms of a percentage of our portfolio, and we continue to do that in the second quarter. So we won't see as much benefit from the lower energy prices that you see today in the market, but we will see some of that. Our hedging strategy is really to avoid the pain of the peaks and the shocks that you see.
Speaker Change: Thank you Kevin.
Kevin: Yeah. So we've talked about this before our hedge strategy as we said the hedge a pretty high percentage.
Kevin: In the current quarter.
Kevin: And then that will gradually step down in the next three quarters. So we were in.
Kevin: In the first quarter, we were very highly.
Kevin: Our highly hedged in terms of a percentage of our portfolio and we continue to do that in the second quarter. So we won't see as much benefit.
Kevin: The and the lower energy prices that you see today in the market, we will see some of that.
Kevin: But you know our hedging strategy is really to is really to avoid the pain of the peaks and the shocks that you see.
Kenneth Todd Lane: I see. Yeah, Kevin, you know, as you saw from Q4 to Q1, Cloroquai had favorable costs, and you should expect that to continue into Q2. Part of that includes power. So even though we are a hedger, the lower power prices, and natural gas costs, will flow through our system, albeit not necessarily on a spot basis, but will flow into our system favorably from a cost perspective.
Speaker Change: That's the way I see it Kevin.
Speaker Change: As you saw from Q4 to Q1 Chlor alkali, we had favorable cost and you should expect that to continue into Q2 part of that includes power. So even though we are a hedger the lower power prices.
Speaker Change: Natural gas costs will flow through our system, albeit not necessarily on a spot basis, but will flow into our system favorable from a cost perspective.
Todd A. Slater: Okay, that's very helpful. And then, Todd, I wanted to clarify... Some of the commentary around levered free cash flow. I think you were at $545 million last quarter. It sounds like, if I did my math correctly, maybe you're tracking a little bit less than that, maybe closer to $500 million, and I heard you call out, you know, tax timing and long-term energy agreement. I guess my questions would be, you know, what exactly changed over the last two or three months? And has there been any change in what I would call kind of the normal drivers of free cash flow, such as working capital and capex, and so on.
Speaker Change: Okay. That's very helpful and then Todd I wanted to clarify.
Some of the commentary around Levered free cash flow I think you were at 545 million last quarter. It sounds like if I did my math correctly, maybe you're tracking a little bit less than that maybe closer to 500 and I heard you call out you know tax timing and long term.
Speaker Change: Energy agreement I guess my question is would be you know.
Speaker Change: What exactly changed over the last two or three months and has there been any change and what I would call kind of a normal drivers of free cash flow, such as working capital and Capex and so forth.
Todd A. Slater: Kevin, you know, from a levered free cash flow perspective, I think our assumptions were virtually unchanged. We did have a slight change on the assumption page where we said we thought the total amount that we were going to spend on the Gulf Coast power contract payments would be $50 million. You know, now that the person that's doing that and we have to pay him, we have a relatively final number now for 2024, so we think that it's going to be $50 million. We had estimated it between $25 and 50 before, so it'll come in at the high end. Other than that, I don't think there were any substantive changes to our outlook on levered free cash flow.
Speaker Change: Yeah, Kevin from a levered free cash flow perspective.
Kevin: I think really our assumptions were virtually unchanged.
Kevin: We did have a slight change in the assumption page, where we said we thought the total amount that we were going to spend on that.
Kevin: Golf Coast power contract.
Payments to be $50 million, you know now that.
Kevin: The person is doing that and we have to pay too we have a relatively final number now for 'twenty 'twenty. Four so we think that's kind of be $50 million. We had estimated about 25 to 50 before so they will come in at the high end other than that I don't think there was any substantive changes to our outlook Unlevered free.
Operator: Got it. Thank you so much.
Kevin: Cash flow.
Speaker Change: Got it thank you so much.
Vincent Stephen Andrews: Our next question comes from Vincent Andrews from Morgan Stanley. Please go ahead with your question.
Speaker Change: Our next.
Speaker Change: She comes from Vincent Andrews from Morgan Stanley. Please go ahead with your question.
Kenneth Todd Lane: Thank you and good morning, and congratulations to you Ken, very well deserved. If I could just ask you two things. One, could you give a little bit more color on the orders that you're already getting for the past half of the year? Are they coming from any specific end markets, and what's driving that so far in advance? And then secondly, if I could ask you just about St. Gabriel and just operating issues in general.
Vincent Stephen Andrews: Thank you and good morning, and congrats to you can very well deserved.
If I could just ask you two things one could you give a little bit more color on the orders.
Vincent Stephen Andrews: Youre already getting for the back half of the year or are they coming from any specific end.
Vincent Stephen Andrews: And market, what's driving that are so far in advance and then secondly, if I could ask you just about St Gabriel and just sort of operating issues.
Vincent Stephen Andrews: Issues in general is there any tension between wanting to be a reliable operator, and having plants down for extended periods of time in terms of you know the risks of you know them.
Kenneth Todd Lane: Is there any tension between wanting to be a reliable operator and having plants down for extended periods of time in terms of the risks of them coming back online easily and without any incremental maintenance costs? Hi Vincent, thank you.
Vincent Stephen Andrews: Coming back online are easily and without any incremental maintenance cost.
Kenneth Todd Lane: Hi Vincent. Thank you. So listen, the orders that we're seeing in the second half are actually pretty broad in terms of the end markets that we see. We're even seeing, you know, some customers who have had assets down that are looking to restart. So it's not just one place that we're seeing that. It's pretty widespread, which gives us some pretty good confidence in terms of that demand uptick that we're talking about. I get your question around the reliability topics and St. Gabriel.
Speaker Change #101: Hi, Vincent Thank you.
Vincent Stephen Andrews: So listen the.
Vincent Stephen Andrews: The orders that we're seeing in the second half, we're actually pretty broad in terms of.
Vincent Stephen Andrews: Of the end markets that we see we're even seeing some.
Vincent Stephen Andrews: Some customers who have had assets now that are looking to restart. So it's not it's not just one place that we're seeing that it's pretty broad.
Vincent Stephen Andrews: Which which gives us some pretty good confidence in terms of that demand uptick that we're talking about I get your question around the reliability Todd.
Vincent Stephen Andrews: Topics in Saint Gabriel.
Kenneth Todd Lane: You know, we will do what we need to do to operate safely first, and, you know, we want to have the assets available when we need them, and that means that when they need to run, they will run, and that's what you've seen happen with St. Gabriel. We took it down. We have restarted that asset, and we're going to continue to focus on operating safely and doing what we have to do to do that.
Vincent Stephen Andrews: We will we will do what we need to do to operate safely first.
Vincent Stephen Andrews: And we want to have the assets.
Vincent Stephen Andrews: Available when we need them.
Vincent Stephen Andrews: That means that when they need to run they will run and that's what you've seen happen with St. Gabriel we took it down.
We have restarted that asset and we're going to continue to focus on operating safely and doing what we have to do to do that.
Kenneth Todd Lane: But make sure that when we need that asset to operate, it will operate. And one of the things that I've seen just traveling around to the sites, and I've visited many of our chlorophyllite sites in the U.S., is the strong commitment to that. I was really impressed with the condition of the asset. I'm very happy with that, and I'll continue to support our manufacturing team to be ready and to be able to operate the assets at the demand level we need and the value that they bring.
Vincent Stephen Andrews: But make sure that when we need that asset to operate it will operate.
Vincent Stephen Andrews: One of the things that I've seen just traveling around to the sites I visited many of our Chlor alkali sites in the U S.
Vincent Stephen Andrews: Is the strong commitment to that I was I was really impressed with the condition of the assets.
Vincent Stephen Andrews: Visiting the site so.
Vincent Stephen Andrews: Very happy with that and I'll continue to support our manufacturing team to be ready and be able to operate the assets. It at.
Vincent Stephen Andrews: The demand level, we need and the value that we need.
Vincent Stephen Andrews: Yeah.
Vincent Stephen Andrews: Yeah.
Operator: Our next question comes from Frank Mitsch from Firmium Research. Please go ahead with your question.
Vincent Stephen Andrews: Our next question comes from Frank Mitsch from Fermium Research. Please go ahead with your question.
Frank Mitsch: Good morning, and yes, let me echo my congratulations, Ken. It's nice to reconnect.
Frank Mitsch: Good morning, and let me Echo my congrats Ken nice to reconnect one.
Kenneth Todd Lane: One of the interesting things is, you know, chlorine prices in the first quarter, according to the consultants, ticked down a little bit, but it was up in your system. So I understand that some of that may be contract resets. Can you talk about the interplay between contract resets and maybe underlying other pricing mechanisms for chlorine that led chlorine prices to be up in the Olin system?
Frank Mitsch: One of the interesting things is no chlorine prices are in.
Frank Mitsch: In the first quarter. According to the consultants ticked down a little bit but it was up in your system. So I understand that some of that.
Frank Mitsch: Maybe contract resets are can you talk about you know the interplay between contract resets and maybe under law and other.
Frank Mitsch: Pricing for chlorine that led our chlorine prices to be up in the Olin system.
Kenneth Todd Lane: Yeah, thanks, Frank. I appreciate the question. Good to reconnect.
Yeah. Thanks, Frank I appreciate the question good to reconnect.
Kenneth Todd Lane: I will tell you that I don't put a lot of faith in those in those indices. I just don't. I look at what we have in our system, and if you know how we operate, we operate to meet the demand at the price that we want. That's basically the model that we have. We're not going to give away our products. We're going to make sure that we get the right value for the products that we produce, and we'll continue to focus on... matching the demand at the weak side of the ECU, and you know, that's the result; that's what you see in the numbers for us. We're going to be the ones that are focusing on value, and that's not going to change.
Speaker Change #103: I listen I will tell you that I don't put a lot of faith in those in those indices I just don't.
So I look at what we have in our system and you know how we operate we operate.
Speaker Change #103: To meet the demand at the value that we wanted and.
Speaker Change #103: That's basically the model that we have we're not going to give away our products.
Speaker Change #103: We're going to make sure that we get the right value for our for.
Speaker Change #103: The products that we produce and we will continue to focus on.
Speaker Change #103: Matching the demand.
Speaker Change #103: At the weak side of E C U E.
Speaker Change #103: That's the result is what you see in the AR and the numbers for us where we're gonna be that we're gonna be the ones that are focusing on value and that's not going to change.
Kenneth Todd Lane: Terrific. The guests that you heard were coming out of CMA and ISIS, et cetera.
Speaker Change #104: Terrific. The guests that you heard we're coming out of CMA and and I supposed etc.
Speaker Change #104: Uh huh.
Kenneth Todd Lane: Great. And then just to follow up on chlorine and use. I mean, you did talk about B and C, not seeing a big recovery there and so forth. Do you have any measure of recovery in the construction markets in the back half of the year? And I guess the reason why I ask that is, obviously, the flavor of the month is interest rates aren't going to be cut anytime soon, so people are concerned about construction in general. Can you talk about how, what may or may not be embedded into your four-year guide from those markets? Yeah, I mean, this is for construction.
Speaker Change #104: Yeah.
Speaker Change #105: Oh, Great and then just a follow up also on on on corn and use I mean, you did talk about a b and C are not.
Speaker Change #105: Not seeing a big recovery, there and so forth do you have any and the $1 3 billion for 2024 do you have any measure of recovery in the construction markets in the back half of the year and I guess the reason why I asked that is.
Speaker Change #105: Obviously, the flavor of the month as our interest rates arent aren't going to be cut anytime soon and so people are concerned about construction in general can you talk about how what you what may or may not be embedded into your full year guide from from those markets.
Speaker Change #106: Yeah, I mean listen for for construction no. We're not we're not baking in any kind of significant recovery there.
Kenneth Todd Lane: Yeah, I mean, listen, for construction, no, we're not baking in any kind of significant recovery there. You know, you look at the housing starts and the permits, and we don't see the momentum in housing that would support us baking in any optimism in that market. So it really, like I said earlier, it's more of a broad base. You know, consumer-driven demand in a lot of different areas that we see signs of hope in, but I wouldn't say construction is one of those yet.
Speaker Change #106: If you just look at the housing starts and the purpose and we don't see the momentum.
Speaker Change #106: Housing that would that would support us baking in any optimism in that market. So it really.
Speaker Change #106: Like I said earlier, it's more of a broad based.
Speaker Change #106: You know consumer driven demand with a lot of different areas that we see signs of hope in but I wouldn't say construction is one of those yet.
Operator: Once again, if you would like to ask a question, please press star and 1. Our next question comes from Roger Spitz from Bank of America. Please go ahead with your question.
Speaker Change #107: Terrific. Thank you so much.
Speaker Change #108: Thank you.
Speaker Change #108: Once again, if he would like to ask a question. Please press star and one our next question comes from Roger Spitz from Bank of America. Please go ahead with your question.
Roger Neil Spitz: Thanks very much. Good morning. When you said earlier the free cash flow yield of 10 percent, are you saying that operating cash flow, less CapEx and before dividends, would be circa $130 million for 2024? Do I understand that correctly?
Roger Neil Spitz: Thanks, very much good morning.
When you said earlier, the free cash flow yield of 10%.
Roger Neil Spitz: Are you, saying that operating cash flow less capex and before dividends would be circa $30 million for 'twenty 'twenty four right I understand that correctly.
Todd A. Slater: Roger, we'll take that.
Roger Neil Spitz: So how do you want to take that.
Todd A. Slater: Roger, when we talked, I said specifically our levered pre-cash flow yield, which is consistent with the metric that we've been using, and we would say that it's probably in the 10 percent range for the year, maybe a little higher than that as we sit with the price today.
Roger Neil Spitz: Roger when we when we talk about we I said, specifically, our levered free cash flow yield, which was consistent with the metrics that we've been using and we would say that's probably in the 10% range for the year, maybe a little higher than that as we said with the price today.
Roger Neil Spitz: Okay. And secondly, I'm looking at slide 12, lower right, where you're showing caustic being on the stronger side in the first half, first quarter, and second quarter of 2024. Next to it on the presentation, it's showing that caustic is actually, you know, down sequentially. I guess maybe I don't fully understand the stronger side when classic soda pricing is falling. Well, again, this is...
Roger Neil Spitz:
Roger Neil Spitz: Okay all right.
Roger Neil Spitz: And secondly, I'm looking at slide 12, lower right, where you're showing classic thing on the stronger side in the first half first quarter and second quarter of 2024.
Roger Neil Spitz: Next to it on the presentation that showing that classic is actually.
Roger Neil Spitz: You know it's down sequentially.
Roger Neil Spitz: I guess, maybe I don't fully understand the stronger side when caustic soda pricing is as it's falling.
Speaker Change #110: Well again. This is this is relative you can't think about it in absolute terms is relative.
Kenneth Todd Lane: Well, again, this is relative; you can't think about it in absolute terms. It's relative to what we see in chlorine versus caustic market momentum. And we have seen caustic market momentum actually be more positive. I talked about this before, where inventory levels are low, ours are very low. We've seen pricing moving up in caustic. And we're just starting to see some recovery in
Speaker Change #110: What we see in him.
Speaker Change #110: Flooring versus caustic market momentum and we have seen caustic market momentum actually be more positive I talked about this before were actually inventory levels are low hours or very low we've seen we've seen pricing moving up in caustic.
Speaker Change #110: And we're just starting to see some recovery in chlorine chlorine from our perspective is still the weaker side.
Kenneth Todd Lane: Got it. Thank you very much. Yeah, thank you.
Speaker Change #111: Got it thank you very much.
Kenneth Todd Lane: Yeah, thank you, Roger.
Speaker Change #112: Thank you Roger.
Kenneth Todd Lane: And ladies and gentlemen, if there are no further questions, this will conclude our question and answer session. I'd like to turn the conference call back over to Ken Lane for closing comments.
And ladies and gentlemen, and showing no further questions. This will conclude our question and answer session I'd like to turn the conference call back over to Ken Layne for closing comments.
Kenneth Todd Lane: Well, thank you very much, Jamie, and thank you all for participating in the call today. I wish you all a safe and relaxing weekend.
Ken Layne: Well, thank you very much Jamie and thank you all for participating on the call today I wish you all a safe and relaxing weekend.
Operator: Ladies and gentlemen, thank you for attending today's presentation. You may now disconnect your lines.
Speaker Change #113: Ladies and gentlemen, thank you for attending today's presentation. You may now disconnect your lines.
Speaker Change #113: [noise].