Olin Corporation (OLN) Q4 2025 Earnings Call Transcript

Jan. 30, 2026 2:50 PM ETOlin Corporation (OLN) Stock

Q4: 2026-01-29 Earnings Summary

EPS of -$0.64 misses by $0.01

 | Revenue of $1.67B (-0.37% Y/Y) beats by $121.30M

Olin Corporation (OLN) Q4 2025 Earnings Call January 30, 2026 9:00 AM EST

Company Participants

Steve Keenan – Director of Investor Relations
Kenneth Lane – President, CEO & Director
Todd Slater – Senior VP & CFO

Kenneth Lane
President, CEO & Director

Thanks, Steve, and thank you to everyone for joining us today. Let’s start with Slide 3 and review our fourth quarter highlights. As we previously announced, our fourth quarter came in significantly below our expectations.

In December, we experienced operational issues related to an extended turnaround of our Freeport, Texas chlorinated organics asset and third-party raw material supply constraints, both of which impacted our chlor-alkali assets. At the same time, we also experienced a sharp decline in chlorine pipeline demand in an already seasonally weaker quarter.

During the quarter, we were able to preserve our ECU values by staying disciplined with our value-first commercial approach, and we also announced the long-term EDC supply agreement with Braskem, which provides a higher value to both parties by integrating the low-cost producer of EDC with the leader in PVC in Brazil.

In addition, we’ve expanded our infrastructure footprint in Brazil, which enables us to grow our caustic sales there in 2026. In our Epoxy business, we were able to contract for significant growth in our European business, which we’ll begin to benefit from in the first quarter of 2026.

This is a result of our commercial team’s successful strategy to position Olin as the last integrated supplier of Epoxy in Europe, providing reliable, secure supply to local customers in the face of continued headwinds from subsidized Asian producers.

Let’s turn to Slide 4 for a closer look at our chlor-alkali products and Vinyls results. Macro conditions remain challenging. Merchant chlorine demand remains under pressure through this extended trough as subsidized Asian chlorine derivatives flood export markets. Since 2019, China exports of titanium dioxide, urethanes, epoxies, crop protection chemicals and PVC have grown 300% to 600% placing significant pressure on U.S. chlorine derivative customers.

As you would expect in a trough environment, we are already seeing chlor-alkali capacity rationalization in Europe, Latin America and the U.S., which should accelerate operating rates as demand recovers. Olin has done a great job of preserving our ECU values and remains committed to our value-first approach, and we are well positioned when markets recover from the trough.

As we look ahead to the first quarter, we’ll continue to face headwinds related to power and raw materials. As a result of winter storm Fern, we proactively shut down several of our Gulf Coast assets, which will increase our first quarter costs. In addition, we’ll see higher turnaround costs as we begin our VCM turnaround at our Freeport, Texas site. This is the single largest turnaround that Olin executes and occurs every 3 years.

In the near term, Olin faces stranded costs of approximately $70 million, resulting from Dow’s recent closure of their Freeport propylene oxide plant. This cost burden will be offset by our Beyond 250 structural cost reductions, which I’ll discuss shortly.

Now let’s turn to Slide 5 for a look at our Epoxy results. Our fourth quarter Epoxy results sequentially increased due to improved product mix, allylics and aromatics margins, partially offset by higher turnaround and seasonally lower demand. As we look ahead to the first quarter, we do expect our Epoxy business to return to profitability, although at a low level. This will be realized through actions we have taken by growing our participation in the European market realizing lower costs at our Stade, Germany site and lower turnaround costs.

As we look out further, structural changes in our cost position, recent European epoxy chain plant closures and continued growth in our formulated solutions portfolio will support a return to profitability for 2026 as well.

Over the past 3 years, Olin’s Epoxy business has remained focused on cost reductions. In that time, we’ve reduced our global epoxy cash costs by about 19%. Our most recent action was this month’s closure of our Guarujá, Brazil epoxy plant. This shutdown is expected to deliver $10 million of annual structural savings.

Also in 2025, we continue to deliver on our formulated solutions sales growth. These solutions enable AI chips to better manage heat and conductivity that allow lightweight wind blades to exceed 500 feet in length and that serves as adhesives in some of the most challenging environments and application. We will continue to benefit from that growth in 2026.

As mentioned earlier, Dow’s closure of its Freeport propylene oxide plant has created a $70 million stranded cost headwind for Olin. By optimizing our power supply, we’ve already managed to offset approximately $20 million of that stranded cost. Earlier this month, we announced the closure of our Epoxy production plant in Brazil. We’ll be able to more cost-effectively serve our customers there with supply from either Freeport or Stade, both of which are vertically integrated with better cost structures. As a result of this action, we expect to realize a $10 million annual benefit.

Frank Mitsch
Fermium Research, LLC

I may have missed this in the past, but I wanted to ask about this $70 million stranded costs for the PO-related closure. Dow announced this back in May of 2023. And so I — obviously, you’ve known about it for a long time and could plan for it, et cetera, that $70 million sounds like a very large number. Can you help explain that to us, to me, in particular?

Kenneth Lane
President, CEO & Director

Thanks for your question. listen, yes, we have known about this for a long time, and we’ve been planning it, and we talked about this at our Investor Day, we knew that this was coming — but you don’t take the costs out until you shut the assets. And so those assets are being closed and wound down as we speak.

So as we go through the year, we’re going to have to find ways to be able to offset that. And that’s — that was the basis for us creating Beyond250 is that we’ve got to find ways to be able to take those costs out. The way that we were talking about this, I think previously as well is that asset and the sales from that asset didn’t generate any margin for us. It was sort of a net zero effect for us in terms of the P&L. But that doesn’t mean that there would not be stranded costs with that. We were aware of that we’ve got to get after that. That is a very clear focus for us to be able to do that as we wind those assets down, but that is going to be something that happens over time. It doesn’t happen like flipping a switch.

Matthew DeYoe
BofA Securities, Research Division

I feel like the prior kind of commentary for 2026 epoxies, I think, we were expecting something around $80 million in cost savings, of which over half was supposed to come from just the Dow contract lapse Stade.

Clearly, you’re talking about modest profitability. Now, this wouldn’t be the first case, productivity is lost through the cycle, but I’m just trying to clarify if that’s what’s happening here or if we should expect those savings to be more ratable in ’27. I’ll let you expand from there.

Kenneth Lane
President, CEO & Director

Listen, so what we had said back at Investor Day, that $80 million, remember that was our cost-out target for 2028. So that — you’re going to realize a very big chunk of that $40 million to $50 million is going to be realized in 2026. So you are going to see Epoxy last year, $50-ish million EBITDA negative.

We’re going to be positive this year. I mean, I do expect that that’s going to be the result in 2026. So you’re going to see a meaningful improvement in our earnings. Most of that are things that we’re doing to help ourselves in cost reduction and efficiency improvements. Just to be clear, we’re not seeing any significant improvement in the Epoxy market. Demand is still subdued. Margins are still weak. That environment has not changed.

So all of this improvement that you’re seeing is a result of what we’ve done. And so it’s not getting lost anywhere. You’re going to see that positive impact coming through in 2026.

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