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OLIN Corp (OLN)·Q3 2025 Earnings Summary

Executive Summary

  • Q3 2025 was mixed: EPS of $0.37 and adjusted EBITDA of $222.4M exceeded prior quarter guidance, aided by a one-time $32M Section 45V clean hydrogen credit; revenue of $1.713B grew 7.8% YoY but fell 2.6% sequentially .
  • Results versus Wall Street: EPS materially beat S&P Global consensus, EBITDA beat, while revenue was slightly below consensus; management guided Q4 adjusted EBITDA to $110–$130M with a planned $40M inventory reduction penalty, signaling seasonal weakness and cash-focus into year-end .
  • Segment dynamics: CAPV drove performance with higher volumes and a 45V benefit; Epoxy remained challenged by subsidized Asian imports despite U.S. pricing traction; Winchester disappointed on commercial ammo while defense improved sequentially .
  • Strategic updates and catalysts: dissolution of Blue Water Alliance JV to pivot toward structural EDC contracts and a new long-term EDC supply partnership with Braskem; Beyond 250 cost program and planned working capital actions support 2026 margin recovery positioning .
  • Near-term stock catalysts: the 45V credit recognition and stronger-than-expected Q3 EBITDA vs guidance are positives; Q4 guide and Winchester commercial headwinds may weigh; Braskem partnership and Epoxy cost actions are medium-term positives .

What Went Well and What Went Wrong

  • What Went Well

    • CAPV led results with sales of $924.0M (+6% YoY) and segment earnings of $127.6M, supported by higher volumes and the $32M 45V pretax benefit; management emphasized preserving ECU values despite a tough market .
    • Q3 adjusted EBITDA of $222.4M exceeded the prior quarter guide, demonstrating cost discipline and integration benefits; EPS improved to $0.37 vs a year-ago loss .
    • Strategic repositioning: dissolving Blue Water Alliance JV to reduce spot EDC exposure and pursue longer-term, higher-return relationships; announced long-term EDC supply partnership with Braskem focused on Brazilian PVC growth .

  • What Went Wrong

    • Epoxy remained weak: segment loss of ($32.2)M; headwinds from subsidized Asian imports persisted, and higher operating costs from planned inventory reductions pressured results despite improved volumes .
    • Winchester underperformed: segment earnings fell to $19.3M on lower commercial pricing/shipments and higher raw material costs; commercial demand stabilization remained elusive .
    • Working capital and cash flow missed internal targets in Q3 due to delayed U.S. government payments (received in October) and inventory build ahead of Q4 turnarounds, necessitating a Q4 $40M EBITDA penalty to free ~$150M cash .

Financial Results

MetricQ1 2025Q2 2025Q3 2025
Revenue ($USD Billions)$1.644 $1.758 $1.713
Net Income ($USD Millions)$1.4 ($1.3) $42.8
Diluted EPS ($USD)$0.01 ($0.01) $0.37
Adjusted EBITDA ($USD Millions)$185.6 $176.1 $222.4
EBITDA Margin (%)11.29%*10.09%*13.10%*

Values retrieved from S&P Global*

Q3 2025 vs Q3 2024Q3 2024Q3 2025
Revenue ($USD Billions)$1.590 $1.713
Net Income ($USD Millions)($24.9) $42.8
Diluted EPS ($USD)($0.21) $0.37
Adjusted EBITDA ($USD Millions)$160.3 $222.4

Segment breakdown

SegmentQ2 2025Q3 2025
CAPV Sales ($USD Millions)$979.5 $924.0
CAPV Segment Earnings ($USD Millions)$64.9 $127.6
Epoxy Sales ($USD Millions)$331.2 $349.6
Epoxy Segment Income (Loss) ($USD Millions)($23.7) ($32.2)
Winchester Sales ($USD Millions)$447.6 $439.6
Winchester Segment Earnings ($USD Millions)$25.0 $19.3

KPIs

KPIQ2 2025Q3 2025
Cash & Equivalents ($USD Millions)$223.8 $140.3
Net Debt ($USD Millions)$2,772.9 $2,853.1
Net Debt / TTM Adjusted EBITDA (x)3.9 3.7
Available Liquidity ($USD Billions)~$1.4 ~$1.3
Share Repurchases (Shares, $USD Millions)~0.5M; $10.1 ~0.5M; $10.1

Guidance Changes

MetricPeriodPrevious GuidanceCurrent GuidanceChange
Adjusted EBITDAQ3 2025$170–$210M Actual: $222.4M Beat
Adjusted EBITDAQ4 2025N/A$110–$130M; includes ~$40M inventory reduction penalty New range; explicit penalty
Net DebtFY2025 year-endExpect flat vs YE 2024 (CFO reiterated) Expect comparable to YE 2024 (CEO) Maintained
Dividend per ShareOngoing$0.20 declared level $0.20 Maintained

Earnings Call Themes & Trends

TopicPrevious Mentions (Q-2 and Q-1)Current PeriodTrend
ECU value disciplineECU values stable; seasonal improvement but pricing pressure in EDC CAPV drove sequential earnings; preserving ECU values; expect Q4 stability Stable discipline; mix-managed
Epoxy headwindsSubdued demand; subsidized Asian competition; cost focus Headwinds persist; U.S. price traction post tariff exemption removal; Q4 maintenance headwind ~$14M; new Stade supply agreement effective Oct 1, 2025 with ~$40M annual EBITDA from Jan 2026 Self-help improving; medium-term uplift
Winchester commercial vs defenseCommercial pressured; defense growing Commercial weak; shift to make-to-order; extended shutdowns; defense sequentially improved; revenue mix ~62% military Mix shifting to defense; operational reset
Section 45V clean hydrogenNot recognized earlier$32M pretax Q3 benefit; expected $15–$20M per year 2026–2028; quarterly COGS reduction going forward New recurring tailwind
Working capital actionsStrong Q2 OCF; elevated inventories persisting Q4 ~$40M EBITDA penalty to free ~$150M cash; DOE payments delayed in Q3, received Oct Aggressive WC/cash optimization
Vinyls strategyCAPV volumes stronger; pricing pressure Dissolve Blue Water Alliance JV; focus on structural contracts; Braskem EDC supply partnership for Brazil PVC market Shift to structural EDC relationships
Cost program (Beyond 250)$50–$70M cost savings; lowered capex $70–$90M run-rate into 2026; embedded in incentives Expanded savings trajectory

Management Commentary

  • “Olin delivered on our sequentially higher earnings expectations, primarily driven by our Chlor Alkali Products and Vinyls segment… Olin maintained its disciplined focus on preserving our Electrochemical Unit (ECU) values.” — Ken Lane, CEO .
  • “We expect Olin’s fourth quarter 2025 adjusted EBITDA to be in the range of $110 million to $130 million, which includes a $40 million penalty from planned inventory reductions… We expect to end this year with net debt comparable with year-end 2024.” — Ken Lane .
  • “We will reduce our spot EDC exposure and focus on longer-term structural relationships offering higher returns across the cycle.” — Ken Lane .
  • “You should start to see the 45V tax credit… as a reduction to cost of goods sold every quarter… $15–$20 million benefit in 2026–2028.” — Todd Slater, CFO .
  • “Recognizing that the commercial market is not improving… we are adjusting our operating model to make-to-order versus make-to-inventory… extend our typical holiday plant shutdowns.” — Ken Lane .

Q&A Highlights

  • Section 45V: The $32M Q3 is catch-up; model $15–$20M adjusted EBITDA benefit annually in 2026–2028, recognized quarterly in COGS .
  • Working capital: Q4 ~$40M EBITDA penalty to unlock ~$150M cash; Q3 WC impacted by delayed U.S. government payments (received in October) .
  • Capital allocation: Prioritize debt reduction in Q4; modest buybacks continue; aim to keep net debt flat YoY .
  • Epoxy outlook: Optimism for 2026 from cost actions, U.S. price support, European capacity rationalizations, and ~+$40M annual EBITDA benefit from Stade supply agreement starting Jan 2026 .
  • CAPV mix: Despite ECU index volatility, portfolio mix drove CAPV EBITDA up; expect ECU stability in Q4 .

Estimates Context

Metric (Q3 2025)S&P Global ConsensusActualOutcome
Primary EPS ($USD)$0.09*$0.37 Beat
Revenue ($USD Billions)$1.731*$1.713 Slight miss
Adjusted EBITDA ($USD Millions)$187.0*$222.4 Beat

Values retrieved from S&P Global*

Forward estimates snapshot (S&P Global): EPS consensus Q4 2025 at approximately ($0.32)* and EBITDA ~$124M*, broadly consistent with Olin’s Q4 adjusted EBITDA guidance range of $110–$130M including the inventory penalty . Values retrieved from S&P Global*

Key Takeaways for Investors

  • CAPV resilience plus 45V credit drove an EBITDA beat versus prior guide; expect seasonal Q4 step-down with explicit inventory reduction penalty but improved cash generation .
  • Epoxy remains a recovery call option into 2026: tariffs, European rationalizations, and Stade supply agreement (~$40M annual EBITDA from Jan 2026) support a meaningful uplift from trough levels .
  • Winchester commercial continues to be a drag; management is resetting operations to make-to-order and extending holiday shutdowns while leaning into higher-margin international defense demand .
  • Balance sheet remains a focus: Q3 liquidity ~$1.3B, aiming for net debt comparable to YE 2024; buybacks subdued as debt reduction is prioritized in Q4 .
  • Strategic pivot in vinyls (Blue Water Alliance JV dissolution) and the Braskem long-term EDC agreement should reduce spot exposure and enhance cycle-average returns .
  • Cost program momentum (Beyond 250) expands savings run-rate to $70–$90M heading into 2026; watch for update at Q4 call .
  • Trading lens: near-term sentiment hinges on Q4 guidance execution and Winchester normalization; medium-term rerating potential if CAPV pricing/mix holds and Epoxy benefits materialize .

Appendix: Additional Data

  • Q3 consolidated P&L snapshot: Revenue $1,713.2M; Operating Income $82.8M; Diluted EPS $0.37; Adjusted EBITDA $222.4M (includes $32M pretax 45V benefit) .
  • Balance sheet: Cash $140.3M; Net Debt $2,853.1M; Net Debt/TTM Adjusted EBITDA 3.7x .
  • CAPV drivers: higher EDC volumes, lower EDC pricing offset by higher caustic soda pricing; segment D&A $109.0M .
  • Epoxy drivers: higher volumes (post Hurricane Beryl comparison) but higher operating costs from planned inventory reductions; segment D&A $13.2M .
  • Winchester drivers: commercial pricing/shipments and raw material costs (propellant and commodity metals) pressured margins; segment D&A $7.8M .