Olin Q2 2026 Earnings Call Transcript

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Provided by Quartr
July 31, 2026

Key Takeaways

  • Positive Sentiment: Huntsman merger advances with shareholder voting underway ahead of the August 25 special meeting; Olin expects the transaction to close in the first half of 2027 and is targeting $400 million in synergies.
  • Negative Sentiment: An unplanned VCM outage at Freeport reduced second-quarter adjusted EBITDA by $40 million and is expected to be a further $20 million headwind in Q3 while repairs are completed, although full recovery is expected in Q4.
  • Neutral Sentiment: Olin expects third-quarter adjusted EBITDA to remain within its $160 million-$200 million range, with stronger domestic caustic soda pricing and Winchester gains offset by weaker export pricing, higher Epoxy FIFO costs, and corporate expenses.
  • Positive Sentiment: Epoxy delivered its best results in more than three years and returned to profitability after price increases and more than $50 million in annual structural cost reductions, though European demand remains weak.
  • Positive Sentiment: Winchester is benefiting from improving commercial ammunition demand, pricing actions, strong military sales, and tariffs reducing import competition; management remains confident it can meet or exceed its $30 million cost-out target.
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Earnings Conference Call
Olin Q2 2026
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Operator

Good morning, welcome to Olin Corporation's second quarter 2026 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 then one on your touchtone phone. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Steve Keenan, Olin's Director of Investor Relations. Please go ahead, Steve.

Steve Keenan
Steve Keenan
Director of Investor Relations at Olin

Thank you, operator. Good morning, everyone. We appreciate you joining us today to review Olin's second quarter 2026 results. Please keep in mind that today's discussion, together with the associated slides, as well as the question and answer session that follows, will include statements regarding estimates or expectations of future performance. Please note these are forward-looking statements and that Olin's actual results could differ materially from those projected. Some of the factors that could cause actual results to differ from our projections are described without limitations in the Risk Factors section of our most recent Form 10-K and in yesterday's second quarter earnings press release. A copy of today's transcript and slides will be available on our website in the Investors section under Past Events. Our earnings press release and related financial data and information are available under Press Releases.

Steve Keenan
Steve Keenan
Director of Investor Relations at Olin

With me this morning are Ken Lane, Olin's President and CEO, and Todd Slater, Olin's CFO. We'll start with some prepared remarks, then we'll look forward to taking your questions. Let me now turn the call over to Olin's President and CEO, Ken Lane.

Ken Lane
Ken Lane
President and CEO at Olin

Thank you, Steve, and thanks to everyone for joining us today. We appreciate your interest in Olin and taking the time to join us on such a busy morning. Let's begin with some highlights from the second quarter on slide three. On June 16th, we were very pleased to announce our planned merger with Huntsman, bringing together two highly complementary businesses to create a world-scale, vertically integrated North American-focused chemical leader with more than $12 billion in sales. Second quarter also saw the conflict involving Iran disrupt chemical supply chains and increase prices. Markets rebalanced as the quarter progressed, although significant uncertainty remains. Caustic soda and EDC export pricing was a second quarter bright spot, reflecting the supply chain disruptions at the beginning of the quarter. This was partially offset by an unplanned VCM shutdown at our Freeport, Texas facility.

Ken Lane
Ken Lane
President and CEO at Olin

Epoxy also achieved higher pricing across all products during the second quarter as hydrocarbon feedstock costs rose and availability tightened. Epoxy demand remained weak in Europe, but the U.S. saw moderate seasonal demand improvement in the quarter. Winchester's commercial ammunition recovery continues as year-over-year demand improves and our pricing initiatives to offset rising metals costs start to gain traction. Domestic and international military sales continue to show strength. Against a backdrop of weak demand and volatile global events, Olin's self-help efforts remain top of mind. Our value-first commercial approach continues to preserve ECU values, while our Beyond 250 initiative is delivering structural cost reductions. Now let's turn to slide four for an update on our recently announced merger with Huntsman, which creates a $12 billion vertically integrated cost-advantaged North American chemicals leader. Since announcing the transaction, we've made significant progress in a short period of time.

Ken Lane
Ken Lane
President and CEO at Olin

We filed our definitive proxy on July 13th, and Olin shareholders have already begun casting their votes as we approach the August 25th special shareholder meeting. Todd and I have spent recent weeks on the road with the Huntsman management team, meeting with both Olin and Huntsman shareholders, listening to feedback, and discussing our value creation thesis. The response has been very supportive and reinforces our excitement about the deal. In the third quarter, we'll begin pre-closing integration planning led by Todd. This is a very important first step toward realizing the $400 million of synergies quickly following the close, which we continue to expect in the first half of 2027. Now let's turn to slide five for a closer look at our Chlor-Alkali products and vinyl second quarter performance.

Ken Lane
Ken Lane
President and CEO at Olin

Early in the quarter, the Iran conflict drove supply chain interruptions and dramatically higher feedstock and energy costs, resulting in higher prices for many products. As supply chains rebalanced during the quarter, export pricing for both EDC and caustic soda trended lower but remained above pre-conflict levels. These export price trends will offset stronger domestic caustic pricing in the third quarter. We expect product availability to tighten in the fourth quarter, driven by persistently higher feedstock and energy costs as well as several planned industry shutdowns. As discussed on our Q1 earnings call, we had an unplanned outage in early May at our Freeport, Texas VCM plant. While the outage was disappointing, it was an isolated equipment issue that we've addressed. We were able to restart the plant by mid-May, but VCM will be running at reduced operating rates through the third quarter while we complete final repairs.

Ken Lane
Ken Lane
President and CEO at Olin

This outage resulted in a $40 million penalty to second quarter adjusted EBITDA and will have an estimated $20 million impact on the third quarter. Second quarter merchant chlorine sales improved seasonally, supported by stronger water treatment, refrigerant, and other derivative demands. During the third quarter, several planned chlorine customer shutdowns will reduce volumes, but chlorine pricing remains stable. Finally, we continue to make very good progress on our Beyond 250 structural cost savings initiatives, and we're on track to deliver on our commitments. Turning to slide six, let's review our epoxy results. During the second quarter, our epoxy business posted its best results in more than three years. As the Iran conflict unfolded, our epoxy team implemented price increases to offset rising raw material and transportation costs. Security of supply became paramount to customers, supporting Olin's strategy to grow our epoxy participation in both the U.S. and Europe.

Ken Lane
Ken Lane
President and CEO at Olin

During the second quarter, U.S. epoxy resin demand experienced moderate seasonal improvements, while European demand remained flat. Our epoxy cost initiatives continue to pay off. Between our new Stade, Germany supply agreements and our Guarujá, Brazil plant closure, we've reduced epoxy structural costs by more than $50 million per year. These actions, in combination with our commercial strategy for increased participation, have returned this business to positive earnings. Now let's take a look at Winchester on slide number seven. Monthly out-the-door commercial ammunition sales have improved year-over-year as consumer demand strengthens. Winchester continues to increase prices to offset rising raw material costs, particularly copper and brass. Both of these have resulted in year-over-year improvement to adjusted EBITDA. Winchester is continuing its disciplined approach to working capital and inventory management as we see our commercial backlog grow.

Ken Lane
Ken Lane
President and CEO at Olin

The third quarter is typically our strongest for commercial ammunition demand due to the fall hunting season. We expect that to drive sequential earnings improvement. Domestic and international military ammunition and project sales continue to be strong. I'll now turn the call over to Todd for a look at our financial highlights.

Todd Slater
CFO at Olin

Thanks, Ken. I'll now walk through our cash flow, liquidity position, and overall financial foundation. Our top priority remains generating strong cash flow, preserving liquidity, and maintaining flexibility through the cycle. We ended the quarter with $1.2 billion of available liquidity, including the undrawn capacity under our revolving credit facility. Our debt profile remains well-structured, with no bond maturities before 2029. During the first half of 2026, working capital increased by $183 million, reflecting our normal seasonal build, which we expect to liquidate in the second half of the year. The increase also included $93 million of payments against previously accrued reserves related to the resolution of the legacy Shintech litigation matters. We expect to pay the remaining $100 million during the second half of 2026.

Todd Slater
CFO at Olin

As a result of these litigation-related cash payments, we expect to end the year with year-over-year increase in outstanding debt, a leverage ratio of approximately 4.5x. We further strengthen our financial resilience, any excess cash flow will be used to reduce our outstanding debt. Our capital allocation priorities also remain consistent and disciplined. First, we continue to target 2026 capital spending of approximately $200 million, with investments focused on the safe, reliable, and efficient operation of our assets. Second, we expect to continue our long history of uninterrupted quarterly dividend payments. Third, excluding approximately $195 million of cash payments to resolve legacy litigation matters I just discussed, we expect working capital to be essentially flat for the full year 2026. Finally, we continue to expect 2026 to be a cash-free tax year, ±$20 million.

Todd Slater
CFO at Olin

Within Beyond 250, we are expanding our focus on people and process improvements and remain on track to deliver more than $100 million of incremental structural cost savings in 2026. In addition, based on the progress we're seeing across the organization, we are increasingly confident we will exceed our $250 million target by 2028. In summary, our teams remain focused on cash generation, cost discipline, and execution of Beyond 250. Our strong financial foundation enables Olin to continue executing our value first commercial approach while maintaining disciplined capital allocation, a prudent capital structure, and resilient cash flows. With that, Ken, I'll turn the call back to you.

Ken Lane
Ken Lane
President and CEO at Olin

Thank you, Todd. I'll finish up with slide nine and our outlook for the third quarter. We expect stronger domestic caustic soda pricing. Export volumes for both caustic soda and EDC should improve, but will largely be offset by lower export pricing. In Epoxy, stable volumes and an improved mix are expected to benefit third quarter results. However, this will be more than offset by higher European FIFO costs. Winchester third quarter results are expected to improve, driven by higher commercial volumes and pricing, partially offset by higher metals costs. We'll continue to remain focused on working capital discipline. Against a backdrop of continued global uncertainty, we expect Chemicals' adjusted EBITDA to be relatively flat in the third quarter. We do expect a modest earnings improvement at Winchester, although corporate costs are expected to be a sequential headwind.

Ken Lane
Ken Lane
President and CEO at Olin

Overall, adjusted EBITDA should again be in the range of $160 million-$200 million. Stepping back, we remain confident in the long-term outlook for our business. Chlor-Alkali continues to benefit from an attractive supply-demand outlook relative to other commodity chemical value chains, supported by recent industry capacity closures and limited new capacity additions globally. As the industry leader in Chlor-Alkali, we are very well positioned to benefit from these favorable dynamics. Our epoxy business has returned to profitability and continues to improve. At Winchester, self-help actions taken in late 2025, disciplined cost and working capital management, and a recovering commercial ammunition market continue to support improved performance. Across Olin, we're making good progress on our priorities: delivering record safety performance in 2026, streamlining work processes, creating new reliability roadmaps, and adding resources to support execution.

Ken Lane
Ken Lane
President and CEO at Olin

Leveraging digital tools and AI across our plants to quickly identify inefficiencies, reduce costs, and improve asset reliability. Finally, we're reinforcing accountability by aligning our short-term incentive program with site-level safety, reliability, and cost performance targets, further strengthening our performance-driven culture. Operator, we're now ready to begin Q&A.

Operator

Thank you. We will now begin the question and answer session. To ask a question, you may press star then one on your touchtone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. To withdraw your question, please press star and then two. Please limit yourself to one question. At this time, we'll pause momentarily to assemble the roster. The first question will come from Frank Mitsch with Fermium Research. Please go ahead.

Analyst at Fermium Research

Hi, guys. Good morning. It's Aziza on for Frank. My first question was around the Iran war, and where would you say this has been the biggest impact within Olin? If the war were to drag on for a few more months, what are the implications for the company?

Ken Lane
Ken Lane
President and CEO at Olin

Good morning, Aziza. Good to hear your voice. Well, listen, the biggest impact really we felt in the second quarter, that's when we saw prices and concern around supply disruptions really ramp up early in the quarter. As we've said in the prepared comments, we saw that abate as we went through the quarter. Going forward, as markets have rebalanced, what we do expect is just globally costs have risen for folks especially producing outside of the U.S. That is going to put maybe a higher floor under prices as we go forward. We recognize that there is some softness in some of the export pricing for EDC and caustic today.

Ken Lane
Ken Lane
President and CEO at Olin

A lot of that is just digesting the volume that was produced when everybody saw that peak in pricing, all of a sudden, even the producers that were not making any money, some that were even cash negative before prices ran up, saw an opportunity to be able to produce and move some product. That's going to be digested here in the third quarter, and then as I said, I think things will start to tighten up more in the fourth quarter. There's a lot of capacity that's going to be down. Demand continues to be stable. We're not seeing any erosion in demand. I think we saw the run-up in Q2. We're going to see things kind of normalize in Q3 at a higher cost level, and that should benefit us in the fourth quarter.

Operator

The next question will come from Hassan Ahmed with Alembic Global. Please go ahead.

Hassan Ahmed
Hassan Ahmed
Partner and Head of Research at Alembic Global

Morning, Ken and Todd. Wanted to sort of revisit the same question a little differently. Trying to get a clearer view on near-term supply-demand dynamics for chlorovinyls. First of all, would love to hear your views about the return of capacity across the Middle East, as in when the conflict does end. Above and beyond that, obviously, we've seen a re-escalation in the price of natural gas in Europe, would love to hear your views around rationalization out there. On the demand side of things, across a variety of chemical chains, it seems that particularly in Asia, we saw a fair amount of inventory destocking. Could we potentially, over the next couple of quarters, expect on the demand side of things, a restocking cycle as well?

Ken Lane
Ken Lane
President and CEO at Olin

Good morning, Hassan. Wow, that's a lot of questions you put in there. I tried to take some notes, and I will try to get to all of them. Listen, again, in terms of short-term supply-demand implications, we saw a run-up in Q2. Looking backwards, we did see a run-up in Chlor-Alkali and PVC operating rates in Q2. Yes, you did see a lot of the Asian ethylene-based producers cut back. Carbide ramped up. Even Europe ramped up and had a spike in operating rates in Q2. We have seen those reverse. Like I said, we had this lump in Q2 of production. Now people have cut back on operating rates, and that's going to start to filter through into the market as we go through the third and the fourth quarter.

Ken Lane
Ken Lane
President and CEO at Olin

I'm not as much worried about what's happening in terms of the return of capacity in the Middle East. That is much less of a concern for me. I think the reality of it is, it is hard to put this genie back in the bottle, and I'm not sure exactly when things are going to settle down there. That's less of a concern. I think the thing that we're going to watch is going to continue to be around what's happening primarily in China and what are they doing with their assets. We have seen operating rates in China already reduce in the third quarter. Again, it takes a little bit of time for that to filter through into the supply-demand balances, but it will.

Ken Lane
Ken Lane
President and CEO at Olin

That combined with some outages that we see, particularly coming up here in North America, should be constructive for supply-demand as we finish out the year. Going back to Europe. Europe, again, we did see a run-up in operating rates there, you saw that come back as prices began to normalize and the fear of not being able to get product sort of waned, I would say. Your final point there around destocking is one that's going to be really important to watch because I do think the buying pattern that we have seen from customers is initially, yes, they were trying to buy to be ahead of any disruptions. Now I think what you see is the behavior is they're going to consume their inventory because they're hoping that prices or costs will come down in the future.

Ken Lane
Ken Lane
President and CEO at Olin

Yes, that is certainly a situation that could change here, that all of a sudden people do need to restock and the apparent demand may improve. I just want to reiterate, underlying housing, underlying automotive demand is still stable, but it is not recovering yet. All of these dynamics are very volatile. They're hard to predict. Frankly, that's why we gave a pretty wide range for the third quarter outlook that we did.

Operator

The next question will come from Gabe Hajde with Wells Fargo. Please go ahead.

Gabe Hajde
Gabe Hajde
Analyst at Wells Fargo

Good morning, Ken. Steve, Todd, thanks for taking the question. I wanted to ask about kind of the 4.5x leverage target at the end of the year. You kind of given us some building blocks, Todd, I think about the normal, when I look at the model, $200 million, give or take, on working capital release and $100 million payment. I'm kind of getting that debt maybe at $2,750 by the end of the year, which would kind of imply a full year EBITDA of $610. Then I'm trying to kind of juxtapose that, I guess, with some comments that you're making, Ken, about improved dynamics in the fourth quarter for the Chlor-Alkali business. Thank you.

Ken Lane
Ken Lane
President and CEO at Olin

Good morning, Gabe. Thanks for joining. I'll start, then I'll let Todd add to it. First, I just want to emphasize that as we have been saying over the course of the second quarter and as we talked about our merger with Huntsman, even for Olin, deleveraging is going to be a priority. That is something that we'll be very focused on. The teams here are extremely focused on cash generation and reducing working capital and managing that very carefully. I think you've got to realize that there is a lot of volatility in the world around things that are going on with the geopolitical environment that we're in. That is not going to change anytime soon, as I just mentioned. We saw the run-up in Q2, which was very beneficial for us. You saw that in our results.

Ken Lane
Ken Lane
President and CEO at Olin

We're going to see a little bit of giveback here in the third quarter as prices, especially in the export markets, reflect some of the pullback in terms of the costs and the results of customers, again, maybe trying to buy ahead a little bit of a lot of uncertainty. I think people are getting more comfortable living in an uncertain world, for what that's worth. What won't change is that there is going to be outages that are occurring. If you think back to the end of last year, we were already in an environment where industry rationalization of capacity, relatively good demand. Yes, it's not growing right now, but it is stable. In the face of all that, we were seeing things begin to improve already.

Ken Lane
Ken Lane
President and CEO at Olin

I think that's what I'm saying is you're going to get back to a more stable environment that reflects what we saw kind of late Q1 and even in the latter part of Q2. That spike that we saw in Q2 is going to be an anomaly here as things try to find a more balanced way forward in a very uncertain world. Todd, I'll let you talk to the balance sheet.

Todd Slater
CFO at Olin

Yeah, no problem. Gabe, thanks for the question. As we obviously do not provide annual EBITDA outlook, but we do expect net debt to increase year-over-year from year-end 2025 to year-end 2026. As I said, driven by the roughly $195 million of legacy litigation payments that we're going to be obligated to make year-end 2026. We would expect to end the year in that 4.5x range on leverage. I just want to remind everyone on the call about cash flow. When you think about our trailing 12-month adjusted EBITDA, here in the end of June is roughly $570. When you look at that number, Olin generated roughly $100 million of levered free cash flow in the last trailing four quarters, even at those levels of adjusted EBITDA. That cash flow has really been utilized to repay legacy litigation matters.

Todd Slater
CFO at Olin

When I talk about levered free cash flow, that is after paying the dividend, that is funding all of our capital spending, paying all our interest, all our capital allocation priorities. Olin does generate cash flow at very low levels of earnings, which is, I think, a distinction among many of our commodity chemical peers.

Operator

The next question will come from Josh Spector with UBS. Please go ahead.

Chris Perrella
Chris Perrella
Analyst at UBS

Good morning. It is Chris Perrella for Josh. Ken, for the CAV business, with the VCM fix in place, do you expect to get that $20 million back in the fourth quarter? Then for Epoxy, how large is that FIFO headwind in the third quarter, and is pricing elevated enough to offset increasing raw materials, or do you need another round to kind of keep things where they are?

Ken Lane
Ken Lane
President and CEO at Olin

Hi, good morning, Chris. Listen, as we get the VCM asset back to full capacity at the end of the quarter here, we do expect to see recovery of that in the fourth quarter. All that is going well at this point. Todd, do you want to take the second part of that question?

Todd Slater
CFO at Olin

Yeah, sure. No problem. Epoxy has announced price increases here in the third quarter, commensurate with increased hydrocarbon and raw material costs that they've seen most recently by the most recent escalation of the conflict in the Middle East. We would expect it net to be a headwind on FIFO between Q2 and Q3. We clearly expect Epoxy to continue to generate positive EBITDA for the third quarter.

Operator

The next question will come from Matthew DeYoe with Bank of America. Please go ahead.

Akeem Saffa
Akeem Saffa
Analyst at Bank of America

Good morning, guys. This is Akeem Saffa for Matthew DeYoe. You guys mentioned that U.S. epoxy resin demand experienced seasonal improvement. What was the main driver, and do you expect it to continue into Q3? Then in Europe, what needs to happen for demand to improve? Is it just more construction and industrial demand? Thank you.

Ken Lane
Ken Lane
President and CEO at Olin

Hi, Akeem. Good morning. Yeah, listen, we did see some, I would say moderate was purposeful because we didn't see the normal level of seasonal improvement even in the U.S. You still do have a construction season in the U.S. that drives things like coatings and that sort of thing. In Europe, we have not seen that improvement. We've seen really a flattish market in Q2. Normally you would see some seasonal improvement. Yes, you're going to need to see some improvement in housing and industrial demand in Europe before you see that. I think you're going to continue to see headwinds there because you've got higher energy costs that are now starting to impact not just the cost of our production, but the cost of everyone else that are producing things in Europe.

Ken Lane
Ken Lane
President and CEO at Olin

I don't see anything in the short term that is going to sort that out. Their policies in Europe continue to be ones that are going to constrain economic growth and expansion. The things that we are doing, like reducing our cost structure is going to continue to be extremely important. We're not counting on the market to help us in Europe anytime soon.

Operator

The next question will come from Arun Viswanathan with RBC Capital Markets. Please go ahead.

Analyst at RBC Capital Markets

Hi, this is Anshuman for Arun. Good morning. Thanks for taking my question. Have you guys broken out how much the FIFO benefit was that you called out for epoxy? I know it's improving, but given that kind of reversal of that benefit next quarter, do you expect overall segment earnings to improve, or should they kind of be more in line with where they were this quarter?

Todd Slater
CFO at Olin

Yeah, great. Thanks. I appreciate the question. Maybe I'll start with the second part. As we think about Chemicals earnings, we would expect Chemicals earnings to be sequentially similar between Q3 and Q2. We would expect epoxy to be slightly lower in the third quarter compared to Q2, with Chlor-Alkali better. As we think about that, epoxy being slightly lower will be driven by the lower benefit from FIFO, and in effect, a higher raw material cost running through the epoxy P&L. We've not quantified a specific number associated with that, but that's how you should think about sequentially Q3 versus Q2.

Operator

The next question will come from Matthew Blair with TPH. Please go ahead.

Matthew Blair
Analyst at TPH

Thanks. Good morning. Slide 15 shows that chlorine prices fell in Q2, even though most of the chlorine derivatives moved up in price, things like PVC and EDC. I think you also mentioned that your merchant chlorine sales were pretty strong in Q2. Could you just help us understand this dynamic and what caused chlorine to come down? Was it, I guess, mostly a supply-driven response? Then finally, I just wanted to confirm, I think you said you expect chlorine prices to be relatively stable, relatively flat in the third quarter. Thank you.

Ken Lane
Ken Lane
President and CEO at Olin

Good morning, Matthew. Yes, you're correct. We do expect that to be the case. You realize that for the chlorine pricing, you're talking about very small movements on an illiquid market. It is frankly not very material to look just at the chlorine price by itself. That's why we published that PCI. It's more important to look at what the ECU with the derivatives is doing across the portfolio. I'll just be honest with you, the chlorine price by itself is not something to look at and pay a whole lot of attention to. It is just a reflection of what you see printed in the publications, which have got a lot of, I would say, don't have a lot of transparency with them. Going forward, we expect to see that stable.

Operator

The next question will come from John Roberts with Mizuho. Please go ahead.

Saurabh Dhir
Saurabh Dhir
Analyst at Mizuho

Hi, good morning. This is Saurabh Dhir on for John Roberts. Thanks for taking my question. Just want to start with the Winchester. You said there's less import competition on the commercial side. Is that related to the wars outside the U.S. or metal costs or something else that is reducing the competition?

Ken Lane
Ken Lane
President and CEO at Olin

Thanks for your question. Good morning. The lower imports are related to tariffs. If you look at the tariffs that have been placed on imported ammunition, it has fluctuated a little bit, but it's now 20%, in some cases a little bit higher than that. We continue to see that being a tailwind for the commercial business for Winchester. We have faced a lot of headwinds related to the tariffs around copper and brass, we've been having to fight that with our price increases. It's now good to see that the imports are getting tariffs that are going to help give us a little bit of support here.

Operator

The next question will come from Peter Osterland with Truist Securities. Please go ahead.

Analyst at Truist Securities

Hi, this is Alec on for Peter. Going forward, what have you guys achieved so far regarding the $30 million of cost outs in Winchester? What remaining buckets are you targeting? If military and commercial are improving, does the cost outlook change?

Ken Lane
Ken Lane
President and CEO at Olin

Good morning, Alec. We are doing very well in Winchester with our cost outs. We've already recognized a pretty significant part of that $30 million that we've committed to through efficiency improvements. You heard us talk about in the fourth quarter of last year, we were doing things to rightsize our ships and make sure that we were operating as efficiently as we could at all of our sites, and we've made a lot of very good progress there. We've also just kicked off here in the third quarter our Beyond 250 efforts, where we're bringing in some outside expertise to help us further improve the efficiencies, particularly at the Lake City facility in Missouri. We're confident in the $30 million that we have out there.

Ken Lane
Ken Lane
President and CEO at Olin

In fact, I would even say that for Winchester, we're likely to exceed that number once we get a little bit further down the road with assessing where we're at in Lake City.

Operator

The next question will come from Roger Spitz with Bank of America. Please go ahead.

Roger Spitz
Roger Spitz
Analyst at Bank of America

Thanks very much. The Shintech's $100 million payment, is that on that Slide 14 or is that addition? I just wasn't clear on that.

Ken Lane
Ken Lane
President and CEO at Olin

Good morning, Roger. Todd, you want to take that?

Todd Slater
CFO at Olin

Roger, the $100 million payment on Slide 14, the $100 million isn't on Slide 14. Slide 14 is your full year modeling assumptions. However, in our outlook expectations for net debt to increase for the full year-over-year, that does include a $100 million payment in the back half of 2026.

Operator

As there are no further questions, this concludes our question and answer session. I would like to turn the conference back over to Ken Lane for closing comments.

Ken Lane
Ken Lane
President and CEO at Olin

Thank you, Nick. I just want to thank everyone for joining us today, and thank you for your interest in Olin. I wish you all a very safe and relaxing weekend.

Operator

Thank you for attending today's presentation. You may now disconnect.

Executives
    • Steve Keenan
      Steve Keenan
      Director of Investor Relations
    • Ken Lane
      Ken Lane
      President and CEO
Analysts
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