Olin Announces $2 Billion Share Repurchase Program
On December 12, 2024, Olin Corporation announced an increase in its share repurchase authorization to $2.0 billion (circa 30% of the shares outstanding at current levels). The company's board approved a new $1.3 billion share buyback program, which complements the existing $0.7 billion remaining under Olin's previous repurchase plan.
The timing and execution of the share repurchases will depend on market conditions and other factors, indicating a strategic approach to capitalize on opportunities and deliver higher shareholder returns. The new 2024 Share Repurchase Program has no expiration date and does not obligate the company to acquire any particular amount of shares.
This move reflects Olin's confidence in its earnings potential and cash flow generation.
Olin is in a cyclical business and it has been in the trough of the cycle, hence the depressed share price. But its new business model puts it in a strong position going forward, and the depressed share price should be seen as a good thing during corporate buy backs (the same sum of money will enable the business to retire a larger number of shares). Know this, if the company is able to retire 30% of its shares, the remaining shares are worth 43% more. So if you buy shares at this level, and they receive a 43% boost, then as the business moves into the next cyclical upswing, your returns are significantly amplified.
This is just an investment which requires patience. It may take a year or two. Olin can't control the industrial cycle. The underlying business is still very robust and, in my opinion, very undervalued.
If I may ask another question, what do you think of the new management? It's certainly to early to tell but you may have done more DD given their past experience. I'll be reading / listening to the latest investor day transcript.
Scott Sutton was a good CEO and changed the operating model. I still don't understand his sudden departure. It was regrettable that he left.
Ken Lane seems to be continuing Sutton's good work, but it's still early days in his tenure. He joined just before a cyclical downturn which must be tough.
I haven't seen anything that derails the investment thesis.
Fourth quarter 2023 net income of $52.9 million, or $0.43 per diluted share
Quarterly adjusted EBITDA of $210.1 million
Share repurchases of $711.3 million in 2023
Expect 2024 adjusted EBITDA to improve from 2023
Scott Sutton, Chairman, President, and Chief Executive Officer, said, "Through the challenging economic environment of 2023, Olin successfully demonstrated our unique winning model by delivering $1.3 billion of adjusted EBITDA and corresponding cash flows enabling the 2023 repurchase of approximately 10% of our outstanding shares. As we are confident in our Company's future and the strength of our earnings and cash flow, we plan to continue our capital allocation strategy, while committing to maintain an investment-grade balance sheet and achieving additional investment-grade credit ratings. We are seeing success with our 'value accelerator initiative'. We anticipate our initiative supports an improved 2024 adjusted EBITDA as compared to 2023."
UPDATE
Olin Announces $2 Billion Share Repurchase Program
On December 12, 2024, Olin Corporation announced an increase in its share repurchase authorization to $2.0 billion (circa 30% of the shares outstanding at current levels). The company's board approved a new $1.3 billion share buyback program, which complements the existing $0.7 billion remaining under Olin's previous repurchase plan.
The timing and execution of the share repurchases will depend on market conditions and other factors, indicating a strategic approach to capitalize on opportunities and deliver higher shareholder returns. The new 2024 Share Repurchase Program has no expiration date and does not obligate the company to acquire any particular amount of shares.
This move reflects Olin's confidence in its earnings potential and cash flow generation.
Hi James.
I hope you are doing well. Thank you for this.
How do you see the business going forward compared to your early 2024 write-up?
I've been following Olin for about 4 years. I heard Chris Bloomstran and then been listening and reading as much as I could.
I am thinking I can initiate a position soon. :)
Olin is in a cyclical business and it has been in the trough of the cycle, hence the depressed share price. But its new business model puts it in a strong position going forward, and the depressed share price should be seen as a good thing during corporate buy backs (the same sum of money will enable the business to retire a larger number of shares). Know this, if the company is able to retire 30% of its shares, the remaining shares are worth 43% more. So if you buy shares at this level, and they receive a 43% boost, then as the business moves into the next cyclical upswing, your returns are significantly amplified.
This is just an investment which requires patience. It may take a year or two. Olin can't control the industrial cycle. The underlying business is still very robust and, in my opinion, very undervalued.
I hope this helps.
Thank you.
If I may ask another question, what do you think of the new management? It's certainly to early to tell but you may have done more DD given their past experience. I'll be reading / listening to the latest investor day transcript.
Scott Sutton was a good CEO and changed the operating model. I still don't understand his sudden departure. It was regrettable that he left.
Ken Lane seems to be continuing Sutton's good work, but it's still early days in his tenure. He joined just before a cyclical downturn which must be tough.
I haven't seen anything that derails the investment thesis.
Thank you James. Keep in touch. :)
Olin figures are due out today. Let's see what they have to say.
Olin Announces Fourth Quarter 2023 Results
Highlights
Fourth quarter 2023 net income of $52.9 million, or $0.43 per diluted share
Quarterly adjusted EBITDA of $210.1 million
Share repurchases of $711.3 million in 2023
Expect 2024 adjusted EBITDA to improve from 2023
Scott Sutton, Chairman, President, and Chief Executive Officer, said, "Through the challenging economic environment of 2023, Olin successfully demonstrated our unique winning model by delivering $1.3 billion of adjusted EBITDA and corresponding cash flows enabling the 2023 repurchase of approximately 10% of our outstanding shares. As we are confident in our Company's future and the strength of our earnings and cash flow, we plan to continue our capital allocation strategy, while committing to maintain an investment-grade balance sheet and achieving additional investment-grade credit ratings. We are seeing success with our 'value accelerator initiative'. We anticipate our initiative supports an improved 2024 adjusted EBITDA as compared to 2023."