Olin Corporation manufactures and distributes chemical products in the United States and internationally. It operates through three segments: Chlor Alkali Products and Vinyls; Epoxy; and Winchester. The Chlor Alkali Products and Vinyls segment offers chlorine and caustic soda, ethylene dichloride and vinyl chloride monomers, methyl chloride, methylene chloride, chloroform, carbon tetrachloride, perchloroethylene, trichloroethylene and vinylidene chloride, hydrochloric acid, hydrogen, bleach products, and potassium hydroxide. The Epoxy segment provides allyl chloride and epichlorohydrin for use in resins and other plastic materials, water purification, and pesticides, as well as for the manufacturers of polymers; liquid epoxy resins that are used in adhesives, paints and coatings, composites, and flooring; and converted epoxy resins for use in electrical laminates, paints and coatings, wind blades, electronics, and construction, as well as offers additives. The Winchester segment offers sporting ammunition, reloading components, small caliber military ammunition and components, and industrial cartridges. The company markets its products through its sales force, as well as directly to various industrial customers, mass merchants, retailers, wholesalers, other distributors, and the U.S. Government and its prime contractors. Olin Corporation was founded in 1892 and is headquartered in Clayton, Missouri.
Business Analysis of Olin
The Retail Sector is witnessing a major shakeup, new age business models in the industry are transforming both customers and businesses. Faced with this uncertainity, companies are investing resources to transform their business. An in-depth business analysis is a valuable resource to identify and articulate the need for a business model change. At R&P Research we believe, the starting point for a business analysis is Benchmarking. Business benchmarking can be done at various levels: 1) Industry Benchmarking 2) Peer Benchmarking 3) Disruptors Benchmarking. In this report, we share the snapshot of how Olin compares against the industry on the major performance indicators. This analysis, along with peer group/disruptors benchmarking and revenue model understanding can help identify growth and cost optimization opportunities to maximize the value delivered by Olin to its stakeholders. R&P Research Industry Intelligence Platform provides historical data for last 15 years with an easy to use benchmarking interface for an in-depth comparative business analysis.
Here is the performance snapshot of Olin with an interactive chart.
- Revenue Growth: Olin reported a revenue growth of 94.5% year-on-year during 2016. Specialized Consumer Services Industry grew at 9.7% in the same period
- COGS share of Revenues: As a percentage of revenue, Olin spent 88.7% of its total revenues on COGS. Specialized Consumer Services industry average (COGS share of revenue) in the same period was 57.3%
- R&D share of Revenues: Olin R&D share of Revenues details are not available because either company does not share the data or we do not have it
- SG&A share of Revenues: As a percentage of revenue, Olin spent 5.8% of its total revenues on Sales, Marketing, and General Administration (SG&A). Specialized Consumer Services industry average SG&A spending in the same period was 22.9%
- Inventory share of Revenues: As a percentage of revenue, Olin spent 11.4% of its total revenues on Inventories. Specialized Consumer Services industry average Inventory spending in the same period was 7.7%
- Accounts Payable share of Revenues: As a percentage of revenue, Olin invested 10.3% of its total revenues on Accounts Payable (A/P) Specialized Consumer Services industry average Accounts Payable investment in the same period was 17.3%
- Accounts Receivable share of Revenues: As a percentage of revenue, Olin invested 12.2% of its total revenues on Accounts Receivable (A/R). Specialized Consumer Services industry average Accounts Receivable investment in the same period was 26.5%
- PP&E share of Revenues: As a percentage of revenue, Olin invested 66.7% of its total revenues on Property, Plants, and Equipments (PP&E). Specialized Consumer Services industry average PPE investment in the same period was 25.5%
- Intangibles share of Revenues: As a percentage of revenue, Olin invested 49.5% of its total revenues on Intangibles. Specialized Consumer Services industry average Intangibles investment in the same period was 58.2%
- Net Margins: Olin Net Margins in the year 2016 were -0.1%. Specialized Consumer Services industry average Net Margins in the same period were 7.0%
Sector and Industry Association of Olin
For the purpose of performance benchmarking of a company with a sector or industry average, R&P Research associates every company with one sector and one industry. An industry consists of companies with related/similar business models. A sector comprises of a group of related/similar industries.
Olin is associated with Retail Sector and Specialized Consumer Services Industry.
Retail sector is comprised of the following industries: Broadline Retail; Grocery Retail; Specialty Retail; Apparel Retail; Home Improvement Retail; Specialized Consumer Services. The definitions for each of the industries is as follows:
- Broadline Retail industry includes retail outlets and wholesalers offering a wide variety of products including both hard goods and soft goods.
- Grocery Retail industry includes retail stores that primarily offer non-perishable food that is packaged in cans, bottles and boxes, with some also having fresh produce, butchers, delis, and bakeries
- Specialty Retail industry includes retailers and wholesalers concentrating on a Single Class of Goods, such as electronics, books, automotive parts or closeouts. It also includes automobile dealerships, video rental stores, dollar stores, duty-free shops and automotive fuel stations not owned by oil companies.
- Apparel Retail industry consists of retailers and wholesalers specializing mainly in Clothing, Shoes, Jewelry, Sunglasses and Other accessories.
- Home Improvement Retail industry includes retailers and wholesalers concentrating on the sale of home improvement products, including Garden Equipment, Carpets, Wallpaper, Paint, Home Furniture, Blinds and Curtains, and Building materials.
- Specialized Consumer Services industry includes providers of consumer services such as Auction Houses, Day-care Centers, Dry Cleaners, Schools, Consumer Rental Companies, Veterinary Clinics, Hair Salons and providers of Funeral, Lawn-maintenance, Consumer-storage, Heating and Cooling installation and Plumbing services.
Industry Ranking of Olin
With $5.6 billion revenues, Olin ranked number 1 of all the companies in the US Specialized Consumer Services industry. There were a total of 32 public companies in the US Specialized Consumer Services industry that had revenues greater than $50 million during 2016.
The top-10 companies in the US Specialized Consumer Services industry by revenues during 2016 were:
- Olin ($5.6 billion)
- Western Union ($5.4 billion)
- Sally Beauty Holdings ($4 billion)
- Ulta Beauty ($3.9 billion)
- KAR Auction Services ($3.2 billion)
- H&R Block ($3 billion)
- Service Corporation International ($3 billion)
- ServiceMaster Global Holdings ($2.7 billion)
- Toro ($2.4 billion)
- Vista Outdoor ($2.3 billion)
Business Model Analysis (BMA) Framework
We use the following framework to assess the business model of a company. Business Model Analysis framework can be used by organizations to articulate growth strategies and identify cost optimization opportunities. Technology and consulting companies can use this framework to identify the value drivers and pain points of their targeted customers. Entrepreneurs can use this framework to understand the language of business and identify promising business opportunities. This framework can be used by any professional aspiring to take up a leadership role to better understand the businesses challenges, articulate growth strategy, and monitor the business improvement requirements for the organization.