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  "docSlug": "97e66c73c118",
  "documentTitle": "Hill-Rom Holdings, Inc. (HRC)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Ben Axler",
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  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2019-10-29 00:00:00",
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  "pageNumber": 15,
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  "notes": "The slide uses a table to isolate the impact of M&A on reported margins, highlighting a discrepancy between total margin growth and organic growth.",
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      "text": "Hill-Rom has achieved effectively zero margin expansion via \"organic\" means (restructuring, cost reduction, price increases, M&A synergies, etc.)",
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      "text": "EBITDA (Adj.) Margin Expansion: 20 bps",
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      "text": "Sell-side analysts are also bullish on Hill-Rom's future opportunities for ongoing margin expansion. Since the Welch Allyn acquisition, Hill-Rom's EBITDA margins have expanded by 200 bps, and management voices confidence that it can continue to improve Company profitability. However, Spruce Point finds that, excluding the impact of management's divestitures of lower-margin businesses and acquisitions of higher-margin businesses, Company EBITDA margins have expanded by just 20 bps since FY16. With new product introductions and restructuring efforts apparently doing little to improve Company profitability, we question the extent to which margins will continue to expand into the future, particularly as management is set to wind down its divestitures within the coming quarters.",
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      "text": "1. Sales impact of divestitures and acquisitions estimated from management commentary on a per-divestiture / per-acquisition basis. EBITDA impact estimated from management commentary on margins / EBITDA contribution of recently-exited and recently-acquired businesses. 2. Annual EBITDA impact of acquisitions estimated as of acquisition date. Therefore, gradual margin improvements achieved via synergies, cost-outs, etc. would be included in \"organic\" margin expansion.",
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      "kind": "title",
      "text": "Little Force Behind Margin Expansion Excluding M&A",
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