{
  "docId": "019dd923-622c-750b-8b99-65deaf51fc65",
  "docSlug": "41aa7e476e91",
  "documentTitle": "Xylem Inc. (XYL)",
  "authorId": "54_Spruce_Point_Capital",
  "authorName": "Spruce Point Capital Management",
  "documentKindSlug": "activist-deck",
  "documentKindLabel": "Activist deck",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2023-08-09 00:00:00",
  "orientation": "landscape",
  "aspectRatio": 1.3333334,
  "pageNumber": 15,
  "pageCount": 82,
  "prevPage": 14,
  "nextPage": 16,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "overcrowded",
  "nDataPoints": 1,
  "notes": "Uses a red arrow to link the company's stated goal (50-75 bps) to the executive's critique of that goal.",
  "elementsJson": [
    "headline_text",
    "callout_box",
    "quote_block",
    "big_number",
    "photo"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b99-65deaf51fc65/15",
  "deckHref": "/decks/019dd923-622c-750b-8b99-65deaf51fc65",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b99-65deaf51fc65.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-65deaf51fc65#slide-15",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Spruce Point interviewed a former senior executive who formerly had insights into executive management and the Board and heard an opinion that a majority of Xylem’s businesses were commodities without a lot of margin potential.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-fb96-7553-b1c7-147b9ee4e5b7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.2,
        "w": 0.2,
        "x": 0.04,
        "y": 0.0043
      },
      "kind": "metric",
      "text": "50-75 bps Avg. Adj. EBITDA Margin Expansion per Year",
      "attrs": null,
      "subkind": "big-number",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "eea7d3f6-ec58-4ecc-9145-fa95966bbe54",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "metric",
      "text": "Avg. Adj. EBITDA Margin Expansion: 50-75 bps",
      "attrs": null,
      "subkind": "primary",
      "toolName": "Quantification",
      "toolSlug": "quantification",
      "confidence": null,
      "componentId": "019dd952-fb96-7553-b1c7-1ee2f84d88af",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.07,
        "w": 0.96,
        "x": 0.02,
        "y": 0.00185
      },
      "kind": "paragraph",
      "text": "Spruce Point interviewed a former senior executive who formerly had insights into executive management and the Board and heard an opinion that a majority of Xylem's businesses were commodities without a lot of margin potential.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "21cf7782-162e-4776-aa06-1970aa7b637b",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.3,
        "w": 0.48,
        "x": 0.5,
        "y": 0.0055
      },
      "kind": "quote",
      "text": "I think while Applied Water and Water Infrastructure segments have scale in these commodity businesses, they are in solid shape and not huge investment, but I think the challenge with Xylem overall is how do you get margin expansion when you have two large segments where there is not a lot of margin expansion potential in those businesses. That is the biggest question; can you get growth and margin expansion faster then the market?",
      "attrs": null,
      "subkind": "testimonial",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5a64cbb2-8616-47aa-bfd4-9cafa0d166bf",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "“I think while Applied Water and Water Infrastructure segments have scale in these commodity businesses, they are in solid shape and not huge investment, but I think the challenge with Xylem overall is how do you get margin expansion when you have two large segments where there is not a lot of margin expansion potential in those businesses. That is the biggest question; can you get growth and margin expansion faster then the market?” — Former Xylem Executive",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd952-fb96-7553-b1c7-1858b6421592",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.02,
        "w": 0.45,
        "x": 0.02,
        "y": 0.97
      },
      "kind": "source-note",
      "text": "Source: Xylem 2021 Investor and Analyst Day, Spruce Point Research Interview",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "b521d39c-5f96-4118-9703-c8148bcba028",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.65,
        "x": 0.31,
        "y": 0.03
      },
      "kind": "title",
      "text": "Xylem's Core Products Described As \"Commodity\" Businesses With Limited Margin Potential",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "7b4951a1-009d-4400-9f7d-1f08265113d3",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "expose_contradiction",
      "slug": null,
      "matchId": "ab2854df-d6f3-4a74-9858-80a027dfade5",
      "evidence": "Contrasts company guidance with expert testimony",
      "confidence": 1
    }
  ],
  "arcBeats": [
    {
      "to": 79,
      "from": 9,
      "beatId": "b68955ea-1bea-4271-af69-04b4b38ed3c6",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Expose Contradiction",
      "beatSlug": null,
      "evidence": "The deck presents a series of contradictions and concerns about Xylem's financial reporting, operations, and growth prospects",
      "position": 0,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    },
    {
      "to": 56,
      "from": 11,
      "beatId": "8beb67eb-29a7-4acc-8013-1400d57c9a45",
      "arcName": "Problem-Agitate-Solution",
      "arcSlug": "problem-agitate-solution",
      "beatName": "Preempt Rebuttal",
      "beatSlug": null,
      "evidence": "The deck anticipates and addresses potential rebuttals to its thesis",
      "position": 2,
      "confidence": 0.8,
      "parentBeatName": null,
      "parentBeatSlug": null
    }
  ],
  "loops": [
    {
      "to": 82,
      "from": 1,
      "name": "Cost Of Inaction",
      "slug": "27-cost-of-inaction",
      "bestFor": "Urgent budget requests, compliance, risk mitigation",
      "matchId": "2fa1c508-68a2-4a6b-9e65-5ff630e9c720",
      "evidence": "The deck presents a detailed analysis of the risks and consequences of not taking action on Xylem's challenges",
      "position": 1,
      "objective": "Highlight the risks of not taking action",
      "structure": "The Status Quo -> The Hidden Costs Accumulating -> The Future State of Inaction -> The Tipping Point",
      "confidence": 0.7,
      "description": "Quantify what happens if the audience does nothing"
    },
    {
      "to": 77,
      "from": 6,
      "name": "So What Cascade",
      "slug": "41-so-what-cascade",
      "bestFor": "Data presentations, executive summaries, driving to recommendations",
      "matchId": "7d351594-e5d5-4f56-831e-33e1f8bcec2d",
      "evidence": "The deck presents a series of logical and connected arguments to support its thesis",
      "position": 2,
      "objective": "Build a logical case for the thesis",
      "structure": "The Data -> So What? (Insight 1) -> So What? (Insight 2) -> So What? (The Action)",
      "confidence": 0.7,
      "description": "Chain insights together, each answering 'so what?' until you reach the actionable conclusion"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}