{
  "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": 37,
  "pageCount": 82,
  "prevPage": 36,
  "nextPage": 38,
  "slideType": "expose_contradiction",
  "function": "expose_contradiction",
  "density": "balanced",
  "nDataPoints": 12,
  "notes": "The slide uses a chronological comparison to highlight the reduction in disclosure quality.",
  "elementsJson": [
    "headline_text",
    "paragraph",
    "data_table"
  ],
  "metadataConfidence": 1,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b99-65deaf51fc65/37",
  "deckHref": "/decks/019dd923-622c-750b-8b99-65deaf51fc65",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b99-65deaf51fc65.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b99-65deaf51fc65#slide-37",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Spruce Point observes that Evoqua changed how it discussed gross margin post-IPO. At first, it gave a more detailed discussion about factors that drove costs, including the impact from acquisitions.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd952-fb96-7553-b1c9-0d6a9755e3d7",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.12,
        "w": 0.96,
        "x": 0.02,
        "y": 0.18
      },
      "kind": "paragraph",
      "text": "Spruce Point observes that Evoqua changed how it discussed gross margin post-IPO. At first, it gave a more detailed discussion about factors that drove costs, including the impact from acquisitions. However, over time it clearly stopped discussing the impact of acquisitions, and in 2022 didn't mention a single word about Mar Cor, its largest acquisition. In its last 10-K filed November 2022, just two months ahead of its announced sale to Xylem, it added an ominous warning about continued pressures.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "1b47e380-5d2a-4fd8-9280-42c7370087d5",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.03,
        "w": 0.2,
        "x": 0.02,
        "y": 0.97
      },
      "kind": "source-note",
      "text": "Source: 10-Ks: 2022, 2021, 2017",
      "attrs": null,
      "subkind": null,
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "5a838665-2060-4dce-8a9e-276aa8813bd3",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.6,
        "w": 0.96,
        "x": 0.02,
        "y": 0.35
      },
      "kind": "table",
      "text": "MD&A On Cost of Sales And Gross Margin",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "85c878ee-bf82-4182-81f7-96750cc31a05",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.68,
        "x": 0.28,
        "y": 0.03
      },
      "kind": "title",
      "text": "Evoqua's Gross Margin Disclosures Became More Opaque Leading Up To Its Sale To Xylem",
      "attrs": null,
      "subkind": "headline",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "201e5783-3a26-49b6-98b0-3e13db11dcd3",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [
    {
      "name": "fraud-exposure",
      "slug": null,
      "matchId": "7de523ee-e6d5-4f65-bcb8-d0bebca09da1",
      "evidence": "The slide highlights a deliberate reduction in disclosure transparency to mask acquisition performance.",
      "confidence": 0.9
    }
  ],
  "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": 39,
      "from": 30,
      "name": "Iceberg",
      "slug": "10-iceberg",
      "bestFor": "Consulting, complex problem solving, organizational change",
      "matchId": "f0ddc3ae-1054-4796-a478-a38122ee1c50",
      "evidence": "The deck highlights concerns about Evoqua's accounting and financial reporting",
      "position": 0,
      "objective": "Reveal potential accounting issues",
      "structure": "The Symptom (Visible) -> The System (Hidden) -> The Root Cause",
      "confidence": 0.7,
      "description": "Reveal that the visible problem is merely a symptom of a deeper root cause"
    },
    {
      "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
}