{ "docId": "019dd923-622c-750b-8b9c-e7508bf92a94", "docSlug": "84e240d51920", "documentTitle": "Huntsman Corporation (HUN)", "authorId": "03_Starboard_Value", "authorName": "Starboard Value", "documentKindSlug": "activist-deck", "documentKindLabel": "Activist deck", "sourceTypeSlug": "activist_investor", "sourceTypeLabel": "Activist investor", "presentationDate": "2022-02-28 00:00:00", "orientation": "landscape", "aspectRatio": 1.3333334, "pageNumber": 51, "pageCount": 238, "prevPage": 50, "nextPage": 52, "slideType": "expose_contradiction", "function": "expose_contradiction", "density": "overcrowded", "nDataPoints": 0, "notes": "The slide uses a series of pull-quotes to build a narrative of consistent underperformance as perceived by the market.", "elementsJson": [ "headline_text", "quote_block", "callout_box" ], "metadataConfidence": 1, "imagePath": null, "slideHref": "/slides/019dd923-622c-750b-8b9c-e7508bf92a94/51", "deckHref": "/decks/019dd923-622c-750b-8b9c-e7508bf92a94", "deckJsonHref": "/decks/019dd923-622c-750b-8b9c-e7508bf92a94.json", "deckAnchorHref": "/decks/019dd923-622c-750b-8b9c-e7508bf92a94#slide-51", "components": [ { "bbox": null, "kind": "callout", "text": "Wall Street analysts have repeatedly highlighted Huntsman’s poor operational execution.", "attrs": null, "subkind": null, "toolName": "Visual emphasis", "toolSlug": "visual-emphasis", "confidence": null, "componentId": "019dd953-14da-72ce-9fb2-1f0339d84708", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.22, "w": 0.9, "x": 0.05, "y": 0.33 }, "kind": "quote", "text": "“Huntsman is unlikely to trade at hybrid/diversified chemical multiples. We attribute this primarily to differences in margins and thus the market's perception of the degree of specialization of the company's products... the company's margin remains well below that of hybrid/diversified peers such as Celanese and Eastman...”", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "0f2b1852-46df-4da3-a00e-26a2e2c1a7b4", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.9, "x": 0.05, "y": 0.58 }, "kind": "quote", "text": "“We feel part of the issue is that HUN’s cost structure has not changed as dynamically as its revenue...the elevated cost structure is dampening margins and impeding free cash flow conversion.”", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "3743cf7f-625a-47d5-870c-8c4cceb27b07", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.15, "w": 0.9, "x": 0.05, "y": 0.73 }, "kind": "quote", "text": "“On cash conversion, we remain skeptical. Free cash flow conversion from Adj. EBITDA for Huntsman has historically lagged, as sizeable restructuring efforts and capital investments have hindered cash flow...We believe the market needs to see a longer track record of solid cash generation before fully underwriting a structural change in the company's cash flow profile...”", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "8cbcddb0-584a-466b-917c-132a94bc2b96", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.12, "w": 0.9, "x": 0.05, "y": 0.18 }, "kind": "quote", "text": "“...[Huntsman] trades at a relatively discounted valuation vs. peers as shares have lagged the group YTD. While we see these characteristics as favorable, in the context of HUN’s margins and FCF generation that we view as low relative to peers, we see this underperformance as fair...”", "attrs": null, "subkind": "testimonial", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "d34a5ad4-5f18-4ada-ab47-bfd89293f04f", "frameworkName": null, "frameworkSlug": null }, { "bbox": null, "kind": "quote", "text": "“...[Huntsman] trades at a relatively discounted valuation vs. peers as shares have lagged the group YTD. While we see these characteristics as favorable, in the context of HUN’s margins and FCF generation that we view as low relative to peers, we see this underperformance as fair...” — Wolfe Research, June 2021; “Huntsman is unlikely to trade at hybrid/diversified chemical multiples. We attribute this primarily to differences in margins and thus the market's perception of the degree of specialization of the company's products. From a segment or portfolio mix perspective it is not self evident that Huntsman meaningfully differs from diversified chemical peers Celanese or Eastman...Not withstanding our view that Huntsman has meaningfully improved its earnings stability and margin structure over the last few years, the company's margin remains well below that of hybrid/diversified peers such as Celanese and Eastman...” — Morgan Stanley, September 2020; “We feel part of the issue is that HUN’s cost structure has not changed as dynamically as its revenue...the elevated cost structure is dampening margins and impeding free cash flow conversion.” — BofA Securities, June 2020; “On cash conversion, we remain skeptical. Free cash flow conversion from Adj. EBITDA for Huntsman has historically lagged, as sizeable restructuring efforts and capital investments have hindered cash flow...We believe the market needs to see a longer track record of solid cash generation before fully underwriting a structural change in the company's cash flow profile...” — Barclays, October 2018", "attrs": null, "subkind": null, "toolName": "Authority citation", "toolSlug": "authority-citation", "confidence": null, "componentId": "019dd953-14da-72ce-9fb2-21b4ddef2074", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.02, "w": 0.2, "x": 0.05, "y": 0.97 }, "kind": "source-note", "text": "Source: Wall Street research.", "attrs": null, "subkind": null, "toolName": null, "toolSlug": null, "confidence": null, "componentId": "06393ecd-5c93-47a5-b310-2924f82af603", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.05, "w": 0.9, "x": 0.05, "y": 0.9 }, "kind": "title", "text": "Wall Street analysts have repeatedly highlighted Huntsman’s poor operational execution.", "attrs": null, "subkind": "action-title", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "a9dd869e-ae16-4ec4-93c6-9873ace4a09b", "frameworkName": null, "frameworkSlug": null }, { "bbox": { "h": 0.1, "w": 0.9, "x": 0.05, "y": 0.05 }, "kind": "title", "text": "Wall Street Analysts Agree That the Company’s Operational Execution Has Been Severely Lacking", "attrs": null, "subkind": "headline", "toolName": null, "toolSlug": null, "confidence": null, "componentId": "dc934b0a-079d-44d2-9071-5b0150687850", "frameworkName": null, "frameworkSlug": null } ], "metrics": [], "tools": [], "frameworks": [ { "name": "authority-citation", "slug": null, "matchId": "3f4ee01b-333b-426c-83cc-ee942f108258", "evidence": "Uses quotes from major financial institutions to validate the thesis.", "confidence": 0.9 } ], "arcBeats": [ { "to": 80, "from": 7, "beatId": "6fee00a2-fd59-4a92-b4c3-f24a64ee9c0e", "arcName": "Problem-Agitate-Solution", "arcSlug": "problem-agitate-solution", "beatName": "Expose Contradiction", "beatSlug": null, "evidence": "The document exposes several contradictions and inconsistencies in the company's promises and actions.", "position": 1, "confidence": 0.8, "parentBeatName": null, "parentBeatSlug": null } ], "loops": [], "imagePathAlt": null, "thumbSrc": null, "thumbSrcAlt": null, "locked": true }