Huntsman (HUN) Goldman Sachs Industrials and Materials Conference summary

Macroeconomic and industry outlook

• No significant improvement or deterioration in business conditions; regional differences persist.

• North America shows more promise, with housing market recovery seen as the key catalyst for growth.

• China faces low consumer confidence and a burst housing/savings bubble, with potential government stimulus expected around Chinese New Year.

• Europe struggles with deindustrialization, energy policy challenges, and needs more than rate cuts to recover.

• Tariffs and trade policy, especially on MDI, could significantly impact pricing and global trade flows.

Business strategy and capital allocation

• Focus remains on asset discipline, creativity, and regular portfolio review; no emotional attachment to divisions.

• Strategic goal is to shift toward Advanced Materials, aerospace, composites, and downstream products, reducing commodity exposure.

• M&A environment is target-rich as valuations and multiples decline, but uncertainty limits aggressive moves.

• Capital allocation prioritizes maintaining net leverage below two times, competitive dividends, and pausing share buybacks until free cash flow improves.

Product and market dynamics

• MDI market could rebound quickly if demand returns, but contract structures delay margin realization.

• Inventories are low across supply chains, setting the stage for potential rapid price increases if demand picks up.

• Aerospace business saw 8% growth, with expectations for further improvement if supply chain and labor issues subside.

• MTBE margins are currently low, with equity income down from previous highs; seasonality and crude prices remain key factors.

• Maleic Anhydride market is oversupplied due to overbuilding in China, with most excess flowing to Europe; anti-dumping actions may increase.