Huntsman (NYSE:HUN) Q4 2025 Earnings call February 18, 2026 10:00 AM ET Company ParticipantsAdam Trigg - Head of ChemicalsHassan Ahmed - Partner and Head of ResearchIvan Marcuse - VP of Investor Relations and Corporate DevelopmentJosh Spector - Director of Equity ResearchMatthew Blair - Managing Director of Refiners, Chemicals, and Renewable Fuels ResearchMike Sison - Managing DirectorPeter Huntsman - Chairman, CEO and PresidentPhil Lister - EVP and CFORyan Pirnat - Managing DirectorTurner Hinrichs - Equity ...

Company Overview - Huntsman Corporation is a diversified chemical manufacturer specializing in organic compounds, particularly polyurethanes and amines, serving a wide range of end markets and reducing reliance on any single sector [2] - The company has a historically stable and higher margin profile compared to peers, driven by the amines segment, which generates approximately 20% EBITDA, while basic polyurethanes generate around 10% EBITDA [2] Current Market Conditions - Huntsman is currently navigating a cyclical downturn with depressed chemical prices, but volumes have been rising steadily over the last two to three quarters, indicating underlying demand resilience [2] - Competitive pressures from lower-cost producers in China and India could challenge pricing and market share [3] Capital Allocation and Shareholder Returns - The company has been disciplined in returning capital to shareholders, reducing shares outstanding from 243 million in 2015 to 172 million today through consistent stock buybacks [3] - Huntsman's shareholder-friendly capital allocation provides a solid foundation despite facing cyclical and structural challenges [3] Future Outlook - The combination of improving volumes, stable specialty margins, and potential tailwinds from onshoring makes Huntsman a company worth monitoring for investors seeking exposure to specialty and basic chemicals [4] - Huntsman represents a measured investment case, balancing near-term cyclical headwinds with longer-term structural opportunities and strong financial discipline [4]

Financial Data and Key Metrics Changes - The company delivered $200 million of operating cash in Q3 2025, with year-to-date free cash flow exceeding $100 million [7] - The latest dividend levels were adjusted down by 65%, resulting in approximately $60 million of cash requirements for the dividend next year, down from $115 million [9][49] - The company is on track to complete a $100 million cost reduction program, which includes the elimination or relocation of over 600 positions and the closure of seven sites, primarily in Europe [6][7] Business Line Data and Key Metrics Changes - The performance products division is expected to see modest recovery starting in 2026, with new capacities being introduced and improvements in contracts within automotive segments [56][57] - The maleic anhydride market remains strong in North America, with the company positioned as the low-cost producer [67] - Performance products volumes have been running down close to double digits, but the reduction is significantly influenced by the closure of the Moors site in Germany [66][68] Market Data and Key Metrics Changes - The U.S. economy is under pressure due to high inflation and rising interest rates, impacting consumer durables and home building [4][5] - Consumer confidence and spending in China are low, while European deindustrialization continues due to high business costs and regulations [5][6] - The U.S. MDI market is experiencing a sluggish demand, with a year-over-year growth of about 6% in Q3 2025 [36][72] Company Strategy and Development Direction - The company plans to continue calibrating its cost structure to align with market realities and manage cash flow during prolonged downturns [6][7] - There is a focus on sourcing energy-intensive raw materials from regions with more competitive costs, while maintaining a strong presence in profitable markets like aerospace and automotive [7][8] - The company is exploring opportunities for consolidations and rationalizing capacities to enhance competitiveness [8] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about a potential recovery in the U.S. and China economies as trade tensions ease and consumer confidence returns [5][6] - The company anticipates typical seasonality in Q4 2025, coupled with higher-than-average destocking, particularly in Europe [10] - Management emphasized the importance of protecting the balance sheet for long-term stability and growth [8][9] Other Important Information - The company is not planning to take on more debt to increase dividends and will consider dividend increases only when market conditions improve [9] - The company is actively managing working capital and has been aggressive in reducing inventory levels [13][15] Q&A Session Summary Question: Cash flow and inventory reduction actions in Q3 - Management indicated that inventory reduction actions may lead to lower utilization rates in Q4, but they aim to calibrate production to actual demand as they enter 2026 [13][17] Question: Risk of European manufacturing capacity leaving - Management is closely monitoring the situation and believes that their supply chain remains strong, particularly in Rotterdam, despite potential risks [22][24] Question: U.S. MDI imports from Europe - Management hopes that the increase in U.S. MDI imports from Europe is not a structural change, as it may not make economic sense in the long term [30][31] Question: Performance products market demand - Management expects gradual improvement in the maleic market and flat to positive performance in ethyleneamines, despite competitive conditions [66][67] Question: Future MDI growth rates - Management anticipates MDI growth to align with GDP growth, plus additional growth from product substitution, estimating a growth rate of about 1.5 times GDP [89]