Huntsman Corporation

Basis of preparation

FY2021: figures are as originally reported (8-K Ex.99.1, Feb 2022). They include Textile Effects (USD 783M revenue) and the USD 332.5M Albemarle settlement cash. They are therefore not like-for-like with FY2022+.

FY2022–FY2023: as reported in the FY2023 release (21 Feb 2024).

FY2024–FY2025: as reported in the FY2025 release (17 Feb 2026).

• Adjusted EBITDA and adjusted EPS are company non-GAAP measures.

Income statement — headline

Sources [V]: 8-K Ex.99.1 for FY2021 (Feb 2022), FY2023 (21 Feb 2024) and FY2025 (17 Feb 2026). The FY2021 diluted EPS of 4.72 is total-company. DPS reflects quarterly declarations of 0.1875 (2021), 0.2125 (2022), 0.2375 (2023), 0.25 (2024), and 0.25×3 + 0.0875 (2025). The 2025 cut is verified [V]; earlier per-quarter levels are reconstructed from the published DPS history (Sure Dividend [S]: 0.73/0.85/0.95/1.00) — FY2021 declared DPS may be reported as 0.73–0.75 depending on timing. Margins [Calc].

Revenue CAGR [Calc]: FY2021→FY2025 reported: −9.5% p.a. (distorted by the Textile Effects exit). FY2022→FY2025 continuing basis: −10.9% p.a.

Income statement — detail (continuing operations, FY2022–FY2025)

FY2025 operating expenses included SG&A 670, R&D 120, restructuring 148, litigation income (33), gain on asset acquisition (5) and other (18). FY2024 included SG&A 671, R&D 121, restructuring 39, gain on asset acquisition (51), a USD 71M prepaid asset write-off and a USD 39M loss on dissolution of subsidiaries [V].

Notable non-recurring items [V]:

FY2025: USD 153M of restructuring, impairment and plant closing and transition costs in adjusted EBITDA reconciliation, including about USD 88M of asset impairment and site closure costs at Moers and about USD 14M of goodwill impairment. Also USD 33M of litigation income and USD 34M of pension actuarial amortisation.

FY2024: USD 71M prepaid asset write-off; USD 39M loss on subsidiary dissolution; USD 51M gain on asset acquisition; USD 23M deferred tax asset valuation allowance.

FY2023: USD 118M income from discontinued operations (Textile Effects sale gain); USD 14M deferred tax asset valuation allowance.

FY2021: USD 332.5M Albemarle settlement cash; record adjusted EBITDA.

Quarterly trajectory — trough and early recovery

Sources: quarterly 8-K exhibits [V]. Q3 2025 revenue derived as FY2025 less Q1, Q2 and Q4 [Calc]; it matches the 1,460 cited by Fintool [S].

LTM to 30 June 2026 [Calc]: revenue ≈ USD 5,898M; adjusted EBITDA ≈ USD 322M. Net debt (excl. affiliates) was USD 1.74B at 30 June 2026 [S Equibles citing 10-Q], which implies net leverage of ≈5.4x. This matches the 5.4x management cited on the Q2 call [S Quartr], down from 6.1x at Q1 2026.

Balance sheet

Sources [V]: Table 5 and Table 6 of the FY2023 and FY2025 releases. Primary working capital [Calc]. FY2022 total assets include 472 of current assets held for sale (Textile Effects).

FY2025 included about USD 14M of goodwill impairment in Performance Products [V].

Debt composition at 31 Dec 2025 [V]: revolving credit facility 343; senior notes 1,488; A/R securitisation programmes 152; variable interest entities 7; other 21. The revolver was undrawn at YE2024; the draw in 2025 reflects repayment of maturing notes in 2025 and trough cash flow.

Liquidity: combined cash and unused borrowing capacity of about USD 1.7B (YE2023), USD 1.3B (YE2025) and USD 0.9B (30 Jun 2026) [V].

Cash flow

The FY2021 FCF of 611 is verified [V]. FY2022–FY2025 [V].

Other cash items FY2025 [V]: cash interest paid 86; cash taxes 98; restructuring cash 29; pension cash 33; primary working capital release 116 (inventory −133). FY2025 FCF conversion of adjusted EBITDA was about 45%, the figure the CEO cited [V].

Verified data points: more than USD 100M of buybacks in Q4 2021 [V]; about 2.1M shares repurchased for about USD 50M in Q4 2023 [V]. Diluted weighted average shares fell from 203M (FY2022) to 177M (FY2023) and 173M (FY2025) [V], which evidences heavy 2022–2023 repurchases. A buyback programme was described as "completed" in 2026 commentary [S Robinhood/Simply Wall St headline]. The 2026 dividend runs at about USD 60M per year at the reset rate [S Fintool, Q3 2025 call].

2026 capex guidance: about USD 170M [V Q2 2026 release via Equibles/Quartr].

Ratio analysis [Calc]

ROIC uses a notional 25% tax rate on operating income and is analyst-defined. The current ratio counts all current assets and liabilities, including held-for-sale items in FY2022.

Commentary — trends, inflections and drivers

1. Revenue. The fall from USD 8.0B (FY2022) to USD 5.7B (FY2025) is mostly a price story. In FY2023 Polyurethanes lost 10% to price and 10% to volume. In FY2024–FY2025 volumes were roughly flat to slightly positive in Polyurethanes while price fell another 7% in FY2025. Performance Products lost 24% of volume in FY2023 to destocking, then a further 9% in FY2025 from the Moers exit.

2. Margins. Gross margin compressed by 6 percentage points over three years (19.3% to 13.2%). Fixed costs did not fall as fast as revenue, and the MDI price/cost spread narrowed. The operating line turned negative in FY2024. FY2025 restructuring (USD 148M) deepened the GAAP loss, but adjusted EBITDA still fell 34%.

3. Below-the-line deterioration. Equity income from the China MDI JV dropped from USD 83M (FY2023) to USD 4M (FY2025), removing a meaningful profit cushion. Net interest rose from USD 62M to USD 79M as rates and the debt mix changed. The tax line stayed positive despite pre-tax losses, because losses in some jurisdictions (notably Europe) could not be tax-effected while profits elsewhere remained taxable. This drove negative effective tax rates (−14% in FY2025; −156% in FY2024).

4. Cash discipline. FCF stayed positive throughout the trough (USD 21–125M). Management achieved this by cutting capex (from 272 to 173), releasing inventory, and using supply-chain financing and extended supplier terms [S Fintool Q3 2025]. Working capital is close to fully optimised. Further FCF upside needs EBITDA recovery rather than balance-sheet levers.

5. Leverage inflection. Net debt to adjusted EBITDA rose from below 1x to almost 6x. This triggered the rating downgrades and the dividend reset. Q2 2026 marks the first sequential de-levering (6.1x to 5.4x), helped by EBITDA recovery rather than debt reduction. Q2 2026 FCF was actually a use of USD 90M because of seasonal working capital.

6. The Q2 2026 inflection. Revenue rose 14% and adjusted EBITDA 62% in Q2 2026, the first broad-based improvement since 2022. MDI prices increased across regions, volumes rose in all three segments, and cost savings flowed through, partly offset by "significant" raw material inflation [V]. Q3 2026 guidance of USD 100–130M implies the recovery is holding but not accelerating.

Management guidance

Q3 2026 adjusted EBITDA: USD 100–130M: (Polyurethanes 60–75; Performance Products 25–35; Advanced Materials 55–60) [S Quartr].

FY2026 capex: about USD 170M [V].

Cost programme: more than USD 100M of savings completed during 2026 [V].

Merger: close expected H1 2027 [V].

Consensus expectations

The direction implied by guidance: H2 2026 adjusted EBITDA run-rate of USD 100–130M per quarter versus USD 35–94M per quarter in 2025. That points to FY2026 adjusted EBITDA plausibly in the high-USD 300M to mid-USD 400M range. This is an inference from guidance, not a consensus figure.

Bull case (grounded in the data)

1. Cyclical torque. Q2 2026 showed +14% revenue translating into +62% adjusted EBITDA [V]. A return to even FY2023's USD 472M adjusted EBITDA [V] would cut leverage towards about 3.7x on current net debt [Calc].

2. Merger value creation. USD 400M+ of synergies [V] exceeds Huntsman's entire FY2025 adjusted EBITDA (USD 275M) [V]. Capitalised at a mid-cycle multiple, synergies could add materially to combined equity value, of which HUN holders own 45.5% [V].

3. Advanced Materials quality hidden in a trough multiple. About USD 160–180M of annual EBITDA at 16–18% margins [V], growing 42% in Q2 2026 [S], inside a company trading at about 0.6x book [S].

Bear case (grounded in the data)

1. Structural, not just cyclical. Chinese MDI capacity and European cost disadvantage may cap Polyurethanes margins below historical averages. PU margin was 3.9% in FY2025 versus 12.4% in FY2022 [V].

2. Balance-sheet fragility. Leverage of about 5.4x [S], sub-IG ratings [S], liquidity of about USD 0.9B [V], negative Q2 2026 FCF (−USD 90M) [V], and GAAP losses for three straight years [V].

3. Value transfer and dilution risk. A fixed exchange ratio set near the trough [V] crystallises HUN's depressed valuation. HUN holders receive 45.5% of a company to which Huntsman contributes about 45% of 2025 revenue (USD 5.68B of about USD 12.5B) [V]. Upside from a Huntsman-specific MDI recovery is shared with Olin holders.

Key catalysts and monitorables (next 12 months)

Analyst verdict

Huntsman enters the final phase of its life as an independent company in a weaker position than at any point since the 2008–2009 crisis. The evidence is unambiguous. Adjusted EBITDA fell 80% from the FY2021 peak to USD 275M in FY2025. Net leverage peaked near 6x. The dividend was cut by 65%, and the credit rating slipped below investment grade at two of three agencies. The strategic repositioning of the past decade (exiting commodities, buying downstream systems, building Advanced Materials) was directionally sound. It did not, however, insulate the company from what management has fairly called an extended cyclical trough, compounded by structural Chinese MDI overcapacity and European cost disadvantage.

The cycle does appear to have turned. Q2 2026 delivered USD 120M of adjusted EBITDA, up 62% year on year, with gains in all three segments. Q3 guidance of USD 100–130M suggests the improvement is durable, if not yet accelerating. Advanced Materials remains a genuinely high-quality asset. The cost programme is real and is already showing up in the numbers.

The Olin merger is therefore best read as a rational but defensive endgame. Industrially, it fixes Huntsman's most obvious weakness, the lack of upstream integration into chlorine and epoxy. It also offers more than USD 400M of synergies, which exceeds Huntsman's own trough EBITDA. Financially, it fixes Huntsman's holders at 45.5% of the combined company at a trough-level exchange ratio. Any standalone MDI recovery is shared with Olin holders, and HUN's share price now tracks Olin's.

For investors, HUN is no longer a standalone thesis. It is a merger-arbitrage and OlinHuntsman thesis. The investment case depends on three things: synergy delivery, combined-entity de-levering, and the depth of the chemicals recovery in 2027. Near-term risk is concentrated in regulatory approval and financing mechanics. Stance: Neutral. The cycle is turning, but the merger has largely capped the upside for HUN holders and transferred it to the combined entity's execution.

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End of dossier. Primary sources referenced: Huntsman Form 8-K Ex.99.1 earnings releases (Feb 2022, 21 Feb 2024, 17 Feb 2025, 6 Nov 2025, 17 Feb 2026, 30 Apr 2026, 30 Jul 2026); Huntsman Form 10-K FY2021 and FY2025; Form 10-Q Q1–Q3 2025; Huntsman/Olin joint release (16 Jun 2026) and shareholder-approval release (25 Aug 2026); Olin Form 10-K FY2025, S-4/A and 424B3 (2026). Secondary sources flagged [S]: Fintool, Quartr, Fintel, Equibles, Investing.com, Robinhood, Motley Fool, MarketBeat, Simply Wall St, Sure Dividend, Chemical Processing, Indian Chemical News.