HUN

• Proposed Merger with Olin Corporation

  • Announced a merger of equals with Olin on June 16, 2026, and has already met with the majority of Huntsman's largest shareholders post-announcement.
  • The merger is expected to deliver $300 million in clearly defined, bottom-up synergies: $75 million from purchasing and logistics efficiencies, $75 million from overlapping epoxy business integration and upstream supply chain optimization, and $150 million from reduced SG&A costs. An additional ~$100 million in benefits is expected from internalizing chlorine and caustic supply when existing third-party contracts expire.
  • Pre-closing integration work is progressing rapidly, with teams prepared to capture synergies immediately upon closing. The combined company will be better positioned to generate higher earnings and stronger balance sheet regardless of future market conditions, with additional upside from uncounted new commercial opportunities.
  • The merger will create greater portfolio optionality for future asset pruning/divestitures to accelerate deleveraging post-close, as the larger combined portfolio has more flexibility than either standalone firm.

• Market Demand and Margin Progress

  • Margins improved sequentially from Q1 2026, with the firm continuing to push for further margin expansion, as management sees remaining room for industry-wide improvement.
  • Global MDI supply is currently well balanced, with global capacity utilization running around the mid-80% range, with recent industry outages supporting market balance. Low single-digit demand growth is currently being seen across global markets.

• Q3 2026 overall market conditions are expected to remain broadly stable, with roughly equal headwinds and tailwinds, consistent with management's prior guidance range.

Specific absolute financial results for individual product segments are not provided in this transcript. Key performance observations across segments include: MDI segment EBITDA nearly doubled year-over-year in Q2 2026. The Advanced Materials segment delivered 8% year-over-year volume growth in Q2 2026, driven by rising demand across power grid modernization, aerospace (including new interior applications and recovering wide-body aircraft build rates), and EV automotive applications. Within Polyurethanes, the overall segment saw 4% year-over-year growth; the spray foam insulation sub-segment is delivering consistent low double-digit growth even in a weak construction environment, and the industrial elastomers sub-segment grew double digits year-over-year across all regions. Competitor outages in polyols generated a low single-digit million dollar benefit for Huntsman in Q2 2026.

• Macroeconomic and geopolitical risks: Softening North American housing data, stagnant Chinese consumer confidence, and rapidly rising natural gas and electricity costs in Europe driven by ongoing misaligned energy policy are all headwinds to demand. The volatile ongoing conflict in the Middle East creates constant uncertainty for energy prices and overall consumer sentiment.
  • Persistently low demand growth: Broad low single-digit global demand growth is well below the historical 4-6% annual growth that would support much tighter markets and margin expansion.
  • Inflation: Ongoing cost inflation creates pressure that requires ongoing efficiency gains to offset.
  • European energy price volatility: Recent sharp increases in European natural gas prices (from $13-$14/MMBTU to over $20/MMBTU) could create headwinds for Huntsman's European operations if the trend continues, even after recent pricing actions.

Q: How is the MDI market balanced by supply and demand, particularly given Middle East tensions, and will Huntsman's European operations be EBITDA positive in Q3? / A: Global MDI supply is currently well balanced, with Huntsman's plant near the Strait of Hormuz accounting for ~4% of global industry capacity. Demand is only growing 0-2% low single digits globally, with improvement needed in North American housing, Asian consumer confidence, and European energy costs to drive stronger growth. Global capacity utilization runs around the mid-80% range. After recent pricing actions, Huntsman expects its European MDI operations to be EBITDA positive in Q3 2026, though sustained further natural gas price increases would create new headwinds.

Q: Are investors skeptical of the proposed Olin merger's $300 million synergy target, and how is this number calculated? / A: It is fair for investors to question synergy projections, as the industry has a history of unmet synergy promises. The $300 million target is a bottom-up calculation from the combined leadership teams, not an arbitrary consultant estimate. It breaks down to $75 million in purchasing/logistics savings, $75 million in epoxy business overlap and integration savings, and $150 million in SG&A cost reduction, with most of the savings realized within two years. An extra $100 million in benefit will come from internalizing supply after existing third-party chlorine contracts expire. Management is highly confident the target will be met, and total synergy and commercial benefits are expected to create enough value to equal the market cap of either standalone firm.

Q: What are the growth drivers for Advanced Materials' 8% Q2 volume growth, specifically for aerospace? / A: Growth is broad-based, but three segments are outperforming: power grid modernization (for renewable energy interconnection and AI data center expansion), aerospace, and EV automotive. Aerospace recovery continues: new interior applications are growing faster than composite material for wide-body aircraft, and wide-body build rates still have not recovered to pre-COVID 2019 levels. EV automotive applications that were qualified 6-12 months ago are now ramping production, delivering stronger than expected growth for the segment.

Q: What impact will anti-dumping duties on U.S. MDI have on the business long-term? / A: Anti-dumping duties should result in a better pricing floor than existed a year ago, but major material benefits will not appear until U.S. housing demand returns to more normalized levels. Benefits will play out over multiple quarters, not immediately, because imported MDI diverted to neighboring markets can still indirectly pressure the U.S. market by displacing U.S.-exported MDI that then flows back to the U.S.