Ashland Inc. · NYSE:ASH
Ashland — Q3 FY2015 Earnings Presentation
30 slides from Ashland's earnings presentation, Jul 29, 2015
Slide 1: Third-Quarter Fiscal 2015 Earnings
Third-Quarter Ngcal 2015 Earnings July 29, 2015
Slide 2: Forward-Looking Statements
Forward-Looking Statements This presentation contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as, amended, and Section 21E of the Securities Exchange Act of 1934, as amended. Ashland has identified some of these forward-looking statements with word
Slide 3: Fiscal Third Quarter 2015 Highlights
Fiscal Third Quarter 2015 Highlights’ (mos) mmmSales_ ——Adj. EBITDA margin 31.300 30% 22.3% sia $1,350 20% ss00 10% seo vt | 0% a0 22016 s2015 AG). EPS $163 $203 stot Factors affecting year-over-year EBITDA sumo) Reported earnings per share (EPS) from continuing operations of $1.68 - Adjusted earnin
Slide 4: Fiscal Third Quarter — Continuing Operations
Fiscal Third Quarter — Continuing Operations Key Items Affecting Income CAS \s, except EPS) Operating Income Total Ashland Ashland Specialty Performance Earnings Ingredients Materials Valvoline Pretax Afterax per Share Restructuring $ (2) $ (2) $ (2) $__ (0.03) Legacy environmental reserves $ (9) (9
Slide 5: Adjusted Results Summary
Adjusted Results Summary’ ark \ (Sin millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, March 31, 2015 2014 Change | 2015 Change Sales $1,367 $1,605 (15) % |) $1,350 1% Gross profit as a percent of sales 315 % 284% 310 bp 33.1 % (160) bp Selling, general and ad
Slide 6: Specialty Ingredients Adjusted Results Summary
Ashland Specialty Ingredients CF) M ‘ Adjusted Results Summary’ a (Sin millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, March 31, 2015 2014 Change | 2015 Change Metric tons sold (in thousands) - Actives basis 83.6 95.0 (12) % 82.7 1% Sales $ 579 $ 653 (11) %
Slide 7: Specialty Ingredients Revenue and Adjusted EBITDA Bridges
Ashland Specialty Ingredients 7 N 4 Revenue and Adjusted EBITDA Bridges’ = Pretimnary Q3 FY 2014 versus Q3 FY 2015 +1% (0) Ss c o > oO o Q3 2014 Vol/Mix: Price Currency Acq/Div! Impact from Q3 2015 Translation Othert Energy see area ame ae ene ee nu nett scene taal MN cee eeeseaseom 3 10 3 1 <x (a)
Slide 8: Performance Materials Adjusted Results Summary
Ashland Performance Materials Adjusted Results Summary’ SON ($in millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, March 31, 2015 2014 Change | 2015 Change Metric tons sold (in thousands) 118.2 154.7 (24) % || 118.3 (0) % Sales $ 278 $ 420 (34) % || $ 286 (3)
Slide 9: Performance Materials Bridge of Items Affecting EBITDA
Ashland Performance Materials Bridge of Items Affecting EBITDA (Sion) Q3 FY 2014 versus Q3 FY 2015 10 1 Preliminary (14) Q3 2014 Volume! Margin SG&A Underlying Currency Acq/Div Shutdown = Q3 2015 Mix Expenses Performance Translation Other’ Impact ofthe Business « Turnaround/shutdown costs within |&S
Slide 10: Valvoline Results Summary
Valvoline Fy Results Summary’ (in millions) Fiscal Third Quarter Three months ended Preliminary Three months ended June 30, March 31, 2015 2014 Change | 2015 Change Lubricant gallons (in millions) 444 42.8 4% 40.5 10 % Sales $ 510 $ 532 (4)% || $ 481 6% Gross profit as a percent of sales 370 % 32.7%
Slide 11: Fiscal Third Quarter 2015 Corporate Items
Fiscal Third Quarter 2015 Corporate Items Adjusted effective tax rate of 22.0% — FY 2015 expectation now at 23-25% Trade Working Capital’ ended quarter at 19.0% of sales Capital expenditures totaled $61 million — Full-year 2015 expectation now at ~$265-$275 million Free cash flow2generation of $184
Slide 12: Corporate Actions to Create Value
Corporate Actions to Create Value ©. { Fiscal Year 2015 : Actions Ashland has taken to improve risk profile, increase earnings, and enhance free cash flow.... v Extended debt maturities at lower interest rate = Executed $1.1 billion five-year term loan = Tendered and called March 2016 bonds = Swappe
Slide 13: Appendix A: Bridges
ASHLAND. Appendix A: Bridges
Slide 14: Q3 FY 2014 vs. Q3 FY 2015 Revenue Bridge
Ashland Q3 FY 2014 vs. Q3 FY 2015 Revenue Bridge ($ millions) Preliminary 0% Q3 2014 Volume Price Currency a da Energy Q3 2015 Othe « Volume growth across most end markets offset by currency headwinds and divestitures. « Raw material pass through was primary driver to lower overall pricing * Acq/Div
Slide 15: Q3 FY 2014 vs. Q3 FY 2015 Adjusted EBITDA Bridge
Ashland Q3 FY 2014 vs. Q3 FY 2015 Adjusted EBITDA Bridge ($ millions) Preliminary 22 10 Q32014 Volume! Margin SG&A Currency Other Q32015 Mix Expenses Translation ¢ Strong margins and SG&A cost savings contributed $32 million to EBITDA, more than offsetting currency headwinds « Elastomers and ASK joi
Slide 16: Specialty Ingredients Adjusted EBITDA Bridge
Ashland Specialty Ingredients Adjusted EBITDA Bridge {$milions) Q3 FY 2014 versus Q3 FY 2015 9 2 1 (5) (12) Q3 2014 Volume! Margin SG&A Currency Other Q3 2015 Mix Expenses Translation e Manufacturing and SG&A cost execution, combined with good margins drove $11 million increase to EBITDA e Currency,
Slide 17: Performance Materials Adjusted EBITDA Bridge
Ashland Performance Materials Adjusted EBITDA Bridge (iS mtions) Q3 FY 2014 versus Q3 FY 2015 Preliminary Q3 2014 Volume! Margin SG&A Currency Other Q32015 Mix Expenses Translation e Turnaround and shutdown costs within |&S more than offset good margins in composites e Other category includes $13 mi
Slide 18: Valvoline Adjusted EBITDA Bridge
Valvoline Adjusted EBITDA Bridge {$mions) Q3 FY 2014 versus Q3 FY 2015 3 17 1 (3) (1) Q32014 Volume! Margin SG&A Currency Other Q32015 Mix Expenses Translation e Lower input costs, disciplined pricing management and good volume/mix key to EBITDA growth e Currency was moderate headwind 18 ASHLAND.
Slide 19: Appendix B: Volume Trends and Liquidity and Net Debt
ASHLAND. Appendix B: Volume Trends and Liquidity and Net Debt
Slide 20: Normalized Volume Trends
Normalized Volume Trends‘ 110% Rolling Four Quarters 105% 100% 95% Jun 13 Sept ‘13 Dec 13 Mar'14 Jun'14 Sept '14 Dec 14 Mar'15 Jun 15 Period Ended 33 ‘ Excludes volumes associated with divestitures of elastomers and biocides for all periods. Excludes volumes associated with exited redispersible powd
Slide 21: Liquidity and Net Debt
Liquidity and Net Debt jons) At June 30, iquidity 2015 Cash $1113 Available revolver and AVR facility capacity 147 Liquidity Ss _2260 Interest at Rate Moody's 475% Bat BB $ 1,120 L475 Bat BB. 4,100 3.875% Bal BB 700 3.000% Bat BB 50 6875% Bal BB 316 Les 205 ars282 milion 082028 8.500% = Bag BE 136 R
Slide 22: Appendix C: Business Profiles
ASHLAND. Appendix C: Business Profiles 12 Months Ended June 30, 2015
Slide 23: Corporate Profile
Corporate Profile Sales' - $5.6 B By commercial unit Ashland Specialty Ingredients Ashland Eh Performance Materials 23% * For 12 months ended June 30, 2015. 2 Ashland includes only U.S. and Canada in its North America designation. By geography Europe North 24% America? ae Asia Pacific 16% Latin Amer
Slide 24: Corporate Profile
Corporate Profile justed EBIT! $1.1B Ashland Renrounaticy NYSE Ticker Symbol: ASH jaterials 1% Total Employees: ~10,000 eae vaWoline Outside North America ~30% 4 ty Inoredltents) a Number of Countries fo p More in Which Ashland . than 100 Has Sales: 24 * For 12 months ended June 30, 2015. See Append
Slide 25: Specialty Ingredients Q&A
Ashland Specialty Ingredients QiA 2 A global leader of cellulose ethers and vinyl pyrrolidones Sales Sales Sales by Market? by Product by Geography Personal f North America a ie a For 12 Months Ended June 30, 2015 Sales: $2.4 billion Adjusted EBITDA: $545 million’ Adjusted EBITDA Margin: 23.1%" + Se
Slide 26: Performance Materials
Ashland Performance Materials Qark >? Global leader in unsaturated polyester resins and vinyl ester resins Sales Sales Sales by Market by Product by Geography g 8 Other Ls Process oe Intermediates/ GY Industries 3 Solvents 27% 13% Flastomers’ 9% 5 North America Composites 45% 5 64% Industrial 30% Fo
Slide 27: Valvoline: a leading worldwide producer and distributor of premium-branded lubricants
Valvoline: a leading worldwide producer and distributor of) ¢ \ premium-branded lubricants and automotive chemicals = Sales Sales International Sales by Market by Product by Region? tale Australia Valvoline 22% instantol “Valvoline Change International - : 28% Lubricants anes Latin Americal Asia Pac
Slide 28: Appendix D: Non-GAAP Reconciliation
ASHLAND. Appendix D: Non-GAAP Reconciliation
Slide 29: Reconciliation of Non-GAAP Data for 12 Months Ended June 30, 2015
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 12 Months Ended June 30, 2015 ($ millions, except percentages) Sales’ Q3 15 Q2 15 Q115 Q414 Total Specialty Ingredients 579 583 561 635 2,358 Performance Materials 278 286 338 383 1,285 Valvoline 510 481 492 520 2,003 Tot
Slide 30: With good chemistry great things happen
ASHLAND. With good chemistry great things happen.”