Ashland Inc. · NYSE:ASH
Ashland — Q2 2024 Earnings Presentation
41 slides from Ashland's earnings presentation, May 1, 2024
Slide 1: always solving
always solving So 3S a a Vv
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 words
Slide 3: agenda
agenda o Q2 performance summary o Q2 financial results ‘o o outlook o update on strategic priorities liquid cellulose+ o closing comments o Q&A <f Ashland always solving PH neutrali:
Slide 4: Q2 performance summary
Guillermo Novo, Chair & CEO Q2 performance summary <t Ashland always solving
Slide 5: Q2 sales and adjusted EBITDA summary
sales adjusted EBITDA adjusted EBITDA % adjusted EPS2 (5) % (13) % (210) bps (11) % $575 MM $126 MM 21.9 % $1.27 lower intermediates lower LS volumes and sequential margin reduced income from pricing and higher overall intermediates / SA pricing recovery with increased continuing operations SARD par
Slide 6: Sales impacted by normalizing demand with improving sequential margins
sales1 impacted by normalizing demand with improving sequential adjusted EBITDA margins 1% 30% 30% 27% -2% 22% -5% 17% -8% -22% 2 2
Slide 7: themes impacting Q2 and the path forward
themes impacting Q2 and the path forward o market demand normalization o high-quality resilient markets o organic profitable growth oe = [Ashland
Slide 8: Q2 financial results
Kevin Willis, CFO Q?2 financial results <t Ashland always solving
Slide 9: fiscal-second quarter adjusted results
fiscal-second quarter adjusted results! operating results summary Ashland ($US in millions, except percentages) Q2 FY24 Q2 FY23 sales $575 gross profit margin 32.9 % 32.7 % SG&A / R&D costs / intangible amortization $117 $110 operating income $72 $87 EBITDA $126 $145 EBITDA margin 21.9% 24.0% EPS (e
Slide 10: business unit reviews
life sciences personal care business unit reviews specialty additives intermediates <t Ashland always solving
Slide 11: Life sciences year-over-year sales
o o o o o o -DD +DD -MSD pharma nutraceuticals nutrition & other Q2 FY24 year-over-year sales (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %)
Slide 12: Personal care year-over-year sales
o o o o o o +HSD +MSD +DD -DD o skin care hair care oral care household Q2 FY24 year-over-year sales (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %)
Slide 13: Specialty additives year-over-year sales
o o o o o u -LSD -LSD coatings construction, energy, performance spec. Q2 FY24 year-over-year sales (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %)
Slide 14: Intermediates year-over-year sales
o o o o u -DD -DD merchant captive Q2 FY24 year-over-year sales (HSD/MSD/LSD = high, mid or low single-digit %. DD = double-digit %)
Slide 15: strong balance sheet
strong balance sheet robust financial position with increased flexibility strong balance sheet! ° cash and liquidity available of ~$1.0 billion ° net debi? of $889 million; net leverage? of 2.2x no long-term debt maturities for the next three years share repurchases under $1 billion authorization °
Slide 16: Annual per-share values 2009-2023
1.60 $1.49 o 1.40 $1.31 $1.18 $1.10 1.20 $1.08 $0.98 o 1.00 $0.87 0.80 $0.74 $0.76 $0.67 $0.61 0.60 o $0.42 0.40 $0.33 $0.26 o 0.20 $0.15 - 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Slide 17: outlook
Kevin Willis, CFO outlook <t Ashland always solving
Slide 18: execute: four primary portfolio actions
execute: four primary portfolio actions strengthen our base and drive performance C1) divest nutraceuticals business in process target to sign and close within FY24 (2) optimize & consolidate CMC business Y closed production / shifting select SKUs 3} optimize & consolidate MC-Industrial business Y c
Slide 19: demand normalization in process
demand normalization in process the volume normalization “math” dynamics * ° one . — customer sales volume trend* market intelligence critical to forecasting —__customer purchase volume trend* * excludes specific customer dynamics our volumes above customers sales volumes inventory rebuild supply co
Slide 20: fiscal Q3 and full-year outlook
fiscal Q3 and full-year outlook forward looking insights ° 20 demand normalization yields year- over-year growth flat - LSD end-market growth favorable PC/SA 2H comps on normalization LS comps easing in 2H normalized order lead times deflationary raw materials to mostly offset softer pricing produci
Slide 21: update on strategic priorities
Guillermo Novo, Chair & CEO update on strategic priorities <t Ashland always solving
Slide 22: execute | globalize | innovate | acquire
execute | globalize | innovate acquire © expand leading o high-value product | o existing technology | o drug delivery technology segments in key platforms technologies capacit eographies — ae o new technology o natural & biotech o exit select product © expand big3 in platforms technologies / busine
Slide 23: globalize: expanding high-margin businesses
globalize: expanding high-margin businesses pharma personal care injectables biofunctionals =a o pipeline programs up >50% o strong new launches o expanding production / lab o rebounding sales into China preservatives o executed India land purchase o supply optimization o starting expansion in Brazi
Slide 24: innovate: advancing scalable growth
innovate: advancing scalable growth select updates transformed bioresorbable ™ @ iv cellulose+ vegetable oils polymers 30+ technical customer > 160 pipeline programs launched 3 products in workshops, strong excitement : architectural coatings : viatel™sales ahead of plan scoping JDAs with top custom
Slide 25: remain on strategy & focus on what we can control
remain on strategy & focus on what we can control invest in our long-term growth strategy increase customer innovation engagement maintain operating and capital allocation discipline take action to maximize fiscal year 2024 performance leverage opportunity to refine portfolio and improve quality/foc
Slide 26: thank you
thank you Q&A *<f Ashland always solving 26
Slide 27: appendix A: adjusted results
appendix A: adjusted results summary and balance sheet «<f Ashland always solving
Slide 28: Adjusted results summary
1 All figures are presented on an adjusted basis except Sales and Diluted share count (million shares). Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income, income
Slide 29: Q2 business unit consolidation
Q2 business Unit consolidation! mp specialty itercompany unallocated SI ano i eliminations? ‘and other? gross profit $189 EBITDA ($24) $126 1 All figures are presented on an adjusted basis except Sales. Appendix B reconciles adjusted amounts to amounts reported under GAAP, including reconciliations
Slide 30: Debt balances and ratings
Moody’s 3/31/24 ($US in millions) expiration interest rate S&P rating rating balance
Slide 31: appendix B: non-GAAP reconciliation
appendix B: non-GAAP reconciliation! Although Ashland provides forward looking guidance for adjusted EBITDA in this presentation, Ashland is not reaffirming or providing forward-looking guidance for U.S. GAAP reported financial measures or a reconciliation of forward-looking non-GAAP financial measu
Slide 32: Reconciliation of Non-GAAP Data
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for the 12 Months Ended March 31, 2024 1 Quarterly totals may not add to annual amounts due to rounding. Calculation of adjusted EBITDA for each period presented have been reconciled within certain financial filings with the
Slide 33: Segment Components of Key Items, Q2 2024
Ashland Inc. and Consolidated Subsidiaries . Segment Components of Key Items for Applicable Income Statement Captions — for the 3 months ended March 31, 2024 In millions - preliminary and unaudited ($ millions) Three Months Ended March 31, 2024 Personal Specialty Intermediate Unallocated lite Scienc
Slide 34: Segment Components of Key Items, Q2 2023
Ashland Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions — for the 3 months ended March 31, 2023 In millions - preliminary and unaudited ($ millions) Three Months Ended March 31, 2023 Personal Specialty Intermediate Unallocated Life Sciences
Slide 35: Free Cash Flow and Adjusted Operating Income
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income
Slide 36: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Ashland Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended March 31, 2024 and 2023 ($ millions)
Slide 37: Adjusted EBITDA – Life Sciences and Personal Care
Life Sciences and Personal Care Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended March 31, 2024 and 2023 ($ millions)
Slide 38: Adjusted EBITDA – Specialties Additives and Intermediates
Specialties Additives and Intermediates Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended March 31, 2024 and 2023 ($ millions)
Slide 39: Adjusted Income from Continuing Operations
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations ($ millions)
Slide 40: Adjusted Diluted EPS from Continuing Operations
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations
Slide 41: OT <t
OT <t Ashland always solving