Ashland Inc. · NYSE:ASH
Ashland — Ashland Global Holdings — Q3 2016 Earnings Presentation
29 slides from Ashland's earnings presentation, Jul 26, 2016
Slide 1: Third-Quarter Fiscal 2016 Earnings
Third-Quarter Fiscal 2016 EarningsJuly 26, 2016 ® Registered trademark, Ashland or its subsidiaries, registered in various countries™ Trademark, Ashland or its subsidiaries, registered in various countries
Slide 2: Forward-Looking Statements
* Forward-Looking StatementsThis 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: Non-solicitation and Additional Information
* Non-solicitationA registration statement relating to the securities of Ashland Global Holdings Inc. in connection with the reorganization of Ashland under a new holding company has been filed with the SEC but has not yet become effective. The securities subject to such registration statement may n
Slide 4: Fiscal Third Quarter 2016 Highlights
* Fiscal Third Quarter 2016Highlights1 Reported earnings from continuing operations of $1.55 per diluted shareAdjusted earnings increased 2% to $1.95 vs. $1.91 per diluted share in prior yearFirst quarter of adjusted EPS growth in fiscal year 2016Adjusted EBITDA increased 1% to $294 million vs. $290
Slide 5: Fiscal Third Quarter – Key Items Affecting Income
* Fiscal Third Quarter – Continuing OperationsKey Items Affecting Income Excluding intangible amortization, adjusted EPS would have been 22 cents higher, or $2.17
Slide 6: Adjusted Results Summary
* Adjusted Results Summary1 As expected, headwinds receded further; currency, energy end markets and divestitures2 were ~$40 million headwind to salesAdjusted EBITDA of $294 million represents both year-over-year and sequential growth 1 Ashland‘s earnings releases dated July 26, 2016, and April 26,
Slide 7: Ashland Specialty Ingredients Adjusted Results Summary
* Ashland Specialty IngredientsAdjusted Results Summary1 Sales or volume growth in numerous core growth and niche end marketsOverall results did not meet the outlook presented at the beginning of the quarter due to weakness in emerging regions 1 Ashland's earnings releases dated July 26, 2016, and A
Slide 8: Ashland Performance Materials Adjusted Results Summary
* Ashland Performance Materials Adjusted Results Summary1 Solid composites margins reflecting pricing disciplineGenerally soft volumes across all global regionsAs expected, weak volumes and margins within I&S 1 Ashland's earnings releases dated July 26, 2016, and April 26, 2016, available on Ashland
Slide 9: Valvoline Results Summary
* ValvolineResults Summary1 Continued execution against strategic objectives leading to the eleventh consecutive quarter of year-over-year earnings growthVIOC added 116 stores over the past year – including 89 from the acquisition of Oil Can Henry’s – bringing the total to 1,055 stores at the end of
Slide 10: Fiscal Third Quarter 2016 Corporate Items
* Fiscal Third Quarter 2016Corporate Items Adjusted corporate operating income of $14 millionNet interest expense of $40 millionFY 2016 expectation of approximately $165-$175 millionAdjusted effective tax rate of 27.9%FY 2016 expectation at the upper end of the 25%-26% rangeTrade Working Capital1 fo
Slide 11: Separation Update
* Separation UpdateSignificant Milestones Achieved Amendment to Ashland’s senior unsecured credit agreementNew $1.325 billion five-year Valvoline credit agreement$450 million revolver$875 million term loanNew 5.5% Valvoline senior bond offering due 2024$375 million aggregate principal amountAshland
Slide 12: Appendix A: Bridges
ASHLAND. Appendix A: Bridges
Slide 13: Revenue Bridge Q3 FY 2015 vs. Q3 FY 2016
* Ashland Q3 FY 2015 vs. Q3 FY 2016Revenue Bridge 1% Q3 2015 Volume Q3 2016 Currency (4%) 1,367 1,290 Price (1%) Acq/Div/Other1 (1%) ($ millions)Preliminary Headwinds from currency, energy markets and divestitures represented ~$40 million headwind to overall salesRaw material pass through was primar
Slide 14: Adjusted EBITDA Bridge Q3 FY 2015 vs. Q3 FY 2016
* Ashland Q3 FY 2015 vs. Q3 FY 2016Adjusted EBITDA Bridge 2 Q3 2015 Volume/Mix Q3 2016 Currency Translation Margin 9 290 294 SG&AExpenses (8) (1) Other 2 ($ millions)Preliminary First quarter of year-over-year EBITDA growth in fiscal year 2016Excluding impact of the energy market, volume/mix contrib
Slide 15: Ashland Specialty Ingredients Adjusted EBITDA Bridge
* Ashland Specialty Ingredients Adjusted EBITDA Bridge Q3 2015 Volume/ Mix Q3 2016 Currency Translation Margin SG&AExpenses Q3 FY 2015 versus Q3 FY 2016 0 0 (7) 128 Excluding impact of the energy market, vol/mix was a positive $2 millionRaw material pass through was the primary driver to lower prici
Slide 16: Ashland Performance Materials Adjusted EBITDA Bridge
* Ashland Performance MaterialsAdjusted EBITDA Bridge Q3 2015 Volume/ Mix Q3 2016 Currency Translation Margin SG&AExpenses Q3 FY 2015 versus Q3 FY 2016 (3) 5 1 Other 0 30 Composites volumes soft but margins remain solidI&S saw continued weak volumes and pricing, however turnaround costs in the prior
Slide 17: Valvoline Adjusted EBITDA Bridge
* ValvolineAdjusted EBITDA Bridge Q3 FY 2015 versus Q3 FY 2016 ($ millions)Preliminary 7 (1) 0 (8) 119 116 5 Strong DIFM results, lower input costs, disciplined margin management and good volume/mix key to EBITDA growthInvestments in promotions, advertising and digital technology upgrades contribute
Slide 18: Appendix B: Volume Trends and Liquidity and Net Debt
Appendix B: Volume Trends and Liquidity and Net Debt
Slide 19: Normalized Volume Trends
* Normalized Volume Trends1 Period Ended 1 Excludes volumes associated with divestitures of elastomers and biocides and exited redispersible powders (RDP) product line for all periods. Includes volumes associated with OCH International, Inc. Rolling Four Quarters 2 2
Slide 20: Liquidity and Net Debt
* Liquidity and Net Debt ($ in millions) Scheduled Debt Repaymentsby Fiscal Year
Slide 21: Appendix C: Business Profiles
Appendix C:Business Profiles 12 Months Ended June 30, 2016
Slide 22: Corporate Profile: Sales by Business Unit and Geography
* Corporate Profile By business unit By geography 1 For 12 months ended June 30, 2016.2 Ashland includes only U.S. and Canada in its North America designation. North America253% Asia Pacific16% LatinAmerica/Other - 7% Europe 24% AshlandSpecialtyIngredients42% AshlandPerformanceMaterials19% Valvoline
Slide 23: Corporate Profile: Adjusted EBITDA
* Corporate Profile 1 For 12 months ended June 30, 2016. See Appendix D for reconciliation to amounts reported under GAAP. NYSE Ticker Symbol: ASH Total Employees: ~11,000 Outside North America ~30% Number of Countries in Which Ashland Has Sales: More than 100 AshlandSpecialtyIngredients46% Valvolin
Slide 24: Ashland Specialty Ingredients Sales by Market
* Salesby Market2 Ashland Specialty Ingredients: A global leader of cellulose ethers, vinyl pyrrolidones and biofunctionals For 12 Months Ended June 30, 2016Sales: $2.1 billionAdjusted EBITDA: $478 million1Adjusted EBITDA Margin: 22.8%1 Salesby Product Cellulosics 38% PVP19% Adhesive 16% North Ameri
Slide 25: Ashland Performance Materials
* Ashland Performance Materials Global leader in unsaturated polyester resins and vinyl ester resins Salesby Geography For 12 Months Ended June 30, 2016Sales: $1.0 billionEBITDA: $133 million1EBITDA Margin: 13.8%1 Salesby Product Composites72% Intermediates/Solvents 28% Construction: Residential13%
Slide 26: Valvoline: Premium-Branded Lubricants and Automotive Chemicals
* Valvoline: A leading worldwide producer and distributor of premium-branded lubricants and automotive chemicals International Salesby Region2 For 12 Months Ended June 30, 2016Sales: $1.9 billionEBITDA: $432 million1EBITDA Margin: 22.5%1 Salesby Product Lubricant389% Chemicals – 4% Do-It-Yourself28%
Slide 27: Appendix D: Non-GAAP Reconciliation
Appendix D: Non-GAAP Reconciliation
Slide 28: Reconciliation of Non-GAAP Data for 12 Months Ended June 30, 2016
* Ashland Inc. and Consolidated SubsidiariesReconciliation of Non-GAAP Data for 12 Months Ended June 30, 2016 1 Quarterly totals may not sum to actual results due to quarterly rounding conventions. Calculation of adjusted EBITDA for each quarter has been reconciled within certain financial filings w
Slide 29: Ashland. With good chemistry great things happen
ASHLAND. With good chemistry great things happen:
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