Ashland Inc. · NYSE:ASH
Ashland — Ashland Global Holdings — Q4 2018 Earnings Presentation
39 slides from Ashland's earnings presentation, Nov 6, 2018
Slide 1: Fourth-Quarter Fiscal 2018 Earnings
Fourth-Quarter Fiscal 2018 Earnings November 6, 2018 / efficacy usability allure integrity profitability Exhibit 99.2
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: Important Information
Important Information In connection with the forthcoming solicitation of proxies from stockholders in respect of Ashland’s 2019 Annual Meeting of Stockholders, Ashland will file with the Securities and Exchange Commission (“SEC”) a proxy statement on Schedule 14A (the “proxy statement”), containing
Slide 4: Fourth Quarter Summary
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Slide 5: Adjusted Results Summary
Ashland Global Holdings Inc. Adjusted Results Summary1 Highlights Sales up 9% with no acquisitions/divestitures impact and including a -1 percentage point (ppt) impact from currency Reported net income was $9 million, compared to a loss of $58 million last year; income from continuing operations was
Slide 6: Specialty Ingredients Adjusted Results Summary
Specialty Ingredients Adjusted Results Summary1 Highlights Sales up 6% with no acquisitions / divestitures impact and including a -1 ppt impact from currency EBITDA increased to $160 million, a 13% increase versus prior year EBITDA margin increased 160 bps to 25.2% Key Drivers Strong customer demand
Slide 7: Specialty Ingredients Sales Trends by End Market
Specialty Ingredients Sales Trends by End Market1 End Market Commentary Strong overall organic sales growth of 6% Within Personal care, robust biofunctional ingredients growth offset by lower oral care sales Recently added cellulosic excipient capacity and new products contributing to double-digit g
Slide 8: Composites Adjusted Results Summary
Composites Adjusted Results Summary1 Highlights Sales up 8% including a -2 ppts impact from currency EBITDA of $20 million Key Drivers Sales growth led by a strong quarter in North America Pricing in excess of raw-material cost inflation SG&A as a % of sales consistent with the prior-year period All
Slide 9: Intermediates & Solvents Adjusted Results Summary
Intermediates & Solvents Adjusted Results Summary1 Highlights Sales up 32% EBITDA increased to $15 million EBITDA margin increased 220 bps to 18.1% Key Drivers Strong operational performance Execution of price increases for the 9th consecutive quarter drove expanded margins versus prior year Global
Slide 10: Fiscal Year Summary
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Slide 11: Fiscal Year 2018 Summary
Ashland Global Holdings Inc. Fiscal Year 2018 Summary1 Full Year Highlights Sales up 15% to $3.7 billion Double-digit sales growth in all three segments Adjusted EBITDA up 20% to $683 million All three segments generated Adjusted EBITDA within or above the outlook ranges presented at the beginning o
Slide 12: Outlook Summary
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Slide 13: Fiscal Year 2019 Outlook
Ashland Global Holdings Inc. Fiscal Year 2019 Outlook Highlights Outlook provided on a current-operations basis Update to be provided following a Composites/Marl divestiture announcement Growth driven by: ~2 - 3% Specialty Ingredients sales growth Mid-single-digit growth in Specialty Ingredients’ Ad
Slide 14: Cost Reduction Targets
Ashland Global Holdings Inc. Cost Reduction Targets Expected Timing ~$20 million run rate2 by 9/30/18 ~$50 million run rate2 by 12/31/18 ~$60 - $70 million realized savings in FY2019 ~$20 million realized savings in Specialty Ingredients in FY2019 ~$120 million run rate2 by 12/31/19 Manufacturing fa
Slide 15: First-Quarter Fiscal 2019 Outlook
Highlights Expect Q1 adjusted EPS in the range of $0.55 - $0.65 vs. $0.42 prior year1 Outlook assumes effective tax rate of 16% vs. 18% prior year Outlook provided on a current-operations basis Update to be provided following a Composites/Marl divestiture announcement Key Drivers Continued strong ye
Slide 16: Appendix A: Key Items and Balance Sheet
Appendix A: Key Items and Balance Sheet
Slide 17: Fourth Fiscal Quarter – Continuing Operations Key Items Affecting Income
Fourth Fiscal Quarter – Continuing Operations Key Items Affecting Income
Slide 18: Liquidity and Net Debt
Liquidity and Net Debt ($ in millions)
Slide 19: Appendix B: Business Profiles
Appendix B: Business Profiles 12 Months Ended September 30, 2018
Slide 20: Corporate Profile
Corporate Profile By business unit By geography 1For 12 months ended September 30, 2018. 2Ashland includes only U.S. and Canada in its North America designation. North America2 40% Asia Pacific 17% Latin America/ Other - 8% Europe 35% Specialty Ingredients 66% Intermediates and Solvents 9% Composite
Slide 21: Corporate Profile
Corporate Profile For 12 months ended September 30, 2018. Non-GAAP measure. Appendix C reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of operating income to adjusted EBITDA. NYSE Ticker Symbol: ASH Total Employees: ~6,000 Outside North America ~45% Number of Co
Slide 22: Specialty Ingredients Sales by Market
Specialty Ingredients Sales by Market2 For 12 Months Ended September 30, 2018 Sales: $2.5 billion Adjusted EBITDA: $574 million1 Adjusted EBITDA Margin: 23.2%1 Sales by Product Cellulosics 34% PVP 17% Adhesives 14% North America 40% Asia Pacific 18% Europe 33% Latin America/ Other – 9% Actives – 6%
Slide 23: Composites Sales by Geography
Composites Sales by Geography For 12 Months Ended September 30, 2018 Sales: $942 million Adjusted EBITDA: $95 million1 Adjusted EBITDA Margin: 10.1%1 Sales by Product UPR/VER2 85% Gel coats and other 15% Construction: Residential 17% Marine 22% Construction: Industrial 41% Sales by Market North Amer
Slide 24: Intermediates and Solvents Sales by Geography
Intermediates and Solvents Sales by Geography For 12 Months Ended September 30, 2018 Sales: $331 million Adjusted EBITDA: $61 million1 Adjusted EBITDA Margin: 18.4%1 Sales by Product Butanediol 45% Derivatives 55% General Industrial 26% Plastics/ Polymers 37% Sales by Application North America 21% A
Slide 25: Appendix C: Non-GAAP Reconciliation
Appendix C: Non-GAAP Reconciliation1 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 26: Reconciliation of Non-GAAP Data for 12 Months
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 12 Months Ended September 30, 2018 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Performance Materials __% Valvoline __% Quarterly total
Slide 27: Segment Components of Key Items for Income Statement Captions
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended September 30, 2018 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Performance Mat
Slide 28: Segment Components of Key Items for 3 Months Ended September 30, 2017
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended September 30, 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Performance Mat
Slide 29: Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income for 3 Months Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland
Slide 30: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Ashland Global Holdings Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Performance Materials __% Valvoline __% 1Depreciation and a
Slide 31: Segment Reconciliation of Non-GAAP Data – Adjusted EBITDA
Specialty Ingredients, Composites, Intermediates and Solvents Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Performance Materials __%
Slide 32: Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations for 3 Months Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Pe
Slide 33: Reconciliation of Non-GAAP Data – Adjusted Diluted EPS
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations for 3 Months Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashla
Slide 34: Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income (Years)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income for Years Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Per
Slide 35: Reconciliation of Non-GAAP Data – Adjusted EBITDA (Years)
Ashland Global Holdings Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for Years Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Performance Materials __% Valvoline __% 1Depreciation and amor
Slide 36: Segment Reconciliation of Non-GAAP Data – Adjusted EBITDA (Years)
Specialty Ingredients, Composites, Intermediates and Solvents Reconciliation of Non-GAAP Data – Adjusted EBITDA for Years Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Performance Materials __% Val
Slide 37: Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations (Years)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations for Years Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland Perfo
Slide 38: Reconciliation of Non-GAAP Data – Adjusted Diluted EPS (Years)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations for Years Ended September 30, 2018 and 2017 North America2 __% Asia Pacific __% Latin America/ Other - _% Europe __% Ashland Specialty Ingredients __% Ashland
Slide 39: Trademark notices
® Registered trademark, Ashland or its subsidiaries, registered in various countries ™ Trademark, Ashland or its subsidiaries, registered in various countries
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