Slide 1: Earnings Conference Call Fourth-Quarter Fiscal 2020
Earnings Conference Call Fourth-Quarter Fiscal 2020 November 11, 2020 – 9:00am Eastern Time / efficacy usability allure integrity profitability
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 Q4 performance summary o Q4 & FY financial results o priorities and outlook o closing comments o thank you and Q&A 3
Slide 4: Q4 performance summary
Q4 performance summary «<f Ashland always solving
Slide 5: Our Priorities in Current Environment
Ashland Global Holdings Inc. Our Priorities in Current Environment priority # 1 contingency planning for COVID-19 uncertainty o health and safety of our employees o continued supply to our customers and the critical industries we serve priority # 2 execute on our strategy o margin expansion o enhanc
Slide 6: Commentary on Q4 Performance
Ashland Global Holdings Inc. Commentary on Q4 Performance o resilient consumer end-market demand o significant sequential improvement in global industrial demand o favorable price/mix and adjusted operating costs o continued benefit from cost-reduction program leading to expanded margins o free cash
Slide 7: Q4 & FY financial results
Q4 & FY financial results «<f Ashland always solving
Slide 8: Fiscal-Fourth Quarter Adjusted Results
Ashland Global Holdings Inc. Fiscal-Fourth Quarter Adjusted Results1 ($US in millions, except percentages) Q4 FY20 Q4 FY19 Change Sales $609 $609 - Gross profit margin 34.3 % 34.4 % (10) bps SG&A / R&D costs / Intangible amortization $118 $124 (5) % Operating Income (EBIT) $91 $85 +7 % EBITDA $154 $
Slide 9: Consumer Specialties Adjusted Results Summary
Consumer Specialties Adjusted Results Summary1 ($US in millions, except percentages) Q4 FY20 Q4 FY19 Change Sales $344 $332 +4 % Gross profit $127 $121 +5 % Gross profit margin 36.9 % 36.4 % +50 bps Operating Income (EBIT) $62 $53 +17 % EBITDA $97 $88 +10 % EBITDA margin 28.2 % 26.5 % +170 bps o res
Slide 10: Industrial Specialties Adjusted Results Summary
Industrial Specialties Adjusted Results Summary1 ($US in millions, except percentages) Q4 FY20 Q4 FY19 Change Sales $240 $247 (3) % Gross profit $76 $76 - Gross profit margin 31.7 % 30.8 % +90 bps Operating Income (EBIT) $39 $37 +5 % EBITDA $64 $62 +3 % EBITDA margin 26.7 % 25.1 % +160 bps o industr
Slide 11: Intermediates & Solvents Adjusted Results Summary
Intermediates & Solvents (I&S) Adjusted Results Summary1 ($US in millions, except percentages) Q4 FY20 Q4 FY19 Change Sales $28 $42 (33) % Gross profit $5 $12 (58) % Gross profit margin 17.9 % 28.6 % (1,070) bps Operating Income (EBIT) $3 $9 (67) % EBITDA $6 $13 (54) % EBITDA margin 21.4 % 31.0 % (9
Slide 12: Inventory Control / Free Cash Flow
Ashland Global Holdings Inc. Inventory Control / Free Cash Flow o exceeded original targets for inventory-control actions o reduced inventory by $99 million compared to June-quarter end; balance offset by $11 million FX impact on remaining inventory o generated $116 million of free cash flow in Q4,
Slide 13: Fiscal Year 2020 Summary
Ashland Global Holdings Inc. Fiscal Year 2020 Summary1 ($US in millions, except percentages and FY20 FY19 Change per share data) Consumer Specialties $1,323 $1,383 (4) % Industrial Specialties $899 $999 (10) % Intermediates & Solvents $129 $160 (19) % Photo Intersegment Sales ($25) ($49) +49 % Sales
Slide 14: Priorities and outlook
oriorities and outlook «<f Ashland always solving
Slide 15: Our Priorities
Ashland Global Holdings Inc. Our Priorities margin expansion business resilience o 2020 SARD reduction o business unit focus o S&OP discipline (increase BU o 2021 COGS/SARD reduction operating visibility) o innovation and mix o organizational ownership / improvement accountability o exit low-end pro
Slide 16: Outlook
Ashland Global Holdings Inc. Outlook not providing specific FY2021 guidance given macro uncertainty forward-looking insights FY2020 performance o assume current continued recovery in + sales growth global demand, 2 – 4% sales growth in fiscal 2021 o incremental volume growth comes at + cost reductio
Slide 17: Strategic Focus
Ashland Global Holdings Inc. Strategic Focus o expand additives portfolio o build out bio-tech capabilities o accelerate our growth in Asia o customer-focused & innovation-centric culture o accelerate our digital modernization 17
Slide 18: CEO Priorities
Ashland Global Holdings Inc. CEO Priorities complete the transformation o operational performance of our business model o deliver $100 MM cost reductions and margin expansion o disciplined capital allocation aligned with strategy focus on growth o commercial excellence & geographic growth o customer
Slide 19: Closing comments
closing comments «<f Ashland always solving
Slide 20: Premier Specialty Materials Company
Ashland Global Holdings Inc. Premier Specialty Materials Company o focused on high-quality markets and businesses with exciting profitable growth opportunities o franchise businesses have leadership positions • #1 or #2 • strong teams with deep industry expertise • excellent customer relationships a
Slide 21: Thank you and Q&A
thank you and Q&A of Ashland
Slide 22: Appendix A: Adjusted Results Summary and Balance Sheet
Appendix A: Adjusted Results Summary and Balance Sheet
Slide 23: Adjusted Results Summary
Ashland Global Holdings Inc. Adjusted Results Summary1 ($US in millions, except percentages and Q4 FY20 Q4 FY19 Change per share data) Sales $609 $609 - Gross profit $209 $210 (1) % Gross profit margin 34.3 % 34.4 % (10) bps Photo SG&A / R&D costs / Intangible amort. $118 $124 (5) % Operating income
Slide 24: Q4 Business Unit Consolidation
Ashland Global Holdings Inc. Q4 Business Unit Consolidation ($US in millions, except Consumer Industrial Interco Unallocated I&S Ashland percentages) Specialties Specialties Eliminations and Other Sales $344 $240 $28 ($3) - $609 Gross profit $127 $76 $5 - - $209 Gross profit margin 36.9 % 31.9 % 17.
Slide 25: Liquidity and Net Debt
Ashland Global Holdings Inc. Liquidity and Net Debt Interest Moody’s 9/30/20 ($US in millions) Expiration S&P Rating Rate Rating Balance Cash $454 Revolver and A/R facility availability 500 Cash, A/R and revolver availability $954 Photo Debt 2.00% Notes (EUR) Jan. 2028 2.000% Ba1 BB+ $587 4.750% Not
Slide 26: Appendix B: Non-GAAP Reconciliation
Appendix B: Non-GAAP Reconciliation1 1 Although Ashland provides forward looking guidance for adjusted EBITDA in this presentation, Ashland is not reaffirming or providing forward-looking guidance for U.S. GAAP reported financial measures or a reconciliation of forward-looking non-GAAP financial mea
Slide 27: Reconciliation of Non-GAAP Data
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 12 Months Ended September 30, 2020 ($ millions, except percentages) 1 Sales Q4 20 Q3 20 Q2 20 Q1 20 Total Q4 19 Life Sciences $ 180 $ 189 $ 184 $ 155 $ 708 $ 176 Personal Care & Household 164 155 159 137 6
Slide 28: Segment Components of Key Items for Income Statement Captions (Q4 2020)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended September 30, 2020 ($ millions) Three Months Ended September 30, 2020 Life Personal Care Consumer Specialty Performance Industrial Intermediates Unal
Slide 29: Segment Components of Key Items for Income Statement Captions (Q4 2019)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended September 30, 2019 ($ millions) Three Months Ended September 30, 2019 Life Personal Care Consumer Specialty Performance Industrial Intermediates Unal
Slide 30: Free Cash Flow and Adjusted Operating Income (3 Months)
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, 2020 and 2019 ($ millions) Three months ended September 30 1 Free cash flows 2020 2019 Total cash flows provided by operating act
Slide 31: Free Cash Flow and Adjusted Operating Income (12 Months)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income for 12 Months Ended September 30, 2020 and 2019 ($ millions) Year Ended September 30 1 Free cash flows 2020 2019 Total cash flows provided by operating activities
Slide 32: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Ashland Global Holdings Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2020 and 2019 ($ millions) Three months ended September 30 Adjusted EBITDA - Ashland Global Holdings Inc. 2020 2019 Net income (loss) $ 5 $ 411 Income tax expense (benefit) 9 22 Net intere
Slide 33: Adjusted EBITDA – Consumer Specialties
Consumer Specialties Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2020 and 2019 ($ millions) Three months ended September 30 2020 2019 Life Sciences Operating income $ 26 $ 26 Add: Depreciation and amortization 15 15 Operating key items (see pages 28 & 29) 10 -
Slide 34: Adjusted EBITDA – Industrial Specialties, Intermediates and Solvents
Industrial Specialties, Intermediates and Solvents Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2020 and 2019 Three months ended ($ millions) September 30 2020 2019 Specialty Additives Operating income $ 5 $ 22 Add: Depreciation and amortization 21 21 Operating
Slide 35: Adjusted Income from Continuing Operations (3 Months)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations for 3 Months Ended September 30, 2020 and 2019 Three months ended September 30 ($ millions) 2020 2019 Income (loss) from continuing operations (as reported) $ - $ 2
Slide 36: Adjusted Income from Continuing Operations (Year)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations for year ended September 30, 2020 and 2019 Year Ended September 30 ($ millions) 2020 2019 Income (loss) from continuing operations (as reported) $ (491) $ 24 Key it
Slide 37: Adjusted Diluted EPS from Continuing Operations (3 Months)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations for 3 Months Ended September 30, 2020 and 2019 Three months ended September 30 ($ millions) 2020 2019 Diluted EPS from continuing operations (as reported) $ -
Slide 38: Adjusted Diluted EPS from Continuing Operations (Year)
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations for year ended September 30, 2020 and 2019 Year Ended September 30 ($ millions) 2020 2019 Diluted EPS from continuing operations (as reported) $ (8.10) $ 0.39
Slide 39: Trademark notice
® Registered trademark, Ashland or its subsidiaries, registered in various countries ™ Trademark, Ashland or its subsidiaries, registered in various countries