Ashland Inc. · NYSE:ASH
Ashland — Q2 2019 Earnings Presentation
26 slides from Ashland's earnings presentation, May 1, 2019
Slide 1: Second-Quarter Fiscal 2019 Earnings
Second-Quarter Fiscal 2019 Earnings April 30, 2019 / 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: Second Quarter Summary
Second Quarter Summary i Ashland always solving
Slide 4: Adjusted Results Summary
Ashland Global Holdings Inc. Adjusted Results Summary1 ($ in millions) Preliminary Fiscal Second Quarter Highlights & Key Drivers Three months ended Mar. 31, • Reflects discontinued operations accounting for 2019 2018 Change Composites and Marl butanediol (BDO) facility; continuing operations includ
Slide 5: Specialty Ingredients Adjusted Results Summary
Specialty Ingredients Adjusted Results Summary1 ($ in millions) Fiscal Second Quarter Highlights & Key Drivers Preliminary • Sales down 1% including a -3 ppt Three months ended Mar. 31, impact from currency and -1 ppt 2019 2018 Change impact from the Colgate oral-care reformulation2 Sales $ 637 $ 64
Slide 6: Specialty Ingredients Sales Trends by End Market
Specialty Ingredients Sales Trends by End Market Fiscal Second Quarter End Market Commentary • Sales grew 3% excluding the impact of foreign currency ($ in millions) Three months ended Mar. 31, (-3 ppts2) and Colgate-Gantrez (-1 ppt) Preliminary 2019 2018 Change • Personal Care constant-currency sal
Slide 7: Intermediates & Solvents Adjusted Results Summary
Intermediates & Solvents Adjusted Results Summary1 ($ in millions) Fiscal Second Quarter Highlights & Key Drivers Preliminary • Reflects results of the Lima, Ohio Three months ended Mar. 31, facility only; Marl facility reported in 2019 2018 Change discontinued operations Sales $ 30 $ 26 15 % • Sale
Slide 8: Outlook Summary
Outlook Summary i Ashland always solving
Slide 9: Fiscal Year 2019 Outlook
Ashland Global Holdings Inc. Fiscal Year 2019 Outlook Key Drivers • Adjusted EPS and Specialty Ingredients’ Adjusted EBITDA Prior Outlook Updated Outlook outlook reduced primarily due to: Adjusted EBITDA − Lower-than-expected Q2 results due to weaker demand in higher-margin end markets offset by - S
Slide 10: Cost Reduction Targets
Ashland Global Holdings Inc. Cost Reduction Targets As presented on July 31, 2018 $120 million cost savings components1 Expected Timing Campuses • ~$20 million run rate2 as of 9/30/18 Labs Manufacturing • ~$50 million run rate2 as of 12/31/18 Third facilities party • ~$60 - $70 million realized savi
Slide 11: Third-Quarter Fiscal 2019 Outlook
Ashland Global Holdings Inc. Third-Quarter Fiscal 2019 Outlook Highlights • Expect Q3 adjusted EPS1 in the range of $0.80 - $0.90 • Outlook assumes effective tax rate of 15 percent • Outlook reflects discontinued operations accounting for Composites and the Marl BDO facility Key Drivers • Low single
Slide 12: Appendix A: Key Items and Balance Sheet
Appendix A: Key Items and Balance Sheet
Slide 13: Key Items Affecting Income
Second Fiscal Quarter – Continuing Operations Key Items Affecting Income ($ in millions, except EPS) Total Preliminary Unallocated After-tax Specialty and earnings 2019 Ingredients I&S Other Pre-tax After-tax per Share Restructuring, separation and other costs $ (20) $ (12) $ (32) $ (29) $ (0.46) Pr
Slide 14: Liquidity and Net Debt
Liquidity and Net Debt ($ in millions) Liquidity Cash $ 164 Revolver and A/R facility availability 741 Liquidity $ 905 Interest Debt Expiration Rate Moody's S&P 4.750% senior notes, par $1,086 08/2022 4.750% Ba3 BB- $ 1,083 Term Loan B 1 05/2024 L+175 Ba1 BB+ 590 6.875% senior notes, par $375 05/204
Slide 15: Appendix B: Business Profiles 2019
Appendix B: Business Profiles 12 Months Ended March 31, 2019
Slide 16: Specialty Ingredients
Specialty Ingredients A global leader of cellulose ethers, vinyl pyrrolidones and biofunctionals Sales Sales Sales 1 by Market by Product by Geography PVP Asia Pharma Coatings 17% Pacific 14% Adhesives Europe 16% 14% 33% 19% Energy 2% Cellulosics North Personal 35% Care Other America 24% 13% 39% For
Slide 17: Appendix C: Non-GAAP Reconciliation
Appendix C: Non-GAAP Reconciliation1 1 Although Ashland provides forward looking guidance for adjusted EBITDA in this presentation, Ashland is not reaffirming or providing forward- looking guidance for U.S. GAAP reported financial measures or a reconciliation of forward-looking non-GAAP financial me
Slide 18: Reconciliation of Non-GAAP Data
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 6 Months Ended March 31, 2019 ($ millions, except percentages) 1 Sales Q2 19 Q1 19 Total Specialty Ingredients 637 553 1,190 Intermediates Ashland and Solvents 30 23 53 Specialty Total 667 576 1,243 Europe
Slide 19: Segment Components of Key Items 2019
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended March 31, 2019 ($ millions) Specialty Intermediates Unallocated Ingredients and Solvents & Other Total OPERATING INCOME (LOSS) Operating key items: R
Slide 20: Segment Components of Key Items 2018
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended March 31, 2018 ($ millions) Specialty Intermediates Unallocated Ingredients and Solvents & Other Total OPERATING INCOME (LOSS) Operating key items: R
Slide 21: 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 March 31, 2019 and 2018 ($ millions) Three months ended March 31 1 Free cash flows 2019 2018 Total cash flows used by operating activities from
Slide 22: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Ashland Global Holdings Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended March 31, 2019 and 2018 ($ millions) Three months ended March 31 Adjusted EBITDA - Ashland Global Holdings Inc. 2019 2018 Net loss $ 76 $ 73 Income tax expense 1 (2) Net interest and other expense (inco
Slide 23: Adjusted EBITDA – Specialty Ingredients, Intermediates and Solvents
Specialty Ingredients, Intermediates and Solvents Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended March 31, 2019 and 2018 ($ millions) Three months ended March 31 Adjusted EBITDA - Specialty Ingredients 2019 2018 Operating income $ 70 $ 89 Add: Depreciation and amortization 1 58
Slide 24: 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 March 31, 2019 and 2018 Three months ended ($ millions) March 31 2019 2018 Income (loss) from continuing operations (as reported) $ 45 $ 42 Key i
Slide 25: Adjusted Diluted EPS from Continuing Operations
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations for 3 Months Ended March 31, 2019 and 2018 Three months ended March 31 2019 2018 Diluted EPS from continuing operations (as reported) $ 0.71 $ 0.65 Key items,
Slide 26: Trademark notice
® Registered trademark, Ashland or its subsidiaries, registered in various countries ™ Trademark, Ashland or its subsidiaries, registered in various countries