Ashland Inc. · NYSE:ASH
Ashland — 19th Annual Citi Chemicals Conference (December 2008)
22 slides from Ashland's conference presentation, Dec 2, 2008
Slide 1: 19th Annual Citi Chemicals Conference
19th Annual Citi Chemicals Conference James J. O'Brien Chairman and Chief Executive Officer December 2, 2008
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 and Section 21E of the Securities Exchange Act of 1934. Such statements include those made with respect to Ashland’s operating performance and Ashland’s a
Slide 3: With the Acquisition of Hercules on Nov. 13, 2008
1 Rankings are based on internal estimates of competitive specialty chemicals sales; includes Hercules Paper Technologies and Ventures and Aqualon sales and excludes Ashland Consumer Markets and Ashland Distribution sales. Specialty chemicals companies are defined as those that generate 70 percent o
Slide 4: Ashland Today
Ashland Performance Materials Ashland Hercules Water Technologies Ashland Distribution Ashland Consumer Markets (Valvoline) Ashland Aqualon Functional Ingredients 1 For the 12 months ended Sept. 30, 2008. Revenue includes intersegment, Hercules Paper Technologies & Ventures and Aqualon sales. See Ap
Slide 5: Fiscal 2008 Pro Forma Sales and Operating Revenue
Ashland Distribution 40% Ashland Consumer Markets 16% 19% North America 65% Latin America/ Other - 4% Europe 24% Ashland Distribution 40% By commercial unit 19% 1 For the 12 months ended Sept. 30, 2008, including intersegment, Hercules Paper Technologies & Ventures and Aqualon sales. North America 6
Slide 6: Pro Forma EBITDA by commercial unit; Corporate Profile
Ashland Distribution 10% Ashland Performance Materials 13% Ashland Consumer Markets 16% Ashland Hercules Water Technologies 25% Ashland Aqualon Functional Ingredients 36% 1 For the 12 months ended Sept. 30, 2008. Ashland Distribution 10% Ashland Performance Materials 13% Ashland Hercules Water Techn
Slide 7: Strong Leadership Positions in the Markets We Serve
Ashland Performance Materials Ashland Hercules Water Technologies Ashland Distribution Ashland Consumer Markets (Valvoline) Ashland Aqualon Functional Ingredients #1 global leader in unsaturated polyester resins and vinyl ester resins #3 passenger- car motor oil and #2 quick-lube chain in the United
Slide 8: Ashland Hercules Water Technologies
North America 43% E&PS 18% Pulp/ Paper 57% Business Overview Customers/ Markets • Pulp and paper processing • Industrial and institutional • Mining • Municipal wastewater treatment • Merchant marine Products/ Services • Process chemicals for microbial and contaminant control, pulping aids and retent
Slide 9: Ashland Performance Materials
North America 45% Europe 36% Trans- portation 24% Ind. Constr. 27% Business Overview Customers • Auto manufacturers; foundries; pipe and tank fabricators; bathware, countertop and window lineal manufacturers; pipe relining contractors; boat builders; wide and narrow web printers Products/ Services •
Slide 10: Ashland Aqualon Functional Ingredients
Business Overview Customers • Diversified, global customer base Products • Broad product line based on renewable resources - Water soluble polymers (cellulose ethers and guar derivatives) - Refined wood rosin and natural wood terpenes Markets • Water-based paints • Paper coatings • Construction • Oi
Slide 11: Ashland Consumer Markets (Valvoline)
Lubricants 80% Valvoline Int'l - 23% Do-It- Yourself 35% Business Overview Customers • Retail auto parts stores and mass merchandisers who sell to consumers; installers, such as car dealers and quick lubes; distributors Products/ Services • Valvoline® lubricants and automotive chemicals • MaxLife® l
Slide 12: Ashland Distribution
Chemicals 47% Plastics 41% Construction 24% Other 15% Business Overview Customers • Diversified customer base Products/ Services • More than 7,000 packaged and bulk chemicals, solvents, plastics and additives • Comprehensive, hazardous and nonhazardous waste- management solutions in North America Ma
Slide 13: Financial Structure
1 As adjusted for bank covenants. Debt/EBITDA ratio of 3.5x based on trailing 12 mos. pro forma EBITDA. Financial Structure • $2.6 billion of debt, plus $200 million available revolver capacity - Term Loan A, Term Loan B, bridge loan, revolver, and A/R securitization - Approximately $250 million boo
Slide 14: October Update
October Update • Legacy Ashland Water Technologies - Sales down slightly in Europe, but up slightly in Americas, vs. October 2007 • Performance Materials - Volume down 12 percent vs. October 2007 • Consumer Markets (Valvoline) - Lubricants volume down 17 percent vs. October 2007 - Gross profit perce
Slide 15: Synergy and integration areas
Sales & Marketing Manufacturing Purchasing G&A - $20 million run-rate by end of CY 2008 Sales & Marketing Manufacturing Purchasing G&A • Estimated one-time integration costs still being finalized • Key areas for synergy - Corporate function restructuring - Global supply chain - Paper/Water integrati
Slide 16: Focus on Cash Flow
Focus on Cash Flow • Reduced dividend reflects levels of specialty chemical peers • Capital expenditures expected to be approximately $200 million • Accelerate realization of $120 million of synergies • Focus on expense control and discretionary spending • Other sources
Slide 17: Investment in Ashland
Investment in Ashland • Focus on cash generation producing results • Realizing cost structure efficiencies • Completion of Hercules acquisition creates a major, global specialty chemicals company - 74 percent of pro forma EBITDA derived from specialty chemicals core, with roughly one-third from bio-
Slide 18: Appendix
Appendix
Slide 19: Fiscal 2008 Financial Results
) ) ) ) ) ) ) ) ) ) ) ) ) ) (20) bp 4.5% 4.3% EBITDA as a percent of sales 3 ) % 349 ) $ 358 ) $ Earnings before interest, taxes, depreciation and amortization (EBITDA) Twelve months ended Sept. 30, (in millions, except change) (30) bp 2.8% 2.5% Operating income percentage 110 bp 15.0% 13.9% SG&A pe
Slide 20: Regulation G: Reconciliation of Operating Income to EBITDA
Regulation G: Reconciliation of Operating Income to EBITDA
Slide 21: Regulation G: Reconciliation of Operating Income to EBITDA
(in millions) Ashland Inc. Fiscal Year Ended Sept. 30 Regulation G: Reconciliation of Operating Income to EBITDA
Slide 22: Regulation G: Reconciliation of Operating Income to EBITDA (Hercules)
Hercules Inc. 12 Months Ended Sept. 30, 2008 Regulation G: Reconciliation of Operating Income to EBITDA
Ashland — 19th Annual Citi Chemicals Conference (December 2008) on 6ix