Slide 1: Earnings conference call fourth-quarter fiscal 2021
earnings conference call fourth-quarter fiscal 2021 November 10, 2021 – 9:00am ET / efficacy usability allure integrity profitability
Slide 2: Forward-Looking Statements; Regulation G: Adjusted Results
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
o Q4 performance summary o Q4 financial results o FY financial results o review new financials and bridge o priorities and outlook o closing comments o Q&A 3
Slide 4: Q4 performance summary
Q4 performance summary <f Ashland always solving
Slide 5: Sale of performance adhesives
sale of performance adhesives o o o o o o o o 5
Slide 6: Commentary on Q4 performance
commentary on Q4 performance strong financial results sales and adjusted EBITDA results consistent with prior expectations o Q4 highlights1 o strong execution despite continued supply-chain logistics challenges o improving core end-market demand and higher pricing partially offset by cost inflation
Slide 7: Q4 financial results
Q4 financial results <f Ashland always solving
Slide 8: Q4 FY21 consolidated results
($US in millions, except percentages) Q4 FY21 Q4 FY20 change sales $591 $529 +12 % gross profit margin 33.2 % 34.0 % (80) bps SG&A / R&D costs / intangible amortization $113 $109 +4 % operating income $85 $71 +20 % EBITDA $149 $131 +14 % EBITDA margin 25.2 % 24.8 % +40 bps EPS (excluding acquisition
Slide 9: Life Sciences Q4 results
($US in millions, except percentages) Q4 FY21 Q4 FY20 change sales $189 $180 +5 % gross profit $61 $67 (9) % gross profit margin 32.3 % 37.2 % (490) bps operating Income $31 $36 (14) % EBITDA $48 $51 (6) % EBITDA margin 25.4 % 28.3 % (290) bps o o o +LSD -MSD +DD pharma nutraceuticals nutrition & ot
Slide 10: Personal Care & Household Q4 results
($US in millions, except percentages) Q4 FY21 Q4 FY20 change sales $183 $164 +12 % gross profit $68 $60 +13 % gross profit margin 37.2 % 36.6 % +60 bps operating Income $29 $26 +12 % EBITDA $51 $46 +11 % EBITDA margin 27.9 % 28.0 % (10) bps o o o +DD -HSD personal care household Q4 FY21 year-over-ye
Slide 11: Specialty Additives Q4 results
($US in millions, except percentages) Q4 FY21 Q4 FY20 change sales $181 $160 +13 % gross profit $47 $47 - gross profit margin 26.0 % 29.4 % (350) bps operating Income $25 $23 +9 % EBITDA $47 $44 +7 % EBITDA margin 26.0 % 27.5 % (150) bps o o o +HSD +DD coatings construction, energy, perf spec Q4 FY2
Slide 12: Intermediates & Solvents Q4 results
($US in millions, except percentages) Q4 FY21 Q4 FY20 change sales $60 $28 +114 % gross profit $30 $5 +300 % gross profit margin 33.3 % 17.9 % +1,540 bps operating Income $18 $3 +500 % EBITDA $21 $6 +250 % EBITDA margin 35.0 % 21.4 % +1,360 bps o o o +DD +TD merchant captive Q4 FY21 year-over-year s
Slide 13: Free cash flow
o generated free cash flow of $120 million compared to $89 million in prior-year Q4 o free cash flow in fiscal 2021 of $361 million compared to $94 million in fiscal year 2020 o improvement primarily driven by higher earnings, lower capital expenditures and lower cash interest expense 1 Restructurin
Slide 14: Fiscal year financial results
fiscal year financial results
Slide 15: Fiscal year 2021 summary
fiscal year 2021 summary ($US in millions, except percentages and FY21 FY20 Change per share data) sales: Life Sciences $737 $708 +4 % Personal Care & Household $592 $615 (4) % Specialty Additives $655 $589 +11 % Photo Intermediates & Solvents $178 $129 +38 % Intersegment Sales ($51) ($25) NM sales
Slide 16: Fiscal year 2021 summary (cont.)
fiscal year 2021 summary1 (cont.) ($US in millions, except percentages and FY21 FY20 Change per share data) EBITDA: Life Sciences $195 $195 - Personal Care & Household $161 $150 +7 % Specialty Additives $158 $143 +10 % Photo Intermediates & Solvents $48 $13 +269 % Unallocated & Other ($67) ($52) NM
Slide 17: New financials and bridge to FY
new financials and bridge to FY <f Ashland always solving
Slide 18: FY21 old reporting to new reporting bridge
disc ops – environ- FY21 ($US in millions, except FY21 stranded Perf. mental (new percentages) (old reporting) costs Adhesives adjustment reporting) sales $2,483 $372 - - $2,111 EBITDA $571 ($84) ($14) $22 $495 EBITDA margin 23.0 % 22.6 % - - 23.4 % o o o o o
Slide 19: Key bridging items for FY2021 baseline
adjusted key bridging items for FY2021 ($US in millions) EBITDA baseline FY2021 reported $495 + impact of one-time items ~$18 one-time items in FY2021 include impact of Belgium-plant strike and + 7 add’l months Schülke & Mayr ~$15 winter storm Uri - completion of TSA income (Composites) ~($8) FY2021
Slide 20: Priorities and Outlook
oriorities and Outlook <f Ashland always solving
Slide 21: Current macro trends
current macro trends tailwinds o improving demand trend across end markets © consumer strength © normalization of COVID impact on demand (pharma funding, consumer behavior) o tight HEC industry capacity favorable to pricing headwinds o continued supply-chain, freight and logistics challenges © expec
Slide 22: Investing in future growth
investing in future growth plans for growth investment © core product capacity expansion o HEC o Kluce o Benece \™ \™ © enhanced pharma and personal care formulation capabilities o growth in Asia 22 planned growth capital investments in FY2022 of ~$60 million <f Ashland always solving
Slide 23: Key risks
o • • • o o key risks o reliability / cost of ocean freight o o China energy-usage restrictions o availability of raw materials o o rising global energy costs o o general cost inflation
Slide 24: Our priorities
our priorities establishing clear priorities for profitable growth into the future operational resilience strategic focus capital allocation © Besiness “ focus maintain portfolio o increase speed and © increase free cash ° ee tona focus & coherence impact flow generation oe ence 0 focus on core © bu
Slide 25: Closing comments
closing comments <f Ashland always solving
Slide 26: Upcoming virtual investor day
upcoming virtual investor day O° 26 Ashland today o resetting who we are o portfolio of businesses o improving performance o financial profile business unit reviews o life sciences o personal care and household o specialty additives Ashland future o strategy and priorities o financial outlook o clos
Slide 27: Ashland: focused additives and specialty ingredients company
Ashland focused additives and specialty ingredients company <f Ashland always solving consistent execution solid growth high margins strong free cash flow o 000 always solving 27 RCKERKKK leadership positions in high-quality markets and with exciting profitable growth opportunities strong technology
Slide 28: Thank you and Q&A
thank you and Q&A <f Ashland always solving
Slide 29: Appendix A: adjusted results summary and balance sheet
appendix A: adjusted results summary and balance sheet <f Ashland always solving
Slide 30: Adjusted results summary
adjusted results summary1 ($US in millions, except percentages and Q4 FY21 Q4 FY20 change per share data) sales $591 $529 +12 % gross profit $196 $180 +9 % gross profit margin 33.2 % 34.0 % (80) bps SG&A / R&D costs / intangible amort. $113 $109 +4 % Photo operating income $85 $71 +20 % depreciation
Slide 31: Q4 segment results
Personal Inter- ($US in millions, except Life Specialty interco. unallocated Care & mediates & Ashland percentages) Sciences Additives eliminations and other Household Solvents sales $189 $183 $181 $60 ($22) - $591 gross profit $61 $68 $47 $20 - - $196 gross profit margin 32.3 % 37.2 % 26.0 % 33.3 %
Slide 32: Liquidity and net debt
liquidity and net debt Moody’s 9/30/21 ($US in millions) expiration interest rate S&P rating rating balance Photo Photo 32
Slide 33: Appendix B: non-GAAP reconciliation
appendix B: non-GAAP reconciliation! provi Although Ashland provides forward looking guidance for adjusted EBITDA in this presentation, Ashland is not reaffirming or iding forward-looking guidance for U.S. GAAP reported financial measures or a reconciliation of forward-looking non-GAAP financial mea
Slide 34: Reconciliation of Non-GAAP Data
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 12 Months Ended September 30, 2021 ($ millions, except percentages) 1 Sales Q4 21 Q3 21 Q2 21 Q1 21 Total Q4 20 Life Sciences $ 189 $ 193 $ 185 $ 170 $ 737 $ 180 Personal Care & Household 183 147 137 125 5
Slide 35: North America 2 Europe
($ millions) Ashland Europe Performance North __% Materials America2 __% __% Asia Pacific Latin __% Valvoline __% America/ Other - _% (1) 35
Slide 36: North America 2 Europe
($ millions) T hre e M o nt hs E nde d S e pt e m be r 3 0 , 2 02 0 P erso nal Care Intermediates and Unallo cated & Life Sciences and Househo ld Specialty A dditives So lvents Other To tal O P ER A T IN G IN C O M E ( LO S S ) Operating key items: Invento ry adjustment $ (10) $ (13) $ (18) $ (6) $
Slide 37: 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 and Fiscal Years Ended September 30, 2021and 2020 ($ millions) Ashland Specialty Ingredients Ashland __% Performance North Materials America2 __% __%
Slide 38: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Ashland Global Holdings Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2021and 2020 ($ millions) Ashland Specialty Ingredients Ashland __% Performance North Materials America2 __% __% Asia Pacific Latin __% America/ Other - _% 38
Slide 39: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Consumer Specialties Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2021and 2020 ($ millions) Ashland Specialty Ingredients Ashland __% Performance North Materials America2 __% __% Asia Pacific Valvoline Latin __% __% America/ Other - _% 39
Slide 40: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Industrial Specialties, Intermediates and Solvents Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended September 30, 2021and 2020 ($ millions) Ashland Specialty Ingredients Ashland __% Performance North Materials America2 __% __% Asia Pacific Valvoline __% __% Latin America/ Other -
Slide 41: 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 and Fiscal Years Ended September 30, 2021and 2020 ($ millions) Ashland Specialty Ingredients Ashland __% Performance North Materials America2 __% __% V
Slide 42: Reconciliation of Non-GAAP Data – 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 and Fiscal Years Ended September 30, 2021and 2020 ($ millions) Ashland Specialty Ashland Europe Ingredients North __% __% Performance Materials Am
Slide 43: Ashland
oT ct Ashland always solving