Ashland Inc. · NYSE:ASH
Ashland — Ashland Global Holdings — Q3 2016 Earnings Presentation
32 slides from Ashland's earnings presentation, Aug 10, 2016
Slide 1: Ashland Inc. Summary and Recent Performance Third-Quarter Fiscal 2016
Ashland Inc. Summary and Recent PerformanceThird-Quarter Fiscal 2016 ® Registered trademark, Ashland or its subsidiaries, registered in various countries™ Trademark, Ashland or its subsidiaries, registered in various countries
Slide 2: Forward-Looking Statements
* Forward-Looking StatementsThis 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 word
Slide 3: Non-solicitation
* Non-solicitationA registration statement relating to the securities of Ashland Global Holdings Inc. in connection with the reorganization of Ashland under a new holding company has been filed with the SEC but has not yet become effective. The securities subject to such registration statement may n
Slide 4: Our History
* Our History * $13.4B 2015 Revenues 37% 63% $5.4B Specialty Chemicals * 1995 adjustedEBITDA margin 2015 adjusted EBITDA margin ~5% 21% Otherproducts Chemicals &Distribution * 66% * * exited JV 1995 2005 2010 2015 entered JV Elastomers exited JV ( Zeta Fraction™) Acquired Exited Ashland Distribution
Slide 5: Strategic Decisions Have Dramatically Expanded EBITDA Margin
* Strategic Decisions Have Dramatically Expanded EBITDA Margin1 Divested DistributionMarch 2011 Acquired Hercules November 2008 Acquired ISPAugust 2011 Divested Water Tech. (July 2014) & Global Restructuring 1 2006 through 2015 EBITDA margins as reported in the fiscal year noted and not adjusted for
Slide 6: Baseline Historical Performance
* Baseline Historical Performance1 ($ in millions) 1 See appendix for reconciliation to amounts reported under GAAP for applicable periods. Strategic actions have led to stable and growing margins
Slide 7: Corporate Profile
* Corporate Profile By business unit By geography 1 For 12 months ended June 30, 2016.2 Ashland includes only U.S. and Canada in its North America designation. North America253% Asia Pacific16% LatinAmerica/Other - 7% Europe 24% AshlandSpecialtyIngredients42% AshlandPerformanceMaterials19% Valvoline
Slide 8: Corporate Profile
* Corporate Profile 1 For 12 months ended June 30, 2016. See Appendix B for reconciliation to amounts reported under GAAP. NYSE Ticker Symbol: ASH Total Employees: ~11,000 Outside North America ~30% Number of Countries in Which Ashland Has Sales: More than 100 AshlandSpecialtyIngredients46% Valvolin
Slide 9: Fiscal Third Quarter 2016 Highlights
* Fiscal Third Quarter 2016Highlights1 Reported earnings from continuing operations of $1.55 per diluted shareAdjusted earnings increased 2% to $1.95 vs. $1.91 per diluted share in prior yearFirst quarter of adjusted EPS growth in fiscal year 2016Adjusted EBITDA increased 1% to $294 million vs. $290
Slide 10: Adjusted Results Summary
* Adjusted Results Summary1 As expected, headwinds receded further; currency, energy end markets and divestitures2 were ~$40 million headwind to salesAdjusted EBITDA of $294 million represents both year-over-year and sequential growth 1 Ashland‘s earnings releases dated July 26, 2016, and April 26,
Slide 11: Ashland Specialty Ingredients
* Salesby Market2 Ashland Specialty Ingredients: A global leader of cellulose ethers, vinyl pyrrolidones and biofunctionals For 12 Months Ended June 30, 2016Sales: $2.1 billionAdjusted EBITDA: $478 million1Adjusted EBITDA Margin: 22.8%1 Salesby Product Cellulosics 38% PVP19% Adhesive 16% North Ameri
Slide 12: Ashland Specialty Ingredients Adjusted Results Summary
* Ashland Specialty IngredientsAdjusted Results Summary1 Sales or volume growth in numerous core growth and niche end marketsOverall results did not meet the outlook presented at the beginning of the quarter due to weakness in emerging regions 1 Ashland's earnings releases dated July 26, 2016, and A
Slide 13: Ashland Performance Materials
* Ashland Performance Materials Global leader in unsaturated polyester resins and vinyl ester resins Salesby Geography For 12 Months Ended June 30, 2016Sales: $1.0 billionEBITDA: $133 million1EBITDA Margin: 13.8%1 Salesby Product Composites72% Intermediates/Solvents 28% Construction: Residential13%
Slide 14: Ashland Performance Materials Adjusted Results Summary
* Ashland Performance Materials Adjusted Results Summary1 Solid composites margins reflecting pricing disciplineGenerally soft volumes across all global regionsAs expected, weak volumes and margins within I&S 1 Ashland's earnings releases dated July 26, 2016, and April 26, 2016, available on Ashland
Slide 15: Valvoline: A leading worldwide producer and distributor of premium-branded lubricants
* Valvoline: A leading worldwide producer and distributor of premium-branded lubricants and automotive chemicals International Salesby Region2 For 12 Months Ended June 30, 2016Sales: $1.9 billionEBITDA: $432 million1EBITDA Margin: 22.5%1 Salesby Product Lubricant389% Chemicals – 4% Do-It-Yourself28%
Slide 16: Valvoline Results Summary
* ValvolineResults Summary1 Continued execution against strategic objectives leading to the eleventh consecutive quarter of year-over-year earnings growthVIOC added 116 stores over the past year – including 89 from the acquisition of Oil Can Henry’s – bringing the total to 1,055 stores at the end of
Slide 17: Fiscal Third Quarter 2016 Corporate Items
* Fiscal Third Quarter 2016Corporate Items Adjusted corporate operating income of $14 millionNet interest expense of $40 millionFY 2016 expectation of approximately $165-$175 millionAdjusted effective tax rate of 28%FY 2016 expectation at the upper end of the 25%-26% rangeTrade Working Capital1 for
Slide 18: Separation Update
* Separation UpdateSignificant Milestones Achieved Amendment to Ashland’s senior unsecured credit agreementNew $1.325 billion five-year Valvoline credit agreement$450 million revolver$875 million term loanNew 5.5% Valvoline senior bond offering due 2024$375 million aggregate principal amountAshland
Slide 19: Appendix A: Bridges, Volume Trends, Liquidity and Net Debt
Appendix A:BridgesVolume TrendsLiquidity and Net Debt
Slide 20: Ashland Q3 FY 2015 vs. Q3 FY 2016 Revenue Bridge
* Ashland Q3 FY 2015 vs. Q3 FY 2016Revenue Bridge 1% Q3 2015 Volume Q3 2016 Currency (4%) 1,367 1,290 Price (1%) Acq/Div/Other1 (1%) ($ millions)Preliminary Headwinds from currency, energy markets and divestitures represented ~$40 million headwind to overall salesRaw material pass through was primar
Slide 21: Ashland Adjusted EBITDA Bridge
* Ashland Q3 FY 2015 vs. Q3 FY 2016Adjusted EBITDA Bridge 2 Q3 2015 Volume/Mix Q3 2016 Currency Translation Margin 9 290 294 SG&AExpenses (8) (1) Other 2 ($ millions)Preliminary First quarter of year-over-year EBITDA growth in fiscal year 2016Excluding impact of the energy market, volume/mix contrib
Slide 22: Ashland Specialty Ingredients Adjusted EBITDA Bridge
* Ashland Specialty Ingredients Adjusted EBITDA Bridge Q3 2015 Volume/ Mix Q3 2016 Currency Translation Margin SG&AExpenses Q3 FY 2015 versus Q3 FY 2016 0 0 (7) 128 Excluding impact of the energy market, vol/mix was a positive $2 millionRaw material pass through was the primary driver to lower prici
Slide 23: Ashland Performance Materials Adjusted EBITDA Bridge
* Ashland Performance MaterialsAdjusted EBITDA Bridge Q3 2015 Volume/ Mix Q3 2016 Currency Translation Margin SG&AExpenses Q3 FY 2015 versus Q3 FY 2016 (3) 5 1 Other 0 30 Composites volumes soft but margins remain solidI&S saw continued weak volumes and pricing, however turnaround costs in the prior
Slide 24: Valvoline Adjusted EBITDA Bridge
* ValvolineAdjusted EBITDA Bridge Q3 FY 2015 versus Q3 FY 2016 ($ millions)Preliminary 7 (1) 0 (8) 119 116 5 Strong DIFM results, lower input costs, disciplined margin management and good volume/mix key to EBITDA growthInvestments in promotions, advertising and digital technology upgrades contribute
Slide 25: Normalized Volume Trends
* Normalized Volume Trends1 Period Ended 1 Excludes volumes associated with divestitures of elastomers and biocides and exited redispersible powders (RDP) product line for all periods. Includes volumes associated with OCH International, Inc. Rolling Four Quarters 2 2
Slide 26: Liquidity and Net Debt
* Liquidity and Net Debt ($ in millions) Scheduled Debt Repaymentsby Fiscal Year
Slide 27: Appendix B: Non-GAAP Reconciliations
Appendix B:Non-GAAP Reconciliations
Slide 28: Reconciliation of Non-GAAP Data for 12 Months Ended June 30, 2016
* Ashland Inc. and Consolidated SubsidiariesReconciliation of Non-GAAP Data for 12 Months Ended June 30, 2016 1 Quarterly totals may not sum to actual results due to quarterly rounding conventions. Calculation of adjusted EBITDA for each quarter has been reconciled within certain financial filings w
Slide 29: Reconciliation of Non-GAAP Data for 12 Months Ended September 30, 2015
* Ashland Inc. and Consolidated SubsidiariesReconciliation of Non-GAAP Data for 12 Months Ended September 30, 2015 1 Quarterly totals may not sum to actual results due to quarterly rounding conventions. Calculation of adjusted EBITDA for each quarter has been reconciled within certain financial fili
Slide 30: Reconciliation of Non-GAAP Data for 12 Months Ended September 30, 2014
* ($ millions, except percentages) 1 Quarterly totals may not sum to actual results due to quarterly rounding conventions. Calculation of adjusted EBITDA for each quarter has been reconciled within certain financial filings with the SEC and posted on Ashland's website for each reportable segment. As
Slide 31: Reconciliation of Non-GAAP Data for Fiscal Years Ended September 30
* ($ millions, except percentages) 1 As reported figures for 2009 - 2011 include proforma adjustments for certain acquisitions and divestitures. See the November 15, 2011 Analyst Day Presentation for the reconciliation of the as reported figures to those reported under U.S. GAAP. For 2012 and 2013,
Slide 32: Ashland. With good chemistry great things happen
ASHLAND. With good chemistry great things happen:
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