Slide 1: Earnings conference call fourth quarter fiscal 2024
earnings conference call fourth quarter fiscal 2024 — November 7, 2024 9:00 a.m. ET
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: Participation of our business leaders
participation of our business leaders — life sciences & personal care specialty additives intermediates Jim Minicucci Dago Caceres Alessandra Faccin senior vice president & senior vice president & senior vice president & general manager general manager general manager 3
Slide 4: Agenda
agenda — o Q4 & FY 24 performance summary o Q4 financial results o portfolio optimization o outlook & priorities for FY 25 o closing comments o Q&A 4
Slide 5: Q4 & FY24 performance summary
Guillermo Novo, Chair & CEO Q4 & FY 24 performance summary 5
Slide 6: Q4 highlights
Q4 highlights1 — sales adjusted EBITDA adjusted EBITDA % adjusted EPS2 +1 % +68 % +950 bps +207 % $522 MM $124 MM 23.8 % $1.26 (+) stronger organic sales (+) sales & production demand & production improved income from volume across BUs (-) volume recovery, mix (-) normalization; significant continui
Slide 7: Organic growth & improving margins
organic growth & improving margins — sales growth & portfolio optimization delivering Adj. EBITDA margin recovery vs. last year 15% 11% sales comparisons versus prior-year 29% 29% 10% portfolio optimization impact 28% 24% 5% 20% 1% (-) (-) 0% +560 +430 +1,450 +1,970 +950 -2% bps bps bps bps bps -3%
Slide 8: FY24 year in review
FY 241 “year in review” — major factors impacting results organic volume (+) 2H demand recovery (-) 1H destocking & normalization of VP&D supply chains price/mix price vs. volume management; tactical pricing in core; intermediates cycle optimization CMC, MC and nutraceuticals portfolio optimization
Slide 9: Q4 financial results & business unit reviews
Q4 financial results & business unit reviews 9
Slide 10: Fiscal-fourth quarter adjusted results
fiscal-fourth quarter adjusted results1 — operating results summary Ashland ($US in millions, except percentages) Q4 FY24 Q4 FY23 change sales $522 $518 +1 % gross profit margin 34.3 % 24.9 % +940 bps SG&A / R&D costs / intangible amortization $111 $116 (4) % operating income $72 $14 +414 % EBITDA $
Slide 11: Life sciences
life sciences — highlights adjusted results summary1 ($US in millions, except o resilient demand in pharma percentages) Q4 FY24 Q4 FY23 change cellulosics sales $192 $203 (5) % o moderating VP&D softness; sequential improvement gross profit $72 $63 +14 % o weaker nutraceuticals prior gross profit ma
Slide 12: Intermediates
intermediates — highlights adjusted results summary1 ($US in millions, except o merchant: lower NMP pricing percentages) Q4 FY24 Q4 FY23 change and higher BDO volumes sales $36 $37 (3) % o weaker demand in electric vehicle / battery gross profit $9 $2 +350 % o favorable product mix & gross profit ma
Slide 13: Personal care
personal care — highlights adjusted results summary1 ($US in millions, except o strong sales volume across percentages) Q4 FY24 Q4 FY23 change markets, skin & hair sales $162 $146 +11 % o unfavorable oral care order timing; full-year sales +MSD gross profit $66 $53 +25 % o avoca impact moderated; gr
Slide 14: Specialty additives
specialty additives — highlights adjusted results summary1 ($US in millions, except o sales volume recovery in percentages) Q4 FY24 Q4 FY23 change coatings & performance specialties sales $144 $144 (-) % o energy end market impact gross profit $32 $11 +191 % moderated on softer PY gross profit margi
Slide 15: Strong balance sheet
strong balance sheet — strong balance sheet1 o cash and liquidity available of ~$0.9 billion o net debt2 of $1,049 million; net leverage3 of 2.3x o no long-term debt maturities for the next two years share repurchases under $1 billion authorization o $620 million remains under the current authorizat
Slide 16: Growing ongoing free cash flow & dividend
growing ongoing free cash flow & dividend — ongoing free cash flow1 generation annual dividend3 increase every year since 2009 1.80 $1.58 o producing to demand / inventory stable 1.60 $1.49 1.40 $1.31 o Q4 ongoing free cash flow1 of $88 million 1.20 $1.08 $1.10 $1.18 $0.98 1.00 $0.87 o FY24 $270 mil
Slide 17: FY24 portfolio reset
FY 24 portfolio reset — adjusting FY 24 for the impact of portfolio optimization (US$ in million) sales (US$ in million) adj. EBITDA FY 2024 reported $2,113 FY 2024 reported $459 portfolio optimization actions ($164) portfolio optimization actions ($30) FY 2024 portfolio reset $1,949 FY 2024 portfol
Slide 18: FY25 execute levers to strengthen core
FY 25 “execute” levers to strengthen core — 1 $30 million restructuring plan o reduce costs & offset stranded costs from optimization actions o no impact to growth strategies, innovate & globalize o ~$15 million FY25 2 $60 million manufacturing productivity and network optimization o strengthen our
Slide 19: Priorities & outlook
Guillermo Novo, Chair & CEO priorities & outlook 19
Slide 20: Operating environment and Ashland
operating environment and Ashland — materials external environment Ashland o elevated but moderating inflation & stimulus o resilient end markets o subdued US & Europe economic recovery o increased competitive intensity o prolonged slowdown in China o high impact self-help actions o geopolitical unc
Slide 21: Full-year 2025 outlook
full-year 2025 outlook — forward looking insights fiscal full-year outlook o recovering demand and improved production volumes; + MSD sales $1.90 – $2.05 billion o mixed regional dynamics with high-level of uncertainty Adj. EBITDA $430 - $470 million o longer China slowdown; heightened competitive i
Slide 22: CEO FY 2025 priorities
CEO FY 2025 priorities — clarity vs. certainty execute globalize o stay on strategy & maintain disciplined capital allocation o share / price management o deliver on restructuring and manufacturing improvements innovate acquire o maintain momentum of globalize & innovate agenda o upgrade planning pr
Slide 23: Closing comments
Guillermo Novo, Chair & CEO closing comments 23
Slide 24: Upcoming strategy update event
upcoming strategy update event — increased focus on near-term performance o recognition of challenging market; o business-unit panel with GMs focused on 2025 commitment o moderated Q&A sessions o ashland today; financial & operational reset o live break-outs with business line leaders & scientists o
Slide 25: Thank you Q&A
thank you Q&A <f Ashland always solving 25
Slide 26: Appendix A: adjusted results summary and balance sheet
appendix A: adjusted results summary and balance sheet 26
Slide 27: Q4 adjusted results summary
Q4 adjusted results summary1 — ($US in millions, except percentages and per share data) Q4 FY24 Q4 FY23 change sales $522 $518 +1 % gross profit $179 $129 +39 % gross profit margin 34.3 % 24.9 % +940 bps SG&A / R&D costs / intangible amort. $111 $116 (4) % operating income $72 $14 +414 % depreciatio
Slide 28: Q4 business unit consolidation
Q4 business unit consolidation1 — specialty intercompany unallocated ($US in millions, except percentages) life sciences personal care Intermediates Ashland additives eliminations 2 and other3 sales $192 $162 $144 $36 ($12) - $522 gross profit $72 $66 $32 $9 - - $179 gross profit margin 37.5 % 40.7
Slide 29: Liquidity and net debt
liquidity and net debt — ($US in millions) expiration interest rate Moody’s rating S&P rating 9/30/24 balance cash $300 revolver availability 596 cash and revolver availability 1 $896 US and foreign A/R sales program1 - debt 2.00% notes (EUR) Jan. 2028 2.000% Ba1 BB+ $558 3.375% notes Sept. 2031 3.3
Slide 30: Appendix B: non-GAAP reconciliation
appendix B: non-GAAP reconciliation1 1 Although Ashland provides forward looking guidance for adjusted EBITDA in this presentation, Ashland is not reaffirming or providing forward-looking guidance for U.S. GAAP reported financial measures or a reconciliation of forward-looking non-GAAP financial mea
Slide 31: Reconciliation of Non-GAAP Data
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for the 12 Months Ended September 30, 2024 — ($ millions, except pecentages) Sales 1 Q4 24 Q3 24 Q2 24 Q1 24 Total Q4 23 Life Sciences 192 195 222 200 810 $ 203 Personal Care 162 175 169 129 634 146 Specialty Additives 144 15
Slide 32: Segment components of key items, three months ended September 30, 2024
Ashland Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions – for the 3 months ended September 30, 2024 — In millions - preliminary and unaudited ($ millions) OPERATING INCOME (LOSS) Life Sciences Care Three Months Ended September 30, 2024 Pers
Slide 33: Segment components of key items, three months ended September 30, 2023
Ashland Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions – for the 3 months ended September 30, 2023 — In millions - preliminary and unaudited ($ millions) Life Sciences Care Three Months Ended September 30, 2023 Personal Specialty Additives
Slide 34: Free cash flow and adjusted operating income reconciliation
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Free Cash Flow and Adjusted Operating Income for the 3 and 12 Months Ended September 30, 2024 and 2023 — ($ millions) Free cash flows Total cash flows provided by operating activities from continuing operations Adjustments:
Slide 35: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Ashland Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended September 30, 2024 and 2023 — ($ millions) Three months ended September 30 Adjusted EBITDA - Ashland Inc. 2024 2023 Net income (loss) $ 16 $ (4) Income tax expense (benefit) 6 (30) Net interest and other expense (i
Slide 36: Adjusted EBITDA – Life Sciences and Personal Care
Life Sciences and Personal Care Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended September 30, 2024 and 2023 — ($ millions) Three months ended September 30 2024 2023 Adjusted EBITDA - Life Sciences Operating income $ 43 $ 31 Add: Depreciation and amortization(a) 15 17 Operati
Slide 37: Adjusted EBITDA – Specialty Additives and Intermediates
Specialties Additives and Intermediates Reconciliation of Non-GAAP Data – Adjusted EBITDA for the 3 Months Ended September 30, 2024 and 2023 — ($ millions) Three months ended September 30 2024 2023 Adjusted EBITDA - Specialty Additives Operating income (loss) $ 9 $ (12) Add: Depreciation and amortiz
Slide 38: Adjusted income from continuing operations reconciliation
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Income from Continuing Operations — for the 3 and 12 Months Ended September 30, 2024 and 2023 Three months ended September 30 Year ended September 30 2024 2023 2024 2023 ($ millions) Income (loss) from continuing o
Slide 39: Adjusted diluted EPS from continuing operations reconciliation
Ashland Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data – Adjusted Diluted EPS from Continuing Operations — for the 3 and 12 Months Ended September 30, 2024 and 2023 ThreeSeptember months ended 30 Year ended September 30 2024 2023 2024 2023 Diluted EPS from continuing operations (
Slide 40: Ashland – always solving
oT <t Ashland always solving