Slide 1: Earnings Conference Call Third-Quarter Fiscal 2020
Earnings Conference Call Third-Quarter Fiscal 2020 July 29, 2020 – 9:00am Eastern Time / 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: Agenda
agenda o Q3 performance summary o Q3 financial results o priorities and outlook o closing comments o thank you and Q&A 3
Slide 4: Q3 performance summary
Q3 performance summary «<f Ashland always solving
Slide 5: Our Priorities in Current Environment
Ashland Global Holdings Inc. Our Priorities in Current Environment priority # 1 address the impact of COVID-19 o health and safety of our employees o continued supply to our customers and the critical industries we serve o position Ashland for success across stressed scenarios o prepare for reopenin
Slide 6: Commentary on Q3 Performance
Ashland Global Holdings Inc. Commentary on Q3 Performance o resilient consumer end-market demand o weak global-industrial demand due to COVID-19 o favorable price/mix and operating costs o continued benefit from cost-reduction program leading to expanded margins 6
Slide 7: Q3 financial results
Q3 financial results «<f Ashland always solving
Slide 8: Fiscal-Third Quarter Adjusted Results
Ashland Global Holdings Inc. Fiscal-Third Quarter Adjusted Results1 ($US in millions, except percentages) Q3 FY20 Q3 FY19 Change Sales $574 $641 (10) % Gross profit margin 34.1 % 32.8 % +130 bps SG&A / R&D costs / Intangible amortization $115 $134 (14) % EBITDA $143 $140 +2 % EBITDA margin 24.9 % 21
Slide 9: Consumer Specialties Adjusted Results Summary
Consumer Specialties Adjusted Results Summary1 ($US in millions, except percentages) Q3 FY20 Q3 FY19 Change Sales $344 $348 (1) % Gross profit $122 $121 +1 % Gross profit margin 35.5 % 34.8 % +70 bps Operating income $56 $49 +14 % Photo EBITDA $90 $84 +7 % EBITDA margin 26.2 % 24.1 % +210 bps o resi
Slide 10: Industrial Specialties Adjusted Results Summary
Industrial Specialties Adjusted Results Summary1 ($US in millions, except percentages) Q3 FY20 Q3 FY19 Change Sales $205 $265 (23) % Gross profit $64 $78 (18) % Gross profit margin 31.2 % 29.4 % +180 bps Operating income $30 $38 (21) % Photo EBITDA $54 $62 (13) % EBITDA margin 26.3 % 23.4 % +290 bps
Slide 11: Intermediates & Solvents Adjusted Results Summary
Intermediates & Solvents (I&S) Adjusted Results Summary1 ($US in millions, except percentages) Q3 FY20 Q3 FY19 Change Sales $37 $41 (10) % Gross profit $10 $11 (9) % Gross profit margin 27.0 % 26.8 % +20 bps Operating income $7 $8 (13) % Photo EBITDA $11 $11 - EBITDA margin 29.7 % 26.8 % +290 bps o
Slide 12: Sale of Maleic Anhydride Business
Ashland Global Holdings Inc. Sale of Maleic Anhydride Business o announced signing of definitive agreement to sell maleic anhydride business in Neal, West Virginia o purchase price of $100 million; expect after-tax net proceeds of approximately $85 – $90 million o business was excluded from the sale
Slide 13: Priorities and outlook
oriorities and outlook «<f Ashland always solving
Slide 14: Our Transformation
Ashland Global Holdings Inc. Our Transformation self-help initiatives proceeding as communicated business-centric operating model BU model in operation and business process improvement in progress o teams in place redesign of core operating systems o strategic planning S&OP process and processes o o
Slide 15: Strategic Next Steps
Ashland Global Holdings Inc. Strategic Next Steps o expand additives portfolio o build out bio-tech capabilities o accelerate our growth in Asia o customer-focused & innovation-centric culture o accelerate our digital modernization o disciplined portfolio management & capital allocation 15
Slide 16: COVID-19 Scenario Planning
Ashland Global Holdings Inc. COVID-19 Scenario Planning key take-aways o largely defensive portfolio o supply chain presents greatest risk o self-help actions improving our performance o high level of uncertainty continues current actions amid great uncertainty o increased focus and active managemen
Slide 17: Outlook
Ashland Global Holdings Inc. Outlook not providing guidance for Q4 or FY2020 forward-looking insights o no significant changes expected in consumer macro trends • areas of weakness continue to be hair styling and sun care • continue working through challenges in Avoca o sequential improvements in in
Slide 18: Well Positioned for Uncertain Times
Ashland Global Holdings Inc. Well Positioned for Uncertain Times strong foundation for success o high-value technologies, leading market positions in critical industries and deep customer relationships o focused business units self-help actions o reducing working capital, capital spending and operat
Slide 19: Closing comments
closing comments «<f Ashland always solving
Slide 20: A Premier Specialty Materials Company
Ashland Global Holdings Inc. A Premier Specialty Materials Company o focused on high-quality markets and businesses with exciting profitable growth opportunities o franchise businesses have leadership positions • #1 or #2 • strong teams with deep industry expertise • excellent customer relationships
Slide 21: Thank you and Q&A
thank you and Q&A of Ashland
Slide 22: Appendix A: Adjusted Results Summary and Balance Sheet
Appendix A: Adjusted Results Summary and Balance Sheet
Slide 23: Adjusted Results Summary
Ashland Global Holdings Inc. Adjusted Results Summary1 ($US in millions, except percentages and Q3 FY20 Q3 FY19 Change per share data) Sales $574 $641 (10) % Gross profit $196 $210 (7) % Gross profit margin 34.1 % 32.8 % +130 bps Photo SG&A / R&D costs / Intangible amort. $115 $134 (14) % Operating
Slide 24: Business Unit Consolidation
Ashland Global Holdings Inc. Business Unit Consolidation ($US in millions, except Consumer Industrial Interco Unallocated I&S Ashland percentages) Specialties Specialties Eliminations and Other Sales $344 $205 $37 ($12) - $574 Gross profit $122 $64 $10 - - $196 Gross profit margin 35.5 % 31.2 % 27.0
Slide 25: Liquidity and Net Debt
Ashland Global Holdings Inc. Liquidity and Net Debt Interest Moody’s 6/30/20 ($US in millions) Expiration S&P Rating Rate Rating Balance Cash $416 Revolver and A/R facility availability 350 Cash, A/R and revolver availability $766 Photo Debt 2.00% Notes (EUR) Jan. 2028 2.000% Ba1 BB+ $561 4.750% Not
Slide 26: Appendix B: Non-GAAP Reconciliation
Appendix B: Non-GAAP Reconciliation1 1 Although Ashland provides forward looking guidance for adjusted EBITDA in this presentation, Ashland is not reaffirming or providing forward-looking guidance for U.S. GAAP reported financial measures or a reconciliation of forward-looking non-GAAP financial mea
Slide 27: Reconciliation of Non-GAAP Data
Ashland Global Holdings Inc. and Consolidated Subsidiaries Reconciliation of Non-GAAP Data for 12 Months Ended June 30, 2020 ($ millions, except percentages) 1 Sales Q3 20 Q2 20 Q1 20 Q4 19 Total Q3 19 Life Sciences $ 189 $ 184 $ 155 $ 176 $ 704 $ 190 Personal Care & Household 155 159 137 157 608 15
Slide 28: Segment Components of Key Items, 3 Months Ended June 30, 2020
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended June 30, 2020 ($ millions) Life Personal Care Consumer Specialty Performance Industrial Intermediates Unallocated Sciences and Household Specialties
Slide 29: Segment Components of Key Items, 3 Months Ended June 30, 2019
Ashland Global Holdings Inc. and Consolidated Subsidiaries Segment Components of Key Items for Applicable Income Statement Captions for 3 Months Ended June 30, 2019 ($ millions) Life Personal Care Consumer Specialty Performance Industrial Intermediates Unallocated Sciences and Household Specialties
Slide 30: 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 June 30, 2020 and 2019 ($ millions) Three months ended June 30 1 Free cash flows 2020 2019 Total cash flow s used by operating activ ities from
Slide 31: Reconciliation of Non-GAAP Data – Adjusted EBITDA
Ashland Global Holdings Inc. Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended June 30, 2020 and 2019 ($ millions) Three months ended June 30 Adjusted EBI TDA - Ashland Global Holdings I nc. 2020 2019 Net income (loss) $ 37 $ 66 I ncome tax expense Ashland (benefit) 12 (1) Net int
Slide 32: Adjusted EBITDA – Consumer Specialties
Consumer Specialties Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended June 30, 2020 and 2019 ($ millions) Three months ended June 30 2020 2019 Life Sciences Operating income $ 40 $ 32 Add: Depreciation and amortization 15 15 Adjusted EBI TDA $ 55 $ 47 Ashland Personal Care and Ho
Slide 33: Adjusted EBITDA – Industrial Specialties, Intermediates and Solvents
Industrial Specialties, Intermediates and Solvents Reconciliation of Non-GAAP Data – Adjusted EBITDA for 3 Months Ended June 30, 2020 and 2019 Three months ended ($ millions) June 30 2020 2019 Specialty Additives Operating income $ 15 $ 19 Add: Depreciation and amortization 20 20 Operating key items
Slide 34: 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 June 30, 2020 and 2019 Three months ended ($ millions) June 30 2020 2019 Income (loss) from continuing operations (as reported) $ 50 $ 23 Key ite
Slide 35: 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 June 30, 2020 and 2019 Three months ended ($ millions) June 30 2020 2019 Diluted EPS from continuing operations (as reported) $ 0.81 $ 0.37
Slide 36: Trademark notices
® Registered trademark, Ashland or its subsidiaries, registered in various countries ™ Trademark, Ashland or its subsidiaries, registered in various countries