Ashland (ASH) Status Update summary

Strategic transformation and leadership

• Completed major portfolio transformation, exiting non-core and low-margin businesses, with only one divestiture (Avoca) remaining in 2024.

• Leadership team significantly refreshed, leveraging diverse experience to drive innovation, growth, and execution across business units.

• Focused on high-quality, consumer-oriented markets with leadership positions in Life Sciences, Personal Care, and Specialty Additives, with ~80% of the portfolio in high-growth markets.

• Emphasis on building a robust, sustainable, and innovation-driven business model, with disciplined capital allocation to deliver shareholder value.

• Strategic actions address market headwinds by focusing on resilient end markets, self-help initiatives, and maintaining a strong balance sheet.

Financial outlook and performance

• Targeting $2 billion in sales and $460 million EBITDA with 24% margins post-portfolio reset; current FY24 adjusted sales are $1.95 billion, EBITDA $429 million, and margin 22.0%.

• $90 million self-help program through 2027, with $30 million in cost reductions and $60 million in productivity improvements, mainly in HEC and VP&D.

• Expecting mid-single-digit top-line growth, high single- to low double-digit EBITDA growth, and >25% EBITDA margins by 2027.

• Over $800 million free cash flow expected in three years, with ongoing FY24 free cash flow at $270 million and conversion at 59%.

• Liquidity stands at $896 million, with net debt at $1.05 billion as of September 30, 2024.

Growth catalysts: globalization and innovation

• Four globalized businesses (injectables, film coatings, Biofunctionals, Microbial Protection) targeted to add $100 million revenue by 2027, growing at 15% CAGR.

• $100 million incremental revenue expected from core and platform innovation by 2027, with a strong pipeline in sustainable and high-performance technologies.

• Innovation focus includes new technology platforms (bioresorbable polymers, transformed vegetable oils, novel cellulosics), with customer co-development and regulatory engagement.

• Investments in regional manufacturing and R&D to support globalization and efficient growth.

• M&A and partnerships are used to fill strategic gaps, accelerate innovation, and provide additional upside potential.