Ashland (ASH) investor relations material

Executive summary

• Q3 sales declined 15% year-over-year to $463M, with adjusted EBITDA down 19% to $113M and adjusted EPS down 30% to $1.04, reflecting portfolio optimization, lower volumes, and cost actions supporting margin resilience.

• Net loss of $742M for Q3, driven by a $706M non-cash goodwill impairment in Life Sciences and Specialty Additives, reflecting lower growth and margins amid a subdued macroeconomic environment.

• Portfolio optimization and restructuring are complete, resulting in a more focused business aligned with high-value, resilient markets.

• Strategic exits, including the Avoca divestiture, reset the business baseline for future growth and improved returns.

• Restructuring and manufacturing optimization initiatives are underway, targeting $30M and $60M in pre-tax savings, with over half of restructuring savings expected in fiscal 2025.

Financial highlights

• Q3 net loss: $742M vs. net income of $6M prior year; adjusted EBITDA $113M, margin 24.4%; adjusted EPS (excluding acquisition amortization) $1.04.

• Q3 sales were $463M, down 15% year-over-year, including a $53M impact from portfolio optimization; organic sales declined 5%.

• Gross margin for Q3: 28.5% (down from 34.2% year-over-year); ongoing free cash flow for the quarter was $108M.

• Average diluted shares outstanding fell to 46M from 51M due to share repurchases.

• Liquidity at quarter end exceeded $800M; net leverage at 2.9x.

Outlook and guidance

• Full-year fiscal 2025 sales expected at $1.825B–$1.85B and adjusted EBITDA at $400M–$410M, with guidance narrowed and weighted toward the lower end due to ongoing macro uncertainty.

• Cost savings and manufacturing optimization initiatives are expected to support continued margin strength, with $7.5M in Q4 savings targeted.

• Free cash flow expected to remain strong in Q4.

• Guidance reflects stable but subdued macro environment and cautious consumer sentiment.