Ashland (ASH) investor relations material

Executive summary

• Q4 sales were $478 million, down 8% year-over-year, mainly due to portfolio optimization actions; excluding these, sales declined 1%.

• Adjusted EBITDA was $119 million, down 4% year-over-year, but up 5% on a comparable basis, with margins expanding to nearly 25%.

• Portfolio optimization and restructuring are complete, with 85% of the portfolio now serving consumer-facing end markets, enhancing stability.

• Net income for the quarter was $32 million, up from $16 million last year; income from continuing operations was $33 million, or $0.73 per diluted share.

• Cost actions and growth initiatives are gaining momentum, positioning the company for resilient long-term value.

Financial highlights

• Adjusted EBITDA margin expanded to 24.9–25%, up 110 basis points year-over-year, marking the most profitable quarter of the year.

• Adjusted EPS was $1.08, down 14% from the prior year, impacted by a higher effective tax rate.

• Ongoing free cash flow was $52 million for the quarter, with total liquidity over $800 million and net leverage at 2.9x, improving to mid-2s after a $103 million tax refund.

• Portfolio optimization actions reduced annual sales by $208 million and adjusted EBITDA by $45 million.

• Average diluted shares outstanding in Q4: 46 million, down from 49 million last year.

Outlook and guidance

• Fiscal 2026 sales expected at $1,835–$1,905 million, representing 1–5% organic growth.

• Adjusted EBITDA projected at $400–$430 million, with free cash flow conversion of 50% and CapEx near $100 million.

• Adjusted EPS expected to grow double digits, outpacing EBITDA growth.

• Guidance includes $30 million in restructuring and network optimization, $20 million for compensation/merit, and $10 million for operational efficiency post-Calvert City outage.

• $4 million increase in R&D to accelerate innovation in disruptive opportunities.