Ashland (ASH) investor relations material

Executive summary

• Sales increased 7% year-over-year to $497 million, with volume gains across all business units and regions, led by Life Sciences and Personal Care; net income was $16 million, reversing a prior year loss, and adjusted EBITDA was $109 million, down 4% year-over-year due to margin compression in Specialty Additives and Intermediates.

• Free cash flow remained strong at $103 million, supported by disciplined inventory management and operating cash flows of $121 million.

• Net leverage improved to 2.4x, within the long-term target range, and liquidity ended at $936 million.

• Announced a cooperation agreement with Ancora, adding two independent directors and forming a capital allocation advisory committee.

• Returned to profitability in Q3 2026, with diluted EPS of $0.35, driven by the absence of a prior year goodwill impairment.

Financial highlights

• Gross profit margin was 34.2% for Q3 2026, up from 28.5% in Q3 2025; adjusted EBITDA margin was 21.9%, down from 24.4% year-over-year.

• Adjusted EPS (excluding amortization) was $1.02, compared to $1.04 in the prior year quarter.

• Operating income was $63 million, down 3% year-over-year, while net income improved to $16 million from a $742 million loss last year.

• Free cash flow conversion was above 90% for the quarter, and ongoing conversion is expected to exceed 50% of adjusted EBITDA.

• Cash and cash equivalents rose to $440 million at June 30, 2026.

Outlook and guidance

• Full-year 2026 sales guidance reaffirmed at $1,835–$1,870 million; adjusted EBITDA guidance at $385–$400 million.

• Adjusted EPS outlook revised to low- to mid-single digit growth due to a higher tax rate from unfavorable discrete items.

• Ongoing free cash flow conversion expected to exceed 50% of adjusted EBITDA, with capital expenditures projected at ~$90 million.

• Sequential improvement expected in Q4 as operational and pricing actions gain traction.