Ashland (ASH) investor relations material

Executive summary

• Q2 2026 delivered resilient commercial performance with 1% sales growth to $482 million, supported by strong execution in Personal Care and Life Sciences, despite operational headwinds from Calvert City delays, Hopewell productivity issues, and adverse weather.

• Net income was $16 million ($0.34 per diluted share), down from $31 million last year; adjusted income from continuing operations excluding intangibles amortization was $42 million ($0.91 per diluted share).

• Adjusted EBITDA was $98 million, down 9% year-over-year, impacted by pricing pressure, operational disruptions, and weather-related events.

• Innovation and globalization initiatives exceeded full-year targets after two quarters, driving incremental sales and reinforcing long-term growth.

• Cash generation and working capital management were notable strengths, supporting a strong balance sheet and liquidity.

Financial highlights

• Q2 sales were $482 million, up 1% year-over-year, with stable volumes and modest pricing declines.

• Adjusted EBITDA was $98 million, down 9% year-over-year, with margin at 20% (down 220 bps YoY); adjusted EPS (excluding intangible amortization) was $0.91, down 8% year-over-year.

• Gross profit margin declined to 30.5% from 30.7% YoY.

• Operating cash flow was $50 million (up from $9 million prior year); free cash flow was $29 million for the quarter, and $144 million for the six months ended March 31, 2026.

• Liquidity stood at $939 million, with net debt just over $1 billion and net leverage at 2.7x.

Outlook and guidance

• Full-year 2026 sales guidance updated to $1,835–$1,870 million; Adjusted EBITDA guidance set at $385–$400 million.

• Adjusted EPS expected to grow mid- to high-single digits; free cash flow conversion targeted at ~50% of Adjusted EBITDA, with capital expenditures of ~$100 million.

• Guidance reflects softer energy and EV demand, slower Hopewell productivity, but is partially offset by resilient core markets and ongoing price actions.

• Performance expected to be second-half weighted, with stable Life Sciences and Personal Care, and gradual recovery in Specialty Additives and Intermediates.

• Manufacturing optimization savings for 2026 reduced by $10–$12 million due to slower ramp-up at Hopewell.