Ashland (ASH) investor relations material

Executive summary

• Sales increased 7% year-over-year to $497 million, with broad-based volume gains across all business units and regions, led by Life Sciences and Personal Care.

• Adjusted EBITDA was $109 million, down 4% from the prior year, reflecting margin compression in Specialty Additives and Intermediates, but strong performance in Life Sciences and Personal Care.

• Net income for Q3 2026 was $16 million, reversing a prior year net loss, with diluted EPS of $0.35, driven by the absence of a $706 million goodwill impairment.

• Free cash flow remained strong at $103 million, supported by disciplined inventory management and ongoing operational improvements.

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

Financial highlights

• Sales volumes increased 6% year-over-year; pricing rose 1%, with favorable foreign currency impact of $3 million.

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

• Gross profit margin for Q3 2026 was 34.2%, up from 28.5% in Q3 2025.

• Operating income was $63 million, down 3% year-over-year; adjusted operating income was $63 million, down from $65 million last year.

• Ongoing free cash flow conversion remained above 90%.

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.

• 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 performance and pricing actions gain traction.