On this page of StockholderLetter.com we present the 12/11/2023 shareholder letter from ASHLAND INC. — ticker symbol ASH. Reading current and past ASH letters to shareholders can bring important insights into the investment thesis.
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12/11/2023 Letter Continued (Full PDF)
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12/9/2024 ASH Stockholder Letter
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ASH Benford's Law Stock Score = 87
12/11/2023 Letter Continued (Full PDF)
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12/9/2024 ASH Stockholder Letter•
12/9/2025 ASH Stockholder Letter•
More "Specialty Chemicals" Category Stockholder Letters•
ASH Benford's Law Stock Score = 87ASH 12/11/2023 Shareholder/Stockholder Letter Transcript:
annual report scal 2023 responsibly solving for a better world 2023 highlights* sales of $2.2 billion down 8 percent adjusted EBIT of $216 million down roughly 38% adjusted EBIT margin 9.9% down from 14.6% adjusted EPS (excluding intangible amortization) of $4.07 down 29% adjusted EBITDA of $459 million down 22% adjusted EBITDA margin of 20.9% down 380 basis points FCF $124 million up from $80 million driven by favorable working capital offset by higher capital expenditures on the cover commercial tablet coating process using Ashland aquarius genesis tablet coating solution strategic priorities execute globalize innovate acquire expand leading technology capacity high-value product segments in key geographies existing technology platforms drug delivery technologies new technology platforms natural & biotech technologies exit select product / business lines expand big3 in Asia organic growth focus high-value additives bolt-on growth sustainably shape and grow contents CEO letter to shareholders ...................................................................................................................4 platform technologies ...........................................................................................................................6 life sciences ............................................................................................................................................. 8 personal care ....................................................................................................................................... 10 specialty additives ...............................................................................................................................12 ESG ............................................................................................................................................................ 14 responsible solvers .............................................................................................................................. 14 inclusion and diversity ......................................................................................................................... 15 10-K ..........................................................................................................................................................17 corporate governance .........................................................................................inside back cover shareholder information .....................................................................................................back cover *This Annual Report includes certain non-GAAP measures. Such measurements are not prepared in accordance with U.S. GAAP and should not be construed as an alternative to reported results determined in accordance with U.S. GAAP. Management believes the use of such nonGAAP measures assists investors in understanding the ongoing operating performance of the company and its segments. The non-GAAP information provided may not be consistent with the methodologies used by other companies. All non-GAAP amounts have been reconciled with reported U.S. GAAP results, which are included in the Management s Discussion and Analysis of Financial Condition and Results of Operations section of this Annual Report. This Annual Report contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are not historical facts and generally are identi ed by words such as anticipates, believes, estimates, expects, is likely, predicts, projects, forecasts, may, will, should, and intends and the negative of these words or other comparable terminology. Although Ashland believes that its expectations are based on reasonable assumptions, such expectations are subject to risks and uncertainties that are difficult to predict and may be beyond Ashland s control. Please see Item 1A. Risk Factors and Use of estimates, risks and uncertainties in Note A of Notes to Consolidated Financial Statements in this Annual Report. Unless legally required, Ashland undertakes no obligation to update any forward-looking statements made in this Annual Report, whether as a result of new information, future events or otherwise. sales 2,391 2,191 2,111 815 869 737 678 592 598 719 655 600 256 178 FY FY FY 2021 2022 2023 life sciences 185 FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 personal care specialty additives intermediates FY 2021 FY 2022 FY 2023 Ashland adjusted EBITDA 247 590 495 195 218 186 185 161 459 137 158 100 94 48 63 FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 FY 2021 FY 2022 FY 2023 life sciences personal care specialty additives intermediates Ashland adjusted EBITDA margin 39.1% 34.1% 26.5% 26.7% 28.4% 27.2% 27.4% 22.9% 27.0% 24.1% 25.7% 23.4% 24.7% 20.9% 15.7% FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 FY FY FY 2021 2022 2023 FY 2021 FY 2022 FY 2023 life sciences personal care specialty additives intermediates Ashland All gures are presented on an adjusted basis. Management s Discussion and Analysis of Financial Condition and Results of Operations section of this Annual Report reconciles adjusted amounts to amounts reported under GAAP, including reconciliations of net income to EBITDA and adjusted EBITDA, operating income to adjusted operating income, income from continuing operations to adjusted income from continuing operations, diluted earnings per share to adjusted diluted earnings per share and adjusted diluted earnings per share, excluding amortization expense. a note from our Chair and CEO Dear Shareholders, Fiscal 2023 was a difficult year. Consumer demand in the global end markets we serve remained resilient yet the additives and ingredients sector in which we operate faced extraordinary challenges. Prolonged customer inventory destocking impacted our full-year results leading to a decline in volume, sales and a decrease in earnings. Forward visibility during the year was clouded by market uctuations, economic volatility, geopolitical con ict and more. Despite these dynamics, the Ashland team successfully maintained discipline. We proactively took actions to manage aspects of the business we could control, strengthened our balance sheet and managed margins. While challenging, uncertainty has not shaken our resolve to responsibly solve for a better world . Ashland s long-term growth prospects remain exciting and impactful. Much of our portfolio consists of leading technology and market positions that can be extended and globalized. 4 Re ecting on the demanding environment, I am extending my gratitude to our employees, customers, suppliers and investors for their unwavering support and collaboration. Ashland s long-term growth prospects remain exciting and impactful. Our strong leadership positions in key technology segments are bolstered by exceptional geographic reach and expertise in virtually every region of the world. Our re ned portfolio focuses on leading technology and market positions that can be extended and globalized, and the fundamentals of our core businesses (pharmaceutical, personal care, and coatings), remain strong. Our strategy to invest in these highly pro table segments positions us well as a critical driver of our customers ability to differentiate themselves in the global marketplace and for our long-term success. hydroxyethyl cellulose (HEC) manufacturing network for greater efficiency. We will have more to report on these actions later in the scal year. At the heart of our growth engine is the company s innovation strategy and robust innovation pipeline. In 2023, we introduced several new, scalable technologies that will expand our toolbox and enhance our organic growth potential. In addition, we are de-risking our innovation growth through prudent capital management and accelerated time to market by repurposing existing assets to commercialize new technologies and accelerate growth across pharmaceutical, personal care and coatings markets. Our commitment to awless execution, including disciplined portfolio management and capital allocation, provides a stable foundation upon which to scale these breakthroughs. Regarding our outlook for 2024, while experts in the specialty materials industry anticipate a modest recovery, Ashland remains committed to sustainably shaping and growing our businesses across the globe. We are taking actions to maximize near term performance, while not losing sight of exciting future growth opportunities including actively investing and adding resources to drive our higher value, globalize and innovate strategy. We are aggressively investing while maintaining capital allocation discipline, funding organic growth, developing plans to repurpose assets to support other long-term growth initiatives, and pursuing value-accretive bolt-on acquisitions. As we look ahead to scal year 2024, we acknowledge the continued challenges and opportunities that lie before us. Visibility remains limited driven by uncertainty surrounding the normalization of customer inventory levels and demand, continued concerns about a global recession or economic slowdown and the impact of ongoing geopolitical con ict. Despite these headwinds, we are building resilience by leveraging core strengths: retaining operating discipline, focusing on margin management, leveraging productivity to improve manufacturing costs and driving innovation across both existing technologies and via our new platforms. Our customer-focused approach remains steadfast as we continue engaging and empowering our teams to drive decision-making deeper into the geographies and markets we serve and proactively taking actions to maximize performance across multiple scenarios. These actions include initiating a divestiture process for the nutraceuticals business, optimizing and consolidating our carboxymethyl cellulose (CMC) and methyl cellulose (MC) industrial businesses and optimizing our global Our priorities are clear: awless execution of our plan by expanding our leading technology capacity, globalizing our reach, and embracing innovation. In closing, we appreciate your continued support and trust in our journey. Our resolve to make a positive impact on the world is stronger than ever. Together, we will overcome obstacles and responsibly solve for a brighter future. Sincerely, Guillermo Novo Chair and Chief Executive Officer Ashland