Ashland reports preliminary financial results for third quarter

Wilmington, DE – Ashland Global Holdings Inc. announced preliminary financial results for the third quarter of fiscal year 2021, which ended June 30. The global specialty materials company serves customers in a wide range of consumer and industrial markets.

Sales were $637 million, up eleven percent compared to the prior year period. Strong demand was partially offset by continued weakness in hand sanitizer ingredients and Avoca. Global supply chain and logistics disruptions also limited the company’s ability to meet all customer demand. Foreign currency favorably impacted sales by three percent.

Net income was $80 million compared to $37 million in the prior year quarter. Income from continuing operations was $87 million compared to $50 million in the prior year quarter, or $1.40 per diluted share compared to $0.81 in the prior year quarter. Adjusted income from continuing operations excluding intangibles amortization expense was $75 million compared to $68 million in the prior year quarter, or $1.22 per diluted share, up from $1.12 in the prior year quarter. Adjusted EBITDA was $148 million, up from $143 million in the prior year quarter. Global supply chain disruptions and raw material cost escalation in performance adhesives contributed to higher than expected costs during the quarter.

Cash flows provided by operating activities totaled $233 million compared to $140 million in the prior year quarter. Free cash flows totaled $210 million compared to $112 million in the prior-year quarter. The current year period included $90 million of cash inflows from the new U.S. Accounts Receivables Sales Program.

“As we indicated during our earnings update on June 10, overall demand during the quarter was strong, though global supply chain challenges continued to impact both sales and costs,” said Guillermo Novo, chairman and chief executive officer, Ashland. “Sales for our industrial businesses reached pre-pandemic levels and the demand for core consumer products demonstrated continued resilience.”

“I am pleased with the progress our team has made executing our strategy, especially in the context of a difficult operating environment,” continued Novo. “The persistence of the global pandemic continues to impact consumer behavior, delaying recovery of some key global markets. In addition, challenges related to raw material and supply chain logistics are realities we continued to face during the quarter. We are working to capitalize on the strong demand environment and satisfy incremental demand from our customers. As such, our expectations for Ashland’s full year results have not changed,” added Novo.

“Finally, I am pleased that we closed the Schülke & Mayr personal care transaction during the quarter and we welcomed our new colleagues to the Ashland team. Our well experienced teams are working diligently to integrate the acquisition into our existing portfolio for consumer products. We are establishing a center of excellence at the Hamburg, Germany location, and we are excited by the opportunity to reach a broader group of customers with new technology that is crucial to our strategy of growth through sustainable innovation,” concluded Novo.

Sales were $340 million, down one percent from the prior year quarter. Pharma sales were softer than the strong prior year period, and supply chain challenges constrained our ability to deliver products globally. Nutrition and nutraceuticals sales reflected an improved demand environment. Sales in personal care and household end markets were down primarily due to weakness in hand sanitizer ingredients and Avoca when compared to the prior year. These impacts were partially offset by the addition of sales from the recently acquired Schülke & Mayr personal care business. Foreign currency favorably impacted sales by three percent.

Operating income was $53 million, compared to $56 million in the prior year quarter. Adjusted EBITDA was $92 million, up two percent from the prior year quarter, primarily reflecting favorable foreign currency and improved costs.

Sales were $263 million, up 28 percent from the prior year quarter when pandemic related lockdowns were in effect across much of the globe. Improved demand was realized across all end markets and regions of the world, except for global energy markets, which remain challenged. Foreign currency favorably impacted sales by four percent.

Operating income was $28 million, consistent with the prior year quarter. Adjusted EBITDA was $55 million, up two percent from the prior year quarter, as strong sales growth was offset by increased manufacturing and shipping costs in addition to unfavorable price versus raw-material costs within performance adhesives.