Ashland Inc.

Good day and thank you for standing by. Welcome to the Ashland Inc. First Quarter 2025 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automated message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to your speaker today, William Whitaker. Please go ahead.

Hello, everyone, and welcome to Ashland's first quarter fiscal year 2025 earnings conference call and webcast. My name is William Whitaker, Ashland Investor Relations. Joining me on the call today are Guillermo Novo, Ashland Chair and CEO, Kevin Willis, Ashland CFO, and our business unit leaders, Alessandra Fasin, Jim Minacucci, and Tyler Caceres. Ashland released results for the quarter ended December 31st, 2024, at approximately 5 p.m. Eastern time yesterday, January 28th. The news release issued last night was furnished to the SEC in a Form 8A. During today's call, we will reference slides that are currently being webcast on our website, Ashland.com, under the Investor Relations section. We encourage you to follow along with the webcast during the call. Please turn to slide two. As a reminder, during today's call, we will be making forward-looking statements on several matters, including our financial outlook for full year fiscal 2025. These forward-looking statements are subject to risks and uncertainties that could cause future results or events to differ materially from today's projections. We believe any such statements are based on reasonable assumptions but cannot assure that such expectations will be achieved. Please refer to slide two of the presentation for an explanation of those risks and uncertainties and the limits applicable to forward-looking statements. You can also review our most recent Form 10-K under Item 1-A for a comprehensive discussion of the risk factors impacting our business. Please also note that we will be referring to certain actual and projected financial metrics of Ashland on an adjusted basis, which are non-GAAP financial measures. We refer to these measures as adjusted and present them to supplement your understanding and assessment of the financial performance of our ongoing business. Non-GAAP financial measures should not be considered a substitute for or superior to financial measures calculated in accordance with GAAP. The most directly comparable GAAP measures as well as reconciliation of the non-GAAP measures to those GAAP measures are available on our website and in the appendix of today's slide presentation. Please turn to slide three. Guillermo will begin the call this morning with an overview of Ashland's performance for the quarter. Next, Kevin will cover the financial details for the quarter, and our business unit leaders will share insights into their respective segments. Guillermo will then provide an update on Ashland's strategic priorities and outlook. Following brief closing comments, we will open the line for your questions. To kick things off, I'll hand the call over to Guillermo for his opening remarks. Guillermo?

Thank you, William, and good morning to everyone. We appreciate you joining us today. I'll focus my update on three topics. First, I'll provide an overview of our Q1 performance, which generally align with the outlook we shared with you at last month's strategy day. What we saw from softening in European demand and inventory control actions from some of our pharma customers, the rest of the business performed generally as expected. Maintenance shutdowns. more proactively shifted to Q1 to ensure we can adapt quickly and effectively to changes in trade policy environment. Second, I'll reiterate our key priorities and our long-term financial commitment we outlined at our recent strategy day. The team is making progress, and we're confident that our portfolio of value-creating opportunities position us well for success. We are committed to providing regular, and transparent updates on our progress going forward. Third, we'll provide an update to our guidance for fiscal 25. We're proactively addressing anticipated challenges like soft demand in China and potential headwinds in Europe by taking decisive actions to deliver on our commitments. There are no significant changes to our underlying assumptions at this time. Our strong progress on self-help initiatives reinforces our confidence in achieving our full-year financial targets. We'll share with you more details later, but we're reaffirming our full-year outlook. Please turn to slide five. Let's begin with a recap of our first quarter performance. Customer demand was generally consistent with our update from last month's Strategy Day. We noted some additional softness in Europe across our business units. Although demand and overcapacity in China has increased competition, overall pricing and volumes remain in line with our expectations. And Pharma customers actively reduced their inventory at year end. The rest of the businesses performed largely as expected. Our Q1 sales were $405 million, down 14% from the prior year. This decline was primarily driven by portfolio improvement actions, including the nutraceutical divestiture.