Ashland Inc. (ASH) Earnings Call Transcript & Summary

In the skin care leave on market, customers are no longer looking for Realogy modifiers that simply build viscosity. They want ingredients that enable new product formats, improved skin feel and create a differentiated consumer experience. Stable S was designed precisely for that need. Stable ES is a double cross-linked carboxy metal starch that self-assembles into complex polymeric structures. When introduced into a formulation containing oil and water, stables as defeats the natural tendency for these components to separate. When used in skin leave on formulations, stables creates a 3D network that builds viscosity and keeps oil and water compatible. The starch is designed to match the rheology and the emulsion stabilization properties of acrylates while adding a superior sensory profile. It is naturally derived nonpersistent in the environment and non microplastic.

These architecture allows formulators to build tunable textures that feel rich, smooth and all and on skin. In short, we have transformed a natural starch into a high-performance cosmetic ingredient. From a formulation standpoint, Stabilis is practical and easy to use. It is supplied as a powder, it's called processable and unlike conventional accolades does not require PH adjustment. It incorporates easily and forms a visually rich, stable emotion meeting industry required shelf-life criteria. The easy of use translate into broad formulation versatility from lightweight serums to pumpable modulations to building butters, and solid fesobonps. [ Stabilis ] performs where other technologies fail. On the customer front, more than 150 customers have better tested stabilities as worldwide. Feedback has been consistently positive and has validated our own application assessments. Moreover, the technology has been recognized through global industry awards. Our customers confirm the technical and sensory attributes that make [ Stabilis ] technology unique, [indiscernible] appearance and texture, strong pickup, attractive firms with a smooth flow and premium sensory performance without the streakiness often associated with natural gas. With customer validation in place, the priority is now commercial execution. In 2026, we scaled the technology from pilot to full manufacturing readiness with a U.S.-based tolling partner. This is an important capability expansion for Ashland as it is our first full-scale multifunctional starch production. The first commercial lots have been successfully produced and we have already received initial commercial purchase others. Stabilis is proprietary to Ashland and is patent protected. We are now extending multifunctional starches into hair styling, which includes gels, muses and pom. Style can replace acrylates while bringing intrinsic stalling properties. It enables formulation of clear gels with stronghold and high humidity resistance. Unlike other natural polymers, [indiscernible] does not flake or leave any residue on hair. Customer valuations are underway, and we have received very positive early feedback. We expect to launch multifunctional starch for her in 2027. And with that, I hand it over to you, Jim.

What we shared today are not simply 2 promising products. They are examples of how personal care is translating differentiated science, customer collaboration and market insight into scalable commercial realities. And the story extends well beyond the innovations we've highlighted today. Within TVO, our breakthrough hairspray polymer is in late-stage development, which would replace a 50-year industry standard. In biofunctional actives, aternite and colapeptil are gaining rapid market adoption. Our super wedding agents are advancing across hair, oral and home care. A multifunctional starch is already expanding beyond skin care into hair styling. These technologies are at different stages and together demonstrate the breadth of our personal care innovation pipeline. It's strong science moving with greater speed and purpose towards commercialization. We are proud of what our teams have accomplished, energized by the opportunities ahead. and confident in our ability to bring new technologies to market. We look forward. [Presentation]

Over the past several years, we have built a differentiated portfolio of high per excipients and advanced drug delivery technology, supporting long-acting injectables, biologics and complex therapies. We are now seeing the benefit of those investments customer programs are increasingly converting into commercial drug products generating multimillion dollar orders and resulting in revenue streams. As a result, the business has entered a rapid scaling phase, providing tangible validation of both our strategy and our execution. Our third pillar leverages our leadership in oral excipients to serve the booming oral biologics and GLP-1 space. We have a multiproduct strategy in this segment that will allow us to capture a high market share in a $270 million directly addressable market. This segment is growing rapidly with high double-digit growth underpinned by a broad research pipeline. We will talk a little bit more about these technologies and commercial traction behind each of the 3 innovation areas, which open up an additional $1.6 billion market for Life Sciences which brings our total addressable market to over $4 billion with a high attractive underlying growth profile. So now you will hear more from Sean and Kapish who are joining me here today.

Thank you, Alessandra. We're really excited to talk more about our new products. Biologics represent 1 of the most attractive growth opportunities in health care today. They are among the fastest-growing therapeutic classes, driven by strong adoption across peptides, monoclonal antibodies, vaccines and next-generation therapies. What makes this particularly attractive for Ashland is that biologics require high purity materials throughout both drug substance manufacturing [Audio Gap] This creates a differentiated advantage for Ashland. Rather than participating at any single point in the process, we encourage customers at multiple stages of development and manufacturing, increasing both our addressable market and our strategic relevance to those important customers. Importantly, many of the world's leading biologics you see here is the foundation of that strategy it supports today's commercial products while enabling growing pipeline of future launches across multiple bioprocessing applications. While still in the early stages, bioprocessing has moved from an opportunity to an execution -- we have launched products. We've secured customers. We've generated significant revenue and built a broader portfolio in terms of innovation pipeline this creates scalable growth opportunities aligned with the long-term expansion of biologic medicines. Having discussed biologic drug manufacturing, let's now move to drug formulation and delivery. Injectables remain the most common delivery route for biologics and represent one of the most attractive growth opportunities within our Life Sciences portfolio. Ashland excipients for the formulation of injectable drug products allow medications that have traditionally been taken orally to be microencapsulated and injected. Once in the body, the excipient transports and protects the Ncase active drug, which is then slowly released over days, weeks or even months. Long-acting injectables can improve medication adherence, reduce hospitalization rates and maintain steady medication levels -- the blood, while providing a more convenient treatment option for individuals who struggle with daily oral medications, thus increasing quality of life. We have built a broad injectable platform, enabling long-acting injectables, biologics and advanced therapies. What began as a leadership position in long-acting Injectables has expanded into stabilizers solubilizers, dermal fillers and advanced drug delivery technologies. This multi-platform approach allows us to address a larger share of the customer spend, deepening strategic relationships and creating opportunities to commercialize multiple technologies within the same drug development program. To support future growth, we have expanded manufacturing and purification capabilities in Ireland and Columbus. These expansions provide the quality, scale and reliability required for global manufacturing and they support continued expansion of our injectables portfolio. As with oil processing, we have moved beyond capabilities. The traction we are seeing across injectables demonstrates execution. Since 2022, we have launched 7 high purity products. We've grown sales by more than 400%. We've put the commercial pipeline exceeding $100 million in value. And today, we support over 500 customers developing drug products. Using our excipients. Our bioabsorbable polymer platform highlights this momentum. Last year, we discussed a pipeline of approximately 200 customer programs and several potential game-changing opportunities. This year, we have large sales converting. Drug products containing our materials have reached the market. Multiple customers have placed multimillion dollar orders and we have secured our first game changer program wins, generating more than $5 million in sales from a single customer within our pipeline. These wins validate that the strategy is working. The pipeline continues to mature and with more programs advancing into later-stage development with increasing visibility to future revenues, we are very confident that we can build this program out and really monetize the platform. The economics are highly attractive, once designed into an approved injectable drug product, our excipients typically remain for the product's entire life cycle, creating long-duration cycles for revenue streams, attractive margins on products sold and high customer retention. Taken together, commercial wins, manufacturing expansion and the deepening pipeline, reinforce our confidence that injectables will remain a significant long-term growth platform for Ashland with substantial runway for high-margin conversion. So a lot of really exciting developments and more to come with Kapish.

Absolutely. The order delivery of biologics and GLP-1 medicines is one of our most exciting growth platforms. Today, most of these drugs are injected turning them into a simple tablet is a very large opportunity. Oral dosage forms like tablets are usually preferred by patients over injectables. The diabetes and weight loss market should exceed $100 billion by 2030 with early proof points in oral delivery of Rybelsus and VigoViPub. Yet it is still early. Over 70% of the programs in preformulation is largely unsolved, and that is exactly where we are positioned. GLP-1 medications have become 1 with most of these formulations delivered via injection. Tablet forms preferred by many users have been difficult to produce due to the large GLP-1 molecules and peptides not naturally crossing the gut wall, resulting in low absorption. Ashland's Permexa sodium caprate. -- helps these molecules effectively cross the gut wall barrier, resulting in improved absorption rates that make an effective tablet form of GLP-1 and similar peptides possible. We are building 2 complementary solutions. One, permeation enhancers, such as a Permexa-sodium caprate that help these molecules across the intestinal barrier and lift by availability as well as co-localization and disintegration excipients leveraging our core VP &D technologies. We are clearly differentiating our solutions through formulation know-how and tablet processability and are leading the industry in this regard. So we aim to solve 3 needs at once, bioavailability, tablet processing and stability and patient comfort by supporting oral solutions. This is a large, fast-growing still early market where Ashland holds a differentiated science-led position. We are thinking about oral biologics space strategically and have deployed a stage part to becoming the premier excipient partner to our customers in this space. We are already actively supporting multiple top-tier pharma customers with GLP-1 formulations using our core VPN technologies. This year, we launched sodium cap rate, which is a first permeation enhancer. We have several additional pipeline projects underway to expand our IP protected portfolio with existing and novel technologies to enhance bioavailability and enable tablet manufacturability. If we focus in our recent Permexa-sodium Caprion. We see that the customer need and the opportunity is real. More than 40 sample requests came in before launch, and we are actively engaging with top-tier pharma companies to support their formulations. These opportunities have enormous potentials up to $30 million per opportunity as they are anchored on disease areas in large patient populations like diabetes and weight loss. What resonates with our customers is that we deliver bioavailability while improving powder flow and tablet processability, solving the whole formulation and manufacturing challenge, not just one piece with FDA approval and regulatory path we cleared, this science is no longer theoretical. It is on the market and Ashland is well positioned to deliver and scale with our customers.

Thank you, Sean and Kapish. That is exciting. We have 3 scalable and high-impact acknowledge growth pillars and each one has moved from strategy to prove this past year. In bioprocessing, we are advancing our purification led portfolio into a double-digit growth market. Our participation is anchored by the Columbus Center of Excellence, 2 Vilos launches and more upcoming new launches in 2027, a robust channel strategy and our first $1 million plus sales in 2026. In Injectables, we have delivered strong growth progress over the last year accumulating 7 high-purity launches since 2022, over $100 million of active sales opportunities, our first $5 million order from a single customer, 2 large facility expansions in Ireland and Columbus and an overall high-margin business built on purification know-how that. not easily replicate. With oral biologics and GLP-1s, we are building industry-leading portfolio in an area with enormous volume growth potential. Our recently launched Pemex Sorghum cap rate. It is a first strong proof point in this space and has already attracted interest and samples requests from over 40 strong pharmaceutical players. Our PNG portfolio is also embedded in multiple GLP-1 formulations. The common thread is that we are not chasing single products. we are building positions along the biologics value chain, where Pirsformulation know-how and scale are the barriers to entry and where the market is growing fast. That is life sciences, innovation converting into growth.

At Ashland, we believe sustainable growth comes from differentiation. Across the market we serve, customers are under pressure to reduce cost improve performance and address sustainability expectations. In this environment, innovation must do more in most of meaningful customer problems and create measurable value. Today, we will show you how specialty additives are meeting the challenges through scalable innovation. I'm excited to share how the Ashland transformed vegetable oil TVO platform is helping address important market challenges through differentiated and tunable chemistry. In coatings, customers are focused on performance, raw material optimization and lower formulation costs. in battery-related applications, customers are seeking alternatives to legacy technologies that enables faster curing, lower energy use and more efficient manufacturing. Industrial coil coatings customers are also need fast-curing durable solutions for applications such as metal roofing, HVAC systems and Stadium Seating. Sustainability is an important part of the value equation because Ashland TVO is a proprietary scalable, tunable and renewable technology, it supports multiple innovation pathways. Today, we will highlight 2 examples. First, we will cover TVO titanium dioxide spacer for water-based architectural paints. Second, we will discuss TVO radiation cure for EV battery and industrial coal coating applications. TVO-TiO2 spacer addresses one of the most significant economic and sustainability challenges in premium paint formulations. Let's start with the fundamentals of making a paint. TiO2 is the key pigment that gives paint its capacity and coverage, allowing manufacturers to deliver brighter colors and better performance with fewer codes. That makes TiO2 one of the most important ingredients in premium paint formulations, but it's also the largest contributor to raw material costs and a significant contributor to the paints carbon footprint. As a result, paint formulators are looking for ways to reduce TiO2 usage while maintaining or even improving hiding performance. Ashland TVO TiO2 spacer technology addresses this challenge by increasing the efficiency of TiO2 in the pain film, helping manufacturers achieve differentiated performance with lower formulation costs and a reduced carbon footprint. The result is a more cost-effective solution that benefits pain manufacturers while delivering high-performing paints for consumers. So how can formulators get more performance from less PiO2? That's exactly what Ashland TVO TiO2 spacer technology enables. To learn more about this exciting technology, let's throw it to link in the lab.

Thank you, Doug. Now let's look at the signs that make this opportunity possible. A can of paint is a complex formulation that when optimized delivers a balance of efficiency and performance. Within that formulation, titanium dioxide, or TiO2 provides opacity by scattering light in the paint film. Hiding efficiency and wall coverage depends not only on how much TiO2 is present in the formulation, but also how evenly it is distributed. When TiO2 particles clump together or are not evenly spaced, coverage efficiency is reduced. Ashland's TiO2 spacer technology modifies the paints binder, optimizing titanium dioxide spacing and recovering the efficiency of the pigment already in the formulation, enabling formulators to reduce TiO2 particle levels in the can, while maintaining premium paint performance. In this demonstration, we compare 3 paint formulations -- the first is a control formulation using a standard TiO2 level. The second contains 20% less DL2 without Ashland TVO TLQ spacer. The third contains 20% less DL2 with Ashland TV space technology. Each formulation is prepared and applied under identical conditions using a controlled drawdown process. As film strike, the difference becomes visible. The reduced TL2 formulation without TVO TLTspacer shows the expected undesirable reduction in capacity. The formulation containing TVO TiO2 spacer maintains hiding performance much closer to the original control. As you can see, the practical value is clear. In this U.S. semi glass paint example, reducing TL2 by 20% with Ashland TVO TL2 spacer results in significant economic and sustainability benefits. The formulation demonstrates an approximately 12% cost reduction and approximately 15% carbon footprint reduction, while still maintaining great hiding performance. For our customers, this means a lower cost per [ canada ] paint and the lower carbon footprint to help them meet their sustainability goals without sacrificing performance for consumers. The technical proof is compelling. Our focus now is in converting that proof into commercial value. the TVO Tier 2 spacer program is progressing along a clear commercialization pathway that includes strategic partner collaborations, scale up meeting regulatory compliance and commercial launch planning. Importantly, the approach includes multiple business models, including technology licensing and exclusivity opportunities. To date, we are encouraged by the level of market engagement. The project currently includes more than 10 global partners, multiple regional launch pathways and several commercialization models depending on customer needs and market requirements. This level of engagement gives us confidence that demand exists for this solution that addresses performance cost and carbon footprint challenges. TVO TiO2 spacer further demonstrates how this technology creates customer value. Now we'll turn to TVO radiation cure for multiple applications. Ashland TVO radiation cure is another example of how the TVO platform can be scaled to solve different customer challenges. Radiation curing is among the fastest-growing formulation systems driven by demand for faster processing lower energy use and high-performance solvent-free coatings. It combines the performance customers require with more efficient processing and solvent-free formulation in EV battery applications, coating helps electrically insulate metal components and protect them from corrosion, moisture, chemicals and physical stress. Strong addition helps the coin remain intact through manufacturing, temperature changes and long-term use, supporting battery safety, reliability and service life. Industrial coatings presents a different set of demands. Customers in both markets are seeking rapid cure, processing efficiency and durable long-term performance that today's solutions do not always provide. Let me turn it over to Link again so that he can explain the science behind the technology. Let's look at how we test the TVO radiation cure performance in the lab. Ashland formulates a [indiscernible] curable system containing our TVO radiation cure technology. The coating is applied to an aluminum substrate and pass through a UV curing unit. Within seconds, the coating cures completely, we then evaded multiple performance attributes. First is coating adhesion to the metal. Strong addition helps maintain coating integrity during manufacturing and use. Second is flexibility. A coating must withstand bending and fabrication without cracking. Third is durability, long-term performance under environmental exposure is critical for demanding applications. Together, this test demonstrates the balance of fast cure, adhesion, flexibility, and durability. As Doug mentioned, industrial coil coatings are used in exterior applications such as metal roofing, HVAC systems and stadium city where long-term glass retention and durability are critical. The varying results provide strong proof of this demanding users. Following 2,500 hours of UV exposure, the Ashland TVO space coating demonstrates 94% glass retention compared with 74% for competitive bio-based technology. These results indicate differentiated durability and long-term glass retention. Now let's go back to Doug to discuss how this performance translates into market potential. The commercialization pathway includes prototype development, better testing, product scale up, regulatory compliance and launch preparation. These activities are being advanced in collaboration with leading global battery manufacturers and industrial coating partners as we move towards commercialization. That collaboration is also building strong market validation. The program has generated positive feedback from leading global customers and continues to expand into a broader portfolio of high-performance products. preparation for global launch activities is underway to support customers across Asia, Europe and North America. Together, Ashland TVO TiO2 spacer and TVO radiation cure demonstrate the broader potential of the TVO platform. What you've heard today demonstrates that TVO is more than a single product. It is a scalable technology platform designed to create value across multiple applications. TVO TiO2 spacer helps pain manufacturers maintain hiding with less while TVO radiation cure combines processing efficiency with the durability required for demanding battery and industrial cooling applications. Together, these innovations show how Ashland is extending on differentiated platform to solve distinct customer challenges with additional opportunities across our portfolio. We are seeing the same momentum across our other technologies platforms in specialty additives. Let me just give you a few examples. We have commercialized 5 grades of super wetting agents, we launched a PH neutralizer using novel chemistry. And our liquid celulose platform is advancing all paint manufacturing with the potential to significantly reduce raw material handling costs. By bringing together differentiated technologies, application expertise and close collaboration with customers, Ashland is commercializing new-to-the-world solutions that help our customers compete more effectively and support our own sustainability growth. With that, I'm going to turn it over to William, our Chief Financial Officer, to give us a perspective on our growth potential and expansion opportunities. William, over to you.

Thank you, Doug, and good morning, everyone. I'd like -- before we get into the financial details, I want to pause for a second and recognize what we just saw. These are big problems, but also big opportunities. Clearly, a lot of momentum underway, but it's not just the technology. It's the team behind the technology as well. I hope what you saw from the divisions, excitement, confidence, momentum. I'm very proud to be a part of this team. And I'm going to spend the next 10 minutes translating what that means in terms of our financial potential and all that great technology you heard this morning. Some of the key questions that we need to ask ourselves, how much growth and what it will take to get there. But first let's ground the discussion in our overall financial targets. Girma spoke at opening on our strategic priorities: execute, globalize, innovate and invest. I think of them as for distinct strategic pillars that drive different outcomes for our long-term financial targets. Execute, grow the base business at market rates, drive productivity, ensure that our core technologies are competitive, improve margins via productivity and network optimization to globalize and Innovate, they're part of our financial targets is driving outperformance first market, globalize investing in the 4 business segments, by the way, above market growth, strong growth rates, and it's accretive to Ashland's overall margins. Innovate is why we're here today. We do have core innovation, of course, platform innovation is where I'll spend my time in the coming slides and then invest. We want to make sure that, that growth is high-quality growth, and we convert it to profitability and free cash flow. So overall, the framework is simple 200 to 300 basis points of performance above market. adjusted EBITDA greater than 25% and convert that EBITDA greater than a 50% free cash flow conversion. So what's the road map? How do we get there? I'm going to step you through first, how big the market size. And then ultimately, how much and how quickly, right, that's the growth potential behind that market opportunity. And then which way? There are several scenarios that we'll talk you through to better understand the potential path forward. And then lastly, at what cost. So first, I'd like to get us started with the market opportunity. This is the third time that we've sized the new technology platform market opportunity 2023, $7 billion. We had 5 platforms launched. We updated that last year, 2025 Innovation Day, 7 platforms launched $8 billion. And in 2026, as Guillermo mentioned in his opening remarks, we wanted to do something different. We're very confident in how we've assessed the market, the value proposition and the sizing, but let's challenge ourselves. Let's have an independent assessment. And so as a part of the refresh this year, we had an outside-in perspective, what does that mean? -- experts in our space, understand the material sector. We connected with several blinded research studies took over 150 expert inputs, independently validated the market size as well as the value capture over time, and that's what you're seeing on the page. That's the $9 billion opportunity in 2026. How do we think about the mix of that opportunity. It's balanced across the portfolio. The biggest is specialty additives at $4 billion, Personal Care second at $3 billion, Life Sciences third at $2 billion. And by the way, not only are these sizable market opportunities, the growth rates are very attractive. Many of these markets growing 4%, 5%, 6% over time, so it compounds. What are some of the key inputs that we found from the research. First, we're solving important unmet customer needs. Many of the things that we're solving for, the big problems for our customers, these are must haves, not nice to have. Of course, the markets themselves are attractive and growing. One of the parts that was most encouraging for us, the upside case also validated. We'll walk you through the scenarios on how we get there, but we came away from the independent research, noting that there was upside to our base case and our upside. And then lastly, you heard this from the talk with Osama and Guillermo earlier, these are additives, they're scalable, they're tunable. The more we learn there's more white space behind all of this. And as a part of that independent work, also over $1 billion of white space opportunities that we haven't talked about yet. So it's a really exciting time. The market is real. And so now the question is how much of that opportunity can we capture? And so what we wanted to do is highlight the ambition. And the ambition is -- this is a transformational opportunity for a company of our size, very big markets, and we have strong value propositions. So what does that mean, William? 200 to 300 basis points of incremental growth over and above market. That's the ambition. So part of how we want to delay this out is the chart on the page. What you can see is, as you move across, this is a time horizon and then the incremental growth delivered from our new technology platform portfolio. The area that we've highlighted in the middle is the 200 to 300 basis points, that's the ambition. And then on top of that, we've mapped the scenarios. That's how we think about it. If something is novel, new, you can take many shapes, sizes, adoption curves. And so what we've done in the last year is we've worked the leadership teams, segment in the market, segment of the customers. better assess the value proposition to that customer set and have identified various adoption curves. That's the low case, the base case and the high case. Before I walk you through that, I want to start with where we are. So where we are today, you heard on our Q3 earnings call greater than $20 million of innovation contribution this year. The other piece that we've said too is that most of that is coming from core innovation, which is a really key piece of the overall growth algorithm, particularly in the near term. But the platforms are contributing, and it's moving, and you heard a lot of that momentum today. So as we move ahead, market entry, 2 to 3 years, several things that the teams talked about today are launching. We believe that can be anywhere from 40 basis points to 110 basis points additive over the next 2 to 3 years. And then you say, William, you're targeting 200 to 300 basis points. Good news is we have the core innovation. We also have the globalized parts of our strategy that are contributing now. Over time, the opportunity, of course, gets bigger, right? Part of how we talk about this is customer wins over time, compound, reformulation cycles are a key part of the compounding growth over time. And by the way, there's step change potential with large customers. You heard many of them today from the divisions. So as you look 5 to 7 years out, we believe that this can add 250 basis points to our overall growth outlook, right in the middle of the growth corridor and then as you go longer term, all 3 of our cases are within that ambition. And just to keep it simple, we talked about a $9 billion opportunity. That's in today's dollars, 10% to 20% of that share at maturity, $900 million to $1.8 billion of sales. Keep in mind, we're just shy of $1.9 billion, clearly, a very transformational opportunity. And I think the key thing for us around this is that it's several opportunities. right? It's not one particular project, 1 particular platform, it's a portfolio. That's how we think about it. So now what I'd like to do is double-click on that middle part, the growth ambition corridor, the 200 to 300 basis points. What are the ways that we can get to that -- but first, what does that mean in dollar terms? So 5 years out, 200 to 300 basis points, that means $200 million to $300 million of incremental sales for the company. If you take that a step further, go 10 years out, $400 million to $600 million of incremental revenue. Okay. So what are the paths to get to that $200 million to $300 million over 5 years? The first one, Pathway -- on -- we've developed base cases for all of the technologies we heard today, again, validated some of those adoption curves. If all those deliver the base case, risk-adjusted, you end up with that 250 basis points that we just talked about. I think something that's probably more likely is when you have something new, you're going to have breakout success. That's pathway 2. What do I mean by that? You heard several opportunities today that have very -- very large potential to IO2 spacer, silicone replacement, bioprocessing, injectables. If any of those hit their upside case you need 1, 2, 3 of those to hit and the remaining $37 million -- we're indifferent. We're still within that 200 to 300. Of course, we like the upside and we're working towards that upside. But to deliver the growth corridor, 2 to 3 of the high-impact projects can get you there if you deliver the upside. And then maybe a more, I would say, a more cautiously optimistic scenario is sustained adoption. Maybe you find targeted customers, niche applications that are important, but not a scalable these are sizable. They are fast market growth rates. You compound that over 10 years is how you get to the 200 basis points even 10 years out. And then the last piece is the white space. It's the least tangible today. but it's also something we know from experience, the more we experiment, the more we learn, the more opportunity there is on new applications of existing technology on the platform. So that's the really exciting part is that there's multiple ways to get there. To achieve our growth ambition. The question is not whether one project wins, it's whether the portfolio performs. So now what do it take? And the answer is, it's less capital than expected. We've been very focused on this for a number of years. So Sam and the team have done excellent work, 52 patents. We've demonstrated the scalability of the technology across multiple end markets. You heard the momentum today. We have a significant head start in terms of proving out the technical capability of the offering. We got to make it. On the manufacturing side, we do have existing capacity. You even heard the example today that there are sometimes we're partnering too with Jim, the tolling relationship on the starch. All of this is important because it derisks the investment risk associated with scaling novel technology. The important piece, too, as I think about the investment -- the invest corridor for us, all of this will fit within our free cash flow framework greater than 50% of EBITDA going forward. And then the last piece is the channels to market. If you think about the themes you heard today, a lot of them sit within the big 3, pharma, personal care, coatings. These are areas that we have market leadership. That provides access to customers, right, and speed to market. So how do I think about, and as a leadership team and a company, how do we think about adding additional resources or capabilities or capital to each of these -- it's a really important question. How do we decide to spend more? And what I'll tell you is it's very disciplined. As I think about a novel technology, what it is, it's a series of questions, and it's a series of questions with price tags. And those price tags are milestones. And we try to answer one question at a time, does it work? Will customers test it? Will they qualify it? Can we manufacture it? We manufacture a lot? Can we sell it once? Can we sell it multiple times -- all of these are different milestones that determine how we're thinking about dialing up or dialing down resources to capture that value over time. The important piece that I want you to take away is that investment follows traction. But the company is very healthy. And as we find opportunities we will invest to capture that growth. So to close, 5 simple takeaways. It's a validated $9 billion market opportunity. growing very strongly. Our growth ambition is 200 to 300 basis points above market. There's significant value creation over and above that ambition. There's multiple pathways to get there. We're not betting on one of the things you heard today -- there's 40 and it's growing. Investment will follow validate Asian and demand -- and we're able to do that in a very efficient way by leveraging existing infrastructure, both on the assets, technology and people. So overall, I'll leave you with, this is a very transformational opportunity for Ashland for our stakeholders and myself and my colleagues and our stakeholders were energized by the opportunity. With that, Guillermo, I'll hand it over to you.

Thank you, William, and thank you, everybody, for joining us today. Just a few closing comments to remind you of some of the key messages that we want you to have. First and foremost, I hope you saw how exciting the progress. We've made significant progress across all of the technologies. But most importantly, the potential that these platforms have. As William said, we're not betting on 1 horse. We have a portfolio approach and how we manage it, and that improves our probabilities of success with many paths to get to the growth area. But as we look at Ashland, I mean, our industry, 1 of the messages, our industry is going through a lot of change right now. our industry will have to change significantly as will many companies. The good news for us, we've been working on this for the last few years, and most of our transformation is done. We've focused our portfolio -- we've streamlined our manufacturing. We're still working on some areas in driving the productivity in our plants, but they're well seen and worked. And we've worked on the longer-term drivers for growth. So the whole approach is about strengthening our core business to play in this more challenging environment for our industry, but also to build growth catalysts that can change us as we move forward -- so we have a high-quality portfolio of businesses and products that are highly differentiated. We've built out commercial capabilities across our portfolio. We've innovated not just the speed of the innovation, but the magnitude, the potential impact of innovation, both in the new technologies, but now bringing a lot of these things back into the core, I think, is going to generate a lot of opportunities. Speed has been a big issue for us in driving the innovation. Asset competitiveness, as I said, very, very important and disciplined capital allocation as we not get excited and throw money at everything. We want to make sure that we're hitting the right milestones as we drive our performance. Our strategy is relevant for these times. Execute is on the front side of it the health of our core businesses, our globalized and innovate. It's about creating company-specific growth catalysts that can enable us to grow above market. And right now, the markets are very challenged in terms of overall growth. So this is going to be very important for us and to get that incremental growth. And again, disciplined around how we invest. And our investments are really driving productivity, driving organic growth and those bolt-on opportunities to extend our businesses into new directions. So the good news, first, the big message is -- we're done with our transformation part, 100% of our attention now is focusing on driving our strategy for growth -- profitable growth as we move forward. Central to our strategy is differentiation. This is a hypercompetitive market today. So whatever we do, we want to make sure that we're driving that differentiation into the portfolio. So how do you get that? Well, we're looking at multiple dimensions, and I hope you see that the things that we've done address a lot of these areas. One, we focused on higher quality markets where know-how and customer intimacy is valued so that we can differentiate. Customers trust us, they share their plans early on. We're working intimately with them, and that's a big differentiator getting a seat at the table with them to develop new things important. We've developed a lot of proprietary technologies in this world of AI, speed, everybody moving owning more real estate in the key areas that we want is absolutely critical, and this is one of the reasons we have been investing so much in innovation, developing it, not just the commercialization, but making sure that we're getting the the toolbox so over the come have a rich portfolio to drive our agenda for growth. We are in regulated markets and part of the portfolio and difficult markets to enter. The qualifications are very long. That can be a pain as you look for growth, but it's something we love once you're in, it brings a lot of stability. It's a big differentiator. A lot of our portfolios have that -- those characteristics. And obviously, the manufacturing and supply chain very critical both. stages of commercialization and manufacturing of these products. This is important because the financial risk and many of us has been that if you have to build a plant before the technology goes, it's higher risk. We don't have to do that. When we need to make the investments, things start taking off, the technology will be proven commercialization is not just in R&D and commercial, but in manufacturing in our administrative. There's a lot of people Innovation has infected us in all aspects. People talk about it, like safety. Innovation for us is a core part of our DNA. And I thank all of you for your dedication for all the energy you're putting and for where you're taking this company to the future. So thank you very much, and I will -- let's turn it over to Q&A, and I'll ask Osama and William to join me.

Guillermo, Osama and William. Your first question is from John Roberts, Mizu Securities. At what point would capital spending for new products become material? Is there a revenue threshold or a time frame where CapEx would need to increase meaningfully to support growth.

Well, let me a few comments and William, you can also chime in. As I said just now, we don't need a lot of immediate capital. A lot of the infrastructure with all the actions we took to get out of businesses. We've had idle capacity. And what we've done is we purpose it to more profitable uses in terms of our portfolio. So super, all the things that we've launched, we've used existing capacity. There are certain ones. You saw the starch, we've used tollers. We have the capacity to make it, but the capacity is too big for this stage. So we go outside, can we get economy of scale? Yes, when we get the volume, we can bring it in-house. We have cellulosic units that are empty that we can repurpose for a lot of these things. Equally, I would say, over time, if the [indiscernible] initiative goes and we can reinvigorate there's opportunity to reopen a lot of these things, but not with commodity products, but differentiated products that we can bring in. So capital is something that is important. I would say the biggest need that we have in the future, let's say, as things develop, is global. Our footprint is around a lot of our bigger plants and units. Some of these technologies, you look at TVO and a few of them, it would be good if we can regionalize them, make more of them in different parts of the world. And that's where we're probably going to look either investing, building ourselves like we did with the globalize or we can buy. This is the time our industry is not doing well. There are a lot of assets that we can look at regionalizing. These growth curves, I mean, you might want to comment on this, William, is based on our ability to ramp. As we -- if we buy assets, we can accelerate some of these things. The big message for me and today, we talk at $7 billion, it's $8 billion, $9 million, that's all nice. That's not what I'm looking at. This is big, big is big enough. I'd rather see how can I accelerate going from 250 to 300 to 300 to 400. I don't need it to get bigger. There's plenty of opportunity. So our issue is as we accelerate, if a customer likes a product and we make it and they start and they say, "I need it in country X, how quickly can I scale in those countries. That is how we're going to accelerate the growth. But I don't know if you have any other.

I think that was a really good overview. Maybe just a couple of specifics to ground some of my commentary on the greater than 50% free cash flow. Now this fits within that framework. I think that's a really key piece. Obviously, Ashland has been on a journey around the network, network optimization. What that's allowed us to do is -- the maintenance CapEx over time has also gotten smaller. We're no longer investing in these areas that we needed -- that we're able to optimize. So what that does, that allows more capacity for growth. And so as I think about the plant network today, probably $50 million to $65 million in terms of maintenance capital per year. As you think about greater than 50% free cash flow, that allows opportunity for growth investments. And what I would say on the core technology today, of course, there's some growth investments we're contemplating, but there's also going to be plenty of capacity for what we're talking about here. I would say, as you start to reach the inflection points on the -- we had the 3 buckets of time, that mid bucket is where we're going to have to start to really think about some of the continuous production, particularly in some of the higher-volume applications. But again, we're thinking that would fit within the context of what I described at the greater than 50% free cash flow.

And your next question comes from the chat in the webcast. as the [indiscernible] has significantly lower cellulose content than wood pulp, is it viable starting -- is it a viable starting material for cellulosic ethers production.

Very good question, and I'm going to let Osama, but I'm going to control him because I can't talk too much about all the -- this is new -- the first time we're talking about this is -- obviously, this is our core business, cellulosic, a big opportunity for us. It's on earlier stages, but we're very excited, both from a cost and from the technical performance that we can bring to many of our markets and the fact that we probably don't need a lot of assets to do this. But a lot of people have looked at this. And that question is relevant to what a lot of people have done. That's the magic of innovation. That's the magic of IP and all these things, our friend here and his team have taken a different approach. And that's really what is driving the difference. One comment I would say in the yield. Maas is actually 75% cheaper than wood and pulp. We say 50 because we need to do some things to transform it in use for us. So there's some costs that we add to it, and that's why we've already brought down some of the -- but the yield question, I can't comment it because that's part of what we do differently. But it is part of why we're excited about it because they've taken a different approach. But I don't know if you'd say anything else.

So thanks, Guillermo some of us very well. So what I think is that, that's the reason we filed 4 patents related to this technology. We have very differentiated with a lot of people thought about it for a long time how to extract cells from by gas. For us, the way we are differentiating Orcel is a new to the [indiscernible] was. So we are making a building block, and this building block is where the differentiator is, building block that can by finding it, giving you that efficiency that you need. So the point I'm making that we don't need a full cellulose, that's where we are. Everyone is thinking about the cars itself, hopefully, in 2 years from now, you will see the patent that we are publishing, and we are writing. This is going to be a breakthrough that's what Asian is doing. Nobody is in the world doing what we are doing. So that is the excitement.

Your next question comes from Josh Spector from UBS Securities.

At a high level for all targets here, what is really incremental or what will cannibalize some of the existing business?

This is exciting. What we're presenting here, it's mostly incremental. If you look at the new technology platforms, by the way, Bagasa is not even in these numbers, it is new. So this is a whole thing that in the next update we will provide -- but most of these other things, TVO opens, if you see all these examples, we're not in many of these applications, the starch. All these are mostly growth that could cannibalize here or there something I would say probably and maybe in certain applications in personal care, you could replace some of our synthetic polymers. But at the same time, we're augmenting a lot of these polymers with the new technology we might be able to gain share with these products that are combinations and new technologies that we're developing. So technically speaking, it's very hard, but the majority -- the great majority is really upside, new markets, new opportunities, and that's why we believe that the transformation is important. And that's why for our growth out, protecting the core, making sure that cost and that we're able to differentiate the core is also important, but also that these new opportunities can allow us to shift our portfolio to new technologies, more differentiation, more.

The next question comes from Chris Parkinson from Wolfe.

How are you assessing market opportunity across pharma? Are you looking at OSD and injectables separately or together, how are you assessing growth rate by geography, given GLP penetration in the U.S., ongoing expansion in Asia and growth of generics in India.

So we play in all of them. So let me first start the broader and then in specific areas. Life sciences is no different than the other markets in the sense that each application has its value proposition. You have to deliver performance. So the issues in OSD are very different than injectables or in bioprocessing. So each one of these have to have targeted value proposition, be it technology, purity, whatever it's relevant and valuable for each of those customers. So that's one. Two, we look at it through our customer each customer, if they're global, they might be playing in different ways in different part of the regions. Our role is to be their partner. Maybe we enter in one region when they do. And until they decide to go into another region with that value proposition, then we go with them. But we're with everybody. And frankly, the propositions for the big pharma versus the generic versus the over-the-counter is very different. Some of them all want technology, new things to enable new drugs, new delivery, others want productivity. And how do we make it faster, cheaper you have from the OTC to the big pharma, the generics are in the middle. They do a little bit of both. So it's different value propositions, and that's why having a portfolio of different things that we're doing tablet coatings is going to have a value proposition. It does go in the same tablet, that maybe the permeation enhancer or some of the new PPPs or the PVPs that they're using in some of the oral biologics. But each one of them, we look at them very different and they each have to stand on their own, but the power is if we can bring them all together as a solution for our customers, that's where we get the differentiation.

Your next question also comes from the chat on the webcast. What aspect of Ashland's innovation portfolio do you believe investors are most underappreciating today?

Well, I think -- I hope what we're trying to show is more and more of the scalability. I think it's harder to communicate some of these newer areas. Most of our investors aren't there's a lot of different markets and all that. So nobody is an expert in every market. So painting that bigger picture of the portfolio, the opportunities, what are the different paths. There's not 1 path. We can we can put an algorithm that says whatever. The issue that we're looking is pressure testing. I'm looking more at scenarios, what scenarios can happen that can get us to where we want to be. hey, these things we failed, but these 2 things hit it as strongly as William was saying, we're going to pass. So our issue is investing on the things based on the information we have and then trying to make sure that we have more scenarios that can drive us in that opportunity. So that part of the communication, everybody, I think the feedback I'm going to be very excited. But again, the proof is in the pudding until you see the commercialization, that's the question. It's cool, it's interesting, but I want to see the sales. I think that's a story that we're going to repeat. That's why we're doing these events of showing the progress -- this is a long journey. The world is changing. We need to show our strategy, what we're doing, the progress, not just when we're getting the sales but when we're doing and I'll remind, when we started the globalized and innovate discussions, we weren't growing those businesses that much. It's been 2 years. And I think we put the investment. We have done everything that we said we were going to do. independent of COVID to all these difficult times, we have achieved these things. And right now that we finish this transformation, we are in a great position of the investments in Globalizer there. The productivity -- we have some issues that we're dealing with, but the fundamentals are there, and we know what we need to do. And over the coming year, we will get all those things accomplished. But this is the big thing. We have a big opportunity with more things coming, how do we pace ourselves to really drive that growth.

Your next question comes from John McNulty from BMO.

Since the appointment of the 2 new directors, have there been any meaningful changes in strategic priorities, capital allocation or operational initiatives.

So one of the areas is what we're talking about, innovation. A lot of discussions with the Board, the new directors. It's where are we going, how we're investing, what are these opportunities? Interestingly, the 2 directors have both experience with what we do. One was a CFO of Hercules, so he understands a lot of what we're doing in cellulosics, -- so we talk about cellulosic -- he gets it, gives great feedback to us, what was done, what wasn't done and there's a lot of excitement there. And the same thing. The other 1 actually worked for GF and ISP in the past understands our chemistry sold our chemistries before. So very relevant. They've actually been very helpful. I think they're very excited about what they're seeing as are our other directors. Our issue now is it's been a difficult transformation. When you make these changes, there's a lot of things, and you make these changes in this environment has been very difficult. But the progress that we made on building the building blocks on which we're going to build the future of the company is there. I think they're seeing there's a lot of excitement. The question we're getting is what can you do to accelerate? What investments do you need? So some of the same questions that our investors are asking, it's now, hey, if these things are working, what are you going to do different? And what are the investments and which are the projects that we want to make sure that we're driving more.

Thank you for that. Given the timing, we're going to go to 1 final question and then I'll ask you to please wrap up. We've covered a lot of ground today. If investors look back on today's discussion a year from now, what should provide them with the greatest confidence in Ashland's ability to translate its innovations portfolio into long-term growth and value creation.

I think the confidence, obviously, everybody, the ultimate test is getting the sales obviously, we're doing. But I hope you've seen we have shown a lot of transparency on everything that we've been doing over the years. We said, we're going to restructure or change the portfolio. We did that, changed our network. We did that globalize and invest. And we're showing the results, good or bad. They're very visible. So our intent right now is to show, hey, what's the real traction? What are we doing? What is the progress? I hope you're seeing that here is we are making significant progress. The customer engagement is very, very good. talk to our customers, talk to the industry. I think there's other voices that you can do. Our issue right now, our excitement is, let's -- we have different businesses, we have dedicated teams. We're not just betting on one thing. Let them drive at the center. We're trying to feed more innovation, more capabilities, but let them really drive it. The focus now is on execution of our strategy. globalize and innovate, commercialize, commercialize, commercialize. In next 2 years, that is our priority. So launching products to broad markets, very important, these projects with our key customers that are more tailored, that are more customer-specific development advance them, partner with them. They have to win. We have to win. It's got to be a mutual and that's the big priority. No other distractions at this point in time. So with that, thank you very much for joining us. I'm sure we'll be encountering many of you over the coming weeks on the -- our visits with the investment community. But I'm sure we'll have more questions. But thank you for your interest in Ashland, for all the technology and for the Ashland team, thank you for everything you're doing.