# Dear Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_ASH_2020/NYSE_ASH_2020.mmd` · pages 3-9_

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Dear Shareholders,

This is my first Annual Report letter to our shareholders since accepting the role of CEO at Ashland and I am privileged to be leading this great company.

In 2020 we have been focused on further advancing our journey to become a premier specialty materials company. In January, we began implementing significant changes that would strengthen and transform the company and position us well for the future. Two months later, the novel coronavirus struck, and the world around us changed dramatically.

The arduous challenges amidst internal transformation came fast, broad and deep. Customers serving critical industries were concerned for supply while others dropped demand forecasts. Governments around the globe instituted regulations further challenging procurement, manufacturing, supply chain and more. Office employees adapted to effectively work from home. Cyber security monitoring heightened and communications about staying vigilant to defend against attacks increased.

Through it all, Ashland's global manufacturing sites have continued to operate safely, and our supply chain continues to receive, process and ship customers' orders for the critical specialty products that our customers and the world needs.

From the onset of the COVID-19 pandemic and continuing today, Ashland remains dedicated to the safety, health, and security of our employees, their families, and the communities where we work and live. Ashland has Incident Management Teams (IMTs) in all regions of the globe operating under the leadership of our Global Incident Management Team. Ashland's Global Incident Management System (IMS) defines our comprehensive approach to working together seamlessly to prevent, protect against, mitigate, respond to, and recover from the effects of incidents such as COVID-19, hurricanes and more.

In addition to COVID-19, the world experienced important social and environmental movements

that have impacted us all.
These events underscore our
commitment to our core values,
while highlighting the need to
take greater actions in 2021 that
further equality.

As we adjust to a new reality, and despite all the challenges that 2020 presented, Ashland stands strong.

Overall, we demonstrated the underlying resilience of our business portfolio in the face of one of the most stressed economic environments the world has seen. Our consumer business units performed particularly well driven by strong demand in our key markets, new business gains and mix improvements. Demand in our industrial businesses was clearly impacted by COVID-19, especially in our FYQ3, but we have demonstrated sequential improvement over the last four months of the year.

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All businesses and corporate groups demonstrated strong operating discipline and cost control to help offset the impact of lower demand and volumes.

## transformation

Driving a transformation is never easy. Driving it while some of our new leaders were under lockdown in other countries and the entire company of office workers were remote, presented interesting challenges. With our team's focus and commitment, we were able to move ahead with our plans and execute all of them without delays or major complications.

Our new business units and leadership teams are in place and they have been fully operational since March. Under our operating model, business unit leaders reset their strategies and cost structures, so they have full accountability for innovation portfolios, profit and loss, and operating performance.

This year we restructured our corporate administrative costs aligning to our new size and strategic focus. We've begun the work to restructure our manufacturing and operations organization to better position us for critical execution in early FY2021.

The transformative self-help actions including right-sizing the company, reducing inventory and taking a disciplined approach to capital allocation all had an impact on our operations and financial performance.

## our future

Looking to 2021 and the potential economic recovery, Ashland is lean and ready to roar. We will build on the progress we have made and the foundation we have set. Our businesses remain keenly focused on maintaining strong operating discipline and performance.

Ashland will continue to make the safety and health of our employees and their families our first priority and we will continue to support the communities in which we operate. We are determined to execute our transformation with a focus on margin expansion and free cash flow, building growth accelerators including a focus on additives and driving our biotech capabilities and accelerating growth in Asia.

This year we will continue disciplined portfolio management and capital allocation. We will make a demonstrable increased commitment to sustainability, social responsibility and digital modernization while building a customer-focused and innovation-centric culture.

In the face of considerable change and challenges during 2020, I want to recognize and thank the Ashland team for their commitment to the company and for operating safely and maintaining the continued supply of products for customers in the critical industries that we serve. Our solvers clearly demonstrated passion and tenacity while advancing our transformation and delivering strong results during one of the most challenging years the world has seen in decades.

I am grateful and appreciative for the opportunities that lie ahead, and I look forward to executing the strategies and plans we have in place.

![](images/4_1.jpg)

Guillermo Novo
Chairman and Chief Executive Officer
Ashland