# Dear Shareholders

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_ASH_2021/NYSE_ASH_2021.mmd` · pages 2-8_

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Dear Shareholders,

2021 was a year characterized by the continued global pandemic, escalating raw material costs, global supply chain challenges and inflation. In the United States, the winter months brought unprecedented storms which impacted manufacturing.

Despite all the external

challenges, Ashland's global team continued to operate safely to ensure we met customer commitments while rewarding our shareholders.

As we managed though unprecedented external challenges, we accomplished many things including improved financial performance, sales and operations (S&OP) discipline, strong operating resilience, a renewed strategy, and a rebalanced innovation portfolio.

Environment, social and governance (ESG) is a significant growth and profitability driver for us, and in 2021 we made a clear corporate commitment to ESG and joined the global movement of leading companies to align operations with the ambitious aim of the Paris Climate Accord to limit global temperature rise to 1.5°C above preindustrial levels. We also committed to making the United Nations Global Compact and its principles part of our business strategy, culture, and day-to-day operations. As a result, we are engaging in collaborative projects which advance the broader development goals of the United Nations, particularly the Sustainable Development Goals.

Executing on our growth strategy, we acquired the Schülke preservatives business. To increase our resources and expand our core additive and ingredients portfolio, we signed a definitive agreement to sell our performance adhesives business to Arkema. Rounding out the fiscal year we refinanced debt and set up an environmental trust.

Ashland today is a different company with the purpose of responsibly solving for a better world.

Our integrated portfolio provides us both leverage and scale with chemistries and product lines that cross multiple categories.

In 2021 we achieved sales of $2.1 billion, EBITDA of $495 million and EBITDA margins greater than 23 percent. We have a strong financial profile with leadership positions in high-quality, resilient, consumer-driven markets with a best-in-class global footprint.

Global megatrends shape our growth agenda. We are focused on meeting customers' increasing needs for sustainable ingredients enabling them to meet their environmental goals. More than 80 percent of our portfolio is natural, nature-derived, inherently biodegradable under OECD methods or sustainable in-use. We have a strong innovation culture and capabilities and executing our innovation goals is critical for 2022.

As we move forward, our strategy is to achieve profitable, sustainable growth and drive consistent execution to achieve even higher margins and continued strong free cash flow (FCF). We will continue our disciplined portfolio management and capital allocation.

In 2022 we plan to expand our additives and ingredients portfolio through bolt-on acquisitions, and we'll continue investing in our core businesses – pharma, personal care, and architectural coatings. Over the next 5 years, we expect to invest ~\(2.0 – \)2.5 billion in bolt-on acquisitions and return ~\(1.5 billion to shareholders.

Next year we will continue building out our bio-tech capabilities and accelerating our growth in Asia. ESG initiatives will increase, and we will accelerate our digital modernization. We're investing in our people and building a customer-focused and innovation-centric culture.

Safety and the drive to zero incidents remains our number one priority. We are dedicated to respecting, protecting, and advancing the people we work with, companies we serve, shareholders who invest in our future, communities we're a part of and planet we share.

I am extremely proud of our employees resilience and our robust performance this year and I am looking forward to what we will accomplish together in fiscal 2022.

Sincerely,

![](images/2_1.jpg)

Guillermo Novo
Chairman and Chief Executive Officer
Ashland