Good morning, everyone. Sorry for the technical difficulties. Welcome to Ashland's Fourth Quarter Fiscal Year 2021 Earnings Call and Webcast. My name is Seth Mrozek, Director, Ashland Investor Relations. Joining me on the call today are Guillermo Novo, Ashland's Chairman and Chief Executive Officer; and Kevin Willis, Senior Vice President and Chief Financial Officer. We released preliminary results for the quarter ended September 30, 2021, at approximately 5:00 p.m. Eastern Time yesterday, November 9. The news release issued last night was furnished to the SEC in a Form 8-K. During this morning'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 during this call. Please turn to Slide 2. As a reminder, during today's call, we will be making forward-looking statements on several matters, including our outlook for fiscal year 2022. 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 2 of the presentation for a more complete 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 1A 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 will refer to these measures as adjusted and present them in order to supplement your understanding and assessment of the financial performance of our ongoing business. Non-GAAP 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 reconciliations 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 3. Guillermo will begin the call this morning with an overview of Ashland's results in the fourth fiscal quarter, including commentary on the recently announced signing of a definitive agreement to sell the Performance Adhesives business. Next, Kevin will provide a more detailed review of financial results for the quarter and the fiscal year. Finally, Guillermo will close with key priorities and planning in the current economic environment in addition to providing his thoughts on important next steps and our financial outlook for fiscal year 2022. We will then open the line for questions. As a reminder, on Friday of this week, we will host a live virtual Investor Day beginning at 9:00 a.m. Eastern Time. We are excited to tell Ashland's story, our plans for sustainable innovation and the strategy for profitable growth and value creation. We encourage all participants to register for the live event using the link available on Ashland's Investor Relations website. Beginning with the start of the live event, all materials and presentations will be accessible on Ashland's website for the next 12 months. Now please turn to Slide 5, and I will turn the call over to Guillermo for his opening comments.

Thank you, Seth, and good morning to everyone. Thanks for your interest in Ashland and your participation this morning. Before I discuss results for the quarter, please let me first acknowledge the Performance Adhesives team. As we announced during the quarter, on August 31, we signed a definitive agreement to sell the Performance Adhesives business to Arkema for $1.65 billion. Our teams are working very well together in planning the sale and future integration. At this time, we expect the transaction to close during the March quarter of 2022. Net proceeds, cash from the sale after tax and transaction-related fees are expected to be in the range of $1.2 billion to $1.3 billion. Given that the Performance Adhesives business is now reported as discontinued operations for Ashland accounting purposes, this is the final quarter in which I plan to specifically address the results of the business. I would like to take this opportunity to recognize their performance. While the Ashland and Arkema teams are working diligently on the transaction closing process, Performance Adhesives continues to execute on their winning strategy. The business performed very well during the quarter with sales up 31% compared to prior year. Adjusted EBITDA also grew by 10% with strong demand and enhanced pricing for its value-added adhesive applications being partially offset by continued raw material and cost inflation. I'd like again to congratulate the Performance Adhesives team for building an excellent business. Adhesives has been an important part of the Ashland portfolio and story. And we'd like to thank the team for the contributions made over the decades. We wish the team great success as they continue their strategy as a future part of Arkema. Please turn to Slide 6, turning to Ashland's results in the fiscal fourth quarter. As you will hear during the call and consistent with our update on November 1, sales and earnings results for the quarter and full year were consistent with the outlook we provided earlier in the year. For the most part, market dynamics of our underlying business continued to improve and behaved in line with our commentary from prior calls. Customer order dynamics remain strong across the core end markets, and we're making progress on taking appropriate pricing actions across all segments. However, ongoing supply chain challenges linked to shipping constraints and raw material availability as well as the pace of raw material and energy cost inflation remain persistent. Despite these challenges, our team operated at a high level to safely deliver products to our customers around the world, yielding the financial results you see for the quarter and the year. The Schülke & Mayr business also made a strong contribution to results in the quarter as the team is now fully integrated into our core personal care segment. For all of Ashland, the sales in the quarter grew by 12% to $591 million and adjusted EBITDA grew by 14% to $149 million. In addition, cash generation remained strong as we reported $120 million of free cash flow in the quarter. Kevin will provide more details on the results for the quarter and the fiscal year in a few moments. In addition to the strong execution to deliver financial results, the Ashland team also made good progress on reshaping the portfolio, strengthening the balance sheet and returning capital to shareholders. I already referenced the signing of the definite agreement to sell the Performance Adhesives business. Second, we issued $450 million of new senior notes while retiring the notes that were due next August, thereby lowering our annual interest expense and pushing out our next notable debt maturity to 2025. Third, we established an annual renewable environmental trust with an initial funding of $90 million. We plan to further fund the trust using proceeds from the planned sale of remediated real estate over the coming years. With this trust, we expect to fund all future environmental-related costs without using operating cash flow, in addition to mitigating some of the volatility we recognize from time to time in our adjusted results. Last but not least, during the quarter, we initiated a $450 million accelerated share repurchase program with an initial delivery of 3.9 million shares, which were retired. We expect the ASR to be complete by March 2022 at the latest, at which point, there will remain $350 million under our existing share repurchase authorization. I'm very pleased with the progress made by the Ashland team during the quarter and the year and look forward to discussing our outlook for the next fiscal year later in the call. In the meantime, I'll turn over the call to Kevin to review our Q4 and fiscal year results in more detail.

Thank you, Guillermo, and good morning, everyone. Please turn to Slide 8. Before I begin, I'd like to remind everyone that the results of the Performance Adhesives business are now reported as discontinued operations for Ashland and will not be included in my discussion of adjusted results from continuing operations. However, as a reminder, even though we still own the business and expect to until sometime in the March quarter, stranded costs related to adhesives are included in our corporate unallocated expenses. Total Ashland sales in the quarter were $591 million, up 12% versus prior year. Favorable currency contributed 1% growth during the quarter. Gross margin for the quarter declined modestly to 33.2%, primarily reflecting higher raw material, freight, and energy costs. Excluding key items, SG&A, R&D, and intangible amortization costs increased modestly to $113 million in the quarter, primarily reflecting the addition of the Schülke & Mayr business. In total, Ashland's adjusted EBITDA for the quarter was $149 million, a 14% increase compared to the prior year adjusted EBITDA of $131 million. Ashland's adjusted EBITDA margin for the quarter was 25.2%, a 40 basis point improvement compared to the prior year, again reflecting the items discussed above. Notably, all four of Ashland's operating segments reported adjusted EBITDA margin above 25%. Adjusted EPS, excluding acquisition amortization for the quarter, was $1.22 per share, up 18% from the prior year. Now let's review the results of each of our four operating segments. Please turn to Slide 9. I'll begin with Life Sciences. The team executed well in the face of continued supply chain disruptions and raw material inflation. Sales were $189 million, up 5% from the prior year quarter. Currency favorably impacted sales by 1%. Demand for pharma and nutrition ingredients was healthy and was only partially offset by lower nutraceutical sales due to labor shortage issues. Life Sciences' gross margins declined by 9% due primarily to raw material cost inflation during the quarter. The vast majority of this inflation came from higher BDO transfer pricing. While the team was able to initiate price increases, there is more work to be done to recapture the inflation we have seen and are continuing to experience. In total, adjusted EBITDA declined by 6% to $48 million in the quarter, due largely to the cost inflation I referenced. Adjusted EBITDA margin in the quarter was 25.4%. Please turn to Slide 10. Personal Care and Household sales were $183 million, up 12% from the prior year quarter. Sales to core personal care end markets were strong across the board as we continue to see improved demand for our ingredients globally, following the onset of the pandemic last year. The Schülke & Mayr business was also a meaningful contributor, adding roughly $22 million of sales to the quarter. These gains were partially offset by the exit of roughly $10 million of low-margin purchase for resale business in addition to lower sales of additives for hand sanitizers compared to the prior year. At the end of fiscal '21, the exit of low-margin Personal Care and Household product lines is complete. The carryover impact to sales of these exits for fiscal '22 is expected to be approximately $35 million with very little EBITDA impact. Gross margins improved by 60 basis points, reflecting the contribution from the acquisition, the exit of low-margin business, and lower operating cost. In total, Personal Care and Household adjusted EBITDA increased by 11% to $51 million. Adjusted EBITDA margin remained healthy at nearly 28%. Please turn to Slide 11. Specialty Additives had yet another nice quarter with sales up 13% to $181 million. Demand for architectural coatings additives remains very strong. And we are seeing a normalization in DIY volumes and a shift to higher contractor paint volumes. As we stated last quarter, global demand continues to be very strong. And our HEC network as well as the industry has sold out. To meet incremental demand, one of our key growth projects in fiscal '22 is expanding our global HEC production capacity. Sales growth remains strong and price versus cost for Specialty Additives was positive during the quarter while operating costs were a headwind year-over-year due to the inventory control actions we took last year. As such, gross margins declined by 350 basis points to 26%. However, in total, adjusted EBITDA grew by 7% to $47 million, and adjusted EBITDA for the quarter was 26%. Please turn to Slide 12. Intermediates & Solvents reported a very strong quarter as pricing has continued to rise following strong global demand and outages at competitor facilities in the U.S. I&S sales were $60 million, more than double compared to the prior year. While merchant sales were up double digits due to strong demand in pricing, internal captive sales were up even more significantly compared to last year, reflecting the higher BDO transfer price and the internal inventory control measures that were in place during fiscal Q4 of last year. I&S margins were up meaningfully. The segment reported adjusted EBITDA of $21 million compared to $6 million in the prior year. And adjusted EBITDA margin in Q4 was 35%. Please turn to Slide 13. As I have done for the last few quarters, I'd like to spend a few minutes talking about cash generation, which continues to be an important component of our value creation strategy. Total free cash flow in the quarter was $120 million, a $31 million increase compared to prior year. While we generated higher cash flow from lower capital expenditures, greater earnings and lower cash interest expense, we also received an additional $16 million as part of the new accounts receivable sales program that we implemented during the quarter. Free cash flow during the fiscal year was also very strong. Ashland generated $361 million of cash from higher earnings, lower capital expenditures, lower interest expense and a $91 million contribution from the AR sales program. The discipline around capital expenditures this year was an important contributor to free cash generation. Total CapEx for the year declined by nearly $30 million as we prioritized plant investments and worked more efficiently in our maintenance activities. As we look to next year, we plan to allocate capital to important organic growth projects. These high-return investments will serve to expand production capacity in some of our key high-margin product lines for our core end markets in pharma, personal care and coatings. In fiscal 2022, we expect to allocate roughly $60 million to these organic growth projects. Total capital expenditures next year should be in the range of $160 million to $170 million. Guillermo will spend more time discussing our overall outlook for fiscal '22 and our underlying assumptions in his closing remarks. Please turn to Slide 15. Next, I'd like to briefly review our financial results for fiscal year '21. For the year, Ashland generated 5% sales growth across the portfolio in a difficult and uncertain economic environment. All businesses saw improved top line results over the prior year, including personal care, which also grew net of exited sales related to low-margin product lines. Demand recovery and the Ashland team's execution in the face of raw material availability and freight and logistics challenges were key drivers to the year-over-year sales growth. Please turn to Slide 16. Adjusted EBITDA for the year was $495 million, a 10% increase over the prior year. Adjusted EBITDA margin also expanded by 110 basis points to 23.4%. Ashland generated strong earnings growth and margin improvement during a challenging macro environment and $18 million of negative impact from the labor strike at our Belgian facility and winter storm Uri. For the year, Ashland generated $361 million of free cash flow, inclusive of about $92 million from our AR sales program and $44 million of cash restructuring payments. Cash generation will be critically important as we execute on our organic growth plans. Please turn to Slide 18. Before Guillermo discusses our financial outlook for fiscal year '22, I think it's appropriate to calibrate the results for fiscal '21 and put them in context for next year. First, as previously discussed, beginning with Q4, we are now reporting adhesives as discontinued operations. With the discontinued operations reporting, a portion of the cost previously allocated to the adhesives business will remain in our unallocated corporate segment. These stranded costs totaled $14 million in fiscal year '21 and are included in our adjusted results for the year being reflected in unallocated and other segments of the income statement. We are also reporting all environmental costs net of asset returns in the renewable environmental trust as key items for adjusted results reporting. After making these adjustments, fiscal year 2021 results amount to $2.1 billion of sales and $495 million of adjusted EBITDA with an adjusted EBITDA margin of 23.4%. Please turn to Slide 19. In addition, there are several discrete items that reset the baseline for fiscal year '21. Earlier this year, there were cost impacts related to winter storm Uri and the labor strike at our plant in Doel, Belgium that impacted earnings. The cumulative amount of EBITDA impact from these two events was approximately $18 million in fiscal '21. We don't anticipate that these events will recur next year, so we factored them into our baseline for 2022 planning. Second, we will have an additional 7 months of earnings from the Schülke & Mayr acquisition in fiscal '22, given that the transaction closed on May 1, 2021. We expect these additional 7 months of earnings to contribute roughly $15 million of EBITDA to fiscal '22. Finally, the transition services agreement we had in place with INEOS following the sale of the composites business in late 2019 has come to an end. We recognized roughly $8 million of income in fiscal '21 from this agreement in the unallocated and other segment. And this income will not repeat in fiscal '22. As such, we are also adjusting this out of the baseline. In summary, as we look at our 2022 planning, our starting point baseline for 2021 is approximately $520 million of EBITDA. For internal analysis, our expectations for fiscal '22 will be compared against this baseline as we started the year. With that, I'll turn the call back over to Guillermo to discuss our priorities and outlook for fiscal '22.

Thanks, Kevin. Please turn to Slide 21. As Kevin indicated, given all the challenges and changes, we have set a clear baseline for 2021 to build our outlook. As we look to 2022, macro trend, we see both tailwinds and headwinds we need to address. Demand remains strong across most of our end markets. Given our increased exposure to consumer-driven segments, we see the strength of the consumer as a positive for us in the coming year. The normalization of social and economic activity as we move past COVID should begin to have a positive impact on demand in key segments. For pharma, we should start to see improved funding for therapeutic treatments for a broad range of infectious diseases, which have been negatively impacted by lower government and donor funding as they focused resources on the COVID pandemic. Equally, the opening of social activities will likely change consumer activities and behaviors, which should have a positive impact on demand in several personal care segments. The pricing environment remains positive, given high demand, supply chain challenges and long-term tight industry supply and demand balances in key technologies, such as HEC. We acknowledge that 2022 will come with its share of challenges and headwinds. We expect supply chain and logistics challenges to persist at least through our fiscal third quarter. Broad-based cost inflation will continue to be a challenge to everyone. For Ashland, we see several cost inflation drivers. We see cost increases in cellulose driven by poor cotton crop, supply logistics challenges as well as high demand for cellulose across all categories. We continue to see cost escalations in butane driven by higher natural gas costs. This impacts our BDO costs. And in general, we expect to continue to see broad-based inflation across our small volume raw materials driven by product supply and logistics-specific factors. This includes higher costs of freight, logistics, and labor. In China, we continue to monitor some of the energy use restrictions and the potential impact on our plant operations in China as well as on the operations of our suppliers and customers. Lastly, although the tight HEC industry supply-demand balances are favorable for pricing, they will place volume growth constraints until we bring online the additional capacity we have announced. Please turn to Slide 22. As you will hear in the coming Investor Day, our priority will be on driving profitable growth. As we move into 2022, we will be increasing our growth investments to drive organic growth. We will be investing in our cellulosic franchise to support growth of HEC, Klucel, and Benecel product lines. We will invest in our geographic formulation capabilities in pharma and personal care to support our oral solid dose business as well as our preservative business. And we will invest in growing in Asia. Please turn to Slide 23. The basis for our 2022 outlook is continued strong demand in Life Science and Specialty Additives and improving demand in personal care. No changes to our operating performance. We expect continued broad-based cost inflation. This will be offset with strong pricing actions across our portfolio. Given the strong market recovery, supply of our product lines will remain tight until we bring on incremental capacity. This tight supply-demand balance will impact the broader industry. Based on these insights, our outlook for 2022 is sales of $2.25 billion to $2.35 billion, adjusted EBITDA of $550 million to $570 million. As was the case in 2021, there are several risks that are difficult for us to forecast. We will monitor developments and adjust our plans as needed. These risk areas include changes in supply chain challenges, as more specifically around ocean freight, which is a big driver of our network; potential impacts of China's energy usage restrictions; raw material availability changes; acceleration of energy cost increases, depending on weather and geographic dynamics; and changes in general inflation trends. Please turn to Slide 24. Although demand continues to improve, we will continue to operate in an environment of uncertainty. We will continue to monitor developments and focus on the things we can control. Our priorities are clear: continue to demonstrate operating discipline and resilience; maintain our strategic focus; continue to drive and accelerate innovation; and maintain disciplined capital allocation. Please turn to Slide 25. As Seth mentioned earlier in the call, on Friday this week, beginning at 9:00 a.m. Eastern Time, we will host a live virtual Investor Day. We're excited about the opportunity to share our views on Ashland today and our expectations for Ashland in the future. We'll talk about the company and our focused portfolio. Our commitment to ESG priorities and goals are improving financial performance and our premier financial profile. You'll have opportunities to hear directly from our business unit general managers and their respective strategies for profitable growth. And we will review our priorities, strategies, and outlook for results over the coming years. Following a live Q&A session with securities analysts, we will highlight 12 different products and technology innovations in which you will have the opportunity to interact with Ashland leaders via live Q&A chat sessions. We anticipate the event will be well attended and look forward to the day's event. In closing, I want to thank the Ashland team once again for their leadership and proactive ownership of their businesses in an uncertain environment. As you will see on Friday, we have changed. We are fortunate to be a premier additives and ingredients company with high-quality businesses that have leadership position in resilient, high-quality, consumer-driven segments. I am pleased by the resilience demonstrated by our people and businesses and look forward to the opportunities that lie ahead. Thank you. And operator, let's move to Q&A.

. And our first question comes from John McNulty from BMO Capital Markets.

Maybe a couple of them. Firstly, just kind of getting some of the noise of freight out of the equation, I guess, can you help us to understand what the impact of freight, either availability and/or costs, were on the quarter? And I guess, how are you going to manage through that as you kind of look to 2022? Have you kind of just either locked up more freight availability? Or I guess, what prevents that from capping some of the growth that you could otherwise see in 2022?

Let me comment on when we look at the whole supply chain logistics side, just what's impacting us and then I'll pass it to Kevin to talk maybe about the cost and freight. But our biggest issue right now is if you look at, let's say, in simplistic terms, 75% of our sales are local. We have inventory around the world and it's just local shipping and 25% is indent. So the biggest issue that we have is more the on-time scheduling of ships. And that's really where we see a lot of this end of the month, end of the quarter surprises of did the ship arrive on time? Did we load it? So the availability is the biggest issue for us. Most of our shipments are coming out of the U.S. and Europe to the rest of the world. We're not in the dynamic that other companies have of shipping in from Asia into the U.S. So we have availability. It's the on-time side that is the biggest impact. On the land transportation, I would say we have some issues in Europe, but the bigger issues are here in the U.S. on truck availability, drivers, those kinds of things. But frankly speaking, that's going to be less and less of an issue as the adhesive business leaves the portfolio. Ocean freight is one of the biggest issues for us. But Kevin, do you want to comment on the cost?

Yes. Q4 of this year versus last, freight and logistics costs were up, call it, mid-single-digit millions of dollars. And '22 versus '21 full year, we expect it to be $15 million or so of inflation based on the environment that we're in today. So not insignificant, but you have to get it through pricing.

Got it. As a follow-up, could you discuss the challenges you're facing in freight? You mentioned the impact on the Life Sciences segment and a bit on personal care. Can you address how you're managing to implement the necessary pricing? Looking ahead to 2022, what price level do you anticipate needing for the consumer-related parts of the business?

We are adjusting our pricing across the board due to a broader inflation that is affecting everyone, not just us, and we are managing to pass those costs on. The pricing dynamics, particularly in the HEC network, are currently tight, and demand remains strong, which is favorable for pricing. Consequently, the growth is expected to come more from pricing strategies than from volume in that segment until new capacity is introduced. The situation is mainly about timing, which differs from our discussions around adhesives that are more volatile within the petrochemical sector. Currently, our major exposure is in cellulose due to our substantial cellulose franchise, which tends to be quite stable. What we're experiencing now is unprecedented and something we haven't seen in the past decade. While we are beginning to observe some signs of softening towards the end of the year, we will continue to monitor that closely. Typically, we can pass on price increases and maintain them for an extended period. The butane dynamics affecting our BDO portfolio are currently influenced by energy factors. Across our procured materials, we do not face significant raw material issues; instead, we have numerous minor increases that collectively contribute to an overall rise, impacting everyone. Therefore, I believe we are in a favorable pricing environment with the entire industry moving in this direction.

Got it. No, that's helpful. Maybe if I can sneak one last one in, with the sale of the adhesive business, you're going to have a significant amount of cash or flexibility. This has only enhanced the improvements you've made in cash conversion. So can you discuss the M&A opportunities you see out there and the potential pipeline in terms of your ability to deploy some of that capital?

So John, I'm going to have to leave you with a little bit of a cliffhanger so that you have to come in and see our Investor Day on Friday. But yes, to answer your question, I mean, we obviously have the resources. And it's not just from the sale. I think you've seen the strong cash flow generation that the core business has, our issue now is going to be to refocus on growth. And we'll talk a little bit more about that in terms of the Investor Day. You've seen the attention we've had of free cash flow conversion. We're fine-tuning that even more. We really want to split out what is the cash flow for maintaining our business, just the normal operations and refocus so that we're investing more of our resources on growth, be it organic growth, and we have some specific areas that we want to accelerate growth because we see we're very well positioned and demand is very good. There's M&A, bolt-on M&A opportunities. And we'll talk about that at the Investor Day and where we're focusing on. And as you've seen, we are also rewarding our shareholders. And I think, fortunately, we're in a position that we can do all of the above. And we'll remain balanced in our approach.

So Guillermo, when you put aside all of the noise, the raw material, P&L pressures in fiscal year '21 and you assess your current ingredients portfolio, specialty materials, et cetera, et cetera, where does it ultimately stand in terms of growth, pricing power, and margin potential versus your original assessment as CEO?

I'm extremely excited about the theme of our upcoming call on Friday. We've undergone a significant transformation over the past decade or more. It's important to recognize that it's not just about reducing size and noise; our portfolio has changed significantly. When I hear references to the past, they're often about aspects of a distribution business, a water business, or a composites business — it's all quite varied. On Friday, we'll provide transparency regarding the changes in our core business. Our current business reflects a portfolio that's about 10 years old, contrasting with the old Ashland that was around for a century. It's very different now and, in my view, of high quality. We have a strategically coherent portfolio of additives and ingredients, with leading positions in high-quality markets such as personal care, pharmaceuticals, and architectural coatings. More than 70-75% of our demand comes from consumer-driven areas, which is very healthy. The remainder is well-integrated to leverage our technologies and capabilities for scale and profitability. We are focused on achieving growth of 200 to 400 basis points above market rates. This growth is supported by steady market trends, and we will discuss that further. We're also committed to improving our margins, and we've taken top-down actions to enhance them through better management, productivity, and mix improvements. As we grow and scale, new businesses brought in through innovation or M&A— which tend to be higher margin than our current operations—will further enhance our margins. I want to highlight that we're not looking to invest in lower-margin businesses. All these factors should help us push our margins upward. Long term, while I don’t want to reveal too much before Friday, we aim to continue striving for greater than 30% EBITDA margins in the future.

Great. And I'll thank McNulty for stealing my cash war chest question, then we'll wait until Friday. I couldn't help but notice on Slide 22, you mentioned expansions in Klucel, Benecel. Many of us recalled those expansions, if I'm not confused, one was in Virginia, one was a conversion in Belgium. Is that ultimately where the expansions will be, if you could confirm that, and then just also mention the longer-term growth outlook for Life Sciences, specifically excipients and how that ties into Asia, if at all?

We are being very careful in planning our capacity expansions, considering not just the immediate needs but also our future goals. We are focusing on making efficient investments that will enhance our infrastructure and profitability. Our initial investments will help us maintain a strong cost position while preparing for long-term opportunities, particularly in Asia. For the cellulosics, that foundational area will be a key driver. Additionally, we see significant growth in biofunctionals within personal care, which is quite profitable. We are expanding our Nanjing plant to leverage that location, allowing us to produce not only for the Asian market but also to collaborate with our customers in that region on new products using various raw materials. Overall, our growth extends beyond cellulose into other areas that may be less asset-intensive, though we still recognize the importance of investing in our existing infrastructure.

I obviously appreciate the outlook on fiscal '22. But you don't provide any quarterly guidance. So I was wondering if you can give us some thoughts on the cadence of earnings as the year progresses. Is it fair to assume that there are some headwinds on the margin front to start the year and then better margin performance later in the year? And also maybe comment on when we start to see the contributions from the capacity expansions.

Let me begin with the last point. The contributions will primarily come towards the end of the year. We are making debottlenecking investments that will be implemented throughout the year, but the more substantial impacts will appear later. To be fully transparent about margins and certain challenges, there's a lot of market noise at the moment. The early part of the year feels quite frothy. As we reviewed our plans for 2022, we noticed a significant rise in raw material and cost inflation compared to our initial plans from two months ago. We are actively adjusting prices, and as we do, we are observing some softening in other areas. It's a volatile situation. Currently, the key is to understand the trends and remain agile in our responses. All companies, including us, need to focus on being swift and flexible to tackle the challenges ahead. We are adjusting our pricing accordingly, but the volatility will persist. The early part of the year is likely to be more unstable, while conditions should improve as we move into the latter part, especially as supply chain dynamics start to normalize. Additionally, we will keep an eye on the winter months, particularly regarding COVID and energy volatility, which impacts demand in various regions.

All right. And then you mentioned within the pharma business that the funding has been directed to COVID. Hopefully, as COVID runs its course, it's going to be shifting back to some other areas that could be a little bit more advantageous for you. We've also heard other pharma-related companies talk about some reductions in demand because fewer people are getting sick as we continue with social distancing and mask-wearing. So maybe just, I guess, give some thoughts on the pharma business as we kind of transition to this post-pandemic environment and how you see the growth opportunities going forward.

I think there are two key points to consider. First, we're starting to see a reopening, and while I'm not a medical expert, it's clear that there have been declines in some therapies due to decreased public exposure. At the same time, as people begin to interact more, we are noticing an uptick in cases of the flu and other illnesses. We need to monitor how this unfolds. Our portfolio encompasses a wide range of therapies, and it's important to highlight that we have strong business, particularly with many generic customers globally. For instance, AIDS treatments have experienced challenges over the past year as funding has been redirected towards COVID, mostly from government and donor sources. As that stabilizes, our overall portfolio will likely benefit.

I think also as we see more elective procedures done, there should also be an uptick in the related therapeutics that go along with those. Because those are still very, very muted really across the world today.

I think you transferred BDO at cost, not market. I just want to confirm if that's true, and therefore, the integrated margin compression was even more relative to market BDO. And as good as the I&S earnings were, I guess, it would have been even higher if they were all priced at market.

No. Actually, I would say we are transferring at a price that aligns with larger buyers. We have substantial customers, so we determine our pricing using a similar approach, taking into account producer economics as well as market rates. This represents a bit of a pocket shift for us. When examining the challenges in our Life Sciences and personal care segments, most of the inflation and cost impacts in 2021 were due to BDO transfer pricing, rather than general costs. We've adjusted our business operations to allow for price increases. We likely performed better because of this price adjustment, though we didn’t capture all the cost impacts. However, if we hadn't been transferring at cost, we probably wouldn’t have pushed for such aggressive price increases, which would have resulted in a lower net for the company. Our current focus is not on which segment benefits financially, but on ensuring we are generating revenue and facilitating movement throughout the business. I want to mention the I&S business, which won’t be a major point of discussion on Friday, but as we've stated in prior calls, the emphasis is on integration. Our goal is to leverage integration for cost efficiency, supply security, and smoothly operating our core business. Fundamentally, it’s about value; if the integration does not result in value creation, we will consider our strategic options. The business dynamics have shifted a bit. We continue to manage transfer pricing that allows for profit maximization on one side or the other, based on pricing conditions. Currently, the BDO pricing situation is quite unique. We anticipate strong pricing in the early part of 2022 and throughout the year, especially in the beginning. However, over time, we expect it to normalize due to global demand trends for BDO. We have a very unique business; we own a valuable asset. Constructing a new BDO plant would be extremely costly, as we are one of only three producers in the U.S. Furthermore, our facilities have proven resilient during hurricanes, positioning us favorably. Additionally, the bulk of our merchant business, particularly in BDO, relies on transfer pricing for internal management. Still, most of our merchant activities involve derivatives and intermediates that we sell—these are primarily used in sectors like semiconductors, battery production, pharmaceuticals, agricultural active ingredients, and coatings. With the U.S. focusing on in-sourcing projects, pricing will likely decrease and stabilize in the long term. However, we believe that stabilization for these derivatives may occur at a higher level than historically, which sometimes required shipping products globally. We will continue to assess the long-term direction for this business, but it’s well-positioned, and broader macro trends also support this portion of our portfolio for the future.

Okay. Regarding the pharmaceutical business, IFF appears to be facing similar supply chain challenges with its pharmaceutical excipient sector. Considering that both of you are among the largest suppliers, what actions are pharmaceutical customers taking if the two major suppliers are both experiencing issues? Or has the demand for pills and gel capsules decreased enough that they don't require as much product?

There are two points I want to make. First, we should not confuse the ability to meet demand with the ability to recognize sales. Our challenge is getting products onto ships. If we can't get something on a ship by September 27, it affects our revenue recognition. However, if we ship it on October 3, it creates a 5-day delay for our customers. The timing issue is not about getting materials to our customers; it creates significant challenges for us in terms of delivery. Our main concern is the supply side, particularly ocean freight. We are also addressing issues with small raw materials that affect our operations, but we have been managing that aspect quite well. The bigger challenge is the loading of ships at the end of the quarter, which is largely beyond our control.

. And our next question comes from Jeff Zekauskas from JPMorgan.

Your BDO operation, the Intermediates & Solvents, earned about $20 million in EBITDA in the fourth quarter. And so if you annualize that, that's about $80 million and your EBITDA this year in that segment was about $50 million. So what you said is that the prices are going to be strong going into next year. So order of magnitude, there's a $30 million increase in EBITDA from the BDO operation alone. But your guidance at the bottom of the range is $550 million. So if you go from $520 million to $550 million, you can do that on BDO alone. So is the meaning of your guidance that there's a lot of growth in BDO and there's a little bit of growth elsewhere and there's only a little bit because raw materials are up a little bit and you're not growing as fast as you can normally yet? Is that the way to understand your guidance? Or do I understand it in a different way?

No, you would understand it differently. If you look at BDO, we expect strong prices at the beginning of the year. However, we anticipate some softening as we progress. There is some uncertainty in that regard. Looking at our plan, it shows a downward trend. Butane significantly contributes to our raw material inflation this year and will continue to do so next year, which creates some balance. The rest of our portfolio is performing well. The BDO transfer price is a concern for other businesses, and we are adjusting our pricing accordingly. As that adjusts, for 50% of that calculation, it will either benefit our downstream business or BDO. We are not particularly worried about where the benefit will come from. The main issue right now is ensuring our pricing is stable on the BDO side regarding our transfer pricing, and that we are able to pass on the price increases to guarantee that our downstream businesses are well-positioned.

A couple of other things to add to that. As you're aware, Jeff, we periodically have to do catalyst change. And that's a pretty major shutdown for that business. We have one of those planned for fiscal '22. So that will be a headwind to earnings for the BDO business or the I&S business. But as we think of it, I mean, most of the growth year-over-year is going to come from the core business and not from the I&S business.

Okay. For my follow-up, I understand that volumes in personal care have decreased slightly, excluding the acquisition. When do you anticipate growth in that area? Additionally, in Specialty Additives, your sales increased by 13%. Can you break down how much of that was due to volume versus price?

I will begin with the personal care segment. Looking at the quarter, when excluding the acquisition and the resale volumes we no longer handle, volumes increased by 5%. Organic volume growth in personal care for Q4 of 2021 compared to Q4 of 2020 was also 5%. This growth occurred across all our markets, including skin, hair, and oral care. In the Specialty Additives segment, organic volume growth was approximately 4% overall. Coatings also saw a 4% rise, while performance specialties and energies grew even more; however, we experienced a decline in the construction sector. Overall, the total volume increased by about 4%, and there was a significant contribution from pricing as well.

And that concludes our question-and-answer session for today. I'd like to turn the conference back over to Mr. Novo for closing remarks.

Okay. Well, thank you very much, Valerie, and thank you all of you for joining us today. And most importantly, thank you to the entire Ashland team for all the support and hard work that has helped us achieve these results. I look forward to talking to all of you on Friday. And we look forward to having a productive and interesting discussion with all of you about Ashland, the changes within our portfolio, the strength and the excitement that we have about the future. So thank you very much, and we look forward to talking to you on Friday. Bye.

This concludes today's conference call. Thank you for participating. You may now disconnect.