Thank you, Abigail. Hello, everyone, and welcome to Ashland's Fourth Quarter Fiscal Year 2023 Earnings Conference Call and Webcast. My name is Seth Mrozek, Director, Ashland Investor Relations. Joining me on the call today are Guillermo Novo, Ashland's Chair and Chief Executive Officer; and Kevin Willis, Senior Vice President and Chief Financial Officer. We released results for the quarter ended September 30, 2023, at approximately 5:00 p.m. Eastern Time yesterday, November 8. The news release issued last night was furnished to the SEC in a Form 8-K. During today's call, we will reference slides that are currently being webcast on our website, ashland.com, under the Investor Relations section. We encourage you to follow along with the webcast during the call. Please turn to Slide 2. As a reminder, during today's call, we will be making forward-looking statements on several matters, including our financial outlook for fiscal year 2024. 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 an explanation of those risks and uncertainties and the limits applicable to forward-looking statements. You can also review our most recent Form 10-K under Item 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 on Ashland on an adjusted basis, which are non-GAAP financial measures. We will refer to these measures as adjusted and present them to supplement your understanding and assessment of the financial performance of our ongoing business. Non-GAAP 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 performance and results in the fourth quarter and fiscal year. Next, Kevin will provide a more detailed review of financial results for the quarter. Guillermo will then provide additional commentary related to Ashland's financial outlook for fiscal year '24. We will then open your line for questions. Now please turn to Slide 5, and I will turn the call over to Guillermo for his opening comments.

Thank you, Seth, and hello to everyone. Thank you for your interest in Ashland and for your participation today. The results in the September quarter were consistent with our preannouncement that we issued last week. Customer demand was generally in line with our expectations. Although destocking has stabilized relative to the prior year, we continue to feel the impact across several markets. Pricing remained favorable compared to the prior year across all our core segments in the integrated business. However, Intermediates did experience price declines in both the merchant business as well as the internal BDO transfer price. By far, the biggest factor impacting Q4 earnings was the proactive inventory control actions we took. These actions were above our regional expectations. Given the uncertainty in the outlook and a different scenario we considered, we took the approach to assume a more conservative scenario for our planning actions. The resulting lower inventory position and improved cash flow will position us better for better operational resilience across multiple scenarios over the next couple of quarters. These inventory control actions resulted in lower production volumes, and nearly $60 million in cost impact. The resulting benefit was a reduction in inventory of about $86 million compared to June 30 and a generation of $104 million in ongoing free cash flow during the quarter. While the $74 million of adjusted EBITDA was below our original expectations, these actions were necessary to meet our commitment to maintaining operating balance sheet and cash discipline during times of uncertain customer demand. Please turn to Slide 6. Fiscal 2023 was a challenging year. As I indicated, reduced volumes resulting from the unprecedented and extended customer destocking was the largest single factor impacting top line results during fiscal '23. Volumes were down 18% during the year due to these impacts. The lower volumes impacted both sales and gross profit as well as plant cost and unit costs. And while pricing was favorable for the year, it was not enough to fully offset the significant reduction in volume. But the net result for the year was sales down roughly $200 million or about 8%, and adjusted EBITDA was down about $131 million or roughly 22%. The lower demand and inventory destocking were clearly very challenging and disruptive for our manufacturing operations. Although the timing of some of the inventory control actions varied across the year, in hindsight, if we average the timing of these actions across the year, the net result would not have changed. The bottom line of production and manufacturing unit costs for the year increased significantly due to the lower production volumes and resulting lower cost absorption. Disciplined SARD variable expense management helped, but the broader underlying costs were in line with our original plans. The only meaningful cost reduction resulted from the reduced incentive compensation based on the lower performance. Let me close my fiscal 2023 comments with some reflections. On the positive side, it's good to see that consumer demand remains resilient for the core markets we serve as our customers destocking actions and our demand align with their underlying production needs to meet demand. We are seeing this dynamic starting to flow through with many customers. Unfortunately, it's also clear that destocking dynamics will continue to persist for longer across some of the supply chains of the industries we serve. If we look at the first half of the year, the expectation was that destocking would be shorter lived, and demand would normalize sooner. Unfortunately, things did not play out that way. The inventory build across many supply chains in fiscal year '21 and '22 was much greater than anyone realized, and it's taking much longer than expected to work down. There's still significant uncertainty as to when these dynamics will end. Until the inventory control actions taken by customers have subsided, it will remain difficult for us to gauge the true end market demand. Waiting for improvements is not a reliable option. Given the continued uncertainty, it is vital that we move proactively to take actions to build resilience, reduce volatility, and maximize performance across various scenarios. We also recognize that while near-term uncertainties of the current environment present challenges, they do not change our exciting long-term opportunity for Ashland. We need to act on both dimensions to improve near-term performance and invest in our long-term profitable growth opportunity. I will discuss these in more details later in the call. Let me now turn the call over 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 review the detailed results for the quarter, I'd like to provide a bit more color on the customer destocking dynamics we experienced during fiscal '23. As you can see in the graph to the left, Q1 and Q2 sales were actually tracking favorably compared to the prior year. While some distributors and customers in China and Europe have begun to reduce their order activity, carryover pricing was more than enough to offset these actions. However, during our fiscal Q3, the persistent customer destocking had expanded to more end markets and customers. These trends accelerated throughout the back half of the fiscal year. As Guillermo has stated, while we have seen some indications that demand has stabilized, we expect destocking to be a factor for at least the next 2 quarters. Hence, the more aggressive actions we took to reduce inventory during the September quarter. Please turn to Slide 9. Total Ashland sales in the quarter were $518 million, down 18% compared to the prior year. Continued customer destocking dynamics resulted in reduced volumes for all segments. Pricing was favorable for all segments except Intermediates. Foreign currency had a favorable impact on sales of 2%. Gross margin declined to 24.9%, driven primarily by the $58 million of inventory actions in the quarter. When excluding key items, SG&A, R&D, and intangible amortization costs were $116 million down from $123 million in the prior year, largely reflecting lower incentive compensation accruals. In total, Ashland's adjusted EBITDA for the quarter was $74 million, down 50% from the prior year. Ashland's adjusted EBITDA margin for the quarter was 14.3%, down from 23.3% in the prior year, again, reflecting the factors I just discussed. Adjusted EPS, excluding acquisition amortization for the quarter was $0.41, down from $1.46 in the prior year quarter. Ongoing free cash flow improved to $104 million for the quarter, primarily reflecting changes in working capital stemming from our internal inventory control actions. Now let's review the results of each of our 4 operating segments. Please turn to Slide 10. Within Life Sciences, demand for our pharmaceutical ingredients remained healthy, though volumes were down a bit versus a strong prior year period. Nutraceuticals demonstrated a nice recovery. Sales to nutrition end markets remain challenged. Overall, pricing for Life Sciences was favorable. In total, Life Sciences sales declined by 5% to $203 million, while adjusted EBITDA decreased by 16% to $48 million. Inventory control actions in the quarter impacted EBITDA by approximately $6 million. Adjusted EBITDA margin decreased to 23.6%, primarily reflecting the impact of inventory control actions. Please turn to Slide 11. Continued customer destocking negatively impacted Personal Care in the quarter. For the quarter, Personal Care sales declined by 22% to $146 million, while adjusted EBITDA declined 36% to $36 million. Pricing continues to hold, but margins were negatively impacted by lower volumes, driven by customer restocking, $5 million of inventory control actions, and negative mix. Please turn to Slide 12. Specialty Additives was impacted by reduced demand, primarily related to continued customer destocking, though the architectural coatings end market was less impacted than others in the business. Pricing remained positive in the quarter versus the prior year. However, volume declines due to destocking, primarily in construction and Performance Specialties, as well as nearly $38 million of inventory control actions by the team negatively impacted profitability in the quarter. Specialty Additives is our highest volume business and is also the landlord for several large manufacturing facilities that also serve the other segments, and therefore, experienced a larger share of the result of the inventory control actions in the quarter. For the quarter, Specialty Additives sales declined by 23% to $144 million, while adjusted EBITDA declined by 81% to $8 million. Please turn to Slide 13. Intermediates reported sales of $37 million, down 42% compared to the prior year, driven by lower pricing and volumes. Intermediates reported adjusted EBITDA of $3 million compared to $17 million in the prior year, and adjusted EBITDA margin declined to 8.1%. The inventory control actions impacted earnings by $9 million in the quarter. Please turn to Slide 14. Fiscal 2023 was obviously a very challenging year. While pricing remains strong throughout the year, customer destocking and the related impacts on revenue and plant loading resulted in decreases in most financial metrics. That being said, it is important to note that in fiscal 2023, Ashland generated strong ongoing free cash flow, which increased meaningfully versus the prior year. Please turn to Slide 15. As of the end of September, we had cash on hand of $417 million, with total available liquidity of roughly $1.1 billion. Our net debt was $913 million, which is about 2 turns of leverage. We have no floating rate debt outstanding, no long-term debt maturities for the next 4 years, and all of our outstanding debt is subject to investment-grade style credit terms. As discussed, we took proactive inventory control actions to reduce inventory by $86 million in the quarter. Not only did these actions better position us for continued uncertainty, they also supported a generation of $104 million of ongoing free cash flow in the quarter, which was nearly half of our ongoing free cash flow for the fiscal year. We are investing in our existing businesses and technology platforms to grow organically and continue to pursue our strategy of enhanced profitable growth through targeted bolt-on M&A opportunities focused on pharma, personal care, and coatings. Against a backdrop of global uncertainty, Ashland's balance sheet is well positioned to give us the flexibility to pursue our targeted growth strategy as well as reward our shareholders with a strong dividend policy and continued share repurchase. With that, I'll turn the call back over to Guillermo to discuss our outlook for fiscal year '24.

Thank you, Kevin. Please turn to Slide 17. I'd like to spend a few minutes providing my take on the challenges that we and others in our industry are likely to face during 2024. From a macro perspective, let me comment on 3 drivers. First, demand uncertainty. There are continuing concerns about the prospect of a global recession and economic slowdown, and there is risk of geopolitical uncertainty across different regions of the world. Of most concern are the potential economic headwinds facing the U.S., Europe, and China. We don't yet know if or how these headwinds will impact the buying patterns of our customers and the global consumer. The question of when destocking will end is front of mind for most companies in our industry. Given the back end of the year recovery expectations, there continues to be uncertainty regarding the timing of the end of customer destocking and demand normalization. Based on consumer demand, the good news is that our customer sales volumes are starting to normalize. However, customers in the end markets we serve continue to hold elevated macro levels of inventory, so some destocking may persist longer. Second is margin management. Maintaining pricing discipline will remain critical throughout the year. Depending on demand recovery, pricing pressures will vary across different segments. Although we expect some improvement in raw material costs, cost improvement will take a while to have impact as we work through existing inventory. Even as volume demands normalize, the demand is expected to be below prior years. This will be reflected in higher and more volatile unit conversion costs. Companies will need to work diligently to maintain margins through disciplined actions across the supply chain. And third is new growth drivers. The commercial success of new innovation platforms is critical to the long-term growth opportunities for the company. We have focused on building a strong balance sheet and financial strength so that in spite of the near-term challenges, we can invest and drive our globalized and innovate growth strategies. Although we expect most of the impact of these investments to begin in fiscal year '25, we will work diligently to accelerate their impact in fiscal year '24. All told, given the uncertainty, fiscal year '24 is a difficult year to forecast at this time. Please turn to Slide 18. To build our plans, we analyzed numerous scenarios. As I indicated, the big variables impacting outlook are volume demand and margins, with demand being the biggest variable. The primary impact on all the scenarios is the timing of demand normalization. From a volume demand perspective, 3 scenarios provided the greatest insights into actions that we should take: no demand recovery, demand recovery during the March quarter, and delayed demand recovery during the June quarter. Each of these scenarios yields significant variation in results for the year, and they are discrete outcomes; you cannot average them to a midpoint performance. Our objective is to build resilience and pursue actions that best position Ashland to maximize performance across each of these scenarios. Please turn to Slide 19. At a recent innovation day, we laid out our business model and the strategic priorities that will drive our actions, investments, and profitable growth expectations. First, disciplined execution across our core businesses, investing in them for the strength and growth of those high-value segments where we have market and technology leadership, and to take the needed portfolio actions to address underperforming businesses that are not core and where we do not have technology or market leadership. Second is globalizing some of our high-value growth businesses. Third is to drive innovation across both existing and new technology platforms. And fourth, to leverage bolt-on M&A to augment our growth capabilities for our big 3 businesses: pharma, personal care, and coatings. Let me start with the first focus area: execution. Please turn to Slide 20. In this environment, just cutting costs will not build the resilience we need. We will take more targeted actions to reduce volatility and performance risk. We will also position our core businesses to be more reliable operations to leverage the eventual volume recovery. During the last year, we have been clear that we need to address some of the strategic structural portfolio gaps with several businesses that are either not a strategic fit or have been structurally underperforming for a long time. At a high level, we have 2 non-core businesses: our nutraceuticals, which have no integration into our core businesses; and to a lesser degree, our Intermediates business, which does have back integration into our core businesses. From an underperforming side, we have 3 businesses that we've identified: our MC, MC-Industrial, and Avoca businesses. As we stated in last week's earnings update, we are executing on 4 primary portfolio optimization actions to strengthen our base, build resilience, and improve profitability. Our plan is as follows: first, divest our nutraceutical business; second, optimize and consolidate our CMC business; third, optimize and consolidate our MC-Industrial business; and finally, rebalance our global HEC production network. The first 3 actions align with our business model and strategic priorities. The nutraceuticals business is a good business. However, like the adhesive business that we divested last year, there are higher-value owners in the marketplace than Ashland where this business can thrive if it's part of the core business and strategy. Our CMC and MC-Industrial businesses, even at peak performance, have not delivered the investment economics. We're also not market leaders or technology leaders in this space, hence the strategic decision to optimize and consolidate. Their performance has also been volatile given their profile of low gross profit margin and high cost absorption margin. In order to enhance profitability and reduce volatility in the portfolio, we will narrow our participation to core segments where we can differentiate, improve profitability, and deliver value for our customers. On the other hand, HEC is a very strong business that is core and where Ashland enjoys both technical and market leadership. We have been investing for growth and see opportunities to drive productivity and optimize our global network. As we take these actions, we will be exploring opportunities to leverage these assets to repurpose and support our core growth initiatives. Please turn to Slide 21. The portfolio actions we're taking will impact revenue, but we do not expect them to impact EBITDA once completed. Although we're still working on the exact timing, when completed, the actions are expected to have the following annualized impact on Ashland's financial results. The sales are expected to be reduced by between $200 million and $225 million. We expect lower gross profit impact of approximately $20 million or roughly a 10% margin, with nutraceutical margin being higher than CMC and MC Industrial, which have very low gross profit margins. Stranded manufacturing at SAR will be about $80 million. The CMC and MC-Industrial businesses have largely been run to absorb costs within the manufacturing network, which makes them more volatile given the low markets. As we complete our portfolio actions, we expect to offset the gross profit and stranded costs with no negative impact on Ashland's adjusted EBITDA. All else being equal, this will result in additional capital from the nutraceutical sale, increased free cash flow from reduced working capital and CapEx, expanded EBITDA margins of 200 to 150 basis points, increased return on net assets of 150 to 200 basis points, and the ability to better leverage our assets and resources to support core businesses. We expect to complete the portfolio optimization by the end of calendar year 2024. Please turn to Slide 22. As I commented, the near-term challenges need to be addressed, but they do not change our excitement about the future. We're confident about our business model and strategy and the opportunities that lie ahead, and we'll invest in our future, which brings me to the second focus area of our strategic priorities we discussed at Innovation Day: globalize, innovate, and acquire to profitably grow in the core of Ashland. Please turn to Slide 23. Each of these components of our strategy are linked to our commitment to invest, a passion to win, and a great sense of urgency. We are investing to globalize core of our higher-growth, higher-margin businesses, namely bifunctionals, preservatives, pharmaceutical injectables, and oral solid dose film coatings. We are adding in commercial and technical resources across the globe to accelerate growth in these product lines and expect to invest more than $5 million this year to support these efforts and will increase our investment in fiscal year '25 and '26. We're also investing in our innovation pipeline. For existing technologies, we're keeping a keen focus on scalable, high-value, high-impact opportunities. And equally, we're investing in new technology platforms to accelerate commercialization across end markets by getting products into the hands of our customers faster. These technologies can expand our addressable market opportunities within both our core markets as well as new markets. We will invest more than $5 million in new technical and commercial resources to drive enhanced growth within the new technology platforms. And we are continuing to pursue our strategy to grow organically by acquiring bolt-on technologies to enhance our big 3 core businesses of pharma, personal care, and coatings, but we will maintain capital allocation discipline as we pursue those opportunities. I want to be clear. Now please turn to Slide 24. I want to be clear, we recognize that these are challenging times for our industry, but we also recognize the opportunities that lie ahead. We will maintain a balance to both, address the urgency of the moment, and the commitment to the future. Please turn to Slide 26. Given all the dynamics at play, I would like to provide some high-level bridging items to fiscal year 2024. First, for discrete items. During the year, we will reset compensation expense, including both merit and incentives, which will total approximately $40 million. We have built our plans and actions around creating more resilient performance across the scenarios we previously commented, the biggest variables being the timing of demand recovery and the resulting plant loading during the year, managing margin performance and accelerating the impact of portfolio optimization actions. Please turn to Slide 27. Our outlook is based on the following: recovery of core business is likely to be back-end loaded into the second half of the fiscal year. We expect lower pricing in Intermediates, and that the impact of this in fiscal year '24 of our portfolio actions will be layered into our models as we engage with all stakeholders. Given the overall uncertainty, we do not feel it's prudent to issue a formal outlook for fiscal year '24. Fiscal year Q1 tends to be our seasonally soft quarter. Our outlook for Q1 is for sales to be in the range of $470 million to $490 million, and adjusted EBITDA in the range of $55 million to $65 million. This outlook is driven by weaker demand, with October results slightly stronger than our expectations, November building up per our expectations, and with the risk of potential customer year-end destocking actions in December. Lower production volumes, including some carryover inventory actions, will impact the quarter and lower Intermediates pricing. For the full year, the color that we can provide is that we expect fiscal year Q2 demand to remain muted given seasonality. Based on the scenarios we model, which are just that: scenarios to prepare the actions that we need to take to drive performance. If demand recovery occurs sooner than anticipated, we can anticipate adjusted EBITDA margins to be above $500 million range for the year. If there is no demand recovery in fiscal year '24, earnings could be below fiscal year '23, given the compensation we reset. There's a wide range of scenarios, and this is what's driving a lot of the actions that we're taking so that we can perform across all these scenarios. It is important to note that while earnings from the Intermediates segment are likely to be down meaningfully next year due to lower volumes and market pricing, our core businesses are expected to perform reasonably well. We will provide an updated outlook for the full year at our fiscal first quarter earnings call. Please turn to Slide 29. In closing, our approach for our fiscal year is straightforward. Build resilience by focusing on clarity of action in the face of uncertainty. We will stay on strategy to maintain operating capital allocation discipline and take appropriate actions to maximize fiscal year '24 performance. This includes optimizing our portfolio, focusing on our core businesses, and perhaps more importantly, continuing to invest in our long-term growth strategy. Despite the challenging environment, we remain confident in the quality and resilience of the markets we serve and our future. I want to thank the Ashland team again for their leadership and proactive ownership of their businesses in these uncertain times. Thank you for your attention. And Abigail, if we could move to Q&A.

Guillermo, Kevin, just on the inventory control actions, why is the number so big? The $58 million cost to reduce inventory in Q4 versus the $86 million reduction in inventory seems high. Is that just under absorption? Or are there also some write-offs you're taking on the inventory?

So one comment I'll make, and Kevin, you can get into the more details. There is a bit of carryover into Q1, as we said, and some of the inventory reduction actions are coming through already in October. So there's just also a quarter-on-quarter delta. But Kevin, do you want to give more color?

Yes. Guillermo, that's right. There is some timing difference in terms of the overall inventory sizing. We did see $86 million in Q4, so far in Q1, we've seen more inventory come down. And so part of that is just timing. Every quarter, we have a certain amount of write-offs, and Q4 was no different. I don't think there's really much to talk about there, but that's always part of the equation for us, just ordinary course. So I would say, most of it is going to be timing. Presuming we see inventory at the end of the quarter where we ended in October, there's more to come on the overall inventory reduction in this quarter. Not a lot of cost related to that, though. And we will, in the quarter, naturally see lower absorption because we're running our plants to demand, and demand is down. But there is a bit of a timing difference between what we saw in Q4 and what we'll see in Q1 relative to the inventory control piece of the equation.

That's helpful. I appreciate that. And just on the stranded costs, can you talk to the $80 million you're going to remove? How are you going to get at those stranded costs?

We are taking multiple actions as we optimize our processes, and I understand there will be many questions regarding this. We are engaging with all our stakeholders, including customers and impacted groups. There are numerous activities underway, such as works councils. We prefer not to go into extensive detail, but our approach will involve various cross actions. We will implement some cost measures, and I believe that enhancing productivity and plant activities will play a significant role. The optimization of our network is likely to be the main factor driving these changes. It relates to absorption costs. As I mentioned earlier, our gross profit is expected to be lower, mainly due to nutraceuticals. The other two businesses are experiencing volatility, which necessitates action because there is minimal upside potential and more risk if volumes do not recover. To clarify, in both CMC and MC, we are not market leaders; the other competitors are significantly larger than we are, and these are not core technologies. Therefore, we intend to concentrate on higher quality segments where we have made technological improvements that can set us apart and add value for both ourselves and our customers. Those are the areas we aim to focus on.

So I guess, just to help us to think about what's embedded in the Q1 outlook for EBITDA? It sounds like there's not as much inventory kind of destocking or of your own in there, as there maybe was of the last quarter. But can you help us to quantify that so we can kind of think about what normalized is at least right now in this demand environment versus how much is being impacted by the destocking?

Yes, that's a great question, John. To provide some clarity, I'll reference 2023 to establish a baseline for our discussion before we move on to our first quarter. In 2023, we produced more than expected, leading to high inventory levels, especially in the first half, as expectations had been optimistic. It wasn't until later that everyone recognized the destocking would be prolonged instead of short-lived, which led to necessary adjustments being made in the second half. In retrospect, we should have aligned our production with demand from the outset. If we had done that, the outcome would have remained unchanged. The adjustments we made were a response to the need to reduce client operations to counterbalance our earlier overproduction. Having now reduced inventory to an acceptable level, we base our targets on forecasted days ahead. If demand slows, we may end up with slightly higher inventory, and if demand increases, we could see lower levels. We're confident in our current position to align production with demand. Consequently, whatever the actual volume is, that will dictate our production. Presently, our production volume is below historical norms since customer volumes have not yet returned to those levels. The key issue for us is determining when our customers' destocking will conclude, allowing their production needs to be in sync with their selling demand, which is not currently the case. Once these alignments occur and they begin purchasing raw materials, it will significantly influence our operations. Instead of emphasizing destocking going forward, we're focused on our production levels. These are tangible costs now and not merely strategic decisions. Until volumes increase, managing unit costs remains a challenge. This reiterates our previous point about acting on certain low-margin, high-cost operations where we lack a competitive edge, as they could introduce considerable volatility during periods of low volume.

If you examine the year-over-year change in EBITDA, it's primarily influenced by two factors. We anticipate that revenue in the first quarter of 2024 will be lower than in the first quarter of 2023, which accounts for about half of the difference. The other half stems from slower manufacturing, where we're producing based on actual demand rather than predicted demand as we did in the first quarter of last year. Together, these two factors largely explain the changes between the first quarter of last year and this year. Sequentially, in the first quarter, which is typically our weakest seasonally, we expect revenue to be lower than where we concluded the fourth quarter of fiscal 2023. Additionally, as Guillermo noted, the resetting of incentives will contribute to the differences between the fourth quarter of 2023 and the first quarter of 2024.

Got it. Okay. No, that's helpful. That makes sense. And then I guess just one follow-up question would be on the nutraceuticals business. Can you just help us to understand roughly what the sales and EBITDA currently are for that business on an annual basis? If you kind of take out the destocking that you saw earlier in the year, just so we have kind of a rough baseline for that.

Yes. We're finalizing the process, so we will begin sharing more details with interested parties on this. You can estimate around $100 million in sales, with gross profits in the 20% range.

This is Lucas coming on for Josh. I'm just trying to think about what the normalized environment looks like. So I mean, over the last 5 years, actually sort of had EBITDA that's ranged from mid-400s to basically high 500s on a like-for-like basis, so like excluding sort of the divested businesses. So without thinking of the outcome of this year, specifically, given all the disruption with volumes, you've exited some volumes in the portfolio. We've had the destocking. I mean, can you just give us your view on what your current view is on the normalized earnings power of the portfolio once we get back to a normal environment?

As I mentioned earlier, the demand recovery timeline varies significantly. Currently, our customer volumes are normalizing to levels that are flat compared to the previous year, which represents a significant improvement for us, positioning us above the $500 million range. When looking back at 2022 as well as 2020 and 2021, we faced challenges due to our lack of capacity, resulting in no volume growth primarily influenced by pricing actions. However, if we consider 2020 and our long-term growth expectations in the mid-single digits, this aligns with needing to reach low to mid-$500 million levels under normalized demand. One area to highlight is Intermediates. While it has shown improvements compared to the past, it remains more of a commodity business with fluctuations. We've enhanced our performance by concentrating on regions where we have advantages and unique supply positions. The primary growth area for us is NMP, particularly linked to the EV battery investments in the U.S. and Europe, which are likely to start around 2025 based on feedback from various customers. This segment may experience some volatility currently, but the remainder of our operations should adhere to the model I outlined earlier.

Right. And then just sort of focusing on pricing. I mean, it sounds like from some of your comments on index that you're anticipating potentially lower prices this year. So I mean, are you seeing any declines across the portfolio? Yes. I guess like, what's your visibility on your ability to hold price into this year? And if you think you can hold it, I just wonder if you could kind of elaborate for us on like what the dynamics are as to why that's achievable for Ashland, like coming off volumes being down a mid-teens percentage, which for most other businesses, you'd usually sort of see downward pricing pressure there if that was happening.

You need to consider the different segments within the portfolio. Intermediates, in particular, are experiencing more volatility, which is reflected in our results, and we are managing this situation. We've noticed this trend especially in Asia, where there are numerous producers, and that is not where we primarily operate. In other parts of the portfolio, we are taking actions with CMC and MC-Industrial, as we are not market leaders in those areas and are relatively small players. We anticipate greater volatility there. Over the past two years, we have successfully improved our mix and optimized our operations within the existing environment. However, the current environment poses higher risks, prompting us to take proactive steps to control our future. These actions should help reduce the impact of volatility we have experienced in the past. Historically, in our core business, we have maintained margins. As we shared in 2022, we performed well with pricing, but most of the margin improvements came from mix and strategic initiatives rather than just price increases. We raised prices to sustain margins, but the enhancements mainly involved focusing on higher-end segments. Moving forward, we aim to continue the model we've established over time that has allowed us to maintain margins. How costs and pricing evolve will vary by segment, with some being more differentiated and less sensitive to price changes. This year, we face challenges during the transition, primarily due to existing inventory levels. Price changes can be implemented immediately, but cost improvements will take longer to realize as we need to manage through the existing inventory that was acquired at different cost levels.

Many of your Personal Care applications are fragranced. It seems like destocking has been a lot less in the fragrance area. I assume you watch this because I know you have some ingredients that actually go into fragrances. Is that correct? And why would your ingredients be seeing much more destocking than the fragrance market?

Yes. There are two separate issues to consider. Most of the destocking in our fragrance business pertains to the Avoca segment I mentioned. This situation is unique. For many other areas, the destocking is largely influenced by specific customer dynamics. As I noted, we are beginning to see that, for some customers, our demand is aligning more closely with their volume sales. However, others continue to experience sales impacts in various regions. The situation differs by customer. I would say things are getting better, but we still need time for destocking alignment to occur. Regarding fragrances, a significant portion of our business comes from Avoca, which is part of our Pharmachem division. We have acknowledged in the past that this area has struggled for quite some time. Although we have stabilized and improved it, further action and pivoting are still required. These assets are from our biotech implementation, and our goal is to shift focus towards other areas. Nonetheless, the Sterin I segment, which is a crucial component, has faced challenges. We lost business towards the end of 2019 when one of our customers shifted to fermentation technology over natural extraction technology, which has posed our most significant hurdle. Therefore, I would consider the Avoca Sterin I segment separately from the rest. The other segments are primarily influenced by market dynamics.

At the Investor Day, I think you had a couple of new chemistries, one targeting silicones; I think that was biodegradable and 0 VOC; and you had a new pH control buffer technology. When do you think you'll actually tell us what those chemistries are?

We have officially introduced the super wetter in the coatings area, and we're focusing primarily on that market for now. I have begun visiting some of our key customers and meeting with their Chief Technology Officers to showcase our technology portfolio. The goal is not simply to present a good product but to demonstrate the technology's potential, engage their interest, and discuss how we can tailor these technologies to meet their specific needs. The initial feedback has been very positive, which is encouraging even though it’s still early in the process. Currently, our top priority is the super wetter. We are also continuing to develop products based on modified vegetable oil and engaging with customers regarding our liquid cellulose injectables, which are performing well. We're aiming to speed up the launch of other projects, such as the buffer, with the goal of rolling it out in the early part of calendar year '24. We are already engaging beta customers for testing and the response has been enthusiastic. Furthermore, we are discovering modifications that will allow for multiple products to be developed from these technologies. While we are launching Gen-1, we anticipate that several products will emerge from these technological advancements, which is very exciting and has prompted us to increase our investment in these areas.

How do you calculate the inventory control penalty? Do you look at last year's level of production and compare it to this year's level of production? Is that the way you do it? Or is there some other way?

No. So for us, the question is how we're controlling inventories. So to clarify, we look at our forecasts. This is a very technical number in terms of, hey, we have these plants; how long does it take to ship to different locations around the world. We calculate shipping time, safety stock. There are a number of factors that we put in. We say, look, for this product, we should have x number of days of forward-looking demand in inventory. That's the issue for us. Right now, we believe we're going to sell 100 units; we'll have, whatever, 20 units in inventory. If the demand comes down, or our forecast comes down, then we have too high inventory, and we have to not produce as much. If the demand outlook goes up, then we have too low of inventory, and we have to produce. So it's all about days of inventory; how we calculate the inventory levels that we have. If you look at during 2021, when things were short, many companies increased the days of inventory targets because of the longer supply chain. So that would add days. Well, before it took me 2 weeks to ship to Europe. Now it takes me a month. Therefore, I need another 15 days of inventory to account for that. It's all mathematical, and it's all about days, what's the should level based on days and safety stocks. Ultimately, it's about your forecast to calculate those days.

So if I understand what you said, you have a hypothetical level of what you think the appropriate inventory is. And what you're doing is you're producing to get down to that number. So have we reached that number of inventory days? Or are the inventory days that we're going to get to another level lower? And if they are another level lower, how much lower are they than where we are today?

I believe we are comfortable with our current inventory days. Our focus now is to align production with demand to avoid increasing our inventory levels. Last time, during the first half of the year, we faced this issue. In the first quarter, we had a certain demand and production plans in place, and we produced accordingly. However, as demand declined, our inventory days increased. Therefore, in the second half, we needed to make reductions. Overall, our average for the year has been more balanced. Moving forward, if we maintain the right number of inventory days and aim not to increase them based on demand, our production will depend on actual demand levels.

Okay. And then lastly, how much will it cost to remove the $80 million in stranded costs? What were the cash costs to eliminate different costs?

We'll share, like I said, we have a lot of stakeholders that we got to engage, and I don't think it would be premature and unfair to start getting into details before we've had the chance to really work through some of these issues. But there are going to be normal actions that we want to take. Some will take costs; some might be some investments that we need to move to allow for some of these adjustments in where we make products and shifting things around. There are multiple things, but we will share more details at the appropriate time.

And Jeff, just for a little perspective, we've done this a lot in the past. While we're not ready to share the number, we would expect it to be less than what we've seen in the past on some of the programs that we've done in terms of overall cash cost to do what we need to do.

I was wondering, Guillermo, if you could answer a couple of questions on Specialty Additives. First of all, during your comments, you suggested that the Specialty Additives business had kind of some parent plans or some shared assets that led that to be the most impacted by inventory control actions. Could you provide some additional color on what's going on there and why we saw the biggest impact from inventory control on Specialty Additives?

Yes. If you look at the two businesses we are focusing on, CMC and MC Industrial, both have assets within the Specialty Additives sector. MC Industrial primarily falls under Specialty Additives, which has obviously been significantly affected. The CMC business is also part of Specialty Additives but serves both the Life Science sector, particularly nutrition, which has seen a considerable decline, and our Personal Care sector, which has also been impacted. We are not reallocating resources to create confusion; most of the issues are centered around Specialty Additives. Notably, the Specialty Additives segment carries the largest volume of HEC, and that volume has been notably affected by destocking. These factors are the main contributors to the challenges we are facing in the plants.

All right. And then could you just make some clarifications regarding what you're seeing in terms of destocking? It sounds like there are some markets where you're seeing destocking continue and other markets where you're maybe more confident that destocking has peaked and is progressing toward an end. Can you walk through your core markets and differentiate which ones you're feeling better about and which ones you expect the destocking to continue?

I believe the coatings segment is poised for improvement as customer volumes are becoming more normalized, although there is still some inventory present. Our larger customers, in a concentrated global industry, will eventually show the impact of their adjustments. Importantly, over the past two years, we haven't seen typical seasonal patterns due to shortages. However, we anticipate a return to seasonality, particularly starting around mid to late Q2 of fiscal '23, specifically in February and March. We don’t foresee a significant increase, but rather a normalization at lower volumes during the winter months. In the nutraceuticals sector, which was notably affected, we are beginning to observe a normalization in orders. There have been months where sales have been minimal due to aggressive destocking. While this area does not yield high margins, it has significantly impacted our absorption. Regarding personal care, we’re witnessing a return to normalized order patterns from some customers, which is encouraging. However, a few specific customers still face challenges that may prolong their recovery. As for intermediates, we are anticipating delays, particularly related to EV battery startups, which will occur later than expected. We expect to see an improvement and normalization in demand in both the U.S. and Europe, but this is contingent upon our current capacity; new capacity won’t come online until late 2024 and more significantly into 2025. Overall, this supply chain development has experienced a delay of 6 to 12 months compared to our initial projections.

How much of a net headwind do you expect in 2024 from the restructuring initiatives? Would it be like $40 million, $50 million? Or is it going to be less than that? I mean, as an EBITDA headwind?

Yes. The key issue here is that we need to engage with the right groups. When we take actions that affect Europe, we must consider works councils, so we are not in a position to discuss that yet. Some of these decisions will lead to quick offsets in certain areas. Currently, our biggest concern is that many of these factors, especially in CMC and MC, are experiencing low margins. Our main priority is to minimize volatility in these sectors, but benefits should materialize relatively quickly. The HEC network will be implemented over the year as it relates to all our plans, production locations, and distribution. Overall, the volume will primarily increase towards the end of the year.

The interest expense will be pretty much what it was in fiscal '23. We don't have any floating rate debt. Nothing is maturing for several years, so our capital structure on that side should be very consistent. Tax rate is probably going to be, call it, low to mid-20s. Part of that is going to be driven by mix. We have a Swiss principle organization that generally generates lower tax rates. Depending on the jurisdiction of the pretax income, that will ultimately drive the tax rate. But generally, we would expect it to be kind of low to mid-20s.

Guys. Can you hear me?

Yes, Mike.

Yes. Just one question. I wanted to understand the EBITDA margins for the first quarter a little bit. You're going to do about $480 million in sales. You did a little over $500 million in the first quarter of '23. Similar first quarter '22, about $460-ish for Q1 of '21. Your EBITDA margins were all above 20%. I sort of understand some of the issues, but at the same sales level, it doesn't seem to me that the margin should be so low. Are you comfortable there's not structural reasons why the margins are so low for the first quarter?

I think two areas, and I'll let Kevin on. One is, as we said, it's the loading of production, volumes, and carryover from prior year. And Intermediates, I would say, would be the other one. But Kevin, if you want to comment in more detail?

No, that's exactly right, Mike. Historically, even though Q1 is typically a weaker season, we would usually ramp up production in preparation for the spring season. However, we are not doing that this year. We are only manufacturing what we expect the demand to be for Q1. This is the significant difference. If you compare year-over-year, there is likely a $25 million difference between last year's Q1 and this year's Q1 solely due to manufacturing levels. So, in terms of pricing, it's expected to remain flat in Q1 of this year based on our current estimates. This is not a pricing issue; it is strictly about aligning production with demand. As Guillermo mentioned, the Intermediates segment is expected to be significantly lower in Q1 of this year compared to Q1 of last year, which will be another major difference.

That's an important point, Mike, in the sense that traditionally, everybody sort of generalizes that sales volume equals volume for everything, right? As Kevin said, that's not necessarily true. Production volume doesn't align necessarily with sales volume. It's about inventories and how we build capacity, peak demands, and managing all that. If we're producing to demand, we're taking a much more conservative position. So as demand picks up, the leverage is very big because it's not just going to sell more; we ramp our plants much more. So that's why the uncertainty and our discomfort for taking a guess of what's going to happen in the second half of the year at this point in time, the variability would be very big. I think the issue now is to understand these dynamics, the scenarios that we've built, and make sure that we're taking the actions that improve our performance across the scenarios. So if things remain slower for longer, we will produce and have more controlled operations. If things pick up, the ramp rates would be significant. We have a lot of upside. The actions we're taking will minimize downside and maximize upside potential for us as we move forward.

Operator Instructions. I'm showing no further questions at this time. I would like to turn the call back over to Guillermo Novo for closing remarks.

Well, thank you very much, everyone, for your participation and questions. We look forward to engaging you throughout the quarter. I appreciate all the attention and interest in Ashland. And Abigail, thank you for all your help.

Thank you for your participation in today's conference. This does conclude the program. You may now disconnect.