Thank you for being here. My name is Hermione and I will be your conference operator today. I would like to welcome everyone to the Ashland Inc. Fourth Quarter 2024 Earnings Call. All lines have been muted to reduce background noise. After the speakers' remarks, there will be a session for questions and answers. I would now like to turn the call over to William Whitaker. Please proceed.

Hello everyone and welcome to Ashland's fourth quarter fiscal year 2024 earnings conference call webcast. My name is William Whitaker, Vice President of Finance and Director of 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. In addition, I want to welcome our three General Managers, which will cover the performance of their respective business units. Alessandra Faccin, Senior Vice President and General Manager of Life Sciences and Intermediates; Jim Minicucci, Senior Vice President and General Manager of Personal Care; Dago Caceres, Senior Vice President and General Manager of Specialty Additives. Ashland released results for the quarter ended September 30th, 2024, at approximately 5:00 P.M. Eastern Time yesterday, November 6th. The news release issued last night was furnished to the SEC on 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'll be making forward-looking statements on several matters, including our financial outlook for full year fiscal 2025. 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 that cannot assure that 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'll 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 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 reconciliation of those 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 4. Guillermo will begin the call this morning with an overview of Ashland's performance for the quarter and year. Next, Kevin and the general managers will provide a more detailed review of financial results for the quarter followed by a portfolio optimization update. Guillermo will then provide an update on Ashland's financial outlook and priorities for the years ahead. We will then open the line for your questions. I will now turn the call over to Guillermo for his opening comments. Guillermo?

Thank you, William and hello everyone. I appreciate your interest in Ashland and your participation today. I would like to focus my update on three key topics. First, I'll provide an overview of our Q4 performance. You'll see that market dynamics and business performance were generally in line with our expectations. The EBITDA performance gap for the quarter was primarily a result of operational challenges at one of our U.S. plants that affected production, along with difficult market conditions for Specialty Additives in China. Second, as anticipated, Ashland has undergone several portfolio changes throughout the year. We have downsized our CMC and MT industrial businesses and divested our nutraceutical business. We will outline the underlying performance of our core portfolio for fiscal 2024, along with the effects of the portfolio reset and the actions we are implementing to mitigate its impact on earnings. Third, we will provide an update on our guidance for fiscal 2025, including known bridging items that will affect our fiscal 2025 performance baseline, such as improved absorption, price erosion carryover, the planned exit from the Avoca business, compensation resets, and our planned restructuring and productivity actions. From this baseline, we will develop our fiscal 2025 outlook, and you will notice that we are maintaining a cautious stance on developments in China. Let's start with Q4 performance. For this quarter, customer demand generally aligned with our expectations, with Q4 sales increasing 1% from the previous year to $522 million. When factoring in portfolio improvement actions and the partial ownership of nutraceuticals, and adjusted for the complete quarter impact of the nutraceutical business and portfolio optimization, revenue rose by 8%. Sales volume increased for the third consecutive quarter, up 4% year-over-year. Pricing remained mostly stable sequentially but showed a decline in low single digits compared to the previous year, excluding the impacts from our Intermediates business, which dropped in high single digits. Overall, our sales performance was in line with our expectations, adjusting for nutraceuticals. Production volumes significantly rose compared to last year, as we are measuring against last year's inventory reduction actions. Adjusted EBITDA for the quarter reached $124 million, reflecting a 68% increase over the previous year. Our main headwind for the quarter was concentrated in our Specialty Additives business, where manufacturing challenges related to our HEC productivity investments led to under-absorption versus expectations. These investments were part of an HEC optimization strategy, with other production units at the site unaffected. Adjusted EBITDA margins grew by 950 basis points, indicating strong margin recovery from last year. From a portfolio perspective, we completed the divestiture of our nutraceuticals business at the end of August and have begun the process of exiting our Avoca business. We repurchased shares in Q4 to counterbalance the EPS impact from our complete exit from Pharmachem. Sales volumes, excluding portfolio optimization actions, showed an increase in the high single to low double digits in Life Sciences, Personal Care, and Specialty Additives. Improved organic volumes were somewhat offset by the portfolio optimization and reduced pricing in certain product lines. All business segments reported strong margin recoveries from the prior year, with the largest improvements seen in Specialty Additives and Intermediates, which had undergone significant inventory control measures during Q4 last year. Three of our four business units achieved adjusted EBITDA margins in the high 20s, with an overall margin of 24%. Examining the businesses, the Life Science pharma segment showed a positive inflection with sales up 6%. The year-over-year headwinds from the share shift in VP&D have moderated, and demand for our cellulosics excipients remained strong. In VP&D, we've started to regain our market share in Asia and Latin America. The nutraceuticals divestiture bolstered margins during the quarter, with the full benefits anticipated in fiscal 2025. Personal Care experienced another strong quarter across most regions, enjoying continued double-digit sales growth. Demand in our largest Personal Care markets, skin and hair care, remained robust, leading to high-quality EBITDA margins of 29% for the quarter. For Specialty Additives, overall sales volumes continued to recover year-over-year, increasing by 5%. Demand was generally in line with expectations across most regions, although we observed some softening in China. Excluding low-margin portfolio optimization actions, the core performance remained strong with sales growth in the mid-single digits. The regional recovery remains variable, with pockets of increased price competition that partially offset volume recovery. Next, I would like to quickly review our financial results for fiscal year 2024. Organic sales volumes increased for the year, characterized by a slower start followed by a recovery in the second half. Portfolio optimization actions reduced lower margins, leading to more volatile sales. Pricing was softer overall, with the largest decreases seen in intermediates and a disciplined approach to price versus volume management in our core businesses. The normalization of VP&D supply chains in pharma and related share shifts weighed on Life Science results, causing a trough impact in Q2 and Q3. Ultimately, our sales declined by 4% for the year. Regarding profitability, normalized production levels in the second half, along with raw material deflation, improved our overall cost structure. Our product mix continues to enhance as we concentrate on high-value business lines. Last year's figures reflected an increase driven by a reset of incentive compensation following a challenging fiscal 2023. Inventory control in the first half and softer pricing posed counteracting headwinds, leading to a flat year-over-year adjusted EBITDA of $459 million. Our team remained focused on managing the business amid intense competition. Throughout the year, we took steps to refine our business portfolio while advancing our innovation and globalization strategies. We are also progressing with plans to exit the Avoca business, completing the Pharmachem acquisition. In summary, while overall recovery trends are positive, they are more moderate than initially expected. Looking ahead, we anticipate challenging market conditions in fiscal 2025 and are adjusting our strategies accordingly. We are increasingly concerned about the state of the Chinese economy and its potential spillover effects into other export markets, which I will elaborate on in our outlook. Over the year, we formulated plans to cut costs, enhance productivity, and strengthen our competitive position. Kevin will provide further details shortly, but ultimately, these actions will enhance our competitive stance in our core technologies and address the remaining portfolio optimization EBITDA impact. Now, let me hand the call over to Kevin for a more detailed review of our Q4 performance. Kevin?

Thank you, Guillermo and good morning, everyone. Please turn to Slide 10. Total Ashland sales in the quarter were $522 million, up 1% compared to prior year. Year-over-year quarterly volumes increased 4% as demand recovered within the Personal Care and Specialty Additives segments. These volume gains were partially offset by unfavorable Life Sciences volumes. Sales volume in Life Sciences was lower due to the CMC and nutraceuticals optimization initiatives. Overall, portfolio optimization initiatives reduced sales by approximately $24 million or 5% during the fourth quarter, including a partial quarter of nutraceuticals. Regional results continue to be mixed. When compared to last year, sales trends in North America are improving. Absolute weakness in Latin America and Middle East, Africa linger, but with moderation on sequential improvement and an easing prior year. Demand was stable in Europe, but off a lower base in the prior year. Overall demand in Asia was generally stronger with a specific weakness in China coatings. Gross profit margin increased 940 basis points to 34.3% in the quarter. Several factors contributed to this improvement, primarily a sales and production volume recovery as well as better mix. This was partially offset by unfavorable pricing versus raws, primarily in pharma as well as coatings. SG&A, R&D, and intangible amortization costs were $111 million, down $5 million from the prior year, primarily reflecting reduced amortization. In total, Ashland's adjusted EBITDA for the quarter was $124 million, up 68% from the prior year. Ashland's adjusted EBITDA margin for the quarter was 23.8%, up from 14.3% in the prior year. Adjusted EPS, excluding acquisition amortization for the quarter, was $1.26 per share, up 207% from the prior year quarter. Now, I will turn the call over to our general managers to review the results of each of our four operating segments. Alessandra?

Thank you, Kevin. Good morning, everyone. Please turn to Slide 11 for Life Sciences. Pharma reached an important inflection in the quarter by returning to growth. Pharma demand was resilient for our market-leading cellulosics excipients, where share gains have more than offset softer market conditions throughout the year. Our VP&D pharma business was down versus the prior year, but improved sequentially as the team executes on share gains opportunities. Crop care demand recovered in the quarter and the comps are easing going forward. In crop care, we accelerated the rollout of our new super-wetting technology platform, launching a biodegradable, silicon-free multifunctional wetting agent for crop care formulations in September. Life Sciences globalized business lines, injectables and OSD coatings both grew at double-digits in the quarter. For injectables, our investments in people, production and technology continue to accelerate our growth in this highly attractive end market. As Guillermo mentioned, we divested the nutraceuticals business, which was down double-digits prior to the sale. We also executed our exposure to low-margin nutrition business in the quarter. Overall, Life Sciences sales declined by 5% to $192 million. The portfolio optimization initiative reduced Life Sciences sales by approximately $15 million or 7% during the fourth quarter. Adjusting for the full quarter impact of nutraceuticals and portfolio optimization, sales volume grew by 13%. Adjusted EBITDA increased by 17% to $56 million, primarily reflecting higher production volumes, improved mix, partially offset by lower pricing and the nutraceutical divestiture. Adjusted EBITDA margin increased 560 basis points to 29.2%. Please turn to Slide 12 for Intermediates. Total merchant and captive sales were $36 million, down 3% from the prior year quarter. Merchant sales totaled $24 million, down from $25 million in the prior year quarter, driven primarily by increased merchant BDO volumes more than offset by lower NMP pricing. Lower NMP results are primarily due to weaker demand in the electric vehicle battery end markets and delayed battery plant start-up. Captive internal BDO sales were $12 million, flat compared to the prior year quarter. Intermediates generated adjusted EBITDA of $10 million or a 27.8% adjusted EBITDA margin compared to $3 million in the prior year. The profit increase reflects significant higher production volumes and improved mix, partially offset by lower pricing. I will now turn the call over to Jim to review the results of our Personal Care business. Jim?

Thank you, Alessandra. Good morning everyone. Please turn to Slide 13 for Personal Care. Nearly all end markets experienced improved demand, marking the second consecutive quarter with double-digit sales growth. Skin Care and Hair Care generated the highest growth as compared to the prior year with regional strength in both Asia and North America. Asia delivered strong revenue growth driven by share gains and our positioning with local customers amidst a softer market backdrop. In addition, North America performed well versus prior year, driven by robust consumer demand. As we shared in the last earnings call, oral care sales in the quarter were negatively impacted by key customer order patterns. For the full year, oral care sales were up mid-single-digits, and we expect to lap the order timing dynamics by the second quarter of fiscal 2025. The performance impact from Avoca moderated, reflecting the start of our actions to sell or exit the business. Personal Care's globalized business lines, biofunctionals and microbial protection, both grew at double-digits in the quarter and delivered outsized mix impact. Microbial protection accelerated the regional asset network program and biofunctionals continued to make good progress on customer expansion efforts. Pricing was stable in the quarter with modestly favorable raw materials. Personal Care sales increased by 11% to $162 million. The portfolio optimization initiatives reduced Personal Care sales by approximately $3 million or 2% during the fourth quarter. The team executed very well, delivering an adjusted EBITDA of $47 million, up 31% versus prior year, primarily reflecting the impact of higher sales and improved mix. Adjusted EBITDA margin increased 430 basis points to 29%. I will now turn the call over to Dago to review the results of our Specialty Additives business. Dago?

Thank you, Jim. Please turn to Slide 14 for Specialty Additives. Overall, sales volumes were up 5% versus the prior year, led by a continued recovery in coatings and performance specialties. Low-margin construction exits and moderating energy weakness partially offset our overall sales volume growth. Performance specialties demand has broadly recovered very well versus the prior year. We are seeing strength in areas such as adhesives, instant printing as well as emission control and catalysts. Our regional coatings recovery continues to be mixed with improving sales in rest of Asia and stability in North America and Europe. Overall, pricing for coatings was lower with the largest impact in China. For the quarter, Specialty Additives sales were in line with the prior year at $144 million. The portfolio optimization initiatives reduced Specialty Additives sales by $6 million or 4% during the fourth quarter. Adjusted for portfolio optimization, sales volumes were up 9% versus the prior year. Adjusted EBITDA more than doubled to $29 million, primarily reflecting the impact of significantly higher production volumes, partially offset by lower pricing. As Guillermo mentioned, our results were lower than expected on HEC operating issues of approximately $5 million while commissioning productivity investments. HEC production at the site has normalized starting in early October. Adjusted EBITDA margins improved nearly 1,500 basis points versus the prior year to 20.1%, including a 350 basis point headwind versus expectations from the discrete operating issues. I will now turn the call back to Kevin. Kevin?

Thanks Dago. Please turn to Slide 15. Ashland continues to have a strong financial position. As of the end of September, we had cash on hand of $300 million with total available liquidity of $896 million. Our net debt was just over $1 billion and about 2.3 turns of leverage. We have no floating rate debt outstanding, no long-term debt maturities for the next two years, and all of our outstanding debt is subject to investment-grade style credit terms. As Guillermo noted, we continue to believe Ashland's stock is an attractive use of capital and deployed $150 million in the quarter to repurchase 1.7 million shares. Our balanced and disciplined capital allocation approach has deployed roughly $1.3 billion to share repurchases during the last four fiscal years. We have $620 million remaining under the current share repurchase authorization. As we've demonstrated, we will not hesitate to act when we see value in share repurchase activity. We are continuing to invest in our existing businesses and technology platforms to grow organically, while pursuing our strategy of targeted bolt-on M&A opportunities focused on pharma, personal care and coatings. Please turn to Slide 16. Ashland prudently managed production and inventory levels throughout the quarter. Our actions should better position us for more resilient performance going forward. Overall, ongoing free cash flow was healthy for the quarter and the year at $88 million and $270 million, respectively. Ongoing free cash flow for the full year grew by 24% with an ongoing free cash flow conversion of 59%, up from 47%. Our progressive dividend policy remains an important part of our capital allocation strategy and is reflective of our confidence in the company's long-term profitable growth and cash flow generation outlook. With that, I will now provide an update on the execute pillar of our strategic priorities and the business portfolio reset of fiscal 2024 performance. Please turn to Slide 17. First, we committed to 4 portfolio actions to start the year. CMC and MC industrial optimization and consolidation, divesting nutraceuticals and rebalancing our global HEC production network. We completed three of the four and made significant progress on the fourth. CMC and MC industrial optimization and consolidation is complete with carryover volume impact into fiscal year 2025. Our latest advancement is the sale of our Nutraceuticals business to Turnspire Capital Partners. The total expected value, including net proceeds and cash tax benefits is approximately $130 million. Our actions improved margins, RONA and consistency of earnings. Adjusting fiscal 2024 for the full year impact of our actions to-date reduces revenue and adjusted EBITDA by approximately $164 million and $30 million, respectively. Most of the EBITDA impact is due to the lost gross profit of nutraceuticals and associated stranded costs. In summary, as we look at our 2025 planning, our starting point, which adjusts for completed portfolio changes is approximately $429 million of EBITDA. Starting last quarter, we added another portfolio action of selling or exiting our Avoca business. Our share repurchases in Q4 offsets the full year adjusted EPS impact of our nutraceuticals divestiture and the future exit of Avoca. We have eliminated approximately $50 million in stranded costs to date and will offset the remaining $30 million EBITDA impact. Please turn to Slide 18. To this end, we are initiating a $30 million restructuring plan with an expected impact of $15 million in fiscal 2025. We are also advancing a significant manufacturing productivity initiative within our HEC and VP&D networks. Our target is $60 million of annual savings with $5 million in fiscal 2025, ramping significantly in fiscal 2026 and beyond. Overall, we continue to expect our portfolio optimization efforts to be EBITDA neutral, and these initiatives go well beyond that to improve our overall performance. I'll now turn the call back over to Guillermo to discuss fiscal 2025 outlook and priorities. Guillermo?

Thanks, Kevin. Please turn to Slide 20. As we look ahead to fiscal 2025, there is considerable uncertainty due to evolving macroeconomic factors that could have varying effects on our industry and markets. While changes can create both opportunities and risks, the current high level of uncertainty leads us to adopt a more conservative perspective and concentrate on enhancing our resilience to mitigate risks and seize new opportunities. Key elements affecting the global economy include high but stabilizing inflation, mixed recovery in demand, and unpredictable policy shifts. Consequently, our outlook varies by region. In the U.S., we anticipate strong consumer segments with potential growth from a robust construction and real estate market. We expect Europe to remain steady from a low starting point, although risks arise from geopolitical factors, structural manufacturing issues, and diminished consumer confidence. We foresee a significant downturn in China, with high uncertainty due to oversupply, a troubled property market, and declining consumer confidence. These issues affect our supply-demand assessments both locally and in other export markets. Therefore, our overall evaluation of the macroeconomic landscape points to subdued demand and heightened competitive pressure. Although this perspective may appear cautious, we believe it is a sensible approach for our future planning. We have taken steps to position Ashland for success in an uncertain environment, supported by a solid balance sheet and cash flow, which will allow for a disciplined and balanced approach to how we allocate capital. Our core markets are committed to catering to resilient customer-centric sectors. Recent portfolio activities aim to decrease business volatility. We are also pursuing several significant self-improvement opportunities to enhance our cost structure, reinforce our competitive standing, and achieve results. We are well-prepared to navigate a prolonged slowdown in China, where sales account for 10% of our company, primarily within the coatings sector. Most of our coatings operations in China rely on local supplies from our Nanjing HEC facility and associated local operations. Our HEC enhancement initiatives are aimed at global improvement and will help us adjust our supply network as necessary. Please turn to Slide 21. As I mentioned earlier, we are adopting a more cautious stance regarding our financial forecast for fiscal 2025. Considering our portfolio optimization efforts, our fiscal 2025 starting point reflects the portfolio reset for 2024 along with known bridging items affecting our baseline. The calculation for our fiscal 2025 baseline is as follows: we begin with a fiscal 2024 EBITDA portfolio reset of $429 million. For context, this figure is derived from our fiscal 2024 actual results of $459 million, adjusted for a $30 million impact due to the loss in gross profit from the nutraceutical sector and stranded costs from portfolio optimization. Next, we factor in known changes expected to impact our fiscal 2025 performance, which includes adding back approximately $45 million in fixed cost absorption and about $20 million in anticipated restructuring and productivity improvements. We must also account for the $20 million negative price carryover and $15 million in EBITDA decline attributable to the Avoca business. Finally, we expect a $10 million adjustment in variable incentive compensation. This brings our fiscal 2025 baseline to $449 million. From this figure, we will develop our forecast for fiscal 2024, considering its stable starting position while not accounting for potential shifts in current economic policies. We project overall volume growth in the mid-single digits. Our portfolio optimization strategies are anticipated to stabilize volatility and facilitate ongoing improvements in mix and margin throughout the year. Raw material costs are expected to remain stable, and we expect to sustain the momentum of our globalized and innovation strategies. Our outlook takes into consideration more negative trends in China’s coatings market, and overall performance will hinge on the interplay between China and other regions. Given the elections, some of these assumptions may evolve, and we will revise our outlook as needed. Based on these factors, we forecast fiscal 2025 sales to range from $1.9 billion to $2.05 billion, with adjusted EBITDA between $430 million and $470 million. Please turn to Slide 22. Despite the high uncertainty, we have a clear understanding of the key issues we need to address while managing controllables and adhering to our strategic plan. Our priorities for the upcoming year align with our strategic pillars—execute, globalize, and innovate—to foster profitable growth in the years ahead. Regarding execution, we have distinct internal opportunities to enhance our core businesses and performance. It is also vital to maintain disciplined management of price and volume. In facing today’s challenges, we will persist in investing in our globalization and innovation strategies, which are critical for long-term growth. We will continue to refine our operating and planning processes and systems to improve our teams' ability to navigate and manage our business portfolio effectively. Please turn to Slide 24. As noted in our earnings release, our Investor Day in December has been rebranded as a strategy update. We recognize that in these challenging market conditions, enhancing near-term performance and concentrating on controllables is essential. Consequently, we are crafting a focused agenda for this event, particularly emphasizing fiscal 2025. The date remains unchanged: December 10th, starting at 9:00 A.M. Eastern Time in New York. We are eager to share the details of our execution-focused initiatives and commitments for 2025. Attendees will have the chance to hear directly from Kevin, our general managers, and me during a moderated Q&A session. Additionally, we will conduct a live breakout discussion on key business lines and technology platforms, allowing for interaction with Ashland leaders driving these efforts. In conclusion, I would like to reiterate the key takeaways. From a market perspective, Q4 was generally consistent with our expectations. We are in the process of finalizing our portfolio transformation. Our portfolio is healthy and well-positioned, concentrating on high-quality markets. We anticipate that fiscal year 2025 will be another challenging year, and our focus will be on balanced management of our business, especially concerning share and price, executing our self-improvement measures, and building resilience to enhance performance in a difficult environment, while maintaining disciplined capital allocation. Despite the immediate challenges, we remain very optimistic about the long-term potential of our business portfolio. We continue to invest in and advance our long-term growth drivers. I want to express my gratitude to the Ashland team once again for their leadership and proactive management of their businesses in this dynamic environment. Operator, we can now proceed to the Q&A session.

Your first question comes from Michael Sison with Wells Fargo. Please go ahead.

Hey good morning. In terms of your outlook for fiscal 2025, I think there was a little bit more negative than we had thought versus sort of the walk to the positive. So, I guess, can you maybe give us a little bit of thoughts on where the upside could be? And then longer term, what type of EBITDA do you think Ashland should get to? We've sort of been stuck here below $500 million for a little bit. So, just maybe a longer term view on that as well, Guillermo.

Thank you for the question, Mike. Looking at the year, we have shared more data and modeling points than in the past. We are aware of the significant changes within Ashland, considering the portfolio adjustments and the structural global changes, particularly in Europe regarding manufacturing competitiveness and shifts in China. The baseline we are starting with at $450 million encompasses these factors, allowing us to move forward. Our model remains unchanged, and we believe the portfolio can achieve mid-single-digit growth with the margins we've discussed. If you examine the range we've provided, projecting 5% growth or 3% to 6% will guide you to the upper end of our expectations, as most businesses and regions are performing within this range. However, we anticipate that China will enter a prolonged phase of heightened competition and oversupply, necessitating caution in our outlook. If we are mistaken, there may be more upside; if we are correct, we are prepared for the implications. Risks to our downside outlook include a slower performance of the global economy and lower growth in China. We are taking a prudent approach, particularly considering the cost savings amid the portfolio optimization. The sale of our nutraceutical business in August has impacted gross profit and incurred some stranded costs. We have acted to mitigate this through share buybacks, and our goal is to restore EBITDA to a satisfactory portfolio level. Over the past two years, while sales have decreased, our EBITDA has remained stable despite shedding some businesses. We acknowledge that we need to address approximately $30 million in commitments, which presents a timing challenge; we expect to realize about $10 million next year and the remainder in 2026. By 2026, we anticipate fully offsetting all portfolio actions and productivity initiatives, which we initially expected to contribute positively to our plan. Considering pricing dynamics, we believe we can maintain our desired performance range and move forward from there. We expect that by 2026, we will return to levels above $500 million.

And Mike, I think it's also important to note that in terms of the optimization items that we've talked about, this $90 million, we have very clear visibility into the vast majority of that $90 million today. It's about timing and execution around the activities that have to happen. And some of these are fairly complex, and they do involve our manufacturing footprint and how we're managing through all of that. But again, we do have very clear visibility into the vast majority of the $90 million that we're talking about.

Great. Thank you.

Hey everyone, this is James Cannon stepping in for Josh. I wanted to follow up on the release where you mentioned some pricing pressure impacting volumes. In Guillermo's outlook, he mentioned mid-single volume growth. Should we expect more pricing pressure to counter that, or does the volume growth suggest overall organic growth?

We are anticipating organic growth overall, which I will break down into two key areas. Excluding China, we expect growth across our portfolio, with a strong volume outlook in most regions. However, we are experiencing some pricing pressures globally, particularly in relation to our fourth-quarter forecast. In the VP&D business within pharma, we are still in negotiations. We have successfully repositioned our approach in Asia and Latin America, where prices are now reflective, and volumes are improving. In Europe, negotiations are ongoing, and while I won't comment extensively on this, we expect to finalize most discussions by January. We consider this a trade-off between pricing and volume, and we are navigating through it. Regarding China, there are two aspects to consider. While volume stability remains, we have observed a decline in pricing. We are particularly focused on demand trends in China. The coatings market consists mostly of 40% repaint and 60-70% new construction, unlike the U.S. market, which has a majority of repainting activity. The repaint market in China may stay stable, but we are concerned about a potential downturn in the property market and construction sectors, particularly regarding how quickly the market recovers. To revitalize the property market, we believe two main factors are necessary: restructuring debt and improving consumer confidence. If individuals hold significant wealth in property, market movement will be hindered, making it difficult to encourage purchases. These changes will not happen immediately, and while stimulus measures may boost personal care and general spending, they typically do not apply to larger expenses. Thus, we expect the next two years to be transitional, with unclear outcomes as we adjust for both pricing and volume in the market. Dago, could you share your insights on the supply dynamics in China?

Thank you, Guillermo. Yes, what I would say is that definitely new construction drives the coatings market in China more than repaint and remodel. That's clear. And from that perspective, as long as the property sector remains depressed, well, we're going to see soft demand, and that's what we're seeing today. Of course, with soft demand, you have oversupply and then you have pricing pressures. I think to Guillermo's point, I actually was in the region a couple of months ago, and the stimulus package was welcomed. I think it's a step in the right direction, but we don't believe it's going to have an effect in 2025. I think it's going to be more 2026 and 2027. Why? Because these are really structural issues that China is dealing with. So, we're taking a conservative approach. We've talked to customers. We do see demand softness, and that's why we are forecasting the way we are.

Okay. Thank you.

Thank you. We're about halfway through the December quarter. Is there anything you can talk about in terms of bridging December quarter EBITDA to September quarter results?

I believe the quarter is starting off a bit weaker, with some customers, particularly in Europe, indicating they are taking more inventory control measures. This could result in some volumes shifting from December to January, depending on their actions. Most of what we're hearing comes from Europe, and there haven't been many changes elsewhere in the world. We're paying close attention to China, and I anticipate that we will start seeing significant changes by the end of this quarter and certainly more prominently in Q2.

And then is there a dollar amount of buyback that we should think about for 2025? Or how should we think about that?

I think we've demonstrated that we have a strong balance sheet and the ability to be optimistic about the long term. Our global segments are growing at double-digit rates, and we have a lot of innovation underway, so nothing has really changed regarding our long-term outlook. We need to navigate through the transition related to Ashland and the structural changes in Europe and China, but this does not alter our long-term view. If market valuations present opportunities, we will take appropriate action, and that remains unchanged. Kevin, would you like to add anything?

Sure. I mean I think we demonstrated in fiscal 2024 that we're very bullish on the company and on the stock. We repurchased nearly 4.3 million shares, spent approximately $380 million to do that. Very comfortable with what we've done there from an execution perspective. The beauty of maintaining a strong balance sheet is that we have the flexibility to do a lot of different things. We can invest in the business. We can continue to repurchase shares. We can support a strong and growing dividend. And you should expect us to do in the future, the things that we have been doing in that regard. So we do have the flexibility to do that. As we look at fiscal 2025, there's no reason that the company shouldn't generate north of 50% free cash flow conversion to EBITDA. And that will help support the activities that we've been doing and that we will continue to do.

Thank you.

Hi, good morning. Dago, I was wondering if you could give us a regional breakout of what the coatings business looks like. I just think it would be helpful if we understood how big the China coatings business is. And maybe also talk a little bit about your expectations for other regions, particularly North America, if we're seeing some relief on mortgage rates.

Thank you for the question. Currently, the North American market appears stable. With interest rates decreasing and based on existing projections, we anticipate growth rates between 3% and 4%, as indicated by the American Coatings Association. Although Europe faces certain challenges, we are experiencing good growth there, and I also view it as a stable market looking towards 2025. Last year, we observed some attractive growth opportunities, particularly in the Middle East, Africa, and India, with India showing significant growth potential that gives us optimism. The rest of Asia remains stable with slight growth. The main concern continues to be China, where we face structural fundamental issues that we need to address in 2025. Overall, aside from the situation in China, I would describe the rest of the market as stable. We are ahead of schedule in our production for the paint season and do not foresee any major issues aside from managing the challenges in China.

China represents about 25% of our coatings business. Our manufacturing presence is balanced across Europe, the U.S., and China. Up to this point, nearly all of our production in China has remained within the country. As we look to rebalance, part of our strategy involves reevaluating our export operations. However, we are currently monitoring developments since many of the anticipated changes have yet to materialize. While we maintain a conservative outlook, we possess the flexibility to adapt based on future conditions. The significant question looming is how the recent elections will affect trade policies, as these changes will likely have a notable impact on our business.

All right. Thank you for that. And then just making sure that I understand what was going on with the operational issues that you incurred during the fourth quarter, it sounds like that was related to fixed cost absorption within Specialty Additives. And I guess my question is, if we're going to see some prolonged weakness in China coatings in particular, could we potentially see some lower utilization rates and some weaker fixed cost absorption in the first part of fiscal 2025? Is that something that's potentially baked into your guidance?

If you consider the volume, what occurred in the U.S. was related to a plant. We're making investments to implement changes for future productivity to enhance our flexibility in production as we progress. We experienced startup issues which led to an absorption problem. The plant did not operate as anticipated during the quarter. Additionally, we faced another setback due to equipment failure during the startup phase, which extended the delay. This is indeed an absorption issue, but the plant is now operating and will align with our regular production plans. We expect to recover some of this throughout the year. Regarding China, all our production there is dedicated to the local market, so any developments in that region could lead to adjustments, which we have included in our guidance range, taking into account both potential upsides and downsides. While this has not occurred yet, we are preparing for various scenarios that could impact our guidance.

All right. Thanks very much.

There are no other questions. I will now turn the call back over to Guillermo Novo for closing remarks.

Thank you all for joining us today. I understand there is a lot of data and commentary shared, and we look forward to seeing everyone in New York in a few weeks, as well as hosting calls in the coming days. I am confident we will have an opportunity to delve deeper and provide additional insights. I want to emphasize that while we are taking a cautious stance regarding one specific region and business that is most affected, we are very optimistic about the majority of our portfolio. Everything we’ve implemented is aligned with our plans, and moving forward, our focus needs to be on maintaining that direction. We must confront the current realities of the business while balancing long-term performance and near-term management. We are committed to investing and growing, and I look forward to our discussions in a few weeks. Thank you.

Ladies and gentlemen, that concludes today's call. Thank you all for joining. You may now disconnect.