Ashland Inc. (ASH) 2016 Q4 法說會逐字稿

Good day ladies and gentlemen. Welcome to the Ashland Global Holdings Incorporated fourth-quarter earnings call.

各位女士、先生，大家好。歡迎參加 Ashland Global Holdings Incorporated 第四季財報電話會議。

(Operator Instructions)

(接線員指示)

As a reminder this conference is being recorded. I would like to introduce your host for today's conference, Seth Mrozek. You may begin.

提醒各位，本次會議將被錄音。我想介紹今天會議的主持人 Seth Mrozek。您可以開始了。

Thank you, Tierra. Good morning everyone. Welcome to Ashland's fourth-quarter FY16 earnings conference call.

謝謝你，Tierra。各位早安。歡迎參加 Ashland 2016 會計年度第四季財報電話會議。

My name is Seth Mrozek, Director, Ashland Investor Relations. Joining me on the call today, are Bill Wulfsohn, Ashland's Chairman and Chief Executive Officer; Kevin Willis, Senior Vice President and Chief Financial Officer; and Luis Fernandez, Senior Vice President of Ashland and President of the Chemicals Group, which includes Ashland Specialty Ingredients and Ashland Performance Materials.

我是 Seth Mrozek，Ashland 投資人關係總監。今天與我一同參與電話會議的有：Ashland 董事長兼執行長 Bill Wulfsohn；資深副總裁兼財務長 Kevin Willis；以及 Ashland 資深副總裁、化學品事業群總裁 Luis Fernandez。化學品事業群包含 Ashland Specialty Ingredients 與 Ashland Performance Materials。

We released preliminary results for the quarter ended September 30, 2016, at approximately 5 pm, Eastern time yesterday, November 8. Additionally, we posted slides and prepared remarks to our website, Ashland.com under the Investor Relations section and have furnished each of the documents to the SEC in a form 8-K. As a reminder, some of the matters discussed today and included in our presentations may include forward-looking statements as such term is defined under US Securities law.

我們已於昨日 11 月 8 日美東時間約下午 5 點，發布截至 2016 年 9 月 30 日之季度初步業績。此外，我們也已將簡報與事先準備的講稿上傳至 Ashland.com 網站「投資人關係」專區，並已以 8-K 表格向美國證券交易委員會（SEC）提交各項文件。提醒各位，今天討論的部分事項以及我們簡報中所包含的內容，可能包含依美國證券法所定義之「前瞻性陳述」。

We believe any such statements are based on reasonable assumptions but cannot assure that such expectations will be achieved. Please also note that we will be discussing adjusted results during this call. We believe this enhances understanding of our performance by more accurately reflecting our ongoing business.

我們相信任何此類陳述係基於合理假設，但無法保證這些預期一定能夠達成。也請注意，我們在本次電話會議中將討論調整後（adjusted）結果。我們相信這有助於更準確反映我們持續經營業務，從而提升對公司表現的理解。

When discussing the Chemicals Group, we also refer to the following, core markets, these are the highly differentiated markets of personal care, pharma, and coatings which we identified during our November 2015 investor day as core platforms for targeted growth; niche markets, where we deliver unique value propositions based on our technology platforms and foundational businesses that provide cash and critical mass.

在討論化學品事業群時，我們也會提及以下分類：核心市場（core markets），即我們在 2015 年 11 月投資人日所辨識、作為目標成長核心平台的高度差異化市場，包括個人護理、製藥與塗料；利基市場（niche markets），我們基於技術平台提供獨特價值主張；以及基礎業務（foundational businesses），其提供現金流與關鍵規模。

With that, I will turn the call over to Bill. Bill?

接下來，我把電話交給 Bill。Bill？

Thank you, Seth. Good morning everyone.

謝謝你，Seth。各位早安。

As you will recall, at this time last year, the Ashland team established four core investor priorities for FY16. The first was to keep the team focused to deliver on our FY16 strategic and financial objectives during this busy and transformational year.

各位應該記得，在去年此時，Ashland 團隊為 2016 會計年度（FY16）訂定了四項核心投資人優先事項。第一項是在這個忙碌且具轉型意義的一年中，讓團隊保持專注，以達成 FY16 的策略與財務目標。

While we won't speak much to the Valvoline results on this call, I would like to acknowledge what a great job the team did. More specifically, they achieved record business results, completed the acquisition of Oil Can Henry's, continued to expand the Valvoline Instant Oil Change network and they reported strength in their international growth markets. To learn more about Valvoline's results, I encourage you to reference their released materials.

雖然本次電話會議不會花太多時間談 Valvoline 的業績，但我想肯定團隊所做的出色工作。更具體而言，他們創下創紀錄的營運成果，完成對 Oil Can Henry's 的收購，持續擴張 Valvoline Instant Oil Change 連鎖網路，並在國際成長市場展現強勁表現。若要進一步了解 Valvoline 的業績，我建議各位參考其已發布的相關資料。

Moving now to the chemicals business, which will ultimately make up the new Ashland, as anticipated earlier in the year, ASI faced a number of macroeconomic challenges from foreign currency and from the negative impact related to reduced oil and gas market activity in North America. That said, ASI made good progress on a number of key fronts.

接著談化學品業務，該業務最終將構成新的 Ashland。如同我們在年初所預期，ASI 受到多項總體經濟挑戰影響，包括外匯因素，以及北美油氣市場活動減少所帶來的負面影響。儘管如此，ASI 在多個關鍵面向仍取得良好進展。

We added new commercial leadership, which has a disciplined focus on driving results and enhancing our global leadership positions. We instituted new commercial excellence initiatives. And we enhanced our R&D processes under a newly created role of Chief Technology Office. Ultimately, as anticipated, the ASI team returned to volume growth in the fourth quarter. I will speak more to these efforts later in the call.

我們增聘新的商務領導團隊，以嚴謹的方式專注於推動成果並強化我們的全球領導地位。我們推行新的商務卓越（commercial excellence）計畫。並在新設立的首席技術長（Chief Technology Office）職務之下，強化我們的研發流程。最終，如同預期，ASI 團隊在第四季恢復了銷量成長。我稍後會在本次電話會議中進一步說明這些努力。

Within APM, the Composites Division proved resilient in a low-growth global environment. The team focused on controlling costs and they drove innovative solutions across their wide range of industries from automotive light weighting to enabling the purification of drinking water across the globe.

在 APM 方面，複合材料事業部在全球低成長環境中展現韌性。團隊專注於成本控管，並在其涵蓋的廣泛產業中推動創新解決方案，從汽車輕量化到協助全球飲用水淨化。

Also, within the APM business, is the I&S division. This business negatively impacted our overall Ashland earnings as BDO prices decreased during the year. That said, our team, which we believe is the strongest in our industry, took action in Q4 to stabilize pricing.

此外，在 APM 業務中還包括 I&S 事業部。由於年度內 BDO 價格下跌，該業務對 Ashland 整體盈餘造成負面影響。儘管如此，我們的團隊——我們相信是業界最強的團隊——在第四季採取行動以穩定價格。

Moving on now to our second core investor priority for FY16, the Ashland team worked hard and made strong progress to improve cash conversion. As you will recall, we took action in FY15 to help drive cash conversion in FY16 and beyond. More specifically, we established a $335 million asbestos trust. And we also made a $500 million voluntary contribution to better fund the US pension, and reduce ongoing cash funding requirements.

接著談 FY16 的第二項核心投資人優先事項，Ashland 團隊努力並在提升現金轉換率方面取得顯著進展。各位應該記得，我們在 FY15 已採取行動，以推動 FY16 及往後年度的現金轉換。更具體而言，我們設立了 3.35 億美元的石綿信託基金。同時，我們也自願提撥 5 億美元，以更充分地資助美國退休金計畫，並降低持續性的現金提撥需求。

Adding to those gains in FY16, we tightly managed working capital and drove productivity improvements, which enabled us to defer certain capital capacity expansions and that ultimately led to lower capital spending versus our original plan. These actions in combination enabled Ashland to produce 24% higher free cash flow in FY16 when compared to FY15.

在 FY16 進一步延續上述成果，我們嚴格管理營運資金並推動生產力改善，使我們得以延後部分資本產能擴張，最終使資本支出低於原先計畫。這些行動綜合起來，使 Ashland 在 FY16 的自由現金流較 FY15 提高 24%。

Our third core investor priority for FY16 was to effectively deploy this cash to create shareholder value. To this end, during FY16, we bought back approximately 5 million shares of Ashland stock under a $500 million accelerated share repurchase program. We completed the Oil Can Henry's acquisition in February. And we paid down on a consolidated basis nearly $500 million of debt.

FY16 的第三項核心投資人優先事項，是有效運用這些現金以創造股東價值。為此，在 FY16 期間，我們透過 5 億美元的加速庫藏股回購計畫（accelerated share repurchase program），回購約 500 萬股 Ashland 股票。我們於 2 月完成對 Oil Can Henry's 的收購。並且在合併基礎上償還近 5 億美元的債務。

We also annuitized approximately $400 million of pension obligations. And in that context, we continued to make important investments in ASI to support growth in our highly differentiated core growth end markets. More specifically, we constructed new production and laboratory capabilities to support the rapidly growing pharmaceutical market in China. And we expanded our cellulosic capacity in both North America and China.

我們也將約 4 億美元的退休金義務年金化（annuitized）。在此背景下，我們持續對 ASI 進行重要投資，以支持在高度差異化的核心成長終端市場中的成長。更具體而言，我們建置新的生產與實驗室能力，以支援中國快速成長的製藥市場。並在北美與中國擴增我們的纖維素產能。

Finally, our fourth core investor priority for FY16 was to take the required action to separate Valvoline from Ashland. This was a major undertaking. The time and energy expended by the organization to achieve this objective should not be underestimated or underappreciated. Ultimately, we took the necessary actions to ensure the separation would be cost neutral. Essentially offsetting incremental costs associated with becoming a public company by taking actions including redesigning and ultimately outsourcing much of our IT infrastructure; expanding the scope of our shared service activities in both Poland and India, and in addition, we made the difficult decision to freeze our pension plan and eliminate retiree medical.

最後，FY16 的第四項核心投資人優先事項，是採取必要行動將 Valvoline 自 Ashland 分拆。這是一項重大工程。組織為達成此目標所投入的時間與精力，不應被低估或忽視。最終，我們採取必要措施以確保分拆在成本上維持中性。基本上，我們透過多項行動抵銷成為上市公司所增加的成本，包括重新設計並最終外包我們大部分的 IT 基礎架構；擴大我們在波蘭與印度的共享服務活動範圍；此外，我們也做出艱難決定，凍結退休金計畫並取消退休人員醫療福利。

Beyond cost neutrality, to effect the separation, we also built the capabilities needed for Valvoline to operate as a standalone company. For example, we on-boarded a new Valvoline CFO, CIO, CHRO and we built the required corporate infrastructure to run a standalone company, including creating a new instance of SIP. It took a tremendous team effort, but on September 28, one year after announcing the separation, we successfully completed an IPO for approximately 17% of Valvoline. I will now turn the call over to Kevin and Luis to discuss Ashland's results in the quarter.

除了成本中性之外，為了完成分拆，我們也建立 Valvoline 作為獨立公司營運所需的能力。例如，我們引進新的 Valvoline 財務長（CFO）、資訊長（CIO）、人資長（CHRO），並建立獨立公司運作所需的企業基礎架構，包括建立一個新的 SIP 實例。這需要龐大的團隊努力，但在 9 月 28 日，也就是宣布分拆後的一年，我們成功完成 Valvoline 約 17% 股權的首次公開發行（IPO）。接下來我把電話交給 Kevin 與 Luis，請他們說明 Ashland 本季的業績。

Thank you, Bill. Good morning everyone.

謝謝你，Bill。各位早安。

I will start with a review of our fourth-quarter results. Our adjusted EBITDA was nearly in line with the prior year, as Specialty Ingredients delivered consistent performance led by both consumer and industrial volume growth. In addition, while Valvoline and the corporate segment income both grew year over year, Performance Materials declined due to the unplanned outage and weak year-over-year pricing in the I&S division. Luis will spend more time discussing the segment results in a few minutes. While I don't usually focus on corporate line items during these calls, I think this quarter it might be helpful.

我將先回顧我們第四季的業績。我們的調整後 EBITDA 幾乎與去年同期持平，因為 Specialty Ingredients 在消費與工業端銷量成長的帶動下，表現穩健一致。此外，雖然 Valvoline 與公司部門的收入皆較去年同期成長，但 Performance Materials 因非計畫性停機，以及 I&S 事業部門疲弱的年對年定價而下滑。Luis 將在幾分鐘後花更多時間說明各事業部門的表現。雖然我通常不會在這些電話會議中特別著重公司層級的科目，但我認為本季這樣做可能會有幫助。

First, adjusted interest expense increased by $9 million year over year. More than half of this reflects the timing associated with the separation-related financing activities leading up to the Valvoline IPO. You may recall that during July, we used $370 million of proceeds from the Valvoline senior notes to repay existing Ashland bank loans.

首先，調整後利息費用較去年同期增加了 900 萬美元。其中一半以上反映了與分拆相關的融資活動時點安排，這些活動發生在 Valvoline IPO 之前。各位或許記得，在 7 月期間，我們使用 Valvoline 高級票據所得款項中的 3.70 億美元，償還既有的 Ashland 銀行貸款。

Due to the success of the financings and the IPO, and since June 30th, excluding Valvoline, Ashland has reduced its gross debt balance by $1.6 billion. This will result in reduced interest expense for Ashland during FY17.

由於融資與 IPO 的成功，加上自 6 月 30 日以來（不含 Valvoline），Ashland 已將其總負債餘額降低 16 億美元。這將使 Ashland 在 2017 財年（FY17）的利息費用下降。

Our effective tax rate in the fourth quarter was 27%. While this was slightly better than we expected, it was well above the 23% effective rate in the fourth quarter of last year. This reflects the evolving regional sales mix during the quarter. After taking all of this into account, Ashland's total operating income was consistent with prior year.

我們第四季的有效稅率為 27%。雖然這略優於我們的預期，但仍明顯高於去年第四季 23% 的有效稅率。這反映了本季區域銷售組合的變化。綜合以上因素，Ashland 的總營業利益與去年同期一致。

I would like to turn briefly to the issue of financial reporting and consolidation, now that the Valvoline IPO is complete. As you probably read in our prepared remarks, in the fourth quarter, Valvoline results on the income statement are consolidated into Ashland's results. This applies to all line items, except for adjusted EBITDA and the bottom of the income statement, net income attributable to Ashland.

現在 Valvoline IPO 已完成，我想簡要談一下財務報導與合併報表的議題。如各位可能已在我們的事先準備稿中讀到，第四季損益表中的 Valvoline 業績會合併計入 Ashland 的業績。這適用於所有科目，唯獨調整後 EBITDA 以及損益表底部的「歸屬於 Ashland 的淨利」除外。

Valvoline income related to the 17% we don't own is excluded from both of these line items. That being said, since the IPO closed so late in the fourth quarter, the Valvoline net income attributable to Ashland's non-controlling interest was very small, or about $1 million. After tax this amount did not have a meaningful impact on our calculation of adjusted EPS attributable to Ashland.

與我們未持有的 17% 相關之 Valvoline 利益，會自上述兩個科目中排除。不過，由於 IPO 在第四季非常接近季末才完成，歸屬於 Ashland 非控制權益的 Valvoline 淨利非常小，約為 100 萬美元。稅後而言，該金額對我們計算歸屬於 Ashland 的調整後 EPS 並無重大影響。

Subject to market conditions and other factors, we presently intend to distribute the remaining Valvoline Incorporated shares next spring following the release of March quarter earnings results by both Ashland and Valvoline respectively. As a result, we will continue to consolidate the Valvoline results in this manner during the first two quarters of the fiscal year. Once the distribution occurs, historical Ashland results will be restated such that nearly all of Valvoline results will be reclassified into discontinued operations.

在市場狀況及其他因素允許下，我們目前計畫於明年春季，在 Ashland 與 Valvoline 各自公布 3 月季度盈餘結果後，分配剩餘的 Valvoline Incorporated 股票。因此，在本財年前兩季，我們將持續以此方式合併 Valvoline 的業績。一旦完成分配，歷史的 Ashland 業績將予以重編，使幾乎所有 Valvoline 的業績將重新分類至停業部門。

Now, let's turn to an overview of our cash flows for the quarter and the year. I continue to be pleased with our cash-generating capabilities. Our team took a strategic, disciplined approach to managing capital spending in the second half of the year, which helped to generate free cash flow of $149 million in the fourth quarter. For the year, we generated free cash flow of $403 million, a 24% increase over last year. From a balance sheet perspective, it is worth reiterating that during the fourth quarter, excluding Valvoline, Ashland reduced gross debt by $1.6 billion using proceeds from the Valvoline financings, IPO and cash on hand.

接著，讓我們概述本季與全年的現金流量。我仍對我們的現金創造能力感到滿意。我們的團隊在下半年以策略性且嚴謹的方式管理資本支出，協助我們在第四季創造 1.49 億美元的自由現金流。全年而言，我們創造了 4.03 億美元的自由現金流，較去年增加 24%。從資產負債表角度來看，值得再次強調的是，第四季期間（不含 Valvoline），Ashland 使用 Valvoline 融資、IPO 所得款項及手上現金，將總負債降低 16 億美元。

On a consolidated basis, including Valvoline, gross debt was reduced by nearly $500 million compared to the prior year. Our liquidity remains strong. As of September 30, we had cash and borrowing capacity of $1.8 billion.

在合併基礎下（包含 Valvoline），相較去年同期，總負債減少近 5 億美元。我們的流動性仍然強勁。截至 9 月 30 日，我們的現金與可動用借款額度合計為 18 億美元。

In addition, as Bill mentioned, prior to the separation, we executed an annuitization program for a portion of retiree population pension obligations to continue down the path of derisking this liability. Overall, I am pleased with the progress we made on the balance sheet during the course of the quarter and the year.

此外，如 Bill 所提到，在分拆之前，我們針對部分退休人員的退休金義務執行了年金化（annuitization）計畫，以持續朝降低此項負債風險的方向前進。整體而言，我對我們在本季與全年資產負債表方面所取得的進展感到滿意。

Lastly, I want to spend a few minutes on our outlook and plans for FY17. As Luis will highlight, beginning this quarter, we will be providing more detail regarding our expectations for the full year.

最後，我想花幾分鐘談談我們對 FY17 的展望與計畫。如 Luis 將強調的，從本季開始，我們將提供更多關於全年預期的細節。

In addition to our normal process of providing quarterly sales and adjusted EBITDA margin ranges for the business, we will also provide full-year forecasted ranges for adjusted EBITDA. We plan to update these each quarter. We believe this will provide more visibility into our thinking about overall business conditions.

除了我們一貫提供的季度銷售額與調整後 EBITDA 利潤率區間之外，我們也將提供全年調整後 EBITDA 的預測區間。我們計畫每季更新一次。我們相信這將使外界更清楚了解我們對整體營運環境的看法。

With that, I will now turn the call over to Luis for his comments about the segments during the quarter. Luis.

接下來，我將把電話會議交給 Luis，請他就本季各事業部門發表意見。Luis。

Thank you, Kevin. Good morning everyone.

謝謝你，Kevin。各位早安。

This morning I would like to start with Specialty Ingredients results during the quarter. At high level, adjusted EBITDA was nearly in line with the prior year. We returned to volume growth in the quarter and continued our progress towards profitable growth. I am encouraged that the year over year declines we experienced earlier in the year are behind us. Under new commercial leadership, our consumer specialty team drove growth in a number of our key end markets, including skin care, hair care and nutrition.

今天早上我想先從本季 Specialty Ingredients 的業績談起。整體而言，調整後 EBITDA 幾乎與去年同期持平。本季我們恢復了銷量成長，並持續朝獲利性成長邁進。我很欣慰我們在今年稍早所經歷的年對年下滑已經成為過去。在新的商務領導團隊帶領下，我們的消費者特殊產品團隊在多個關鍵終端市場推動成長，包括肌膚護理、頭髮護理與營養。

Results with our pharma customers were consistent with a strong year-ago period. I am pleased to report in late October, Ashland took a very important step to expand our global leadership position in pharmaceutical activities. We opened a world-class production facility in Nanjing, China to better serve China's growing pharma industry. Demand for polymer excipients is rising in China as the industry moves to modernize oral drug manufacturing and comply with new regulatory standards that will become effective in early 2017.

我們與製藥客戶的業績與去年同期的強勁表現一致。我很高興報告，10 月下旬 Ashland 採取了一項非常重要的步驟，以擴大我們在製藥業務的全球領導地位。我們在中國南京啟用了一座世界級的生產設施，以更好地服務中國成長中的製藥產業。隨著產業推動口服藥製造現代化，並遵循將於 2017 年初生效的新監管標準，中國對聚合物賦形劑的需求正在上升。

We are pleased to offer the production capabilities and an advanced quality control lab to our customers as we continue to grow our global leadership position in pharma. Returning to Consumer Specialties results, total volumes grew by 2% over the prior year. The volume improvement was offset by some lower selling prices primarily for synthetic polymers attributed mainly to a lower raw material cost and a slightly lower mix of our higher margin products.

我們很高興能向客戶提供生產能力與先進的品質控制實驗室，並持續強化我們在製藥領域的全球領導地位。回到 Consumer Specialties 的業績，總銷量較去年同期成長 2%。不過，銷量改善被部分較低的售價所抵銷，主要發生在合成聚合物，主要歸因於原料成本下降，以及我們高毛利產品的組合占比略為降低。

We also drove overall volume gains with the Industrial Specialties. Again, under new commercial leadership, we drove gains in each of our coatings, adhesives and other specialties end markets. Furthermore, and as you may have seen during the quarter, we announced price increases for a number of our industrial cellulosic product lines.

我們在 Industrial Specialties 也帶動了整體銷量成長。同樣在新的商務領導團隊帶領下，我們在塗料、黏著劑及其他特殊產品終端市場均取得成長。此外，正如各位在本季可能已看到的，我們宣布對多項工業用纖維素產品線調漲價格。

While it is too early to figure out the complete impact of these announcements, these price increases are part of our strategy to better capture the value we are delivering to our customers. Overall industrial growth in the quarter was somewhat offset by weaker construction demand.

雖然現在仍為時過早，尚無法判斷這些公告的完整影響，但這些漲價是我們策略的一部分，旨在更好地掌握我們為客戶所提供價值的回報。整體而言，本季工業成長在一定程度上被較疲弱的建築需求所抵銷。

In total, Industrial Specialties grew volume 1% over the prior year. Lower raw material pricing, compared to prior year, also contributed to generally lower pricing yielding a 3% sales decline in the quarter.

總體來看，工業特用產品（Industrial Specialties）較去年同期的銷量成長1%。與去年同期相比，原物料價格較低亦促使整體定價走低，導致本季銷售額下滑3%。

Turning to our outlook, as Kevin mentioned, I would like to share some insight into our current thinking for FY17. First we fully expect that Specialty Ingredients will continue the trend toward improving growth and profitability. We expect to leverage our leading technology positions across our core end markets, enhance our growing commercial excellence initiatives, and introduce new products to help our customers win in the marketplace.

接著談到我們的展望，如Kevin所提，我想分享一些我們目前對2017財年的看法。首先，我們完全預期特用成分（Specialty Ingredients）將延續成長與獲利能力改善的趨勢。我們預期將運用我們在核心終端市場的領先技術地位，強化日益成長的商業卓越（commercial excellence）計畫，並推出新產品，協助客戶在市場上勝出。

This comes against an expected backdrop of low global economic growth and in the context of flat global currency exchange rates. We also expect to continue to keep our fixed costs in check while leveraging our commercial excellence initiatives to offset competitive pricing dynamics in the marketplace.

上述預期是在全球經濟低成長的背景下，並假設全球匯率持平的情境中提出。我們也預期將持續控管固定成本，同時運用商業卓越計畫來抵銷市場中的競爭性定價動態。

For the year, we expect adjusted EBITDA to be in the range of $480 million to $510 million with similar seasonal patterns as in 2016. For the first quarter of FY17, we expect sales to be in the range of $470 million to $485 million and adjusted EBITDA margin to be in the range of 19.5% to 20.5%.

就全年而言，我們預期調整後EBITDA將落在4.80億至5.10億美元區間，季節性型態與2016年相近。就2017財年第一季而言，我們預期銷售額將落在4.70億至4.85億美元區間，調整後EBITDA利潤率將落在19.5%至20.5%區間。

You may remember that the first quarter is seasonally ASI's slowest quarter from a commercial standpoint. And while we won't have the elevated level of plant turnarounds that we had in the year-ago period, we expect overall manufacturing expenses to be generally consistent as we continue to effectively manage our working capital.

您可能記得，第一季從商業角度來看，通常是ASI季節性最淡的一季。此外，雖然我們不會像去年同期那樣有較高水準的工廠歲修（plant turnarounds），但在我們持續有效管理營運資金的情況下，預期整體製造費用大致將保持一致。

Turning now to performance materials, adjusted EBITDA declined to $17 million in the quarter. This decline was driven almost entirely by I&S pricing and the impact of the I&S plant outage. Composite's operating results were generally consistent with the prior year.

接著談到高性能材料（Performance Materials），本季調整後EBITDA下滑至1,700萬美元。這一下滑幾乎完全由I&S的定價以及I&S工廠停工的影響所致。複合材料（Composites）的營運結果大致與去年同期一致。

While composites sales declined, overall margin improved due to lower raw material costs and a scheduled plant turnaround in the prior year. Our composites business continues to be resilient, despite the generally low growth of the overall economic environment.

雖然複合材料銷售下滑，但由於原物料成本降低，以及去年同期有一次排程性的工廠歲修，整體利潤率有所改善。儘管整體經濟環境普遍低成長，我們的複合材料業務仍持續展現韌性。

Intermediates and solvents' year-over-year adjusted EBITDA decline during the quarter was more than we originally anticipated. We had an unplanned shut down at the US I&S facility during the month of August that lasted for approximately five weeks. The outage resulted in incremental costs of roughly $4 million during the quarter. We were able to continue serving our customers through proactive inventory and supply chain management.

本季中間體與溶劑（Intermediates and solvents）年對年調整後EBITDA的下滑幅度，超出我們原先的預期。8月期間，我們在美國I&S廠發生一次非計畫性停機，持續約五週。此次停工在本季造成約400萬美元的額外成本。我們透過主動的庫存與供應鏈管理，仍得以持續服務客戶。

Despite the outage, I&S volumes actually grew by 1% during the quarter compared to prior year. During the quarter, we performed an asset impairment review of the I&S division. As a result, we recorded a noncash impairment charge to the I&S division assets.

儘管發生停工，I&S本季銷量相較去年同期實際仍成長1%。本季我們對I&S事業部進行資產減損檢視。因此，我們對I&S事業部資產認列了一筆非現金減損費用。

Turning now to our outlook for APM in 2017, I would like to provide some insight into our current thinking. For composites, we expect volume and operating results to be generally consistent with 2016. In I&S, we expect BDO and related derivatives pricing to remain well below prior-year levels through the first three quarters of the year.

接著談到我們對2017年APM的展望，我想提供一些我們目前的看法。就複合材料而言，我們預期銷量與營運結果大致將與2016年一致。在I&S方面，我們預期BDO及其相關衍生品的價格在今年前三季將維持遠低於去年同期的水準。

Assuming that prices remain stable at fourth-quarter levels, we expect the full-year impact to Performance Materials' adjusted EBITDA to be approximately $20 million, with the largest impact being in the first half of this year, due to the impact of FY16 price declines.

假設價格維持在第四季水準且保持穩定，我們預期對高性能材料調整後EBITDA的全年影響約為2,000萬美元，其中最大影響將出現在今年上半年，主要是受到2016財年價格下跌的遞延影響所致。

For the full year we expect APM adjusted EBITDA in the range of $95 million to $105 million, reflecting these assumptions for both composites and I&S. For the first quarter of FY17, we expect APM sales to be in the range of $210 million to $230 million, with adjusted EBITDA margins to be in the range of 6% to 8%.

就全年而言，我們預期APM調整後EBITDA將落在9,500萬至1.05億美元區間，反映上述對複合材料與I&S的假設。就2017財年第一季而言，我們預期APM銷售額將落在2.10億至2.30億美元區間，調整後EBITDA利潤率將落在6%至8%區間。

The forecast includes the impact of a planned turnaround of our US BDO facility. This work has been scheduled to complete a required catalyst change at the plant that occurs once every 4 to 5 years.

此預測包含我們美國BDO工廠一項計畫性歲修的影響。該作業已排程完成工廠所需的觸媒更換，此更換約每4至5年進行一次。

With that I will turn the call back over to Bill for his closing thoughts. Bill?

接下來我將把電話會議交回給Bill，請他做結語。Bill？

Thank you Luis. As we look forward to FY17, we have established three core investor priorities. The first is to complete the separation of Valvoline and establish the new Ashland as a focused specialty chemical Company. As Kevin described, we are well on our way on this front. Our second core investor priority is to meet or exceed our FY17 business plans.

謝謝你，Luis。展望2017財年，我們已建立三項核心投資人優先事項。第一項是完成Valvoline的分拆，並將新的Ashland打造為一家聚焦的特用化學品公司。如Kevin所述，我們在這方面進展順利。第二項核心投資人優先事項是達成或超越我們2017財年的業務計畫。

For ASI, we are targeting mid-single-digit growth in adjusted EBITDA. This will be in a low-growth market environment and ASI will need to leverage its differentiated research, technical and supply chain capabilities. We'll also need to price aggressively to capture the value we create. We will need to prune less, so the positive impact of our share gains become more visible and impactful. And as in the past, we will maintain strong cost discipline.

就ASI而言，我們目標是調整後EBITDA達到中個位數成長。這將發生在低成長的市場環境中，ASI必須運用其差異化的研發、技術與供應鏈能力。我們也需要積極定價，以掌握我們所創造的價值。我們需要減少修剪（prune less），使我們市占提升的正面影響更清楚可見且更具影響力。並且如同以往，我們將維持嚴謹的成本紀律。

Within APM, we expect composites results will be in line with FY16 by driving value pricing, providing solutions to customers' needs and by continuing to reduce overhead costs. Also within APM, in FY17, while BDO prices appear to have stabilized, we believe the I&S division will be negatively impacted by carryover, price reductions experienced in FY16. Put together, we expect overall chemical-to-EBITDA growth, from the combination of ASI and APM, to be in the low single digits in FY17.

在APM內部，我們預期複合材料的結果將透過推動價值定價、提供符合客戶需求的解決方案，以及持續降低間接費用，而與2016財年大致一致。同樣在APM內部，於2017財年，雖然BDO價格看似已趨於穩定，但我們認為I&S事業部仍將受到2016財年所經歷的降價之遞延影響而承壓。綜合而言，我們預期2017財年由ASI與APM合計帶來的整體化學業務對EBITDA的成長將為低個位數。

That brings us to our third core investor priority for FY17. We believe now is the time to pivot the Company from a focus in 2016 that was heavily concentrated on the Valvoline separation to a new focus on driving the new Ashland to achieve its full potential as the leading specialty chemical company. To achieve this objective, the Ashland team is focused on four critical success factors.

這也帶出我們2017財年的第三項核心投資人優先事項。我們認為現在是時候讓公司從2016年高度聚焦於Valvoline分拆的重點，轉向新的重點：推動新的Ashland發揮其作為領先特用化學品公司的全部潛力。為達成此目標，Ashland團隊聚焦於四項關鍵成功要素。

The first is, quite obviously, to ensure that we have a true specialty chemicals portfolio. In our November 15 Investor Day, we defined a specialty chemical as being a material that has a small portion of our customers' products cost but delivers a big impact on our customers' products' performance. It took a tremendous amount of work over the years by the organization to create and ultimately recraft our ASI business to meet that definition. So not surprisingly, we see ASI as the new Ashland's primary area for growth and investment.

第一項很明顯，是確保我們擁有真正的特用化學品產品組合。在11月15日的投資人日，我們將特用化學品定義為：在客戶產品成本中占比不高，但能對客戶產品性能帶來重大影響的材料。多年來，組織投入了大量工作，打造並最終重新塑造我們的ASI業務，以符合該定義。因此並不令人意外，我們將ASI視為新Ashland成長與投資的主要領域。

Moving to composites, this business meets part of our definition of a specialty chemical. The composite team clearly leverages innovation and service to enable solutions which positively impact the performance of their customers' end products. That said, as our composite materials are a major part of the customers' end cost, we know this business will always have a greater price sensitivity.

再談到複合材料，這項業務符合我們對特用化學品定義的一部分。複合材料團隊明確運用創新與服務來提供解決方案，對其客戶終端產品的性能帶來正面影響。然而，由於我們的複合材料在客戶終端成本中占有較大比重，我們知道這項業務將始終具有較高的價格敏感度。

Still, the composites division plays an important role in our portfolio due to its strong North American-centric cash flow. To put it in perspective, the composites business produces cash flow roughly equal to the cash required to pay the new Ashland's dividend.

儘管如此，由於複合材料事業部以北美為核心的強勁現金流，它在我們的投資組合中仍扮演重要角色。換個角度來看，複合材料業務所產生的現金流，大致相當於支付新 Ashland 股利所需的現金。

That leaves us with I&S, which, while well managed, does not meet our criteria as a specialty chemical. It's a cyclical business, where profitability is driven largely by supply and demand. Thus, while we believe we are at the bottom of the BDO cycle, as we emerge as the new Ashland, it will be important that we further assess the role of I&S within our portfolio. Rest assured, as in the past, Ashland's Board and Management Team will have a bias for action in terms of enhancing and further evolving the portfolio at the appropriate time.

接下來是 I&S，該業務雖然管理良好，但不符合我們對特用化學品的標準。這是一項景氣循環型業務，其獲利能力主要由供需所驅動。因此，儘管我們相信目前正處於 BDO 循環的底部，但當我們以新 Ashland 的身分走出來時，進一步評估 I&S 在我們投資組合中的角色將很重要。請放心，如同過去，Ashland 董事會與管理團隊在適當時機，將傾向採取行動以強化並進一步演進投資組合。

The second critical element to being the premiere specialty chemical Company is to deliver top-quartile EBITDA margins and growth in excess of GDP. To achieve this level of performance within the ASI, we are reengineering our approach to prioritizing and commercializing new product development activities. Our target is to increase our sales from new products to 30% of sales within ASI by 2020.

成為首屈一指的特用化學公司之第二個關鍵要素，是交付同業前四分位的 EBITDA 利潤率，以及高於 GDP 的成長。為在 ASI 內達成此等績效水準，我們正重新設計方法，以優先排序並商品化新產品開發活動。我們的目標是到 2020 年，將 ASI 內新產品銷售占比提高至銷售額的 30%。

We also believe new product sales should carry gross margins at least 5% higher than the average today. We start this journey with a highly differentiated set of technology platforms, the best scientists in our industry and world-class laboratory analytical scaleup and manufacturing infrastructure.

我們也認為，新產品銷售應帶來至少比目前平均水準高 5% 的毛利率。我們以高度差異化的一組技術平台、業界最優秀的科學家，以及世界級的實驗室分析、放大試驗與製造基礎設施，展開這段旅程。

We currently have more than 2800 active patents around the world; and over the last year, we filed for over 30 unique patents, including 19 to protect our new hybrid technology which bridges the benefits of our unique combination of technology platforms. To accelerate our progress in this important area, we recently kicked off a multifunctional engagement team which was tasked with expanding the size of our pipeline and speeding new technology to commercialization.

我們目前在全球擁有超過 2,800 件有效專利；且在過去一年中，我們申請了超過 30 件獨特專利，其中包括 19 件用以保護我們的新混合技術，該技術結合了我們獨特的多項技術平台組合之優勢。為加速在此重要領域的進展，我們近期啟動了一個多職能參與團隊，負責擴大我們的研發管線規模並加快新技術的商品化。

Next, to capture the value our solutions bring to our customers, we are bringing new tools and training to our industry-leading commercial teams. Our journey to commercial excellence has accelerated with the new commercial leadership we put in place late in FY16.

接著，為了掌握我們的解決方案為客戶帶來的價值，我們正為業界領先的商務團隊導入新工具與訓練。隨著我們在 2016 會計年度末所任命的新商務領導團隊到位，我們邁向商務卓越的旅程已加速推進。

These leaders bring a new sense of purpose and discipline to our commercial efforts. To augment their impact, we are now moving forward with a focused price-to-value initiative, led by those commercial leaders, and leveraging new approaches from external experts. To drive targeted EBITDA and growth levels, we are also taking actions to redefine our function roles.

這些領導者為我們的商務工作帶來新的使命感與紀律。為放大其影響力，我們正推動一項聚焦的「價格對價值」倡議，由這些商務領導者主導，並運用外部專家的新方法。為推動目標 EBITDA 與成長水準，我們也正採取行動重新界定各職能角色。

Our functional teams have always had a steadfast focus on governance and compliance. We must now augment this focus with a commitment to operate at a competitive cost structure while enabling our commercial organizations to expand their sales. On the cost front, as previously discussed, we have taken actions to ensure the Valvoline separation will be cost neutral, essentially offsetting incremental standalone Company costs.

我們的職能團隊一向堅定聚焦於治理與法遵。我們現在必須在此基礎上，加入以具競爭力的成本結構營運的承諾，同時使我們的商務組織能擴大銷售。在成本方面，如先前所述，我們已採取行動以確保 Valvoline 分拆在成本上維持中性，基本上可抵銷新增的獨立公司成本。

In addition, we are making strong progress towards achieving the $25 million of cost savings we announced during our Q3 earnings call. We expect these savings to more than offset inflation over the next 18 to 24 months.

此外，我們在達成於第三季財報電話會議中宣布的 2,500 萬美元成本節省目標方面，正取得強勁進展。我們預期這些節省在未來 18 至 24 個月將足以且超過抵銷通膨影響。

That brings us to the fourth critical element to meet our full potential as the premiere specialty chemical Company. That is to ensure that we effectively drive our earnings to cash and we deploy that cash effectively to create shareholder value.

這就帶到第四個關鍵要素，使我們能以首屈一指的特用化學公司之姿發揮全部潛力。也就是確保我們能有效地將盈餘轉化為現金，並有效部署該現金以創造股東價值。

To that end, we are targeting to keep changes in working capital plus capital expenditures to less than 7% of sales in FY17. This will require that we reduce our capital expenditures relative to FY16 and that we also manage down inventory levels during the year.

為此，我們的目標是在 2017 會計年度，將營運資金變動加上資本支出控制在銷售額的 7% 以下。這將要求我們相較於 2016 會計年度降低資本支出，並在年度內同時降低庫存水準。

As for our capital deployment strategy, we will keep the same priorities going forward. We will prioritize organic investment in our specialty product markets first. That said, we already have a healthy level of R&D investment and we do not believe we need significant capital to support our near-term growth objectives.

至於我們的資本部署策略，未來將維持相同的優先順序。我們將優先投入特用產品市場的有機投資。話雖如此，我們已具備健康的研發投資水準，且我們不認為需要大量資本即可支撐短期成長目標。

Next, we have the financial flexibility and remain open to bolt-on acquisitions if they're close to our core, in highly differentiated areas and at a price that delivers compelling investor returns. That said, this is not our primary focus at this time, as valuations are high and we want to keep a laser-like focus on driving EBITDA growth through execution within the businesses.

接著，我們具備財務彈性，並對補強型併購保持開放，只要其與核心業務相近、位於高度差異化領域，且價格能帶來具吸引力的投資人報酬。不過，這並非我們目前的主要重點，因為估值偏高，而我們希望以雷射般的專注，透過在各業務中的執行來推動 EBITDA 成長。

That leaves us with two other uses for cash: reducing debt to lower our interest expense, and returning cash to shareholders. Please note, we still have $500 million remaining on the share buyback authorization by our Board, which is active through December 2017.

如此一來，現金尚有另外兩項用途：降低負債以減少利息費用，以及回饋現金給股東。請注意，我們仍有董事會核准的 5 億美元庫藏股回購額度尚未使用，該授權有效至 2017 年 12 月。

So in conclusion, while we have had numerous challenges, we made great progress on many fronts in 2016, especially as it relates to driving record performance in Valvoline, achieving a major milestone in the separation of Valvoline with the September IPO and returning ASI to volume growth in Q4. As we move to FY17, we are pivoting our focus to achieve our full potential as the premiere specialty chemical Company.

總結而言，儘管我們面臨諸多挑戰，但在 2016 年我們在多個面向取得重大進展，特別是推動 Valvoline 創下紀錄的表現、透過 9 月 IPO 達成 Valvoline 分拆的重要里程碑，以及在第四季讓 ASI 重回銷量成長。邁入 2017 會計年度，我們正轉換重心，以實現作為首屈一指特用化學公司的全部潛力。

We have much work to do and it will take some time to see the full impact of our efforts. However, we are committed to making the tough decisions to further evolve our portfolio. We are also committed to improving our margin and growth rates with a fundamental focus on new products, commercial excellence and reducing our infrastructure costs, and we are also committed to take actions to drive increased cash conversion and then deploy that cash effectively to drive shareholder value creations.

我們還有許多工作要做，且需要一些時間才能看見我們努力的全面影響。然而，我們承諾將做出艱難決策，以進一步演進我們的投資組合。我們也承諾以新產品、商務卓越與降低基礎設施成本為根本重點，改善利潤率與成長率；同時也承諾採取行動提升現金轉換率，並有效部署該現金以推動股東價值的創造。

I believe we have a great team which is aligned around a clear strategy. We are excited to complete the Valvoline separation as it will complete our journey to create two great companies and it will also enable us to focus all our efforts on moving the new Ashland to the next level and ultimately create the premiere specialty chemical Company.

我相信我們擁有一支優秀的團隊，並已圍繞清晰的策略達成一致。我們很期待完成 Valvoline 分拆，因為這將完成我們打造兩家卓越公司的旅程，也將使我們能把所有努力聚焦於把新 Ashland 推向更高層次，最終打造首屈一指的特用化學公司。

Thank you for your interest in Ashland and I will now turn the call over to the operator to take your questions.

感謝各位對 Ashland 的關注，接下來我將把電話交給接線員，開始提問。

[Operator Instructions]

[接線員指示]

Our first question comes from the line of John Roberts from UBS.

我們的第一個問題來自 UBS 的 John Roberts。

Good morning. A quick question, Bill. Speaking of growth you talk about global GDP in 2017 of 3%, 3.5%. Do you expect ASI's growth to exceed the market? Can ASI grow above that for next year?

早安。Bill，我有個簡短問題。談到成長時，你提到 2017 年全球 GDP 為 3%、3.5%。你是否預期 ASI 的成長會超過市場？ASI 明年能否高於這個水準成長？

Certainly I think that's a function of the segments that we operate and the geographies that we operate in, we would expect that, for example, in the pharma markets, we would continue to grow at rates that are better than that. And there are other parts of the market which we'll say have a little bit more cyclical component and we may grow at a slower rate in those areas. Luis, you may want to add a few specifics to that.

當然，我認為這取決於我們所營運的事業部門以及我們所處的地理區域；我們預期例如在製藥市場，我們將持續以優於該水準的速度成長。而市場中也有其他部分，我們會說具有較多景氣循環成分，在那些領域我們的成長可能較慢。Luis，你或許可以補充一些更具體的說明。

Thanks, Bill. That's a perfect answer. There are areas like energy where we at this time are not assuming any recovery of the energy market. And even though it's a small portion of our business, that's one that we are going to expect to grow. But it's definitely in our core segments. We are seeing now volume growth and we expect to grow close to that GDP slightly ahead or above that level in both pharma, personal care, coatings, some of our niche business like adhesives and so forth. Again the areas where we are more conservative is more in energy and construction where again we still see more muted growth.

謝謝，Bill。這個回答很到位。像能源這類領域，我們目前並未假設能源市場會有任何復甦。即使它只占我們業務的一小部分，但那是我們預期會成長的部分。不過，成長主要仍會來自我們的核心事業部門。我們目前看到銷量成長，並預期在製藥、個人護理、塗料，以及部分利基業務如黏著劑等領域，成長將接近 GDP、略為領先或高於該水準。同樣地，我們較為保守的領域主要在能源與建築，因為我們仍看到較為溫和的成長。

Okay. And, just as a follow up, the issues you have in the past in ASI, in terms of emerging markets or Latin American customers trading down, is that still going on and like what can you do to serve those markets if this is a longer-term issue than initially expected?

好的。另外，作為後續追問，您過去在 ASI 方面提到的問題——就新興市場或拉丁美洲客戶降級消費（trading down）而言——現在還在發生嗎？如果這成為比原先預期更長期的問題，您能做些什麼來服務那些市場？

I think that I have good news to report there. Actually definitely we have seen some improvement in Latin America specifically in Brazil where we saw both the reduction of demand as well as trading down as the new government there is kind of watching the economy, the currency has actually recovered somewhat. And actually we're seeing both whether return of demand and the return of customers back to buying the products that they really like.

我想我在這方面有好消息可以報告。事實上，我們確實看到拉丁美洲有所改善，特別是在巴西；那裡我們看到需求下滑以及降級消費的情況都有所減少，因為新政府某種程度上正在觀察經濟情勢，而貨幣也確實有所回升。而且我們也看到需求回流，以及客戶回到購買他們真正喜歡的產品。

So although it was still a decline year on year, the decline was much smaller and we are starting to see a trend into Latin America. And at the same time we continue to do what we do well which is reformulate our customers products and help them drive products that the consumers will be able to buy. So we are seeing both impacts at this time.

所以，雖然同比仍是下滑，但降幅小了很多，我們也開始看到拉丁美洲的趨勢改善。同時，我們也持續做我們擅長的事，也就是重新配方我們客戶的產品，並協助他們推出消費者買得起的產品。因此目前我們同時看到這兩方面的影響。

Kevin and I were just in China a week or so ago. The overall sentiment and mood of the team is much more buoyant now than it was 1 to 2 quarters ago. So we are cautiously optimistic. We will see a stabilizing and hopefully ultimately an uptick in demand in those important regions for us.

Kevin 和我大約一週前剛去過中國。整體而言，團隊的情緒與氛圍比 1 到 2 個季度前更為樂觀、振奮。所以我們保持審慎樂觀。我們將看到局勢趨於穩定，並希望最終在這些對我們很重要的地區出現需求回升。

I was in India three weeks ago and I think it's similar in India as well.

我三週前在印度，我認為印度的情況也類似。

Thank you very much.

非常感謝。

Thank you. Our next question comes from the line of Mike Harrison from Seaport Global Securities.

謝謝。我們的下一個問題來自 Seaport Global Securities 的 Mike Harrison。

Good morning Mike.

早安，Mike。

Hi. Thanks for taking my question. I am curious, the volume growth in Specialty Ingredients seemed to come a little bit at the expense of margins. I think some of us would have thought that as you started to see volume growth that you would be able to leverage that to the bottom line and see better margin performance. Why do we seem to be getting less margin traction even though volumes are improving?

嗨。謝謝讓我提問。我很好奇，Specialty Ingredients 的銷量成長似乎在某種程度上是以犧牲毛利率為代價。我想我們有些人原本以為，當你開始看到銷量成長時，你應該能把這個槓桿效應帶到損益表底線，看到更好的毛利率表現。為什麼在銷量改善的同時，我們的毛利率改善動能似乎比較弱？

That's a very good question. I am glad that you asked it. We are starting to see volume growth. Fundamentally our mix of market segments was widely different. We had comparable sales in pharma. Pharma is definitely one of our highest margin business on the backdrop of our very strong quarter last year. While some of the growth that we started to see came back in areas like personal care, like adhesives that have lower margins. So really we had a little bit of an impact of mix. We continued to grow in all of the segments. I expect that to be more evident that part of the growth is also driving higher margins. Again, I do want to highlight that we are working very aggressively in managing our working capital and that will surpass any effect in markets.

這是個非常好的問題。我很高興你問到。我們確實開始看到銷量成長。從根本上來看，我們的市場區隔組合（mix）差異很大。我們在製藥（pharma）有可比銷售。在去年非常強勁的一季的高基期背景下，製藥無疑是我們毛利率最高的業務之一。而我們開始回來的一些成長，則出現在像個人護理、像黏著劑等毛利率較低的領域。所以本質上，我們受到了一點組合影響。我們在所有區隔都持續成長。我預期會更明顯看到：成長的一部分也會帶動更高的毛利率。另外我也想強調，我們正非常積極地管理營運資金，而這將會超過市場因素帶來的任何影響。

I'm guessing that really relates to just the activity levels within our facilities and just to highlight also, we are taking I think a fundamental and aggressive action as it relates to really making sure that we are very disciplined in terms of understanding, defining and ultimately pricing to value as I mentioned earlier, so that should help as well.

我猜這其實也與我們廠內的活動水準有關；另外也要強調，我們正在採取我認為是根本且積極的行動，確保我們在理解、定義並最終「按價值定價」（pricing to value）方面非常自律，正如我先前提到的，這也應該會有所幫助。

And then curious in terms of the capital deployment, what capital projects did you delay and why?

另外就資本配置而言，你們延後了哪些資本專案？原因是什麼？

We had a couple of expansion projects that we expected to start working on as we speak on some of our cellulosic chain. And the good thing here is throughout the last year we had wealth and productivity initiatives and we actually have been able to increase the capacities of our plants. So at this time, we don't see the need for those expansions and that's true again for some of our cellulosics and for some of our PDP plants fundamentally driven by productivity initiatives that have increased the capacity of our facilities which at this time allow us to delay the expansions that we thought we were going to need at this time. We will continue to work on those productivity initiatives in that regard.

我們原本預期現在就要開始推進幾個擴產專案，主要在我們的纖維素（cellulosic）產業鏈上。好消息是，在過去一年裡我們推動了許多精實與生產力提升計畫，而我們實際上已經能提高工廠產能。因此目前我們看不到那些擴產的必要性；這同樣適用於我們部分纖維素業務，以及部分 PDP 工廠——基本上是由生產力計畫所驅動，提升了我們設施的產能，使我們目前可以延後原本以為此時需要的擴產。我們會在這方面持續推動這些生產力計畫。

Luis, just in terms of the BDO plant in the US, you had the five week unplanned outage during this quarter and then you are going to be changing the catalyst during Q1. Why didn't you change the catalyst while you had the unplanned outage?

Luis，關於美國的 BDO 工廠，本季你們有一次為期五週的非計畫性停機，然後你們又打算在第一季更換觸媒。為什麼你們沒有在那次非計畫性停機期間就把觸媒換掉？

That is a good question and one that I ask myself but I will tell you what it is. Fundamentally this is an incredibly complex catalyst change. It's a very specific catalyst; it happens 4 to 5 years. And both getting the catalyst on time, this is a catalyst that cannot see humidity, it cannot see air. It requires months of planning.

這是個好問題，也是我自己也問過自己的問題；我告訴你原因。從根本上說，這是一個極其複雜的觸媒更換作業。這是一種非常特定的觸媒；大約每 4 到 5 年才會進行一次。而且無論是觸媒能否準時到位——這種觸媒不能接觸濕氣，也不能接觸空氣——都需要數月的規劃。

So unfortunately, even though we had the unplanned outage, it really couldn't come at a worse time because we just couldn't do this, what is really one of the most complex operations in this plant that can only happen every 4 to 5 years. I will tell you the team tried hard to make it happen together but because of the complexity of the operation both from a safety perspective and from the type of catalyst and the type of equipment that we needed, we just weren't able to do it. So it is a very unfortunate situation in that regard. The good thing is this only happens every 4 or 5 years in that facility and we're going to do it in a quarter.

所以很不幸地，儘管我們遇到非計畫性停機，但時機其實再糟不過，因為我們就是無法在那段時間完成這項作業；而這是該廠最複雜的操作之一，且只能每 4 到 5 年進行一次。我可以告訴你，團隊非常努力想把它一起完成，但由於作業的複雜性——無論從安全角度，還是觸媒種類與所需設備的角度——我們就是做不到。因此在這方面確實是非常不幸的情況。好消息是，這在該設施只會每 4 或 5 年發生一次，而我們會在下一個季度完成。

Our next question comes from the line of David Begleiter from Deutsche Bank.

我們的下一個問題來自德意志銀行（Deutsche Bank）的 David Begleiter。

Thank you. Good morning.

謝謝。早安。

Good morning.

早安。

Bill, Luis, just on ASI, the low end of the guidance, of $480 million, what needs to occur for you to hit that number? Just how conservative is that guidance of $480 million that you put out there?

Bill、Luis，關於 ASI，指引區間的低端是 4.8 億美元；要達到這個數字需要發生什麼？你們給出的 4.8 億美元指引到底有多保守？

Well, at this time David, we are trying to be-- to put a number that is consistent with our expectations. I think that Bill was very clear that our target is to have mid-to -- mid business segment growth and that's what we are planning to do. What would need to happen? Obviously lower growth than we are expecting, some slowness that we are seeing in the emerging economies to continue in a way that we're not expecting. So I think it's in the realms of the possibility, but definitely we are trying to put our guidance where hopefully the middle is where we believe is where we're going to be. But we wanted to make sure that we have that all our calls and we'll continue to update the guidance throughout the year as we move forward. And we did want to share what our costs were; but again, our objective is to have mid single-digit, double-digit growth for the business.

David，目前我們正努力——提出一個與我們預期一致的數字。我想 Bill 已經很清楚地說過，我們的目標是達到中段——中等業務區隔的成長，而這就是我們的規劃方向。那需要發生什麼？很明顯，如果成長低於我們的預期，或我們在新興經濟體看到的放緩以我們未預期的方式持續下去。所以我認為這在可能性範圍內，但我們確實是希望把指引放在一個位置：我們相信中位數大概就是我們將落點的地方。但我們也想確保在所有電話會議上都涵蓋到這點，並且會在今年推進過程中持續更新指引。另外我們也確實想分享我們的成本情況；但再次強調，我們的目標是讓該業務達到中個位數到雙位數的成長。

I think that's an important point Luis just made is we do plan to provide some update as we go forward. And it would be logical that we would pull that range in a little tighter as we begin to get quarters behind us. So as we learned this year, a fiscal year can be actually a long time and many things can change. There were some surprises out there in the world last night and this morning. You know it's the types of things like that will have some impact on the world and it will be interesting, but we're ready. I think our focus on the fundamentals, controlling the things that we can control, managing our costs, managing our price, driving productivity and ultimately volume through our facilities, driving share shifts, those are the things that we can control that make a difference and can help to drive our results more to the top end of that range which ultimately of course would be our logical objective.

我認為 Luis 剛才提出的是一個重要觀點：我們確實計畫在未來推進的過程中提供一些更新。而且，隨著我們逐步走過幾個季度，把那個區間再收斂得更精準一些是合乎邏輯的。因此，正如我們今年所學到的，一個會計年度其實可能很長，很多事情都可能改變。昨晚和今天早上，外部世界出現了一些意外。你知道，這類事情會對全球產生一些影響，會很有意思，但我們已經準備好了。我認為我們的重點在於基本面：控制我們能控制的事情、管理成本、管理價格、提升生產力，並最終透過我們的設施帶動出貨量、推動市占率移轉；這些都是我們能掌控、能帶來差異、並有助於把我們的結果推向該區間上緣的事情，而那當然也會是我們合乎邏輯的目標。

Very good. Just one last thing on the performance materials, the guidance in that segment, the improvement in Q2 through 4 verses Q1. Any more color you can provide on what's driving that improvement and to how much confidence you have in that being realized?

很好。關於高性能材料（performance materials）再問最後一點：該事業部的指引顯示，第二季到第四季相較第一季會改善。你能否再多提供一些背景，說明是什麼在推動這項改善，以及你對於能否實現的信心有多大？

Are you referring to FY17?

你指的是 2017 財年（FY17）嗎？

Yes.

是的。

Well I think Luis can provide more color on it, but one of the things to note is that the BDO prices were falling throughout the fiscal or the margin related to pricing was falling throughout the fiscal year. So when you start in Q1, you have the biggest gaps between where we are today and where prices were last year. You combine that with the outage which is significant as Luis said and then ultimately as we begin to move past those sequentially through the year, that's where we begin to see things, if you will, improving and we are working hard to drive prices up. It's still a challenge in this market, but we are making some progress and while we don't talk a lot about it, this big outage that Luis is referencing related to the catalyst, it actually does change our plant productivity and our yields and that should help us as well. So clearly Q1 is the most difficult as we see it within the I&S business.

我想 Luis 可以補充更多細節，但有一點要注意：BDO 價格在整個會計年度都在下滑，或者說與定價相關的毛利在整個會計年度都在下滑。因此，當你從第一季開始時，你會看到我們目前的水準與去年價格之間的落差最大。再加上 Luis 所說的那次相當重大的停工（outage），然後隨著我們在年度中逐季往後推進、逐步走過這些因素，你就會看到情況開始改善；同時我們也在努力把價格往上推。在這個市場中仍然具有挑戰，但我們確實取得了一些進展；另外，雖然我們不常談到，Luis 提到的那次與觸媒（catalyst）相關的大型停工，實際上也會改變我們工廠的生產力與收率，這也應該會對我們有所幫助。因此，顯然在我們看來，I&S 業務中第一季是最困難的。

That's answered very good, but nothing to add.

這樣的回答很好，我沒有要補充的。

Thank you very much.

非常感謝。

Our next question comes from the line of Christopher Parkinson from Credit Suisse.

我們下一個問題來自 Credit Suisse 的 Christopher Parkinson。

Thank you. Can you talk a little bit more about your new product pipelines specifically in personal care and coatings? Within personal care, I believe you previously launched some new products in hair care but you're discussing some new stuff in skin and oral care. Is there anything to consider that as we head into 2017?

謝謝。你能否再多談一些你們的新產品管線，特別是在個人護理與塗料方面？在個人護理方面，我記得你們之前在護髮領域推出了一些新產品，但你們也在談一些皮膚與口腔護理的新產品。展望 2017 年，有沒有什麼需要特別留意的？

Definitely. Actually, as we speak there is Inc cosmetics in Thailand and we have a variety of products that we are introducing there. One is hair care. We are also introducing a fair number of biofunctionals, some of them naturally based on our Zeta-fraction technology, so that would be an example of a pipeline. We're introducing them at the show, but that's again just to show that we're starting to move things. And the biofunctionals they're mostly for skin care and in terms of oral care we'll -- again, we have a pipeline. We're not introducing anything this quarter but we have a couple of other products that we are working on with our customers.

當然可以。其實此刻泰國正在舉辦 In-Cosmetics，我們在那裡正推出多種產品。其中一項是護髮產品。我們也在推出相當多的生物功能性成分（biofunctionals），其中一些是以我們的 Zeta-fraction 技術為基礎、偏天然來源的，所以這就是管線的一個例子。我們在展會上做介紹，但這也只是為了展示我們正在開始推動這些項目。而這些生物功能性成分多數用於護膚；至於口腔護理，我們也有管線。我們本季不會推出任何新產品，但我們正與客戶合作開發另外幾項產品。

That's true also for the products area where we are working with some of our customers moving forward. Again some of the introductions are market-related. We introduce it in the market. Some others are very specific to our customer and we don't announce anything publicly. But the example I wanted to give is again, in cosmetics, we are introducing a new set of products hair care, skin care. And we've also introduced new products in nutrition. So I feel stronger about our pipeline. And then the commercial excellence initiatives to drive that to commercialization fast.

這在產品領域也是一樣，我們正與部分客戶合作、持續往前推進。同樣地，有些推出是與市場相關的。我們會在市場上推出。另一些則非常針對特定客戶，我們不會對外公開宣布。但我想舉的例子是：同樣在化妝品領域，我們正在推出一系列新的產品，涵蓋護髮、護膚。我們也在營養（nutrition）方面推出了新產品。因此我對我們的產品管線更有信心。接著再透過商業卓越（commercial excellence）計畫，推動這些產品更快商業化。

The only thing I might just add is that, as we are talking about with the lab that we established in pharma and those capabilities in the infrastructure that's been established around the globe, making sure that we take the core technology and localize those to meet the very specific needs of the local markets. Those are really critical and ultimately would fall within our definition of new products. Some of those are not headline in terms of it's a new patented molecule, but they're relevant to the customers and enable solutions for the customers and that's why we are making the investment and we feel very good about that global footprint to support whether they'd be global customers or local customers meet their local needs.

我唯一想補充的是：正如我們先前提到在製藥（pharma）領域所建立的實驗室，以及我們在全球建立的基礎設施能力，我們要確保能把核心技術在地化，以滿足各地市場非常具體的需求。這些都非常關鍵，最終也會落在我們對「新產品」的定義之內。其中有些不一定是頭條新聞式的「全新的專利分子」，但它們對客戶很相關、能為客戶提供解決方案；這也是我們投入資本的原因，我們對這個用以支援全球或在地客戶、滿足其在地需求的全球布局感到非常有信心。

That's helpful. Also, can you just give us a little more of a glimpse into your updated thought process on capital allocation specifically buybacks versus M&A. On the M&A front, can you broadly discuss any key trends you have seen whether it's geographic or from an end-market perspective and how you are thinking about targeting assets complementary to your portfolio? Thank you.

很有幫助。另外，你能否再讓我們更了解你們更新後對資本配置的思考，特別是庫藏股回購（buybacks）相對於併購（M&A）？在併購方面，你能否概括談談你們看到的關鍵趨勢，不論是地理區域或終端市場角度，以及你們如何思考鎖定與你們產品組合互補的資產？謝謝。

Sure. And, as referenced just a few minutes ago, we really want to maintain a strong discipline, things that are very close to the core that enhance our position in our more differentiated areas, those things I believe where cost synergies can enable the fundamental economics are really key to us. And yet, at the same time and also I would mention, really more bolt-on related as opposed to very large acquisitions, but I also want to emphasize while we would be, if you will, opportunistic in that area, valuations still do remain high. And I think we feel that as we are pivoting to become the new Ashland, we have opportunities within our core business to continue to drive greater gains. And as important and valuable ultimately as acquisitions can be, we'd like to make sure that we execute at a high level on both. So we want to maintain our focus. So we will be opportunistic, but it would be close to the core if we were to take any actions.

當然。如同幾分鐘前提到的，我們確實希望維持高度紀律：聚焦非常貼近核心、能強化我們在更具差異化領域的地位的項目；我認為那些能透過成本綜效來支撐基本經濟效益的案子，對我們非常關鍵。同時我也要提到，我們更偏好補強型（bolt-on）交易，而不是非常大型的收購；但我也想強調，即便我們在這方面會把握機會，估值仍然偏高。我想我們也認為，隨著我們轉型成為「新的 Ashland」，在核心業務內仍有機會持續推動更大的改善。而且，儘管收購最終可能很重要也很有價值，我們希望確保在兩方面都能以高水準執行。因此我們要維持專注。所以我們會把握機會，但若要採取任何行動，會是非常貼近核心的。

I think what I would add to that is, as we indicated, we still have a $500 million share repurchase authorization that is active through the end of December. Obviously, we pay a dividend and, as in the past, we don't view these things as mutually exclusive. And so, we can do any combination of these things over the course of time.

我想我會補充的是：如同我們所指出的，我們仍有 5 億美元的股票回購授權，且有效期到 12 月底。顯然，我們也會發放股利；而且如同過去，我們不認為這些選項彼此互斥。因此，隨著時間推進，我們可以在這些選項之間做任何組合。

That was really a key part of creating in the way we established the separation to two great companies as we ultimately wanted both of the companies to have the financial flexibility to ultimately pursue their strategy. We feel good about that.

這其實是我們在設計分拆、打造兩家優秀公司的方式中非常關鍵的一部分，因為我們最終希望兩家公司都具備財務彈性，以推進各自的策略。我們對此感到很有信心。

Thank you very much.

非常感謝。

Our next question comes from the line of Laurence Alexander from Jefferies.

下一個問題來自 Jefferies 的 Laurence Alexander。

You guys mentioned changing dynamics. With the outcome of the presidential election, would you think a change in policy would have an outside effect on ASI given the relatively large exposure you guys have in that segment from the emerging markets?

你們提到動態正在改變。隨著總統大選結果出爐，考量到你們在新興市場該領域的曝險相對較大，你認為政策變動會對 ASI 產生超出預期的影響嗎？

Your guess on that front is as good as ours in terms of what will be the net effect on we'll say overall GDP and relative growth and health of the global economy of which we're a part of. We'll have to see the effect of that result on the strength of our dollar. That's an area that we'll keep a close focus on. But there is nothing specific other than what you would expect to see really with all industrial companies related to the impact of the election. So we're just like so many people waking up with interesting news to digest. That's the only reason why I mention it.

就那方面而言，對於我們所說的整體 GDP、相對成長，以及我們身處其中的全球經濟之健康狀況，最終會有什麼淨影響，你的猜測跟我們一樣。我們得觀察該結果對美元強勢的影響。這是我們會密切關注的領域。但除了你會預期所有工業公司都會面臨、與選舉影響相關的情況之外，沒有什麼特別的。所以我們就像許多人一樣，醒來看到有趣的新聞需要消化。這就是我提到它的唯一原因。

Okay. Then you did talk about I&S and potentially your strategic alternatives. Is it large enough to be spun or is it something where you're looking for a sale or this kind of everything is on the board so to speak?

了解。那你確實談到 I&S 以及可能的策略性替代方案。它的規模大到可以分拆嗎？還是你們在考慮出售？或者可以說一切選項都在檯面上？

Well, I think what's important is we do need to recognize, we do need to have a truly specialty portfolio. We know that on the range of businesses within our overall Company, the new Ashland, that is on the commodity end. There are different ways to reduce the volatility that's associated with I&S. I'd rather not get into specific thoughts and specific actions and just leave it that the Company has had a good discipline and a good bias for action and we understand the issue at hand. And so we'll probably talk more about this in the future.

我認為重要的是，我們確實需要認知到，我們需要一個真正的特用化產品組合。我們知道，在我們整體公司（新的 Ashland）旗下的業務範圍中，那一塊屬於大宗商品端。降低與 I&S 相關波動性有不同的方法。我寧可不深入談具體想法與具體行動，只想說公司一直保持良好的紀律與行動導向，我們也理解眼前的問題。因此我們未來可能會再多談一些。

Thank you very much.

非常感謝。

Our next question comes from the line of Mike Sison from KeyBanc.

下一個問題來自 KeyBanc 的 Mike Sison。

Hey guys. Good morning.

各位好。早安。

Good morning Mike.

早安，Mike。

When I think about the outlook for ASI, the first quarter EBITDA growth essentially flat and I understand the seasonality on a sequential basis but when you think about Q2 particularly, what type of growth do you think you need to see in the beginning of the year to sort of get to that mid single digits? And any particular areas of growth that you need to see on a volume basis to get there?

當我思考 ASI 的展望時，第一季 EBITDA 成長基本持平；我理解按季的季節性因素，但特別是看第二季，你認為年初需要看到什麼樣的成長，才能達到你們所說的中個位數成長？在銷量方面，有沒有特定需要看到的成長領域才能達成？

I think there is three things we are working on that are relevant to get us to that mid-single-digit EBITDA growth. Clearly volume growth is one of those and their commercial excellence initiatives, specifically managing pipeline of new opportunities and new products is key. So again, if we get volume growth in that low single digit, that GDP number, that would be one key, but again, we're working very specifically on driving that. Secondly is the work that we're doing on our price-to-value initiatives which include both our general increases but very specifically driving to get the value that our product delivers for our customers, will be segment elementals will be increased. And then the third is maintaining cost discipline. Those three things, together as we execute them, should get us to that level. So volume growth, success on our price initiatives and cost discipline will get us there.

我認為我們正在推動三件事，與達到中個位數 EBITDA 成長相關。很明顯，銷量成長是其中之一；而我們的商業卓越（commercial excellence）計畫，特別是管理新機會與新產品的管線，是關鍵。所以再說一次，如果我們能取得低個位數的銷量成長、也就是那個 GDP 數字，那會是其中一個關鍵；但同時我們也正非常具體地推動這件事。第二是我們在推動的「價格對價值」（price-to-value）計畫，包含一般性漲價，但更具體地是要把我們產品為客戶帶來的價值反映出來，將帶動各事業部的基本面提升。第三是維持成本紀律。這三件事一起執行到位，應該能讓我們達到那個水準。也就是：銷量成長、價格措施成功，以及成本紀律，會帶我們到那裡。

I just want to highlight that we have mentioned this before that really, we have had a good history of growing in our key segments like pharma. Unfortunately, some of that growth has been obscured by some of those things that we have faced over the last year, and other companies have as well, as decisions to really be pruning our portfolio. We understand our mantra now is really more focused on growth. So I think some of those things that have been happening in the business will be more apparent as we go forward.

我想強調，我們之前提過：在我們的關鍵領域（例如製藥）其實有良好的成長歷史。不幸的是，過去一年我們面臨的一些事情（其他公司也同樣面臨），以及我們為了修剪產品組合所做的決策，使得部分成長被掩蓋了。我們理解，我們現在的口號（mantra）確實更聚焦在成長。因此，我認為隨著我們往前走，業務中正在發生的一些事情會更明顯地呈現出來。

Got it. And then, when I think about each of the major businesses within ASI that consumer specialties, industrial specialties, in terms of their specific EBITDA growth, I know you don't report in that manner but would you have consumer specialties growing faster than mid single digits to get to your goal and then industrial specialties lower?

了解。另外，當我思考 ASI 旗下各主要業務（消費者特用、工業特用）各自的 EBITDA 成長時，我知道你們不會用那種方式揭露，但你們是否需要讓消費者特用的成長快於中個位數，才能達到目標，而工業特用相對較低？

I think that again we normally don't talk specifics about those. I would say that what we are trying to do is grow faster our core segments, so obviously pharma, consumer and coatings. We are seeing that followed very closely by our niche businesses and within that, adhesives and nutrition are businesses that are growing at a good pace. So, it's very consistent with the strategy that we've set in the past. Those are the areas of the business that again if they grow faster, automatically they're in that growth stocks because those are the higher margin business.

我想我們通常不會談那些細項。我會說，我們正在努力讓核心領域成長更快，所以很明顯是製藥、消費者與塗料。我們也非常密切地看到利基業務緊跟其後；其中，黏著劑與營養相關業務的成長速度不錯。所以這與我們過去所設定的策略非常一致。這些業務領域如果成長更快，自然就會帶動成長，因為它們是毛利較高的業務。

Great. Thank you.

很好。謝謝。

(Operator Instructions)

(接線員指示)

At this time I am showing no questions in the queue. I would like to turn the call back over to Seth Mrozek for closing remarks.

目前我看到佇列中沒有問題。我想把電話交回給 Seth Mrozek 作結語。

Thank you Tierra. Thank you all for your time this morning. Thank you for your interest in Ashland. I hope everyone has a great day.

謝謝你，Tierra。謝謝各位今天早上撥冗參與。感謝各位對 Ashland 的關注。祝大家有美好的一天。

Ladies and gentlemen, thank you for your participation in today's conference. This does conclude the program. You may now disconnect. Everyone have a great day.

各位女士、先生，感謝各位參與今天的會議。本次議程到此結束。您現在可以掛線。祝大家有美好的一天。