Ashland (ASH) To Realign Business Operations Starting 2020
Zacks Investment Research | Dec 23, 2019 09:58PM ET
Ashland Global Holdings Inc. (NYSE:ASH) is set to change the way it manages the business from a functionally-led organization to a business-unit focused company starting second-quarter fiscal 2020.
Per management, the change acknowledges the fact that it has a diverse business portfolio with different value propositions, with respect to the markets served. The changes will allow the company to align its resources, cost structure and business models with each business unit’s specific needs.
Further, the change will enable Ashland to create greater accountability and ownership for both short-term and long-term results. Also, the company plans to align incentive rewards with the business units’ performance.
It will restructure the business into three primary external-reporting segments and a corporate reporting segment. Notably, the three primary external-reporting segments are Consumer Specialties, Industrial Specialties, and Intermediates & Solvent.
The Consumer Specialties segment will serve the Life Sciences business, and Personal Care & Household business units. Notably, Pharma and Health & Wellness will be part of the Life Sciences business unit.
The Industrial Specialties segment will serve the Specialty Additives and Performance Adhesives business units. Notably, Specialty Additives will include Coatings and Performance Specialties.
The Intermediates & Solvents segment is expected to report the results of its Lima, OH-facility.
The Corporate reporting segment will have corporate governance practices and some legacy issues.
The company plans to implement key improvements, resource management, leadership structures, processes and financial reporting during second-quarter fiscal 2020. Notably, the new teams will start evaluating and developing their respective plans, business models and cost structures throughout the quarter.
Shares of Ashland have gained 8.5% year to date against the Zacks Investment Research
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