Slide 1: Second Quarter 2023 Earnings Presentation
SECOND QUARTER 2023 EARNINGS PRESENTATION August 3, 2023
Slide 2: Use of non-GAAP financial measures and forward-looking statements
Use of non-GAAP financial measures: This presentation includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided within the Appendix to this presentation. In
Slide 3: Agenda
AGENDA 1 Quarter highlights and updates 2 Consolidated financial results 3 Segment performance 4 Guidance 5 Q&A 3
Slide 4: Quarter Highlights and Updates
QUARTER HIGHLIGHTS AND UPDATES Double-digit revenue growth while maintaining mid-20s EBITDA margins Improved auto production vs. last year positively impacted Performance Materials and Advanced Polymer Technologies Record sales quarter for Pavement Technologies business line reflects record legacy p
Slide 5: Second Quarter (Q2) Consolidated Financial Performance
SECOND QUARTER (Q2) CONSOLIDATED FINANCIAL PERFORMANCE Q2 financials (1) Performance highlights $ in millions except percentage and EPS Q2 Q2 vs PY Sales up ~15% driven by stronger pricing across all segments and volume 2023 2022 ∆% increases in Performance Materials (PM) and Performance Chemicals’
Slide 6: Q2 2023 Financial Metrics and Highlights
Q2 2023 FINANCIAL METRICS AND HIGHLIGHTS Net Sales Free cash flow (1) $ in millions $ in millions Sales for Q2 2023 include FCF of $27 million 383 Q4 Q4 impacted by higher contribution of Ozark road markings business 122 Q3 inventory levels, Q3 Q2 primarily driven by Year-over-year sales are 5
Slide 7: Performance Chemicals
PERFORMANCE CHEMICALS Q2 Q2 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2023 2022 YEAR YEAR Performance highlights Net Sales 284.0 243.7 40.3 16.5% Industrial Specialties 143.1 165.9 (22.8) (13.7)% Sales of $284.0 million up 17% due to higher pricing across the segment and the addition of Ozark, partially
Slide 8: Advanced Polymer Technologies
ADVANCED POLYMER TECHNOLOGIES Q2 Q2 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2023 2022 YEAR YEAR Performance highlights Net Sales 53.2 53.8 (0.6) (1.1)% Sales of $53.2 million flat due to market weakness in Europe and Asia Segment EBITDA 11.6 3.8 7.8 205.3% Increased sales volumes in North America dr
Slide 9: Performance Materials
PERFORMANCE MATERIALS Q2 Q2 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2023 2022 YEAR YEAR Performance highlights Net Sales 144.6 122.4 22.2 18.1% Sales of $144.6 million up 18% as last year’s volumes were negatively Segment EBITDA 64.2 55.6 8.6 15.5% impacted by Covid-related shutdowns in China Segment
Slide 10: 2023 Guidance and Outlook
2023 GUIDANCE AND OUTLOOK Adjustment to Guidance: FY Guidance Financial Cost of CTO stays higher for longer FY Guidance metric Persistent weak demand for rosin-based products constrains Revenue $1.6 - $1.7 billion TOFA production and sales Recovery in China less robust than expected, negativel
Slide 11: For More Information
FOR MORE INFORMATION Investors John E. Nypaver, Jr. (843) 740 - 2002 Media Caroline Monahan (843) 740 - 2068 Thank you for your interest in Ingevity. 11
Slide 12: Appendix
APPENDIX 12
Slide 13: Definitions of non-GAAP financial measures
Ingevity has presented certain financial measures, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has provided a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP. These finan
Slide 14: Reconciliation of Net Income and Diluted EPS to Adjusted Earnings
Reconciliation of Net Income (Loss) (GAAP) and Diluted Earnings (Loss) Per Share (GAAP) to Adjusted Earnings (Loss) (Non-GAAP) and Diluted Adjusted Earnings (Loss) Per Share (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except per data (unaudited) 2023 2022 2023 2022
Slide 15: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2023 2022 2023 2022 Net income (loss) (GAAP) $ 35.5 $ 59.8 $ 86.2 $ 120.6 Provision (benefit) for income taxes 12.2 16.7 25.6 33.5 Inter
Slide 16: Reconciliation of Gross Profit to Adjusted Gross Profit
Reconciliation of Gross Profit (GAAP) to Adjusted Gross Profit (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2023 2022 2023 2022 Gross Profit (GAAP) $ 153.0 $ 150.6 $ 283.4 $ 288.4 Plus: Depreciation and amortization 17.5 15.7 34.8 32.3
Slide 17: Reconciliations of SG&A to Adjusted SG&A
Reconciliations of SG&A (GAAP) to Adjusted SG&A (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2023 2022 2023 2022 SG&A (GAAP) $ 51.7 $ 48.7 $ 100.3 $ 88.7 Research and technical expenses (GAAP) 8.0 8.2 16.8 15.5 Total SG&A (GAAP) 59.7 56
Slide 18: Reconciliations of Other (income) expense, net to Adjusted
Reconciliations of Other (income) expense, net (GAAP) to Adjusted Other (income) expense, net (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2023 2022 2023 2022 Other (income) expense, net (GAAP) $ 3.0 $ (1.6) $ (15.2) $ (3.0) Less: Gain
Slide 19: Reconciliation of Cash Flow from Operations to Free Cash Flow
Reconciliation of Cash Flow from Operations (GAAP) to Free Cash Flow (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions (unaudited) 2023 2022 2023 2022 Cash Flow from Operations $ 48.4 $ 90.5 $ 53.6 $ 114.8 Less: Capital Expenditures 21.7 29.6 47.1 57.2 Free Cash Flow $ 26.
Slide 20: Calculation of Net Debt to Adjusted EBITDA Ratio
Calculation of Net Debt to Adjusted EBITDA Ratio (Non-GAAP) In millions, except ratios (unaudited) June 30, 2023 Notes payable and current maturities of long-term debt $ 0.9 Long-term debt including finance lease obligations 1,525.5 Debt issuance costs 6.0 Total Debt $ 1,532.4 Less: Cash and cash eq
Slide 21: Calculation of Historical Net Debt Ratio
Calculation of Historical Net Debt Ratio (Non-GAAP) December 31, 2022 2023 In millions, except ratios (unaudited) 2019 2020 2021 Q1 Q2 Q3 Q4 Q1 Net Debt (1) $ 1,121.0 $ 982.7 $ 928.7 $ 976.7 $ 975.9 $ 1,011.3 $ 1,324.3 $ 1,352.3 Adjusted EBITDA(2) 396.9 397.9 422.2 435.8 439.2 457.9 452.6 437.5 Capr