Slide 1: Third Quarter 2019 Earnings Presentation
PURIFY I PROTECT I ENHANCE Third Quarter 2019 Earnings Presentation October 24, 2019
Slide 2: Disclaimer
Disclaimer: This presentation contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward looking statements generally include the words “may,” “could,” “should,” “believes,” “plans,” “intends,” “targets,” “will,” “expects,” “suggest
Slide 3: Today's Agenda
Today’s Agenda ▪ Third Quarter Highlights ▪ Segment Performance ▪ Financial Review ▪ Revised Guidance ▪ Closing Remarks ▪ Q&A 3
Slide 4: Third Quarter 2019 Results
Third Quarter 2019 Results vs Prior Year $ in millions 3Q 2019 3Q 2018 ∆ ∆% Performance Highlights Net Sales 359.9 311.2 48.7 15.6% Adjusted EBITDA(1) 114.0 90.7 23.3 25.7% ▪ Strong quarter in line with expectations given challenging macroeconomic Adjusted EBITDA(1) 31.7% 29.1% +260 bps headwinds Ma
Slide 5: Performance Chemicals
Performance Chemicals vs Prior Year $ in millions 3Q 2019 3Q 2018 ∆ ∆% Performance Highlights Net Sales 229.7 214.9 14.8 6.9% ▪ Revenue increase of 7% driven by addition of Industrial Specialties 99.9 114.3 (14.4) (12.6)% Capa (pro forma(1) revenue down 11%) Oilfield Technologies 27.6 32.5 (4.9) (15
Slide 6: Performance Materials
Performance Materials vs Prior Year $ in millions 3Q 2019 3Q 2018 ∆ ∆% Performance Highlights Net Sales 130.2 96.3 33.9 35.2% ▪ Record revenue increase of 35% Automotive Technologies 120.5 86.6 33.9 39.1% Process Purification 9.7 9.7 — —% ▪ Accelerated sales in China due to China 6 standard, despite
Slide 7: Third Quarter 2019 Financial Summary
Third Quarter 2019 Financial Summary Key Operating Metrics Q3 QTD Q3 QTD vs PY Q3 YTD Q3 YTD vs PY $ in millions except EPS 2019 2018 2019 2018 ∆% ∆% Consolidated Income Statement: Net sales $359.9 $311.2 15.6% $989.5 $855.0 15.7% Gross Profit $139.5 $118.6 17.6% $371.0 $319.2 16.2% % Margin 38.8% 3
Slide 8: Third Quarter 2019 Financial Summary: Balance Sheet Snapshot
Third Quarter 2019 Financial Summary Balance Sheet Snapshot Capital Structure (as of 9/30/19) Working Capital Management $ in millions Current $ in millions Pricing Amount $750m Revolver L+150 $193.0 Term Loans L+100-150 745.3 Inventory, net $210 $221 $141m Interest Rate Swap (1) 1.41% Senior Notes
Slide 9: Revised 2019 Guidance
Revised 2019 Guidance ($M) Original FY19 Revised FY19 Item Guidance Guidance Revenue $1,300 to $1,360 $1,280 to $1,300 Adjusted EBITDA(1) $390 to $410 $390 to $400 Adjusted tax rate(1) 21 – 23% 21 - 23% Capital expenditures $110-$120 $110-$120 Free Cash Flow(2) $180-$190 $180-$190 Net Debt Ratio(3)
Slide 10: For More Information
PURIFY │ PROTECT│ENHANCE For More Information Investors Dan Gallagher (843) 740-2126 Media Jack Maurer (843) 746-8242 Thank you for your interest in Ingevity! 10
Slide 11: Appendix
Appendix 11
Slide 12: Non-GAAP Financial Measures
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 accor
Slide 13: Reconciliation of Net Income (Loss) (GAAP) to Adjusted Earnings (Loss) (Non-GAAP)
Reconciliation of Net Income (Loss) (GAAP) to Adjusted Earnings (Loss) (Non-GAAP) Three Months Ended Nine Months Ended September 30, September 30, In millions, except per data (unaudited) 2019 2018 2019 2018 Net income (loss) $ 59.9 $ 51.7 $ 139.4 $ 139.7 Less: Net income (loss) attributable to nonc
Slide 14: Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) Three Months Ended Nine Months Ended September 30, September 30, In millions (unaudited) 2019 2018 2019 2018 Net income (loss) (GAAP) $ 59.9 $ 51.7 $ 139.4 $ 139.7 Provision (benefit) for income taxes 17.5 16.4 33.4 38.5 Interest expe
Slide 15: Reconciliation of SG&A (GAAP) to Core SG&A (Non-GAAP)
Reconciliation of Selling, General and Admin (SG&A) (GAAP) to Core SG&A (Non-GAAP) Three Months Ended Nine Months Ended In millions (unaudited) September 30, September 30, 2019 2018 2019 2018 SG&A (GAAP) $ 40.7 $ 34.5 $ 122.3 $ 96.5 Intangible amortization expense related to acquisitions 6.9 3.2 19.
Slide 16: Calculation of Trading Working Capital to LTM Pro Forma Net Sales
Calculation of Trading Working Capital to LTM Pro Forma Net Sales In millions, except percentages (unaudited) Net sales Twelve months ended December 31, 2018 $ 1,133.6 Nine months ended September 30, 2018 (855.0) Nine months ended September 30, 2019 989.5 Net sales - LTM as of September 30, 2019 1,2
Slide 17: Supplemental Historical Quarterly Pro Forma Financial Information
Supplemental Historical Quarterly Pro Forma Financial Information The following unaudited pro forma condensed combined financial information has been prepared to also illustrate the effect of the acquisition of the Capa™ Caprolactone division ("Caprolactone Business") of Perstorp Holding AB (the "Se
Slide 18: Reconciliation of Condensed Statement of Operations to Pro Forma
Reconciliation of Condensed Statement of Operations to Pro Forma Condensed Statement of Operations Quarter Ended September 30, 2018 Historical Caprolactone Pro In millions, except per share data Ingevity Business 1 Forma Net sales $ 311.2 $ 43.0 $ 354.2 Cost of sales 192.6 25.4 218.0 Gross profit 11
Slide 19: Reconciliation of Net Income (Loss) to Pro Forma Adjusted EBITDA
Reconciliation of Net Income (Loss) to Pro Forma Adjusted EBITDA Quarter Ended September 30, 2018 Historical Pro Forma In millions, except percentages (unaudited) Ingevity Adjustment 1 Pro Forma Net income (loss) $ 51.7 $ 4.3 $ 56.0 Provision (benefit) for income taxes 16.4 0.6 17.0 Interest expense