Slide 1: Fourth Quarter 2020 Earnings Presentation
Fourth Quarter 2020 Earnings Presentation February 11, 2021 PURIFY I PROTECT I ENHANCE
Slide 2: Disclaimer
Disclaimer: This presentation contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,
Slide 3: Today's Agenda
Today’s Agenda 1 Fourth Quarter and Full Year Highlights 2 Segment Performance 3 2020 Achievements and Ingevity 2.0 Strategy 4 Growth Initiatives 5 Financial Review 6 Outlook and Guidance 7 Q&A 3
Slide 4: Fourth Quarter and Full Year 2020 Results
Fourth Quarter and Full Year 2020 Results % % Q4 Full Year $ in millions 2020 Vs. Prior 2020 % Prior Vs. Q4 Performance Highlights Year Period Year Revenues up 7% Net Sales 325.6 7.3% 1,216.1 (5.9)% Despite challenging conditions, strong results Adjusted EBITDA(1) 110.9 19.8 397.9 0.3% driven by
Slide 5: Performance Chemicals
Performance Chemicals % % Q4 Full Year $ in millions 2020 Vs. Prior 2020 Vs. Prior % Q4 Performance Highlights Year Period Year Net Sales Revenue of $165 million; down 6% 164.9 (5.9)% 706.1 (12.0)% Engineered Polymers 34.5 10.6% 127.7 4.6% Engineered Polymers: Volumes up due to improved demand i
Slide 6: Performance Materials
Performance Materials % % Q4 Full Year $ in millions 2020 Vs. Prior Year Period 2020 Vs. % Prior Year Q4 Performance Highlights Net Sales Record revenues of $161 million; up 25% due to 160.7 25.4% 510.0 4.0% rebound in global automotive production Automotive 153.2 26.8% 477.7 5.0% Production in
Slide 7: 2020 Accomplishments
2020 Accomplishments Financial Performance Performance Chemicals Performance Materials Cost reduction initiatives Maintained solid performance Delivered another year of resulted in savings of $35M for in Pavement Technologies record revenue and the year and $12M on an earnings in Performance annuali
Slide 8: Ingevity 2.0 Strategy: Maximize Value
Ingevity 2.0 Strategy: Maximize Value Grow The Enterprise Drive Business Excellence Identify and enter high-margin carbon markets Increase efficiency and customer experience as alternatives to automotive through - Renewable natural gas / methane capture - Digital transformation - Human health - Supp
Slide 9: Ingevity 2.0 Growth Initiatives
Ingevity 2.0 Growth Initiatives Biomethane / Renewable Gas Alternative Feedstocks Renewable energy mandates coupled with Expand our market focus and product Market Market portfolio by broadening the raw material reduced emissions drive demand for bio- Opportunity Opportunity feedstocks beyond legacy
Slide 10: Fourth Quarter 2020 Financial Summary
Fourth Quarter 2020 Financial Summary Capital Structure Working Capital Management $ in millions $ in millions Current Pricing Amount $500m Revolver L+150 $0.0 Term Loan L+150 351.6 Inventory, net $189 $204 $166mm Interest Rate Swap (1) 1.97% Senior Notes 3.875% & 4.5% 850.0 Accounts receivable, net
Slide 11: 2021 Guidance and Outlook
2021 Guidance and Outlook ($M) FY 2021 Item Guidance Revenue $1,250 - $1,300 Adjusted EBITDA(1) $400 - $420 Capital expenditures $100 – 120 Free Cash Flow(1) $200 Net Debt Ratio(1) 2.0x – 2.5x Outlook Assumptions Uncertainty around: Continued impacts of COVID-19 Potential impacts of tightness ac
Slide 12: Well Positioned for Value Creation
Well Positioned for Value Creation Developing and Deep and Market-leading Strong balance Experienced delivering high- longstanding global specialty sheet and cash flow and proven performance customer chemical company generation management team solutions relationships • Well-positioned to • Brings ex
Slide 13: For More Information
For More Information Investors Jack Maurer (843) 746-8242 Media Amy Chiconas (843) 746-8197 Thank you for your interest in Ingevity! 13
Slide 14: Appendix
Appendix 14
Slide 15: Fourth Quarter 2020 Financial Results
Fourth Quarter 2020 Financial Results Q4 Q4 vs PY FY FY vs PY $ in millions except EPS 2020 2019 ∆% 2020 2019 ∆% Consolidated Income Statement: Net sales $325.6 $303.4 7.3% $1,216.1 $1,292.9 (5.9)% Gross Profit $127.4 $111.0 14.8% $465.5 $482.0 (3.4)% % Margin 39.1% 36.6% +250 bps 38.3% 37.3% +100 b
Slide 16: 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 17: Reconciliation of Net Income (GAAP) to Adjusted Earnings (Non-GAAP)
Reconciliation of Net Income (Loss) (GAAP) to Adjusted Earnings (Loss) (Non-GAAP) Three Months Ended Twelve Months Ended December, 31 December 31, In millions, except per data (unaudited) 2020 2019 2020 2019 Net income (loss) (GAAP) $ 50.8 $ 44.3 $ 186.2 $ 183.7 Restructuring and other (income) char
Slide 18: Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP)
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) Three Months Ended Twelve Months Ended December, 31 December 31, In millions (unaudited) 2020 2019 2020 2019 Net income (loss) (GAAP) $ 50.8 $ 44.3 $ 186.2 $ 183.7 Provision (benefit) for income taxes 15.6 10.8 48.9 44.2 Interest expe
Slide 19: Calculation of Total Debt to Net Income Ratio to Net Debt Ratio
Calculation of Total Debt to Net Income (Loss) Ratio (GAAP) to Net Debt to Adjusted EBITDA Ratio (Non-GAAP) In millions, except ratios (unaudited) December 31, 2020 Notes payable and current maturities of long-term debt $ 26.0 Long-term debt including finance lease obligations 1,267.4 Debt issuance
Slide 20: Calculation of Historical Net Debt Ratio (Non-GAAP)
Calculation of Historical Net Debt Ratio (Non-GAAP) slid 2016 2017 2018 In millions, except ratios (unaudited) Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Net Debt(1) $ 445.2 $ 424.0 $ 391.7 $ 405.1 $ 370.2 $ 314.0 $ 295.8 $ 628.7 $ 600.2 $ 627.5 $ 610.2 Adjusted EBITDA(2) 58.4 59.6 36.0 50.2 67.2 72.7 52.6 67
Slide 21: 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 Twelve Months Ended In millions (unaudited) December, 31 December 31, 2020 2019 2020 2019 SG&A (GAAP) $ 41.5 $ 40.8 $ 149.4 $ 163.1 Intangible amortization related to acquisitions 7.9 8.1 31.8 27.1