Slide 1: First Quarter 2023 Earnings Presentation
FIRST QUARTER 2023 EARNINGS PRESENTATION May 4, 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 Price increases offset volume weakness due to slower than expected recovery in China and continued customer destocking Advanced Polymer Technologies formerly Engineered Polymers, is now a reportable segment separate from Performance Chemicals Beginning in April, crude
Slide 5: First Quarter (Q1) Consolidated Financial Performance
FIRST QUARTER (Q1) CONSOLIDATED FINANCIAL PERFORMANCE Q1 financials (1) Performance highlights $ in millions except percentage and EPS Q1 Q1 vs PY Sales up ~3% reflecting increased pricing across all segments and the 2023 2022 ∆% inclusion of Ozark, partially offset by weaker volumes $392.6 $382.8 2
Slide 6: Q1 2023 Financial Metrics and Highlights
Q1 2023 FINANCIAL METRICS AND HIGHLIGHTS Net Sales Free cash flow (1) $ in millions $ in millions Q4 Sales for Q1 2023 set a new FCF of negative Q4 $20.2 million Q1 record for the company Q3 Q3 383 with higher prices offsetting 122 reflects lower Q2 lower volumes Q2 earnings and 51 39 Q1 49 Q1 s
Slide 7: Performance Chemicals
PERFORMANCE CHEMICALS Q1 Q1 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2023 2022 YEAR YEAR Performance highlights Net Sales 185.6 172.6 13.0 7.5% Industrial Specialties 139.8 144.7 (4.9) (3.4)% Sales of $185.6 million up 8% due to higher pricing across the segment and the addition of Ozark, partially off
Slide 8: Advanced Polymer Technologies
ADVANCED POLYMER TECHNOLOGIES Q1 Q1 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2023 2022 YEAR YEAR Performance highlights Net Sales 65.6 61.8 3.8 6.1% Sales of $65.6 million up 6% as higher prices more than offset volume Segment EBITDA 13.8 10.3 3.5 34.0% declines Segment EBITDA Margin 21.0% 16.7% 430 bp
Slide 9: Performance Materials
PERFORMANCE MATERIALS Q1 Q1 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2023 2022 YEAR YEAR Performance highlights Net Sales 141.4 148.4 (7.0) (4.7)% Sales of $141.4 million down 5% due to lower volumes attributed Segment EBITDA 69.8 77.9 (8.1) (10.4)% primarily to the slower China recovery, partially off
Slide 10: 2023 Guidance and Outlook
2023 GUIDANCE AND OUTLOOK Opportunities: FY Guidance Financial Accelerate AFA production and new market FY Guidance metric development Revenue $1.75 - $1.95 billion Pace of automotive production picks up China market has strong recovery Adj. EBITDA (1) $450 - $480 million Infrastructure fund
Slide 11: Investor Day May 22, 2023
INVESTOR DAY May 22, 2023 11
Slide 12: Thank you for your interest in Ingevity
FOR MORE INFORMATION Investors John E. Nypaver, Jr. (843) 740 - 2002 Media Caroline Monahan (843) 740 - 2068 Thank you for your interest in Ingevity. 12
Slide 13: Appendix
APPENDIX 13
Slide 14: 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 15: 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 March 31, In millions, except per data (unaudited) 2023 2022 Net income (loss) (GAAP) $ 50.7 $ 6
Slide 16: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) Three Months Ended March 31, In millions, except percentages (unaudited) 2023 2022 Net income (loss) (GAAP) $ 50.7 $ 60.8 Provision (benefit) for income taxes 13.4 16.8 Interest expense, net 19.6 10.7 Depreciation and amortization 31.
Slide 17: Reconciliation of Gross Profit to Adjusted Gross Profit
Reconciliation of Gross Profit (GAAP) to Adjusted Gross Profit (Non-GAAP) Three Months Ended March 31, In millions, except percentages (unaudited) 2023 2022 Gross Profit (GAAP) $ 130.4 $ 137.8 Plus: Depreciation and amortization 17.3 16.6 Inventory fair value step-up amortization 0.8 — Adjusted gros
Slide 18: Reconciliations of SG&A to Adjusted SG&A
Reconciliations of SG&A (GAAP) to Adjusted SG&A (Non-GAAP) Three Months Ended March 31, In millions, except percentages (unaudited) 2023 2022 SG&A (GAAP) $ 48.6 $ 40.0 Research and technical expenses (GAAP) 8.8 7.3 Total SG&A (GAAP) 57.4 47.3 Less: Depreciation and amortization 12.7 10.4 Adjusted SG
Slide 19: 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 March 31, In millions, except percentages (unaudited) 2023 2022 Other (income) expense, net (GAAP) $ (18.2) $ (1.4) Less: Gain on strategic investment (19.2) — Depreciation and
Slide 20: 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 March 31, In millions (unaudited) 2023 2022 Cash Flow from Operations $ 5.2 $ 24.3 Less: Capital Expenditures 25.4 27.6 Free Cash Flow $ (20.2) $ (3.3) 2018 2019 In millions (unaudited) Q1 Q2 Q3 Q4 Q1
Slide 21: Calculation of Net Debt to Adjusted EBITDA Ratio
Calculation of Net Debt to Adjusted EBITDA Ratio (Non-GAAP) In millions, except ratios (unaudited) March 31, 2023 Notes payable and current maturities of long-term debt $ 0.9 Long-term debt including finance lease obligations 1,502.5 Debt issuance costs 6.2 Total Debt $ 1,509.6 Less: Cash and cash e
Slide 22: Calculation of Historical Net Debt Ratio
Calculation of Historical Net Debt Ratio (Non-GAAP) December 31, 2022 In millions, except ratios (unaudited) 2019 2020 2021 Q1 Q2 Q3 Q4 Net Debt (1) $ 1,121.0 $ 982.7 $ 928.7 $ 976.7 $ 975.9 $ 1,011.3 $ 1,324.3 Adjusted EBITDA(2) 396.9 397.9 422.2 435.8 439.2 457.9 452.6 Caprolactone Pro Forma (3) 5