Slide 1: Second Quarter 2022 Earnings Presentation
SECOND QUARTER 2022 EARNINGS PRESENTATION August 3, 2022
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 2 Consolidated financial results 3 Segment performance 4 Strategic growth investments 5 Guidance 6 Q&A 3
Slide 4: Quarter Highlights
QUARTER HIGHLIGHTS Record sales quarter; second highest adjusted EBITDA Record safety performance in first half of 2022 Strategic growth investments Investment in Nexeon Agreement to acquire Ozark Materials Appointment of two new Board members 4
Slide 5: Second Quarter (Q2) Consolidated Financial Performance
SECOND QUARTER (Q2) CONSOLIDATED FINANCIAL PERFORMANCE Q2 financials Performance highlights vs PY Record sales up 17% reflecting price increases across the company; Q2 Q2 $ in millions except percentage and EPS 2022 2021 ∆% revenue mix shift to 71% Performance Chemicals vs. 65% last year Increased
Slide 6: Q2 2022 Financial Metrics and Highlights
Q2 2022 FINANCIAL METRICS AND HIGHLIGHTS Net Sales Free cash flow (1) $ in millions Q4 $ in millions Q4 Record Q2 2022; up 17.2% vs. Solid FCF of $61 million 336 Q3 Q3 prior year enabled $49.5 million of Q2 122 share repurchases in the Growth led by Performance 51 39 Q2 Chemicals quarter 377 Q
Slide 7: Performance Chemicals
PERFORMANCE CHEMICALS Q2 Q2 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2022 2021 YEAR YEAR Performance highlights Net Sales 297.5 232.4 65.1 28.0% Engineered Polymers 53.8 44.6 9.2 20.6% Sales of $297.5 million up 28% due to price gains across the segment to 165.9 120.1 45.8 38.1% offset inflationary cos
Slide 8: Performance Materials
PERFORMANCE MATERIALS Q2 Q2 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2022 2021 YEAR YEAR Performance highlights Net Sales 122.4 126.0 (3.6) (2.9)% Sales of $122.4 million down 2.9% Segment EBITDA 55.6 61.3 (5.7) (9.3)% Sales of our automotive activated carbon products were negatively impacted by lowe
Slide 9: Nexeon Investment
NEXEON INVESTMENT Investment in Nexeon opens activated carbon pathway into battery electric vehicle market with joint development arrangement Global leader in development of next generation silicon- based anode materials Advancing silicon/carbon technology to improve battery performance Large
Slide 10: Ozark Materials: Transaction Overview
OZARK MATERIALS Transaction Overview Ingevity has reached an agreement to acquire leading pavement marking materials business, Ozark Materials Anticipate closing transaction by early Q4 2022, subject to regulatory approval and other customary closing Summary conditions Business to be included
Slide 11: Ozark Materials: Strategic Rationale
OZARK MATERIALS Strategic Rationale 1 Moves Business 6 Downstream & Closer to End 2 Customers Transaction Strengthens Existing Pavement and Adhesives Businesses Foundation Diversifies and Serves as Platform for Further Growth and Expansion from Which Product to Further Offering in Expand Core Segmen
Slide 12: Pavement Markings Industry Snapshot
PAVEMENT MARKINGS INDUSTRY SNAPSHOT Highway and Traffic Markings Technology Overview North America pavement markings industry estimated Thicker and more durable than traditional traffic paint to be $1.5B in 2022; industry should benefit from: Thermoplastics Most often used in high traffic area
Slide 13: Ozark Materials: Business Profile
OZARK MATERIALS Business Profile Business Description Strategically Located Production Facilities(2) Leading manufacturer of pavement marking materials Headquartered in Greenville, AL Specialize in waterborne traffic paints, thermoplastic All Products pavement markings, preformed thermoplast
Slide 14: Ozark Materials: Unique Fit with Growth Opportunities
OZARK MATERIALS Unique Fit with Growth Opportunities Multitude of Factors Expected to Drive Continued Growth and Expansion of Business F E D C B A Current State A B C D E F Future State A B C Increased Outlet for New Product Government Spending on Ingevity Rosin Development Infrastructure D E F Vari
Slide 15: 2022 Guidance: Reaffirming Prior Guidance
2022 GUIDANCE: REAFFIRMING PRIOR GUIDANCE FY Guidance Financial FY Guidance Continuing to raise prices to offset cost pressures metric Expanding markets in which we participate Revenue $1,525 - $1,650 Anticipate recovery in back half of year in Performance Adj. EBITDA (1) $430 - $470 Materials
Slide 16: For More Information
FOR MORE INFORMATION Investors John Nypaver, Jr. (843) 740 - 2002 Media Caroline Monahan (843) 740 - 2068 Thank you for your interest in Ingevity. 16
Slide 17: Appendix
APPENDIX 17
Slide 18: 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 19: 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) 2022 2021 2022 2021
Slide 20: 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) 2022 2021 2022 2021 Net income (loss) (GAAP) $ 59.8 $ 44.3 $ 120.6 $ 93.0 Provision (benefit) for income taxes 16.7 29.4 33.5 42.5 Inter
Slide 21: Reconciliation of Provision for Income Taxes to Adjusted Earnings
Reconciliation of Provision for Income Taxes (GAAP) to Provision for Income Taxes on Adjusted Earnings (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2022 2021 2022 2021 Adjusted EBITDA (Non-GAAP) $ 121.1 $ 117.7 $ 240.1 $ 223.1 Less: Dep
Slide 22: Calculation of Free Cash Flow
Calculation of Free Cash Flow (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions (unaudited) 2022 2021 2022 2021 Cash Flow from Operations $ 90.5 $ 65.8 $ 114.8 $ 116.9 Less: Capital Expenditures 29.6 23.9 57.2 40.9 Free Cash Flow $ 60.9 $ 41.9 $ 57.6 $ 76.0 Calculation of
Slide 23: 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, 2022 Notes payable and current maturities of long-term debt $ 0.9 Long-term debt including finance lease obligations 1,176.2 Debt issuance costs 7.0 Total Debt $ 1,184.1 Less: Cash and cash eq
Slide 24: Calculation of Historical Net Debt Ratio
Calculation of Historical Net Debt Ratio (Non-GAAP) December 31, 2021 2022 In millions, except ratios (unaudited) 2018 2019 2020 Q1 Q2 Q3 Q4 Q1 Net Debt (1) $ 610.2 $ 1,121.0 $ 974.8 $ 982.6 $ 981.8 $ 940.2 $ 928.7 $ 976.1 Adjusted EBITDA(2) 320.5 396.9 397.9 411.1 461.6 453.5 422.2 435.8 Pine Chemi