Slide 1: Third Quarter 2016 Earnings Presentation
Third Quarter 2016 Earnings Presentation November 3, 2016 1
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: Agenda
Agenda 1. Quarter Highlights 2. Segment Performance 3. Pine Chemicals Industry 4. Financial Review 5. Closing Remarks 6. Q&A 3
Slide 4: Third Quarter Highlights
M (USD) Q315 Q316 Chg % Sales 256.5 252.0 (4.5) (1.8%) Income/Loss 24.7 (4.8) (29.5) (119.4%) Adj. EBITDA(1) 56.6(2) 59.6 3.0 5.3% Adj. EBITDA(1) Margin 22.1%(2) 23.7% +160 bps Third Quarter Highlights Delivered strong results in line with our expectations Posted adjusted EBITDA more than 5% hig
Slide 5: Performance Materials
Quarterly record for sales and adjusted EBITDA Increasingly stringent regulations with the roll out of 2017 model year vehicles in North America help drive revenues Trend toward larger vehicles favorably impacted product mix and enabled growth far beyond growth in vehicle demand Successful o
Slide 6: Performance Chemicals
Performance Chemicals Industrial specialties sales down 11%; even sequentially Continue to see volume and price pressure in upstream products Oilfield sales down 18%; up 5% sequentially New products gaining traction globally and in Middle East Sales to pavement applications down versus pre
Slide 7: Pine Chemicals Industry Dynamics
Pine Chemicals Industry Dynamics • Reduced global demand for CTO for pine chemicals • “Take” contracts result in inflated CTO inventories; choosing to not renew some CTO supply agreements • CTO cost structure is based on market pricing, not energy indexes; currently working with suppliers to ensure
Slide 8: Third Quarter 2016 Financial Results: Key Income Statement Metrics
Third Quarter 2016 Financial Results Key Income Statement Metrics (1) Please see appendices included at the end of this presentation for Ingevity's use of non-GAAP financial measures, definitions of those financial measures as well as the reconciliation to the nearest GAAP financial measure. (2) Inc
Slide 9: Third Quarter 2016 Financial Results: Key Balance Sheet & Cash Metrics
Third Quarter 2016 Financial Results Key Balance Sheet & Cash Metrics in millions 12/31/2015 6/30/2016 9/30/2016 Cash & cash equivalents 32.0 55.7 27.1 Restricted investment (related to capital lease) (1) - 69.1 69.4 Long term debt including capital lease obligation (2) 80.1 570.0 521.7 Net Debt(3)
Slide 10: 2016 Business Outlook and Guidance
2016 Business Outlook and Guidance Item FY16 Revenue $895M to $905M Adjusted EBITDA (1) $192M to $197M Adjusted tax rate (1) ~35% Capital expenditures $60M to $65M Free Cash Flow(2) $45M to $50M Net Debt Ratio(3) 2.0-2.25x (1) A reconciliation of Net Income to Adjusted EBITDA or Adjusted tax rate as
Slide 11: For More Information
For More Information Thank you for your interest in Ingevity! 11 Investors Dan Gallagher (843) 740-2126 Media Jack Maurer (843) 746-8242
Slide 12: Appendix
Appendix 12
Slide 13: 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 14: Reconciliation of Net Income (Loss) to Adjusted Earnings (Loss)
Reconciliation of Net Income (Loss) (GAAP) to Adjusted Earnings (Loss) (Non-GAAP) 14 Reconciliation of 2015 Pro Forma - Adjusted Earnings (Loss) (Non-GAAP)
Slide 15: Reconciliation of Net Income (Loss) to Adjusted EBITDA
15 Reconciliation of Net Income (Loss) (GAAP) to Adjusted EBITDA (Non-GAAP) Reconciliation of 2015 Pro Forma - Adjusted EBITDA (Non-GAAP)
Slide 16: Reconciliation of Segment Operating Profit to Segment EBITDA
16 Reconciliation of Segment Operating Profit (GAAP) to Segment EBITDA (Non-GAAP) Reconciliation of 2015 Pro Forma - Segment EBITDA (Non-GAAP)
Slide 17: Notes to the Unaudited Pro Forma Adjustments
Notes to the Unaudited Pro Forma Adjustments 17