Slide 1: Second Quarter 2024 Earnings Presentation
SECOND QUARTER 2024 EARNINGS PRESENTATION August 1, 2024
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 Performance Chemicals Repositioning 3 Consolidated financial results 4 Segment performance 5 Guidance Q&A 3
Slide 4: Quarter Highlights and Updates
QUARTER HIGHLIGHTS AND UPDATES Performance Materials delivers 4th straight quarter of 50%+ EBITDA margins, with revenue growth of 9% and EBITDA growth of 28% Advanced Polymer Technologies delivers 20% EBITDA margins with its 3rd consecutive quarter of volume growth Announced necessary steps as part
Slide 5: Termination of Long-Term CTO Contract
TERMINATION OF LONG-TERM CTO CONTRACT CTO purchase requirements from Georgia Pacific ceased July 1 Termination payment of $100 million, with one payment of $50 million made on July 1; second payment due by October 15 As a result of the termination, CTO resale activity will cease other than pre
Slide 6: Consolidating All Refining to North Charleston
CONSOLIDATING ALL REFINING TO NORTH CHARLESTON Consolidating oleo-based refining to North Charleston facility to maximize asset utilization Aligns manufacturing footprint with revised view on market demand of oleo products and improves cost structure Entrance into new oleo markets slower than ex
Slide 7: Performance Chemicals Repositioning Strategy
PERFORMANCE CHEMICALS REPOSITIONING STRATEGY Products/Mix Manufacturing Optimization Other Savings Optimizing physical footprint Results in reduced exposure to Termination of long term CTO Closure of DeRidder, LA site low margin, cyclical end markets Consolidated remaining CTO based supply a
Slide 8: Second Quarter (Q2) Consolidated Financial Performance
SECOND QUARTER (Q2) CONSOLIDATED FINANCIAL PERFORMANCE GAAP Net loss of $283.7 million primarily due to Performance Chemicals non-cash goodwill impairment charge of $349.1 million Performance highlights Q2 financials (1) Sales down 19% primarily driven by lower sales in Industrial vs PY $ in million
Slide 9: Q2 2024 Financial Metrics and Highlights
Q2 2024 FINANCIAL METRICS AND HIGHLIGHTS Net Sales by Product Line Free cash flow (1) $ in millions Performance Materials Industrial Specialties Road Technologies FCF of $12 million and Road Technologies Advanced Polymers Technologies 30% Performance Materials includes $26 million become larger
Slide 10: Performance Materials
PERFORMANCE MATERIALS Q2 Q2 $ % $ IN MILLIONS VS. PRIOR VS. PRIOR 2024 2023 YEAR YEAR Performance highlights Net Sales 157.2 144.6 12.6 8.7% Sales of $157.2 million up 9% benefited from increased pricing and Segment EBITDA 82.2 64.2 18.0 28.0% automotive carbon volume Segment EBITDA Margin 52.3% 44.
Slide 11: Advanced Polymer Technologies
ADVANCED POLYMER TECHNOLOGIES Q2 Q2 $ % $ IN MILLIONS 2024 2023 VS. PRIOR VS. PRIOR Performance highlights YEAR YEAR Net Sales 47.9 53.2 (5.3) (10.0)% Sales of $47.9 million down 10% as lower pricing offset increased volumes Segment EBITDA 9.8 11.6 (1.8) (15.5)% Third consecutive quarter of volume
Slide 12: Performance Chemicals
PERFORMANCE CHEMICALS $ IN MILLIONS Q2 Q2 $ VS. PRIOR % VS. PRIOR Performance highlights 2024 2023 YEAR YEAR Sales of $185.5 million down 35% due primarily to the segment repositioning Net Sales 185.5 284.0 (98.5) (34.7)% INDUSTRIAL SPECIALTIES: Sales down 61% due to lower volumes driven primarily
Slide 13: 2024 Guidance and Outlook
2024 GUIDANCE AND OUTLOOK FY Guidance(1) Financial metric FY Guidance 2024 Uncertainties: Timing and pace of global industrial recovery Revenue $1.40 - $1.50 billion Geopolitical risks Adj. EBITDA(2) $350 - $360 million U.S. Presidential election year dynamics Capital expenditures $90– $100 mi
Slide 14: 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. 14
Slide 15: Appendix
APPENDIX 15
Slide 16: 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 on the follo
Slide 17: 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) 2024 2023 2024 2023
Slide 18: Restructuring and other (income) charges
Restructuring and other (income) charges Three Months Ended June 30, Six Months Ended June 30, In millions 2024 2023 2024 2023 Work force reductions and other $ — $ 7.0 $ — $ 10.1 Performance Chemicals' repositioning 10.0 — 72.3 — Restructuring charges (1) $ 10.0 $ 7.0 $ 72.3 $ 10.1 Alternative feed
Slide 19: Acquisition and other-related (income) charges
Acquisition and other-related (income) charges Three Months Ended June 30, Six Months Ended June 30, In millions 2024 2023 2024 2023 Legal and professional service fees $ (0.2) $ 1.8 $ 0.1 $ 3.7 Acquisition-related (income) costs $ (0.2) $ 1.8 $ 0.1 $ 3.7 (1) Inventory fair value step-up amortizatio
Slide 20: Reconciliation of Net Income and Diluted EPS (revised Q1 2024)
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) We revised our March 31, 2024 non-GAAP Adjusted earnings (loss) calculation to remove previous adjustments of $2.5
Slide 21: 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) 2024 2023 2024 2023 Net income (loss) (GAAP) $ (283.7) $ 35.5 $ (339.7) $ 86.2 Provision (benefit) for income taxes (50.9) 12.2 (66.8) 2
Slide 22: Reconciliation of Net Income to Adjusted EBITDA (revised)
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) We revised our December 31, 2023 and March 31, 2024 non-GAAP Adjusted EBITDA calculation to remove previous adjustments of $19.7 million and $2.5 million, respectively, related to inventory lower of cost or market charges associated w
Slide 23: Reconciliation of Gross Profit to Adjusted Gross Profit
Reconciliation of Gross Profit (GAAP) to Adjusted Gross Profit (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2024 2023 2024 2023 Gross Profit (GAAP) $ 123.2 $ 153.0 $ 222.9 $ 283.4 Plus: Depreciation and amortization 17.3 16.5 34.9 33.8
Slide 24: Reconciliation of SG&A to Adjusted SG&A
Reconciliation of SG&A (GAAP) to Adjusted SG&A (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2024 2023 2024 2023 SG&A (GAAP) $ 41.4 $ 51.7 $ 88.6 $ 100.3 Research and technical expenses (GAAP) 7.3 8.0 14.1 16.8 Total SG&A (GAAP) 48.7 59.
Slide 25: Reconciliation of Other (income) expense, net to Adjusted
Reconciliation of Other (income) expense, net (GAAP) to Adjusted Other (income) expense, net (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except percentages (unaudited) 2024 2023 2024 2023 Other (income) expense, net (GAAP) $ 23.9 $ 3.0 $ 56.1 $ (15.2) Less: (Gain) l
Slide 26: 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 June 30, Six Months Ended June 30, In millions (unaudited) 2024 2023 2024 2023 Cash Flow from Operations (GAAP) $ 29.7 $ 48.4 $ 17.6 $ 53.7 Less: Capital Expenditures (GAAP) 18.1 21.7 34.7 47.1 Free Ca
Slide 27: 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, 2024 Notes payable and current maturities of long-term debt $ 103.0 Long-term debt including finance lease obligations 1,401.0 Debt issuance costs 4.8 Total Debt $ 1,508.8 Less: Cash and cash
Slide 28: Calculation of Net Debt to Adjusted EBITDA Ratio (revised March 2024)
Calculation of Net Debt to Adjusted EBITDA Ratio (Non-GAAP) We revised our March 31, 2024 non-GAAP Net debt ratio calculation to remove the previous adjustments of $2.5 million from the three months ended March 31, 2024 and $19.7 million from the three months ended December 31, 2023, from the last t
Slide 29: Calculation of Net Debt to Adjusted EBITDA Ratio (revised December 2023)
Calculation of Net Debt to Adjusted EBITDA Ratio (Non-GAAP) We revised our December 31, 2023 non-GAAP Net debt ratio calculation to remove the previous adjustment of $19.7 million from the three months ended December 31, 2023, from the last twelve months Adjusted EBITDA related to inventory lower of