Slide 1: Fourth Quarter and Full Year 2023 Earnings Presentation
FOURTH QUARTER AND FULL YEAR 2023 EARNINGS PRESENTATION February 22, 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 Full year summary 2 Consolidated financial results 3 Segment performance 4 Guidance 5 Q&A 3
Slide 4: Full Year Summary
FULL YEAR SUMMARY Performance Materials posted record revenue and EBITDA as global auto production rebounded and consumers showed a preference for hybrids vs. fully electric vehicles Advanced Polymer Technologies (APT) posted record EBITDA on significantly improved EBITDA margins, despite volume dec
Slide 5: Fourth Quarter and Full Year Consolidated Financial Performance
FOURTH QUARTER (Q4) AND FULL YEAR (FY) CONSOLIDATED FINANCIAL PERFORMANCE GAAP Net loss of $116.8 million in Q4 and $5.4 million for FY primarily due to $120.2 million and $138.1 million of Performance Chemicals repositioning charges, respectively Q4 and FY financials Performance highlights vs PY vs
Slide 6: FY 2023 Financial Metrics and Summary
FY 2023 FINANCIAL METRICS AND SUMMARY Net Sales Free Cash Flow (FCF) (1) $ in millions 1,692 $ in millions 1,668 Note that due to the 270.3 Generated FCF of 15% 12% repositioning of Performance 170.9 $95.3 million despite 1,293 1,392 189.5 Chemicals, the segment will 160.9 more than $150 million
Slide 7: Performance Materials
PERFORMANCE MATERIALS % % Q4 $ IN MILLIONS 2023 VS. PRIOR YEAR PERIOD FULL YEAR 2023 VS. PRIOR Performance summary YEAR Net Sales 152.8 15.1% 586.0 6.8% Q4 Sales of $152.8 million up 15% vs. prior year and record FY sales of $586.0 million up 7% Segment EBITDA 78.1 35.8% 286.6 13.6% Q4 sales up as
Slide 8: Advanced Polymer Technologies
ADVANCED POLYMER TECHNOLOGIES Q4 % % $ IN MILLIONS FULL YEAR VS. PRIOR 2023 YEAR PERIOD 2023 VS. PRIOR YEAR Performance summary Net Sales 42.4 (28.9)% 204.0 (16.6)% Q4 Sales of $42.4 million down 29% and FY sales of $204 million down 17% Segment EBITDA 7.9 (45.9)% 44.5 11.3% Q4 and FY sales were n
Slide 9: Performance Chemicals
Performance summary PERFORMANCE CHEMICALS Q4 Sales of $176.5 million down 8% and FY sales of $902.1 million up 3% ROAD TECHNOLOGIES: Q4 sales up 13% as volumes reflected increased Q4 % % technology adoption; Record sales for the year were up over 53% as the legacy $ IN MILLIONS FULL YEAR 2023 VS.
Slide 10: 2024 Guidance and Outlook
2024 GUIDANCE AND OUTLOOK FY Guidance Financial metric FY Guidance 2024 Macro Uncertainties Revenue $1.40 - $1.55 billion Timing and pace of global economic recovery Geopolitical risks Adj. EBITDA (2) $365 - $390 million U.S. Presidential election year dynamics Capital expenditures $90– $110 m
Slide 11: Thank you for your interest in Ingevity
FOR MORE INFORMATION Investors John Nypaver, Jr. (843) 740 - 2002 Media Caroline Monahan (843) 740 - 2068 Thank you for your interest in Ingevity. 11
Slide 12: Appendix
APPENDIX 12
Slide 13: Non-GAAP financial measures definitions
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 14: 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 December 31, Twelve Months Ended December 31, In millions, except per data (unaudited) 2023 2022
Slide 15: Reconciliation of Net Income and Diluted EPS to Adjusted Earnings (footnotes)
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) (4) Due to the DeRidder Plant closure, as noted in footnote 1 above, and the corresponding reduced CTO refining cap
Slide 16: Restructuring and other (income) charges
Restructuring and other (income) charges Three Months Ended December 31, Twelve Months Ended December 31, In millions 2023 2022 2023 2022 Work force reductions and other $ 0.9 $ — $ 12.5 $ — Performance Chemicals' repositioning 113.1 — 113.1 — Restructuring charges (1) $ 114.0 $ — $ 125.6 $ — Altern
Slide 17: Acquisition and other-related (income) charges
Acquisition and other-related (income) charges Three Months Ended December 31, Twelve Months Ended December 31, In millions 2023 2022 2023 2022 Legal and professional service fees $ (0.2) $ 3.1 $ 3.6 $ 5.0 Acquisition-related (income) costs $ (0.2) $ 3.1 $ 3.6 $ 5.0 Inventory fair value step-up amor
Slide 18: Reconciliation of Net Income to Adjusted EBITDA
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) Three Months Ended December 31, Twelve Months Ended December 31, In millions, except percentages (unaudited) 2023 2022 2023 2022 Net income (loss) (GAAP) $ (116.8) $ 15.6 $ (5.4) $ 211.6 Interest expense, net 22.7 17.0 87.0 54.3 Provi
Slide 19: Reconciliation of Gross Profit to Adjusted Gross Profit
Reconciliations of Gross Profit (GAAP) to Adjusted Gross Profit (Non-GAAP), SGA (GAAP) to Adjusted SG&A (Non-GAAP) and Other (income) expense, net (GAAP) to Adjusted Other (income) expense, net (Non-GAAP) Three Months Ended December 31, Twelve Months Ended December 31, In millions, except percentage
Slide 20: Reconciliation of SG&A to Adjusted SG&A
Reconciliations of Gross Profit (GAAP) to Adjusted Gross Profit (Non-GAAP), SGA (GAAP) to Adjusted SG&A (Non-GAAP) and Other (income) expense, net (GAAP) to Adjusted Other (income) expense, net (Non-GAAP) Three Months Ended December 31, Twelve Months Ended December 31, In millions, except percentage
Slide 21: Reconciliation of Other (income) expense, net
Reconciliations of Gross Profit (GAAP) to Adjusted Gross Profit (Non-GAAP), SGA (GAAP) to Adjusted SG&A (Non-GAAP) and Other (income) expense, net (GAAP) to Adjusted Other (income) expense, net (Non-GAAP) Three Months Ended December 31, Twelve Months Ended December 31, In millions, except percentage
Slide 22: Reconciliation of Provision for Income Taxes
Reconciliation of Provision for Income Taxes (GAAP) to Provision for Income Taxes on Adjusted Earnings (Non-GAAP) Three Months Ended December 31, Twelve Months Ended December 31, In millions, except percentages (unaudited) 2023 2022 2023 2022 Adjusted EBITDA (Non-GAAP) $ 61.8 $ 74.3 $ 396.8 $ 452.6
Slide 23: Performance Chemicals' Repositioning Charges
Performance Chemicals’ Repositioning Charges Three Months Ended December 31, Twelve Months Ended December 31, In millions 2023 2022 2023 2022 Performance Chemicals restructuring and other (income) charges, net (1) $ 124.5 $ 1.6 $ 164.2 $ 7.0 Performance Chemicals repositioning impact on Advanced Pol
Slide 24: 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 December 31, Twelve Months Ended December 31, In millions (unaudited) 2023 2022 2023 2022 Cash Flow from Operations (GAAP) $ 44.6 $ 98.5 $ 205.1 $ 313.4 Less: Capital Expenditures (GAAP) 29.2 49.2 109.
Slide 25: Calculation of Net Debt to Adjusted EBITDA Ratio
Calculation of Net Debt to Adjusted EBITDA Ratio (Non-GAAP) In millions, except ratios (unaudited) December 31, 2023 December 31, 2022 Notes payable and current maturities of long-term debt $ 84.4 $ 0.9 Long-term debt including finance lease obligations 1,382.8 1,472.5 Debt issuance costs 5.3 6.5 To
Slide 26: Calculation of Historical Net Debt Ratio
Calculation of Historical Net Debt Ratio (Non-GAAP) December 31, In millions, except ratios (unaudited) 2019 2020 2021 2022 Net Debt (Non-GAAP) (1) $ 1,121.0 $ 982.7 $ 928.2 $ 1,324.3 Adjusted EBITDA(2) 396.9 397.9 422.2 452.6 Caprolactone Pro Forma (3) 5.5 — — — LTM Pro Forma Adjusted EBITDA (Non-G