Ingevity Corporation · NYSE:NGVT
Ingevity — Ingevity Oilfield Technologies and Industrial Specialties Webinar (June 2020)
33 slides from Ingevity's conference presentation, Jun 11, 2020
Slide 1: Oilfield Technologies and Industrial Specialties
Oilfield Technologies and Industrial Specialties June 11, 2020 Mike Smith, EVP & President, Performance Chemicals Nick Kob, VP, Oilfield and Lubricant Technologies Rich White, VP, Industrial Specialties 1
Slide 2: Disclaimer
Disclaimer: This presentation contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,
Slide 3: Strong, Experienced Business Leadership
Strong, Experienced Business Leadership Mike Smith Nick Kob Rich White Executive Vice Vice President, Vice President, President and Oilfield & Lubricant Industrial Specialties President, Technologies Performance Chemicals ▪ Joined Ingevity in 2016 ▪ Joined Ingevity in 2014 ▪ Joined Ingevity in 2019
Slide 4: Company Overview
Company Overview Performance Performance Chemicals Materials Carbon Pavement Oilfield Industrial Engineered Technologies Technologies Technologies Specialties Polymers 2019 Sales $491 million $183 million $111 million $386 million $122 million(1) 2019 Segment $213 million $183 million EBITDA #1 in p
Slide 5: Pine Chemicals Value Chain
Pine Chemicals Value Chain Enhancing Value Through Derivatization Derivatives Intermediates End Uses Renewable forests Tall Oil Fatty Acid Specialty ▪ Pavement ▪ Oilfield Derivatization ▪ Lubricants Tall Oil Rosin Biorefinery Specialty ▪ Adhesives ▪ Inks Biorefinery ▪ Paper size Derivatization ▪ Rub
Slide 6: Strategic Focus on High Value-Added Products and Markets
Strategic Focus on High Value-Added Products and Markets Ingevity Business Models Across the Value Chain Basic materials Essential ingredients Technology partner ▪ Tall oil fatty acid (TOFA) ▪ Oil well service ▪ Lubricants ▪ Activated carbon ▪ Tall oil rosin (TOR) additives ▪ Adhesives ▪ Pavement te
Slide 7: Oilfield Technologies
Oilfield Technologies 7
Slide 8: Business Overview – Oilfield Technologies
Business Overview – Oilfield Technologies Business Description Sales ($M) 125 $114 $111 Specialty intermediates and TOFA used in drilling, 100 production and transportation of crude oil $78 $78 75 $59 ▪ Emulsifiers for manufacture of oil-based muds 50 ▪ Rheology modifiers and wetting agents for used
Slide 9: Relationships Across the Value Chain
Relationships Across the Value Chain Focused Upstream With Strong Relationships Throughout UPSTREAM DOWNSTREAM DRILLING STIMULATION PRODUCTION FUEL ADDITIVE Our drilling and production chemical additive products are used in each step of the value chain to help customers develop tailored, better-perf
Slide 10: Products for Every Step in the Value Chain
Products for Every Step in the Value Chain Adding Value From Drilling to Transportation DRILLING UPSTREAM EnvaMul® EnvaMod® EnvaWet® ▪ Drilling fluid emulsifier ▪ Rheology modifier ▪ Wetting agent ▪ Extends mud life ▪ Increases suspension ▪ Enhances dispersion ▪ Minimizes fluid loss ▪ Aids in cuttin
Slide 11: Oilfield Technologies Strategies
Oilfield Technologies Strategies ▪ Grow specialty additives based on performance and cost Market ▪ Partner with service companies Development ▪ Leverage technical service to guarantee product success ▪ Continue to drive growth in production chemicals Innovation ▪ Accelerate growth in stimulation ▪ P
Slide 12: Oilfield Technologies Strategies
Oilfield Technologies Strategies ▪ Grow specialty additives based on performance and cost Market ▪ Partner with service companies Development ▪ Leverage technical service to guarantee product success ▪ Continue to drive growth in production chemicals Innovation ▪ Accelerate growth in stimulation ▪ P
Slide 13: Market Development
Market Development Tenax® Specialty TOFA Derivative to Enable Enhanced Corrosion Protection Challenge Shale wells deplete quickly and as such, the produced water-to-oil ratio increases, driving the need for corrosion protection that is also water dispersible. Benefits ▪ Performs at lower dosages ▪ I
Slide 14: Oilfield Technologies Strategies
Oilfield Technologies Strategies ▪ Grow specialty additives based on performance and cost Market ▪ Partner with service companies Development ▪ Leverage technical service to guarantee product success ▪ Continue to drive growth in production chemicals Innovation ▪ Accelerate growth in stimulation ▪ P
Slide 15: Innovation
Innovation Novel Powder Emulsifier Additive to Improve Drilling Performance in Difficult Conditions Challenge Liquid emulsifiers often pose challenges for offshore and cold-weather oil drilling and production locations due to their susceptibility to freezing temperatures and harsh conditions. Benefi
Slide 16: Oilfield Technologies Strategies
Oilfield Technologies Strategies ▪ Grow specialty additives based on performance and cost Market ▪ Partner with service companies Development ▪ Leverage technical service to guarantee product success ▪ Continue to drive growth in production chemicals Innovation ▪ Accelerate growth in stimulation ▪ P
Slide 17: Geographic Expansion
Geographic Expansion China Saudi Arabia National strategic intent to diversify Established less cyclical oil market energy source ▪ Large production in region ▪ Drive towards less dependence ▪ Low cost to produce on coal ▪ Strategic importance to government ▪ Reduce oil imports Chinese government in
Slide 18: Oilfield Technologies
Oilfield Technologies Moving to Higher-Value, Cycle-Sustainable Portfolio Leader in drilling mud emulsifiers Deep customer relationships based on technical service and product performance Sustainably profitable oilfield business through the market cycles Opportunity for growth in production and stim
Slide 19: Industrial Specialties
Industrial Specialties 19
Slide 20: Business Overview – Industrial Specialties
Business Overview – Industrial Specialties Business Description Sales ($M) Driving value from pine-based chemistry 500 $476 $440 ▪ TOR: ink resins, adhesives – tackifiers, paper $400 $382 $386 400 sizing, rubber emulsifiers 300 ▪ TOFA: coatings, mining, emulsifiers 200 ▪ Lignin: agricultural chemica
Slide 21: Product Foundations
Product Foundations Refinery Produces Rosin and TOFA in Fixed Proportion TOR Global Rosin Market ▪ Recent gum rosin price improvement TOR focus on sustainability ▪ Growing consumer TOR ▪ Adhesive growth in packaged goods and hygiene products Gum rosin ▪ Digital, electronic media replacing print medi
Slide 22: Printing Inks
Printing Inks Continued Commitment to Innovation in a Dynamic Environment Increasing industry shift towards digital media continues Strategic Focus Improve margins by moving away from less profitable business ▪ Exited low-margin European market Drive sustainable, environmentally friendly alternative
Slide 23: Adhesives
Adhesives Enhancing Performance and Bio-Content in Key Applications A global leader in rosin-based tackifiers for pavement marking and packaging adhesive applications Since 2016, adhesives has increased from 28% to 38% of Ingevity’s rosin sales Pavement Marking Packaging Adhesives ▪ Improves driver
Slide 24: Agricultural Chemicals
Agricultural Chemicals Providing Eco-Friendly, Multifunctional Formulation Alternatives The leading global manufacturer of kraft lignosulfonate dispersants and bio-based adjuvants used: ▪ In crop protection applications ▪ To enhance the performance of active ingredients in plant health Industry Tren
Slide 25: Industrial Specialties Strategies
Industrial Specialties Strategies Higher-Margin ▪ Continue to expand derivative demand ▪ Drive improved margins with continued mix optimization Growth ▪ Leverage diversified end markets ▪ Strong global reputation for customer-centric approach ▪ Continued strategic new product development though “cus
Slide 26: Industrial Specialties Strategies
Industrial Specialties Strategies Higher-Margin ▪ Continue to expand derivative demand ▪ Drive improved margins with continued mix optimization Growth ▪ Leverage diversified end markets ▪ Strong global reputation for customer-centric approach ▪ Continued strategic new product development though “cus
Slide 27: Higher-Margin Products and Applications
Higher-Margin Products and Applications Diacid 1550®, a Bio-Based, Multifunctional Additive for Demanding Metalworking Fluid Applications Challenge The growing use of super alloy metals in jet and rocket engine production means metalworking fluid manufacturers need innovative, multifunctional machin
Slide 28: Industrial Specialties Strategies
Industrial Specialties Strategies Higher-Margin ▪ Continue to expand derivative demand ▪ Drive improved margins with continued mix optimization Growth ▪ Leverage diversified end markets ▪ Strong global reputation for customer-centric approach ▪ Continued strategic new product development though “cus
Slide 29: Innovation
Innovation AltaHance® and AltaSolv™, Higher-Performing, Multifunctional Formulations for Plant Health and Crop Protection Challenge Stringent environmental requirements have led commercial farmers to seek formulations that combine multiple active ingredients in one product, enhance performance and p
Slide 30: Industrial Specialties Strategies
Industrial Specialties Strategies Higher-Margin ▪ Continue to expand derivative demand ▪ Drive improved margins with continued mix optimization Growth ▪ Leverage diversified end markets ▪ Strong global reputation for customer-centric approach ▪ Continued strategic new product development though “cus
Slide 31: Driving Operational Excellence
Driving Operational Excellence Successful Integration of Georgia-Pacific’s Pine Chemicals Business ▪ Strengthened Ingevity’s leading position in Performance Chemicals ▪ Added scale through a combination of highly complementary technologies and product offerings ▪ Provided long-term CTO supply securi
Slide 32: Industrial Specialties
Industrial Specialties Optimizing Product Mix to Maximize Earnings Number 1 or 2 position across all segments Strong reputation for technical expertise and delivering customer solutions Drive lower-cost/improved efficiency Innovation focused on agricultural chemicals, adhesives and new uses for rosi
Slide 33: Strategic Focus on High Value-Added Products and Markets
Strategic Focus on High Value-Added Products and Markets Ingevity Business Models Across the Value Chain Basic materials Essential ingredients Technology partner ▪ Tall oil fatty acid (TOFA) ▪ Oil well service ▪ Lubricants ▪ Activated carbon ▪ Tall oil rosin (TOR) additives ▪ Adhesives ▪ Pavement te
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