Slide 1: Second Quarter 2020 Earnings Presentation
Second Quarter 2020 Earnings Presentation July 30, 2020 PURIFY I PROTECT I ENHANCE
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 forward looking statements generally include the words “may,” “could,” “should,” “believes,” “plan
Slide 3: Today's Agenda
Today’s Agenda 1 Second Quarter Highlights 2 Segment Performance 3 Financial Review 4 Guidance 5 Q&A 3
Slide 4: Second Quarter 2020 Results
Second Quarter 2020 Results $ in millions 2Q 2020 2Q 2019 vs Prior Year % % Performance Highlights ▪ Results in line with second quarter guidance Net Sales 270.6 352.8 (82.2) (23.3%) ▪ Reaffirmed fiscal year 2020 guidance Adjusted EBITDA(1) 67.2 108.3 (41.1) (38.0%) ▪ Implemented cost reduction init
Slide 5: Cost-Reduction Initiatives
Cost-Reduction Initiatives ▪ Early retirement program 2020 Cost Estimated (39 positions) Reductions Annual Savings ($M) ($M) ▪ Headcount reduction (26 positions) Personnel 2 7 reductions ▪ Suspended retirement 401(k) Compensation & 8 TBD match benefits ▪ Reduced variable Other SG&A 6 2 compensation
Slide 6: Performance Chemicals
Performance Chemicals $ in millions 2Q 2020 2Q 2019 vs Prior Year % % Performance Highlights Net Sales 186.2 229.7 (43.5) (18.9%) ▪ Revenue decreased 19% ▪ Pavement Technologies: North Pavement Technologies 63.9 64.6 (0.7) (1.1%) American paving season continues Engineered Polymers 31.6 34.3 (2.7) (
Slide 7: Rig Count and Oil Prices / TOR Substitutes
Rig Count and Oil Prices / TOR Substitutes Rig Count and Oil Prices TOR Substitutes 1,200 70 2,200 1,000 60 2,000 50 800 1,800 WTI $/bbl (2) Rig Count (1) 40 600 $/Ton 30 1,600 400 20 200 1,400 10 0 0 1,200 Rig Count Oil $ CGR C5 HCR ▪ Rig count in North America is down 67% YTD ▪ Chinese gum rosin(3
Slide 8: Performance Materials
Performance Materials $ in millions 2Q 2020 2Q 2019 vs Prior Year % % Performance Highlights Net Sales 84.4 123.1 (38.7) (31.4%) ▪ Revenue decrease of 31% ▪ Significantly lower volumes resulting Automotive 74.7 113.9 (39.2) (34.4%) from North America and Europe Technologies automotive shutdowns Proc
Slide 9: Regional Auto Demand/Production (2020 vs. 2019)
Regional Auto Demand/Production (2020 vs. 2019) Light Vehicle Sales & Production: China, U.S./Canada, and Europe Light Vehicles - China Light Vehicles – U.S./Canada 2,500,000 2,500,000 2,000,000 2,000,000 1,500,000 1,500,000 1,000,000 1,000,000 500,000 500,000 - - Jan Feb Mar Apr May Jun Jul Aug Sep
Slide 10: Second Quarter 2020 Financial Results
Second Quarter 2020 Financial Results vs PY vs PY $ in millions except EPS Q2 2020 Q2 2019 1H 2020 1H 2019 ∆% ∆% Consolidated Income Statement: Net sales $270.6 $352.8 (23.3)% $558.8 $629.6 (11.2)% Gross Profit $83.9 $134.4 (37.6)% $198.5 $231.5 (14.3)% % Margin 31.0% 38.1% -710 bps 35.5% 36.8% -130
Slide 11: Second Quarter 2020 Financial Summary
Second Quarter 2020 Financial Summary Capital Structure Working Capital Management $ in millions Current $ in millions Pricing Amount $750m Revolver L+150 $220.0 Term Loans L+100-150 731.2 Inventory, net $224 $236 $166m Interest Rate Swap (1) 1.35% Senior Notes 4.5% 300.0 Accounts receivable, net Fi
Slide 12: 2020 Reaffirmed Guidance
2020 Reaffirmed Guidance ($M) FY19 Actual Reaffirmed FY20 % Item Guidance Revenue $1,292.9 $1,100 to $1,200 Adjusted EBITDA(1) $396.9 $310 to $350 Adjusted tax rate(1) 21.5% 22-24% Capital expenditures $115 ~$85 Free Cash Flow(1) $161 $130-170 Net Debt Ratio(1) 2.79x ~2.75 - 3.25x Performance Materi
Slide 13: Well Positioned for Value Creation
Well Positioned for Value Creation Developing and Deep and Market-leading Strong balance Experienced delivering high- longstanding global specialty sheet and cash flow and proven performance customer chemical company generation management team solutions relationships • Well-positioned to • Brings ex
Slide 14: For More Information
For More Information Investors Jack Maurer (843) 746-8242 Media Laura Woodcock (843) 746-8197 Thank you for your interest in Ingevity! 14
Slide 15: Appendix
Appendix 15
Slide 16: 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 17: Reconciliation of Net Income to Adjusted Earnings
Reconciliation of Net Income (Loss) (GAAP) to Adjusted Earnings (Loss) (Non-GAAP) Three Months Ended June 30, Six Months Ended June 30, In millions, except per data (unaudited) 2020 2019 2020 2019 Net income (loss) (GAAP) $ 20.2 $ 56.8 $ 65.5 $ 79.5 Restructuring and other (income) charges (1) 7.3 0
Slide 18: 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 (unaudited) 2020 2019 2020 2019 Net income (loss) (GAAP) $ 20.2 $ 56.8 $ 65.5 $ 79.5 Provision (benefit) for income taxes 5.2 15.9 15.1 15.9 Interest expense, net 10.0
Slide 19: Reconciliation of SG&A to Core SG&A
Reconciliation of Selling, General and Admin (SG&A) (GAAP) to Core SG&A (Non-GAAP) In millions (unaudited) Three Months Ended June 30, Six Months Ended June 30, 2020 2019 2020 2019 SG&A (GAAP) $ 34.5 $ 42.5 $ 73.0 $ 81.6 Intangible amortization related to acquisitions 7.9 7.1 15.9 12.1 Core SG&A (No
Slide 20: Calculation of Total Debt to Net Income Ratio, June 2020
Calculation of Total Debt to Net Income (Loss) Ratio (GAAP) to Net Debt to Adjusted EBITDA Ratio (Non-GAAP) In millions, except ratios (unaudited) June 30, 2020 Notes payable and current maturities of long-term debt $ 21.7 Long-term debt including finance lease obligations 1,308.5 Debt issuance cost
Slide 21: Reconciliation of Net Income to Adjusted EBITDA, Full Year
Reconciliation of Net Income (GAAP) to Adjusted EBITDA (Non-GAAP) Twelve Months Ended December 31, In millions (unaudited) 2019 2018 Net income (loss) (GAAP) $ 183.7 $ 181.8 Provision (benefit) for income taxes 44.2 40.0 Interest expense, net 46.9 29.8 Depreciation and amortization 85.0 57.0 Restruc
Slide 22: Calculation of Total Debt to Net Income Ratio, December 2019
Calculation of Total Debt to Net Income (Loss) Ratio (GAAP) to Net Debt to Adjusted EBITDA Ratio (Non-GAAP) In millions, except ratios (unaudited) December 31, 2019 Notes payable and current maturities of long-term debt $ 22.5 Long-term debt including finance lease obligations 1,228.4 Debt issuance
Slide 23: Calculation of Free Cash Flow
Calculation of Free Cash Flow (Non-GAAP) Twelve Months Ended In millions (unaudited) December 31, 2019 2018 Cash Flow from Operations $ 275.7 $ 252.0 Less: Capital Expenditures 114.8 93.9 Free Cash Flow (Non-GAAP) $ 160.9 $ 158.1 23