Financial Performance - Ingevity Corporation reported net sales of $284.0 million for Q1 2025, a decrease of approximately 16.5% from $340.1 million in Q1 2024[166]. - The gross profit for Q1 2025 was $113.4 million, compared to $99.7 million in Q1 2024, reflecting an increase in gross profit margin[166]. - The net income for Q1 2025 was $20.5 million, a significant recovery from a net loss of $56.0 million in Q1 2024[166]. - Adjusted EBITDA for the three months ended March 31, 2025, was $91.3 million, compared to $74.4 million in 2024, reflecting an increase of 22.5%[200]. - Cash provided by operating activities for the three months ended March 31, 2025, was $25.4 million, an increase of $37.5 million compared to the same period in 2024[218]. Cost Management - The company incurred approximately $12.3 million in restructuring and other charges in Q1 2025, down from $62.8 million in Q1 2024[166]. - Gross profit for Q1 2025 increased by $13.7 million, primarily due to decreased manufacturing costs of $18.1 million and LIFO liquidation benefit of $4.5 million, partially offset by unfavorable sales volume of $7.7 million[170]. - Selling, general and administrative expenses (SG&A) decreased by $4.1 million (nine percent) to $43.1 million, representing 15 percent of net sales in Q1 2025[171]. - Research and technical expenses increased by $0.9 million, with a percentage of net sales rising to 2.7 percent in Q1 2025 due to lower sales[172]. Segment Performance - Performance Materials net sales increased by $1.7 million (one percent) in Q1 2025, driven by favorable pricing and sales mix[185]. - Performance Chemicals net sales decreased by $52.0 million (35 percent) in Q1 2025, primarily due to repositioning actions and a slower start to the road paving season[187]. - Advanced Polymer Technologies net sales decreased by $5.8 million (12 percent) in Q1 2025, primarily due to a volume decline and unfavorable pricing[192]. - Segment EBITDA for Performance Chemicals improved by $10.3 million in Q1 2025, reflecting cost savings from repositioning actions[191]. Future Outlook - The company expects net sales for 2025 to be between $1.25 billion and $1.4 billion, reflecting a downward adjustment due to an estimated 10% reduction in North America light vehicle production[207]. - The Performance Chemicals reportable segment anticipates improved net sales in its road technologies product line compared to 2024, while the Advanced Polymer Technologies segment expects flat net sales due to weak end market demand[207]. - Projected Adjusted EBITDA for 2025 is expected to be between $380 million and $415 million, with Performance Materials segment EBITDA anticipated to decline compared to the prior year[208]. Cash and Capital Management - As of March 31, 2025, the company had $71.5 million in cash and cash equivalents, with $67.5 million held by foreign subsidiaries[211]. - The company has $353.4 million remaining under its stock repurchase authorization as of March 31, 2025, with no common stock repurchased during the three months ended March 31, 2025[215]. - Capital expenditures for the three months ended March 31, 2025, totaled $10.0 million, a decrease of $6.6 million compared to $16.6 million in 2024[220]. Foreign Operations and Currency Impact - Approximately 27% of the company's net sales in the first three months of 2025 came from foreign-based operations in Europe, South America, and Asia[226]. - A hypothetical 10% adverse change in the average exchange rates of the Brazilian real, Chinese renminbi, and euro to the U.S. dollar would have decreased net sales by approximately $3.5 million or 1% for Q1 2025[226]. Interest Rates and Debt Management - Total interest expense for Q1 2025 was $19.4 million, down from $22.3 million in Q1 2024[177]. - The company entered into a floating-to-fixed interest rate swap with a notional amount of $200 million, converting floating rate debt to a fixed rate of 3.84% until August 2026[227]. - As of March 31, 2025, approximately $547 million of borrowings had a variable interest rate component with a weighted average interest rate of 5.80%[228]. - A hypothetical 100 basis point increase in variable interest rates would have increased annual interest expense by approximately $5.5 million or 8% for Q1 2025[228]. Raw Material Costs - Crude tall oil (CTO) represented 8% of the cost of sales for Q1 2025, with raw material CTO spend of approximately $10 million[230]. - A hypothetical unhedged 10% increase in CTO prices would have increased the cost of sales by approximately $1.0 million or 1% for Q1 2025[230]. - Natural gas constituted approximately 5% of the cost of goods sold for Q1 2025, with a hypothetical 10% increase in natural gas pricing resulting in a $0.9 million increase in cost of sales[231]. - As of March 31, 2025, the fair value of open natural gas derivative contracts was a net asset of $1.0 million[231]. Accounting Policies - The company's critical accounting policies have not substantially changed from those described in the 2024 Annual Report[225].

Financial Data and Key Metrics Changes - First quarter sales were $284 million, down 17% year-over-year primarily due to repositioning actions in Performance Chemicals and weak industrial demand [12] - Adjusted gross profit increased by 10% to $129 million, with gross margin improving over 1,000 basis points [12] - Adjusted EBITDA rose by $17 million, with margins improving from 21.9% to 32.1%, marking the fourth consecutive quarter of year-over-year margin improvement [13][25] - Free cash flow improved by $44 million year-over-year to $15 million, reflecting repositioning benefits [14] Business Line Data and Key Metrics Changes - Performance Materials saw higher sales due to favorable regional and product mix, with volume growth in China driven by government incentives [15] - Advanced Polymer Technologies (APT) experienced lower overall sales, with North America and EMEA showing higher volumes while Asia faced decreased volumes due to inventory adjustments and increased competition [21] - Performance Chemicals sales decreased by 35% due to repositioning actions, but segment EBITDA improved by $10 million year-over-year [23] Market Data and Key Metrics Changes - North American auto production is expected to decline by approximately 10% year-over-year, impacting guidance for the Performance Materials segment [10][17] - The average age of automobiles in the U.S. is at an all-time high of around 14 years, indicating a future need for replacements [18] Company Strategy and Development Direction - The company is focused on disciplined execution of its strategy to optimize the portfolio and drive business performance, aiming to create significant value for shareholders [10] - Management is actively monitoring macro demand conditions and tariffs, believing the direct impact on the business will be minimal [9][26] - The company is exploring strategic options for Industrial Specialties and the North Charleston refinery, with discussions progressing well [24] Management's Comments on Operating Environment and Future Outlook - Management acknowledges challenges in the operating environment but remains confident in the company's ability to deliver strong profitability in 2025 and beyond [10][26] - The company has widened its guidance range to account for potential declines in auto production, reflecting a cautious outlook [27] Other Important Information - The company has introduced a new leader for APT, Michael Shukov, who brings over 25 years of experience in specialty chemicals [22] - The company expects to generate strong free cash flow, especially in the second half of the year, affirming prior guidance of leverage less than 2.8 times by year-end [14][59] Q&A Session Summary Question: Pricing in Performance Materials business - Management indicated that pricing remains a lever that can be adjusted if production declines or unexpected tariff impacts occur, but currently, business conditions are stable [30][31] Question: Update on strategic review of Industrial Specialties - The strategic review process is progressing well with significant interest, and management aims to provide updates before the end of the year [35][38] Question: Strategic and operational priorities in a volatile environment - The focus remains on disciplined execution, optimizing business performance, and reducing leverage while exploring growth opportunities [41][42] Question: Impact of EV slowdown on forecasts - The company has adjusted guidance based on a 10% reduction in North American auto production, but remains optimistic about the long-term potential of EV technologies [47][49] Question: Filtration market capacity for potential shifts - The filtration market is sizable and can absorb underutilized capacity, although it is considered a lower-margin market compared to automotive [56] Question: Long-term leverage goals - The long-term target for leverage remains between 2 to 2.5 times, with current efforts focused on reducing leverage to below 2.8 times by year-end [59]

Financial Data and Key Metrics Changes - First quarter sales were $284 million, down 17% year-over-year due to repositioning actions in Performance Chemicals and weak industrial demand [10] - Adjusted gross profit increased by 10% to $129 million, with gross margin improving over 1,000 basis points [10] - Adjusted EBITDA rose by $17 million, with margins improving from 21.9% to 32.1%, marking the fourth consecutive quarter of year-over-year margin improvement [11][12] - Free cash flow improved by $44 million year-over-year to $15 million, reflecting benefits from repositioning actions [12] Business Line Data and Key Metrics Changes - Performance Materials saw higher sales due to favorable regional and product mix, with EBITDA margins remaining near 54% [13][15] - Advanced Polymer Technologies (APT) experienced lower overall sales, but EBITDA increased by $3 million, with margins rising to 29.6% [19] - Performance Chemicals sales decreased by 35% primarily due to repositioning actions, but segment EBITDA showed year-over-year improvement of $10 million [21][22] Market Data and Key Metrics Changes - North American auto production is expected to decline by approximately 10% year-over-year, impacting guidance for the Performance Materials segment [8][15] - Volume growth was observed in China due to government incentives driving higher vehicle sales, while North American volumes were down year-over-year [13][14] Company Strategy and Development Direction - The company is focused on disciplined execution of its strategy to optimize the portfolio and drive business performance, aiming to create significant value for shareholders [8][24] - The strategic review of Industrial Specialties and the North Charleston refinery is progressing well, with expectations to communicate a path forward before the end of the year [22] Management's Comments on Operating Environment and Future Outlook - Management is actively monitoring developments related to tariffs and macro demand conditions, believing the direct impact on the business will be minimal [7][24] - Despite headwinds, the company is confident in its ability to deliver strong profitability in 2025 and beyond [8][24] Other Important Information - The company has introduced a new President for APT, who brings over 25 years of experience in transforming business profitability [20] - The average age of automobiles in the U.S. is at an all-time high, suggesting a future need for replacements [15] Q&A Session Summary Question: Pricing in Performance Materials business - Management indicated that they have a strong position and are seeing encouraging performance, with pricing being a lever they can pull if needed [29][30][32] Question: Update on strategic review of Industrial Specialties - The process is progressing well with a broad degree of interest, and management is being deliberate in their approach [34][36] Question: Strategic and operational priorities in a volatile environment - The focus remains on disciplined execution, optimizing business performance, and reducing leverage [40][41] Question: Cash flow forecast amidst potential auto production decline - Management is confident in free cash flow generation even in a declining sales environment due to effective working capital management [43][44] Question: Impact of EV slowdown on forecasts - While EVs are slowing down, management remains optimistic about the adoption of new technologies and their investment in Nexeon [47][48][50] Question: Filtration market capacity for potential volume shifts - The filtration market is sizable and can absorb underutilized capacity, although it is a lower margin market compared to auto [53][54] Question: Long-term leverage goals - The long-term target for leverage remains between 2 to 2.5 times [58]

Financial Performance - Net sales decreased by 16.5% from $340.1 million in Q1 2024 to $284 million in Q1 2025[7] - Adjusted EBITDA increased by 22.7% from $74.4 million in Q1 2024 to $91.3 million in Q1 2025[7] - Adjusted EBITDA margin increased by 1020 bps from 21.9% in Q1 2024 to 32.1% in Q1 2025[7] - Diluted adjusted EPS increased by 110.6% from $0.47 in Q1 2024 to $0.99 in Q1 2025[7] - Free cash flow improved from negative $28.7 million in Q1 2024 to positive $15.4 million in Q1 2025[71] Segment Performance - Performance Materials net sales increased by 1.2% from $145.1 million to $146.8 million, with a 1.4% increase in Segment EBITDA from $78 million to $79.1 million[18] - Advanced Polymer Technologies net sales decreased by 12.1% from $48 million to $42.2 million, but Segment EBITDA increased by 31.6% from $9.5 million to $12.5 million[23] - Performance Chemicals net sales decreased by 35.4% from $147 million to $95 million, but Segment EBITDA improved by $10.3 million from negative $10.6 million to negative $0.3 million[28] Guidance and Outlook - The company widened its revenue guidance to $1.25 - $1.4 billion and affirmed free cash flow guidance of $220 - $260 million[33] - The company expects net debt ratio to be below 2.8x by year end[17, 33] - A 10% reduction in North America auto production is expected to lower Performance Materials EBITDA by approximately $15-$20 million[33, 34]

[Ingevity Q1 2025 Financial Results Overview](index=1&type=section&id=Ingevity%20reports%20first%20quarter%202025%20financial%20results) [Q1 2025 Financial Highlights](index=1&type=section&id=HIGHLIGHTS) Ingevity's first quarter 2025 results showed a **17% decline** in net sales to **$284.0 million**, primarily due to the strategic repositioning of the Performance Chemicals segment, while adjusted EBITDA grew **23%** to **$91.3 million** with margins improving to **32.1%**, driven by cost reductions and a better product mix Q1 2025 Key Financial Metrics | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $284.0M | $340.1M | -17% | | Net Income | $20.5M | ($56.0M) | N/A | | Diluted EPS | $0.56 | ($1.54) | N/A | | Adjusted EBITDA | $91.3M | $74.4M | +23% | | Adjusted EBITDA Margin | 32.1% | 21.9% | +10.2 p.p. | | Diluted Adjusted EPS | $0.99 | $0.47 | +111% | | Operating Cash Flow | $25.4M | ($12.1M) | N/A | | Free Cash Flow | $15.4M | ($28.7M) | N/A | - The decline in net sales was **primarily attributed** to the strategic repositioning of the Performance Chemicals segment, which involved exiting certain lower-margin end markets[3](index=3&type=chunk) - The **significant improvement** in **Adjusted EBITDA** and margins was a **result of successful repositioning actions** in Performance Chemicals, including reduced raw material costs and an improved product mix[4](index=4&type=chunk)[5](index=5&type=chunk) [Segment Performance](index=1&type=section&id=Segment%20Performance) The company's segments showed mixed results, with Performance Materials sales growing slightly, Advanced Polymer Technologies sales declining but achieving higher EBITDA, and Performance Chemicals experiencing a significant sales drop but a substantial improvement in its EBITDA loss [Performance Materials Segment](index=1&type=section&id=Performance%20Materials) Sales in the Performance Materials segment increased by **1%** to **$146.8 million**, driven by higher volumes in China and the Asia Pacific region, with segment EBITDA also rising by **1%** to **$79.1 million**, maintaining a strong EBITDA margin of **53.9%** Performance Materials Q1 2025 Results | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $146.8M | $145.1M | +1% | | Segment EBITDA | $79.1M | $78.0M | +1% | | Segment EBITDA Margin | 53.9% | 53.8% | +0.1 p.p. | - Growth was **primarily due to higher volumes** in China and the Asia Pacific region. In North America, an **improved mix of higher-value products** for fuel-efficient vehicles offset lower volumes[8](index=8&type=chunk) [Advanced Polymer Technologies Segment](index=2&type=section&id=Advanced%20Polymer%20Technologies) The Advanced Polymer Technologies segment reported a **12% sales decrease** to **$42.2 million**, as lower volumes in Asia offset gains in EMEA and North America, yet segment EBITDA increased by **$3.0 million** to **$12.5 million**, and margins expanded to **29.6%**, primarily due to higher plant utilization rates Advanced Polymer Technologies Q1 2025 Results | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $42.2M | $48.0M | -12% | | Segment EBITDA | $12.5M | $9.5M | +31.6% | | Segment EBITDA Margin | 29.6% | 19.8% | +9.8 p.p. | - The increase in **EBITDA** was driven by **higher utilization rates** as the company built inventory ahead of a planned extended outage in Q2 for new boiler installation[9](index=9&type=chunk) [Performance Chemicals Segment](index=2&type=section&id=Performance%20Chemicals) Performance Chemicals sales fell **35%** to **$95.0 million**, with the Industrial Specialties product line down **50%** due to strategic repositioning and the exit from lower-margin markets, but segment EBITDA improved by **$10.3 million** to a near break-even negative **$0.3 million**, demonstrating the positive impact of cost savings, improved product mix, and lower raw material costs Performance Chemicals Q1 2025 Results | Metric | Q1 2025 | Q1 2024 | Change | | :--- | :--- | :--- | :--- | | Net Sales | $95.0M | $147.0M | -35% | | - Industrial Specialties | $50.7M | $101.3M | -50% | | - Road Technologies | $44.3M | $45.7M | -3% | | Segment EBITDA | ($0.3M) | ($10.6M) | +$10.3M | - The **significant improvement** in **EBITDA** reflects the **successful execution of repositioning actions**, including cost savings, exiting low-margin markets, and lower raw material costs[10](index=10&type=chunk) [Liquidity and Capital Management](index=2&type=section&id=Liquidity%2FOther) The company **Generated operating cash flow** of **$25.4 million** and **$15.4 million** in **free cash flow**, aided by improved working capital from lower raw material costs, with no shares repurchased and **$353.4 million remains available** under the current **Board authorization**, and **Net leverage improved sequentially** to **3.3 times** - **Generated operating cash flow** of **$25.4 million** and **free cash flow** of **$15.4 million**[11](index=11&type=chunk) - **No share repurchases were made** in Q1; **$353.4 million remains available** under the current **Board authorization**[11](index=11&type=chunk) - **Net leverage improved sequentially** to **3.3 times**[11](index=11&type=chunk) [Full Year 2025 Guidance](index=2&type=section&id=Full%20Year%202025%20Guidance) Ingevity has **widened to reflect risks** from international trade relations and lowered expectations for global auto production, while continuing to focus on improving profitability and reducing leverage Revised Full Year 2025 Guidance | Metric | Guidance Range | | :--- | :--- | | Sales | $1.25 billion to $1.40 billion | | Adjusted EBITDA | $380 million to $415 million | - The guidance range was **widened to reflect risks** associated with lowered expectations of global auto production due to the current state of international trade relations[12](index=12&type=chunk) [Financial Statements & Schedules](index=4&type=section&id=FINANCIAL%20SCHEDULES) [Condensed Consolidated Statements of Operations](index=5&type=section&id=Condensed%20Consolidated%20Statements%20of%20Operations) For Q1 2025, Ingevity reported **Net sales** of **$284.0 million**, a decrease from **$340.1 million** in Q1 2024, with **Gross profit** increasing to **$113.4 million** from **$99.7 million**, and achieving a **Net income** of **$20.5 million**, a significant turnaround from a net loss of **$56.0 million** in the prior-year period, resulting in a **Diluted EPS** of **$0.56** compared to a loss of **$1.54** Q1 2025 Statement of Operations (in millions, except per share data) | Metric | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net sales | $284.0 | $340.1 | | Gross profit | $113.4 | $99.7 | | Restructuring and other charges, net | $12.3 | $62.8 | | Income (loss) before income taxes | $26.8 | ($71.9) | | Net income (loss) | $20.5 | ($56.0) | | Diluted earnings (loss) per share | $0.56 | ($1.54) | [Segment Operating Results](index=6&type=section&id=Segment%20Operating%20Results) In Q1 2025, Performance Materials sales grew slightly to **$146.8 million** with stable **EBITDA** of **$79.1 million**, Performance Chemicals sales dropped to **$95.0 million** from **$147.0 million**, but its **EBITDA** loss narrowed significantly to **$0.3 million** from **$10.6 million**, and Advanced Polymer Technologies sales decreased to **$42.2 million**, while its **EBITDA** grew to **$12.5 million** Q1 Net Sales by Segment (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Performance Materials | $146.8 | $145.1 | | Performance Chemicals | $95.0 | $147.0 | | Advanced Polymer Technologies | $42.2 | $48.0 | | **Total net sales** | **$284.0** | **$340.1** | Q1 Segment EBITDA (in millions) | Segment | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Performance Materials | $79.1 | $78.0 | | Performance Chemicals | ($0.3) | ($10.6) | | Advanced Polymer Technologies | $12.5 | $9.5 | | **Total segment EBITDA** | **$91.3** | **$76.9** | [Condensed Consolidated Balance Sheets](index=8&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of March 31, 2025, Ingevity's **Total Assets** stood at **$2,056.1 million**, a slight increase from **$2,022.6 million** at year-end 2024, with **Total Liabilities** relatively stable at **$1,821.5 million**, and key changes including an increase in accounts receivable and **Inventories, net**, while **Long-term debt** saw a slight reduction Balance Sheet Summary (in millions) | Account | March 31, 2025 | Dec 31, 2024 | | :--- | :--- | :--- | | Cash and cash equivalents | $71.5 | $68.0 | | Inventories, net | $245.4 | $226.8 | | **Total Assets** | **$2,056.1** | **$2,022.6** | | Long-term debt | $1,332.6 | $1,339.7 | | **Total Liabilities** | **$1,821.5** | **$1,827.4** | | **Total Equity** | **$234.6** | **$195.2** | [Condensed Consolidated Statements of Cash Flows](index=9&type=section&id=Condensed%20Consolidated%20Statements%20of%20Cash%20Flows) For the first three months of 2025, the company **Generated operating cash flow** of **$25.4 million**, a **significant improvement** from a **$12.1 million** use of cash in the same period of 2024, with cash used in investing activities at **$11.5 million** and cash used in financing activities at **$11.0 million**, leading to a net increase in cash for the quarter Q1 Cash Flow Summary (in millions) | Cash Flow Activity | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $25.4 | ($12.1) | | Net cash provided by (used in) investing activities | ($11.5) | ($16.3) | | Net cash provided by (used in) financing activities | ($11.0) | $23.4 | | **Change in cash, cash equivalents, and restricted cash** | **$4.3** | **($6.8)** | [Non-GAAP Reconciliations](index=10&type=section&id=Non-GAAP%20Financial%20Measures) This section provides reconciliations for key non-GAAP metrics used by management, including **Adjusted Earnings**, **Adjusted EBITDA**, **Free Cash Flow**, and **Net Debt Ratio**, which are adjusted for items like restructuring charges, acquisition costs, and other special items to provide a clearer view of the company's core operational performance and liquidity [Reconciliation of Net Income to Adjusted Earnings](index=12&type=section&id=Reconciliation%20of%20Adjusted%20Earnings%20(Loss)%20and%20Diluted%20Adjusted%20Earnings%20(Loss)%20per%20Share) **Adjusted earnings** for Q1 2025 were **$36.4 million**, or **$0.99** per **diluted share**, compared to **$17.2 million**, or **$0.47** per share, in Q1 2024, with adjustments from GAAP **Net income** of **$20.5 million** primarily including **$12.3 million** in **Restructuring and other charges, net** and **$7.9 million** in proxy contest charges Q1 Reconciliation to Adjusted Earnings (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) (GAAP) | $20.5 | ($56.0) | | Restructuring and other charges, net | $12.3 | $62.8 | | Loss on CTO resales | — | $26.5 | | Proxy contest charges | $7.9 | — | | Tax effect and other items | ($4.3) | ($21.2) | | **Adjusted earnings (loss) (Non-GAAP)** | **$36.4** | **$17.2** | [Reconciliation of Net Income to Adjusted EBITDA](index=14&type=section&id=Reconciliation%20of%20Adjusted%20EBITDA) **Adjusted EBITDA** for Q1 2025 was **$91.3 million**, an increase from **$74.4 million** in Q1 2024, with the reconciliation from GAAP **Net income** including adding back interest, taxes, D&A, and **Other adjustments**, and the **Adjusted EBITDA Margin** improved significantly to **32.1%** from **21.9%** in the prior year Q1 Reconciliation to Adjusted EBITDA (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net income (loss) (GAAP) | $20.5 | ($56.0) | | Provision (benefit) for income taxes | $6.3 | ($15.9) | | Interest expense, net | $19.4 | $22.3 | | Depreciation and amortization | $24.9 | $29.6 | | Restructuring and other charges, net | $12.3 | $62.8 | | Other adjustments | $7.9 | $31.6 | | **Adjusted EBITDA (Non-GAAP)** | **$91.3** | **$74.4** | [Calculation of Free Cash Flow](index=15&type=section&id=Calculation%20of%20Free%20Cash%20Flow) The company **Generated operating cash flow** of **$15.4 million** in **free cash flow** in Q1 2025, a substantial improvement from a cash use of **$28.7 million** in Q1 2024, calculated by subtracting **Capital expenditures** of **$10.0 million** from net cash provided by operating activities of **$25.4 million** Q1 Free Cash Flow Calculation (in millions) | Line Item | Q1 2025 | Q1 2024 | | :--- | :--- | :--- | | Net cash provided by (used in) operating activities | $25.4 | ($12.1) | | Less: Capital expenditures | $10.0 | $16.6 | | **Free Cash Flow (Non-GAAP)** | **$15.4** | **($28.7)** | [Calculation of Net Debt Ratio](index=16&type=section&id=Calculation%20of%20Net%20Debt%20Ratio) As of March 31, 2025, Ingevity's **Net Debt** was calculated at **$1,242.8 million**, and with a **LTM Adjusted EBITDA** of **$379.6 million**, the **Net debt ratio** stood at **3.3x** Net Debt Ratio Calculation as of March 31, 2025 (in millions) | Component | Amount | | :--- | :--- | | Total Debt | $1,397.0 | | Less: Cash and equivalents | $71.7 | | Less: Restricted investment | $82.5 | | **Net Debt** | **$1,242.8** | | LTM Adjusted EBITDA | $379.6 | | **Net debt ratio (Non GAAP)** | **3.3x** |

Group 1: Product Launch and Innovation - BASF SE has launched three new natural-based products for personal care: Verdessence Maize, Lamesoft OP Plus, and Dehyton PK45 GA/RA [1][2] - Verdessence Maize is a plant-based styling polymer made from renewable feedstocks, offering performance comparable to synthetic polymers [3] - Lamesoft OP Plus is a biodegradable opacifier dispersion that enhances the appearance of formulations, while Dehyton PK45 GA/RA is a betaine derived from Rainforest Alliance Certified coconut oil, suitable for shampoos and cleansers [3] Group 2: Market Position and Performance - BASF's focus on biodegradable solutions aims to capture the conscious consumer market in the personal care sector [3] - The company's stock has declined by 18.4% over the past year, slightly worse than the industry average decline of 17.1% [4] - BASF currently holds a Zacks Rank of 3 (Hold), with better-ranked stocks in the Basic Materials sector including Ingevity Corporation, Axalta Coating Systems, and Carpenter Technology Corporation [5]

Core Viewpoint - Ingevity Corporation (NGVT) has shown a strong performance with a 9.6% increase in shares over the past six months, outperforming the Zacks Chemicals Specialty industry's decline of 8% during the same period [1][2]. Group 1: Strategic Actions and Financial Performance - The company is focused on expanding capacity and driving long-term growth through organic investments and strategic repositioning [3][4]. - Ingevity is repositioning its Performance Chemicals segment to reduce exposure to lower-margin markets, which includes consolidating operations and closing the Crossett facility, leading to significant cost savings of approximately $84 million in 2024 and an expected $10-$25 million in 2025 [4][5]. - The company aims to enhance shareholder value through improved EBITDA, margins, and strong cash flows, benefiting from operational improvements and lower input costs [5]. Group 2: Acquisitions and Market Position - The acquisition of the Capa caprolactone business has provided Ingevity with a new technology platform for revenue and earnings growth, with a focus on high-growth applications [6]. - In July 2024, Ingevity expanded its Capa caprolactone distribution network in Europe, further strengthening its market position [6]. - The acquisition of Ozark Materials has also bolstered the company's presence in the paving construction industry [6]. Group 3: Market Ranking - Ingevity currently holds a Zacks Rank 1 (Strong Buy), indicating strong market confidence in its performance [7].

Core Insights - Ingevity's shares have declined approximately 8.3% since the last earnings report, underperforming the S&P 500 [1] - There is uncertainty regarding whether this negative trend will continue or if the company is poised for a breakout before the next earnings release [1] Earnings Report Summary - The last earnings report for Ingevity was about a month ago, and it is essential to analyze this report to understand the key catalysts affecting the company's performance [1] - No earnings estimate revisions have been made by analysts in the past two months, indicating a period of quiet regarding future earnings expectations [2]

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Core Viewpoint - Ingevity Corporation's stock is currently viewed as a promising investment opportunity, having increased approximately 41% over the past six months, driven by strategic repositioning, acquisitions, and growth initiatives [1]. Financial Performance - Earnings estimates for Ingevity for 2025 have risen by 29% over the past 60 days, indicating analysts' optimism [3]. - Ingevity has surpassed the Zacks Consensus Estimate in three of the last four quarters, achieving an average earnings surprise of about 202.9% [4]. - The company's return on equity (ROE) stands at 41.4%, significantly higher than the industry average of 15.5% [5]. Strategic Initiatives - Ingevity is focusing on expanding capacity and driving long-term growth through organic investments and strategic acquisitions [6]. - The repositioning of the Performance Chemicals segment aims to reduce exposure to lower-margin markets, with actions including consolidating operations and closing the Crossett facility, resulting in approximately $84 million in savings in 2024 and projected incremental savings of $10-$25 million in 2025 [7]. - The acquisition of the Capa caprolactone business has introduced a new technology platform for revenue and earnings growth, with a recent expansion of its distribution network in Europe [9]. Shareholder Value Enhancement - The company is committed to enhancing shareholder value through improved EBITDA, better margins, and strong cash flows, benefiting from operational improvements and lower input costs [8].