Executive Summary

Q4 2024 revenue fell 20% YoY to $298.8M as planned exits of lower‑margin markets in Performance Chemicals weighed on sales, but adjusted EBITDA more than doubled YoY to $80.6M with margins expanding to 27.0% on cost actions and mix improvement; GAAP EPS was $0.46 and adjusted EPS was $0.95 .
Sequentially, revenue declined vs Q3 (seasonality/PC exits) while adjusted EBITDA pulled back to $80.6M from $106.4M, with margin down ~120 bps QoQ to 27.0% from 28.2% .
2025 guidance: sales $1.3B–$1.4B, adjusted EBITDA $400M–$415M, free cash flow $220M–$260M; target net leverage below 2.8x by Q4 2025; guidance excludes any impact from strategic alternatives for Industrial Specialties/CTO refinery .
Strategic and cash catalysts: PC repositioning delivered a $20.4M YoY improvement in PC segment EBITDA in Q4; working capital discipline drove Q4 FCF of $39.6M and net leverage improvement to 3.5x; the strategic alternatives review for Industrial Specialties could further streamline and re-rate the portfolio .

What Went Well and What Went Wrong

What Went Well
- Performance Materials delivered another strong quarter: Q4 sales +2% YoY to $156.2M; EBITDA $78.3M; margin 50.1%, supported by operational efficiency and lower energy spend; FY margins reached 52.3% (+340 bps) .
- PC repositioning showing traction: Q4 Performance Chemicals EBITDA improved by $20.4M YoY to $(3.8)M as plant closures and cost savings reduced costs despite a 44% sales decline tied to exits of lower‑margin markets .
- Cash generation and deleveraging: Q4 operating cash flow $64.5M and FCF $39.6M despite paying the second $50M CTO termination installment; net leverage improved to 3.5x from 4.0x in Q3 .
- Management tone: “We remain focused on…execution excellence, reducing leverage, and portfolio optimization,” highlighting momentum and execution confidence (Interim CEO) .
What Went Wrong
- Topline contraction: Q4 revenue down 20% YoY to $298.8M driven by Performance Chemicals exits; Road Technologies also declined 9% due to weather, and APT margin compressed on adverse price/mix .
- Sequential normalization: Adjusted EBITDA decreased sequentially to $80.6M from $106.4M in Q3; PM margin dipped ~100 bps YoY to 50.1% on lower plant utilization versus last year .
- Continued PC headwinds near term: High-cost CTO inventory consumption now expected by Q2 2025 (slipped from prior expectation of end Q1), while competitive pricing offsets part of the raw material tailwind .

Financial Results

Quarterly performance (oldest → newest)

Metric	Q2 2024	Q3 2024	Q4 2024
Revenue ($M)	$390.6	$376.9	$298.8
Adjusted EBITDA ($M)	$101.3	$106.4	$80.6
Adjusted EBITDA Margin (%)	25.9%	28.2%	27.0%
Diluted EPS (GAAP)	$(7.81)	$(2.95)	$0.46
Diluted Adjusted EPS	$1.01	$1.10	$0.95

Q4 YoY and vs estimates

Metric	Q4 2023	Q4 2024	YoY	Vs. Estimates
Revenue ($M)	$371.7	$298.8	-20%	Unavailable (S&P Global data not retrieved due to access limits)
Adjusted EBITDA ($M)	$42.1 (revised)	$80.6	+91%	Unavailable (S&P Global data not retrieved due to access limits)
Diluted Adjusted EPS	$(0.20) (revised)	$0.95	N/M	Unavailable (S&P Global data not retrieved due to access limits)

Segment sales and profitability (Q4 2024 vs Q4 2023)

Segment	Q4 2023 Sales ($M)	Q4 2024 Sales ($M)	Q4 2023 EBITDA ($M)	Q4 2024 EBITDA ($M)
Performance Materials	$152.8	$156.2	$78.1	$78.3
Performance Chemicals (total)	$176.5	$98.7	$(24.2)	$(3.8)
- Road Technologies	$53.4	$48.5	—	—
- Industrial Specialties	$123.1	$50.2	—	—
Advanced Polymer Technologies	$42.4	$43.9	$7.9	$6.1

Cash flow and balance sheet KPIs (oldest → newest)

KPI	Q2 2024	Q3 2024	Q4 2024
Operating Cash Flow ($M)	$29.7	$46.5	$64.5
Free Cash Flow ($M)	$11.6	$28.5	$39.6
Net Leverage (Net Debt / LTM Adj. EBITDA)	4.0x	4.0x	3.5x
Capex ($M)	$18.1	$18.0	$24.9

Notes and adjustments

SEC-driven revisions: NGVT revised prior non-GAAP to stop excluding certain inventory charges; Q4’23 adjusted EBITDA revised to $42.1M (from $61.8M), and Q4’23 diluted adjusted EPS to $(0.20) .
Non-GAAP definitions and reconciliations provided in the release and 8-K .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Sales ($B)	FY 2024	$1.40–$1.50B (affirmed Oct 29, 2024)	Actual $1.406B	Delivered near low end
Adjusted EBITDA ($M)	FY 2024	$350–$360M (affirmed Oct 29, 2024)	Actual $362.7M	Slight beat vs top end
Sales ($B)	FY 2025	N/A (prelim view only)	$1.3–$1.4B	New formal guidance
Adjusted EBITDA ($M)	FY 2025	“Slightly above $400M” (Jan 16, 2025 prelim)	$400–$415M	Tightened with range
Free Cash Flow ($M)	FY 2025	N/A	$220–$260M	New
Net Leverage	FY 2025 (Exit)	N/A	<2.8x by Q4’25	New
Tax Rate	FY 2025	N/A	22%–24%	New
Capex ($M)	FY 2025	N/A	$50–$70M	New
Performance Materials EBITDA margin	FY 2025	N/A	~50%	New
Advanced Polymer Technologies EBITDA margin	FY 2025	N/A	~20%	New
Performance Chemicals EBITDA margin	FY 2025	N/A	Mid‑ to high‑single digits	New
High‑cost CTO inventory depletion	Timing	End Q1’25 (prior expectation)	Q2’25	Later

All FY 2025 guidance excludes any impact from strategic alternatives for Industrial Specialties/CTO refinery .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024 and Q3 2024)	Current Period (Q4 2024 call)	Trend
Performance Chemicals repositioning and costs	Q2: CTO contract terminated; work through high-cost CTO by end Q1’25; PC profitability to improve from Q2’25 . Q3: $84M savings realized YTD, PC margin improvement .	CTO depletion now Q2’25; PC pricing aligned to market; 2025 PC margins mid‑ to high‑single digits .	Execution improving; timing modestly later
Automotive mix (hybrids vs EVs) and PM demand	PM growth on hybrids, operational gains; Q3 PM margin 53.3% .	Hybrids gaining share; PM margins targeted ~50% in 2025; regional mix dynamics reiterated .	Supportive auto mix; margins durable
Tariffs/macro	Not emphasized in Q2. Q3 broadly cited macro/FX/industrial weakness .	Tariff outlook uncertain; no current impact seen; monitoring for potential demand effects .	Watch item; no current headwind
APT price/mix and margin stability	Q2: 20.5% margin on price concessions; Q3: 20.1% margin, volumes up .	2025 margin guided ~20%; innovation runway in bioplastics .	Stable; selective pricing persists
Battery materials/Nexeon initiative	Limited detail earlier.	PM R&D focus on silicon-anode battery applications via Nexeon investment .	Emerging optionality
Working capital/FCF discipline	Q2: modest FCF; Q3: FCF $28.5M .	Q4 FCF $39.6M; 2025 FCF $220–$260M; no repeat of 2024 WC tailwind .	FCF ramping; mix shift aiding cash

Management Commentary

“Ingevity’s management team and Board have taken aggressive actions to improve performance and our stronger than expected results are evidence of our solid execution.” – Interim CEO Luis Fernandez‑Moreno .
“Performance Materials had its best year yet… The segment achieved record sales and EBITDA due to increased volumes, improved price and mix, and lower costs.” – Interim CEO .
“We generated over $50 million of free cash flow in a year where we had $200 million of repositioning cash costs… we ended the year at 3.5x net leverage.” – Interim CEO .
“Adjusted EBITDA margin improved 350 bps to 25.8% as our repositioning actions had their desired effect, driving a higher mix of revenue from our more profitable businesses and…cost reductions.” – CFO .
“We expect Performance Chemicals to generate EBITDA margins in the mid‑ to high single digits [in 2025]… prices reduced to align with market prices will mostly offset lower CTO costs.” – CFO .

Q&A Highlights

PC pricing and CTO inventory: Prices already aligned to market CTO; profitability should improve as high-cost CTO is consumed by Q2’25, though price reductions offset part of the benefit .
Auto mix: Industry forecasts indicate stronger hybrids vs EVs, favorable for NGVT content and PM demand .
Tariffs: Uncertainty acknowledged; no current impact on NGVT or customers; monitoring potential effects on production and demand .
Capex: 2025 spend primarily maintenance/SHE; limited growth capex .
PM innovation: Incremental R&D targeted at silicon‑anode battery applications (Nexeon), requiring testing/fine‑tuning .
Working capital: 2024 WC reduction was significant; not assumed to repeat in 2025; CTO working capital tailwind likely offset by growth in core businesses .
Strategic alternatives logistics: Active inbound interest; potential separation of co‑located assets feasible (condominium model); retain raw material flexibility for Pavement .

Estimates Context

S&P Global consensus snapshots for Q4 2024 EPS/Revenue/EBITDA were unavailable at time of analysis due to data access limits; therefore, no explicit beat/miss vs consensus is presented. Where estimates are needed for modeling, please note that consensus values could not be retrieved from S&P Global during this session.
Company-reported outcomes for Q4 2024: revenue $298.8M, adjusted EPS $0.95, adjusted EBITDA $80.6M, adjusted EBITDA margin 27.0% .

Key Takeaways for Investors

Portfolio quality improving: PM now >40% of revenue with structurally higher margins; PC exits and cost actions materially lifted consolidated margins in 2H .
Near‑term PC inflection lagged into Q2’25 as high‑cost CTO runs off; pricing competitiveness tempers raw material tailwind—model gradual margin build, not step‑function .
2025 setup: Guidance brackets EBITDA at $400–$415M with FCF $220–$260M and deleveraging to <2.8x—cash generation should be a central narrative/catalyst in 2025 .
Strategic alternatives for Industrial Specialties/CTO refinery are a potential unlocking event; any transaction could simplify the portfolio and raise margin/FCF profile (guidance currently excludes such impact) .
PM durability: Expect ~50% EBITDA margins in 2025 supported by favorable hybrid/ICE mix and operational efficiencies; watch EU/China regulatory and competitive dynamics longer term .
APT steady at ~20% margin with scope to improve on demand recovery and higher‑value bioplastics; pricing remains selective to defend share .
Risk monitor: Tariffs/macro uncertainty, industrial demand softness, and execution on PC strategic actions; however, cash discipline and cost control give cushion .

Ingevity Corp (NGVT)·Q4 2024 Earnings Summary