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Sep 30, 2020
Ingevity Q3 2020 Earnings Report
Ingevity's Q3 2020 results were driven by global automotive demand and production rebound, continued strong paving activity, cost reduction actions and strong execution.
Key Takeaways
Ingevity reported Q3 2020 net sales of $332 million, a decrease of 7.8% compared to the prior year quarter. Net income increased by 16.7% to $70 million, and adjusted EBITDA rose by 11.9% to $128 million. The company also generated $74 million in free cash flow and increased its full-year adjusted EBITDA guidance to $355 million - $365 million and sales guidance to $1.15 billion - $1.20 billion.
Net sales were $332 million, down 7.8% year-over-year due to COVID-19 impacts.
Net income increased 16.7% year-over-year to $70 million, with a net income margin of 21.1%.
Adjusted EBITDA increased 11.9% year-over-year to $128 million, with an adjusted EBITDA margin of 38.5%.
The company generated $74 million in free cash flow.
Revenue by Segment
Forward Guidance
Ingevity narrowed its fiscal year 2020 guidance for sales from between $1.10 billion and $1.20 billion to between $1.15 billion and $1.20 billion, and increased and narrowed its guidance for adjusted EBITDA from between $310 million and $350 million to between $355 million and $365 million.
Positive Outlook
- Company increases and narrows fiscal year 2020 guidance for adjusted EBITDA to between $355 million and $365 million.
- Company narrows guidance for sales to between $1.15 billion and $1.20 billion.
- Cost controls implemented are expected to maintain favorable adjusted EBITDA and adjusted EBITDA margins.
- Honeycomb scrubbers quarterly production reached a record.
- Strong leverage of low variable cost structure
Challenges Ahead
- Weakness may continue on the revenue line.
- Uncertainty remains regarding global economic strength.
- Performance Chemicals segment was negatively impacted by a weak economy resulting from COVID-19.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
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Avg. Return Before/After Earnings
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