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Sep 30, 2023
Ingevity Q3 2023 Earnings Report
Reported a decrease in net sales compared to the prior year, but maintained mid-twenties adjusted EBITDA margins due to the value delivered by specialty businesses and cost reduction actions.
Key Takeaways
Ingevity's third quarter net sales decreased by 7% compared to the prior year, with weak industrial demand impacting Advanced Polymer Technologies and Industrial Specialties. Net income and EPS also decreased. However, the company maintained mid-twenties adjusted EBITDA margins due to its specialty businesses and cost reduction actions.
Net sales decreased 7% to $446.0 million compared to a record prior year.
Net income decreased to $25.2 million, with diluted EPS of $0.69; adjusted earnings were $44.2 million, with diluted adjusted EPS of $1.21.
Adjusted EBITDA decreased to $110.4 million, with an adjusted EBITDA margin of 24.8%.
Operating cash flow was $106.9 million, with free cash flow of $73.4 million.
Revenue by Segment
Forward Guidance
The company reduced its full-year adjusted EBITDA guidance to between $375 million and $390 million due to weak industrial demand, pricing pressure, and rising CTO costs in the fourth quarter.
Challenges Ahead
- Weak industrial demand environment is not expected to recover in the fourth quarter.
- Continued volume weakness is expected.
- There is more pricing pressure, particularly in cyclical markets.
- CTO costs are rising in the fourth quarter.
- Inability to recover costs through pricing actions.
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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