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Dec 31, 2019
Ingevity Q4 2019 Earnings Report
Reported an increase in net sales and adjusted EBITDA, driven by strong performance in the Performance Materials segment and the addition of the engineered polymers product line.
Key Takeaways
Ingevity reported Q4 2019 net sales of $303.4 million, up 8.9% year-over-year, and net income of $44.3 million, up 5.2% year-over-year. Adjusted EBITDA was $91.1 million, up 24.3% year-over-year, with an adjusted EBITDA margin of 30.0%. The company announced FY 2020 guidance of sales between $1.30 billion and $1.35 billion and adjusted EBITDA between $400 million and $420 million.
Net sales increased by 8.9% to $303.4 million compared to the prior year quarter.
Net income increased by 5.2% to $44.3 million compared to the prior year quarter.
Adjusted EBITDA increased by 24.3% to $91.1 million compared to the fourth quarter of 2018.
Performance Materials segment's growth was fueled by automakers' implementation of China 6 gasoline vapor emission control standards.
Revenue by Segment
Forward Guidance
Ingevity announced its fiscal year 2020 guidance to sales between $1.30 billion and $1.35 billion and adjusted EBITDA between $400 million and $420 million. Free cash flow will be between $200 million and $220 million.
Positive Outlook
- Performance Materials segment to deliver double-digit revenue growth
- Performance Materials segment to deliver accretion in adjusted EBITDA margins
- Engineered polymers will deliver solid growth due to new product and innovation projects in the pipeline
- Pavement technologies will see continued solid growth driven by adoption of our Evotherm® warm mix technology and global expansion
- Earnings growth and accreting margins, coupled with lower capital demands, will result in substantially higher free cash flow
Challenges Ahead
- Guidance reflects little to no improvement in the global macroeconomic environment
- Assumes limited impacts from the coronavirus in China, which remains unknown
- Revenues for Performance Chemicals segment expected to be flat to down slightly
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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