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Dec 31, 2024
Ingevity Q4 2024 Earnings Report
Ingevity reported a 20% decrease in net sales for Q4 2024, primarily due to strategic repositioning in the Performance Chemicals segment, while adjusted EBITDA increased by 91%.
Key Takeaways
Ingevity's fourth quarter of 2024 saw a significant 20% decrease in net sales, primarily driven by strategic repositioning actions in the Performance Chemicals segment, which involved exiting lower-margin end markets. Despite this, the company reported a substantial 91% increase in adjusted EBITDA, reflecting the benefits of these repositioning efforts and a non-cash inventory charge in the prior year. Net income for the quarter was $16.6 million, with diluted EPS of $0.46.
Net sales decreased by 20% to $298.8 million in Q4 2024, mainly due to strategic repositioning in the Performance Chemicals segment.
Adjusted EBITDA surged by 91% to $80.6 million, with the adjusted EBITDA margin reaching 27.0%.
Net income for the quarter was $16.6 million, with diluted EPS of $0.46, including pre-tax restructuring charges of $23.4 million.
Operating cash flow was $64.5 million, and free cash flow was $39.6 million, including a $50.0 million termination fee installment.
Revenue by Segment
Forward Guidance
Ingevity announced its full year 2025 guidance, projecting sales between $1.3 billion and $1.4 billion, adjusted EBITDA between $400 million and $415 million, and free cash flow between $220 million and $260 million. This guidance excludes potential impacts from exploring strategic alternatives for the Performance Chemicals Industrial Specialties product line and North Charleston CTO refinery.
Positive Outlook
- Expected sales between $1.3 billion and $1.4 billion for full year 2025.
- Anticipated adjusted EBITDA between $400 million and $415 million.
- Projected free cash flow between $220 million and $260 million.
- Commitment to enhancing shareholder value through improved EBITDA with margins approaching 30%.
- Expectation to reduce net leverage ratio to below 2.8 times by Q4 2025.
Challenges Ahead
- Guidance does not include potential impact from the exploration of strategic alternatives for the Industrial Specialties product line.
- Guidance does not include potential impact from the exploration of strategic alternatives for the North Charleston CTO refinery.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
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Avg. Return Before/After Earnings
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