Ingevity reports record year, progresses with strategic repositioning

NORTH CHARLESTON, S.C. - Ingevity Corporation (NYSE: NYSE:NGVT), a specialty chemicals company with a market capitalization of $1.74 billion, today announced significant progress in its business repositioning and financial performance, including a record year for its Performance Materials segment and strategic advancements in its Performance Chemicals division. According to InvestingPro data, the stock currently trades at $48.02, with analysts setting price targets between $45 and $66.

The company reported record sales and EBITDA for Performance Materials in 2024, with margins exceeding 50%. This growth is attributed to new pricing and operational efficiency initiatives, as well as increasing demand for fuel-efficient internal combustion engine (ICE) vehicles and hybrid cars. Ingevity also highlighted advancements in carbon technologies for silicon anode batteries.

Ingevity’s Performance Chemicals segment has undergone a transformation, including exiting lower-margin markets, reducing its physical footprint to optimize costs, diversifying raw material streams, and renegotiating long-term supply contracts. These actions are expected to improve the segment’s profitability and cash flow.

On October 30, 2024, Ingevity announced a strategic review of its business portfolio, which included exploring options for the majority of its Industrial Specialties product line and its North Charleston CTO refinery. This review aims to focus on higher growth and margin opportunities and is expected to conclude by the end of the year.

The company has also refreshed its Board of Directors with new appointments, including J. Kevin Willis, Senior Vice President & CFO of Ashland Inc (NYSE:ASH)., in December 2024. Ingevity has added three independent directors over the last three years.

Despite market challenges, Ingevity’s initiatives have already yielded results. The company realized $84 million in savings from Performance Chemicals repositioning actions in 2024, surpassing the target of $65-$75 million. With trailing twelve-month EBITDA of $374.6 million and revenue of $1.41 billion, this contributed to a second-half EBITDA margin increase to approximately 28% and free cash flow that exceeded guidance. Ingevity aims to reduce its net leverage ratio to below 2.8x by year-end 2025 and is targeting $400 to $415 million in EBITDA for the year. InvestingPro analysis reveals several additional key metrics and insights available to subscribers, including detailed financial health scores and comprehensive valuation metrics.

The company is also in the midst of a CEO search and continues to evaluate cost reduction opportunities and portfolio reviews with a "best owner" mindset.

Ingevity’s engagement with shareholder Vision One Management Partners has been tense, with the latter issuing a public presentation and nominating four director candidates. Ingevity’s Nominating and Governance Committee did not recommend these candidates, citing a lack of relevant experience. The company remains open to constructive dialogue but has rejected Vision One’s push for board representation, focusing instead on the best interests of all Ingevity shareholders.

This announcement is based on a press release statement from Ingevity Corporation. InvestingPro subscribers can access the complete financial analysis, including over 30 key metrics and expert insights available in the Pro Research Report, one of 1,400+ comprehensive company analyses available on the platform.

In other recent news, Ingevity Corporation announced its preliminary financial results for fiscal year 2024, reporting expected net sales of approximately $1.40 billion, aligning with consensus forecasts. The company anticipates an adjusted EBITDA of around $360 million and projects free cash flow to exceed $40 million. This financial performance underscores the success of Ingevity’s restructuring efforts, particularly within its Performance Chemicals segment. The company is also exploring strategic alternatives for its Performance Chemicals Industrial Specialties product line and North Charleston CTO refinery, aiming to enhance earnings and cash flow. Meanwhile, BMO Capital Markets adjusted its price target for Ingevity, increasing it from $61.00 to $62.00, while maintaining a Market Perform rating. BMO noted improvements in Ingevity’s Performance Materials business and the anticipated benefits from internal efficiencies in the APT segment. The firm acknowledged the improved risk/reward balance for Ingevity, although it remains cautious due to pending leadership appointments and potential tariff impacts. These developments reflect Ingevity’s ongoing strategic initiatives and financial progress.

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