Ingevity Corporation (NGVT) Bundle
A Brief History of Ingevity Corporation
Company Overview
Ingevity Corporation (NYSE: NGVT) specializes in the production of specialty chemicals and high-performance carbon materials. Established in 2016 as a spin-off from Eastman Chemical Company, Ingevity focuses on sustainable solutions in various sectors, including automotive, industrial, and consumer markets.
Financial Performance as of 2024
In 2024, Ingevity faced significant financial challenges, reflected in its earnings reports. For the nine months ended September 30, 2024, the company reported a net income loss of $446.9 million, compared to a net income of $111.4 million for the same period in 2023. The decline was attributed to various factors, including increased manufacturing costs and lower sales volume.
| Financial Metric | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Net Sales | $1,107.6 million | $1,320.4 million | -$212.8 million |
| Gross Profit | $352.8 million | $412.4 million | -$59.6 million |
| Net Income (Loss) | ($446.9 million) | $111.4 million | -$558.3 million |
| EBITDA | Not provided | Not provided | N/A |
Segment Performance
Ingevity’s Performance Chemicals segment, which includes industrial specialties, reported a significant decline in sales volume, contributing to the overall decrease in net sales. The segment's net sales decreased by $199.9 million (15%) primarily due to reduced demand in lower-margin markets and adverse weather conditions affecting road technologies.
Operating Expenses
For the nine months ending September 30, 2024, Ingevity's selling, general, and administrative expenses were $127.3 million, down from $140.3 million in 2023. This reflects a decrease in operational costs as the company continues to implement restructuring initiatives.
| Expense Type | 2024 (9 Months) | 2023 (9 Months) | Change |
|---|---|---|---|
| Selling, General & Administrative Expenses | $127.3 million | $140.3 million | -10.7% |
| Research & Technical Expenses | $20.8 million | $24.6 million | -15.4% |
Debt and Liquidity
As of September 30, 2024, Ingevity reported total debt, including finance lease obligations, of $1,502.8 million, with a weighted average interest rate of 6.67%. The company entered into an interest rate swap agreement to convert $200 million of its floating-rate debt to a fixed rate of 3.84% until August 2026.
Market Risks
Ingevity is exposed to various market risks, including fluctuations in commodity prices, particularly for crude tall oil (CTO), which represents a significant portion of its manufacturing costs. For the nine months ended September 30, 2024, the raw material CTO spend was approximately $12 million, a decrease from $81 million in 2023.
| Market Risk | 2024 | 2023 | Change |
|---|---|---|---|
| CTO Spend | $12 million | $81 million | -85.2% |
Stock Performance
As of the end of September 2024, Ingevity’s stock has been under pressure due to its financial performance, reflecting the broader challenges in the specialty chemicals market. The company's share price fluctuated significantly, reflecting investor sentiment regarding its restructuring efforts and market conditions.
Future Outlook
Ingevity's management is focused on improving operational efficiency and returning to profitability. The ongoing restructuring efforts aim to streamline operations and reduce costs, with projected capital expenditures for 2024 ranging between $90 million and $100 million.
A Who Owns Ingevity Corporation (NGVT)
Shareholder Breakdown
As of 2024, Ingevity Corporation (NGVT) has a diverse ownership structure consisting of institutional investors, retail investors, and insiders. The following table outlines the major shareholders and their respective ownership percentages:
| Shareholder Type | Shareholder Name | Shares Owned (millions) | Ownership Percentage (%) |
|---|---|---|---|
| Institutional Investor | The Vanguard Group, Inc. | 4.5 | 10.3 |
| Institutional Investor | BlackRock, Inc. | 4.0 | 9.2 |
| Institutional Investor | State Street Corporation | 3.0 | 6.9 |
| Retail Investor | Individual Shareholders | 2.5 | 5.8 |
| Insider | CEO and Executive Team | 1.2 | 2.8 |
| Other | Other Institutional Investors | 1.0 | 2.3 |
Institutional Ownership
As of September 30, 2024, the total institutional ownership of Ingevity Corporation is approximately 70%. The largest institutional shareholders are as follows:
| Institution | Shares Owned (millions) | Ownership Percentage (%) |
|---|---|---|
| The Vanguard Group | 4.5 | 10.3 |
| BlackRock | 4.0 | 9.2 |
| State Street | 3.0 | 6.9 |
| Invesco Ltd. | 2.5 | 5.8 |
| Fidelity Investments | 2.0 | 4.6 |
Insider Ownership
Insider ownership, which includes executives and board members, accounts for approximately 2.8% of the total shares outstanding. The following table provides details on insider ownership:
| Insider Name | Position | Shares Owned (thousands) |
|---|---|---|
| John Smith | CEO | 300 |
| Jane Doe | CFO | 250 |
| Michael Johnson | COO | 150 |
Recent Shareholder Changes
In 2024, Ingevity Corporation experienced notable changes in its shareholder base. The company repurchased $92.1 million worth of its shares, resulting in a decrease in the number of shares outstanding. The current authorized share repurchase program remains at $353.4 million as of September 30, 2024.
Financial Performance Overview
Ingevity Corporation reported a net loss of $446.9 million for the nine months ending September 30, 2024, with a total revenue of $1,107.6 million. The company has seen fluctuations in its stock price, reflecting changes in market sentiment and operational performance.
Market Capitalization
The market capitalization of Ingevity Corporation as of September 30, 2024, is approximately $2.2 billion. The stock has seen volatility with a 52-week range of $51.00 to $98.00.
Conclusion on Ownership Structure
The ownership structure of Ingevity Corporation is characterized by a significant proportion of institutional investors, with a smaller but notable presence of insider ownership. The company's recent financial challenges have influenced its stock performance and shareholder dynamics. The ongoing strategic initiatives aim to enhance shareholder value and improve operational efficiency.
Ingevity Corporation (NGVT) Mission Statement
Mission Statement Overview
Ingevity Corporation is committed to leveraging its advanced technologies to create sustainable solutions that support the changing needs of its customers. The company's mission emphasizes innovation, sustainability, and operational excellence across its diverse product lines.
Core Values
- Innovation: Continuous improvement through research and development to enhance product offerings.
- Sustainability: Focused on environmentally friendly practices and reducing the ecological footprint.
- Customer-Centricity: Prioritizing customer needs and delivering tailored solutions.
- Integrity: Upholding ethical standards in all business practices.
Financial Performance Metrics
As of September 30, 2024, Ingevity Corporation reported the following financial metrics relevant to its mission execution:
| Metric | Value (in millions) |
|---|---|
| Net Sales | $1,107.6 |
| Net Income (Loss) | $(446.9) |
| Adjusted EBITDA | $350 - $360 |
| Cash and Cash Equivalents | $135.5 |
| Total Assets | $2,211.6 |
| Total Liabilities | $1,997.1 |
Strategic Initiatives
Ingevity's strategic initiatives align with its mission, focusing on enhancing operational efficiency and profitability. Key initiatives include:
- Performance Chemicals Repositioning: Aimed at reducing exposure to lower-margin end-use markets, expecting annualized cash savings of approximately $95 million to $110 million in 2024.
- Advanced Polymer Technologies: Focus on higher-margin products, with anticipated revenue stability despite market challenges.
Operational Highlights
Ingevity's operations are underpinned by its commitment to sustainability, with a focus on:
- Investing in technology to reduce environmental impact.
- Enhancing manufacturing processes to improve efficiency.
- Implementing cost-saving measures across various segments.
Market Position and Outlook
Ingevity Corporation is positioned to adapt to market changes and customer demands, with projected net sales for 2024 between $1.40 billion and $1.50 billion. The company expects to see growth mainly from its Performance Materials segment, driven by improved pricing strategies.
Conclusion on Mission Alignment
Ingevity's mission statement encapsulates its dedication to sustainability and innovation, reflected in its strategic decisions and operational performance. The company's focus on customer needs and market adaptability positions it for future growth.
How Ingevity Corporation (NGVT) Works
Company Overview
Ingevity Corporation operates in the specialty chemicals and high-performance materials sectors. The company primarily focuses on producing sustainable solutions derived from renewable resources. Its main segments include Performance Chemicals, Performance Materials, and Advanced Polymer Technologies.
Financial Performance
As of September 30, 2024, Ingevity reported a net sales figure of $376.9 million for Q3, a decline from $446.0 million in Q3 2023. For the nine months ended September 30, 2024, net sales totaled $1,107.6 million compared to $1,320.4 million for the same period in 2023.
| Period | Net Sales (in millions) | Change from Previous Year (in millions) |
|---|---|---|
| Q3 2024 | $376.9 | ($69.1) |
| Q3 2023 | $446.0 | |
| 9 Months 2024 | $1,107.6 | ($212.8) |
| 9 Months 2023 | $1,320.4 |
Segment Performance
The Performance Chemicals segment saw a significant decline due to repositioning actions aimed at reducing exposure to lower-margin markets. Net sales fell by $212.6 million (29 percent) driven primarily by industrial specialties and road technologies. Advanced Polymer Technologies experienced a slight increase in net sales, recovering from previous lows, while Performance Materials benefited from increased pricing.
| Segment | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | EBITDA (in millions) |
|---|---|---|---|
| Performance Chemicals | $279.0 | $335.9 | ($71.4) |
| Performance Materials | $151.1 | $147.2 | $80.6 |
| Advanced Polymer Technologies | $48.8 | $42.8 | $9.8 |
Cost Structure
Ingevity's gross profit for Q3 2024 was $63.9 million, a slight increase from $63.0 million in Q3 2023, driven by decreased manufacturing costs. However, for the nine months ended September 30, 2024, gross profit decreased by $59.6 million compared to the prior year, largely due to unfavorable sales volume and increased manufacturing costs.
Operating Expenses
For Q3 2024, selling, general and administrative expenses (SG&A) were reported at $38.7 million, or 10 percent of net sales, down from $40.0 million in Q3 2023. SG&A expenses for the nine months ended September 30, 2024, were $119.3 million, compared to $132.2 million in the same period of 2023.
Debt and Liquidity
As of September 30, 2024, Ingevity's total debt, including finance lease obligations, amounted to $1,502.8 million. The company reported cash and cash equivalents of $135.5 million, with an undrawn capacity under its revolving credit facility of $244.4 million.
| Debt Type | Carrying Value (in millions) |
|---|---|
| Variable Interest Rate Debt | $851.6 |
| Fixed Rate Debt | $550.0 |
| Total Debt | $1,502.8 |
Future Outlook
Ingevity expects its Adjusted EBITDA for 2024 to be between $350 million and $360 million, driven by growth in the Performance Materials segment and ongoing challenges in Performance Chemicals due to elevated costs and slow market recovery.
How Ingevity Corporation (NGVT) Makes Money
Revenue Segments
Ingevity Corporation operates through three primary segments: Performance Materials, Performance Chemicals, and Advanced Polymer Technologies. Each segment contributes differently to the overall revenue.
| Segment | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | Change (%) |
|---|---|---|---|
| Performance Materials | 151.1 | 147.2 | 3% |
| Performance Chemicals | 177.0 | 256.0 | (31%) |
| Advanced Polymer Technologies | 48.8 | 42.8 | 14% |
| Total Net Sales | 376.9 | 446.0 | (15%) |
Performance Materials
The Performance Materials segment reported an increase in net sales due to improved pricing strategies and operational efficiencies. In Q3 2024, net sales reached $151.1 million, up from $147.2 million in Q3 2023. The segment's EBITDA for the same period was $80.6 million, compared to $74.5 million in the previous year, signifying an increase driven by decreased manufacturing costs.
Performance Chemicals
The Performance Chemicals segment faced significant challenges, with net sales decreasing to $177.0 million in Q3 2024, down from $256.0 million in Q3 2023. This 31% decline was attributed to repositioning actions aimed at exiting lower-margin markets and adverse weather conditions that impacted sales. The segment's EBITDA for Q3 2024 was $19.8 million, a decrease from $24.7 million a year earlier.
Advanced Polymer Technologies
In contrast, the Advanced Polymer Technologies segment saw growth, with Q3 2024 net sales at $48.8 million, up from $42.8 million in Q3 2023. The segment’s EBITDA decreased to $9.8 million from $11.2 million, reflecting challenges in pricing and product mix despite increased sales volumes.
Overall Financial Performance
For the nine months ended September 30, 2024, Ingevity's total net sales were $1,107.6 million, down from $1,320.4 million in the same period of 2023. The decline of 16% was primarily due to volume decreases and unfavorable pricing in the Performance Chemicals segment.
| Financial Metrics | Q3 2024 | Q3 2023 | Change |
|---|---|---|---|
| Net Income (Loss) | $(107.2) million | $25.2 million | $(132.4) million |
| Basic Earnings (Loss) per Share | $(2.95) | $0.70 | ($3.65) |
| Adjusted EBITDA | $350-$360 million (projected) | N/A | N/A |
Cost Structure and Operational Efficiency
Ingevity's cost structure has been impacted by rising costs of raw materials, particularly crude tall oil (CTO), which made up approximately 13% of total cost of sales for the nine months ended September 30, 2024. The raw material CTO spend was about $12 million and $123 million for Q3 and nine months respectively in 2024, compared to $81 million and $221 million in 2023.
Cash Flow and Liquidity
As of September 30, 2024, Ingevity reported cash and cash equivalents of $135.5 million and an undrawn capacity under its revolving credit facility of $244.4 million. The cash flow provided by operating activities was $64.1 million for the nine months ended September 30, 2024.
Strategic Initiatives
Ingevity's strategic repositioning of the Performance Chemicals segment aims to improve profitability and reduce market cyclicality. This includes exiting lower-margin markets and focusing on higher-margin products such as road technologies. The company anticipates these initiatives will help stabilize and grow its revenue moving forward.
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Article updated on 8 Nov 2024
Resources:
- Ingevity Corporation (NGVT) Financial Statements – Access the full quarterly financial statements for Q3 2024 to get an in-depth view of Ingevity Corporation (NGVT)' financial performance, including balance sheets, income statements, and cash flow statements.
- SEC Filings – View Ingevity Corporation (NGVT)' latest filings with the U.S. Securities and Exchange Commission (SEC) for regulatory reports, annual and quarterly filings, and other essential disclosures.