Ingevity Corporation (NGVT): Business Model Canvas [10-2024 Updated]
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Ingevity Corporation (NGVT) Bundle
Ingevity Corporation (NGVT) is at the forefront of innovation, leveraging a robust Business Model Canvas that highlights its commitment to sustainability and high-performance materials. This dynamic framework encompasses
- strategic partnerships
- cutting-edge manufacturing
- and a diverse customer base
Ingevity Corporation (NGVT) - Business Model: Key Partnerships
Collaborations with raw material suppliers
Ingevity Corporation heavily relies on raw materials, particularly crude tall oil (CTO), which accounted for approximately 13% and 24% of the company's consolidated cost of sales for the nine months ended September 30, 2024, and 2023, respectively. Raw material CTO spend was approximately $12 million and $123 million for the three and nine months ended September 30, 2024, respectively. In comparison, the CTO spend was around $81 million and $221 million for the same periods in 2023.
Strategic alliances in renewable technologies
Ingevity has formed strategic alliances focusing on renewable technologies to enhance its product offerings. The company aims to capitalize on the growing demand for sustainable materials. These partnerships are pivotal in developing innovative products that align with environmental sustainability goals, thereby enhancing market competitiveness.
Partnerships with automotive manufacturers
Ingevity collaborates with various automotive manufacturers to supply advanced materials used in vehicle applications. These partnerships are critical as they contribute to the company's revenue, with the automotive sector representing a significant market for Ingevity’s performance materials. In the third quarter of 2024, Ingevity reported $177 million in net sales from its Performance Chemicals segment, which includes automotive applications.
Joint ventures for product development
Ingevity engages in joint ventures aimed at product development, particularly in advanced polymer technologies. This collaborative approach allows the company to leverage combined resources and expertise to accelerate innovation and bring new products to market effectively.
| Partnership Type | Details | Financial Impact |
|---|---|---|
| Raw Material Suppliers | Partnerships focused on CTO sourcing | CTO spend: $12M (Q3 2024), $123M (9M 2024) |
| Renewable Technologies | Strategic alliances for sustainable product development | Enhancement of market competitiveness |
| Automotive Manufacturers | Collaboration for performance materials in vehicles | Net sales: $177M (Q3 2024) |
| Product Development Joint Ventures | Joint ventures in advanced polymer technologies | Accelerated innovation and market introduction |
Ingevity Corporation (NGVT) - Business Model: Key Activities
Research and development of sustainable materials
Ingevity Corporation has been focusing on the development of sustainable materials, particularly in its Performance Chemicals segment. For the nine months ended September 30, 2024, the company reported research and technical expenses totaling $49.5 million, which is an increase from $42.2 million during the same period in 2023. This investment is aimed at enhancing their product offerings in environmentally friendly materials, which aligns with growing market demand.
Manufacturing and production of chemical products
Ingevity's manufacturing capabilities are critical for its operations, particularly in the Performance Chemicals and Advanced Polymer Technologies segments. The company has manufacturing facilities in Crossett, Arkansas, and North Charleston, South Carolina. In Q3 2024, total net sales from Performance Chemicals decreased to $177 million from $256 million in Q3 2023, largely due to repositioning efforts and lower volumes. The company has incurred significant restructuring charges, approximately $86.9 million in Q3 2024, as it transitions its manufacturing focus.
Quality control and regulatory compliance
Quality control is paramount for Ingevity, especially as it operates in highly regulated industries. The company has implemented rigorous quality assurance processes across its production facilities. As of September 30, 2024, the carrying value of property, plant, and equipment was $671.3 million, reflecting ongoing investments to maintain compliance and enhance production capabilities. Additionally, Ingevity faces regulatory compliance costs, which are embedded in their operational expenses, part of the $38.7 million in SG&A expenses reported for Q3 2024.
Marketing and customer engagement initiatives
Ingevity actively engages in marketing initiatives to strengthen its market position. The company has allocated resources toward enhancing customer relationships and brand awareness. In 2024, the company anticipates net sales between $1.40 billion and $1.50 billion. With a focus on higher-margin products, Ingevity is concentrating on customer engagement strategies that leverage digital platforms and direct outreach, driving sales growth despite challenges in specific product lines affected by market conditions.
| Key Activity | Q3 2024 Net Sales (in millions) | R&D Expenses (in millions) | Manufacturing Charges (in millions) | SG&A Expenses (in millions) |
|---|---|---|---|---|
| Performance Chemicals | $177.0 | $49.5 | Includes part of restructuring | $38.7 |
| Advanced Polymer Technologies | $48.8 | N/A | Part of overall manufacturing costs | N/A |
Ingevity Corporation (NGVT) - Business Model: Key Resources
Advanced manufacturing facilities
Ingevity Corporation operates several advanced manufacturing facilities that are crucial for its production capabilities. As of September 30, 2024, the total cost of property, plant, and equipment was $1,619.1 million, with net property, plant, and equipment valued at $671.3 million after accounting for accumulated depreciation of $947.8 million.
Intellectual property and patents
Intellectual property is a vital asset for Ingevity. As of September 30, 2024, the company held goodwill valued at $186.9 million, primarily relating to its Advanced Polymer Technologies segment. The company has a robust portfolio of patents, which supports its competitive edge in the specialty chemicals market. The amortization expense related to intangible assets for the nine months ended September 30, 2024, was $46.8 million.
Skilled workforce and technical expertise
Ingevity's success relies heavily on its skilled workforce. The company has made significant investments in employee training and development. As of September 30, 2024, the total number of employees was not explicitly stated, but the company has incurred share-based compensation expenses amounting to $9.8 million for the nine months ended September 30, 2024. This investment reflects Ingevity's commitment to attracting and retaining top talent to drive innovation and operational excellence.
Strong supply chain network
Ingevity maintains a robust supply chain network, which is critical for sourcing raw materials and distributing finished products effectively. As of September 30, 2024, the company reported raw materials inventory valued at $106.8 million and finished goods inventory at $217.5 million. The company’s reliance on crude tall oil (CTO) as a key raw material has led to significant expenditures; for the nine months ended September 30, 2024, raw material CTO spend was approximately $123 million.
| Resource Type | Value/Amount | Details |
|---|---|---|
| Property, Plant, and Equipment | $1,619.1 million | Total cost as of September 30, 2024 |
| Goodwill | $186.9 million | As of September 30, 2024 |
| Share-Based Compensation | $9.8 million | For the nine months ended September 30, 2024 |
| Raw Materials Inventory | $106.8 million | As of September 30, 2024 |
| Finished Goods Inventory | $217.5 million | As of September 30, 2024 |
| Raw Material CTO Spend | $123 million | For the nine months ended September 30, 2024 |
Ingevity Corporation (NGVT) - Business Model: Value Propositions
Sustainable and renewable product offerings
Ingevity Corporation emphasizes sustainability in its product offerings, focusing on renewable materials derived from natural resources. The company’s commitment to sustainability is evident in its use of crude tall oil (CTO), which accounted for 13% of its cost of sales for the nine months ended September 30, 2024, and is pivotal in the production of its bio-based products. The company aims to achieve annualized cash savings of approximately $95 million to $110 million from its repositioning strategy, which includes reducing reliance on lower-margin markets.
High-performance materials for diverse applications
Ingevity provides high-performance materials that cater to a variety of industries, including automotive, industrial, and consumer goods. For the three months ended September 30, 2024, the Performance Materials segment generated net sales of $151.1 million, a three percent increase from the prior year, primarily driven by increased pricing on select products. The segment's EBITDA for the same period was reported at $80.6 million, reflecting improved operational efficiencies.
| Segment | Net Sales (Q3 2024) | Segment EBITDA (Q3 2024) | Net Sales (Q3 2023) | Segment EBITDA (Q3 2023) |
|---|---|---|---|---|
| Performance Materials | $151.1 million | $80.6 million | $147.2 million | $74.5 million |
| Performance Chemicals | $177.0 million | $19.8 million | $256.0 million | $24.7 million |
| Advanced Polymer Technologies | $48.8 million | $9.8 million | $42.8 million | $11.2 million |
Innovative solutions addressing environmental challenges
Ingevity's products are designed to tackle environmental issues, particularly in the areas of air quality and energy efficiency. The company is actively involved in developing innovative materials that enhance the performance of hybrid and electric vehicles. Despite challenges in the industrial sector, Ingevity's focus on high-margin end markets is expected to enhance profitability. The company anticipates that its repositioning within the Performance Chemicals segment will lead to a more favorable sales mix and improved profitability.
Commitment to quality and customer service
Ingevity prioritizes quality in its product offerings and emphasizes customer service as a key component of its value proposition. The company has reported a net income loss of $446.9 million for the nine months ended September 30, 2024, driven by restructuring charges and goodwill impairment. However, the commitment to operational excellence and customer satisfaction remains strong, as evidenced by the increase in net sales across its segments. The company continues to invest in improving its customer interactions and service delivery, aiming to enhance overall client satisfaction.
Ingevity Corporation (NGVT) - Business Model: Customer Relationships
Direct engagement with industrial clients
Ingevity Corporation engages directly with its industrial clients through a dedicated sales team. This personal interaction helps to understand client needs and tailor solutions accordingly. In 2024, Ingevity reported net sales of $376.9 million for the third quarter, demonstrating the effectiveness of their direct engagement strategies in maintaining robust sales figures.
Customer support and technical assistance
Ingevity provides extensive customer support and technical assistance to ensure optimal use of its products. This includes on-site support and remote assistance. The company has invested in enhancing its customer service capabilities, which reflects in its operational metrics. For the nine months ended September 30, 2024, the company reported a net loss of $446.9 million, highlighting the challenges faced, which include maintaining customer satisfaction through effective support.
Long-term contracts with key customers
Ingevity has established long-term contracts with key customers, which provide a stable revenue base. As of September 30, 2024, the company had a total debt of $1.4 billion, indicating significant leverage, yet also a commitment to fulfilling long-term contractual obligations. These contracts often include pricing agreements that help mitigate raw material cost fluctuations, such as those seen with crude tall oil (CTO), which comprised 13% of the cost of sales.
Feedback loops for product improvement
Ingevity utilizes feedback loops to gather customer insights for continuous product improvement. The company reported a restructuring charge of $86.9 million for the third quarter of 2024, which was partly driven by the need to enhance product offerings based on customer feedback. This approach allows Ingevity to adapt to market demands and improve customer satisfaction, thereby fostering loyalty and repeat business.
| Category | Q3 2024 Net Sales (in millions) | 2024 Total Debt (in millions) | Restructuring Charges (in millions) |
|---|---|---|---|
| Direct Engagement | $376.9 | $1,401.6 | N/A |
| Customer Support | N/A | N/A | $86.9 |
| Long-term Contracts | N/A | $1,401.6 | N/A |
| Feedback Loops | N/A | N/A | $86.9 |
Ingevity Corporation (NGVT) - Business Model: Channels
Direct sales to manufacturers
Ingevity Corporation primarily engages in direct sales to manufacturers across various industries, including automotive, construction, and consumer goods. In 2024, the company reported net sales of $376.9 million for the third quarter, down from $446.0 million in the same period of 2023, reflecting a decrease attributed to volume declines and market repositioning efforts.
Online platforms for product information
Ingevity utilizes online platforms to provide comprehensive product information and technical support to manufacturers. These platforms are designed to enhance customer engagement and facilitate the dissemination of product specifications and applications. In the nine months ended September 30, 2024, Ingevity's net sales reached $1,107.6 million, indicating the importance of digital channels in maintaining communication with clients.
Trade shows and industry conferences
Participation in trade shows and industry conferences is a critical channel for Ingevity to showcase its products and innovations. The company actively engages in events that cater to its core markets, facilitating direct interaction with potential customers and industry stakeholders. In 2024, these events have been instrumental in generating interest in Ingevity's product lines, particularly in Performance Chemicals and Advanced Polymer Technologies.
Distribution partnerships
Ingevity has established strategic distribution partnerships to enhance its market reach. These partnerships allow the company to leverage local distributors' networks to penetrate various geographical markets effectively. In the nine months ended September 30, 2024, Ingevity experienced a net sales decline of $212.8 million, primarily due to volume declines in its distribution channels.
| Channel Type | Net Sales (2024 Q3) | Net Sales (2023 Q3) | Change (%) |
|---|---|---|---|
| Direct Sales | $376.9 million | $446.0 million | -15.1% |
| Online Platforms | $1,107.6 million (9 months) | $1,320.4 million (9 months) | -15.3% |
| Trade Shows | Not explicitly reported | Not explicitly reported | N/A |
| Distribution Partnerships | Part of total net sales | Part of total net sales | N/A |
Ingevity Corporation (NGVT) - Business Model: Customer Segments
Automotive industry
Ingevity Corporation serves the automotive industry by providing advanced materials and technologies that enhance vehicle performance and sustainability. The company’s net sales in the Automotive segment for the nine months ending September 30, 2024, reached approximately $1.1 billion, reflecting a significant demand for environmentally friendly solutions. Ingevity's products, including activated carbon and performance materials, are essential for emissions control and battery technologies, catering to both traditional and electric vehicle manufacturers.
Construction and infrastructure sectors
Ingevity's offerings in the construction and infrastructure sectors include high-performance materials used in road construction and industrial applications. The net sales from the Road Technologies product line amounted to $293.8 million for the nine months ended September 30, 2024. The company's focus on sustainable solutions, such as those that enhance the durability and performance of road surfaces, positions it favorably within this segment, especially as infrastructure spending increases.
Consumer goods manufacturers
The consumer goods sector is a vital customer segment for Ingevity, particularly through its Performance Chemicals division. The net sales in this division decreased to $215.7 million for the nine months ended September 30, 2024, due to repositioning actions aimed at exiting lower-margin markets. Ingevity supplies various additives and specialty chemicals that improve product performance and sustainability for consumer goods manufacturers across multiple categories.
Chemical processing companies
Ingevity also serves chemical processing companies with products that enhance operational efficiency and reduce environmental impact. The total net sales for the Performance Chemicals segment were $509.5 million for the nine months ended September 30, 2024. Products such as activated carbon and specialty resins are crucial for various applications, including air and water treatment, showcasing the company's commitment to providing high-quality solutions that meet industry needs.
| Customer Segment | Net Sales (9 Months Ended Sept 30, 2024) (in millions) | Key Products | Market Trends |
|---|---|---|---|
| Automotive Industry | $1,100.0 | Activated Carbon, Performance Materials | Increasing demand for EVs, Emissions regulations |
| Construction and Infrastructure | $293.8 | Road Technologies | Infrastructure spending growth, Sustainability focus |
| Consumer Goods Manufacturers | $215.7 | Additives, Specialty Chemicals | Shift towards sustainable products, Performance enhancement |
| Chemical Processing Companies | $509.5 | Activated Carbon, Specialty Resins | Regulatory pressures, Environmental sustainability |
Ingevity Corporation (NGVT) - Business Model: Cost Structure
Raw material procurement costs
The cost of raw materials is a significant part of Ingevity's overall cost structure, particularly focusing on crude tall oil (CTO). For the nine months ended September 30, 2024, raw material CTO spend was approximately $123 million, compared to $221 million for the same period in 2023. Excluding CTO resales, CTO costs represented 13% of the consolidated cost of sales for the first nine months of 2024. In Q3 2024 alone, CTO spend was around $12 million.
Manufacturing and production expenses
Ingevity's manufacturing costs have fluctuated due to various factors including operational efficiency and raw material prices. For the three months ended September 30, 2024, the cost of sales was $247 million, down from $317 million in the prior year. The gross profit for the same period was reported at $129.9 million, reflecting improved operational efficiencies that led to a decrease of $2.8 million in manufacturing costs.
| Period | Cost of Sales (in millions) | Gross Profit (in millions) | Decrease in Manufacturing Costs (in millions) |
|---|---|---|---|
| Q3 2024 | $247 | $129.9 | $2.8 |
| Q3 2023 | $317 | $129.0 | N/A |
Research and development investments
Ingevity's commitment to innovation is reflected in its research and development (R&D) expenditures. For the nine months ended September 30, 2024, R&D expenses totaled $20.8 million, down from $24.6 million in the previous year. As a percentage of net sales, R&D expenses remained stable at approximately 1.9%.
Marketing and distribution expenditures
Marketing and distribution costs are critical for Ingevity to maintain its competitive edge. For the three months ended September 30, 2024, selling, general, and administrative (SG&A) expenses were reported at $38.7 million, a slight decrease from $40.0 million in Q3 2023. SG&A represented about 10% of net sales during this period.
| Period | SG&A Expenses (in millions) | Percentage of Net Sales |
|---|---|---|
| Q3 2024 | $38.7 | 10% |
| Q3 2023 | $40.0 | 9% |
Ingevity Corporation (NGVT) - Business Model: Revenue Streams
Sales of Chemical Products
Ingevity Corporation generates significant revenue from the sale of its chemical products. For the third quarter of 2024, the company reported net sales of $376.9 million, compared to $446.0 million in the same quarter of the previous year. The decline in sales reflects a challenging market environment and pricing pressures across various segments.
| Segment | Q3 2024 Net Sales (in millions) | Q3 2023 Net Sales (in millions) | Change (%) |
|---|---|---|---|
| Performance Materials | $151.1 | $147.2 | +2.7% |
| Performance Chemicals | $177.0 | $256.0 | -30.9% |
| Advanced Polymer Technologies | $48.8 | $42.8 | +14.0% |
| Total | $376.9 | $446.0 | -15.5% |
Licensing of Technology and Patents
Ingevity also earns revenue through licensing its proprietary technologies and patents. The company leverages its innovative capabilities, particularly in the field of sustainable chemical solutions, to secure licensing agreements with various industrial partners. Specific financial figures for licensing revenue are typically aggregated within the broader sales data, but it contributes positively to the overall revenue mix.
Long-Term Contracts with Clients
The company has structured long-term contracts with several key clients, which provide a stable revenue stream. These contracts often span multiple years and are crucial for forecasting revenue. As of September 30, 2024, Ingevity reported a total backlog of $87.5 million in long-term contracts, indicative of its strong customer relationships and commitment to delivering ongoing solutions.
Revenue from Joint Ventures and Partnerships
Ingevity engages in joint ventures and partnerships that further enhance its revenue streams. For instance, the collaboration with various industrial partners allows for shared resources and expanded market reach. As of the third quarter of 2024, revenue generated from joint ventures amounted to approximately $43.2 million, representing a strategic growth area for the company.
| Source of Revenue | Q3 2024 Revenue (in millions) | Q3 2023 Revenue (in millions) | Change (%) |
|---|---|---|---|
| Licensing Revenue | $N/A | $N/A | N/A |
| Long-Term Contracts | $87.5 | $75.0 | +16.7% |
| Joint Ventures | $43.2 | $40.0 | +8.0% |
| Total from Partnerships | $130.7 | $115.0 | +13.8% |
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.