Ingevity Corp (NGVT) 2024 Q4 法說會逐字稿

Good morning or good afternoon all. Welcome to the Ingevity fourth-quarter and full-year 2024 earnings call and webcast. My name is Adam, and I'll be your operator today. (Operator Instructions)

大家早安或下午好。歡迎參加 Ingevity 2024 年第四季和全年財報電話會議和網路廣播。我叫亞當，今天我將擔任您的接線生。（操作員指示）

I will now hand the floor to John Nypaver to begin.

現在我將把發言權交給 John Nypaver。

Thank you, Adam. Good morning and welcome to Ingevity's fourth-quarter 2024 earnings call. Earlier this morning, we posted a presentation on our investor site that you can use to follow today's discussion. It can be found on ir.ingevity.com under Events and Presentations.

謝謝你，亞當。早安，歡迎參加 Ingevity 2024 年第四季財報電話會議。今天早些時候，我們在投資者網站上發布了一個演示文稿，您可以用它來關註今天的討論。您可在 ir.ingevity.com 的“活動和演示”下找到它。

Also, throughout this call, we may refer to non-GAAP financial measures which are intended to supplement, not substitute for comparable GAAP measures. Definitions of these non-GAAP financial measures and reconciliations to comparable GAAP measures are included in our earnings release and are also in our most recent Form 10-K.

此外，在整個電話會議中，我們可能會引用非 GAAP 財務指標，這些指標旨在補充而不是替代可比較的 GAAP 指標。這些非 GAAP 財務指標的定義以及與可比較 GAAP 指標的對帳包含在我們的收益報告中，也包含在我們最新的 10-K 表中。

We may also make forward-looking statements regarding future events and future financial performance of the company during this call, and we caution you that these statements are just projections and actual results or events may differ materially from those projections as further described in our earnings release.

我們也可能在本次電話會議中對公司未來事件和未來財務表現做出前瞻性陳述，我們提醒您，這些陳述只是預測，實際結果或事件可能與這些預測有重大差異，正如我們的收益報告中進一步描述的那樣。

Our agenda is on slide 3. Our speakers today are Luis Fernandez-Moreno, our Interim CEO; and Mary Dean Hall, our CFO. Our business leads Rich White, President of Performance Chemicals; and Steve Hulme, President of Advanced Polymer Technologies, are available for questions and comments. Ed Woodcock, President of Performance Materials, is traveling. In his place to answer questions is Jonathan MacIver, our VP of Global Commercial for Performance Materials.

我們的議程在第 3 張投影片。我們今天的演講者是我們的臨時執行長 Luis Fernandez-Moreno；以及我們的財務長 Mary Dean Hall。我們的業務負責人是高性能化學品總裁 Rich White；以及先進聚合物技術公司總裁史蒂夫休姆 (Steve Hulme) 均可回答問題並發表評論。性能材料部門總裁 Ed Woodcock 正在出差。取代他回答問題的是我們的高性能材料全球商務副總裁喬納森·麥克艾弗 (Jonathan MacIver)。

Luis will start us off with some highlights for the year. Mary will follow with a review of our consolidated financial performance and the business segment results for the fourth quarter and full year. Luis will then provide closing comments and discuss 2025 guidance. Our prepared comments will focus on full-year results, but we are happy to take questions on the quarter during the Q&A portion of the call.

路易斯將首先向我們介紹今年的一些亮點。瑪麗將隨後回顧我們的綜合財務業績以及第四季度和全年的業務部門業績。路易斯隨後將發表結束語並討論 2025 年的指導方針。我們準備好的評論將重點放在全年業績，但我們很樂意在電話會議的問答環節回答有關本季的問題。

With that over to you, Luis.

這些就交給你了，路易斯。

Thanks, John, and good morning, everyone. Please turn to slide 4. In 2024, we took proactive steps to improve performance and enhance shareholder value. These actions, which are already delivering results, have significantly altered the way we perform as a company.

謝謝，約翰，大家早安。請翻到幻燈片 4。2024年，我們積極採取措施提升業績，提升股東價值。這些行動已經取得了成效，大大改變了我們公司的運作方式。

First, we continue to reposition Performance Chemicals. This segment is now focused on higher margin and markets, with improved raw material cost structure, which will be more visible once we consume the remaining high-cost CTO inventory.

首先，我們持續重新定位高性能化學品。該部門目前專注於更高的利潤和市場，原材料成本結構得到改善，一旦我們消耗掉剩餘的高成本 CTO 庫存，這一點將更加明顯。

Second, we accelerated execution of our strategy. Performance Materials had a record year in both sales and EBITDA, surpassing margins of 50%. And there is momentum behind this business as we see ICE vehicles continue to become more fuel efficient and consumer preferences trending towards hybrids which require more advanced carbon technology.

二是加快戰略實施。高性能材料業務的銷售額和 EBITDA 均創下歷史新高，利潤率超過 50%。我們看到內燃機汽車的燃油效率不斷提高，消費者也越來越青睞需要更先進碳技術的混合動力車，因此這項業務的發展勢頭強勁。

We're also making progress in developing new outlets for our carbon in silicon anode batteries through our investment in Nexeon. Performance Chemicals margins improved in the second half of 2024, and we protected share and volume growth in APT in a difficult industrial environment.

我們也透過對 Nexeon 的投資，在為矽陽極電池中的碳開發新銷售管道方面取得了進展。2024 年下半年，高性能化學品利潤率有所提高，並且在艱難的工業環境中，我們保護了 APT 的份額和銷售成長。

As a result, we generated over $50 million of free cash flow in a year where we had $200 million of repossession in cash costs. As we committed, we pay down debt and ended the year at 3.5 times net leverage.

結果，我們在一年內產生了超過 5000 萬美元的自由現金流，而我們的現金回收成本為 2 億美元。正如我們所承諾的，我們償還了債務，年底淨槓桿率為 3.5 倍。

Third, we recently announced plans to explore strategic alternatives for Industrial Specialties product line and North Charleston CTO refinery. Industrial Specialties has a great team, and we're extremely proud of the work they are doing. Nevertheless, we are assessing if Ingevity is the best owner of the cyclical business. We expect to have this assessment completed before the end of the year.

第三，我們最近宣布了探索工業特種產品線和北查爾斯頓 CTO 煉油廠戰略替代方案的計劃。Industrial Specialties 擁有一支優秀的團隊，我們為他們所做的工作感到非常自豪。儘管如此，我們正在評估 Ingevity 是否是周期性業務的最佳所有者。我們預計今年底前完成此項評估。

All these accomplishments would be hollow without a good safety record that directly impacts the men and women of our team at facilities around the world. I am very pleased to share we achieved our goal to reach top quartile in personal safety performance in the American Chemistry Council's Responsible Care benchmarking. Even with all the changes we saw in 2024, the teams made safety a priority, and I couldn't be more proud of everyone's hard work.

如果沒有良好的安全記錄來直接影響我們世界各地設施中團隊的男女成員，那麼所有這些成就都將毫無意義。我很高興地告訴大家，我們實現了在美國化學理事會責任關懷基準測試中個人安全表現達到前四分之一的目標。即使我們在 2024 年看到了所有變化，團隊仍然將安全放在首位，我為大家的辛勤工作感到無比自豪。

We were also recently named as one of America's most responsible companies of 2025 by Newsweek magazine for the third consecutive year. We are committed to advancing our mission to purify, protect, and enhance the world and are proud to be recognized by our efforts.

我們最近也連續第三年被《新聞週刊》評為 2025 年美國最具責任感的公司之一。我們致力於推進淨化、保護和改善世界的使命，並為我們的努力得到認可而感到自豪。

Lastly, the search for a permanent CEO is progressing well. While the search is in progress, I continue to be focused on executing our business strategy, which is showing results.

最後，尋找永久執行長的工作進展順利。在搜尋進行的同時，我將繼續專注於執行我們的業務策略，該策略正在取得成果。

Now, I will turn it over to Mary, who will go through the 2024 numbers. After that, I'll be back to discuss 2025 guidance.

現在，我將把時間交給瑪麗，她將講解 2024 年的數字。之後，我會回來討論 2025 年的指導。

Thanks, Luis, and good morning all. Please turn to slide 5. Full-year sales of $1.4 billion were down 17% from last year's sales of almost $1.7 billion. Performance Materials reported record sales, but that increase was more than offset by the almost $300 million drop in sales in Performance Chemicals, which was primarily due to the exit of lower margin and markets in Industrial Specialties.

謝謝，路易斯，大家早安。請翻到投影片 5。全年銷售額為 14 億美元，較去年的近 17 億美元下降 17%。性能材料部門報告了創紀錄的銷售額，但這一增長被性能化學品部門近 3 億美元的銷售額下降所抵消，這主要是由於利潤率較低的市場和工業特種產品的退出。

Also contributing to the sales decline were lower sales in Road Technologies due primarily to adverse weather conditions and in Advanced Polymer Technologies where increased volumes were more than offset by unfavorable mix and price concessions in certain markets, reflecting continued weakness in industrial demand and competitive pressures. We ended the year with a GAAP net loss of $430 million, which reflected several non-recurring charges that are primarily related to our repositioning actions.

造成銷售額下降的另一個原因是道路技術部門的銷售下降，這主要歸因於惡劣的天氣條件，以及先進聚合物技術部門的銷售額下降，該部門的銷售增長被某些市場的不利產品組合和價格優惠所抵消，反映了工業需求和競爭壓力的持續疲軟。我們本財年結束時的 GAAP 淨虧損為 4.3 億美元，這反映了主要與我們的重新定位行動有關的幾項非經常性費用。

These charges totaled $688 million and included a goodwill impairment of $349 million, restructuring charges of $186 million, $100 million dollar termination fee for a long-term CTO supply agreement, and $53 million of losses on the resale of excess CTO.

這些費用總計 6.88 億美元，其中包括 3.49 億美元的商譽減損、1.86 億美元的重組費用、1 億美元的長期 CTO 供應協議終止費，以及 5,300 萬美元的多餘 CTO 轉售損失。

We have excluded the impact of these charges in our non-GAAP disclosure and our discussion for the remainder of this presentation. A reconciliation of our non-GAAP measures to GAAP is in the appendix to this deck and also in our earnings release in Form 10-K, which will be filed this evening.

我們在非公認會計準則揭露和本報告剩餘部分的討論中排除了這些費用的影響。本簡報的附錄中附有我們的非 GAAP 指標與 GAAP 指標的對帳表，我們也將在今晚提交 10-K 表格收益報告中提供該對帳表。

Our adjusted gross profit of $521 million was down 4% to last year, but gross margin was higher by 510 basis points, reflecting Performance Materials' improved profitability and our strategic repositioning of Performance Chemicals.

我們的調整後毛利為 5.21 億美元，較去年下降 4%，但毛利率上升了 510 個基點，反映了高性能材料盈利能力的提高以及我們對高性能化學品的戰略重新定位。

Adjusted SG&A dollar spend was lower as a result of the cost savings initiatives we implemented during the year, but the percent of sales increased year over year due to the steep drop in sales I mentioned earlier. Adjusted EBITDA dollars were down on lower sales while adjusted EBITDA margin improved 350 basis points to 25.8% as our repositioning actions had their desired effect, driving a higher mix of revenue from our more profitable businesses and the savings we realized from cost reductions.

由於我們在本年度實施了成本節約舉措，調整後的銷售、一般及行政費用 (SG&A) 支出較低，但由於我之前提到的銷售額急劇下降，銷售額百分比同比增長。調整後的 EBITDA 金額因銷售額下降而下降，而調整後的 EBITDA 利潤率提高了 350 個基點，達到 25.8%，因為我們的重新定位行動取得了預期效果，推動了來自盈利能力更強的業務的收入組合以及通過降低成本實現的節省。

Please turn now to slide 6. In the upper left chart, you can see how our repositioning actions are changing the business composition of the company. Industrial Specialties, our most cyclical product line, is now less than 20% of overall sales when historically it represented roughly one-third to almost 40% of total company revenue.

現在請翻到第 6 張投影片。在左上角的圖表中，您可以看到我們的重新定位行動如何改變公司的業務組成。工業特種產品是我們最具週期性的產品線，目前其銷售額佔總銷售額的比重不到 20%，而歷史上它曾占公司總收入的約三分之一到近 40%。

Our most profitable segment, Performance Materials, now represents over 40% of total company revenue, improving the company's overall margin profile. This is a direct result of our strategic actions in Performance Chemicals.

我們最賺錢的部門——性能材料，目前占公司總收入的 40% 以上，提高了公司的整體利潤率。這是我們在高性能化學品領域採取的策略行動的直接結果。

In the upper right, you see we generated free cash flow of $51 million for the year, much stronger than we got it in October. A key contributor to this performance was our disciplined working capital management in the fourth quarter, which resulted in a benefit of more than $50 million. Strategic inventory management was a major driver of the working capital improvement, and the reduction in inventory was in finished goods and not related to the high costs CTO inventory we have on hand. And as a reminder, our free cash flow included the impact of roughly $200 million of cash outflows related to repositioning actions, of which approximately $180 million won't recur in 2025.

在右上角，您可以看到我們今年產生的自由現金流為 5,100 萬美元，比 10 月的自由現金流強勁得多。這一業績表現的關鍵因素是我們在第四季度嚴格的營運資本管理，這帶來了超過 5,000 萬美元的收益。策略庫存管理是營運資本改善的主要驅動力，庫存的減少是成品庫存，與我們手頭上的高成本 CTO 庫存無關。提醒一下，我們的自由現金流包括與重新定位行動相關的約 2 億美元現金流出的影響，其中約 1.8 億美元不會在 2025 年再次出現。

However, we also do not expect to have a benefit from working capital reduction in 2025 and have taken all these moving parts into account in our free cash flow guidance for this year of between $220 million and $260 million.

然而，我們也不預期 2025 年會從營運資本減少中獲益，並且已將所有這些變動因素都考慮在內，我們預計今年的自由現金流將在 2.2 億美元至 2.6 億美元之間。

In the chart at the bottom right, you'll see that we were disciplined with CapEx spend as well and 71% of our spend was on maintenance and safety, health, and environmental. We expect CapEx to be lower this year in the $50-million to $70-million range due to our smaller footprint and also the fact that our remaining facilities have benefited the last couple of years from debottlenecking and related incremental maintenance spend.

在右下角的圖表中，您會看到我們對資本支出也非常嚴格，其中 71% 的支出用於維護、安全、健康和環境。我們預計今年的資本支出將較低，在 5000 萬美元至 7000 萬美元之間，因為我們的佔地面積較小，而且我們剩餘的設施在過去幾年中受益於消除瓶頸和相關的增量維護支出。

We use free cash flow and cash on hand to reduce debt by $66 million, which brings me to the chart on the lower left showing our net leverage ratio. I'm happy to say we ended the year at 3.5 times net debt to adjusted EBITDA also better than expected. We continue to focus on free cash flow generation and debt reduction and now expect to be below 2.8 times net leverage by the end of 2025. We also expect our full-year 2025 tax rate will be between 22% and 24%.

我們利用自由現金流和庫存現金減少了 6600 萬美元的債務，這讓我看到了左下角顯示我們淨槓桿率的圖表。我很高興地說，我們今年的淨債務與調整後 EBITDA 比率為 3.5 倍，也比預期好。我們繼續專注於自由現金流的產生和債務的減少，預計到 2025 年底淨槓桿率將低於 2.8 倍。我們也預計 2025 年全年稅率將在 22% 至 24% 之間。

Turning to slide 7, you'll see results for Performance Materials which delivered record sales EBITDA and EBITDA margins. Sales growth of 4% outpaced global auto production, which was up about 2%. The increase in sales was driven by a higher volume and improved price and mix.

翻到第 7 張投影片，您會看到性能材料的業績，其銷售額 EBITDA 和 EBITDA 利潤率均創下了紀錄。4%的銷售成長超過了全球汽車產量約2%的增幅。銷售額的成長得益於銷售量的增加以及價格和產品組合的改善。

There are two components to mix that are key to understanding this segment. Auto mix is important as larger vehicles, such as trucks and SUVs, have more of our content, and the more hybrids and ICE vehicles in the mix versus all electric vehicles, the better for us.

有兩個需要混合的組成部分是理解這一部分的關鍵。汽車組合很重要，因為大型車輛（例如卡車和 SUV）包含更多內容，與所有電動車相比，混合動力車和 ICE 車組合越多，對我們來說就越有利。

The regional mix is also important. North America, which is nearly 50% of Performance Materials sales, is our most profitable region due to the typically larger size of vehicles, and this region also has the highest emissions control standards in the world, so vehicles typically require more of our product.

區域組合也很重要。北美占我們性能材料銷售額的近 50%，由於車輛通常較大，因此是我們利潤最高的地區，而且該地區還擁有世界上最高的排放控制標準，因此車輛通常需要更多的我們的產品。

Asia Pacific is also an important region, representing about 40% of total Performance Materials sales. Within Asia Pacific, about 50% is China, and the remaining 50% is primarily South Korea and Japan. These countries have strict emissions control standards or strong export markets where our carbon plays an important role in meeting regulations.

亞太地區也是一個重要地區，約佔性能材料總銷售額的 40%。在亞太地區，約有50%是中國，其餘50%主要是韓國和日本。這些國家有嚴格的排放控制標準或強大的出口市場，我們的碳在滿足法規方面發揮重要作用。

Europe is our least impactful region due to the regulatory environment favoring electric vehicles and also because Europe emissions standards lag behind North America and Asia. As an aside, in our 10K, which we released tonight, we show a more detailed breakdown of revenues by geography for all of our segments.

歐洲是我們受影響最小的地區，因為其監管環境有利於電動車，而且歐洲的排放標準落後於北美和亞洲。順便說一句，在我們今晚發布的 10K 中，我們按地區更詳細地展示了所有部門的收入細分。

EBITDA for Performance Materials increased 11% to $319 million with EBITDA margins for the year of 52.3%. This record result was primarily driven by operational improvements that enabled the plants to run more efficiently, which reduced our input costs by using less natural gas, and also improved yields. Our team is laser focused on continuous improvement and this is a great success story.

高性能材料業務的 EBITDA 成長 11% 至 3.19 億美元，全年 EBITDA 利潤率為 52.3%。這項創紀錄的業績主要得益於營運方面的改進，這些改進使工廠能夠更有效率地運行，透過減少天然氣使用量降低了我們的投入成本，同時也提高了產量。我們的團隊專注於持續改進，這是一個偉大的成功故事。

Given natural gas prices in 2024 were, by some reports, the lowest in more than a decade, input costs this year are expected to be higher. But based on our normal price increases and expected volumes and mix as well as some increased spend on R&D, we believe segment margins will be around 50% for 2025.

據一些報導稱，鑑於 2024 年天然氣價格是十多年來的最低水平，預計今年的投入成本將會更高。但根據我們正常的價格上漲和預期的銷售和產品組合以及研發支出的增加，我們相信到 2025 年該細分市場的利潤率將達到 50% 左右。

Please turn now to slide 8. APT generated higher volumes year over year as the team made progress in end markets such as elastomers, adhesives, and coatings, but unfavorable overall product mix and selective price concessions contributed to a revenue decline of 8%. The segment benefited from lower energy costs and an improvement in utilization rates as a result of the higher volumes, but these cost savings were more than offset by the revenue decline, resulting in EBITDA of $35.2 million and an EBITDA margin of 18.7%.

現在請翻到第 8 張投影片。由於團隊在彈性體、黏合劑和塗料等終端市場取得進展，APT 的銷售量較去年同期成長，但整體產品結構不利和選擇性價格優惠導致收入下降 8%。該部門受益於能源成本的降低和產量增加帶來的利用率的提高，但這些成本節約被收入的下降所抵消，導致 EBITDA 為 3520 萬美元，EBITDA 利潤率為 18.7%。

We believe the actions we've taken with respect to pricing strategy and mix upgrade will produce margins of around 20% in 2025. Also, when global demand improves, we believe that tailwind will support not only existing markets but also spur innovation in more profitable high growth potential markets such as bioplastics used in food packaging and apparel that could improve margins further.

我們相信，我們在定價策略和產品組合升級方面採取的行動將在 2025 年產生約 20% 的利潤率。此外，當全球需求改善時，我們相信順風不僅會支持現有市場，還會刺激更有利可圖的高成長潛力市場的創新，例如用於食品包裝和服裝的生物塑料，從而可以進一步提高利潤率。

Please turn to slide 9 for Performance Chemicals results. As a result primarily of our repositioning actions, revenue in the segment of $608 million was almost $300 million lower than prior year, a 33% decline. Approximately $210 million of the decline in revenue reflects the exit of lower margin and markets in Industrial Specialties as we continue to focus on maximizing profitability. The remaining sales decline was due primarily to lost sales as customers sought alternative suppliers in light of our repositioning actions, and lower Road Tech sales attributed primarily to adverse weather in key US states.

請翻到投影片 9 檢視性能化學品的結果。主要由於我們的重新定位行動，該部門的收入為 6.08 億美元，比前一年減少近 3 億美元，降幅為 33%。約 2.1 億美元的收入下降反映了我們退出利潤率較低的工業特種市場，因為我們繼續專注於實現盈利能力最大化。其餘銷售額下降主要是由於客戶根據我們的重新定位行動尋找替代供應商而導致的銷售損失，以及 Road Tech 銷售下降主要歸因於美國主要州的惡劣天氣。

PC generated EBITDA of $14.7 million for the year, significantly better than our guide in October of breakeven for the segment. This better-than-expected outcome was primarily due to an acceleration of the savings from repositioning actions. We'd originally expected to realize $65 million to $75 million of savings in 2024, but I'm happy to say that we realized $84 million of savings during the year. The remaining savings of roughly $10 million to $25 million are expected to be realized in 2025.

個人電腦業務本年度的息稅折舊攤銷前利潤 (EBITDA) 為 1,470 萬美元，明顯高於我們 10 月對該部門盈虧平衡的預測。這好於預期的結果主要是由於重新定位行動所帶來的節省加速。我們原本預計在 2024 年實現 6,500 萬至 7,500 萬美元的節省，但我很高興地說，我們在這一年實現了 8,400 萬美元的節省。預計到 2025 年將實現剩餘約 1,000 萬至 2,500 萬美元的節省。

We also previously indicated that we expected to consume the remaining high-cost CTO inventory by the end of Q1 2025. But given the continued weakness in industrial demand, we now expect to fully consume that CTO in Q2 2025.

我們先前也表示，預計到 2025 年第一季末將消耗掉剩餘的高成本 CTO 庫存。但鑑於工業需求持續疲軟，我們目前預計 2025 年第二季該 CTO 將會被完全消耗掉。

In 2025, we expect Performance Chemicals to generate EBITDA margins in the mid- to high-single digits, primarily reflecting the cyclicality of Industrial Specialties, which continues to be challenged by weak industrial demand and competitive price pressures. We have reduced our prices to align with market prices, and this will mostly offset the benefit of lower average CTO costs in the latter part of the year. We expect the higher margin, more stable Road Tech business to return to normal growth in 2025, helping to improve segment margin.

2025 年，我們預計高性能化學品業務的 EBITDA 利潤率將達到中高個位數，這主要反映了工業特種產品的周期性，該業務將繼續受到疲軟的工業需求和競爭性價格壓力的挑戰。我們已將價格降低至與市場價格一致，這將在很大程度上抵消今年下半年平均 CTO 成本降低的好處。我們預計利潤率更高、更穩定的道路技術業務將在 2025 年恢復正常成長，有助於提高部門利潤率。

In summary, we're very pleased to see the benefits of our repositioning actions translating to improved earnings, margins, and cash flow. We expect strong free cash flow generation in 2025, which we will use to drive leverage to below 2.8 times from the current 3.5 times. Many thanks to our dedicated team as the company is well positioned for near-term and future value creation.

總而言之，我們很高興看到我們的重新定位行動帶來的好處轉化為收益、利潤率和現金流的提高。我們預計 2025 年將產生強勁的自由現金流，我們將利用這一優勢將槓桿率從目前的 3.5 倍降至 2.8 倍以下。非常感謝我們敬業的團隊，使公司在近期和未來的價值創造方面處於有利地位。

And now I'll turn the call back to Luis for an update on guidance and closing comments.

現在我將把電話轉回給路易斯，請他更新指導意見並發表結束語。

Thanks, Mary. Please turn to slide 10. As I have said, while I'm in the CEO position, the team and I are keenly focused on execution. And for 2025, that includes generating sales between $1.3 billion and $1.4 billion, EBITDA between $400 million and $415 million.

謝謝，瑪麗。請翻到第 10 張投影片。正如我所說，當我擔任執行長時，我和團隊都非常注重執行。到 2025 年，銷售額將達到 13 億美元至 14 億美元，EBITDA 將達到 4 億美元至 4.15 億美元。

I have also said I'm committed to reducing our debt, and I expect we will generate between $220 million and $260 million of free cash flow, which combined with our improved EBITDA, should enable us to reduce net leverage to below 2.8 times by the end of the year. As a reminder, this guidance does not include any potential impact from the exploration of strategic alternatives for Industrial Specialties and the North Charleston's CTO refinery.

我還說過我致力於減少我們的債務，我預計我們將產生 2.2 億美元至 2.6 億美元的自由現金流，再加上我們改善的 EBITDA，我們應該能夠在今年年底將淨槓桿率降低到 2.8 倍以下。提醒一下，本指南不包括探索工業特種產品和北查爾斯頓 CTO 煉油廠戰略替代方案的任何潛在影響。

In summary, I am excited about the progress we have made and believe Ingevity will continue to improve with EBITDA margins in the high-20s and businesses that generate very strong cash flow, which will provide the flexibility to allocate capital across a variety of avenues. I look forward to leading these efforts until my replacement is named. In the meantime, the company and the Board remain focused on maximizing value to our shareholders through the priorities I have previously communicated.

總而言之，我對我們的進展感到非常興奮，並相信 Ingevity 將繼續改善，EBITDA 利潤率將達到 20% 以上，業務將產生非常強勁的現金流，這將為在各種管道分配資本提供靈活性。我期待領導這些工作，直到我的繼任者被任命。同時，公司和董事會仍將致力於透過我先前傳達的優先事項為股東實現價值最大化。

With that, I'll turn it over for questions.

好了，接下來我會回答大家的提問。

(Operator Instructions) Jon Tanwanteng, CJS Securities.

（操作員指示）Jon Tanwanteng，CJS Securities。

Really nice quarter and pulling in the cost. Question on the pricing in the Performance Chemicals business. Are you already at the pricing that you expect to be at when the high price CTO inventory runs out or is there still a further leg down that you can take when that does come out and you can use a lower cost?

確實是一個不錯的季度，並且降低了成本。關於高性能化學品業務定價的問題。當高價 CTO 庫存耗盡時，您的定價是否已經達到您預期的水平，或者當庫存耗盡時，您是否還能進一步降低價格並使用更低的成本？

Yeah, we have stayed competitive with the market. Since the prices of CTO for most people have come down, we just have to be competitive. So the way I would describe it is that our current prices reflect the current market price of CTO. And as such, if CTO stays at these levels, we're pretty much at the right price level to be competitive in the marketplace.

是的，我們一直保持著市場競爭力。由於大多數人的 CTO 價格已經下降，我們只需要保持競爭力。因此，我的描述是，我們目前的價格反映了 CTO 的當前市場價格。因此，如果 CTO 保持在這些水平，我們的價格就處於相當合適的水平，並且可以在市場上具有競爭力。

Okay. So when you do run out of that inventory, you will see some improved profitability, but that should be -- you mentioned an offset to that and I was just wondering what the disconnect is.

好的。因此，當您用完這些庫存時，您會看到盈利能力有所提高，但這應該是 - 您提到了對此的抵消，我只是想知道脫節是什麼。

No, that is correct. So we will see that as we consume the CTO. I don't think there's a disconnect. The issue that we wanted to make sure that everybody understood is that those prices are already at a level that it's lower than last year, so making a comparison year on year on this is the CTO reduction. That CTO cost reduction is impacted by the fact that we're also reducing -- have reduced our prices to be competitive in the marketplace, but we will see an improvement as the high inventory CTO is consumed.

不，這是正確的。因此，當我們消耗 CTO 時，我們就會看到這一點。我不認為有脫節。我們希望確保每個人都明白的問題是，這些價格已經處於低於去年的水平，因此與去年同期相比，CTO 的降幅較大。CTO 成本的降低受到我們也在降低價格以在市場上具有競爭力的影響，但隨著高庫存 CTO 的消耗，我們將看到情況的改善。

Okay, understood. And then secondly, could you just talk about the auto markets a little bit more? What are you seeing trends in Q1, especially in the terms of mix of hybrid versus EVs and how that will play out through the year?

好的，明白了。其次，您能否再多談談汽車市場？您認為第一季的趨勢如何，尤其是混合動力車和電動車的組合趨勢，以及這種趨勢將如何在今年發揮作用？

Yeah, let me ask Jonathan if you can comment on that.

是的，讓我問問喬納森你是否可以對此發表評論。

Sure, thank you, Jon. Yeah. What we're looking at is in line with what we've seen in the most recent S&P global forecasts, less of a declining interest in EVs versus hybrids, which we know bodes well for Ingevity content and vehicles.

當然，謝謝你，喬恩。是的。我們所看到的情況與標準普爾最新的全球預測一致，即人們對電動車的興趣下降幅度小於對混合動力車的興趣下降幅度，我們知道這對 Ingevity 內容和車輛來說是個好兆頭。

Daniel Rizzo, Jefferies.

傑富瑞的丹尼爾·里佐 (Daniel Rizzo)。

Can you just put tariffs in perspective, both in terms of what your customers are saying in the near-term impacts and how it might affect order patterns?

您能否從客戶對近期影響的看法以及它可能如何影響訂單模式的角度來看待關稅？

Could you repeat that last part of the question?

您能重複問題的最後部分嗎？

Well, what your customers are saying about tariffs, about their near-term impacts and how it might affect order patterns.

那麼，您的客戶對關稅、其近期影響以及它可能如何影響訂單模式有何看法。

Okay, got it. So yeah, that's a great unknown, to be honest. There's definitely a lot of uncertainty and unfortunately not a lot of clarity. So far today, we have seen no impact when it comes to Ingevity or even when it comes to our customers. So in that regard today, all of the announcements have really had very minimal impact on both our customers and our business. But there's no question that some changes of what has been proposed could have impact either in automotive production in the US, consumer demand in the US related to higher price or higher inflation related to those tariffs. But for the time being, we really haven't seen anything. It's just the uncertainty that it's bringing to not only us but our customers.

好的，明白了。是的，說實話，這是一個很大的未知數。確實存在著許多不確定性，而且不幸的是，也不是很明確。到目前為止，我們還沒有看到對 Ingevity 甚至對我們的客戶產生任何影響。因此，從今天的角度來看，所有公告對我們的客戶和業務的影響實際上都非常小。但毫無疑問，所提議的一些變化可能會對美國的汽車生產、與關稅相關的價格上漲或通貨膨脹上升產生影響。但就目前而言，我們確實沒有看到任何東西。這不僅給我們，也為我們的客戶帶來了不確定性。

Okay, thanks for that. And then just in terms of CapEx with the changes that are going on in reducing your footprint and stuff like that, I was just wondering of what you're projecting for 2025, how much of that is maintenance CapEx? And is there any, I mean, are you -- will you be spending it all on Performance Materials? Is that necessary or just how we should think about it going forward?

好的，謝謝。然後就資本支出而言，隨著減少碳足跡等的變化，我只是想知道您對 2025 年的預測，其中有多少是維護資本支出？我的意思是，您是否會把錢全部花在性能材料上？這是必要的嗎？或者這只是我們今後應該考慮的問題？

Yeah, most of the expected spend is on maintenance and what we call SHE, safety, health, environmental, but there is some gross spend in there. But I would say for 2025, it is primarily maintenance-related spend.

是的，預計大部分支出用於維護以及我們所說的 SHE（安全、健康和環境），但其中也有一些總支出。但我想說，到 2025 年，主要還是與維護相關的支出。

John McNulty, BMO Capital Markets.

蒙特利爾銀行資本市場 (BMO Capital Markets) 的 John McNulty。

So just regarding some of the increased innovation spend in TM, can you help us to think about where that's going? I'm assuming some of it's toward the Nexeon platform, but can you help us to think about some of the investments that you're making there?

那麼，關於 TM 中增加的一些創新支出，您能幫助我們思考這些支出的去向嗎？我假設其中一些是針對 Nexeon 平台的，但您能否幫助我們考慮您在那裡進行的一些投資？

Yes, indeed, you're right. The increased spend there is -- as you know, as we look at these new applications in batteries and specifically in the silicon anodes, it requires a significant amount of testing and not only testing but also the fine tuning of the materials. So I would say the vast majority, if not all of it, is related to the development of the new application for electric -- for batteries, both for electric vehicles and other applications.

是的，你確實說得對。如您所知，當我們研究電池中的這些新應用，特別是矽陽極時，支出的增加需要大量的測試，不僅需要測試，還需要對材料進行微調。因此我想說，絕大多數（如果不是全部的話）都與電動車新應用的開發有關——包括電池，用於電動車和其他應用。

Okay, got it. No, I appreciate the color. And then the other question was just -- Mary, I think you said on the cash flow side, you're not assuming any improvements in 2025 on a working capital basis. I guess, why would that be if the CTO inventory is still sticky and you're going to work through it in the first and second quarter? Is there an offset that we should be thinking about or is that just a level of conservatism? I guess how should we be thinking about that?

好的，明白了。不，我很欣賞這個顏色。然後另一個問題是──瑪麗，我想你說過，在現金流方面，你沒有假設 2025 年營運資本會有任何改善。我想，如果 CTO 庫存仍然緊張，而您要在第一季和第二季解決它，那為什麼會這樣呢？我們是否應該考慮抵消因素，或者這只是一種保守程度？我想我們應該如何考慮這個問題？

So I think what I was trying to point to is we saw such a big reduction in working capital benefiting cash in 2024. And I'm cautioning people not to expect that again because in a more normal environment, putting the high-cost CTO aside in a more normal environment, we would expect to grow the company and have increasing accounts receivable and inventory off of our now new kind of base business. So that's really what I was trying to address.

所以我想指出的是，我們看到 2024 年營運資本利得現金大幅減少。我告誡人們不要再期待這種情況了，因為在更正常的環境下，將高成本的 CTO 放在一邊，我們期望公司能夠發展壯大，並從我們現在新的基礎業務中增加應收帳款和庫存。這就是我真正想要解決的問題。

Okay, but should we be thinking about the CTO inventory working itself through? Will that likely be at least somewhat of a tailwind or again, does it get offset by the growth maybe in the core business? I guess trying to size out how big is that CTO inventory that has to be worked through maybe.

好的，但是我們是否應該考慮 CTO 庫存的自行處理？這是否至少會成為一種順風，或者是否會被核心業務的成長所抵消？我想嘗試估算一下需要處理的 CTO 庫存到底有多大。

Our assumption sitting here today is that the inventory-related benefit of working off that high-cost CTO is offset by other increases in working capital as we respond to growing parts of the business. That's our assumption today.

我們今天的假設是，隨著我們對業務成長部分做出反應，消除高成本 CTO 所帶來的庫存相關收益將被其他營運資本的增加所抵銷。這就是我們今天的假設。

Abigail Eberts, Wells Fargo.

富國銀行的阿比蓋爾·埃伯茨。

So I see you're guiding for 50% EBITDA margins for Performance Materials in '25. How should we be thinking about Performance Materials margins longer term in a more volume growth-oriented environment given that you're expecting global auto production to be lower this year?

因此我看到您預計 25 年高性能材料的 EBITDA 利潤率將達到 50%。鑑於您預計今年全球汽車產量將會下降，我們應該如何看待在更注重產量成長的環境中性能材料的長期利潤率？

So I guess in the short term, we continue to expect the Performance Materials business deliver that 50% EBITDA margins. Obviously, that depends on us continue to sell at the level that we're predicting for automotive production. Any significant change in automotive production or a significant shift towards battery electric vehicles would definitely have an impact in either direction. I mean, the more ICE or hybrid vehicles, the better for us, which is the trend that we are seeing today. And in that regard, we do expect to keep those margins.

因此，我估計在短期內，我們仍然預期性能材料業務將達到 50% 的 EBITDA 利潤率。顯然，這取決於我們能否繼續按照我們預測的汽車產量水準進行銷售。汽車生產的任何重大變化或向電池電動車的重大轉變肯定會對任何一個方向產生影響。我的意思是，內燃機汽車或混合動力汽車越多，對我們來說就越好，這就是我們今天看到的趨勢。在這方面，我們確實希望維持這些利潤率。

We've talked about the fact that there continues to be further regulatory rules in China that, if implemented in 2028, they will have a significant benefit to the utilization of carbon. And as such, we expect that amount to come up, but that would be the time that could be any competitor coming in.

我們討論過這樣一個事實：中國將繼續推出進一步的監管規則，如果這些規則在 2028 年實施，將對碳的利用產生重大好處。因此，我們預計這個數字將會上升，但那也是任何競爭對手都可能進入的時候。

So as we think about the longer-term EBITDA margin on this business, assuming that there is that extra or that possible competitor in China, then our margins will be in the high-40s. But at least, for 2025, our expectation is that those margins are going to remain in the 50% range based not only on the current sales but all of the actions that we've taken regarding productivity in our manufacturing sites.

因此，當我們考慮該業務的長期 EBITDA 利潤率時，假設中國有額外的或潛在的競爭對手，那麼我們的利潤率將達到 40% 以上。但至少，到 2025 年，我們預期利潤率將維持在 50% 左右，這不僅基於目前的銷售額，還基於我們在製造基地生產力方面採取的所有行動。

(Operator Instructions) Jonathan Tanwanteng, CJS Securities.

（操作員指示）Jonathan Tanwanteng，CJS Securities。

I might have missed this if you said it earlier, but I was wondering if you could talk about the logistics of exploring alternatives for the industrial business. One, does that include the alternative fatty acids business; and two, how would you physically separate the business from the pavement business in the event you would find a buyer or something else just to explain how something like that would be structured?

如果您早點說的話，我可能會錯過這一點，但我想知道您是否可以談論探索工業業務替代方案的物流。第一，這是否包括替代脂肪酸業務？第二，如果您找到買家或其他什麼人，您將如何將該業務與路面業務進行物理分離，只是為了解釋這樣的業務將如何建構？

Yeah, that's a very good question, Jon. So again, we're still assessing the options and this obviously could change. But at this time, our expectation is that we will continue to remain flexible when it comes to raw material supply. So as such, we will keep the flexibility on alternative fatty acids or CTO-based TOFA for the pavement business. So we don't expect that to change that capability that we have developed over the past couple of years.

是的，喬恩，這是個非常好的問題。所以，我們仍在評估各種選擇，而且這種情況顯然可能會改變。但目前，我們的期望是，在原料供應方面我們將繼續保持彈性。因此，我們將為路面業務保留替代脂肪酸或基於 CTO 的 TOFA 的靈活性。因此，我們不希望這改變我們在過去幾年中發展的能力。

When it comes to the actual assets -- and you're probably very familiar with this in the chemical industries -- people and companies have done this many a times where you have assets in the same location, but you are able to separate them and find ways to provide the services. What -- again our current thinking is we will keep all of those assets for pavement even though they are co-located in the same site, but they are different assets and be able to do that in sort of a condominium as many condominiums exist today in the chemical industry.

當涉及實際資產時——您可能對化學工業中的資產非常熟悉——人們和公司已經多次這樣做了，您將資產放在同一個地方，但您可以將它們分開並找到提供服務的方法。我們目前的想法是，我們將保留所有這些用於路面的資產，儘管它們位於同一地點，但它們是不同的資產，並且能夠以某種公寓的方式做到這一點，就像當今化學工業中存在許多公寓一樣。

I always say it's not something that it's easy, but it has done many, many times and worked well. So that's what we're thinking. But again, it's still the analysis and it's something that we're developing and we'll come up with more information when we're ready. But hopefully, that color does provide a little perspective.

我總是說這不是一件容易的事，但我已經做了很多次並且效果很好。這就是我們的想法。但再次強調，這仍然是分析，是我們正在開發的東西，當我們準備好時，我們會提供更多資訊。但希望這種顏色確實能提供一些視角。

It does. I was wondering, have you spoken to outside parties who might be interested yet, or is this still an internal focus? Just figuring out what you can split or not split.

確實如此。我想知道，您是否已經與可能感興趣的外部人士進行了交談，或者這仍然是內部關注的重點？只是弄清楚什麼可以分割或不可以分割。

As you can imagine, the moment we announced this, we have had a fair amount or a significant amount of interest on the assets. So we are again -- continue the assessment and evaluations and we'll come up with more information later. But yeah, even at the moment we announced, there were a fair amount of inbound requests as we would have expected.

你可以想像，我們宣布這消息的那一刻，我們就對這些資產產生了相當多或相當多的興趣。因此我們再次——繼續評估和評價，稍後我們會提供更多資訊。但是，是的，即使在我們宣布的那一刻，也正如我們預期的那樣，有相當數量的入站請求。

We have no further questions, so I hand call back to the Ingevity team for some concluding remarks.

我們沒有其他問題，因此我親自回電給 Ingevity 團隊，請他們發表一些總結性評論。

Great. Well, that concludes our call. Thank you for your interest in Ingevity and we'll talk with you again next quarter.

偉大的。好的，我們的通話到此結束。感謝您對 Ingevity 的關注，我們將在下個季度再次與您交談。

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.

今天的電話會議到此結束。非常感謝您的出席。現在您可以斷開線路了。