Ingevity Corp (NGVT) 2025 Q2 法說會逐字稿

Good morning or good afternoon, and welcome to the Ingevity Q2 2025 earnings call and webcast. My name is Adam and I will be your operator today. (Operator Instructions)

早安或下午好，歡迎參加 Ingevity 2025 年第二季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. So John, please go ahead when you are ready.

現在我將把發言權交給 John Nypaver。所以約翰，當你準備好了，請繼續。

Thank you, Adam. Good morning, and welcome to Ingevity's second-quarter 2025 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. Also throughout this call, we may refer to non-GAAP financial measures, which are intended to supplement, not substitute for, comparable GAAP measures.

謝謝你，亞當。早安，歡迎參加 Ingevity 2025 年第二季財報電話會議。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。此外，在整個電話會議中，我們可能會參考非 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。

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. 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.

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。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，這些聲明只是預測，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 David Li, our CEO; and Mary Dean Hall, our CFO. Dave will provide introductory comments, Mary will follow with a review of our consolidated financial performance and the business segment results for the quarter. Dave will then provide closing comments and discuss 2025 guidance.

我們的議程在第 3 張投影片。今天的演講者是我們的執行長 David Li 和我們的財務長 Mary Dean Hall。戴夫將提供介紹性評論，隨後瑪麗將回顧我們本季的綜合財務業績和業務部門業績。戴夫隨後將發表結束語並討論 2025 年的指導方針。

With that, over to you, Dave.

現在，就交給你了，戴夫。

Thanks, John, and good morning, everyone. This week marks my fourth month with Ingevity. As I've traveled to our sites and met with our teams globally, I've been energized by the passion and pride our people bring to work every day. The [IngeviWay], our shared values and mission to purify, protect and enhance the world around us, is deeply embedded across the company.

謝謝，約翰，大家早安。本週是我加入 Ingevity 的第四個月。當我前往我們的生產基地並與全球團隊會面時，我們的員工每天工作時所展現的熱情和自豪感讓我充滿活力。[IngeviWay] 是我們共同的價值觀和使命，即淨化、保護和改善我們周圍的世界，這一理念已深深植根於整個公司。

And what I consistently hear from our organization is that they feel we have reached an inflection point and are ready to start winning again. This quarter was another clear demonstration of our strong execution, ability to deliver results and disciplined focus on profitability, which drove significant free cash flow and leverage improvement.

我不斷從我們組織聽到的是，他們認為我們已經到達了一個轉折點，並準備再次開始獲勝。本季度再次清楚地證明了我們強大的執行力、實現成果的能力以及對盈利能力的嚴格關注，從而推動了自由現金流和槓桿率的大幅改善。

Our leverage has improved to three times, which reflects a full turn improvement in less than a year. Our strong profitability was driven by performance materials, which delivered another quarter of EBITDA margins above 50%, and our successful repositioning actions in performance chemicals, resulting in a consolidated EBITDA margin of 30%. Also, we are making meaningful progress on our strategic portfolio assessment.

我們的槓桿率已提高至三倍，這反映出在不到一年的時間內實現了全面的改善。我們強勁的獲利能力得益於高性能材料，這使得我們的 EBITDA 利潤率在本季度再次超過 50%，並且我們在高性能化學品領域採取了成功的重新定位行動，使合併 EBITDA 利潤率達到 30%。此外，我們在策略性投資組合評估方面也取得了有意義的進展。

The sale process for our Industrial specialties business and CTO refinery has reached an advanced stage and we expect to share an update soon. We are also advancing our review of the entire portfolio with a focus on strategic fit and value creation. I'll share more about where we're heading in my closing comments.

我們的工業特種業務和 CTO 煉油廠的銷售流程已進入後期階段，我們預計很快就會分享最新消息。我們也正在推進對整個投資組合的審查，重點是策略契合度和價值創造。我將在結束語中進一步分享我們的發展方向。

For now, I'll hand it over to Mary to walk through the quarter in more detail.

現在，我將把時間交給瑪麗，讓她更詳細地介紹本季的情況。

Thanks, Dave, and good morning all. Please turn to slide 5. Second-quarter sales of $365 million were down 7% versus Q2 last year, due primarily to repositioning actions in industrial specialties combined with wet weather impacting paving activity in Roadtec and indirect tariff impacts on the APT volumes, particularly in Europe. Despite the sales decline, adjusted gross margin improved 600 basis points, driving a 9% increase in adjusted gross profit.

謝謝，戴夫，大家早安。請翻到投影片 5。第二季銷售額為 3.65 億美元，較去年同期下降 7%，主要原因是工業特種產品的重新定位行動，加上潮濕天氣影響了 Roadtec 的鋪路活動，以及間接關稅對 APT 銷售的影響，尤其是在歐洲。儘管銷售額下降，調整後的毛利率仍提高了 600 個基點，推動調整後毛利成長 9%。

Most of this improvement flowed through to adjusted earnings and adjusted EBITDA, with adjusted earnings up 39% and adjusted EBITDA up 9%. Our adjusted EBITDA margin improved over 400 basis points to 30.1% even as spend increased to support investments in innovation and performance materials to drive future growth and an equipment for APT to improve operational efficiency and cost control.

大部分改善都體現在調整後收益和調整後 EBITDA 上，其中調整後收益增長 39%，調整後 EBITDA 增長 9%。我們的調整後 EBITDA 利潤率提高了 400 多個基點，達到 30.1%，儘管支出增加了，以支持對創新和性能材料的投資，從而推動未來成長，並為 APT 提供設備，以提高營運效率和成本控制。

During the quarter, we recorded a non-cash goodwill impairment charge of $184 million for our APT segment. Shifts in this segment's customer order patterns due to tariff uncertainty and ongoing weakness in global industrial markets led us to conduct an interim goodwill impairment test. Updated forecasts and market assumptions, including a higher discount rate, resulted in the conclusion that APT's goodwill was fully impaired.

在本季度，我們為 APT 部門記錄了 1.84 億美元的非現金商譽減損費用。由於關稅不確定性和全球工業市場持續疲軟，該部門客戶訂單模式發生變化，促使我們進行中期商譽減損測試。更新的預測和市場假設（包括更高的折現率）得出的結論是 APT 的商譽已完全減損。

My comments going forward exclude the impact of this charge and a full reconciliation to GAAP results is provided in the appendix. Please turn to slide 6 for financial highlights of our consolidated results. The consistent EBITDA growth we've delivered combined with improved free cash flow has allowed us to accelerate our reduction in net leverage.

我今後的評論將排除這項費用的影響，附錄中提供了與 GAAP 結果的完整對帳。請翻到投影片 6，查看我們合併業績的財務亮點。我們實現的持續 EBITDA 成長加上改善的自由現金流使我們能夠加快降低淨槓桿率。

The chart in the upper left of the slide shows how quickly we are driving that leverage toward our goal of 2 times to 2.5 times. Also note, the CapEx chart in the top right of the slide. While CapEx spending year-to-date appears light, this reflects our normal spend pattern, and we continue to expect CapEx to be in the $50 million to $70 million range for the full year.

幻燈片左上角的圖表顯示了我們正在多快地將槓桿率推向 2 倍到 2.5 倍的目標。也請注意幻燈片右上角的資本支出圖表。雖然今年迄今的資本支出似乎很少，但這反映了我們的正常支出模式，我們仍然預計全年資本支出將在 5,000 萬至 7,000 萬美元之間。

I'll point out that our work to optimize our manufacturing footprint has structurally lowered our maintenance CapEx requirements, and our guide for this year reflects those benefits. As a result of improved adjusted earnings, disciplined working capital management and lower CapEx, we are raising the midpoint of our free cash flow guide, and we are confident we will be below 2.8 times by year-end.

我要指出的是，我們優化製造足跡的工作從結構上降低了我們的維護資本支出要求，我們今年的指南反映了這些好處。由於調整後收益的提高、營運資本管理的嚴格性以及資本支出的降低，我們正在提高自由現金流指南的中點，並且我們有信心到年底將低於 2.8 倍。

Turning to slide 7. Performance materials sales declined about $3 million or 2% as higher revenue in North America was offset by declines in Europe and Asia, excluding China, where sales were flat year over year. Europe's decline was attributed to tariff-related uncertainty and the decline in Asia, ex-China, was due to timing of customer orders, which benefited Q2 last year.

翻到幻燈片 7。性能材料銷售額下降約 300 萬美元，即 2%，因為北美收入的成長被歐洲和亞洲（不包括中國）的下降所抵消，中國的銷售額與去年同期持平。歐洲的下滑歸因於與關稅相關的不確定性，而亞洲（中國除外）的下滑則歸因於客戶訂單的時間安排，這對去年第二季有利。

Auto production forecasts are being revised frequently as the tariff landscape continues to shift and have improved since April of this year, particularly for North America. However, expectations still call for lower auto production year over year in all major markets, except China. We have reflected the most recent information we have in our updated guidance.

隨著關稅狀況的不斷變化以及自今年 4 月以來的改善，汽車產量預測正在頻繁修改，尤其是北美。然而，預期除中國外，所有主要市場的汽車產量仍將年減。我們在更新後的指南中反映了我們掌握的最新資訊。

EBITDA margin ended the quarter just over 50%. The decline in margin year over year was due to the slightly lower revenue I mentioned, investments we made in innovation to drive future growth and certain onetime employee compensation costs. We continue to expect full-year segment EBITDA margin to be above 50%.

本季末 EBITDA 利潤率略高於 50%。利潤率同比下降的原因是，我提到的收入略有下降，我們為推動未來成長而對創新進行的投資以及某些一次性員工薪酬成本。我們繼續預計全年分部 EBITDA 利潤率將超過 50%。

Please turn to slide 8 for APT results. Weaker customer demand partly attributed to tariff uncertainty and price concessions to address competitive pressures contributed to a 10% drop in sales in our APT segment. Last quarter, we commented that direct impacts from tariffs were expected to be minimal for our segments, and that continues to hold true. However, during the quarter, we began to see customer demand weaken further in our APT segment due to indirect tariff impacts. As we've noted before, APT is our most globally diversified business and the indirect impact of tariffs has been meaningful to APT's results.

請翻到幻燈片 8 查看 APT 結果。由於關稅不確定性和為應對競爭壓力而採取的價格優惠，客戶需求減弱，導致我們 APT 部門的銷售額下降了 10%。上個季度，我們表示，關稅對我們的部門的直接影響預計很小，而且這一觀點仍然成立。然而，在本季度，由於間接關稅的影響，我們開始看到 APT 領域的客戶需求進一步減弱。正如我們之前所指出的，APT 是我們全球最多元化的業務，而關稅的間接影響對 APT 的表現產生了重大影響。

We have seen this most clearly in footwear and apparel and automotive markets, particularly in Europe, where our customers slowed their order patterns as a result of tariff uncertainty and concern over increased costs. We expect this uncertainty to continue and to impact customer demand in the second half of the year.

我們在鞋類、服裝和汽車市場，尤其是在歐洲，最明顯地看到了這一點，由於關稅的不確定性和對成本上升的擔憂，我們的客戶放慢了訂購速度。我們預計這種不確定性將持續下去，並影響下半年的客戶需求。

In addition, our APT plant in the UK was down for an extended period of time to install new boilers as we discussed last quarter. The outage costs of about $5.5 million, in combination with the top-line pressures I just discussed, resulted in EBITDA of about $1 million for the quarter. I'm happy to report that the boilers are up and running and are expected to give us better control over energy costs and improve operational efficiency going forward.

此外，正如我們在上個季度討論的那樣，我們位於英國的 APT 工廠將停工一段時間以安裝新鍋爐。約 550 萬美元的停電成本，加上我剛才討論的營業壓力，導致本季的 EBITDA 約為 100 萬美元。我很高興地報告，鍋爐已啟動並運行，預計將使我們能夠更好地控制能源成本並提高未來的營運效率。

Also, as markets and businesses adjust to the new tariff environment, our team is moving aggressively to reorganize and refocus our commercial efforts to align with our customers as they pivot between regions and markets.

此外，隨著市場和企業適應新的關稅環境，我們的團隊正在積極重組和重新調整我們的商業努力，以適應客戶在不同地區和市場之間的轉變。

Due to the shifting landscape and current market conditions, we expect full-year revenue in APT to be down mid- to high single digits as a result of lower industrial demand, with EBITDA margin between 15% and 20%.

由於情勢變化和當前市場狀況，我們預計 APT 全年收入將因工業需求下降而下降中高個位數，EBITDA 利潤率將在 15% 至 20% 之間。

Please turn to slide 9 for performance chemicals results. Sales were down about 10%, as last year's results included the final remnants of revenue generated from the lower margin markets we exited as a result of repositioning actions.

請翻到投影片 9 檢視性能化學品的結果。銷售額下降了約 10%，因為去年的業績包括了我們因重新定位行動而退出的低利潤市場所產生的最後剩餘收入。

Lower sales in Roadtec also contributed to the drop in sales as we saw a slow start to the paving season due to wet weather. And that may sound like a repeat of last year, which was also affected by wet weather. But last year was more concentrated in terms of geography. This year, a wider swath of the country was impacted, particularly in the Mid-Atlantic and the South.

由於天氣潮濕，鋪路季節開局緩慢，Roadtec 的銷售下降也導致了銷售量的下降。這聽起來像是去年的重演，也受到潮濕天氣的影響。但去年在地理方面更加集中。今年，美國更大範圍的地區受到影響，尤其是大西洋中部地區和南部地區。

The good news is that we saw a strong June and the positive momentum continued into July. We are cautiously optimistic that the crews will be able to complete enough road construction projects in the second half, such that on a full-year basis, Roadtec revenue should be up low single digits.

好消息是，6 月我們表現強勁，這種積極勢頭一直延續到 7 月。我們謹慎樂觀地認為，施工隊將能夠在下半年完成足夠多的道路建設項目，這樣一來，Roadtec 全年的收入將實現低個位數成長。

The segment continued to show improved profit and stability as a result of our successful execution of repositioning actions. Segment EBITDA was more than three times last year's number and EBITDA margin approached 20%, the highest in nearly two years. I'm also pleased to report that we've completely consumed the high-cost CTO inventory before the end of the quarter and are now recording CTO purchases at market rates which today are around $550 to $600 per ton.

由於我們成功實施了重新定位行動，該部門的利潤和穩定性繼續提高。分部EBITDA為去年同期的三倍多，EBITDA利潤率接近20%，為近兩年來的最高水準。我還很高興地報告，我們在本季度結束之前已經完全消耗了高成本的 CTO 庫存，目前正在按市場價格記錄 CTO 採購量，目前市場價格約為每噸 550 至 600 美元。

In addition to lower raw material costs, repositioning allowed us to right size our footprint. So we are seeing significantly lower costs in our supply chain for logistics, storage and warehousing for example, which also contributed to the EBITDA improvement.

除了降低原材料成本之外，重新定位還使我們能夠適當地擴大我們的足跡。因此，我們看到供應鏈中的物流、倉儲和倉儲成本顯著降低，這也有助於 EBITDA 的提高。

Because we are realizing mix and cost improvements more quickly than originally anticipated, we are increasing our guidance for full-year performance chemicals EBITDA margin to be in the high single digits to low double digits, as we expect second half margins to be similar to first half.

由於我們比最初預期更快地實現產品組合和成本改進，我們將全年高性能化學品 EBITDA 利潤率的預期提高到高個位數至低兩位數，因為我們預計下半年的利潤率將與上半年相似。

In summary, the company's focus on execution excellence is evident in our results through continued improvement and profitability and strong free cash flow, which we are using to accelerate deleveraging. We're pleased with the progress we're making in a very challenging global business environment.

總而言之，公司對卓越執行的關注體現在我們的業績中，透過持續的改進和盈利能力以及強勁的自由現金流，我們正在利用這些來加速去槓桿化。我們對在極具挑戰性的全球商業環境中取得的進展感到滿意。

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

現在我將把電話轉回給戴夫，讓他更新指導意見並發表結束語。

Thanks, Mary. Please turn to slide 10. Given the continued strong performance in performance chemicals, and sustained 50-plus percent EBITDA margins in performance materials coupled with an improved outlook for North American auto production, we are raising the low end of our full-year EBITDA guidance to a range of $390 million to $415 million.

謝謝，瑪麗。請翻到第 10 張投影片。鑑於高性能化學品的持續強勁表現、高性能材料的 EBITDA 利潤率維持在 50% 以上，再加上北美汽車生產前景的改善，我們將全年 EBITDA 預期的低端上調至 3.9 億美元至 4.15 億美元之間。

In addition, with the strong free cash flow we're generating, we're revising our full-year free cash flow guidance upward to $230 million to $260 million, and we remain highly confident we will achieve our year-end net leverage target of below 2.8 times. We are maintaining our sales guidance as we continue to navigate macroeconomic uncertainty and weakness in industrial and consumer demand as well as potential shifts in interest rates and tariffs during the second half.

此外，憑藉我們產生的強勁自由現金流，我們將全年自由現金流預期上調至 2.3 億美元至 2.6 億美元，我們仍然非常有信心實現低於 2.8 倍的年底淨槓桿率目標。由於我們將繼續應對宏觀經濟的不確定性、工業和消費者需求的疲軟以及下半年利率和關稅的潛在變化，我們維持銷售指導不變。

As I close, let me once again highlight the significant progress the company has made over the last two years as a result of the successful execution of our repositioning strategy. We've posted three straight quarters of year-over-year improvement in EBITDA and free cash flow, five straight quarters of year-over-year EBITDA margin improvement and four consecutive quarters of reduced leverage.

最後，請容許我再次強調公司在過去兩年中由於成功執行重新定位策略而取得的重大進展。我們的 EBITDA 和自由現金流已連續三個季度同比增長，EBITDA 利潤率已連續五個季度同比增長，槓桿率已連續四個季度下降。

We believe our results demonstrate that we are building momentum as we transition beyond this repositioning phase. Strategically, we are pleased with the progress of the sale of our industrial specialties business and CTO refinery and expect to provide an update soon. I'm also excited to share that we expect to host an investor update later this year or early next year, where I'll communicate the results of our comprehensive portfolio review, share our long-term growth strategy and articulate our vision for Ingevity's future.

我們相信，我們的結果表明，隨著我們逐漸走出這個重新定位階段，我們正在累積動力。從戰略上講，我們對工業特種業務和 CTO 煉油廠的銷售進展感到滿意，並希望很快提供最新消息。我也很高興地告訴大家，我們預計將在今年稍後或明年年初舉辦一次投資者更新會議，屆時我將傳達我們全面的投資組合審查結果，分享我們的長期成長策略，並闡明我們對 Ingevity 未來的願景。

In closing, our strong results over multiple quarters underscores the strength of our execution and the momentum we are building across the company. With more stable and profitable businesses, a strengthened financial profile and a clear strategic direction, we believe Ingevity has passed an inflection point and is well positioned for sustained growth and long-term value creation.

最後，我們多個季度的強勁業績凸顯了我們的執行力以及我們在整個公司範圍內建立的勢頭。憑藉更穩定、更獲利的業務、更強勁的財務狀況和更明確的策略方向，我們相信 Ingevity 已經度過了一個轉折點，並已做好準備實現持續成長和長期價值創造。

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, CGS Securities.

（操作員指示）CGS 證券的 Jon Tanwanteng。

Congrats on a nice earnings quarter and the higher outlook for the year. Maybe first of all, could you give us an update on the profitability of the InSpec stand-alone ex pavement where CTO prices are relative to a year ago and also relative to alternative OLOs and crude alternatives.

祝賀本季獲利良好，並祝福今年前景光明。首先，您能否向我們介紹 InSpec 獨立路面盈利能力的最新情況，其中 CTO 價格與一年前相比有所差異，並且與替代 OLO 和原油替代品相比也有所差異。

Yes. As you know, we don't break out the profitability of that, Jon. I think where we tried to guide people on that is if you look at -- keep in mind the seasonality of pavement, which is a Q2, Q3 story and compare that to Q4, Q1, you get an idea of the relative profitability of inSpec, and that's really the best we can do.

是的。喬恩，正如你所知，我們不會公佈其盈利能力。我認為，我們試圖引導人們的是，如果你看一下——記住路面的季節性，這是第二季度、第三季度的故事，並將其與第四季度、第一季度進行比較，你就會了解 inSpec 的相對盈利能力，這確實是我們能做的最好的事情。

But Jon, I'd say, overall, we're pleased to be through the higher cost inventory CTO. We're pleased to be through the repositioning efforts. And as I mentioned, I think we're -- we feel like we've reached an inflection point for the company.

但喬恩，我想說，總的來說，我們很高興能夠通過更高成本的庫存 CTO。我們很高興能夠完成重新定位的努力。正如我所提到的，我認為我們已經到達了公司的轉折點。

Got it. I was wondering if you could talk about the investments that you mentioned in your prepared remarks, maybe some of the opportunities there, if those are mostly in the carbon segment or others? And if there's any update on the already ongoing projects that you have?

知道了。我想知道您是否可以談談您在準備好的演講中提到的投資，也許是其中的一些機會，這些投資主要是在碳領域還是其他領域？您正在進行的專案有任何更新嗎？

Yes. Thanks, Jon. So as you know, we've made investments and have a strong partnership with a company called Nexeon. So part of that investment is continued investment into that partnership, which we're very encouraged about. It will allow us to use our highly engineered activated carbon in the EV segment of the business.

是的。謝謝，喬恩。如您所知，我們已經與一家名為 Nexeon 的公司進行了投資並建立了牢固的合作夥伴關係。因此，這筆投資的一部分是對該合作關係的持續投資，我們對此感到非常鼓舞。這將使我們能夠在電動車業務領域使用我們高度工程化的活性碳。

Also, we've been participating in other applications for activated carbon, which we call process purification. And I think in the past, although we've participated, we haven't been really intentional or having developed those channels in an intentional way. And so we're putting some more energy and focus behind that. And I think we'll see some really good results in the future from those investments as well.

此外，我們也參與了活性碳的其他應用，我們稱之為製程淨化。我認為，過去我們雖然參與過，但我們並沒有真正有意識地或以有意的方式開發這些管道。因此，我們為此投入了更多的精力和精力。我認為未來我們也會看到這些投資帶來一些非常好的成果。

Okay. And just to stick one more in that. Congratulations on a really exceptional run for the segment. Any thoughts on just what you're looking for in leadership there and if there's any tweaks you might be doing to the segment?

好的。再堅持一下。恭喜您在該環節取得了非凡的成績。您對那裡的領導力有何看法？您是否會對該部門進行一些調整？

Yes. So as we announced, after a very long and celebrated career, we had one leader step away from the business, Ed, and really want to acknowledge his contributions to building that business. We have an active search ongoing for his replacement, and we're really pleased with the progress we're making there and excited for that new leader to come aboard. We hope to have that completed search in the next several months, I would say.

是的。因此，正如我們所宣布的那樣，在經歷了漫長而輝煌的職業生涯之後，我們有一位領導者離開了公司，他就是艾德，我們非常想承認他為公司建設所做的貢獻。我們正在積極尋找他的繼任者，我們對目前的進展感到非常滿意，並對新領導人的到來感到興奮。我想說，我們希望在接下來的幾個月內完成搜索。

And then internally, we have a lot of momentum. So we don't want to wait for that new leader to come aboard. We're ready, reorganizing, just to focus on, of course, the automotive aspect of the business, but also, as I mentioned, that process purification business. We brought on some new leaders to focus in that area and excited about what they'll bring to that part of the business.

而在內部，我們擁有很大的發展動能。所以我們不想等待新領導人上任。我們已經準備好進行重組，當然只是為了專注於汽車業務，而且，正如我所提到的，還有工藝淨化業務。我們聘請了一些新的領導者來專注於該領域，並對他們將為業務領域帶來的貢獻感到興奮。

John McNulty, BMO.

約翰·麥克納爾蒂，BMO。

So on performance chemicals, obviously, a really big jump in the margins, maybe bigger than what we were looking for, but a lot of things going on in there. I guess, can you help us to think about what the margin would have been if you didn't have this high-cost CTO running through the P&L? The presumption would be it would have been even higher and probably in the 20s, but can you help us to maybe think about that?

因此，就高性能化學品而言，利潤率顯然出現了大幅增長，可能比我們預期的還要高，但這其中還有很多事情發生。我想，您能否幫助我們思考一下，如果沒有這位高成本的 CTO 貫穿損益表，利潤率會是多少？我們推測這個數字可能會更高，可能在 20 多歲，但您能幫我們考慮一下嗎？

So I'll give you some insight how I think about that. And then we've got Phil Platt here, our Head of Finance and Accounting here as well. So as I mentioned, when we think about the full year, a lot of noise in the first half as we were working through the high-cost CTO. But we did say -- I did say we expect the second half margins to be similar to first half.

因此我將向您介紹我對此的看法。我們還有財務和會計主管菲爾普拉特 (Phil Platt)。正如我所提到的，當我們考慮全年時，上半年我們處理高成本 CTO 時出現了很多噪音。但我們確實說過——我確實說過，我們預計下半年的利潤率將與上半年相似。

And again, so that reflects the seasonality of pavement, but also the fact that we will have worked through the high-cost CTO and it won't be dragging down the second half of the year. Keep in mind that pavement, as I mentioned, had a relatively tough Q2, because of the weather impacts. And I mentioned the strong June and the good momentum in July.

再次，這反映了路面的季節性，也反映了我們將解決高成本的 CTO 問題並且不會拖累下半年的事實。請記住，正如我所提到的，由於天氣影響，路面在第二季度表現相對艱難。我提到了六月的強勁表現和七月份的良好勢頭。

So if you think about maybe absent hurricanes and the like, pavement does a bit better in Q3 than Q2. And we don't have the drag from the CTO inventory that gets you to kind of that full-year look that I gave among -- what else am I missing, John? Is there something -- does that help?

因此，如果考慮到可能沒有颶風等因素，那麼第三季的路面狀況會比第二季好一些。而且我們並沒有受到 CTO 庫存的拖累，這讓你對我給出的全年展望有所了解——我還遺漏了什麼，約翰？有什麼幫助嗎？

Yes, definitely gives us a little bit of color on it at least. Okay. And then maybe we can --

是的，至少給我們一點色彩。好的。然後也許我們可以--

Second half, John, yes, just to be clear, second half won't include the impact of the high-cost CTO. And we're saying that the margin -- we expect the margin to be similar to first half.

下半場，約翰，是的，需要明確的是，下半場不會包括高成本 CTO 的影響。我們說的是利潤率——我們預計利潤率將與上半年相似。

Okay. Fair enough. Okay. That helps. And then on the free cash flow side. So 2Q is normally kind of just about a breakeven-type free cash quarter this time, noticeably better than that. I guess, can you help us to think about some of the levers that you're pulling to drive incremental free cash flow as we look forward? Are there some new kind of initiatives or things that you're focused on to kind of tighten things up or push the profitability and the improvement on the cash flow a little bit harder?

好的。很公平。好的。這有幫助。然後是自由現金流方面。因此，第二季度通常只是一個損益平衡型的自由現金季度，這次的情況明顯好於此。我想，您能否幫助我們思考一下，展望未來，您將採取哪些措施來推動自由現金流的增量？您是否正在採取一些新的措施或重點關注的事情來加強管理或進一步提高獲利能力和改善現金流？

I think the main drivers in the second quarter were the improved earnings. And we've clearly continue to work on our inventory management initiatives. And with the cost of the inventory also coming down, we see the benefits showing up in working capital. So less of the CapEx story, as I mentioned. It's pretty typical for us to spend less in the first half of the year on CapEx than we do in the second half, but it's really due primarily to the improved earnings.

我認為第二季度的主要驅動力是獲利的成長。我們顯然會繼續致力於庫存管理計劃。隨著庫存成本的下降，我們看到營運資金方面出現了收益。正如我所提到的，資本支出的故事較少。我們上半年的資本支出比下半年少，這是很典型的，但這主要歸功於獲利的提高。

Yes. And I think, John, just to add on to Mary's comment. We're really pleased with our execution. Obviously, we're seeing benefits from the repositioning strategy, clearly through an inflection point there. And I think what we would expect and we guided to this as well is really much more predictable cash flows for the business that the underlying strength of our business model, whether it's performance materials, which had another 50-plus percent EBITDA quarter. We would expect strong cash flows and predictable cash flows going forward.

是的。我認為，約翰，我只是想補充瑪麗的評論。我們對我們的執行感到非常滿意。顯然，我們看到了重新定位策略帶來的好處，顯然是透過那裡的一個轉折點。我認為，我們所期望的和我們對此做出的指導是，業務的現金流更加可預測，這是我們業務模式的潛在優勢，無論是性能材料，還是其 EBITDA 本季度都實現了 50% 以上的增長。我們預計未來現金流將強勁且可預測。

Daniel Rizzo, Jefferies.

傑富瑞的丹尼爾·里佐 (Daniel Rizzo)。

You mentioned doing a strategic review, just kind of for the whole portfolio. Is it going to be like an earlier process that once you're done with what you're thinking about with industrial specialties that you'll then move on to the next? Or is it something that could happen all at once? I mean, is there ongoing conversations with others about different parts of your business that haven't been previously mentioned?

您提到要對整個投資組合進行策略性評估。這是否會像早期的過程一樣，一旦您完成了對工業專業的思考，您就可以繼續下一個過程？或者這是可能同時發生的事情？我的意思是，您是否正在與其他人討論您業務中之前未提及的不同部分？

Yes. Thanks, Daniel. So what we mentioned is that we're in advanced stages of the sale process of our industrial specialties business and CTO refinery. And hopefully have an update soon. We're very encouraged. And at the same time, there's a lot of work going on internally in parallel to look at the entire portfolio. And obviously, we want to be measured here.

是的。謝謝，丹尼爾。因此，我們提到的是，我們正處於工業特種業務和 CTO 煉油廠銷售過程的後期階段。希望很快能得到更新。我們非常受鼓舞。同時，公司內部也在同步進行大量工作，以審查整個投資組合。顯然，我們希望在這裡進行衡量。

It's obviously -- those are some big decisions for the company, and how we're approaching it is just thinking about what are our core competencies, where are we the best owner and then transposing kind of the financial profile of the different businesses, where can we really add value. And that work is ongoing now. We would expect that to be completed.

顯然，這些對公司來說都是一些重大的決策，而我們處理這些決策的方式就是思考我們的核心競爭力是什麼，我們在哪裡是最好的所有者，然後轉換不同業務的財務狀況，看看我們在哪裡可以真正增加價值。這項工作仍在進行中。我們期望它能夠完成。

And we mentioned that we'd be providing an investor update. Hopefully, by the end of the year, might be early next year, but that work is already ongoing. It also includes a look at where we are -- where we have opportunities to grow. So there may be opportunities, I mentioned one, process purification and within performance materials, where perhaps we've under-resourced in the past and we see opportunities for growth.

我們提到我們將向投資者提供最新消息。希望在今年年底或明年年初完成，但這項工作已經在進行中。它也包括審視我們所處的位置——我們在哪裡有成長的機會。因此可能存在機會，我提到過一個，即工藝淨化和性能材料領域，過去我們可能資源不足，但現在我們看到了成長機會。

So we'll be able to talk more about that in the second half or later in the year, but that process is ongoing as we speak.

因此，我們將能夠在今年下半年或稍後進一步討論這個問題，但目前這個過程仍在進行中。

And then you mentioned that CTO prices now as you purchase them in the open market, I think it's $550 to $600 a ton. I was just wondering what that is as comparing to what your high cost one was from the beginning of the year and late last year. And how we should think about it going forward? Is the market long CTO now just given what you've done? How we should just think about these costs versus your other inputs in the back half of the year?

然後您提到現在在公開市場上購買的 CTO 價格我認為是每噸 550 至 600 美元。我只是想知道，與今年年初和去年年底的高成本相比，這算什麼呢？我們該如何看待這個問題？鑑於您所做的一切，現在市場是否正在做多 CTO？我們該如何考慮這些成本與下半年的其他投入？

Yes. The $550 to $600, again, we use that ARGUS data versus what we were paying before. I think we at one time had talked about levels even in the -- that it was 5x current market conditions at a time when the CTO market prices were in a similar area. So the reality is, with the downsizing of our footprint, our CTO purchase requirements, volume requirements also came down. So the combination of requiring less CTO as well as the lower prices is really what you're seeing in those improved results in the first half of this year.

是的。550 美元到 600 美元，我們再次使用 ARGUS 數據與我們之前支付的價格進行比較。我認為我們曾經討論過水平，甚至是——當時 CTO 市場價格處於類似水平，其價格是當前市場狀況的 5 倍。實際情況是，隨著我們足跡的縮小，我們的 CTO 採購要求和數量要求也下降了。因此，您在今年上半年看到的業績改善實際上是對 CTO 需求減少和價格降低的結合。

And going forward?

那麼接下來呢？

And going forward, yes. I mean, volume of purchases would be similar to what we saw in Q2. And the price, again, we're comfortable that we have enough CTO to run our operations and certainly are less dependent on the vagaries of the CTO market and how pricing is moving than we have ever been in the past.

並且繼續向前，是的。我的意思是，購買量與我們在第二季度看到的類似。至於價格，我們對擁有足夠的 CTO 來經營我們的業務感到滿意，而且與過去相比，我們對 CTO 市場變化和定價走勢的依賴程度肯定有所降低。

Mike Sison, Wells Fargo.

富國銀行的麥克·西森。

Nice quarter and outlook. I guess first question, in terms of performance materials, you got pricing, again. It seems like the ability to get pricing has been very good over the years. Can you sort of talk about why in the year with down volumes you've been able to get pricing and how that looks for the second half of the year?

不錯的季度和前景。我想第一個問題是，就性能材料而言，你再次得到了定價。看來這些年來定價的能力一直很好。您能否談談為什麼在銷售下降的今年您仍能獲得定價以及下半年的情況如何？

Right. So thanks for the question. I think just first touching base on the business itself, we see a pretty resilient -- obviously, we're very North American-centric from a business perspective. We sell globally, but the North American market is very important to us, and that's proven to be pretty resilient, whether it's North American auto production or, so far, the consumers buying behavior.

正確的。感謝您的提問。我認為，首先從業務本身來看，我們看到了相當強的彈性——顯然，從業務角度來看，我們非常以北美為中心。我們的產品銷往全球，但北美市場對我們非常重要，事實證明該市場具有相當強的彈性，無論是北美汽車生產還是迄今為止消費者的購買行為。

With respect to pricing, I think it's just reflective of the value that we're providing to customers. We're providing a highly engineered activated carbon solution. Customers are delighted with the products and the technology. We continue to work closely with those key customers globally. And so that pricing and that value that we're getting back is just reflective, I think, of what we're providing to those customers.

關於定價，我認為這只是反映了我們為客戶提供的價值。我們提供高度工程化的活性碳解決方案。客戶對產品和技術非常滿意。我們將繼續與全球這些關鍵客戶密切合作。因此，我認為，我們所獲得的定價和價值只是反映了我們為這些客戶提供的服務。

And as you know, Mike, we've always been able to get price in -- price increases in that business. That has been really unique somewhat -- we believe unique and as an auto supplier in that chain that we were able to get those price increases every year. And I think it is a clear sign of that business's resilience [said] in the face of the kind of the tariff uncertainty. This year, we've been able to continue just kind of business as usual on the pricing front.

麥克，正如你所知，我們一直能夠提高該業務的價格。這確實有點獨特——我們相信這是獨一無二的，而且作為該鏈中的汽車供應商，我們每年都能獲得這些價格上漲。我認為這清楚地顯示了企業在面對關稅不確定性時所展現出的韌性。今年，我們在定價方面能夠繼續照常營業。

Got it. And then shifting gears to advanced [pharma] technologies. David, this business seems to have underperformed quite a bit over the years. Just curious your thoughts on the business itself. What needs to happen for this to be considered a core business longer term? And what's sort of your assessment of this segment, I guess, is the question?

知道了。然後轉向先進的[製藥]技術。大衛，這些年來，這項業務似乎表現不佳。只是好奇您對業務本身的看法。需要怎麼做才能將其視為長期核心業務？我想，問題是您對這一部分的評價是什麼？

Yes. Thanks for the question. First, as we mentioned in the last call, we have new leadership in place, and that team, I think, is doing a really great job taking a look at the entire -- whether it's the commercial approach or approach towards innovation. And so we're encouraged, and I think we'll see benefits from that team and that leadership in the near term.

是的。謝謝你的提問。首先，正如我們在上次電話會議中提到的，我們已經有了新的領導層，我認為這個團隊在審視整體方面做得非常出色——無論是商業方法還是創新方法。因此我們受到鼓舞，我認為我們將在短期內看到該團隊和領導力帶來的好處。

I think as I mentioned in the midterm, from a portfolio perspective, we're looking at the entire portfolio and seeing really where we can add value, where we can be the best owner. APT will be part of that review. And as I mentioned, we'll have more to say on it towards the end of the year.

我認為，正如我在中期提到的那樣，從投資組合的角度來看，我們正在審視整個投資組合，並真正了解我們可以在哪些方面增加價值，在哪些方面我們可以成為最佳所有者。APT 將成為該審查的一部分。正如我所提到的，我們將在今年年底前對此進行更多討論。

But also, as Mary mentioned, we just got through a pretty major CapEx investment. We're pleased with that, how it's come online. And so I think the team is in place. The leadership is in place. So I think we're set up well in the near term, in the mid- to longer term. We're looking at the portfolio and more to come.

但正如瑪麗所提到的，我們剛剛完成了一項相當大的資本支出投資。我們對此感到很高興，它已經上線了。所以我認為團隊已經到位。領導班子已經到位。所以我認為我們在短期、中期和長期都做好了準備。我們正在研究投資組合以及未來的更多內容。

Right. And then just one quick last one. Your free cash flow looks pretty good. I think you raised that, and the goal is to lower debt, get your leverage ratio down. So beyond this year, what do you think is the right way to deploy cash going forward if the leverage looks good beyond this year?

正確的。最後再說一句。您的自由現金流看起來相當不錯。我認為你提到了這一點，目標是降低債務，並降低槓桿率。那麼，如果今年以後槓桿率看起來不錯，您認為未來部署現金的正確方法是什麼？

Sure. And where you finished getting the debt to our target area, that 2 to 2.5 times is clearly our priority. But beyond that, again, investing organically. As I mentioned, we're continuing to do some of that. We continue to see pathways for growth organically and want to give that the priority that it's due.

當然。當您將債務償還至我們的目標區域時，2 到 2.5 倍顯然是我們的首要任務。但除此之外，再次強調，投資是有機的。正如我所提到的，我們正在繼續做其中的一些事情。我們繼續看到有機成長的途徑，並希望給予其應有的優先權。

Share repurchases, in our past before the leverage got elevated, we were a regular participator in share repurchases. And I think that is something that clearly is on our radar as well in terms of returning cash to shareholders. M&A, in terms of our capital allocation priorities. Again, not a priority in the near term, clearly, but something that is always on the list to the extent that, once we are stable, generating a lot of free cash flow, the other capital allocation priorities are hitting on all cylinders. We will have the flexibility to look at M&A opportunities when they arise.

股票回購，在槓桿率上升之前，我們是股票回購的常規參與者。我認為，就向股東返還現金而言，這顯然也是我們關注的事情。就我們的資本配置重點而言，併購。再次強調，這顯然不是短期內的優先事項，但它始終列在優先考慮之列，一旦我們穩定下來，產生大量自由現金流，其他資本配置優先事項就會全力以赴。當併購機會出現時，我們將靈活地尋找機會。

We have no further questions, so I'll hand it back to John Nypaver for some closing comments.

我們沒有其他問題了，所以我會把話題交還給約翰·尼帕弗 (John Nypaver)，請他發表一些結束語。

Thanks, Adam. That concludes our call today. Thank you for your interest in Ingevity and we'll talk with you again next quarter.

謝謝，亞當。今天的通話到此結束。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 attendance. You may now disconnect your lines.

今天的電話會議到此結束。非常感謝各位的出席。現在您可以斷開線路了。