HIGHLIGHTS: (comparisons versus prior year period)

• Company delivered strong results driven by record sales of $382.8 million, up 19.5%
• Net income of $60.8 million and diluted earnings per share (EPS) of $1.55; adjusted earnings of $63.5 million and diluted adjusted EPS of $1.62
• Record first quarter adjusted EBITDA of $119.0 million, up 12.9% and adjusted EBITDA margin of 31.1%
• Operating cash flow of $24.3 million and free cash flow of negative $3.3 million, reflecting working capital increases driven by the strong sales
• Company adjusts full year 2022 guidance increasing the top ends of the ranges to sales between $1.525 billion and $1.65 billion and adjusted EBITDA between $430 million and $470 million

The results and guidance in this release include non-GAAP financial measures. Refer to the section entitled “Use of non-GAAP financial measures” within this release.

Ingevity Corporation (NYSE: NGVT) today reported its financial results for the first quarter 2022.

Record net sales of $382.8 million in the first quarter rose 19.5% versus the prior year quarter, as price increases were implemented across the company that were enabled by strong end-market demand and which helped offset inflationary cost pressures. First quarter net income of $60.8 million increased 24.8% compared to the prior year quarter.

Diluted earnings per share (EPS) in the current quarter was $1.55 compared to diluted EPS of $1.20 in the prior year quarter. Adjusted earnings of $63.5 million increased 22.4% versus the prior year quarter and diluted adjusted EPS was $1.62, which excludes, net of tax, $0.07 primarily related to restructuring and other charges recognized during the quarter. This compares to diluted adjusted EPS of $1.27 in the prior year quarter.

Record first quarter adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $119.0 million was up 12.9% year over year with adjusted EBITDA margin of 31.1%. First quarter operating cash flow was $24.3 million and free cash flow was negative $3.3 million, reflecting working capital increases driven by the strong sales.

“We continue to see strong end-market demand across the company which allowed us to increase prices,” said John Fortson, president and CEO. “In Performance Chemicals, this was particularly true in our Industrial Specialties and Engineered Polymers businesses. In addition, our Performance Chemicals’ Pavement Technologies business achieved record first quarter sales due to strong volume growth. We also showed excellent results throughout Performance Materials. Regional shifts in automotive product sales, along with volume growth and price increases in process purification, helped the segment reach its second-best revenue quarter and maintain strong margins. Throughout our company, our team continues to respond quickly and execute extremely well in a dynamic and challenging environment exacerbated by supply chain disruptions and inflationary pressures driving higher logistics, raw materials and energy costs.”

Performance Chemicals

Sales in the Performance Chemicals segment were up 30.5% from prior year to $234.4 million.

“Sales across our Performance Chemicals segment rose significantly compared to the prior year quarter,” said Fortson. “Our teams implemented price increases in all of our business areas which allowed us to offset energy, logistics and raw materials inflation in the quarter.”

Engineered Polymers sales rose 34.1% and sales in Industrial Specialties applications rose 29.1% as price increases offset rising costs. Industrial Specialties also benefited from an improved mix of higher-value derivatized products. Pavement Technologies delivered a record Q1, with sales up 30.4% versus the prior year quarter, driven by volume increases in the Americas and Europe.

First quarter segment EBITDA was $41.1 million, up 29.7% versus the prior year quarter, and first quarter segment EBITDA margin was 17.5% versus 17.7% last year.

Performance Materials

Sales in Performance Materials were $148.4 million, up 5.5% compared to the prior year quarter.

“This was our second-best revenue quarter in Performance Materials. Sales growth benefited from a geographic mix shift within our automotive products and strong demand for our process purification products,” said Fortson. “Continued strength in automotive carbon sales and our U.S. Tier 3 / LEV III ‘honeycomb’ products in North America largely offset declines in Asia-Pacific which was negatively impacted by COVID-related automotive plant shutdowns. We are also pleased to note our increased sales to South America due to the positive impact of the regulatory implementation of the new Proconve L-7 emission standards in Brazil. I continue to be impressed with our operating flexibility which allows us to respond quickly to changing market dynamics.”

Segment EBITDA of $77.9 million was up 5.7% versus the prior year period. First quarter segment EBITDA margin was 52.5% versus 52.4%.

Updated Full-Year 2022 Guidance

Ingevity raised the top ends of its 2022 guidance ranges to sales between $1.525 billion to $1.65 billion and adjusted EBITDA between $430 million to $470 million.

“One quarter in, we see continued demand allowing us to capture value and increase prices to offset rising costs. However, the global environment remains volatile and uncertain,” said Fortson. “We’ve demonstrated our ability to respond quickly to these challenges and are taking the actions necessary to continue to drive growth and profitability, including our continued focus on operational excellence. At the same time, we are driving forward with our strategic initiatives to position the company to thrive in the long term.”

Ingevity: Purify, Protect and Enhance

Ingevity provides products and technologies that purify, protect, and enhance the world around us. Through a team of talented and experienced people, we develop, manufacture and bring to market solutions that help customers solve complex problems and make the world more sustainable. We operate in two reporting segments: Performance Chemicals, which includes specialty chemicals and engineered polymers; and Performance Materials, which includes high-performance activated carbon. These products are used in a variety of demanding applications, including asphalt paving, oil exploration and production, agrochemicals, adhesives, lubricants, publication inks, coatings, elastomers, bioplastics and automotive components that reduce gasoline vapor emissions. Headquartered in North Charleston, South Carolina, Ingevity operates from 25 locations around the world and employs approximately 1,850 people. The company is traded on the New York Stock Exchange (NYSE:NGVT). For more information visit www.ingevity.com.

Additional Information

The company will host a live webcast on Thursday, May 5, 2022, at 10:00 a.m. (Eastern) to discuss first quarter 2022 fiscal results. The webcast can be accessed here or on the investors section of Ingevity’s website. You may also listen to the conference call by dialing 844-200-6205 (inside the U.S.) or 929-526-1599 (outside the U.S.) and entering access code 080961. Information on how to access the webcast and conference call, along with a slide deck containing other relevant financial and statistical information, will be posted to Ingevity’s investor site prior to the call. A replay will be available beginning at approximately 2:00 p.m. (Eastern) on May 5, 2022 through May 4, 2023 at this replay link.

Use of non-GAAP financial measures: This press release includes certain non‐GAAP financial measures intended to supplement, not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided within the Appendix to this presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided. The company does not attempt to provide reconciliations of forward-looking non-GAAP guidance to the comparable GAAP measure because the impact and timing of the factors underlying the guidance assumptions are inherently uncertain and difficult to predict and are unavailable without unreasonable efforts. In addition, Ingevity believes such reconciliations would imply a degree of certainty that could be confusing to investors.

Forward-looking statements:

This press release contains “forward-looking statements” within the meaning of the Securities Exchange Act of 1934, as amended, and the Private Securities Litigation Reform Act of 1995. Such statements generally include the words “will,” “plans,” “intends,” “targets,” “expects,” “outlook,” “believes,” “anticipates” or similar expressions. Forward-looking statements may include, without limitation, expected financial positions, guidance, results of operations and cash flows; financing plans; business strategies and expectations; operating plans; impact of COVID-19; capital and other expenditures; competitive positions; growth opportunities for existing products; benefits from new technology and cost-reduction initiatives, plans and objectives; litigation related strategies and outcomes; markets for securities and expected future repurchases of shares, including statements about the manner, amount and timing of repurchases. Actual results could differ materially from the views expressed. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, adverse effects from the COVID-19 pandemic; adverse effects from general global economic, geopolitical and financial conditions beyond our control, including inflation and war in Ukraine; risks related to our international sales and operations; adverse conditions in the automotive market; competition from substitute products, new technologies and new or emerging competitors; worldwide air quality standards; a decrease in government infrastructure spending; adverse conditions in cyclical end markets; the limited supply of or lack of access to sufficient crude tall oil and other raw materials; integration of future acquisitions; the provision of services by third parties at several facilities; supply chain disruptions; natural disasters and extreme weather events; or other unanticipated problems such as labor difficulties (including work stoppages), equipment failure or unscheduled maintenance and repair; attracting and retaining key personnel; dependence on certain large customers; legal actions associated with our intellectual property rights; protection of our intellectual property and other proprietary information; information technology security breaches and other disruptions; complications with designing or implementing our new enterprise resource planning system; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; and losses due to lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes, and the other factors detailed from time to time in the reports we file with the SEC, including those described in Part I, Item 1A. Risk Factors in our 2021 Annual Report on Form 10-K as well as in our other filings with the SEC. These forward-looking statements speak only to management’s beliefs as of the date of this press release. Ingevity assumes no obligation to provide any revisions to, or update, any projections and forward-looking statements contained in this press release.

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Ingevity Corporation

Non-GAAP Financial Measures

Ingevity has presented certain financial measures, defined below, which have not been prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) and has provided a reconciliation to the most directly comparable financial measure calculated in accordance with GAAP on the following pages. These financial measures are not meant to be considered in isolation or as a substitute for the most directly comparable financial measure calculated in accordance with GAAP. Investors should consider the limitations associated with these non-GAAP measures, including the potential lack of comparability of these measures from one company to another.

We believe these non-GAAP financial measures provide management as well as investors, potential investors, securities analysts and others with useful information to evaluate the performance of the business, because such measures, when viewed together with our financial results computed in accordance with GAAP, provide a more complete understanding of the factors and trends affecting our historical financial performance and projected future results.

Ingevity uses the following non-GAAP measures:

Adjusted earnings (loss) is defined as net income (loss) plus restructuring and other (income) charges, net, acquisition and other-related costs, litigation verdict charges, pension and postretirement settlement and curtailment (income) charges and the income tax expense (benefit) on those items, less the provision (benefit) from certain discrete tax items.

Diluted adjusted earnings (loss) per share is defined as net income (loss) per diluted share plus restructuring and other (income) charges, net, acquisition and other related costs, litigation verdict charges, pension and postretirement settlement and curtailment (income) charges and the income tax expense (benefit) on those items, less the tax provision (benefit) from certain discrete tax items, in each case on a per share basis.

Adjusted EBITDA is defined as net income (loss) plus interest expense, net, provision (benefit) for income taxes, depreciation, amortization, restructuring and other (income) charges, net, acquisition and other-related costs, litigation verdict charges, pension and postretirement settlement and curtailment (income) charges, net.

Adjusted EBITDA Margin is defined as Adjusted EBITDA divided by Net sales.

Free Cash Flow is defined as net cash provided by operating activities less capital expenditures.

Net Debt is defined as the sum of notes payable, short-term debt, current maturities of long-term debt and long-term debt less the sum of cash and cash equivalents, restricted cash associated with our New Market Tax Credit financing arrangement, and restricted investment.

Net Debt Ratio is defined as Net Debt divided by last twelve months Adjusted EBITDA, inclusive of acquisition-related pro forma adjustments.

Ingevity also uses the above financial measures as the primary measures of profitability used by managers of the business. In addition, Ingevity believes Adjusted EBITDA and Adjusted EBITDA Margin are useful measures because they exclude the effects of financing and investment activities as well as non-operating activities.

GAAP Reconciliation of 2022 Adjusted EBITDA Guidance

A reconciliation of net income to adjusted EBITDA as projected for 2022 is not provided. Ingevity does not forecast net income as it cannot, without unreasonable effort, estimate or predict with certainty various components of net income. These components, net of tax, include further restructuring and other income (charges), net; additional acquisition and other-related costs; litigation verdict charges; additional pension and postretirement settlement and curtailment (income) charges; and revisions due to legislative tax rate changes. Additionally, discrete tax items could drive variability in our projected effective tax rate. All of these components could significantly impact such financial measures. Further, in the future, other items with similar characteristics to those currently included in adjusted EBITDA, that have a similar impact on comparability of periods, and which are not known at this time, may exist and impact adjusted EBITDA.

INGEVITY CORPORATION

Reconciliation of Non-GAAP Financial Measures

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INGEVITY CORPORATION

Reconciliation of Non-GAAP Financial Measures

INGEVITY CORPORATION

Reconciliation of Non-GAAP Financial Measures

INGEVITY CORPORATION

Reconciliation of Non-GAAP Financial Measures

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