Ingevity Corporation Common Stock

Good morning or good afternoon all and welcome to the Ingevity fourth quarter and full year 2021 earnings webcast. My name is Adam and I'll be your operator today. If you'd like to ask a question during the Q&A portion of today's call, you may do so by pressing star 1 on your telephone keypad. I will now hand you over to Mary Hall to begin. So Mary, please go ahead when you are ready.

Yes, thank you Adam. Good morning all. Welcome to Ingevity's fourth quarter and full year 2021 earnings call. Early 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.engevity.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. Definitions of these non-GAAP financial measures and reconciliations to comparable GAAP measures are included in our earnings release and are also found in our 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 these projections as further described in our earnings release. Our agenda is on slide four. With me today are John Fortson, our President and CEO, Mike Smith, President of Performance Chemicals, and Ed Woodcock, President of Performance Materials. In addition, we have Rich White, Steve Hume, and Eric Ripple available for questions and comments. Rich and Steve are our recently appointed co-leads for Performance Chemicals, given Mike's March 1st, retirement. And Eric heads our growth and innovation effort. John will review key accomplishments in 2021. I'll follow with highlights of our financial performance in Q4 and full year. Mike and Ed will review the performance of their business segments. And John will conclude with our outlook for 2022 and full year guidance. And with that, over to you, John.

Thanks, Mary, and good morning, everyone. Thank you for joining us this morning on what is obviously a busy news day, and we appreciate your interest in Ingevity as we report on what we feel was a strong 2021. If you turn to slide number five, I'll start by highlighting some of our accomplishments. As you've seen on the new landscape slide after our cover page, Ingevity's products touch our everyday lives in many ways. Our technologies really do purify, protect, and enhance the world around us. And we're doing this while being a best in class, profitable and growing company. Overall, I'm really proud of the way Ingevity performed for the year. We grew revenue by 14% and adjusted EBITDA by 6% over 2020, despite what was a dynamic business environment. We all know the supply chain and logistics challenges our industry faced. Ingevity did a terrific job driving revenue growth through both increased volume and price across our portfolio. Performance Chemical saw a strong recovery from the pandemic impacted 2020. Engineer polymers in particular drove revenue increases by almost 50%. Remarkable work by this team and we thank them. Demand for our industrial specialties products continued to increase. Compared to the last several years, supply and demand are in a good spot across plant chemical applications. This increased demand has translated into higher volumes and has allowed us to aggressively raise prices. Performance materials performed well in the face of the microchip shortage. While Q1 2021 started strong, microchip issues plagued the global auto industry throughout the year before chip availability improved in Q4 2021. From our internal estimates, this resulted in roughly 60 to 70 million of lost sales last year. We anticipate this will correct as auto industry production increases and microchip supplies normalize. Despite these hurdles, Performance Materials delivered impressive 40-plus percent segment EBITDA margins for both Q4 and the full year. We also leveraged operational excellence to serve customers and gain share. Our team continued to work safely in the face of first the Delta variant and then the Omicron variant of COVID-19. While our goal is always zero injuries, I am proud of our operations teams for working injury-free at all our global technical centers in over 50% of our manufacturing facilities. We jumpstarted continuous improvement projects across our plant network. This is no easy feat while wearing masks and with ongoing on-site testing. These projects are intended to drive down costs this year, increase efficiencies, and lead to better customer service. Finally, our supply chain excellence really is a competitive advantage for us. We are stepping in to support new and existing customers when others are unable to. Now is the time to gain market share, and we are doing just that. We have experienced significant share gains in our adhesives products as a direct result of these efforts. We continue to strategically invest in growth in our future. We completed alternative fatty acid production and saw the first sales of our new AltaVeg product. We continue to assess other feedstocks and expect commercial sales to grow this year. Our performance chemicals team advanced their work in bioplastics understanding the role our engineered polymers technologies can play in addressing the world's plastic pollution challenges. Our products are increasingly being recognized as a critical component in various biodegradable processes. We recently received news that our products have passed tests for marine biodegradation, which will lead to future certifications that complement the industrial and home compostable certifications we already have. Also, we're excited about the product's potential to further grow in the auto industry and support electric vehicles. We continue to expand in-market penetration of Engineer Palmer's products due to their unique performance and sustainability attributes. We further improved our sustainable value proposition for shareholders and customers. We increased our key ESG ratings, particularly our S&P Global CSA and ECOWAS scores. More importantly, we advance the role our products play in helping our customers achieve their own sustainability goals. For example, a recently completed third-party product study shows that West Res, our performance chemicals adhesive technology, has a 62% lower in-life carbon footprint than petroleum-based alternatives. And we increased the number of USDA-certified bio-based products in our portfolio by 50%. bringing our total to 34 products that are recognized. A lot was accomplished in 2021, and we will do even more in 2022. I'll now turn the call over to Mary to review our fourth quarter and full-year financial performance.