Ingevity Corporation Common Stock

Ladies and gentlemen, hello and welcome to the Ingevity fourth quarter and full year 2022 earnings call and webcast. My name is Maxine and I'll be coordinating the call today. If you would like to ask a question during the presentation, you may do so by pressing star followed by one on your telephone keypad. I will now hand over to your host, John Nypova, Treasurer and Investor Relations to begin. John, please go ahead when you're ready.

Thank you, Maxine. Good morning and welcome to Ingevity's fourth quarter and full year 2022 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 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 three. Our speakers today are John Fortson, our President and CEO, Mary Hall, our CFO, Ed Woodcock, President of Performance Materials, and Rich White, President of Industrial Specialties and Pavement Technologies. In addition, Steve Hume, President, Engineered Polymers, will be available for questions and comments. John will start us off with some highlights for the year. Mary will follow with a review of our consolidated financial performance for the fourth quarter and full year. Rich, on behalf of his performance chemical segment co-lead, Steve Hume, will discuss the entire performance chemical segment, and Ed will review the results of performance materials. Finally, John will conclude with our guidance for 2023. With that, over to you, John.

Thanks, John, and good morning, everyone. Thanks for joining us today. On slide four, you will see that Ingevity has much to be proud of in 2022. Both segments posted record revenue in EBITDA. Combined, Ingevity's revenue reached almost $1.7 billion, and our EBITDA was over $450 million. We profitably grew all the businesses in our portfolio. This was despite the challenges of 2022 that were thrown at us as we grappled with energy spikes, inflation, and then fears of a recession. Like many of our peers, the fourth quarter was slower than expected. For us, the quarter was a tale of two halves. October and early November were strong, but starting just before Thanksgiving, we saw a significant deterioration in our order book as customers aggressively destocked inventory in advance of year end, particularly in higher value product lines such as adhesives. Additionally, as China began to reopen, auto OEMs and parts plants in the country ceased production as they dealt with rising COVID infections. During 2022, Ingevity continued to lay the foundations for sustainable long-term growth. Our investments included our purchase of Ozark materials, which expands our reach into pavement markings in the road construction market. We developed several alternative fatty acids, allowing us to diversify our raw material streams and expand into new markets. We certified our TOPA for use in the biofuels market. We added Kappa Polyols capacity for our engineer polymers business at our Derrida, Louisiana site, allowing us to better meet the growing demand for this product. And we continue to develop new market opportunities for our activated carbon through our investments in the electric battery space and renewable natural gas. We did all these things while also returning significant capital to shareholders through our share repurchase program. All these growth initiatives are consistent with our mission to purify, protect, and enhance the world around us. And we received recognition for these efforts in 2022 with a gold ranking from Echovatus and inclusion in Newsweek's list of America's most responsible companies. We invite you to learn more about our ESG efforts by reading our sustainability report found on our website. I'll end my opening comments with a heartfelt thank you to the entire Ingevity team for their perseverance in delivering record performance in 2022. We are now firmly focused on 2023 and are off to the races. With that, I'll turn it over to Mary to discuss the financials.