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- **$110M Industrial Specialties Sale**: Proceeds to reduce debt, with 2026 close expected.
- **Q3 Resilience**: 33.5% EBITDA margin, $118M free cash flow, and 2.7x net leverage (vs. 2.8x target).
- **Segment Performance**: PM flat to down year-over-year, APT down mid-teens, Road Technologies record sales.
- **Strategic Moves**: New PM leader Ruth Castillo, $25M share buybacks, and December Investor Update on portfolio review.

**【Management Opening Remarks】**
- Announced the sale of Industrial Specialties business for $110 million, expected to close in early 2026, with proceeds to be used for debt reduction.
- Highlighted strong Q3 execution across segments: Performance Materials and Road Technologies delivered record sales, while APT faced challenges from weak end-market demand and competitive dynamics.
- Appointed Ruth Castillo as leader of Performance Materials, emphasizing strategic growth and operational improvements.
- Provided full-year guidance, including free cash flow and net leverage targets, with plans to accelerate debt reduction.

**【CEO Commentary】**
- Q3 results demonstrated resilience across businesses, with Performance Materials and Road Technologies outperforming despite global auto production challenges.
- Emphasized the company's strategic focus on profitable growth, disciplined capital allocation, and operational efficiency.
- Highlighted the importance of the automotive industry's shift to hybrids and fuel-efficient ICE platforms for future demand in Performance Materials.
- Announced an Investor Update on December 8 to discuss strategic portfolio review and future business direction.

**【CFO Financial Commentary】**
- Total company sales of $362 million for Q3, down 4% year-over-year, driven by lower Industrial Specialties sales and APT challenges.
- Adjusted EBITDA margin improved to 33.5%, reflecting cost control and lower raw material costs.
- Free cash flow of $118 million enabled $25 million in share repurchases and net leverage reduction to 2.7x, ahead of target.
- Full-year guidance updated to reflect ongoing challenges in APT and stable Performance Materials outlook.

**【Q&A Highlights】**
- Performance Materials segment resilience despite supply chain disruptions (aluminum plant fires, chip shortages) and tariffs, with Q3 results demonstrating operational strength.
- APT segment faced weak demand in footwear/apparel and competitive pressures in China, but maintained 26% EBITDA margin through cost management.
- Divestiture of Industrial Specialties expected to contribute $40 million annual free cash flow and reduce stranded costs by $15 million by 2026.
- Management reaffirmed commitment to disciplined capital allocation and debt reduction, with plans to use sale proceeds for further deleveraging.

Ingevity Corporation (NGVT) Q3 2025 Earnings Call Transcript

Revenue

Sales and Services Revenue

Financing Services Revenue

Other Revenue

Cost of Revenue

Cost of Goods and Services

Cost of Financing Services

Other Cost

Gross Profit

Other Operating Income

Operating Expenses

Selling, General and Administrative Expenses

Selling and Marketing Expenses

General and Administrative Expenses

Research and Development Expenses

Loss on Bad Debts

Loss on Impairment of Other Assets

Loss on Disposal of Assets

Other Operating Expenses

Operating Income

Non-Operating Income (Loss)

Income (Loss) from Affiliates

Income (Loss) from Associates

Income (Loss) from Joint ventures

Gain (Loss) on Other Investment

Gain (Loss) on Change in Fair Value

Gain (Loss) on Foreign Currency Exchange

Other Non-Operating Income (Loss)

Net Interest Expense

Interest Expense

Interest Income

Pretax Income From Continuing Operations

Income Tax Expense

Current Income Tax

Deferred Income Tax

Income Tax Adjustments

Net Income from Continuing Operations

Income from Discontinued Operations

Other Items Before Net Income

Net Income

Net Income Attributable to Minority Interests

Net Income Attributable to Owners of the Company

Preferred Stock Dividends

Other Adjustments

Net Income Attributable to Common Stockholders

Other Comprehensive Income

Total Comprehensive Income

Total Comprehensive Income Attributable to Minority Interests

Total Comprehensive Income Attributable to Owners of the Company

Basic EPS

Basic EPS from Continuing Operations

Basic EPS from Discontinued Operations

Diluted EPS

Diluted EPS from Continuing Operations

Diluted EPS from Discontinued Operations

NGVT

NGVT fundamentals

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