Ingevity Corporation · Q1 2023 earnings

Briefing

Reported a mixed first quarter, with sales up but net income down due to various factors.

Ingevity's first quarter 2023 results showed a slight increase in net sales, but a decrease in net income and adjusted EBITDA. The company faced challenges including a slow start in China, customer destocking, and rising raw material costs, but saw strong performance in certain segments and regions.

• Net sales increased by 2.6% to $392.6 million, driven by pricing and the Ozark acquisition, but offset by lower volumes.
• Net income decreased by 17% to $50.7 million, with diluted EPS down 13% to $1.35, impacted by lower operating earnings and increased expenses.
• Adjusted EBITDA decreased by 13% to $103.9 million with adjusted EBITDA margin of 26.5%, due to gross margin pressure from lower volumes and increased costs.
• The company adjusted its full year 2023 guidance to sales between $1.75 billion and $1.95 billion, and adjusted EBITDA between $450 million and $480 million.

Headline financials

Revenue & EPS history

Ingevity adjusted its full year 2023 guidance due to recent market softness and the possibility of a recession. They anticipate a strong year in APT and Performance Materials as the China market recovers and automotive production increases, as well as strength in Pavement Technologies. Results in Industrial Specialties are expected to be challenged.