And good morning, everyone. Good afternoon. Welcome to the Ingevity Corporation fourth quarter and full year 2024 earnings call and webcast. My name is Adam, and I will be your operator today. If you would like to ask a question during the Q&A portion of today's call, you may do so by pressing star followed by one on your telephone keypad. I will now hand the floor to John Nypaver to begin.

Thank you, Adam. Good morning, and welcome to Ingevity Corporation's fourth quarter 2024 earnings call. Earlier 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.ingevity.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 most recent 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 those projections as further described in our earnings release. Our agenda is on slide three. Our speakers today are Luis Fernandez-Moreno, our Interim CEO, and Mary Dean Hall, our CFO. Our business leads, Richard White, President of Performance Chemicals, and Steve Hume, President of Advanced Polymer Technologies, are available for questions and comments. Ed Woodcock, President of Performance Materials, is traveling. In his place to answer questions is Jonathan McIver, our VP of Global Commercial for Performance Materials. Luis will start us off with some highlights for the year. Mary will follow with a review of our consolidated financial performance, and the business segment results for the fourth quarter and full year. Luis will then provide closing comments and discuss 2025 guidance. Our prepared comments will focus on full year results. But we are happy to take questions on the quarter during the Q&A portion of the call. With that, to you, Luis.

Thanks, John, and good morning, everyone. Please turn to Slide four. In 2024, we took proactive steps to improve performance and enhance shareholder value. These actions, which are already delivering results, have significantly altered the way we perform as a company. First, we continue to reposition Performance Chemicals. This segment is now focused on higher margin end markets with an improved raw material cost structure, which will be more visible once we consume the remaining high-cost CTO inventory. Second, we accelerated execution of our strategy. Performance Materials had a record year in both sales and EBITDA, surpassing margins of 50%. And there is momentum behind this business as we see ICE vehicles continue to become more fuel-efficient and consumer preferences trending towards hybrids, which require more advanced carbon technology. We are also making progress in developing new outlets for our carbon in silicon anode batteries through our investment in Nexium. Performance Chemicals margins improved in the second half of 2024, and we protected share and volume growth in APT in a difficult industrial environment. As a result, we generated over $50 million of free cash flow in a year where we had $200 million of repositioning cash costs. As we committed, we paid down debt and ended the year at 3.5 times net leverage. Third, we recently announced plans to explore strategic alternatives for the industrial specialties product line, North Charleston CTO Refinery. Industrial Specialties has a great team and we are extremely proud of the work they are doing. Nevertheless, we are assessing if Ingevity Corporation is the best owner of this cyclical business. We expect to have this assessment completed before the end of the year. All these accomplishments would be hollow without a good safety record that directly impacts the men and women of our team at facilities around the world. I am very pleased to share we achieved our goal to reach the top quartile in personal safety performance in the American Chemistry Council's responsible care benchmarking. Even with all the changes we saw during 2024, the teams made safety a priority. And I could not be more proud of everyone's hard work. We were also recently named as one of America's most responsible companies of 2025 by Newsweek Magazine for the third consecutive year. We are committed to advancing our mission to purify, protect, and enhance the world and are proud to be recognized for our efforts. Lastly, the search for a permanent CEO is progressing well. While the search is in progress, I continue to be focused on executing our business strategy, which is showing results. Now I will turn it over to Mary who will go through the 2024 numbers. After that, I will be back to discuss 2025 guidance.

Thanks, Luis, and good morning all. Please turn to slide five. Full year sales of $1.4 billion were down 17% from last year's sales of almost $1.7 billion. Performance Materials reported record sales but that increase was more than offset by the almost $300 million drop in sales in Performance Chemicals, which was primarily due to the exit of lower margin end markets in industrial specialties. Also contributing to the sales decline were lower sales in road technology due primarily to adverse weather conditions, and in advanced polymer technologies where increased volumes were more than offset by unfavorable mix and price concessions in certain markets, reflecting continued weakness in industrial demand and competitive pressures. We ended the year with a GAAP net loss of $430 million, which reflected several non-recurring charges that are primarily related to our repositioning action. These charges totaled $688 million and included a goodwill impairment of $349 million, restructuring charges of $186 million, a $100 million termination fee for a long-term CPO supply agreement, and $53 million of losses on the resale of excess CTO. We have excluded the impact of these charges in our non-GAAP disclosure and our discussion for the remainder of this presentation. A reconciliation of our non-GAAP measures to GAAP is in the appendix to this deck and also in our earnings release and Form 10-K, which will be filed this evening. Our adjusted gross profit of $521 million was down 4% to last year. The gross margin was higher by 510 basis points, reflecting Performance Materials' improved profitability and our strategic repositioning of Performance Chemicals. Adjusted SG&A dollar spend initiatives we implemented during the year, but the percent of sales increased year over year due to this steep drop in sales I mentioned earlier. Adjusted EBITDA dollars were down on lower…

Thanks, Mary. Please turn to slide ten. As I have said, while I am in the CEO position, the team and I are keenly focused on execution and for 2025, that includes generating sales between $1.3 and $1.4 billion, EBITDA between $400 million and $415 million. I have also said I am committed to reducing our debt. And I expect we will generate between $220 and $260 million of free cash flow, which combined with our improved EBITDA should enable us to reduce net leverage to below 2.8 times by the end of the year. As a reminder, this guidance does not include any potential impact from the exploration of strategic alternatives for industrial specialties and the North Charleston's CTO refinery. In summary, I am excited about the progress we have made and believe Ingevity Corporation will continue to improve. With EBITDA margins in the high twenties and businesses that generate very strong cash flow, which will provide the flexibility to allocate capital across a variety of avenues. I look forward to leading these efforts until my replacement is named. In the meantime, the company and the board remain focused on maximizing value to our shareholders through the priorities I have previously communicated. With that, I will turn it over for questions.

As a reminder, if you would like to ask a question on today's call, please press star followed by one on your telephone keypad now. And our first question comes from Jonathan Tanwanteng from CGS Securities. Jonathan, your line is open. Please go ahead.

Hi. Good morning. Thank you for taking my questions and really nice quarter on and pulling in the cost. Question on the pricing in the Performance Chemicals business. Are you already at the pricing that you need to be at when the high price CTO inventory runs out or is there still a further leg down that you can take when that does come out and you can use a lower cost?

Hi, Jonathan. Good morning. We have stayed competitive with the market. Since the prices of CTO for most people have come down, we just have to be competitive. So the way I would describe it is that our current prices reflect the current market price of CTO. And as such, if CTO stays at these levels, we are pretty much at the right price level to be competitive in the marketplace.

Okay. So when you do run out of that inventory, you will see some profit improvement. But you mentioned an offset to that. I was just wondering what the disconnect is.

No. That is correct. So we will see that as we consume the CTO. I do not think there is a disconnect. The issue that we wanted to make sure that everybody understood is that those prices are already at a level that is lower than last year. So making a comparison year on year on this is the CTO reduction, that CTO cost reduction is impacted by the fact that we are also reducing our prices to be competitive in the marketplace. But we will see an improvement as the high inventory CTO is consumed.

Okay. Understood. And secondly, could you just talk about the auto market a little bit more? What are you seeing trends in Q1? Especially in terms of mixes of hybrid versus EVs and how that will play out through the year.

Yeah. Let me ask Jonathan McIver if you can comment on that.

Sure. Thank you, Jonathan. Yeah. What we are looking at is in line with what we have seen in the most recent S&P Global forecasts, less of a declining interest in EVs versus hybrids, which we know bodes well for Ingevity Corporation's content of vehicles.

Okay. Great. Thank you. I will turn back to the queue.

Next question comes from Daniel Rizzo from Jefferies. Daniel, your line is open. Please go ahead.

Hi. Good morning, everyone. Thanks for taking the question. Can you just put tariffs in perspective in terms of what your customers are saying in the near-term impacts and how it might affect the order patterns?

Could you repeat that last part of the question?

Well, what your customer is saying about tariffs about their near-term impacts and how it might affect order patterns.

Okay. Got it. So, yeah, that is a great unknown to be honest. There is definitely a lot of uncertainty and, unfortunately, not a lot of clarity. So far today, we have seen no impact when it comes to Ingevity Corporation or even when it comes to our customers. So in that regard today, all of the announcements have really had very minimal impact on both our customers and on our business. But there is no question that some changes of what has been proposed could have an impact either in automotive production in the US, consumer demand in the US related to higher price or higher inflation related to those tariffs. But for the time being, we really have not seen anything. It is just the uncertainty that it is bringing to not only us, but our customers.

Okay. Thanks for that. And then just in terms of CapEx with, you know, with the changes that are going on and kind of reducing your footprint and stuff like that, I was just wondering, of what you are projecting for 2025, how much of that is maintenance CapEx? And is there any, I mean, are you will you be spending it all on performance materials? Is that necessary or just how we should think about it going forward?

Yep. Most of the expected spend is on maintenance and what we call SHE, Safety, Health, Environmental. But there is some growth spend in there. But I would say for 2025, it is primarily maintenance-related spend.

Thank you very much.

Next question comes from John McNulty from BMO Capital Markets. John, your line is open. Please go ahead.

Hi. Good morning. Thank you for taking my question. So just regarding some of the increased innovation spend in PM, can you help us to think about where that is going? I am assuming some of it is toward the Nexium platform, but can you help us to think about some of the investments that you are making there?

Hi, John. Good morning. Yes. Indeed. You are right. The increased spend there is as you know, as we look at these new applications in batteries and specifically in the silicon anodes, it requires a significant amount of testing. And not only testing, but also the fine-tuning of the materials. So I would say the vast majority, if not all, is related to the development of the new application for electric for batteries. Both for electric vehicles and other applications.

Okay. Got it. No. Appreciate the color. And then the other question was just Mary, I think you said in the cash flow side, you are not assuming any improvements in 2025 on a working capital basis. I guess, why would that be if the CTO inventory is still kind of sticky and you are going to work through it in the first and second quarter? Like, what is are there an offset that we should be thinking about or is that just a level of conservatism, I guess, how should we be thinking about that?

So I think what I was trying to point to is we saw such a big reduction in working capital, benefiting cash in 2024, and I was I am cautioning people not to expect that again because in a more normal environment, putting the high-cost CTO aside in a more normal environment, we would expect to grow the company and have increasing accounts receivable and inventory off of our now new kind of base business. So that is really what I was trying to address.

Okay. But should we be thinking, like, thinking about the CTO inventory working itself through, will that likely be at least somewhat of a tailwind or, again, does it get offset by the growth maybe in the core business? I guess trying to size out how big is that CTO inventory that has to be worked through maybe.

Our assumption sitting here today is that the inventory-related benefit of working off that high-cost CTO will is offset by other increases in working capital as we respond to growing parts of the business. That is our assumption today.

Got it. Okay. Thanks very much for the color.

Next question comes from Abigail Ebers from Wells Fargo. Abigail, your line is open. Please go ahead.

Hi. Thanks for taking my question. So I see you are guiding for 50% EBITDA margins from materials in 2025. How should we be thinking about performance material margins longer term in a more volume growth-oriented environment? Given that you are expecting global auto protection to be lower.

So I guess in the short term, we continue to expect Performance Materials business to deliver that 50% EBITDA margins. Obviously, that depends on us continuing to sell at the level that we are predicting for automotive production. Any significant change in automotive production or a significant shift towards battery electric vehicles would definitely have an impact in either direction. I mean, the more ICE or hybrid vehicles, the better for us. Which is the trend that we are seeing today. And in that regard, we do expect to keep those margins. We have talked about the fact that there continues to be further regulatory rules in China. That if implemented in 2028 they will have a significant benefit to the utilization of carbon. And as such, we expect that amount to come up, but that would be the time that could be any competitor coming in. So as we think about the longer-term EBITDA margin on this business, assuming that there is that extra or that possible competitor in China, then our margins will be in the high forties. But at least for 2025, our expectation is that those margins are going to remain in the 50% range based not only on the current sales, but all of the actions that we have taken regarding productivity in our manufacturing sites.

Okay. Got it. Thank you.

As a reminder, that is star followed by one on your telephone keypad. We have a follow-up from Jonathan Tanwanteng from CGS Securities. Jonathan, please go ahead.

Hi. Thanks for the follow-up. I might have missed this if you said it earlier, but I was wondering if you could talk about the logistics of exploring alternatives for the industrial business. One, does that include the alternative fatty acids business? And two, how would you physically separate the business from the paper business? In the event you find a buyer or something else just to explain how something like that would be structured.

Yeah, that is a very good question, Jonathan. So again, we are still assessing the options. And this obviously could change. But at this time, our expectations are that we will continue to remain flexible when it comes to raw material. So as such, we will keep the flexibility on alternative fatty acids or CTO-based solutions for the pavement business. So we do not expect that to change that capability that we have developed over the past couple of years. When it comes to the actual assets and you are very familiar with this in the chemical industries. People and companies have done this many times where you have assets in the same location, but you are able to separate them and find ways to provide the services. Again, our current thinking is we will keep all of those assets for payment. Even though they are collocated in the same site, but they are different assets. And be able to do that in sort of a condominium as many condominiums exist today in the chemical industry. I always say, it is not something that is easy, but it has been done many, many times and worked well. So that is what we are thinking. But, again, it is still an analysis that is something that we are developing. And we will come up with more information when we are ready. But, hopefully, that color does provide a little perspective.

It does. I was wondering, have you spoken to outside parties who might be interested yet, or is this still an internal focus? Just figuring out what you can split or not split.

Yeah. As you could imagine, the moment we announced this, we have had a fair amount or a significant amount of interest in the assets. So we are, again, continuing the assessment and evaluations, and we will come up with more information later. But, yeah, even at the moment we announced, there were a fair amount of inbound requests as would have been expected.

Understood. Thank you very much.

You have no further questions. So I will hand the call back to the Ingevity Corporation team for some concluding remarks.

Great. Well, that concludes our call. Thank you for your interest in Ingevity Corporation, and we will talk with you again next time.

This concludes today's call. Thank you very much for your attendance. You may now disconnect your lines.