NGVT - Earnings call transcript Q3 2021

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Operator

Greetings. Welcome to the Ingevity Third Quarter Earnings Report. At this time, all participants are in a listen-only mode. A question-and-answer session will follow the formal presentation. [Operator Instructions] Please note this conference is being recorded. the Investor to Relations. turn and Hamilton, now of Head will conference Bill over Treasurer I Bill, may you now begin.

Bill Hamilton

detailed we a slide This Thanks, in likely to filings Rob. to are use presentation our also Any presentation we've and of found we to and our statement call. involve can call. you our & Presentations. on Ingevity's for refer release Welcome our earnings goals to SEC posted discussing reconciliations morning our be results. risks third quarter follow non-GAAP and you projections today release, see site Good two. XXXX you may forward-looking earnings we can morning, that in the measures presentation earnings when on everyone. ir.ingevity.com disclosures here include It Events our investor today's on I'll conference or under use

three. President President Hall, today Materials. is me are on agenda Performance Chemicals; Fortson, of CFO; slide our President and Ed John of Our Woodcock, Mary Performance With Mike CEO; and Smith,

John current the status. turn comment two With the Mary of the our John our the to comment highlights CEO, performance and I'll discuss will segments. Fortson. guidance Mike revised for John will the on will First of Ed lastly, on our And our that, quarter. will review financial year. call over

John Fortson

everyone. good and morning, you Thank for Bill, Thanks, us. joining

for some way If quarter. turn Ingevity quarter. you this highlights I'm the performed really slide note you'll of has four, Overall, proud the to

initiatives. million year's to supply advancing to the inflation grow XXXX third current in of face raw our Sales chain third compared of $XXX quarter the while and XX% our of headwinds, to previous continue in rose also the quarter. many new product We material businesses

Chemicals third This product in saw price demonstrated results business significantly segment. were robust Specialties growth Industrial driven for across and quarter all Performance lines. throughout increases QX and Polymers increased supported higher volumes by were Polymers XXXX. volumes Engineered the and by Our Engineered has

demand. prolonged And were of negatively global impact Industrial delivered Our Performance Materials automotive The business depress which our our products impacted also the to our Specialties of ahead third activated sales sales performance on carbon continue prior quarter. production, year's of the segment. Pavement increased shortage microchip Technologies very in good slightly

result, XXXX a down were a EBITDA compression the our Ingevity's As is lower both adjusted third third from lows. to tough which With was rebounded Materials quarter to consolidated pandemic down from EBITDA sales comparable respect the earnings, production This due period. Performance year and last caused our margin Materials were segment. margin sales to adjusted and quarter, by quarter demand Performance compared and sharply when in EBITDA adjusted of impact XXXX's

that flat EBITDA when However, were year of grew more the to compared essentially XXXX, almost on X%. margins normal

for us and from we sales You application biofuels positioning we are sustainable significant Ed to that in commercial and TOFA company European initiatives first represent will growth. more opportunity advance us a future. market, long-term will had hear our continue the We the anticipate an important Mike into of the across for

We have well plant to our sales to for and it at Charleston process is and obtained expand biofuel Crossett underway. DeRidder North certification the

of a our facility, advance significantly at XXXX. Crossett soy-based quarter the acid goal production in our fatty second to capability working are capacity with more We of

feedstock. We opportunities are market finding alternate increasing for this

are DeRidder Warrington of the plans capacity levels QX to expanding of caprolactone in higher demand also and for year. meet our production track monomer plant to for at of add our our products are next on We polyol our capacity

Our value products the are vehicle even finding their electric into way chain.

noise Polymers and are battery electric Engineered performance-enhancing to mining and batteries. materials pads, selling our is used vehicle team as to Our and lithium product operations Industrial dampen support critical Capa products protect Specialties the

ways in finding be these to growth value add We markets. are to excited

are technology. ANG see we to by Finally, our testing for increased fleets utility continuing

storage testing trucks with our are and complete strategic largely methane operational of capture we on-site tank partner is our GreenGasUSA. large Beyond and storage

have agreement University. Duke their being second Enviva. is offtake the with You may the first seen XX-year This announced recently GreenGas with

last lower published the highlights our sustainability and we Ingevity's customer-focused high-performing important sustainably an the to playing Additionally XXXX global in operating report commitment solutions week race update that bringing to ongoing market role to emissions.

, competitive raw Engineered past environmental on homepage be Polymer found recovery both materials significant give story I supporting site been a technology read and technologies the the our the us UK you edge. Our existing to the what benefits update our quarter of them which and particularly our to encourage renewable can of who drive be under thank Ingevity day to markets challenging the and to of chain I entire these hard for out to conditions. times. in by for new advancing in entire these in this our investor I market remarkable to trying determination and a smart want operations the adoption. the and I thank impressed has work continue safely day site. team their able their supply work employees but was team and get in continued

they With that We turn are in call all their excited I'll the future. to Mike about Chemicals. have the the Performance over for opportunities results review to

Mike Smith

to the offer our sustainable record across see in strong technology demand Across our products lines the to $XXX continuing adoption portfolio volume we through product and rose automotive, we we'll the versus In improved incredibly in realized sales all sales we to Polymers coatings Chemicals Engineered Thanks, and solutions and were the up see high-margin in vehicle all Performance for businesses globe equipment battery our customers. On for and markedly XX% quarter applications. We're an growth growth all-time demand industrial realized segment across million in and higher due the Engineered pleased Polymers automotive to the electric derivative pads. adoption protective Quarterly grow. over level XXX% John. third slide almost of period. prior-year X, sales many

growth who are solutions applications customers of Capa increasing our these goals. meet in by sustainability their the using addition, and show the sales are to In number continue encouraged to bioplastic we

the has addition robust costs. to price inflation XX%. In important growth, Polymers sales and oilfield all increases price increases which the QX be products acid Industrial for rosin come offset oil both price fourth packaging through are adhesives, realized dynamics growth Specialties tall business higher road Engineered gum the We supply-demand in material quarter. the products lubricants prices in oil Adhesive remain five been strike. to which XX%. to years and levels growth sales saw in and up also of than in tall also raw rosin-based acids was effect additional the in volume benefit rosin fatty Sales Chinese the were quarter fatty and continue third rose we strong implemented and and for over in last and strong. improvement adhesives for safety seen

derivatives fatty the material product During expand acid. steps important These straight adopting potential acid feedstocks continued portfolio our soy-based beyond quarter fatty are as end-use we soy-based and sales raw CTO. of saw we by applications

commercial up also realized of by driven to grow turn temporarily demand to to strong paving the TOFA our and We quarter were first to spending raw recycling offset reduction attribute now and versus the to expect whole forward. we which call to of continued in and Ed segment inflation quarter EBITDA logistic we Performance Outside activities. compared the costs. to higher year continued curtailed in I'll Material was friendly third in Technology America million biofuels volumes results. by local was Chemicals North into technology. for previous by third applications reduce materials prices significantly government up the that Europe to discuss Sales partially our sales Performance a Pavement but leading sales offset prior-year European environmentally quarter slightly sales growth in infrastructure over quarter adoption had going $XX this due in XX% application China

Ed Woodcock

Mike. Thanks,

quarter, less down automotive you the X can products the compared of million disrupting purchase. the at is in negatively vehicles of September of vehicles September greater our vehicles million. vehicles, slide down for mix pickups trucks and XXXX that emissions at than production worldwide. as to of third vehicle and truck XX% their carbon canisters profitable North in to see of as of of Sales compared impact has declined most pre-COVID SUVS. has production. as is the quarter-over-quarter XX% shortage were microchip the automotive These control even when prior in XX% since microchips end sequentially consumers vehicle fell to September, vehicles, also number shortage XX% mix by the production Ingevity continues of and Canada the favorable year quarter, as their decline and have This SUVs vehicle inventories to million compared OEMs In larger sales remains to inventory The activated of industry X.X down SUV $XXX quarter they XX% and and availability to year's beneficial volumes this to the reflecting X.X were evaporative range directing the light inventory the declining As America been XX% North sedans. XXXX. America both vehicles were part US beginning a vehicle of sales reduced in global are light of on the segment been typically QX. the honeycombs since lack the and for in are multiple one vehicle in production The XXXX. inventory US microchip for million systems. to limited their

Ingevity vehicle versus about million IHS impact to light estimate $XX to quarter. losses were China down lower to the XX% the Based was and production be the in revenue. data, Additionally related we sales prior-year XX% in production on QX microchip of quarter million $XX

of We microchip through expect rest XXXX. issue continue to and XXXX supply into the the

XXXX the we completed family Lastly, reduce apply Ingevity's of down near-zero X future EBITDA 'XXX of to This the fuel technologies like sub-hybrid Europe variations announced China million advance and believe the as of suppliers. to and and model lower to we Remaining designs. to anywhere should system emissions no that decision sales don't Segment challenge early products tested purge that XXXX. aren't XX% Tier turbo XX% start-stop, and strong patent low could engine EBITDA from newer Also year quarter. following recognized aware by in anticipate the a or portfolio, was commercial our due OEMs the and honeycomb our initiated Tier $XX the Board of in 'XXX September, certain maintained segment was US cycles Appeal prior-year review of US patent implementation the US to an to It design challenging the sales by Patent use competitor is delayed at immediate margins claims revenue, Trial in multiyear by This Despite mid-September, a District post-grant adverse validity platforms we in that within the has emissions certified some honeycomb an the jury in period. standard Tier related X win our our were we for of control automotive and or development versus on technologies XX% a to design. in verdict generation add implementations bearing as ongoing replace be intention our US, to In investment patent to XX% is X in Court a emissions year products. pandemic. control automotive of the and of the specialty of Materials immediately Performance We ongoing end Canada Ingevity honeycombs great in obtained and portfolio. the canister recognizes IP impact continue next competing using and Delaware. of outcome could research our the specialized and solutions

continuing expertise increasingly our stringent Mary emissions As metrics. purge, in to leverage engine the over the QX OEM complex, innovations in targets. for call financials to further we're to leader I'll low help customers committed detail space, our on to world the meet turn our and

Mary Hall

all. to Ed good Thanks X. morning Please and slide turn

the see which were almost you up increase XX%. healthy Here revenues, in

and Performance decline and due down revenue XX% in Materials margin adjusted reduced EBITDA Chemicals Materials margin versus However, you revenue to up QX the significant shift last Performance see the mix year revenue sales also gross XX%. in and with in Performance a of both

we hiring meet and more growth resumed can normal travel on investment SG&A increased to rebound eight-year year from addition in et operations prudent management year-over-year, expense fourth activity. the cost We the XXXX bit rate remain positions, with as quarter focused quarter bond borrowing and including an floating we of in innovation fixed $XX.X was rate our commercial resources. up our with we fill the million, a a for interest business In and last revolver while up open as ensuring replaced was maturity.

different earnings Our on million provision mix reflecting earnings tax geographic a our quarter, across lower earnings year-over-year adjusted $XX locations. decrease and for was also the

Our year, adjusted range tax rate $X.XX per earnings are XX% we rate in adjusted and the XX%. last of to lower QX share $X.XX our the estimate of will reflecting adjusted was XX.X% in Diluted QX be from XXXX full-year in down margins. tax

X. slide to Turning

You'll We deteriorated did cash production plant forecast $XX approximately somewhat throughout in see and Materials we solid management. inventory we're as as working free dynamic in auto production and up of we optimize million capital managing in environment. Performance quarter QX navigate flow on for pick focused operations remain the see we the generated quarter as to the disciplined inventories this

authorization. with totaled leaves As year-to-date will million about million $XXX our approximately $XXX repurchased share we we've opportunistic of stated, repurchases. we In repurchases to about million previously available million share or QX, repurchase This shares. $XX on and continue be shares X.X

end EBITDA down of flat debt Our to at of the X.X leverage XXXX. ratio from QX, the times at was end X.X and times sequentially QX net adjusted

approximately of John. initiatives. sheet cost growth and have summary, our ample strong. In meaningful maturities organic now, was to inorganic capital X.X% average to as And our balanced over August no until We're back and support of is you liquidity we we and our debt have Our disciplined allocation XXXX. debt balance in

John Fortson

Mary. XXXX. On our I'd X, review slide for you, guidance like to Thank updated

demand Our year Performance guidance for and continued confidence Materials the in reflects the expectations the for tempered Chemicals fourth Performance strong remainder in quarter. of portfolio our in the products for

inflation Throughout EBITDA of the and watching we expect updated the production. XXXX, and energy also and shortage be materials and of west. issues to the continued We're the the other logistics and million. ongoing Our between to $X.XX to could that any rest X.XX billion microchips be year, XXX be head guidance impact raw for full year $XXX for automotive also adjusted sales between

products. to supply the monitor continue these costs team on demand challenges, market to strategy. ensure Despite and optimal will and the we we value is in operating to extract pass-through execute continue our We effectively our and for our very

being are in value realizing market, also aggressive but in in We applications. our new both the products for finding

of closing, and call questions. this worldwide this work Ingevity. reflect point the and efforts advantage open you hard in take share value future to this. and dynamic our today enthusiasm we'll our up I determined opportunities employees We the of we are and to appreciate hope operator, At results We in ongoing maximize situation thank the them. In to for our

Operator

be conducting question-and-answer question. Please comes At you. Instructions] from McNulty first Thank session. question this the time, [Operator we John will BMO of a line Our with Capital. your proceed with

Unidentified Analyst

had This gum? what Good just the morning. is Thank on a in question pricing little out Hey. seeing John. in Caleb into a you're Chinese especially and you're further maybe quick bit for dynamics XXXX, with QX PC on I you. in seeing

Mike Smith

supporting will that Thanks. our successful. we Yes. really point, At optimistic increases be this price market ongoing continue The is are to it.

years. the gum As that It's on you last it's Chinese in supply-demand as five been got mentioned, situation remains good as about favorable. we've a quite

continue next fully And we're the we in additional fourth we'll so opportunities. year increases quarter further certainly have believe to enter as optimistic we we're price and going get that to

Unidentified Analyst

you. just was an update capture you're Thank of provide transportation regarding working around, and on if some you renewables then the longer-term Okay. and like? and the And wondering I could methane initiatives

Ed Woodcock

fully GreenGas I we're that offtake are news initiatives, would We'll Well, is taking also They substitute that. rate been at what a bit within of our are in sufficient methane. work a happened the across makes is Enviva. talked call big generate the that agreements that announce using announce technology the where that wood now of but has used viable. we've conversation. be mean all cycled of did sold pellets that tank good did little a about as being Most we right? excited They been recently oil. the these The I pretty our two that Europe. company off one pellets for are times, We through commercially we front as X.X

to in as out chain the parts of grow sort a customers to that. lot a and continue with well. talked we different little lot of about are different bit we're to value talking a regards going the And we a fatty So assets to that and of methane marketplace then of

on feedstocks getting start we ramping at we're sales can place focused on is but looking year the processes focus so near answers while we're also Our soy in the in that next other Hopefully, soy your question. term.

Unidentified Analyst

Yes, thank you.

Operator

the proceed Please next Your question. your question is from of Securities. with Tanwanteng CJS Jon coming line with

Jon Tanwanteng

for room taking I before your have next later and everybody. to Good of demand the year? you Thank come online you on much capacity grow Engineered how question. was morning, you kind the business there, wondering Polymers my do Hi. have given just

Ed Woodcock

have to anticipated meet We any demand. ample capacity

you represent production increase As at announced recently expansion in more year, for our XX% DeRidder We'll monomer of capacity may about we polyol have for have on Warrington in coming production. XX% seen, next polyols. site will a that

super growth that committed growth so we with to And all we've future and of for the need we're outlook ensure pleased it got that business to we're and the capacity support

Jon Tanwanteng

Okay. in the you increase wondering kind especially expecting just of your expect in relief and they Do we discussions QX? with was Are year? Great. QX go of you production Do any on And see next sequential as anytime customers. through coming automotive QX just I as it soon? business, we then had and any

Ed Woodcock

Yes.

You've seen probably Ed. this is –

Volkswagen continue probably Effectively, coming throughout Ford. You've announcements out view will heard that XXXX. and their and is the of seen some GM, this of

this additional to understand chips first view really half. to it the point opaque when is expecting with half QX be when supply. improvements those in those our Our to will it's improvements at equal but we're Ultimately will occur, back out the come the roughly be occurring is hard of and that market meaningful so QX

Jon Tanwanteng

do if And could it. one Got more. I Okay.

to partner volumes? was those agreement your the ANG Just how big of you that carbon how with you mentioned. off-take that just on sell much in wondering was I could terms support

John Fortson

by particular good. we business it's right? I I think methane model capture different that is verification technology it in or lot of one. not a different And good what – I that used characterize validate or is a a one Well this customers. situation, the lot a be wouldn't will the applications view can of then way for the as and material, profitable it potential validation it a

but it's big not going push to revenue it's So start. be a a

Jon Tanwanteng

you, guys. Thank enough. Fair Okay.

Operator

The next of Please Rizzo your with proceed question question. with is Jefferies. from the line Daniel

Daniel Rizzo

my for Hi, guys. Thanks questions. taking

obvious production effect you noted least just and kind auto of was kind production I the Performance Materials. as growth given drive its So that was Performance wondering figured wondering why there's slowdown be difference I Engineered that pressure in of why would auto a on Chemicals I well. is in Polymers. helping under at so

Ed Woodcock

Dan. Thanks,

think different situations. I got Performance it's Chemicals, about two all to adoption. new very really Within we've technology really

have we additional when penetration some And so are as about it's And strong side, business we've we've technology low protective the coming on a in from that then think other really getting vehicles. got films business growth that's adopting customers got you very the great new and there. in aggressively base electric

customers polyurethane grow we're And battery use so growth technology those is pads the continue within a microcellular business areas are of and to Capa that electric really pleased the sales EV applications for for auto. vehicle choosing in to number type new.

Daniel Rizzo

something Okay. And else. then

of a sedan said to if sales because up? So to think XX% obvious XX% of more sort catch see shortage But could chip the and on -- you some guy that will produced you that's more more automakers outlook leading much back of lot have being when that that and guess indicated make a And have chip or SUV because that it's profitable. we is the shift sedans of follow. trucks it's impact some of shortage you you I and -- percent I eases because

Ed Woodcock

should when and based Dan on should the more content our top Ed. I content, tanks for on it's and that all be for North supply as think have to little overall with of profitable them size But can. don't Yes, SUVs, light-duty hang be this on is as We sedans are of an OEMs a mix especially going view they impact recovers. going on obviously their relatively to canisters trucks trucks long of fuel similar that to similar those. bit it the extra relatively try from the America honeycombs to is

Daniel Rizzo

much. Thank you very

Operator

proceed comes Please from line question with Stifel. your the question. Vincent next of Our Anderson with

Vincent Anderson

you. Yes. Thank

So in get when biodegradable are investments planned where in instance world some aggressive. looking to projections capacity but China's starting the now, like I'm PLA at for plastics western there's you are pretty obviously planned the like growth good

with of couple an kind US you So geographic feel your or what similar the like your relative you Asia? disparity just pursue comfortable something learned are from to years investment regional there's over to next footprint maybe I'm in wondering opportunity growth, here that and do in take you of

Ed Woodcock

Thanks. Yes.

that And with support and we footprint are the can customers we so comfortable going to we're yes, our world. sure the make around

our said use as that the be. continue making the first making make expenditure you out already to geographies And the see the able business. expansion right with of we'll new with that over by to time. we'll diversify Asia as evaluating we're here continue best North and We're growth production capacity where capacity move balance the working support Now of the as polyol been in well expect I right our America. customers of and growth and America to investments to supply continually Warrington North can we've our But should in in capital closely

John Fortson

to mean we market that participate make accordingly I are Vincent in clear we we resourced expect support will to to and Yes. be that sure that.

Vincent Anderson

of I'm your just some in alternative one had internally you. here but left-field then exploring new space. there even seems or coming maybe And to out me when what's that it hard curious done suppliers this activated carbon, batteries called any you've if that potential conversations these to opportunities little similar we're any work a they're using very think with are but graphite, but we is thinking Thank of usually about chemistries Excellent. with product.

Ed Woodcock

opportunities carbon are has Obviously, into is to this look that that us. Vincent, Yes, anything try we word for it, the available the to Ed.

the hard have We within looked at well carbons, --

John Fortson

at carbon. are hard We looking

Ed Woodcock

to have, there's opportunity we bring continue applications an technology those us our into and Yes, for to evaluate whether

Vincent Anderson

Okay. I one in. sneak Excellent. more If could

Just just commercial you here also to I'm think that the about of at going not really kind producing running? up getting start curious, start for quick. in When investment, building relationships those products, until soy level comfortable enough or I are you're this earnest oil to proof-of-concept is fully and really

Mike Smith

quantities of made We've We've begun commercial to the at from number here initiate customers supplied to a initial arrangements. our commercial the we product that facility. Charleston

work And begun. so, that has

has up we derivatives sure to make to ramp both step in so, facility And capability sales that that in up supporting to when and holding and second want quarter acid. production fatty Crossett set we're initial back the next that ready a those ourselves to the year year we're soy-based not starting to And up will for over in continue time, but beyond. next grow, engagements commercial for the and

Vincent Anderson

me. That’s for Thanks. all right. All

Operator

Oppenheimer. the with from Ian of with your Please Zaffino comes proceed question next questions. line Your

Ian Zaffino

third what about and this ramp? maybe how into I'm far long take the would worked channel? auto does, come quarter? as to we just And trying to just kind as then, Great. general. the should as of a for expect of there sequential side, auto space on as to Thanks. Is And it look in in back when fourth quarter, sales that also, see you we it product guys Hi. your Can the Has business starts through? you the inventory talk -- in about all been think

Ed Woodcock

first. I'll Thanks, about the one, I talk Ian. QX can, if Yes.

If QX IHS you losses were million around look data, vehicles. chip at X.X

losses already about X.X it as -- anywhere be, from the projecting what X.X will to vehicles into but X.X million IHS Looking well they on QX, a be is range X million quarter losses. X losses, to million put

for OEMs three-month relatively our we're think, into is because view think, surpass talking end X X.X XXXX easily, X.X first to ultimately, But what million. But we're are I improve period. one about in to of that, QX monitoring as about. we'll So obviously, going up and I earlier, a that the half and we month you're somewhere between million talked beginning the

we kind -- a the they are opaque and also to with feel of that is, increase. engaging will get our how market metrics OEMs when but for we better really using get Just to feel demand what on a IHS at, as this customers start feel to look the

Mary Hall

So could on to that. tag if I

So kind taken QX, we do misspeak well, generally, I QX of, here, similar but but Ed outages outages have in and our we've normal as -- is QX. add-on some that if to

So we outages take us is around chatter outages, OEMs might fair? our caution. and gives not holiday those take whether a or that Is that their extended little some get to, there

Ian Zaffino

Yes.

I'm industry. at far your fell as then, arguably just And sales side, as Okay. on -- looking I and versus less the sales sales your guess, materials the in

So is the channel? kind just in of wondering if there inventory

Ed Woodcock

operate facilities. to continue obviously We've our

automobile in plans going to make company's with inventories just inventory that we're can optimize to we'll within supplies. forward to to respond going to We have surge be the occur to inventory think sure increased inventories our built our balance chip the I slightly. that and But our we are all to any But are manage suppliers automotive the -- of ultimately are. demands industry kind have able what

John Fortson

as are carbon the the that's OEMs, of shifting mix volumes Some to is absolute -- as continue trucks, right? that's Ian, and look of they our a are between their -- right? SUVs the right? Because too, off, like mix, which when it, of the and lot this So and explaining differential to fall produce bigger the our at and I honeycombs users sales

Mary Hall

or the inventories to also build we chip their expect mentioned OEMs too alleviate shortage And as so. Ed once

John Fortson

Right.

Ian Zaffino

you so Thank much. Perfect.

Operator

your Our next question comes from the line of Paretosh question. Misra proceed with with Berenberg. Please

Paretosh Misra

seeing much? March the close year, is Could talk guess to trying get get I Could new capacity? the or to be that patent expiring is I'm to next morning. you Thank you. so next As about risk for bringing Good are what a competitors you on not year? that deadline, you

Ed Woodcock

or takes the competitive honeycomb Ed. We At our multiyear is again, a do of this for a as it for in XX that prepared also a risk. tested and this it. not product expire don't point, Paretosh, certified the to We've fact honeycombs well but replace we look work sales anticipating but immediately. Yes, primarily get at see years, been that cycle the patent it March certified. product due to to of And effort design lot the also could a 'XXX

point, So product impacting this competitive just at out don't there point again, this see that going revenue any our be at would forward. we

Paretosh Misra

then, competitors was And one pine chemicals in recently Thanks, Ed. of acquired. your

curious for of in largely the any event that you're because you? landscape is if or just neutral So anticipating a changes that

John Fortson

it But opportunities I looking mean, of disruptions to of intend as and there's that to in obviously, we the a look as occur be the event. Paretosh, it. might neutral a advantage I to we're there marketplace for result we extent transaction take any approach have that always to mean

Paretosh Misra

it. maybe last a one. And Got

I well electric Chemicals think an Do business? from products your aftermarket segment. Performance as you OEM vehicle have primarily or these products mentioned some it's in

John Fortson

Yes. OEM It's an business.

Ed Woodcock

people application. that Primarily all some an there is about for at in considered we -- when protective in -- wrapping that the aftermarket films talk cars their be talk about protection US could the least

John Fortson

both and For internal. for EVs

Ed Woodcock

-- protective choosing and before lot that choosing coating very soon are early as after Any choose them getting sold are of to that the others are wrapped they're a purchase. to Yeah. put car on you as wrap they to be

John Fortson

because out mean it look, of new I we called example Paretosh, an it's applications.

set keep lithium automobiles points right? find segment across obviously, that multiple where Inspec we've mining Materials market, is and and new trying great right? applications And job its and Performance the high-growth that think Performance areas Capa's very to markets being got we the segment, working of aside going a these attractive done can looking participate has on aggressive markets working to Chemicals for EV we're for on in are relationship entry applications. at I with new more broadly

Paretosh Misra

with Got everything. luck Good it. Thanks guys.

John Fortson

you. Thank

Ed Woodcock

you. Thank

Operator

of Our your next with Fargo. question comes Wells with Please from the line Sison Michael proceed question.

Unidentified Analyst

Hi. Richard This Mike. is for on

material into on as on should about quarter impacts fourth Can we how and First a did gotten color pushing and worse increases heading as cost where than think seeing availability you price the question, of stabilized? the great inflation. raw job Has terms in of just the side that? more logistics to in a raw it you well terms give some maybe you're material offset

John Fortson

aware board, each across the ships materials transportation one it. news the is we're we've right? at to the material and across I costs headwinds see reality mean that getting And the think seeing answer. inflated. night everyone right? not turn seeing the raw all just seen is we're it's really its are But you raw But our of I set on mean and own can tough up. a more, we're right? I board I has paying back segment mean issues,

no different we're out to and offset So we do. any other We're to working there doing keep than that. company what we'll need hard

Unidentified Analyst

I mentioned there? Okay, last seeing if great. on then continued And Are of about Performance quarter in think technologies, oilfield And outlook year growth for Specialties, Chemicals, could was little your year-over-year. XX% bit rest you a you XXXX? still you for Industrial the maybe within talk the up what's it that

Ed Woodcock

Yeah.

third In fact in saw we really growth strong quarter. the

was that above year last third was that application the ourselves Now an within of to it's where quarter for was but Specialties important oilfield, sales XX%. low growth up Industrial quite remind

we the be experts, in that the number industry of forward by a to solid drilling quite projected manner. outlooks North here looks look As at get activity we year’s next the growing outlook in in America look and for

as work markets expand footprint going our East we've technology. that our to that as America represent We've are and that had oilfield to beyond good utilize geographic we got. opportunities we especially ensure Middle North So to for the support business well China, in two us ongoing

Unidentified Analyst

then talk just flat growth about could prior for months? on should finally Great. we And Maybe think is through versus XX about business that Technologies the the you next relatively that year. how Pavement

Ed Woodcock

mid over were higher China, slightly our even solid frankly year This we Pavement growth demonstrated rates -- has downturn to that. growth. about if it in business Technology hadn't to Well, if similar this talking top-line been time be for in quarter, would look this that it

that to certainly inflection, We've think technology We hope for business. spending. got bill looking tailwind any near-term to that. I significant business, great will continue So only got fully to on major so placed globalize that increasing we've And we're that not the certainly highway very while investment be it to eye and be on positive can counting infrastructure be that we're there. we've pursue more got opportunity in And a keen adoption opportunities Pavement.

So opportunity quite business think the a it great are to and grow I solid. to continue

Unidentified Analyst

you. Thank Great.

Operator

Thank you.

Please of Loop is the line Kapsch Markets. with with Chris question from question. Our your next proceed Capital

Chris Kapsch

good Hi, morning. Yeah.

could at the given is is So that really question more magnitude are my your to Curious for gum are run there. So allow And supply higher the refineries sales there getting of to volumes would lieu biodiesel on I in unit guess into other China. in TOFA market. TOFA these in any which be is the in nature? European for in help produce the also -- would seems these domestic latter, that quantify or guess some looking way short color sustainably in sale volumes you you which enough rates tour, you incremental costs? I situation And turn to the assuming

John Fortson

then biofuel on it then higher to larger become we're to today. what's need the -- to refineries levels say something Chris, might not at at perspective relative to the we places happen profit but market. park utilization that it's mean that the our a I'll really be would that in us -- car and current run a as valuable going production rates TOFA plants right? run to Mike regardless would from start But the becomes that that I market -- other will I our market, it situation going high of think it's What can evolves allows I very

Mike Smith

to we John production. biofuel balance in have going exactly. We're the to -- total

demand think I source for it's TOFA. encouraging a to very significant new of have

TOFA therefore think well can that supply-demand I bode for for pricing. only over and So time

European opportunities standpoint there Our we do what to that we Ingevity And biofuel that. the market, to we'll a are the execution the customer forward. how profitability we from significant well that's were If progresses in the we'll to and third relationship for our and make best supply set TOFA, But put for that that we'll quarter represents did. path opportunity to that's going better, continue logistic and wanted that got will up sure large markets we if so TOFA. customer see first sales pricing a to be of the are business, the where that optimize other

Chris Kapsch

to And like Chinese you tour sounds response gum a helpful. rosin if more follow-up right, as in I'm just increase product. your have fundamentals get allowed That's to rates just interpreting the

demand? as Just with those refineries, the curious of if there's any in in we should governors such on bias rates utilization strength near-term the kind in an utilization or of CTO, upward rates availability at least expect Thanks. overall the your

Mike Smith

that market become think as purchase on-a-spot and that constrained, we profitable an business. from to outlook always I and forward. going making we we're that can take we've where going on availability turn some we But said, see Well, we're have the whatever continue to -- growth and sure that CTO also we basis, that the into CTO can

enough at planning next secured point have CTO to We our for this year. achieve

So we're from that perspective. I in think good shape

so And the good business and to the continue profitability obviously we'll and output for it. between inputs the demand run optimize

John Fortson

be next just TOFA your we network products, more we to trying long-term that TOFA not strategy actually yield would will what some is the I so know are the Part Lexicon get CTO. year, for these So we have we TOFA in Chris, do And incremental right? overall be of to marketplace, bias the yield. substitute can secured upward parallel of we we're we clear, what enhance running CTO so secured to CTO if actually will actually around be is in by mean, Yes. in to sell in processes is to have the going relative our our the constrained.

Chris Kapsch

Thanks. Appreciate the color.

Operator

line question Please next Tanwanteng Securities. with proceed your Our of a with question. is Jon from the follow-up CJS

Jon Tanwanteng

outlook and just forward? of expenses Hi. kind your and I terms was litigation is wondering for Just strategy going ongoing if you that? legal could about costs in your talk of what

Ed Woodcock

We're Yes, Jon, is normalized to more a to likely level. this Ed. return

So as third a think of what we of had spending. about been it

Jon Tanwanteng

$X Okay. isn't My that about that million-ish was right? was impression roughly quarter, a

Ed Woodcock

Yes.

million $XX an million $X forward. So on so annual going basis,

John Fortson

per Jon. That's year,

Ed Woodcock

yes. year, Per

Jon Tanwanteng

it. Got

Okay. Thank much. you so

Operator

reached session. the this At Bill you. time, Hamilton turn for over call the question-and-answer Thank And to I'll now closing the we've remarks. of end

Bill Hamilton

quarter. this remain business positive We long-term you with look time outlook about again incredibly and Thank next you for your morning. forward to talking our

Operator

you. concludes Thank today's This conference.

your disconnect time. may you for lines You participation. at this Thank your

Ingevity (NGVT) 28 Oct 212021 Q3 Earnings call transcript