Good morning. My name is Brica, and I'll be your conference operator for today. At this time, I would like to welcome everyone to the Ingevity second quarter 2022 earnings call and webcast. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during this time, you can simply press Star followed by the number one on your telephone keypad. If you would like to withdraw your question, please press Star and then two. Thank you. I would now like to hand over to John Nypaver, Treasurer & Investor Relations. You may begin your conference. Thank you, Brica. Good morning, and welcome to Ingevity's second quarter 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.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 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 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 Hulme, President, Engineered Polymers, and Erik Ripple, Chief Growth and Innovation Officer, will be available for questions and comments. John will start us off with some highlights for the quarter, including our recent announcements. Mary will follow with a review of our consolidated financial performance for the second quarter. Rich, on behalf of his Performance Chemicals segment co-lead, Steve Hulme, will discuss the entire Performance Chemicals segment. Ed will review the results of Performance Materials, and then Ed and Rich will discuss our two growth investments. Finally, John will conclude with our outlook for 2022. With that, over to you, John. Thanks, John, and good morning, everyone. As you saw last night, in addition to our earnings release, we announced two exciting investments that we'll discuss on today's call. First, we'll spend some time on our quarterly results, and then Rich and Ed will provide more color on our two growth investments. We also want to leave plenty of time for Q&A, so let's get started. Turning to slide four, you may remember hearing on our last call that first-quarter revenue was an all-time record for the company. That record did not last long as our second-quarter revenue topped it. This reflects the continuing demand from our customers across all of our businesses for products that purify, protect, and enhance the world around us. I am proud of the team for their work in growing our businesses while managing higher input and logistics costs. Our commercial teams continue to stay close to our customers and ensure we are the provider of choice in our markets. Our supply chain team works tirelessly to ensure we have the materials we need to keep producing and can then deliver our finished goods to our customers. This focus on the customer is a competitive differentiator for us and is paying dividends in this environment. The first six months of the year also represent the best safety record we have delivered in our history as a public company. Safety is at the forefront of everything we do, and I want to congratulate our operations team on this phenomenal achievement. You can read more about our ESG progress in our sustainability report released in May, which is available on our website. Last night, we announced two important transactions. The first is our agreement to acquire Ozark Materials, a leading producer of pavement marking materials, including thermoplastic pavement markings, waterborne traffic paints, and preformed thermoplastics, headquartered in Greenville, Alabama. The transaction also includes a logistics division with a dedicated fleet of vehicles located in five states across the U.S. to serve customers with best-in-class shipping times. The acquisition is consistent with our strategy to pursue value-creating growth, and Ozark is a great match for Ingevity. Like our current businesses, Ozark Materials develops technology-focused customer relationships, partnering with the customer to drive innovation. Consistent with our commitment to safety, the Ozark Materials Greenville facility has received ISO certification, and its other facilities are ISO compliant. These are important indicators of the quality of the Ozark business and its leadership. Ozark is a strategic transaction for us as it builds on two of our core strengths at Ingevity, our leading position in Pavement Technologies and our expertise in rosin-based adhesive applications. Ozark extends our product portfolio in the stable and growing pavement construction industry, and we believe it will serve as a platform for strong growth in the future. We are also excited to announce an investment in Nexeon Limited. Based in the U.K., Nexeon is a leading technology company that produces silicon-based anode materials designed to improve the performance of lithium-ion batteries for electric vehicles. Our investment in Nexeon includes a commitment to jointly develop technology for electric vehicles that will use our activated carbon to enhance battery performance. As we have long stated, the performance characteristics of our carbon can be used in a variety of high-value add applications, and this one is particularly exciting as an entry point for our activated carbon into the growing electric vehicle battery market. As Nexeon grows, this market could be a very significant source of volume demand for our carbon. These transactions demonstrate our ability to identify and execute on growth investments. We are committed to maximizing shareholder value and utilizing our resources and strong balance sheet to support growth. Before I turn it over to Mary, as you saw announced a few days ago, we made some changes to our board of directors. We added two new board members, William Slocum and Shon Wright, both of whom bring great experience to our board and will be key contributors in advancing our long-term strategy. Michael Fitzpatrick, who's been on the board since our spin, is retiring. We want to thank Michael for his years of service to the board. With that, I'll turn the call over to Mary to discuss our consolidated results. Thanks, John. Please turn to slide five. As John mentioned, second quarter revenue was a record for the company, growing at just over 17% year-over-year. End market demand remained strong for our products, and our teams were successful in driving price increases to recoup the inflated input costs that continued to rise during the quarter. Our supply chain and logistics teams continued to do great work in navigating the congestion and delays in the various delivery networks. Their creativity and frankly, dogged persistence, optimized our ability to meet customer needs. Our gross profit was up nearly 8% year-over-year, while our gross margin declined about 300 basis points. This decline was due to some margin compression in each segment and also the mix shift in revenue from Performance Materials to Performance Chemicals. Performance Chemicals margin compression was primarily due to lower volumes attributed to raw material availability and plant downtime, particularly in engineered polymers that Rich will discuss. While Performance Materials margin compression was primarily due to the mix shift within Performance Materials from automotive carbon to process purification, which Ed will review. In addition, Performance Chemicals represented 71% of total sales in this Q2 as compared to 65% last year. As Performance Chemicals revenues grew 28% year-over-year, while Performance Materials revenue was down about 3% due primarily to lower auto production in China. Core SG&A, which excludes depreciation and amortization, was up a bit in total dollars due primarily to higher labor-related costs, but was lower as a percentage of sales. Our strong top-line growth drove our second-highest quarterly adjusted EBITDA of $121.1 million, and our diluted adjusted EPS of $1.73 is up over 11% versus last year. Turning to slide six, you can see our positive sales trajectory, good free cash flow generation, and stable leverage. You can also see in the bottom right capital allocation chart that we've been active the last few years in using our strong free cash flow to return cash to shareholders, spending around $90 million year to date to repurchase approximately 1.3 million shares. By the end of Q2, we had used about $300 million of our outstanding $500 million board authorization for share repurchases. Last week our board refreshed the authorization to allow repurchases up to $500 million. Turning to the transactions that John mentioned, the purchase price for Ozark Materials is $325 million, and it's expected to close in Q4, hopefully early Q4. Rich will give you more color on the business and strategic fit. Financially, we estimate that this business will contribute approximately $150 million of revenue in 2023, with adjusted EBITDA margins of approximately 20%, and it is expected to be immediately accretive to earnings. As John mentioned, Ed will speak to our $60 million investment in Nexeon Limited, which is a strategic investment to diversify the end markets for our activated carbon. This investment gives Ingevity a minority interest in Nexeon as well as a seat on their board. The Nexeon investment was completed in July using cash on hand. We expect to fund the acquisition of Ozark Materials with a mix of cash and borrowings from our recently upsized revolving credit facility. Initially, we expect our net debt to adjusted EBITDA leverage ratio will be in the mid- to high-2x area, but we also expect our free cash flow generation will allow us to be back within our target 2-2.5x range within 6-12 months post-close, while still allowing for other capital allocation choices, including share repurchases. In summary, we continue to deliver solid financial results and strong free cash flow. Our commercial and financial discipline enables us to execute on our organic and inorganic growth initiatives while supporting a balanced capital allocation strategy that includes returning cash to shareholders and managing to a prudent debt level. Now I'll turn it over to Rich for more color on our Performance Chemicals segment results. Thank you, Mary, and hello, everyone. Turning to slide seven, our Performance Chemicals segment saw record revenue growth versus the prior year's quarter on solid end market demand and continued price improvement. Particularly in engineered polymers and industrial specialties. These increases were necessary to keep pace with the significant cost increases we're experiencing related to energy, raw materials, and logistics. We continue to see strong demand across all of our business lines. Segment sales were up 28% quarter-over-quarter to $298 million. Speaking for Steve, our engineered polymers business had a solid second quarter with revenue growing almost 21% versus prior year. This was largely due to necessary price increases to help offset inflation in raw materials, logistics, and particularly energy. We continue to see strong demand across most product lines, with isolated temporary weakness in some markets due to the inability of our customers to source specific raw materials. In the quarter, our ability to meet all customer demand was constrained by unplanned downtime resulting from the inability of our strategic partners to consistently provide energy and raw materials. Given our market position, we believe that this has created pent-up demand for our caprolactone products, which should benefit the second half of the year barring further disruption. We are very excited about our caprolactone polyol capacity expansion project and expect it to be up and running in August with commercial sales late Q3, early Q4. As mentioned earlier, Steve will be available for Q&A. Industrial Specialties had another record quarter with sales up 38% versus prior year quarter. Sales growth in our adhesives, oilfield, and lubricants businesses were all up over 50% versus prior year and averaging double-digit growth versus Q1 of this year. While this was primarily due to price increases to help offset inflationary costs, we're able to maintain volumes in these key markets. These gains are a direct result of our team's success in optimizing our product mix by focusing on higher value derivatized market segments. Pavement Technologies had a record Q2 with sales up 15%. While we did implement some price increases, most of this growth was driven by improved volumes. Paving season is in full swing, with much of the volume increase in the Americas. Performance Chemicals EBITDA of almost $66 million in Q2 was up 16% versus prior-year quarter, while our segment EBITDA margin was down 230 basis points, which we attribute to the timing of pricing actions, supply chain constraints, and lower volumes impacting plant throughput. Our team remains focused on improving and maintaining margins in the second half of the year. I would like to thank our entire Performance Chemicals team for their continued excellent work. I'll now turn the call over to Ed to discuss Performance Materials. Thanks, Rich. As you can see on slide number eight, sales of the Performance Materials segment were $122.4 million, down 2.9% versus the prior year's quarter. With global auto production down, we are proud of our team's ability to quickly pivot to process purification markets to keep our plants running at near planned utilization rates, helping to deliver solid results. Sales of our automotive activated carbon products were down compared to the second quarter of 2021, reflecting the impact of China's COVID-related shutdowns in April and May, and the cascading negative impact on global vehicle production. We are optimistic about the second half of the year as we see encouraging news out of China. For example, China has announced the introduction of multiple auto-related incentives at all levels of the government, and some OEMs have announced incentives as well. License plate limits are being increased in major cities for internal combustion engine vehicles, as well as incentives by the central government, reducing the purchase tax on these vehicles by 50%, with some OEMs further reducing the purchase tax on internal combustion engine vehicles to a near zero tax level. I also want to thank our China team for the continued dedication during such a challenging time. Outside of China, we saw significant ripple effects of the China COVID-related shutdowns throughout the global automotive production supply chain, and particularly in neighboring countries. Part supplies for vehicle production were constrained due to their reliance on China auto parts production, further impacting our sales in Asia-Pacific. While we estimate that chip supply constraints continue to have some negative impact on auto production, the effects of the China shutdowns in April and May on global auto production in Q2 were the primary driver negatively impacting our activated carbon sales. In North America, we saw increased volumes in automotive carbon as North American light vehicle production was up 13% versus prior-year quarter. Process purification sales were higher as volume was up, and we were able to increase prices to capture more of the value of our highly differentiated carbon. Segment EBITDA was $55.6 million, down 9.3% versus prior-year period on lower sales. Second segment EBITDA margin was 45.4% as our segment product mix shifted from our higher margin automotive carbon to process purification volume. Turning to slide nine, as John mentioned earlier, we are thrilled to be investing in and partnering with Nexeon as part of our strategic focus to expand end markets in our performance materials business and to gain a technology footprint in the electric vehicle market. There are a lot of participants in the electric vehicle battery market working on different parts of the value chain. Nexeon is one of the four or five that are emerging as leaders in the anode space. They are unique to others in that they are focusing on a silicon anode to drive better battery performance, including shortening the charging times and extending the driving range as compared to today's batteries that have graphite anodes. While silicon is known to provide up to 10 times the energy storage capacity versus graphite, its use in lithium-ion batteries has been limited by the tendency of the silicon to swell and damage the internal cells of the battery. We started working with Nexeon to test our activated carbon as a substrate for the silicon. A silicon-activated carbon composite anode enables higher levels of silicon to be effectively incorporated in a lithium-ion battery while mitigating the potentially negative impact of swelling. Ingevity's sustainable wood-based activated carbons are already showing promising results with Nexeon's patented technology, exceeding test parameters, and we are working with them now to develop and commercialize this application. Our long track record of meeting rigorous automotive industry quality standards and commercial scale volumes make us an excellent partner for Nexeon as they strive to meet their aggressive long-term goals. This collaboration will evolve over the next few years, with any significant volumes coming in middle of the decade. We view this as a tremendous opportunity, and we are excited about our future role and how we can impact this rapidly developing market. I'll turn the call back to Rich to discuss our acquisition of Ozark. Thanks, Ed. As already mentioned by John, we are certainly excited about Ozark becoming a part of the Ingevity family and expect to close on the transaction in Q4 of this year. I would like to spend a couple minutes taking you through an overview of the strategic rationale, a summary of the industry, the business, and why we feel that Ozark is a unique fit for Ingevity. On slide 10, we provide an overview of the transaction, which was mostly already highlighted in the comments by both John and Mary. This transaction is the culmination of over a year's worth of work and an output of a strategic exercise we undertook with respect to our pavement technologies business. The strategic rationale on slide 11 is focused on six areas. It moves Performance Chemicals downstream and closer to end customers. Provides fuel toward diversification of our product offerings in core segments. Ozark comes with a strong growth and margin profile. Expands on the logistics capabilities of Ingevity. Allows for the opportunity to leverage the respective strengths of both corporations and provides a foundation on which to further build and expand. We believe that this transaction further strengthens our position in two key segments of our business: pavement technologies and adhesives, and expect that it will serve as a platform on which to grow. On slides 12 and 13, you will see more details about the pavement marking industry and Ozark. Ozark is a leader in the North American pavement marking industry, which is estimated to be on the order of $1.4 billion. Industry is comprised of thermoplastic coatings, paint, and preformed thermoplastics for the highway and traffic markings industry, with each playing a specific role in the market. As we have discussed in the past, Ingevity tall oil rosin is used in thermoplastic coatings and provides enhanced chemical resistance and increased retroreflectivity versus alternative technology. Ozark Materials specializes in each of the applications and is headquartered in Greenville, Alabama, with roughly 200 employees spread across five strategically located facilities. They also have a fleet of trucks that service the business as well as third-party customers. If we go to the final slide, you'll see why we believe Ozark Materials business is a unique fit with Ingevity. We have previously discussed the increased government spending and the benefits to our business. The same can be said about Ozark. It also provides a platform for the captive use of Ingevity rosin. The Ozark team has done a wonderful job on product development, and we expect that leveraging that expertise with our in-house capability will keep us on the front end of technology. The broad network access we currently have with our pavement business will help further expand the Ozark brand in the marketplace. While still early, we believe there will be opportunity for margin expansion once post-close, and we have had the opportunity to further leverage our combined strengths and capture the common value of ownership. We are certainly excited to welcome the Ozark Materials team to Ingevity and look forward to closing the transaction later this year. With that, I'll turn the call back over to John to discuss guidance and closing remarks. Thanks, Rich. With another strong quarter behind us, we are reiterating our guidance on slide 15. End markets appear healthy across all of our businesses, and in the second half of the year, we expect to benefit from the recovery of auto production. Additionally, we expect to see a re-acceleration of growth in engineered polymers. We have not seen signs of a recession in our businesses yet, and if we stay on this trajectory, we should finish the year at or even above the high end of our guidance for both revenue and EBITDA. However, we are monitoring the markets carefully and recognize that many believe a recession may happen in the second half of the year. Those who follow us know we are conservative by nature, so we are factoring that into our guidance, and we will be prepared as a company if we see demand begin to weaken. Before I turn it over for Q&A, I wanted to mention that we have a new Chief Human Resources Officer, Christine Stungio, who joined us last month from Host Hotels & Resorts. Christine has more than 20 years experience, and she will be instrumental in continuing our commitment to diversity, equity and inclusion, drawing the best talent to Ingevity and helping to develop our employees both professionally and personally. We are thrilled to have her on the leadership team and welcome Christine. With that, we'll take your questions. Operator? Thank you. We will now begin the Q&A session. If you would like to ask a question, please press star, then the number one on your telephone keypad. We'll pause for a moment to compile the Q&A roster. Your first question comes from the line of Vincent Anderson of Stifel. Your line is open. Thanks and good morning, everyone. Morning. I know this question is definitely premature, but if I just look at what Nexeon is claiming for energy density and just kind of throw some back of the envelope math at, you know, what share your carbon might be based on normal cell economics. I'm coming out to numbers in kind of the low hundreds of dollars of Ingevity product per electric vehicle, and that compared to the tens of dollars you get today on ICEs. You know, I'm not looking for a blessing on that, but am I out of line thinking that this could be looking at multiples of per vehicle revenue versus your current business? Yeah. Vincent, this is Erik Ripple. That math is headed in the right direction. A lot of it depends upon the size of the battery for the vehicle, and so that can range from a smaller vehicle to 50 kW to a Tesla truck that's 250. If you get up to the 250 size, you certainly are getting in the range that you talked about. The average that we would see, you know, is kinda 75- 100 on a vehicle. Certainly multiples of what we're selling on a vehicle today. The reality though, Vincent, is obviously, as we've said in our script, I mean, look, this technology will take several years to develop and be commercialized and enter the market. We're pretty excited about it because, you know, as we sort of look at our business portfolio and our exposure to the automobile industry, this provides a complement as internal combustion demand might slow, that we are very hopeful that this demand will accelerate, right? You are correct that, you know, it could be very significant volumes for us depending on the market share that Nexeon gets and, you know, there's a lot at work here, but it's a great opportunity for us. Sure. No, that's very helpful. Maybe just turning over to Ozark. Is there any more detail that you could give on the magnitude of the opportunity to move more of your rosin into pavement markings? Like, you know, were they already a large customer of Ingevity prior to the acquisition? Just maybe a part B to that, is there also an opportunity to incorporate your specialty polyols into the, you know, the pavement markings business? Yeah. Vincent, we see that there'll be some opportunity for extension of our rosin into this market. Ozark has only been a customer for us for a few years now. We see some extension of our rosin going into that business. Great. Thanks. If I could just ask one last quick one, and I'll give somebody else a turn here. In Capa, you know, what are you learning maybe, for the first time here about the price sensitivity of demand for that product in such a, you know, high inflation environment? I'm thinking, you know, along the lines of customers potentially trading down out of caprolactone or just how. Well- How resistant has that demand been? Yeah, I appreciate that, but I think, look, Well, I don't wanna say issues, but the slower growth in this quarter versus Q1 and where we expect for the rest of the year was really due to operational inefficiencies at the site, right? The demand for the product remains very robust. One of the nice things about that product is once it's sort of scoped into an end market application, it's hard to scope it back out and substitute, right? We don't see a pricing pressure issue. We need to get the operational kinks kinda worked out. We had some, as you can imagine, over there in Europe, you know, some issues with some raw materials, etcetera. From where I sit, that re-acceleration is already underway. They seem to have that behind them. All right. Perfect. Thank you. Thank you, Vincent. Your next question comes from Jon Tanwanteng from CJS Securities. Please go ahead, Jon. Hey, good morning, everyone. Thank you for taking my questions. My first one is on Nexeon, and they do seem to have a very interesting product. Do they have design wins or offtake agreements that support potential adoption scenarios? First of all, and second, do you have to build additional facilities to support them if they are successful? Yeah. To your two questions, the first is they do have offtake agreements signed with customers. They're in the process of qualification, and that takes several years in the automotive industry, but they have several very large OEMs that they are successfully moving down the pathway for that. Then secondly, you know, relative to our facilities and you know, the carbon supply for that, we have process purification volume that's available to sell them. As you know, from the earlier question, we anticipate multiples of volume on a vehicle and if there's a need to expand our facilities in the future, we'll be prepared to do that. It would be, Jon, some period out. Yeah. Right. Yeah. We might do some work at Wickliffe to help. We might do some, you know, some debottlenecking and some work at Wickliffe to help facilitate this. You know, this will be several years out. It is a product that we have made that this is what they've tested in the U.K., and they've had great success with the products that we sent to them. You know, obviously we're thrilled that we already have a product that can meet most of their needs, and ultimately our objective is to get our product to meet all of their needs. Got it. That sounds very exciting. My second question, just on Ozark Materials. That 20% EBITDA margin you have for next year, does that include any potential synergies in it, or is that before you get into the weeds with that? I guess the second part, what is the plan for the logistics business within that company? It seems like a bit of a non-core thing to have there. there's no synergies involved, right? No synergies in the. In the numbers that we've given, right? We obviously anticipate that we will as we work and refine and take ownership of the company, there's lots of opportunities, and we'll quantify those, you know, hopefully by the time I get to our Investor Day, right? Right. Close. When it closes. We continue to do that. Right. Listen, the logistics business, I mean, it's listed because it's sort of a separate entity as a part of the acquisition. It's a fleet of 71 trucks, right? That help them move their product around. It helps, you know, support the customer. We have opportunities there. I mean, we're already looking at, you know, maybe when they backhaul back, they bring in things from DeRidder, Louisiana facility. In this type of business environment, having that kind of logistics support can be quite helpful across the network. We're, you know, not gonna be focusing on that as a third-party logistics company, if that's what you're worried about. Got it. Understood. Do you have a sense what was the historical growth in the entire Ozark business, just for reference? Pretty robust, okay? What I think we're sort of prepared to sign up for right now with you guys is, you know, we see it as, you know, couple multiples of GDP. It does have a very strong track record of growth, and we think the business has a lot of tailwinds behind it. They've done a great job getting it positioned for sort of the next wave. Just stand by for more. Understood. Thank you, guys. Thank you. Your next question comes from the line of Paretosh Misra of Berenberg. Your line is open, Paretosh. Thanks. Good morning. For Nexeon, what are some of the near-term goals and projects that they're working on? Is there any specific use for that, the $60 million proceeds, for them? Yes. You know, as we announced in the press release, our near-term action is continuing to work with them on the development of an activated carbon for their application. That'll be, you know, our goal over the next couple of months. We have a product that has been approved. You know, we have a little bit of refinement to that relative to the $60 million as Nexeon also made an announcement today, that, you know, that's to continue their development efforts and to prepare for full production of the product in the next couple years. Got it. Can you comment about the soya-based product development and the Performance Chemicals business? Any updates on that project? Yeah. We're still very excited about the alternative fatty acid capability that we've brought online. As we mentioned at the end of our last call, the Crossett facility is up and running, and we don't give numbers, but we can tell you that our second quarter was record sales for us in that space. We expect to continue to grow from that area and are very excited about everything that the team is working on and the customers that are being interested in the product. Well, we're actually already working on another veggie oil as well. You know, we're beginning to push beyond soy-based products and, you know, again, you know. It takes a while to get product substitution certified. You know, we do see this as being a meaningful part of our platform going forward. When we look at it from a diversification standpoint, it's being applicable in our pavement business, in our oil field business, in our lubricant business, and not just in some historical, merchant type businesses. We're really excited about that work that's going on. If I could just add a quick follow-up. In the recent sell-off in some of these commodities, does that change the economics of that business or not so much because the quality of your product is kind of very differentiated? Well, it does. It's a complicated question, Paretosh, but a good one, right? It does change the quality of our pine chemical, our legacy business, if you will, for a couple of reasons. It does have better performance characteristics. So in some applications, it is more valuable, if you will, to the customer because it has better color on the Gardner scale, doesn't have the odor. But then there's other markets where it doesn't work, right? But net-net, it's very much a positive for us. The other benefit we get from this is when we do run this SOFA, you know, we can take that TOFA and put it into other applications, right? So other derivatized applications. So we sort of get a double whammy benefit, right? You know, as Rich works to take costs out of this process and scale this business, it's just gonna continue to make the margin profile better. Got it. Thanks, John. Thank you. We now have a question from Michael Sison of Wells Fargo. Your line is open. Hey, good morning. Congrats on a good quarter and these transactions look great. Just quick question in terms of Nexeon. You know, your base activated carbon business, you had an advantage using sort of wood to make your activated carbon. Is there an advantage here relative to the other, you know, activated carbon players? I know some of the others have talked about getting into EVs as well. I'm not sure if it's a similar application, but is there a sort of technology advantage with your feedstock to make the activated carbon for the EVs? Yeah, thanks. This is Eric. Thanks for the question. There absolutely is advantage there. There are really two. One is the fact that our product is sustainable, and so all the battery manufacturers want as much sustainable chemistry in their batteries as possible. So that gives Ingevity a unique advantage with our wood-based carbon. Then the second is a cost advantage compared to some of the alternatives for using silicon in batteries. Using our activated carbon will give Nexeon a cost advantage to be able to expand their revenue and grow faster as a company. Got it. In this whole, I mean, correct me if I'm wrong, but this expansion is also sort of a competitive threat. Right. Yeah. I mean, using it in general as a scaffold to control the expansion of silicon is the core advantage of the activated carbon usage on the anode. Got it. Just to follow up on Ozark Materials. I'm just curious who the competition is. Are you competing against the paint companies like PPG of the world? Is this a market that there's still a lot of smaller players that if this initial deal works out well, that you could continue to roll up this industry and add some growth? Yeah. As you mentioned there is a very regional play in this market where there are a lot of regional players that participate in segments of North America, Mexico and Canada for that reason. It could be a platform for it, which we can build upon going forward. You're right, though. I mean, you know, Ennis-Flint, it will compete against Ennis-Flint in certain marketplaces, right? Which is now owned by PPG to get to the first part of your question. You know, one of the attractions is what you described, Mike, which is it's a pretty fragmented marketplace, a lot of operators across the geographies, as Rich alluded to. There's good opportunities for us to grow this business organic and inorganically at a good pace, you know, over time. Great. Thank you. Thank you, Mike. We now have a question from Daniel Rizzo of Jefferies. Your line is open, Daniel. Good morning, everyone. Thank you for taking my questions. If we talk about the Ozark Materials acquisition and the 20% EBITDA margins, how does that compare to Pavement Technologies' margins? Is it roughly similar, a little higher, a little lower? It is not as good as Pavement Technologies, but at where we are, sort of at the adhesives, right? Okay. The idea is to improve that margin profile, as we work to sort of better integrate it into our platform and bring it closer to our sales force, et cetera, et cetera. Okay. If we think about the back half of the year with costs and pricing, I don't know if I missed this, but are we expecting things to kind of even out from here, probably a plateauing with both? Or, I mean, are we still expecting some appreciation and corresponding price increases? We have not seen the peak yet in raw materials and logistics costs. We did see in Q2, if you look kind of sequentially, the slope of the line, if you will, dampen a bit. The pace of increases was lower, but still increasing. We're cautious about that. You know, again, what we've said is once that trend peaks and stabilizes and hopefully raws and logistics costs begin to come down, we hope we could get a little margin expansion. Again, we are not seeing that yet. We are continuing to push through price increases to offset the rising costs. If and when the costs do roll over, how meaningful are price concessions in the different segments? Yeah, I mean, you know. We're gonna find out. We'll find out. You know, I mean, this is the game most chemical companies play, right? When those costs begin to trend the other way, we will have to give some back on price, or we would expect to, but we'll hold on to it, kicking and screaming as long as we can, and with the objective of expanding the margin. One other advantage we have going for us is because of the you know the market demand and everything just how dynamic the market has become and the rising CTO prices, we have probably jettisoned you know a number. Our mix is much better, right? We are and have had to unfortunately stop supplying some of our lower margin customers. So our belief is that as we do roll and the market rolls, when and if you know we should be in a better position because the customers that we're selling to today are more derivatized. Okay. Thank you very much. Thank you. We now have Ian Zaffino from Oppenheimer. Please go ahead when you're ready, Ian. Hey, good morning. This is Isaac Salas on for Ian Zaffino. First question on the material side. I know you mentioned you expect China auto production to sort of ramp up to normal levels in the second half of the year. I guess assuming fewer shutdowns, could you provide some insight into what you've seen with production and customer activity either in China or Europe through the end of the second quarter into the third quarter? Have you seen any, I guess, improvements at all from the first half of the year? Yeah, Isaac, this is Ed. I can talk about the China issues. If you look at what happened in April, May and June, it kind of shows what the trend. In April, vehicle manufacturing was down 44%. May was down like 1%, and then June it was up 35%. They basically through the quarter have swung through the problems that they had, and they're back, you know, operating at full rates to generate a lot of vehicles to take advantage of the incentives that are being pushed into the marketplace. Okay, great. That makes sense. Briefly on the CapEx guidance that was unchanged, I guess from the $155-$175, would you be able to just sort of lay out the projects within that CapEx? I guess, are there any investments going to be made in the Ozark business along with that? Yeah. I mean, look, we're maintaining our guidance with regards to where CapEx is at. You know, truthfully, raw material availability for some of these projects might steer us to the lighter end of that, just because we're, you know, you got to get the steel to build this stuff out, right? You know, the major project that we have to finish is the polyol expansion at DeRidder, right? Then we've got some work going on with relatively modest numbers in Crossett, Arkansas, as we work on the alternative fatty acids. Then believe it or not, we've got an S/4 implementation that has some capital involved too. That's where we're spending the money, but we do not anticipate any significant capital being injected or capital expenditure being injected in the near term into Ozark. You might be looking at the CapEx number on one of the financial chart too. You know, if you double that, considering we're halfway through the year, it looks like it's coming in lighter. Part of that is our normal trajectory as well. Most of our CapEx does get spent in the second half of the year. Okay, got it. Thank you. Congrats, congrats on the quarter. Just on a larger, more philosophical, but it helps. One of the things that we like about Nexeon is as we work to expand carbon availability for them, our ability to actually offer a variant, but a not too distant variant, if you will, of that carbon into other markets is good. To some extent, we see that as a de-risker, if you will, because as we work to expand capacity to support them, we do have the opportunity to use that capacity for other things. That's a longer term answer, but it's important. Yep. Okay. Thank you very much. Thank you, Ian. We now have Chris Kapsch from Loop Capital Markets. Please go ahead when you're ready, Chris. Yeah. Hi, good morning. Just a follow-up on the earnings progression in Performance Chemicals. Really, you touched on this in prior discussion about pricing versus raws, but I want to parse it a slightly different way. Just in terms of the inflation and COGS, still being a thing, even as that, as you mentioned, the pace of inflation has slowed. Just wondering if the predominant contributor there is the energy component of CTO. And then in terms of, you know, more than passing along those costs via pricing, just curious if that dynamic is more pronounced in TOFA vis-à-vis TOR, or is it pretty comparable across the various products and the derivatives? Let me start with just a comment on the waterfall for PC, if that's what you're looking at. One thing that's sometimes escapes attention is, you know, the volume impact is on revenue, and EBITDA is called out there in that one bar. In COGS, the plant throughput impact of lower volumes is in that number. When we're looking at COGS on these segment waterfalls, the main drivers of these big, you know, the big red numbers is raw materials, as you mentioned. Also that's where plant throughput, additional costs associated related to lower than expected volumes shows up. It does inflate that COGS number, if you will, somewhat. I wasn't really sure about the other part of your question. Could you restate? Yeah, your question. Yeah. Yeah. Just curious if you're able to get pricing through partly justified by, you know, higher raw material costs, presumably. I'm just curious if that ability to pass along that pricing is comparable in the TOFA complex as it is to TOR. Or in other words, is pricing and mix better in one of those product lines versus the other, or is it comparable across the board? Yeah. No, that's a good question. You mentioned CTO earlier, and just based on the CTO, you know, for this year, you know, the majority of business is contracted, right? As we look to produce more and we have to get CTO on a spot basis, that CTO price has inflated. That being said, in the current condition that we're in, we have been able to obtain the necessary pricing on both our TOR and TOFA products to be able to justify us getting that spot CTO prices. Going forward, you know, we expect that CTO will continue to inflate for all the reasons that we've discussed previously. The second part of his question, as I understood it, is okay, so then we're paying more for the CTO, are we able to pass those costs through on the TOFA and TOR? Do we have more better price leverage in TOFA versus TOR, or is it about the same? It's about the same because, as John mentioned earlier, we've moved away from the merchant type sales to more of the derivative type sales, which we get better economics on. That's helpful color. Maybe just as a follow-up, could you just provide any context to what the dynamic is currently or recently with the gum rosin industry as a, you know, as an alternative to pine-based rosin? Thank you. Yeah, that's a good question. Certainly, we've been tracking gum rosin for a long time. As you all know, we're currently in the middle of the harvest season. Recent data that has come out from Rosinnet and Argus shows that the current Chinese pricing has dropped a bit versus Q1, but is still greater than 50% above what the price was when it was at its low in early 2020. So Chinese gum rosin price is still high, trending lower than it was when we last talked. Not sure where it's going. Not sure where it's going. We gotta keep our eye on it, and we'll know more as we go throughout the rest of the year. Thank you. Thank you. We now have a follow-up question from Vincent Anderson of Stifel. Your line is open. Yeah. Thanks. I just wanted to go back to Mike's question earlier for some clarification. You know, you mentioned the environmental footprint of your carbon and what Nexeon is doing with it that is unique. But historically, you've talked about your carbon's, you know, pore size or blend of pore sizes and your ability to control that mix as differentiators in your other applications. Are those not as relevant in the battery world? Yeah. Vincent, this is Eric. That's a great question, and it's a key factor for Nexeon. It's really our ability to control the pore size of our carbon that gives us a unique position and to be a good partner with them. That's one of the important aspects that we'll be working with them going forward. Yeah. I'd add to be able to do that at scale is ultimately important as well. Okay, perfect. That was it. Thank you, Vincent. We have no further questions on the line, so I'd like to hand it back to John for some closing remarks. Thank you, everyone. That concludes our call. Appreciate your interest in Ingevity, and we'll talk with you again next quarter. Thank you all for joining. That does conclude today's call. Please have a lovely day, and you may now disconnect your lines.