Good morning or good afternoon, all, welcome to the Ingevity First Quarter 2023 Earnings Webcast. My name is Adam; I'll be your operator for today. If you'd like to ask a question at the Q&A portion of today's call, you may do so by pressing star point one on your telephone keypad to enter the queue. I will now hand the call over to John Nypaver to begin. John, please go ahead when you are ready. Thank you, Adam. Good morning, and welcome to Ingevity's First Quarter 2023 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. 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, and Mary Hall, our CFO. Our business leads, which include Ed Woodcock, President of Performance Materials, Rich White, President of Performance Chemicals, and Steve Hume, President of Advanced Polymer Technologies, are available for questions and comments. John will start us off with some highlights for the quarter. Mary will follow with a review of our consolidated financial performance, and the business segment results for the first quarter. John will provide an update on guidance, followed by closing comments. With that, over to you, John. Thanks, John. Hello, everyone. On slide four, you can see our highlights for first quarter. After a slow start, we put up a solid quarter. The quarter ended with what we would consider more normal sales levels. However, it was not enough to offset the weakness at the start. This manifested itself in lower volumes in all of our businesses except Pavement Technologies. We did have a number of positive developments in the quarter. Auto production started picking up in North America, which is obviously good for Performance Materials and also for APT, which also sells a lot into the automobile industry. Another positive for APT was that we saw higher demand for bioplastics in the US Pavement Technologies enjoyed strong organic growth in the quarter, which is good news for Performance Chemicals. The quarter also had its challenges. The slower China recovery affected all the business segments in some way, and we're still seeing some customers who have not restocked to normal expected levels, most acutely in the adhesives markets. As we have discussed, CTO prices continued to rise in the quarter, offsetting gains we have made in reducing costs elsewhere. Comparing to last year, remember that first quarter 2022 was a record for both revenue and EBITDA as demand was picking up and inflation hadn't quite peaked, which allowed us to raise prices to offset higher input costs. It is a tough comp. This is the first quarter we get to share the details of the business line formerly known as Engineered Polymers. The segment is now called Advanced Polymer Technologies or APT for short. The new name better reflects what we do today and where we are going. We produce specialty caprolactone products with tremendously sustainable characteristics, including improved durability and biodegradability in its end uses. By separating the segment, you will be able to see the strength of this business and the growth opportunities and improved profitability. It's exciting stuff. In the quarter, we continued a number of key strategic moves to transition and better position our Performance Chemicals business for the future. Ingevity has a long history of innovation and execution. As market demands for CTO-based products have evolved, we are evolving too. Hopefully, everyone noticed our filings regarding the extensions of our long-term supply agreements for CTO from both Georgia-Pacific and WestRock. These agreements provide us with the certainty of supply to fully run our Charleston and DeRidder plants well into the future. These plants will continue to support our existing chemical customer base while also entering the biofuels market. In April, we shut down Crossett to transition its production fully to alternate soy, palm, and canola fatty acids. We expect the plant to be back up in the next few weeks. These products will offer a broader array of alternatives to our existing customers while also enabling us to enter new markets such as personal care. This strategy should drive our plant utilization rates and resulting volumes up by over a third when we complete this journey. I'm very proud of what has been accomplished so far, but this transition of products and markets will continue through the remainder of the year. When complete, we will emerge a stronger and better company. With that, I'll turn it over to Mary to discuss this quarter's financials. Thanks, John, and good morning, all. Please turn to slide five. Sales were up 2.6% for the quarter as Advanced Polymer Technologies and Legacy Pavement had year-over-year revenue growth, plus we had the benefit in including the Ozark Road markings business in this year's numbers. Adjusted gross profit was lower by 250 basis points as lower volumes and higher input costs, primarily for CTO, outpaced price increases. SG&A was up about $7.8 million, excluding depreciation and amortization, due primarily to employee-related costs. Adjusted EBITDA for the quarter was $103.9 million, down 12.7% as a result of the gross margin pressure and increased SG&A. Adjusted EBITDA margin remained solid at 26.5%. Diluted adjusted EPS of $1.09 reflects the margin pressure as well as the increased interest expense and D&A associated with the Ozark acquisition. Turning to slide six, you'll see that our free cash flow for the quarter was negative $20 million. The first quarter is typically a negative free cash flow quarter as it is usually our lowest earnings quarter of the year, we build working capital for the seasonal paving upswing. 2020 to 2022 during COVID were the exceptions to this norm. Our net leverage is similar to year-end and reflects the fourth quarter Ozark acquisition. As we move into the second quarter, we expect to see our free cash flow pick up and leverage to improve throughout the year towards our year-end target of around 2.5 ton. We remained active in share repurchases with $33 million of repurchases in the quarter. Turning to Performance Chemicals on slide seven, it was a mixed quarter. Despite lower sales volume, primarily from rosin that is sold into adhesives, revenue was up over 7% to $186 million due to higher pricing across the segment and the addition of revenue from Ozark. The lower volumes led to lower capacity utilization and combined with higher CTO costs and increased employee-related expenses negatively impacted segment EBITDA, which was down 34% in the quarter. In Pavement Technologies, we see the step-up in revenue that is primarily related to Ozark. However, the legacy pavement business did grow year-over-year. The legacy increase in sales was primarily outside of North America. We continue to drive geographic expansion in this higher margin business, which should also help reduce its seasonality. In Industrial Specialties, the themes are higher CTO costs and continued customer destocking, particularly in our adhesive's product lines, which we attribute to a weak consumer packaging market. We've talked for the last couple of quarters about higher CTO costs. To put it in perspective, in 2022, the price we paid for CTO increased by nearly 40% over 2021. The price we paid for CTO in first quarter of this year was higher sequentially than fourth quarter. We expect second quarter prices to be significantly higher than first quarter. Higher CTO prices were the main driver of the EBITDA drop in Performance Chem icals in the quarter. We do expect CTO pricing to level off towards the end of the year. It will be a challenging year for Industrial Specialties, CTO is their key raw material. That said, as John mentioned, we reached a major milestone in our strategy to diversify raw material feedstocks by consolidating CTO processing in our DeRidder and North Charleston sites and dedicating our Crossett site to run 100% non-CTO feedstocks such as soy, canola, and palm oils to produce alternative fatty acids or AFA. Beginning in first quarter, we more than tripled our use of these non-CTO raw materials in products that we sell. We're well on our way to mitigating the higher cost of CTO, it will take some time to ramp up both for production and for customer adoption of AFA products. As we execute this transition, we expect results in this business will be choppy. Turning to slide eight, here you see our new segment, Advanced Polymer Technologies or APT, formerly our Engineered Polymers business within Performance Chemicals. They had a great quarter to kick off the year. Revenue was up 6% Our focused management of prices and costs resulted in a 430-basis points improvement in the EBITDA margin from last year, with particularly strong sales in auto and bioplastics. Great job by Steve and the team. This segment has a diverse geographical mix of sales, which was important in the first quarter as different regions had different paces of recovery. For instance, in the Americas, auto and bioplastics were strong, partially offset by weakness in Europe and Asia, particularly China. As we've discussed in prior quarters, we added polyols capacity to our Louisiana site last year in order to meet the growing North America demand for Capa products and to better serve these customers. In first quarter, we saw a perfect example of this as a large US company needed product in a very short time, because we had US capacity, we were able to fulfill the order within the customer's required timeline. Turning to slide nine, you'll find results for Performance Materials. Of all the business segments, this one has the largest exposure to China's slower than expected recovery resulted in lower revenue and EBITDA compared to last year, which was a good first quarter, a tough comp. It should be noted that this quarter's revenue is still one of the highest ever for the segment, primarily due to pric e increases. China was slow, sales in North America were the highest in three years as auto show signs of life. Segment EBITDA was down 10% to $70 million, primarily as a result of unplanned downtime at our China plants as we look to control inventory due to the market softness there. Even with the lower EBITDA, margins were still 49%. In summary, Ingevity continues to produce top-quartile specialty chemical margins even in the face of unprecedented cost increases for a key raw material. We can deliver this performance because of our unique technologies in each business segment, serving a wide range of end markets across the globe. We are taking the strategic actions necessary to diversify our raw materials and increase the operating flexibility of our fixed assets while developing new markets for our products. We saw the changing market dynamics in CTO coming and began our AFA transition about two years ago, and our execution plan is well underway. While the timing is perhaps not ideal, given the uncertain state of the global economy, we're confident we are setting the foundation for continued long-term growth at attractive margins. I'll now turn the call back over to John for an update on guidance and closing comments. Thanks, Mary. We've made the decision to lower our revenue and EBITDA guidance for 2023. We continue to see increased CTO costs, and our strategy to deal with this has been explained to you. As Mary described, this CTO inflation is not insignificant, and we expect it to continue to sequentially increase each quarter over the course of the year, albeit at a slower pace in the back half of the year. Our decision to lower our guidance, though, is really being driven by softness that has materialized over the last few months in several of our other core markets. We do expect the paving season to be strong. The broader global economy appears to be weakening, and this is particularly true in China, where we have not seen the level of recovery that was expected even a few months ago. These trends are impacting both our Advanced Polymer Technologies and Performance Materials segments. The lack of robust restocking and its impact on sales volumes indicates a softer next several quarters. We expect both these segments to grow and increase margins, but not at the rates we had previously forecasted. We are adjusting our full-year guidance to sales between $1.75 billion and $1.95 billion and adjusted EBITDA of between $450 million and $480 million. We will also reduce our capital expenditures in this environment and focus on debt reduction. To the extent we do see some acceleration of an economic recovery in China or in the US, we would obviously be a beneficiary of that. Let me end by formally inviting all of you to our Investor Day on Monday, 2 May 2023 in New York City. John or Meredith can ensure you have an invitation and all the details. We're excited about what will be our first Investor Day in over five years. Senior management from across the company will present and showcase many of our technologies. At the reception, you will have a chance to touch and feel our products and ask any questions of our leadership team that you might have. We consider this day an important milestone for investors. Despite the near-term challenges of the economic environment, we view the changes in our markets as tremendous opportunities. As we transition both our legacy pine chemicals and Performance Materials businesses over the next 18 months, we will emerge a stronger, more customer-focused company that offers a range of solutions to the end markets we serve. We will improve our position as a best-in-class specialty chemical company with industry-leading financial performance. This Investor Day will be our opportunity to show you our roadmap. With that, I'll turn it over for questions. Thank you. As a reminder, if you'd like to ask a question today, please press star followed by one on your telephone keypad to enter the queue. When preparing to ask your question, please ensure your headset is fully plugged in and unmuted locally. That's star one to ask a question. Our first question today comes from Vincent Anderson from Stifel. Vincent, your line is open. Please go ahead. Yeah. Thanks, and good morning. Yeah, let's just spend a little bit of time on the guidance, 'cause there's a lot of moving parts. You know, how much of that is kind of implying the carrying costs, carrying the fixed costs and any non-capitalized expense of the Crossett conversion? Are you talking about transition-related costs, related to the AFA? Yes. Okay. you know, we are Ultimately, we will plan to pool those costs together and decide how to treat them going forward. The guidance that we presented today does not reflect largely costs related to the transition. It is primarily related to our view that we are seeing softening in markets other than just the adhesives markets as reflected in volume softness, really across the board other than in the pavement business. Okay. If I kind of wed that with the CTO pressures, I mean, as far as I can tell, CTO prices aren't much different than where you set guidance. You know, when you last set guidance. It sounds like you have a pretty heavy lag impact in your contract structures if you're expecting sequential increases throughout the... [crosstalk] That's correct, Vincent. You're looking at it the right way. Yeah. That's right. If anything, the CTO market... [crosstalk] Yeah. S pot market is actually probably softening a little bit, right? Its uptake into the biofuels market has been more muted this year because of just how fast it's run up in cost. There's definitely a timing lag in the nature of our contracts, which is why we said what we said. Okay. The issue with guidance, just to build on what Mary said, I mean, look, we have pretty good line of sight, as you know, into what we're gonna pay for CTO over the course of the year, right? Because of the nature of our contracts. Right. Right? Now, that is becoming a little bit more dynamic as it moves closer to sort of a true market price. What's really causing our guidance to be adjusted is what Mary alluded to. As we went into the year, we were expecting probably more upside from our other businesses to offset the CTO inflation. It looks like it just looks a little shaky right now relative to where we were at the start of the year, right? China has not come back like we thought it would. The US is doing okay, but not crazy or really all that great. We just have not seen the restocking on the adhesives. Now this could change at some point that, you know, the customer will have to start buying. It's just, I personally think we wanna be conservative, we're not gonna overpromise, we'll just see how the rest of the year shakes out. The way to think about... [crosstalk] Okay. Yeah. Those CTO contracts, Vincent, you mentioned, you know, perhaps a significant lag. It's more like a quarter lag, which is pretty typical in terms of contract pricing reset. When you look at kind of the trajectory of CTO prices in the market, I think it, you know, it makes sense that as we talked about significant tick up in second quarter, when you look at where the big escalation was in CTO prices in the market, it was in first quarter, so we'll feel that in second quarter. Okay. All right. That makes sense. If I could just ask a couple on Crossett, briefly. Sure. You mentioned soy, palm, and canola fatty acids. Those are more longer chain oleochemicals. In the past, you've maybe acknowledged, if not mentioned proactively opportunity for, you know, something a little bit shorter chain. Just curious if this decision is more of a stepping stone for your AFA portfolio, or if there are some other constraints to processing lighter oils at Crossett? No, it's a steppingstone. I mean, look, I believe that, you know, if you were to flash forward a couple of years from now, you're gonna see us offering a much broader array of both short and long chain. I think what's happening is that we've discovered and have uncovered some really exciting opportunities with these sort of critical raws, both in terms of product substitution for our existing customers, but also new market applications. It lends itself to the way we're kind of reconfiguring Crossett to kinda go after these three first. It's, it's pretty exciting stuff. You know, we're gonna feel it, to Mary's point and in our prepared comments. I mean, it's down the month of April, and we'll be up soon, so we're not gonna get that absorption that you normally see. Y ou know, as this thing gains momentum over the course of the year, you know, it's a real volume opportunity for the company. It's just, as Mary said, gonna be a little choppy as we cut over. Okay. Just super quick on that because you did mention it recently. Wondering if it's now a higher priority to either come up with a plan for the rosin side of the Crossett asset base, whether that's an alternative feedstock or just minimizing any stranded costs associated with that. Well, the beauty of those raw materials is they don't generate rosin. Right. You have assets associated with processing the rosin cuts. We do... [crosstalk] It's how the figures are... [crosstalk] We do. They're not fixed to an individual site. Gotcha. Okay. All right. That's helpful. I'll turn it over. The next question comes from John McNulty from BMO Capital Markets. John, your line is open. Please go ahead. Hey, good morning. This is Cale with Conference John. Just given kind of the expectations for the big jump in China autos for second quarter, just kind of wondering how you're thinking about the trajectory in PM and how steep you think the ramp might be for the rest of the year? Thanks. Go ahead, Ed. Yeah. This is Ed, Cale. You know, obviously first quarter was a little light in China as, you know, as impacted to a large degree to the end of incentives in December, which pulled forward a lot of vehicles out of first quarter into fourth quarter. first quarter, relatively light from a production standpoint, but we do expect that to continue to grow throughout the year as China gets into. A better frame of chip issues as well as supply chain issues and being able to increase the overall output in China for the year. We have high expectations for them. We do feel that they will continue to crank out internal combustion engine vehicles. We are obviously in place to serve those vehicles with the products that they want. Gotcha. Okay, thanks very much. How should we think about the puts and takes for free cash flow for the rest of the year given kind of spiking CTO, but then volumes are off? Yeah. We see a pretty normal pattern for free cash flow this year. Again, free cash flow is typically negative in first quarter, excluding the COVID period. Really no surprise there. We look forward. We held the guidance, I'm sure you noted on free cash flow and debt reduction and feel good about that. You know, sometimes we get the question, "Well, what about, you know, if the recession does play out, things continue to slow down, how does that impact free cash flow?" As you know, in this business, actually, if we really got into recessionary scenario, free cash flow improves because then you're not building inventory, you're not building accounts receivable. We are holding steady on that free cash flow projection and feel good about it. Yeah. Thanks very much. The next question comes from Jon Tanwanteng from CJS Securities. Jon, your line is open. Please go ahead. Hi. Good morning. Thank Thank you for taking my questions. My first one is on the APT biz, which I'm happy you guys are breaking out. Historically, that's been a fairly high margin business. I know you have the price increases and maybe some weakness in China and some other places to start the year. Where do you see that ending the year, just given the strength demand there and what your recovery expectations are from a volume and, you know, just end demand activity perspective? Yeah. I mean, look, you know, as we talked about John in last quarter, and you know, we'll talk more I guess during Investor Day. I mean, it is a high margin business with great secular tailwinds behind it. It did have some issues over the last year or so because of all the challenges that were going on in Europe, whether it was Brexit or natural gas, energy, lot of different challenges, freight and logistics. I think you can see in fourth quarter of last year and first quarter of this year that it's gaining a lot of momentum. You know, we would like to see that business to be sort of in the mid-20s, which is where we're headed, and we're on that journey, and I think you'll see it manifest itself over the course of the year. Okay, great. Then, just a question on the, on the non-CTO, the AFA businesses that you're getting into or transitioning over to. Are the margins there better today than on your CTO-based derivatives? Or, if not, can you describe the types of economics you're getting there? As a second part to that question. Well, the margins are. Our expectation is that the margins that we will produce from AFA will be better or at the levels of what I would call sort of our normalized historical margins. The, you know, the margins today, obviously because of the CTO price escalations and our legacy products are under some pressure, right? But, you know, we believe that once we get the AFA, you get the plant fully utilized, get the absorption cost, get the pricing dynamics properly you know, beaten out into the market, we will find ourselves with a business that's got margins comparable to what has been sort of our historical you know, normal margins. When do... [crosstalk] To add onto that... [crosstalk] G o ahead. John, if I could add onto that. This is Rich White. As you know, in our historical business it was all about derivatization. We've talked about fatty acids and going from soy, which a year ago we only talked about soy. We didn't talk about canola or palm. As we talk about all of these short chain or long chain fatty acids, it's really about how we will derivatize those to additionally get the value that we have come to know from our historical business. Got it. When do you expect to complete that transition to the full 100% usage of AFA? Well, we're, as I've said in my comments, right, I mean, I think our goal is to sort of have this transition moving by the end of the year. You know, whether we can get it up to full volumes at that point, we'll see. We want this transition effected by the end of the year. I mean, we've sent hundreds of product samples out. We are working very rapidly. The amount of progress that we've made is pretty stunning actually. And honestly, you'll see at the Investor Day, and you know, this can be somewhat controversial in our company just because of our history, you know, some of these products, like the canola fatty acid, are honestly better than some of our legacy fatty acids, right? Because canola is, you know, a more transparent raw material, if you will, you know, we have big expectations for that over the long term, right? Big opportunities. It's just gonna take us a little time to get... you know, anytime you cut over something, it just takes a little time. Understood. Just to clarify, that end of year, is that just the changing of the facility itself, or is that including qualification and? The facility will be cut over hopefully by the end of this month, right? In terms of getting volumes back up to, you know, more normalized level where we can get the absorption for the plant, it's probably gonna take through fully to the end of the year. Perfect. Thank you so much. I'll jump back in queue. The next question comes from Chris Kapsch from Loop Capital Markets. Chris, your line is open. Please go ahead. Yeah, good morning. I had a couple. Just wanted to make sure I understood the guidance reduction. You're attributing that to incremental softness that either materialized or sustained in the APT and PM segments or is some of that also attributable to incremental softness in adhesives within Pine Chem... [crosstalk] No, no, it definitely includes it. And/or incremental CTO... [crosstalk] It definitely includes adhesives, Chris. Yeah. Yeah. I mean, it's... [crosstalk] Yeah. I would characterize it as sort of incremental softness across all of our businesses with the exception maybe of Pavement Technologies, right? Versus when we spoke at the end of... [inaudible] [crosstalk] Okay. Not... [crosstalk] Right. Right. Not, not attributable to incremental inflation in CTO, correct? Well, we knew. Look, I mean, we've been pretty open. You know, the difference between this year and last year, the CTO inflation is definitely a part of it, but we've been able to factor that in from day one. What's changed from a quarter ago is just the sort of weakness that we've seen in the other markets, right? The CTO market, like I said earlier. Right. If anything, actually may look a little bit better from where we were a quarter ago, but it's still not enough to move the needle. The issue here is around the other markets. We just have not seen the recovery in China, and the US market remains pretty muted. Got it. Then on the CTO inflation, can you just remind us that, you know, presumably where you can, you would, you know, try to push along pricing. I'm assuming the biggest challenge is in the Tall Oil Rosin side. Are you able to get pricing through on TOFA and TOFA derivatives, or is that becoming also challenging given the macro? Chris, we still are seeing good pricing in our TOFA and fatty acid markets as well as the merchant and derivatized products. We will continue to push that as we see fit. Know that there certainly will be an upper limit as on anything else. We haven't really dropped rosin pricing. Right. It's just when you look at... you can see this in our waterfalls. I mean, it's just been more of a volume. We, you know, we've seen some degradations in volumes. Okay. Got it. Then if I could ask a question about the press releases that came out with WestRock looking to shut the mill there in North Charleston. Yeah. You guys have a fence line relationship. If I look at their materials, it looks like their overall mill capacity may just represent less than 4%. I don't know if that's a commensurate level of... [crosstalk] You can't look at it that way, Chris. The contract... [crosstalk] Right. As we mentioned in our press release, the contract with WestRock with regards to Crude Tall Oil remains unchanged, right? Their shutting this mill down will not impact us with regards to Crude Tall Oil. There is another product, lignin, that we do get from this mill, but we have alternate sources which we will be able to replace that through other providers. What will impact us, though, is there are a number of what I call shared services. Think utilities, power, steam, water, wastewater that we will have to cut over to independent or standalone use. We have done this many times. Wickliffe at one point, you know, there was a paper mill down the road, right? We co-locate today with Covington in Virginia. I mean, if you go to Crossett, it is a Georgia-Pacific mill down, you know, half a mile away. We know what we're doing here. It's just gonna cost some incremental costs to do it, but it's not gonna impact our operations at the site at all. It doesn't change anything logistically in terms of sourcing feedstock. It's just about some incremental cost 'cause of... [crosstalk] It is, right? The co-location piece... [inaudible] [crosstalk] Other than the lignin. Yeah. Got it... [crosstalk] Got it... [crosstalk] We'll have to buy more lignin from third-party providers, but yeah, it's just a logistics cut-over cost. Okay. I'm assuming given that their, you know, decision to do this is for August, that you knew this was happening and therefore these incremental costs are also have been baked into the guidance. Is that fair? The answer is... I mean, look, we have been an independent company from WestRock since May of 2016. We obviously have a shared heritage, we have been co-located, right? We have been watching and been aware of, you know, that mill's performance and opportunities and challenges for a long period of time. The decision to do something is not ours. It belongs to WestRock. We've always had to plan and be thoughtful around that this could happen. This is, like as I said earlier, not a new phenomenon in this industry. We've, you know, the time is here, and we're now gonna have to execute on the plans that we have. Gotcha. Thanks, John. Appreciate the comments. Yeah. Yeah. Next question comes from Ian Zaffino from Oppenheimer. Ian, your line is open. Please go ahead. Great. Thank you. You know, just to follow up on that WestRock question. I mean, do you see any incremental cost pressure in the overall CTO market coming from this closure or... [crosstalk] No, not really. Do you think we'll see some more? I mean, To the global market, there's obviously going to be some reduction, but it's pretty minimal, right? This plant did not produce a lot of CTO. Yeah. Their CTO, Ian, was less than 1% of the total market... [crosstalk] Right. Coming out of that plant. [crosstalk] Coming out of that plant. Let me be clear, it will not impact our re-relationship with WestRock. Okay, good. On the AFA transition, when that's all said and done, how much of the raw materials will now be to come from AFA versus CTO? What is sort of the goal over, I don't know, if we look the next 12, 18 months as far as mix of raw material between, let's just say CTO and AFA? This is important, Ian, and I'll answer this, and Rich can chime in too. You know, when you look historically over the last four or five years, set aside financial performance, our capacity or asset utilization was really running around 2/3, right? We had, put another way, we were running a three-plant network with each plant running at basically a 2/3 utilization, right? Running on CTO, right? What we're doing is we're going to move that CTO to go to Charleston and to Ritter. Those plants will now run at or near max utilization, right? We can then load Crossett, so you should see a 1/3 volume pickup over time, right? That's the opportunity for us, both from a revenue, volume, raw material, whatever. Once we get that to full utilization, then about a third of our raw materials will be non-CTO related, and about a third of our sales will be non-CTO related. A third of our profitability will be non-CTO related. That's the goal, but it'll also be a third bigger, right, than it is today because right now that capacity's been sitting unused. Okay. Understood. Thank you very much. Yeah. As a reminder, if you'd like to ask a question today, please press star followed by the pound on your telephone keypad. Next question comes from Mike Sison from Wells Fargo. Mike, your line is open. Please go ahead. Hey, good morning. You know, when I take a look at your outlook for the year, 450 to 480, you know, given the weaker environment, you know, US recession slow down, you're still gonna be flat to maybe up growth. You know, pretty good outlook, I guess, in a tough environment. What do you think you know, are there any other risks to volume, I guess, in each of the businesses? We hear a lot about destocking, and you talked about a little bit, but what. Are there any other risks that you see, you know, within that outlook, for the year? I think, look, I mean, one of the advantages of resetting guidance, Mike, is that you get to reset guidance, right? I mean, we've tried to, you know, be pretty balanced and sort of. We sit here today, we see weakness, right? We have the advantage, I guess, of reporting earnings maybe a little bit later than some of the other companies or what have you. You know us by nature, we're pretty conservative, right? In our minds, we've reset this to numbers that sitting here today, we think we'll meet, right? Now, if Ukraine evolves into World War III or, you know, something happens in Taiwan, or there's other geopolitical issues, that could change things or the debt default, I guess. You know, I was listening to that today on CNBC. Those are exogenous things that are not factored into our guidance, but the current and anticipated weakness in the economy is in our guidance. Got it. For Performance Materials, are you still looking for some growth in auto builds this year? I guess that if China continues to recover, the second half will be stronger than the first half for Performance Materials? Yeah, Mike, this is Ed. You know, I think as you listen to the OEMs and as they talk about chip shortages and issues still in the first half, our expectation and I think what we see in the marketplace is that they're expecting the chip issues will be in a much better position in the back half of the year. We're planning to, you know, run at full rates based on what we've got coming up in the back half of the year. Got it. One follow-up on Advanced Polymer Technologies. You know, it's a business where customers, you know, want to innovate potentially. Do you still see that activity in this environment? Is that some upside potential as the year unfolds for that segment? Yeah, I mean, that's a good point. I mean, the answer is yes. We do continue to see a lot of innovation and development going on. You still there, Mike? Yeah, I'm here. Yeah. Sorry. The thing cut out in here. No, we continue to see a lot of innovation and work being done. We're really excited about, you know, sort of the next gen applications that are associated with this. We have great expectations and aspirations for that business, and there probably is some upside, assuming that the economy, you know, continues on as we forecast it. Got it. Great. Thank you. Yeah, thank you. The next question comes from Daniel Rizzo from Jefferies. Daniel, your line is open. Please go ahead. Hey, thank you. Just a couple quick questions. Have you ever in history had to go to the spot market for CTO? Is that something that occasionally crops up? Go ahead. Yeah. Thanks, Daniel. Yeah, we procure about 15% of our CTO from the spot market on an annual basis, have been doing that for some time now. Okay... [crosstalk] This is Rich White, by the way. Sorry? I was just saying this is Rich White answering your question. Oh, yeah. Okay, thank you. More importantly, and just something a little different, with the Advanced Polymers, how much of that is tied to the auto end market versus elsewhere? Steve, do you wanna take that or... [crosstalk] I can take that... [crosstalk] the automotive market has always been a, an important market for this business. In recent years, with the growth of the paint protection film and EV battery material, it's become more important. We've kind of seen growth from about 25% of the business up to about a third of the business now. I'm sorry, 25% was the last thing you said? It used to be... [inaudible] [crosstalk] 25% to 30%. Right. Okay. Around about the 30% mark now, yeah. Is it fair to say that a lot of the growth or a lot of the performance in that, in that business is just coming from auto restock cycle? Is that kind of accurate? I don't know if I agree with that because a lot of what he's doing is, new product application, right? One of the things that the picture that was on the slide is a protective film that is pretty popular in Asia, in particular in China, right? It's an aftermarket application that because their roads are a little tougher than in the Western Europe and in the United States, a lot of the people will put this film on their car because it helps avoid the dings and the dashes that you would get from rocks or other things that are on the road, right? That's really a technology or product development as opposed to just being tied to builds, right? There are also, you know, there's a lot of work being done with the applications tied to electric vehicles in terms of these, basically bounce joists, which are think of them as sort of rubber shock pads that the batteries sit on, Dan. Yes, it's benefiting, but I think it's more a function of its move into new applications. I think for the next few quarters, what I would add to that is, again, if we see a China bounce back and stronger recovery, APT, because of the auto exposure, particularly those products, that John referenced in China, APT will see a stronger... [crosstalk] Yeah. Bounce back as well. Okay. Thank you very much. Just a final reminder that star plus one on your telephone keypad to ask a question today. We have a follow-up question from Jon Tanwanteng from CJS Securities. Jon, please go ahead. Your line is open. Hi, guys. Thanks for taking my follow-up. Just any thoughts on sequence expectations in second quarter? I know Pavement is usually off, maybe seeing some China improvement, but maybe that's more than offset by the CTO, the transition views you got going on. Just help me understand the puts and takes versus what you would normally see on a seasonal basis this year. Yeah, I mean, look, it's I think we've tried to describe it as best we can, John. I mean, you know, at the end of the day, we're dealing with some pretty significant CTO inflation in the legacy Industrial Specialties markets. We were, you know, anticipating growth in oilfield, which we are seeing some growth in oilfield, some great growth. We're also seeing from a negative side, pressure on the adhesives that are sort of more than offsetting opportunities that sit in the other legacy Industrial Specialties markets. It's unfortunate, but that's kind of what we're seeing. Pavement Technologies, I think will continue to have a very robust year. It's a very strong business. It had great performance last year. It will have great performance this year. It's off to the races with a really strong start this quarter. They've been working really hard, and I think we feel good about that business. When you look at Advanced Polymer Technologies, you know, the type of growth that you saw in first quarter, I think is probably what we would sort of expect for the year with some potential for upside. Obviously, we're sensitive to its, you know, sort of broader economic exposure. As Ed has kind of alluded to, you know, the auto business is gonna be up from last year, but probably not as up as it could have been in a better economic environment. That, I mean, as we alluded to in our prepared remarks, that's really the issue. Both APT and Performance Materials are gonna grow, and their margins are gonna improve, just probably not as much as would otherwise have been in a more normal environment, right? Those are really the puts and takes. If I could tack on just a second, a point I wanted to mention, earlier when we talk about the pavement business, now of course we have Ozark as part of that as well. It did appear, you know, that Some of the analysts and others that we have talked to perhaps underappreciated the seasonality of Ozark as well. I mean, again, we're talking, you know, asphalt paving and road markings, and when you got a foot of snow on the ground in the northern half of the United States, you're not doing roadwork. Again, the seasonality that we've always talked about with respect to pavement applies to that whole business line that now includes Ozark. Just keep that in mind as people are doing their modeling. Great. Thank you. If I could switch gears a little bit, could you just give us a little bit more of an update on Nexeon and how that investment is doing and how the business there is doing? I've seen a lot of its competitors receiving a lot of funding, offtake contracts. Can you talk about where they're standing from a progress standpoint with the development of customers, you know, funding and then getting into new applications? Yeah. John, this is Ed. You know, Nexeon is a privately held company and we respect that obviously. They are continuing to test our products and, you know, as we continue to work with them, we're gonna help them with their overall projects. You know, Nexeon is what we consider to be the leader in silicon-based composite anode materials. As we want to integrate with them, we are working hard to evaluate different samples and, you know, we expect, you know, to see something in the next, what, four to five years from an activity standpoint. You know, in the meantime, we continue to work with them to develop new products for their applications. Great. Thanks, Ed. See you at the Investor Day. We have no further questions at this time. I'll turn the call back to the management team for any concluding remarks. Well, that concludes our call. Thank Thank you for your interest in Ingevity, and we'll talk to you again next quarter. This concludes today's call. Thank you very much for your attendance. You may now disconnect your line.