Great. Good morning, everyone. This is Mike Sison with Wells Fargo. I cover the ever-exciting chemical industry, which, for what it's worth, has outperformed the S&P 500 this year. Coverage is up 14% year-to-date. S&P's up 8%. Ingevity has kept pace this year. Today we have David Li, the CEO of Ingevity, here, as well as Phillip Platt, the CFO. They're going to tell us why Ingevity is a much more exciting story than some small little space company coming out tonight. We're excited to have them here. Thanks. David, you took over as CEO about a year ago in March 2025. You started a transformation for the company. Maybe can you give us a quick summary of what you've learned, the actions that you have been focused on, and ultimately the vision for the company? Since you started, your stock's up 50%. Wall Street has clearly taken notice. Give us some color there, and we'll keep on going. Yeah. First, thanks, Mike, for having us. Always appreciate and really appreciate the support from the Wells team. Thanks, and great to be here. As you mentioned, I've been with the company for over a year. I joined on Liberation Day, so exciting times there. What I saw in the company coming in was really some remarkable, unique businesses, world-class, where we're the leader. What had held the company back was, unfortunately, some acquisitions that didn't work out as well as we thought, and some businesses that we no longer considered core. The first thing that we did was really take a deep look at the portfolio and take a look at what we thought were our core competencies. In other words, what are we the best in the world at doing? Coming out of that, we got conviction around portfolio transformation that you talked about, that one, we're really excited about the core businesses that we'll have going forward, Performance Materials and Pavement Technologies. I put a wager out there that no one could find a company with EBITDA margins and cash flow conversion as high as we have with our core businesses. Second, obviously, it's just making sure the company's on more stable footing. Through those divestments, taking the noise and volatility out of the story. I know, Mike, you're going to miss talking about CTO and everything with Ingevity, that's no longer part of the story. We're fully into this portfolio transformation. We announced the intention to do three divestitures. We've done two of them successfully. The other one is well underway, which is the specialty polymers business. We talked about having something to announce there before the end of the year. Excited about coming out the other end of the portfolio transformation. Equally exciting, I think, is the work that we've done on the leadership and the culture. The company has a long and strong foundation of culture, which we call the IngeviWay. I think there's opportunities to build and refine upon that culture. We've really refreshed the leadership team. You talked about Phil. Phil's been with the company for more than 10 years but just took over as our CFO May 1st. We've also brought in some new leaders to lead some of our businesses, including Performance Materials, Pavement Technologies, and our growth areas in filtration and energy storage. It's an exciting time at the company. The organization is engaged and energized, and I think we really can feel the momentum. Thanks. Great. Yeah, normally my next question is where crude oil prices are going. Sorry, we don't really have to talk about that. Just for those on the webcast, I am live on Bloomberg Messenger, so if you have a question, just let me know. Let's talk a little bit about your largest business, Performance Materials. For those who are not as familiar, I remember when this business spun off from WestRock. It really created a lot of excitement in the stock. What makes it so special? It's consistently generating EBITDA margins in the 50+ range. I don't think there are other businesses in chemicals that are even in that area. Most impressively, your major customers are auto. Maybe give the audience a little bit of color there. Yeah. Great. Phil, please chime in as well. It is a remarkable business, primarily supporting evaporative emissions in the automotive space. That's for ICE and hybrid cars, and we've talked more and more about how hybrids are becoming more and more a part of the auto story, especially here in the U.S. What we provide is a unique carbon solution using our activated carbon, which we produce both in the U.S. as well as in Asia. We produce local for local. We have a long track record working with the automotive suppliers. We've never had a recall. We do have a unique business in that we increase pricing every year. I think that's just reflective of the value that we provide. Essentially what we say is, without the activated carbon solutions that we're providing, we'd have a lot of gas emissions going into the environment, which we know is harmful. By using our activated carbon solutions, it's estimated that we're saving around 8 million gallons of gas a day. Significant environmental factor to our solutions. It also historically has had an amazing barrier to entry. We've heard or seen companies try to inch into the business. The Chinese haven't even come close to. They like to ruin a lot of chemical markets, but they can't. Can you remind us what's so special about the Ingevity technology? Why activating the carbon from wood is differentiated from activated from coal or any other sources? I think it starts with, we were one of the pioneers in the industry. Yeah. Working closely with the suppliers. It's not just the recipe, it's the knowhow, it's the applications, it's the teams that work closely with our customers that make the whole thing come together. I think that provides a significant competitive advantage for us. As I mentioned, we've never had a recall, so that's very important for our automotive partners. Also, I think there's an advocacy aspect to our business where we're working with the regulatory bodies, whether it's in the U.S. or China. China has a new emissions standard that's expected to come out in the next several years. We're actually helping them write the standards, right? Right. We've become kind of experts in this emissions space, where we can, we provide help and assistance. Obviously, that also helps support our solutions as well. There's an advocacy part, there's a quality aspect, there's obviously an IP aspect as well, and then there's just years of experience working with this industry. Let me ask Phil what he would add, since he's been at the company a lot longer than I have. Well, we're in the business of providing solutions to problems that our customers have, and that is particularly in the EVAP space, is complying with these really stringent requirements, especially here in the U.S. with Tier 3 standards. We've been doing that for many, many years, providing quality products that frankly have never had recall and fulfilling the need. There's no unmet need in that space. I was just with our teams a couple of weeks ago. They were showing me a new sort of activated carbon that provides a very dust-free environment. That's not for every auto maker, but if you're driving a high-end Porsche or something like that's very important to them. We really work closely with our customers to make sure we're anticipating their needs. I think that all builds onto the kind of competitive advantage and the value that we bring. Right. Well, I've got one college kid left. I need three more years before I get that Porsche. You can buy the Porsche. I could have had three Porsches by now. I'll give you the honeycomb, Mike. You've also talked about expanding into different markets. The technology, as I recall, as you've said, is just very unique. You're very early stages of moving into different areas. Can you maybe give us an update of what areas seem exciting, where this technology can go into, and why they would pay a similar premium for that technology? Thanks for that. One of the areas that we're most excited about at Ingevity is our focus on filtration. Yeah. First, I would say filtration is not new for us. We've been a participant in filtration for many, many years. In the past, it's not with the intention to make it a sustainable business. A few things have happened. One is productivity. The teams working in our operations area have done a wonderful job improving productivity. That frees up capacity in our facilities. The second is, as the auto fleet has evolved, for example, the hybrids, that requires less activated carbon content, also freeing up volume. As a result, what we've seen over the years is 20%+ of our volume in the past, we would just kind of. It obviously provides asset utilization, but we essentially just get rid of it and at pretty negligible margin, and we were open about that. It was basically 0% EBITDA for us. The opportunity there is to take a look at that 20%+ volume. This is millions of pounds, Mike, that are going into filtration. Where are those end markets? Where are we actually adding value, and how can we understand our differentiation a bit more? Obviously enhance those relationships and partnerships where we see better profitability opportunities or just price based on the value that we're providing. We've narrowed in on three areas that we're really excited about: pharma, water treatment, and food and beverage. We think that we're uniquely suited to support those industries. We're in a discovery process right now, we've brought in some new leaders. We've brought in some new sales folks. This doesn't require new CapEx. It doesn't require invention. It's just really understanding the market. We're having a lot of customer conversations, we're really encouraged because, one, it's very close in, we're already participating. Two, the opportunity is not to invent something. It's really to take a significant volume that we're selling essentially at zero and selling it at something more, at 5%, 10%, 15% EBITDA. To your question, I don't think we're ever going to find something at 50%+ EBITDA. If you find something, please let us know. Even if we can take that 0% EBITDA to 10% or 15%, that's actually going to be accretive to our PM segment margins, which is hard to believe. Yeah. Keep in mind, that requires minimal to no CapEx. Right. We have that capacity today, it's just keeping the volumes consistent with today and just upgrading those volumes. Right. For Performance Materials in total, I think there was a perception that EVs would take over and growth would slow, you guys have done a really nice job with growth. When you think about between now and the end of the decade, what do you think the growth algorithm for Performance Materials is? Then you talked about, is China 7 or 6 or whatever? Seven. That's coming up. That could be a pretty nice catalyst - Right. - for that growth. Yeah, thanks for that. We're excited. First, I would just say looking at the macro, the macro for auto has been pretty flat. Yeah. Even within that environment, we've been able to grow through pricing, higher value product mix. We think that can continue. When you look at the auto fleet, for example, in the U.S., it is as old as it's ever been. I think the average age of a car is what, 12+ years or something like that. I think it's 14. 14 now. Encourage everyone to get out there and buy some new cars. ICE and hybrid for sure will be here for a long time, and as long as those vehicles are being produced and purchased, we're going to have a big part in that. We see that as a very sustainable, long-lived part of the business. We talked about filtration as sort of that upside growth to the business, but we're not also standing still. We're innovating even in the automotive space with new solutions, just so that we're going hand-in-hand with customers that are trying new engine designs. Hybrid is becoming a much larger part of that equation. If you look at where we were just a few years ago, I think most would say pure EVs are going to be a very significant part of the auto fleet. Where we stand today is the government subsidies have been backed off or taken out completely. I think consumers recognize that there's benefits to electrification, but you get the best of both if you have a hybrid vehicle. We're seeing that as a big part of the story going forward. Right. The regulation that's coming in play, right? Yeah. China- China 7 at the end of this decade. Yeah. That's moving China from China 6 to China 7. That's the equivalent of a Tier 3 in the U.S., which is the highest regulated jurisdiction for us and highest profitability. We expect to participate in that. India as well. India is moving to Tier 2, a developing economy, and expect to participate in that as well. There's regulatory tailwinds that will come at the back end of this decade that we fully expect to participate in. Right. To do a little math, as I recall, when you go from a Tier 2 to a Tier 3, you basically add the honeycomb, and - That's right. - per car goes from 13 to something higher, 20. Yeah, it could be upwards of, it's disclosed on our website, $40-$45 for the content. Right. For the Tier 3 level. Yep. Right. There have been attempts in China to use inferior products as the Chinese have tried to come in. How do you manage, because you do have a big facility there, ho w do you manage IP protection and that type of stuff from getting stolen? Yeah, I think, Mike, I was just visiting with our teams in China recently. We have great teams. We have two facilities. We have a big team in Shanghai. We've got a facility in Zhuhai and also a facility in Changshu. Yeah. The teams there, I think, really value working at the company. I'm really proud of them, and they've done a great job. We obviously take safeguards with IP. So far, we've seen pretty minimal competition globally. We're obviously super paranoid about it. We take the measures we think are needed to protect that IP. It's not one single recipe. It's all the knowhow. It's the application space. It's the advocacy efforts. All of those go into what we provide to customers. Right. Great. You do have a very nice smaller business in Road Technologies. Maybe give us a little bit of color on that business. It's been a very steady growth business for you guys for a long time. Right. Lot of infrastructure spending. I live in New Orleans, so the roads are a disaster, so I think we need more of your stuff there. We're definitely getting it around to New Orleans. For what it's worth. Right. Maybe just give us your thoughts on that business and how it really fits in the portfolio for Ingevity. Right. From a revenue perspective, about a third of the size of the company. Within that, what we call Pavement Technologies segment, you really have two kind of businesses. One is pavement preservation. Yeah. One is kind of the warm mix additive, Evotherm. I think that when you think about pavement preservation, think of that as sort of a GDP plus type of business. On the other side of it, what we're really excited is the opportunity to convert hot mix, which is the traditional way of laying asphalt, into something called warm mix by using our additives. This is something that traditional pavers can just use in their process without any sort of significant change and get all the benefits. They get benefits including longer road life, lower energy cost because they're not heating the asphalt as much. They get a longer paving season, which can be invaluable in certain regions, as well as it's much more environmentally friendly. The education process with that conversion is all those factors. We're working with the pavers. We're working with the local departments of transportations to advocate for those and educate, I think we're seeing nice progress. What we expect from that business, as you mentioned, is the overall segment should be growing at sort of mid-single digits as we grow profitability. We've recently updated our profitability projections to be sort of high teens. In the future, I think that can be a 20%+ EBITDA business. Within that segment, what's growing the fastest is Evotherm, right? So if the segment's growing at mid-single digits, Evotherm's growing at something much higher. Right. Now I guess with the Iran war sort of, I think, ongoing. How's that affected your businesses in total? Obviously, there's an inflationary impact because of raw materials and such. You don't buy a lot of petrochemical raw materials, but there's general inflation. How do you think this has impacted Ingevity or two different businesses, if at all? Yeah. First, I would say, I'll ask Phil to chime in as well, we're fortunate that we have a very North America-centric business, so we're selling a lot of our products in the U.S. that are produced in the U.S. and not really reliant on a lot of oil or oil byproducts. I think we're well-insulated there. We do have one business, APT, which is in the process of being divested. Yeah. That has some exposure. We've put in place surcharges. The teams have done a great job. What would you say, Phil? We've been reasonably insulated from that. When you think about raw material costs or really energy inputs to both our businesses, primarily natural gas, which has been relatively insulated from the impacts of higher pricing of crude oil. To the extent that we have been impacted, it's really been APT, and we instituted back in March of this year some temporary surcharges to recapture the costs of the elevated raw material inputs in that business. One thing I would say, coming out of the conflict, and hopefully it ends soon, is that this theme of hybrids becoming more and more a part of the auto fleet has really become more pronounced. Right? As gas prices go up, I think there's still a strong preference for ICE engines, so the hybrid provides a really good solution for that. We saw that, we talked about that in Q1 as one of the drivers for the outperformance, I think that is a structural, sustainable change that we'll see going forward. Right. Great. Back to the APT potential review, sale, or whatever. The business alone has improved quite a bit on your own, the biggest issue is competitive position with China. As you think about that business and what you've been able to do over the last year to improve it, where do you think we are now on sort of that ramp-up? Any update, I think you said recently the interest was good and that you're still on track - Yeah. - find a solution by the end of the year. Why don't I let Phil comment on the transaction? The business itself is performing well. We brought in place a new leader last year. He's done a fantastic job kind of revitalizing the innovation, the operations, the commercial approach. I think it comes at a good time because we're one of three suppliers worldwide of this specialty polymer, and I think we're well-positioned, especially in this kind of Middle East conflict environment, to supply this specialty polymer. Admittedly, we've been in a trough for a while from an end market demand perspective. We're starting to see some recovery in those end markets, and within that, we think we're really well-positioned to outperform versus our peers in the space. We're seeing that recover. We're seeing that kind of results of our efforts that we invested in last year. We're encouraged by the performance of the business. Yeah. With respect to the process, we're on schedule. What we said is we're, and continue to say is we're highly encouraged by the interest in the asset. We would expect to have an announcement probably by the end of the year, no later than the end of the year, on where we are in that process. Right. Okay. Can we talk a little bit about your little bit longer-term targets? They were longer term when you got here. 2027, targeting revenue of $940 million-$980 million. Third, Pavement Technologies, as you mentioned. Two-thirds from Performance Materials. EBITDA in that $350 million-$370 million range and margins of 36%-39%. Seems like you're on track, but just any thoughts, any nuances on that goal as you think about it only one year away? I think one is we put those kind of two-year projections out there. We're encouraged by where we are - Yeah. - versus the kind of transformation of the company that we talked about on the onset. We feel like we've got good momentum there. I'll let Phil talk about performance versus the specific targets, but we feel really good about where we are in the business. We do know that we're going to have to update those financial metrics. Yes. We anticipate. We got five minutes left. Yeah. We won't update those today. However, we would anticipate an investor day sometime in the first half of next year to update some of the progress. I think some of the things that investors and folks that are interested in this story should look forward to is how's our progress on some of the growth pathways, including filtration. How are we doing at sustaining and building on our strong position in automotive, and how's that whole market evolving? How is the sort of Evotherm adoption story happening? Those are sort of the things that we stay focused on. Obviously, we're working on a lot of other things around the company, but those are three things that I think will move the financial metrics. Yeah. I think the internal theme, and we're trying to display this externally as well, is we're doing exactly what we said we were going to do. We would expect, assuming an announcement sometime this year with APT, start the beginning of 2027 as new Ingevity. Yeah. As Dave said, we are executing to our strategy and our plan. A quick follow-up question from Bloomberg or the webcast. Just curious on how you think about acquisitions going forward. New CFO and new thoughts. It is part of the growth potential for a lot of companies in materials and chemicals. Obviously, you're probably not ready to do any right now, but your balance sheet looks pretty good. How do you think about acquisitions Yeah. longer term, just strategically? Yeah. I think for us right now, we've been very intentional about saying, in terms of capital allocation priorities, share repurchase and debt repay down are definitely 1A and 1B. I think we've, to Phil's point, done exactly what we said we're going to do there. I think there's a few drivers for that in terms of deprioritizing M&A for right now. One is we want to get the company in a more financially stable position. We're levered a bit high for what we'd like to be at. We were at 4x at one point. Now we're much closer to our target range. I think we're 2.6 or something like that. Yes. We just really wanted a chance to let the quality of the underlying businesses show themselves, I think that's what's happened over the last few quarters. Going forward, we expect more of the same. We will generate a lot of cash, and so that theme or opportunity to do some M&A, I do think M&A will have a place in Ingevity's future, but just not in the next, I'd say, year or so. If I had an ideal target, it'd be something smaller in the filtration space, perhaps to accelerate our own organic efforts. That might be something of interest to us. I think we're really excited about our organic playbook, and we want to give that some time to play out. In terms of the balance sheet, you're aiming to have roughly $1 billion of deployable cash, when you set the plan, over the next two years. You're within that leverage target of 2.5x, CapEx $60 million, you want to sort of buy back $300 million of stock over the next couple of years. Just any update there in terms of - Phil, why don't you take that one? - getting to that goal. Well, again, we're doing what we said we would do. Through our Q1 earnings release, we're around $70 million bought back out of that $300. What we did say is a minimum of at least $300. When we think about the balance sheet going forward, we aim to be within the 2- 2.5x range for leverage. We're going to obviously prioritize allocating capital to organic growth opportunities. We disclose that in the strategic portfolio update, around $60 million a year, and the rest we'll buy back shares and return cash to shareholders. Right. The goal is to get the balance sheet strong and very flexible. There was another follow-up question on, in February 2024, you had an agreement to try to get into the battery space or a licensed technology. Any update on, I think that was with CHASM Advanced Materials, as I recall. Any update there? I think that CHASM. Carbon nanotubes, was it? Yeah. Yeah. We've put a few bets out there in energy storage. Yeah. I think it is important for us to participate in that space because it's a growing space for the world. I think activated carbon has an important role to play. We put a few bets out there. I describe them as more exploratory and R&D in nature. The two that we've been most public about are our partnership with Nexeon. Nexeon. The silicon anode provider, and also CHASM, who's a carbon nanotube supplier. Yeah. We're encouraged by both. They're obviously farther out there, and it's a very competitive and dynamic space. Nonetheless, I think putting a few bets out there makes sense. We don't see them, and they weren't reflected in the kind of financial - Right - projections we put out there. To the extent that those companies are successful, we will be successful with them. Right. Then, just to wrap it up a little bit, you have 2026 guidance out there, $370 million-$395 million in EBITDA, a billion or so in sales, and you gave us an EBITDA margin range. You talked about auto a little bit. A lot of companies have suggested it's sluggish thus far here through 2Q. Just any thoughts on the trends and, obviously, the war is very difficult to incorporate in anybody's guidance these days. Yes. Any thoughts on maybe the upper end of the range, lower end of the range, what sort of helps you get to one point or the other? How did I know we'd get a guidance question, Mike? God, you put it in at the last minute. I think for us, one, we came out Q1 very strong, some outperformance there. We talked about the reasons why. In terms of how we think about the guidance for the remainder of the year, we'll be announcing in July, I think it is. Yes, July. I think the one thing to look at is some of those trends that we talked about, for example, hybrids. We think that they're here to stay. That will provide us, even within a flattish auto environment, some upside from a higher value product mix perspective. I think that is encouraging for us as we work with those customers on new hybrids and new solutions in that area. I think that, and knock on wood. Yeah. Paving season is upon us, so hopefully no rain in those regions that are doing paving. That has held us back a little bit in the previous years. I think paving season's off to a good start so far. Those are some things I'd say. What would you say? No, it's well said. Okay, thanks. Well, great. I think that's it for me. We're right on time here. Thank you very much, David. If you have any closing remarks or thoughts, we'd be happy to close it here. No, again, thanks again to the Wells team. Always great to be here. I think you can hopefully hear it from us that it's an exciting time at Ingevity. We feel like we've got momentum. We're really in the midst of this transformation. We're through most of the portfolio transformation. We've got some interesting growth pathways and a refreshed leadership team that's highly energized.