Pavement Technologies - s23.q4cdn.com · Pavement Technologies Well-positioned for value creation Significant opportunity for increased warm mix adoption Further runway for growth

Pavement Technologies

April 16, 2020

Mike Smith, EVP & President, Performance Chemicals

Andrew Crow, VP, Pavement Technologies

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Disclaimer: This presentation contains “forward-looking statements” within the meaning of Securities Exchange Act of 1934, as

amended, and the Private Securities Litigation Reform Act of 1995. Such forward looking statements generally include the words “may,” “could,” “should,” “believes,” “plans,” “intends,” “targets,” “will,” “expects,” “suggests,” “anticipates,” “outlook,” “continues,” “forecast,” “prospect,” “potential” or similar expressions. Forward-looking statements may include, without limitation, expectedfinancial positions, results of operations and cash flows; financing plans; business strategies and expectations; operating plans; impact of coronavirus; synergies and the potential benefits of the acquisition of Perstorp Holding AB’s Capa® caprolactone business (the “acquisition”); capital and other expenditures; competitive positions; growth opportunities for existing products; benef its from new technology and cost-reduction initiatives, plans and objectives; markets for securities and expected future repurchase of shares, including statements about the manner, amount and timing of repurchases. Like other businesses, Ingevity is subject to risks anduncertainties that could cause its actual results to differ materially from its expectations or that could cause other forward-looking statements to prove incorrect. Factors that could cause actual results to materially differ from those contained in the forward-looking statements, or that could cause other forward-looking statements to prove incorrect, include, without limitation, risks that theexpected benefits from the acquisition will not be realized or will not be realized in the expected time period; the risk that the acquired business will not be integrated successfully; significant transaction costs; unknown or understated liabilities; general economic and financial conditions; international sales and operations; currency exchange rates and currency devaluation; compliance with U.S. and foreign regulations; competition from infringing intellectual property activity; attracting and retaining key personnel; changes in trade policy, including the imposition of tariffs; the impact of the United Kingdom’s withdrawal from the European Union; conditions in the automotive market or adoption of alternative technologies; worldwide air quality standards; a decrease in government infrastructure spending; declining volumes and downward pricing in the printing inks market; the limited supply of crude tall oil (“CTO”); lack of access to sufficient CTO; access to and pricing of raw materials; competition from producers of alternative products and new technologies, and new or emerging competitors; a prolonged period of low energy prices; the provision of services by third parties at several facilities; natural disasters, such as hurricanes, winter or tropical storms, earthquakes, floods, fires; the adverse effect of the coronavirus on our global sales and operations, demand for our automotive carbon products, and our manufacturing facilities and supply chain; other unanticipated problems such as labor difficulties including renewal of collective bargaining agreements, equipment failure or unscheduled maintenance and repair; protection of intellectual property and proprietary information; information technology security breaches and other disruptions; government policies and regulations, including, but not limited to, those affecting the environment, climate change, tax policies, tariffs and the chemicals industry; and lawsuits arising out of environmental damage or personal injuries associated with chemical or other manufacturing processes. These and other important factors that could cause actual results or events to differ materially from those expressed in forward-looking statements that may have been made in this document are and will be more particularly described in our filings with the U.S. Securities and ExchangeCommission, including our Form 10-K for the year ended December 31, 2019 and our other periodic filings. Readers are cautioned not to place undue reliance on Ingevity’s projections and forward-looking statements, which speak only as the date thereof. Ingevity undertakes no obligation to publicly release any revision to the projections and forward-looking statements contained in this announcement, or to update them to reflect events or circumstances occurring after the date of this announcement.

Non-GAAP Financial Measures: This presentation includes certain non‐GAAP financial measures intended to supplement,

not substitute for, comparable GAAP measures. Reconciliations of non‐GAAP financial measures to GAAP financial measures are provided within the Appendix to this presentation. Investors are urged to consider carefully the comparable GAAP measures and the reconciliations to those measures provided.

▪ Joined Ingevity in 2016

▪ 23 years at FMC Corporation, positions included:

▪ Vice President, Health and Nutrition

▪ Division General Manager Hydrogen Peroxide and Active Oxidants

▪ Director of Business Planning and Strategy

▪ Global Business Director, Process Additives, Manchester England

▪ Technical Sales Positions at Hercules in Paper Chemicals and Resins

▪ Bachelor of Arts degree in chemistry from the University of Virginia

▪ Master of Business Administration degree from the University of Michigan

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Mike Smith

Executive Vice President and President, Performance Chemicals

Andrew Crow

Vice President, Pavement Technologies

▪ Joined Ingevity in 1991

▪ 28 Years of pavement industry experience, positions included:

▪ Vice President, Pavement Technologies

▪ Business Director, Pavement Technologies

▪ Business Manager, Pavement Technologies

▪ EMEA Product Manager, Pavement, Brussels, Belgium

▪ US Product Manager, Pavement Technologies

▪ Sales Representative, Polychemicals

▪ Bachelor of Arts degree in chemistry from Clemson University

Strong, Experienced Business Leadership

Company Overview

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1) We acquired the Engineered Polymers division via the acquisition of the Capa Caprolactone business from Perstorp Holdings AB on February 13, 2019. This

amount represents Ingevity’s as-reported 2019 for the remainder of the year.

2) Not disclosed due to NDAs and confidentiality.

Performance Materials

Performance Chemicals

Carbon Technologies

Pavement Technologies

Oilfield Technologies

Industrial Specialties

Engineered Polymers

2019 Sales $491 million $183 million $111 million $386 million $122 million(1)

2019 Segment EBITDA

$213 million $183 million

Market Position

#1 in automotive#1 in Preservation,

Recycling and Warm Mix

#1 or #2 in oil-based muds

#1 or #2 #1

Applications▪ Automotive

▪ Process purification

▪ Pavement preservation

▪ Recycling

▪ Evotherm® technologies

▪ Well Service Additives

▪ Production and Downstream

▪ Adhesives

▪ Agrochemicals

▪ Lubricants

▪ Inks

▪ Intermediates

▪ Coatings

▪ Resins

▪ Elastomers

▪ Adhesives

▪ Bioplastics

Select Competitors

Select Customers

(2)

Biorefinery

DerivativesEnd Uses

Renewable forests

Intermediates

(CTO)

Pine Chemicals Value ChainEnhancing value through derivatization

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Biorefinery

Tall Oil Rosin

Biofractions

Tall Oil Fatty Acid

▪ Pavement

▪ Oilfield

▪ Lubricants

▪ Adhesives

▪ Inks

▪ Paper size

▪ Rubber

▪ Oilfield

▪ Pavement

▪ Sterols

▪ Pavement

▪ Agchem

▪ Dyes

Lignin

Derivatization

Specialty

Specialty

Derivatization

Derivatization

Specialty

Derivatization

Specialty

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Pavement TechnologiesWell-positioned for value creation

Significant opportunity for increased warm mix adoption

Further runway for growth in global markets across all product lines

2-3x GDP business driven by technology adoption and infrastructure spending

Deep customer relationships based on technical expertise and custom solutions

Technology leader in asphalt pavement additives

-

50

100

150

200Asphalt additives derived from tall oil fatty acid, lignin, amines, surfactants and polymers

▪ Evotherm® technologies: additives for road construction in the fast-growing category of warm mix asphalt

▪ Pavement preservation: emulsifiers for specialty ultra-thin maintenance layers

▪ Pavement reconstruction and recycling: emulsifiers for rehabilitating road bases

Business Overview – Pavement Technologies

2019 Sales - $183M

By End Application By Region

Business Description Business Unit Sales ($M)

CAGR +8%

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North

America

81%

South

America

4%

EMEA

8%

Asia Pac

7%

Preservation & Reconstruction

65%

Evotherm35%

Customers Competitors

▪ Over 500 customers in 60 countries

▪ Top 10 customers represent 37% of sales

▪ Very strong margins

94%5%1% =

AggregateAsphaltIngevity Additive

Higher performing, more sustainable road

▪ Our products are used at low dosages but deliver an impressive impact on total road performance and constructability.

▪ Our products are used in multiple places in the paving process and are blended into the asphalt which is mixed with the aggregate and then paved.

▪ Faster, easier construction

▪ Cost reduction

▪ Emissions reduction

▪ Longer-lasting roads

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Composition of a RoadOur additives deliver significant performance and value

+ +

Recycling Technology

Maintain the road:

Build the road:

Products for Every Layer of the Road Adding value from top to bottom

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Reconstruct the road: Morlife® Adhesion promoters

Indulin® Asphalt emulsifiers and additives

Onyx®Specialty seal coat

Indulin®Asphalt emulsifiers and additives

Ralumac® Micro surfacing system

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Standard hot-mix asphalt

▪ Reduces emissions 40-50% by lowering paving temperatures 50-100 ºF

▪ Lowers fuel use by 30%-40%

▪ Allows 20-40% higher recycle contents

▪ Creates longer-lasting, higher performing roads

▪ Extends paving season 1-2 months (depending on region)

▪ Over 375,000 miles paved worldwide

Evotherm warm-mix asphalt

Evotherm Warm Mix Asphalt Technology Delivering a wide range of quantifiable benefits(1)

(1) Management Estimates

▪ Ultra-thin protective layers paved on top of roads

▪ Water-based asphalt emulsion technologies paved at ambient temperatures

▪ Reduces environmental emissions and improves worker safety

▪ Customized solutions based on climate and geography

▪ Specialized technical support with global resources

▪ Roads put back in service very quickly

Pavement PreservationExtending pavement life, reducing costs and maintaining safe roads

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$240,000 per lane mile savings over

30 years(1)

$8,000 per lane mile savings per

year(1)

OR


Pavement ReconstructionCold Recycling

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▪ Reduces life cycle cost of pavement by milling up and reusing the existing roadway

▪ 100% recycled asphalt pavement

▪ Lowest environmental emissions; dramatic fuel reduction from reducing delivery trucks

▪ Growth in US, Canada, China, South America

▪ Excellent for remote areas far from mixplant

Injection of asphalt emulsion with Ingevity additives

Pavement Technologies Strategies

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▪ Create demand by marketing technologies to DOTs

▪ Partner with contractors for technology acceptance

▪ Leverage technical depth to ensure new product success

Market

Development

▪ Continue to drive Evotherm warm mix asphalt adoption

▪ Accelerate growth and evolution of cold recycling

▪ Create new market space with new technologies that pull

through Ingevity chemistry

Innovation

▪ Local technical support laboratories in key markets

▪ Localized product development for target countries

▪ Create pipelines to ministries of transportation

Geographic

Expansion


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Market

Development





Innovation




Geographic

Expansion

Asphalt

refineries

Paving

contractors

Departments of

transportation

Market Development Strategy Providing value throughout the chain

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Deep market knowledge · Technical expertise · Innovative solutions

Ingevity Technical Marketing

Evotherm Warm-Mix Value PropositionSignificant, quantifiable benefits for road construction

▪ Total Evotherm value delivered is often double the input cost

▪ Numerous benefits can be applied in combination

▪ 30-40% lower fuel use

▪ 90% reduction in worker exposure to fumes

▪ Extends paving season by 1-2 months

▪ Patented technology

$1500

0

Sustainability benefits

Quantifiable value

Value created per lane mile

$500

$1000

Evothermcost per lane mile

Recycling: milled asphalt, tires

Materials savings

Increased asphalt plant production

Faster construction

Cold weather paving

Extended haul distance

Energy savings

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Emissions reduction

Worker safety

$2000



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Market

Development





Innovation




Geographic

Expansion

Innovation StrategyAccelerating speed and scale

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Rapid product development cycle

▪ Chemistry customized around regional customer needs

▪ Low capital requirements for production with minimal risk for new chemistries

▪ Quick progression from lab scale to plant production (often within a month)

▪ Drive industry-wide adoption through DOTs and industry associations

Recent product launches:

▪ Evoflex® asphalt rejuvenators product line

▪ Restores old, oxidized asphalts

▪ Complements Evotherm by allowing extremely high recycled contents

▪ Onyx® Ultra thin, fast-drying sealcoat

▪ Very black, durable surface

▪ Restores frictional characteristics to road

▪ Used on highways and airports around the world

Innovative Technology AdoptionCase Study: Evotherm

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Evotherm warm-mix asphalt technology was utilized for emergency reconstruction in Flagler County, FL, after Hurricane Matthew.

▪ Only main evacuation route for residents had been completely destroyed

▪ Governor wanted road opened again in 30 days in case of a second hurricane

▪ Evotherm provided workability needed to accelerate paving speed

▪ Reopened in 14 days – less than half the projected construction time

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Innovative Technology AdoptionCase Study: Cold In-Place Recycling

Cold in-place recycling used near Roswell, NM instead of normal hot-mix

▪ Reopened to traffic 40% faster than traditional construction

▪ In-place recycling allowed a reduction of 1,500 truckloads of materials

▪ 50% lower overall cost

▪ 90% reduction in jobsite emissions(1)



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Market

Development





Innovation




Geographic

Expansion

Geographic Expansion StrategyTechnical laboratories support key global markets

Shanghai ChinaAsia Pacific

Chennai, India South Asia

Charleston, SC & Tulsa, OKNorth & South America

Lille, FranceEurope-Middle East-Africa

▪ Industry experts provide support with local market knowledge

▪ Develop relationships and influence with national DOTs

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Geographic Expansion StrategyCase Studies

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Evotherm: Remote Brazil near Amazon rainforest

▪ Lowered production temperature by 100°F to improve fuel use by 40%

▪ Increased the production rate to make better use of rare dry days in the rainforest

▪ Optimized road compaction performance for contractor

Onyx: Changsha, China Airport

▪ Runway was cracking, permeability issues

▪ Safety was starting to be compromised

▪ Onyx allowed fast, nighttime construction and reopening for morning flights

Balanced Global Growth

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0

20

40

60

80

100

120

140

160

10

15

20

25

30

35

40

45

507.7% CAGR 8.2% CAGR

▪ Strong, stable long-term growth in North America driven by accelerating technology adoption

▪ Rest of world results variable but clear growth trend over time with excellent long-term upside

North America Sales ($M) Rest of World Sales ($M)

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Pavement TechnologiesWell-Positioned for Value Creation

Significant opportunity for increased warm mix adoption

Further runway for growth in global markets across all product lines

2-3x GDP business driven by technology adoption and infrastructure spending

Deep customer relationships based on technical expertise and custom solutions

Technology leader in asphalt pavement additives

Documents

Pavement Technologies - s23.q4cdn.com · Pavement Technologies Well-positioned for value creation Significant opportunity for increased warm mix adoption Further runway for growth