Core Insights - Ingevity reported total sales of $1.3 billion in 2025, an 8% decline year-over-year, while adjusted EBITDA increased by approximately 10% to $398 million, and diluted adjusted EPS rose by 30% to $4.55 [1][7][8] Financial Performance - The company achieved adjusted EBITDA of $398 million, with a margin expansion of 500 basis points to 30.8% [9] - Free cash flow reached $274 million, the highest level in the past five years, and exceeded previous guidance [9][10] - A net loss of $167 million was reported on a GAAP basis, primarily due to $337 million in pre-tax special charges, including a goodwill impairment of $184 million [7][9] Segment Performance - Performance Materials sales remained flat at $607 million, with an EBITDA margin of 53.8% despite lower automotive production [11] - Performance Chemicals saw a total segment EBITDA increase of $45 million year-over-year, with combined segment EBITDA margin expanding to 13.5% from 4% [13] - Advanced Polymer Technologies (APT) sales declined by 15% in 2025, with segment EBITDA falling by 18% due to weak demand in automotive and industrial markets [15] Strategic Actions - On January 1, 2026, Ingevity completed the sale of its North Charleston CTO refinery and most of its Industrial Specialties product line to Mainstream Pine Products, aimed at reducing portfolio volatility and enhancing profitability [2][6] - The company is actively reshaping its portfolio, initiating sales processes for APT and Road Markings, with expectations of interest in both segments [16] 2026 Guidance - For 2026, Ingevity guided adjusted EPS of $4.08 to $5.20, sales of $1.1 billion to $1.2 billion, and adjusted EBITDA of $380 million to $400 million [5][17] - Free cash flow guidance excludes approximately $95 million in expected litigation payments, with plans for continued share repurchases totaling $300 million through 2027 [18] Market Outlook - The company anticipates low single-digit sales growth in Performance Materials and mid-single-digit growth in Performance Chemicals, with EBITDA margins in the mid-teens [18] - Long-term market drivers include potential emissions regulations in China and India, with a focus on higher-value filtration applications expected to expand over the next few years [20]