NORTH CHARLESTON, S.C. - Ingevity Corporation (NYSE:NGVT) has undergone a significant leadership change as John Fortson has stepped down from his roles as president, chief executive officer, and board member, effective Wednesday. Luis Fernandez-Moreno, an experienced executive in the specialty chemicals industry, has been appointed as the interim president and CEO while the company searches for a permanent successor.
Jean Blackwell, chair of the board of directors, expressed gratitude for Fortson's nine-year tenure, during which Ingevity became a standalone public company, expanded its global reach, and established leadership in key markets. Fortson reciprocated with thanks for the opportunity to serve the company and extended his best wishes for its future.
Fernandez-Moreno, who has been with Ingevity's board since its 2016 spinoff, brings a wealth of experience to the interim role. His career spans over four decades, including leadership positions at Ashland (NYSE:ASH) Inc. and Arch Chemicals Inc., and a long tenure at Rohm & Haas Company. He also serves on the board of Select Water Solutions Inc. and holds a Bachelor of Science in chemical engineering and a management certificate from Wharton.
In his statement, Fernandez-Moreno acknowledged the company's recent strategic transformations and voiced his commitment to building on the progress made under Fortson's leadership. The board has initiated a search for a permanent president and CEO, engaging a leading executive search firm to assist.
Ingevity, known for its performance materials, advanced polymer technologies, and performance chemicals, is set to release its third-quarter earnings at the end of October and will discuss the results in a live webcast the following day.
This news is based on a press release statement from Ingevity Corporation. The company operates in over 30 countries and employs around 1,700 people, providing solutions that purify, protect, and enhance the world around us. Its common stock trades on the New York Stock Exchange.
In other recent news, Ingevity Corporation reported mixed financial results for a recent quarter, with a net loss of $283.7 million, primarily due to restructuring charges, CTO resale losses, and a noncash goodwill impairment charge. The company is actively implementing a repositioning strategy for its Performance Chemicals segment and anticipates a decline in leverage to around 3.5 times by year's end. Ingevity also revised its full-year sales guidance to be between $1.4 billion and $1.5 billion, with an adjusted EBITDA guidance between $350 million and $360 million.
In an effort to reduce costs, the company plans to relocate oil refining operations to North Charleston and close its Crossett site. Despite these changes, Ingevity's Performance Materials delivered strong margins, and its Advanced Polymer Technologies saw volume growth. The company aims to achieve a consolidated margin in the mid to high 20% range and generate over $150 million a year in free cash flow.
Meanwhile, BMO Capital Markets revised its price target for Ingevity, decreasing it to $42 from the previous $45, while maintaining a Market Perform rating. The revised target reflects a cautious outlook on the potential earnings from the Performance Chemicals segment by 2025 and the extent to which free cash flow may recover. Ingevity expects to transition to a lower-cost CTO by the second quarter of next year and anticipates the Performance Chemicals segment to return to profitability in 2025.
InvestingPro Insights
As Ingevity Corporation (NYSE:NGVT) navigates this leadership transition, InvestingPro data provides additional context to the company's current financial position. With a market capitalization of $1.36 billion, Ingevity faces some challenges reflected in its recent performance metrics.
The company's revenue for the last twelve months as of Q2 2024 stood at $1.55 billion, with a concerning revenue growth decline of 11.01% over the same period. This downward trend is even more pronounced in the quarterly figures, with Q2 2024 showing an 18.93% decrease in revenue compared to the previous year.
Despite these headwinds, InvestingPro Tips highlight that analysts predict Ingevity will be profitable this year, which could be a positive sign for investors. This aligns with another InvestingPro Tip indicating that net income is expected to grow this year, potentially reversing the current unprofitable status over the last twelve months.
It's worth noting that Ingevity's stock price movements have been quite volatile, which may present both risks and opportunities for investors as the company transitions to new leadership. The company's Price to Book ratio of 4.78 suggests it's trading at a high multiple, which investors should consider in light of the recent financial performance and leadership changes.
For those seeking a more comprehensive analysis, InvestingPro offers additional tips and insights that could be valuable in assessing Ingevity's future prospects during this pivotal time.
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