The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: So I guess the first one would just be on the Performance Chemical business. The margins came in really strong. And I know there's seasonality,
but it looked like the improvement was kind of bigger than the usual seasonal norm. And that's, I guess, despite some planned downtime. So I
guess, can you help us to understand what drove that or what some of the fundamentals are that kind of gave you that margin lift? And how we
should be thinking about the margins as they progress into 3Q?
Michael P. Smith - Ingevity Corporation - Executive VP and President of Performance Chemicals, Strategy & Business Development
I think primarily, it's an increased positive mix within the business. As you could see, the Engineered Polymer business had another terrific quarter.
And then we've got the pavement business, which continued to grow in much the way we anticipated it. So that's naturally going to be delivering
that ongoing positive margin. That's very consistent with our overall strategy to optimize the results of the segment.
Question: John Patrick McNulty - BMO Capital Markets Equity Research - Analyst
: And then just as a follow-up, when we look at the free cash that you've been generating, I mean, the leverage looks like it's going to be down to
2x by the end of the year, maybe even a little bit below that. I guess, can you speak to the capital uses? And if we can see maybe more cash going
either into M&A or into buybacks? I guess, how would you characterize that now that you're getting toward the low end of your kind of debt targets?
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JULY 29, 2021 / 2:00PM, NGVT.N - Q2 2021 Ingevity Corp Earnings Call
Question: Paretosh Misra - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: I guess as a follow-up to last question, and I realize it's too early to think about next year's CapEx. But given you're working on several growth
initiatives, any larger internal investment opportunity that you have identified that looks attractive?
Question: Paretosh Misra - Joh. Berenberg, Gossler & Co. KG, Research Division - Analyst
: And then in Engineered Polymers, what was the bigger growth driver? Was it pricing or volumes?
Michael P. Smith - Ingevity Corporation - Executive VP and President of Performance Chemicals, Strategy & Business Development
It was volumes. The team has really done a great job moving price.
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