Company: NGVT
Filing Date: 2025-02-19
Form Type: 10-K
Source: 0001653477-25-000015
Chunk: 833

Company: Ingevity Corp
Filing Date: 2025-02-19
Form: 10-K
Item: Item 4
Chunk 833
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 currencies for which we have exchange rate exposure are the U.S. dollar versus the euro, the Japanese yen, the pound sterling, the Brazilian real, and the Chinese renminbi. In addition, certain of our domestic operations have sales to foreign customers. In the conduct of our foreign operations, we also make inter-company sales. All of this exposes us to the effect of changes in foreign currency exchange rates. Our earnings are therefore subject to change due to fluctuations in foreign currency exchange rates when the earnings in foreign currencies are translated into U.S. dollars. In some cases, to minimize the effects of such fluctuations, we use foreign exchange forward contracts to hedge firm and highly anticipated foreign currency cash flows. Our largest exposures are to the Brazilian real, the Chinese renminbi, and the euro. A hypothetical 10 percent adverse change, excluding the impact of any hedging instruments, in the average Brazilian real, Chinese renminbi, and euro to U.S. dollar exchange rates during the year ended December 31, 2024, would have decreased our net sales and income before income taxes for the year ended December 31, 2024, by approximately $18 million or one percent and $6 million or one percent, respectively. Comparatively, a hypothetical 10 percent adverse change in the average Brazilian real, Chinese renminbi, and euro to U.S. dollar exchange rates during the year ended December 31, 2023 would have decreased our net sales and income before income taxes for the year ended December 31, 2023, by approximately $20 million or one percent and $5 million or two percent, respectively.

Concentration of credit risk

The financial instruments that potentially subject Ingevity to concentrations of credit risk are accounts receivable. We limit our credit risk by performing ongoing credit evaluations and, when necessary, requiring letters of credit, guarantees, or collateral. Our largest customer as of December 31, 2024, had accounts receivable of $8.3 million and $7.5 million as of December 31, 2024 and 2023, respectively. Sales to our largest customer, which is in our Performance Materials segment, were approximately six percent of total net sales for the year ended December 31, 2024, and four percent for each of the years ended December 31, 2023, and 2022, respectively. Sales to the automotive industry, which represents our largest industry concentration, were approximately 40 percent of our consolidated Net sales. No customer individually