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Q4 2024 Earnings February 2025 1
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Forward Looking Statements This presentation contains certain "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Such forward- looking statements include statements (covered by words like “expects,” “estimates,” “anticipates,” “may,” “could,” “believes,” “feels,” “plans,” “intends,” “outlook” or similar words or expressions, for example) which relate to earnings, growth potential, operating performance, events or developments that we expect or anticipate will or may occur in the future. Although forward-looking statements are believed by management to be reasonable when made, they are subject to certain risks, uncertainties and assumptions, and our actual performance or results may differ materially from these forward-looking statements. Additional information regarding risks, uncertainties and assumptions relating to Innospec and affecting our business operations and prospects are described in Innospec’s Annual Report on Form 10-K for the year ended December 31, 2023, Innospec’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2024 and other reports filed with the U.S. Securities and Exchange Commission. You are urged to review our discussion of risks and uncertainties that could cause actual results to differ from forward- looking statements under the heading "Risk Factors” in such reports. Innospec undertakes no obligation to publicly update or revise any forward- looking statements, whether as a result of new information, future events or otherwise. ©2024 Innospec Inc. 2
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Use of Non-GAAP Financial Measures The information presented in this presentation includes financial measures that are not calculated or presented in accordance with Generally Accepted Accounting Principles in the United States (GAAP). These non-GAAP financial measures comprise adjusted EBITDA, income before income taxes excluding special items, net income excluding special items and related per share amounts together with net cash. Adjusted EBITDA is net (loss)/income per our consolidated financial statements adjusted for the exclusion of interest (income)/expense, net, income taxes, depreciation and amortization, pension scheme settlement charge, recovery of historical pension costs, foreign currency exchange (gains)/losses, legacy costs of closed operations, adjustment to fair value of contingent consideration and acquisition related costs. Income before income taxes, net income and diluted EPS, excluding special items, per our consolidated financial statements are adjusted for the exclusion of settlement charge on UK pension scheme buy out, adjustment of income tax provisions, amortization of acquired intangible assets, recovery of historical pension costs, foreign currency exchange (gains)/losses, adjustment to fair value of contingent consideration, legacy costs of closed operations, settlement of historical tax audits, impact of internal reorganizations and acquisition related costs. Net cash is cash and cash equivalents less total debt. The Company believes that such non-GAAP financial measures provide useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, these non-GAAP measures address questions the Company routinely receives from analysts and investors and the Company has determined that it is appropriate to make this data available to all investors. While the Company believes that such measures are useful in evaluating the Company’s performance, investors should not consider them to be a substitute for financial measures prepared in accordance with GAAP. In addition, these non-GAAP financial measures may differ from similarly- titled non-GAAP financial measures used by other companies and do not provide a comparable view of the Company’s performance relative to other companies in similar industries. Management uses adjusted EPS (the most directly comparable GAAP financial measure for which is GAAP EPS) and net income excluding special items and adjusted EBITDA (the most directly comparable GAAP financial measure for which is GAAP net income) to allocate resources and evaluate the performance of the Company’s operations and has provided a reconciliation of adjusted EBITDA and net income excluding special items, and related per share amounts, to GAAP net (loss)/income in our earnings release. ©2024 Innospec Inc. 3
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Earnings Conference Call Agenda Introduction David Jones - VP, General Counsel Business Commentary Patrick S. Williams - President & CEO Financial Performance Ian Cleminson - Executive Vice President & CFO Questions & Answers Patrick S. Williams and Ian Cleminson 1 2 3 4 ©2024 Innospec Inc. 4
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As expected, Oilfield Services continued at lower activity levels in Latin America Core business remains strong Summary of 4th Quarter Performance Performance Chemicals revenue up 23 percent; operating income up 14 percent with improved gross margin Fuel Specialties revenue up 5 percent; operating income up 7 percent with improved gross and operating margin GAAP loss per share of $2.80 driven by non- cash buyout of pension plan Adjusted non-GAAP EPS of $1.41 Q4 ©2024 Innospec Inc. 5 Strength in Performance Chemicals and Fuel Specialties continued to offset lower results in Oilfield Services Balance sheet has $289.2 million in net cash Continued capital allocation flexibility
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Financial Performance 6
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Q4 2024 Consolidated Results ($ MM) ©2024 Innospec Inc. 7 Q4 2023 Q4 2024 • Revenue down 6 percent • Gross margin down 2.3 percentage points • Operating income down 8 percent • Adjusted EBITDA down 8 percent • Adjusted EPS of $1.41
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Q4 2024 Performance Chemicals ($ MM) ©2024 Innospec Inc. 8 • Revenue up 23 percent • Acquisition growth of 7 percent • Volumes up 17 percent • Price/mix down 2 percent • Gross margin up 1.4 percentage points • Operating income up 14 percent Q4 2023 Q4 2024
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Q4 2024 Fuel Specialties ($ MM) ©2024 Innospec Inc. 9 Q4 2023 Q4 2024 • Revenue up 5 percent • Volumes up 9 percent • Price/mix down 5 percent • Gross margin up 1.5 percentage points • Operating income up 7 percent
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Q4 2024 Oilfield Services ($ MM) ©2024 Innospec Inc. 10 Q4 2023 Q4 2024 • Revenue down 40 percent on lower Latin America activity • Core business remains strong • Gross margin down 7.9 percentage points on weaker sales mix • Operating income down 59 percent
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Q4 2024 Corporate Items ($ MM) ©2024 Innospec Inc. 11 Q4 2023 Q4 2024 • Corporate costs down; prior year includes $1.3 million in acquisition costs • Full year adjusted effective tax rate of 26.4 percent • Full year 2025 tax rate expected to be 27.0 percent
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Q4 2024 Balance Sheet ($ MM) ©2024 Innospec Inc. 12 Q4 2023 Q4 2024 • Operating cash inflow of $25.7 million • Capital expenditures of $20.6 million • Net cash balance of $289.2 million
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Concluding Comments 13
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Summary of 4th Quarter Performance ©2024 Innospec Inc. 14 Performance Chemicals revenue up 23 percent; Operating income up 14 percent with improved gross margins Fuel Specialties revenue up 5 percent; Operating income up 7 percent with improved gross and operating margins As expected, Oilfield Services continued at lower activity levels in Latin America; Core business remains strong Strong pipeline of technology-based, organic growth opportunities 2025 outlook remains for full year growth in Performance and Fuels and sequential quarterly recovery in Oilfield $289 million net cash on balance sheet to pursue further M&A, organic investment, dividend growth and share repurchases
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Q&A 2/18/2025 ©2024 Innospec Inc.
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Final Comments ©2024 Innospec Inc. 16 Thank You for Your Continued Support May 2025 Sun Mon Tue Wed Thu Fri Sat 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Q1 2025 Results Schedule • May 8th – Results Release After Close • May 9th – Conference Call