INNOSPEC INC.
For the period ended Sep 30, 2025. Filed Nov 5, 2025.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Sep 30, 2025 · Filed Nov 5, 2025
Extracted filing text, with the paragraph anchors used by the comparison.
See the whole filing, with its images and exhibitsContents
Item 2. Results of Operations
RESULTS OF OPERATIONS
The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services.
The following table provides sales, gross profit and operating income by reporting segment:
| Three Months EndedSeptember 30, | Nine Months EndedSeptember 30, | |||
|---|---|---|---|---|
| (in millions) | 2025 | 2024 | 2025 | 2024 |
| Net sales: | ||||
| Performance Chemicals | $170.8 | $163.6 | $513.0 | $484.5 |
| Fuel Specialties | 172.0 | 165.8 | 507.4 | 509.3 |
| Oilfield Services | 99.1 | 114.0 | 302.0 | 384.8 |
| $441.9 | $443.4 | $1,322.4 | $1,378.6 | |
| Gross profit: | ||||
| Performance Chemicals | $25.8 | $36.1 | $91.6 | $110.0 |
| Fuel Specialties | 61.2 | 55.7 | 184.9 | 173.9 |
| Oilfield Services | 29.7 | 32.3 | 88.5 | 122.8 |
| $116.7 | $124.1 | $365.0 | $406.7 | |
| Operating income/(loss): | ||||
| Performance Chemicals | $9.2 | $20.0 | $43.3 | $62.3 |
| Fuel Specialties | 35.3 | 30.9 | 107.6 | 94.7 |
| Oilfield Services | 4.8 | 7.1 | 15.1 | 31.3 |
| Corporate costs | (18.2) | (11.8) | (56.8) | (49.6) |
| Adjustment to fair value of contingent consideration | 17.7 | (0.7) | 16.2 | (2.1) |
| Restructuring charge | (0.9) | — | (0.9) | — |
| Impairment of property, plant and equipment | (22.9) | — | (22.9) | — |
| Impairment of intangible assets | (19.1) | — | (19.1) | — |
| Profit on disposal of property, plant and equipment | — | 0.1 | 0.2 | 0.2 |
| Total operating income | $5.9 | $45.6 | $82.7 | $136.8 |
Three Months Ended September 30, 2025
The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the three months ended September 30, 2025, and the three months ended September 30, 2024:
| Three Months EndedSeptember 30, | ||||
|---|---|---|---|---|
| (in millions, except ratios) · 2025 · 2024 · Change | ||||
| Net sales: | ||||
| Performance Chemicals | $170.8 | $163.6 | $7.2 | +4% |
| Fuel Specialties | 172.0 | 165.8 | 6.2 | +4% |
| Oilfield Services | 99.1 | 114.0 | (14.9) | -13% |
| $441.9 | $443.4 | $(1.5) | -0% | |
| Gross profit: | ||||
| Performance Chemicals | $25.8 | $36.1 | $(10.3) | -29% |
| Fuel Specialties | 61.2 | 55.7 | 5.5 | +10% |
| Oilfield Services | 29.7 | 32.3 | (2.6) | -8% |
| $116.7 | $124.1 | $(7.4) | -6% | |
| Gross margin (%): | ||||
| Performance Chemicals | 15.1 | 22.1 | -7.0 | |
| Fuel Specialties | 35.6 | 33.6 | +2.0 | |
| Oilfield Services | 30.0 | 28.3 | +1.7 | |
| Aggregate | 26.4 | 28.0 | -1.6 | |
| Operating expenses: | ||||
| Performance Chemicals | $(16.6) | $(16.1) | $(0.5) | +3% |
| Fuel Specialties | (25.9) | (24.8) | (1.1) | +4% |
| Oilfield Services | (24.9) | (25.2) | 0.3 | -1% |
| Corporate costs | (18.2) | (11.8) | (6.4) | +54% |
| Adjustment to fair value of contingent consideration | 17.7 | (0.7) | 18.4 | n/a |
| Restructuring charge | (0.9) | — | (0.9) | n/a |
| Impairment of property, plant and equipment | (22.9) | — | (22.9) | n/a |
| Impairment of intangible assets | (19.1) | — | (19.1) | n/a |
| Profit on disposal of property, plant and equipment | — | 0.1 | (0.1) | n/a |
| $(110.8) | $(78.5) | $(32.3) | +41% | |
Performance Chemicals
| Change (%) | Americas | EMEA | ASPAC | Total |
|---|---|---|---|---|
| Volume | -1 | -3 | +2 | -2 |
| Price and product mix | -1 | +7 | -8 | +3 |
| Exchange rates | — | +7 | +2 | +3 |
| -2 | +11 | -4 | +4 |
Volumes for the Americas were down slightly as demand for our personal care products stabilized following a period of growth, combined with an adverse price and product mix due mostly to pricing erosion. The volume decline in EMEA was offset by a favorable price and product mix, primarily driven by higher demand for higher priced personal care products. ASPAC volumes were higher driven by increased demand for our personal care products, partly offset by an adverse price and product mix due to higher demand for lower priced products. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements.
Gross margin: the year over year decrease of 7.0 percentage points was primarily due to pricing erosion, higher demand for our lower priced products that contribute lower gross margins and the impact of some tariffs not passed on to customers.
Operating expenses: increase by $0.5 million year over year due to higher provisions for doubtful debts together with higher research and development expenses, being partly offset by lower provisions for performance-related remuneration accruals.
Fuel Specialties
| Change (%) | Americas | EMEA | ASPAC | AvGas | Total |
|---|---|---|---|---|---|
| Volume | -8 | -3 | -39 | +48 | -7 |
| Price and product mix | — | +14 | +21 | -18 | +7 |
| Exchange rates | — | +8 | +1 | — | +4 |
| -8 | +19 | -17 | +30 | +4 |
Sales volumes in all our regions decreased year over year due to decreased demand from customers. EMEA and ASPAC benefited from a favorable price and product mix due to an improved sales mix and disciplined pricing. AvGas volumes were higher than the prior year due to variations in the demand from customers, being partly offset by an adverse price and product mix due to an adverse customer mix. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements.
Gross margin: the year over year increase of 2.0 percentage points was driven by an improved sales mix from increased sales of higher margin products, together with disciplined pricing and reduced raw material and other inflationary pressures.
Operating expenses: the year over year increase of $1.1 million was due to higher research and development expenses and higher provisions for performance-related remuneration accruals.
Oilfield Services
Net sales: have decreased year over year by $14.9 million, or 13 percent. Sales in the Americas were higher year over year, being outweighed by lower sales in EMEA. The majority of our customer activity is concentrated in the Americas region.
Gross margin: the year over year increase of 1.7 percentage points was due to a favorable sales mix.
Operating expenses: the year over year decrease of $0.3 million was primarily due to lower provisions for performance-related remuneration accruals and lower amortization of acquired intangible assets, being partly offset by adverse changes to our doubtful debt provisions year over year.
Other Income Statement Captions
Corporate costs: the year over year increase of $6.4 million was primarily due to the prior year including a recovery of $8.4 million of historic pension costs, combined with increased costs in the current year for the additional investment in our IT infrastructure and the amortization of the group's new ERP system, being partly offset by lower provisions for performance-related remuneration accruals.
Adjustment to fair value of contingent consideration: the credit in the current year is $17.7 million (prior year an expense of $0.7 million) relating to the acquisition of QGP within our Performance Chemicals segment. See Note 11 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Restructuring charge: the charge in the current year is $0.9 million relating to our operations in South America within our Performance Chemicals segment.
Impairment of property, plant and equipment: the charge in the current year is $22.9 million relating to our Oilfield Services segment. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Impairment of intangible assets: the charge in the current year is $19.1 million relating to our Performance Chemicals and Oilfield Services segments. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Other net income/(expense): for the three months ended September 30, 2025 and 2024, included the following:
| (in millions) | 2025 | 2024 | Change |
|---|---|---|---|
| Net pension credit/(cost) | $(0.1) | $1.7 | $(1.8) |
| Loss/(profit) attributable to non-controlling interests | 0.2 | (0.9) | 1.1 |
| Foreign exchange gains/(losses) on translation | 0.5 | (7.1) | 7.6 |
| Foreign currency forward contracts gains/(losses) | 2.8 | 2.8 | — |
| $3.4 | $(3.5) | $6.9 |
Interest income/(expense), net: in the three months ended September 30, 2025 was $2.2 million of income compared to $2.7 million of income in the three months ended September 30, 2024, driven by lower interest rates and lower cash balances in the current year.
Income taxes: the effective tax rate was (12.2)% and 25.4% in the third quarter of 2025 and 2024, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 22.5% in 2025 compared with 24.6% in 2024. The 2.1% decrease in the adjusted effective rate was primarily due to the fact that a higher proportion of the Company’s profits are being generated in lower tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company’s operations and for planning and forecasting in subsequent periods.
The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:
| Three Months EndedSeptember 30, | ||
|---|---|---|
| (in millions) | 2025 | 2024 |
| Income before income taxes | $11.5 | $44.8 |
| Adjustment for stock compensation | 0.9 | 2.2 |
| Adjustment to fair value of contingent consideration | (17.7) | 0.7 |
| Impairment of acquired intangible assets | 19.1 | — |
| Impairment of property, plant and equipment | 22.9 | — |
| Legacy costs of closed operations | 1.0 | 1.0 |
| Adjusted income before income taxes | $37.7 | $48.7 |
| Income taxes | $(1.4) | $11.4 |
| Tax on stock compensation | (0.2) | (0.2) |
| Adjustment of income tax provision | — | (0.9) |
| Tax on adjustment to fair value of contingent consideration | — | 0.2 |
| Tax on impairment of acquired intangible assets | 5.1 | — |
| Tax on impairment of property, plant and equipment | 4.8 | — |
| Tax on legacy cost of closed operations | 0.2 | 0.2 |
| Adjustments to tax charge of prior periods | — | 1.3 |
| Adjusted income taxes | $8.5 | $12.0 |
| GAAP effective tax rate | (12.2)% | 25.4% |
| Adjusted effective tax rate | 22.5% | 24.6% |
Nine Months Ended September 30, 2025
The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the nine months ended September 30, 2025, and the nine months ended September 30, 2024:
| Nine Months EndedSeptember 30, | ||||
|---|---|---|---|---|
| (in millions, except ratios) · 2025 · 2024 · Change | ||||
| Net sales: | ||||
| Performance Chemicals | $513.0 | $484.5 | $28.5 | +6% |
| Fuel Specialties | 507.4 | 509.3 | (1.9) | -0% |
| Oilfield Services | 302.0 | 384.8 | (82.8) | -22% |
| $1,322.4 | $1,378.6 | $(56.2) | -4% | |
| Gross profit: | ||||
| Performance Chemicals | $91.6 | $110.0 | $(18.4) | -17% |
| Fuel Specialties | 184.9 | 173.9 | 11.0 | +6% |
| Oilfield Services | 88.5 | 122.8 | (34.3) | -28% |
| $365.0 | $406.7 | $(41.7) | -10% | |
| Gross margin (%): | ||||
| Performance Chemicals | 17.9 | 22.7 | -4.8 | |
| Fuel Specialties | 36.4 | 34.1 | +2.3 | |
| Oilfield Services | 29.3 | 31.9 | -2.6 | |
| Aggregate | 27.6 | 29.5 | -1.9 | |
| Operating expenses: | ||||
| Performance Chemicals | $(48.3) | $(47.7) | $(0.6) | +1% |
| Fuel Specialties | (77.3) | (79.2) | 1.9 | -2% |
| Oilfield Services | (73.4) | (91.5) | 18.1 | -20% |
| Corporate costs | (56.8) | (49.6) | (7.2) | +15% |
| Adjustment to fair value of contingent consideration | 16.2 | (2.1) | 18.3 | n/a |
| Restructuring charge | (0.9) | — | (0.9) | n/a |
| Impairment of property, plant and equipment | (22.9) | — | (22.9) | n/a |
| Impairment of intangible assets | (19.1) | — | (19.1) | n/a |
| Profit on disposal of property, plant and equipment | 0.2 | 0.2 | 0.0 | n/a |
| $(282.3) | $(269.9) | $(12.4) | +5% | |
Performance Chemicals
| Change (%) | Americas | EMEA | ASPAC | Total |
|---|---|---|---|---|
| Volume | +7 | -3 | +14 | +2 |
| Price and product mix | -4 | +9 | -1 | +3 |
| Exchange rates | — | +2 | +1 | +1 |
| +3 | +8 | +14 | +6 |
Higher sales volumes for the Americas were driven by increased demand for our personal care products, being partly offset by an adverse price and product mix due to pricing erosion and higher demand for our lower priced products. The volume decline in EMEA was offset by a favorable price and product mix, primarily driven by increased demand for our higher priced products. ASPAC volumes were higher driven by increased demand for our personal care products, being partly offset by an adverse price and product mix due to higher demand for lower priced personal care products. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements.
Gross margin: the year over year decrease of 4.8 percentage points was primarily due to pricing erosion, higher demand for our lower priced products and the impact of some tariffs not passed on to customers.
Operating expenses: increased by $0.6 million year over year due to higher selling expenses and higher research and development expenses, being partly offset by lower provisions for performance-related remuneration accruals.
Fuel Specialties
| Change (%) | Americas | EMEA | ASPAC | AvGas | Total |
|---|---|---|---|---|---|
| Volume | -4 | — | -26 | +9 | -4 |
| Price and product mix | +1 | +4 | +10 | -1 | +3 |
| Exchange rates | — | +2 | — | — | +1 |
| -3 | +6 | -16 | +8 | — |
Sales volumes in the Americas and ASPAC have decreased year over year due to decreased demand from customers, being partly offset by a favorable price and product mix due to an improved sales mix and disciplined pricing. Sales volumes in EMEA have remained constant year over year, combined with a favorable price and product mix due to an improved sales mix and disciplined pricing. AvGas volumes were higher than the prior year due to variations in the demand from customers, being partly offset by an adverse price and product mix due to an adverse customer mix. EMEA benefited from favorable foreign currency exchange rate movements.
Gross margin: the year over year increase of 2.3 percentage points was driven by an improved sales mix from increased sales of higher margin products, together with disciplined pricing and reduced raw material and other inflationary pressures.
Operating expenses: the year over year decrease of $1.9 million was primarily due to favorable movements for the provisions for doubtful debts.
Oilfield Services
Net sales: have decreased year over year by $82.8 million, or 22 percent, with the majority of our customer activity concentrated in the Americas region. Sales volumes in the current year were adversely impacted by the absence of production chemical activity in Mexico.
Gross margin: the year over year decrease of 2.6 percentage points was due to an unfavorable sales mix as our customer demand has weakened.
Operating expenses: the year over year decrease of $18.1 million was due to lower customer service costs and commissions related to the reduced demand from certain customers, together with lower provisions for performance-related remuneration accruals.
Other Income Statement Captions
Corporate costs: the year over year increase of $7.2 million was primarily due to the prior year including the recovery of $8.4 million of historic pension costs, together with increased provisions for environmental remediation in relation to legacy operations, the additional investment in our IT infrastructure and the amortization of the group's new ERP system, being partly offset by lower provisions for performance-related remuneration accruals.
Adjustment to fair value of contingent consideration: the credit in the current year is $16.2 million (prior year an expense of $2.1 million) relating to the acquisition of QGP within our Performance Chemicals segment. See Note 11 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Restructuring charge: the charge in the current year is $0.9 million relating to our operations in South America within our Performance Chemicals segment.
Impairment of property, plant and equipment: the charge in the current year is $22.9 million relating to our Oilfield Services segment. See Note 6 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Impairment of intangible assets: the charge in the current year is $19.1 million relating to our Performance Chemicals and Oilfield Services segments. See Note 5 of the Notes to the Condensed Consolidated Financial Statements for additional information.
Other net income/(expense): for the nine months ended September 30, 2025 and 2024, included the following:
| (in millions) | 2025 | 2024 | Change |
|---|---|---|---|
| Net pension credit/(cost) | $(0.2) | $5.0 | $(5.2) |
| Profit attributable to non-controlling interests | (1.0) | $(1.7) | 0.7 |
| Foreign exchange gains/(losses) on translation | 2.6 | (2.1) | 4.7 |
| Foreign currency forward contracts gains/(losses) | (3.6) | (1.1) | (2.5) |
| $(2.2) | $0.1 | $(2.3) |
Interest income/(expense), net: in the nine months ended September 30, 2025 was $7.3 million of income compared to $6.9 million of income in the nine months ended September 30, 2024, driven by the interest income being earned from our cash balances.
Income taxes: the effective tax rate was 21.2% and 26.3% in the first nine months of 2025 and 2024, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 23.6% in 2025 compared with 25.7% in 2024. The 2.1% decrease in the adjusted effective rate was primarily due to the fact that a higher proportion of the Company’s profits are being generated in lower tax jurisdictions. The Company believes that this adjusted effective tax rate, a non-GAAP financial measure, provides useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses this non-GAAP financial measure internally to evaluate the performance of the Company’s operations and for planning and forecasting in subsequent periods.
The following table shows a reconciliation of the GAAP effective tax charge to the adjusted effective tax charge:
| Nine Months EndedSeptember 30, | ||
|---|---|---|
| (in millions) | 2025 | 2024 |
| Income before income taxes | $87.8 | $143.8 |
| Indemnification asset regarding tax audit | — | 0.1 |
| Adjustment for stock compensation | 5.0 | 6.4 |
| Adjustment to fair value of contingent consideration | (16.2) | 2.1 |
| Impairment of acquired intangible assets | 19.1 | — |
| Impairment of property, plant and equipment | 22.9 | — |
| Legacy cost of closed operations | 4.8 | 2.6 |
| Adjusted income before income taxes | $123.4 | $155.0 |
| Income taxes | $18.6 | $37.8 |
| Tax on stock compensation | (0.5) | (0.1) |
| Adjustment of income tax provision | — | (3.8) |
| Tax on adjustment to fair value of contingent consideration | — | 0.7 |
| Tax on impairment of acquired intangible assets | 5.1 | — |
| Tax on impairment of property, plant and equipment | 4.8 | — |
| Tax on legacy cost of closed operations | 1.1 | 0.6 |
| Adjustments to tax charge of prior periods | — | 4.7 |
| Adjusted income taxes | $29.1 | $39.9 |
| GAAP effective tax rate | 21.2% | 26.3% |
| Adjusted effective tax rate | 23.6% | 25.7% |
The text of this filing, as the company filed it with the SEC, without its images or exhibits. This is not investment advice.