INNOSPEC INC.

Working Capital

In the nine months ended September 30, 2025 our working capital increased by $47.5 million, while our adjusted working capital increased by $43.1 million. The difference is primarily due to the exclusion of the movements for cash and cash equivalents, together with the changes for taxes.

The Company believes that adjusted working capital, a non-GAAP financial measure (defined by the Company as trade and other accounts receivable, inventories, prepaid expenses, accounts payable and accrued liabilities rather than total current assets less total current liabilities) provides useful information to investors in evaluating the Company’s underlying performance and identifying operating trends. Management uses this non-GAAP financial measure internally to allocate resources and evaluate the performance of the Company’s operations. Items excluded from working capital in the adjusted working capital calculation are listed in the table below and represent factors which do not fluctuate in line with the day to day working capital needs of the business.

We had a $7.8 million increase in trade and other accounts receivable, which was primarily due to increases in our Performance Chemicals segment due to the timing of customer collections, being partly offset by lower sales in our Oilfield Services segment. Days’ sales outstanding increased in our Performance Chemicals segment from 61 days to 75 days; remained unchanged at 57 days in our Fuel Specialties segment; and decreased from 83 days to 67 days in our Oilfield Services segment.

We had a $44.2 million increase in inventories, including a $4.8 million increase in allowances, which was driven by higher levels of finished goods in our Fuel Specialties segment, due to higher production relating to expected sales volumes. The Company continues to maintain inventory levels necessary to manage the risk of potential supply chain disruption for certain key raw materials, especially in our Fuel Specialties segment. Days’ sales in inventory in our Performance Chemicals segment increased from 63 days to 66 days; increased from 113 days to 160 days in our Fuel Specialties segment; and remained unchanged at 76 days in our Oilfield Services segment.

Prepaid expenses decreased $12.3 million, from $21.0 million to $8.7 million, primarily due to the cyclical expensing of prepaid invoices.

We had a $3.4 million decrease in accounts payable and accrued liabilities, which was dependent on the timing of payments for each of our reporting segments and includes the effect of the lower activity in our Oilfield Services segment. Creditor days (including goods received not invoiced) have increased in our Performance Chemicals segment from 46 days to 48 days; increased from 44 days to 56 days in our Fuel Specialties segment; and decreased from 68 days to 57 days in our Oilfield Services segment. The changes for creditor days are impacted by the timing of sales and cost of sales in the quarter, when using a countback methodology.

Operating Cash Flows

We generated cash from operating activities of $76.9 million in the nine months ended September 30, 2025 compared to $158.8 million in the nine months ended September 30, 2024. The decrease in cash generated from operating activities was primarily related to decreased operating income, less favorable working capital cash flows and increased income tax payments.

Cash

At September 30, 2025 and December 31, 2024, we had cash and cash equivalents of $270.8 million and $289.2 million, respectively, of which $160.8 million and $133.9 million, respectively, were held by non-U.S. subsidiaries principally in the United Kingdom.

The decrease in cash and cash equivalents of $18.4 million for the nine months ended September 30, 2025 was primarily driven by our continued investments in capital projects, the payment of our semi-annual dividend and the repurchases of our common stock, being partly offset by the cash generated from operating activities.

Debt

We continue to have available a $250.0 million multicurrency revolving credit facility.

At September 30, 2025, and December 31, 2024, we had no debt outstanding under the revolving credit facility and no obligations were outstanding under finance leases. See Note 9 of the Notes to the Condensed Consolidated Financial Statements for additional information.