INNOSPEC INC.

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 Ended March 31, 2026

The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the three months ended March 31, 2026, and the three months ended March 31, 2025:

Performance Chemicals

Net sales: the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

Volumes for the Americas were lower due to reduced demand for our personal care products, partly offset by a favorable price and product mix due to pricing improvements. Volumes in EMEA were lower, combined with an adverse price and product mix driven by higher demand for lower priced products. ASPAC volumes were lower driven by decreased demand for our personal care products, slightly offset by a favorable price and product mix. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements.

Gross margin: the year over year decrease of 4.2 percentage points was primarily due to an adverse sales mix, together with the negative manufacturing variances in North America due to lower production volumes following severe weather conditions at the start of the quarter.

Operating expenses: the year over year increase of $2.2 million year over year was primarily due to adverse movements to the provisions for doubtful debts driven by our aged debtor accounting policy, together with increased research and development expenses.

Fuel Specialties

Net sales: the table below details the components which comprise the year over year change in net sales spread across the markets in which we operate:

Sales volumes in all our regions increased year over year due to increased demand from customers. All our regions were impacted by an adverse price and product mix due to higher sales of lower priced products. AvGas volumes were lower than the prior year due to variations in the demand from customers, being offset by a favorable customer mix. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements.

Gross margin: the year over year decrease of 0.3 percentage points was due to an adverse sales mix from increased sales of lower margin products.

Operating expenses: the year over year increase of $2.6 million was primarily due to adverse movements to the provisions for doubtful debts driven by our aged debtor accounting policy, together with increased administrative expenses.

Oilfield Services

Net sales: have increased year over year by $0.1 million. Sales in the Americas were higher year over year, being partly 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 increase of $0.3 million was primarily due to higher selling expenses.

Other Income Statement Captions

Corporate costs: the year over year increase of $4.6 million was primarily due to higher legacy costs of closed operations, an adverse revaluation for the U.K. emissions trading scheme carbon credits, higher legal and compliance expenses and additional amortization for the new ERP system.

Adjustment to fair value of contingent consideration: is a credit in the current year of $4.7 million compared to an expense in the prior year of $0.7 million. The adjustment relates to the acquisition of QGP within our Performance Chemicals segment. See Note 10 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Other net income/(expense): for the three months ended March 31, 2026 and 2025, included the following:

Interest income/(expense), net: in the three months ended March 31, 2026 was $0.8 million of income compared to $2.4 million of income in the three months ended March 31, 2025, driven by lower interest rates and lower cash balances in the current year.

Income taxes: the effective tax rate was 22.8% and 25.7% in the first quarter of 2026 and 2025, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 22.9% in 2026 compared with 24.0% in 2025. The 1.1% 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: