INNOSPEC INC.

Working Capital

In the six months ended June 30, 2026 our working capital increased by $12.1 million, while our adjusted working capital increased by $55.1 million. The difference is primarily due to the exclusion of the movements for cash and cash equivalents and the movements for income taxes, being partly offset by the other movements shown in the table below.

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 $66.3 million increase in trade and other accounts receivable, including a $3.6 million increase in allowances, which was primarily due to increased sales for all our segments. Days’ sales outstanding decreased in our Performance Chemicals segment from 72 days to 66 days; increased from 57 days to 62 days in our Fuel Specialties segment; and increased from 64 days to 80 days in our Oilfield Services segment.

We had a $8.0 million increase in inventories, including a $2.1 million increase in allowances, which was primarily driven by higher levels of finished goods for our Fuel Specialties segment due to the timing of production. 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 decreased from 65 days to 53 days; increased from 133 days to 144 days in our Fuel Specialties segment; and decreased from 83 days to 61 days in our Oilfield Services segment.

Prepaid expenses decreased $6.8 million, from $20.1 million to $13.3 million, primarily due to the cyclical expensing of prepaid invoices.

We had a $12.4 million increase in accounts payable and accrued liabilities, which was dependent on the timing of payments for each of our reporting segments. Creditor days (including goods received not invoiced) have decreased in our Performance Chemicals segment from 50 days to 49 days; decreased from 58 days to 54 days in our Fuel Specialties segment; and increased from 46 days to 59 days in our Oilfield Services segment.

Operating Cash Flows

We generated cash from operating activities of $24.8 million in the six months ended June 30, 2026 compared to $38.8 million in the six months ended June 30, 2025. The decrease in cash generated from operating activities compared to the prior year was primarily related to higher increases in working capital, being partly offset by the timing of income tax payments.

Cash

At June 30, 2026 and December 31, 2025, we had cash and cash equivalents of $250.2 million and $292.5 million, respectively, of which $131.4 million and $145.4 million, respectively, were held by non-U.S. subsidiaries principally in the United Kingdom.

The decrease in cash and cash equivalents of $42.3 million for the six months ended June 30, 2026 was primarily driven by our continued investments in capital projects, payments for our new ERP system implementation, 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 June 30, 2026, and December 31, 2025, we had no debt outstanding under the revolving credit facility and no obligations were outstanding under finance leases. See Note 8 of the Notes to the Condensed Consolidated Financial Statements for additional information.