Innospec reports $31.8 million net income for Q3 2026

Cover page 2 changes

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For the quarterly period ended June September 30, 2026

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Outstanding as of July October 31, 2026

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Financial statements 61 changes

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Restructuring charge

Impairment of property, plant and equipment

Impairment of intangible assets

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Income before income tax expense taxes

Net income loss/(income) attributable to non-controlling interests

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Income tax income/(expense) related to other comprehensive income ( 0.1 ( 0.3 ( 1.4 1.5

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Trade and other accounts receivable (less allowances of $ 15.4 14.9 million and $ 11.8 million respectively)

Inventories (less allowances of $ 42.5 40.0 million and $ 40.4 million respectively):

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Treasury stock ( 4,923,453 4,922,905 and 4,776,918 shares at cost, respectively)

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Impairment of property, plant and equipment

Impairment of intangible assets

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Business combinations, net of cash acquired

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Balance at June September 30, 2026

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'Dividend paid ($ 0.76 0.84 per share)

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Balance at March 31, 2026

Balance at June September 30, 2025

Balance at June 30, 2026

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'Dividend paid ($ 0.84 per share)

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Balance at March 31, 2025

Balance at June September 30, 2026

Balance at June 30, 2025

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Dividend paid ($ 0.76 per share)

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Treasury stock reissued

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Balance at June September 30, 2025

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Restructuring charge

Impairment of property, plant and equipment

Impairment of intangible assets

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In the three and six nine months ended June September 30, 2026 , the average number of anti-dilutive options excluded from the calculation of diluted earnings per share were 23,172 21,340 and 23,346 21,687 ( three and six nine months ended June September 30, 2025– 59,418 57,824 and 23,283 23,875 ).

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Closing balance at June September 30

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Gross cost at June September 30

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Accumulated amortization at June September 30

Net book amount at June September 30

The amortization expense for the six nine months ended June September 30, 2026 , was $ 5.4 7.9 million (six (nine months ended June September 30, 2025, – $ 5.9 9.3 million).

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The Company maintains an unfunded defined benefit pension plan covering certain current and former employees in Germany (the "German plan"). The German plan is closed to new entrants and has no assets. As at June of September 30, 2026, we have recorded a liability of $ 9.1 8.9 million (December 31, 2025, $ 9.4 million).

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Amortization of actuarial net gains

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The prior year includes a service cost related to the now closed United Kingdom (U.K.) defined benefit pension scheme. The service cost has been recognized in selling, general and administrative expenses. All other items have been recognized within other income and expense.

In addition, we have obligations for post-employment benefits in some of our other European businesses. As at June of September 30, 2026, we have recorded a liability of $ 3.7 3.6 million (December 31, 2025 , $ 3.8 million).

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As of January 1, 2026, the Company had no unrecognized tax benefits, and there has been no change in unrecognized tax benefits during the six nine months ended June September 30, 2026. Accordingly, there was no accrual for uncertain tax positions as of June September 30, 2026, and the Company recorded no associated interest or penalties. The Company does not expect any significant changes to this position over the next twelve months.

As of June September 30, 2026, the Company and its U.S. subsidiaries remain open to examination by the IRS for years 2022 onwards under the statute of limitations. The Company's subsidiaries in foreign tax jurisdictions are open to examination including Brazil (2021 onwards), Germany (2021 onwards), and the U.K. (2024 onwards).

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As at June of September 30, 2026, and December 31, 2025 , the Company had no t drawn down on its revolving credit facility. During the three and six nine months ended June September 30, 2026 and 2025 , the Company did no t draw down or repay any borrowing on its revolving credit facility.

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Total at September 30

The charge for the six nine months ended June September 30, 2026, was $ 3.2 4.1 million (six (nine months ended June September 30, 2025, $ 4.1 5.0 million). The current year charge represents the accounting accretion and a $ 1.4 million increase to the provisions for legacy operations in the United Kingdom. U.K.. Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date.

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Other current and non-current liabilities:

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Other current and non-current liabilities:

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Acquisition-related contingent consideration: Contingent consideration payable in cash is discounted to its fair value at each balance sheet date. Where contingent consideration is dependent upon pre-determined financial targets, an estimate of the fair value of the likely consideration payable is made at each balance sheet date. The contingent consideration payable has been calculated based on the latest forecast. The movement in the current year relates to a $ 4.9 6.3 million reduction in the fair value of the expected payable relating to the acquisition of QGP Química Geral ("QGP") in our Performance Chemicals segment and a small acquisition in our Oilfield Services segment, partially offset by an accretion charge of $ 0.3 0.5 million and the impact of foreign exchange of $ 0.4 0.5 million.

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The Company enters into various foreign currency forward exchange contracts to minimize currency exchange rate exposure from expected future cash flows. As at June of September 30, 2026, the contracts have maturity dates of up to two years at the date of inception. These foreign currency forward exchange contracts have not been designated as hedging instruments, and their impact on the income statement for the six nine months ended June September 30, 2026, was a loss gain of $ 1.1 million (six (nine months ended June September 30, 2025, a loss of $ 6.4 3.6 million). The gain or loss has been recorded in other income or expense.

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The Company and certain of the Company's consolidated subsidiaries are contingently liable for certain obligations of affiliated companies primarily in the form of guarantees of debt and performance under contracts entered into as a normal business practice. This includes guarantees of non-U.S. excise taxes and customs duties. As at June of September 30, 2026, such guarantees, which are not recognized as liabilities in the condensed consolidated financial statements, amounted to $ 5.9 7.3 million (December 31, 2025, $ 6.0 million). The remaining terms of the fixed maturity guarantees are up to 6 years, with some further guarantees having no fixed expiry date.

Under the terms of the guarantee arrangements, generally the Company would be required to perform fulfil the obligations should the affiliated company fail to fulfill fulfil its obligations under the arrangements. In some cases, the guarantee arrangements have recourse provisions that would enable the Company to recover any payments made under the terms of the guarantees from securities held of the guaranteed parties' assets.

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The following table summarizes the transactions of the Company's share-based compensation plans for the six nine months ended June September 30, 2026.

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Nonvested at June September 30, 2026

For the awards granted with market conditions, a Monte Carlo model has been used to calculate the grant-date fair value. For all other awards, granted, a fair market value methodology or a Black-Scholes model has been used to calculate the grant-date fair value.

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As of June September 30, 2026, there was $ 26.0 26.3 million of total unrecognized compensation cost related to nonvested share-based compensation arrangements. That cost is expected to be recognized over a weighted-average period of 2.1 years.

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There were no reclassifications out of accumulated other comprehensive loss ("AOCL") for the six nine months ended June September 30, 2026.

Changes in AOCL for the six nine months ended June September 30, 2026, net of tax, were:

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Balance at June September 30, 2026

There were no reclassifications out of AOCL for the six nine months ended June September 30, 2025.

Changes in AOCL for the six nine months ended June September 30, 2025, net of tax, were:

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Balance at June September 30, 2025

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In May 2026, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 20264-01, Environmental Credits and Environmental Credit Obligations (Topic 818). The amendments in this ASU require disclosure on the balance sheet and within the notes to the financial statements, of specified information about environmental credits and associated obligations. The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods beginning after December 15, 2027. Early adoption is permitted. We expect the adoption of this ASU will impact the Company's current accounting methodology and disclosures, however we do not expect the impact to be material.

There were no new accounting pronouncements relevant to Innospec in the quarter.

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Mr. David F. Landless has been a non-executive director of the Company since January 1, 2016, and is a non-executive director of Ausurus Group Limited which owns European Metal Recycling Limited ("EMR") which from time to time purchases scrap metal from the Company. The Company has sold less than $ 0.1 million of scrap metal to EMR in the six nine months ended June September 30, 2026 (six (nine months ended June September 30, 2025 , less than $ 0.1 million). A tendering process is operated periodically to select the best buyer for the sale of scrap metal by the Company. As at June of September 30, 2026 , EMR owed less than $ 0.1 million nil for scrap metal purchased from the Company ( December 31, 2025 , nil ).

Ma nagement's Discussion and Analysis of Financial Condition and Results of Operations for the Three and Nine Months Ended September 30, 87 changes

11 unchanged paragraphs

Restructuring charge

Impairment of property, plant and equipment

Impairment of intangible assets

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Three Months Ended June September 30, 2026

The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the three months ended June September 30, 2026, and the three months ended June September 30, 2025:

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Restructuring charge

Profit on disposal Impairment of property, plant and equipment

Impairment of intangible assets

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Three Months Ended June September 30, 2026

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Gross margin: the year over year decrease of 0.2 percentage points was primarily due to negative manufacturing variances due to lower production volumes in North America, as we continue to advance our plant repairs, process improvements and upgrades following severe weather conditions in the first quarter.

The Americas volumes were lower due to some continued supply constraints and reduced demand for our personal care products, being offset by a favorable price and product mix due to pricing improvements Volumes in EMEA were higher due to increased demand for our personal care products, combined with a favorable price and product mix, driven by higher demand for our higher priced products. ASPAC volumes were lower due to some supply constraints and decreased demand for certain products, being offset by a favorable price and product mix, driven by higher demand for our higher priced products. EMEA and ASPAC benefited from favorable foreign currency exchange rate movements. raw material costs.

EMEA volumes were lower due to decreased demand for our personal care products, being offset by a favorable price and product mix, driven by higher demand for our higher priced products and higher raw material costs.

ASPAC volumes were higher due to increased demand for certain products, together with a favorable price and product mix, driven by higher demand for our higher priced products and higher raw material costs.

EMEA was impacted by adverse foreign currency exchange rate movements.

Gross margin: the year-over-year increase of 3.7 percentage points was primarily due to pricing improvements in the current year, and improved manufacturing variances compared to the prior year.

Operating expenses: the year over year year-over-year increase of $0.4 $0.5 million was primarily due to higher selling expenses and higher provisions for performance-related remuneration accruals, being partly offset by lower administrative costs.

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Three Months Ended June September 30, 2026

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Sales volumes in the Americas increased year over year due to increased demand from customers, being partly offset by an adverse price and product mix. Sales volumes in EMEA increased year over year due to increased demand from customers, combining with a favorable price and product mix. Sales volumes in ASPAC decreased year over year due to decreased demand from customers, being offset by a favorable price and product mix. AvGas volumes were lower than the prior year due to variations in the demand from customers, combined with an adverse customer mix. All our regions benefited from favorable foreign currency exchange rate movements.

Gross margin: the year over year increase of 2.7 percentage points was due to a favorable sales mix.

Operating expenses: the year over year increase of $5.0 million was primarily due to adverse movements to the provisions for doubtful debts, together with increased operating expenses and increased employee-related costs, including higher provisions for performance-related remuneration accruals.

Sales volumes in the Americas were higher year-over-year due to the increase and timing of demand from customers, while partly offset by an adverse price and product mix.

Sales volumes in EMEA decreased year-over-year primarily due to the timing of demand from customers, being partly offset by a favorable price and product mix.

Sales volumes in ASPAC decreased year-over-year primarily due to the timing of demand from customers, being partly offset by a favorable price and product mix.

AvGas sales volumes were lower than the prior year due to changing demand from customers, partly offset by a favorable customer mix.

The favorable impact of foreign currency exchange rate movements in the Americas was offset in EMEA.

Gross margin : the year over year year-over-year decrease of 1.5 0.5 percentage points was due to an adverse sales mix in the Americas from increased sales of lower margin lower-margin products, being partly offset by sales in EMEA of higher margin products.

Operating expenses: the year over year year-over-year increase of $4.2 $1.9 million was primarily due to adverse movements to the provisions for doubtful debts, together with increased employee-related costs, including higher provisions for performance-related remuneration accruals.

Net sales: have increased year over year year-over-year by $14.6 $13.3 million, driven by our DRA plant expansion and associated demand. The majority of the segment's sales are concentrated in the Americas region.

Gross margin: the year-over-year decrease of 1.8 percentage points was primarily due to higher raw materials costs and pricing pressures.

Operating expenses: the year-over-year increase of $0.1 million was primarily due to an increase in research and development expenses and selling expenses, being partly offset by lower performance-based remunerations accruals.

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Corporate costs: the year over year year-over-year increase of $0.7 $0.4 million was primarily due to higher legal and compliance expenses, together with higher information technology costs including additional amortization for our new ERP system, and higher provisions for performance-related remuneration accruals, being partly offset by lower legacy costs of closed operations and a favorable revaluation for our U.K. emissions trading scheme credits.

Adjustment to fair value of contingent consideration: is an expense a credit in the current year of $0.1 $1.1 million compared to an expense a credit in the prior year of $0.8 $17.7 million. The adjustment relates to the acquisition of QGP within our Performance Chemicals segment and a small acquisition in our Oilfield Services segment. The year over year decrease relates to reduced accretion, due credits in both years relate to the a reduction in the overall expected payable compared to payables, together with the prior year. lower accretion charge calculated on the lower expected consideration payable. See Note 10 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Other net income/(expense): for the three months ended June September 30, 2026, was $1.1 $0.5 million of income compared to a $4.7 $3.2 million expense of income in the three months ended June September 30, 2025, primarily driven by the revaluation of foreign currency forward contracts, and the foreign currency translation of non-USD balances in the group.

Interest income/(expense), net: in the three months ended June September 30, 2026, was $0.8 $0.4 million of income compared to $2.7 $2.2 million of income in the three months ended June September 30, 2025, driven by lower interest rates and lower cash balances in the current year.

Income taxes: the effective tax rate was 25.0% 25.8% and 26.0% (12.4)% in the second third quarter of 2026 and 2025, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 23.1% 24.7% in 2026 compared with 23.3% 22.7% in 2025. The 0.2% decrease 2.0% increase 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 higher 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.

4 unchanged paragraphs

Impairment of acquired intangible assets

Impairment of property, plant and equipment

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Tax on impairment of acquired intangible assets

Tax on impairment of property, plant and equipment

Tax on legacy cost costs of closed operations

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Six months ended June 30, 2026

Nine Months Ended September 30, 2026

The following table shows the changes in sales, gross profit and operating expenses by reporting segment for the six nine months ended June September 30, 2026, and the six nine months ended June September 30, 2025:

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Restructuring charge

Impairment of property, plant and equipment

Impairment of intangible assets

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Six Months Ended June 30, 2026

Nine Months Ended September 30, 2026

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The Americas volumes were lower due to some supply constraints and reduced demand for our personal care products, partly being offset by a favorable price and product mix due to continuing pricing improvements. Volumes in EMEA were higher, being partly offset by an adverse price and product mix driven by higher demand for our lower priced products. ASPAC volumes were lower driven by some supply constraints and decreased demand for certain products, being partly offset by a favorable price and product mix. EMEA improved pricing and ASPAC benefited from favorable foreign currency exchange rate movements. higher raw material costs.

EMEA volumes were unchanged, combined with a favorable price and product mix driven by improved pricing and higher raw material costs.

ASPAC volumes were lower driven by some supply constraints and decreased demand for certain products, being partly offset by a favorable price and product mix driven by improved pricing and higher raw material costs.

EMEA and ASPAC benefited from the favorable foreign currency exchange rate movements.

Gross margin: the year over year year-over-year decrease of 2.1 0.2 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 including the impact of the severe weather conditions in the first quarter, being partly offset by pricing improvements.

Operating expenses: the year over year year-over-year increase of $2.6 $3.1 million was primarily due to adverse movements to the provisions for doubtful debts, together with increased research and development expenses, and together with higher provisions for performance-related remuneration accruals and adverse provisions for doubtful debts, being partly offset by the reductions for other expenses.

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Six Months Ended June 30, 2026

Nine Months Ended September 30, 2026

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

The Americas and EMEA volumes increased year-over-year due to higher customer demand.

ASPAC volumes declined due to the timing of demand from customers, while benefiting from a favorable price and product mix with increased sales of higher priced products.

AvGas volumes were lower than the prior year due to changing demand from customers, being partly offset by a favorable customer mix.

All our regions benefited from favorable foreign currency exchange rate movements.

Gross margin : the year over year year-over-year decrease of 0.9 0.7 percentage points was due to an adverse sales mix in the Americas from increased sales of lower margin lower-margin products, being partly offset by sales in EMEA of higher margin products.

Operating expenses: the year over year year-over-year increase of $6.8 $8.7 million was primarily due to adverse movements to the provisions for doubtful debts, together with increased operating expenses, and including increased employee-related costs including higher and adverse provisions for performance-related remuneration accruals. doubtful debts.

Net sales: have increased year over year year-over-year by $14.7 $28.0 million, driven by our DRA plant expansion and associated demand. The majority of the segment's sales are concentrated in the Americas region.

Gross margin: the year over year year-over-year increase of 2.3 0.9 percentage points was primarily due to a favorable sales mix, being partly offset by pricing pressures.

Operating expenses: the year over year year-over-year increase of $5.3 $5.4 million was primarily due to increased selling administration and research expenses, together with adverse movements to the provisions for doubtful debts, together with increased operating expenses and increased employee-related costs, including higher provisions for being partly offset by lower performance-related remuneration accruals.

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Corporate costs: the year over year year-over-year increase of $5.3 $5.7 million was primarily due to higher legal and compliance expenses, together with higher information technology costs including additional amortization for our new ERP system, and higher provisions for performance-related remuneration accruals and higher legal and compliance expenses, being partly offset by lower legacy costs of closed operations and a favorable revaluation revaluations for our U.K. emissions trading scheme credits.

Adjustment to fair value of contingent consideration: is a credit in the current year of $4.6 $5.7 million compared to an expense a credit in the prior year of $1.5 $16.2 million. The adjustment relates to the acquisition of QGP within our Performance Chemicals segment The credit and a small acquisition in our Oilfield Services segment. The current year relates credits in both years relate to a reduction in the expected payable, payables, together with the lower accretion charge calculated on the lower expected consideration payable. See Note 10 of the Notes to the Condensed Consolidated Financial Statements for additional information.

Other net income/(expense): for the six nine months ended June September 30, 2026, was $3.7 $4.2 million of income compared to a $4.4 $1.2 million of expense in the three nine months ended June September 30, 2025, primarily driven by the revaluation of foreign currency forward contracts, and the foreign currency translation of non-USD balances in the group.

Interest income/(expense), net: in the six nine months ended June September 30, 2026, was $1.6 $2.0 million of income compared to $5.1 $7.3 million of income in the six nine months ended June September 30, 2025, driven by lower interest rates and lower cash balances in the current year.

Income taxes: the effective tax rate was 23.9% 24.6% and 25.8% 20.9% in the first six nine months of 2026 and 2025, respectively. The adjusted effective tax rate, once adjusted for the items set out in the following table, was 23.0% 23.6% in 2026 compared with 23.7% 23.4% in 2025. The 0.7% decrease 0.2% increase 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 higher 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.

4 unchanged paragraphs

Impairment of acquired intangible assets

Impairment of property, plant and equipment

Legacy cost costs of closed operations

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Tax on legacy cost of closed operations

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Tax on impairment of acquired intangible assets

Tax on impairment of property, plant and equipment

Tax on legacy costs of closed operations

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In the six nine months ended June September 30, 2026, our working capital increased by $12.1 $38.7 million, while our adjusted working capital increased by $55.1 $80.8 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.

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We had a $66.3 $53.3 million increase in trade and other accounts receivable, including a $3.6 $3.1 million increase in allowances, which was primarily due to increased sales and the timing of collections for all our segments. different customers. Days' sales outstanding decreased in our Performance Chemicals segment from remained unchanged at 72 days; to 66 days; increased from 57 days to 62 63 days in our Fuel Specialties segment; and increased from 64 days to 80 76 days in our Oilfield Services segment.

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and 7 more changes in the filing

Controls and procedures 2 changes

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Based on an evaluation carried out as of the end of the period covered by this report, under the supervision and with the participation of our management, our Chief Executive Officer and our Chief Financial Officer concluded that the Company's "disclosure controls and procedures" (as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934) were effective as of June September 30, 2026, to provide reasonable assurance that information required to be disclosed by the Company in reports that it files or submits under the Exchange Act is (i) recorded, processed, summarized and reported within the time periods specified in the SEC rules and forms and (ii) accumulated and communicated to the Company's management, including its principal executive officer and principal financial officer, as appropriate to allow timely decisions regarding required disclosure.

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As previously disclosed, we have been developing a new information system platform which began in 2022. The new platform provider is well established in the market. The implementation has been a phased, risk-managed, site deployment following a multistage user acceptance program and the implementation is now complete. In connection with this implementation, the Company has updated its internal controls over financial reporting, as necessary, to accommodate modifications to its business processes and accounting procedures.

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Unregistered sales of stock 7 changes

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On March 10, 2025, the Company announced a repurchase program which allows for up to $50 million of the Company's common stock to be repurchased in the open market over a three-year period commencing on March 10, 2025.

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The company also repurchases its common stock in connection with the exercising of stock options by directors and employees. The following table provides information about our repurchases of equity securities in the three months ended June 30, 2026.

value of shares that

may yet be purchased

April 1, 2026 through April 30, 2026

May 1, 2026 through May 31, 2026

The company did not repurchase any of its common stock in the quarter ended September 30, 2026.