IOSP - Earnings call transcript Q4 2021

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Operator

Good day and thank you for standing by. Welcome to the Innospec's Fourth Quarter, 2021, Earnings Release and Conference Call. At this time, all participants are in a listen-only mode. After the speakers' presentation, there will be a question-and-answer session. [Operator Instructions] Please, be advised that today's conference is being recorded. now today, turn David would to conference I speaker your Jones, Instructions] like the to over [Operator General Counsel. ahead. go Please,

David Jones

Thank posted on call earnings company site December earnings to quarter, the in Welcome innospecinc.com. release are year-end The XXst, for presentation this at and XXXX. you. the Innospec

Ian turn measures statements. uncertainties forward-looking to company's risks the or That, Executive have our discussion financial Innospec to those Officer. GAAP be GAAP. we With also included substitute SEC. and forward-looking and could are predictions, in Visit to items these us Chief Vice by other addition based the superior that current site are and a Financial the today which expectations, comparable projections, President to over Chief are I'll risks, measures additional earnings for events. Patrick measures. and implied items as performance to Cleminson, in this on you, considered impact the in Officer, and call, today, we've understanding that Executive from as from aid A statements future contained accordance to not and site SEC and expense These financial statements included During our financial results. it Williams, Patrick. other President Innospec's detailed non-GAAP XX-Qs, Innospec's that financial In further These They subject prepared are with non-GAAP assumptions should directly and XX-K, clarification most The will a the release. is with are investors in some make results materially actual are statements for about cause on uncertainties from filings reconciliation other differ results these and documents. anticipated

Patrick Williams

headwinds, extremely welcome, chain strong the ended the improved And on full-year we and Fourth Quarter David. in strong inflationary Innospec's sustained our prior labor operating year for quarterly million. of everyone, a present supply very quarterly to set flow Conference net position another Call. year. Innospec. pleased up Despite sales and and income I'm quarter, to with record XX% was to $XXX you, results the Cash XXXX cash Thank

we repurchase today $XX market these conditions I'm of approved the extremely that has volatile our deliver a quarterly has year's full-year addition, new our results. set million In navigated board strong results and program. announced way of Innospec team share this to proud

also our target, lag in but all which demand growth growth over its future inflation. investment exciting, believe performance. meet improved Customers our formula record across technology remained to achieved delivered $X.X customers' consecutive sustainability, of was growth Technology and fuel and jet with naturally teams our and opportunities are continued state-of-the-art sales of well-positioned year, margin this growing this Performance first With Center Global innovation customer-focused safe, year. on We up full-year a all entering consumers drive continued expansion Fuel business technology-lead delay in primarily quarterly XX% price margins want requirement are this dual But want to they XX% leverage. plans an with growth challenging income XXXX. operating our to Our in continue we resourceful, sales along throughout and Chemical operating Performance mix, fourth in due we organic for operating surpass our sales businesses. full-year full-year impressive QX for record time. business and year Chemicals XX% cost the completion and Gross by well-positioned Specialties million for increases, range. demands. and to billion and will ran the recovery, $XX achieved motion, sales The This below high XXXX contract in markets. income quarterly new track our

fuel demand to we our current target margins Innospec's return and gross are Performance sales expect sustainability. to range. to to fuel Consistent of of and proud deploy directly I tied the to and continues inflation in economy. opportunities initiatives growth jet Chemicals future plays addressing moderates, role cost our the business, technology cleaner global recover fuel majority As with am increase specialties in these fuels directly our that

diesel, Our and technology and properties performance emission reduction, safety, fuels. renewable, to adds critical distillate

and and to standards, market directly ways society As cost-effective The towards operational expands. addressable drive efficiency and reduce technology expected Services tighter overall is cleaner to and market of in increase our improve the to The commodity fuels, emissions, defined in to terms environment our margin moves global expanded X completion, higher for operating cleaner activity engines, fuels, continue plays production emission sales XXXX. grew leadership. efficiency Oilfield consecutive burn quarter. prices,

continues prior potential the in with growth. As for significant be to quarter, backdrop, this there operating

financial results with in return that, will Now, over take comments Then will detail. who questions. I the Cleminson, will I some turn more our to call after Ian review and I will Ian concluding your

Ian Cleminson

Thanks, Patrick.

quarter year. $XX.X EBITDA last for compared A prior ago. revenues the the $XX.X a million quarter to XX.X%. margin driven by compared from year income ago $XX.X million, million businesses the $XXX.X in company's compared Slide year gross for to by in last decreased X Overall, quarter was were for increase, year $XXX.X to all million fourth Turning our a was $XX.X and million. the the net our COVID million, total X% to year. presentation, A points to recovering XX% impacted demand

per of $X.XX, impact earnings, decreased GAAP from items, special GAAP Our per of items. per $X.XX, earnings by included which per share. The $X.XX our share including we of special fourth-quarter year share earnings reported were which ago, $X.XX A the negative share. effect net

EPS special in Excluding year items years, a to ago. was compared $X.XX a quarter adjusted our both for the $X.XX

XXXX. million $XX.X $XXX.X a net revenues the total XXXX. compared to billion in And year year of from was million For billion ago. XX% million in $XX.X the EBITDA increased $X.X $XXX.X million $X.X full year, income for was to compared

$X.XX share which the per XXXX, per earnings special including $X.XX items, special which included GAAP items of earnings reported per In share, per full-year our $X.XX, were impact $X.XX share. earnings decreased GAAP full-year by of Our from we negative share.

Excluding items EPS year the for compared both special $X.XX our $X.XX in was a ago. year to adjusted years,

points X%. Performance price currency the Turning revenues slowdown in were fourth grew Gross provisions. compared and of holiday to Chemicals $XXX.X XX%, down XX.X% quarter the X.X quarter, impact one-off X% XX.X% facilities by XX% manufacturing of of inventory XXXX, $XXX.X to period X, Volumes the of impacted over for percentage in same year's the margins positive were our million. Slide million, an last offsetting with up a from adverse mix

revenues to XX% We income $XXX.X return million. up year million expect margins last XXXX. to in Performance last to Operating to full-year, $XX.X gross from XX% QX, year's were Chemical increased from million, $XX.X 's XX% increased the by and $XXX.X income million of For operating XX%

being believe compared price pricing of at Fuel in to were XX%, mix, weaker from naturally Slide effect. quarter negative the takes X% XX% Volumes Moving below a in Specialties the to Fuel margins the revenues X%. there contract driven by and year XX% lower XX.X% sales range million same range positive our $XX.X $XXX.X and in gross than Operating inflation. a on to margins the will which Specialties action income last lag XX.X% expected a for quarter return higher year of price were grew X XXXX our million, ago. XX% expected for currency QX, a in We we end offsetting increases, gross XXXX, to mix $XXX.X the of cost quarter, was impact by increased million. fourth as reported the effect from

For was XX% XX% full-year to revenues Fuel operating to and the up million. million, $XXX.X were Specialties up $XXX.X income

XX.X% were million in Slide from up the year, a improvements for XX% of points ago. million the on last Oilfield continues year quarter up percentage year's were Operating to X.X quarter as a increase. XX. customer $X.X Moving $XX.X fourth million million from on in margins XX.X%. to Gross activity was $X.X income last services Revenues $XX.X of

XX% Oilfield million an compared million of For million of were XXX.X loss to the and services operating income $XX.X in revenues last year's full-year of operating $XXX up XXXX. from $X.X

slide compensation ago, to mainly million, due rates profits. XX.X% a adjusted ago, tax to effective Turning quarter corporate compared with distribution to the XX, higher full-year due compared XX.X the mainly a year for The were XX.X%, year costs accruals. of was to million XX.X geographical

adjusted expect tax to we XXXX, effective the XX%. rate For be

XXXX. quarter, on XX% share. This was the full-year capital $X.XX we from announced to before the XX, generated the paid another per $X.X per total of with a brought Moving this Slide excellent dividend for increase $X.XX cash to for the previously million share, dividend quarter common semi-annual operations In over expenditure million. of $XX.X cash, net of

million $XXX.X net full-year, the expenditure after cash For million to XXXX. capital $XX operations was compared from during

to As million substantial I had million, over it for of net a some cash will of to now, a back $XXX.X of And $XXX.X cash Innospec compared Patrick XXst, December a year comments. turn XXXX, final net ago. improvement

Patrick Williams

service, Thanks, maintain Entering focus teams and their our technology, tight sharp imperative continue. chain XXXX, gross expect Ian. and costs inflation management. that business elevated supply margin pricing, we It is on to customer

in continued that optimistic and cautiously expansion coming all the margin quarters. businesses. And are are well-positioned we We conditions growth for these will moderate

offset been the sustainable continue innovative increases Our Further customers announced of our other impact are and in products in dominated higher personal to performance. through to and use the more we by transportation. can all businesses in portfolio And the performance is cleaner applications, have critical which help first quarter. of to parallel, including introduce technologies cleaning, prices that daily enhanced care, price

did position during $XXX over an cash and cash our million. businesses to quarter, excellent capital working Our increasing job net managing the

and pursuing for funding growth pipeline of through growth We disciplined through dividend capital allocation our include our our will announced acquisitions, increasing projects, newly $XX value returns programs. our continue in organic capital complementary of to million buyback well-defined facility. shareholders create shareholders share execution to our These

the Operator, call to take the Now Ian over turn I your will will I questions. and and

Operator

question from Instructions] line [Operator from the first Thank Tanwanteng CJS today Jon comes Please, you. Securities. ahead. go of Your

is line open. Your

Jon Tanwanteng

Hi. Thank morning, everyone. you. Good [Indiscernible]

Ian Cleminson

[Indiscernible] Jon. Hey,

Jon Tanwanteng

as about of wondering, there's -- XXXX? of more assume versus the as was expectation, I pricing the volume each you wondering volume component your into growth? revenue components thinking I forward, talk as side QX, there but of expectations your for -- In that high-level pricing the coming, we enter we I'm on [Indiscernible] segments how can are what you go specifically, as

Ian Cleminson

one, with that up for start sure comments. Patrick come me will some I'm then let Jon,

So pleased where, and XXXX, performance sweet really through to been in just businesses, come single-digit we've is growth high most volume. to expecting growth We're individual we that a as expect talking spot. chemicals we're throughout of going through the with really and

a XXXX. to the in underlying three revenues growth, business sort bit we have likely there reached The Now bit terms diesel High demand slowly that now has will in got mainly XXXX. more from come impact still Specialties to of little We back to a raw Fuel little will Fuel but will expected. come volume are in-flight. single-digit Those be that jet different. Specialties fuel, slightly material pre-COVID volumes. globally. in done throughout is that of

returning. X% of better volume it we'd overall, is see expect we're to back settle our well see has business will Customer XXXX. the field perform expect that inflation probably the see share fuel is a X% there, in where done into may price in Again, growth growth and to uncertain that You bit market, specialties, revenue the business. that's that at but some We're rates. underlying, bit than a the we'll slowly business more little in [Indiscernible] moment. line one to in really activity single-digit capturing little will volume the but low you

So we'll growth volume good that well. there again, see we're to continue optimistic as

Patrick Williams

consistent as versus businesses all pricing it's growth volume It's I We're throughout with think And to pretty nice you we're been we're been activity. it's very year-end very with just results. the alluded happy the yourself. quarter, to three happy see Jon, -- confident,

Jon Tanwanteng

in nice as color inflation inflation you're to talked there that terms you also to margin see well there I that well, about for as wage you need expecting is OpEx gross if guys we retention? QX. Thank great. of you go as improvement Okay, it's address employee especially in and was forward had that wondering as and

Ian Cleminson

raw else -- industry freight, wider are want of like inflation. a the do everybody it. inflation, are attract assets. best coming the name key we all we We've material wage in the best Jon, lot to you people everything economy, clear seen seeing retain We're lot trucking, we're of Yeah, and the talent. It's and our talent that We very to can through. our a

all action taking working we're across our around flexibility. businesses of wages, conditions, So, and and

numbers. expenses? the the How yes, our margins, will thing operating It the part think to correct action, baked We've see into whichever onto more see and operating but do, us a operating So right we'll all that we'll -- in. we're it's do set of we lot our of pressure you'll add that world impacts that. some

Jon Tanwanteng

Okay, great.

buyback of is Just opportunity given that more is where strategy. a in some what something allocation that or for your the thing to authorization, on? on Just are plan waiting alternatives quickly you the question an you're execute opportunistic capital rather

Patrick Williams

preventing manageable. a I as both, years bit being moving And and It's allocation this see bit of we see little you'll It's the a program, little dilution. to marketplace. It's of would this like both that opportunistic Jon. we think balanced have such forward a in the is easily move capital It's that because that continue on.

We increased next We've five-years, We've the identified between spot. our a I continue program puts we're But position. and XX% over time Performance want doing allocation's the that. increasing Chemical a every think in dividend nice good to in a buyback capital I as growth great well, a So, XX% to share going. over with where in potentially year. really really think along good us

Jon Tanwanteng

Got end-markets money and one investment, ounce an can me if you you product are the final million and just the it. up XX that what one I between actually in lines for could, break putting into? And

Ian Cleminson

Yeah Jon.

Let go. me the at say that first

$XX home and the over The investments we're across care and investing having just investing facilities. will well. over two Europe. focus with -- personal So, the industrial, years that also and be growing investing business our care support also into first, of in be capacity number primary our our markets, and will initially We're we'll a US that both million in agriculture, but mining the in as of in and are markets,

primary blind as of but personal part just care, will now, right other our most that to and not business the seeing of the if we focus business So, the that's are be part growth we're well. the the

our most infrastructure that's piping, [Indiscernible] chunking, that that the needed be So, will expansions, and be. manage might of around it it wherever go into growth, capacity to or

It's and So, that going multiyear Jon. growth into And a it not we're now. program there's right an also to XXXX, awful what's into lot and support on, high but just on 'XX 'XX with beyond. going single-digit that's well and

Patrick Williams

Yes.

Ian expansion theme all our to that, all and And that think etc. I just that's that's along. typically around And add based think we moving And it's already the growth sustainability, I volumes other when add to natural, Jon, spoken been the themes reactors, really of forward. said, as typically for.

put it. based And with back so, it's a some to really nice program sustainability, contracts it's all place long-term around in natural. And that's sustainability, nice and

Jon Tanwanteng

guys. in jump queue. it. Got Thanks, back I'll

Patrick Williams

you. Thank

Ian Cleminson

Thanks, Jon.

Operator

will Williams hand I closing the to Patrick you. back Thank remarks. call for now

Patrick Williams

and today. for shareholders, all our Innospec all customers, and support. joining you for us Thank thanks And your interest employees to

a May. about day. with great call. results Innospec you first-quarter today, If up questions further us any or a being have give Have XXXX to to in discussed our discuss look you matters please forward again We

Operator

Thank for you you. That does conclude participating. today's conference. Thank

all disconnect. may You

Innospec (IOSP) 16 Feb 222021 Q4 Earnings call transcript