IOSP - Earnings call transcript Q2 2024

Due to licensing restrictions, you must log in to view earnings call transcripts.

Operator

Good day, and thank you for standing by. Welcome to the Innospec Second Quarter 2024 Earnings Release Conference Call and Webcast. [Operator Instructions] Please note that today's conference is being recorded. I would now like to turn the conference over to your speaker, Mr. David Jones, General Counsel and Chief Compliance Officer. Please go ahead.

David Jones

you. Thank second Innospec's earnings quarter to call. Welcome release posted on earnings for the are presentation this and the quarter The company's website.

Officer. should comparable earnings is Vice I'll of and They GAAP the financial you, Officer; had me results. With and in financial investor the company's In and risks During -- and forward-looking Chief performance based are see make in and are accordance measure The and with non-GAAP assumptions in Innospec's results results this reconciliation forward-looking statements, addition Cleminson, site The cause of that additional for to the to XX-Qs the prepared Innospec are included President anticipated to subject and with not which will as financial considered from we call, risks directly actual items are that and turn implied to those such are XX-K, projections for Innospec other in filings Ian A it Executive be also GAAP. to and release. detailed uncertainties these items current most SEC. Please financial SEC on over on today Patrick Financial today's Executive about that, events Chief Williams, the these these And the Patrick. statements. included measures. as impact understanding with are statements have the expectations substitute and differ non-GAAP could a aid side from we uncertainties related presentation, predictions and by materially President measures documents. to

Patrick Williams

while was last Call. double-digit improvement as for and Innospec Specialties further over as Performance mixed growth improvement, Innospec's Second doubled oilfield strong Thank you, David, quarter services welcome, production and more declined Quarter year. than a delivered expected. Performance income results margin operating delivered Chemicals XXXX as Fuel and Chemicals income Conference operating to This everyone,

We that patterns, by this order in margins innovation full by their pipeline, can strong return disciplined target to optimistic remain year natural end remain volumes rates While technologies. Supported customers key the of markets driven and and income maintain improved we operating to remains XXXX. our mild care our our in XXXX half in levels. second our improvement personal

addition, driven Fuel our QGP by and margins, integration In the income recent operating is the at performance growth which and acquisition sales to delivered of higher proceeding double-digit Specialties plan. were gross upper opportunities XX% applications. footprint pipeline targeted our of to strong capabilities, our continues innovation our of end future Leveraging in and growth team a fuel range. both and global to build nonfuel XX%

Services lower As expected, activity chemical impacted significantly results in Oilfield were the quarter. by production

and seeing below of applications. a inventory rates lower in with high-volume levels treatment We continuation chemical combined are average usage certain

as we As this quarter possibly recover of July, seen we of currently activity persist not through have lower previously of these end remainder anticipated, and year. the levels third and the the will assume we the through

recovery of We expect trajectory these are to the consumption more applications our optimize and on of quarter. with and performance coming have detail in on customers on production levels to focusing working chemical the

and on In we margin multiple continue to segments. in growth execute Oilfield other opportunities addition, our improvement

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

Ian Cleminson

Patrick. Thanks,

a compared quarter $XX.X was XX.X%. Adjusted $XX.X to to quarter percentage presentation. EBITDA was quarter for million points million last were for year the $XXX.X $XX.X The million, by to the compared $XX.X total X.X from margin Overall ago. and in X% for a a second net X Slide decrease income gross company's the decreased $XXX million million year, million ago. to Turning year last from the revenues year

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

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

X.X Slide second in Revenues Performance price of Turning material to to benefiting an from Chemicals XX% to million, X. $XX.X of $XXX.X same compared costs quarter selling the last lower XX% year. in quarter to sales from of offset over up margins $XXX.X flowing adverse XXX% volume increased increased growth growth were raw the XX%, of of increased mix million and volumes. through last Operating mainly due for were attributable to QGP income percentage acquisition the prices. Gross year's XX.X% XXXX, by points production and million, X%

maintain able half in to to expect be the level this profit of of operating the We year. second

an a Slide with reported were the up above was million. year, Moving comparable margins on year gross million mix $XX.X Brazil margins income gross in material the up outweighed million the Fuel X. loss million, from was Specialties $XXX.X in lower raw million a from by and from XX% year quarter second was of quarter adverse were to of mix ago. A the the price favorable XX.X% by last $XXX.X of points $XX.X Revenues Specialties for XX.X% income X.X the of XX%, pricing million $XX.X Adjusting X% XX% operating increase Fuel $X volume in were percentage the offset sales in Operating same for prior costs. easing a year. ago.

decreased quarter $X.X production of XX.X for a to Gross to last million, sales a year Slide from XX.X% Services in Due chemical operating to on $XX Revenues last reduced the XX% the quarter. we $XXX.X of rate income year million points $XXX.X Oilfield the on ago. XX% weaker quarter million activity run our our Moving income down X from at were from X in percentage continue year. in quarter mix. Operating decreased million expect to business, this XX. margins second similar in

The for the compared the costs $XX.X XX.X% $XX.X a was for Corporate XX. effective Slide year with rate quarter compared to ago. XX% million to tax were quarter a year Turning ago. million

the For the rate our full in we due geography our XX% change to the be expect profits. of year, now tax taxable to

on XX. Moving Slide to

quarter, operating $X.X of the cash before For was million $XX.X capital million. expenditures flow

XX, As of in back I'll turn and to for cash and now had $XXX.X debt. And it Innospec some equivalents over million Patrick cash no June comments. final

Patrick Williams

outlook Ian. Oilfield net continue intensely investments overall our to Thanks, In which Chemicals Specialties, growth strong balance our to business. With through shareholders M&A and clearly pleased in on while we pursue target this recovery despite drove delivering Performance I operating drive am returning the we dividend range, will the with solutions over results we the sheet, complementary which our innovation income below organic committed of and very in and quarter. Fuel believe to short-term remain customers, being Services, million to in $XXX value growth. double-digit cash

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

Operator

the questions [Operator of from The CL King from come Instructions] line Silver Associates. & David

David Silver

your little So we of bit chemical to A a assess customer-specific I going like shale would I I this that detail. there tied just could what's on and so the if kind on bit a color problem? a side. better? regions? region, basin was to little maybe Services decline just of mean this can X particular of you the a Just that, Is of with out little production Oilfield bit maybe wondering the on it. outline more is kind start just

Patrick Williams

very of their South to quarter. a in due It's been of down. for not years. America, customer levels David. in some have in And election at has a point sure, dilution political now. the region, inventory inventory so seeing U.S. Yes, Saudi. And bring at feel the a in Mexico been It's been we like start and not using time, to some they our kind it's It's saying it's who we on to should but we've that end orders, be situation

obviously politics So dilution involved. obviously There's there's involved.

caught technology. hard we on going put in know sit what's us updated keep the why to now, offshore the applications, to in see and up the it, in onshore. best text and politics, It's have on for the quarters. it's involved down the right everybody out. itself have play in heavily through And we'll are it's we But that's process, we it just handle and and we just say a that but We

David Silver

I good. Fuel over Specialties for Very like to moment. to the a would just Okay. segment switch

is maybe business further there's be your on? Is So sales target mix upside margin back desired sign mix, might guess, in in I been margin, that should pretty guess, a we I level and level highest side. there the the levels? segment time the to this at, some gross gross And it's maybe is Or pandemic going absolute read since of something at your guess getting else the long that on the and gross margin the I began, pickup? a

Ian Cleminson

quarter. We're And together Specialties, that have little have it Specialties They've on as been raw pricing with material down. really lag that. Fuel as a this gross pricing. focused control good that's in And part team Fuel performance And why keep we've customers we're really the up to with the hard pleased margins prices put of you can the the know, in over our worked quarter. seeing and go the tight to in reason

of as that there's go step of But we're side we top we're a outside quarter that range positive the compared range, the range I we end the year, the certainly reason and of rest the is think quote. from comparable feeling that through we think is the the mix benefit top do the did the I no of sales our normally range. quarter. it we that to of why should end step this other that And in have away towards

pretty now. So we're right at about where good we feel

David Silver

release, was Okay. Specialties, in stationary X within a in opportunities? your Is just be nonfuel. bit the on and there wondering but And follow this nonfuel I something fuel to highlighted -- that Specialties, then think, could beyond just a bit... Fuel Fuel if Patrick, opportunities. the one, up might press just the more I Or elaborate little little on you power you

Patrick Williams

of little everything, a bit It's David.

that fuel. within products have outside treat We that are that portfolio some of applications

and of those through to And so year. throughout this some grow those are coming quarter, expect applications the we

the lot you're have active technologies tapped applications. of that's other the just outside made surface as based another aware, market. fuel And into technology we So a market around we

Operator

of from line CJS question Tanwanteng Jon the from The come Securities.

Jonathan Tanwanteng

is one? more was the Oilfield elaborate on hand, there what wondering issue driving if you understand switch What this? the over I a you could or so number really political could at a into that we recall number with bit technological just Could if those, could, two, And of situation. was also I is change detail little that both you go involved. is

Patrick Williams

probably have some it's election But of obviously to. -- we're They our They've middle as they're quarter. get as since had into, and trying three sitting We pipeline least Yes, talking to the reordered of can. that in diluting limited not much year. at or some we information numerous information, low. the or We first downhole in products on know inventories There go who products been a, depending inventory. critically offshore. they

only is information application the us in product. We hoping want as it give production that that see are don't I We we That's get and some waiting to John. until they probably issues. highly some problem. but as and that safety some down. to answers there's the it's just We political, know near starving term. We much and the quarter, been know for is orders have do here fourth know

as in know the know as we'll right you. our give in technology our works. in see It's we and low now. start information public. need quarter, they you product. We we more can can't probably color, stated It's critically that stated, the don't proven. that product as That's I back coming give I I but they're been situation much they're next they just with -- mean, how So

Jonathan Tanwanteng

reducing I guess someone ask hand a all? actually or in the not the versus using question was you're Got trying or whether your I or at production is it. political customer product to question else's

Patrick Williams

I think neither. it's

issue it's want run other there's to think where how I political politicians a business. on they this within each fighting

we're the hands seeing you're And they're got they general top. And in put use It's use and or the whole critical now it's we has state. put is going are going to personnel in it's to do it's therefore, are the run of critical be that figure are It nothing have. vendors finally country up the that's build other when how really issue Innospec out they fixed I business just so think And politics they business right issue. to that to XX what and well. at with going to to an going not -- the a as the the business,

Jonathan Tanwanteng

helpful. very That's Understood.

was stuff, what I terms about some weaknesses and and seeing if just of the strength could demand trends other personal of creating. the between wondering care X just Performance you're the Secondly, and different you or in buckets in ag, just Chemicals of industrials, talk

some If helpful. you that, could give that color be us would on

Patrick Williams

We've coming similar demand Care quarters Yes. trending that's strong upward. expected. Personal that we we've said back And why -- see as and seen very moving in forward that's we

quite back the we're pretty that So we're and Agriculture, But industrial starting very flat. happy to there. happy markets are business. come frankly, with

even into we're John. I freight quarter of strong that a return. are are moving an still train hit at on patterns everybody we about order a the yet, think trajectory from immediate not to seeing inflation And going in and worried once. nice QX. pretty running all of people seeing We're recession? to We're QX Is

pretty business optimistic. we're is confident So in pretty that

Jonathan Tanwanteng

then cash down, sense getting that less urgency on. if rates I put to especially you regarding it. work, $XXX million that any mean, coming are Got to interest more have, just And the in income you're

Patrick Williams

I Yes. these of I that at looking and a mean companies think of now assets. lot justification their assets right are

still which lot a I obviously, as have a organic have always of lot opportunities growth. you looking organic is, pay well, opportunities. don't at as say, we're of to So on We multiple do M&A a growth

And the that looking that's at buybacks. you again, opportunistic radar. radar, XX%. price, been start consistently. our increasing dividend doing off So not the being That's on our We've on share as

we EPS do fighting and strong a sales always as will and that. back increase have and as we hell We always do and you we business know, come like

be So if potentially is in down, buybacks. opportunistic share price going to we're our

we So we're saying X, have. we've been what as always think really going hasn't I on changed from day stay that to steady

Operator

question end the Patrick We session. to I'll will remarks. now for now answer turn closing

Patrick Williams

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

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

Operator

all Thank you This call. conference for concludes today's participating.

disconnect a now your day. may You you, lines. have Bye-bye. and great Thank

Innospec (IOSP) 7 Aug 242024 Q2 Earnings call transcript