IOSP - Earnings call transcript Q3 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 Third Quarter 2024 Earnings Release and Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded.

I would now like to hand the conference over to your speaker today, David Jones, General Counsel and Chief Compliance Officer. Please go ahead.

David Jones

you. Thank Jones. David is This earnings release posted this are quarter for the company's the on and website. presentation The

and During Innospec's this materially statements. on uncertainties call, projections we actual such risks will make forward-looking forward-looking could that anticipated XX-K, events. that subject the detailed SEC. other cause statements are results and assumptions by uncertainties about to filings statements, and These are the with and The based differ XX-Qs risks expectations results are in to from future which are implied

non-GAAP Please these considered most see addition financial today's those also understanding should site that financial the GAAP. earnings the items as accordance SEC with as financial for the in site The are contained non-GAAP investor these comparable to results. directly and and aid presentation, had measures a performance and Innospec's in to for substitute is They company's on measures. prepared included financial additional included to the events measure In impact related reconciliation GAAP A items the documents. not in of we've be release.

With Vice And Executive and Cleminson, from Ian Officer; Financial and Executive to me President turn Chief and Innospec are Patrick Officer. it I'll with today Patrick. that, Chief over President Williams, you,

Patrick Williams

and first of and Oilfield coming performance operating was activity as quarter. Fuel comparable Chemicals and levels Innospec, results Chemicals broadly with improvement, quarters double-digit in David, income Third margin lower XXXX, Quarter with was for quarter while the to expectations. expected. XXXX delivered to Performance you, with continued Services expect welcome, Thank the Innospec's operating this in have everyone good to Conference Call. a growth we similar Overall, Performance Specialties our income line X

and full margins Our target rates XXXX return income for operating year to levels. remains to run our XXXX

their next expand our technologies. products. deliver generation will by for continue performance customers formulation the that value portfolio sulfate-free of and Supported industry-leading X,X-Dioxane expertise, require We to our our we of

our agriculture we within of growth other income remained care, demand delivered end home target improved emissions. industrial a focus fuels In renewable on lower range. addition coming cleaner gross margins, operating opportunities transportation for broad care, the Specialties over continues in steady With mix outlook personal and double-digit to fuels our with growth Fuel see heavy along in a multiyear organic decades, to our XX% XX% which be to and with markets.

nonfuel Our will and applications. technology both pipeline opportunities drive in fuel

through by in levels As Latin expected, lower Oilfield impacted Services of assume this year into America and these be will to the persist our lower activity We end currently continue business. XXXX.

remains team improvement expect multiple our in focused quarterly we to Our on sequential which other growth and in drive margin Oilfield segments, XXXX. growth opportunities

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

Ian Cleminson

Patrick. Thanks,

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

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

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

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

be this We able expect to in level to quarter. profit of operating fourth maintain the

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

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

primarily year, period Slide with The tax taxable the of rate geographical costs. to location compared the $X.X costs the million recovery pension the the were ago, year quarter million for $XX compared XX.X% million quarter profits. XX.X% of Corporate effective last reflecting historic in XX. due same Turning a to was for to $XX.X

to tax rate be For expect our we XX%. XXXX,

to on XX. Slide Moving

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

equivalents Innospec September XX, million in of As debt. has cash and cash $XXX.X and no

for now it some And over Patrick final turn comments. to I'll back

Patrick Williams

growth relatively Oilfield In flat the double-digit the quarter, the the Thanks, I this with was both we well overall over income XXXX, sequential year second Fuel quarter Specialties believe we and and Specialties seasonal with in year, for Fuel Services are full expect Oilfield sequential Chemicals steady were on demand which Performance in in quarter. recovery with Performance operating Specialties. line Fuel while fourth growth and Services. Ian. results our quarter, results Chemicals with we Performance generally pleased growth am In Oilfield prior expectations. and Chemicals some delivered in Services in positioned

investments was well cash This through net pursue balance complementary generation. in sheet, continue for on to quarter positioned shareholders while we over dividend excellent another returning our $XXX million value organic With to M&A are cash and to growth.

increase. full $X.XX, quarter, This semiannual our bringing year a $X.XX, to increased we to representing dividend dividend XX% our annual

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

Operator

[Operator of Instructions] from question Seaport Mike now Research from take We first will the the Partners. line Harrison

Michael Harrison

business. sequentially. the with bit So I we that bit a surprised hoping that revenue see little little I start was I could a guess was higher did to out Oilfield move

are that to us feeling expect can and the And quarters? where America opportunities about of some details up you're this seeing few make revenue to curious, guys out the kind play looking of you shortfall? good outside Just you them maybe how you're for Latin opportunities give on next maybe over you some of those

Patrick Williams

Yes, Patrick. Mike, it's

XXXX, at we I working entity full yet. American we and at QX quite think you then throughout business look year of a don't Latin lot if see really look

other approach. we in but what's think on, going done government it what it's also see margin being handle the a U.S. other in, improvement is traction, wait-and-see of we'll new DRA, I be some on hope completions concentrated kind in activity But we've with coming a areas, our on production not have chemicals. to but only getting business including businesses,

East Middle the job. those that in done people Middle big Aramco. East in specific A really of Saudi we a And and Saudi push lot have have now a the made there. and all the right We've headway offices good to is in

proven As moving a I ourselves fact, of the we ourselves why matter you'll products. opportunities a from in do continue I uplift proven And there, We've forward that just with returned XXXX. to with services a see we'll great have lot think that's of and trip that. and we've

Michael Harrison

operating Can whether Fuel like was unusual line, line SG&A Fuel look All lighter the just Specialties? right. that than expense about kind And quarter. going you it lot in on seems SG&A there I it came then last anything within in at the expenses a on, if of talk was or Specialties,

Ian Cleminson

time any significance of at nothing little perhaps costs Mike. whatsoever. bad Nothing all, A of a bit with little No, relief. bit debt of

Michael Harrison

talk All right. we kind like that sounds Great. Chemicals, then you're about I might mix was cost that lower just see pricing price that raw know when Performance of lower. still But And and trends seeing of raw material the stabilize? you number can It number pass-through material to expect costs. just in is

Ian Cleminson

moment. from comes material raw And it's Mike, products. at our pretty seeing now. generally So crude natural pricing of stable the business, a we're derivatives stable across the pricing And lot right or pretty

So all the some we're And pass-through that gross on margins stability pricing We've stabilizing some of and up seeing now. of Chemicals is there. in sort in [indiscernible] fuels, Performance sort higher and cut there.

have So as year-over-year we're numbers. seeing in but we year-over-year seeing done not as movements, sequential violent the we're movements

that down. So I think settle going you're sequentially, to see

a of realigned. get just more the it's think I comparatives periods, little going to bit take time we so

Michael Harrison

little guidance. performance seasonal then uptick improvement little question Specialties of last business, and Performance sequential the bit for or on just in kind a Chemicals of is And about right. may maybe It lower. like All a be steady you're the me maybe then a talking Oilfield Fuel bit sounds in

is quarter? $X.XX see would just on Is EPS ballpark the that to Or bit little So you next higher that reported. still right in a line? you expect for the that the

Patrick Williams

it's Mike broadly I think line. in

in I other a on think line. moving probably think forward you're businesses and sequential some higher I maybe on, $X.XX a is right you'll Oilfield. And tad see improvement spot the

Operator

from We line Jon will question from CJS. of the the next Tanwanteng take now

Jonathan Tanwanteng

looks what that from items I historic we the normalized was and corporate pension higher costs the I was wondering wondering, going corporate I about noticed forward? like quarter. had cost in you think what should some

Ian Cleminson

was from into this $XX that's Ian, XXXX. for credit Jon. And the a one-off U.K. Yes, This about received some is number going sort we adjusted corporate of pension That historic number in good The costs. million quarter costs a that is forward

quarter, for a the full year. million $XX $XX So million

Jonathan Tanwanteng

it. Got

growth Patrick, What's just I of investments the pipeline investing in mentioned business? for then, top think And Okay. you the in M&A. you organic terms in of on for

Patrick Williams

we're looking as We're like that it to But make at markets bit Performance a I still are. the interesting. think monitoring still speak, Chemicals. are little fluid It's in they sure we

bit additional looking Oilfield, think acquisition M&A the Some some looking in we opportunities And at potentially some we geographically, could of of in with expansion then just And areas. we a DRA also are QGP other then that. with our of at of Brazil, areas organically. that that down expand new business outside little in other

Jonathan Tanwanteng

as business just results, light your the to stock And benefits the impacts today, reacting we in think forward? then it. The of go are. I'm be be you Got might thoughts your that wondering election Okay. might do what and or on what

Patrick Williams

I you that's see help the mean to benefit corporate going tax everybody.

That's is hope. have you political general the some hope view Our stability to globally.

I general looking think that general -- business, positive, pre-election. are in things

should to in our there I I bring everybody. up there But positivity happen. and hope that's think I do what as election. well. the back And prosperity the as be stability obviously, that, hoping President, no a boost. set businesses think gets is and this to post-election, going world think very that a happened bit they matter And whoever bring potential with well world are And were that's quite that peace of we

Operator

King question take & David the CL from now from will the We line next Associates. of Silver

David Silver

Performance the First area. on question would be Chemicals

So acquisition overall a currently. and role comment Latin been it's since I'm you playing but few your couple a could and wondering now American on the if just integration the things, quarters of maybe it's

part products this for it on in find try earlier, of this but And I local markets producing network maybe does purely? bolt-ons to words, similar it's or So you Is formulations shipping area? other overall, a those touched of more in strategic think that certain where more make you and global is kind in to specializing unit likely globally? it more of

Patrick Williams

to as fairly be to It's strategic acquisition there in we'll but Fuel only make to us able in question. in Oilfield especially a Latin assets. regards capabilities Dave, America, time, there on Over the country was probably in Yes, not manufacturing products diverse well. on good Brazil. Specialty give It products

in the have it do So the customers of have It U.S. but well, is applications in is they as the like our a expectations. U.S. Latin meeting business, assets. we capabilities does and American the primarily

them from markets expect the We especially to XXXX, come a year nice as back. have going into agriculture

that very positioned. So well is

world or And like it's what that of China system, is similar that we India into that integrate units. whether in where look do does as can type activities millions fully areas millions, spend our it and by or the at don't giving X business we want need in-country to assets control and we all to and capabilities of spending we go but hundreds we'll

David Silver

the Chemicals, then currently. Performance maybe also demand on seeing for you're the demand And a that just comment but profile maybe

So did the kind post customer overtaking revenues you organic planned programs in there, pandemic I for causing know, certain I -- pandemic other know see on expansion rate base basis. versus major demand. Specialty business and some a close Fuel your where in of new undertake program amount run of But a mind investment that And a words, or where certainly in very don't or your while revenue effects we to adjustments the to mind. -- with in

orders of the customer Or filling do you fully menu would there Just going fill had to new programs be you anticipated? some you don't you're incremental and projects demand still customers think Have are? I entire, or forward? know, where that the for engaged

Patrick Williams

I Yes. see -- that were in The XXXX is the think in hope we'll XXXX. what levels we hitting hitting

You like through are caliber as type a we in the that sell. mix lower but to especially seeing gone They've product, commodity, a higher high not not type inflationary product markets. product differential

higher you'll market been stabilization, rebound. trends. the up see nice as back think you'll see them moving I But into a it's

see I least to rebound the beyond XXXX goal keep get continue and is those to at that to think we'll that. XXXX we'll and pushing levels in

margins So the we're the as mix, well. as mix, right those we see long price And direction. the improve right get you'll moving right as

David Silver

or Fuel of over moment. just And couple your pre-pandemic on to But the the maybe into of margin market I other a switch is maybe of is levels. and guess for margin touch I'm kind In other a fuel business aviation I higher that Or be your new a some while. I'm just margins a to of words, margin, reflection getting things. current in business, a new contributions from this the additives? some products highest, Fuel EBITDA a and into it's returning quarter's in looking what to starting comment on Specialties mix of just strong maybe kind little been performance quite performance of this could the that? Specialty the at want margin bit more So reflection the went wondering maybe I side? very did benefits a to the If But the here. would see

Patrick Williams

for raw product David. materials, I a conscious It's improvement. think it's a mix, margin mix. and there's It's internally effort lower

And so combined of X with had really I think all those, they a margins. strong quarter in

have cautious we similar before we moving think QX in in to see maybe margins a a be But in do fourth down type we but quarter similar see bit the quarter. XXXX, trends I forward. little

David Silver

lower one. X touch maybe did situation you on the revenue levels. just then Oilfield last And I But with the in mean,

-- without can't pretty might reduced products talking, your Any thinking days lines? process edges I there's mean those on. further involved. XX road? might the proceeding But it's or political the to the XX days was orders I your hurt the XX if operations -- it's we I be anything when compared was directly. up wondering whatever that that it down indicate do a that their -- situation picked customers would that with further understand you've feeling maybe be And along customer your Just days well, were the ago certainly that think how that around forever. still

Patrick Williams

of the through down product have We're our market. When great established. X that come We that's well control. We products that We're bit. marketplace. in partner know safety political established. of know literally has come product the environment there. is have little It's gone We very got We've out a the was a well off. levels few work all testing a off in production that technically our

We're at they've not some and that be help the in. I we're think up time, point worked. in. hands pieces. pick their to something things around other pretty it it's But involved waiting have we'll still sure in involved definitely tried we'll and get We're probably that there

us, until going And us. just there need when help sit we're to to them. tight we'll they So they be need

Operator

conference to to Patrick like the you. for Williams closing back would remarks. Thank now turn I

Patrick Williams

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

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

Operator

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

You may now disconnect.

Innospec (IOSP) 6 Nov 242024 Q3 Earnings call transcript