Innospec Inc. (NASDAQ:IOSP) Q3 2022 Earnings Conference Call November 9, 2022 11:00 AM ET

Company Participants

David Jones - Senior Vice President, General Counsel and Chief Compliance Officer and Corporate Secretary

Patrick Williams - President and Chief Executive Officer

Ian Cleminson - Executive Vice President and Chief Financial Officer

Conference Call Participants

Michael Harrison - Seaport Research Partners

Jonathan Tanwanteng - CJS Securities

Christopher Shaw - Monness, Crespi, Hardt & Co., Inc.

David Silver - CL King & Associates, Inc.

David Jones

Thank you. This is David Jones. The earnings release for the quarter and this presentation are posted on the Company's website. During this call, we will make forward-looking statements, which are predictions, projections and other statements about future events. These statements are based on current expectations and assumptions that are subject to risks and uncertainties that could cause actual results to differ materially from the anticipated results implied by such forward-looking statements. The risks and uncertainties are detailed in Innospec's 10-K, 10-Qs and other filings with the SEC. Please see the SEC site and Innospec site for these and related documents.

In our discussions today, we've also included non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure is contained in earnings release. The non-GAAP financial measures should not be considered as a substitute for or superior to those prepared in accordance with GAAP. They are included as additional items to aid investor understanding of the Company's performance in addition to the impact that such items and events had on financial results.

With me today from Innospec are Patrick Williams, President and Chief Executive Officer; and Ian Cleminson, Executive Vice President and Chief Financial Officer.

And with that, I'll turn it over to you, Patrick.

Patrick Williams

Thank you, David, and welcome, everyone, to Innospec's third quarter 2022 conference call. This was an excellent quarter for Innospec. Volume and price/mix improvements drove strong sales growth in all businesses. We delivered a 60% increase in operating income and margins expanded. Over 80% of our gross profit in the quarter came from business outside of Europe where recessionary pressures are more prevalent. We believe we are well positioned for both an end market and geographic perspective to navigate continued expected headwinds.

In Performance Chemicals, strong Personal Care growth continued to offset weaker demand in smaller segments like our European Home Care. Overall volumes and price/mix both improved in the quarter and operating income was up 43%. We do not see any change in our customers' drive towards higher performance and cleaner formulations.