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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to

Commission file number 1-13879

INNOSPEC INC.

(Exact name of registrant as specified in its charter)


	DELAWARE		98-0181725
	(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

	8310 South Valley Highway Suite 350 Englewood

	Colorado		80112
	(Address of principal executive offices)		(Zip Code)

Registrant’s telephone number, including area code: (303) 792 5554

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

     Title of each class

     Trading 
Symbol(s)

     Name of each exchange
on which registered

     Common stock, par value $0.01 per share

     IOSP

     NASDAQ

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such file. Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
Emerging growth company	☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


	Class		Outstanding as of July 31, 2025
	Common Stock, par value $0.01		24,833,161

TABLE OF CONTENTS


PART I	FINANCIAL INFORMATION	2
Item 1	Condensed Consolidated Financial Statements	2
	Condensed Consolidated Statements of Income	2
	Condensed Consolidated Statements of Comprehensive Income	3
	Condensed Consolidated Balance Sheets	4
	Condensed Consolidated Statements of Cash Flows	5
	Condensed Consolidated Statements of Equity	6
	Notes To The Unaudited Interim Condensed Consolidated Financial Statements	8
Item 2	Management’s Discussion and Analysis of Financial Condition and Results of Operations for the Three and Six months ended June 30, 2025	18
	Critical Accounting Estimates	18
	Results of Operations	18
	Liquidity and Financial Condition	25
Item 3	Quantitative and Qualitative Disclosures about Market Risk	27
Item 4	Controls and Procedures	28
PART II	OTHER INFORMATION	29
Item 1	Legal Proceedings	29
Item 1A	Risk Factors	29
Item 2	Unregistered Sales of Equity Securities and Use of Proceeds	29
Item 3	Defaults Upon Senior Securities	30
Item 4	Mine Safety Disclosures	30
Item 5	Other Information	30
Item 6	Exhibits	31
SIGNATURES		32

CAUTIONARY STATEMENT RELATIVE TO FORWARD-LOOKING STATEMENTS

This Form 10-Q contains certain “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. All statements other than statements of historical facts included or incorporated herein may constitute forward-looking statements. Such forward-looking statements include statements (covered by words like “expects,” “estimates,” “anticipates,” “may,” “could,” “believes,” “feels,” “plans,” “intends,” “outlook” or similar words or expressions, for example) which relate to earnings, growth potential, operating performance, events or developments that we expect or anticipate will or may occur in the future. Although forward-looking statements are believed by management to be reasonable when made, they are subject to certain risks, uncertainties and assumptions, and our actual performance or results may differ materially from these forward-looking statements. Additional information regarding risks, uncertainties and assumptions relating to Innospec and affecting our business operations and prospects are described in Innospec’s Annual Report on Form 10-K for the year ended December 31, 2024, and other reports filed with the U.S. Securities and Exchange Commission ("SEC"). You are urged to review our discussion of risks and uncertainties that could cause actual results to differ from forward-looking statements under the heading “Risk Factors” in such reports. Innospec undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

PART I FINANCIAL INFORMATION

Item 1 Condensed Consolidated Financial Statements

INNOSPEC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(Unaudited)


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions, except share and per share data)	2025			2024			2025			2024
Net sales	$	439.7		$	435.0		$	880.5		$	935.2
Cost of goods sold		(316.5	)		(308.1	)		(632.2	)		(652.6	)
Gross profit		123.2			126.9			248.3			282.6
Operating expenses:
Selling, general and administrative		(74.6	)		(71.6	)		(143.9	)		(162.1	)
Research and development		(13.6	)		(14.0	)		(26.3	)		(28.0	)
Adjustment to fair value of contingent consideration		(0.8	)		(0.6	)		(1.5	)		(1.4	)
Profit on disposal of property, plant and equipment		0.1			—			0.2			0.1
Total operating expenses		(88.9	)		(86.2	)		(171.5	)		(191.4	)
Operating income		34.3			40.7			76.8			91.2
Other income/(expense), net		(5.1	)		0.9			(5.6	)		3.6
Interest income, net		2.7			2.1			5.1			4.2
Income before income tax expense		31.9			43.7			76.3			99.0
Income tax expense		(8.4	)		(12.5	)		(20.0	)		(26.4	)
Net income	$	23.5		$	31.2		$	56.3		$	72.6
Earnings per share:
Basic	$	0.94		$	1.25		$	2.26		$	2.91
Diluted	$	0.94		$	1.24		$	2.24		$	2.89
Weighted average shares outstanding (in thousands):
Basic		24,937			24,937			24,954			24,918
Diluted		25,042			25,097			25,097			25,091

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

INNOSPEC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended June 30,					Six Months Ended June 30,
(in millions)	2025		2024			2025		2024
Net income	$	23.5	$	31.2		$	56.3		72.6
Other comprehensive income/(loss):
Changes in cumulative translation adjustment		37.4		(6.3	)		55.8		(14.0	)
Amortization of prior service cost		—		0.2			—		0.3
Amortization of actuarial net gains		—		—			—		(0.1	)
Other comprehensive income/(loss), before tax		37.4		(6.1	)		55.8		(13.8	)
Tax related to cumulative translation adjustment		1.5		1.0			1.8		1.4
Tax related to other movements		—		(0.1	)		—		(0.1	)
Income tax income/(expense) related to other comprehensive income		1.5		0.9			1.8		1.3
Total comprehensive income	$	62.4	$	26.0		$	113.9	$	60.1

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

INNOSPEC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)


(in millions, except share and per share data)	June 30, 2025		December 31, 2024
Assets
Current assets:
Cash and cash equivalents	$	266.6	$	289.2
Trade and other accounts receivable (less allowances of $9.4 million and $11.9 million respectively)		336.1		341.7
Inventories (less allowances of $37.7 million and $34.6 million respectively):
Finished goods		235.2		197.9
Raw materials		101.6		103.1
Total inventories		336.8		301.0
Prepaid expenses		13.7		21.0
Prepaid income taxes		12.1		3.1
Other current assets		4.4		0.6
Total current assets		969.7		956.6
Net property, plant and equipment		295.8		269.7
Operating lease right-of-use assets		49.3		44.8
Goodwill		397.6		382.5
Other intangible assets		78.3		65.4
Deferred tax assets		8.9		9.4
Pension asset		—		2.4
Other non-current assets		6.5		3.9
Total assets	$	1,806.1	$	1,734.7


Liabilities and Equity
Current liabilities:
Accounts payable	$	149.4		$	163.8
Accrued liabilities		163.5			169.1
Current portion of operating lease liabilities		15.6			13.9
Current portion of plant closure provisions		5.0			5.0
Accrued income taxes		3.9			19.6
Total current liabilities		337.4			371.4
Operating lease liabilities, net of current portion		33.7			31.0
Plant closure provisions, net of current portion		63.8			55.3
Deferred tax liabilities		24.0			23.5
Pension liabilities and post-employment benefits		13.9			13.1
Acquisition-related contingent consideration		24.5			20.1
Other non-current liabilities		7.3			4.2
Total liabilities		504.6			518.6
Equity:
Common stock, $0.01 par value, authorized 40,000,000 shares, issued 29,554,500 shares		0.3			0.3
Additional paid-in capital		372.7			369.9
Treasury stock (4,656,089 and 4,594,943 shares at cost, respectively)		(104.7	)		(93.0	)
Retained earnings		1,060.5			1,025.0
Accumulated other comprehensive loss		(33.4	)		(91.0	)
Total Innospec stockholders’ equity		1,295.4			1,211.2
Non-controlling interest		6.1			4.9
Total equity		1,301.5			1,216.1
Total liabilities and equity	$	1,806.1		$	1,734.7

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

INNOSPEC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)


	Six Months Ended June 30,
(in millions)	2025			2024
Cash Flows from Operating Activities
Net income	$	56.3		$	72.6
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization		22.0			21.5
Adjustment to fair value of contingent consideration		1.5			1.4
Deferred taxes		(0.6	)		0.7
Profit on disposal of property, plant and equipment		(0.2	)		(0.1	)
Non-cash movements on defined benefit pension plans		2.6			(1.6	)
Stock option compensation		4.1			4.2
Changes in assets and liabilities, net of effects of acquired and divested companies:
Trade and other accounts receivable		28.9			54.5
Inventories		(13.3	)		(17.8	)
Prepaid expenses		8.3			8.9
Accounts payable and accrued liabilities		(46.5	)		(55.6	)
Plant closure provisions		1.4			(0.1	)
Income taxes		(22.9	)		(0.1	)
Unrecognized tax benefits		—			(2.9	)
Other assets and liabilities		(4.0	)		(0.3	)
Net cash provided by operating activities		37.6			85.3
Cash Flows from Investing Activities
Capital expenditures		(21.4	)		(21.6	)
Internally developed software		(10.8	)		(8.1	)
Business combinations, net of cash acquired		—			(0.2	)
Proceeds on disposal of property, plant and equipment		0.5			0.2
Net cash used in investing activities		(31.7	)		(29.7	)
Cash Flows from Financing Activities
Non-controlling interest		1.2			0.8
Refinancing costs		—			(0.3	)
Dividend paid		(20.8	)		(19.0	)
Issue of treasury stock		0.4			0.8
Repurchase of common stock		(13.3	)		(0.7	)
Net cash used in financing activities		(32.5	)		(18.4	)
Effect of foreign currency exchange rate changes on cash		4.0			(0.7	)
Net change in cash and cash equivalents		(22.6	)		36.5
Cash and cash equivalents at beginning of period		289.2			203.7
Cash and cash equivalents at end of period	$	266.6		$	240.2

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

INNOSPEC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


(in millions)	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Loss			Non- Controlling Interest		Total Equity
Balance at December 31, 2024	$	0.3	$	369.9		$	(93.0	)	$	1,025.0		$	(91.0	)	$	4.9	$	1,216.1
Net income										56.3								56.3
'Dividend paid ($0.84 per share)										(20.8	)							(20.8	)
Changes in cumulative translation adjustment, net of tax													57.6					57.6
Share of net income																1.2		1.2
Treasury stock reissued				(1.3	)		1.6											0.3
Treasury stock repurchased							(13.3	)										(13.3	)
Stock option compensation				4.1														4.1
Balance at June 30, 2025	$	0.3	$	372.7		$	(104.7	)	$	1,060.5		$	(33.4	)	$	6.1	$	1,301.5


(in millions)	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Loss			Non- Controlling Interest		Total Equity
Balance at December 31, 2023	$	0.3	$	361.0		$	(94.3	)	$	1,028.2		$	(148.1	)	$	2.5	$	1,149.6
Net income										72.6								72.6
Dividend paid ($0.76 per share)										(19.0	)							(19.0	)
Changes in cumulative translation adjustment, net of tax													(12.6	)				(12.6	)
Share of net income																0.8		0.8
Treasury stock reissued				(0.7	)		1.6											0.9
Treasury stock repurchased							(0.7	)										(0.7	)
Stock option compensation				4.2														4.2
Amortization of prior service cost, net of tax													0.2					0.2
Amortization of actuarial net losses, net of tax													(0.1	)				(0.1	)
Balance at June 30, 2024	$	0.3	$	364.5		$	(93.4	)	$	1,081.8		$	(160.6	)	$	3.3	$	1,195.9

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

INNOSPEC INC. AND SUBSIDIARIES

CONDENSED CONSOLIDATED STATEMENTS OF EQUITY

(Unaudited)


(in millions)	Common Stock		Additional Paid-In Capital			Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Loss			Non- Controlling Interest		Total Equity
Balance at March 31, 2025	$	0.3	$	370.7		$	(96.5	)	$	1,057.8		$	(72.3	)	$	5.7	$	1,265.7
Net income										23.5								23.5
'Dividend paid ($0.84 per share)										(20.8	)							(20.8	)
Changes in cumulative translation adjustment, net of tax													38.9					38.9
Share of net income																0.4		0.4
Treasury stock reissued				(0.2	)		0.3											0.1
Treasury stock repurchased							(8.5	)										(8.5	)
Stock option compensation				2.2														2.2
Balance at June 30, 2025	$	0.3	$	372.7		$	(104.7	)	$	1,060.5		$	(33.4	)	$	6.1	$	1,301.5


(in millions)	Common Stock		Additional Paid-In Capital		Treasury Stock			Retained Earnings			Accumulated Other Comprehensive Loss			Non- Controlling Interest		Total Equity
Balance at March 31, 2024	$	0.3	$	362.4	$	(93.3	)	$	1,069.6		$	(155.4	)	$	2.6	$	1,186.2
Net income									31.2								31.2
Dividend paid ($0.76 per share)									(19.0	)							(19.0	)
Changes in cumulative translation adjustment, net of tax												(5.3	)				(5.3	)
Share of net income														0.7			0.7
Treasury stock reissued						0.2											0.2
Treasury stock repurchased						(0.3	)										(0.3	)
Stock option compensation				2.1													2.1
Amortization of prior service cost, net of tax												0.1					0.1
Balance at June 30, 2024	$	0.3	$	364.5	$	(93.4	)	$	1,081.8		$	(160.6	)	$	3.3	$	1,195.9

The accompanying notes are an integral part of these unaudited interim condensed consolidated financial statements.

INNOSPEC INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1 – BASIS OF PRESENTATION

The accompanying unaudited interim condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles in the United States of America for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X under the Securities Exchange Act of 1934. Accordingly, they do not include all the information and notes necessary for a comprehensive presentation of financial position, results of operations and cash flows.

During the year to date, the Company has reclassified prior period amounts to conform to the 2025 presentation. The reclassification had no impact on previously reported total net revenue, operating income or net income. For the six months ended June 30, 2025, this has resulted in $3.8 million (six months ended June 30, 2024 $4.0 million) of costs that were previously disclosed within selling, general and administrative expenses, being moved to research and development expenses.

It is our opinion, however, that all adjustments (consisting of normal, recurring adjustments, unless otherwise disclosed) have been made which are necessary for the condensed consolidated financial statements to be fairly stated. These condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024, filed on February 19, 2025 (the “2024 Form 10-K”).

The results for the interim period covered by this report are not necessarily indicative of the results to be expected for the full year.

When we use the terms “Innospec,” “the Corporation,” “the Company,” “Registrant,” “the Group,” “we,” “us” and “our,” we are referring to Innospec Inc. and its consolidated subsidiaries unless otherwise indicated or the context otherwise requires.

NOTE 2 – SEGMENT REPORTING

The Company reports its financial performance based on three reportable segments, which are Performance Chemicals, Fuel Specialties and Oilfield Services.

The Chief Operating Decision Maker (“CODM”) is the President and Chief Executive Officer (the Principal Executive Officer) and is a Director of Innospec Inc.. The CODM evaluates the performance of the Company’s segments and makes strategic decisions relating to the Company's allocation of resources, based on the segments' gross profit and operating income.

The following table analyzes sales and other financial information by the Company’s reportable segments:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2025			2024			2025			2024
Net Sales:
Personal Care	$	105.0		$	97.7		$	205.5		$	192.5
Home Care		26.1			24.3			52.4			50.7
Other		42.7			38.1			84.3			77.7
Performance Chemicals		173.8			160.1			342.2			320.9
Refinery and Performance		112.8			109.1			242.2			254.2
Other		52.3			57.5			93.2			89.3
Fuel Specialties		165.1			166.6			335.4			343.5
Oilfield Services		100.8			108.3			202.9			270.8
	$	439.7		$	435.0		$	880.5		$	935.2
Gross profit:
Performance Chemicals	$	30.5		$	36.2		$	65.8		$	73.9
Fuel Specialties		62.9			57.6			123.7			118.2
Oilfield Services		29.8			33.1			58.8			90.5
Total gross profit	$	123.2		$	126.9		$	248.3		$	282.6
Operating income/(loss):
Performance Chemicals	$	14.3		$	21.2		$	34.1		$	42.3
Fuel Specialties		35.4			30.4			72.3			63.8
Oilfield Services		6.2			7.3			10.3			24.2
Corporate costs		(20.9	)		(17.6	)		(38.6	)		(37.8	)
Adjustment to fair value of contingent consideration		(0.8	)		(0.6	)		(1.5	)		(1.4	)
Profit on disposal of property, plant and equipment		0.1			—			0.2			0.1
Total operating income	$	34.3		$	40.7		$	76.8		$	91.2

The difference between net sales and gross profit is defined as cost of goods sold. The difference between segmental gross profit and operating income/(expense) is split between selling, general and administrative expenses and research and development expenses.

The following table analyzes cost of goods sold by the Company’s reportable segments:


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2025		2024		2025		2024
Performance Chemicals	$	143.3	$	123.9	$	276.4	$	247.0
Fuel Specialties		102.2		109.0		211.7		225.3
Oilfield Services		71.0		75.2		144.1		180.3
Total cost of goods sold	$	316.5	$	308.1	$	632.2	$	652.6

The following table analyzes selling, general and administrative expenses and research and development expenses by the Company’s reportable segments:


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2025		2024		2025		2024
Performance Chemicals	$	16.2	$	15.0	$	31.7	$	31.6
Fuel Specialties		27.5		27.2		51.4		54.4
Oilfield Services		23.6		25.8		48.5		66.3
Corporate		20.9		17.6		38.6		37.8
Total selling, general and administrative expenses and research and development expenses	$	88.2	$	85.6	$	170.2	$	190.1

NOTE 3 – EARNINGS PER SHARE

Basic earnings per share is based on the weighted average number of common shares outstanding during the period. Diluted earnings per share includes the effect of options that are dilutive and outstanding during the period under the treasury stock method. Per share amounts are computed as follows:


	Three Months Ended June 30,				Six Months Ended June 30,
	2025		2024		2025		2024
Numerator (in millions):
Net income available to common stockholders	$	23.5	$	31.2	$	56.3	$	72.6
Denominator (in thousands):
Weighted average common shares outstanding		24,937		24,937		24,954		24,918
Dilutive effect of stock options and awards		105		160		143		173
Denominator for diluted earnings per share		25,042		25,097		25,097		25,091
Net income per share, basic:	$	0.94	$	1.25	$	2.26	$	2.91
Net income per share, diluted:	$	0.94	$	1.24	$	2.24	$	2.89

In the three and six months ended June 30, 2025, the average number of anti-dilutive options excluded from the calculation of diluted earnings per share were 59,418 and 23,283 (three and six months ended June 30, 2024– 10,436 and 10,483).

NOTE 4 – GOODWILL

The following table summarizes the goodwill movements in the year:


(in millions)	2025
Opening balance at January 1	$	382.5
Exchange effect		15.1
Closing balance at June 30	$	397.6

The exchange effect for the six months ended June 30, 2025 was $14.9 million relating to our Performance Chemicals segment and $0.2 million relating to our Fuel Specialties segment.

NOTE 5 – OTHER INTANGIBLE ASSETS

The following table analyzes other intangible assets movements in the year:


(in millions)	2025
Gross cost at January 1	$	331.8
Additions		10.8
Exchange effect		16.7
Gross cost at June 30		359.3
Accumulated amortization at January 1		(266.4	)
Amortization expense		(5.9	)
Exchange effect		(8.7	)
Accumulated amortization at June 30		(281.0	)
Net book amount at June 30	$	78.3

The amortization expense for the six months ended June 30, 2025 was $5.9 million (six months ended June 30, 2024 – $6.0 million).

In 2025, we have capitalized $10.8 million in relation to our internally developed software for a new Enterprise Resource Planning (“ERP”) system covering all our regions. The project is ongoing and is currently expected to complete in 2026. The expenses capitalized include the acquisition costs for the software as well as the external consultancy costs and the internal employee costs relating to the software development.

NOTE 6 – PENSION AND POST EMPLOYMENT BENEFITS

The Company previously maintained a defined benefit pension plan covering certain current and former employees in the United Kingdom (the “UK Plan”).

The UK Plan was bought out in the fourth quarter of 2024, therefore the company is no longer responsible for the future obligation for retirement benefits due to current and former employees. As at June 30, 2025, there is no remaining asset on the balance sheet (December 31, 2024 $2.4 million). Following the UK Plan buy-out, the Company is no longer required to make future cash contributions to the UK Plan. On July 29, 2025, the UK Plan was fully wound up.

The Company also 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 30, 2025, we have recorded a liability of $10.1 million (December 31, 2024 $9.0 million).

The net periodic benefit of these plans is shown in the following table:


	Three Months Ended June 30,						Six Months Ended June 30,
(in millions)	2025			2024			2025			2024
Service credit/(cost)	$	(1.2	)	$	(0.9	)	$	(2.4	)	$	(1.7	)
Interest cost on projected benefit obligation		—			(4.6	)		(0.1	)		(9.3	)
Expected return on plan assets		—			6.4			—			12.8
Amortization of prior service cost		—			(0.2	)		—			(0.3	)
Amortization of actuarial net gains		—			—			—			0.1
Net periodic benefit/(cost)	$	(1.2	)	$	0.7		$	(2.5	)	$	1.6

The service cost has been recognized in selling, general and administrative expenses. All other items have been recognized within other income and expense. The amortization of prior service cost and actuarial net gains are a reclassification out of accumulated other comprehensive loss into other income and expense.

In addition, we have obligations for post-employment benefits in some of our other European businesses. As at June 30, 2025, we have recorded a liability of $3.8 million (December 31, 2024 $4.1 million).

NOTE 7 – INCOME TAXES

As of January 1, 2025, the Company had no unrecognized tax benefits, and there has been no change in unrecognized tax benefits during the six months ended June 30, 2025. Accordingly, there was no accrual for uncertain tax positions as of June 30, 2025, 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 30, 2025, the Company and its U.S. subsidiaries remain open to examination by the IRS for years 2021 onwards under the statute of limitations. The Company’s subsidiaries in foreign tax jurisdictions are open to examination including Brazil (2020 onwards), Germany (2020 onwards), and the U.K. (2023 onwards).

NOTE 8 – LONG-TERM DEBT

As at June 30, 2025, and December 31, 2024, the Company had not drawn down on its revolving credit facility. During the first six months of 2025 and 2024, the Company did not draw down or repay any borrowing on its revolving credit facility.

The Company continues to have available a $250.0 million multicurrency revolving credit facility until May 30, 2028.

NOTE 9 – PLANT CLOSURE PROVISIONS

The Company has continuing plans to remediate manufacturing facilities at sites around the world as and when those operations are expected to cease, or we are required to decommission the sites according to local laws and regulations. The liability for estimated plant closure costs includes costs for environmental remediation liabilities and asset retirement obligations.

The principal site giving rise to asset retirement obligations is the manufacturing site at Ellesmere Port in the U.K.. There are also asset retirement obligations and environmental remediation liabilities in respect of other manufacturing sites.

Movements in the provisions are summarized as follows:


(in millions)	2025
Total at January 1	$	60.3
Charge for the period		4.1
Utilized in the period		(2.6	)
Exchange effect		7.0
Total at June 30		68.8
Due within one year		(5.0	)
Due after one year	$	63.8

The charge for the six months ended June 30, 2025, was $4.1 million (six months ended June 30, 2024 $1.7 million). The current year charge represents the accounting accretion and a $2.3 million increase to the provisions for legacy operations in the United States. Amounts due within one year refer to provisions where expenditure is expected to arise within one year of the balance sheet date.

NOTE 10 – FAIR VALUE MEASUREMENTS

The following table presents the carrying amount and fair values of the Company’s financial assets and liabilities measured on a recurring basis:


	June 30, 2025				December 31, 2024
(in millions)	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Assets
Derivatives (Level 1 measurement):
Other current and non-current assets:
Emissions Trading Scheme credits		2.2		2.2		3.9		3.9
Foreign currency forward exchange contracts		1.7		1.7		1.5		1.5
Liabilities
Non-financial liabilities (Level 3 measurement):
Acquisition-related contingent consideration		24.5		24.5		20.1		20.1

The following methods and assumptions were used to estimate the fair values:

Emissions Trading Scheme credits: The fair value is determined by the open market pricing at the end of the reporting period.

Foreign currency forward exchange contracts: The fair value of derivatives relating to foreign currency forward exchange contracts are derived from current settlement prices and comparable contracts using current assumptions. Foreign currency forward exchange contracts primarily relate to contracts entered into to hedge future known transactions or hedge balance sheet net cash positions. The movements in the carrying amounts and fair values of these contracts are largely due to changes in exchange rates against the U.S. dollar.

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.

NOTE 11 – DERIVATIVE INSTRUMENTS AND RISK MANAGEMENT

The Company enters into various foreign currency forward exchange contracts to minimize currency exchange rate exposure from expected future cash flows. As at June 30, 2025, 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 first six months of 2025 was a loss of $6.4 million (first six months of 2024 a gain of $1.6 million). The gain or loss has been recorded in other income or expense.

NOTE 12 – CONTINGENCIES

Legal matters

We are involved from time to time in claims and legal proceedings that result from, and are incidental to, the conduct of our business including business and commercial litigation, and employee and product liability claims.

As reported in our Annual Report on Form 10-K for the year ended December 31, 2023 (the “2023 Form 10-K"), we have incurred financial losses and lodged a civil and criminal legal claim related to a misappropriation of inventory in Brazil. At the time of filing, there have been no significant developments to report in relation to the claims being made. Consistent with prior quarters, a corresponding asset for the potential legal or insurance recoveries has not been recorded for the resulting financial losses arising from this matter.

In addition, unrelated to the Brazil matter, in the unlikely event there are an unexpectedly large number of individual claims or proceedings with an adverse resolution, this could in the aggregate have a material adverse effect on the results of operations for a particular year or quarter.

Guarantees

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 30, 2025, such guarantees, which are not recognized as liabilities in the condensed consolidated financial statements, amounted to $8.3 million (December 31, 2024 $6.8 million). The remaining terms of the fixed maturity guarantees are up to 7 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 the obligations should the affiliated company fail to fulfill 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.

The Company and its affiliates have numerous long-term sales and purchase commitments in their various business activities, which are expected to be fulfilled with no adverse consequences material to the Company.

NOTE 13 – STOCK-BASED COMPENSATION PLANS

The following table summarizes the transactions of the Company’s share-based compensation for 2025 and 2024:


	Three Months Ended June 30,				Six Months Ended June 30,
(in millions)	2025		2024		2025		2024
Stock options	$	2.2	$	2.2	$	4.1	$	4.2
Stock equivalent units		0.3		1.5		0.5		4.0
Total	$	2.5	$	3.7	$	4.6	$	8.2

The following table summarizes the transactions of the Company’s share-based compensation plans for the six months ended June 30, 2025.


	Number of shares			Weighted Average Grant-Date Fair Value
Nonvested at December 31, 2024		574,671		$	86.2
Granted		166,037		$	107.1
Vested		(165,047	)	$	88.5
Forfeited		(9,738	)	$	67.5
Nonvested at June 30, 2025		565,923		$	91.7

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 has been used to calculate the grant-date fair value.

The awards granted with market conditions include a performance measure for Innospec's total shareholder return as compared to a peer group of companies. This measure can result in a maximum 130% vesting for the number of stock options granted. The maximum potential vesting has been reflected in the grant-date fair value calculation, but not reflected for the number of awards granted, as shown in the table above. All other awards granted in the quarter have similar vesting conditions to those granted in the previous periods.

As of June 30, 2025, there was $25.3 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.

NOTE 14 – RECLASSIFICATIONS OUT OF ACCUMULATED OTHER COMPREHENSIVE LOSS

Reclassifications out of accumulated other comprehensive loss (“AOCL”) for the first six months of 2025 were:


(in millions) Details about AOCL Components		Amount Reclassified from AOCL

For the transition period from to

Commission file number 1-13879

98-0181725

80112

Registrant’s telephone number, including area code: (303) 792 5554

Securities registered pursuant to Section 12(b) of the Securities Exchange Act of 1934:

NASDAQ

Outstanding as of July 31, 2025

INNOSPEC INC. AND SUBSIDIARIES

NOTES TO THE UNAUDITED INTERIM CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

INNOSPEC INC. 10-Q