Innospec Inc. · NASDAQ:IOSP
Innospec — Q1 2014 Earnings Presentation
22 slides from Innospec's earnings presentation, May 7, 2014
Slide 1: Investor Presentation Quarter 1, 2014
Investor Presentation Quarter 1, 2014 7th May 2014 Patrick Williams President & Chief Executive Officer Ian Cleminson Executive Vice President & Chief Financial Officer
Slide 2: Forward-Looking Statements
2 Forward-Looking Statements This presentation 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.
Slide 3: Use of Non-GAAP Financial Measures
3 Use of Non-GAAP Financial Measures The information presented in this presentation includes financial measures that are not calculated or presented in accordance with Generally Accepted Accounting Principles in the United States (GAAP). These non-GAAP financial measures comprise EBITDA, income befo
Slide 4: Innospec – Summary of 1st Quarter Performance
4 Innospec – Summary of 1st Quarter Performance Good first quarter performance and continued momentum Negligible sales in Octane Additives as predicted, but strong Q2 recovery anticipated Excellent contributions from acquisitions and solid underlying growth in core businesses Fuel Specialties delive
Slide 5: Financial Presentation
Financial Presentation Ian Cleminson Executive Vice President & Chief Financial Officer
Slide 6: Q1 2014 Consolidated Results
6 Q1 2014 Consolidated Results Total revenues up 11% to $220.7 million driven by acquisitions and a strong core business GAAP EPS of $0.69 despite the absence of Octane Additive sales EBITDA of $27.1 million reflects strong underlying businesses Q1 2013 Q1 2014 Growth $m $m % Net sales 199.4 220.7 1
Slide 7: Q1 2014 Fuel Specialties
7 Q1 2014 Fuel Specialties Revenue increased 17% to $164.2 million Bachman acquisition contributed 13% to top-line results Gross profit rises to $52.0 million; gross margin of 31.7% Q1 2013 Q1 2014 Growth $m $m % Net sales 140.0 164.2 17% Gross profit 47.0 52.0 11% Gross margin 33.6% 31.7% (1.9%)pt
Slide 8: Q1 2014 Performance Chemicals
8 Q1 2014 Performance Chemicals Net sales increase 17% to $56.1 million Chemsil and Chemtec contribute 16% to sales growth Gross margin improves to 24.2% as Personal Care expands its segment share Q1 2013 Q1 2014 Growth $m $m % Net sales 47.8 56.1 17% Gross profit 10.5 13.6 30% Gross margin 22.0% 24
Slide 9: Q1 2014 Octane Additives
9 Q1 2014 Octane Additives Slow start to 2014, as predicted Anticipate strong recovery in Q2 Medium and long term prognosis unchanged Q1 2013 Q1 2014 Growth $m $m % Net sales 11.6 0.4 (97)% Gross profit 6.3 0.1 (98)% Gross margin 54.3% 25.0% (29.3%)pt Operating income/(loss) 4.8 (1.2) N/A EBITDA 5.1
Slide 10: Q1 2014 Corporate Items
10 Q1 2014 Corporate Items Corporate costs increased to $12.1 million Effective tax rate of 11.1% for the quarter Q1 2013 Q1 2014 $m $m Corporate costs (11.5) (12.1) Pension charge (0.7) (0.8) Effective tax rate 21.4% 11.1%
Slide 11: Q1 2014 Balance Sheet
11 Q1 2014 Balance Sheet Net debt position of $43.8 million significantly reduced from year end Generated $20.9 million in net cash from operations $95.9 million in cash and cash equivalents as of March 31; total debt of $139.7 million Q4 2013 Q1 2014 $m $m Total cash and cash equivalents 86.8 95.9
Slide 12: Concluding Comments
Concluding Comments Patrick Williams President & Chief Executive Officer
Slide 13: Additional Highlights
13 Additional Highlights Strong first quarter performance driven by our core businesses and recent acquisitions Solid foundation for sustainable growth; in Personal Care, Fuel Specialties and Oilfield Confidently positioned for the future; continued strong balance sheet and robust cash generation 8%
Slide 14: Your opportunity to ask questions
Your opportunity to ask questions
Slide 15: Final Comments
15 Final Comments Thank you for your interest Our next call will be in August 2014 Have a good day
Slide 16: Appendix
Appendix s ospec
Slide 17: Innospec Income Statement - Quarter 1
17 Innospec Income Statement - Quarter 1 Q1 2013 Q1 2014 Variance Pr. Yr. $m $m $m Net sales 199.4 220.7 21.3 Sales growth (0.7%) 10.7% N/A Gross profit 63.8 65.7 1.9 Gross margin 32.0% 29.8% (2.2%)pt SAR expenses (41.3) (47.5) (6.2) Operating income pre restructuring 22.5 18.2 (4.3) Operating margi
Slide 18: Fuel Specialties – Quarter 1
18 Fuel Specialties – Quarter 1 Q1 2013 Q1 2014 Variance Pr. Yr. $m $m $m Net sales 140.0 164.2 24.2 Sales growth 7.1% 17.3% N/A Gross profit 47.0 52.0 5.0 Gross margin 33.6% 31.7% (1.9%)pt Selling (13.1) (17.4) (4.3) Administrative (4.4) (4.1) 0.3 Research (4.6) (4.7) (0.1) SAR expenses (22.1) (26.
Slide 19: Performance Chemicals - Quarter 1
19 Performance Chemicals - Quarter 1 Q1 2013 Q1 2014 Variance Pr. Yr. $m $m $m Net sales 47.8 56.1 8.3 Sales growth 2.8% 17.4% N/A Gross profit 10.5 13.6 3.1 Gross margin 22.0% 24.2% 2.2%pt Selling (2.1) (3.7) (1.6) Administrative (2.4) (2.4) - Research (1.0) (1.0) - SAR expenses (5.5) (7.1) (1.6) S
Slide 20: Octane Additives - Quarter 1
20 Octane Additives - Quarter 1 Q1 2013 Q1 2014 Variance Pr. Yr. $m $m $m Net sales 11.6 0.4 (11.2) Sales growth (50.8%) (96.6%) N/A Gross profit 6.3 0.1 (6.2) Gross margin 54.3% 25.0% (29.3%)pt Selling (0.4) (0.5) (0.1) Administrative (1.1) (0.8) 0.3 SAR expenses (1.5) (1.3) 0.2 SAR % (12.9%) N/A N
Slide 21: GAAP Reconciliation EBITDA - Quarter 1
21 GAAP Reconciliation EBITDA - Quarter 1 Q1 2013 Q1 2014 $m $m Net income 18.0 16.9 Interest expense, net 0.3 0.9 Income taxes 4.9 2.1 Depreciation and amortization 4.4 7.2 Impairment of Octane Additives segment goodwill 0.3 - EBITDA 27.9 27.1
Slide 22: GAAP Reconciliation: Net income excluding special items - Quarter 1
22 GAAP Reconciliation: Net income excluding special items - Quarter 1 Q1 2013 Q1 2014 Income before Income before income taxes Net income Diluted EPS income taxes Net income Diluted EPS $m $m $ $m $m $ Reported GAAP amounts 22.9 18.0 0.75 19.0 16.9 0.69 Adjustment of income tax provisions - - - (2.