Innospec Inc. (NASDAQ:IOSP) Q4 2023 Earnings Call Transcript
Innospec Inc. (NASDAQ:IOSP) Q4 2023 Earnings Call Transcript February 14, 2024
Innospec Inc. isn't one of the 30 most popular stocks among hedge funds at the end of the third quarter (see the details here).
Operator: Good day, and thank you for standing by. Welcome to the Innospec's Fourth Quarter 2023 Earnings Release and Conference Call Webcast. [Operator Instructions]. Please note that today's conference is being recorded. I would now like to hand the conference over to your first speaker, Mr. David Jones, General Counsel and Compliance Officer. Please go ahead, sir.
David Jones: Thank you. Welcome to Innospec's fourth quarter earnings call. This is David Jones, I'm Innospec's General Counsel and Chief Compliance Officer. 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-Q and other filings with the SEC. Please see the SEC site and Innospec's site for these and related documents.
In today's presentation, we've also included non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure is contained in the earnings release. The non-GAAP financial measures should not be considered as a substitute for, or compared 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 these 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 fourth quarter and full-year 2023 conference call. I am pleased with another excellent quarter for Innospec. Performance Chemicals and Fuel Specialties delivered improved margins and double-digit operating income growth over the fourth quarter last year. While oilfield services maintained a strong performance. In December, we completed the acquisition of QGP Quimica. This acquisition aligns with our previously stated M&A goals to further strengthen our Performance Chemicals segment and add strategic manufacturing in South America. QGP brings meaningful capabilities that complement many of the end markets we serve, including agriculture, Personal Care, Home Care, Industrial, Construction and Mining.
In addition, there is significant manufacturing flexibility for future organic expansion. We expect this transaction to be immediately accretive and approximately $0.08 of EPS in 2024. In Performance Chemicals, operating income in the quarter grew by double digits over the prior year and margins improved. Our focus remains on returning operating income, and run rate and margins to levels consistent with the full year 2022. While the economic environment remains a challenge, we are making progress against that objective. On a sequential basis, Performance Chemicals delivered its second consecutive quarter of operating income growth and margin improvement. We continue to have strong technology pipeline and organic growth opportunities in all end markets.
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