Innospec Inc.

there will be the question and answer session. To ask a question during the session, you will need to press star 11 on your telephone. You will then hear an automatic message advising your hand is raised. To withdraw your question, please press star 11 again. Please be advised that today's conference is being recorded. I would now like to hand the conference over to our first speaker today, David Jones, General Counsel. Please go ahead.

Thank you. Welcome to InnoSpec's fourth quarter earnings call. This is David Jones, and I'm InnoSpec's General Counsel and Chief Compliance Officer. The earnings released in 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 risk and uncertainties that can cause actual results to differ materially from the anticipated results implied by such forward-looking statements. The risk and uncertainties are detailed in InSPEC's 10-K, 10-Qs, and other filings with the SEC. Please see the SEC site and InSPEC site for these and related documents. In our discussion today, 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 superior to those prepared in accordance with GAAP. They're 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 Clementson, Executive Vice President and Chief Financial Officer. And with that, turn it over to you, Patrick.

Thank you, David, and welcome everyone to InnoSpec's fourth quarter and full year 2022 conference call. I am pleased to present another very strong set of results for InnoSpec. Our balanced portfolio achieved excellent overall operating results in the quarter. Strong activity in oil field services and steady results in field specialties offset the effect of aggressive year-end destocking in performance chemicals. Overall operating income was up 31% in the quarter and 42% for the year with margin expansion. Performance Chemicals had an excellent year, despite the impacts of customer destocking in the fourth quarter. The business delivered strong operating income growth and margin expansion with full-year operating income up an impressive 34% over 2021. Destocking was mostly in our U.S. personal care business, and lower volumes and higher cost inventory drove a negative product mix and lower margins in the quarter. We expect this to continue in the first half of 2023. However, new customer projects are on track and we remain optimistic that volumes will normalize in the coming quarters and we will return to volume growth in the second half of the year. In addition, we're very excited about our increasing prospects in our agriculture, mining, construction, and other industrial end markets, which collectively registered double-digit profit growth in 2022. In fuel specialties, operating income grew by 4% over the same quarter last year, and by an impressive 16% for the full year. Gross margins continue to track below our target of 32% to 35% range. The primary impact on margins has been the lag between price action and input cost inflation, in particular in the EMEA region where inflation remains very high. We expect margins to stay below our target range in the coming quarter, but returning to margins back into our target range is a significant opportunity and priority for the business in 2023. Over the medium to long term, we remained well positioned to help advance our customers' priorities to lower carbon footprint, deploy cleaner fuels, and drive operating efficiency in both transportation fleets and non-fuel applications. Oilfield Services had an excellent quarter and record four-year operating income. Production chemicals continue to have a very strong order activity in the fourth quarter, which drove a strong significant sequential increase in operating income. In the coming quarters, we continue to anticipate that a portion of these production cells will moderate. However, we expect further top line and margin improvement in our other oil field segments, and we remain very optimistic that we can deliver sequential four-year operating income growth in 2023. Now I'll turn the call over to Ian Clemson, who will review our financial results in more detail. Then I will return with some concluding comments. After that, Ian and I will take your questions. Ian?