INNOSPEC REPORTS SECOND QUARTER 2013 FINANCIAL RESULTS

Adjusted non-GAAP Diluted EPS of $0.75, exceeds consensus expectations

Gross margin resilient at 32.1 percent; Fuel Specialties delivers good growth

Strong balance sheet with cash inflows of $19.7 million in the quarter; net cash position of $26.0 million

Littleton, CO – August 7, 2013 – Innospec Inc. (NASDAQ: IOSP) today announced its financial results for the second quarter ended June 30, 2013.

Total net sales for the second quarter were $185.0 million, a 4 percent increase from $178.5 million reported in the corresponding quarter last year. Net income was $17.1 million, or $0.71 per diluted share, compared to $15.5 million, or $0.65 per diluted share, recorded a year ago. EBITDA (earnings before interest, taxes, depreciation, amortization and impairment) for the quarter was $25.8 million, up from $22.8 million posted in 2012’s second quarter.

Results for the second quarter include after-tax foreign currency exchange losses of $0.8 million and acquisition-related costs of $0.2 million, a combined negative impact of $0.04 per diluted share; a year ago, similar items had a negative impact of $3.4 million, or $0.14 per diluted share. Excluding these special items from both periods, adjusted non-GAAP EPS was $0.75 per diluted share, a decrease from $0.79 per diluted share a year ago, but exceeding consensus analyst expectations for the quarter. Cash generation for the quarter was strong, with operating cash inflows of $19.7 million, before capital expenditures during the quarter of $4.4 million. Net cash stood at $26.0 million at the end of the quarter.

EBITDA and net income excluding special items, and related per-share amounts, are non-GAAP financial measures that are defined and reconciled with GAAP results herein and in the schedules below.

For the first six months of 2013, total net sales of $384.4 million increased 1 percent from $379.3 million in the corresponding period last year. Net income for the first half of the year was $35.1 million, or $1.46 per diluted share,

down from $40.1 million, or $1.68 per diluted share, a year ago. Excluding special items, diluted earnings per share for the first six months of 2013 were $1.47, down from $1.79 a year ago. EBITDA for the first half of 2013 was $53.7 million, compared with $58.0 million in last year’s first half.

“Innospec performed extremely well in the second quarter, especially considering that some of our markets continue to suffer from soft demand and intense competition,” said Patrick Williams, President and Chief Executive Officer.

“We have delivered top-line growth, even in the face of the expected decline in our Octane Additives business. We are particularly pleased with the strong performance of our Fuel Specialties business, which has become a key and consistent driver of our business growth, across the markets we serve. The strength and resilience of this business is the principal reason we are able to absorb the continued and expected decline of Octane Additives and the more uneven growth patterns in other businesses.

“Importantly, in Oilfield Specialties we have made continued progress, including integrating our Strata business which is gaining momentum and delivering higher margin performance. We are pleased with the acquisition, and we expect it to deliver enhanced growth in 2014. Fuel Specialties delivered excellent sales growth despite the predicted normalization of our Avtel business. Margin performance is pleasing in all regions, especially in some areas where fuel demand has been sluggish.

“Performance Chemicals’ results were essentially unchanged and roughly in line with what we expected. Our Personal Care and Fragrance Ingredients markets continue to show positive development, with our exciting new product pipeline and good sales momentum. We recorded 3 percent top-line growth in the Americas, driven by volume growth. The business was negatively impacted by product mix and industrial demand. In addition, we still face unsettled Polymers markets. We will remain vigilant in these business areas particularly with respect to inventory demand and pricing concerns.

“Our Octane Additives business performed as expected, with global TEL demand continuing to wind down. We also have somewhat improved visibility for the remainder of 2013, with one customer contract extension expected, but demand for 2014 remains very uncertain.”

Net sales in Fuel Specialties for the second quarter were $126.2 million, 10 percent higher than the $114.5 million reported in last year’s second quarter, primarily driven by 6 percent higher volumes and a 3 percent uplift from the inclusion of the Strata business. By region, sales were up 10 percent in the Americas, 13 percent in EMEA and 27 percent in Asia-Pacific. As predicted, Avtel sales in the second quarter have normalized, from an excellent first quarter, and were down 31 percent against a strong comparative performance last year. The segment’s gross margin was 32.1 percent, primarily driven by a richer sales mix and higher margin contribution from the Strata business. Operating income for the quarter was $19.2 million, up from last year’s $16.9 million.

In Performance Chemicals, net sales were essentially unchanged at $44.5 million, compared to $44.9 million in last year’s second quarter. By region, sales increased 3 percent in the Americas, driven by volume growth across all markets and strong sales momentum in the Personal Care and Fragrance Ingredients markets. Asia-Pacific sales were on par with last year, whilst sales in EMEA decreased 6 percent primarily due to lower industrial demand. Performance Chemicals’ gross margin was 25.4 percent, down from last year’s 26.9 percent. The segment’s operating income was $6.5 million, down from $7.2 million in last year’s second quarter.

Octane Additives’ net sales for the quarter were $14.3 million, compared with $19.1 million in the year-ago period. The segment’s gross margin improved to 53.1 percent, from last year’s 51.8 percent. Operating income for the quarter was $6.1 million, compared to $8.0 million in 2012’s second quarter.

Corporate costs for the quarter were $8.5 million, compared to $7.8 million a year ago. The increase was primarily due to higher legal, enhanced compliance and acquisition-related costs, offset by lower share based compensation accruals. As expected the quarterly pension charge was $0.7 million, compared to a $0.1 million pension credit a year ago. The effective tax rate for the quarter was 18.2 percent, compared to 20.5 percent in last year’s second quarter.

Net cash generated from operations was $19.7 million, a 60 percent increase from the $12.3 million recorded a year ago, primarily reflecting a reduction in working capital requirements since December 2012. As of June 30, 2013,

Innospec had $59.0 million of cash, cash equivalents and short-term investments, $26.0 million more than its total debt of $33.0 million.

Mr. Williams concluded, “We built on our first quarter performance with enhanced growth throughout the second quarter and we are pleased with our overall performance for the first half of the year. Our core businesses continue to deliver organic growth, sales and volume momentum and margin improvement; and the integration and accretive contribution from our Strata acquisition is going to plan. We will continue to invest prudently and efficiently in new technology and compliance programs. We are still actively pursuing acquisitions, with at least two projects in advanced stages. Overall, we continue to view the second half of 2013 with cautious optimism.”

The information presented in this press release 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 before income taxes excluding special items and net income excluding special items and related per share amounts. EBITDA is net income per our consolidated financial statements adjusted for the exclusion of charges for interest expense, net, income taxes, depreciation, amortization and impairment of Octane Additives segment goodwill. Income before income taxes, net income and diluted EPS, excluding special items, per our consolidated financial statements are adjusted for the exclusion of foreign currency exchange losses and acquisition-related costs. Reconciliations of these non-GAAP financial measures to their most directly comparable GAAP financial measures are provided herein and in the schedules below. The Company believes that such non-GAAP financial measures provide useful information to investors and may assist them in evaluating the Company’s underlying performance and identifying operating trends. In addition, management uses these non-GAAP financial measures internally to allocate resources and evaluate the performance of the Company’s operations. While the Company believes that such measures are useful in evaluating the Company’s performance, investors should not consider them to be a substitute for financial measures prepared in accordance with GAAP. In addition, these non-GAAP financial measures may differ from similarly-titled non-GAAP financial measures used by other companies and do not provide a comparable view of the Company’s performance relative to other companies in similar industries. Management believes the most directly comparable GAAP financial measure is GAAP net income and has provided a reconciliation of EBITDA and net income excluding special items, and related per share amounts, to GAAP net income herein and in the schedules below.

Innospec Inc. is an international specialty chemicals company with approximately 900 employees in 20 countries. Innospec manufactures and supplies a wide range of specialty chemicals to markets in the Americas, Europe, the Middle East, Africa and Asia-Pacific. Innospec's Fuel Specialties business specializes in manufacturing and supplying the fuel additives that help improve fuel efficiency, boost engine performance and reduce harmful emissions. Innospec's Performance Chemicals business provides effective technology-based solutions for our customers’ processes or products focused in the Personal Care; Polymers; and Fragrance Ingredients markets. Innospec's Octane Additives business is the world's only producer of tetra ethyl lead.

This press release 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,” “anticipates,” “may,” “believes” or similar words or expressions), for example, which relate to operating performance, events or developments that we expect or anticipate will or may occur in the future (including, without limitation, any of the Company’s guidance in respect of sales, gross margins, pension liabilities and charges, net income, growth potential and other measures of financial performance). 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 the Company and affecting our business operations and prospects are described in the Company’s Annual Report on Form 10-K for the year ended December 31, 2012, and other reports filed with the U.S. Securities and Exchange Commission. 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. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Amortization of deferred finance costs of $0.2 million (2012 - $0.2 million) are included in depreciation and amortization in the cash flow statement but in interest expense in the income statement.