Segment Reporting and Geographical Area Data

12 Months Ended

Dec. 31, 2019

Segment Reporting and Geographical Area Data

Note 3. Segment Reporting and Geographical Area Data

The Fuel Specialties, Performance Chemicals and Oilfield Services segments operate in markets where we actively seek growth opportunities although their ultimate customers are different. The Octane Additives segment revenues may conclude in the early part of 2020 as our one remaining refinery customer transitions to unleaded fuel.

Our Fuel Specialties segment develops, manufactures, blends, markets and supplies a range of specialty chemicals products used as additives to a wide range of fuels.

Our Performance Chemicals segment provides effective technology-based solutions for our customers’ processes or products focused in the Personal Care, Home Care, Agrochemical and Metal Extraction markets.

Our Oilfield Services segment develops and markets products to prevent loss of mud in drilling operations, chemical solutions for fracturing and stimulation operations and products for oil and gas production which aid flow assurance and asset integrity.

Our Octane Additives segment, which we believe is the world’s only producer of tetra ethyl lead (“TEL”), comprises sales of TEL for use in automotive gasoline and provides services in respect of environmental remediation.

There are no significant customers with sales greater than 10% of our net group sales in the last three financial years.

The Company evaluates the performance of its segments based on operating income. The following table analyzes sales and other financial information by the Company’s reportable segments:


(in millions)		2019		2018		2017
Net Sales:
Refinery and Performance	$	427.9	$	432.1	$	397.0
Other		155.8		142.4		126.8

Fuel Specialties		583.7		574.5		523.8

Personal Care		228.0		241.4		206.5
Home Care		93.4		109.1		103.4
Other		107.3		117.6		109.6

Performance Chemicals		428.7		468.1		419.5

Oilfield Services		479.9		400.6		304.4
Octane Additives		21.0		33.7		59.1

	$	1,513.3	$	1,476.9	$	1,306.8


( in millions )	2019			2018			2017
Gross profit:
Fuel Specialties	$	204.5		$	195.0		$	188.2
Performance Chemicals		100.1			97.5			75.8
Oilfield Services		159.9			130.4			109.3
Octane Additives		1.7			12.1			30.0

	$	466.2		$	435.0		$	403.3

Operating income/(expense):
Fuel Specialties	$	116.6		$	116.3		$	107.7
Performance Chemicals		48.7			44.7			32.6
Oilfield Services		39.7			22.1			9.5
Octane Additives		(0.7	)		9.9			26.7
Corporate costs		(54.4	)		(52.4	)		(48.8	)
Restructuring charge		0.0			(7.1	)		0.0
Loss on disposal of subsidiary		0.0			0.0			(0.9	)
Foreign exchange loss on liquidation of subsidiary		0.0			0.0			(1.8	)

Total operating income	$	149.9		$	133.5		$	125.0

Identifiable assets at year end:
Fuel Specialties	$	499.7		$	470.5		$	437.0
Performance Chemicals		383.3			463.9			480.8
Oilfield Services		316.8			296.1			256.6
Octane Additives		24.2			39.6			41.7
Corporate		244.8			203.3			194.1

	$	1,468.8		$	1,473.4		$	1,410.2

Identifiable assets relating to the TEL operations are included within our Octane Additives segment in the table above, as they cannot be separately reported for the periods shown. Our TEL operations produce TEL for automotive gasoline, which is reported in our Octane Additives segment, and produce TEL for our AvTel product line, which is reported in our Fuel Specialties segment.

The Company includes within the corporate costs line item the costs of:

•

managing the Group as a company with securities listed on the NASDAQ and registered with the SEC;

•

the President/CEO’s office, group finance, group human resources, group legal and compliance counsel, and investor relations;

•

running the corporate offices in the U.S. and Europe;

•

the corporate development function since they do not relate to the current trading activities of our other reporting segments; and

•

the corporate share of the information technology, production technology, safety, health, environment, accounting and human resources departments.

The following tables analyze sales and other financial information by location:


( in millions )	2019			2018			2017
Net sales by source:
United States & North America	$	897.2		$	803.1		$	615.7
United Kingdom		810.9			797.5			730.9
Rest of Europe		115.7			143.7			143.4
Rest of World		47.8			29.5			39.2
Sales between areas		(358.3	)		(296.9	)		(222.4	)

	$	1,513.3		$	1,476.9		$	1,306.8

Income before income taxes:
United States & North America	$	53.9		$	37.1		$	11.5
United Kingdom		67.0			59.5			51.9
Rest of Europe		27.2			32.8			63.1
Rest of World		2.3			2.2			1.6

	$	150.4		$	131.6		$	128.1

Long-lived assets at year end:
United States & North America	$	156.0		$	148.6		$	149.7
United Kingdom		70.4			71.6			45.7
Rest of Europe		116.6			112.2			163.5
Rest of World		0.3			0.3			0.3

	$	343.3		$	332.7		$	359.2

Identifiable assets at year end:
United States & North America	$	419.5		$	402.5		$	452.2
United Kingdom		487.2			504.7			258.4
Rest of Europe		163.2			173.1			317.5
Rest of World		35.9			28.2			20.3
Goodwill		363.0			364.9			361.8

	$	1,468.8		$	1,473.4		$	1,410.2

Sales by geographical area are reported by source, being where the transactions originated. Intercompany sales are priced using an appropriate pricing methodology and are eliminated in the consolidated financial statements.

Identifiable assets are those directly associated with the operations of the geographical area.

Goodwill has not been allocated by geographical location on the grounds that it would be impracticable to do so.