What changed in this filing

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Item 1. Business

2022-03-01 compared with 2021-03-01 · 430 added, 445 removed, 111 unchanged (89% of the section changed)

General Description

The Company was organized in 1918, incorporated

as a Pennsylvania business corporation in 1930,

and in August 2019

the Combination with Houghton to form Quaker Houghton.

Quaker Houghton is a global leader in industrial process

With a presence around the world,

including operations in over 25 countries, the Company’s

The Company was organized in 1918, incorporated as a Pennsylvania

business corporation in 1930, and in August 2019

completed the Combination with Houghton to form Quaker Houghton.

Quaker Houghton is the global leader in industrial process

With a presence around the world, includi

ng operations in over 25 countries, the Company’s

customers include thousands of

the world’s most advanced

and specialized steel, aluminum, automotive, aerospace,

offshore, can, mining, and metalworking

Quaker Houghton develops, produces, and

markets a broad range of formulated chemical specialty

products and offers

the world’s most advanced and specialized

steel, aluminum, automotive, aerospace, offshore, can,

mining, and metalworking

Quaker Houghton develops, produces, and markets a broad range of formulated

chemical specialty products and offers

chemical management services (which we refer to as “Fluidcare

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throughout its four segments:

Europe, Middle

East and Africa (“EMEA”);

Europe, Middle East and Africa

Asia/Pacific;

and Global Specialty

The major product lines of Quaker Houghton include

metal removal fluids, cleaning fluids, corrosion inhibitors, metal

and forming fluids, die cast mold releases, heat treatment

and quenchants, metal forging fluids, hydraulic fluids,

specialty greases,

offshore sub-sea energy control fluids,

rolling lubricants, rod and wire drawing fluids and surface treatme

nt chemicals.

and Global Specialty Businesses.

The major product lines of Quaker Houghton include metal removal fluids,

cleaning fluids, corrosion inhibitors, metal drawing

and forming fluids, die cast mold releases, heat treatment and quenchants,

metal forging fluids, hydraulic fluids, specialty greases,

offshore sub-sea energy control fluids, rolling

lubricants, rod and wire drawing fluids and surface treatment chemicals.

The following

are the respective contributions to consolidated net sales of

each of our principal product lines representing more than 10% of

consolidated net sales for

any of the past three years based on the Company’s

are the respective contributions to consolidated net sales of each of our principal

product lines representing more than 10% of

consolidated net sales for any of the past three years based on the Company’s

current product line segmentation:

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Hydraulic fluids

Houghton Combination

On August 1, 2019, the Company completed the Combination

and acquired all of the issued and outstanding shares of

from Gulf Houghton Lubricants, Ltd.

(“Gulf”) and certain other

selling shareholders in exchange for a combination of cash and

of the Company’s common

stock in accordance with the share purchase agreement dated

April 4, 2017 (the “Share Purchase

The shares were bought for an aggregate purchase consideration

consisting of:

(i) $170.8 million in cash;

issuance of approximately 4.3 million shares of the

Company’s common stock, $1.00

par value per share, comprising 24.5% of the

common stock outstanding upon the closing of the Combination;

and (iii) the Company’s refinancing

of Houghton’s net indebtedness

as of the closing of the Combination of approximately

$702.6 million.

Houghton is a leading global provider of specialty chemicals and

technical services for metalworking and other industrial

applications, and, the combination with Legacy Quaker

created a leading global supplier of industrial process fluids.

Combination expanded the Company’s

addressable metalworking, metals and industrial end markets, including

steel, aluminum,

aerospace, defense, transportation-original equipment

manufacturer (“OEM”), transportation-components, offshore

sub-sea energy,

architectural aluminum, construction, tube and pipe,

can and container, mining, specialty coatings

and specialty greases.

Combination also strengthened the product portfolio of the

combined Company.

Notable Recent Acquisition Activity

In December 2020, the Company completed its acquisition

of Coral Chemical Company (“Coral”), a privately held,

provider of metal finishing fluid solutions, for approximately

$53 million, net of cash acquired.

Coral provides technical expertise and

product solutions for pre-treatment, metalworking and wastewater

treatment applications to the beverage can and general industrial

In February 2021, the Company acquired certain assets related to

tin-plating solutions primarily for steel end markets for

approximately $25 million.

Impact of COVID-19

During 2020, the global outbreak of COVID-19 and

subsequent pandemic negatively impacted all locations where

does business.

Although the Company has now operated during several

quarters in this COVID-19 environment, the full extent of

pandemic and related business impacts remains

uncertain and volatile, and therefore the full extent to which

COVID-19 may impact

the Company’s future

results of operations or financial condition is uncertain.

The pandemic has disrupted the operations of the

Company and its suppliers and customers and, as a result,

the Company experienced volume declines and lower net sales during

as further described in Item 7 of this Report.

The initial impact was at its China subsidiaries in the first quarter

of 2020 and beginning

in late March continued throughout 2020 in the rest of

the business as the pandemic led to a global economic slowdown.

continues to monitor the impact of the COVID-19

pandemic on the Company,

the overall specialty chemical industry and the

economies and markets in which the Company operates.

Sales Revenue

A substantial portion of the Company’s

sales worldwide are made directly through its own employees

and its Fluidcare programs,

with the balance sold through distributors and agents.

sales worldwide are made directly through its own employees and its Fluidcare

programs, with the balance sold through distributors and agents.

The Company’s employees typically

visit the plants of customers regularly,

work on site, and through training and experience,

identify production needs which can be resolved or otherwise addressed

utilizing the Company’s

existing products or by applying new formulations developed

in its laboratories.

The Company recognizes revenue in an amount that

reflects the consideration that the Company expects to receive

for the goods or services transferred to its customers.

To do this, the Company

applies a five-step model that requires the Company

(i) identify the contract with a customer;

(ii) identify

the performance obligations in the contract;

(iii) determine the

(iv) allocate the transaction price to the performance

obligations in the contract;

and (v) recognize revenue when

Company satisfies a performance obligation.

As part of the Company’s

Fluidcare business, certain third-party product sales to customers are

managed by the Company.

the Company acts as principal, revenues are recognized

on a gross reporting basis at the selling price negotiated

with its customers.

Where the Company acts as an agent, revenue is recognized on

a net reporting basis at the amount of the administrative fee earned

the Company for ordering the goods.

The Company transferred third-party products under arrangements resulting

in net reporting of

$42.5 million,

$48.0 million and $47.1 million for the years ended December

2019 and 2018,

respectively.

The specialty chemical industry comprises a number

of companies similar in size to the Company,

as well as companies larger

visit the plants of customers

regularly, work on

site, and through training and experience, identify production needs which can be resolved

or otherwise addressed

either by utilizing the Company’s existing

products or by applying new formulations developed in its laboratories.

As part of the Company’s Fluidcare

business, certain third-party product sales to customers are managed by the

Where the Company acts as principal, revenues are recognized on

a gross reporting basis at the selling price negotiated with its

Where the Company acts as an agent for its customers, revenue is recognized on

a net reporting basis at the amount of the

administrative fee earned by the Company for ordering the goods.

See Note 5 of Notes to Consolidated Financial Statements in Item 8

of this Report.

The specialty chemical industry comprises a number of companies similar in

size to the Company, as well

as companies larger

and smaller than Quaker Houghton.

The Company cannot readily determine its precise position in

every industry it serves.

the Company estimates it holds a leading global position

in the market for industrial process fluids including significant

positions in the markets for process fluids in portions of

the automotive and industrial markets, and a leading position in

the market for

process fluids to produce sheet steel and aluminum.

The Company cannot readily determine its precise competitive position

in every industry it

However, the Company estimates it holds a leading

global position in the market for industrial process fluids including

significant global positions in the markets for process fluids in portions of

the automotive and industrial markets, and a leading

position in the market for process fluids to produce sheet steel and aluminum.

The offerings of many of the Company’s

competitors differ from those of Quaker

some offer a broad portfolio of

fluids, including general lubricants, while others have more

differ from those of Quaker Houghton;

a broad portfolio of fluids, including general lubricants, while others have more

specialized product ranges.

competitors provide different levels of technical

All competitors provide different levels of technical

services to individual customers.

Competition in the industry is based primarily on

the ability to supply products that meet the needs of the

customer and provide technical services and laboratory assistance

customer, and to a lesser extent, on

Competition in the

industry is based primarily on the ability to supply products that meet the needs of

the customer and provide technical services and

laboratory assistance to the customer, and

to a lesser extent, on price.

Major Customers and Markets

Quaker Houghton’s five largest

customers (each composed of multiple subsidiaries or divisions

In 2021, Quaker Houghton’s

five largest customers (each composed of multiple subsidiaries or divisions

with semi-autonomous

purchasing authority) accounted for approximately

10% of consolidated net sales, with its largest customer

accounting for

purchasing authority) accounted for approximately 10% of

consolidated net sales, with its largest customer accounting for

approximately 3% of consolidated net sales.

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revenues are realized from the sale of process

fluids and services to manufacturers of steel, aluminum,

automobiles, aircraft, industrial equipment, and durable goods and,

Houghton is subject to the same business cycles as those experienced

fluids and services to manufacturers of steel, aluminum, automobiles,

aircraft, industrial equipment, and durable goods and, therefore,

Quaker Houghton is subject to the same business cycles as those experienced

by these manufacturers and their customers.

Company’s financial performance

is generally correlated to the volume of global production

within the industries it serves, rather than

directly related to the financial performance of its customers.

The Company’s financial

performance is generally correlated to the volume of global production within

the industries it serves, rather

than directly related to the financial performance of its customers.

Furthermore, steel and aluminum customers typically have limited

manufacturing locations compared to metalworking

customers and generally use higher volumes of products at a single

manufacturing locations compared to metalworking customers and

generally use higher volumes of products at a single location.

Raw Materials

Quaker Houghton uses approximately 3,000 raw materials,

including animal fats, vegetable oils, mineral oils, oleochemicals,

Quaker Houghton uses approximately 3,000

raw materials, including animal fats, vegetable oils, mineral oils, oleochemicals,

ethylene, solvents, surfactant agents, various chemical compounds

that act as additives to our base formulations, and a wide variety

other organic and inorganic compounds

and various derivatives of the foregoing.

that act as additives to our base formulations, and a wide variety of

other organic and inorganic compounds and

various derivatives of the foregoing.

The price of mineral oil and its derivatives can be

affected by the price of crude oil and industry

refining capacity.

Animal fat and vegetable oil prices, as well as the prices of

materials, are impacted by their own unique supply

and demand factors, and by biodiesel consumption which

is affected by the price

affected by the price of crude oil and industry refining

Animal fat and vegetable oil prices, as well as the prices of other raw

materials, are impacted by their own unique supply and demand factors,

and by biodiesel consumption which is affected by the price

of crude oil.

Accordingly, significant fluctuations

in the price of crude oil can have a material impact on

the cost of these raw

In addition, many of the raw materials used by Quaker

Houghton are commodity chemicals which can experience

in the price of crude oil can have a material impact on the cost of these raw

In addition, many of the raw materials used by Quaker Houghton are

commodity chemicals which can experience

significant price volatility.

Accordingly, the

Company’s earnings could be

affected by market changes in raw material prices.

Reference is made to the disclosure contained in Item 7A

of this Report.

As experienced during 2021, the Company’s

earnings have been and could continue to be affected by

market changes in raw material prices.

Reference is made to the disclosure contained in Item 7A of this Report.

Patents and Trademarks

Quaker Houghton has a limited number of patents and patent

applications including patents issued, applied for,

or acquired in the

and in various foreign countries, some of which may

prove to be material to its business, with the earliest patent expiry

The Company principally relies on its proprietary formulae

and its applications know-how and experience to meet

customer needs.

Quaker Houghton products are identified by numerous trademarks

that are registered throughout its marketing area.

Quaker Houghton has a limited number of patents and patent applications including

patents issued, applied for, or acquired in the

and in various foreign countries, some of which may prove to be material

to its business, with the earliest patent expiry in 2024.

The Company principally relies on its proprietary formulae and its applications

know-how and experience to meet customer needs.

Quaker Houghton products are identified by numerous trademarks that

are registered throughout its marketing area.

Research and Development—Laboratories

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research and development.

In addition, the Company maintains quality control labs at

each of its manufacturing facilities.

In addition, the Company maintains quality control labs at each of its manufacturing

Houghton research and development is directed primarily

toward applied technology since the nature of the Company’s

requires continual modification and improvement of formulations

to provide specialty chemicals to satisfy customer requirements.

problems are encountered which cannot be resolved

by local laboratories, the problem is referred to one of our ten principal

requires continual modification and improvement of formulations to provide

specialty chemicals to satisfy customer requirements.

problems are encountered which cannot be resolved by local laboratories,

the problem is referred to one of our ten principal

laboratories, located in Conshohocken, Pennsylvania;

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Aurora, Illinois;

Santa Fe Springs,

Santa Fe Springs, California;

Uithoorn, the Netherlands;

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Research and development expenses during the years ended

December 31, 2020,

2019 and 2018 were $40.0 million,

$32.1 million and $24.5 million, respectively.

December 31, 2021, 2020 and 2019 were $44.9 million, $40.0 million and

$32.1 million, respectively.

Recent Acquisition Activity

The Company has completed several recent acquisitions that expand its strategic product

offerings and increase the Company's

presence in its core industries.

The Company's 2021 and 2022 acquisitions consist of:

In January 2022, the Company acquired a business related to the sealing

and impregnation of metal castings for the

automotive sector, as well as impregnation resin

and impregnation systems for metal parts for approximately $1.4 million.

This business expands the Company's geographic presence in Germany

as well as broadens its product offerings and service

capabilities within its existing impregnation business that was initially entered into

as part of its past acquisition of Norman

In January 2022, the Company acquired a business that provides pickling

inhibitor technologies for the steel industry,

drawing lubricants and stamping oil for metalworking, and various other

lubrication, rust preventative, and cleaner

applications, for approximately $8.0 million.

This business broadens the Company’s

product offerings within its existing

metals and metalworking business in the Americas

In November 2021, the Company acquired a business that provides hydraulic

fluids, coolants, cleaners, and rust preventative

oils for approximately $3.7 million.

This business expands the Company’s

geographic presence in Turkey as well as

broadens its product offerings within its existing metalworking

In November 2021, the Company acquired Baron Industries ("Baron"),

based privately held company that provides

vacuum impregnation services of castings, powder metal and electrical components

for an initial payment of approximately

$7.1 million.

Baron expands the Company's geographic presence as well as broadens its product

offerings and service

capabilities within its existing impregnation business.

In September 2021, the Company acquired the remaining interest in Grindaix-GmbH

(“Grindaix”), a Germany-based, high-

tech provider of coolant control and delivery systems for approximately $2.9

Previously, in February 2021,

Company acquired a 38% ownership interest in Grindaix for approximately $1.7

Grindaix expands the Company's

geographic presence in Germany and broadens its product offerings

and service capabilities within its equipment solutions

and fluid intelligence business.

In June 2021, the Company acquired certain assets for the Company’s

chemical milling maskants product line for

approximately $2.8 million.

In February 2021, the Company acquired a tin-plating solutions business for

the steel end market for approximately $25.0

This business broadens the Company’s product

offerings within its existing metals business globally.

Impact of COVID-19

The global outbreak of COVID-19, and its variants, has negatively impacted

all locations where the Company does business.

Although the Company has now operated in this COVID-19 environment

for almost two years, the full extent of the outbreak and

related business impacts continue to remain uncertain and volatile.

This outbreak has significantly disrupted the operations of the

Company and those of its suppliers and customers.

Management continues to monitor the impact that the COVID-19 pandemic

having on the Company,

the overall specialty chemical industry,

and the economies and markets in which the Company operates.

Regulatory Matters

In order to facilitate compliance with applicable federal,

state, and local statutes and regulations relating to occupational

and safety and protection of the environment, the Company

has an ongoing program of site assessment for the

purpose of identifying

capital expenditures or other actions that may be

necessary to comply with such requirements.

In order to facilitate compliance

with applicable federal, state, and local statutes and regulations relating

to occupational health

and safety and protection of the environment, the Company has an ongoing

program of site assessment for the purpose of identifying

capital expenditures or other actions that may be necessary to comply with

such requirements.

The program includes periodic

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experts, as well as ongoing inspections and training by on-site

Such inspections address operational matters, record keeping, reporting

requirements and capital improvements.

expenditures directed solely or primarily to regulatory

compliance amounted to approximately $3.7

Such inspections address operational matters, record keeping, reporting requirements

and capital improvements.

expenditures directed solely or primarily to regulatory compliance amounted

to approximately $4.2

million, $3.7 million and $4.4

million during the years ended December 31, 2020,

2019 and 2018,

million during the years ended December 31, 2021, 2020 and 2019,

respectively.

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The Company’s operating

segments, which are consistent with its reportable segments,

reflect the structure of the Company’s

internal organization, the method by which

the Company’s resources are allocated

and the manner by which the Company and the

chief operating decision maker assess performance.

The Company’s reportable segments

segments, which are consistent with its reportable segments, reflect the structure of the

internal organization, the method by which the Company’s

resources are allocated and the manner by which the chief operating

decision maker assesses the Company’s

The Company has four reportable segments:

(i) Americas;

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and (iv) Global Specialty Businesses.

See Note 4 of Notes to Consolidated Financial Statements in Item

8 of this Report,

incorporated herein by this reference.

Since significant revenues and earnings are generated by

operations, the Company’s

financial results are affected by

See Note 4 of Notes to Consolidated Financial Statements in Item 8 of this Report.

Since significant revenues and earnings are generated by non-U.S.

the Company’s financial results are

currency fluctuations, particularly between the U.S.

dollar and the euro, the British pound sterling, the Brazilian

real, the Mexican

peso, the Chinese renminbi and the Indian rupee,

and the impact of those currency fluctuations on the underlying economies.

Incorporated by reference is (i) the foreign exchange

risk information contained in Item 7A of this Report, (ii)

the geographic

information in Note 4 of Notes to Consolidated Financial

Statements included in Item 8 of this Report, and (iii) information

risks attendant to foreign operations included in Item

1A of this Report.

dollar and the

euro, the British pound sterling, the Brazilian real, the Mexican

peso, the Chinese renminbi and the Indian rupee, and the impact of those currency

fluctuations on the underlying economies.

Reference is made to (i) the foreign exchange risk information

contained in Item 7A of this Report, (ii) the geographic information in

Note 4 of Notes to Consolidated Financial Statements included

in Item 8 of this Report, and (iii) information regarding risks attendant

to foreign operations included in Item 1A of this Report.

Number of Employees

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were employed by the parent company and its U.S.

subsidiaries,

and approximately 3,300 were employed by its non

subsidiaries, and approximately

3,500 were employed by its non-U.S.

subsidiaries.

Associated companies of Quaker Houghton (in which

it owns 50% or less and has significant influence) employed

approximately 600

Associated companies of Quaker Houghton (in which it owns 50% or less and has

significant influence) employed approximately 600

people on December 31, 2021.

Quaker Houghton considers its employees as its greatest strength

in differentiating our business and strengthening our

Quaker Houghton considers its employees as its greatest strength in differentiating

our business and strengthening our market

We have established

core values that are inclusive of embracing diversity and

creating a culture where we learn from and

are inspired by the many cultures, backgrounds and knowledge

of our team members.

core values that are inclusive of embracing diversity and creating a culture

where we learn from and

are inspired by the many cultures, backgrounds and knowledge of our

team members.

The Company’s goal is to have

an organization

that is inclusive of all its people and is representative

of the communities in which we operate.

The Company’s core

values are (i) live safe;

that is inclusive of all its people and is representative of the communities

in which we operate.

The Company’s core values

are (i) live safe;

(ii) act with integrity;

(iii) drive results;

(iv) exceed customer expectations;

(iv) exceed customer

expectations;

embrace diversity;

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guide our decisions and

Our commitment to these values, in words and actions, builds

a safer, stronger Quaker Houghton

and these values guide

the Company’s internal

conduct and its relationship with the outside world.

Our commitment to these values, in words and actions, builds a safer,

stronger Quaker Houghton, and these values guide

the Company’s internal conduct

and its relationship with the outside world.

By fostering a culture and environment that exemplifies

our core values, we gain, as a company,

unique perspectives, backgrounds and varying experiences

to ensure continued long-term

The Company respects and values all of its employees and

believes inclusion, diversity and equality are essential pillars to

drive the Company’s

unique perspectives, backgrounds and varying experiences to ensure

continued long-term

The Company respects and values all of its employees and believes inclusion,

diversity and equality are essential pillars to

drive the Company’s success.

Sustainability Report

We report our

progress on Environmental, Social, and Governance (“ESG”) milestones in our

sustainability report, which is

published annually and is available free of charge on our corporate

website at home.quakerhoughton.com/sustainability.

Company’s 2020 Sustainability

Report reflects the most recent available data on a variety of topics, including

specific information

relating to the Company’s:

(i) environmental footprint and climate change commitments;

(ii) diversity initiatives;

(iii) safety initiatives

and performance;

and (iv) training courses our employees have completed.

Information in these sustainability reports and on our

website are not incorporated by reference in this Report and, accordingly,

should not be considered part of this Report.

Environmental Strategy

In 2020, we established the Board Sustainability Committee, which has specific

responsibility to assist the Board of Directors (the

“Board”) in its assessment, evaluation, and oversight of the Company’s

sustainability programs and initiatives pertaining to the

Company’s business, operations,

and employees.

In formulating our environmental strategy,

our Executive Leadership Team

and Board consider certain risks and uncertainties that may materially impact

our financial condition and results of operations.

risks and uncertainties are further described in Item 1A of this Report.

In 2021, we set a target to achieve carbon neutrality in our global

operations by 2030 and net zero emissions across our entire

value chain by 2050.

The Company established 15 long-term goals,

based on the results of the Company's 2020 materiality

assessment, which was completed with input from customers, investors, suppliers,

and internal stakeholders.

Our 15 long-term goals

are closely aligned with the United Nations Sustainable Development Goals.

We also identified short

and medium-term milestones

that may help support the achievement of our 2030 targets.

Management and Retention

Maintaining a robust pipeline of talent is crucial to our continued

success and is a key aspect of succession planning efforts across

the organization.

and human resources teams are responsible for attracting and retaining top talent by facilitating

environment where employees want to show up to work and do great

things together.

To achieve sustained high performance,

management invests in the development, safety,

and wellbeing of our employees.

Among other metrics, we measure training hours,

turnover, time to hire, and diversity hiring

to assess our progress in these areas.

Additionally, we

regularly evaluate our compensation and benefits packages

for our employees, including health and wellness

benefits, paid-time off policies, monetary compensation,

and educational reimbursements, to ensure that our total compensation and

benefits packages are aligned with our business strategy,

organizational culture, and diversity and inclusion philosophy

while ensuring

that we remain competitive in the markets we serve while following

local and statutory wage and benefits laws and guidelines.

Diversity, Equity,

and Inclusion

As a global company,

we want to build an organization that is inclusive of all people and representative of

the communities in

which we operate.

Quaker Houghton provides equal employment opportunities and does not discriminate

based on age, ethnicity,

gender identity,

disability / medical, race, religion, or sexual orientation.

We believe that diversity and

inclusion are embodied by

having working norms and cultural familiarities whereby employees

feel included, engaged, and rewarded, regardless of their

background or where they sit in the organization.

Inclusion and diversity begin with the Board and ELT.

The Board is comprised of twelve individuals with diverse experience and

credentials, selected for their business acumen and ability to challenge and add

value to management.

Our current Board composition

includes two female and four racially diverse directors out of a total of

twelve directors.

For additional information on the Company’s

leadership, refer to Item 4(a) Information about our Executive Officers

Directors, Executive Officers and Corporate

our workforce demographics in our Sustainability Report.

By publicly disclosing our workforce demographics, we

increase transparency in the composition of our workforce as well as facilitate accountability

in achieving progress in our diversity

goals, including ensuring that diverse candidates are actively considered

for roles throughout the organization.

We are committed

to maintaining a strong safety culture and to emphasizing

the importance of our employees’ role in identifying,

to maintaining a strong safety culture and to emphasizing the importance of

our employees’ role in identifying,

mitigating and communicating safety risks.

We maintain policies

and operational practices that communicate a culture

We maintain policies and

operational practices that communicate a culture where all

levels of employees are responsible for safety.

We believe that

the achievement of superior safety performance is both

short-term and long-term strategic goal in managing our

ten “lifesaving” rules which make a significant

difference in preventing serious injuries and

the achievement of superior safety performance is both an important

short-term and long-term strategic goal in managing our operations.

We emphasize ten

“lifesaving” rules which make a significant

difference in preventing serious injuries and fatalities.

We also require

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Additionally, our

senior management team is closely involved in our safety programs

and conducts regular reviews of safety

performance metrics and reviews the Company’s

safety performance during Company-wide meetings.

Management and Retention

Maintaining a robust pipeline of talent is crucial to

continued success and is a key aspect of succession planning efforts

the organization.

Our leadership and human resources teams are responsible for

attracting and retaining top talent by facilitating an

environment where employees want to show up to work

and do great things together.

To achieve sustained high

management invests in the development, safety,

and wellbeing of our employees.

Additionally, we regularly

compensation and benefits package,

including health and wellness benefits, paid-time off policies,

monetary compensation, and

educational reimbursements,

to ensure that our total compensation and benefits packages are aligned

with our business strategy,

organizational culture, and diversity and inclusion

philosophy while ensuring that we remain competitive in

the markets we serve

while following local and statutory wage and benefits

laws and guidelines.

Sustainability Report

The Company publishes annual sustainability reports which

are available free of charge on its corporate

website under “Investors

- Commitment to Sustainability - Sustainability Report.”

The Company’s 2019 Sustainability Report

reflects the most recent available

data on a variety of topics, including

specific information relating to:

(i) the Company’s

environmental footprint and climate change

(ii) the Company’s diversity

(iii) certain safety metrics;

and (iv) training courses our

employees completed.

Information included in these sustainability reports is not intended

to be incorporated into this Report.

ELT is closely involved

in our safety programs and conducts regular reviews of safety performance

reviews the Company’s safety

performance during Company-wide meetings.

Quaker Houghton on the Internet

Financial results, news and other information about

Quaker Houghton can be accessed from the Company’s

Financial results, news and other information about Quaker Houghton

can be accessed from the Company’s

https://www.quakerhoughton.com

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financial reports, news releases and career opportunities.

The Company’s periodi

and current reports on Forms 10-K, 10-Q, 8-K, and

other filings, including exhibits and supplemental

schedules filed therewith, and amendments to those reports, filed with

the Securities

and Exchange Commission (“SEC”) are available on

the Company’s website, free of

charge, as soon as reasonably practicable after

The Company’s periodic and current reports

on Forms 10-K, 10-Q, 8-K, and

other filings, including exhibits and supplemental schedules filed therewith,

and amendments to those reports, filed with the Securities

and Exchange Commission (“SEC”) are available on the Company’s

website, free of charge, as soon as reasonably practicable after

they are electronically filed with or furnished to the SEC.

Information contained on, or that may be accessed through,

the Company’s

website is not incorporated by reference in this Report and,

accordingly, you

should not consider that information part of this Report.

Factors that May Affect Our Future

(Cautionary Statements under the Private Securities Litigation

Reform Act of 1995)

Certain information included in this Report and other

materials filed or to be filed by Quaker Chemical Corporation

(as well as information included in oral statements or other

written statements made or to be made by us) contain

or may contain

forward-looking statements within the meaning of Section

27A of the Securities Act of 1933, as amended, and Section

Information contained on, or that may be accessed through, the Company’s

website is not incorporated by reference in this Report and, accordingly,

you should not consider that information part of this Report.

Factors that May Affect Our Future Results

(Cautionary Statements under the Private Securities Litigation Reform

Certain information included in this Report and other materials filed or

to be filed by Quaker Chemical Corporation with the SEC,

as well as information included in oral statements or other written statements made

or to be made by us, contain or may contain

forward-looking statements within the meaning of Section 27A of the

Securities Act of 1933, as amended, and Section 21E of the

Securities Exchange Act of 1934, as amended.

These statements can be identified by the fact that they do

not relate strictly to

These statements can be identified by the fact that they do not relate strictly to

historical or current facts.

We have based

these forward-looking statements, including statements regarding

the potential effects of the

COVID-19 pandemic on the Company’s

business, results of operation, and financial condition, and our expectations

maintain sufficient liquidity and remediate any

of our material weaknesses in internal control over financial

reporting on our current

these forward-looking statements, including statements regarding the potential

effects of the

COVID-19 pandemic and global supply chain constraints on the Company’s

business, results of operations, and financial condition,

our expectation that we will maintain sufficient liquidity and

remediate any of our material weaknesses in internal control over

financial reporting, and statements regarding the impact of increased

raw material costs and pricing initiatives on our current

expectations about future events.

These forward-looking statements include statements with respect

to our beliefs, plans, objectives, goals, expectations,

anticipations, intentions, financial condition, results of operations,

future performance, and business, including:

These forward-looking statements include statements with respect to

our beliefs, plans, objectives, goals, expectations,

anticipations, intentions, financial condition, results of operations, future

performance, and business, including:

the potential benefits of the Combination and other acquisitions;

the impacts on our business as a result of the COVID-19

pandemic and any projected global economic rebound

anticipated positive results due to Company actions taken

in response to the pandemic;

our current and future results and plans;

the impacts on our business as a result of the COVID-19 pandemic and

any projected global economic rebound or

anticipated positive results due to Company actions taken in response;

cost increases in prices of raw materials and the impacts of constraints and

disruptions in the global supply chain;

our current and future results and plans including our sustainability goals

statements that include the words “may,”

1 unchanged sentence

“intend,” “plan” or similar expressions.

Such statements include information relating to current and

future business activities, operational matters, capital spending,

Such statements include information relating to current and future business activities,

operational matters, capital spending, and

financing sources.

From time to time, forward-looking statements are also included in

the Company’s other periodic

reports on Forms

10-K, 10-Q and 8-K, press releases, and other materials released

to, or statements made to, the public.

Any or all of the forward-looking statements in this Report,

in the Company’s Annual

Report to Shareholders for 2020 and in any

From time to time, forward-looking statements are also included in the Company’s

other periodic reports on Forms

10-K, 10-Q and 8-K, press releases, and other materials released to,

or statements made to, the public.

Any or all of the forward-looking statements in this Report, in the Company’s

Annual Report to Shareholders for 2021 and in any

other public statements we make may turn out to be wrong.

This can occur as a result of inaccurate assumptions

or as a consequence

This can occur as a result of inaccurate assumptions or as a consequence

of known or unknown risks and uncertainties.

Many factors discussed in this Report will be important in determining

Many factors discussed in this Report will be important in determining our future

Consequently, actual results may

differ materially from those that might be anticipated

from our forward-looking

no obligation to publicly update any forward-looking statements,

whether as a result of new information, future

differ materially from those that might be anticipated from our forward-looking

no obligation to publicly update any forward-looking statements, whether

as a result of new information, future

events or otherwise.

However, any further disclosures made

on related subjects in the Company’s

subsequent reports on Forms 10-K,

However, any further disclosures made on

related subjects in the Company’s subsequent

reports on Forms 10-K,

10-Q, 8-K and other related filings should be consulted.

1 unchanged sentence

products and services is

largely derived from the demand for our customers’

products, which subjects the Company to uncertainties related

to downturns in a

customer’s business and unanticipated customer

production shutdowns.

largely derived from the demand for our customers’ products, which

subjects the Company to uncertainties related to downturns in a

customer’s business and unanticipated customer production

slowdowns and shutdowns, including as is currently being experienced by

many automotive industry companies as a result of supply chain disruption.

Other major risks and uncertainties include, but are not

limited to, the primary and secondary impacts of the COVID-19

pandemic including actions taken in response to the pandemic by

various governments, which could exacerbate some

or all of the other risks and uncertainties faced by the Company,

including the

potential for significant increases in raw material costs, supply

chain disruptions, customer financial instability,

limited to, the primary and secondary impacts of the COVID-19 pandemic,

including actions taken in response to the pandemic by

various governments, which could exacerbate

some or all of the other risks and uncertainties faced by the Company,

as well as the

potential for significant increases in raw material costs, supply chain

disruptions, customer financial instability,

worldwide economic

and political disruptions, foreign currency fluctuations,

significant changes in applicable tax rates and regulations,

future terrorist

attacks and other acts of violence, each of which

is discussed in greater detail in Item 1A of this Report.

Furthermore, the Company is

subject to the same business cycles as those experienced

by our customers in the steel, automobile, aircraft, industrial

equipment, and

durable goods industries.

The ultimate significance of COVID-19 impacts on our business will depend

on, among other things, the

extent and duration of the pandemic, the severity of the

disease and the number of people infected with the

virus, the continued

uncertainty regarding availability,

administration and long-term efficacy of a

vaccine, or other treatments, including on new strands or

mutations of the virus, the longer term effects on

the economy, including

the resulting market volatility,

and the measures taken by

governmental authorities and other

third parties restricting day-to-day life and business operations

and the length of time that such

measures remain in place, as well as laws and other governmental

programs implemented to address the pandemic or assist impacted

businesses, such as fiscal stimulus and other legislation

and political disruptions such as the current conflict between Russia and Ukraine

foreign currency fluctuations, significant changes in

applicable tax rates and regulations, future terrorist attacks and other acts of violence.

Furthermore, the Company is subject to the

same business cycles as those experienced by our customers in the steel, automobile,

aircraft, industrial equipment, and durable goods

The ultimate impact of COVID-19 on our business will depend on,

among other things, the extent and duration of the

pandemic, the severity of the disease and the number of people infected

with the virus including new variants, the continued

uncertainty regarding global availability,

administration, acceptance and long-term efficacy

of vaccines, or other treatments for

COVID-19 or its variants, the longer-term effects on the

economy of the pandemic, including the resulting market volatility,

the measures taken by governmental authorities and other third parties restricting

day-to-day life and business operations and the

length of time that such measures remain in place, as well as laws and other

governmental programs implemented to address the

pandemic or assist impacted businesses, such as fiscal stimulus and other legislation

designed to deliver monetary aid and other relief.

Other factors could also

adversely affect us, including those related to

the Combination and other acquisitions and the integration of

the acquired businesses.

Our forward-looking statements are subject to risks, uncertainties

and assumptions about the Company and its operations

subject to change based on various important factors,

Other factors could also adversely affect us, including those related

to the Combination and other acquisitions and the integration of

acquired businesses.

Our forward-looking statements are subject to risks, uncertainties and

assumptions about the Company and its

operations that are subject to change based on various important factors,

some of which are beyond our control.

These risks, uncertainties, and possibly

inaccurate assumptions relevant to our business could

cause our actual results to differ materially from expected

and historical results.

Therefore, we caution you not to place undue reliance

on our forward-looking statements.

uncertainties, and possible inaccurate assumptions relevant to our business

could cause our actual results to differ materially from

expected and historical results.

Therefore, we caution you not to place undue reliance on our forward-looking

For more information regarding these

risks and uncertainties as well as certain additional

risks that we face, refer to the Risk Factors section in Item

1A of this Report, and

in our quarterly and other reports filed from time

to time with the SEC.

This discussion is provided as permitted by the Private

Securities Litigation Reform Act of 1995.

risks and uncertainties as well as certain additional risks that we face,

refer to the Risk Factors section, which appears in Item 1A of

this Report and in our quarterly and other reports filed from time to time

with the SEC.

This discussion is provided as permitted by

the Private Securities Litigation Reform Act of 1995.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business