Stepan Company · NYSE:SCL
Stepan — Q3 2024 Earnings Presentation
20 slides from Stepan's earnings presentation, Oct 30, 2024
Slide 1: Third Quarter 2024 Earnings Results
Third Quarter 2024 Earnings Results October 30, 2024 Providing innovative chemical solutions for a cleaner, healthier, more energy efficient world.
Slide 2: Cautionary Statement
Cautionary Statement Certain information in this presentation consists of forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended.
Slide 3: Earnings Conference Call Agenda
Earnings Conference Call Agenda Opening Remarks F. Quinn Stepan, Jr., Chairman of the Board of Directors 2024 Third Quarter Highlights Luis E. Rojo, President & Chief Executive Officer 2024 Third Quarter Financial Results Samuel S. Hinrichsen, Vice President & Interim Chief Financial Officer Strateg
Slide 4: Third Quarter 2024 Highlights
Third Quarter 2024 Highlights Net Reported Net Income was $23.6 million and Adjusted Net Income(1) was $23.7 million, Income up 88% and 61% respectively, year-over-year, mainly due to higher margins and a lower effective tax rate. Up EBITDA(2) EBITDA(2) was $53.0 million and Adjusted EBITDA(2) was $
Slide 5: Net Income Bridge – Q3 2023 to Q3 2024
Net Income Bridge – Q3 2023 to Q3 2024 $1.03 Adj. EPS $0.64 Adj. EPS Note: All amounts are in millions of U.S. dollars and are reported after-tax. (1) The adjustments to Reported Net Income in Q3 2023 consisted of deferred compensation income and cash-settled SARs income of $2.1million and environme
Slide 6: Adjusted EBITDA Bridge – Q3 2023 to Q3 2024
Adjusted EBITDA(1) Bridge – Q3 2023 to Q3 2024 Note: All amounts are in millions of U.S. dollars. (1) Adjusted EBITDA is a Non-GAAP measure. See Appendices III and VII for GAAP reconciliations. Surfactants Adjusted EBITDA growth was driven by volume growth across several end markets and margin impro
Slide 7: Global Surfactants
Quarter-over-Quarter Volume Change Global Surfactants Q3 2023 to Q3 2024 Net Sales Bridge Q3 2023 to Q3 2024 Adjusted EBITDA(1) Bridge (1) Adjusted EBITDA is a Non-GAAP measure. See Appendix III for GAAP reconciliations. Volume was driven by double-digit growth across our North America and Asia bene
Slide 8: Global Polymers
Quarter-over-Quarter Volume Change Global Polymers Q3 2023 to Q3 2024 Net Sales Bridge Q3 2023 to Q3 2024 Adjusted EBITDA(1) Bridge (1) Adjusted EBITDA is a Non-GAAP measure. See Appendix III for GAAP reconciliations. Volume was impacted by a 13% decrease in global Rigid North America results were d
Slide 9: Balance Sheet & Cash Flow
Balance Sheet & Cash Flow Net Debt(1) / TTM Adjusted EBITDA(2) ($MM) Capital Expenditures ($MM) 2.9 Net Debt/TTM Adj EBITDA Ratio(3) 541 189 Net Debt(1) TTM Adjusted EBITDA(2) Cash from Operations ($MM) Free Cash Flow(4) ($MM) (1) Net Debt is a Non-GAAP measure. See Appendix VI for a GAAP reconcilia
Slide 10: Stepan Strategic Priorities & Growth Strategy
Stepan Strategic Priorities & Growth Strategy Creating and Delivering Shareholder Value Customer Intimacy & Extended Reach • Focused Growth with Strategic Tier 1 Customers • Grow Share of Wallet and expand Tier 2 & 3 Customer Base Priority Market Diversification Efficient Capital Allocation • Agricu
Slide 11: Strategic Capital Investments Update
Strategic Capital Investments Update New Alkoxylation Capacity: Pasadena, Texas $265MM Summary & Benefits Estimated CapEx Alkoxylates are a core surfactant technology consumed across Stepan’s key agricultural, oilfield, 75KTA construction, and household end use markets Annual Alkoxylation Business c
Slide 12: Thank You
NYSE: SCL Thank You Samuel S. Hinrichsen VP and Interim CFO 847-446-7500
Slide 13: Appendix: Financials and GAAP Reconciliations
APPENDIX Financials and GAAP Reconciliations 13
Slide 14: Update on Certain Expectations
Appendix I Update on Certain Expectations (millions USD) 2021 Actual 2022 Actual 2023 Actual 2024 Forecast Capital Expenditures 195 301 260 120 - 125 Debt Repayments 38 38 38 54 Interest Net 6 10 12 14-15 Depreciation & Amortization 91 95 105 114-116 Effective Tax Rate (%) 20% 22% 17% 19 - 20%(*) (*
Slide 15: Reconciliation of Adjusted Net Income and EPS
Appendix II Reconciliation of Non-GAAP Adjusted Net Income and Earnings Per Diluted Share Reconciliation of Pre-Tax to After-Tax Adjustments 15
Slide 16: Adjusted EBITDA and EBITDA Reconciliations
Appendix III Adjusted EBITDA and EBITDA Reconciliations Q3 2024 and Q3 2023(1) (1) Refer to Income Statement on appendix VII for an Operating Income to Net Income reconciliation. 16
Slide 17: Trailing Twelve Months Adjusted EBITDA Reconciliation
Appendix IV Trailing Twelve Months Adjusted EBITDA Reconciliation 9/30/2024 TTM – Adjusted EBITDA Reported Operating Income 63.0 Depreciation & Amortization 110.7 Other Net Income (Expense) 3.1 Deferred Compensation 1.6 Cash Settled SARS 0.1 Goodwill and Other Intangibles Impairment Expense 2.0 Busi
Slide 18: Free Cash Flow Reconciliations
Appendix V Free Cash Flow (FCF) Reconciliations (million USD) Q3 2024 Q3 2023 Cash Flow from Operations 22.7 70.1 Capital Expenditures (26.7) (53.7) Free Cash Flow (4.0) 16.4 Year-to-Date Year-to-Date (million USD) 2024 2023 Cash Flow from Operations 93.8 105.9 Capital Expenditures (86.6) (213.6) Fr
Slide 19: Net Debt to Total Capitalization Ratio
Appendix VI Net Debt to Total Capitalization Ratio (millions USD) September September September September September September 30, 2024 30, 2023 30, 2022 30, 2021 30, 2020 30, 2019 Total Debt 688.5 649.4 564.9 279.8 207.9 231.9 Cash 147.3 105.5 165.7 105.3 310.4 286.0 Net Debt 541.2 543.9 399.2 174.5
Slide 20: Income Statement
Appendix VII Income Statement 20