Stepan Company · NYSE:SCL
Stepan — Q1 2021 Earnings Presentation
18 slides from Stepan's earnings presentation, Apr 27, 2021
Slide 1: Earnings Call Presentation First Quarter 2021
Earnings Call Presentation First Quarter 2021 April 27, 2021
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 F. Quinn Stepan, Jr., First Quarter Highlights Chairman and Chief Executive Officer Luis E. Rojo, First Quarter Financial Results Vice President and Chief Financial Officer Scott Behrens, Strategic Outlook President and Chief Operating Officer Analyst / Shareholder Qu
Slide 4: First Quarter 2021 Financial Recap - RECORD
First Quarter 2021 Financial Recap - RECORD • RECORD Q1 Reported Net Income was $40.6 million, or $1.74 per diluted share, a 48% increase versus $27.5 million, or $1.18 per diluted share, in Q1 2020. • RECORD Q1 Adjusted Net Income(1) was $42.4 million, or $1.82 per diluted share, a 75% increase ver
Slide 5: Net Income Bridge – Q1 2020 to Q1 2021
Net Income Bridge – Q1 2020 to Q1 2021 Note: All amounts are in millions of U.S. dollars and are reported after-tax. $50 8.1 (1.0) (2.2) $45 (0.4) 42.4 (1.8) 40.6 $40 13.7 $35 USD in Millions $30 27.5 (3.3) $25 24.2 $20 $15 $10 $5 $0 (1) The adjustments to Reported Net Income in Q1 2020 consisted of
Slide 6: Surfactants – RECORD Quarter
Surfactants – RECORD Quarter Improved mix and higher global demand in the agricultural and oil field end markets. Q1 2021 Business Results Highlights in millions $ Q1 2021 Q1 2020 Operating Income was a record $53.2 million, an increase of $17.0 million, or 47%, compared to the prior Net Sales $ 370
Slide 7: Polymers
Polymers Higher results primarily driven by both the INVISTA acquisition and organic market growth. Q1 2021 Business Results Highlights in millions $ Q1 2021 Q1 2020 Operating Income was $18.0 million, an increase of $10.5 million, compared to the prior year, due to a 32% increase in $ 150.4 $ 106.5
Slide 8: Strong Balance Sheet and Ample Liquidity to Invest for Growth
Strong Balance Sheet and Ample Liquidity to Invest for Growth Cash vs. Debt Net Debt / TTM Adjusted EBITDA 350 331 291 0.34 248 Net Debt / TTM $ Millions $ Millions Adjusted EBITDA Ratio(3) 199 176 151 98 2015 2020 Q1 2021 Net Debt(1) TTM Adjusted Cash Debt EBITDA(2) Interest Expense Ratio Debt Prin
Slide 9: Stepan Strategic Priorities
Stepan Strategic Priorities Our Vision: Innovative Chemical Solutions for a Cleaner, Healthier, More Energy Efficient World BUSINESS PRIORITIES • Enable a healthier world through the supply of surfactants for cleaning, disinfection and personal wash applications. • Accelerate growth with Tier 2/3 Cu
Slide 10: Strategic Priorities
Strategic Priorities: Key Priorities Stepan Opportunities / Actions • Ensure the health and safety of our employees and preserve the right to operate and compete during and after the COVID-19 crisis. • Produce and deliver products that help fight the global pandemic. COVID-19 • 8 formulations approv
Slide 11: Growth through M&A
Growth through M&A Q1 2021 Acquisition of Aromatic Polyester Polyol Business from INVISTA Benefits of Acquisition Financial Performance • Expected to be accretive to Stepan’s EPS and EBITDA $100MM margins in 2021 • This transaction allows us to continue our journey to Annual Revenue create a more sp
Slide 12: Thank You
NYSE: SCL Thank You Luis E. Rojo VP and CFO 847-446-7500 WORKING TOGETHER FOR A SAFER, CLEANER WORLD
Slide 13: Appendix: Financials and GAAP Reconciliations
APPENDIX Financials and GAAP Reconciliations 13
Slide 14: Appendix I: Update on Certain Expectations
Appendix I Update on Certain Expectations 2019 Actual 2020 Actual 2021 Expected Capital expenditures $106 million $126 million $150-170 million Debt repayments $54 million $24 million $38 million Interest expense $6 million $5 million $7+ million Effective tax rate 18% 25% 23-26% 14
Slide 15: Appendix II: Reconciliation of Non-GAAP 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: Appendix III: Foreign Exchange Impact – Q1 2021
Appendix III Foreign Exchange Impact – Q1 2021 (millions USD) Surfactants Polymers Specialty Consolidated Products Net Sales 1.5 2.5 0.2 4.2 Gross Profit (0.3) 0.5 0.0 0.2 Operating 0.1 0.1 0.0 0.2 Expenses Operating Income (0.4) 0.4 0.0 0.0 16
Slide 17: Appendix IV: Net Debt to Total Capitalization Ratio
Appendix IV Net Debt to Total Capitalization Ratio (millions USD) March 31, December 31, March 31, March 31, March 31, March 31, 2021 2020 2020 2019 2018 2017 Total Debt 248.4 198.7 222.1 271.9 290.8 316.7 Cash 150.7 349.9 254.3 269.5 244.6 197.8 Net Debt 97.7 (151.2) (32.2) 2.4 46.2 118.9 Equity 1,
Slide 18: Appendix V: Adjusted EBITDA Reconciliations
Appendix V Adjusted EBITDA Reconciliations Q1 2021 – Quarterly Adjusted EBITDA by Segment Surfactants Polymers Specialty Products Corporate Total Stepan Net Sales 371 150 16 - 538 Reported Operating Income 53 18 3 -20 54 Adjustments* 0 0 0 3 3 Adjusted Operating Income 53 18 3 -17 57 Depreciation &