Stepan Company · NYSE:SCL
Stepan — Q4 2024 Earnings Presentation
23 slides from Stepan's earnings presentation, Feb 19, 2025
Slide 1: Fourth Quarter 2024 Earnings Results
Fourth Quarter 2024 Earnings Results February 19, 2025
Slide 2: Safe Harbor
Safe Harbor 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 (the Excha
Slide 3: Agenda
Stepan Company: Agenda AGENDA 1 2024 FullInvest Yearin Highlights Organic Growth 2 2024 Fourth Quarter and Full Year Financial Results 3 Strategic Outlook 4 Q&A 5 Closing Remarks 3
Slide 4: CEO Remarks - 2024 Full Year Highlights
Stepan Company: Highlights CEO Remarks - 2024 Full Year Highlights NET INCOME UP ▪ Reported net income was $50.4 million, up 25% versus prior Reported Net Income Adjusted Net Income(1) year. Adjusted net income(1) was $50.5 million, flat versus prior $50.4MM $50.5MM year. +25% YoY Flat YoY EBITDA GR
Slide 5: Fourth Quarter - Highlights
Stepan Company: Highlights Fourth Quarter - Highlights NET INCOME UP ▪ Reported net income was $3.4 million versus a $1.2 million net loss in Reported Net Income Adjusted Net Income(1) the prior year. Adjusted net income(1) was $2.8 million, down 63% versus prior year, mainly due to higher pre-opera
Slide 6: Net Income Bridge Q4 2023 to Q4 2024
Stepan Company: Financial Results Net Income Bridge Q4 2023 to Q4 2024 $1.2 $8.7 $7.5 $0.6 $3.4 $2.6 $1.2 $2.8 $0.33 ($1.2) $0.12 Adj. EPS Adj. EPS ($8.6) ($1.2) Q4 2023 Adjustments(1) Q4 2023 Surfactants Polymers Specialty Corporate Taxes Q4 2024 Adjustments(3) Q4 2024 Reported Adjusted Operating O
Slide 7: Adjusted EBITDA Bridge Q4 2023 to Q4 2024
Stepan Company: Financial Results Adjusted EBITDA(1) Bridge Q4 2023 to Q4 2024 $3.1 $37.5 $2.8 $0.7 $35.0 ($9.1) Q4 2023 Surfactants Polymers Specialty Products Corporate Q4 2024 Adj. EBITDA(1) Adj. EBITDA(1) Note: All amounts are in millions of U.S. dollars. ▪ Surfactants Adjusted EBITDA(1) growth
Slide 8: Surfactants
Stepan Company: Business Segments Surfactants Q4 2023 to Q4 2024 Net Sales Bridge Adjusted EBITDA(1)Bridge $34.8 $15.5 $3.9 $34.7 $369.5 $4.9 $378.9 $31.6 $6.5 ($11.0) ($7.1) Q4 2023 Volume Price/Mix F/X Q4 2024 Q4 2023 North America Latin America Europe Q4 2024 Net Sales Net Sales Adj. EBITDA(1) +
Slide 9: Polymers
Stepan Company: Business Segments Polymers Q4 2023 to Q4 2024 Net Sales Bridge Adjusted EBITDA(1)Bridge $147.3 $20.5 $1.5 $129.8 ($13.4) ($5.5) $0.1 $11.4 ($8.8) ($0.6) Q4 2023 Volume Price/Mix F/X Q4 2024 Q4 2023 North America Europe Asia + Q4 2024 Net Sales Net Sales Adj. EBITDA(1) Latin America A
Slide 10: Adjusted EBITDA Bridge FY 2023 to FY 2024
Stepan Company: Financial Results Adjusted EBITDA(1) Bridge FY 2023 to FY 2024 $20.9 $9.6 $187.0 $180.0 ($20.2) ($3.3) FY 2023 Surfactants Polymers Specialty Products Corporate FY 2024 Adj. EBITDA(1) Adj. EBITDA(1) Note: All amounts are in millions of U.S. dollars. ▪ Surfactants adjusted EBITDA(1) g
Slide 11: Balance Sheet & Cash Flow
Stepan Company: Financial Results Balance Sheet & Cash Flow 2023 to 2024 Net Debt(1) / TTM Adjusted EBITDA(2) ($MM) Capital Expenditures ($MM) 2.8 Net Debt/TTM Adj EBITDA 526 Ratio(3) 187 Net Debt(1) TTM Adjusted EBITDA(2) 2024 Working Capital(5) Free Cash Flow(4) ($MM) (1) Net Debt is a Non-GAAP me
Slide 12: Strategic Priorities and Growth Drivers
Stepan Company: Growth Strategy Strategic Priorities and Growth Drivers Creating and Delivering Shareholder Value ▪ Greater Than GDP Growth ▪ Customer Intimacy ▪ Accretive Margins ▪ Expand Tier 2 & 3 Customer Base ▪ Limited Global Risk Exposure ▪ World Class R&D & Sustainability High-Margin / Custom
Slide 13: Strategic Capital Investments Update
Stepan Company: Strategic Investments Strategic Capital Investments Update New Alkoxylation Capacity: Pasadena, Texas Summary & Benefits $265MM Estimated CapEx ▪ Alkoxylates are a core surfactant technology consumed across Stepan’s key agricultural, oilfield, construction, and household end use mark
Slide 14: Thank You
Stepan Company –> Growth Drivers Thank You Samuel S. Hinrichsen VP and Interim Chief Financial Officer 847-446-7500 14
Slide 15: Appendix
Appendix Additional Sources of Information and Definitions
Slide 16: Update on Certain Expectations
Stepan Company: Appendix I Update on Certain Expectations (millions USD) 2022 Actual 2023 Actual 2024 Actual 2025 Forecast Capital Expenditures 301 260 123 125 - 135 Debt Repayments 38 38 49 69 Interest Net 10 12 14 23-25 Depreciation & Amortization 95 105 112 128 – 132 Effective Tax Rate (%) 22% 17
Slide 17: Reconciliations
Stepan Company: Appendix II Reconciliations Reconciliation of Non-GAAP Adjusted Net Income and Earnings Per Diluted Share Three Months Ended Twelve Months Ended December 31, December 31, ($ in thousands, except per share amounts) 2024 EPS 2023 EPS 2024 EPS 2023 EPS Net Income Reported $ 3,350 $ 0.15
Slide 18: Adjusted EBITDA and EBITDA
Stepan Company: Appendix III Adjusted EBITDA and EBITDA Reconciliations Q4 2024 and Q4 2023(1) Adjusted EBITDA and EBITDA Reconciliations Q4 2024 and Q4 2023(1) Three Months Ended December 31, 2024 Specialty Unallocated ($ in millions) Surfactants Polymers Products Corporate Consolidated Operating I
Slide 19: Trailing Twelve Months
Stepan Company: Appendix IV Trailing Twelve Months Adjusted EBITDA Reconciliation 12/31/2024 TTM – Adjusted EBITDA Reported Operating Income 70.5 Depreciation & Amortization 112.3 Other Net Income (Expense) 4.1 Deferred Compensation (2.4) Cash Settled SARS 0.0 Goodwill and Other Intangibles Impairme
Slide 20: Free Cash Flow (FCF) Reconciliations
Stepan Company: Appendix V Free Cash Flow (FCF) Reconciliations (million USD) Q4 2024 Q4 2023 Cash Flow from Operations 68.3 69.0 Capital Expenditures (36.2) (46.7) Free Cash Flow 32.1 22.3 (million USD) 2024 2023 2022 Cash Flow from Operations 162.1 174.9 160.8 Capital Expenditures (122.8) (260.3)
Slide 21: Net Debt to Total Capitalization Ratio
Stepan Company: Appendix VI Net Debt to Total Capitalization Ratio (millions USD) December December December December December December 31, 2024 31, 2023 31, 2022 31, 2021 31, 2020 31, 2019 Total Debt 625.4 654.1 587.1 363.6 198.7 222.1 Cash 99.7 129.8 173.8 159.2 349.9 315.4 Net Debt 525.7 524.3 41
Slide 22: Income Statement
Stepan Company: Appendix VII Income Statement Three Months Ended Twelve Months Ended December 31, December 31, 2024 2023 2024 2023 Net Sales $ 525,609 $ 532,131 $ 2,180,274 $ 2,325,768 Cost of Sales 468,913 465,726 1,908,060 2,048,170 Gross Profit 56,696 66,405 272,214 277,598 Operating Expenses: Se
Slide 23: Adjusted EBITDA and EBITDA
Stepan Company: Appendix VIII Adjusted EBITDA and EBITDA Reconciliations 2024 and 2023(1) (1) Refer to Income Statement on appendix VII for an Operating Income to Net Income reconciliation. 23