Earnings Call Presentation 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. These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, the amount and timing of future cash distributions, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K (MARK ONE) ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE FISCAL YEAR ENDED DECEMBER 31, 2022 OR ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 1-4462 STEPAN COMPANY (Exact name of registrant as specified in its charter) | Delaware 36-1823834 | | --- | | (State or other jurisdicti ...

Financial Data and Key Metrics Changes - Adjusted net income for Q4 2022 was $13.5 million or $0.59 per diluted share, down from $22.5 million or $0.97 per diluted share in Q4 2021 [23][32] - For the full year 2022, adjusted net income reached a record $153.5 million or $6.65 per diluted share, a 7% increase from $143.5 million or $6.16 per diluted share in 2021 [32][34] - The effective tax rate for 2022 was 22%, up from 20% in 2021, primarily due to non-recurring favorable tax benefits recognized in 2021 [35] Business Line Data and Key Metrics Changes - Surfactant segment net sales were $455 million for Q4 2022, an 8% increase year-over-year, with selling prices up 26% due to higher raw material and logistic costs [17][27] - Polymer segment net sales were $148 million for Q4 2022, a 15% increase year-over-year, with selling prices increasing by 14% [28] - Specialty Products operating income reached a record $30 million in 2022, compared to $14 million in the prior year, driven by improved margins and customer mix [21][34] Market Data and Key Metrics Changes - Global volume declined by 15% year-over-year, primarily due to lower demand in commodity laundry and personal care markets [26] - Foreign currency translation negatively impacted net sales by 3% in Q4 2022 and by $5.6 million or $0.24 per diluted share for the full year [26][34] - North America and Europe experienced lower volumes across all polymer segments, while Asia saw improvements due to increased demand following the easing of COVID restrictions [31] Company Strategy and Development Direction - The company aims to invest in current business operations, pursue strategic M&A opportunities, and return cash to shareholders [22] - Significant investments are being made in the new alkoxylation production facility in Pasadena, Texas, expected to be operational by mid-2024 [40] - The company is focused on transitioning to low 1,4-dioxane products to meet new regulatory requirements, with completion expected in the first half of 2023 [127] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the strength and diversity of the business despite challenges from inflation and supply chain issues [12][22] - The macro environment is expected to negatively impact consumer demand and construction-related activity in 2023, affecting both surfactant and polymer businesses [65] - Management noted that destocking activities are expected to continue, particularly in the polymer segment, but signs of normalization in order patterns are anticipated [47][68] Other Important Information - The company paid $30.6 million in dividends and repurchased $25 million of its stock in 2022, with $125 million remaining under the share repurchase program [5] - The company achieved a gold rating from EcoVadis, placing it in the 96th percentile within the specialty chemical sector for ESG efforts [61] Q&A Session Summary Question: Factors driving the 17% volume decline in Q4 - Management identified three main factors: demand decline, customer destocking, and the transition to low 1,4-dioxane products, with each contributing approximately one-third to the decline [68] Question: Signs of order pattern normalization - Management indicated that while some uptick in demand is expected, destocking activities are still ongoing, particularly in the polymer segment [47][69] Question: Impact of Pasadena startup process on P&L - Management noted that there will be additional costs associated with the startup of the Pasadena facility, estimated at around $10 million [50] Question: Regional outlook for 2023 - Management highlighted that Europe is ahead in demand recovery compared to North America, with concerns about prolonged inflation impacting Latin America [107][108] Question: New product development and sales performance - Management emphasized a focus on agricultural chemicals and specialty alkoxylates, with ongoing investments in R&D to support growth in these areas [86][110]

Fourth Quarter 2022 Cautionary Statement There are a number of risks, uncertainties and other important factors, many of which are beyond Stepan Company's control, that could cause actual results to differ materially from the forward-looking statements contained in this presentation. Such risks, uncertainties and other important factors include, among other factors, the risks, uncertainties and factors described in Stepan Company's Form 10-K, Form 10-Q and Form 8-K reports and exhibits to those reports, and ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 1-4462 STEPAN COMPANY (Exact name of registrant as specified in its charter) Delaware 36-1823834 (State or other jurisdiction of in ...

Financial Data and Key Metrics Changes - Reported net income reached a record $39.4 million or $1.71 per diluted share, while adjusted net income was a record of $46.3 million or $2.01 per diluted share, compared to $36.4 million or $1.57 per diluted share for the same quarter last year [7][11] - Surfactant operating income was $39.0 million, up from $34.5 million in the prior year quarter, driven by a better product and customer mix despite an 8% decline in global volume [7][14] - Polymer segment operating income reached a record $31.9 million, a 61% increase from $19.8 million in the prior year, driven by margin recovery and improved mix [8][15] - Specialty Products segment also had a record quarter with operating income growing to $9.7 million, a $7.3 million increase over the prior year [8][16] Business Line Data and Key Metrics Changes - Surfactant net sales were $475 million, a 22% increase year-over-year, with selling prices increasing by 35% due to higher raw material and logistics costs [14] - Polymer net sales were $215 million, an 8% increase from the same quarter last year, with selling prices up 26% [15] - Specialty Products segment saw a favorable customer mix and improved margins, contributing to record operating income [16] Market Data and Key Metrics Changes - Global agricultural volumes increased double digits in Q3 2022, driven by high agricultural commodity prices and increased planted acreage [20] - Oilfield volumes also increased despite raw material availability constraints, with robust demand as crude oil prices remained elevated around $90 per barrel [20] Company Strategy and Development Direction - The company continues to advance its strategic priorities, focusing on diversification into functional products, including agricultural and oilfield chemicals [19] - Investments are being made to improve productivity and reliability at the Millsdale plant, with expectations of benefits starting next year [21] - A new alkoxylation production facility in Pasadena, Texas, is expected to be operational by early 2024, supporting long-term specialty alkoxylate growth [22] Management's Comments on Operating Environment and Future Outlook - The operational environment remains challenging due to raw material constraints, energy crisis in Europe, cost inflation, and global macroeconomic uncertainties [7] - Despite these challenges, the company is confident in delivering another record year, with expectations for growth in all segments [26] - Management anticipates that the company will face slowing global economic growth and weakening consumer demand, particularly in Europe and emerging markets [27] Other Important Information - The company declared a quarterly cash dividend of $0.365 per share, representing a 9% increase, and has paid and increased its dividend for 55 consecutive years [8] - The company has $127.7 million remaining under its share repurchase program [9] Q&A Session Summary Question: Price cost dynamics in Surfactants and Polymers - Management indicated that while raw materials are somewhat moderating, they remain volatile, and inflationary costs continue to be a challenge across both segments [34][35] Question: Energy availability situation in Europe - Management does not foresee disruptions in European operations and plans to continue running all plants through winter, having contingency plans in place [36] Question: Impact of lower commodity laundry volume on fixed cost absorption - Lower volumes do impact fixed costs, but management remains confident in margins due to a focus on high-margin businesses [38] Question: Demand trends in the construction-related portions of polymers - Management noted a slowdown in construction markets in Europe, with expectations of a recovery in the second half of next year [80] Question: Interest expense trends - Management expects interest expenses to rise due to new debt but believes they are in a good position with fixed interest rates below 3% [62] Question: Impact of Mississippi water levels on logistics - Management confirmed that they have robust contingency plans in place and have not experienced major impacts from the water level disruptions [64][68]

Delivering Our Future Now August 2022 Investor Presentation 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 (the Exchange Act). These statements include statements about Stepan Company's plans, objectives, strategies, financial performance and outlook, trends, ...

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 1-4462 STEPAN COMPANY (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organizati ...

Financial Data and Key Metrics Changes - Reported net income reached a record of $52.1 million or $2.26 per diluted share, while adjusted net income was a record $53 million or $2.30 per diluted share, compared to $42.2 million or $1.81 per diluted share for the same quarter last year [5][10] - Surfactant operating income was $48.2 million, a 5% increase from the prior year, driven by improved product and customer mix [5][15] - Polymer segment achieved record operating income of $33.9 million, representing a 47% increase from the prior year [6][17] Business Line Data and Key Metrics Changes - Surfactant net sales were $485 million, a 26% increase year-over-year, with selling prices up 32% due to higher raw material and logistics costs [14] - Polymer net sales were $239 million, up 25% from the same quarter last year, with selling prices increasing by 30% [16] - Specialty Products segment delivered $9.9 million of operating income, a 41% increase, driven by improved margins within the MCT product line [17] Market Data and Key Metrics Changes - Global sales volume for surfactants declined by 3%, primarily due to lower commodity laundry demand in Latin America and raw material supply constraints in North America [5][14] - The Polymer business in China experienced a slight decline due to COVID lockdowns, but overall demand in North America and Europe remained strong [17][66] Company Strategy and Development Direction - The company is focused on diversifying into functional products, including agricultural and oilfield chemicals, with strong double-digit growth in agricultural volumes [21][22] - Investments are being accelerated at the Millsdale plant to improve productivity and reliability [24] - A new alkoxylation production facility in Pasadena, Texas, is under development, with a projected 10% increase in total project costs due to supply chain disruptions [25][26] Management's Comments on Operating Environment and Future Outlook - The operating environment remains challenging due to raw material and transportation constraints, cost inflation, and global macroeconomic uncertainties [4][8] - Management expressed cautious optimism for the second half of the year, expecting continued growth in surfactant volumes within functional product end markets [30][31] - The company anticipates that external supply chain challenges and inflationary pressures will persist as headwinds [33] Other Important Information - The Board declared a quarterly cash dividend of $0.335 per share, with a total of $7.5 million paid in dividends during the second quarter [7] - The company has $133 million remaining under its share repurchase program [7] Q&A Session Summary Question: Volume impact from laundry detergents compared to growth in functional products - Management noted a 3% decline in global surfactant volume, primarily due to lower commodity laundry demand, but offset by growth in functional products [35] Question: Margin degradation sources - Margin degradation was attributed to lower volumes impacting fixed costs, with historical data showing lower margins in Q2 compared to Q1 [36] Question: Delay in Pasadena project and contractual recourse - Management acknowledged the delay and increased costs but emphasized a strong relationship with the contractor and no additional issues anticipated [38] Question: Sustainability of Polymers margin performance - Management indicated that the 14.2% margin in Q2 reflects recovery from previous years, with ongoing monitoring of raw material prices [45][46] Question: Demand trends in Europe - Management has not seen signs of declining demand in surfactants but noted some concerns in the polymers business for the second half of the year [47][48] Question: Contingency plans for energy rationing in Europe - Management is actively looking at contingency plans to switch utility capabilities and believes they can supplement supply from global networks [50][51] Question: Currency impact on EPS - Currency fluctuations had a negative impact of $0.08 on EPS, but management has an active hedging program to mitigate risks [61][62] Question: Impact of China lockdowns on business - The business in China was impacted by lockdowns, but the overall effect on Q2 results was negligible [66] Question: Leadership impact on results - Management emphasized that the results are a reflection of the team's efforts over the years and the execution of a long-term strategic plan [69]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (MARK ONE) ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO Commission File Number 1-4462 STEPAN COMPANY (Exact name of registrant as specified in its charter) (State or other jurisdiction of incorporation or organizat ...