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 ...

Stepan S | --- | --- | --- | --- | --- | --- | |--------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | Earnings Call | | | | | | | | | | | | | | Presentation | | | | | | | First Quarter 2022 | | | | | | | April 26, 2022 | | | | | | | | | | | | | 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 amende ...

Financial Data and Key Metrics Changes - Reported net income reached a record $44.8 million or $1.93 per diluted share, while adjusted net income was $40.7 million or $1.76 per diluted share, marking the third best quarter ever on an adjusted net income basis [9] - Adjusted net income for Q1 2022 was $40.7 million or $1.76 per diluted share, compared to $42.4 million or $1.82 per diluted share for Q1 2021 [16] - The effective tax rate increased to 24.6% in Q1 2022 from 23.6% in the same quarter last year, primarily due to a less favorable geographical mix of income [17] Business Line Data and Key Metrics Changes - Surfactant net sales were $468 million, a 26% increase year-over-year, with selling prices up 29% due to higher raw material costs [18] - Polymer net sales were $187 million, up 24% from the prior year, with selling prices 26% higher [19] - Specialty Product business results improved due to order timing differences and margin recovery in the MCT product line [11] Market Data and Key Metrics Changes - Global agricultural volumes increased high-single-digits in Q1 2022, driven by high commodity prices and increased planted acreage [24] - Oilfield volumes increased mid-single-digits, with robust demand for products used in oilfields as crude prices remained elevated [25] - The Polymer business in China was flat compared to the previous year, impacted by COVID lockdowns [20] Company Strategy and Development Direction - The company continues to focus on diversification into functional products, with strong growth in agricultural and oilfield markets [24] - Investments in the Millsdale plant are prioritized to improve productivity and capacity, with ongoing CapEx throughout the year [27] - The company plans to pursue strategic M&A opportunities and invest in new product platforms, including biosurfactants [32][33] Management's Comments on Operating Environment and Future Outlook - The operating environment remains challenging due to raw material and transportation constraints, cost inflation, and COVID-19 variants [8] - Management is cautiously optimistic about the balance of the year, expecting strong demand in surfactants and agricultural chemicals [34] - External supply chain challenges and inflationary pressures are acknowledged as ongoing headwinds [36] Other Important Information - The Board declared a quarterly cash dividend of $0.335 per share, marking 54 consecutive years of dividend increases [12] - The company repurchased $10 million of its stock during the first quarter, with $140.1 million remaining under the share repurchase program [12] Q&A Session Summary Question: Margin performance in surfactants and polymers segments - Management indicated they have effectively managed pricing to cover inflationary pressures, but acknowledged ongoing inflation may impact margins in Q2 and Q3 [42][43] Question: Millsdale outage resolution and future prevention - Management confirmed that production is back to full capacity and improvements are being made to prevent future power disruptions [45][46] Question: Weakness in Laundry within Surfactants - The softness in Laundry is attributed to raw material constraints and inflation impacting consumer demand, particularly in developing regions [47][48] Question: Investments at the Wilmington site - Future investments at the Wilmington site will focus on enhancing production capabilities but will not be on the same scale as other major projects [50] Question: Quality of INVISTA assets compared to Stepan's portfolio - Management stated that INVISTA's technology complements Stepan's portfolio, providing more choices for customers [52][53] Question: Logistics issues and ethylene oxide transportation - Logistics issues are broad-based and not specific to ethylene oxide [54] Question: Staffing and skilled labor for new projects - Management reported no issues with staffing and highlighted a motivated workforce aligned with growth strategies [55] Question: Competitive dynamics in the Surfactants business - No significant changes in competitive dynamics were noted, with overall market demand holding up despite supply chain constraints [70]

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, 2021 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 ...

Stepan S | --- | --- | --- | --- | --- | |---------------------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | Earnings Call | | | | | | | | | | | | Presentation | | | | | | Fourth Quarter 2021 | | | | | | February 17, 2022 | | | | | | | | | | | | | | | | | | | | | | | 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 ...

Financial Data and Key Metrics Changes - The reported net income for 2021 reached a record $138 million or $5.92 per diluted share, while adjusted net income was also a record at $143.5 million or $6.16 per diluted share, representing a 9% increase from the previous year [3][12] - Adjusted net income for Q4 2021 was $22.5 million or $0.97 per diluted share, a 32% decrease from $33.1 million or $1.42 per diluted share in Q4 2020 [6][12] - The effective tax rate decreased to 20% in 2021 from 25% in 2020, primarily due to favorable one-time tax benefits [8][13] Business Segment Data and Key Metrics Changes - Surfactants segment net sales were $420 million, a 17% increase year-over-year, with selling prices up 27% but volume down 9% due to decreased demand for cleaning and personal wash products [8][9] - Polymer segment net sales were $174 million, up 49% from the prior year, with selling prices increasing 39% and volume growing 12% driven by the INVISTA acquisition [10][12] - Specialty Products operating income was $14.2 million, basically flat compared to the prior year, with the overall estimated negative impact of supply chain disruptions on operating income totaling $21 million for 2021 [12][13] Market Data and Key Metrics Changes - Global demand for cleaning, disinfection, and personal wash products decreased compared to the pandemic peak in 2020, while demand for institutional cleaning and functional products increased [3][12] - The agricultural segment saw strong double-digit growth in 2021, driven by high commodity prices and increased planted acreage [15][16] Company Strategy and Development Direction - The company is focused on diversifying into functional products and increasing capacity in biocides and other product lines to meet customer demand [15][17] - Investments are being made to enhance production capabilities, particularly in sulfates to meet new regulatory requirements [17][19] - The company aims to pursue strategic M&A opportunities to broaden its portfolio of sustainable offerings [20] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism for 2022, expecting strong demand for products but acknowledging ongoing challenges from supply chain disruptions [21][22] - The company anticipates improvements in raw material availability and transportation issues throughout the year [67] - Management highlighted the importance of sustainability initiatives and the positive market interest in bio-based materials [19] Other Important Information - The company declared a quarterly cash dividend of $0.335 per share, marking 54 consecutive years of dividend increases [4] - The company plans to increase capital expenditures to $350 million to $375 million in 2022, focusing on capacity expansion and regulatory compliance [17][19] Q&A Session Summary Question: Can you provide more details on the inflationary and supply chain disruption impacts? - Management indicated that supply chain disruptions had a total impact of approximately $21 million on operating income for 2021, with significant inflation in raw materials and logistics costs [29][30] Question: What is the current status of the Millsdale facility? - The Millsdale facility is currently operating at about half capacity due to a power disruption, with plans to return to full production by early March [34][35] Question: What are the expectations for the tax rate in 2022? - The expected tax rate for 2022 is between 24% and 26%, higher than the 20% seen in 2021 due to the absence of one-time tax benefits [36][37] Question: How did the INVISTA acquisition perform in Q4? - The INVISTA business contributed approximately $120 million in revenue for the full year, with Q4 performance below average due to seasonality [38][40] Question: What are the expectations for cleaning and disinfecting products in 2022? - Management expects growth in consumer cleaning and disinfecting products, although volumes may not return to the pandemic peak levels [66][67]