Investor Presentation GHS 100 Energy Conference June 23, 2015 Core Components of Stepans Strategy Leverage Technical and Market Leadership Improve Mix Geographic expansion Operational excellence Baseload Operations Economies of…
Stepan Company Profile 2014 Sales 1.9B in Sales 4% 3 Reportable Segments 17 manufacturing sites with 29% operations in 12 countries Surfactants Polymers 2000 employees Specialty 67% Traded on NYSE as SCL 2
Stepan Company Profile MM USD Net Income * Operating Income 100 2014 = 132MM 80 8% 60 Surfactants 47% Polymers 45% Specialty 40 Q1 2015 Adjusted NI ** 20.4MM vs. 12.8MM in Q1 2014 20 Operating Income 2014 Q1 2015 % of…
Core Components of Stepans strategy Leverage Technical and Market Leadership Baseload Operations Improve Mix Geographic expansion Operational excellence Economies of Scale Surfactants: Balance Consumer Products and Functional…
Polyols for insulation is a high volume, and high value business Energy efficiency is a key growth driver (Government mandated and consumer preference) Europe leads the way, but the US is rapidly increasing energy standards Since…
Core Components of Stepans strategy Leverage Technical and Market Leadership Improve Mix Geographic expansion Operational excellence Baseload Operations Economies of Scale Drive growth in Functional Surfactants Drive growth…
Recent History- Increasing sales in higher end products MM USD 2,000 1,600 +14% / Yr Polymers 1,200 Functional Distributors +7% / Yr Institutional & Industrial 800 Consumer Products 400 Flat - 2010 2014 Growth from…
Global Agriculture presents an attractive opportunity for growth Global Agriculture remains very attractive despite recent headwinds 2014 was a difficult year industry-wide but not expected to repeat Global population growth…
Oilfield is the broader category - Enhanced Oil Recovery (EOR) is within Oil Field 2040 Projected Energy Mix Surfactant Applications 250 Oil Sands Bitumen Dilution Water Treatment 200 Rig/Equipment Cleaning Emulsion Breakers…
Core Components of Stepans strategy Leverage Technical and Market Leadership Improve Mix Geographic expansion Operational excellence Baseload Operations Economies of Scale Surfactants Brazil Polymers China 10
Winning in Brazil is a core component of our strategy We believe Brazil provides the right combination of Consumer surfactant drivers Opportunities to grow in Agriculture and Oil Field Brazil is the 5th most populous country with a…
Growing Polymers in China is also key to our strategy China is a large, growing market for insulation z Chinese Government is mandating greater energy efficiency throughout economy and more use of insulation z Significant MDI*…
Global MDI Capacity MDI is the component Thousand Metric Tons product to our Polyol to produce Rigid 4,000 Insulation Foam China 2x capacity from 2012 to 2014 China passes NA and W EU in 2014 3,500 3,000 2,500 NA 2,000 W EU…
Core Components of Stepans strategy Leverage Technical and Market Leadership Improve Mix Geographic expansion Operational excellence Baseload Operations Economies of Scale Q4 2013 restructuring which reduced North America…
Operational Excellence Q4 2013 Booked Restructuring Reserve Reduces capacity in North America Consumer Products On target to save 2.5MM / year Q4 2014 Booked Restructuring Reserve Offered early retirement incentive which reduced…
Strong Balance Sheet Key Covenant Metrics Most restrictive Calculations per 2014 10-K Interest Coverage 2 5 Net Worth 325MM 537MM Total Debt / Total Capital Max is 55% 34% A lot of room to use balance sheet to drive growth Cash…
Leveraging the Balance Sheet to drive future earnings growth MM USD 140 Recent key investments 130 R&D facilities in Brazil, China, and France Surfactants 120 US - Specialty surfactants Brazil - Neutralization capacity 102 100 93…
Dividend legacy Source: www.dividend.com 25-Year Dividend Increasing Stocks The total group was sorted by the longest history of paying increased dividends and the companies with the longest histories are shown here. Stepan…
First Quarter 2015 Financial Recap Q1 Reported Net Income of 21.3 million or 0.93 per diluted share included a few non-operational and non-recurring items. One-time gain from the sale of the Specialty Polyurethane Systems (Systems)…
2014 versus 2015 (as shown in the Q1 2015 earnings call) ** Potential Potential Improvements Headwinds Net EPS * Net EPS * Income Income Surf Vol/Mix Items (6MM) ** (0.25) Non-Recurring Maintenance and +6MM +0.25 Shutdown costs…
Expectations for 2015 * z Continued income growth in Polymers z Higher Functional Surfactant volumes z Improve asset utilization in North America z Improve Operations z Stronger US Dollar would negatively impact earnings z Benefits…
Thank you for your interest in Stepan Company (NYSE: SCL) Contact information: Scott Beamer CFO 847-446-7500 22
Appendix I Reg G reconciliation: Net Income Excluding Deferred Compensation expense/income to Reported Net Income Reference: Slide 4 Stepan Company Profile 23
Appendix II Reference: Slide 4 Stepan Company Profile 24
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