Stepan Accelerated Sales Growth as Surfactants Rebounded
Adjusted EBITDA climbed 45% to $74.4 million as operating performance recovered.
Stepan Company (SCL), the specialty-chemicals maker, reported a 15% increase in second-quarter sales as higher volumes joined pricing and currency gains in driving growth.
The quarter marked an acceleration from 2% growth in the first quarter and 5% in the fourth quarter of 2024. Organic volume rose 6% after holding flat in the preceding quarter, broadening the recovery beyond price increases.
Net sales reached $684.1 million, up 13% sequentially from $604.5 million. Adjusted net income more than doubled from a year earlier to $27.1 million and rose about 162% from the first quarter, reversing the earlier period's 47% year-over-year decline.
Surfactants led the improvement. Segment sales rose 18% to $483.9 million, while adjusted EBITDA increased 59% to $54.9 million after higher oleochemical costs and operating disruptions weighed on first-quarter results. Organic volume grew 7%, with gains across every region and end market.
Polymers sales increased 9% to $178.0 million after declining 11% in the first quarter. Volume rose 5%, led by double-digit growth in North America, and adjusted EBITDA growth accelerated to 22% from 8% as margins improved. Europe and Asia remained weaker.
Reported net income swung to $22.9 million from a first-quarter loss of $41.4 million as the pre-tax restructuring charge fell to $5.1 million from $65.4 million. Free cash flow remained negative at $15.0 million as working-capital requirements increased, and net debt rose to $533.7 million at June 30.
Stepan now expects full-year adjusted EBITDA growth and positive free cash flow in 2024 while continuing to reduce leverage. Under Project Catalyst, the company plans to eliminate about 100 salaried positions by year-end and expects restructuring charges of $75 million to $80 million, raising the low end of its previous range.