Q2 2024 Stepan Co Earnings Call Transcript
Key Points
- Stepan Co (SCL) reported a 4% year-over-year increase in adjusted EBITDA for the second quarter of 2024.
- Global sales volume increased by 4% year-over-year, with strong recovery in most core markets.
- Surfactants experienced double-digit volume growth in several end markets, including laundry and cleaning, construction, and industrial solutions.
- Latin America surfactant volumes grew double digits, with strong performance in Mexico and Brazil.
- The company is on track to achieve its $50 million cost reduction goal for 2024, which is expected to offset higher operating costs.
- Net sales decreased by 4% year-over-year due to lower selling prices and an unfavorable product mix.
- The agricultural market remained weak in North America and Europe due to continued inventory destocking.
- Operational issues at the Millsdale site led to lower phthalic anhydride volumes and higher expenses.
- A criminal social engineering scheme in Asia resulted in a $3.5 million pre-tax charge for the quarter, with similar charges expected in the third quarter.
- Free cash flow was close to zero in the second quarter due to a seasonal increase in inventory.
Good morning, and welcome to the Stepan Company second-quarter 2024 earnings conference call. (Operator Instructions)
As a reminder, this call is being recorded on Wednesday, July 31, 2024. It's now my pleasure to turn the call over to Mr. Luis Rojo, Vice President and Chief Financial Officer of Stepan Company. Mr. Rojo, please go ahead.
Good morning, and thank you for joining the Stepan Company's second quarter 2024 financial review.
Before we begin, please note that information in this conference call contains forward-looking statements, which are not historical facts. These statements involve risks and uncertainties that could cause actual results to differ materially, including but not limited, the prospects for our foreign operations, global and regional economic conditions and factors detailed in our Securities and Exchange Commission filings.
In addition, this conference call will include discussion of adjusted net income, adjusted EBITDA and free cash flow, which
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