Stepan Co (SCL) 2022 Q3 法說會逐字稿

Greetings, and welcome to the Stepan Company Third Quarter 2022 Results. During the presentation, all participants will be in a listen-only mode. Afterwards, we will conduct a question-and-answer session. At that time, if you have a question, please press the one followed by the 4 on your telephone. If at any time during the conference, you need to reach an operator, please press Star 0. As a reminder, this conference is being recorded Wednesday, October 19, 2022. I would now like to turn the conference over to Luis Rojo, Vice President and Chief Financial Officer. Please go ahead.

您好，歡迎閱讀 Stepan 公司 2022 年第三季度業績。在演示過程中，所有參與者都將處於只聽模式。之後，我們將進行問答環節。屆時，如果您有任何疑問，請按您電話上的數字 4。如果在會議期間的任何時候，您需要聯繫接線員，請按 Star 0。提醒一下，本次會議將於 2022 年 10 月 19 日星期三進行錄製。我現在想將會議轉交給副總裁 Luis Rojo總裁兼首席財務官。請繼續。

Good morning, and thank you for joining Stepan Company's Third Quarter 2022 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 prospects for our foreign operations, global and regional economic conditions and factors detailed in our Securities and Exchange Commission filing. Whether you're joining us online or over the phone, we encourage you to review the investor slide presentation, which we have made available at www.stepan.com under the Investors section of our website. We make these slides available at approximately the same time as when the earnings release is issued, and we hope you find the informational perspective helpful. With that, I would like to turn the call over to Mr. Scott Behrens, our President and Chief Executive Officer.

早上好，感謝您參與 Stepan Company 的 2022 年第三季度財務審查。在開始之前，請注意本次電話會議中的信息包含前瞻性陳述，並非歷史事實。這些陳述涉及可能導致實際結果出現重大差異的風險和不確定性，包括但不限於我們海外業務的前景、全球和區域經濟狀況以及我們在美國證券交易委員會備案中詳述的因素。無論您是通過在線方式還是通過電話加入我們，我們都鼓勵您查看投資者幻燈片演示，我們已在我們網站的投資者部分下的 www.stepan.com 上提供了該演示文稿。我們大約在發布收益報告的同時提供這些幻燈片，我們希望您能從信息角度找到有用的信息。有了這個，我想把電話轉給我們的總裁兼首席執行官斯科特貝倫斯先生。

Good morning, and thank you for joining us today to discuss our third quarter results. To begin, I will share our third quarter highlights and strategy outlook, and Luis will provide additional details on our financial results for the quarter. The third quarter continued to be a challenging operating environment given continued raw material constraints, the energy crisis in Europe, cost inflation, foreign currency exchange impacts from a stronger U.S. dollar and overall global macroeconomic uncertainties. Nonetheless, I am proud of how our team has continued to overcome these challenges by delivering record results for the third quarter. 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. Surfactant operating income was $39.0 million compared to $34.5 million in the prior year quarter. Growth was mainly driven by a better product and customer mix, partially offset by an 8% decline in global volume. Our Polymer segment reached a record operating income of $31.9 million compared to $19.8 million in the prior year, which represents a 61% increase driven by margin recovery and improved mix. Our Specialty Products segment also had a record quarter, growing operating income to $9.7 million, representing a $7.3 million increase over prior year. Our Board of Directors declared a quarterly cash dividend on Stepan's common stock of $0.365 per share, payable on December 15, 2022. And -- this represents a 9% increase in our dividend, and Stepan has paid and increased its dividend for 55 consecutive years. During the third quarter of 2022, the company paid $7.5 million of dividends to shareholders and repurchased $5.3 million of company stock. During the first 9 months of 2022, the company paid $22.5 million in dividends and repurchased $22.3 million of company stock. The company still has $127.7 million remaining under our share repurchase program. Looking forward, we believe the operational environment will remain challenging. However, we are confident that we can deliver another record year. At this point, I would like Luis to walk through a few more details about our third quarter results.

早上好，感謝您今天加入我們討論我們的第三季度業績。首先，我將分享我們第三季度的亮點和戰略展望，Luis 將提供有關本季度財務業績的更多詳細信息。鑑於原材料持續受限、歐洲能源危機、成本通脹、美元走強對外匯匯率的影響以及全球宏觀經濟的整體不確定性，第三季度的經營環境仍然充滿挑戰。儘管如此，我為我們的團隊如何通過在第三季度取得創紀錄的業績來繼續克服這些挑戰感到自豪。報告的淨收入達到創紀錄的 3940 萬美元或每股攤薄收益 1.71 美元，而調整後的淨收入達到創紀錄的 4630 萬美元或每股攤薄收益 2.01 美元。表面活性劑營業收入為 3900 萬美元，而去年同期為 3450 萬美元。增長主要得益於更好的產品和客戶組合，部分被全球銷量下降 8% 所抵消。我們的聚合物部門營業收入達到創紀錄的 3190 萬美元，而去年同期為 1980 萬美元，在利潤率恢復和產品組合改善的推動下增長了 61%。我們的特種產品部門也有一個創紀錄的季度，營業收入增長到 970 萬美元，比上一年增加 730 萬美元。我們的董事會宣布每季度派發 Stepan 普通股 0.365 美元的現金股息，將於 2022 年 12 月 15 日支付。這意味著我們的股息增加了 9%，Stepan 已連續 55 年支付和增加股息. 2022 年第三季度，公司向股東支付了 750 萬美元的股息，並回購了 530 萬美元的公司股票。 2022 年前 9 個月，公司支付了 2250 萬美元的股息並回購了 2230 萬美元的公司股票。根據我們的股票回購計劃，該公司仍有 1.277 億美元剩餘。展望未來，我們相信經營環境仍將充滿挑戰。但是，我們有信心我們可以創造另一個創紀錄的年份。在這一點上，我希望路易斯再介紹一下我們第三季度業績的更多細節。

Thank you, Scott. My comments will generally follow the slide presentation. Let's start with Slide 4 to recap the quarter. Adjusted net income for the third quarter of 2022 was a record $46.3 million or $2.01 per diluted share versus $36.4 million or $1.57 per diluted share for the third quarter of 2021. Because adjusted net income is a non-GAAP measure, we provide full reconciliations to the comparable GAAP measures, and this can be found in Appendix 2 of the presentation and Table 2 of the press release. Specifically, the adjusted net income for the third quarter excludes deferred compensation income of $1.1 million compared to last year's income of $1.3 million. It also excludes changes in our environmental reserve of $7.9 million compared to last year's excluded reserve of $0.7 million. The company increased its pretax environmental reserve from $23 million to $33.5 million based on new remediation cost estimate associated with the Maywood New Jersey site. The deferred compensation figures represent the net income related to the company's deferred compensation plan as well as cash-settled stock appreciation rights for our employees. Because these liabilities change with the movement in the stock price, we exclude this item from operational discussion. Slide 5 shows the total company net income bridge for the third quarter compared to the third quarter last year and break down the increase in adjusted net income. Because this is net income, the figures noted here are on an after-tax basis. We will cover each segment in more detail, but to summarize, we delivered excellent income growth in all our segments. Corporate and all other expenses, which are not allocated to the business segments were up $2.3 million, driven by higher interest expenses and overall inflation. The company effective tax rate was 24% for the first 9 months of 2022 versus 19.6% for the first 9 months of 2021. This year-over-year increase was primarily due to nonrecurring favorable tax benefits recognized in the third quarter of 2021. -- we expect the full year 2022 effective tax rate to be in the range of 23% to 25%. Slide 6 focuses on Surfactant segment results for the quarter. surfactant net sales were $475 million, a 22% increase versus the prior year. Selling prices increased 35%, primarily due to the fast-through of higher raw material and logistic costs and improved product and customer mix. Volume decreased 8%, primarily due to lower commodity laundry demand and raw material availability issues in North America. This was partially offset by higher global demand in functional products and institutional cleaning end markets. Foreign currency translation negatively impacted net sales by 5%. Surfactant operating income for the quarter was $39 million, which represents a 13% growth versus prior year. This increase was driven by improved product and customer mix that was partially offset by the 8% decline in volume. All regions grew operating income in surfactant despite volume reductions, supply chain challenges, inflationary pressures and FX headwinds in Europe. This is the result of our diversification strategy to deliver higher value behind product and customer mix. Now turning to Polymers on Slide 7. Net sales were $215 million, up 8% from the same quarter last year. Selling prices increased 26% due to the pass-through of higher raw material and logistics costs and recovering margins. Volume decreased 10%, driven an 8% decline in global (inaudible) volume, primarily due to softening demand in Europe. Foreign currency translation negatively impacted net sales by 8%. Polymers delivered a record operating income for the quarter of $31.9 million, which represents a 61% increase versus prior year. This is primarily due to margin recovery and improved mix, which was partially offset by the 10% decrease in global volumes. North America Polio and PA income increased driven by margin recovery and mix improvement. The decrease in Europe was driven by FX and volume reductions. China operating income was down slightly due to suppressed demand from the COVID lockdowns and restrictions. Finally, Specialty Products also had a record quarter, delivering $9.7 million of operating income, an increase of $7.3 million. The operating income improvement was primarily attributable to a favorable customer mix and improved margins within our MCT product line. Turning to Slide 8. Our balance sheet remains strong, and we have ample liquidity to invest in the business. Despite our CapEx investments, our leverage and interest coverage ratios continues at very healthy levels. During the quarter, cash from operations was $71 million, and we deployed $132 million against CapEx investments, dividends and debt payments, share repurchases, higher working capital requirements due to strong sales growth and the acquisition of Performing a console business. We project full year capital spending in the range of $330 million to $350 million, inclusive of our 1,4-dioxane project and Pasadena investments in the U.S. Beginning on Slide 9, Scott will now update you on our 2022 strategic priority.

謝謝你，斯科特。我的評論通常會在幻燈片演示之後。讓我們從幻燈片 4 開始回顧本季度。 2022 年第三季度的調整後淨收入為創紀錄的 4630 萬美元或攤薄後每股收益 2.01 美元，而 2021 年第三季度為 3640 萬美元或攤薄後每股收益 1.57 美元。由於調整後的淨收入是一項非 GAAP 衡量標準，我們提供了完整的調節表可比的 GAAP 措施，這可以在演示文稿的附錄 2 和新聞稿的表 2 中找到。具體而言，第三季度調整後的淨收入不包括 110 萬美元的遞延薪酬收入，而去年同期為 130 萬美元。它還不包括我們環境儲備的 790 萬美元變化，而去年的排除儲備為 70 萬美元。根據與新澤西州梅伍德工廠相關的新修復成本估算，該公司將其稅前環境儲備金從 2300 萬美元增加到 3350 萬美元。遞延薪酬數字代表與公司遞延薪酬計劃以及我們員工以現金結算的股票增值權相關的淨收入。由於這些負債隨著股價的變動而變化，因此我們將此項目排除在操作討論之外。幻燈片 5 顯示了第三季度與去年第三季度相比的公司淨收入總額，並細分了調整後淨收入的增長。因為這是淨收入，所以這裡提到的數字是稅後數據。我們將更詳細地介紹每個細分市場，但總而言之，我們在所有細分市場都實現了出色的收入增長。未分配給業務部門的公司和所有其他費用增加了 230 萬美元，原因是利息費用增加和整體通貨膨脹。公司 2022 年前 9 個月的實際稅率為 24%，而 2021 年前 9 個月為 19.6%。這一同比增長主要是由於 2021 年第三季度確認的非經常性優惠稅收優惠。- - 我們預計 2022 年全年有效稅率將在 23% 至 25% 之間。幻燈片 6 側重於本季度的表面活性劑部門業績。表面活性劑淨銷售額為 4.75 億美元，比上年增長 22%。銷售價格上漲了 35%，這主要是由於原材料和物流成本的增加以及產品和客戶組合的改善。銷量下降 8%，主要是由於北美商品洗衣需求下降和原材料供應問題。這部分被功能性產品和機構清潔終端市場的全球需求增加所抵消。外幣換算對淨銷售額產生了 5% 的負面影響。本季度表面活性劑營業收入為 3900 萬美元，比上年增長 13%。這一增長是由改進的產品和客戶組合推動的，但部分被銷量下降 8% 所抵消。儘管銷量下降、供應鏈挑戰、通脹壓力和歐洲的外匯逆風，所有地區的表面活性劑營業收入均有所增長。這是我們多元化戰略的結果，旨在為產品和客戶組合提供更高的價值。現在轉向幻燈片 7 上的聚合物。淨銷售額為 2.15 億美元，比去年同期增長 8%。由於原材料和物流成本上漲以及利潤率回升，銷售價格上漲了 26%。銷量下降 10%，導致全球（聽不清）銷量下降 8%，這主要是由於歐洲需求疲軟。外幣換算對淨銷售額產生了 8% 的負面影響。聚合物業務本季度的營業收入達到創紀錄的 3190 萬美元，較上年同期增長 61%。這主要是由於利潤率回升和產品組合改善，部分被全球銷量下降 10% 所抵消。北美脊髓灰質炎和 PA 收入在利潤率恢復和產品組合改善的推動下有所增加。歐洲的減少是由外彙和交易量減少推動的。由於 COVID 封鎖和限制措施抑制了需求，中國營業收入略有下降。最後，特殊產品也有一個創紀錄的季度，營業收入為 970 萬美元，增加了 730 萬美元。營業收入的改善主要歸功於有利的客戶組合和我們 MCT 產品線的利潤率提高。轉到幻燈片 8。我們的資產負債表依然強勁，我們有充足的流動性來投資業務。儘管我們進行了資本支出投資，但我們的槓桿率和利息覆蓋率仍保持在非常健康的水平。本季度，運營現金為 7100 萬美元，我們部署了 1.32 億美元用於資本支出投資、股息和債務支付、股票回購、由於強勁的銷售增長和收購 Performing a console 業務而導致的更高營運資金需求。我們預計全年資本支出在 3.3 億美元至 3.5 億美元之間，包括我們的 1,4-二噁烷項目和在美國帕薩迪納的投資。從幻燈片 9 開始，Scott 現在將向您介紹我們 2022 年的戰略重點。

Thank you, Luis. In addition to delivering another record quarter, we continue to advance our strategic priorities in the third quarter. The following 2 slides capture our strategic priorities and vision for a cleaner, healthier and more energy-efficient world with our customers' preferences in mind. Our diversification strategy into functional products, including agricultural and oilfield chemicals continues to be a key priority for Stepan. Our global agricultural volumes increased double digits in the third quarter of '22. High agricultural commodity prices, coupled with increased planted acreage in 2022, drove a strong season for Crop Protection sales in North America, while elevated and agricultural commodity prices and a favorable currency impact on exports are driving increased planted acreage in Brazil. Oilfield volumes also increased in the third quarter of 2022 despite raw material availability constraints. Demand for our products used in oilfield remains robust as crude oil prices remained elevated at around $90 per barrel. Additionally, we are expecting the raw material constraints in this business to improve over the next few quarters. We continue with the build-out of our KMCO oilfield Demulsifier product line. We remain optimistic about future opportunities in this business as elevated crude prices should encourage increased oil production and the use of production and stimulation chemicals. Our Millsdale plant continues to be one of our key priorities. We are accelerating investments to improve productivity and reliability and to increase capacity through operational excellence initiatives. These investments will continue throughout the year, and we expect to see benefits from our efforts and investments starting next year. One of the key priorities at Millsdale is the execution of our low 1,4-dioxane project. Moving to Slide 11. Work continues on our new alkoxylation production facility in Pasadena, Texas. This asset will be a flexible state-of-the-art multi-reactor facility with approximately 75,000 tons per annum of annual alkoxylation capacity. It will provide strategically located capacity and capability for long-term specialty alkoxylate growth across our strategic growth end markets, including agriculture, oilfield, construction and household and institutional cleaning. We expect the plant to be up and running in early 2024. The underlining alkoxylation business that supports the Pasadena investment continues its strong growth and at margins above our original projections. We remain confident and excited about our investment in Pasadena. The recent acquisition of performanX alkoxylates business should deliver additional baseload volumes for Pasadena in the future and the chemistries are well known by Stepan. This acquisition is a strong fit within Stepan Surfactant business and provides attractive market diversification opportunities for our alkoxylation product line. The acquired surfactants are supplied to key customers and end markets covering personal care, pulp and paper, lubricants, household institutional cleaning, oil and gas, agricultural and other industrial markets. We are excited to expand our customer base in some of these new end use markets for Stepan. As you know, we are increasing North American capability and capacity to produce either sulfates that meet new regulatory limits on 1,4-dioxane by the end of January 2023. The 1,4-dioxane is a minor byproduct generated in the manufacture of ether sulfate surfactants, which are key cleaning and foaming ingredients used in consumer product formulations. Stepan is working to supply customers with either sulfates that meet the new regulatory requirements. As part of this transition, one key customer chose to invest in internal production capabilities so that lost volume was recognized starting in the third quarter. However, we have gained volume with other customers and we'll continue focusing on strategic priority of growing within our Tier 2, Tier 3 customer segment. We expect this transition to go through 2023, and our focus is on generating value growth. The good news is that the overall market continues to believe that either sulfates, which meet the new regulation levels for 1,4-dioxane are the best alternative for performance and costs. We are pleased with our progress in our fermentation product platform. Our priority remains the development and commercialization of rhamnolipids, our first anticipated biosurfactant offering. We believe this new bio-based product family has significant opportunities in several important end markets for Stepan, including agricultural chemicals, consumer cleaning, personal care and oilfield. Our new fermentation laboratory, which opened in February continues to make good progress in process development, and we expect to start providing samples to customers later this year. Finally, given the strength of our balance sheet, acquisition opportunities that align with our growth and diversification strategy remain a priority. Summarizing the quarter, we delivered record third quarter and first 9 months net income, and I am proud of our team's effort and resiliency in delivering record earnings during this challenging market environment. We expect to deliver another record year, both on a reported and on an adjusted basis, despite approximately $8 million of incremental fourth quarter expenses related to planned maintenance activity in our PA plant at Millsdale and low 1,4-dioxane related transition expenses. We believe that surfactants, polymers and specialty products will all deliver full year operating income growth over prior year. Growing the 3 segments at the same time would represent an extraordinary outcome for 2022. From a segment perspective, we believe that Surfactant volume within the functional products and institutional cleaning end markets should show full year growth over 2021. -- despite the short-term challenge demand challenges and volatility, we believe that the long-term outlook for rigid polyols will remain extremely attractive as energy conservation efforts and more stringent building codes are expected to continue and are a critical step to deliver a world with less energy consumption. In closing, looking forward to the next few quarters, we believe the company will be challenged by slowing global economic growth, weakening consumer and construction demand, continued inflationary pressures and a stronger U.S. dollar. Despite this projected macro environment, we remain committed to executing our long-term growth strategy. This concludes our prepared remarks. At this time, we would like to turn the call over for questions to Kathy, please review the instructions for the question portion of today's call.

謝謝你，路易斯。除了創造另一個創紀錄的季度外，我們還在第三季度繼續推進我們的戰略重點。以下兩張幻燈片描述了我們的戰略重點和願景，即考慮到客戶的喜好，打造一個更清潔、更健康、更節能的世界。我們的功能性產品多元化戰略，包括農業和油田化學品，仍然是 Stepan 的首要任務。 22 世紀第三季度，我們的全球農業產量增長了兩位數。高昂的農產品價格加上 2022 年種植面積的增加推動了北美作物保護銷售旺季，而農產品價格上漲以及貨幣對出口的有利影響正在推動巴西種植面積的增加。儘管原材料供應受到限制，但油田產量在 2022 年第三季度也有所增加。由於原油價格維持在每桶 90 美元左右，對我們用於油田的產品的需求依然強勁。此外，我們預計該業務的原材料限制將在未來幾個季度得到改善。我們繼續擴建 KMCO 油田破乳劑產品線。我們對這項業務的未來機會保持樂觀，因為原油價格上漲應該會鼓勵增加石油產量以及生產和增產化學品的使用。我們的米爾斯代爾工廠仍然是我們的主要優先事項之一。我們正在加速投資以提高生產力和可靠性，並通過卓越運營計劃提高產能。這些投資將全年持續，我們希望從明年開始的努力和投資中受益。 Millsdale 的首要任務之一是執行我們的低 1,4-二噁烷項目。轉到幻燈片 11。我們在德克薩斯州帕薩迪納的新烷氧基化生產設施的工作繼續進行。該資產將是一個靈活的最先進的多反應器設施，每年的烷氧基化產能約為 75,000 噸。它將為我們的戰略增長終端市場（包括農業、油田、建築以及家庭和機構清潔）的長期特種烷氧基化物增長提供具有戰略意義的產能和能力。我們預計該工廠將於 2024 年初投產。支持帕薩迪納投資的重要烷氧基化業務繼續保持強勁增長，利潤率高於我們最初的預測。我們對我們在帕薩迪納的投資仍然充滿信心和興奮。最近收購的 performanX 烷氧基化物業務應該會在未來為帕薩迪納市帶來額外的基本負荷量，而且 Stepan 熟知這些化學品。此次收購非常適合 Stepan 表面活性劑業務，並為我們的烷氧基化產品線提供了極具吸引力的市場多元化機會。收購的表面活性劑供應給主要客戶和終端市場，涵蓋個人護理、紙漿和造紙、潤滑劑、家庭機構清潔、石油和天然氣、農業和其他工業市場。我們很高興能為 Stepan 在這些新的終端使用市場中的一部分擴大我們的客戶群。如您所知，到 2023 年 1 月底，我們正在提高北美生產滿足 1,4-二噁烷新監管限制的硫酸鹽的能力。1,4-二噁烷是乙醚製造過程中產生的次要副產品硫酸鹽表面活性劑，它們是消費品配方中使用的主要清潔和發泡成分。 Stepan 正在努力為客戶提供滿足新法規要求的硫酸鹽。作為這一轉變的一部分，一個主要客戶選擇投資於內部生產能力，以便從第三季度開始確認損失的數量。然而，我們已經增加了其他客戶的數量，我們將繼續專注於在我們的第 2 層、第 3 層客戶群中增長的戰略重點。我們預計這一轉變將持續到 2023 年，我們的重點是創造價值增長。好消息是，整個市場仍然認為滿足 1,4-二噁烷新法規水平的硫酸鹽是性能和成本最佳的替代品。我們對我們在發酵產品平台方面取得的進展感到滿意。我們的首要任務仍然是鼠李醣脂的開發和商業化，這是我們預期的第一個生物表面活性劑產品。我們相信，這個新的生物基產品系列在 Stepan 的幾個重要終端市場中具有重大機遇，包括農用化學品、消費品清潔、個人護理和油田。我們於 2 月啟用的新發酵實驗室在工藝開發方面繼續取得良好進展，我們預計將在今年晚些時候開始向客戶提供樣品。最後，鑑於我們資產負債表的實力，符合我們增長和多元化戰略的收購機會仍然是優先事項。總結本季度，我們實現了創紀錄的第三季度和前 9 個月的淨收入，我為我們團隊在這個充滿挑戰的市場環境中實現創紀錄收益的努力和彈性感到自豪。我們預計將在報告和調整後的基礎上再創紀錄，儘管第四季度增加了約 800 萬美元的費用，這些費用與我們位於 Millsdale 的 PA 工廠的計劃維護活動相關，並且與 1,4-二噁烷相關的過渡費用較低。我們相信，表面活性劑、聚合物和特種產品都將比上年實現全年營業收入增長。同時增長這三個細分市場將代表 2022 年的非凡成果。從細分市場的角度來看，我們認為功能性產品和機構清潔終端市場中的表面活性劑數量在 2021 年應該會出現全年增長。——儘管短期挑戰需求挑戰和波動性，我們認為剛性多元醇的長期前景將仍然極具吸引力，因為節能工作和更嚴格的建築規範預計將繼續，並且是實現能源消耗更少的世界的關鍵一步。最後，展望未來幾個季度，我們認為公司將面臨全球經濟增長放緩、消費者和建築需求疲軟、持續的通脹壓力和美元走強的挑戰。儘管存在這種預期的宏觀環境，但我們仍致力於執行我們的長期增長戰略。我們準備好的發言到此結束。此時，我們想將問題的電話轉給凱西，請查看今天電話問題部分的說明。

Thank you, Kathy, and thank you all for joining us on today's call. We appreciate your interest and ownership in Stepan Company. Have a great day.

謝謝你，凱西，感謝大家參加今天的電話會議。感謝您對 Stepan Company 的興趣和所有權。祝你有美好的一天。

Thank you. That does conclude the call for today. We thank you for your participation and ask that you please disconnect your lines. Have a great day.

謝謝你。這確實結束了今天的呼籲。我們感謝您的參與，並請您斷開您的線路。祝你有美好的一天。

Certainly, thank you -- if you would like to register a question, please press the 1 followed by the 4 on your telephone. You will hear a three tone prompt to acknowledge your request. If your question has been answered and you like to the withdraw registration, please press the 1 followed by the 3. Again, to register question, please press the 1 followed by the 4 -- and our first question comes from the line of Mike Harrison with Seaport Research Partners.

當然，謝謝——如果您想提出問題，請在電話上按 1，然後按 4。您將聽到三聲提示音以確認您的請求。如果您的問題已得到解答並且您希望撤回註冊，請按 1，然後按 3。同樣，要註冊問題，請按 1，然後按 4——我們的第一個問題來自 Mike Harrison 的台詞與海港研究合作夥伴。

Hi good morning, Congratulations on a nice quarter.

嗨，早上好，祝賀你度過了一個愉快的季度。

Thank you, Michael.

謝謝你，邁克爾。

Scott, I was hoping that you could talk about price cost dynamics in both the Surfactants business and polymers as we look from Q3 into Q4, are you still seeing higher costs and expecting that maybe we could see some sequential margin headwind? Or are you seeing the costs are moderating a little bit and price cost is turning into a good guide for you? I think that seems to be particularly the case in polymers, but maybe you could give us some color again on both of your key segments?

斯科特，我希望你能談談我們從第三季度到第四季度的表面活性劑業務和聚合物的價格成本動態，你是否仍然看到更高的成本，並期望我們可能會看到一些連續的利潤逆風？或者您是否看到成本有所下降並且價格成本正在成為您的良好指南？我認為這似乎在聚合物中尤其如此，但也許你可以在你的兩個關鍵部分再次給我們一些顏色？

Yes. I would -- from a high level, Mike, what I would say is we've done a good job recovering our margins and covering our inflationary cost to this point. Although we are seeing raw materials somewhat moderating, they still remain highly volatile -- and the other inflationary costs that the business is facing still remains. And those remain in the freight area, utilities and even labor. So I would say we are not at a point where we're done in terms of covering future cost escalations, and I think it's going to remain volatile going forward. And I would say it's pretty evenly spread between the surfactants and polymers business. Each are facing similar continued cost pressures.

是的。我會 - 從高水平來看，邁克，我想說的是，到目前為止，我們在恢復利潤率和彌補通脹成本方面做得很好。儘管我們看到原材料有所緩和，但它們仍然非常不穩定——而且企業面臨的其他通貨膨脹成本仍然存在。那些留在貨運區、公用事業甚至勞動力中。因此，我想說我們還沒有達到解決未來成本上漲的地步，而且我認為未來它將繼續波動。而且我會說它在表面活性劑和聚合物業務之間相當均勻地分佈。每個人都面臨著類似的持續成本壓力。

So Mike, this is Luis in line with what Scott was mentioning, raw materials, if you think about raw material specifically, we are seeing kind of the peak. However, there are still a lot of volatility and some of things are coming down and others are going up. But we believe at least the raw material piece is in a better spot versus the previous quarter. But again, the other inflationary pressures on freight and other elements will continue...

所以邁克，這是路易斯與斯科特提到的一致，原材料，如果你具體考慮原材料，我們看到了某種高峰。然而，仍然存在很大的波動性，有些東西在下降，有些在上升。但我們相信至少原材料部分比上一季度處於更好的位置。但同樣，運費和其他因素的其他通脹壓力將繼續……

All right. And maybe kind of a related question on how you're seeing the energy availability situation unfold in Europe and with your European operations. Are you planning to continue running all of your plants in the winter? Or could you see that maybe energy availability or demand issues could lead you to idle some of your facilities in Europe?

好的。也許還有一個相關的問題，關於您如何看待歐洲的能源可用性情況以及您的歐洲業務。你打算在冬天繼續運行你所有的工廠嗎？或者您是否認為能源可用性或需求問題可能會導致您在歐洲閒置一些設施？

Good question, Mike. At this point, we do not see a disruption in any of our operations in Europe and are expected to continue to operate throughout the winter. We have worked on contingency plans with alternate sourcing of energy. That gives us a little more confidence if there was a constraint put on industrial use of natural gas or electricity. But as of this point, our anticipation is we're going to operate as normal throughout the winter.

好問題，邁克。目前，我們在歐洲的任何業務都沒有中斷，預計將在整個冬季繼續運營。我們制定了備用能源的應急計劃。如果天然氣或電力的工業使用受到限制，這會讓我們更有信心。但就目前而言，我們預計整個冬天我們將照常運營。

All right, Thank you. And then my last one for now is on the Surfactants business and the margin performance there. I'm just curious if that lower commodity laundry volume number is having a negative impact on your fixed cost absorption? Or is maybe the plant loading factor less of an issue for you guys than it might have been in the past? And also just curious if you're seeing any trading down in this more challenging economic environment for consumers, any trading down to lower value products in surfactants, whether that's on the laundry side or in Personal Care?

好噠。謝謝你們。然後我現在的最後一個是關於表面活性劑業務和那裡的利潤率表現。我只是好奇較低的商品洗衣量是否會對您的固定成本吸收產生負面影響？或者，與過去相比，植物負荷係數對你們來說可能不是一個問題？而且也很好奇，在這個對消費者更具挑戰性的經濟環境中，您是否看到任何交易下降，是否有任何交易下降到表面活性劑中的低價值產品，無論是在洗衣方面還是在個人護理方面？

No, good questions, Mike. Of course, when you have lower volumes, you have the fixed cost impacting you. But again, we feel very good with the work that we have done in margins in both surfactants and polymers. And remember that we focus first in dollars per pound and the percentage of sales is a consequence of our sales growing significantly higher. But we're very happy with the year-to-date margins that we have, the 10% in surfactant and 13% in polymers. And of course, you also now that we have some seasonality by quarter. So of course, Q4 is the lowest volume quarter. You see more fixed cost impact and, therefore, lower margins there. But again, our strategy is to continue growing the high growth, high-margin businesses functional, as Scott was mentioning, the strong double-digit growth in ag and oilfield. So those will continue helping our margins despite whatever fixed cost impact that we're going to have. And I will let Scott talk a little bit more about the dynamics on consumer demand.

不，好問題，邁克。當然，當您的產量較低時，固定成本會影響您。但同樣，我們對我們在表面活性劑和聚合物方面所做的工作感到非常滿意。請記住，我們首先關注的是每磅美元，而銷售額百分比是我們銷售額顯著增長的結果。但我們對年初至今的利潤率感到非常滿意，表面活性劑為 10%，聚合物為 13%。當然，你現在也知道我們按季度有一些季節性。因此，當然，第四季度是銷量最低的季度。您會看到更多的固定成本影響，因此那裡的利潤率較低。但同樣，我們的戰略是繼續發展高增長、高利潤的業務，正如斯科特提到的那樣，在農業和油田領域實現兩位數的強勁增長。因此，儘管我們將產生任何固定成本影響，但這些將繼續幫助我們提高利潤率。我會讓斯科特多談談消費者需求的動態。

So Mike, I would say the trading down in -- from premium to mid or economy tiers. I think that started well earlier this year and even late last year. I think what's different now is the sustained inflation that the consumers are facing, it's actually starting to show demand softness across the board. Stepping we're agnostic to whether we participate in all segments of consumer products, whether it be premium economy or mid-tier. So we're agnostic there. But I think now we're seeing the overall softness in demand from the consumer.

所以邁克，我想說的是從高級到中級或經濟級的交易。我認為這在今年早些時候開始得很好，甚至在去年年底也開始了。我認為現在不同的是消費者面臨的持續通脹，它實際上開始全面顯示需求疲軟。 Steping 我們不知道我們是否參與了消費產品的所有領域，無論是高端經濟還是中端。所以我們在那裡是不可知論者。但我認為現在我們看到消費者需求整體疲軟。

And fair to say that, that's primarily Europe and emerging market trend rather than something you're seeing in North America?

公平地說，這主要是歐洲和新興市場的趨勢，而不是您在北美看到的趨勢？

Yes. Yes, as it follows the other industries, the first signs of softness happened in the emerging markets and Europe with the energy crisis and and interest rates rises, definitely, Europe is going to be in that board as well. North America to this point has held up much better than the other region.

是的。是的，正如其他行業一樣，隨著能源危機和利率上升，新興市場和歐洲出現了疲軟的第一個跡象，當然，歐洲也將進入該董事會。到目前為止，北美的表現比其他地區要好得多。

All right. Thanks very much. I'll turn it back for now...

好的。非常感謝。我暫時把它轉回去......

And our next question comes from the line of Vincent Anderson with Stifel. Please proceed.

我們的下一個問題來自文森特安德森與 Stifel 的合作。請繼續。

Yeah, Good morning. Scott, Luis... So I just wanted to dig in on the acquisition a little bit. I'm trying to understand how the alcohol ethoxylates kind of fits your portfolio. Would these like -- would these represent an intermediate product between your existing formulations that are mostly told -- or is this just a brand-new derivative family that would generally be sold as is? And then second, were these products already 1,4-dioxane compliant? Or is that something that you're bringing to this company?

是的，早上好。斯科特、路易斯……所以我只是想深入了解一下這次收購。我試圖了解酒精乙氧基化物如何適合您的投資組合。這些會像 - 這些是否代表您現有的配方之間的中間產品，這些產品通常被告知 - 或者這只是一個通常會按原樣出售的全新衍生產品系列？其次，這些產品是否已經符合 1,4-二噁烷標準？或者這是你要給這家公司帶來的東西？

Yes. Great question, Vincent. First, the alcohol ethoxylates product line that we're acquiring or have acquired from PerformanX. That is a standard product line that exists in the industry today, and quite honestly, is in Stepan's product portfolio and has been for 20 years. What it's really doing is bringing new customers and new markets to Stepan, that is a great diversification opportunity for our ethoxylate business and provides, I believe, material opportunities for pull-through products within other Stepan's other product lines, including cationic and maybe even biocides into these new end-use markets. So that was really the driver. The chemistry is a standard chemistry line that we have in our product portfolio today. And can you remind me your second question?

是的。好問題，文森特。首先，我們正在或已經從 PerformanX 收購的乙醇乙氧基化物產品線。這是當今行業中存在的標準產品線，老實說，在 Stepan 的產品組合中已經存在 20 年了。它真正做的是為 Stepan 帶來新客戶和新市場，這對我們的乙氧基化物業務來說是一個很好的多元化機會，我相信，它為 Stepan 其他產品線中的直通產品提供了重要機會，包括陽離子甚至殺菌劑進入這些新的最終用途市場。所以那才是真正的驅動力。化學是我們今天產品組合中的標準化學系列。你能提醒我你的第二個問題嗎？

1,4-dioxane.

1,4-二噁烷。

So 1,4-dioxane is really primarily generated from the sulfonation process that's in our commodity anionic product line used in laundry. These non-ionic that are not sulfinative have much, much lower, almost negligible levels of 1,4-dioxane and not really of concern as it relates to the new regulations that are showing up next year.

所以 1,4-二氧六環實際上主要是從我們用於洗衣的商品陰離子產品線中的磺化過程中產生的。這些非亞磺化的非離子物質的 1,4-二氧六環含量低得多，幾乎可以忽略不計，並且與明年出台的新法規有關，因此並不真正令人擔憂。

Okay. Perfect. And then just on the topic of 1,4-dioxane you have your investments there to reduce its levels in your relevant products, but we were reading about some switching to alpha olefin sulfonates as an alternative to just not even deal with the lower 1,4-dioxane concentration. Is that an opportunity within your portfolio to also push that as an alternative? Or would that be considered trading down? Or you really are focused on other end markets with your AOS capacity?

好的。完美的。然後就 1,4-二氧雜環己烷這一主題，您在那裡投資以降低其在相關產品中的含量，但我們讀到一些人轉向使用 α 烯烴磺酸鹽作為替代品，甚至不處理較低的 1， 4-二噁烷濃度。在您的投資組合中，這是否也是一個將其作為替代方案的機會？還是會被視為減價交易？還是您的 AOS 能力真的專注於其他終端市場？

No. So Stepan is a one-stop shop for sulfonation chemistries, whether it be either sulfate, sulfonic acids alpha olefin sulfonates. We've been practicing and producing these and selling to the market for multiple decades. So we are agnostic to the customer base in terms of what is their best solution for their company's needs. -- either sulfates do provide the best cost performance in some consumer cleaning and liquid cleansing applications. So customers that are formulating based on strong consumer performance benefits want to stay in either sulfates, Others that may be looking to avoid a lot of reformulation or I should say, cost-related issues with the new 1,4-dioxane regulations are looking to switch away to alternative anionics. And we're working with those customers on changing their formulations to ALS or lauryl sulfate or sulphonic acid. So we're agnostic, and it remains an opportunity for our ALS franchise as well as customers look to find their own custom solution for the 1,4-dioxane regulation.

不，所以 Stepan 是磺化化學品的一站式商店，無論是硫酸鹽、磺酸 α 烯烴磺酸鹽。幾十年來，我們一直在實踐和生產這些產品並向市場銷售。因此，就什麼是滿足他們公司需求的最佳解決方案而言，我們對客戶群一無所知。 ——這兩種硫酸鹽在一些消費者清潔和液體清潔應用中確實提供了最佳的性價比。因此，基於強大的消費者性能優勢進行配製的客戶希望繼續使用硫酸鹽，其他可能希望避免大量重新配製的客戶，或者我應該說，與新的 1,4-二噁烷法規相關的成本問題正在尋求改用替代陰離子。我們正在與這些客戶合作，將他們的配方改為 ALS 或月桂基硫酸鹽或磺酸。所以我們是不可知論者，這仍然是我們 ALS 特許經營權的機會，以及客戶希望為 1,4-二噁烷法規找到他們自己的定制解決方案。

Great. That's very helpful. And just one more quick one from me on selling that we don't normally talk about. But MCT has had another nice quarter. You've mentioned in the past that you wanted to build out some of your raw material availability to improve output of those products. Is that still a strategy? And how much volume upside is there from those assets?

偉大的。這很有幫助。還有一個來自我的關於我們通常不談論的銷售的快速銷售。但 MCT 有另一個不錯的季度。您過去曾提到您希望增加一些原材料的可用性以提高這些產品的產量。這還是一種策略嗎？這些資產有多少上漲空間？

The supply of the fatty acid used to make MCTs has loosened up a bit. Global supply chains are operating a little more freely. But I would not say that there's a significant opportunity from here in terms of continued profit expansion that we've seen over the last 4 months or last 4 quarters, I should say. Margins are probably close to being at their peak. I think we've done a really good job with our customer optimization and getting fatty acids into our manufacturing facilities in a time where they were constrained.

用於製造 MCT 的脂肪酸供應有所放鬆。全球供應鏈的運作更加自由。但我不會說，就我們在過去 4 個月或過去 4 個季度中看到的持續利潤擴張而言，這裡有重大機會，我應該說。利潤率可能接近頂峰。我認為我們在客戶優化方面做得非常好，並在他們受到限制的時候將脂肪酸引入我們的製造設施。

And Vincent, this is Luis. -- an additional perspective is, as Scott was mentioning, probably were on the peak on the margin side, but we continue looking for opportunity to grow volume, and we have extra capacity right now in our facility in Maywood, -- so as fatty acid become more available, our focus for the next few quarters will continue to grow as a business, get new customers and continue growing volume.

文森特，這是路易斯。 -- 另一個觀點是，正如斯科特提到的那樣，利潤率可能處於頂峰，但我們繼續尋找增加產量的機會，我們現在在梅伍德的工廠有額外的產能，--所以脂肪酸變得更容易獲得，我們未來幾個季度的重點將作為業務繼續增長，獲得新客戶並繼續增長。

Understood. If I remember correctly, these are mostly coconut oil or palm kernel oil fatty acid derivatives...

明白了。如果我沒記錯的話，這些大多是椰子油或棕櫚仁油的脂肪酸衍生物……

yeah.

是的。

okay thanks guys.

好的，謝謝大家。

And as a reminder, to register for a question, please press the 1 followed by the 4 on your telephone. And our next question comes from the line of David Silver with CL King. Please proceed.

提醒一下，要註冊提問，請在電話上按 1，然後按 4。我們的下一個問題來自 David Silver 與 CL King 的對話。請繼續。

Yeah HI, good morning. I guess my first question would be regarding the Surfactant segment, and you talked about the price cost balance earlier. I was wondering if you could maybe just help me parse through the lower sales volume. So in other words, for the last few quarters, you've been clear about the divergent trends, let's say, in the personal care side of your surfactants business versus institutional or commercial, which has been healthier. And I'm just wondering when -- if you could maybe just talk about that a little bit and how far along do you think we are in the personal care side bottoming out post pandemic? If we -- maybe we could just start there.

嗨，早上好。我想我的第一個問題是關於表面活性劑部分，你之前談到了價格成本平衡。我想知道你是否可以幫我解析較低的銷量。所以換句話說，在過去的幾個季度裡，你已經清楚了不同的趨勢，比方說，在你的表面活性劑業務的個人護理方面與機構或商業相比，後者更健康。我只是想知道什麼時候 - 如果你能稍微談談這個，你認為我們在個人護理方面在大流行後觸底反彈有多遠？如果我們——也許我們可以從那裡開始。

Yes. David, if I understand your question as it relates to our personal care volumes, one thing I would say is we've had significant raw material constraints affecting our personal care volumes, specifically in our Amphoterics product lines. And that was, quite honestly, industry-wide in terms of a critical raw material that was short to the industry. So that's helped exasperate some of the divergence that you're referring to. In terms of the post-covid demand in personal care as it relates to the increased use of hand wash factoring the peak of the pandemic, that has pretty much stabilized and is not in any declining or significant increasing trajectory. So that's kind of more stable. So I'd say most of the impact of divergence you're seeing has really just been with some isolated supply chain constraints on raw materials that has really impacted the volumes.

是的。大衛，如果我理解你的問題與我們的個人護理產品量有關，我想說的一件事是我們的個人護理產品量受到嚴重的原材料限制，特別是在我們的 Amphoterics 產品線中。老實說，就行業短缺的關鍵原材料而言，這在整個行業範圍內都是如此。所以這有助於加劇你所指的一些分歧。就個人護理的 covid 後需求而言，因為它與大流行高峰期洗手使用量的增加有關，這種需求已經基本穩定，沒有任何下降或顯著增加的軌跡。所以這樣更穩定。所以我想說你所看到的分歧的大部分影響實際上只是對原材料的一些孤立的供應鏈限制，這些限制確實影響了數量。

And then, thank you for that -- and then also on Surfactant, I was just hoping to get an update, let's say, year-to-date on your Tier 2, Tier 3 customer strategy? Do you have a figure for accounts that it maybe this quarter or year-to-date? And then if you might be able to comment on how that's affected the margins. In other words, smaller volumes, but maybe with the greater service component, structurally higher margins. I mean, when we look at the third quarter segment results there, what would you say the impact of that strategy to date might be?

然後，謝謝你——還有關於 Surfactant，我只是希望得到更新，比方說，年初至今你的第 2 層、第 3 層客戶戰略？您是否有本季度或今年迄今的賬戶數據？然後，如果您能夠評論這對利潤率的影響。換句話說，體積較小，但可能具有更大的服務成分，結構上更高的利潤率。我的意思是，當我們查看那裡的第三季度業績時，您認為該戰略迄今為止的影響可能是什麼？

Yes, definitely contributing to the continued success. It's a core element of our strategic growth priorities going forward. I think in our earnings slide deck, you'll see that there's over 100 new customers that were gained in the third quarter. And yes, the smaller volume tends to be higher margin business, and that's been a core foundation of our growth strategy going forward...

是的，絕對有助於持續成功。這是我們未來戰略增長重點的核心要素。我認為在我們的收益幻燈片中，您會看到第三季度獲得了 100 多個新客戶。是的，較小的數量往往是利潤率較高的業務，這是我們未來增長戰略的核心基礎......

Okay. And this one is for Luis and we just have to do with the trend on interest expense. So sequentially, I see your debt levels are rising. I think we know that interest rates, at least in this country are rising -- just wondering why there was a modest sequential decline in interest expense and maybe if you could kind of help us on where that interest expense line might go in the next quarter or 2 is maybe another rate hike or 2 is in the offing. That would be great, Thank you.

好的。這是給路易斯的，我們只需要處理利息支出的趨勢。因此，依次地，我看到你的債務水平在上升。我認為我們知道利率，至少在這個國家正在上升——只是想知道為什麼利息支出連續下降，也許你能幫助我們確定下個季度利息支出線的走向或者 2 可能是另一次加息，或者 2 即將到來。那太好了，謝謝。

Great question, David. And yes, you are right. We're going to see our interest net on a yearly basis, of course, going up. We have clear guidance that it's going to be around $11 million this year versus last year was roughly around $6 million. So you clearly see the effect of all the new debt that we acquired. However, remember that we acquired significant new debt at fixed interest rates that were well below 3%. So I think we believe we're in a very good spot. And actually, what we're seeing recently is, of course, with the interest rate increases, we're generating more interest income of our cash. So that is actually helping. And by the way, we're generating now interest income that are higher than what we are paying on the debt. So we're generating 3 and 3.5 in interest rates for the interest income piece. So that is actually healthy. But in February, I will give you -- I will provide clear guidance as always, on what would be our interest net forecast for 2023. Of course, it should go higher than the $11 million that that we have in 2022. I will give you, but nothing dramatic, and we will give you guys the exact numbers when we meet in February.

好問題，大衛。是的，你是對的。當然，我們每年都會看到我們的利息淨額上升。我們有明確的指導，今年將達到 1100 萬美元左右，而去年約為 600 萬美元。所以你清楚地看到我們獲得的所有新債務的影響。但是，請記住，我們以遠低於 3% 的固定利率獲得了大量新債務。所以我認為我們相信我們處於一個非常好的位置。事實上，我們最近看到的是，當然，隨著利率的提高，我們正在從現金中獲得更多的利息收入。所以這實際上是有幫助的。順便說一句，我們現在產生的利息收入高於我們為債務支付的利息收入。因此，我們為利息收入部分產生了 3 和 3.5 的利率。所以這實際上是健康的。但在 2 月，我將一如既往地提供明確的指導，說明我們對 2023 年的淨利息預測是多少。當然，它應該高於我們 2022 年的 1100 萬美元。我會給你，但沒什麼大不了的，我們會在二月份開會時給你們確切的數字。

Okay. Great. And then just last question. I mean, this is something I just have noticed in the headlines over the last week or 2. But water levels, this is in the U.S. logistics, but the water levels on the Mississippi are such that barge and vehicle vessel traffic is being disrupted. So thinking about Millsdale and maybe some of your other -- or maybe your flow of raw materials -- is that creating unusual issues for you? Are you kind of diverting to different modes of transport as a result? Or is that just -- is that something you're able to manage without too much difficulty, thank you.

好的。偉大的。然後是最後一個問題。我的意思是，這是我在過去一兩週的頭條新聞中註意到的事情。但是水位，這是在美國物流中，但密西西比河的水位高到駁船和車輛交通中斷。因此，考慮 Millsdale 和您的其他一些人——或者您的原材料流——是否會給您帶來不尋常的問題？您是否因此而轉向不同的交通方式？或者這只是 - 是您能夠輕鬆管理的事情，謝謝。

Yes. We -- yes, great question. And yes, we've been operating our plants on the Illinois River, the is Plaines River for 50 years, and we have very robust contingency plans in our sourcing and planning groups work with very closely with our raw material suppliers to ensure alternate modes are available into the Chicago area. So not an impactful...

是的。我們 - 是的，很好的問題。是的，我們在伊利諾斯河上運營我們的工廠，即普蘭斯河已有 50 年了，我們的採購和計劃小組有非常強大的應急計劃，與我們的原材料供應商密切合作，以確保替代模式可進入芝加哥地區。所以影響不大...

Yes. No major impact.

是的。無重大影響。

No major impact to our...

對我們沒有太大影響...

But you're right, David, that has been -- that has been an issue, but no major impact for us.

但你是對的，大衛，這一直是一個問題，但對我們沒有重大影響。

Okay. Great. Thank you very much. Appreciate it...

好的。偉大的。非常感謝你。欣賞它...

And I do have a follow-up question from the line of Mike Harrison with Seaport Research Partners, Please proceed.

我確實有來自海港研究合作夥伴邁克哈里森的後續問題，請繼續。

Just a few more for me. In terms of this $8 million fourth quarter impact related to some planned maintenance, how much of that is going to hit the polymers business? And how much of it impacts Surfactants?

再給我幾個。就第四季度與某些計劃維護相關的 800 萬美元影響而言，其中有多少將影響聚合物業務？它對錶面活性劑有多大影響？

Good question, Mike. Actually, I want to make a clarification that $8 million is after tax, just make sure that everybody understands that it's roughly $10 million to $11 million on a pretax basis and around 70% of that will hit polymers and 30% will hit surfactants...

好問題，邁克。實際上，我想澄清一下，800 萬美元是稅後的，只要確保每個人都明白稅前大約是 1000 萬到 1100 萬美元，其中大約 70% 用於聚合物，30% 用於表面活性劑。 .

Okay. And have you seen any customers pulling forward any volumes in Q3 in anticipation of that Q4 outage? Or were the order patterns generally pretty steady?

好的。您是否看到任何客戶因預期第四季度中斷而將第三季度的任何數量提前？還是訂單模式總體上相當穩定？

Yes. We work with our customers well in advance. Our shutdowns are planned 6 to 12 months in advance. So the supply chain has already been executed against the shutdown.

是的。我們提前與客戶合作。我們的停產計劃提前 6 到 12 個月。所以供應鏈已經針對停工執行了。

Okay. And then I guess, maybe hoping for a little bit more color on what exactly you guys are doing at that Millsdale site. You mentioned some operational excellence initiatives. But are some of these actions intended to help improve reliability. And I know if we look back over the last couple of years, we've had some power outages that have affected production out of that plant.

好的。然後我想，也許希望對你們在 Millsdale 網站上所做的事情有更多的了解。您提到了一些卓越運營計劃。但其中一些行動旨在幫助提高可靠性。我知道，如果我們回顧過去幾年，就會發現一些停電影響了該工廠的生產。

Yes. Great insight, Mike. And yes, we are investing heavily in improving the reliability of the infrastructure at that -- at our Millsdale site. So we've had multiple projects ongoing since Q2 to replace substrate substations, MCCs and we feel really good that the projects are going to significantly improve our reliability, and we're ready for the upcoming winter.

是的。偉大的洞察力，邁克。是的，我們正在大力投資提高基礎設施的可靠性——在我們的米爾斯代爾站點。因此，自第二季度以來，我們正在進行多個項目來更換基板變電站、MCC，我們感覺非常好，這些項目將顯著提高我們的可靠性，我們為即將到來的冬天做好了準備。

And then, I guess, as it relates to the low 1,4-dioxane transition costs that are associated with this $8 million impact. What do those costs entail? And are they onetime in nature? Or are there going to be additional costs that we see you guys incur at some point in 2023...

然後，我猜，因為它與與這 800 萬美元的影響相關的低 1,4-二噁烷轉換成本有關。這些費用意味著什麼？它們在自然界中存在過一次嗎？或者我們看到你們在 2023 年的某個時候會產生額外費用......

Mike, I will say a good chunk will be onetime. But of course, as we mentioned in our prepared remarks, the transition for low 1,4-dioxane is going to go through 2023. This is not a 1-day switch. So we need to go through the transition and after we execute all of these, of course, we're not going to incur in some of those one-timers.

邁克，我會說很多都是一次性的。但是，當然，正如我們在準備好的發言中提到的那樣，低 1,4-二噁烷的過渡將持續到 2023 年。這不是 1 天的轉換。所以我們需要經歷過渡，在我們執行所有這些之後，當然，我們不會招致其中一些一次性的。

Okay. But it sounds like maybe as we're thinking about 2023 that we should consider that there's still some headwinds associated with these transition costs.

好的。但聽起來也許在我們考慮 2023 年時，我們應該考慮到這些過渡成本仍然存在一些不利因素。

Yes, a little bit. I mean, it's not going to be major. And I'm looking forward also to the meeting in February, we can provide a little bit more guidance about how we see the years and what are some of the key elements that we see going forward. But yeah, you're going to expect some additional expenses there but nothing major.

是有點。我的意思是，它不會是主要的。我也很期待 2 月的會議，我們可以就我們如何看待這些年以及我們看到的一些關鍵要素提供更多指導。但是，是的，你會在那裡期待一些額外的費用，但沒什麼大不了的。

Okay. And then the last one I had is on polymers. I was just hoping you could give a little bit more detail on what you're seeing in terms of demand trends as we're getting into Q4. Obviously, the 10% volume decline in Q3 suggests that you're definitely seeing some things getting worse. Curious if some of that is customer inventory destocking that might be a little bit more temporary, but anything you can share on near-term demand in the construction-related portions of polymers would be appreciated.

好的。然後我最後一個是關於聚合物的。我只是希望您能在我們進入第四季度時就您在需求趨勢方面看到的情況提供更多細節。顯然，第三季度 10% 的銷量下降表明你肯定會看到一些事情變得更糟。好奇的是，如果其中一些是客戶庫存去庫存，這可能會更暫時一些，但您可以分享任何關於聚合物建築相關部分的近期需求的信息，我們將不勝感激。

Yes. I think as we all read what's happening in Europe, specifically in the construction markets, there is a slowdown happening. Projects are being put on hold or canceled, which is really what's driven our volume decline in polymers in Q3. And then the continued kind of lockdowns in China have also significantly impacted demand. Where is it look sequentially quarter-over-quarter into Q4, we're kind of expecting a lot of the same for Q4. And I think the overall hope is that there's maybe a 2 or 3 quarter, call it, a hiatus and expecting growth and recovery in the construction markets in Europe in the second half of next year. I think that's kind of a general consensus right now across what we're hearing in the market.

是的。我認為當我們都讀到歐洲正在發生的事情時，特別是在建築市場，正在發生放緩。項目被擱置或取消，這確實是導致我們第三季度聚合物銷量下降的原因。然後，中國持續的封鎖也對需求產生了重大影響。第四季度的季度環比看起來在哪裡，我們有點期待第四季度會有很多相同的情況。我認為總體希望是明年下半年歐洲建築市場可能會有 2 或 3 個季度的中斷，並預計會出現增長和復蘇。我認為這是目前我們在市場上聽到的普遍共識。

And as you know, Mike, I mean, at the end, insulation played a critical role in what needs to be achieved in the world, which is to reduce energy consumption. So of course, people preserve cash in this environment and people put on hold some of the projects. But if you need to replace your roof, you need to replace it, right? And you can hold out for 1, 2, 3 quarters, but you cannot hold forever. So we believe this is a transitory theme. And if you look at North America, despite all the challenges, a region in North America year-to-date is growing volume, single low single digits, but it's still growing. So the impact that we saw in Q3 is mainly Europe and Asia.

正如你所知，邁克，我的意思是，最後，絕緣在世界上需要實現的目標中發揮了關鍵作用，即減少能源消耗。因此，當然，人們會在這種環境下保留現金，並擱置一些項目。但是如果你需要更換你的屋頂，你需要更換它，對吧？你可以堅持1、2、3個季度，但你不能堅持到永遠。所以我們認為這是一個暫時的主題。如果你看看北美，儘管面臨所有挑戰，但今年迄今為止北美的一個地區的銷量正在增長，低個位數，但它仍在增長。所以我們在第三季度看到的影響主要是歐洲和亞洲。

All right. That's very helpful. Thanks.

好的。這很有幫助。謝謝。

And our next question comes from the line of David Storms with Stonegate. Please proceed.

我們的下一個問題來自 David Storms 和 Stonegate 的台詞。請繼續。

Good morning gentlemen. Thanks for taking my call. You actually just touched on it with the demand weakening in Europe and the Chinese markets. I know the North American markets seem to still have pretty strong demand. Are there any indicators that you're keeping an eye on to forecast if or when any of this demand weakness does spread to the North American markets?

先生們早上好。謝謝你接我的電話。實際上，您剛剛談到了歐洲和中國市場需求減弱的問題。我知道北美市場似乎仍有相當強勁的需求。您是否有任何指標可以預測這種需求疲軟是否或何時會蔓延到北美市場？

Yes. We're obviously staying very close to our customers and watching and hearing what they're saying about the installation contractors in (inaudible). I think everyone's been talking about the backlog of orders and projects. And in the first sign of weakness that we will see is when we hear that those back orders are starting to decline. So at this point in time, as Luis mentioned, our growth -- our rigid North American volumes continue to grow in the small single digits. And I think we can anticipate that Q4 should be very similar. But too early to tell.

是的。顯然，我們與客戶保持非常密切的關係，並觀察和聽到他們對安裝承包商的看法（聽不清）。我想每個人都在談論訂單和項目的積壓。我們將看到的第一個疲軟跡像是，當我們聽說那些延期交貨訂單開始下降時。因此，正如路易斯所提到的，在這個時間點，我們的增長——我們剛性的北美銷量繼續以小個位數增長。而且我認為我們可以預期第四季度應該非常相似。但現在下結論還為時過早。

Thanks, And one more, if I could. You mentioned earlier that labor is an inflationary pressure expected to continue along with freight and utilities. But the labor market in the U.S. remains as strong as it is, do you anticipate this to becoming an outsized expense relative to those freight and utilities expenses or just kind of maintaining as it has that.

謝謝，如果可以的話，還有一個。您之前提到，勞動力是一種通貨膨脹壓力，預計將與貨運和公用事業一起持續下去。但美國的勞動力市場仍然保持強勁，你是否預計這將成為相對於運費和公用事業費用的過大支出，或者只是維持現狀。

No. What I would say is, of course, as a normal chemical company, we don't have a lot of labor in our site. And -- but the situation is that we're coming from years where salary inflation was -- in the U.S. was roughly in the 3%, we could see a little bit more pressure on those numbers in the short term. So that's kind of the difference. And when you think about developing markets in Europe, it could be higher single-digit type of number. So that's kind of the new thing on the labor piece. However, labor for us is not the biggest impact for us, it's about raw materials, freight and utilities.

沒有。當然，我要說的是，作為一家普通的化學公司，我們的現場沒有很多勞動力。而且 - 但情況是我們來自工資通脹的年份 - 在美國大約在 3%，我們可以看到這些數字在短期內面臨更大的壓力。這就是區別所在。當你考慮歐洲的發展中市場時，它可能是更高的個位數類型的數字。所以這是勞動片上的新事物。然而，勞動力對我們來說並不是最大的影響，它與原材料、運費和公用事業有關。

okay thank you very much

好的，非常感謝

And I have a follow-up question from the line of Vincent Anderson from Stifel. Please proceed.

我有來自 Stifel 的 Vincent Anderson 的後續問題。請繼續。

Yeah thanks, Just hopefully a quick one. I meant to ask the customer that took its 1,4-dioxane compliance internal. Was that a customer that was kind of core to your investment case into the low 1,4-dioxane capacity? Or are those customers more secure? And then I just have a quick follow-up on that.

是的，謝謝，希望能快一點。我想問問將其 1,4-二噁烷合規性納入內部的客戶。那個客戶是您投資低 1,4-二噁烷產能的核心客戶嗎？還是這些客戶更安全？然後我就快速跟進一下。

Yes. So you know with the level of investment that we've made for 1,4-dioxane, we obviously had early and off in conversations with our customer base, both existing and new to get ready for the type of capacity and capability we put in. So core to Stepan, yes, but definitely within our plans and our forecast.

是的。所以你知道我們對 1,4-二氧六環的投資水平，我們顯然很早就和我們的客戶群進行了對話，包括現有的和新的，為我們投入的產能和能力類型做好準備. 對 Stepan 來說如此核心，是的，但絕對在我們的計劃和預測之內。

Okay. That makes sense. And then just to understand maybe the commercialization of that product, assuming I'm guessing it's a little bit more overcapacity, so to speak, than you need for day 1 compliance. Is most of this being addressed with the purification step post reaction that you could maybe bypass -- or are you managing this on the front end. And so when the plant changes over, you're just making low 1,4 product regardless and it's up to our team to find a home for it at an accretive margin?

好的。這就說得通了。然後只是為了了解該產品的商業化，假設我猜它的產能過剩比第一天合規所需的要多一些。其中大部分是通過您可能繞過的純化步驟後反應來解決的——還是您在前端進行管理。因此，當工廠轉換時，您只是在生產低 1,4 的產品，而我們的團隊是否需要以增加的利潤為它找到一個家？

We have the flexibility and the design of the process that we've implemented. We have the flexibility to operate the units as we see fit. I'll leave it at that.

我們擁有已實施流程的靈活性和設計。我們可以靈活地操作我們認為合適的單位。我會留在那裡。

No, it's perfect. I appreciate it. That's all for me, I promise.

不，它是完美的。我很感激。這就是我的全部，我保證。

And there are no other questions. I'll turn the call back to you, Scott for closing remarks.

並且沒有其他問題。我會把電話轉回給你，斯科特，請你發表結束語。