Stepan Co (SCL) 2024 Q2 法說會逐字稿

Good morning, and welcome to the Stepan Company second-quarter 2024 earnings conference call. (Operator Instructions)

早安，歡迎參加 Stepan 公司 2024 年第二季財報電話會議。（操作員說明）

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.

謹此提醒，此通話錄音時間為 2024 年 7 月 31 日星期三。現在我很高興將電話轉接給 Stepan 公司副總裁兼財務長 Luis Rojo 先生。羅霍先生，請繼續。

Good morning, and thank you for joining the Stepan Company's second quarter 2024 financial review.

早安，感謝您參與 Stepan 公司 2024 年第二季財務回顧。

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.

在開始之前，請注意，本次電話會議中的資訊包含前瞻性陳述，並非歷史事實。這些陳述涉及風險和不確定性，可能導致實際結果出現重大差異，包括但不限於我們的海外業務前景、全球和地區經濟狀況以及我們向美國證券交易委員會提交的文件中詳述的因素。

In addition, this conference call will include discussion of adjusted net income, adjusted EBITDA and free cash flow, which are non-GAAP measures. We provide reconciliations to the comparable GAAP measures in the earnings presentation and press release, which we have made available at www.stepan.com under the Investors section of our website.

此外，本次電話會議還將討論調整後淨利潤、調整後 EBITDA 和自由現金流，這些都是非 GAAP 指標。我們在收益報告和新聞稿中提供了可比較 GAAP 指標的調節表，這些資訊已在我們網站的投資者部分 www.stepan.com 上提供。

Who are joining also online and over the phone, we encourage you to review the investor site presentation. We have made this available at approximately the same time as when the earnings release is issued, and we hope that you find the information perspective helpful. With that, I would like to turn the call over to Mr. Scott Behrens, our President and Chief Executive Officer.

對於透過線上和電話方式加入的人，我們鼓勵您查看投資者網站演示。我們大約在發布收益報告的同時提供此信息，我們希望您發現資訊視角有幫助。現在，我想將電話轉給我們的總裁兼執行長貝倫斯先生。

Good morning, and thank you all for joining us today to discuss our second quarter 2024 results. I plan to share highlights from our second quarter performance, and will also share updates on our key strategic priorities, while Luis will provide additional details on our financial results.

早安，感謝大家今天加入我們討論我們的 2024 年第二季業績。我計劃分享我們第二季業績的亮點，也將分享我們關鍵策略優先事項的最新情況，而路易斯將提供有關我們財務業績的更多詳細資訊。

The company reported second quarter adjusted EBITDA of $47.7 million, up 4% year-over-year. Global sales volume was also up 4% on a year-over-year basis. We saw strong volume recovery across most core markets, except for weakness in the agricultural market due to continued inventory destocking, and lower phthalic anhydride volumes due to operational issues at our Millsdale site.

該公司公佈第二季調整後 EBITDA 為 4,770 萬美元，較去年同期成長 4%。全球銷量也較去年同期成長 4%。我們看到大多數核心市場的銷售強勁復甦，但由於持續去庫存導致農產品市場疲軟，以及米爾斯代爾工廠營運問題導致鄰苯二甲酸酐銷售下降。

Global sales volume excluding the impact of ag and phthalic anhydride was up 6%. Surfactants experienced double-digit volume growth within the laundry and cleaning, construction and industrial solutions and oilfield end markets and also within our distribution partners.

排除農業和鄰苯二甲酸酐的影響，全球銷售成長 6%。表面活性劑在洗衣和清潔、建築和工業解決方案、油田終端市場以及我們的分銷合作夥伴中經歷了兩位數的銷售成長。

Latin America surfactant volumes grew double digits as we continue to recover consumer volumes in Mexico. We also experienced strong volume growth in several end markets in Brazil, inclusive of double digit volume growth within our agricultural business.

隨著我們繼續恢復墨西哥的消費量，拉丁美洲的界面活性劑銷量增長了兩位數。我們在巴西的幾個終端市場也經歷了強勁的銷售成長，其中包括我們農業業務的兩位數銷售成長。

However, North America and European agricultural volumes remained soft in the second quarter. Rigid and specialty polyols also delivered volume growth during the quarter that was partially offset by the lower phthalic anhydride volumes due to the production issues at Millsdale. Overall, global margins were in line with expectations, despite unfavorable product mix.

然而，北美和歐洲第二季農產品產量依然疲軟。本季剛性和特種多元醇的銷量也出現成長，但由於米爾代爾的生產問題導致鄰苯二甲酸酐銷量下降，部分抵消了這一增長。整體而言，儘管產品結構不利，但全球利潤率仍符合預期。

On July 18, 2024, we determined that one of our company's Asia subsidiaries had been the victim of a criminal social engineering scheme, which resulted in fraudulently induced outbound payments. The company launched an investigation led by outside counsel to determine the full extent of the fraud scheme, and the related potential exposure.

2024 年 7 月 18 日，我們確定我們公司的一家亞洲子公司是犯罪社會工程計劃的受害者，該計劃導致欺詐性誘導對外付款。該公司發起了一項由外部法律顧問領導的調查，以確定詐欺計劃的全部範圍以及相關的潛在風險。

We are limited in what we can disclose because of the ongoing investigation. We initiated contact with our banks as well as our appropriate US and local law enforcement authorities in an effort to, among other things, recover the transferred funds.

由於調查仍在進行中，我們所能揭露的資訊有限。我們開始與我們的銀行以及我們相應的美國和當地執法機構聯繫，以期追回轉移的資金等。

To date, the company has not found any evidence of additional fraudulent activity, and we believe this event is isolated and contained. This incident did not result in any unauthorized access to our information systems or any confidential customer information or other data that we maintain.

迄今為止，該公司尚未發現任何其他詐欺活動的證據，我們認為該事件是孤立且受到控制的。此事件並未導致對我們的資訊系統或我們維護的任何機密客戶資訊或其他資料的任何未經授權的存取。

While this matter will result in some additional near term expenses, the company does not expect this incident to otherwise have a material impact on its business. The company recognized a $3.5 million pre-tax charge for the quarter ended June 30, 2024, and while the investigation is ongoing, the company expects to record a pre-tax charge of a similar amount in the third quarter of this year.

雖然此事將導致一些額外的近期費用，但該公司預計該事件不會對其業務產生重大影響。該公司在截至 2024 年 6 月 30 日的季度確認了 350 萬美元的稅前費用，在調查正在進行期間，該公司預計將在今年第三季記錄類似金額的稅前費用。

We do not expect this incident to otherwise have a material impact on our business or our ability to serve our customers.

我們預計此事件不會對我們的業務或我們服務客戶的能力產生重大影響。

From an earnings perspective, we delivered adjusted EBITDA growth of 4% during the second quarter despite higher operating costs at our Millsdale site, higher pre commissioning expenses at our new alkoxylation investment in Pasadena, Texas, the negative effect of agricultural destocking and the impact of the fraud event mentioned before.

從獲利角度來看，儘管米爾斯代爾工廠的營運成本較高、德州帕薩迪納新烷氧基化投資的預調試費用較高、農業去庫存的負面影響以及前面提到的詐騙事件。

Excluding these second quarter special events, our adjusted EBITDA grew more than 50% versus prior year. Net sales in the second quarter of 2024 decreased 4% year-over-year, primarily due to lower selling prices that were mainly attributable to the pass through of lower raw material costs and less favorable product mix. These lower selling prices were partially offset by a 4% increase in global sales volume as mentioned before.

排除這些第二季的特殊事件，我們調整後的 EBITDA 比去年同期成長了 50% 以上。2024 年第二季的淨銷售額年減 4%，主要是由於原物料成本下降和產品組合不利的影響導致售價下降。如前所述，這些較低的售價被全球銷售 4% 的成長部分抵消。

For the first half of 2024, adjusted EBITDA of $98.9 million was up 5% versus the prior year as global sales volume grew 2% year-over-year. Excluding declines in our agricultural and commodity phthalic anhydride businesses, volume was up 5% when compared to the first six months of 2023.

2024 年上半年，調整後 EBITDA 為 9,890 萬美元，較上年成長 5%，全球銷售量年增 2%。排除農業和商品鄰苯二甲酸酐業務的下滑，銷量與 2023 年前 6 個月相比增長了 5%。

Free cash flow in the second quarter was close to zero due to a seasonal increase of $13 million in inventory. We generally build inventories in the second quarter in preparation for hurricane season. We also have two upcoming biannual planned turnarounds within our polymers business where inventory builds assist in meeting our customers' demand during the turnarounds.

由於庫存季節性增加 1,300 萬美元，第二季自由現金流接近零。我們通常在第二季度建立庫存，為颶風季節做準備。我們的聚合物業務中還有兩個即將進行的半年計劃週轉，其中庫存建設有助於在周轉期間滿足客戶的需求。

Free cash flow for the first half of the year was $11 million, and we remain confident that we will close 2024 with positive free cash flow. The company is on track to deliver our $50 million cost reduction goal for 2024 through the ongoing disciplined efforts in the supply chain and the workforce productivity actions taken in the last quarter of 2023.

上半年的自由現金流為 1,100 萬美元，我們仍然有信心在 2024 年結束時實現正自由現金流。透過在供應鏈中持續嚴格的努力以及 2023 年最後一個季度採取的勞動生產力行動，該公司有望實現 2024 年 5,000 萬美元的成本削減目標。

We expect these reductions to help offset higher operating costs at our Millsdale site, and pre commissioning expenses at our new alkoxylation facility in Pasadena, Texas.

我們預計這些減少將有助於抵消米爾斯代爾工廠較高的營運成本以及德州帕薩迪納新烷氧基化工廠的預調試費用。

During the second quarter of 2024, the company paid $8.4 million in dividends to shareholders. The company did not repurchase any company stock during the first half of 2024, and has $125 million remaining under the share repurchase program authorized by our Board of Directors.

2024年第二季度，該公司向股東支付了840萬美元的股利。該公司在 2024 年上半年沒有回購任何公司股票，根據董事會授權的股票回購計劃，剩餘資金為 1.25 億美元。

Yesterday, our Board of Directors declared a quarterly cash dividend on Stepan common stock of $0.37.5 per share payable on September 13, 2024. Stepan has paid and increased its dividend for 56 consecutive years.

昨天，我們的董事會宣佈於 2024 年 9 月 13 日支付 Stepan 普通股每股 0.37.5 美元的季度現金股利。Stepan 已連續 56 年支付並增加股利。

First half volume growth within several of our core markets at healthy margins is a testament to the strength and diversity of our business, which in turn supports our continued investment in our business and the return of cash to our shareholders. Luis will now share some details about our second quarter results.

上半年，我們幾個核心市場的銷售成長以及健康的利潤率證明了我們業務的實力和多樣性，這反過來又支持我們對業務的持續投資以及向股東返還現金。路易斯現在將分享有關我們第二季業績的一些細節。

Thank you, Scott. My comments will generally follow the slide presentation. Slide 5 shows the total company net income bridge for the second quarter compared to last year's second quarter and breaks down the decrease in adjusted net income. Because this is net income, the figure is not here at an after tax basis.

謝謝你，斯科特。我的評論通常會在幻燈片演示之後進行。投影片 5 顯示了第二季與去年第二季相比的公司淨利總額，並詳細說明了調整後淨利潤的下降情況。由於這是淨利潤，因此該數字不是稅後資料。

Second quarter 2024 adjusted net income was $9.4 million, or $0.41 per diluted share versus $12.1 million or $0.53 per diluted share for the second quarter of last year. The adjusted net income reduction was driven by a higher effective tax rate compared to 2023.

2024 年第二季調整後淨利為 940 萬美元，即稀釋後每股收益 0.41 美元，去年第二季為 1,210 萬美元，即稀釋後每股收益 0.53 美元。與 2023 年相比，調整後淨利減少是由於有效稅率較高。

We are projecting a higher effective tax rate for 2024 due to the anticipated disallowance of the GLT deduction and foreign tax credit resulting from the expected election of bonus depreciation for our Pasadena capital investment.

由於我們的帕薩迪納資本投資預計將選擇紅利折舊，預計將不允許 GLT 扣除和外國稅收抵免，因此我們預計 2024 年的有效稅率將提高。

Slide 6 shows the total company adjusted EBITDA bridge for the second quarter compared to last year's second quarter. Adjusted EBITDA was $47.7 million versus $45.8 million in the prior year, a 4% increase year-over-year.

投影片 6 顯示了與去年第二季相比，第二季公司調整後的 EBITDA 總額。調整後 EBITDA 為 4,770 萬美元，上年同期為 4,580 萬美元，年增 4%。

We will cover this segment in more detail. But to summarize, we delivered adjusted EBITDA growth in surfactant and specialty products, partially offset by global polymers. Higher corporate expenses reflect the fraud incident mentioned before.

我們將更詳細地介紹這一部分。但總而言之，我們在界面活性劑和特種產品領域實現了調整後的 EBITDA 成長，但部分被全球聚合物所抵消。較高的企業開支反映了前面提到的詐欺事件。

Slide 7 focus on surfactant segment results. Surfactant net sales were $380 million for the quarter, a 3% decrease versus the prior year. Selling prices were down 8%, primarily due to the pass through of lower raw material costs, less favorable product mix, and competitive pricing pressures in Latin America.

幻燈片 7 重點關注表面活性劑細分市場的結果。該季度表面活性劑淨銷售額為 3.8 億美元，比去年同期下降 3%。銷售價格下降 8%，主要是由於原材料成本下降、產品組合不利以及拉丁美洲競爭性定價壓力的影響。

Volume was up 5% year-over-year, driven by double-digit growth in laundry and cleaning, construction and industrial solutions and oilfield end markets. We also delivered double-digit growth with our distribution partners. This was partially offset by lower agricultural demand due to the continued customer and channel inventory destocking.

在洗衣和清潔、建築和工業解決方案以及油田終端市場兩位數成長的推動下，銷量較去年同期成長 5%。我們也與分銷合作夥伴實現了兩位數的成長。由於客戶和渠道庫存持續去庫存，農業需求下降部分抵消了這種影響。

Surfactant adjusted EBITDA for the quarter increased $4 million, or 13% versus the prior year. This increase was primarily driven by the 5% growth in volume and a slight margin improvement. This was partially offset by higher expenses associated with the operational issues at the Millsdale plant and higher pre operating expenses at our new Pasadena site. Excluding these expenses, adjusted EBITDA grew 47% versus prior year.

本季經界面活性劑調整後的 EBITDA 增加了 400 萬美元，比前一年增加了 13%。這一增長主要是由於銷量增長 5% 和利潤率略有改善所致。這被米爾斯代爾工廠運營問題相關的較高費用以及帕薩迪納新工廠較高的運營前費用所部分抵消。排除這些費用，調整後的 EBITDA 比上年增長 47%。

Now on slide 8, polymers net sales were $160 million for the quarter, a 3% decrease versus the prior year. Selling prices decreased 6%, primarily due to the pass through of lower raw material costs. Volume increased 2% in the quarter, driven by a 2% increase in global rigid polyol demand, and specialty polyol had an excellent quarter growing 28% versus prior year.

現在在幻燈片 8 上，該季度聚合物淨銷售額為 1.6 億美元，比前一年下降 3%。銷售價格下降 6%，主要是由於原材料成本下降的影響。在全球剛性多元醇需求成長 2% 的推動下，本季銷量成長了 2%，特種多元醇季度表現出色，與去年同期相比成長了 28%。

This growth was offset by lower PA volumes. Polymer adjusted EBITDA decreased $2.8 million, or 11% versus the prior year, driven by a non cash PA write-off of $2.1 million and higher costs incurred at Millsdale due to the operational issues mentioned before. Excluding these special items, adjusted EBITDA grew 8% versus prior year.

這一增長被 PA 銷售下降所抵消。Polymer 調整後 EBITDA 比前一年減少 280 萬美元，即 11%，原因是非現金 PA 沖銷 210 萬美元，以及米爾斯代爾因上述營運問題而產生的成本上升。排除這些特殊項目，調整後的 EBITDA 比上年增長 8%。

Finally, specialty product net sales were $16.9 million for the quarter, a 29% decrease versus the prior year. Volume was down 2% versus the prior year due to overall lower demand, while adjusted EBITDA increased $3.6 million or 69%, primarily due to the higher unit margins within the MCT product line.

最後，本季特色產品淨銷售額為 1,690 萬美元，比上年同期下降 29%。由於整體需求下降，銷售量比上年下降了 2%，而調整後的 EBITDA 增加了 360 萬美元，即 69%，這主要是由於 MCT 產品線的單位利潤率較高。

Turning to slide 9, we continue making progress on our cash position. For the first half of 2024, cash from operation was $71 million, or almost double versus the first half of 2023. Free cash flow for the first half was positive at $11 million, as CapEx investments returned to historical levels.

轉向幻燈片 9，我們的現金狀況繼續取得進展。2024 年上半年，營運現金為 7,100 萬美元，幾乎是 2023 年上半年的兩倍。隨著資本支出投資恢復到歷史水平，上半年自由現金流為 1,100 萬美元。

During the first half, we deployed $60 million against CapEx investments and $16.9 million for dividends. During the second quarter, we increased our inventory levels to protect us against the hurricane season and in anticipation of planned shutdowns in the polymers business. We expect to return to lower inventory levels during the fourth quarter.

上半年，我們部署了 6,000 萬美元的資本支出投資和 1,690 萬美元的股利。在第二季度，我們增加了庫存水平，以保護我們免受颶風季節的影響，並預計聚合物業務將計劃停產。我們預計第四季度庫存將恢復到較低水準。

Now on slide 10 and 11, Scott will update you on our strategic priorities and capital investments.

現在，在投影片 10 和 11 上，Scott 將向您介紹我們的策略重點和資本投資的最新情況。

Thanks, Luis. I will focus my comments on our cost initiatives, business strategy and the progress of our major capital investments. Our cost reduction program initiated last year along with the additional productivity and cost out initiatives underway centered around improved performance within our supply chain and are expected to deliver $50 million in pre-tax savings in 2024.

謝謝，路易斯。我的評論將集中在我們的成本計劃、業務策略和主要資本投資的進展。我們去年啟動了成本削減計劃，同時還圍繞提高供應鏈績效開展了提高生產力和成本削減計劃，預計到 2024 年將節省 5,000 萬美元的稅前成本。

As of the first half of the year, the company recognized $21 million in pre-tax savings despite the operational issues in Millsdale that led to $17 million in total expense at the site. These savings were also partially offset by pre-operating expenses of our new Pasadena site, higher operating expenses related to the new low 1,4-dioxane manufacturing process and overall labor cost inflation.

截至今年上半年，儘管米爾斯代爾的營運問題導致該工廠的總支出為 1,700 萬美元，但該公司還是確認了 2,100 萬美元的稅前節省。這些節省也部分被我們帕薩迪納新工廠的前期營運費用、與新的低 1,4-二噁烷製造流程相關的較高營運費用以及整體勞動力成本上漲所抵消。

We remain encouraged by the continued volume growth in several of our core end markets during the second quarter. As mentioned earlier, surfactant experienced double-digit volume growth within Laundry and cleaning, construction and industrial solutions, within oilfield and within our distribution partners.

第二季我們幾個核心終端市場的銷售持續成長仍然令我們感到鼓舞。如前所述，表面活性劑在洗衣和清潔、建築和工業解決方案、油田和我們的分銷合作夥伴中經歷了兩位數的銷售成長。

Latin American surfactant volumes grew double digits. Rigid and specialty polyols also delivered volume growth that was partially offset by lower phthalic anhydride volumes due to the operational issues mentioned before.

拉丁美洲界面活性劑銷量成長兩位數。硬質和特種多元醇也實現了銷售成長，但由於前面提到的營運問題導致鄰苯二甲酸酐銷量下降，部分抵消了這一增長。

Global margins were aligned with expectations despite unfavorable mix. Our customers will always remain at the center of our strategy and innovation. Our long standing Tier 1 customers value our technical capacity and the ability to manufacture and deliver quality products at the scale they need.

儘管存在不利的組合，但全球利潤率仍符合預期。我們的客戶將始終是我們策略和創新的中心。我們的長期一級客戶非常看重我們的技術能力以及按他們需要的規模製造和交付優質產品的能力。

We were pleased with the continued strong second quarter volume growth within our distribution partners around the world. We continue to grow and diversify this important and profitable segment of our surfactant customer base, having added over 800 new customers in the first half of the year.

我們對全球分銷合作夥伴第二季銷售的持續強勁成長感到高興。我們繼續發展表面活性劑客戶群中這一重要且有利可圖的客戶群並使其多元化，今年上半年新增了 800 多個新客戶。

Our technical collaborations are increasingly focused on helping our customers make their product portfolio transition towards a more sustainable future and we are happy to be on this journey with them.

我們的技術合作越來越注重幫助客戶將他們的產品組合轉向更永續的未來，我們很高興與他們一起踏上這趟旅程。

Our diversification strategy in the Tier 2 and Tier 3 markets and functional products, including Agriculture and oilfield continues to be our key priority for Stepan. Insulation remains a critical enabler of a more sustainable and energy efficient world and our polymers business continues to focus on developing the next generation rigid polyol technologies that can increase the energy efficiency and cost performance of our customers' insulation products.

我們在二級和三級市場和功能性產品（包括農業和油田）的多元化策略仍然是 Stepan 的首要任務。絕緣材料仍然是一個更永續和節能的世界的關鍵推動者，我們的聚合物業務繼續專注於開發下一代剛性多元醇技術，以提高客戶絕緣產品的能源效率和成本效益。

Moving to slide 11, construction at our new alkoxylation production facility in Pasadena, Texas is approximately 96% complete, and we expect the plant to start up mid fourth of this year. The underlying alkoxylation business that supports the Pasadena investment, including alkoxylate sales into the ag market, delivered double digit volume growth during the second quarter and add attractive unit margins.

轉向幻燈片 11，我們位於德克薩斯州帕薩迪納的新烷氧基化生產設施的建設已完成約 96%，我們預計該工廠將於今年四月中旬啟動。支持帕薩迪納投資的基礎烷氧基化業務，包括向農業市場的烷氧基化銷售，在第二季度實現了兩位數的銷售成長，並增加了有吸引力的單位利潤率。

After completing a three-year capital investment program last year, Stepan now has the largest installed low 1,4-dioxane production capacity serving the North American merchant market. For the first half of 2024, volumes grew double digits versus prior year and should continue to ramp up throughout the year as more customer and product qualifications are completed.

去年完成三年資本投資計畫後，Stepan 目前擁有最大的低 1,4-二噁烷產能，服務於北美商業市場。2024 年上半年，銷售量比去年增長了兩位數，隨著更多客戶和產品認證的完成，全年銷售量應該會繼續增加。

As referenced in our earnings release, Millsdale had higher second quarter expenses of $11.8 million due to operational issues. The Millsdale site continued to advance our water management improvement initiatives, but was impacted by a flooding event which led to higher expenses than expected for the quarter.

正如我們在財報中提到的，由於營運問題，米爾斯代爾第二季度的支出增加了 1,180 萬美元。米爾斯代爾工廠繼續推進我們的水管理改善計劃，但受到洪水事件的影響，導致本季的費用高於預期。

In addition to near term improvements already taken, we have identified longer term process and infrastructure improvements which will be part of the normal CapEx program at the site.

除了已經採取的近期改進之外，我們還確定了長期流程和基礎設施改進，這將成為現場正常資本支出計畫的一部分。

The plant has been operating with minimal interruptions over the last month. We expect Millsdale expenses related to these operational issues to be substantially lower in the second half as compared to the first half of 2024.

過去一個月，該工廠一直在運營，中斷情況極少。我們預計米爾斯代爾下半年與這些營運問題相關的費用將比 2024 年上半年大幅降低。

Although, Millsdale first half operational challenges and the aforementioned recent Asia flood event prevented us from delivering significant double-digit adjusted EBITDA growth versus last year, we are encouraged by the volume recovery in our core markets.

儘管米爾斯代爾上半年的營運挑戰和上述最近的亞洲洪水事件使我們無法實現與去年相比大幅兩位數的調整後 EBITDA 增長，但我們對核心市場的銷售復甦感到鼓舞。

Excluding what we consider special events, which are the Millsdale disruption, the pre-operating expenses in Pasadena, the Ag destocking and the fraud incident, adjusted EBITDA in the first half grew more than 35% versus 2023.

排除我們認為的特殊事件，例如米爾斯代爾工廠停產、帕薩迪納的營業前費用、農業去庫存和欺詐事件，上半年調整後的 EBITDA 比 2023 年增長了 35% 以上。

In closing, we expect second half adjusted EBITDA to improve versus prior year based on continued volume growth and a substantial reduction in second half operational expenses at our Millsdale site, which was the majority of the variance in second quarter expenses. The ongoing recovery in rigid polyols and the expected second half recovery of the Agricultural Chemicals business should drive improved earnings.

最後，我們預計下半年調整後的EBITDA 將比去年同期有所改善，這是基於我們米爾斯代爾工廠下半年銷售的持續成長和營運費用的大幅減少（這是第二季度費用差異的主要原因）。硬質多元醇的持續復甦和農業化學品業務下半年的預期復甦應會推動獲利改善。

Free cash flow should continue to improve versus prior year, driven by the completion of our Pasadena investment, the growth in market volumes and our continued focus on cost reduction. We believe we are positioned to deliver full year adjusted EBITDA growth and positive free cash flow.

在我們帕薩迪納投資的完成、市場容量的成長以及我們持續關注成本降低的推動下，自由現金流應繼續比去年有所改善。我們相信，我們有能力實現全年調整後 EBITDA 成長和正自由現金流。

This concludes our prepared remarks. At this time, we would like to turn the call over for questions. Marvin, please review the instructions for the question portion of today's call.

我們準備好的演講到此結束。此時，我們想轉接電話詢問問題。馬文，請查看今天電話會議問題部分的說明。

(Operator Instructions)

（操作員說明）

Mike Harrison, Seaport Research Partners.

麥克·哈里森，海港研究夥伴。

Hi, good morning.

嗨，早安。

Good morning, Mike.

早上好，麥克。

Good morning, Mike.

早上好，麥克。

I was hoping that you guys could maybe provide a little bit more detail on what you guys are seeing in the agricultural space. It sounds like Latin America maybe showed some recovery, but North America and Europe were below your expectations that you had coming into the quarter?

我希望你們能夠提供更多關於你們在農業領域所看到的細節。聽起來拉丁美洲可能出現了一些復甦，但北美和歐洲的表現低於您對本季的預期？

And understand you expect some more recovery in the second half, but maybe just help us understand across those key regions how things are tracking relative to normal?

並了解您預計下半年會出現更多復甦，但也許只是幫助我們了解這些關鍵地區的情況相對於正常情況如何？

Yes, so Mike, spot on. I think in our April call we said we expected the destocking in ag to continue through the first half of the year with recovery in the second half. That story held true unfortunately in North America, and in Europe volumes remain soft.

是的，麥克，說得對。我認為在四月的電話會議中，我們表示預計農業去庫存將持續到今年上半年，下半年將會復甦。不幸的是，這個故事在北美是正確的，而在歐洲，銷量仍然疲軟。

But the real highlight in the second quarter was the start of the recovery in the Latin American ag market. So the Brazilian ag market, our volumes were up strong double digits, which was a nice surprise.

但第二季真正的亮點是拉丁美洲農業市場的復甦。因此，在巴西農業市場，我們的銷量強勁成長了兩位數，這是一個不錯的驚喜。

And our story and our expectations still holds true. We believe North America and Europe are right behind Latin America in that recovery.

我們的故事和我們的期望仍然成立。我們相信北美和歐洲的復甦緊隨拉丁美洲之後。

Let me add something, Mike. As Scott mentioned, we were expecting destocking to continue hitting Q2, and that's exactly what we saw. And if you think about the quarter, we saw still destocking in April and May, but then in June we delivered similar numbers than last year.

讓我補充一點，麥克。正如斯科特所提到的，我們預計第二季將繼續去庫存，而這正是我們所看到的。如果你考慮這個季度，我們會發現四月和五月仍在去庫存，但六月我們交付的數字與去年相似。

And looking here into July, we're starting to grow our ag business. So actually the destocking is playing out as we thought and hopefully we won't talk about destocking in the future.

展望七月，我們將開始發展我們的農業業務。所以實際上去庫存正在按照我們的想法進行，希望我們將來不會談論去庫存。

All right. And then, I was hoping you could give a little bit more color on what happened with the Asia fraud. I think other than understanding what was going on, I think what investors would like to know is, is this going to be fully resolved, and no more charges after we have another $3.5 million impact in Q3? Or could there be some additional impacts going forward?

好的。然後，我希望你能對亞洲詐欺案的發生情況提供更多的資訊。我認為除了了解正在發生的事情之外，我認為投資者想知道的是，這個問題是否會完全解決，並且在第三季度再次產生 350 萬美元的影響後不再收取任何費用？或者未來會產生一些額外的影響嗎？

And then also what kind of changes are you guys looking at in your processes to make sure that this doesn't happen again either in Asia or in another region or subsidiary?

然後，你們在流程中考慮了什麼樣的改變，以確保這種情況不會在亞洲或其他地區或子公司再次發生？

Yes. Great question, Mike. As we mentioned in our release, the investigation is ongoing. I think the important message there is we believe that this incident is isolated and contained. And what we have shared at this point is our current evaluation of that isolated and contained event. And I think that's all we can comment at this time.

是的。好問題，麥克。正如我們在新聞稿中提到的，調查正在進行中。我認為重要的訊息是我們相信這一事件是孤立的並且受到控制。我們目前分享的是我們目前對這一孤立且受控制的事件的評估。我想這就是我們目前能發表的全部評論。

Okay, and then the last question for me is kind of more on the guidance or outlook front. You said you expect to show year-over-year EBITDA growth in the second half and for the full year. Obviously, we're looking at an unusually weak prior year.

好的，我的最後一個問題更多的是關於指導或前景。您表示預計下半年和全年 EBITDA 將年成長。顯然，我們看到的是前一年異常疲軟的情況。

So just was wondering if you could provide any further granularity on where you see EBITDA shaking out for the full year? I know the consensus was previously around $240 million, the prior year was $180 million. Do you expect consensus to come down to something more like $220 million, is it closer to $200 million that makes sense? I think we'd appreciate any additional precision you can provide on the outlook.

因此，我想知道您是否可以進一步詳細說明全年 EBITDA 的變更？我知道之前的共識是 2.4 億美元左右，前一年是 1.8 億美元。您是否預期共識會下降到 2.2 億美元左右，接近 2 億美元是否有意義？我想如果您能提供有關前景的任何額外的精確信息，我們將不勝感激。

Sure, Mike. As you know, we don't provide formal guidance. But look, look at what happened in the first half, right? We delivered, call it, $100 million EBITDA in the first half with a lot of one-time events. So if you think about the Millsdale full first half impact of $70 million, plus the fraud, plus the ag destocking, plus the pre-operating expenses, we're spending a lot of money in Pasadena now without any benefits, right?

當然，麥克。如您所知，我們不提供正式指導。但是看看上半場發生了什麼，對吧？透過許多一次性活動，我們在上半年實現了 1 億美元的 EBITDA。因此，如果你考慮一下米爾斯代爾上半年7000 萬美元的全部影響，再加上欺詐、農業去庫存以及前期運營費用，我們現在在帕薩迪納花了很多錢，卻沒有任何好處，對吧？

I mean the site is going to be up and running in Q4. So that's the 35% EBITDA growth that Scott was mentioning. So, call it at $120 million, $125 million. We should be running at $60 million per quarter on an EBITDA basis without these special items.

我的意思是該網站將在第四季度啟動並運行。這就是 Scott 提到的 35% EBITDA 成長。所以，稱之為 1.2 億美元、1.25 億美元。如果沒有這些特殊項目，我們每季的 EBITDA 收入應該為 6000 萬美元。

And of course, Q4, you know that we always have some seasonality in Q4, December tends to be low because of people reducing inventory levels and all of that. So I know you guys will be more careful with the number in Q4, but we should be running at $60 million plus per quarter. And that's what we need to deliver in the future without these special items and with Pasadena up and running.

當然，第四季度，你知道我們在第四季度總是有一些季節性，12 月往往較低，因為人們減少了庫存水平等等。所以我知道你們會對第四季的數字更加謹慎，但我們應該以每季 6000 萬美元以上的速度運行。這就是我們未來需要在沒有這些特殊物品且帕薩迪納啟動並運行的情況下提供的服務。

All right. Very helpful. Thanks very much.

好的。非常有幫助。非常感謝。

Dave Storms, Stonegate.

戴夫·斯托姆斯，石門。

Good morning. Just wanted to kind of get your thoughts on some of the geographical differences in surfactants. I know you mentioned ag growth was really strong in Brazil, not as strong as North America. But you also mentioned that laundry and cleaning had a strong growth quarter over quarter.

早安.只是想了解一下您對錶面活性劑的一些地理差異的看法。我知道您提到巴西的農業成長非常強勁，但不如北美。但您也提到洗衣和清潔業務季度環比強勁成長。

Just wondering if you could break out what that volume growth look like between your geographies?

只是想知道您是否可以詳細說明您所在地區之間的銷售成長？

Sure, Dave. Look, what we have provided in the remarks, a strong growth in laundry and cleaning behind very strong growth in Mexico. So we have acquired new businesses in our Mexico business, and that is driving a lot of this growth. And then when you think about, I mean, we had high single-digit growth in Colombia.

當然，戴夫。看，我們在評論中提供了墨西哥強勁增長背後的洗衣和清潔業務的強勁增長。因此，我們在墨西哥業務中收購了新業務，這在很大程度上推動了這一成長。然後當你想到時，我的意思是，我們在哥倫比亞實現了高個位數成長。

We had very strong growth in Brazil. We had a strong growth in North America in many of the end markets. So we are very pleased with the 5% volume growth in Surfactant despite the double-digit Ag impact because of destocking. So Surfactant volumes are pretty strong across the board. Actually, Europe is also growing volumes, a more competitive environment there on pricing, but volumes are growing.

我們在巴西的成長非常強勁。我們在北美的許多終端市場都實現了強勁成長。因此，我們對錶面活性劑 5% 的銷售成長感到非常滿意，儘管由於去庫存而對 Ag 產生了兩位數的影響。因此，表面活性劑的銷售量總體上相當強勁。事實上，歐洲的銷售量也在成長，那裡的定價環境更具競爭力，但銷售仍在成長。

And David, I would just add, as we went through 2023 and saw the destocking that was general across all geographies, all end use markets, the recovery I would characterize as a similar reversal of that. It's not isolated. The only thing that's isolated right now is sg. But as you think about distribution, laundry and cleaning, construction, we're seeing it kind of across the board.

大衛，我想補充一點，當我們經歷 2023 年時，我們看到了所有地區、所有最終用途市場普遍出現的去庫存現象，我將這種復甦描述為類似的逆轉。它不是孤立的。現在唯一孤立的是sg。但當你想到配送、洗衣和清潔、建築時，我們會看到這種情況是全面的。

Yes. We're very pleased with the numbers in distribution because these distributors touch thousands of customers and we're seeing a strong double-digit growth and having a strong double-digit growth in a set of thousands of customers is a good indication that the market is strong.

是的。我們對分銷數字非常滿意，因為這些分銷商接觸了數千名客戶，我們看到了強勁的兩位數增長，而數千名客戶的強勁兩位數增長很好地表明了市場很強大。

Understood. Very helpful. And then just looking at your taxes, I know you've mentioned that you're expecting a higher tax impact for 2024. Just trying to put a finger in the wind. Is Q2 tax rate kind of a catch up from Q1 being normalized? Or is it reasonable to use the Q2 tax rate as kind of a run rate for the remainder of the year?

明白了。非常有幫助。然後看看您的稅收，我知道您提到您預計 2024 年的稅收影響會更高。只是想把一根手指放在風中。第二季的稅率是否比第一季的正常化有所趕上？或者使用第二季稅率作為今年剩餘時間的運行稅率是否合理？

Yes. Look, our guidance right now for the year is similar to what we had before, 36% to 38% effective tax rate. It's going to have some fluctuations by quarter, depends on the discrete items that you have in each quarter. But again, let me remind you guys, 36% to 38% is the P&L rate.

是的。看，我們今年的指導方針與我們之前的指導方針相似，有效稅率為 36% 至 38%。每個季度都會有一些波動，具體取決於每個季度擁有的離散項目。但我再次提醒大家，36%到38%是損益率。

We are not going to pay any. If we apply at the end of the year the bonus depreciation of Pasadena asset, actually on a cash basis we're not paying any taxes. And we will return next year to the normal effective tax rate. This is just a P&L non cash number in the ETR. Use the 36% to 38% guidance that we have.

我們不會支付任何費用。如果我們在年底應用帕薩迪納資產的紅利折舊，實際上在現金基礎上我們不需要繳納任何稅款。明年我們將恢復正常的有效稅率。這只是 ETR 中的損益非現金數字。使用我們提供的 36% 至 38% 指導。

That's very helpful. I'll get back in queue. Thank you.

這非常有幫助。我會回到隊列中。謝謝。

(Operator Instructions)

（操作員說明）

David Silver, CL King and Associates.

David Silver，CL King 及其同事。

Good morning. This is Kevin Holder on for Dave Silver this morning. Hi. So my first question is related to the Millsdale facility and insurance recoveries regarding the disruptions. So do you guys expect to have any insurance recoveries from, I guess, the flood event and prior disruptions over the next few quarters at the from the Millsdale facility?

早安.我是凱文霍爾德 (Kevin Holder)，今天早上替戴夫西爾弗 (Dave Silver) 發言。你好。所以我的第一個問題與米爾斯代爾設施和中斷的保險賠償有關。那麼，我想你們是否希望從米爾斯代爾工廠未來幾季的洪水事件和先前的中斷中獲得保險賠償？

No. This is expense that we're taking on a quarterly basis. As we said in the comments, we believe the improvements that we've made to date through the first half of the year give us strong confidence that our expenses in the second half will be substantially lower, but nothing related to insurance.

不。這是我們每季承擔的費用。正如我們在評論中所說，我們相信上半年迄今所取得的改進使我們堅信下半年的費用將大幅降低，但與保險無關。

Thank you, that's very helpful. And then my next question is more your strategy and goals in the pre-pandemic period versus the post pandemic period. So if you could please highlight two or three like high priority goals in the pre-pandemic period, and what your current progress is with those goals post pandemic? And you’re in the future how you plan to achieve those goals going forward?

謝謝，這非常有幫助。然後我的下一個問題更多的是您在大流行前和大流行後時期的策略和目標。那麼，請您強調一下大流行前時期的兩三個類似的高度優先目標，以及大流行後這些目標目前的進展如何？未來您打算如何實現這些目標？

Are you referring to 2020 as kind of your timeframe prior to 2020 and then since 2020?

您所說的 2020 年是指 2020 年之前還是 2020 年後的時間範圍？

So prior to 2020 and then since 2020, yes, please.

所以，請在 2020 年之前和 2020 年之後。

In terms of our strategy, our strategy -- our core strategy really has not changed. It remains the continued diversification and acquisition of new customers within the our surfactant business, which is all about continuing to diversify and grow in ag and oilfield and construction and with our Tier 2, Tier 3 customers.

就我們的策略而言，我們的策略—我們的核心策略確實沒有改變。我們的界面活性劑業務仍然是持續多元化和收購新客戶，這一切都是為了在農業、油田和建築業以及我們的二級、三級客戶中繼續多元化和成長。

The impact of the pandemic had no impact on that strategy whatsoever, and I would say also as it relates to our rigid polyol franchise, energy efficiency driven by building code mandates around the world still remains as strong or even stronger now than it was pre-pandemic. So I don't see any impact from our strategy from the pandemic.

The impact of the pandemic had no impact on that strategy whatsoever, and I would say also as it relates to our rigid polyol franchise, energy efficiency driven by building code mandates around the world still remains as strong or even stronger now than it was pre-大流行.因此，我認為我們的策略不會受到這場流行病的任何影響。

Awesome. Thank you. That's all for me. I'll hop back in the queue. Thank you.

驚人的。謝謝。這就是我的全部。我會跳回到隊列中。謝謝。

Thank you.

謝謝。

Thank you. I'm showing no further questions at this time. I'd now like to turn it back to Scott Behrens for closing remarks.

謝謝。我目前沒有提出任何進一步的問題。現在我想請史考特·貝倫斯做結束語。

Thank you very much for joining us on today's call. We appreciate your interest and ownership in Stepan Company, and please have a great day.

非常感謝您參加今天的電話會議。我們感謝您對 Stepan 公司的興趣和所有權，並祝您有個愉快的一天。

Thank you for your participation in today’s conference. This does conclude the program. You may now disconnect.

感謝您參加今天的會議。這確實結束了該程式。您現在可以斷開連線。