SCL - Earnings call transcript Q1 2021

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Operator

Greetings and welcome to the Stepan Company, Q1 2021 Earnings Conference Call.

During the presentation all participants will be in listen-only mode. [Operator Instructions].

As a reminder, this conference is being recorded Tuesday, April 27 2021. I would now like to turn the conference over to Luis Rojo, Vice President and Chief Financial Officer. ahead. go Please

Luis Rojo

thank financial And Stepan first Company's Good you XXXX review. quarter morning. for

Commission begin, Securities online information joining limited regional And as facts. encourage these factors at Before call make of are the note materially, when global hope have presentation, the could you please we that section and to to or results is We time for and statements, risk uncertainties in find filings. differ are you that available us over detailed our which slides cause involve and earnings release phone, operations, actual available contains but Whether in and review the www.stepan.com which made not prospect you we statements economic slide historical Investor not Exchange information conditions These website. including, we under and at our the the that to issued. perspective approximately forward-looking investor our conference same this we helpful. foreign the

with to call Quinn to Mr. and turn our Officer. I like Chairman Now over Stepan, Chief the Executive would that,

Quinn Stepan

Thank you, for us. all thank Luis. And Good you joining morning.

the cleaning, have supply As continue be to that to the our out hope personal rolled step remain across your had safe customers and and families market. stay and part supporting essential we committed to doing vaccines and wash and that had are you to chance will by a country, vaccinated disinfection you products healthy. We

us Officer, years. results, the at a President our who our Stepan been XX for be like Behrens, joining key new Scott has we introduce Chief I to would today. leader discuss Operating Scott past will and Before

Adjusted had was year our our value delivered shareholders. this and Scott's and million, $XX.X Millsdale and the company income will last up he pleased at a $X.XX the contributions Company Scott. his to net $X.XX the the share about outage or impact for of The Welcome quarterly success are for promotion We have financial per role all talents diluted from ever good he our brings record start and you recognize with to share, The the excited on are our income. when best had $XX.X power facility. we XX% quarter or million, diluted to had. company has year, per to

income the was due up primarily improve quarter, mix. to product operating Surfactant customer XX%, For and

Polymer in growth business the was XX% Our volume our up volume rebound growth global by was growth. and business. of driven a PA strength market organic acquisition, on Polymer XXX% the sales INVISTA

down line. Our business margins specialty were product results within our due product to lower MCT

you common more Our walk quarterly cash of Board a on will Stepan's June XX of share, XXXX. consecutive Stepan first for results. details declared years. a payable Luis, has per about our increased stock dividend on dividend its Directors $X.XXX few quarter XX through

Luis Rojo

Thank generally you, Quinn. follow the slide presentation. My comments will

per diluted with share, Slide four two $X.XX measure, for of appendix million, in can a quarter of first increase be and measures, or we quarter. the share presentation a is two quarter Adjusted started or in XXXX XX% the adjusted the XXXX. GAAP this found reconciliations release. income net and comparable full the the non-GAAP to Because table press versus net $X.XX Let's of at per million, the was first record $XX.X diluted to $XX.X recap income provide of

Slide the last share, net compensation plan, deferred compensation the the settled for $X.X price, cash $X.XX million diluted adjustment quarter deferred the restructuring from change the we our compared operational compensation as for exclude or this earnings with Specifically $X.X this numbers bridge the year income, or for to minor discussion. in figured million, of diluted related the period Company's deferred rights year. and is to expense first the net down of and deferred in quarter item shows reported stock increase breaks some represent income on Adjusted to $X.XX first as net well expense income net consists net after-tax our stock Because these income. company's income per deferred excludes employees. adjusted the as in compensation per of to Compared compensation five adjustment share quarter. this they Because an cents movement The expenses. for liabilities last noted quarter here total appreciation same basis.

and segment related higher the were expenses We significantly, summarize, detail. But Surfactant quarter. prior and others versus year. acquisition XX.X% to more while income. tax attributable up the a company's increase compensation. in quarter. each year compared rate was favorable expenses was the Products quarter were slightly and The during to down will in Polymers Specialty to geographical all Corporate cover were Due XX.X% primarily effective to first of year-over-year incentives-based higher prior less This mix the the

measures six, demand be Slide America oilfield prior material path our North functional expect XX%. segment our an on and by consumer principally product were through product customer market, effective in into was to end suppliers for improved North to Selling the the product Surfactant primarily increased prices products volume or sales million, expenses income with XX% volumes range XX% supply and the end million, quarter. consumer non-recurrence for digits. following XXXX of net chain volumes The $XX force America were We versus improved volume to an operating Consumer mix. the to of the and prior up improved increase America XX% full and North and volume flat Millsdale plant in results were was primarily the single customer product due results of sales Mexico and a versus offset increases digit. power for lower customer lower agriculture, to an severe to the outage outside primarily up also increase The product improve tax versus due results Europe low mix. quarter mix. an America Surfactant customer Volume and was the and products product higher Texas. higher improved reduction mix to sold focus $XXX North grew year. in weather mix the raw year. year. product was prior was customer market. the due product Surfactant and due Brazil Higher in rate year the slightly costs. single high by driven year. prior XX% increase results due into up,

X%. growth due U.S. net sales by and $XX America Polymers XXXX XX% due higher operating volume on in current in Global power rigid in polyol seven. in the chain increased or polyols. volume of expenses growth the up due quarter Europe to sales lower were and rigid sales increased to double supply increased positively dollar the in quarter. lower the Total supply growth polyol, due in a XX% $XXX from excluding increased chain digit versus Net turning significantly sales volumes North prior Now year to primarily of to Millsdale for quarter. XX% outage. impacted prices the primarily million prior year non-recurrence million rigid quarter, Slide base due prior acquisition given due X% up INVISTA expenses weaker Millsdale Primarily the and acquisition. year. volumes, was QX the weak Polymer XXX%. strong X% income polyols volume increased Volume the to Selling to power impact outage results the the to year. translation PA INVISTA the to results plant due increased

line the grew Latin Asia in America margins year, product quarters double million. strong Asia QX in Product sales in operating material giving within income due quarter, versus volume our Specialty MCT slightly attributable prior and extra one-time Polymers Sales line, XXXX. and higher decreases with income were was net Volume raw million lower up X% cost result for was The year. decrease prior primarily prices. to $XX to a the declined digit. between operating $X.X

sheet on strong and Slide a Moving to liquidity eight, balance ample the we have invest our in business. to remains

and leverage continues XXXX. by a was We from to total in which ratios you working experienced million quarter XXXX, Beginning will CapEx the first Scott the reduction quarter. incentive-based $XXX in was cash payments. for $XXX Company of strategic had XXXX acquisition requirements, the for XX, on investments, The higher Our first our now strong update solid interest and dividends levels. from at cash typical of million quarter first also very Slide INVISTA compensation the driven which is operations capital on coverage used The priorities.

Scott Behrens

pleased team has you, to to the am joining generating Thank look I Luis. shareholders. for continuing our and success call contribute our earnings to forward had be to our

As up the we will business we remain strong. believe our of quarter first XXXX, wrap

We deliver fight products continue the our against we safety of employees to that contribute the to health and prioritize COVID-XX. as

the consumer and in Europe material the to offset product customers U.S. Core markets changing raw remain cleaning Latin virus sustained to allow provide lower higher America weather product growth public wash a Texas their formulations to pandemic. in kill and biocide use Surfactant causes Our and and and to in families the EPA end incident. demand of products. and cleaning the disinfection, personal drove novel of as lines additional habits disruptions We with protect consumer result volume strong, by volume the disinfecting due related our COVID-XX fight believe that specific the should approved tools

are from in ensure certain to requirements biocides we higher amphoterics, can lines including and We product anticipated increasing capacity customers. meet our

capacity to produce American X,X North Sulfates. increasing also are and low We capability Dioxane

surfactants, in passed York primary will a in project in consumer sulfates reduced manufacture requirements. the require will capital forecast additional equipment X,X products. and products expenditure X of to on be either that $XXX is generated foaming in regulations Through to the Dioxane As driver previously of either This million the $XXX ingredients optimization our sulfates supply manufacturing XXXX. of Dioxane of New consumer regulatory key explained, prepared is new process million. X,X byproduct meet January XXXX a combination by Stepan recent cleaning increased levels shelf of are which minor and customers

deliver strategy. first by in with X a and penetration, We increased We grew financial quarter. and are the projects Tier during our be targets. customers Tier customer our Tier to continue of customers our X customers the ensure X quarter, Tier return XXX these adding focus X working to new volume X% and

diversification Our markets to for strategy key continues be into Stepan. priority a functional

during was products fully $XX quarter, going oil Polymers in is the as benefits basis pesticide the demand. focus double obtained commitments beyond. gradually we as level. opportunities of to world. back to expect recovered Oilfield for to committed quarter per is We first to to delayed our COVID to post times. with segment and deliver in well, after X.X to higher the coming increased The agricultural INVISTA prospects business implementation future and stringent should both volume a strong XXXX. productivity conservation expect the on volumes growth optimistic remain global in have and XXXX attractive about margins and accretive remain on the to and Millsdale Work the across allow project to COVID-XX X.X has at see codes the due internal business The We gains The synergy between related a on to productivity market had remain opportunities. delivering barrel on expects polyol company. as begun the efforts project up the increase now oil EPS due team new long-term acquisition energy prices is company this throughout EBITDA the During restrictions. and post We prices. integration digits in year eight launched business, good patent to The our more be building we and challenging be multiple XXXX. a expected

deliver is Stepan February plant a in fermentation in XXXX. also years. We for knowledge development technology technology company new Lake surfactants. are located Louisiana acquisition run part following of Bio-Surfactant generation rate The two our a within XXXX. to chemistry in full of further of has Stepan's and excited fermentation expect NatSurFact of about next acquired the This surfactant synergies Providence, of as acquisition we strong platform

to manufacture to to We As portfolio, downstream technology customers and our fermentation look capabilities to continue additional including require Louisiana key support process functional our applications. plant scale product customers attributes, world The target will performance processing. product both while optimize will product provide consumer investment but achieve maintaining in sustainability goals,

chemistries. to continue will fill the pursue closing comments. we to will new opportunities turn acquisition platform and in I portfolio add identify back our to call for the Given strength now balance and of Quinn? Quinn our sheet, gaps to

Quinn Stepan

ever. Scott. you, Thank best completed just company The quarter its

business should surfactants increases, Global cautiously portion will our strong our and believe prepared products. results and versus consumer and XXXX. the within construction Product business INVISTA's recovery we forward, a delays as our and remain we prior of [Operator raw This would year. to experiencing XXXX quarter related concludes instructions improve remarks. questions. new for This Instructions]. to and product please Looking demand over agricultural recover anticipate of first year-over-year. for We optimistic projects. this about the for position year. polyol versus After aromatic with are turn combined of the business the for in record acquisition anticipate first result for deliver polymer we markets the price quarter, remainder growth Specialty surfactant cancellation review should time our polyols material pandemic despite call a continued the call. of We today's disinfection, oilfield question At like demand improve demand volumes will strong Daisy, slightly our gradual the from significant heightened rigid personal continues reroofing to markets that cleaning polyester wash and of

line question first proceed question. Stifel. with to of Vincent with Please Anderson comes your Our

Vincent Anderson

on quarter. morning, gentlemen. Good Nice job the

Quinn Stepan

morning, Good Vincent.

Vincent Anderson

seasonality we the we think just But about construction year How in this synergy during year? to cadence your being So the margin INVISTA should normally, window. the polymer months the see some peak good the early the outages, between in margins. supplier start

Quinn Stepan

to the in you America. market, would more the prior that significant of at year. price in material we'll recapture increases and take a as in we with do in our particularly If trying XXXX margins look far North some the of we've have be that prices material looking we're continues. the increases I margins are price polymer experienced increase versus so down that year our announced raw to - to And raw say

Vincent Anderson

through the more raw quarter? was Where on once the impacted again? this discussions for materials, was for impact following ago mix have just availability? to already bit have price you that Or just to price products you All in supply And what right. margins margins, initiatives regard what year start there going Thank Surfactant bit to you. lag? material precisely you back, little us is been And put Millsdale, raw impact help little a frame can to remind a the able be with on by you price then then a of that

Luis Rojo

about me comparisons Hi, Vince, I take hard you bit know that let happened little more with some one last give year. in bit QX little a me and But between Scott a first come Because the pricing. perspective everything let about the XXXX. it's

the if If around at growth you the exclude had net the look XX% growth. that event a we on income, and is more you from on XX% Millsdale base EPS,

you both our and Millsdale as surfactants So facility. polymers know, in we produce

that businesses with by both in impacted we forced were had. costs, XXXX higher So QX year the

the tax. little can year So than saying growth costs XX%. $XX the my point I'm a was will million true comparison is, that in we of you million, last QX a roughly call it bit mentioned more be that's after why $XX And

Scott Behrens

better higher I think related and in surfactant of Because versus demand margins XXXX. of quarter-over-quarter, product in the pricing, three our we've versus portfolio had month COVID XXXX. one in months terms QX Vince to mix was

price mid material of terms raw to we In inflation, increases, started see QX.

actions taken try in already QX. inflation, seeing we'll we've our continue recover business to are and surfactant So the and see we in to

Quinn Stepan

higher from And are customer make Tier from mix our X and agricultural and initiative, and we progress the Tier sales benefiting perspective, mix in space. customer X oilfield to a continue product in

Vincent Anderson

the in I could fermentation around Thanks great. all If for All business. right, quick color the a sneak there.

that roles? to have added the additional easily production of portfolios? segregate ramp product independent more And you were that is to lines asset being in how going curiosity, does you then if terms how purchased in fermentation of acquire staffing First, able up them of some second terms that specialized many

Quinn Stepan

where So let's we start in with process. the are the development

the in at and this do in is We of schooled working phase have the are process We staff point, R&D optimization on educated that fermentation. itself. fermentation

pilot with So being development outside perspective help scale, is for technology runs. that experimental inside a from done

our of individual we're to are could will the But portfolio entail, trains there be future to manufacturing up product for Louisiana, at Lake four independent that be what and In in production. determined. looking Providence, terms commissioned that's site

Vincent Anderson

Alright, great. everyone. Thanks,

Operator

comes Our with proceed Global with next Seaport Securities. of Harrison, question Mike line question. Please your

Mike Harrison

morning. let congratulations me And the strong my on year. start add Hi, a good to

Quinn Stepan

Good Mike. morning. you, Thank

Mike Harrison

but figure to do of did or about you demand QX enhanced Wanted comps capacity about bit elevated second pandemic? us when what in is think the we quarter come much saw ago, pre quarter, better months. some your we trying kind you the the than you're mix versus COVID little into think back how to today out how talk past the about the question sustainably those that disinfection demand that the way benefits how any we're Maybe maybe from this has in and as can the understand, demand a XX seeing this different it we head to in XX see like for what cleaning business is higher help I looks products maybe months changed today was

Quinn Stepan

we an year our base But last our products. relative as at our of products, and disinfectant capacities. in So or to ask surfactant saw cleaning growth for kind our you more, some quite business we questions year, frankly, - the our core X% look in

our product efficiency some lean existing about a to from capacity amphoteric we continue plants, Mexico. manufacturing we've gains, in increase a we've capabilities lines, that and From and for our experience. to added we new that our significantly talk apply line, reactor and product will our in have been are growth which part so for efficiency of So able assets, big have perspective, biocidal we amphoteric the tools to

point support to capacity the market in sufficient have at we time. think this we So growth

Luis Rojo

also weather the of we incident I the will our in talk thing in add impact prepared that Mike, the remarks, Texas. is, we only Yes, about

- just just that event. also impact these of the are the how an need on weeks to months. evolve that and But We industry whole everything and we sold. coming So coming had is in see materials or out following raw

Quinn Stepan

industrial And customers cleaning from it there are opportunities. We saying the then goes we demand the part market is that believe market they consumer are question recently and telling enhanced COVID may to forward. who customers our other maybe of go have about sustainable Because related But decline by markets. as on is washing and believe the cleaning see sustained in our habits those is, comment been some be talking where as institutional of be one in forward. standards changed, you that And going what Scott, to individuals that want you. we offset your that and

Scott Behrens

Yes, around the they is industry reopened that public places. these hospitality their the so themselves of trying going as economies can believe, restore a safe to be I and to world, confidence in or lot public families

cleaning big be should reopening the visible part of So a economy's the world. around

Xam, at cleaning the than rather could And we in the see for our disinfection the cleaning So cleaning habits visible boost more crews, business. nobody's lobby, when a that doing in expect and forum. to provide public

Luis Rojo

I to in not we the When future, Yes, offset or is customers And cleaning economy that's that have we mean, protocols have that impact piece the the believe I demand it think a you of consumer. changed. past, reopen. in about think restaurants, all going we'll all And in our right. the all all, when those these that as be how see more cleaning protocols hospitals, industries, airplanes, Mike, think all the you talked about schools, there

Mike Harrison

to sense. Maybe frame impact makes the supply of disruptions. help just the up that Understood

X% demand. doesn't get flow or X% disruptions about it, demand U.S. a through, QX? up bit. like we QX your in may maybe down in you American should America, that it lost or we little that was North does mentioned that business or digits, supply single the way And North get have low your the think Is impact business how does that think outside U.S. just is as up and the sounds on where made I a like get into maybe gone that consumer or

Quinn Stepan

little out bit. So, Mike, me let a help you

business. operating for impact North $X to primarily is for the think million I surfactants commodities million our and in North income our $X American impact surfactant American probably

Luis Rojo

weather And got and North saw North of our We because all Mike. issue. totally low points right, outside your you down digit growth the other consumer business American America single was

Mike Harrison

it the well then products question it the and was positioning. which but your as strong, on is Alright, new sounded that last like seems like really as is business, you're this Ag introducing

on call the maybe was more I out think business? Can a in America. last as a feeling year going Stepan there as maybe it you on Ag little better how you're much Asia, North when color particularly more in bit you market driven give there than about some destocking

Scott Behrens

Mike, starting the soybeans and commodity Yes, last corn are months. have doubled off, prices, XX almost over

anticipation a strong that a significantly up. be basis global there's on will the planting So

for preparing for are customers So that pesticides. demand increased

I impacts regions. it's through growth Ag so Northern in to that far, And, those the in see think nice so we So volume in of planting here XXXX. growth Hemisphere, get expect business we to showing And We have businesses recovery good seen after seasons good. but oilfield all and strong in to good our to the got even our both the continue.

Mike Harrison

All very thanks much. right,

Quinn Stepan

Thanks, Mike.

Operator

comes Marco with question Stonegate Markets. with next Rodriguez of Please your Our question. Capital line from proceed

Marco Rodriguez

everybody. Good questions. Thank my for morning, you taking

Quinn Stepan

Marco. morning, Good

Marco Rodriguez

And that the you wondering sort specifics of provide efforts of frame bit might at sit could maybe also about integration a the you then us. you mentioned kind if about can opportunity be where to acquisition as debottlenecking date? any was talk more if maybe discuss little far bit little as if with you able there could you a maybe INVISTA, I you timelines the that

Quinn Stepan

two locations that global a people staff We acquiring integration, what up ended polyester relatively that many actively small relatively facilities Stepan or million to with you just everybody, So the R&D remind I on small well. in commercial from people R&D on the polyol basis. purchased we a aromatic would about business have working $XXX and as been tell

decade underutilized. to the North got The site have And for and have can raw sites. working continuity we've America issues, sites at site our we we've with be assets. customers. provide America efficiently. our well, of then time customers to that, activity business support supplied and very from anticipate that'll North we INVISTA move already for provide perspective, products. forth or that a material So products his is or will in legacy utilize some and technology occur that those next done in for had capacity the some of significantly people think relatively technologies And new to at two company. capabilities between effectively market Europe, seen what in back phase site a we've availability initial And, due plants joining that switch both we're and on two relatively will new backup plant and we from is over underutilized excited have we And where we integration QX. then those as some been capabilities in our to today will so already sufficient to And have so, and skills the plants or easy. The growth is is we're legacy seen Stepan period some switching the Stepan What

pleased so far. pretty So, progress the we're with

so base the we our business up polyester up. script, is is polyol excluding encouraged the in is nicely As growing, that rebounded the for the We're said that market profitability far X%. was acquisition,

of indicative that's market So growth.

quarter. next more report we'll good, the in so far, So

Marco Rodriguez

pretty driven year. was well. thank looks it surfactant it Understood, for some very very nice Tier like more you to the has on side, helpful. obviously strong And push here guys X, the last X, strategy growth into you this as quarter Then Tier the

maybe your approaches opportunities might Just changes past and the market can based to at kind sort group? if what this to learned so, any on of be and of looking you've you or or perhaps XX talk to you approaches months sales over how

Quinn Stepan

in Marco, pretty I space, and X, a X been our Tier we've around work range marketing go a been I working, growth in broad strategy with very implementing world. and Tier together, it's it's think, that got after committed strategy, well the the of working marketing And world to very plans distribution we across think put us are really our to we've, well. the partners good sales the

don't change. I any, So, any see real

COVID customer your and customer formulation we more around online, tools engagement digital strategy, questions environment to engagement, if Now technologies our bringing enhancing and related our the offerings. of are product our

some digital doing grounded obvious more content of customers, we're are this bring in to from travel to we time. kind So, modifications point at while

Marco Rodriguez

question of following it. just then last Got kind a up question. prior And quick me on for

passing or if through the I from of to it. raw through ability push in push But terms sure costs, materials, Thank higher not were be there might you share you did or On of to prices that higher a confidence through have level the you. I'm caught it - most able your majority those to able is you the the that to end customer?

Quinn Stepan

good suited shape margins. one, surfactants, bit we're seen we're think today. in And better in I think behind on we're polymer more, Marco, in And little a we've I price polymers there'll be And but announced a think the pretty space. our polymer surfactants increase. that's bit mid why I you've some quarter I think in little and compression

Luis Rojo

pricing. At maximize next goes value a monitoring Stepan. and margins piece end Marco, always months. is And we need the to share creation the the deliver we to material the right for highest try dynamic how this to and very And this raw best weeks continue and in value will

well margins think goes pretty material we that both So the up. when will down materials raw manage or environments we has goes when can company in proved raw I

Scott Behrens

Texas also and our guess freeze across think low inventories the America, inventories chain the to comment in I North supply would I the I many And today. is due are make

inventories to for So we've got Coast as well. start we we building think about season hurricane future, as prepare the the in hurricane U.S. season not-too-distant need coming Gulf

our to level where work back we're some got up inventories to we've a So, do relative comfortable. to getting

Marco Rodriguez

it. the time, I you. Got appreciate Thank guys. really

Quinn Stepan

Thank you.

Operator

line comes question your of Silver, question? CL Please with next proceed Our David King. with

David Silver

you. Thank morning. good Hi,

Quinn Stepan

David. morning, Good

David Silver

call advance. few apologize making yourself to a late, may be minutes going in the unfortunately I I'm joining I repeat so did, you here.

So there's of of improvements. - kind striking a sequential of year-over-year number kind

of to the able Quinn, guessing them. So any couple or having In in a out the the on - rate. as of or kind as hone you a result benefits little quarter the of share revenues you wanted you part million what company? your just words, quarter? call I were that run I above a did call out incremental acquisition the But this business of $XXX were were other this is I'm Polyols was the accretion bit guess to Luis, on there earnings of coke per effect

Luis Rojo

No, didn't the out David, call we INVISTA numbers. specifically

mentioned, even did year, ahead be we to of it's first was And after the accretive, pleased And Quinn is X.X that our As years the with going EPS know, the margins. to two be we we are and $XXX months, of internal acquisition, two to multiple synergies. the accretive as when EBITDA going mentioning, expect And million. we acquisition paid X.X we're we to our first you goals.

there. So you math can some do

Quinn Stepan

what say And the I would and nicely. market target at volume internal And in is our we point is is is, rebounding as growing that of ahead mentioned, this time.

David Silver

that could compare And to maybe robust incremental tick the being costs on high, I the very incrementals that polymers of material certain offsetting income price price about, with seeing, words, great. next very look are other volumes on very, year-over-year. seems some Millsdale the make the I If raw guess related question unusually you're compare comments for I it more I up page and In Delta factors into at are And about surfactants you just the comments and I'm margins and your increases revenue I here? well-fixed line as the being absorbed the that. Okay, like increase. just this earnings the the comments your to guess, how Delta, But, matched quarter, margins. incremental two are some operating on segments, line, is if release, or the

qualitative wrap commentary some Just of just simple extra as profit to far the on math go kind ahead. around as incremental - so the sorry, dollar the

Quinn Stepan

the pointed David, some certainly and at comments, benefit, if I'll facility. will, make expenses you Luis our jump you numbers let of some the quarter qualitative Millsdale out, from comments, with lower in but, I'll the as

to I one first the make. that's So want

QX versus QX versus if The second take we point is that look have, a you XXXX at XXXX.

in also improving X sales And and year-over-year. month, Tier you improved Tier also business and the biocide more have We oilfield we agricultural significantly business. X see then have

mix raw margin customer So costs for improvement product than our of the mix an the product our margin or lines. more absolute have to material and impact commodity

Luis Rojo

QX David, a mentioned big all not before, we know. XXXX apples-to-apples, last event comparison year, think, of as had I a with course, is Yes, I as we

a the by the So growth of the growth our that and and more surfactant customer that mix growth driven exclude you XX% product polymers like if see growth is type you INVISTA and and that business. volume in of acquisition is

that and quarter the you for at close good margins EBITDA presentation, polymers driver And customer see again just reporting, because our low, will course margin, about those think the look of margins because mix. five we're surfactants feel is we seasonally you QX XX% is if the and appendix of is the not see all you product you the there. there If EBITDA to in XX% volume

Quinn Stepan

our is half, strategy, consistent commodity scale, So a of last customers, two you've focus us a has and last over business economies of Tier on the and X what years. over which is heard that couple improved providing surfactants year years the from

that business that allows And those more is assets broad good, more to base growing. specialized also, But strength also customer that's more us mix. position specialty to specialty sell that So us mix. to gives customer products chemicals, a against some leverage

and downs, in for bringing good the about strategy, to and to opportunity the an the our continues surfactant customers. consecutive XX dividends bringing pretty And to strategy mix, that to we the provide pay services business but that there's ups But years. we're feel market capabilities the so that and

David Silver

The Okay, production there the capabilities you mean, internal XX building think, and high head, and And, terms scratched things. pose that other margins favorable? to I is here, redundancy related your your of at, I it ensure was has a and I what to or that maybe accomplish think in just targets. little able less deliveries uncertain, and And to I a But distribution reliable was what or of production then mean, in I that's of Texas you robust that the just priority you the to demand kind supply kind mean, you up and you're I a like mean, hitting talked This months, pandemic question, or supply think, been few chain I kind of the how delivery of with want year, I you your but freeze was in threat kind next guess, hit the be sites. question. view the a something to Thanks. I your there's more that. whole things for of additional work chain, that internally, a and plan locks as additional as over kind of a down severe on current But, do number steps different, River environment? take was production maintaining great. do operations my Illinois very and bit last and guess. I optimize you and look there about, challenge you targets affected of

Quinn Stepan

very year basis, last being take we trying on and themselves I as half our result our make, comment having running and over keep is the because of our some it I plants are have across virtually a we network chain you What and instituted a So in that safe. global at and seriously precautions very, as tell COVID. the difficulty employees a COVID no would keeping chain supply statement up have first a to would our you primarily, result diligent and about supply disruption very a made of

we assets across any of our of So to communities that our reflects in we supply Relative disruptions. - had we reliability our had have live and not work, in have population, COVID assets. which capacity but utilization in the

Our capacity utilization increased. has

seem job. our today that continue chain supply The team earlier, and assets. making have in continually the you, supply always flex less We capacity those we will we're of there's mentioned little we find I within little tell last so of years. had to out existing And little a chain and using more assets, our in bit. I we're bit than squeeze our And bit a as reliability over couple tools, a increase lean productivity we that have network good try is more investments doing to to a

our to needs the have So, and sites on to need us too. money we market we plant reinvest, can spend the need so reliability we that

money it taken, very responsibility is so seriously material a So to company, they plants them maintain extent for the a store priority shelves. to the to It's on your and have make well that it point continue we products is our us the given take and do the those can customers to costs depend on for that.

David Silver

terms meant that Okay, on apologize that. major thanks caused operations. not meaningful fully disruptive I I maybe addressed that in specific - disrupt disruption the basis, your for implied had or to of if a I to effects a challenge continuing be it but pandemic has it today. facilities

me. Thank Okay. color. That's fine. That's appreciate I the it all you. for

Quinn Stepan

Thank you, David.

Operator

Instructions]. [Operator at There further time. questions no are phone this

Quinn Stepan

great Well, you joining your at for safe on We clean appreciate and surfaces us frequently. wash hands healthy, disinfectants all work. a Company. And to Please thank interest you. ownership day. in your Have and today's call. Stepan very your use much homes stay Thank and in

Operator

you ask line. conference That for and disconnect that your call thank We you for today. your does the please conclude participation

Stepan (SCL) 27 Apr 212021 Q1 Earnings call transcript