Delivered 6% adjusted EBITDA growth in 2025 despite unprecedented raw material inflation, tariff impacts, and a challenging chemical sector macro environment.

Performance was driven by disciplined pricing and favorable mix in crop productivity, oilfield, and specialty products, which offset softer demand in global consumer surfactants.

Successfully commissioned the Pasadena alkoxylation facility, marking a transition from a heavy investment phase to an operational ramp-up period.

Surfactant margins faced significant second-half pressure due to a lag in passing through elevated oleochemical costs, specifically the spike in coconut oil prices.

Polymers growth of 11% was supported by strong volume in North American and Asian rigid polyols, despite competitive pricing pressures from lower raw material pass-throughs.

Management prioritized balance sheet health, reducing the net leverage ratio from 2.8x to 2.5x through disciplined working capital management and positive free cash flow generation.

Project Catalyst aims to deliver $100 million in pretax savings over two years, with $60 million expected in 2026 to offset persistent 3% plus inflation in fixed costs.

The Pasadena facility is projected to reach 70% to 80% utilization in 2026, achieving full utilization by 2027 as volume shifts from less efficient sites.

Management expects a back-half weighted 2026 performance as oleochemical cost relief and structural savings from footprint optimization materialize in the second half.

Q1 2026 results are expected to include a $6 million EBITDA headwind due to historic U.S. winter weather impacting production absorption and construction-related demand.

Capital expenditure is guided to a lower range of $105 million to $115 million for 2026, reflecting a shift toward sustaining capital and targeted growth projects post-Pasadena.

Announced the closure of the Fieldsboro, New Jersey site and decommissioning of select assets at Millsdale and Stalybridge to address declining commodity surfactant demand.

Exiting a low-margin, high-capital organics business in the U.K. to improve overall Return on Invested Capital (ROIC).

Acknowledged ongoing volatility in global tariff policies, noting that 2025 results were negatively impacted by unforecasted tariff costs.

The 58th consecutive annual dividend increase underscores management's commitment to shareholder returns despite the current restructuring phase.

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Management clarified that the closing sites were not necessarily losing money, but the consolidation is required to improve utilization at more modern, cost-efficient sites like Pasadena.

The move targets specific chemistries including AOS, ether sulfates, and lauryl alcohol ethoxylates where the company maintains excess growth capacity.

The spread between coconut oil (CNO) and palm kernel oil (PKO) is normalizing toward historical levels of $130 to $150 per metric ton.

Due to long supply chains from Asia and high inventory levels, the P&L benefit of lower raw material costs will not be fully realized until the second half of 2026.

The program includes investments in automation and systems specifically designed to make it easier for smaller customers to engage with Stepan.

Management expects growth in this segment to accelerate beyond the mid-single digits achieved in 2025 due to these organizational effectiveness gains.

Management confirmed consumers are trading down in personal care and cleaning categories.

The strategy to counter this involves focusing on sulfate-free technologies and expanding the Tier 2/Tier 3 customer base to capture shifting market share.

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