Stepan Company reported a 45% year-over-year increase in second-quarter EBITDA as its two-year cost-reduction initiative began delivering tangible results, executives said Thursday during the 17th Annual Midwest IDEAS Conference.
The company’s Project Catalyst program, launched in 2024, targets $100 million in total savings, with 60% allocated to 2026 and the remainder to 2027. By the end of June, roughly $18 million to $20 million of the targeted $25 million in quarterly savings had already materialized, supporting margin expansion. Net leverage improved from 3.0x to 2.5x, while organic volume rose 6% compared with the same period last year.
Capital expenditures are expected to normalize within a range of $100 million to $110 million annually. Working capital consumed $58 million during the quarter, partly due to customers pulling forward purchases to secure materials, contributing an estimated $5 million to $10 million to second-quarter EBITDA.
The company’s surfactants segment, which accounts for about 70% of sales and 60% of EBITDA, remains its largest business line. Within surfactants, commodity products represent 52% of volume and 43% of net sales but only 20% of EBITDA, while priority segments—including non-commodity surfactants, oil field services, agriculture, and tier-2/tier-3 customers—now generate approximately 75% of total EBITDA. The rigid foam and spray foam business within polymers tripled during the quarter, reflecting strong demand in construction-related applications.
Oil field services grew at a high single-digit rate in Q2, supported by crude prices that averaged between $80 and over $100 per barrel. Stepan operates 19 facilities across 11 countries and employs 230 scientists across 14 application centers globally. The company launched 41 new products in the past year, with roughly 10% of annual sales derived from recent innovations.
Stepan closed its legacy New Jersey unit at the end of the first quarter and is consolidating operations in Illinois and the United Kingdom as part of a geographic footprint optimization. Its alkylation plant in Pasadena, Texas, is targeting an 80% average utilization rate by year-end. The company’s Houston laboratory, staffed by nine scientists, focuses on oil field applications.
Shares of Stepan were down 0.25% at $62.65 in after-hours trading on August 28, 2026.
