NORTHBROOK, Ill. - Stepan Company (NYSE: NYSE:SCL), a global manufacturer of specialty and intermediate chemicals, announced today the appointment of Luis E. Rojo as the new President and Chief Executive Officer, also joining the Board of Directors with immediate effect.
The leadership change comes as Scott R. Behrens departs after a 31-year tenure with Stepan to explore other opportunities. F. Quinn Stepan, Jr., Chairman of the Board, expressed gratitude for Behrens' contributions to the company's growth and diversification, particularly in R&D, sales, marketing, and leadership roles.
Rojo, who has been with Stepan since April 2018 as Vice President and Chief Financial Officer, brings over two decades of experience from his time at Procter & Gamble Co. His promotion reflects Stepan's focus on long-term strategic value for shareholders. F. Quinn Stepan, Jr. praised Rojo's comprehensive business understanding, strategic and financial acumen, and commitment to operational excellence.
In his statement, Rojo expressed his commitment to driving profitable growth through customer-centric innovation and operational excellence. He also emphasized his dedication to creating value for shareholders.
In conjunction with Rojo's promotion, Stepan has appointed Samuel S. Hinrichsen as Vice President and Interim Chief Financial Officer. The company is conducting a comprehensive search for a permanent CFO.
Stepan Company, headquartered in Northbrook, Illinois, is recognized for its production of surfactants, key ingredients in cleaning and disinfection products, and its supply of polyurethane polyols for thermal insulation and CASE industries. The company operates a network of production facilities across the Americas, Europe, and Asia.
This leadership transition is based on a press release statement issued by Stepan Company. The company's forward-looking statements involve risks and uncertainties, and actual results may differ materially from those projected. Stepan Company has not committed to updating any forward-looking statements following the date of the press release.
In other recent news, Stepan Company has reported several significant developments. The company has amended its existing credit agreements with New York Life and Prudential, increasing its borrowing capacity to $175 million and $225 million respectively, and extending the issuance period end date to August 27, 2027. This move offers Stepan extended flexibility to manage its debt and finance its operations or potential expansions.
In addition, Stepan has reported a 4% rise in adjusted EBITDA to $47.7 million in its Q2 2024 earnings call, along with an equal increase in global sales volume. The Surfactants division demonstrated double-digit volume growth, counterbalancing weaker agricultural volumes in North America and Europe. The company also disclosed a criminal social engineering scheme but anticipates a limited impact on its business.
Furthermore, Stepan is on track to meet its $50 million cost reduction target for 2024 and has announced a quarterly dividend of $0.375 per share. The company's new alkoxylation production facility in Pasadena, Texas is nearing completion and is expected to commence operations in the fourth quarter. These developments highlight the company's ongoing resilience and strategic growth, particularly in its Surfactant and Rigid Polyol segments.
InvestingPro Insights
As Stepan Company (NYSE: SCL) undergoes this significant leadership transition, investors may find additional context from InvestingPro's data and tips particularly relevant.
One of the most notable InvestingPro Tips is that Stepan has raised its dividend for 53 consecutive years, demonstrating a strong commitment to shareholder returns. This aligns with Luis E. Rojo's stated dedication to creating value for shareholders in his new role as CEO. The company's dividend yield stands at 2.06%, with a dividend growth of 2.74% over the last twelve months.
However, investors should note that Stepan is currently trading at a high earnings multiple, with a P/E ratio of 47.55. This valuation metric suggests that the market has high expectations for the company's future performance under its new leadership.
From a financial perspective, Stepan's revenue for the last twelve months as of Q2 2023 was $2,202.18 million, with a gross profit of $277.47 million. The company's gross profit margin of 12.6% aligns with the InvestingPro Tip indicating that Stepan suffers from weak gross profit margins. This could be an area for the new CEO to focus on improving.
It's worth noting that InvestingPro offers 8 additional tips for Stepan Company, providing a more comprehensive analysis for investors interested in deeper insights.
As Stepan navigates this leadership change, these financial metrics and insights from InvestingPro could prove valuable for stakeholders monitoring the company's performance and strategic direction under its new CEO.
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