Illinois, US – Income at Stepan in 2022 was up by a healthy 18% from the previous year, at $2733m compared with $2346m in 2021. This was despite a decline in total sales volume of 7% during the year, driven by a 12% drop in the first half of the year.
Sales in its polymers business were up 11%, from $731.4m to $789.1m. Operating income for this part of the business was up by 13%. The global sales volume decline of 7% mirrors the situation in the business overall. In polymers, this reflects customers destocking and lower construction-related activities, particularly in the second half of the year.
Indeed, in the fourth quarter, polymer operating income was down sharply on the same quarter in the previous year, down from $12.9m to just $3.0m. The company attributed the decrease to a 23% decline in global sales volume, including a 21% drop for rigid polyols. Selling prices in the quarter were up by 14%, primarily as a result of higher raw material and input costs being passed on to customers.
“The company delivered record full year earnings in 2022 despite significant inflation across many cost elements, supply chain challenges, a slowdown in demand across most end-use markets and customer destocking efforts during the second half of the year,” said Scott Behrens, the company’s president and CEO.
He added that the company believes 2023 will continue to be challenging, with high inflation and interest rates having an impact. “We believe this macro environment could negatively impact consumer demand and construction-related activity,” he said. “We are seeking to partially offset these 2023 headwinds with productivity improvements, pricing increases where possible, and furthering our efforts to improve product and customer mix.”