Stepan Company (SCL) Q3 2026 Earnings Call: EBITDA plus 18 %, Volumen plus 7 %

Wichtigste Erkenntnisse

• Die Stepan Company wies für das 3. Quartal 2026 ein bereinigtes EBITDA von 66,3 Millionen US-Dollar aus, was einem Anstieg von 18 % gegenüber dem Vorjahr entspricht, da organisches Mengenwachstum, die Margenerholung und Einsparungen aus dem Projekt Catalyst höhere Konzernaufwendungen ausglichen.
• Das bereinigte Nettoergebnis stieg um 98 % auf 21,7 Millionen US-Dollar, während das bereinigte verwässerte Ergebnis je Aktie von 0,48 US-Dollar auf 0,94 US-Dollar zulegte. Das ausgewiesene verwässerte Ergebnis je Aktie lag bei 0,78 US-Dollar verglichen mit 0,47 US-Dollar im Vorjahr.
• Das organische Volumen wuchs über alle drei Segmente hinweg um 7 %. Der Bereich Tenside legte um 8 % zu, Polymere stiegen um 3 % und Spezialprodukte verzeichneten ein Plus von 20 %.
• Das Segment Tenside führte das Ergebniswachstum an, wobei das bereinigte EBITDA um 27 % auf 48 Millionen US-Dollar stieg. Preismaßnahmen und vertragliche Weitergabemechanismen glichen höhere Rohstoffkosten aus.
• Der freie Cashflow lag nach Investitionen von 21 Millionen US-Dollar und einem Working-Capital-Aufbau von 32 Millionen US-Dollar bei 8 Millionen US-Dollar. Der Nettoverschuldungsgrad verbesserte sich gegenüber dem Vorjahr von 2,7x auf 2,4x.
• Das Management erwartet für das Gesamtjahr 2026 ein Wachstum des bereinigten EBITDA, einen positiven freien Cashflow und einen fortgesetzten Verschuldungsabbau. Zudem rechnet es für 2026 mit Einsparungen aus dem Projekt Catalyst von etwa 66 Millionen bis 70 Millionen US-Dollar, was über der ursprünglichen 60-%-Etappenmarke des zweijährigen Ziels von 100 Millionen US-Dollar liegt.

Wichtigste Finanzdaten

Die ausgewiesenen Ergebnisse enthielten einen Restrukturierungsaufwand vor Steuern in Höhe von 5,6 Millionen US-Dollar, der sich hauptsächlich auf die Schließung des Standorts Fieldsboro, New Jersey, die Stilllegung ausgewählter Vermögenswerte und den im Juli angekündigten weltweiten Stellenabbau bei angestellten Mitarbeitern bezieht.

Geschäfts- und operative Entwicklung

Tenside

Der Nettoumsatz im Segment Tenside stieg um 15 % auf 487 Millionen US-Dollar. Die Verkaufspreise erhöhten sich um 10 %, das ausgewiesene Volumen wuchs um 3 %, das organische Volumen legte um 8 % zu und Währungseffekte trugen 2 % zum Umsatz bei.

Das organische Wachstum wurde von zweistelligen Zuwächsen bei Konsumgütern (einschließlich Waschmitteln) sowie in den Märkten Bau & Industrie und Ölförderung angeführt. Eine geringere Nachfrage aus dem Bereich Pflanzenschutz schwächte diese Zugewinne teilweise ab.

Das bereinigte EBITDA stieg um 27 % auf 48 Millionen US-Dollar. Nordamerika, Asien und Lateinamerika profitierten von organischem Mengenwachstum, Preisausschöpfung und Margenerholung. Europa lag leicht darunter, da die schwächere Nachfrage im Bereich Pflanzenschutz das Wachstum im Konsumgütermarkt überwog.

Polymere

Der Nettoumsatz im Segment Polymere stieg um 24 % auf 179 Millionen US-Dollar. Die Verkaufspreise kletterten um 22 %, was hauptsächlich die Weitergabe höherer Rohstoffkosten widerspiegelt, während das Volumen um 3 % zulegte.

Das Volumen in Nordamerika wuchs im zweistelligen Bereich, unterstützt durch Hartschaum-Polyole, Phthalsäureanhydrid und weiteres Wachstum bei Sprühschaum. Eine schwächere Nachfrage in Europa und Asien wirkte dem entgegen.

Das bereinigte EBITDA erhöhte sich um 4 % auf 23 Millionen US-Dollar. Das EBITDA in Nordamerika stieg um 3 Millionen US-Dollar, während Europa um 2 Millionen US-Dollar nachgab, was vor allem auf eine behördlich vorgeschriebene Wartungsabschaltung am deutschen Standort zurückzuführen war. Asien lag aufgrund einer schwächeren chinesischen Nachfrage nach Spezialpolyolen geringfügig darunter.

Spezialprodukte

Der Nettoumsatz im Segment Spezialprodukte stieg um 12 % auf 27 Millionen US-Dollar, während das Volumen um 20 % zulegte. Das bereinigte EBITDA wuchs um 5 % auf 11,7 Millionen US-Dollar, angetrieben durch ein höheres MCT-Volumen, was jedoch teilweise durch einen weniger günstigen Produktmix ausgeglichen wurde.

Das Management erklärte, dass das erweiterte MCT-Angebot zusätzliche Marktsegmente und Preisklassen abdeckt. Das Unternehmen verfügt über freie Kapazitäten und plant, die Reaktorauslastung zu Renditen weiter zu steigern, die es für angemessen hält.

Cashflow, Kapitalallokation und operativer Betrieb

Der operative Cashflow vor Veränderung des Working Capitals lag bei 49 Millionen US-Dollar. Der freie Cashflow von 8 Millionen US-Dollar spiegelte einen Aufbau des Working Capitals von 32 Millionen US-Dollar wider, der durch stärkere Umsätze und höhere Rohstoffkosten verursacht wurde, sowie barwirksame Restrukturierungszahlungen in Höhe von 6 Millionen US-Dollar.

Stepan schüttete Dividenden in Höhe von 9 Millionen US-Dollar aus und hob die Quartalsdividende um 0,01 US-Dollar je Aktie bzw. 2,5 % an. Dies war die 59. jährliche Dividendenerhöhung in Folge.

Im Oktober schloss das Unternehmen den Verkauf von Grundstücken nahe seinem Standort Millsdale im Wert von 28,5 Millionen US-Dollar ab. Das Management gab bekannt, dass die Erlöse im November zum Schuldenabbau verwendet werden sollen.

Der Standort Pasadena, Texas, lief mit einer Auslastung von etwa 75 % bis 80 %. Das Management erklärte, dass die Anlage im Jahr 2026 bereits über den Erwartungen liegende Lohnfertigungseinsparungen erzielt und für das künftige Wachstum bei Spezialalkoxylaten weiterhin wichtig bleibt.

Ausblick des Managements

Das Management erwartet für das Gesamtjahr 2026 ein Wachstum des bereinigten EBITDA bei Stepan, einen positiven freien Cashflow und einen weiteren Abbau der Bilanzverschuldung.

Die quartalsweise Einsparungs-Run-Rate des Projekts Catalyst erreichte im 3. Quartal rund 23 Millionen US-Dollar. Das Unternehmen rechnet für 2026 nun mit Einsparungen von etwa 66 Millionen bis 70 Millionen US-Dollar und übertrifft damit die bisherige 60-%-Etappenmarke auf dem Weg zum zweijährigen Einsparungsziel von 100 Millionen US-Dollar vor Steuern.

Für 2027 erwartet das Management, dass die durchschnittlichen vierteljährlichen Einsparungen aus dem Projekt Catalyst 25 Millionen US-Dollar übersteigen werden. In der ersten Jahreshälfte dürften die Einsparungen leicht unter diesem Niveau liegen und in der zweiten Jahreshälfte darüber, da die Produktion in Pasadena hochläuft und zusätzliche Projekte umgesetzt werden.

Das Management erwartet für das 4. Quartal eine Verlangsamung des organischen Mengenwachstums gegenüber 6 % in Q2 und 7 % in Q3. Dennoch bezeichnete es das in den ersten neun Monaten erzielte organische Wachstum von 4 % im Vergleich zu den Endmärkten des Unternehmens als stark.

Risiken und Beobachtungspunkte

• Die Volatilität bei Rohstoff- und Ölpreisen bleibt hoch, einschließlich Beeinträchtigungen im Zusammenhang mit dem Nahostkonflikt. Das Management erklärte, dass die meisten Preisanpassungen unter der Annahme der Ölpreisbedingungen des 3. Quartals abgeschlossen seien, jedoch noch einige zusätzliche Maßnahmen ausstünden.
• Das Unternehmen erwartet, dass Wartungs- und Überholungskosten für Phthalsäureanhydrid in den USA das 4. Quartal belasten werden, nachdem die Betriebsunterbrechung in Deutschland das Segment Polymere im 3. Quartal mit mehr als 2 Millionen US-Dollar belastet hatte.
• Europa und China bleiben im Bereich Polymere aufgrund einer schwachen Nachfrage aus der Bauwirtschaft, der Automobilindustrie und den breiteren Endmärkten weiterhin schwach.
• Die Nachfrage im Bereich Pflanzenschutz ging im 3. Quartal zurück, wobei das Management schwierige Bedingungen in der Agrarbranche und Druck auf die Düngemittelpreise einräumte.
• Das Working Capital band im 3. Quartal 32 Millionen US-Dollar, da die Umsätze und Rohstoffkosten stiegen.
• Eine normale Inflation von 2 % bis 3 % auf Stepans Fixkostenbasis von rund 800 Millionen US-Dollar könnte einen Teil der Einsparungen aus dem Projekt Catalyst aufzehren.

Highlights aus der Fragerunde für Analysten

Preise und Margen: Laut Management lag die bereinigte EBITDA-Marge im Segment Tenside seit Jahresbeginn im zweistelligen Bereich, während Polymere bei etwa 13 % bis 15 % lag. Die meisten Preismaßnahmen wurden umgesetzt, obwohl der Ausblick weiterhin von der Entwicklung der Rohstoff- und Ölpreise abhängt.

Quartalsweiser Ergebnisverlauf: Das Management betonte, dass Q2 und Q3 zusammen betrachtet werden sollten. Q2 profitierte von günstigeren Lagerbeständen, während Q3 normalisierte Lagerkosten und einen veränderten Umsatzmix widerspiegelte. Das kumulierte bereinigte EBITDA beider Quartale lag bei rund 140 Millionen US-Dollar.

Kunden- und Marktanteilswachstum: Stepan konnte seit Jahresbeginn mehr als 300 neue Kunden gewinnen und lieferte fast 900 neue Kunden-Produkt-Kombinationen aus. Die Tier-2- und Tier-3-Kundenbasis wuchs im zweistelligen Bereich und ergänzte das fortgeführte Geschäft mit multinationalen Tier-1-Kunden.

Regionale Nachhaltigkeit: Das Management hält einen Großteil der Verbesserung in Lateinamerika für nachhaltig und verweist auf die Produktionspräsenz von Stepan in Mexiko, Kolumbien und Brasilien. Zudem wurde angemerkt, dass Mexiko stärker als Brasilien asiatischen Importen ausgesetzt ist.

Längerfristige europäische Nachfrage: Obwohl die derzeitige Nachfrage nach Polymeren schwach bleibt, geht das Management davon aus, dass Investitionen in die Gebäudeeffizienz in den nächsten drei bis fünf Jahren eine angestaute Nachfrage in Europa freisetzen könnten.

Vollständiges Transkript der Telefonkonferenz

Vollständiges Transkript der Telefonkonferenz

Ausführungen des Managements

Operator

Good morning and welcome to the Stepan Company Third Quarter 2026 Earnings Conference Call. [Operator Instructions] As a reminder, this call is being recorded on Wednesday, October 28, 2026. It is now my pleasure to turn the call over to Mr. Ruben Velasquez, Senior Vice President and Chief Financial Officer of Stepan Company. Mr. Velasquez, please go ahead.

Ruben Velasquez

Thanks, Sherry. Good morning, and thank you for joining Stepan Company's Third Quarter 2026 Financial Review. Before we begin, please note that information in this conference call contains forward-looking statements, which are not historical facts. These statements involve risks and uncertainties that could cause actual results to differ materially, including, but not limited to, prospects for our foreign operations, global and regional economic conditions and factors detailed in our Securities and Exchange Commission filings. In addition, this conference call will include discussions of adjusted net income, adjusted EBITDA, free cash flow, net debt and leverage-related metrics, which are non-GAAP measures. We provide reconciliations to the comparable GAAP measures in the earnings presentation and press release, which we have made available at www.stepan.com under the Investors section of our website.

Whether you are joining us online or over the phone, we encourage you to review the investor slide presentation. We make these slides available at approximately the same time as when the earnings release is issued, and we hope that you find information and perspectives helpful. With that, I would like to turn the call over to Mr. Luis Rojo, our President and Chief Executive Officer.

Luis Rojo

Thank you, Ruben. Good morning, and thank you all for joining us today to discuss our third quarter 2026 results. I will share the highlights of the quarter and an update on our key strategic priorities, while Ruben will take you through the financial details. Before reviewing the quarter, I want to recognize our teams around the world for their commitment to safety. Safety remains our top priority and the foundation of everything we do at Stepan. Our safety performance over the last 12 months remained strong. The third quarter was another quarter of earnings growth for Stepan. The 3 segments delivered organic volume growth and increased earnings versus the prior year.

Adjusted EBITDA was $66 million, up 18% versus the prior year, driven by global volume growth, margin recovery and Project Catalyst savings. Surfactant adjusted EBITDA was up 27%. Polymers grew single digits, including onetime maintenance turnaround costs at our Germany site. And Specialty Products grew EBITDA single digits, driven by double-digit volume growth. On a consolidated basis, adjusted earnings per diluted share were $0.94, nearly double the prior year. Now I want to highlight a few elements of our third quarter performance. First, volume growth. Organic volume grew 7% with growth in all 3 segments. Surfactant organic volume was up 8%, and the growth was broad-based across most of the end markets. Polymers volume was up 3% with North America growing strong double digits.

And Specialty Products delivered 20% volume growth behind a strong innovation plan in our MCT product line. We are pleased with the growth we achieved in several of our key strategic end markets despite ongoing global economic uncertainties and supply chain disruptions. Second, margin recovery and pricing discipline. Raw material cost continues to increase in a volatile environment, including the disruption related to the Middle East conflict. Our pricing actions, together with our disciplined execution of our contractual pass-through mechanism offset those higher costs. Third, productivity and cost out. Project Catalyst continues to deliver savings, and we are now projecting to exceed the 60% target for 2026. Finally, we remain focused on cash generation and balance sheet deleveraging. Our net leverage improved to 2.4x. Free cash flow was positive at $8 million despite a further investment in working capital.

In October, we closed the sale of a parcel of land near our Millsdale site for $28.5 million. The full cash proceeds will be used to pay down debt and continue to deleverage the balance sheet in November. Through the first 9 months of the year, adjusted EBITDA is up 15% and adjusted earnings per share are up 40% versus the prior year. We remain committed to a balanced approach to capital allocation. During the quarter, we continued to invest in working capital. We executed our capital plan across our site, and we paid $9 million in dividends. Finally, we increased our quarterly dividend by $0.01 per share or 2.5%, marking the 59th consecutive year that Stepan has increased its dividend. With that, I will turn the call back to Ruben to walk you through the financial details for the quarter.

Ruben Velasquez

Thank you, Luis. As shared in our third quarter 2026 earnings release, reported net income was $17.8 million or $0.78 per diluted share, up 64% versus $10.8 million or $0.47 per diluted share in the prior year. Reported results include a $5.6 million pretax restructuring charge largely related to the previously announced close of our Fieldsboro, New Jersey site, the decommissioning of select assets at our Millsdale, Illinois and the Stalybridge, United Kingdom facilities and the global salaried workforce reduction we announced in July. Let's move to Slide 6, which shows the adjusted net income bridge for the third quarter of 2026 versus the third quarter of last year. Adjusted net income was $21.7 million or $0.94 per diluted share, up 98% versus $10.9 million or $0.48 per diluted share in the prior year.

The increase in adjusted net income was primarily due to higher surfactant earnings with additional contributions from polymers and specialty products, partially offset by higher corporate expenses and a higher tax provision on the stronger earnings. Adjusted corporate expenses increased by $1 million or 6%, primarily due to higher incentive-based compensation associated with the improved operating performance. Slide 7 shows the total company adjusted EBITDA bridge. Adjusted EBITDA was $66.3 million, up $10.1 million or 18% versus the prior year. This increase was primarily due to higher surfactant earnings driven by sales volume growth and margin recovery with Polymers and Specialty Products also up, partially offset by $1.6 million of higher corporate expenses, reflecting higher incentive-based compensation.

I will now cover each segment in more detail. Turning to Surfactants on Slide 8. Net sales were $487 million, up 15% versus the prior year. Selling prices were up 10%, primarily due to the pass-through of higher raw material costs and targeted pricing actions. Reported volume grew 3% and organic volume increased 8%. Foreign currency translation positively impacted net sales by 2%. The organic growth was led by double-digit increases in consumer products, including laundry, Construction & Industrial and oilfield end markets, partially offset by lower crop productivity demand. Surfactants adjusted EBITDA was $48 million, up $10 million or 27% versus the prior year. North America and Asia earnings improved on organic volume growth in Consumer Products, oilfield and Construction & Industrial, together with margin recovery.

Latin America earnings increased on double-digit organic volume growth, pricing execution and margin recovery. Europe was modestly lower as reduced crop productivity demand more than offset growth in our consumer end markets. Moving to Polymers on Slide 9. Net sales were $179 million, a 24% increase versus the prior year. Selling prices were up 22%, primarily due to the pass-through of higher raw material costs. Sales volume increased 3% in the quarter. North American volume was up double digits, driven by rigid polyols and Phthalic Anhydride, including continued significant growth in our spray foam product line. This growth was partially offset by softer demand in Europe and Asia. Foreign currency translation negatively impacted net sales by 1%. Polymer adjusted EBITDA was $23 million, up 4% versus the prior year as North America's strong volume growth in rigid polyol, spray foam and Phthalic Anhydride more than offset the 5-year regulatory mandated maintenance turnaround costs at the company's Germany site, lower rigid polyol volume in Europe and softer demand in China.

North America EBITDA was up $3 million on volume growth and margin improvement. Europe was down $2 million, primarily due to the maintenance turnaround at our Germany site. Asia was slightly lower on softer demand for specialty polyols in China, partially offset by improved rigid polyol margins. Specialty Products net sales were $27 million, a 12% increase versus the prior year and volume increased 20%. Adjusted EBITDA was $11.7 million, up 5% versus the prior year, primarily due to higher volume in the MCT product line, partially offset by less favorable product mix. Now turning to cash flow and the balance sheet on Slide 10. Cash flow from operations before working capital was $49 million in the third quarter, while free cash flow was $8 million after $21 million of capital expenditures. Free cash flow reflected a $32 million working capital build from accounts receivables, account payables and inventories, driven by stronger sales and higher raw material costs.

Free cash flow included $6 million of restructuring-related cash payments. We ended the quarter with net debt of $536 million. Our net leverage ratio improved to 2.4x from 2.7x a year ago, reflecting continued progress in deleveraging. Improving cash flow and further strengthening the balance sheet remain key priorities across the organization. Moving to Slide 15 and Project Catalyst. Through September, we have recognized $76 million of pretax restructuring charges. The year-to-date cash impact of restructuring is $13 million. Project Catalyst continues to deliver savings in line with our plan. The savings run rate increased to approximately $23 million in the third quarter. These savings were partially offset by inflationary pressures on operating expenses. For 2026, we expect to exceed the 60%, 2-year $100 million pretax savings target. With that, I will turn the call back to Luis for an update on our strategic priorities and Project Catalyst.

Luis Rojo

Thanks, Ruben. Our strategy continues to be anchored in 4 pillars: First, customer-centric innovation to drive top line growth, diversification of our markets and customers with a focus on higher growth end markets and Tier 2 and Tier 3 accounts. Third, operational excellence, including the reliability and resiliency of our manufacturing network and supply chain; and fourth, financial strength through the free cash flow generation, deleveraging the balance sheet and disciplined capital allocation. We continue to make progress against these priorities during the quarter. Surfactants showed consistent and broad-based growth in the third quarter. Year-to-date, we have more than 300 new customers, and we have delivered nearly 900 new customer and product combination in this business with our global Tier 2 and Tier 3 customer base growing double digits.

Additionally, we delivered a strong double-digit growth in North America polymers and our MCT product line. We delivered this growth while continuing to recover margin in an inflationary raw material environment, which reflects disciplined commercial execution. The Middle East conflict has added volatility to fixed costs and supply chains, and we believe we are well positioned to manage that disruption. Our regional manufacturing footprint keeps production close to our customers with a particular advantage in the United States. Our dual petrochemical and oleochemical raw material streams give us flexibility on feedstock management and maximize customer supply. Finally, we continue to improve the reliability and resiliency of our manufacturing network.

Our flagship Millsdale site had a great quarter in terms of production volumes and improving all key operating metrics. Our Pasadena, Texas site continues to ramp up production and deliver the expected supply chain savings embedded in Project Catalyst. Pasadena remains a critical enabler for strategic future growth in specialty alkoxylates. Let's move to Slide 12 for an update on Project Catalyst. As a reminder, Project Catalyst is our comprehensive plan to further optimize our asset base and create a more productive and agile organization to enable balanced growth. We're executing the program safely and in line with expectations. Third quarter run rate savings was approximately $23 million, and we have identified actions that we believe will enable us to exceed the $25 million per quarter goal on average during 2027. We executed the organizational redesign phase of Project Catalyst during the third quarter.

This new organization design is a key enabler for us to deliver our balanced growth strategy, which is focused on top line growth, margin recovery and disciplined cost-out initiatives. To conclude, we believe we are positioned to continue delivering growth in our businesses. Despite the ongoing and significant market uncertainties and challenges, the organization continues to be focused on executing our growth opportunities, productivity plans and cash intervention. With these actions and our strong results through the first 9 months of the year, we believe we will deliver full year adjusted EBITDA growth, positive free cash flow and continued deleveraging of the balance sheet in 2026. This concludes our prepared remarks. At this time, we would like to turn the call over for questions. Sherry, please review the instructions for the questions portions of today's call.

Operator

[Operator Instructions] And our first question will come from the line of Mike Harrison with Seaport Research Partners.

Fragen und Antworten

Michael Harrison

So really good to see all the pricing that you guys are getting across the 3 segments. I think we're trying to understand a little bit better the margin impact that you're seeing from raw material inflation and how much pricing is offsetting you across the 3 segments. Maybe help us understand where the margin pressure is still a factor from inflation? And should we see further pricing catch-up in Q4? Or maybe when do you neutralize the impact of some of the higher raw material costs that you're seeing?

Luis Rojo

Great question, Mike. And what I will say is this continues to be a very volatile environment when you think about oil prices and raw materials. I think we did a pretty good job in Q2 and Q3. I don't want to focus too much in quarterly numbers. But when you think about on a year-to-date basis and you look at our margins and you see surfactants double-digit margins, I mean, EBITDA margins, you see polymers in the 13% to 15% EBITDA margins. Those are healthy margins, and we will continue to work on productivity to make sure that we have the best value for our customers, right? So right now, with the current oil prices, we believe we are in a good position in several places. There are a few places where we are still making some price adjustments. But in general terms, I think the majority have been done. And again, this assumes the oil prices of Q3. We will see what happens in the next few weeks with the raw material environment.

But so far, I think the margins for the year are going in the right direction, and we are pleased with the work that our commercial team have done, not only to have decent margins, but to be able to grow our volumes 4%. 4% organic volume growth in the first 9 months is almost a record, right? I mean this is a significant amount of volume growth. And we want to make sure that we -- I have talked a lot about balanced growth. And again, I want to continue balancing volumes, margins and of course, cash, but we need to keep our reactors full, and that's what we are after.

Michael Harrison

All right. And then in terms of Project Catalyst, it sounds like the savings there are running ahead of plan for both 2026 and maybe the longer-term run rate into '27. I guess the way we were thinking about it is you'd get about $60 million worth of savings this year and then the incremental $40 million coming next year. But how should we think about Project Catalyst contribution to further earnings growth in '27 versus '26. Is $40 million still a good number? Or could it be higher or lower than that?

Luis Rojo

No. Look, good question, Mike. But as we said today, we are ahead of the 60% target for 2026. So we are -- instead of the $60 million, we are more in the $66 million to $70 million range. And we already are delivering $23 million run rate in the savings in Q3. We believe we can be ahead of the $25 million on average for 2027, right? So that means $2 million, $3 million more versus where we are today. Now that's going to be, again, on average for 2027, which means ahead of the $25 million in the second half, slightly below the $25 million in the first half as we continue ramping up production in Pasadena, as we continue implementing other projects that we have in the pipeline.

So that's the main component of the gradual savings increases in the next 4 to 5 quarters. And remember that we have been very clear that these are the savings from Project Catalyst. We also have the normal inflation in our P&L. You know that our fixed cost base is roughly $800 million. That's public information. And you can factor the normal 2%, 3% on the inflation piece on that base, and we will continue working on productivity, as I said before, to provide the best value that we can to our customers.

Michael Harrison

All right. Just a couple more for me. Apologies if I missed this earlier, but what was the impact of the maintenance costs in Germany in the Polymers business in Q3? And is that cost completely isolated to Q3? Or is there some carryover into Q4 or next year?

Ruben Velasquez

Yes, Mike. Effectively, as you mentioned, we have that turnaround in Europe in our Germany site. That's a turnaround that happens every 4 years. It's regulated, it's mandated. And the impact on the Polymers business for Q3 was $2 million plus driven by that maintenance.

Luis Rojo

Remember, Mike, that we talked last quarter that we had $4 million, $5 million of headwinds in turnaround maintenance costs, both Germany and the U.S. So Germany was more Q3. You will see the impact in Q4 in U.S. with all the maintenance and turnaround costs that we need to do in our PA facility. So it's coming in line as expected and as planned.

Michael Harrison

All right. And then last quarter, you had talked a little bit about some volume that you felt like was being pulled forward or some prebuying that might be happening. I think at the time you expected that maybe that was as much as a $10 million impact to EBITDA. Now that we're sitting here in October and maybe you have the numbers to fully understand how much impact you saw. Is there any way to help understand how much stronger Q2 was than what might have been normal and how much weaker, I guess, that made Q3? Any color on that would be helpful.

Luis Rojo

No, yes. I agree, Mike, that we talked about the $5 million to $10 million impact from Q3 to Q2 last call. I will say that some of that was expected on the volume side, but a lot of that was expected on the margin side as well, right? I mean we grew in Q2 6% volume, but the reality is that we grew with lower cost inventory in our tank. Now we're accelerating the growth actually to 7% with a different mix, with a different mix than we had in Q2 as well and with a normalized cost position in our tanks and our inventory. So what I will say is that I think the best way to look at Q2, Q3 will be averaging both.

When you think about the $75 million and the $66 million, there was some swing for sure, but delivering $140 million in those 2 quarters shows the discipline of our execution plan, shows a strong volume growth, which, let's be clear, when you think about 6% volume in Q2 and 7% volume in Q3, we are expecting a lower growth in Q4 for sure. When you think about the year, when you include also Q1, we're growing volumes 4% on an organic basis. That's still a very strong performance when these markets are basically not growing, right? These markets are 0% to 1% growth. So that 4% growth on volume is coming from a lot of new customers and share growth in the different end markets. So we're happy with a 4% volume growth. If we can continue that throughout the year, that will be an outstanding year of volume growth for Stepan Company.

Operator

One moment for our next question. And that will come from the line of Dave Storms with Stonegate.

David Storms

Luis, I actually wanted to go back to kind of what you just mentioned around margin growth coming from both new customers and share growth. I was hoping, given you mentioned approximately 340 new customers, 900 new combinations, can you help us understand how much of the margin growth came from new customers versus share growth?

Luis Rojo

No. Look, when you're growing volume 7%, of course, you have the benefit of reducing all the fixed cost and improving the margins this way. So again, we are seeing very strong performance in the surfactants business when you think about especially the Americas, you can do the math, right? On a year-to-date basis, our Surfactant business grew EBITDAR in all the regions. I mean, grew EBITDAR in North America, grew EBITDAR in Latin America, actually even grew EBITDAR very slightly, but grew EBITDAR in Europe. So the business -- the Surfactant business continues to be strong based on share growth, Tier 2, Tier 3 strength and actually a few very good quarters on the crop productivity business. Q3 was a little bit softer. But when you think about the year, crop productivity is still okay and still positive. So we feel good about the Surfactant business. And when you think about polymers, again, very strong performance in North America with a strong double-digit growth. The rigid business is strong, and we are growing a lot of share in spray foam and in PA. We have talked the PA business in the past. It's not secret. We are growing significantly in the PA business. So we feel good about how the margin profile is going vis-a-vis the leverage that you have when you are growing volumes 4% or 6% or 7%. Again, this is not related to one side of one customer or the others. I mean this is across the board.

David Storms

Understood. Appreciate that. You also -- in that answer, you mentioned North America polymers is growing strong, but Europe and Asia still remain weak on the polymer side. Any green shoots there? Any signs of improvements? Is that just a macro story? Anything we should keep an eye out for there?

Luis Rojo

Yes. No, totally right. I mean this is a macro story for Europe and China. It's not a secret how the chemical industry is doing and a lot of the end market demand are doing in Europe and in China, when you think about China, the car industry and a lot of our polymers products goes there as well, and that's not robust. And then, of course, all the challenges that we see in Europe with the overall demand and with the overall construction environment there. Now there is a lot of pent-up demand in Europe that we believe and our customers believe we can capture in the next 3 to 5 years.

There is plenty of work to be done to continue reducing energy consumption in Europe, which is the biggest issue there. And the building envelope can make a significant impact in reducing the energy consumption. So that's where we play, and we are happy to play in that industry, and we're happy to play and help the Europe region to reduce the energy consumption in the building. So we are all hopeful that the next 3 to 5 years, we will realize that pent-up demand.

David Storms

That's really great color. If I could ask one more, and it might be a quarter too early to ask this, but because you brought up crop productivity volumes decline in the quarter, when we're looking into the next couple of quarters with a developing El Nino, do you see any changes in customer purchase expectations as we start to get ready for the next 6 to 9 months on the ag side?

Luis Rojo

Great great question, Dave, because we are seeing -- I mean, and you guys are seeing a lot of struggle from some of the big ag companies. So it's not a secret. Now what I will tell you is that our team continues to do a great job in developing new products, new formulations to continue growing share with all our key multinational accounts in the ag business and also growing with the middle Tier 2, Tier 3 ag companies. We still have plenty of opportunities, right? When you think about tank mix adjuvant, this is a $1 billion market in the U.S. This is a $700 million market in Brazil. And we are still in the infant phase of developing our tank mix adjuvants and growing in that space. So I agree with you that the macros are not there for the overall ag industry and fertilizer prices and all of that. On the other hand, we will continue working on our innovation plan to continue growing in this space because it's a key strategic priority for a Stepan company to grow in crop productivity. We have the products, we have the team, we have the know-how, and we will continue executing.

Operator

One moment for our next question. And that will come from the line of Gowshi Sri with Singular Research.

Gowshihan Sriharan

Congratulations on a strong quarter. It's my first call covering Stepan.

Luis Rojo

Welcome Gowshi. Welcome to the team and happy to have you here.

Gowshihan Sriharan

On my first question is the double-digit growth in the consumer products. I know you alluded that there's some share gains. And I just want to make sure, are these share gains that you can hold to? Because I think in previous call, you alluded to the fact that some of the competitors were short on raw materials. Any comment or color on that?

Luis Rojo

Sure. We continue executing our Tier 2, Tier 3 strategy, Gowshi. So that works in the consumer space that works in many of our end markets, but it's working. It's working in -- especially in the Americas. And we will continue growing with our Tier 1 multinational companies. We have a strong plan there. We have been doing extremely good with our Tier 1 accounts. And on top of that, Tier 2, Tier 3 is coming up incremental. So that's the good news about how the strategy is playing out. Tier 1s represents a very important business for a Stepan company. We are doing extremely well with Tier 1s and Tier 2s and Tier 3s are coming on top, and we're happy to support them as they need formulation services and help on their products. So it's an AND strategy. We're working on both.

Gowshihan Sriharan

On the Specialty Products in the MCT, how sustainable do you see this MCT volume growth heading into next year? Was there any kind of order timing benefit in the segment this quarter?

Luis Rojo

Yes, yes. Remember that we have a pharma business that is very seasonal, and that's why you see the EBITDA or the operating income on Specialty Product this quarter because we ship a lot of the pharma business in Q3, and that was very similar to last year, right? That's why last year was also in the same level of $11 million of operating income in Q3. When I think about the MCT business, Jamil and the team in Maywood has done an extremely good job of expanding our offerings in MCT, and we have developed a new innovation program to go into different segments and different price tiers within the MCT business, not only on the top tier, but also on the mid-tier.

That's why the mix effect and the margin is a little bit different. But that is showing up on the results, and that is also filling up our reactors. And the reality is that this year, we had a lot of headwinds on the fatty acid pricing. When you think about raw materials for fatty acids, we had a lot of challenges there. That's why we are not growing even faster, which we could in this MCT business. So -- that's our plan for next year. And we will continue to filling up the reactors. We have extra capacity, and we want to deliver all the capacity that we have at margins that make sense.

Gowshihan Sriharan

And then a little bit of color on the Pasadena utilization. Where is it running today in terms of utilization? And what does getting into full utilization add to next year?

Luis Rojo

Good point. Look, we are in the -- we have talked this in the past. We are in the 75%, 80% range on utilization. And as we plan and as we plan next year, that's why I mentioned before that probably we will see more savings on tolling savings and things like that in the second half than the first half, as we continue ramping up production in Pasadena. Now when I say the 75%, 80%, of course, is very focused on the volume piece. We are very focused on maximizing Pasadena on the dollar front because at the end, every product is different. There are products that require 30 hours in a reactor and there are products that require way more or way less. And what we need to maximize is the dollar return from our Pasadena site, and that's what the team is working. We are delivering more savings than we thought on the tolling piece in 2026 from our Pasadena site. So we are happy with the development even at 75%, 80% capacity utilization.

Gowshihan Sriharan

And just I'll sneak in one last question. Latin America, I think you mentioned there was a competition that left. And so how exposed is Latin America to the Asian imports coming back? And how much of this year's recovery do you see it as structural?

Luis Rojo

Great point, Gowshi, great great point because for sure, Asia imports, especially in Mexico, Brazil is more protected. Brazil has a lot more restrictions. But in Mexico is where we see a lot of the imports from Asia. And you're rightly so that that having local production in the environment where we were in 2026 is a significant advantage for companies like Stepan. We need to continue making sure that we provide the right value for our customers in 2027, so we continue growing that business. We have an excellent footprint in Mexico, in Colombia, in Brazil. I want to give kudos to the other Jamil. We have 2 Jamil's in the company, but the other Jamil is in Brazil and the whole Brazil team for what they are delivering this year has been an outstanding performance from them. And we believe a lot of that is sustainable. So we will continue our plan to grow share to fill up our reactors at the right margins and continue to provide the right value to our customers in the Latin America region.

Gowshihan Sriharan

Congratulations, and i will talk to you later.

Operator

I'm showing no further questions in the queue at this time. I would now like to turn the call back over to Mr. Rojo for any closing remarks.

Luis Rojo

Thank you very much for joining us on today's call. We appreciate your interest and ownership in Stepan Company. Have a great and safe day.

Operator

This concludes today's program. Thank you all for participating. You may now disconnect.