RUPS Insights: Conflicting Signals on Volume Expectations and Market Conditions

Financial Performance and Cost Reduction:
- Koppers Holdings reported adjusted EBITDA margins of more than 15% for the first time in eight years, with sales down over 10% from the prior year.
- The improvement is attributed to a 13% reduction in year-to-date SG&A, a 11% drop in FTEs, and significant cost savings.

Catalyst Transformation Process:
- The initiation of the Catalyst transformation process aims to deliver consistent mid- to high teens EBITDA margins by the end of 2027.
- This strategic initiative involves an assessment of top-performing companies and a focus on enhancing technology, upskilling team members, and upgrading processes.

Challenging Demand Environment:
- PC volumes beyond market share loss were down a few percent for the first six months, while Class I demand is expected to tail off in the second half.
- The demand issues are attributed to a sluggish demand environment across the portfolio, including reductions in PC volumes and slower-than-expected improvements in industrial markets.

Railroad Products and Services Outlook:
- The Railroad Products and Services business achieved its highest quarterly crosstie profitability since 2016.
- Despite this, the forecast for treated sales improvement has been revised from an 8% year-over-year increase to 4%, due to slower-than-expected volume increases.