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1. Company Snapshot

1.a. Company Description

Koppers Holdings Inc.provides treated wood products, wood preservation chemicals, and carbon compounds in the United States, Australasia, Europe, and internationally.The company operates through three segments: Railroad and Utility Products and Services (RUPS), Performance Chemicals (PC), and Carbon Materials and Chemicals (CMC).


The RUPS segment procures and treats crossties, switch ties, and various types of lumber used for railroad bridges and crossings.It also provides rail joint bars to join rails together for railroads; transmission and distribution poles for electric and telephone utilities; and pilings.This segment also provides railroad services, such as engineering, design, repair, and inspection services for railroad bridges.


The PC segment develops, manufactures, and markets copper-based wood preservatives, including micronized copper azole, micronized pigments, alkaline copper quaternary, amine copper azole, and chromated copper arsenate for decking, fencing, utility poles, construction lumber and timbers, and various agricultural uses; and supplies fire-retardant chemicals for pressure treatment of wood primarily in commercial construction.The CMC segment manufactures creosote for the treatment of wood or as a feedstock in the production of carbon black; carbon pitch, a raw material used in the production of aluminum and steel; naphthalene for use as a feedstock in the production of phthalic anhydride and as a surfactant in the production of concrete; phthalic anhydride for the production of plasticizers, polyester resins, and alkyd paints; and carbon black feedstock for use in the production of carbon black.The company serves the railroad, specialty chemical, utility, residential lumber, agriculture, aluminum, steel, rubber, and construction industries.


Koppers Holdings Inc.was founded in 1988 and is headquartered in Pittsburgh, Pennsylvania.

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1.b. Last Insights on KOP

Koppers Holdings Inc.'s recent performance was negatively impacted by a 10.4% year-over-year drop in consolidated sales, which fell to $505 million. The company's Q2 earnings missed estimates, coming in at $1.48 per share versus the expected $1.49 per share. Despite achieving a record adjusted EBITDA margin of 15.3%, Koppers reduced its full-year sales and adjusted EBITDA guidance due to ongoing industry-wide demand weakness. Additionally, the company's net income attributable to Koppers was $16.4 million, down from the prior year quarter.

1.c. Company Highlights

2. Koppers' Q3 Earnings: A Mixed Bag Despite Headwinds

Koppers reported a mixed third quarter, with sales declining 12% to $485 million, largely due to market headwinds, while adjusted EBITDA came in at $70.9 million, down from $77.4 million in Q3 2024. Adjusted EPS was $1.21, below estimates of $1.25. The revenue decline was driven by decreases across all segments, with Railroad Products and Services (RUPS) down 6%, Performance Chemicals (PC) down 18%, and Carbon Materials and Chemicals (CM&C) down 16%. Despite the top-line decline, the company's focus on cost control helped mitigate the impact, with adjusted EBITDA margin holding relatively steady.

Publication Date: Nov -16

📋 Highlights
  • Sales Decline: Q3 2025 sales fell 12% to $485 million compared to Q3 2024.
  • Adjusted EBITDA: Q3 2025 adjusted EBITDA was $70.9 million, down from $77.4 million in the prior year.
  • Capital Expenditure Reduction: 2025 CapEx guidance cut to $52–$55 million, down from $74 million in 2024.
  • Safety Performance: Recordable injury rate dropped 23%, and serious safety incidents fell 72% year-to-date.
  • Performance Chemicals Margin: PC segment maintained 18% adjusted EBITDA margin despite 18% lower sales.

Segment Performance

The RUPS segment saw a decline in sales due to lower volumes of Class I crossties and maintenance-of-way business, partly offset by higher commercial crosstie volumes and domestic utility pole sales. The PC segment's decline was primarily driven by market share shifts in the United States. CM&C's sales decrease was largely due to the exit of the phthalic anhydride business. Despite these challenges, the company is making progress in simplifying its business, including the sale of its Railroad Structures business and the closure of its phthalic anhydride plant.

Operational Highlights

Koppers continued to make strides in its safety performance, with leading activities up 29% and recordable injury rate and serious safety incidents declining 23% and 72%, respectively. The company is also focusing on transforming its business through the Catalyst initiative, aiming to deliver 15-plus percent margins and drive earnings improvement of over 10% on average over the next three years.

Outlook and Valuation

Koppers revised its 2025 sales guidance to $1.9 billion and adjusted EBITDA forecast to $255 million to $260 million. The company's focus on growing its utility pole business and improving supply chain efficiency is expected to drive growth. With a current P/E Ratio of 35.33 and EV/EBITDA of 9.41, the market is pricing in some level of growth. Analysts estimate next year's revenue growth at 1.9%. The company's commitment to returning capital to shareholders is evident in its quarterly dividend of $0.08 per share, representing a dividend yield of 1.07%.

3. NewsRoom

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Koppers Holdings Inc. (KOP) Presents at Bank of America Leveraged Finance Conference Transcript

Dec -02

Source: seekingalpha.com

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Contrasting Valhi (NYSE:VHI) & Koppers (NYSE:KOP)

Dec -02

Source: defenseworld.net

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Koppers Management Participating in BofA Securities Leveraged Finance Conference

Nov -26

Source: prnewswire.com

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Koppers Trades At 7x Cycle-Average Income, But All Businesses Are In Retreat

Nov -23

Source: seekingalpha.com

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Koppers Announces Participation in Southwest IDEAS Investor Conference

Nov -17

Source: prnewswire.com

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Koppers Holdings Inc. (KOP) Q3 2025 Earnings Call Transcript

Nov -07

Source: seekingalpha.com

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Here's What Key Metrics Tell Us About Koppers (KOP) Q3 Earnings

Nov -07

Source: zacks.com

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Koppers (KOP) Misses Q3 Earnings and Revenue Estimates

Nov -07

Source: zacks.com

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (5.35%)

6. Segments

Railroad and Utility Products and Services

Expected Growth: 5%

Koppers Holdings Inc.'s Railroad and Utility Products and Services segment growth is driven by increasing demand for rail infrastructure, rising utility spending on grid modernization, and growing need for sustainable energy solutions. Additionally, strategic acquisitions, cost savings initiatives, and a strong backlog of orders contribute to the 5% growth rate.

Performance Chemicals

Expected Growth: 7%

Koppers Holdings Inc.'s Performance Chemicals segment growth is driven by increasing demand for creosote and carbon materials in the railroad industry, expansion in the global wood preservation market, and strategic acquisitions. Additionally, the company's focus on innovation and R&D has led to the development of new, high-margin products, contributing to the 7% growth rate.

Carbon Materials and Chemicals

Expected Growth: 4%

Koppers Holdings Inc.'s Carbon Materials and Chemicals segment growth is driven by increasing demand for aluminum and steel production, growth in railroads and highway infrastructure, and rising adoption of renewable energy sources. Additionally, the segment benefits from its diversified product portfolio, strategic acquisitions, and cost-saving initiatives.

7. Detailed Products

Carbon Materials

Koppers Holdings Inc. produces a range of carbon materials, including carbon pitch, tar pitch, and naphthalene, which are used in the production of aluminum, steel, and other metals.

Railroad Products

Koppers Holdings Inc. offers a range of railroad products, including railroad ties, switch ties, and crossing ties, which are used in the construction and maintenance of railroad tracks.

Utility Poles

Koppers Holdings Inc. produces utility poles, which are used to support power lines, communication cables, and other infrastructure.

Transmission Poles

Koppers Holdings Inc. offers transmission poles, which are used to support high-voltage power lines and transmission infrastructure.

Distribution Poles

Koppers Holdings Inc. produces distribution poles, which are used to support lower-voltage power lines and distribution infrastructure.

Pentachlorophenol (PCP)

Koppers Holdings Inc. produces PCP, a wood preservative used to treat wood products, such as railroad ties and utility poles.

8. Koppers Holdings Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

The threat of substitutes for Koppers Holdings Inc. is medium due to the availability of alternative products and services in the market.

Bargaining Power Of Customers

The bargaining power of customers for Koppers Holdings Inc. is low due to the company's strong brand reputation and customer loyalty.

Bargaining Power Of Suppliers

The bargaining power of suppliers for Koppers Holdings Inc. is medium due to the presence of multiple suppliers in the market.

Threat Of New Entrants

The threat of new entrants for Koppers Holdings Inc. is high due to the low barriers to entry in the industry.

Intensity Of Rivalry

The intensity of rivalry for Koppers Holdings Inc. is high due to the presence of several competitors in the market.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 63.38%
Debt Cost 10.58%
Equity Weight 36.62%
Equity Cost 13.27%
WACC 11.57%
Leverage 173.04%

11. Quality Control: Koppers Holdings Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

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A-Score: 3.8/10

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

28.28$

Current Price

28.29$

Potential

-0.00%

Expected Cash-Flows