Cabot Corporation · NYSE:CBT
Cabot — Investor Day (December 2021)
121 slides from Cabot's investor day presentation, Dec 2, 2021
Slide 1: Cabot Investor Day December 2, 2021
Exhibit 99.2 Cabot Investor Day December 2, 2021
Slide 2: Safe Harbor Statement
Safe Harbor Statement This presentation contains forward‐looking statements based on management’s current expectations, estimates and projections. Allstatements that address expectations or projections about the future, including statements about the Company’s strategy for growth, the future growthr
Slide 3: Today's Agenda
Today’s Agenda 11:00AM Performance Chemicals ‐Performance 9:30AM Welcome and Opening Remarks Additives Steve Delahunt Jeff Zhu VP, Treasurer and IR SVP and President, Performance Additives; President, Asia Pacific Region Winning Today and Creating for Tomorrow Sean Keohane Performance Chemicals ‐For
Slide 4: Winning Today and Creating for Tomorrow
Winning Today and Creating for Tomorrow Sean Keohane President & CEO Cabot Corporation | Investor Day 2021 | 4
Slide 5: Key Messages
Key Messages 1 2 3 4 5 Strong Execution Leading Businesses A Portfolio of High A Record of ESG A Strategy for Track Record with Durable Growth Vectors Leadership Breakout Value Advantages Creation Exceeded financial #1 or #2 in all of our Capitalizing on Driving circularity in Investing for commitme
Slide 6: Cabot at a Glance
1 Cabot at a Glance 4 FY’21 Financial Highlights Business Segments EBIT ($M) $329 FFo ou unded nded 1882 1882 $211 $652M 2 2 Reinforcement Materials Mark Marke ett Cap Cap ~$3.1B ~$3.1B $3.4B Adjusted Performance Chemicals Revenue 3 EBITDA Headqu Headquar artte errss Bos Bostton, on, MA MA Employ Em
Slide 7: Experienced and Diverse Global Management Team
Experienced and Diverse Global Management Team Sean Keohane Erica McLaughlin Bart Kalkstein Jeff Zhu Aaron Johnson President & Chief SVP & Chief Financial SVP & President, Reinforcement SVP & President, Performance SVP & President, Formulated Solutions; Executive Officer Officer Materials & Americas
Slide 8: Successfully Executed "Advancing the Core" Strategy
Successfully Executed “Advancing the Core” Strategy Track Record of Strong Execution (2016 –2021) Divested Non‐Core Enhanced Operating Established a New Level Businesses & Reshaped Platform of Profitability Portfolio to Drive Growth 1 ◆ Announced Purification Solutions ◆ Commercial Excellence –stron
Slide 9: Strong Earnings Growth with High ROIC
Strong Earnings Growth with High ROIC 1 1 1 1 Adjusted EPS Adjusted EBIT Adjusted EBITDA Adjusted ROIC +12% +10% +6% ($) ($M) ($M) ($M) CAGR CAGR CAGR $652 18% $5.02 $492 $470 $2.49 $286 8% FY2015 FY2021 FY2015 FY2021 FY2015 FY2021 FY2015 FY2021 Driven by Successful Execution of Strategy 1.Non‐GAAP
Slide 10: Leading Upstream Product Positions with Strategic Downstream Integration
Leading Upstream Product Positions with Strategic Downstream Integration Core Performance Additives Reinforcing Specialty Fumed Carbons Carbons Metal Oxides # 1# 2# 2 Engineered Inkjet Specialty Battery Elastomer Colorants & Compounds Materials Composites Inks Strategic Downstream Formulations Enabl
Slide 11: Leveraging Sustainable Competitive Advantages
Leveraging Sustainable Competitive Advantages How We Win Unparalleled Global Leadership in Innovative Product Ability to Capitalize on Footprint Sustainability Leadership High‐Growth Markets u Exceptional Talent: global u Collaborate with customers u Long history of innovation u Uniquely positioned
Slide 12: We Have Built an Unparalleled China Position
We Have Built an Unparalleled China Position in our Businesses Investments Have Driven Acquired A BestOperator in China CNT Long‐Term Profitability producer Sanshun FMO u Long history of leveraging our in‐ operations Asia country “make and sell” business in Wuhai Technology 2020 model Center in Carb
Slide 13: Positioned to Capitalize on Key Macro Trends
Positioned to Capitalize on Key Macro Trends Portfolio of High Growth Emerging Businesses TTrrends ends Cabot Cabot Solutions Solutions u Shift to electric vehicles u Battery materials for EV li‐ion batteries u Growth in global miles driven Changing Mobility u Specialty compounds for EMI shielding L
Slide 14: Cabot is a Recognized Leader in Sustainability
Cabot is aRecognized Leader in Sustainability Expanded BOD Oversight Refreshed Emissions Sustainability with Dedicated & Expanded Our Goals & Human Reporting SHE&S Sustainability Rights Policy Committee Goals Strong SHE&S Renewal & UN Global Management & Compact Commitment to Looking Forward Respons
Slide 15: Independent Board Built to Support Strategy
Independent Board Built to Support Strategy Diverse Set of Expertise International Governance üü Strategy Operations üü Sue Rataj Dr. Cynthia Arnold Douglas Del Grosso Juan Enriquez Sean Keohane Chairwoman Former CTO, Valspar President and CEO, Adient CEO, Biotechonomy President and CEO, Cabot Techn
Slide 16: Our Purpose
OUR PURPOSE Creating materials that improve daily life and enable a more sustainable future 16 Cabot Corporation | Investor Day 2021 16
Slide 17: Our Strategy: Creating for Tomorrow
OUR STRATEGY Creating for Tomorrow We will leverage our strengths to lead in performance and sustainability —today and into the future. GROW INNOVATE OPTIMIZE Investing for Developing innovative Driving continuous advantaged growth. products and processes improvement in that enable a better future.
Slide 18: Our Strategy | Creating for Tomorrow
Our Strategy | Creating for Tomorrow Leveraging our strengths to lead in performance and sustainability— today and into the future GROW INNOVATE OPTIMIZE Developing innovative products and Driving continuous improvement in Investing for advantaged growth processes that enable a better future everyth
Slide 19: 2022–2024 Outlook
2022 –2024 Outlook Supportive market environment and positive macro trends High value Performance Chemicals segment expected to grow volume 9‐11% with capacity additions, whileReinforcement Materials expected to maintain steady volume growth of 2‐3% Expect EBIT CAGR of 50%+ in Battery Materials 1 Ex
Slide 20: Creating for Tomorrow Path Ahead for Value Creation
Creating for Tomorrow Path Ahead for Value Creation Pivoting to Higher Valuation Creation Roadmap Creating for Tomorrow Strategy (2022+) High growth vectors Battery Materials, Inkjet and E2C™ High Growth solutions Vectors Core Reinforcement Materials, Specialty Successfully Executed Carbons, Special
Slide 21: ESG Leadership: Creating a More Sustainable Future
ESG Leadership: Creating a More Sustainable Future Martin O’Neill Senior Vice President ‐Safety, Health,& Environmentand Government Affairs Cabot Corporation | Investor Day 2021 | 21
Slide 22: ESG | Key Messages
ESG | Key Messages 1 2 3 4 Innovations for a Delivering World Driving Leading in ESG lower Carbon Class Performance Environmental Future Responsibly and Operational Excellence Portfoliooffersproducts Making progress A “best operator” in Long‐standing culture that solve ourcustomers’ against our 2025
Slide 23: ESG Leadership Provides Foundation for the Future
ESG Leadership Provides Foundation for the Future Expanded BOD Oversight Refreshed Emissions Sustainability with Dedicated & Expanded Our Goals & Human Reporting SHE&S Sustainability Rights Policy Committee Goals Strong SHE&S Renewal & UN Global Management & Compact Commitment to Looking Forward Res
Slide 24: Our Innovative Chemistry Enables Sustainable Solutions
Our Innovative Chemistry EnablesSustainable Solutions Sustainability Trends Cabot Cabot Solutions Solutions Mobility u Light weighting u Extend tire life to reduce waste u Low rolling resistance for fuel efficiency and EV range Specialty Carbonsand Silicas Reinforcing carbons & E2C™solutions Conduct
Slide 25: Circularity is Embedded in Our Operating Practices
Circularity is Embedded in Our Operating Practices Raw Raw Pr Product oduct Materials/ Materials/ Feedstock of our carbon black Specific Specificaattion ion By By‐ ‐products products and fumed silica product lines are a by‐product of another production process Energy centers convert waste Re Recco o
Slide 26: Making Progress with Broad Sustainability Focus
Making Progress with Broad Sustainability Focus Caringfor our people Buildinga better Acting responsibly and communities future together for the planet Cabot Corporation | Investor Day 2021 26
Slide 27: Caring for Our People and Communities
Caringfor Our People and Communities United Nations Sustainable Objectives 2025 Targets Progress Development Goals u Achieved 96% and 88% of our Personal Safety Goals – Occupational FY 2021 Global Total Recordable Incident Rate of 0.34 u Reduce injuries and significant process Health & safety events
Slide 28: Building a Better Future Together
Buildinga Better Future Together United Nations Sustainable Objectives 2025 Targets Progress Development Goals Economic u Achieved 36% of our goal Value u Invest $1B in capital and technology u Completed strategic investments in our operating Generated and facilities and portfolio Distributed u Comp
Slide 29: Acting Responsibly for the Planet
ActingResponsibly for the Planet United Nations Sustainable Objectives 2025 Targets Progress Development Goals Environmental u 100% of facilities certified with an u 76% of our locations have achieved external environmental management system certification Compliance u Reduce GHG intensity by 20% u A
Slide 30: A Leader in ESG Transparency
A Leader in ESG Transparency A strong culture of leadership in sustainability enables us to differentiate ourselves Commit Committte ed d to to TTrranspar ansparency ency Aw Awar ards ds and and R Re ecognition cognition Disclosures on energy and emissions to Achie ved Platinum rating for sustainabi
Slide 31: Our Net Zero Ambition
Our Net Zero Ambition We support the objectives established by the Paris Climate Agreement and will set ambitious goals to enable us to achieve net zero carbon emissions by 2050 TTrranspar ansparency ency Our Our Pa Patth hw wa ayy Our Our Appr Approach oach u Continued transparency of our u We will
Slide 32: ESG | Key Takeaways
ESG | Key Takeaways Enabling a lower carbon future by delivering products 1 that address sustainability challenges Progressing against our 2025 Sustainability goals 2 Driving circularity and resource conservation across our 3 operations A leader in our industry through transparency and a 4 vision fo
Slide 33: Reinforcement Materials
Reinforcement Materials Bart Kalkstein SVP and President, Reinforcement Materials President Americas Region Cabot Corporation | Investor Day 2021 | 33
Slide 34: Reinforcement Materials | Key Messages
Reinforcement Materials | Key Messages 1 2 3 4 Global Leader with Durable Earnings Supportive Sustainable Robust Cash with Plans to Grow Industry Solutions for the Generation Structure Mobility Evolution Global footprint serving Strong operator with Limited capacity additions Engineered Elastomer TM
Slide 35: Reinforcement Materials at a Glance
Reinforcement Materials at a Glance 1 Key Products Competitive Landscape Key Applications Tires u Reinforcing carbons provide durability to rubber goods Cabot TM u E2C solutions deliver higher levels of rubber performance Comp A Cabot is Auto Weather‐Stripping the Industry Industry Environment Comp
Slide 36: Attractive Network of Global Assets
Attractive Network of Global Assets 1 19% 1 1 39% EMEA 42% Americas Asia u 20 plantsglobally u Aligned with customers and world reinforcing carbons growth u Significant economies of scale;superior cost competitiveness The Right Assets in the Right Places 1. Percent of FY’21 revenue 36 Cabot Corporat
Slide 37: Rubber Applications Using Reinforcing Carbons
Rubber Applications Using Reinforcing Carbons 1 Reinforcing Carbons for Rubber Applications Industrial Products 21% O.E. O.E. Light Vehicle 14% 23% (LV) Tires 35% Heavy 2021 Light Industrial Non‐ Commercial Auto Auto Vehicle Rubber Industry Vehicle 52% 48% Other Tires Products Volumes Tires Tires 17
Slide 38: Parc Shows Smooth, Steady Replacement Growth
Parc Shows Smooth, Steady Replacement Growth; Global Recessions Temporary with Rapid Recovery 1 1 1 Vehicle Parc Tire Production Vehicle Production 2.3% 3.2% 4.5% (M) China (M) (M) Global CAGR Global CAGR Global CAGR (2021‐2026) (2021‐2026) (2021‐202~40% 6) 2,250 110 1,800 100 2,000 1,600 China 90 C
Slide 39: Strong Profitability and Cash Generation
Strong Profitability and Cash Generation 1 Segment EBIT Segment EBITDA Excess Cash +10% +9% +15% 2 ($M) ($M) CAGR CAGR CAGR Generation ($M) $399 $329 $298 $226 $182 $143 FY2015 FY2021 FY2015 FY2021 FY2015 FY2021 Funding Company Growth Projects and Return to Shareholders 1. Non‐GAAP measure –See Appe
Slide 40: Strong Execution Driving Performance
Strong Execution Driving Performance Commercial Excellence Operational Excellence Yield and Energy Management ◆ Leading supply position with key ◆ Added ~150,000 MT of capacity ◆ Continuous improvement program 2 global tire accounts through debottlenecking and OEE drives product yields up and CO 2 i
Slide 41: Capital Efficiency Will Drive Future Growth
Capital Efficiency Will Drive Future Growth Continued OEE Cilegon, Indonesia Inorganic Improvements Expansion Opportunities u Additional 100,000+ MT can u Fastest growing region, u Increase scale and market be unlocked through structurally short supply of share in strategic operational excellence an
Slide 42: Proven Ability to Pass through Environmental Costs
Proven Ability to Pass through Environmental Costs Environmental Costs Drive Price . . . But Impact to Tire Manufacturer . . . And Cabot Has Demonstrated Increases in Carbon Black . . . Economics are Modest . . . Ability to Pass Costs through u Significant SO , NO reductions enabled u Completed air
Slide 43: Electric & Hybrid Vehicle Growth Expected to Change Tire Markets
Electric & Hybrid Vehicle Growth Expected to Change Tire Markets ~17% LV Tire Light Vehicle Light Vehicle Percent of Tire Sales to ~33% ~10% 1 1 Hybrid & Electric Production 1 Production Percent Production PARC Percent of Parc in 2026 Hybrid & Electric (M) Hybrid & Electric (M) (M) in 2026 in 2026 1
Slide 44: Well-Positioned to Benefit from Macro Trends
Well‐Positioned to Benefit from Macro Trends Auto Industry Tire Industry Cabot’s Reinforcing Impact on Trends & Challenges Trends & Challenges Materials Opportunity Cabot Solutions Higher torque Quicker replacement Growth in volume Changing Move Battery weight Higher wear Better mix Mobility to EVs
Slide 45: Innovations Focused on Sustainable Product, Process and Downstream Solutions
Innovations Focused on Sustainable Product, Process and Downstream Solutions PERFORMANCE Material Process Innovations Innovations Developing process Designing for performance, sustainability and circularity: technologies: Cabot Engineered u Biobased additivesu Reducing GHG emissions Advantage u Nove
Slide 46: Engineered Elastomer Composites (E2C) Solutions Provides Long Term Growth Platform
Engineered Elastomer Composites (E2C™) Solutions Provides Long Term Growth Platform Next Growth Platform Following Batteries and Inkjet Ultra‐Large Mining Tires Long‐Haul Truck Tires Performance EV Tires Benefits Benefits Benefits u Improved fuel efficiencyu Durable, lightweight tires u Higher truck
Slide 47: Reinforcement Materials | Key Takeaways
Reinforcement Materials | Key Takeaways Global Leader With Robust Cash Generation Right assets in the right places and an experienced team 1 delivering strong execution Durable Earnings Base with Plans to Grow Limited industry capacity expansions provide 2 opportunity for advantaged M&A Supportive I
Slide 48: Q&A
Q&A 48 Cabot Corporation | Investor Day 2021
Slide 49: Break
Break 49 Cabot Corporation | Investor Day 2021
Slide 50: Performance Chemicals
PERFORMANCE CHEMICALS Jeff Zhu Aaron Johnson SVP and President, SVP and President, Formulated Performance Additives; Solutions; President, President, Asia Pacific Region Purification Solutions Cabot Corporation | Investor Day 2021 | 50
Slide 51: Performance Chemicals | Key Messages
Performance Chemicals | Key Messages 1 2 3 4 5 Breadth of Product Top Tier Macro‐Driven Portfolio of High Potential for Manufacturing, Technologies and Demand Positions Growth, High Significant Value R&D and Manufacturing Segment for Margin Businesses Creation Commercial Outsized Growth Footprint Ca
Slide 52: Performance Chemicals Financial Performance
Performance Chemicals Financial Performance Volume Segment EBIT +4% +3% GDP+ volume growth (KMTs) ($M) CAGR CAGR despite headwinds driven by external environment $211 $178 Continued to invest in areas with significant growth potential Delivered fiscal 2021 1 EBITDA of $284M as growth investments sta
Slide 53: Performance Chemicals Exposure is Well-Balanced
Performance Chemicals Exposure is Well‐Balanced 1 End Market Exposure Products enable wide range of functionalities; ubiquitous in everyday life Transportation Infrastructure / Asia 26% Industrial Resilient demand across many attractive applications 44% Diverse customer base: 3,000+ EMEA customers g
Slide 54: Globally Distributed Sales and Production Facilities
Globally Distributed Sales and Production Facilities Recent Growth Investments 1 1 32% 26% 1 u Specialty Carbons: EMEA Americas 42% Xuzhou, China acquisition Asia and capacity conversion u Battery Materials: Tianjin, China conversion and Zhuhai, China CNT acquisition u Fumed Metal Oxides: Capacity e
Slide 55: Performance Chemicals Portfolio of attractive specialty businesses
Performance Chemicals Portfolio of attractive specialty businesses Performance Additives FormulatedSolutions Fumed Metal Oxides Inkjet Specialty Carbons Specialty Compounds w Versatile performance additives w A leading global supplier of w Products deliver color, w Growing, high‐RONA used in range o
Slide 56: Specialty Carbons
SPECIALTY CARBONS Jeff Zhu SVP and President, Performance Additives; President, Asia Pacific Region Cabot Corporation | Investor Day 2021 | 56
Slide 57: Performance Chemicals Portfolio of attractive specialty businesses
Performance Chemicals Portfolio of attractive specialty businesses Performance Additives FormulatedSolutions Fumed Metal Oxides Inkjet Specialty Carbons Specialty Compounds w Versatile performance additives w A leading global supplier of w Products deliver color, w Growing, high‐RONA used in range o
Slide 58: Specialty Carbons at a Glance
Specialty Carbons Specialty Carbons at a Glance Overview Competitive Landscape Key Industries Industrial/Infrastructure u Global elevated growth driven w MV/HV Cables by electrification, infrastructure, Cabot digitalization w Pressure Pipes Others u EV penetration accelerating as w Industrial Coatin
Slide 59: Specialty Carbons Creating for Tomorrow by Addressing Key Macro Trends
Specialty Carbons Creating for Tomorrow by Addressing Key Macro Trends Macro trends position business for outsized growth Specialty Carbons Solution u Broad conductive carbon additives portfolio positions business Changing as a leader in EV lithium‐ion batteries Key Investments in China Mobility u S
Slide 60: Specialty Carbons Strong Underlying Growth with Competitive Advantages
Specialty Carbons Strong Underlying Growth with Competitive Advantages Resilient Macro trends Well‐positioned Sales to 6 of top 8 demand battery makers driving growth for EV expansion Driven by broad product Mobility, Sustainability A leading manufacturer with With new product programs portfolio wit
Slide 61: Spotlight on Battery Materials within Specialty Carbons
SPOTLIGHT ON BATTERY MATERIALS WITHIN SPECIALTY CARBONS Cabot Corporation | Investor Day 2021 | 61
Slide 62: Battery Materials Vehicle Electrification Drives Need for Li-ion Batteries
Battery Materials Vehicle Electrification Drives Need for Li‐ion Batteries Global Passenger Vehicles annual sales u EVs with lithium‐ion batteries expected to have >50% (inmillions) share of global passenger vehicles sold in 2035 100 1 u Manycountries and companies supporting EV growth 90 80 ꟷ Biden
Slide 63: Conductive Carbon Additives Market Expected to Grow ~30% CAGR
Battery Materials Conductive Carbon Additives (CCAs) Market Expected to Grow ~30% CAGR Accelerating Battery Demand Increasing Global Conductive Carbon Additives 1627 (CCA) Demand (GWh) MT 950 80,000 26% CAGR 2020‐2027 345 60,000 280 Carbon Black (Powder) 45 60 40,000 2020 2030 20,000 North America E
Slide 64: Conductive Carbon Additives are a Critical Component for Lithium-ion Batteries
Battery Materials Conductive Carbon Additives are a Critical Component for Lithium‐ion Batteries Conductivecarbon additives connect active materials within the electrode for efficient and durable charge transfer u ~1% dosage in weight u Less than 2% of total cost Provide optimized conductivity (shor
Slide 65: We Have "Right to Win" in CCAs for Li-ion Batteries
Battery Materials We Have “Right to Win” in CCAs for Li‐ion Batteries LITX® ENERMAX™ Carbon Blacks CNTs Broadspectrum of CCA Global manufacturing StrongR&D commitment product portfolio footprint is a strong value in new material proposition development for next‐gen u Portfolio includesspecialty batt
Slide 66: Battery Materials Expanding Our Global Footprint
Battery Materials Expanding Our Global Footprint Billerica, MA, USA Botlek, Netherland Tianjin, China Shanghai, China Pampa, TX, USA Zhuhai, China Canal, LA, USA 5 ManufacturingSites 3 R&D/Technology Centers 6 Commercial & Technical Support Sites Strong Reputation with Global Network and Scale 66 Ca
Slide 67: Strategic Investments Have Enabled Strong Growth
Battery Materials Strategic Investments Have Enabled Strong Growth to Date and Expected in the Future Completed $100M CNT acquisition in April 2020 1 ◆ Purchased #2 CNT manufacturer in China with extensive experience in CNT dispersions ◆ Enhanced product offerings to battery customers ◆ Strengthened
Slide 68: Positioned to Win with 50%+ Forecasted EBIT CAGR
Battery Materials Positioned to Win with 50%+ Forecasted EBIT CAGR Over Next 3 Years ~30% 10‐year Distinguished Global network to Performance anticipated market commercial position enable expansion track record demand CAGR Commercial sales to 6 of top 8 Manufacturing plants, R&D Delivered FY21 EBITD
Slide 69: Fumed Metal Oxides
FUMED METAL OXIDES Cabot Corporation | Investor Day 2021 | 69
Slide 70: Fumed Metal Oxides at a Glance
FMO Fumed Metal Oxides at a Glance Overview Competitive Landscape Key Industries Industrial/Infrastructure u Global, GDP+ growth driven by w Bonding pastes building & construction, Cabot digitalization, and alternative w Adhesives & Composites Others energy w Elastomers 2021E u Scarcity of feedstock
Slide 71: FMO Creating for Tomorrow by Addressing Key Macro Trends
FMO Creating for Tomorrow by Addressing Key Macro Trends Macro trends position business for strong growth FMO Solution u Fumed silica and fumed alumina are enabling technologies in Changing certain battery applications Mobility Capacity Expansions u Leading products and investing in new capacity to
Slide 72: FMO Highly Profitable Business with Strong Forecasted Growth
FMO Highly Profitable Business with Strong Forecasted Growth Macro trends support Attractive industry High‐margin and Leading position Sustainability‐focused GDP+ demand growth structure growing business in China products Direct linkage to silicone Few global players, high entry Clean power expected
Slide 73: Specialty Compounds
SPECIALTY COMPOUNDS Aaron Johnson SVP and President, Formulated Solutions; President, Purification Solutions Cabot Corporation | Investor Day 2021 | 73
Slide 74: Performance Chemicals Portfolio of attractive specialty businesses
Performance Chemicals Portfolio of attractive specialty businesses Performance Additives FormulatedSolutions Fumed Metal Oxides Inkjet Specialty Carbons Specialty Compounds w Versatile performance additives w A leading global supplier of w Products deliver color, w Growing, high‐RONA used in range o
Slide 75: Specialty Compounds Plastics Industry Value Chain
Specialty Compounds Plastics Industry Value Chain Ingredients Formulation Product ◆ Specialty carbons tailored for specific end‐◆ Close connectivity to OEM allows quick ◆ Finished products manufacturing applications response to changing needs ◆ Pulls next‐gen materials in response to ◆ Rapid new pro
Slide 76: Specialty Compounds at a Glance
Specialty Compounds Specialty Compounds at a Glance Overview Competitive Landscape Key Industries Agriculture Automotive w End‐users from diverse set of Cabot GDP+ markets Comp w Customer base consolidating and A looking for global partners Black Comp Others Masterbatch w Highly fragmented landscape
Slide 77: Winning by Combining High RONA with Growth
Specialty Compounds 1 Winning by Combining High RONA with Growth 30%+ RONA driven by high asset turns RONAu An industry‐leading RONA driven by EBIT % Asset Turns X= (30%+) (low‐double‐digits) (low‐to‐mid 3s) high asset turns ꟷ Capital efficiency ꟷ Working capital management u Proven growth well in‐e
Slide 78: Specialty Compounds Creating for Tomorrow by Addressing Key Macro Trends
Specialty Compounds Creating for Tomorrow by Addressing Key Macro Trends Well‐positioned to benefit from macro trends Specialty Compounds Solution Formulations designed for engineering thermoplastics to enable Changing metal replacement in high‐performance vehicle applications to improve fuel effici
Slide 79: Partner of Choice for Customers Seeking to Innovate
Specialty Compounds Partner of Choice for Customers Seeking to Innovate Successful engagement with a polymer producer paying off Customer Success Story Customer Background Large, global polymer producer looking to take engineering solutions for automotive applications to the next level Cabot Solutio
Slide 80: Robust Business Potential with 10%+ Annual EBIT Growth Expected
Specialty Compounds Robust Business Potential with 10%+ Annual EBIT Growth Expected Over Next 3 Years Continue strong Leverage recent Increase sustainability Expand Explore further organic demand bolt‐on in new product capacity bolt‐on growth acquisitions development acquisitions Operational improve
Slide 81: Inkjet
INKJET Cabot Corporation | Investor Day 2021 | 81
Slide 82: Inkjet Production Printing Industry Value Chain
Inkjet Inkjet Production Printing Industry Value Chain Dispersion is a critical control point in formulation design Ingredients Formulation Product ◆ Leverage expertise and intellectual ◆ Multiple dispersion platforms facilitates ◆ Pulls next‐gen products in line with property in carbon black and pa
Slide 83: Inkjet at a Glance
Inkjet Inkjet at a Glance Overview Competitive Landscape Key Segments Packaging Commercial u Major trend away from analog to digital printing supports Other Cabot shorter runs allowing more Comp customization and less waste D 2021 u Commercial printing is now Comp 1 Revenue ~20% digital due to small
Slide 84: Shift from Analog to Digital Creates Significant Opportunity
Inkjet Shift from Analog to Digital Creates Significant Opportunity for Inkjet Technology Shift from analog to digital Case Study: Commercial Printing u Facilitates shorter print run lengths u Technology has reached an inflection point and is poised to grow aggressively with less waste over next 5 y
Slide 85: In a Leading Position as Corrugated Packaging Starts Digital Adoption
Inkjet In a Leading Position as Corrugated Packaging Starts Digital Adoption u Packaging market is >5x size of commercial, office, and work‐from‐home combined u Digitization journey for packaging has begun and corrugated sub segment is expected to be first to convert u Pigment dispersion: strong cos
Slide 86: Winning in Packaging: Leveraging Capabilities and Breadth of Technology
Inkjet Winning in Packaging: Leveraging Capabilities and Breadth of Technology Solution Early Engagement Competitive Advantage IP‐protected surface Enabled advantaged Winning through strong Majorestablished modified technology position to get specified technical competitive analog OEM adopted due to
Slide 87: Digitization Driving Potential for Transformative Growth
Inkjet Digitization in Commercial and Packaging Driving Potential for Transformative Growth Digitization drives Commercial and Investments for increased High‐growth, significant inkjet packaging segments capacity aligned with high‐RONA demand driving growth demand growth business Revenue expected to
Slide 88: Performance Chemicals – Looking Ahead
Performance Chemicals –Looking Ahead Differentiated opportunities enable 9‐11% expected volume CAGR Fumed Specialty Battery Specialty Metal Inkjet Carbons Materials Compounds Oxides u Xuzhou capacity u Rapid growth of EVsu GDP+ end market u Unique downstream u Capacity additions addition growth posi
Slide 89: Financial Framework
Financial Framework Erica McLaughlin SVP & CFO Cabot Corporation | Investor Day 2021 | 89
Slide 90: Financial Update | Key Messages
Financial Update | Key Messages 1 2 3 4 1 Capital Allocation Strong Execution Disciplined Step up in DFCF is Priorities Focused Resulted in Robust Balance Sheet Expected toFund on Accelerating Financial Results Management Strategic Bolt‐on Growth and through Fiscal 2021 Enables Growth Acquisitions a
Slide 91: Robust Financial Performance
Robust Financial Performance 1 1 1 1 Adjusted EPS Adjusted EBIT Adjusted EBITDA Adjusted ROIC +12% +10% +6% ($) ($M) ($M) ($M) CAGR CAGR CAGR $652 18% $5.02 $492 $470 $2.49 $286 8% FY2015 FY2021 FY2015 FY2021 FY2015 FY2021 FY2015 FY2021 Driven by Successful Execution of Strategy 1.Non‐GAAP measure –
Slide 92: Significant Improvement in Net Working Capital
Significant Improvement in Net Working Capital Net Working Capital Days Net Working Capital ($M) 600 120 $535 $501 $485 77 $466 $459 500 100 $434 66 64 63 61 400 80 52 $289 46 300 60 $72 $70 $57 200 40 $50 $45 $45 $40 100 20 0 0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 :
Slide 93: Uninterrupted Dividend Payment
Uninterrupted Dividend Payment Dividends Per Share $1.60 $1.40 Dividend Dividend Yield Payout Ratio $1.20 Cabot 2.8% 28% $1.00 Peers 1.3% 19% $0.80 $0.60 $0.40 $0.20 $0.00 Consistent Dividend Payment for Over 50 Years with Regular Increases for an Industry‐Leading Dividend Yield 93 Cabot Corporation
Slide 94: Returned over $1B to our Shareholders
Returned over $1B to our Shareholders 2015‐2021 Cumulative Dividends and Share Repurchases Diluted Shares Outstanding ($M) $1,200 64.0 $1,000 62.0 $800 60.0 $600 58.0 $400 56.0 $200 $0 54.0 2015 2016 2017 2018 2019 2020 2021 2015 2016 2017 2018 2019 2020 2021 1 u Dividends and repurchases totaled 64
Slide 95: Disciplined Balance Sheet Management
Disciplined Balance Sheet Management 1 2 Net Debt/Adjusted EBITDA Key Financial Metrics 2.4x 1 Adjusted EBITDA $652M 1.9x 1.7x 1.5x 1.5x 1.3x 1.5x Cash Balance $168M Gross Debt $1,162M 1 DFCF $353M 2015 2016 2017 2018 2019 2020 2021 Liquidity/Credit Ratings Maturity Profile ($M) u Significant liquid
Slide 96: Capital Allocation Framework Supports Creating for Tomorrow
Capital Allocation Framework Supports Creating for Tomorrow Growth Strategy High Confidence, Bolt‐on M&A Grow Dividend Share Repurchases Maintain Financial High Return Flexibility u Disciplined approach u Continued support of u Access market Investments to M&A opportunities a growing dividend opport
Slide 97: 3-Year Outlook for Business Segments
3‐Year Outlook for Business Segments Reinforcement Materials Performance Chemicals Volume CAGR 2‐3% 9‐11% EBIT CAGR 5‐9% 12‐15% Average CapEx Per Year ~$130M ~$140M Focused on maintenance and Focused on growth capital in compliance capital and added differentiated spaces, such as capacity in Indones
Slide 98: Driving Growth across the Portfolio
Driving Growth across the Portfolio 1 Total Segment EBIT ($M) $85 –$105 $685‐$755 Building on Record Results $50 –$100 $550 u Leveraging our advantaged positions across our businesses u Delivering growth in differentiated end markets, such as batteries and inkjet packaging u Driving sustainability a
Slide 99: Capital Expenditures
Capital Expenditures Investing in our high growth businesses, Creating for Tomorrow Key Growth Projects 2022‐2024 Capex Capex Targets and Focus Areas Performance Chemicals | Performance Additives Specialty Carbons & Battery Materials Growth ‐ ~$27M ($30M spent to date) Xuzhou acquisition u Anticipat
Slide 100: 3-Year Consolidated Financial Targets
3‐Year Consolidated Financial Targets Reflect new level of Earnings and Cash Flow KEY MACRO DRIVERS & CAGR ASSUMPTIONS 1 Global GDP 3‐4% 6 Adjusted EPS CAGR 8‐12% 2 Tire Production 3% 3 Auto Builds 8% Discretionary Free Cash Flow $1B+ over 3 years 6 4 (DFCF) Polymer Demand (Plastics) 5‐6% 5 Lithium‐
Slide 101: Discretionary Free Cash Flow (DFCF)
1 Discretionary Free Cash Flow (DFCF) Robust and Growing DFCF generation Annual DFCF ($M) $450M u Generated $223M of DFCF on average per year from $353 2015‐2020 1 $223 u Strong underlying Adj. EBITDA drove step‐up in DFCF starting in 2021 u Expect DFCF to grow to $450M in FY’24 as we execute our Cr
Slide 102: Compensation Programs Aligned with Targets
Compensation Programs Aligned with Targets Short‐term Incentive Program Adjusted EBIT, Net Working Capital Days, Discretionary Free Cash Flow Long‐term Incentive Program Adjusted EPS, Adjusted RONA Continuous improvement expected in ESG performance aligned with our 2025 goals Align Compensation with
Slide 103: M&A Opportunities
M&A Opportunities STRATEGIC FOCUS AREAS INVESTMENTCRITERIA Accretive bolt‐on acquisitions to support strategy could drive incremental growth above targets Growth and/or u Capability and capacity acquisitions in Accretive to Earnings Margin Enhancing high growth segments – Batteries – Inkjet Packagin
Slide 104: Financial Framework | Key Takeaways
Financial Framework | Key Takeaways Strong Execution Resulted in Robust Financial 1 Results through 2021 Disciplined Balance Sheet Management Enables 2 Growth Strategy Capital Allocation Priorities Focused on Accelerating 3 Growth and Creating Stakeholder Value 1 Step up in DFCF Expected to Fund Str
Slide 105: Closing Remarks
CLOSING REMARKS Sean Keohane President & CEO Cabot Corporation | Investor Day 2021 | 105
Slide 106: Looking Ahead
Looking Ahead Core businesses Elevated growth Advantaged Creating for remain well levels driven by growth Tomorrow positioned for high potential investments strategy calls for growth product lines funded by strong further integrating cash flow and sustainability in balance sheet everything we do 106
Slide 107: Q&A
Q&A 107 Cabot Corporation | Investor Day 2021
Slide 108: Appendix
Appendix 108 Cabot Corporation | Investor Day 2021
Slide 109: Use of Non-GAAP Financial Measures
Use of Non‐GAAP Financial Measures This presentation includes references to adjusted earnings per share (EPS), total segment EBIT, segment EBITDA, adjusted EBITDA,adjusted return on invested capital (ROIC), discretionary free cash flow (DFCF) and operating tax rate, which are non‐GAAP measures. Reco
Slide 110: Use of Non-GAAP Financial Measures: Explanation of Terms Used
Use of Non‐GAAP Financial Measures Explanation of Terms Used EBITDA Margin by product line is calculated by dividing estimated net income (loss), including depreciation and amortization, by estimated revenues Adjusted return on net assets (“adjusted RONA”) by product line presented for the Performan
Slide 111: Non-GAAP Reconciliations: Adjusted EPS
Non‐GAAP Reconciliations Adjusted EPS 1 Per Share/Fiscal Year FY2021 FY 2015 Net income (loss) per share attributable to Cabot Corporation $ (5.49) $ 4.34 Less: Net income (loss) per share from discontinued operations 0.02 ‐ Net income (loss) per share from continuing operations (5.51) 4.34 Less: Ce
Slide 112: Non-GAAP Reconciliations: Adjusted EBIT, Adjusted EBITDA
Non‐GAAP Reconciliations Adjusted EBIT, Adjusted EBITDA and Adjusted EBITDA Margin 1 Dollars in Millions/Fiscal Year FY 2021 FY 2015 $ (399) $ 406 Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies Interest expense 53 49 Certain items 617 34 G
Slide 113: Non-GAAP Reconciliations: Segment EBITDA and Margin
Non‐GAAP Reconciliations Segment EBITDA and Segment EBITDA Margin ($M)/Fiscal Year FY 2015 FY 2021 Reinforcement Materials EBIT $ 143 $ 329 Plus: Depreciation & Amortization 83 70 Reinforcement Materials EBITDA $ 226 $ 399 Reinforcement Materials Sales 1,507 1,781 Reinforcement Materials EBITDA Marg
Slide 114: Non-GAAP Reconciliations: Total Segment EBIT
Non‐GAAP Reconciliations Total Segment EBIT ($M)/Fiscal Year FY2021 Income (loss) before income taxes and equity in earnings of affiliated companies $ 406 Less: Certain items (34) Less: Other Unallocated items (110) Total Segment EBIT $ 550 114 Cabot Corporation | Investor Day 2021
Slide 115: Non-GAAP Reconciliations: Adjusted ROIC
Non‐GAAP Reconciliations Adjusted Return on Invested Capital (ROIC) 1 ($M)/Fiscal Year FY 2021 FY 2015 Numerator ‐ Adjusted net income (loss): Net income (loss) attributable to Cabot Corporation $ (334) $ 250 Less: Certain items, net of tax benefit (provision) (510) (38) Less: Net income attributabl
Slide 116: Non-GAAP Reconciliations: Operating Tax Rate & Net Debt to Adjusted EBITDA
Non‐GAAP Reconciliations Operating Tax Rate & Net Debt to Adjusted EBITDA ($M)/Fiscal Year FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 Current portion of long‐term debt & Short‐term borrowings $ 23 $ 8 $ 263 $ 284 $ 40 $ 21 $ 445 Long‐term debt 970 918 661 719 1,024 1,094 717 Total Debt
Slide 117: Non-GAAP Reconciliations: Discretionary Free Cash Flow
Non‐GAAP Reconciliations Discretionary Free Cash Flow (DFCF) ($M)/Fiscal Year FY 2021 $ 257 Cash flow from operating activities (222) Less: Changes in net working capital Less: Sustaining and compliance capital expenditures 126 Discretionary Free Cash Flow $ 353 117 Cabot Corporation | Investor Day
Slide 118: Leadership Bios
Leadership Bios 118 Cabot Corporation | Investor Day 2021
Slide 119: Leadership Bios
Leadership Bios Sean Keohane President and Chief Executive Officer Sean Keohane is president and chief executive officer of Cabot Corporation and a member of the Board of Directors. Since joining Cabot in 2002. Sean has held numerous key management positions including president of the Reinforcement
Slide 120: Leadership Bios
Leadership Bios Martin O’Neill SVP, Safety, Health & Environment and Government Affairs Martin O'Neill joined Cabot in 2000. Since joining Cabot, Martin has held several key positions including director of SH&E for the former Cabot supermetals business, plant general manager for the company's tantal
Slide 121: Leadership Bios
Leadership Bios Jeff Zhu SVP& President, Performance Additives & Asia Pacific Region Jeff Zhu joined Cabot in 2012. Prior to joining the company, he spent 18 years with Rhodia (and its predecessor Rhone‐ Poulenc) where he served in a variety of regional and global business leadership roles, includin