Slide 1: Cabot Earnings Teleconference Third Quarter Fiscal 2023
CABOT EARNINGS TELECONFERENCE THIRD QUARTER – FISCAL 2023
Slide 2: Forward Looking Statements
Forward Looking Statements This presentation contains forward-looking statements. All statements that address expectations or projections about the future, including with respect to our expectations for our performance in fiscal year 2023, including our expectations for adjusted earnings per share a
Slide 3: Q3 2023 Highlights
Creating for Tomorrow Q3 2023 Highlights Third quarter Diluted EPS of $1.43. Adjusted EPS1 of $1.42, up 7% sequentially Record Reinforcement Materials segment EBIT in the third fiscal quarter of $132 million, up 17% year-over-year Strong Cash Flow from Operations of $243 million supported the return
Slide 4: Reinforcement Materials Market Update
Reinforcement Materials Market Update Long term demand drivers remain solid End Market Exposure Miles Driven 340 US Miles Travelled (billions) Industrial Auto OE (Seasonally Adjusted) 10% Miles traveled (bn) 290 27% 240 190 Replacement 140 Sep-2021 Sep-2017 Sep-2018 Sep-2019 Sep-2020 Sep-2022 Jun-20
Slide 5: Performance Chemicals Market Update
Performance Chemicals Market Update Key end markets remain challenging End Market Exposure Global Manufacturing PMI PMI - Manufacturing 2 Transportation Infrastructure / 26% 65 US Europe China 6 Industrial 60 44% 55 50 10 45 Consumer / 40 7 Apr Feb Sep Feb Sep Feb Jan Mar May Aug Jan Mar Apr May Aug
Slide 6: Q3 2023 Financial Highlights
Q3 2023 Financial Highlights Adjusted EPS1 Discretionary Free Free Cash Flow1 Cash Flow1 $163 million $1.42 $128 million Diluted EPS $1.43 Cash flow from operations of $243m Capex Cash Operating Tax Rate1 $ 80 million $220 million 28% YTD Fiscal ‘23 expected to Liquidity FY’23 forecast range be appr
Slide 7: Reinforcement Materials Segment
Reinforcement Materials Segment Operating Performance Q3 2023 RESULTS SEGMENT EBIT & EBITDA Q4 2023 OUTLOOK ◆ Margins improved due to ◆ Relatively flat volumes expected $149 sequentially across most regions, favorable pricing and product mix in calendar year 2023 customer with lower seasonal volumes
Slide 8: Performance Chemicals Segment
Performance Chemicals Segment Operating Performance Q3 2023 RESULTS SEGMENT EBIT & EBITDA Q4 2023 OUTLOOK ◆ Lower volumes were driven by ◆ Volumes expected to be consistent continued softness in key end sequentially in larger product lines $81 markets, most notably in fumed and improve sequentially
Slide 9: Strong Operating Cash Flow
Strong Operating Cash Flow Outlook for continued strong cash generation enables growth investments, dividends and share repurchases STRONG HISTORICAL PERFORMANCE Q4 OUTLOOK $457 million Expect continued strength in operating cash flow YTD’23 operating cash flows ~$166 million Net Debt to EBITDA rati
Slide 10: 2023 Outlook
2023 Outlook Adjusted EPS1 guidance 1 $1.40 to $1.55 adjusted EPS expected for fiscal fourth quarter; equates to $5.13 - $5.28 for fiscal 2023 Reinforcement Materials results remain strong despite lower 2 volumes Expecting the continuation of year over year EBIT growth for Q4 Sequential improvement
Slide 11: 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 12: Q&A
CABOT (3 FISCAL 2023 12
Slide 13: Appendix
APPENDIX Q3 FISCAL 2023 13
Slide 14: 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, free cash flow, discretionary free cash flow, and operating tax rate, which are non-GAAP measures. Reconciliations of Adjusted EPS to ne
Slide 15: Non-GAAP Financial Measures: Total Segment EBIT and Adjusted EBITDA
Non-GAAP Financial Measures Total Segment EBIT and Adjusted EBITDA Our Chief Operating Decision Maker uses segment income (loss) from continuing operations before interest and taxes (which we refer to as segment “EBIT”) to evaluate the operating results of each segment and to allocate resources to t
Slide 16: Non-GAAP Financial Measures: Segment EBITDA
Non-GAAP Financial Measures Segment EBITDA Segment EBITDA is comprised of Segment EBIT plus depreciation and amortization. Management believes that Segment EBITDA is useful supplemental information because it provides investors with a view of the cash generated by each of the Company’s segments, whi
Slide 17: Free Cash Flow and Discretionary Free Cash Flow
Non-GAAP Financial Measures Free cash flow (FCF) & Discretionary free cash flow (DFCF) To calculate “Discretionary Free Cash Flow” we deduct sustaining and compliance capital expenditures and changes in Net Working Capital from cash flow from operating activities. Dollars in millions Q3 FY2023 Q3 FY
Slide 18: Non-GAAP Financial Measures: Adjusted EPS
Non-GAAP Financial Measures Adjusted EPS Fiscal 2023 (A) Dec. Q Mar. Q June Q Sept. Q FY 2023 Reconciliation of Adjusted EPS to GAAP EPS Net income (loss) per share attributable to Cabot Corporation $ 0.93 $ 1.29 $ 1.43 $ — $ 3.65 Less: Certain items after tax per share (0.05) (0.04) 0.01 — (0.08) A