Slide 1: Cabot Earnings Teleconference, Second Quarter Fiscal 2023
CABOT EARNINGS TELECONFERENCE SECOND 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: Q2 2023 Highlights
Creating for Tomorrow Q2 2023 Highlights Second quarter results in line with expectations; diluted EPS of $1.29 and adjusted EPS1 of $1.33 Record Reinforcement Materials segment EBIT of $122 million; up 21% compared to the same quarter in the prior year Cash Flow from Operations of $162 million supp
Slide 4: Global EV and Lithium-ion Battery (LiB) Market Update
Global EV and Lithium-ion Battery (LiB) Market Update Expect EV and LiB Demand to Improve Sequentially k units Quarterly Global EV Sales Electric Vehicles (EV) Market Update 4,000 ◆ Significant sequential decline in EVs in March quarter; decreased 27% from December quarter − Impacted by COVID-19 out
Slide 5: Advancing our Sustainability Strategy
Advancing our Sustainability Strategy EVOLVE™ Sustainable Solutions Technology Platform ◆ Focused on advancing sustainable reinforcing carbons that offer sustainable content with reliable performance at industrial scale ◆ Cabot’s first ISCC PLUS certified solutions ENTERA™ Aerogel Particles for EV B
Slide 6: Q2 2023 Financial Highlights
Q2 2023 Financial Highlights Adjusted EPS1 Discretionary Free Cash Cash Flow1 $1.33 $76 million $205 million Diluted EPS $1.29 Cash flow from operations of $162M Capex Liquidity Operating Tax Rate1 $51 million $1.2 billion 25% YTD Fiscal ‘23 expected to Net Debt to EBITDA FY’23 forecast range be app
Slide 7: Reinforcement Materials Segment
Reinforcement Materials Segment Operating Performance Q2 2023 EBIT RESULTS Q3 2023 OUTLOOK FY 2023 OUTLOOK ◆ Unit margins improved due to ◆ Volumes expected to improve ◆ Record results expected from favorable pricing and product mix sequentially, especially in Asia as improved price and product mix
Slide 8: Performance Chemicals Segment
Performance Chemicals Segment Operating Performance Q2 2023 EBIT RESULTS Q3 2023 OUTLOOK Fiscal 2023 OUTLOOK ◆ Volumes declined 5% driven by key ◆ Sequential volume improvement ◆ Sequential EBIT improvement end market softness and COVID-19 expected as key end markets recover expected in both Q3 and
Slide 9: 2023 Outlook
2023 Outlook Adjusted EPS1 Expected to be $6.10-$6.50 in Fiscal 2023 Key Assumptions 2023 Outlook ◆ Reinforcement Materials - 2H FY23 YOY return to ◆ Another year of strong double-digit EBIT normalized volume levels expected ◆ Performance Chemicals - 2H FY23 volumes growth expected for Reinforcement
Slide 10: Cabot: A Compelling Investment Thesis
Cabot: A Compelling Investment Thesis 1 Reinforcement Materials is structurally stronger 2 Performance Chemicals poised for recovery and growth 3 Advancing high growth vectors of Batteries and Inkjet Strong Discretionary Free Cash Flow1 to fund growth 4 investments and return cash to shareholders 5
Slide 11: Q&A Q2 Fiscal 2023
CABOT Q2 FISCAL 2023 11
Slide 12: Appendix
APPENDIX Q2 FISCAL 2023 12
Slide 13: 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 14: 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 15: 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 16: Non-GAAP Financial Measures: Free cash flow & 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 Q2 FY2023 Q2 FY
Slide 17: 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 $ — $ — $ 2.23 Less: Certain items after tax per share (0.05) (0.04) — — (0.08) Adjuste