CABOT CORPORATION EARNINGS TELECONFERENCE FIRST QUARTER - FISCAL 2026 Q1 Fiscal 2026 1 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 the second quarter of and fiscal year 2026, including our expectations for performance in our businesses, cash flow generation, our growth in battery materials, for cost savings we will recognize and for ...

分组1 - Cabot reported quarterly earnings of $1.53 per share, exceeding the Zacks Consensus Estimate of $1.4 per share, but down from $1.76 per share a year ago, representing an earnings surprise of +9.36% [1] - The company posted revenues of $849 million for the quarter, missing the Zacks Consensus Estimate by 3.73%, and down from $955 million year-over-year [2] - Over the last four quarters, Cabot has surpassed consensus EPS estimates three times but has not beaten consensus revenue estimates [2] 分组2 - The stock has gained approximately 9.9% since the beginning of the year, outperforming the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $1.66 on revenues of $891.24 million, and for the current fiscal year, it is $6.47 on revenues of $3.52 billion [7] - The Zacks Industry Rank for Chemical - Diversified is currently in the bottom 15% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Performance - First Quarter 2026 diluted EPS was $1.37, with Adjusted EPS at $1.53, reflecting a 13% decrease year-over-year[5] - Net sales for the quarter were $849 million, down from $955 million in the same period last year[4] - Net income attributable to Cabot Corporation was $73 million, compared to $93 million in the prior year[4] - Gross profit for the same period was $211 million, down from $235 million, reflecting a gross margin of 24.8% compared to 24.6% in the prior year[30] - Net income attributable to Cabot Corporation for the three months was $73 million, a decrease of 21.5% from $93 million in the previous year[31] - Diluted earnings per share for the three months ended December 31, 2025, were $1.37, down from $1.67 in the same period of 2024[31] - Total net sales for the fiscal year 2025 were $3,591 million, with a quarterly breakdown of $955 million in December, $936 million in March, and $923 million in June[35] - Net income for the fiscal year 2025 was $376 million, with quarterly net income of $104 million in December, $105 million in March, and $113 million in June[35] - Diluted earnings per share for fiscal year 2025 were $6.02, with quarterly earnings of $1.67 in December, $1.69 in March, and $1.86 in June[36] - Adjusted earnings per share (EPS) for Fiscal 2026 is projected at $1.53, while the net income per share attributable to Cabot Corporation is $1.37 for the December quarter[40] - For Fiscal 2025, the adjusted EPS was $7.25, with a net income per share of $6.02 for the full year[41] Segment Performance - Performance Chemicals segment EBIT increased by 7% year-over-year to $48 million, driven by a favorable product mix and strength in Battery Materials[5] - Reinforcement Materials segment EBIT decreased by 22% year-over-year to $102 million, primarily due to lower volumes in the Americas and Asia Pacific[5] - Segment sales for Reinforcement Materials were $520 million, a decline of 14.9% from $611 million, while Performance Chemicals sales decreased by 3.5% to $300 million from $311 million[31] - Total Segment EBITDA for Fiscal 2026 is reported at $191 million, with an adjusted EBITDA of $179 million[42] - Reinforcement Materials sales for Fiscal 2026 reached $520 million, with an EBITDA margin of 23%[42] - Performance Chemicals sales for Fiscal 2026 amounted to $300 million, also with an EBITDA margin of 23%[42] Cash Flow and Capital Management - Cash flows from operations were $126 million, enabling $76 million returned to shareholders through dividends and share repurchases[5] - Cash provided by operating activities for the three months ended December 31, 2025, was $126 million, compared to $124 million for the same period in 2024[38] - Cash and cash equivalents at the end of the period were $230 million, up from $183 million at the end of the previous year[38] - Free cash flow for the December quarter of Fiscal 2026 is $57 million, while discretionary free cash flow is $71 million[42] - Cash provided by operating activities for the December quarter is $126 million, with $69 million allocated to property, plant, and equipment[42] Balance Sheet and Financial Ratios - The net debt to EBITDA ratio was 1.2 times as of December 31, 2025, indicating a strong balance sheet[6] - Total current assets as of December 31, 2025, were $1,457 million, down from $1,539 million at the end of September 2025[33] - Total liabilities as of December 31, 2025, were $2,028 million, compared to $2,062 million at the end of September 2025[34] - The company reported a decrease in accounts payable and accrued liabilities from $648 million to $575 million over the same period[34] Taxation - The effective tax rate for the three months ended December 31, 2025, was 31%, with an operating tax rate of 28%[39] - The operating tax rate is calculated based on management's forecast and excludes certain discrete tax items, which could materially impact future effective tax rates[27] - The operating tax rate for Fiscal 2026 is expected to be in the range of 27% to 29%[40] Other Notable Items - A multi-year supply agreement was signed with PowerCo SE for conductive carbons and dispersions for lithium-ion battery applications, reinforcing Cabot's leadership in Battery Materials[6] - The company reported a total of $9 million in certain items after tax for the three months ended December 31, 2025, resulting in a per-share impact of $(0.16)[39] - Certain items after tax per share for Fiscal 2026 is $(0.16), impacting the adjusted EPS calculation[41] - Research and technical expenses for the three months were $13 million, slightly down from $14 million in the previous year[30] - Additions to property, plant, and equipment for the three months ended December 31, 2025, were $(69) million, compared to $(77) million in the same period of 2024[38]

Core Insights - Cabot Corporation reported diluted earnings per share (EPS) of $1.37 and adjusted EPS of $1.53 for the first quarter of fiscal 2026, reflecting a 13% decrease in adjusted EPS year-over-year [1][4][10] Financial Performance - Net sales and other operating revenues for the first quarter were $849 million, down from $955 million in the same period last year [3][26] - Net income attributable to Cabot Corporation was $73 million, compared to $93 million in the prior year [5][26] - The Performance Chemicals segment EBIT increased by 7% year-over-year to $48 million, driven by a favorable product mix and strength in the Battery Materials product line [4][6] - The Reinforcement Materials segment EBIT decreased by 22% year-over-year to $102 million, primarily due to lower volumes in the Americas and Asia Pacific [4][6] Segment Highlights - Global Reinforcement Materials volumes decreased by 7%, with a 15% decline in the Americas and a 7% decline in Asia Pacific, while Europe, the Middle East, and Africa saw a 6% increase [7][10] - The Performance Chemicals segment experienced lower volumes due to weaker demand in Europe, despite higher gross profit per ton [6][7] Strategic Developments - Cabot entered into a multi-year supply agreement with PowerCo SE to supply conductive carbons and dispersions for lithium-ion battery applications, reinforcing its leadership in the Battery Materials sector [4][10] - The company aims to build its position in the battery materials sector, which is a strategic priority given the expected growth in electric vehicles and energy storage applications [4][10] Cash Flow and Capital Allocation - Operating cash flow for the first quarter was $126 million, allowing the company to invest in capital expenditures of $69 million, pay $24 million in dividends, and repurchase $52 million of shares [4][8] - The company maintains a strong balance sheet with a net debt to EBITDA ratio of 1.2 times as of December 31, 2025 [4][10] Outlook - The company narrowed its full-year adjusted EPS guidance to a range of $6.00 to $6.50 per share, reflecting ongoing negotiations for tire customer agreements [10] - Despite challenges in the Reinforcement Materials segment, the company expects earnings growth in the Performance Chemicals segment, particularly in Battery Materials [10]

Core Viewpoint - Cabot Corporation has experienced a slight decline in consensus price target, yet shows potential for future growth due to recent stock price increase and positive analyst outlook [2][5][6] Company Overview - Cabot Corporation (NYSE:CBT) operates in the specialty chemicals and performance materials sector, with three main segments: Reinforcement Materials, Performance Chemicals, and Purification Solutions [1] - The company offers a diverse range of products including reinforcing carbons, specialty carbons, and activated carbon, serving industries such as automotive, electronics, and consumer products [1] Stock Performance - The consensus price target for Cabot's stock has decreased from $81 to $78.67 over the past year, indicating a modest reduction in analyst optimism [2][6] - Despite the decline in consensus price target, Cabot's stock has seen a 4.4% increase since the last earnings report [2][6] Analyst Insights - Analyst John Roberts from Mizuho Securities has set a price target of $104 for Cabot's stock, reflecting a positive outlook for the company's future performance [3][6] - This suggests that some analysts remain optimistic about Cabot's potential despite the overall decline in consensus price target [3] Investment Considerations - Investors are advised to monitor Cabot's quarterly earnings reports for insights into financial health and performance [4] - Keeping track of industry trends and any strategic initiatives or product developments from Cabot Corporation could provide valuable information for assessing the stock's potential [4]

Core Viewpoint - Cabot Corporation has successfully completed the acquisition of Mexico Carbon Manufacturing S.A. de C.V. from Bridgestone Corporation, enhancing its manufacturing capabilities and reinforcing its position in the reinforcing carbon market [1][2][3] Group 1: Acquisition Details - The acquisition follows a definitive agreement announced in August and the receipt of necessary regulatory approvals [1] - The MXCB facility is strategically located near Cabot's existing facility in Altamira, Mexico, which enhances production capacity and operational flexibility [2] Group 2: Strategic Implications - This acquisition strengthens the partnership between Cabot and Bridgestone, allowing Cabot to better support diverse customer needs and future growth opportunities [2][3] - The addition of the MXCB facility expands Cabot's global manufacturing footprint and positions the company for long-term success in its core markets [3] Group 3: Company Background - Cabot Corporation is a global specialty chemicals and performance materials company headquartered in Boston, Massachusetts, and is a leading provider of reinforcing carbons and other specialty materials [4] - Bridgestone Corporation is a global leader in tires and rubber, employing approximately 121,000 people and operating in over 150 countries [5]

Core Viewpoint - Cabot has signed a multi-year supply agreement with PowerCo SE, a subsidiary of Volkswagen Group, to provide advanced conductive carbon black and conductive pastes for electric vehicle battery electrodes [1] Group 1: Agreement Details - The agreement includes the supply of high-performance conductive additives designed to enhance battery conductivity and efficiency, leading to higher energy density, faster charging capabilities, and longer cycle life for lithium-ion batteries [1] - Cabot's product portfolio also includes a wider range of conductive additives and pastes aimed at optimizing battery performance across various applications, including electric vehicles, energy storage systems, and consumer electronics [1] Group 2: Company Positioning - This collaboration positions Cabot as one of the leading suppliers of conductive materials in the European electric vehicle battery market, demonstrating the company's strength in technology development and large-scale production [1] - The partnership reflects the growing global demand for high-performance conductive agents, which Cabot is well-equipped to meet [1]

Core Insights - Cabot Corporation received an A- for Water Security and a B for Climate Change in CDP's 2025 assessment, indicating consistent progress in sustainability programs [2][4] - The Water Security score improved from a B in 2024 to an A-, while the Climate Change score remained a solid B, with improvements in climate risk disclosure and industry collaboration [2][3] - Cabot's performance reflects a five-year trend of steady improvement despite stricter reporting standards and rising stakeholder expectations [3] Sustainability Performance - The improvement in Water Security score highlights Cabot's leadership in managing water-related risks and implementing sustainable practices [2][4] - The company is committed to enhancing its sustainability strategy across all domains, supported by a dedicated global team [4][5] - CDP evaluated over 24,800 companies globally in 2025, covering two-thirds of global market capitalization, emphasizing the significance of Cabot's ratings [4]

Core Insights - The article discusses Cabot Corporation's (CBT) performance and market trends, particularly focusing on bearish technical trends and volume pressure in its Reinforcement Materials and Performance Chemicals segments [1]. Company Analysis - Cabot Corporation's last earnings report was released on November 3, 2025, which followed a previous analysis in October of the same year [1]. - The company is experiencing bearish technical trends, indicating potential challenges in its stock performance [1]. - There is noted volume pressure in both the Reinforcement Materials and Performance Chemicals segments, which may affect overall profitability and market perception [1].

Core Viewpoint - Cabot Corporation will release its operating results for the first quarter of fiscal 2026 on February 3, 2026, after market close, followed by a conference call on February 4, 2026, at 8:00 am ET [1]. Group 1 - The conference call will be available via webcast on Cabot's website and will be archived for later access [2]. - Cabot Corporation is a global specialty chemicals and performance materials company headquartered in Boston, Massachusetts, providing a range of products including reinforcing carbons, specialty carbons, and battery materials [3].