Cabot Corporation

Good day, and welcome to the first quarter 2022 Cabot Earnings Conference Call. At this time, all participants are in listen-only mode. After the speaker's presentation, there will be a question and answer session. To ask a question during the session, you will need to press star then 1 on your touchtone telephone. If anyone should require assistance during the conference, please press star then 0 to reach an operator. As a reminder, this call is being recorded. I would like to turn the call over to Steve Delahunt, Vice President, Investor Relations. You may begin.

Thanks, Michelle, and good morning. I would like to welcome you to the Cabot Corporation Earnings Teleconference. With me today are Sean Cohane, CEO and President, and Erica McLaughlin, Senior Vice President and CFO. Last night, we released results for our first quarter of fiscal year 2022, copies of which are posted in the Investor Relations section of our website. The slide deck that accompanies this call is also available in the investor relations portion of our website and will be available in conjunction with the replay of the call. During this conference call, we will make forward-looking statements about our expected future operational and financial performance. Each forward-looking statement is subject to risks and uncertainties that could cause actual results to differ materially from those projected in such statements. Additional information regarding these factors appears in the press release we issued last and in our 10-K for the fiscal year ended September 30, 2021, and in subsequent filings we make with the SEC, all of which are available on the company's website. In order to provide greater transparency regarding our operating performance, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results. Any non-GAAP financial measure referenced on this call is reconciled to the most directly comparable GAAP financial measure in a table at the end of our earnings release issued last night and available in the investors section of our website. I will now turn the call over to Sean, who will discuss the first quarter highlights, provide an update on our strategy, and then discuss our progress in the areas of battery materials and ESG. Erica will review the company and business segment results, along with some corporate financial details. Following this, Sean will provide closing comments and open the floor to questions. Sean?

Thank you, Steve. Good morning, ladies and gentlemen, and welcome to our call today. I'm very pleased with results in the first quarter as we delivered adjusted earnings per share of $1.29, which is up 9% compared to the same quarter last year. Performance across our businesses was strong, and I'm very proud of our execution discipline across all facets of the company. Additionally, our discretionary free cash flow during the quarter was robust, and this supported the repurchase of shares and an increase to the dividend of 6%. Our team executed exceptionally well in the quarter, and this made the difference in successfully navigating a dynamic macro environment. The quarter was marked by strong progress against our key strategic objectives, and I would like to highlight a few noteworthy accomplishments. We recently concluded our calendar year 2022 reinforcement materials customer agreements and are very pleased with the outcomes, having achieved substantial price increases in all regions. As we shared during Investor Day, the market environment remains supportive and Cabot's value proposition of supply reliability, quality, and global reach continues to resonate with customers. This is especially true in this period where supply chains are stressed and customers are increasingly looking to de-risk their operations through regionalization of the supply base. This plays very well to our strengths as a company, as we can support our global customers with local supply in all regions. During the quarter, we also continued to build momentum in battery materials, and we advanced a number of ESG priorities. I will elaborate on both of these fronts, but before I do, I think it's important to connect our priorities to our strategies. During our recent Investor Day, we launched our new Creating for Tomorrow strategy. This strategy is inspired by our purpose to create materials that improve daily life and enable a more sustainable future. As we execute our strategy, we will leverage our strengths to lead in performance and sustainability today and into the future. And we will deliver on this strategy by advancing three key pillars, driving advantage growth, delivering innovative chemistry to enable a better future, and relentlessly pursuing continuous improvement in everything that we do. By pursuing our Creating for Tomorrow strategy, we will grow, transform, and reshape the valuation potential of the company. Our strategic outlook is underpinned by an expectation of a supportive market environment and the clear connection of our products to compelling macro trends. As a result, our targets call for strong growth of adjusted earnings per share and robust discretionary free cash flow to fund growth and return capital to shareholders. Of our many compelling growth options, we are particularly excited about the momentum we are building in battery materials, and so I'd like to transition now to give you an update on our progress in this critical growth vector. As one of our key growth vectors along with Inkjet and E2C, battery materials is a key part of our Creating for Tomorrow strategy and is expected to be a major driver of our growth and reshaping the valuation of the company. The market size for conductive carbon additives and lithium ion batteries is expected to be approximately $2 billion by 2025, with 30% plus growth expected through 2030. Cabot is very well positioned given the breadth of our conductive carbon additive portfolio, our global footprint of assets, and our strong local commercial and technical support. The Cabot value proposition is resonating strongly with leading customers, as evidenced by our success in selling to six of the top eight battery producers, which represent approximately 90% of the market. During the first quarter, volumes increased 58% year over year, and we were recently qualified in a new EV platform with a top five battery manufacturer with sales expected to start in fiscal Q3. Given the strong demand outlook, we advanced important capacity projects in the quarter, including the announced acquisition of a plant in Tianjin, China. We expect to close this deal in the second quarter of this year when we will start our upgrade and conversion of equipment to produce battery material products. Also, we are on schedule to start up our new specialty carbons plant in Shuzhou, China, which is expected to free up additional battery material capacity in other parts of our network. Given this strong momentum, we expect our fiscal year 2022 full-year EBITDA to be in the range of $25 million to $35 million. The lithium-ion battery application holds great promise for Cabot, and we are both capable and determined to realize its full potential. Sustainability is integrated into everything we do at Cabin. We advance the number of important ESG priorities in the quarter. We are committed to reducing our environmental impact while supporting our customers with innovative materials to help them achieve their sustainability goals. We recently announced that we are joining other leading companies to align our sustainability agenda with the Paris Climate Agreement to achieve net zero carbon dioxide emissions by 2050. For many years, we have focused on reducing our environmental impact, and our net zero ambition is a natural progression in our sustainability journey. Aligned with this ambition, we recently completed an assessment according to the Task Force on Climate-Related Financial Disclosure, or TCFD, and published our risk and opportunity matrix. This matrix is posted on our website. Our continued leadership in ESG was also further recognized with two notable achievements. First, we were recognized by Newsweek as one of America's most responsible companies. This is the third consecutive year that we have been included on Newsweek's list, and we are very proud of this recognition. And second, we were named by Investors Business Daily as one of their 100 best ESG companies in 2021. Bringing the power of innovative chemistry to solve our customers' sustainability challenges and reduce our impact is what motivates us, and it's essential to our purpose. I look forward to updating you on further developments as we progress on our journey. I will now turn the call over to Erica to discuss the financial results of the quarter in more detail. Erica?