Cabot Corporation

Good day, ladies and gentlemen. Thank you for standing by, and welcome to the Cabinet's second quarter 2022 earnings conference call. At this time, all participants are on a listen-only mode. After this week's presentation, there will be a question and answer session. To ask a question during the session, you will need to press the star, then the one key on your touch-tone telephone. If you recall operating systems at any time, please press star, then zero. I would now like to turn the conference over to your speaker host, Steve Delahan of Cabinet Investor Relations. Please go ahead.

Thanks, Livia. Good morning. I would like to welcome you to the Cabot Corporation Second Quarter 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 second 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 night 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 measures referenced on this call are 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 investor section of our website. I will now turn the call over to Sean, who will discuss the second floor highlights and provide an update on 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 some closing comments and open the floor to questions.

Sean? Thank you, Steve, and good morning, ladies and gentlemen, and welcome to our call today. I am very pleased with results in the second quarter as we delivered record adjusted earnings per share of $1.69, which was up 22% compared to the same quarter last year. Demand across all businesses was strong, and we continue to leverage our global scale, a differentiated portfolio, and our strong track record of operational excellence. While geopolitical events, the persistence of COVID-19, and global supply chain disruptions presented execution challenges to industries globally, we demonstrated continued resilience across our operations, driving strong earnings and discretionary free cash flow generation. Results across our businesses were very strong, with record performance in both the reinforcement materials and performance chemical segments, as we delivered volume growth while mitigating the impacts of rising raw material and energy costs. During the quarter, we made important progress on our Creating for Tomorrow strategy. We completed the sale of purification solutions and are now solely focused on growing our industry-leading portfolio of businesses. Central to our purpose and strategy is a commitment to sustainability leadership, and during the quarter, we achieved important recognition, earning a platinum rating from EcoVedas. And finally, on the capital allocation front, we move forward with strategic high-value growth investments while continuing to return capital to shareholders through our robust dividend and share refurchases. I've talked quite a bit about battery materials over the last few quarters, as I believe it represents a transformational opportunity for Cabot. Over the past several years, we've been systematically building out the product portfolio, technical expertise, customer support, and global footprint required by the leading lithium ion battery producers. Battery technology is complex and rapidly changing as manufacturers look to improve safety and battery range while reducing costs and shortening charging time. Conductive carbon additives are one of the critical ingredients to address these evolving market needs and will be required regardless of whether the battery roadmap evolves from current chemistry to dry process or solid state. Cabot is the only global conductive carbon additive player that has the broad product range of conductive carbons, carbon nanotubes, and carbon nanostructures, each of which offers different levels of conductivity and formulation flexibility for battery manufacturers. Our portfolio breadth and ability to formulate blends of conductive carbon additives allows us to tailor the solution for our customers' unique battery chemistries. During our recent Investor Day, we outlined an investment plan that will triple capacity over the next three years across our battery materials portfolio. Recently, we completed technical upgrades at our Shuzhou Specialty Carbons plant with the first unit commissioned in April. This will immediately free up additional conductive carbons capacity in our global network to support growth of battery materials. We've also commenced the de-bottleneck project to expand capacity at our carbon nanotube plant in Zhuhai, China, and have begun the technology conversion of our newly acquired plant in Tianjin to further add capacity for battery materials. This portfolio of projects is capital efficient, and we intend to execute these projects with speed to capture the market growth opportunity and meet the needs of our customers. Results in our battery materials business have continued to surpass expectations. Year-to-date EBITDA in this business increased by approximately 80% compared to the prior year, driven by rapid market growth for electric vehicles and continued momentum with customer adoptions for our products. We believe there is tremendous potential to deliver greater performance from lithium-ion battery chemistries through innovation and optimization of conductive carbon additive blends, and we are seeing active engagement with our customers in this area. In the quarter, we achieved a key conductive carbon additive blend win with a top five battery manufacturer that will be utilizing a blend of our conductive carbons and carbon nanotubes. This customer win further supports our belief that blends of conductive carbon additives will play a key role in the future of battery innovations. as the formulations can be tailored to optimize both short-range and long-range conductivity. Given our strong momentum, we are tightening our EBITDA guidance range to $30 to $35 million for fiscal year 2022. The midpoint of this range represents a 100% year-over-year growth rate of earnings for battery materials. Sustainability is at the heart of our purpose and integral to everything we do. Given that, we are especially proud of the various forms of external recognition that we have received over the years for our sustainability leadership. At the top of this list is the platinum rating we recently received from EcoVedas, the highest recognition available for the second consecutive year. EcoVedas is the world's largest and most trusted provider of business sustainability ratings with more than 90,000 rated companies. A platinum rating recognizes our sustainability efforts and places Cabot among the top 1% of companies in the manufacturing of basic chemicals group. This prestigious recognition underscores Cabot's commitment to transparency and provides customers with a better understanding of our sustainability performance. We are very pleased with our progress this quarter, both on the operational execution front and on our strategic priorities. I'll now turn the call over to Erica to discuss the financial and performance results of the quarter in more detail. Erica?