Cabot Corporation

Good day and welcome to the third quarter 2022 Cabot Earnings Conference call. At this time, all participants are on a listen-only mode. After the speaker's presentation, there will be a question and answer session. As a reminder, this call is being recorded. I would like to turn the call over to Steve Delahunt, Vice President, Investor Relations, and Treasurer. You may begin.

Thanks, Michelle. Good morning. I would like to welcome you to the Cabot Corporation third 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 third quarter fiscal 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 that 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 our 10-Q for our fiscal quarter end March 31, 2022, which are also available in 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 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 third quarter 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, John will provide some closing comments and open the floor to questions. John?

Thank you, Steve, and good morning, ladies and gentlemen. Welcome to our call today. I'm very pleased with our performance in the quarter as adjusted earnings per share was up 28% to a record of $1.73 compared to the same period in fiscal 2021. This record level of performance reflects the resilience of our businesses and end markets, our focus on execution, and the continued momentum in our high growth vectors. As a result, our team was able to navigate dynamic market conditions, the impacts of pandemic lockdowns in China, continued logistics constraints, and higher energy and raw material costs. Results across our businesses were very strong, with consecutive quarterly record performance in the reinforcement materials segment, where EBIT was up 33% year-over-year. In the performance chemical segment, we delivered 17% year-over-year EBIT growth through effective pricing execution and strategic actions to enrich the product mix. Battery Materials continues to outperform the market, driven by strong execution and continued customer penetration. And finally, central to our purpose and strategy is a commitment to leadership and sustainability. And during the quarter, we published our 2021 Sustainability Report, highlighting our continued progress towards achieving our 2025 sustainability goals. Year-to-date results in battery materials have continued to exceed market growth rates. In the third quarter, volumes grew 60% year-over-year, while EBITDA grew approximately 70% over the same period. We continue to expand our relationships with the world's largest battery manufacturers and are building significant momentum outside the Asia region as our global customers build factories in Europe and the U.S. For the full year, we continue to expect EBITDA to be in the range of $30 to $35 million. The midpoint of this range equates to 100% EBITDA growth year-over-year, driven by rapid market growth for electric vehicles and continued momentum with customer adoptions of our products. The growth of battery materials is underpinned by strategic capacity additions, which are critical to meet our customers' volume ramp-up requirements. Recently, we completed technical upgrades at our Shuzhou specialty carbons plant, with the plant becoming operational during the third quarter. The facility will optimize our specialty carbons production network to meet customer demand across a wide range of applications, while immediately freeing up additional conductive carbons capacity in our global network to support the growth of battery materials. We are also well underway in the first phase of technical upgrades at our new Tianjin China site, which is specifically targeted to support the growth of battery materials. We expect the first phase of the battery materials capacity expansion to come online in mid-fiscal 2024. And finally, we've completed the first phase of a carbon nanotube dispersion capacity expansion at our Zhuhai China facility in July. These investments will give us a combined capacity position that will enable us to continue growing at above market growth rates. As we outlined last quarter, over the next three years we plan to triple our capacity across our battery materials portfolio to ensure we are well positioned to capitalize on the transformational opportunity of electric vehicles. Now moving to an update on the ESG front. This quarter we published our annual sustainability report which further advances our commitment to transparency and progress. This year's report includes enhanced disclosures and reaffirms our commitment to the UN Global Compact. Our sustainability report details the achievements and progress we have made toward our 2025 sustainability goals and discusses our focus on achieving our net zero ambition by 2050. The report outlines the following noteworthy achievements. We realized 91% of our 2025 greenhouse gas intensity goal by the end of 2021 and are evaluating options for establishing interim greenhouse gas reduction targets to support our ambition of achieving net zero emissions by 2050. We also made significant progress against our 2025 energy goal, achieving an energy ratio of 157% by effectively operating our fleet of cogeneration units. By capturing and exporting excess energy from our operations, we are helping to provide neighboring businesses and communities with clean energy. We see great potential in the evolution of our transportation fleet to electric and other low-carbon vehicles. And to that end, we collaborated with one of our suppliers to conduct a successful pilot project to test zero-emissions trucking technology. And finally, we're committed to continuing to develop innovative products that improve performance for our customers by imparting properties that provide sustainability benefits. Over the past year, 100% of our new products were evaluated and scored for their sustainability benefits. We have long been dedicated to comprehensive reporting on our sustainability performance and aim to provide transparent disclosures as a tool for engagement with our customers, shareholders, employees, and communities. To this end, we incorporated the climate scenario analysis and climate-related risks and opportunities matrix we completed in accordance with the Task Force on Climate-Related Financial Disclosures, or TCFD, in our sustainability report. We are very pleased with our progress this quarter, both on the operational execution front and against our strategic priorities. Our products are helping to enable the transformation to a more sustainable world and our entire global team is excited about the opportunities that are in front of us. I'll now turn the call over to Erika to discuss the financial and performance results in the quarter in more detail. Erika?