Slides
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Q1 Fiscal 2026 1CABOT CORPORATIONEARNINGS TELECONFERENCEFIRST QUARTER - FIS CAL 2026
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Forward Looking StatementsThis 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 adjusted earnings per share ("EPS") in fiscal year 2026 and our assumptions underlying such expectations, are forward-looking statements. These statements are not guarantees of future performance and are subject to risks, uncertainties, potentially inaccurate assumptions, and other factors, some of which are beyond our control and difficult to predict. If known or unknown risks materialize, or should underlying assumptions prove inaccurate, our actual results could differ materially from past results and from those expressed or implied by forward-looking statements. Important factors that could cause our results to differ materially from those expressed or implied in the forward-looking statements include, but are not limited to, industry capacity utilization, shifts in the geographic area of tire production and competition from other specialty chemical companies; safety, health and environmental requirements and related constraints imposed on our business; regulatory and financial risk related to climatechange developments; volatility in the price and availability of energy and raw materials, including with respect to the Russianinvasion of Ukraine; a significant adverse change in a customer relationship or the failure of a customer to perform its obligations under agreements with us; failure to achieve growth expectations from new products, new applications and technology developments; failure to realize benefits from acquisitions, alliances or joint ventures or achieve our portfolio management objectives; unanticipated delays in, or increased cost of site development projects; negative or uncertain worldwide or regionaleconomic conditions and market opportunities, including from trade relations, global health matters or geo-political conflicts; interest rates, tax rates, currency exchange controls, tariffs and fluctuations in foreign currency rates; and the accuracy of the assumptions we used in establishing reserves for our estimated share of liability for respirator matters. These factors are discussed more fully in the reports we file with the Securities and Exchange Commission (“SEC”), particularly under the heading “Risk Factors” in our annual report on Form 10-K for our fiscal year ended September 30, 2025, filed with the SEC at www.sec.gov. We assume no obligation to provide revisions to any forward-looking statements should circumstances change, except as otherwise required by securities and other applicable laws.Q1 Fiscal 2026 2
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Q1 2026 Highlights Q1 Fiscal 2026 3GAAP EPS of $1.37; Adjusted EPS1of $1.53 which represents a 13% decrease year-over-yearGAAP EPS of $1.37; Adjusted EPS1of $1.53 which represents a 13% decrease year-over-yearGAAP EPS of $1.37; Adjusted EPS1of $1.53 which represents a 13% decrease year-over-yearReinforcement Materials segment EBIT of $102 million; down 22% year-over-yearReinforcement Materials segment EBIT of $102 million; down 22% year-over-yearReinforcement Materials segment EBIT of $102 million; down 22% year-over-yearPerformance Chemicals segment EBIT of $48 million; up 7% year-over-yearPerformance Chemicals segment EBIT of $48 million; up 7% year-over-yearPerformance Chemicals segment EBIT of $48 million; up 7% year-over-year 1. Non-GAAP measure – See Appendix Cash Flows from Operations of $126 million; returned $76 million to shareholders through dividends and share repurchasesSigned multi-year supply agreement with PowerCoSE to supply conductive carbons and dispersions for lithium-ion battery applications
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Challenging Market Conditions Impacted CY26 Reinforcement Materials Customer Negotiations Q1 Fiscal 2026 4 Declining western tire production driven by elevated tire imports from Asia PacificWestern carbon black demand remains weak and carbon black plant utilizations in the Americas & Europe have been impacted by the decline in tire productionNegotiations reflected these conditions, resulting in year-over-yearprice reductions in the western regions and volume loss in Europe
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Driving Countermeasures Expect to maintain the $50 million of costs savings delivered in the prior year-Implemented and realized in fiscal year 2025 Targeting an additional $30 million of savings in Fiscal Year 2026 -Global programs focused on further enhancing our long-term cost competitiveness-Includes procurement savings, headcount reductions and accelerating technology deployment targeting improved yield and manufacturing efficiencies Reduced capital expenditures outlook; $200 - $230 million forecasted-Free Cash Flow expected to remain robust Finalizing plans to rationalize carbon black capacity in the Americas & Europe Actions underway to help offset challenging market conditions Q1 Fiscal 2026 5
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Battery Materials Building MomentumA global leader with the broadest range of conductive additives, formulations and blendsStrong performance in Battery Materials product line with revenue growth of 39% over Q1 FY25 and Q1 FY26 TTM EBITDA margins of 22%Global lithium-ion battery demand projected to grow at ~20%1CAGR through 2030, driven by Electric Vehicle (EV) adoption and the build out of Battery Energy Storage Systems (BESS)LITX® and ENERMAX® brands of products and blends that are enabling superior battery performance in EVs and BESSQ1 Fiscal 20266 1. Rho Motion Dec 2025 PowerCo multi-year supply agreement marks a significant milestone in Cabot’s strategic growth in Battery Materials
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Battery Energy Storage Systems (BESS) demand is expected to grow at ~26%1CAGR over the next five years accounting for 30%1of global battery demand by 2030 Growth supported by uninterrupted power supply (UPS) needs for AI related data centers and bridging support that enables smoother integration of renewable energy to the grid CABOT participates in the BESS segment through ourLITX® and ENERMAX®brands, with our newest LITX®ௗ95F product enhancing performance through improved cycle life and material efficiency BESS is a fast-growing application enabling clean, reliable, and flexible power for grids, renewables, and rapidly expanding data centersBattery Energy Storage Systems (BESS) Growth Q1 Fiscal 2026 71. Rho Motion Dec 2025
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Q1 2026 Financial HighlightsAdjusted EPS1$1.53GAAP EPS $1.37Cash & Cash Equivalents$230 MillionDebt Balance$1.1 BillionLiquidity$1.4 BillionOperatingTax Rate128%FY26 forecast range of 27%-29%Capex$69 millionFY26 forecast range of $200 - $230 millionOperating Cash Flow$126 MillionDiscretionary Free Cash Flow1$71 MillionQ1 Fiscal 2026 81. Non-GAAP measure – See Appendix
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Reinforcement Materials SegmentOperating Performance Q1 Fiscal 2026 9 ΔQ1 FY25Q1 FY26(22%)$130M$102MSegment EBIT(18%)$147M$121MSegment EBITDA124%23%EBITDA Margins1Volumes declined 7% year-over-year primarily due to lower volumes in the Americas and Asia Volumes were impacted by lower production levels and year-end inventory management by our tire customers in the Americas and increased competitive intensity in AsiaExpect lower sequential EBIT from CY26 customer agreement outcomesAnticipate sequential volume increases with seasonality improvements Q1 FY26 Highlights Q2 FY26 Outlook1. Non-GAAP measure – See Appendix
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Performance Chemicals SegmentOperating Performance Q1 Fiscal 2026 10Higher gross profit per ton from a favorable product mixContinued optimization and cost reduction effortsVolumes down 3% year over year primarily due to weak demand in EuropeExpect segment EBIT to be relatively consistent sequentiallyAnticipate sequential volume improvement in western regions offset by timing of costsQ1 FY26 Highlights Q2 FY26 OutlookΔQ1 FY25Q1 FY26+7%$45M$48MSegment EBIT+8%$65M$70MSegment EBITDA121%23%EBITDA Margins11. Non-GAAP measure – See Appendix
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Fiscal 2026 Outlook Q1 Fiscal 2026 11 Adjusted EPS1Guidance Range$6.00 to $6.50 Adjusted EPS1expected for fiscal 2026Assumes current FX Rates, oil & energy prices and forecasted interest rates as of the end of January Full Year Segment AssumptionsReinforcement MaterialsExpect flat volumes year-over-yearLower CY26 customer agreement pricing year-over-year Performance Chemicals Anticipate low single digit volume growth supported by Battery Materials product lineExpect to maintain gross profit per ton as compared to the prior yearContinued Disciplined Capital Allocation FrameworkBalance sheet remains strong with Net Debt to EBITDA of 1.2x2as of December 31, 2025Anticipating strong operating cash flow and moderating capital expenditures to generate robust free cash flow; allowing for capital return to shareholders through dividends and share repurchases 1. Non-GAAP measure – See Appendix. 2. Calculated in accordance with the terms of the debt covenant calculation in Cabot’s revolving credit facility
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Drivers of Future Demand Growth GlobalDataforecast for domestic tire production in the western regions projecting a return to growth for calendar year 2026 and 20271 Effective tariffs and anti-dumping duties that moderate import levels would support a recovery in domestic tire production in western geographies Improvement in demand from delayed tire replacement cycles would also support volume growth Continued efforts by global tire manufacturers to leverage their Tier 2 brands would support increased domestic tire production in western geographiesQ1 Fiscal 2026 12Reinforcement Materials Growth in lithium-ion battery applications (EV and BESS) expected to drive Battery Materials product line growthGDP-plus growth expected in consumer and infrastructure applications as demand recovers from previously depressed levelsInterest rate cuts, easing inflation and improving consumer confidence could unlock pent-up demand in consumer durablesPerformance Chemicals 1. December 2025 Report (Formerly LMC)
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Industry Leadership Backed by Scale, Competitiveness, and Strategic Growth Levers Q1 Fiscal 2026 13 Technology LeadershipA proven technology leader with advanced product offerings and the ability to leverage process technology across our global scaleRobust Cash Generation & Strong Balance SheetTrack record of delivering a high level of cash return through dividends and share repurchases while supporting growth investmentsStrategic Growth LeversUnderwriting high-growth business priorities with strong macro tailwinds to deliver earnings growthCompetitive Global AssetsGlobal footprint of strategically-located, cost-competitive assets
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QUESTIONS & ANSWERSQ1 Fiscal 2026 14
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APPENDIXQ1 Fiscal 2026 15
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FY26 Guidance & Modeling AssumptionsFull Year Modeling Assumptions~$6.00 to $6.50Adjusted Earnings per Share1~($71M) to ($75M)Interest Expense~$21M to $25MGeneral Unallocated Income (Expense)~$200M to $230MCapital Expenditures~$100M to $200M Shares Repurchases~27% to 29%Operating Tax Rate1 January RatesForecast FX RatesQ1 Fiscal 2026 161. Non-GAAP measure – See Appendix
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Use of Non-GAAP Financial MeasuresThis 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 net income (loss) per share attributable to Cabot Corporation, the most directly comparable GAAP financial measure, Total Segment EBIT, Total Segment EBITDA, and Adjusted EBITDA to income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies, the most directly comparable GAAP financial measure of each such non-GAAP measure, operating tax rate to effective tax rate, the most directly comparable GAAP financial measure and Free Cash Flow and Discretionary Free Cash Flow to Cash flow from operating activities, the most directly comparable GAAP financial measure, are provided in the tables included in our first quarter 2026 earnings release and filed on our Current Report on Form 8-K dated February 3, 2026. Reconciliations for Total Segment EBIT and segment EBITDA for each segment are included in the following slides.Cabot does not provide an expected GAAP EPS range or reconciliation of the Adjusted EPS range with an expected GAAP EPS range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on GAAP EPS in future periods.This presentation also includes our forecast of the range we expect our “operating tax rate”, which represents the tax rate on our recurring operating results, to fall within. This rate excludes discrete tax items, which are included in the effective tax rate. Discrete tax items are comprised of (i) unusual or infrequent items, (ii) items related to uncertain tax positions, and (iii) other tax items, such as the impact from the timing of losses in certain jurisdictions and cumulative tax rate adjustments, the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvested assertions. The operating tax rate also excludes the impact of the items of expense and income we identify as certain items on both our operating income and the tax provision. Management believes that the operating tax rate is useful supplemental information because it helps our investors compare our tax rate year to year on a consistent basis and to understand what our tax rate on current operations would be without the impact of these items.Cabot does not provide a forward-looking reconciliation of the operating tax rate range with an effective tax rate range because, without unreasonable effort, we are unable to predict with reasonable certainty the matters we would allocate to “certain items,” including unusual gains and losses, costs associated with future restructurings, acquisition-related expenses and litigation outcomes. These items are uncertain, depend on various factors, and could have a material impact on the effective tax rate in future periods.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. To calculate “Free Cash Flow” we deduct capital expenditures as disclosed in the consolidated statement of cash flows (as Additions to property, plant and equipment) from cash flow from operating activities.Explanation of Terms UsedProduct Mix.The term “product mix” refers to the mix of types and grade of products sold or the mix of geographic regions where products are sold, and the positive or negative impact this has on the revenue or profitability of the business or segment.Net Working Capital.The term “net working capital” includes accounts receivable, inventory and accounts payable and accrued liabilities.Q1 Fiscal 2026 17
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Non-GAAP Financial MeasuresAdjusted EPS Q1 Fiscal 2026 18 Dec. Q Mar. Q June Q Sept. Q FY 20261.37$ —$ —$ —$ 1.37$ (0.16) — — — (0.16) 1.53$ —$ —$ —$ 1.53$ Dec. Q Mar. Q June Q Sept. Q FY 20251.67$ 1.69$ 1.86$ 0.79$ 6.02$ (0.09) (0.21) (0.04) (0.91) (1.23) 1.76$ 1.90$ 1.90$ 1.70$ 7.25$ (A)Fiscal 2026 (A )Fiscal 2025 (A )Per share amounts are calculated after tax.Reconciliation of Adjusted EPS to GAAP EPSNet income (loss) per share attributable to Cabot CorporationLess: Certain items after tax per shareAdjusted earnings (loss) per shareReconciliation of Adjusted EPS to GAAP EPSNet income (loss) per share attributable to Cabot CorporationLess: Certain items after tax per shareAdjusted earnings (loss) per share
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Non-GAAP Financial MeasuresTotal Segment EBIT & Adjusted EBITDAOur 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 the segments. We believe Total segment EBIT, which reflects the sum of EBIT from our 2 reportable segments, provides useful supplemental information for our investors as it is an important indicator of the Company’s operational strength and performance, allows investors to see our results through the eyes of management, and provides context for our discussion of individual business segment performance. Total segment EBIT is a non-GAAP financial measure and should not be considered an alternative for Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies, which is the most directly comparable GAAP financial measure. In calculating Total segment EBIT, we exclude from our income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies: (i) items of expense and income that management does not consider representative of our fundamental on-going segment results, which we refer to as “certain items”, and (ii) items that, because they are not controlled by the business segments and primarily benefit corporate objectives, are not allocated to our business segments, such as interest expense and other corporate costs, which include unallocated corporate overhead expenses such as certain corporate salaries and headquarter expenses, plus costs related to special projects and initiatives, which we refer to as “other unallocated items”. Management believes excluding the items identified as certain items facilitates operating performance comparisons from period to period by eliminating the differences caused by the existence and timing of certain expenses and income items that would not otherwise be apparent on a GAAP basis. Investors should consider the limitations associated with this non-GAAP measure, including the potential lack of comparability of this measure from one company to another. A reconciliation of Total segment EBIT to Income (loss) from continuing operations before income taxes and equity in earnings of affiliated companies is below.Q1 Fiscal 2026 19Fiscal 2025 Fiscal 2026Dec. Q Dec. Q93$ 73$ 11 9 (1) (1) 41 37 144$ 118$ 18 18 6 7 13 12 (7) (6) (1) (1) 175$ 150$ 37 41 212$ 191$ 13 12 199$ 179$ Less: Equity in earnings of affiliated companiesTotal Segment EBITDepreciation and amortization excluding corporate depreciation and amortizationTotal Segment EBITDALess: Unallocated corporate costs before corporate depreciation and amortizationAdjusted EBITDAProvision (benefit) for income taxesIncome (loss) from operations before income taxes and equity in earnings of affiliated companiesInterest expenseCertain itemsUnallocated corporate costsGeneral unallocated (income) expenseDollars in millionsReconciliation of Total Segment EBIT, Total Segment EBITDA and Adjusted EBITDA to Net Income and Segment EBITDA MarginNet income (loss) attributable to Cabot CorporationNet income (loss) attributable to noncontrolling interestsEquity in earnings of affiliated companies, net of tax
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Non-GAAP Financial MeasuresSegment EBITDA Q1 Fiscal 2026 20 Fiscal 2025 Fiscal 2026Dec. Q Dec. Q130$ 102$ 17 19 147$ 121$ 611$ 520$ 24% 23%Fiscal 2025 Fiscal 2026Dec. Q Dec. Q45$ 48$ 20 22 65$ 70$ 311$ 300$ 21% 23%Dollars in millionsPerformance Chemicals EBIT Performance Chemicals Depreciation and amortizationPerformance Chemicals EBITDAPerformance Chemicals Sales Performance Chemicals EBITDA Margin Reinforcement Materials EBITReinforcement Materials Depreciation and amortizationReinforcement Materials EBITDA Reinforcement Materials SalesReinforcement Materials EBITDA Margin Dollars in millions
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Non-GAAP Financial MeasuresFree Cash Flow (FCF) & Discretionary Free Cash Flow (DFCF) Q1 Fiscal 2026 21Fiscal 2026Dec. Q126$ 69 57$ 69 5 50 71$ (B)As provided in the Condensed Consolidated Statements of Cash Flows.(C)Reconciliation of Free Cash Flow and Discretionary Free Cash Flow to Cash provided by (used in) operating activitiesDefined as changes in Accounts and notes receivable, Inventories, and Accounts payable and accrued liabilities as presented on the Condensed Consolidated Statements of Cash Flows.Dollars in millionsLess: Sustaining and compliance capital expendituresDiscretionary free cash flowCash provided by (used in) operating activities (B)Less: Additions to property, plant and equipmentFree cash flowPlus: Additions to property, plant and equipmentLess: Changes in net working capital (C)
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Non-GAAP Financial MeasuresOperating Tax Rate(B)(D)(E)Our operating tax rate for fiscal 2026 is expected to be in the range of 27% to 29%.The operating tax rate is calculated based upon management's forecast of the annual operating tax rate for the fiscal year applied to adjusted pre-tax earnings. The operating tax rate excludes income tax (expense) benefit on certain items, discrete tax items and, on a quarterly basis the timing of losses in certain jurisdictions.Non-GAAP tax adjustments are made to arrive at the operating tax provision. It includes the income tax (expense) benefit on certain items, discrete tax items, and, on a quarterly basis the timing of losses in certain jurisdictions. The income tax (expense) benefit on certain items is determined using the applicable rates in the taxing jurisdictions in which the certain items occurred and includes both current and deferred income tax (expense) benefit based on the nature of the certain items. Discrete tax items include, but are not limited to, changes in valuation allowance, uncertain tax positions, and other tax items, such as the tax impact of legislative changes and tax accruals on historic earnings due to changes in indefinite reinvestment assertions.Q1 Fiscal 2026 22 (Provision) / Benefit for Income Taxes Rate (Provision) / Benefit for Income Taxes Rate(37)$ 31%(41)$ 28%(2) 1 (35)$ 28%(42)$ 28%20252024TABLE 3: RECONCILIATION OF EFFECTIVE TAX RATE TO OPERATING TAX RATEThree months ended December 31Dollars in millions (unaudited)Effective Tax RateLess: Non-GAAP tax adjustments(B)Operating tax rate (D) (E)