Cabot Corp (CBT) 2023 Q3 法說會逐字稿

Good day and thank you for standing by. Welcome to the Q3 2023 Cabot Earnings Conference Call.

美好的一天，感謝您的支持。歡迎參加 2023 年第三季度卡博特收益電話會議。

At this time, all participants on a listen-only mode. After the speakers' presentation, there will be a question-and-answer session.

此時，所有參與者都處於僅聽模式。演講者演講結束後，將進行問答環節。

(Operator Instructions)

（操作員說明）

Please be advised that today's conference is being recorded. And I would now like to hand the conference over to your speaker today, Mr. Steve Delahunt, Vice President of Investor Relations and Treasury. Sir, please go ahead.

請注意，今天的會議正在錄製中。現在我想將會議交給今天的發言者，投資者關係和財務副總裁 Steve Delahunt 先生。先生，請繼續。

Thank you, Chris. Good morning. I would like to welcome you to the Cabot Corporation Earnings Teleconference. With me today are Sean Keohane, CEO and President and Erica McLaughlin, Executive Vice President and CFO.

謝謝你，克里斯。早上好。歡迎您參加卡博特公司收益電話會議。今天與我在一起的有首席執行官兼總裁 Sean Keohane 和執行副總裁兼首席財務官 Erica McLaughlin。

Last night, we released results for our third quarter of fiscal year 2023, copies of which are posted to the Investor Relations section of our website. The slide deck that accompanies this call is also available on the Investor Relations portion of our website and will be available in conjunction with the replay of the call.

昨晚，我們發布了 2023 財年第三季度的業績，其副本發佈在我們網站的投資者關係部分。本次電話會議附帶的幻燈片也可在我們網站的投資者關係部分獲取，並將與電話會議重播一起提供。

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, 2022, and in subsequent filings we make with the SEC all of which are available on the company's website.

在本次電話會議期間，我們將就我們預期的未來運營和財務業績做出前瞻性聲明。每項前瞻性陳述都存在風險和不確定性，可能導致實際結果與此類陳述中預測的結果存在重大差異。有關這些因素的更多信息出現在我們昨晚發布的新聞稿和截至2022 年9 月30 日的財年10-K 中，以及我們向SEC 提交的後續文件中，所有這些都可以在公司網站上找到。

In order to provide greater transparency regarding our expected performance, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results. The 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 Investors section of our website.

為了提高我們預期業績的透明度，我們參考了某些涉及對 GAAP 結果進行調整的非 GAAP 財務指標。本次電話會議中引用的非公認會計原則財務指標與我們昨晚發布的收益報告末尾的表格中最直接可比的公認會計原則財務指標進行了調整，該表格可在我們網站的投資者部分找到。

I will now turn the call over to Sean, who will discuss the third quarter highlights and the market environment in our Reinforcement Materials and Performance Chemicals segments. Erica will review the company and business segment results along with some corporate financial details. Following this, Sean will provide a strategic summary and closing comments and open the floor to questions. Sean?

我現在將電話轉給肖恩，他將討論第三季度的亮點以及我們的增強材料和高性能化學品領域的市場環境。艾麗卡將審查公司和業務部門的業績以及一些公司財務細節。隨後，肖恩將提供戰略總結和結束語，並開始提問。肖恩？

Thank you, Steve, and good morning, ladies and gentlemen, and welcome to our call today. In our third fiscal quarter, we continue to navigate a challenging macroeconomic environment. Despite lower volumes in both segments and the tax headwind, we delivered sequential earnings improvement due to the continued strength of the Reinforcement Materials segment.

謝謝你，史蒂夫，早上好，女士們先生們，歡迎來到我們今天的電話。在第三財季，我們繼續應對充滿挑戰的宏觀經濟環境。儘管兩個細分市場的銷量均較低且面臨稅收阻力，但由於增強材料細分市場的持續強勁，我們的盈利連續改善。

Consistent with the commentary in our June announcement, we continue to see weakness in China and soft demand on a global basis across many of our key performance chemicals end markets, particularly in the housing and construction sector and across consumer durable applications. In the quarter, we delivered adjusted earnings per share of $1.42, up 7% sequentially. Reinforcement Materials delivered a record quarter with EBIT of $132 million, up 17% year-over-year and 8% sequentially despite the third consecutive quarter of year-over-year volume declines. This level of performance reflects the resilient nature of this business and the structural improvements we have made over the last several years.

與我們 6 月份公告中的評論一致，我們繼續看到中國的疲軟以及全球許多關鍵高性能化學品終端市場的需求疲軟，特別是在住房和建築行業以及耐用消費品應用領域。本季度，我們的調整後每股收益為 1.42 美元，比上一季度增長 7%。儘管銷量連續第三個季度同比下降，但增強材料業務的季度息稅前利潤 (EBIT) 創歷史新高，達到 1.32 億美元，同比增長 17%，環比增長 8%。這種業績水平反映了該業務的彈性本質以及我們在過去幾年中所做的結構性改進。

EBIT in the Performance Chemicals segment improved sequentially, largely due to cost initiatives across the segment. Demand in the segment remained challenged as we saw continued weakness in our key end markets with the exception of battery materials. In the quarter, we generated strong operating cash flow of $243 million and free cash flow of $163 million, of which we returned $38 million to shareholders through dividends and share repurchases. Our balance sheet remains strong with net debt to EBITDA of 1.7x and we have $1.3 billion of committed liquidity that has been recently extended to 2027.

高性能化學品業務部門的息稅前利潤連續增長，這主要歸功於該部門的成本舉措。由於我們看到除電池材料之外的主要終端市場持續疲軟，該領域的需求仍然面臨挑戰。本季度，我們產生了 2.43 億美元的強勁運營現金流和 1.63 億美元的自由現金流，其中我們通過股息和股票回購向股東返還了 3800 萬美元。我們的資產負債表依然強勁，淨債務佔 EBITDA 的 1.7 倍，我們擁有 13 億美元的承諾流動資金，最近已延長至 2027 年。

Our balance sheet and investment-grade credit rating gives us the flexibility to continue to advance our long-term strategic priorities supported by our disciplined and balanced capital allocation strategy. Moving to the market environment, across both segments, we've been dealing with weak end market demand. So I wanted to spend a few minutes to take you through what we are currently seeing.

我們的資產負債表和投資級信用評級使我們能夠靈活地繼續推進我們的長期戰略重點，並得到我們嚴格和平衡的資本配置策略的支持。轉向市場環境，在這兩個細分市場中，我們一直在應對疲弱的終端市場需求。因此，我想花幾分鐘時間向您介紹我們目前所看到的情況。

Let's start with Reinforcement Materials, where the key end markets are replacement tires in auto OE production. You will recall that replacement tires account for approximately 2/3 of segment volume with OE production and industrial applications driving the balance. For the first 3 quarters of our fiscal year, we've experienced year-over-year volume declines with year-to-date volumes down 8% in this segment. The decline is principally driven by a deep inventory destocking cycle and there is some anecdotal evidence that customers are delaying purchases.

讓我們從增強材料開始，其主要終端市場是汽車原廠生產中的替換輪胎。您可能還記得，替換輪胎約佔該細分市場銷量的 2/3，而 OE 生產和工業應用則推動著這一平衡。在本財年的前 3 季度，我們的銷量同比下降，該細分市場的銷量今年迄今下降了 8%。下降的主要原因是深度的庫存去庫存週期，並且有一些傳聞證據表明客戶正在推遲購買。

When we look at the industry demand fundamentals, we see pretty stable conditions. For the passenger car replacement market, miles driven and the global car park are generally good indicators for light vehicle replacement tire demand. In the U.S., for example, passenger miles driven is holding steady, while the global car park continues to expand. For the Truck and Bus segment, truck tonnage is a good indicator of underlying health and we can see in the U.S. that this too is holding steady. The performance of these fundamental demand drivers gives us confidence that volumes will normalize when we exit the current destocking cycle. Auto production is the other key end market for this business and accounts for approximately 27% of reinforcement materials volumes.

當我們審視行業需求基本面時，我們看到相當穩定的狀況。對於乘用車更換市場而言，行駛里程和全球停車位通常是輕型車更換輪胎需求的良好指標。例如，在美國，乘客行駛里程保持穩定，而全球停車場繼續擴大。對於卡車和公共汽車領域，卡車噸位是衡量潛在健康狀況的良好指標，我們可以看到在美國，這一指標也保持穩定。這些基本需求驅動因素的表現讓我們相信，當我們退出當前的去庫存週期時，銷量將會正常化。汽車生產是該業務的另一個關鍵終端市場，約佔增強材料產量的 27%。

Global auto production is one area we are seeing signs of recovery across North America, Europe and China. This end market has experienced growth in recent quarters and is projected to grow in 2023, providing some offset to the lower replacement tire volumes. The impact of a pickup in auto production in this segment is seen fairly quickly given the relatively shallow value chain as compared to the replacement market.

全球汽車生產是我們在北美、歐洲和中國看到復蘇跡象的領域之一。該終端市場在最近幾個季度經歷了增長，預計到 2023 年將實現增長，從而在一定程度上抵消輪胎更換量的下降。鑑於與替換市場相比價值鏈相對較淺，該領域汽車產量回升的影響很快就能顯現出來。

In Performance Chemicals, the external environment remains challenging. Most of our industrial sector end markets are experiencing weak demand, particularly housing and construction. And on the consumer application side, we have seen that demand for durable goods and electronics has also been weak. Manufacturing PMI has historically been a key indicator of demand in this segment. Currently, manufacturing PMI levels in the U.S. and Europe remain below 50, and China has been oscillating around 50 with several recent data points in contraction territory.

在高性能化學品領域，外部環境仍然充滿挑戰。我們大多數工業部門終端市場的需求疲軟，特別是住房和建築業。而在消費應用方面，我們看到耐用品和電子產品的需求也一直疲軟。製造業 PMI 歷來是該領域需求的關鍵指標。目前，美國和歐洲的製造業PMI水平仍低於50，而中國一直在50左右振盪，近期多個數據點均處於收縮區間。

Recent housing data, both housing starts and building permits indicates a potential turning point in the U.S., but European permits continue to drop and the China real estate market remains stagnant. Construction and housing demand has a significant impact on our specialty carbon, specialty compounds and fumed metal oxides product lines.

最近的房屋開工數據和建築許可數據都表明美國可能出現轉折點，但歐洲許可繼續下降，而中國房地產市場仍然停滯不前。建築和住房需求對我們的特種碳、特種化合物和氣相金屬氧化物產品線產生重大影響。

As I mentioned earlier, auto production is one area where we are seeing some promising signs in terms of new car builds. Approximately 25% of Performance Chemicals volume is tied to the transportation OE sector. However, we have not yet seen the impact in our sales due to lingering destocking and the depth of this value chain. Historically, this has taken about 2 to 3 quarters to see the impact of a turn in auto production translate into higher demand for our products. As this happens, we would expect a lift in terms of both volumes and product mix as the automotive sector pulls through a high percentage of specialty grades. And finally, the China EV market continues to recover from a sharp sequential slowdown in electric vehicle sales in the March quarter. The June quarter saw sequential growth, though EV sales volumes still aren't back to the level achieved in the December quarter.

正如我之前提到的，在汽車生產領域，我們在新車製造方面看到了一些有希望的跡象。約 25% 的高性能化學品銷量與運輸原裝備行業相關。然而，我們尚未看到由於持續的去庫存和該價值鏈的深度而對我們的銷售產生的影響。從歷史上看，汽車生產轉變的影響大約需要兩到三個季度才能轉化為對我們產品的更高需求。當這種情況發生時，我們預計隨著汽車行業採用高比例的特種牌號，銷量和產品組合都會有所提升。最後，中國電動汽車市場繼續從三月份季度電動汽車銷量急劇下滑中恢復過來。儘管電動汽車銷量仍未恢復到 12 月季度的水平，但 6 月季度出現環比增長。

Our battery materials volumes recovered in line with this trend with Q3 volumes increasing 29% on a sequential basis and 50% year-over-year. While the volume trend is encouraging, the auto EV market in China is experiencing an increase in competitive intensity as auto OEMs compete aggressively on price for market share, and this pressure is flowing back upstream to the battery producers and material suppliers.

我們的電池材料銷量與這一趨勢一致，第三季度銷量環比增長 29%，同比增長 50%。雖然銷量趨勢令人鼓舞，但隨著汽車原始設備製造商在價格上激烈競爭以爭奪市場份額，中國汽車電動汽車市場的競爭強度正在加劇，這種壓力正在回流到上游的電池生產商和材料供應商。

As we transitioned into Q4 and look forward to the balance of the fiscal year, we have experienced pricing pressure that is impacting our margins. The impact is concentrated in our China business and particularly where our products were sold into batteries for lower-priced domestic vehicles. Where our products are sold into batteries for export to global OEMs or to customers outside of China, we are seeing stable prices.

當我們進入第四季度並期待本財年的平衡時，我們經歷了影響我們利潤率的定價壓力。影響主要集中在我們的中國業務，特別是我們的產品被銷售為低價國產汽車電池的業務。當我們的產品銷往電池並出口到全球原始設備製造商或中國以外的客戶時，我們看到價格穩定。

Given this dynamic in China and the continued delay in scale-up of one of our Western auto OEMs, we now expect the fiscal year EBITDA to be in the low $20 million range. As we manage through this unexpected period of turbulence in China, our focus is on 3 priorities: first, market segmentation to focus our efforts on higher-performing batteries, particularly NCM chemistry and on those batteries targeted for Weston exports. Second, we'll continue to carefully manage the balance between volume and pricing. And third, we're aggressively attacking the cost structure across our base products. Over the long term, we believe that electrification will transform the mobility sector with most growth forecasts for lithium-ion batteries in the 25% to 30% CAGR range through the end of the decade. We also expect that the EV and battery market will bifurcate into a China market and a rest of world market.

鑑於中國的這種動態以及我們一家西方汽車原始設備製造商規模擴大的持續延遲，我們現在預計本財年 EBITDA 將在 2000 萬美元左右。在我們度過中國這段意想不到的動盪時期時，我們的重點是三個優先事項：第一，市場細分，將我們的精力集中在高性能電池上，特別是NCM化學和針對韋斯頓出口的電池。其次，我們將繼續謹慎管理數量和價格之間的平衡。第三，我們正在積極改善基礎產品的成本結構。從長遠來看，我們相信電氣化將改變移動出行行業，預計到本十年末，鋰離子電池的複合年增長率將達到 25% 至 30%。我們還預計電動汽車和電池市場將分為中國市場和世界其他市場。

We expect the market outside of China will orient more towards higher-performing NCM chemistry, which requires higher-performing conductive additives. We also expect that customers outside of China, particularly the global auto OEMs, will continue with strict qualification requirements and management of change protocols required by the IATF quality management system.

我們預計中國以外的市場將更多地面向高性能的 NCM 化學品，這需要更高性能的導電添加劑。我們還期望中國以外的客戶，特別是全球汽車原始設備製造商，將繼續遵守 IATF 質量管理體係要求的嚴格資質要求和變更協議管理。

Additionally, we also expect that the trend towards supply regionalization will accelerate and this development provides an advantage to a technology leader like Cabot that has a strong global footprint and an ability to scale up capacity in region to meet customer requirements.

此外，我們還預計供應區域化的趨勢將會加速，這種發展為像卡博特這樣的技術領導者提供了優勢，因為卡博特擁有強大的全球影響力，並且有能力擴大區域產能以滿足客戶需求。

Over the next decade, the industry will undergo fundamental change as EVs grow in the West, battery supply chains regionalize and new technologies such as dry process take hold. Over this time, we expect that North America and Europe will grow to comprise approximately 50% of the global battery market.

未來十年，隨著電動汽車在西方的發展、電池供應鏈的區域化以及乾法工藝等新技術的普及，該行業將發生根本性的變化。在此期間，我們預計北美和歐洲將增長至佔全球電池市場的約 50%。

We remain excited by the long-term growth prospects for battery materials and believe it can become a meaningful part of our profitability over time. At Cabot, we have the broadest conductive additive portfolio, a leading global footprint and the capability to expand in North America and Europe to support our customers' requirements. We believe this value proposition is compelling to customers, and we continue to see momentum with the leading battery producers.

我們對電池材料的長期增長前景仍然感到興奮，並相信隨著時間的推移，它可以成為我們盈利能力的重要組成部分。在卡博特，我們擁有最廣泛的導電添加劑產品組合、領先的全球足跡以及在北美和歐洲擴張的能力，以滿足客戶的需求。我們相信這一價值主張對客戶來說很有吸引力，並且我們繼續看到領先電池生產商的發展勢頭。

I'll now turn the call over to Erica to discuss the segment and financial performance. Erica?

我現在將把電話轉給艾麗卡，討論該部門和財務業績。艾麗卡？

Thanks, Sean. I'll start with discussing results for the company and then review the segment results. Adjusted EPS for the third quarter of fiscal 2023 was $1.42 compared to $1.73 in the third quarter of fiscal 2022, with growth in reinforcement materials offset by declines in the Performance Chemicals segment.

謝謝，肖恩。我將從討論公司的業績開始，然後審查分部業績。 2023 財年第三季度調整後每股收益為 1.42 美元，而 2022 財年第三季度為 1.73 美元，增強材料的增長被高性能化學品業務的下滑所抵消。

Discretionary free cash flow in the quarter was $128 million, and we ended the quarter with $220 million of cash. Cash flow from operations was $243 million, which included a reduction in networking capital in the quarter of $71 million.

本季度的可自由支配自由現金流為 1.28 億美元，本季度末我們的現金為 2.2 億美元。運營現金流為 2.43 億美元，其中包括本季度網絡資本減少的 7100 萬美元。

CapEx in the quarter was $80 million, and we expect full year CapEx to be approximately $250 million. The balance sheet remains strong with total liquidity at $1.3 billion and net debt to EBITDA of 1.7x as of June 30.

本季度資本支出為 8000 萬美元，我們預計全年資本支出約為 2.5 億美元。截至 6 月 30 日，資產負債表依然強勁，流動性總額為 13 億美元，淨債務與 EBITDA 之比為 1.7 倍。

In the third quarter, we increased our year-to-date operating tax rate from 25% to 28%, driven by an update to the fiscal year forecast and the geographic mix of earnings within the updated forecast. The increase in the operating tax rate included a catch-up of expense for the first half of the fiscal year that we booked in the third quarter, which resulted in an unfavorable impact of $0.10 of adjusted earnings per share this quarter for the catch-up and a total of $0.17 in the year-to-date impact.

在第三季度，由於財政年度預測的更新以及更新預測中收入的地理組合的推動，我們將年初至今的營業稅率從 25% 提高到 28%。營業稅率的增加包括我們在第三季度登記的上半財年費用的追趕，這對本季度調整後的每股收益產生了 0.10 美元的不利影響。年初至今的影響總計為 0.17 美元。

We expect the fiscal year operating tax rate range to now be between 27% and 29%. Now moving to Reinforcement Materials. During the third quarter, EBIT for Reinforcement Materials increased by $19 million as compared to the same period in the prior year to a record EBIT of $132 million. The increase was driven by improved unit margins from higher pricing and product mix in our 2023 calendar year customer agreements net of higher fixed costs, partially offset by 8% lower volumes.

我們預計本財年營業稅率目前介於 27% 至 29% 之間。現在轉向增強材料。第三季度，增強材料的息稅前利潤與去年同期相比增加了 1900 萬美元，達到創紀錄的 1.32 億美元。這一增長是由於我們 2023 年客戶協議中更高的定價和產品組合帶來的單位利潤率的提高（扣除固定成本的增加）所推動的，但銷量下降 8% 部分抵消了這一增長。

Globally, volumes were down in all regions in the third quarter as compared to the same period of the prior year, with declines of 10% in the Americas, 12% in Europe and 5% in Asia. Looking to the fourth quarter of fiscal 2023, we expect Reinforcement Material's EBIT to decrease sequentially due to seasonally lower volumes in Europe and higher fixed costs driven by the timing of spend. Volumes in the fourth quarter in regions outside of Europe are expected to be relatively consistent with the third fiscal quarter.

從全球來看，第三季度所有地區的銷量均較去年同期下降，其中美洲下降 10%，歐洲下降 12%，亞洲下降 5%。展望 2023 財年第四季度，我們預計增強材料公司的息稅前利潤將連續下降，原因是歐洲銷量季節性下降以及支出時間驅動的固定成本上升。歐洲以外地區第四季度的銷量預計將與第三財季相對一致。

Now turning to Performance Chemicals. EBIT decreased by $31 million in the third fiscal quarter as compared to the same period in fiscal 2022. The decrease was driven by 9% lower volumes and lower unit margins. Volumes were lower across all product lines, except battery materials. And most notably, there was a 23% year-over-year decline in metal oxide volumes. Lower volumes in fumed metal oxides were driven by weaker demand in silicones applications and the impact from partner-driven downtime. Lower margins were driven by a less favorable product mix in Battery Materials and Specialty carbons.

現在轉向高性能化學品。與 2022 財年同期相比，第三財季的息稅前利潤減少了 3100 萬美元。這一下降是由於銷量下降 9% 和單位利潤率下降所致。除電池材料外，所有產品線的銷量均較低。最值得注意的是，金屬氧化物產量同比下降了 23%。有機矽應用需求疲軟以及合作夥伴造成的停機影響導致氣相金屬氧化物產量下降。利潤率下降的原因是電池材料和特種碳的產品組合較差。

Looking ahead to the fourth quarter of fiscal 2023, we expect EBIT in Performance Chemicals to be up sequentially due to higher volumes in our battery materials and inkjet growth vectors, while volumes in our larger product lines are expected to remain consistent with the levels experienced in the third fiscal quarter. We expect pricing pressure in the EV value chain in China, as Sean discussed, in the near term to impact battery materials results.

展望2023 財年第四季度，由於我們的電池材料和噴墨增長矢量的銷量增加，我們預計高性能化學品的息稅前利潤將連續上升，而我們較大產品線的銷量預計將與2023 財年第四季度的水平保持一致。第三財季。正如 Sean 所討論的，我們預計中國電動汽車價值鏈的定價壓力將在短期內影響電池材料的業績。

Now moving to our cash performance. Our outlook for the rest of the year is for continued strong cash generation that will continue to enable our growth investments as well as returning cash to our shareholders through dividends and share repurchases. Year-to-date, we have generated $457 million in operating cash flow. We have spent $166 million year-to-date for capital expenditures which included spending on growth investments as well as maintenance and compliance projects. As we have talked about before, returning cash to shareholders is a critical component of our capital allocation strategy and has been supported by our operating cash flow. We raised our dividend by 8% in May and year-to-date, we have paid $65 million in dividends.

現在轉向我們的現金表現。我們對今年剩餘時間的展望是持續強勁的現金產生，這將繼續促進我們的增長投資，並通過股息和股票回購向股東返還現金。年初至今，我們已產生 4.57 億美元的運營現金流。今年迄今為止，我們已花費 1.66 億美元用於資本支出，其中包括增長投資以及維護和合規項目的支出。正如我們之前談到的，向股東返還現金是我們資本配置策略的重要組成部分，並得到了我們運營現金流的支持。 5 月份，我們將股息提高了 8%，今年迄今，我們已支付了 6500 萬美元的股息。

In addition, we repurchased $48 million of shares year-to-date for a total of $113 million of cash returned to shareholders this year. Our outlook for cash remains positive for the year. We expect strong operating cash flow to continue given current assumptions on oil prices. Debt levels are sound and are expected to stay around the current level of net debt to EBITDA at 1.7x and our full year forecast for capital expenditures is approximately $250 million. We also expect to continue to return cash to our shareholders. In addition to our quarterly dividend, we anticipate increasing the amount of share repurchases in the fourth quarter given the strong cash flow forecast.

此外，我們今年迄今回購了 4800 萬美元的股票，今年向股東返還的現金總額為 1.13 億美元。我們對今年的現金前景仍然樂觀。鑑於目前對油價的假設，我們預計強勁的經營現金流將繼續。債務水平穩健，預計將保持在當前 EBITDA 的 1.7 倍淨債務水平附近，我們全年資本支出預測約為 2.5 億美元。我們還期望繼續向股東返還現金。除了季度股息外，鑑於強勁的現金流預測，我們預計第四季度將增加股票回購數量。

I will now turn the call back over to Sean.

我現在將把電話轉回給肖恩。

Thanks, Erica. Moving to the fourth quarter outlook, I am pleased with how the Cabot team continues to respond despite the challenging macroeconomic environment. The Reinforcement Materials segment posted record results in the third quarter and is on its way to another year of record EBIT results despite weak replacement tire demand throughout the fiscal year from a prolonged destocking cycle.

謝謝，艾麗卡。展望第四季度，我對卡博特團隊在宏觀經濟環境充滿挑戰的情況下繼續做出的反應感到滿意。儘管由於長期的去庫存週期，整個財年的更換輪胎需求疲軟，但增強材料部門在第三季度取得了創紀錄的業績，並且有望再創歷史新高的息稅前利潤 (EBIT) 業績。

In Performance Chemicals, we expect results to improve sequentially, driven by volume growth in Battery Materials and inkjet, while the larger product lines in this segment seem to have stabilized, albeit at a level well below recent history. Given these factors, we expect adjusted earnings per share in the fourth quarter to be in the range of $1.40 to $1.55, which would bring our full year range between $5.13 to $5.28.

在高性能化學品方面，我們預計，在電池材料和噴墨銷量增長的推動下，業績將連續改善，而該領域較大的產品線似乎已經穩定，儘管其水平遠低於近期歷史水平。考慮到這些因素，我們預計第四季度調整後每股收益將在 1.40 美元至 1.55 美元之間，這將使我們全年的每股收益範圍在 5.13 美元至 5.28 美元之間。

As Erica discussed, we expect the fourth quarter to be another strong cash flow quarter to support our capital allocation priorities. Fiscal year 2023 certainly has developed differently than expected. The rapid increase in interest rates has dampened demand across the housing sector and for consumer durable goods. Europe has been in a technical recession and China's economy has not been the driver of global growth as was expected following their exit from strict COVID protocols. Despite these headwinds, we believe our creating for tomorrow strategy is the right one for Cabot, with a focus on advantage growth, innovation and continuous improvement.

正如埃里卡（Erica）所討論的，我們預計第四季度將是另一個強勁的現金流季度，以支持我們的資本配置優先事項。 2023 財年的發展肯定與預期不同。利率的快速上升抑制了整個住房部門和耐用消費品的需求。歐洲一直處於技術性衰退，而中國經濟在退出嚴格的新冠協議後並沒有像預期那樣成為全球增長的驅動力。儘管存在這些不利因素，我們相信我們的“創造明天”戰略對於卡博特來說是正確的，重點是優勢增長、創新和持續改進。

By pursuing this strategy, we believe we will grow, transform and reshape the valuation potential of the company. We continue to execute against this strategy despite a challenging environment. We have a very resilient, structurally different business and reinforcement materials as evidenced by record results despite lower year-over-year volumes. The Performance Chemicals segment remains a mix of high-growth, high-margin businesses with leading market positions and good industry structure that at the moment is dealing with a unique environment of weak end market demand and a China economy that is yet to rebound post COVID.

通過實施這一戰略，我們相信我們將實現增長、轉型並重塑公司的估值潛力。儘管環境充滿挑戰，我們仍繼續執行這一戰略。我們擁有非常有彈性、結構不同的業務和加固材料，儘管銷量同比下降，但創紀錄的業績證明了這一點。高性能化學品業務仍然是高增長、高利潤業務的組合，具有領先的市場地位和良好的行業結構，目前正在應對終端市場需求疲軟和新冠疫情后尚未反彈的中國經濟的獨特環境。

We believe that these product lines will recover in line with the underlying end markets. The Battery Materials product line, while developing slower than we originally expected, remains a compelling growth opportunity for Cabot, and we believe we are well positioned to grow as the EV market expands outside of China. Our cash flow and balance sheet remain very strong and support our balanced capital allocation priorities.

我們相信這些產品線將隨著潛在終端市場的複蘇而復蘇。電池材料產品線雖然發展速度慢於我們最初的預期，但對卡博特來說仍然是一個引人注目的增長機會，我們相信，隨著電動汽車市場在中國以外的擴張，我們已經做好了實現增長的有利條件。我們的現金流和資產負債表仍然非常強勁，支持我們平衡的資本配置優先事項。

And finally, we're a recognized leader in sustainability, and this strength underpins our purpose and are creating for tomorrow's strategy. I would like to close by again recognizing the entire global Cabot team for their resilience and their commitment to execution as we navigate this challenging macroeconomic period. Thank you very much for joining us today. And I'll now turn the call back over for our Q&A session.

最後，我們是可持續發展領域公認的領導者，這種優勢支撐著我們的目標，並正在為明天的戰略制定。最後，我想再次表彰整個全球卡博特團隊在我們度過這個充滿挑戰的宏觀經濟時期時所表現出的韌性和對執行的承諾。非常感謝您今天加入我們。現在我將把電話轉回我們的問答環節。

(Operator Instructions)

（操作員說明）

Our first question will come from David Begleiter of Deutsche Bank.

我們的第一個問題將來自德意志銀行的大衛·貝格萊特。

Sean, in replacement tires, how long are prior destock cycles lasted for?

肖恩，在更換輪胎時，之前的去庫存週期持續了多長時間？

David, I think certainly, the destock that we seem to be experiencing right now is longer than I think history would say we're now 3 -- all 3 of our fiscal quarters have volumes down year-over-year and our expectation on the Q4, consistent with the outlook that Erica provided would say that, that will probably 4 quarters, where we're down year-over-year. So it certainly feels like more pronounced destock cycle than history. And I think the result, if we listen to what the big tire makers say, I think we should be coming to an end on this. But I think it has been more difficult, I think, for people to see this because we came out of COVID, a sharp bounce than there was a long period of transportation, logistics disruptions. And given how many of the tires in the world rely on Chinese exports, I think there were a lot of tires on ships and in the supply chain that were tied up, and it really created a lot of distortion.

大衛，我認為當然，我們現在正在經歷的去庫存時間比我認為歷史上所說的要長，我們現在已經是3 個季度了——我們所有3 個財政季度的銷量都同比下降，而且我們對第四季度，與 Erica 提供的前景一致，這可能會持續 4 個季度，我們將同比下降。因此，這確實感覺是比歷史上更明顯的去庫存週期。我認為結果是，如果我們聽聽大型輪胎製造商的說法，我認為我們應該結束這個問題。但我認為，人們更難看到這一點，因為我們已經擺脫了新冠疫情，比長期的運輸、物流中斷出現了急劇的反彈。考慮到世界上有多少輪胎依賴中國出口，我認為船上和供應鏈中有很多輪胎被捆綁起來，這確實造成了很大的扭曲。

So I think all of that has been getting worked off here, this year. But certainly, from our historical experience, David, this one is a bit longer. But I think it's because of those distortions coming out of COVID and the supply chain disruptions that have now worked their way out. And again, as we look across our customer base, it seems that should be coming to an end here. And as that happens, then we would expect a positive turn from a volume standpoint. And given the operating leverage in the business, that can be quite material.

所以我認為今年所有這些都已經解決了。但當然，根據我們的歷史經驗，大衛，這個有點長。但我認為這是因為新冠疫情帶來的扭曲和供應鏈中斷現在已經解決了。再次，當我們審視我們的客戶群時，這似乎應該到此結束。當這種情況發生時，我們預計從成交量的角度來看會出現積極的轉變。考慮到該業務的運營槓桿，這可能是相當重要的。

Very good. And just on your annual contract negotiations, how are they progressing? I know you had some -- a number of annual or 2-year contracts. So overall, how they're progressing? How should we think about pricing for next year in that business?

非常好。就你們的年度合同談判而言，進展如何？我知道你有一些——一些年度或兩年期的合同。總體而言，他們進展如何？我們應該如何考慮該業務明年的定價？

Yes, it's early to say at this point, David, but I would say the annual contract cycle is beginning now and will follow, I would say, a more normal cadence, which is really a fall, September through end of year cadence. Last year, there was -- that was pulled forward a little bit, I would say, this year's cycle will probably resemble a more traditional pace.

是的，現在說這個還為時尚早，大衛，但我想說年度合同周期現在已經開始，並且將遵循，我想說，更正常的節奏，這實際上是秋季，九月到年底的節奏。去年，我想說，這一點被提前了一點，今年的周期可能會類似於更傳統的節奏。

So again, discussions in the fall is likely what will happen. We continue to believe that price increases are needed based on increased sustainability costs as well as the premium and quality and service that we provide to customers. And so while I can't comment because it's too early in the process. Just as a reminder, we did close several multiyear agreements last year with an incremental price increase in 2024. And our view is that those price increases are the baseline for the rest of our 2024 contracts and should set the level of price increases expected during the negotiations. So we'll certainly be updating on our next call as we're deeper into the cycle and that would be typical.

因此，秋季的討論很可能會發生。我們仍然認為，由於可持續成本的增加以及我們為客戶提供的溢價、質量和服務的增加，價格上漲是必要的。因此，雖然我無法發表評論，因為這個過程還為時過早。提醒一下，我們去年確實簽署了幾項多年期協議，並在2024 年逐步提價。我們的觀點是，這些提價是我們2024 年其餘合同的基準，並應確定2024 年期間預期的提價水平。談判。因此，隨著我們更深入地了解這個週期，我們肯定會在下一次電話會議上進行更新，這將是典型的情況。

(Operator Instructions)

（操作員說明）

Our next question will come from John Roberts of Credit Suisse.

我們的下一個問題將來自瑞士信貸銀行的約翰·羅伯茨。

How much has the energy co-product credit decline for earnings with the lower oil prices that we've had until the recent balance?

直到最近的平衡之前，隨著油價下跌，能源副產品信用收益下降了多少？

John, I think certainly last year, energy prices were higher, and those have moderated. And so I think in the full year numbers this year, we're running about $5 million per quarter lower in energy center benefits, so 2023 versus 2022. So something in the order of $20 million on a full year basis, 2023 versus '22 down?

約翰，我認為去年能源價格確實較高，但現在已經有所放緩。因此，我認為，在今年的全年數據中，我們的能源中心效益每季度減少約500 萬美元，因此2023 年與2022 年相比。因此，2023 年與22 年相比，全年約為2000萬美元向下？

And then are all carbon black producers reducing production similarly? Or are you seeing any significant share shifts from some of the suppliers continuing to run full out?

那麼所有炭黑生產商是否都類似地減產呢？或者您是否發現一些供應商的份額發生了重大變化？

No. We're seeing, I think, real stability there. I think our volume declines are consistent with what, on average, the major tire producers are experiencing themselves. So we're not seeing any share shift here. And that would not be expected as agreements, annual agreements or multiyear agreements have certain volume targets attached to them. So you typically don't see movements inside of the contract period.

不，我認為我們看到了真正的穩定。我認為我們的銷量下降與主要輪胎生產商平均經歷的情況一致。所以我們在這裡沒有看到任何份額轉移。這是不會出現的情況，因為協議、年度協議或多年協議都附有一定的數量目標。因此，您通常不會看到合同期內的變動。

I think also if you look at this business, you have a business with relatively, I would say, stable but modest growth rates. And so it's very important in terms of the key levers of success in running the business. You want stability of volumes grow at the market rate, manage the pricing and product mix in a stable way and then continue to drive technology and operational efficiency in the plant, so high OEE. So we keep our assets and our uptime high and then also drive the energy recovery that you touched on. Those are really the drivers of success here and not really share grab. That's not how we think about the business.

我認為，如果你看看這個業務，我想說的是，你的業務增長率相對穩定但適度。因此，就成功經營業務的關鍵槓桿而言，它非常重要。您希望銷量穩定地以市場速度增長，以穩定的方式管理定價和產品組合，然後繼續推動工廠的技術和運營效率，從而實現高 OEE。因此，我們保持我們的資產和正常運行時間較高，然後還推動您提到的能源回收。這些確實是這裡成功的驅動力，而不是真正的份額爭奪。我們不是這樣看待業務的。

(Operator Instructions) The next question will come from Josh Spector of UBS.

（操作員說明）下一個問題將由瑞銀集團的 Josh Spector 提出。

I just had a couple of questions on the battery business. So I think, Sean, if we look back a couple of quarters, you originally thought that business could do north of $40 million in EBITDA, I believe, this year. Now you're talking low $20s, if I heard you correctly. Can you go through that and maybe parse out how much of that is volumes versus some of the pricing pressure here (inaudible)? And then I'll have a follow-up there as well.

我只是有幾個關於電池業務的問題。所以我認為，肖恩，如果我們回顧幾個季度，您最初認為今年的業務 EBITDA 可以超過 4000 萬美元。如果我沒聽錯的話，你現在說的是 20 美元的低價格。您能否仔細研究一下，並分析其中的銷量與定價壓力之間的關係（聽不清）？然後我也會在那裡進行跟進。

Sure. Josh. So certainly, you're right, at the beginning of the fiscal year, we had been seeing at that time, really consistent sequential quarterly growth in the market. And our expectation was that this trend would continue for the year. And that core assumption in combination with an expected ramp of volumes at new customers, particularly outside of China is what informed our expectation for the year. And then as the year progressed in Q2, we saw a significant sequential decline in EV sales in China. The market was down pretty sharply. We commented on that, which disrupted this trend of sequential growth that we had been seeing. And that was driven by several factors. Certainly, the COVID-related disruptions that were occurring at that time had a distorting effect on things. As well as the fact that there was a very significant decline in key raw material prices, particularly lithium in that March quarter. And so it really drove a behavior of destocking, and then finally, the Chinese government had incentives for EVs in place, and those expired at the end of December. So that impacted buying behavior. And so this impact in China from all of these things definitely caused us to lower our outlook in Q2.

當然。喬什。所以，當然，你是對的，在本財年之初，我們當時看到市場的季度連續增長非常一致。我們預計這一趨勢將在今年持續下去。這一核心假設與新客戶（尤其是中國以外的客戶）的預期銷量增長相結合，構成了我們對今年的預期。然後，隨著第二季度的進展，我們看到中國電動汽車銷量連續大幅下降。市場大幅下跌。我們對此發表了評論，這擾亂了我們一直看到的連續增長趨勢。這是由幾個因素驅動的。當然，當時發生的與新冠病毒相關的破壞對事情產生了扭曲的影響。事實上，關鍵原材料價格（特別是鋰）在三月份季度出現了非常顯著的下降。因此，這確實推動了去庫存行為，最後，中國政府出台了電動汽車激勵措施，但這些激勵措施已於 12 月底到期。這影響了購買行為。因此，所有這些因素對中國的影響肯定導致我們降低了第二季度的前景。

Now since that time, we have seen a pickup in volumes in China starting in April and this continued through our Q3, as we commented on. However, while volumes began the sequential recovery, we have seen price pressure in the EV auto EM market has really intensified. I think this was very visible as Tesla reduced prices there and it set off a bit of a price war for auto EVs in China as they were competing for market share. And this has created pricing pressure in the battery flowing back up to both batteries and the materials chain as we move into our fourth quarter.

從那時起，我們看到從 4 月份開始，中國的銷量有所回升，正如我們評論的那樣，這種情況一直持續到第三季度。然而，雖然銷量開始連續復甦，但我們看到電動汽車新興市場的價格壓力確實加劇了。我認為這一點非常明顯，因為特斯拉在中國降低了價格，並在中國爭奪市場份額時引發了汽車電動汽車的價格戰。隨著我們進入第四季度，這給電池和材料鏈帶來了價格壓力。

So I think this factor, combined with continued delay in the ramp of some of our Western customers is impacting our view on the forecast and informs the outlook that we shared. So I'd say while the current environment in China is challenging, it is concentrated in the lower-end domestic Chinese vehicle market. The market for the U.S. and Europe remains stable from pricing standpoint and Chinese batteries that are sold for export to Western auto OEMs that also remains -- remain stable.

因此，我認為這個因素，再加上我們一些西方客戶的增長持續延遲，正在影響我們對預測的看法，並影響我們所分享的前景。所以我想說，雖然中國目前的環境充滿挑戰，但主要集中在中國國內的低端汽車市場。從定價角度來看，美國和歐洲市場保持穩定，銷售給西方汽車原始設備製造商的中國電池也保持穩定。

So it's really thinking through the segmentation of the market here. This is a real priority for us focusing our market segmentation on higher-performing batteries and then balancing share and pricing. And on the more base end of our product line, really focusing on cost reduction. And then over time, what we see, Josh, is that the market is clearly bifurcating into a China market and a rest of world market. And we expect the rest of world market to behave pretty consistent with the auto market norms, where there are very strict qualification requirements and management of change protocols, et cetera. And we also expect this market is going to continue to regionalize.

所以它確實在考慮市場的細分。對於我們來說，將市場細分重點放在高性能電池上，然後平衡份額和定價，這是我們真正的首要任務。在我們產品線的更基礎端，真正關注降低成本。喬什，隨著時間的推移，我們看到市場明顯分為中國市場和世界其他市場。我們預計世界其他市場的表現將與汽車市場規範非常一致，這些市場有非常嚴格的資格要求和變更協議管理等。我們還預計這個市場將繼續區域化。

So all of that creates, I think, momentum for growth outside of China and for more predictable and durable profit pools. And then we expect inside of China that the market, too, is bifurcating there with lower-end vehicles sort of on one end, where the Chinese government is promoting EVs aggressively and the lower end of the market. There are offerings in the $10,000 to $15,000 per vehicle range, which is very, very, very cheap. And then you've got, on the higher end side, more traditional vehicles that are a bit more premium. And I think in this market, our view is that the lower end will use more base conductive additives and pricing and margins here will probably cycle with demand, and this will be probably pretty consistent with what we've experienced in China over the years across our other markets.

因此，我認為，所有這些都為中國以外地區的增長創造了動力，並創造了更可預測和更持久的利潤池。然後，我們預計在中國內部，市場也將出現兩極分化，一方面是低端汽車，一方面是中國政府積極推廣電動汽車，另一方面是低端市場。每輛車的價格在 10,000 美元到 15,000 美元之間，非常非常非常便宜。然後，在高端方面，您會得到更高端的更傳統的車輛。我認為在這個市場上，我們的觀點是，低端市場將使用更多的基礎導電添加劑，這裡的定價和利潤可能會隨著需求而循環，這可能與我們多年來在中國經歷的情況非常一致我們的其他市場。

And then we expect the high end of the market will require higher-performing conductive additives which should command higher pricing and margins. So I think it's going to be critical that we manage these segments in a differentiated way, and that will be really important for us as we manage through this unexpected turbulence in China.

然後我們預計高端市場將需要更高性能的導電添加劑，這應該要求更高的定價和利潤。因此，我認為我們以差異化的方式管理這些細分市場至關重要，這對我們應對中國這場意外的動盪非常重要。

In the long term, we see the growth fundamentals here remaining intact, and we see the growth expected outside of China, in U.S. and Europe over the next 10 years, it's expected by most forecasters to represent about 50% of the market. And so I think the requirements and therefore, the profit pools outside of China will remain very attractive and more durable. And inside of China, it will be about how we segment the market and choose our places to participate that orient more towards higher value.

從長遠來看，我們認為這裡的增長基本面保持不變，並且我們看到未來 10 年中國以外、美國和歐洲的預期增長，大多數預測者預計將佔市場的 50% 左右。因此，我認為這些要求以及中國以外的利潤池將仍然非常有吸引力且更持久。而在中國內部，問題在於我們如何細分市場並選擇更注重更高價值的參與地點。

So that's a bit of what's going on in the market and how things have developed over the course of the year, and what evolved differently than what was originally expected and informed our initial outlook.

這就是市場上正在發生的一些事情，以及一年來事情的發展情況，以及與最初預期不同的演變，並告訴我們最初的展望。

I appreciate that. Just two quick follow-ups. Just one, your exposure to China today in this business versus where you aim to be a couple of years from now. Can you give us some numbers there? And then second, just has anything changed on the supply side and carbon nanotubes, is that an area you're seeing more pressure? Or is it relatively broad across your portfolio?

我很感激。只需兩次快速跟進。只有一個，你今天在這個行業中對中國的接觸與你幾年後的目標。你能給我們一些數字嗎？其次，供應方面和碳納米管是否發生了變化，您是否在這個領域看到了更大的壓力？或者在您的投資組合中它相對廣泛嗎？

Yes. So first, I'll take them in the order, Josh. So in terms of the China market today, it represents for the whole market, about 70% of batteries are made in China. So the world is definitely skewed to China at this point and our geographic makeup is similarly skewed probably even a bit higher than that in terms of our portfolio.

是的。首先，我將按順序排列它們，喬什。所以就今天的中國市場而言，代表著整個市場，大約70%的電池是中國製造的。因此，目前世界肯定偏向中國，而我們的地理構成也同樣偏向，甚至可能比我們的投資組合偏向更高一些。

What we would expect as we look out over the next 10 years is that U.S. and Europe will grow to represent about 50% of the battery market, and we would certainly be targeting at least that level of breakdown across our portfolio. But given our position, our global footprint, our breadth of technology, the orientation of the market outside of China towards NCM because they want longer range, et cetera, those are going to orient towards higher-performing products is our view. And so we would hope to win a disproportionate share. But that's how the market will break out, and we would expect that our percentage of our business would, at a minimum, evolve accordingly.

展望未來 10 年，我們預計美國和歐洲將佔據電池市場約 50% 的份額，我們的投資組合肯定會以至少達到這一細分水平為目標。但考慮到我們的地位、我們的全球足跡、我們的技術廣度、中國以外的市場對 NCM 的定位（因為他們想要更長的航程）等等，我們認為這些將面向更高性能的產品。因此，我們希望贏得不成比例的份額。但這就是市場將如何爆發，我們預計我們的業務比例至少會相應發展。

Now on the second question on the supply side, the market inside of China is certainly very dynamic. And we have seen new entrants that have been developing here over the recent period and customers, certainly, given the pricing pressure in China right now at the EV level, you're seeing that push all the way upstream and customers are getting more aggressive about pricing and about trying to develop additional alternatives. And so again, our focus is on segmentation because on the higher end of the market, we see prices more stable because the performance is higher. And certainly, on batteries that are exported to global auto OEMs, same thing.

現在關於供應方面的第二個問題，中國國內的市場肯定是非常有活力的。我們看到最近一段時間以來這裡一直在發展的新進入者和客戶，當然，考慮到中國目前在電動汽車層面的定價壓力，你會看到一路向上游推進，客戶變得更加積極定價以及嘗試開發其他替代方案。同樣，我們的重點是細分，因為在高端市場，我們看到價格更穩定，因為性能更高。當然，對於出口到全球汽車原始設備製造商的電池也是如此。

So I think it's, again, in China going to be about how we segment the market towards the higher-value product lines. That will be our key area of focus.

因此，我認為，在中國，我們將如何將市場細分為更高價值的產品線。這將是我們關注的重點領域。

(Operator Instructions) The next question will come from Jeff Zekauskas of JPMorgan.

（操作員指令）下一個問題將由摩根大通的 Jeff Zekauskas 提出。

I know that it's early to talk about carbon black price negotiations in Europe and the United States for 2024. But if the general posture that the Carbon Black companies think that prices should be up and the customers think that prices should be down?

我知道現在談論2024年歐洲和美國的炭黑價格談判還為時過早。但是，炭黑公司認為價格應該上漲而客戶認為價格應該下降的總體姿態是否是這樣呢？

Hi Jeff, I think that's perhaps a reasonable summary. If you look at our business, we have a percentage of our business that has multiyear agreements with the second year with price increases. I know some of our competitors that have commented publicly have the same. And so I think that the view is that those price increases are kind of the baseline for the rest of our 2024 contracts and should really set the level of price increases, I would say, number one.

嗨，傑夫，我認為這也許是一個合理的總結。如果你看看我們的業務，我們有一定比例的業務與第二年簽訂了多年協議，價格上漲。我知道我們的一些競爭對手也曾公開發表過同樣的言論。因此，我認為，人們的觀點是，這些價格上漲是我們 2024 年其餘合同的基準，並且應該真正確定價格上漲的水平，我想說，第一。

Number two, the environmental costs continue to rise in this business and those costs have to be recovered. And so I think the fundamentals there have not really changed. So as we head into the negotiations here, I would say on the supplier side, the supply side capacity is picture remains as structurally as we have commented on in the past. So no change there. We are going to see restrictions or sanctions go in place around Russian products into Europe in 2024.

第二，該行業的環境成本持續上升，這些成本必須收回。所以我認為基本面並沒有真正改變。因此，當我們進入這裡的談判時，我想說，在供應商方面，供應方的產能狀況在結構上仍然與我們過去評論的一樣。所以那裡沒有變化。 2024 年，我們將看到針對俄羅斯產品進入歐洲的限製或制裁。

So I think the supply picture remains very important for customers, and I think that getting supply reliability is going to be pretty critical for them.

因此，我認為供應情況對客戶來說仍然非常重要，並且我認為獲得供應可靠性對他們來說非常關鍵。

Okay. And in China -- in the traditional China Carbon Black tire markets, can you talk about the price raw material spreads whether they're narrowing or expanding? And can you talk about the effect of Russian imports of Carbon Black into China if there are impacts.

好的。在中國，在傳統的中國炭黑輪胎市場，您能談談原材料的價差是縮小還是擴大嗎？如果有影響的話，您能談談俄羅斯進口炭黑對中國的影響嗎？

Yes. So in terms of our margin profile in China, Jeff, it's pretty stable right now. So as raws move around that market because it's more of a spot market tends to adjust very quickly. And so I think the price raws recovery is basically matched and the unit margins are holding pretty steady, though at a lower level than where they were a couple of years ago, but they're holding steady.

是的。傑夫，就我們在中國的利潤率而言，目前相當穩定。因此，當原料在該市場上移動時，因為它更多的是現貨市場，因此往往會很快調整。因此，我認為原材料價格的複蘇基本上是匹配的，單位利潤率保持相當穩定，儘管水平低於幾年前，但仍保持穩定。

In terms of Russian product into China, maybe I'll just sort of pull the lens back a bit. So the Russian exports right now are down about 50%, from into Europe, from where they were pre Ukraine invasion. And again, there are sanctions on the books that will go into effect at the end of June 2024. So that number based on those sanctions, then arguably has to go to 0.

就俄羅斯產品進入中國而言，也許我會把鏡頭拉回來一點。因此，與烏克蘭入侵之前相比，俄羅斯目前對歐洲的出口量下降了約 50%。同樣，賬面上的製裁將於 2024 年 6 月下旬生效。因此，基於這些制裁的數字可以說必須降至 0。

Now what's happening with the product and where is it going. We're seeing some of the product go into markets like Turkey, which is a pretty good-sized tire production base with no carbon black production in country. So some of it's flowing there. Some of it's flowing to the Middle East, some of it is flowing into China. We're not seeing that flow have any material impact on the competitive dynamics in China because the market is just so big. So a few hundred thousand tons flowing into a market that is, I think somewhere in the order of probably 7 million or 8 million tons is not really changing the dynamic there. I think in China, the market has its competitive intensity and the Russian stuff isn't really changing that.

現在該產品發生了什麼以及它將走向何方。我們看到一些產品進入了土耳其等市場，這是一個規模相當大的輪胎生產基地，但該國沒有炭黑生產。所以其中一些流在那裡。其中一些流向中東，一些流向中國。我們沒有看到流量對中國的競爭動態產生任何實質性影響，因為市場太大了。因此，流入市場的數十萬噸，也就是說，我認為大約 700 萬噸或 800 萬噸的數量級並沒有真正改變那裡的動態。我認為在中國，市場有其競爭強度，而俄羅斯的東西並沒有真正改變這一點。

But that's a quick overview of kind of what's happening with Russian exports and where we see them showing up. And the expectation is that the exports into Europe, given the sanctions go to 0 by that date of June -- end of June.

但這是對俄羅斯出口情況以及我們看到它們出現在哪裡的快速概述。鑑於製裁措施，預計到 6 月底，對歐洲的出口將降至 0。

Okay. And then lastly, can you talk about your Specialty Black volumes, both in the second quarter and year-to-date? That is what kind of growth or contraction you're experiencing? And how's the profitability of that business?

好的。最後，您能談談第二季度和今年迄今為止的 Specialty Black 銷量嗎？您正在經歷什麼樣的增長或收縮？該業務的盈利能力如何？

Yes. So certainly, across Performance Chemicals, we have seen weak volumes, and it's really driven by weakness in the end markets and in specialty carbons, that is definitely the case where it's been more pronounced in Performance Chemicals is in our few metal oxides business, but certainly, specialty carbons has seen weaker volumes. But I would say the carbons volumes are pretty similar to what we summarized for the overall segment down around 9% in the quarter.

是的。因此，當然，在高性能化學品領域，我們看到了銷量疲軟，這實際上是由終端市場和特種碳的疲軟推動的，這在我們為數不多的金屬氧化物業務中在高性能化學品領域表現得更為明顯，但是當然，特種碳的銷量有所下降。但我想說，碳排放量與我們總結的本季度整個細分市場下降約 9% 的情況非常相似。

Now while that's sort of headline volume, you also have a mix factor here where some of the higher-end mix that pull through much stronger margins has been weak. While the auto sector is beginning to recover in terms of production, we typically see a lag in that given the length of these value chains that we sell into. So we've not yet seen that translate into our business. And as a result, we're not getting that mix uplift that we would normally get.

現在，雖然這是頭條新聞，但這裡也有一個混合因素，其中一些利潤率更高的高端產品組合一直疲軟。雖然汽車行業的生產開始復蘇，但考慮到我們銷售的這些價值鏈的長度，我們通常會看到生產的滯後。所以我們還沒有看到這轉化為我們的業務。結果，我們沒有得到通常情況下的混合提升。

Again, as the lag works its way out from the auto build should flow through. But certainly, there's a mix impact on the business today. In terms of profitability, it is down in the business, very similar to the overall declines in the segment, I would say. That's roughly how it's playing out.

同樣，隨著滯後從自動構建中消失，應該會流過。但可以肯定的是，這對當今的業務產生了複雜的影響。我想說，就盈利能力而言，該業務正在下降，與該領域的整體下降非常相似。事情大致就是這樣進行的。

(Operator Instructions) The next question will come from Chris Kapsch of Loop Capital.

（操作員說明）下一個問題將來自 Loop Capital 的 Chris Kapsch。

A lot of my questions have been asked, but I do have a couple. One, I wanted to peel back a little bit on the battery materials discussion, and thanks for a lot of the characterization and details on that. But -- so I get the bifurcation, China versus Western OE producers, particularly I guess, low price, low value cars and LFP battery in China, NMC for the longer range in Western markets. But it's not intuitive to me that the role of the conductive carbon in these batteries is all that different.

有人問了我很多問題，但我確實有幾個問題。第一，我想稍微回顧一下電池材料的討論，感謝您提供的大量描述和細節。但是——所以我得到了分歧，中國與西方OE生產商，特別是我猜，中國的低價格、低價值的汽車和LFP電池，NMC在西方市場的長續航里程。但對我來說，導電碳在這些電池中的作用完全不同，這一點並不直觀。

My understanding is, regardless of the battery chemistry, there inputs to just facilitate the flow of electrons from cathode and vice versa. So I'm wondering what is it about the China LFP battery construction that's led to this increase in competitive intensity? Is it simply the mentality of these producers that they -- you kind of alluded to this, but it sounds like they're not adhering to strict and keeping a high bar with the qualifications. And I'm curious if that's just how pronounced that dynamic is in the overall battery value chain, is it more focused on carbon nanotubes? Or is it also applicable to the conductive carbons that are made in your traditional reactor footprint?

我的理解是，無論電池化學成分如何，輸入只是促進電子從陰極流動，反之亦然。那麼我想知道中國磷酸鐵鋰電池建設的原因是什麼導致了競爭強度的增加？這只是這些製作人的心態嗎？他們——你有點提到了這一點，但聽起來他們並沒有遵守嚴格的資格標準。我很好奇這種動態在整個電池價值鏈中是否有多明顯，是否更關注碳納米管？或者它是否也適用於在傳統反應器佔地面積中製造的導電碳？

Yes. So Chris, a couple of things here. So at a high level, what you have in China is a market that a battery market that is more oriented towards LFP rather than NMC. And so -- and outside of China, you have the orientation towards NMC because range matters more. And so inside of China, it tends to be more LFP. And while it is true that they both require conductive carbon additives and the volume loading is not materially different across those two, you can have a very different levels of performance. So some of the low-end batteries in China, LFP might have ranges in the hundred miles, where these are going into EVs that are sold into consumers that are probably in more like Tier 3, Tier 4 cities in China, and so it is a lower performing battery. And so a couple of things, I think, happen there. The pricing intensity given that the cars are selling for such a low price is definitely higher. And given the performance requirements, they'll put more pressure on the inputs.

是的。克里斯，這裡有幾件事。因此，從較高的層面來看，中國的電池市場更傾向於磷酸鐵鋰而不是三元鋰電池。因此，在中國以外的地區，您會傾向於 NMC，因為範圍更重要。所以在中國國內，更多的是LFP。雖然它們確實都需要導電碳添加劑，並且兩者的體積負載量沒有本質上的不同，但您可以獲得非常不同的性能水平。因此，中國的一些低端電池，磷酸鐵鋰電池的續航里程可能在百英里內，這些電池將被用於電動汽車，這些電動汽車銷售給可能更多地在中國三四線城市的消費者，所以它是性能較低的電池。我認為，那裡發生了一些事情。鑑於汽車以如此低的價格出售，定價強度肯定更高。考慮到性能要求，他們會對輸入施加更大的壓力。

And our view, what we see is they're more aggressive or less disciplined around sort of qualification standards because they're being sold as local domestic vehicles at a very low price.

我們認為，我們看到的是，他們在某種資格標準方面更加激進或更缺乏紀律，因為它們以非常低的價格作為本地國產車輛出售。

These are not products that are being exported, either the batteries or the cars. So I think that's a bifurcation that you're seeing, how the market plays out at the low price end of the EV spectrum, you're going to see LFP technology, and you're going to see the low end of LFP technology, LFP can stretch in terms of its range, but at the low end for these low-priced cars, you're seeing much lower performing LFP batteries. So that's the dynamic there.

這些不是出口產品，無論是電池還是汽車。所以我認為這是你所看到的一個分歧，市場如何在電動汽車的低價端發揮作用，你將看到 LFP 技術，你將看到 LFP 技術的低端， LFP 的續航里程可以延伸，但在這些低價汽車的低端，您會看到性能低得多的LFP 電池。這就是那裡的動態。

In the sort of mid- to higher end, you still see an orientation in China towards LFP. It makes up, I think, somewhere maybe close to 70% of the market, is LFP in China today, but you have higher performing end of the market there where you get more range. And therefore, the requirement for higher conductive additives -- better-performing conductive additives higher purity and a more discerning customer base in terms of their willingness to switch and take quality risks and things like that.

在中高端，你仍然會看到中國對 LFP 的定位。我認為，今天中國的 LFP 可能佔據了近 70% 的市場，但那裡的市場表現更高，範圍更廣。因此，需要更高的導電添加劑——性能更好的導電添加劑、更高的純度以及更挑剔的客戶群，他們願意更換並承擔質量風險等。

So some of it is behavioral or the mentality as you put it, but we see the market kind of bifurcating between that low end and then domestic, the medium and higher end domestic. And then on the export side, where Chinese producers are exporting batteries to global auto OEMs, we're seeing real stability there. And we're seeing that obviously, the management of change requirements for Western auto or Global auto OEMs are pretty strict. And we know that from our other participation in the auto sector. But that's pretty strict. That's why we see the West developing differently than in China.

正如你所說，其中一些是行為或心態，但我們看到市場在低端和國內、中端和高端國內之間存在分歧。然後在出口方面，中國生產商向全球汽車原始設備製造商出口電池，我們看到了真正的穩定。我們顯然看到，西方汽車或全球汽車原始設備製造商的變更要求管理相當嚴格。我們從我們在汽車行業的其他參與中知道這一點。但這是相當嚴格的。這就是為什麼我們看到西方的發展與中國不同。

Got it. I appreciate that. Just as a follow-up, and I appreciate your comments about the market segmentation approach and a little bit of a pivot on the strategy, addressing this growth opportunity. But does the evolution of this market dynamic, does it influence your intent with respect to capital allocation to grow capacity as this market grows? In other words, are you going to focus only on installing the capability to supply the western markets and walk from the large and growing domestic market in China? Or how are you approaching that?

知道了。我很感激。作為後續行動，我感謝您對市場細分方法的評論以及針對這一增長機會的策略的一點轉變。但是，這個市場動態的演變是否會影響您在資本配置方面的意圖，以隨著市場的增長而擴大產能？換句話說，您是否打算只專注於建立供應西方市場的能力，而放棄中國龐大且不斷增長的國內市場？或者你是如何做到這一點的？

Yes. So I wouldn't say any fundamental shift but a bit of an adjustment I would say, in terms of our approach. So it will be guided first by our choices around segmentation. And so certainly in the West, in the U.S. and Europe, we continue with our intentions to build capacity there to support customers. But that will be timed with how the customers' projects are advancing. I would say, in general, while there are a lot of battery giga factories under construction right now, most of them are targeted to come on in the sort of '25 through 2028 period. And so we'll be looking to synchronize our capacity adds with that. But I would say no change in the aiming point here because we believe those are going to be valuable and durable profit pools.

是的。因此，我不會說有任何根本性的轉變，而是在我們的方法方面進行了一些調整。因此，它將首先以我們圍繞細分的選擇為指導。因此，當然在西方、美國和歐洲，我們將繼續致力於建設能力以支持客戶。但這將根據客戶項目的進展情況而定。我想說，總的來說，雖然目前有很多超級電池工廠正在建設中，但其中大多數的目標是在 25 年到 2028 年期間建成。因此，我們將尋求與此同步我們的容量增加。但我想說這裡的目標點沒有改變，因為我們相信這些將成為有價值且持久的利潤池。

With respect to inside of China, again, segmentation will be critical here. And what we'll be doing is managing our capacity adds to match that. As you know, last year, we brought on a significant tranche of specialty carbons capacity in China. And with that market slower to recover, that is making more capacity to make high-value battery grades in China off our existing network. It's creating more capacity to do that. So we can, I think, adequately serve that without significant increases in our near-term capacity. So we're going be managing that very carefully in China tied to our segmentation approach. And then outside of China, it's really no change in the aiming point. We're just going to make sure we synchronize that. I wouldn't call that a change, but we're going to make sure we synchronize that with customers' timing.

就中國內部而言，細分再次至關重要。我們要做的就是管理我們的容量以匹配這一點。如您所知，去年我們在中國引進了大量特種碳產能。隨著該市場恢復速度較慢，我們正在利用現有網絡在中國生產更多的高價值電池。它正在創造更多的能力來做到這一點。因此，我認為，我們可以在不大幅增加近期產能的情況下充分滿足這一需求。因此，我們將根據我們的細分方法在中國非常謹慎地管理這一點。而在中國之外，瞄準點確實沒有變化。我們只需確保同步即可。我不會稱其為更改，但我們將確保與客戶的時間同步。

That's helpful. If I could just sneak in one last one about the fumed metal oxide business. Under what scenarios would you be able to underwrite a recovery -- a more pronounced recovery in that business? Is it depend on the semiconductor end market recovery? Is it going to be piggybacking off of China stimulus and recovery there? Or is there something that Cabot can do specifically to drive a recovery there?

這很有幫助。如果我能偷偷地插上最後一篇關於氣相金屬氧化物業務的文章就好了。在什麼情況下，您能夠承擔該業務的複蘇——更明顯的複蘇？是否取決於半導體終端市場的複蘇？它會藉助中國的刺激和復蘇嗎？或者卡博特可以採取哪些專門措施來推動那裡的複蘇？

Yes. So certainly, the semiconductor -- I mean the silicone space, which really drives the largest part of the fumed silica business has been very weak. And if you look at end markets for silicones, building and construction is the largest one, and that has been quite weak globally. So I think we would need to see a turn in building and construction in order to provide more stable volumes in that business because in this business, volumes are off greater than 20% year-over-year, and it is the highest margin business in the Performance Chemicals portfolio.

是的。當然，半導體——我指的是有機矽領域，它真正推動了氣相二氧化矽業務的最大部分，一直非常疲軟。如果你看看有機矽的終端市場，建築業是最大的市場，而這一市場在全球範圍內一直相當疲軟。因此，我認為我們需要看到建築業的轉變，以便在該業務中提供更穩定的銷量，因為在該業務中，銷量同比下降了 20% 以上，而且它是利潤率最高的業務。高性能化學品產品組合。

So it is impacting us with those weaker volumes. But I would say housing recovery and building and construction is one. Silicones also go into the automotive sector, and so as the auto builds improve, again, with a little bit of a lag, we should see some improvement there. And then the semiconductors, as you said, electronics, in general, that's another important area and that certainly looks like it's beginning to pick up a bit more now, which is good. But we need to see those end markets really improve Chris, to provide a more normalized volume picture.

因此，這些疲軟的銷量正在影響我們。但我想說，住房恢復和建築施工就是其中之一。有機矽也進入了汽車領域，因此，隨著汽車製造的改進，雖然有一點滯後，但我們應該會看到一些改進。然後是半導體，正如你所說，電子產品，總的來說，這是另一個重要領域，而且看起來現在確實開始有所回升，這很好。但我們需要看到這些終端市場真正改善克里斯，以提供更加正常化的銷量情況。

In terms of the things that we can do in terms of self-help, of course, we continue to do in terms of how we segment the market and the products we're selling, the mix and how we manage our costs, all of that is stuff that we can do, but we need to see the end markets improve a bit here. And there are some mixed signals in the U.S., we're seeing maybe some early signs of housing and construction beginning to turn. I wouldn't say that's the case yet in Europe or China, but we'll have to see how that evolves here in the coming couple of quarters.

當然，就我們在自助方面可以做的事情而言，我們繼續在如何細分市場和我們銷售的產品、組合以及如何管理成本方面繼續做這是我們可以做的事情，但我們需要看到終端市場有所改善。美國出現了一些混雜的信號，我們可能看到住房和建築業開始好轉的一些早期跡象。我認為歐洲或中國的情況還不是這樣，但我們必須看看未來幾個季度情況會如何發展。

(Operator Instructions) Our next question will come from the line of Laurence Alexander of Jefferies.

（操作員說明）我們的下一個問題將來自 Jefferies 的 Laurence Alexander。

So I guess, first of all, do you have any end markets by region where customers are clearly telling you inventories are too low? And secondly, can you give an update on how the conductive carbons platform is evolving? So should your operating leverage to an improvement in EV sales be different in 2025 than it was in 2023? Can you just give a sense for what the kind of underlying technology development is looking like?

所以我想，首先，您是否有按地區劃分的終端市場，客戶明確告訴您庫存太低？其次，您能否介紹一下導電碳平台的最新發展情況？那麼，您在 2025 年提高電動汽車銷量的運營槓桿是否應該與 2023 年有所不同？您能否簡單介紹一下底層技術開發是什麼樣的？

Sure. Thanks, Laurence. So in terms of end markets and inventory positioning, it certainly seems like we're at the end or near the end of destocking. I mean, as we talk to our customers, we're not seeing inventory levels at normal safety stock. They're below that is what customers are telling us and they're basically ordering to meet their current demand, not building stock in anticipation of growth. And we do see that translate into order pattern behavior where we might find customers order a couple of times a month instead of once a month. So they're truly reacting to their current demand, and I think have a very cautious posture on inventory. Where it can get more murky, I think, is downstream of them, how good is their visibility, especially in some of these longer value chains.

當然。謝謝，勞倫斯。因此，就終端市場和庫存定位而言，我們的去庫存似乎已經結束或接近結束。我的意思是，當我們與客戶交談時，我們沒有看到正常安全庫存的庫存水平。他們的價格低於客戶告訴我們的價格，他們基本上是為了滿足當前的需求而訂購，而不是為了預期增長而增加庫存。我們確實看到這轉化為訂單模式行為，我們可能會發現客戶每月訂購幾次而不是每月一次。因此，他們確實對當前的需求做出了反應，而且我認為對庫存持非常謹慎的態度。我認為，情況變得更加模糊的是它們的下游，它們的可見性有多好，特別是在一些較長的價值鏈中。

But I would say the general sense is that inventory levels are low and below normalized levels of safety stock, but people were being cautious and looking for a turning point with rates having ratcheted consistently throughout 2023 and question marks around the macroeconomic environment. Customers have just been really, really cautious. And I would say that's how I would characterize the things.

但我想說的是，普遍的感覺是庫存水平較低，低於正常的安全庫存水平，但人們持謹慎態度，並尋找一個轉折點，利率在 2023 年持續上升，宏觀經濟環境存在疑問。客戶真的非常非常謹慎。我想說這就是我對事物的描述。

So as a turning point happens, then I think our expectation is that customers would have to rebuild inventories to a more normal level to support demand, but we've not seen that yet. But that's a bit of characterization on the inventory side. And my sense in hearing how other players in the chemical chain are seeing things, I think that's pretty consistent. In terms of the conductive carbons' technology evolution here, we have a range of conductive carbon additive technologies in our portfolio. The widest breadth of products compared to any competitor from both conductive carbon furnace black types to carbon nanotubes to carbon nano structures.

因此，當轉折點發生時，我認為我們的期望是客戶必須將庫存重建到更正常的水平以支持需求，但我們還沒有看到這一點。但這只是庫存方面的一些特徵。我在聽到化學鏈中其他參與者如何看待事物時的感覺，我認為這是非常一致的。就導電碳技術的發展而言，我們的產品組合中有一系列導電碳添加劑技術。與任何競爭對手相比，產品範圍最廣，從導電碳爐黑類型到碳納米管再到碳納米結構。

Now over time, what we see as the battery market evolves here is that as the proportion of NMC batteries increases, then the need for higher-performing carbons and blends of things like conductive carbon black and CNTs will become more important. So no real change there. And we continue to develop both of those product lines because we think they'll offer differentiated performance, especially in these higher-end batteries. I mean, certainly, as volumes continue to grow in this market, there will be some operating leverage of benefits.

現在，隨著時間的推移，我們看到電池市場的發展是，隨著 NMC 電池比例的增加，對高性能碳以及導電炭黑和碳納米管等混合物的需求將變得更加重要。所以沒有真正的改變。我們繼續開發這兩個產品線，因為我們認為它們將提供差異化​​的性能，特別是在這些高端電池中。我的意思是，當然，隨著這個市場的銷量繼續增長，將會產生一些效益的運營槓桿。

We've been investing ahead on growth, both in terms of capacity as well as SG&A in this business. And as those growth investments are absorbed or the costs are absorbed with volumes, there will be some operating leverage that will certainly come.

我們一直在該業務的產能和銷售、一般行政管理費用方面進行提前投資。隨著這些增長投資被吸收或成本被銷量所吸收，肯定會出現一些運營槓桿。

And I see no further questions in the queue. I would now like to turn the conference back to Sean Keohane for closing remarks.

我在隊列中沒有看到更多問題。現在我想請肖恩·基歐漢 (Sean Keohane) 致閉幕詞。

Great. Well, thank you very much, Chris, and thank you all for joining the call today. I would appreciate your continued support of Cabot and look forward to speaking with you next quarter. Thank you very much.

偉大的。嗯，非常感謝你，克里斯，也感謝大家今天加入電話會議。我感謝您對卡博特的持續支持，並期待下個季度與您交談。非常感謝。

This concludes today's conference call. Thank you all for participating. You may now disconnect and have a pleasant day.

今天的電話會議到此結束。感謝大家的參與。您現在可以斷開連接並度過愉快的一天。