Cabot Corp (CBT) 2024 Q1 法說會逐字稿

Good day, and thank you for standing by. Welcome to Cabot's First Quarter 2024 Earnings Conference Call. (Operator Instructions) Please be advised that today's conference is being recorded.

美好的一天，感謝您的支持。歡迎參加卡博特 2024 年第一季財報電話會議。 （操作員指示）請注意，今天的會議正在錄製中。

I would now like to hand the conference over to your speaker today, Steve Delahunt, Vice President, Treasurer and Investor Relations. Please go ahead, sir.

現在我想將會議交給今天的發言人史蒂夫·德拉亨特（Steve Delahunt），他是財務主管和投資者關係副總裁。請繼續，先生。

Thanks, Norma. Good morning. I would like to welcome you to the Cabot Corporation earnings teleconference.

謝謝，諾瑪。早安.歡迎您參加卡博特公司的財報電話會議。

With me today are Sean Keohane, CEO and President; and Erica McLaughlin, Executive Vice President and CFO. Last night, we released results for our first quarter of fiscal year 2024, copies of which are posted in 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. 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.

今天與我在一起的有執行長兼總裁 Sean Keohane；以及執行副總裁兼財務長 Erica McLaughlin。昨晚，我們發布了 2024 財年第一季的業績，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。在本次電話會議期間，我們將就我們預期的未來營運和財務表現做出前瞻性聲明。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有重大差異。

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, 2023, and in subsequent filings we make with the SEC, all of which are also available on the company's website. In order to provide greater transparency regarding our operating performance, we refer to certain non-GAAP financial measures that involve adjustments to GAAP results. 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.

有關這些因素的更多資​​訊出現在我們昨晚發布的新聞稿、截至2023 年9 月30 日的財年的10-K 以及我們隨後向SEC 提交的文件中，所有這些資訊也可以在公司網站上找到。為了提高我們經營績效的透明度，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較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 first quarter highlights, followed by an update on our execution against our strategy and then discuss the company's recent cash flow performance. [Erica] will review the first quarter financial highlights in the business segment results. Following this, Sean will provide a strategic summary and closing comments and open the floor to questions. Sean?

我現在將把電話轉給肖恩，他將討論第一季的亮點，然後介紹我們策略執行的最新情況，然後討論公司最近的現金流表現。 [Erica] 將回顧第一季業務部門業績的財務亮點。隨後，肖恩將提供策略總結和結束語，並開始提問。肖恩？

Thank you, Steve. Good morning, ladies and gentlemen, and welcome to our call today. I am pleased with our first quarter results, which were aligned with our expectations and reflected strong year-over-year growth. We delivered adjusted earnings per share of $1.56, which is up 59% as compared to the same period in the prior year, setting us off to a strong start to fiscal year 2024.

謝謝你，史蒂夫。早安，女士們先生們，歡迎今天致電我們。我對我們第一季的業績感到滿意，該業績符合我們的預期，並反映出強勁的同比增長。我們的調整後每股收益為 1.56 美元，比上年同期增長 59%，為我們 2024 財年開了個好頭。

I would like to thank our entire global Cabot team for their resilience and commitment to execution as we navigate these dynamic times. EBIT in Reinforcement Materials was up 37% year-over-year, demonstrating the structural improvements we have made in recent years to the business and a structurally tight supply-demand balance in the mature regions. We also concluded our customer agreements with strong pricing and mix improvements in all regions that total an annualized increase year-over-year of $75 million. Net of inflationary and other cost increases, we expect the pricing and product mix benefits to equate to an EBIT increase of approximately $15 million per quarter for the remaining 3 quarters of fiscal year 2024 as compared to the same quarters of fiscal 2023.

我要感謝我們整個全球卡博特團隊在我們度過這個充滿活力的時代時所表現出的韌性和對執行的承諾。增強材料業務息稅前利潤年增37%，反映了我們近年來業務結構性改善以及成熟地區結構性供需平衡偏緊的情況。我們還與所有地區的客戶簽訂了強有力的定價和產品組合改進協議，年增長率總計達 7500 萬美元。扣除通貨膨脹和其他成本的增加，我們預計，與 2023 財年同期相比，2024 財年剩餘 3 個季度的定價和產品組合效益將相當於每季息稅前利潤增加約 1500 萬美元。

These results reflect the favorable supply and demand outlook and Cabot's value proposition of supply reliability, quality and sustainability leadership. EBIT in Performance Chemicals was up 17% compared to the first quarter of fiscal 2023 as demand in the segment appears to have generally stabilized and the effects of destocking have diminished. While we did see some signs of pickup in our automotive applications, demand in other key end markets for this segment remained consistent with the September quarter. Cash flow was strong in the quarter, which supported the return of $55 million to shareholders through a combination of share repurchases and dividends.

這些結果反映了良好的供需前景以及卡博特在供應可靠性、品質和永續發展領導方面的價值主張。與 2023 財年第一季相比，高性能化學品的息稅前利潤增加了 17%，因為該領域的需求似乎總體穩定，而且去庫存的影響也有所減弱。雖然我們確實看到汽車應用出現一些回升的跡象，但該細分市場其他主要終端市場的需求仍與 9 月季度保持一致。本季現金流強勁，透過股票回購和股息相結合，為股東帶來了 5500 萬美元的回報。

And finally, we continue to be recognized for our leadership in sustainability. For the fifth consecutive year, we were named to Newsweek's list of Most Responsible Companies. This distinction recognizes our strong performance in the areas of environmental, social and governance, and we are very proud of this recognition. With the company off to a strong start to our fiscal 2024 and a track record of disciplined execution, I am confident in our ability to deliver continued earnings and cash flow growth consistent with our Creating for Tomorrow strategy. As we discussed last quarter, the EBIT performance in the Reinforcement Materials segment has increased dramatically over the past 8 years, supported by the long-term resilience of the replacement tire market and an increasingly tight supply-demand balance in the mature regions.

最後，我們在永續發展方面的領導地位繼續受到認可。我們連續第五年被《新聞週刊》評為最具責任感公司名單。這項殊榮認可了我們在環境、社會和治理領域的出色表現，我們對此感到非常自豪。隨著公司 2024 財年的良好開局以及嚴格執行的記錄，我相信我們有能力實現持續盈利和現金流增長，符合我們的「創造明天」策略。正如我們上季度討論的那樣，在替換輪胎市場的長期彈性以及成熟地區日益緊張的供需平衡的支撐下，增強材料領域的息稅前利潤表現在過去8年中大幅增長。

The industry is also facing stricter environmental regulations that require producers to make significant abatement investments to ensure reliable and sustainable supply to our customers. These investments raise the barriers to entry for additional capacity, roughly doubling the cost of new capacity. Furthermore, I believe we have structurally improved our performance through a commitment to commercial and operational excellence across the company. Over the past decade, we have invested in the marketing and sales capabilities of our team and relentlessly pursued continuous improvement across our manufacturing network to drive excellence in yields, OEE, and energy recovery.

該行業還面臨更嚴格的環境法規，要求生產商進行大量減排投資，以確保向客戶提供可靠和可持續的供應。這些投資提高了額外產能的進入壁壘，使新產能的成本增加了一倍。此外，我相信，透過致力於整個公司的商業和營運卓越性，我們已經在結構上提高了我們的業績。在過去的十年中，我們對團隊的營銷和銷售能力進行了投資，並不懈地追求整個製造網絡的持續改進，以推動產量、OEE 和能源回收方面的卓越表現。

As a result of these factors, I believe the outlook for this business remains strong. Our expectation is that we will see continued earnings growth driven by enhanced pricing and product mix, volumes that move in line with growth of passenger and freight miles driven, differentiated capacity adds in high-growth markets such as Indonesia, continued efficiency benefits from yield, OEE, and energy recovery, and finally, innovation contributions through our EVOLVE Sustainable Solutions and E2C technology platforms. In our fiscal 2023, Performance Chemicals results were impacted by significant destocking, but we have seen these impacts diminish in our most recent quarters. While we do not expect the same impact to our sales volumes from destocking in fiscal 2024, we have not yet seen signs that some of our key end markets such as building and construction, infrastructure and consumer durables are moving back to prior levels.

由於這些因素，我相信該業務的前景仍然強勁。我們的預期是，我們將看到由於定價和產品組合的增強而帶來的持續盈利增長，銷量隨著客運和貨運里程的增長而變化，印度尼西亞等高增長市場的差異化運力增加，收益帶來的持續效率效益， OEE、能源回收，最後是透過我們的 EVOLVE 永續解決方案和 E2C 技術平台做出的創新貢獻。在 2023 財年，高性能化學品的業績受到大幅去庫存的影響，但我們發現這些影響在最近幾季有所減弱。雖然我們預計 2024 財年去庫存不會對我們的銷售產生同樣的影響，但我們尚未看到有跡象表明我們的一些關鍵終端市場（例如建築、基礎設施和耐用消費品）正在恢復到之前的水平。

This segment is comprised of a core group of businesses with a GDP plus growth outlook and strong earnings potential. In addition, we are building out our strategic positions in battery materials and inkjet, 2 growth vectors that offer compelling long-term growth and where we believe we have a strong right to win. In battery materials, we expect the market to grow between 20% and 30% over time, and we are well positioned with the leading global EV battery makers, particularly as they expand in the Western economies. In inkjet, we are winning share with printer OEMs that are serving the packaging market as it transitions from traditional analog printing to digital.

該部門由一群具有 GDP 加成長前景和強勁獲利潛力的核心企業組成。此外，我們正在建立我們在電池材料和噴墨領域的戰略地位，這兩個成長領域提供了引人注目的長期成長，並且我們相信我們有強大的獲勝權利。在電池材料方面，我們預計市場隨著時間的推移將成長 20% 至 30%，並且我們與全球領先的電動車電池製造商處於有利地位，特別是隨著他們在西方經濟體的擴張。在噴墨領域，我們正在贏得與服務包裝市場的印表機原始設備製造商的份額，因為包裝市場正在從傳統的類比印刷過渡到數位印刷。

EBIT in this segment is expected to grow north of 20% per year, and we are well positioned to capture this growth. We remain confident that these businesses can be material contributors to Cabot's earnings profile in the coming years. With this portfolio of businesses, we have been delivering strong earnings growth over time. When we met in December of 2021 at our Investor Day, we had just completed fiscal year 2021 and had achieved adjusted earnings per share of $5.02, which represented a compound annual growth rate of 12% from 2015. We set a 3-year target at that Investor Day with the expectation to grow adjusted earnings per share between 8% and 12% by 2024.

該領域的息稅前利潤預計每年增長 20% 以上，我們已做好充分準備來抓住這一成長機會。我們仍然相信，這些業務可以為卡博特未來幾年的獲利做出重大貢獻。憑藉這一業務組合，我們隨著時間的推移實現了強勁的獲利成長。當我們在2021 年12 月的投資者日見面時，我們剛剛完成了2021 財年，並實現了調整後每股收益5.02 美元，這意味著自2015 年以來複合年增長率為12%。我們將3 年目標設定為投資者日預計到 2024 年調整後每股盈餘將成長 8% 至 12%。

Our current outlook for fiscal 2024 puts us in this band and would reflect a 9% CAGR at the midpoint of our guidance range. While the macroeconomic environment has weakened since Investor Day in 2021, we continue to manage the businesses dynamically and execute to deliver on our commitments. I remain confident in the resilience and strength of our portfolio and in achieving the corporate Investor Day target for adjusted earnings per share growth. In addition to strong growth in adjusted earnings per share, the Cabot portfolio has robust cash flow characteristics. On a trailing 12-month basis, our strong execution has resulted in operating cash flow of $648 million.

我們目前對 2024 財年的展望使我們處於這一區間，且複合年增長率為 9%，處於我們指導範圍的中點。儘管自 2021 年投資者日以來宏觀經濟環境有所減弱，但我們繼續動態管理業務並履行我們的承諾。我對我們投資組合的彈性和實力以及實現企業投資者日調整後每股收益成長的目標仍然充滿信心。除了調整後每股收益強勁成長外，卡博特投資組合還具有強勁的現金流特徵。在過去 12 個月的基礎上，我們強大的執行力帶來了 6.48 億美元的營運現金流。

Free cash flow yield over that same time period was 8.3%, which puts us in the top quartile of the S&P 1500 Chemicals Index. Our cash generation power allows us to pursue a balanced capital allocation strategy focused on funding strategic investments to deliver long-term earnings growth and returning cash to shareholders while maintaining a strong investment-grade balance sheet. We have maintained a continuous and growing dividend since 1968, and that commitment remains a core part of our capital allocation priorities. Over the last 12 months, we paid $89 million in dividends, including an 8% increase in May, reflecting our confidence in the long-term cash flow outlook for the company.

同期自由現金流收益率為 8.3%，這使我們躋身標準普爾 1500 化學品指數前四分之一。我們的現金產生能力使我們能夠追求平衡的資本配置策略，專注於為戰略投資提供資金，以實現長期盈利增長並向股東返還現金，同時保持強勁的投資級資產負債表。自 1968 年以來，我們一直保持持續成長的股息，這項承諾仍然是我們資本配置優先事項的核心部分。過去 12 個月，我們支付了 8,900 萬美元的股息，其中 5 月份股息成長了 8%，反映了我們對公司長期現金流前景的信心。

We would expect to continue to raise the dividend over time as our earnings grow. We also repurchased $114 million of shares over the last 12 months. We plan to offset dilution every year, and we'll be opportunistic with additional purchases based on our outlook for cash flow and the timing of growth investment opportunities. The dividends paid and shares repurchased totaled $203 million in the past 12 months, equating to a total payout ratio of 61%. We also set a corporate discretionary free cash flow target at our December '21 Investor Day, which was to generate in excess of $1 billion of discretionary free cash flow over 3 years.

隨著我們獲利的成長，我們預計將繼續提高股息。過去 12 個月我們也回購了價值 1.14 億美元的股票。我們計劃每年抵消稀釋，並且我們將根據現金流前景和成長投資機會的時機，機會主義地進行額外購買。過去12個月支付的股利和回購的股票總計2.03億美元，相當於總股利支付率為61%。我們也在 12 月 21 日投資者日設定了企業可自由支配自由現金流目標，即在 3 年內產生超過 10 億美元的可自由支配自由現金流。

We are also on track to achieve this target in fiscal 2024. The strength of our cash flow generation and disciplined capital allocation are fundamental to the strong Cabot investment thesis and are a priority for this management team.

我們也預計在 2024 財年實現這一目標。我們強大的現金流產生能力和嚴格的資本配置是卡博特強而有力的投資理念的基礎，也是該管理團隊的首要任務。

I will now turn it over to Erica to discuss the segment and financial performance in the quarter. Erica?

我現在將其交給 Erica，討論本季的部門和財務表現。艾麗卡？

Thanks, Sean. I'll start with discussing results for the company and then review the segment results. Adjusted EPS for the first quarter of fiscal 2024 was $1.56 compared to $0.98 in the first quarter of fiscal 2023, with growth coming from both the Reinforcement Materials and Performance Chemicals segments. Cash flow from operations was strong at $105 million in the quarter, which included a working capital increase of $46 million. Discretionary free cash flow was $118 million in the quarter. We ended the quarter with a cash balance of $244 million, and our liquidity position remains strong at approximately $1.2 billion. Capital expenditures for the first quarter of fiscal 2024 were $54 million, and we continue to expect $250 million to $275 million of capital spending for the fiscal year. Additional uses of cash during the first quarter were $22 million for dividends and $33 million for share repurchases. Our debt balance was $1.3 billion, and our net debt to EBITDA was 1.5x. The operating tax rate for the first quarter of fiscal 2024 was 28%, and we anticipate our operating tax rate for fiscal 2024 will be in the range of 28% to 30%.

謝謝，肖恩。我將從討論公司的表現開始，然後審查分部績效。 2024 財年第一季調整後每股收益為 1.56 美元，而 2023 財年第一季調整後每股收益為 0.98 美元，成長來自增強材料和高性能化學品領域。本季營運現金流強勁，達 1.05 億美元，其中營運資本增加 4,600 萬美元。本季可自由支配的自由現金流為 1.18 億美元。本季結束時，我們的現金餘額為 2.44 億美元，流動性狀況依然強勁，約 12 億美元。 2024 財年第一季的資本支出為 5,400 萬美元，我們繼續預期本財年的資本支出為 2.5 億至 2.75 億美元。第一季額外使用的現金包括 2,200 萬美元用於股利和 3,300 萬美元用於股票回購。我們的債務餘額為 13 億美元，淨債務與 EBITDA 的比為 1.5 倍。 2024財年第一季的營業稅率為28%，我們預計2024財年的營業稅率將在28%至30%之間。

One additional item to note is the benefit seen in the general unallocated income. As we discussed last quarter, this line item of general unallocated income and expense includes currency exposures related to our net asset positions, mainly in South American currencies and investment income we earn in that region as well as the interest income on our global cash balances. During the quarter, we experienced a foreign currency loss due to a government-imposed devaluation in Argentina. On December 13, the Argentinian government devalued the currency from [365 pesos per dollar] to more than [800 pesos per dollar], resulting in a foreign currency loss of $33 million on that day.

另一項需要注意的是一般未分配所得中看到的好處。正如我們上季度討論的那樣，一般未分配收入和支出的這一行項目包括與我們的淨資產頭寸相關的貨幣風險敞口，主要是南美貨幣和我們在該地區賺取的投資收入以及我們的全球現金餘額的利息收入。本季度，由於阿根廷政府強制貶值，我們經歷了外匯損失。 12月13日，阿根廷政府將貨幣從【每美元365比索】貶值至【每美元800比索】以上，導致當日外匯損失達3,300萬美元。

We treated this as a certain item, consistent with how we treated the Argentina government devaluation in August and how we have treated similar government-imposed devaluations in other countries, most recently being Venezuela. The market depreciation of the Argentinian peso throughout the rest of the quarter, which was an expense of $7 million is included in operating results, as only the impact on the day of the government devaluation was treated as a certain item. During the quarter, interest and investment income in Argentina outpaced the foreign currency losses and operating results and was the driver of general unallocated income of $13 million in the first quarter. While currency movements are quite difficult to predict, as we look ahead, we are expecting in the range of $7 million to $9 million per quarter for general unallocated income driven by interest and investment income and the net foreign currency impacts on our cash balances.

我們將其視為一個特定項目，這與我們對待八月份阿根廷政府貶值的方式以及我們對待其他國家（最近是委內瑞拉）類似的政府強制貶值的方式一致。阿根廷比索在本季剩餘時間內的市場貶值（相當於 700 萬美元的支出）已包含在營運業績中，因為僅將政府貶值當天的影響視為特定項目。本季度，阿根廷的利息和投資收入超過了外匯損失和經營業績，是第一季一般未分配收入 1,300 萬美元的推動力。雖然貨幣走勢很難預測，但展望未來，我們預計每季由利息和投資收入驅動的一般未分配收入將在 700 萬至 900 萬美元之間，以及外幣淨額對我們現金餘額的影響。

Now moving to Reinforcement Materials. During the first quarter, EBIT for Reinforcement Materials was $129 million, which was an increase of $35 million as compared to the same period in the prior year. The increase was driven by higher pricing and product mix in our 2023 calendar year customer agreements and higher volumes. Globally, volumes were up 2% in the first quarter as compared to the same period of the prior year due to 11% growth in Europe and 7% in Asia as demand in those regions improved. Looking to the second quarter of fiscal 2024, we expect the Reinforcement Materials EBIT to improve sequentially due to the outcome of our calendar year 2024 customer agreements and modestly higher sequential volumes.

現在轉向增強材料。第一季度，增強材料業務的息稅前利潤為 1.29 億美元，較上年同期增加 3,500 萬美元。這一增長是由於 2023 日曆年客戶協議中更高的定價和產品組合以及更高的銷量所推動的。在全球範圍內，第一季銷量較上年同期增長 2%，其中歐洲增長 11%，亞洲增長 7%（隨著這些地區需求的改善）。展望 2024 財年第二季度，由於我們 2024 年客戶協議的結果以及連續銷量的小幅增長，我們預計增強材料息稅前利潤將連續改善。

Now turning to Performance Chemicals. EBIT increased by $5 million in the first fiscal quarter as compared to the same period of fiscal 2023. The increase was driven by higher volumes in the specialty carbons, specialty compounds and fumed metal oxides product lines as the destocking we experienced in 2023 was not a significant factor in the first quarter of fiscal 2024. Looking ahead to the second quarter of fiscal 2024, we expect a sequential increase in volumes driven by seasonality impacts more than offset by higher costs sequentially, including $4 million of higher costs associated with maintenance activities and the impact of reducing inventory levels.

現在轉向高性能化學品。與2023 財年同期相比，第一財季的息稅前利潤增加了500 萬美元。這一增長是由於特種碳、特種化合物和氣相金屬氧化物產品線產量增加所致，因為我們在2023 年經歷的去庫存並不是一次持續的庫存減少。這是2024 財年第一季的重要因素。展望2024 財年第二季度，我們預計季節性影響推動的銷售連續成長將被連續增加的成本所抵消，其中包括與維護活動和相關的400 萬美元的較高成本降低庫存水準的影響。

I will now turn the call back over to Sean to discuss the fiscal year outlook. Sean?

我現在將把電話轉回給肖恩，討論財政年度前景。肖恩？

Thanks, Erica. Moving to our 2024 outlook. We feel very good about the first quarter results and the remainder of the year. We are reaffirming our outlook for adjusted earnings per share in the range of $6.30 to $6.80, which is up 22% at the midpoint year-over-year. In terms of the assumptions that underpin our outlook, the key drivers of earnings growth continue to develop as we expected. We had a strong outcome to our calendar year 2024 Reinforcement Materials customer agreements, reflecting the structurally tight supply-demand dynamics and the importance of regional supply security, quality consistency and sustainability leadership to our customers.

謝謝，艾麗卡。展望 2024 年。我們對第一季和今年剩餘時間的業績感覺非常好。我們重申調整後每股收益的預期為 6.30 美元至 6.80 美元，年比中位數成長 22%。就支持我們前景的假設而言，獲利成長的主要驅動力繼續按照我們的預期發展。我們在 2024 年增強材料客戶協議中取得了強勁成果，反映出結構性緊張的供需動態以及區域供應安全、品質一致性和永續發展領導力對客戶的重要性。

The improved pricing and mix from our calendar year 2024 agreements will drive margin improvement in fiscal 2024. We continue to believe that the Q4 2023 volume run rate is a good basis for segment volumes in fiscal 2024, which would imply low single-digit percentage growth compared to fiscal year 2023. These factors will drive our expectation for another year of strong EBIT growth in the Reinforcement Materials segment.

我們的2024 日曆年協議的定價和組合的改善將推動2024 財年的利潤率改善。我們仍然認為2023 年第四季度的銷售運行率為2024 財年的細分市場銷售奠定了良好的基礎，這意味著低個位數百分比成長與 2023 財年相比。這些因素將推動我們對增強材料領域息稅前利潤再次強勁成長的預期。

The Performance Chemicals segment is still expected to be impacted by weakness in certain end markets, with volumes on average expected to be similar to the fourth quarter of fiscal 2023. Regarding margins for the segment, we continue to expect relatively consistent margins to the Q4 exit rate. Cash generation is expected to remain strong, and we intend to return a robust amount of cash to shareholders through dividends and share repurchases. Overall, I'm very pleased with how the company is positioned today, and I'm confident in the outlook for the year.

高性能化學品業務預計仍將受到某些終端市場疲軟的影響，平均銷售量預計將與 2023 財年第四季相似。關於該業務的利潤率，我們繼續預計第四季度的利潤率將保持相對穩定速度。現金產生預計將保持強勁，我們打算透過股息和股票回購向股東返還大量現金。總的來說，我對公司今天的定位非常滿意，並且對今年的前景充滿信心。

Thank you very much for joining us today, and I'll now turn the call over for our Q&A session.

非常感謝您今天加入我們，我現在將轉接電話參加我們的問答環節。

(Operator Instructions) Our first question comes from the line of David Begleiter with Deutsche Bank.

（操作員說明）我們的第一個問題來自德意志銀行的 David Begleiter。

It's David Huang here for Dave. I guess, first on China. Can you talk about your outlook for the key segments specific to China? And what type of volume outlook is embedded in the full year guidance?

我是戴維‧黃 (David Huang)。我想，首先是中國。能談談您對中國特定關鍵領域的展望嗎？全年指導中包含什麼類型的銷售展望？

Sure. So maybe an update on China, and I'll sort of pull the lens back a bit in terms of what we're seeing there. I would say the Chinese economy appears to have stabilized, albeit at a lower level of growth than we've seen historically. And it is showing some signs of marginal improvement in the recent months. We've definitely seen some pockets of stronger demand in certain sectors, notably in tire driven by replacement tire exports and the automotive OE sector. And the growth, I think, in the replacement tire exports is likely a sign that supply chains are destocked in the West, and there's a need for more tire inventory.

當然。所以也許是有關中國的最新情況，我會根據我們在那裡看到的情況將鏡頭拉回來一點。我想說，中國經濟似乎已經穩定，儘管成長水準低於歷史水準。近幾個月來，它顯示出一些邊際改善的跡象。我們確實看到某些行業的需求強勁，特別是在替換輪胎出口和汽車原裝備行業推動的輪胎領域。我認為，替換輪胎出口的成長可能表明西方供應鏈正在去庫存，並且需要更多的輪胎庫存。

But the latest economic indicators released in Q4 and the calendar Q4 of '23 and for the full year calendar '24 were largely consistent with market expectations. And so I think we're seeing some stability here. The housing market, which accounts for about 25% of China's overall economy is still quite weak, and we believe it will take some time to replace this demand driver. But the government is trying to stimulate consumer confidence and we're seeing actions on that front. I just came back from a 2-week trip to China. And I think there's a pretty consistent narrative that the government has stimulus plans around their so-called 3 major projects, which are building out affordable housing, urban renovation and what they're calling dual-use infrastructure.

但最新發布的第四季經濟指標以及23年第四季和24年全年經濟指標與市場預期基本一致。所以我認為我們在這裡看到了一些穩定性。佔中國整體經濟約25%的房地產市場仍然相當疲軟，我們認為取代這項需求驅動力還需要一段時間。但政府正在努力刺激消費者信心，我們正在看到這方面的行動。我剛結束為期兩週的中國之旅。我認為有一個相當一致的說法，即政府圍繞所謂的三大項目制定了刺激計劃，即建設經濟適用房、城市改造以及所謂的軍民兩用基礎設施。

So things like 5G and EV charging and renewable energy and power distribution, these types of forms of infrastructure. So I think these efforts, if we see them materialize, will definitely drive demand for chemicals, but we'll have to see how things develop coming out of Chinese New Year. I think the next few months will be important, and we'll be monitoring the situation closely, and we'll continue to actively manage our business there in this dynamic situation. So overall, I think growth expectations would probably be kind of in line with the latest macroeconomic indicators out of China, which sort of has GDP growth in the 4% to 5% range, something like in that zone.

5G 和電動車充電以及再生能源和配電等基礎設施形式。因此，我認為，如果我們看到這些努力成為現實，肯定會推動對化學品的需求，但我們必須看看農曆新年後情況如何發展。我認為接下來的幾個月非常重要，我們將密切關注事態發展，並在這種動態情況下繼續積極管理我們的業務。因此，總體而言，我認為成長預期可能與中國最新的宏觀經濟指標相符，中國的 GDP 成長在 4% 到 5% 的範圍內，就像這個區域一樣。

Okay. Got it. And then on battery materials, do you still expect EBITDA to be up in '24 given all the incremental challenges, I guess, in some parts of the EV battery chains?

好的。知道了。然後在電池材料方面，考慮到電動車電池鏈某些部分面臨的所有增量挑戰，您是否仍預計 EBITDA 在 24 年會上升？

Yes. Definitely, the sentiment across the EV and battery chain is somewhat depressed right now. We would expect EBITDA to grow in fiscal year '24 based on continued year-over-year volume growth and a better product mix in China as we optimize our participation and drive a higher penetration of our performance grades. Now I think growth in fiscal '24 is expected to be more second half driven as OEMs and battery makers are expected to reduce what are pretty high inventory levels in this coming quarter, in the March quarter.

是的。當然，目前整個電動車和電池鏈的情緒有些低迷。隨著我們優化我們的參與度並提高我們的績效等級的滲透率，我們預計 EBITDA 將在 24 財年實現成長，這是基於持續的同比銷售成長和中國更好的產品組合。現在，我認為 24 財年的成長預計將更多地受到下半年的推動，因為原始設備製造商和電池製造商預計將在下一個季度（即 3 月的季度）減少相當高的庫存水準。

So that's definitely a factor in China today. Outside of China, we're expecting volumes to be higher than fiscal year '23. Though, again, the ramp is somewhat difficult to project here. But overall, we'd expect to grow profitability in fiscal '24, I would say, roughly in line with battery production growth. That's probably the best way to think about it.

所以這絕對是當今中國的一個因素。在中國以外，我們預計銷售量將高於 23 財年。不過，這裡的坡道投影還是有點困難。但總體而言，我們預計 24 財年的獲利能力將與電池產量的成長大致一致。這可能是最好的思考方式。

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

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

In Reinforcement Materials, how much of your volumes are now covered by multiyear contracts?

在加固材料領域，您現在有多少銷售是由多年合約涵蓋的？

On multiyear contracts, very little, Laurence. They're largely all 1-year agreements.

勞倫斯，多年合約很少。它們基本上都是為期一年的協議。

Okay. And...

好的。和...

We -- in fiscal '24, we had a residual of 2-year agreements from last year. So we'll have the second year in 2024. And then the negotiations that we had this year were 1-year agreements. And that was really reflecting our view on our outlook. I would say multiyear discussions were a more minor part of the conversation. And given the market environment we were negotiating this year, we were not seeking multiyear deals.

在 24 財年，我們與去年簽訂了剩餘的 2 年期協議。所以我們將在 2024 年進行第二年。然後我們今年進行的談判是為期一年的協議。這確實反映了我們對前景的看法。我想說，多年的討論只是對話中較次要的部分。考慮到我們今年談判的市場環境，我們並不尋求多年期交易。

And how much can you debottleneck capacity across your system each year?

您每年可以消除系統中的容量瓶頸嗎？

Yes. So the way that we think about capacity, Laurence, there are really 2 levers. One is continuing to drive what we call OEE, overall equipment effectiveness. And so this is really driving up the uptime in the assets as well as the throughput rates and minimizing off quality. Those 3 factors calculate to what's called OEE. And of course, that is the first priority for us because that is the most capital-efficient way to grow capacity. And over a period of time here, we've substantially improved the OEEs. And so I think you can expect to get a point or 2 of OEE each year. That's kind of an increase.

是的。勞倫斯，我們思考容量的方式其實有兩個槓桿。一是繼續提高我們所謂的 OEE（整體設備效率）。因此，這確實提高了資產的正常運行時間和吞吐率，並最大限度地降低了品質問題。這 3 個因素可計算出所謂的 OEE。當然，這是我們的首要任務，因為這是提高產能最有效的資本效率的方式。經過一段時間的努力，我們的 OEE 得到了顯著提高。因此，我認為您每年可以期望獲得 1 或 2 分的 OEE。這就是一種增加。

And then the second lever is what we call capital-efficient debottlenecks. And so this would be where there is relatively minor capital required to debottleneck a particular unit operation in the plant in order to unlock some additional capacity. And I would say every Carbon Black plant has an option set of debottlenecks that can be done, some more capital-efficient than others, but these are generally very capital-efficient ways. So if you then take those 2 levers and match them up against what is a low single-digit growth rate from a demand standpoint, we feel confident that we've got growth runway here for multiple years.

第二個槓桿就是我們所說的資本效率去瓶頸。因此，這將需要相對較少的資本來消除工廠中特定單位操作的瓶頸，以釋放一些額外的產能。我想說，每個炭黑工廠都有一套可以解決的瓶頸選項，其中一些比其他工廠更具資本效率，但這些通常是非常資本高效的方法。因此，如果你將這兩個槓桿與從需求角度來看的低個位數成長率進行比較，我們相信我們已經擁有多年的成長跑道。

And then with the carbon elastomers projects, if you invested more, could you accelerate market adoption or is it purely sort of customer considerations at this point?

然後，對於碳彈性體項目，如果您投資更多，是否可以加速市場採用，或者目前純粹是出於客戶考慮？

Yes. It's more about customer adoption because it is a high performance but a novel technology, new technology that does have -- require some change in the customers' production process. You're basically making some changes to the front end of their plant, the mixing part of their plant. And so that it's really about the customer adoption time more than anything else.

是的。這更多的是關於客戶的採用，因為它是一項高性能但新穎的技術，新技術確實需要對客戶的生產過程進行一些改變。你基本上是在對他們工廠的前端、他們工廠的混合部分做一些改變。因此，最重要的是客戶採用時間。

Now we have seen very clear adoption in the market segment for off-the-road tires. These are large earthmoving tires, and that's where, particularly the wear and cut and chip performance of this enhanced compound really, really, really plays very strongly. So that's the first place where you're seeing customers commercialize. There are commercial -- a lot of commercial tires out there right now in this space.

現在我們已經看到越野輪胎在細分市場中得到了非常明顯的採用。這些是大型土方輪胎，這就是這種增強複合材料的磨損、切割和切屑性能確實非常非常重要的地方。所以這是你看到客戶商業化的第一個地方。現在這個領域有很多商業輪胎。

I think the next place would be in the truck and bus tires, where they're trying to improve both the wear characteristics but also balance the fuel economy or the rolling resistance and our elastomer composites materials play well there. And so those -- we have a number of customers that are in extended road tests right now in that application. So it's a conservative market, understandably from a qualification standpoint, but the driver here, I think, is really just that.

我認為下一個地方將是卡車和巴士輪胎，他們試圖改善磨損特性，同時平衡燃油經濟性或滾動阻力，而我們的彈性體複合材料在這方面表現良好。因此，我們有許多客戶目前正在該應用程式中進行擴展道路測試。因此，從資格的角度來看，這是一個保守的市場，這是可以理解的，但我認為，這裡的驅動因素實際上就是這樣。

I think the compelling nature of the value proposition has been becoming more evident here over the last several years. And so I think it's about them working through their adoption cycle.

我認為，在過去的幾年裡，價值主張的引人注目的本質在這裡變得越來越明顯。所以我認為這與他們在採用週期中的工作有關。

(Operator Instructions) Our next question comes from the line of Chris Kapsch with Loop Capital Markets.

（操作員說明）我們的下一個問題來自 Loop Capital Markets 的 Chris Kapsch。

I had a question just on the pricing and mix gains that you mentioned in Reinforcement Materials. Just curious how balanced that was across regions? Or was there more of an affirmative step change in Europe given the sanctions that are happening against the Russian source Carbon Black this year?

我有一個關於您在強化材料中提到的定價和混合收益的問題。只是好奇跨地區的平衡程度如何？或者考慮到今年針對俄羅斯炭黑供應商的製裁，歐洲是否出現了更多積極的變化？

Yes. So in the prepared remarks, you've got the net impact, which we're very pleased with. But let me try to give you a little bit of color here by region and see if that helps. I would say, first, in terms of Europe, definitely the upcoming ban on Russian supply to the EU drove strong demand from customers to secure supply. And we engaged with our long-standing partners here first, followed by other customers looking for security and local supply from within the regions. And I think customers have recognized the long-term value of Cabot's stability and I think the contract outcomes there affirm that view. So we definitely saw impact from that phenomenon that you raised.

是的。因此，在準備好的發言中，您已經得到了最終的影響，我們對此感到非常滿意。但讓我嘗試按地區為您提供一些顏色，看看是否有幫助。我想說，首先，就歐洲而言，即將到來的俄羅斯向歐盟供應的禁令肯定會推動客戶對確保供應的強勁需求。我們首先與這裡的長期合作夥伴進行接觸，然後是在該地區尋求安全和本地供應的其他客戶。我認為客戶已經認識到卡博特穩定性的長期價值，而且我認為合約結果也證實了這一觀點。所以我們確實看到了你所提出的這種現象的影響。

In the Americas, even with a bit softer demand in the second half of 2024 due to the sort of transient destocking that occurred in the replacement chain, I think the outlook for tight supply-demand fundamentals remains in the Americas, and we realized price increases in this region as well across the board. And I think, again, our customers continue to recognize the value proposition of regional supply and consistent quality in our sustainability leadership. And related to that, our need to pass along higher operational costs associated with environmental compliance and the need to earn a return on that capital. So that's the Americas.

在美洲，即使由於替換鏈中出現短暫的去庫存，2024年下半年需求會有所疲軟，但我認為美洲供需基本面緊張的前景仍然存在，並且我們實現了價格上漲在這個地區也是如此。我再次認為，我們的客戶繼續認識到區域供應的價值主張和我們可持續發展領導力中始終如一的品質。與此相關的是，我們需要轉嫁與環境合規相關的更高營運成本，並需要獲得該資本的回報。這就是美洲。

And then in Asia, as you know, the majority of our business is negotiated on a monthly or quarterly spot basis. For those global customers where we do negotiate annual agreements, we achieved price increases in this region as well. So really across the board, with probably a little bit stronger outcomes in the European region because of the Russia sanction phenomenon.

然後在亞洲，如您所知，我們的大部分業務都是按月或按季度進行現貨談判。對於那些我們談判年度協議的全球客戶，我們也在該地區實現了價格上漲。因此，實際上是全面的，由於俄羅斯的製裁現象，歐洲地區的結果可能會稍微好一點。

That's helpful. And the follow-up was, I guess, sort of bigger picture, because the company's performance has done well. The returns are improved. It sort of validates the structural improvement for the industry. Yet embedded in the valuation of the stock is some skepticism, I guess, that there'll be some reversion. And I'm just curious about your comments about the barriers to entry and the 2x multiple to stand up new capacity. Just wondering if you -- what your thoughts are on the skepticism, I guess, by the market about the structural improvement in the industry.

這很有幫助。我想，後續行動是更大的圖景，因為該公司的業績表現良好。回報得到改善。這在某種程度上驗證了產業的結構性改善。然而，我認為該股的估值中存在一些懷疑，認為該股的估值會出現一些逆轉。我只是很好奇您對進入障礙和新產能的 2 倍倍數的評論。我想知道您對市場對行業結構性改善的懷疑有何看法。

And also juxtaposed against there was an example, fairly recently, one of your competitors is -- did announce some small additions, granted they're targeted, it looks like Southeast Asia and where the growth rates are higher. So wondering if you could just comment overall on just the competitive landscape and the structural thesis about the industry?

還有一個例子，最近，你的競爭對手之一確實宣布了一些小的補充，假設它們是有針對性的，看起來像東南亞，那裡的成長率更高。那麼想知道您是否可以對競爭格局和有關行業的結構性論文進行總體評論？

Sure, Chris. So well, in the prepared remarks, I commented on the long-term execution of our strategy and how we have now over a very long period of time demonstrated quite strong earnings growth. And so I think there are a lot of proof points there that the structural dynamics are very different, particularly in Reinforcement Materials.

當然，克里斯。那麼，在準備好的發言中，我評論了我們策略的長期執行，以及我們如何在很長一段時間內表現出相當強勁的獲利成長。因此，我認為有許多證據表明結構動力學非常不同，特別是在增強材料中。

And as I've said in the past, I think if you go way back in history in this business, you did see a different set of structural dynamics primarily because there was a tire migration out of the West and to China. And that tire migration has been over now for a number of years. And so that demand picture in each region is much more stable, I think, number one. Number two, there have been a number over that period of time of supply side reductions in capacity that have consistently tightened up the balance, and that's been playing out now for 7 years, 8 years, something in that range.

正如我過去所說，我認為如果你回顧這個行業的歷史，你確實會看到一組不同的結構動態，主要是因為輪胎從西方遷移到中國。輪胎遷移已經結束很多年了。我認為，第一，每個地區的需求狀況都更加穩定。第二，在這段時間內，供應方出現了多次產能削減，導致平衡不斷收緊，這種情況已經持續了 7 年、8 年，在這個範圍內。

And when you overlay the environmental capital that is required if you can get new capacity permitted in a jurisdiction, certainly raises the barriers to entry and the cost recovery and earning a return on the capital is quite a different number from historical. And then finally, I would say the importance of having regional supply, while this business has always been a regionally driven business, I think today with the, call it, derisking or decoupling or regional supply security, however you want to sort of phrase the trend, it's pretty clear that there's a level of sort of onshoring back to regions and an effort to try to derisk global supply chains.

當你涵蓋一個司法管轄區允許的新產能所需的環境資本時，肯定會提高進入壁壘，並且成本回收和獲得資本回報與歷史數字有很大不同。最後，我想說的是區域供應的重要性，雖然這項業務一直是區域驅動的業務，但我認為今天可以稱之為消除風險或脫鉤或區域供應安全，無論您想用什麼措辭從趨勢來看，很明顯存在一定程度的回流到地區的現象，以及試圖消除全球供應鏈風險的努力。

And so again, this business has always been regionally driven. But I would say the emphasis on that, the importance of that has only gotten stronger. So I think the structural dynamics here are quite different and quite compelling. And on top of those market factors, we've done a number of things as I commented on in the prepared remarks to improve the performance of our business, sort of self-help, if you will, where we've really driven up over a long period of time through operational excellence, our OEE performance. We always are driving our yields, making investments to drive yield. And then finally, energy recovery is really critical, not only to the economics of the business, but also to our sustainability goals if we can produce cogeneration power.

同樣，這項業務始終是區域驅動的。但我想說的是，對這一點的強調，其重要性只會變得更強。所以我認為這裡的結構動態非常不同並且非常引人注目。除了這些市場因素之外，正如我在準備好的發言中評論的那樣，我們還做了很多事情來提高我們的業務績效，如果你願意的話，可以說是自助，我們確實已經超過了長期以來，透過卓越運營，我們的OEE 表現得以實現。我們始終致力於提高收益率，透過投資來提高收益率。最後，能源回收確實至關重要，不僅對企業的經濟效益，而且對我們的永續發展目標（如果我們能夠生產熱電聯產）也至關重要。

So I think all of those self-help measures, combined with the industry structure comments that I made to create a quite different looking business, and now you're seeing proof points play out over a very long period of time.

因此，我認為所有這些自助措施，再加上我所做的行業結構評論，創造了一個看起來完全不同的業務，現在你會看到證據點在很長一段時間內發揮作用。

That's helpful. But just any thoughts on the [furlough] additions? And is that just keeping up with growth in certain regions? Is it helping backfill the displacement of the Russian supply? Appreciate it.

這很有幫助。但對[休假]的補充有什麼想法嗎？這只是跟上某些地區的成長嗎？它是否有助於補充俄羅斯供應的流失？欣賞它。

Yes. Yes, sure. Sorry, Chris. I forgot about that. So our view on that dates back to announcements that might be almost 10 years old and never fully acted on. So not sure how firm that most recent announcement is when you put it in the history of prior announcements that have been made. That being said, they're targeted in the ASEAN region if they do come to fruition, and that is expected to be the highest growth region for tire production.

是的。是的，當然。對不起，克里斯。我忘了那件事了。因此，我們對此的看法可以追溯到可能近 10 年前發布的公告，但從未完全付諸實施。因此，當您將最近的公告放入先前發布的公告的歷史記錄中時，不確定它的堅定程度如何。話雖如此，如果它們確實取得成果，它們的目標是東協地區，預計該地區將成為輪胎生產成長最快的地區。

And so that would certainly make sense as on the margin, tire production is -- capacity is moving into ASEAN rather than China, the need for Carbon Black will certainly grow there. It's possible that there's some backfill to the Russian supply that's anticipated in that announcement as well. But we feel like between the growth in ASEAN and the fact that Europe does need some structural supply to backfill the Russian material, we think it should be in balance, but questions about whether or not it actually happens.

因此，這肯定是有道理的，因為輪胎生產的產能正在轉移到東協而不是中國，那裡對炭黑的需求肯定會成長。俄羅斯的供應也可能會得到一些回補，這也是該公告中預期的。但我們認為，東協的成長與歐洲確實需要一些結構性供應來回補俄羅斯材料的事實之間，我們認為應該是平衡的，但問題是它是否真的發生了。

(Operator Instructions) Our next question comes from the line of Joshua Spector with UBS.

（操作員說明）我們的下一個問題來自 UBS 的 Joshua Spector。

This is James Cannon on for Josh. I just wanted to poke on some of the data we saw in the Reinforcement market, specifically with respect to the Americas, I think the data we were tracking pointed to Reinforcement or replacement tires being up 10% year-over-year and some of the weakness that I'm sure came through in the numbers with OE tires being down about 8%. I had a hard time kind of balancing that against the minus 7% you called out in Americas. I was just wondering if you could point to anything you saw in the delta there?

我是詹姆斯·坎農 (James Cannon) 替約什 (Josh) 發言。我只是想看看我們在加固市場看到的一些數據，特別是美洲的數據，我認為我們跟踪的數據表明加固或更換輪胎同比增長了 10%，並且一些我確信OE 輪胎下降了約8% 的數字也體現了這個弱點。我很難平衡這一點與你在美洲所說的負 7% 之間的關係。我只是想知道你能否指出你在三角洲看到的任何東西？

Yes. Well, I would say it's really driven by demand in the region. Remember, this is Americas, both North and South. I think South was probably a little weaker than North America, so that's impacting here. And we also see year-end inventory adjustments made by customers as well. And we think there was definitely some of that happening. But our expectation here is that we'll see sequential improvement in our fiscal Q2. So the March quarter here and then a return to year-over-year growth in the second half. So not particularly concerned about it and our assessment is really driven by those factors.

是的。嗯，我想說這確實是由該地區的需求所驅動的。請記住，這是美洲，包括南北美洲。我認為南方可能比北美弱一些，所以這對這裡產生了影響。我們也看到客戶對年終庫存進行了調整。我們認為肯定有一些這樣的事情發生了。但我們的預期是，我們將看到第二財季的持續改善。因此，三月季度將恢復年增，下半年將恢復年成長。所以並不特別關心它，我們的評估其實是由這些因素所驅動的。

Okay. And then on the PC side, you called out some pretty solid volumes in the quarter. I think over the past couple, you've had some headwinds on the pricing side. Are you -- is that starting to turn around or are you still seeing pressure there?

好的。然後在個人電腦方面，本季的銷量相當可觀。我認為在過去的幾年中，您在定價方面遇到了一些阻力。你的情況是否開始好轉，還是你仍然感受到壓力嗎？

Yes. So I'm not sure that last statement was accurate. I think our comments more recently have been that margins in the segment have generally been holding up relatively well. And the biggest challenge in the segment has been volume -- has been volume weakness. But we definitely, on the volume side, did see some nice improvement in the quarter, and that was driven by specialty carbon, specialty compounds and fumed metal oxides. So really kind of across the board. So I think that was positive to see after a pretty extended period of destocking and where we were seeing negative year-over-year comp.

是的。所以我不確定最後的陳述是否準確。我認為我們最近的評論是，該領域的利潤率總體上保持得相對較好。該領域最大的挑戰是銷售量——銷量疲軟。但在銷售方面，我們確實在本季度看到了一些不錯的改善，這是由特種碳、特殊化合物和氣相金屬氧化物推動的。所以真的是全面的。因此，我認為，在經歷了相當長一段時間的去庫存之後，我們看到同比增長率為負，這是積極的。

So I think that's a positive signal here. I think the timing of recovery in the segment beyond this sort of the next leg will depend, I think, on how things develop in some of our key end markets, building construction, infrastructure, consumer durable goods, things like this. And so far, those aren't showing any signs of inflection. So I think we're pleased to see that perhaps a turning point where we're no longer seeing negative year-over-year comps, but whether or not these end markets pick up and drive the next leg of growth, we're perhaps a bit cautious here until we get a number of months under our belt here. But definitely pleased to see the stabilization and hopefully, the signs of a turn here.

所以我認為這是一個積極的信號。我認為，下一階段之後該領域的復甦時機將取決於我們的一些關鍵終端市場、建築施工、基礎設施、耐用消費品等的發展。到目前為止，這些還沒有顯示出任何變化的跡象。因此，我認為我們很高興看到這也許是一個轉折點，我們不再看到同比負增長，但無論這些終端市場是否回升並推動下一階段的增長，我們也許會在我們在這裡待了幾個月之前，這裡要有點謹慎。但肯定很高興看到穩定，並希望看到這裡出現轉變的跡象。

(Operator Instructions) Our next question comes from the line of John Roberts with Mizuho.

（操作員說明）我們的下一個問題來自約翰·羅伯茨（John Roberts）和瑞穗（Mizuho）的線路。

Sean, there's a precipitated silica business for sale. Would that fit with the Reinforcement business?

肖恩，有一家沉澱二氧化矽業務出售。這適合加固業務嗎？

John, I think we're always looking at M&A to enhance the portfolio. I would say the way we think through it is first, if there is M&A that would help our existing businesses in terms of global footprint to serve customers and build that position out, I would say, number one. Number two, in our chosen growth vectors, so in battery materials and inkjet, if there are attractive opportunities there that would strengthen our position, then we are always looking at those.

約翰，我認為我們一直在尋求併購來增強產品組合。我想說的是，我們的思考方式是第一，如果有併購能夠幫助我們現有的業務在全球範圍內服務客戶並建立這一地位，我想說，第一。第二，在我們選擇的成長向量中，例如在電池材料和噴墨領域，如果那裡有有吸引力的機會可以加強我們的地位，那麼我們總是會關注這些機會。

And then I think the third area would be, are there logical adjacencies where the combination of our business and another one would be accretive. Now with respect to precipitated silica specifically, I think there are a couple of ways to think about it. One is you could get basic in the precipitated silica. The other is that you could use your technology platform like E2C to incorporate other materials into an advanced formulation. And that's certainly something that we look at and think about. So -- so it's definitely something that we evaluate.

然後我認為第三個領域是，是否存在邏輯上的相鄰關係，使我們的業務與另一個業務的結合產生增值。現在，具體到沉澱二氧化矽，我認為有幾種方法可以考慮。一是您可能會在沉澱二氧化矽中得到鹼性。另一個是您可以使用 E2C 等技術平台將其他材料納入先進的配方中。這當然是我們所關注和思考的事情。所以——所以這絕對是我們評估的事情。

The prioritization of how we look at things would be strengthen our existing position, one, number two, invest in or explore M&A to support the growth vectors and then three, evaluate adjacencies such as the one you just described. Norma, I'm not sure -- did we lose connection here?

我們看待事物的優先順序將是加強我們現有的地位，第一，第二，投資或探索併購以支持成長向量，然後第三，評估鄰接關係，例如您剛才描述的鄰接關係。諾瑪，我不確定──我們是不是失去了聯繫？

Mr. Roberts, do we have another question?

羅伯茲先生，我們還有其他問題嗎？

No.

不。

No, just that one.

不，就那一個。

All right. Thank you.

好的。謝謝。

Okay. Thank you, John.

好的。謝謝你，約翰。

At this time, I'm showing -- I'm showing no further questions. I'd like to hand the conference back over to Mr. Keohane for closing remarks.

此時，我表明──我不再提出任何進一步的問題。我想將會議交還給基歐漢先生致閉幕詞。

Okay. Great. Thank you, Norma, and thank you all for joining the call today and for your support of Cabot, and I look forward to speaking with you again next quarter. Thank you.

好的。偉大的。謝謝諾瑪，感謝大家今天加入電話會議以及對卡博特的支持，我期待下個季度再次與您交談。謝謝。

This concludes today's conference call. Thank you for your participation. You may now disconnect. Everyone have a wonderful day.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。每個人都度過了美好的一天。