Cabot : 2022 Annual Report

CABOT CORPORATION

ANNUAL REPORT 2022

HIGHLIGHTS 2022

GROWTH & INNOVATION

Broke ground on new specialty compounds facility in Cilegon, Indonesia

Acquired Tokai Carbon (Tianjin) Co. Ltd carbon black plant in China to support growth of battery materials product line

Expanded capacity at Inkjet facility in Haverhill, MA, USA to support growth in digital printing applications

Announced collaboration with IFF Health and Biosciences to develop sustainable reinforcing additives

SUSTAINABILITY

Completed one of Europe's first cross-board transportations using a heavy-dutyzero-emissions electric truck

Announced ambition of achieving net zero carbon emissions globally by 2050

Committed ~$1M to fund twenty college scholarships as part of the chemical industry initiative, Future of STEM Scholars Initiative (FOSSI)

Received a Platinum Rating from EcoVadis for the second consecutive year

Named by

Newsweek

as one of "America's Most

Named

E2C™ product line to

European Rubber Journal's

Responsible Companies" for the third consecutive year

"Top 10 Elastomers for Sustainability" list for the second time

FINANCIAL PERFORMANCE

$6.28

$395M

1

1

of

of

Adjusted EPS

Discretionary Free Cash Flow

Diluted EPS of $3.62

Operating Cash Flow of $100M

1Non-GAAP measures. For definitions and reconciliation to the most directly comparable U.S. GAAP measure, see supplemental information for Non-GAAP Reconciliations located at cabotcorp.com/investors under Financials.

• CABOT CORPORATION ANNUAL REPORT 2022

A MESSAGE TO

OUR SHAREHOLDERS

Sean D. Keohane

President and Chief Executive Officer

Dear Fellow Shareholders,

As I reflect on the past year, our story at Cabot is one of resilience, transformation, and opportunity. Fiscal 2022 was certainly not without obstacles, as the world experienced the geopolitical shock of Russia's invasion of Ukraine, an associated energy crisis, particularly in Europe, and macroeconomic instability as inflation surged.

Building a resilient organization that can navigate this level of disruption is extremely difficult. However, our employees at Cabot did more than simply navigate the environment. Our team delivered record results and positioned our company to capitalize on transformational growth opportunities. Driven by the adaptability of our teams and leveraging our collaborative culture, we were able to support our customers and deliver innovation to meet their expectations, demonstrate leading shareholder returns, advance our sustainability agenda, and fuel investment in key growth vectors. In doing so, we enter fiscal year 2023 in a position of strength.

I am immensely proud of the accomplishments of our talented global team, and I want to thank them for their passion, perseverance, and commitment to excellence. Our people are unified behind our purpose, which is to improve daily life and enable a more sustainable future. This clarity of purpose, and the diverse range of backgrounds, skills, and experiences that our employees bring to work every day, are what make our company successful.

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"Driven by the adaptability of our teams and leveraging our collaborative culture, we were able to support our customers, innovate for the future, demonstrate improved shareholder returns, make progress on our sustainability journey and fuel investment in key growth vectors."

DELIVERING A WINNING

GROWTH STRATEGY

At the beginning of the fiscal year, we introduced our 'Creating for Tomorrow' strategy which focuses on a new phase of growth and breakout value creation by leveraging our strengths to lead in performance and sustainability today and into the future. Our focus is on driving advantaged growth, delivering innovative chemistry to address our customer's most pressing application challenges, and relentlessly pursuing continuous improvement in everything that we do. We have made tremendous progress in executing our strategy and are currently tracking ahead of our long-term goals.

The power of our 'Creating for Tomorrow' strategy is evident in our financial performance. Despite a turbulent global environment, we achieved a record level of financial performance for our shareholders in fiscal year 2022.

24% year-over-year increase

for Reinforcement Materials EBIT

11% year-over-year increase

for Performance Chemicals EBIT

In our business segments, Reinforcement Materials EBIT increased 24% year-over-year to a record high of $408 million and Performance Chemicals segment EBIT increased 11% year-over-year. Furthermore, we increased revenue by 74% in our Battery Materials product line and generated an 81% EBITDA increase year-over-year. These results were rewarded with total shareholder return of 30% in the fiscal year ended September 30, 2022 which was at the top of our proxy peer group

for the 1-year period. Overall, we are very pleased with our performance, which reflects the resilience of our businesses and end-markets, our focus on execution, and the continued momentum in our high growth vectors.

CAPITALIZING ON ADVANTAGED GROWTH OPPORTUNITIES

With 'Creating for Tomorrow,' we are focused on driving advantaged growth by building from our positions of strength and connecting our unique capabilities to end markets that have strong sustainability tailwinds. Over the past year, we have strengthened our industry leading businesses through a relentless focus on commercial and operational excellence. Additionally, we have invested in a pipeline of opportunities across all of our businesses that are driven by compelling growth fundamentals and support the world's sustainability transition.

Paramount among these growth opportunities is battery materials. Led by the transition to electric vehicles, we see a unique opportunity to capitalize on the shift in mobility from internal combustion engines to electric. Our conductive carbon additives play a critical role in

• CABOT CORPORATION ANNUAL REPORT 2022

lithium-ion battery chemistry by efficiently transporting electrons in the charging and discharging of the battery and by enabling greater energy density. We have made a variety of strategic investments over the years to position Cabot to capture the explosive growth of this application and broaden our offerings and capacity in this space. In fiscal year 2020, we acquired a leader in carbon nanotube (CNT) production, which broadened our customer offering beyond conductive carbons.

In fiscal year 2022, we completed the first phase of a CNT dispersion capacity expansion at this facility and initiated a capital project to double capacity by 2024.

We also completed technical upgrades and commenced operations at our Xuzhou, China specialty carbons plant, which allows us to optimize our production and support the growth of battery materials. We acquired a new facility in Tianjin, China with plans to upgrade this facility with technology to produce battery material products to enable a fast and capital efficient capacity expansion to meet our battery customers' growth expectations.

I believe that our strategic investments, strong global footprint, technical expertise, and track record of performance give us a strong "right-to-win" in the battery materials space.

As we look to the future, we see that sustainability-driven macro trends will continue to drive a transformation in the way we invest, innovate, and operate.

DRIVING OUR SUSTAINABILITY AMBITIONS

Sustainability is central to our 'Creating for Tomorrow' strategy, and this past year has been about evolving and further integrating our sustainability agenda into our business processes. We recognize that the way we do business and the actions we take are important for the future strength of Cabot and we are committed to continued leadership in this respect.

As a company, we have long been focused on reducing our environmental impact and this commitment is reflected in our 2025 sustainability goals. Fiscal year 2022 marked another year of important progress towards these goals and I encourage our shareholders to learn more about our accomplishments in our most recent sustainability report. While our focus is on achievement of our 2025 goals as a foundation for long-term progress, we strive to continue to elevate our aspirations. To this end, we announced our ambition to achieve net zero emissions globally by 2050. This aspiration requires a long-term strategic view of our business, partnership with customers and suppliers across our value chains, and a multi-faceted approach to technology development.

The progress we are making on our sustainability journey has been recognized by a range of third-party organizations. For the second consecutive year, we earned a platinum rating from EcoVadis, the highest recognition available. EcoVadis is the world's largest provider of business sustainability ratings and many

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