Cabot (CBT) Q4 2024 earnings summary

Executive summary

• Fiscal 2024 Adjusted EPS rose 31% year-over-year to $7.06, achieving the top end of the 2021 Investor Day CAGR target and strong EBIT growth in both Reinforcement Materials and Performance Chemicals segments.

• Generated $692 million in operating cash flow and returned $265 million to shareholders via dividends and buybacks, representing about 55% of discretionary free cash flow.

• Nine of 14 sustainability goals for 2025 achieved ahead of schedule; received EcoVadis Platinum rating for the fourth consecutive year.

• Awarded a $50 million DOE grant to build a U.S. battery materials plant, targeting a 2028 startup; negotiations ongoing.

• Launched new sustainable products, including universal circular black masterbatches and EVOLVE Sustainable Solutions platform.

Financial highlights

• Q4 Adjusted EPS was $1.80, up 9% year-over-year; Q4 operating cash flow was $204 million and discretionary free cash flow was $105 million.

• Fiscal 2024 net sales were $3.99 billion; net income attributable to the company was $380 million.

• Fiscal 2024 capital expenditures totaled $241 million; year-end cash balance was $223 million; liquidity at $1.4 billion; net debt to EBITDA at 1.2x.

• Fiscal 2024 discretionary free cash flow was $479 million; free cash flow was $451 million.

• Fiscal 2024 operating tax rate was 26%, down from 28% in 2023.

Outlook and guidance

• Fiscal 2025 Adjusted EPS expected in the range of $7.40–$7.80, representing 5–10% growth.

• Strong operating and discretionary free cash flow anticipated in 2025, supporting growth investments and capital returns.

• Reinforcement Materials segment expected to see global volume growth and higher unit margins, offset by higher costs from new projects.

• Performance Chemicals EBIT run rate from 2H 2024 expected to continue, with mid-single-digit volume growth.

• Fiscal 2025 operating tax rate forecasted at 27–29%; CapEx projected at $250–$300 million, focused on U.S. air pollution control, Indonesia expansion, and battery growth projects.