Cabot (CBT) 7 May 242024 Q2 Earnings call transcript

Good day, everyone, and thank you for standing by. Welcome to the Second Quarter 2024 Cabot's Earnings Conference Call. [Operator Instructions] Please be advised that your today's conference is being recorded. I would now like to hand the conference over to the Vice President, Treasurer and Investor Relations, Steve Delahunt. Please go ahead.

morning. good and Carmen, Thanks, I would Earnings the Corporation you to welcome Teleconference. to Cabot like today CEO With Erica Sean are me Keohane, Vice and McLaughlin, and President CFO. Executive and President; of are posted the released our results Last our section in XXXX, night, which second Investor we quarter of copies fiscal of for website. Relations year that in call portion is deck website and conjunction our the of the will available of on slide The available also accompanies this be with replay Relations the Investor call.

will we operational materially call, cause conference forward-looking Each statements statement statements. future this During to to from could expected our make in such uncertainties and forward-looking differ about projected actual results that performance. financial those risks is subject and

last discuss the and second in results. followed update issued the the allocation end efforts quarter and I on company's operating ended in fiscal the section night for an the table Additional second make last a XX, filings earnings who financial discuss September segment XX-K by non-GAAP the and Sean, the will the then now adjustments measure refer regarding information the factors product capital issued business transparency highlights, we in night the to appears our GAAP year call in of these turn and greater performance, order most of our highlights will to with available in measures we directly at referenced non-GAAP will financial in GAAP innovation. the our regarding sustainable XXXX, to SEC. In are financial on quarter subsequent we this comparable and certain website. release press reconciled release provide call involve review Investors Erica to our framework our over to results. that financial measures The

an questions. floor on Sean our open this, provide will Sean? and outlook to then Following XXXX update the

In up adjusted year-over-year, is second still I'm in quarter, by pleased as outlook this quarter global XX% you, segment EBIT have segments. Reinforcement ladies of share delivered segment. EBIT remains quarter to leading macroeconomic with and our Steve. Chemicals up the delivered today. outstanding XXXX fiscal long-term driven our market execution and with resilience second dynamics and in welcome in and of up the to the in year-over-year and of across team position, Performance quarter tremendous to XX% supply $XXX both growth the efforts demand morning, the million. tire of replacement for and Materials appears was the have The in of and results against a ended. backdrop. call very Cabot Thank second the what very we Good the the business compared driven results challenging the to strong favorable by gentlemen, destocking per the regional earnings demand market, effects $X.XX, execute XX% to stabilized generally strong,

year. Operating cash automotive, trends see at we through supported strong million, $XX did rest a shareholders of signs of strengthen of these will quarter repurchases flow of our early the return remain was We and to further through combination While the $XXX if cautious in particularly and dividends. infrastructure share in semiconductor demand demand the improvement million applications. the in some which

XXXX, increasing be Cabot of the and X% of business dividend the history marked growth quarterly over achieved at We our strong continuous of fundamentals flow fiscal totaled flow strength in dividend amount on remain the the increase And since to XXXX X%, went public, balanced sharp we million. a our shareholders competitive the our returning an continue very dividend. remain in last through generated capital strong, capital payout compound share projects XXXX, of in which and earnings is the funding maintained shareholders. and year profit we cash operating as balance we characteristics, strategy in to maintaining generation dividend and portfolio, a our our the confidence, year our allocation the flow would of strong cash has be intend committed X% grown Cash robust expect destocking, million. cash high that including cash year and growth over This environment commitment an cash while conviction strong time. and core generation our strategy. operating dividends macroeconomic has return long to our and an increase. fiscal to Given dividend a time cash annual announcement high-return of the by our of company has maintain portfolio cash of investment-grade to to long-term industry night allocation a which our balance underlying of a and cash and flow element yesterday, Since business weak XXXX, growing $XXX grow. The to dividend expectation repurchases. We've and fiscal a ratio it has announced flow inventory is can return year-to-date and sheet. Despite focused yield Cabot dividend $XXX of a enable growth remains and rate expected growing

XXXX, or $XXX shares. since we have years, we of our $XX dilution. Year-to-date, by at in repurchased opportunistic an repurchased from and And of count incentive dilution minimum use repurchased XXXX, fiscal shares are repurchases excess exception approximately plans of COVID share with reduced a that XXXX, believe have most in the million offset to our of million. the share Since attractive with also of impact compensation have been shares we We have cash. and outstanding in million repurchases shares XX% X

our our given strong tailwinds. Cabot improvements Materials consistently the growth acknowledged in recognized our in cash flow, by a structural leader excellence long potential this area. We expect Reinforcement being sustainability, and has parties to long-term in portfolio business sustainability the by continue opportunistic external driven as been of for

the growth tailwinds. I would that embedded practices in highlight innovation technology a a for and potential opportunity our to earned Recently, our excellence the deeply recent Technology sustainability-driven few showcase. for driven industry of decades, growth has award pipeline sustainability have the also showcase responsibly While been developments our by we XXXX tire like at operating for EXC Expo, the Tire premier line portfolio. product rich

of recognized were chemicals compounding category Elastomer we and the the for in Specifically, platform. Year Innovation our Engineered Composites

rubber compromising by EXC-DX-XXXX market. proprietary sold the produced to enhances and patented EXC performance and Our in composite through resistance compared elastomer by tire has approximately customers abrasion a been by when XX% rolling are mixing validated conventional resistance platform being process, tire global compounds. The increasing products our without

designed needs tailored these of rubber applications, wear. PROPEL industrial increase rolling and unique quarter, addresses platform posed performance tire PROPEL manufacturers vehicles. the EX launched to by to our durability, in reinforcing electric and of carbon new resistance by our enhanced challenges offers with Additionally, of increased extending EXC tire of an engineered array benefits. In address delivering the combining drive torque an the sustainability products and also specifically black EX low meet tire The and life. higher weight weight EVs issues torque thereby tread we

support to on project cells grant and cells. under a extended This will that our critical grant cells. producing are long supports an ranges transportation and heavier Department manufacturing law. $X which scalable in with driving process million loads, carbons, for bipartisan for particularly innovative focus ability are will overcome challenges manage specialized as of by due catalyst the distance commercial fuel U.S. intended Finally, difficult Fuel the research the of partners infrastructure technology. the to their to battery recently This is and Energy were awarded developing of serve electrification development Cabot fuel to

initiative sustainable commitment the in the its make our deep and energy United driving believe These performance call this technologies. the to in and initiatives future and and innovation energy States role our with Erica? expertise our shaping proactive demonstrating collaboration hydrogen contributions in discuss economy, the that across now aspects quarter. mobility to our us sectors. I'll the leadership sustainability of financial to in over to the segment more forward collective reflect various to Erica long-term turn stages, is Although partners we early further position clean substantial a

XXXX, EPS Thanks, compared to Sean. million. quarter year. with the XXXX for spending was $XXX million, $XX then XXXX fiscal expenditures start fiscal expect segment will of we for to $XXX free the I company the quarter decrease ended results. cash cash of our Discretionary the results flow in at included capital a remains which $X.XX with liquidity and the of coming billion. was Performance growth and approximately of segments. the both $X.XX for operations from in the and the Adjusted balance Reinforcement flow $XX fiscal million strong $X.X discussing in with continue Capital position fiscal million, $XXX for Materials quarter review second Cash the to of quarter. We and million quarter, from million a working Chemicals quarter strong million was second at of capital second $XXX $XXX the were

of quarter repurchases. uses the and cash for million Additional for during share dividends $XX million were $XX second

was Our XX% and tax debt rate we XXXX end XX% the The fiscal general billion and to debt-to-EBITDA our of operating One tax seen was additional balance to note X.Xx. quarter to in the be fiscal net the item. $X.X the XX%. range anticipate of our operating at for unallocated line in March, the second XXXX item of rate is for was benefit income

net and asset as expense general includes quarter, and positions our investment America last earned well discussed in income balances. cash of our interest on currency we exposures mainly As this income the income to as region line South global we related item unallocated

applied this of and to allocation to certain part were and access regulated still bonds in related sold evaluations bonds, bonds to million sale and for used discount it evaluation in suppliers. Cabot control U.S. purchased purchased use earn $XX we a peso of We have during dollar be of December. The there Argentinian mandated much December, prior sold, loss the of unallocated an resulting of how government was while to balances offshore that outstanding regulations to of guidance benefit time net benefit most on in Argentina the our During reported cash companies date. as higher country. At into $X investments of could and than in we $X that the quarter depreciation balance. rate quarter, million and a around the government in and dollars which supplier and government quarter a which this immediately government the the slower the a of due of general largely in of of cash the interest recent as place pay loss. U.S. the an $X in pay was expected, that treated could million continue at followed lower path In the March, as were The was we for million. a evaluation put resulted on the the item than purchase to offshore $XX income, million

not So currency course to for from peso we income can impact would the going in income volatility volatility expect Argentina of suppliers level we earnings be from would over a to unallocated mandated of the the remainder expense do year from nor line, the expect in Argentina the the normal line general expect forward, minimal. We we offshore the pay the the and now Argentina going business items. forward. Therefore, which the of investments of time

movements global While net driven ahead, $X impacts predict, around cash to the FX per and unallocated income income look would difficult general on as currency be our expect balances. quarter we to million global the $X income of interest by are million to we

Materials. Reinforcement to Now moving

volumes was of in same due second period the and year During the were higher X% XXXX in prior as up customer same quarter, to mix million, X% increase compared is of to to The our year. the volumes. XX% compared in which the increase quarter the in second pricing product Materials Reinforcement Asia by million in agreements prior Europe. year period growth for was EBIT $XX driven $XXX Globally, an and calendar the as and higher

South fiscal and quarter America, Looking to offset XXXX and with improvement costs in pricing. second energy Materials sequential by the recovery EBIT of demand maintenance higher quarter with expect Reinforcement expected lower plant modest third from we to XXXX, line the of in volume fiscal roughly the be

Performance Compounds The fiscal by as quarter increased line. compared to Carbons and turning by fiscal was driven the Now XXXX. Chemicals. $X driven million our X% Specialty to EBIT Specialty the higher in same product increase second in by volumes period

Sean the demand to Sean? in expect Looking sequentially ahead some year signs discuss we as raw and to we as over margins compounds are to fiscal modest XXXX, the with of early material hold pricing volume turn strengthening carbons back to sequentially moves we expect the I now quarter seeing call in improvement costs. outlook. of line will third specialty and fiscal

Erica. Thanks,

Moving to our XXXX outlook.

fiscal out feel businesses, to and raising We for the of for at second market XXXX the about share to coming year. quarter, with adjusted The and from $X.XX Based year-to-date year. back earnings the increase our earnings for we $X.XX the guidance customer The are unchanged. drivers upward midpoint Materials our pleased range Reinforcement revision strategic impact guidance. we per half the to the results calendar represents good the At on outlook the are strength our very this replacement be of in segment. momentum of our and resilience the a prior across key level, the $X.XX the our remain year the a in growth agreements tire driving of are compared

not double-digit destocking strong semiconductor the in higher some sequentially. we Reinforcement our expectation improvement, end factors is segment. In growth of with beginning customer volumes we be second Materials discussed most to applications of prior repeat. to we driving year in automotive, the to in expect are for year market signs expected As our experienced in volume growth early EBIT the 'XX as of the expected Chemicals, These infrastructure another notably and modestly Performance fiscal in are half quarters, year-over-year see

will trends in demand that fiscal into year this optimistic as are head segment to We continue XXXX. improve we

is is strategy robust to and expected Cash returned balance generation growth to will balanced Our pursue capital and shareholders. strong. investments a we sheet cash continue of allocation to remain

announced going X% growth the Overall, with remain and the confident team, intend and of the I'm I'm yesterday, company portfolio. is pleased dividend addition forward. to opportunistic very repurchases In about of to in prospects share how we our today. positioned capability our with our the increase strategy we I'm our excited execution

consolidated We and on now in our Investor much today, are year for our executing very you for Q&A and call session. us targets. track we I to Day Thank well fiscal meet over turn remain the joining XXXX back will XXXX

Instructions] [Operator All right.

line Our Deutsche first the from with question Bank. David Begleiter of comes

imports are what black the Xst ahead Europe? carbon Sean, or ban you seeing exports July to of on Russian

Sorry, say phone noise it little again, David, a the there on was there.

further Carbon you behavior? Xst on change, ahead buyer So the ban July what market exports any change Europe? of Any seeing to Black are in Russian or

Yes.

So that the since reducing the been fully as know, announced exports fully trend out date, will carbon happen. we of Europe. effect Russia you And we've and date, into into June of a the customers XX, seeing sanction were expect expect continued black ever goes and our sanctions

that we So in fully will date. that expect be that, effect on that on

certainly and the long-term Europe, region. customers We was purchases the are XXXX, last are in keen in an out. dynamic for that negotiations. are here, through saw regional operations year out many we we in our certainly, spot with closer as important getting to for period, And of global And play they incremental contracting remain secure supply reaching that significant supply

there contracted largely is our business Europe our while limited. and is supply excess Now in

around the playing effect our closer our clearly, something is to even has base some as into out time that remaining asset this And is of are is world it. period here. that we from can. But date for continued alternative find what We there's sources as been the gets push to going support customers for working over global best

continue we them our customers asset to with we'll can. base help from global our best to So try work closely as to

trends on results Is is good implied which seasonal Or just QX based guidance, normal -- on in that I is seeing? believe, QX a guidance, behavior just Very good. sequentially. you're conservative? just And your guidance, that being which normal down

I'd Maybe for walk through ask Erica can Dave. she that Yes. and you,

Sure.

outlook, QX the of terms David? In

it that being means just expect is you be versus Or down what to looks sequentially QX it or that that in Is guidance, like me conservative? to see What quarter-over-quarter. do would implied normally see the for QX? QX

Yes.

is in we modest to in volumes business about guidance. the the has in I results, Performance outlook do compared increase an and first strong, been of drivers talked terms prior So the forward as going as and the a think the Chemicals. in Reinforcement both segment the Materials half we EBIT of And in the quite expect increase

which that what this expect where we of decrease. to a item talked was unallocated and seen other the it benefit the would large think general expense, I I in we've income quarter about, was previous

saw the go that we $X expect So million in next would to developing. and that's $X back quarters X we half, million we to QX, how about in $XX million down to and the see would

Roberts One moment with Mizuho. for our comes next it question, of line please. John from the And

M&A under And update Back us at are being you other point? capital this any any on on capital major could programs review? anticipated there allocation,

priority our that operate will allocation and we're our recap the what come Certainly, level compliance well quick a the right assets first plans to in is in of That's that continue to capital priorities customers. we'll standpoint. from ensure sure the invest to that of and now results to just and Maybe our strong Thanks. make seeing maintenance to we continue support the generate they've expect. a

So and foremost. that's first

continue the well strategic to growth we have Now and in investments reinforcement, say new being at packaging, for out flow as underway time as as dividend and finally a next this that's investing of and for Indonesia strong targeted strong to third the cash particular, the sure as in growth dividend some plan share but is, vectors opportunistic well so to in the earnings this over example, in for growing priority, supporting our grow, market. I invest repurchases. point, means in growth a build the and course, with batteries we jet as in and and unit maintaining would sufficient capacity we then and ASEAN so make

the specifically, piece supports comment M&A where can't I it of our remains chosen with Now to but respect strategy strategy. M&A, a

businesses established vectors, markets, strength strengthen can very the our targeted in position in growth support our active areas. will the certainly looking we existing on So front whether there our core at opportunities where be or M&A to we are those

specialty strength. include on material were markets? those And it fumed looked like probably in year-over-year. stable and the did And silica then going battery what's strength carbons in inks

Yes.

heavily the we we're improvement, In areas well signs volumes automotive see infrastructure. lines. did as the was in applications the of specialty and higher quarter pretty driven the early across seeing overall, the that carbons as segment where So product compounds good our certainly across specialty by

the farms for So this and go into is energy cable where the like. and like applications and wind alternative of we offshore carbons that sell and compounds build-out connecting the wire grid

sector good. a would the semiconductor pretty in weak positive that in was a remains, of side destocking somewhat business, say I in in demand that fuel was fairly to that position oxides, see infrastructure then after And So overall in metal prolonged would but I long semiconductor. still was silicones demand of a pickup say, terms there

respect to our positive with to that's So were volumes see. And year-over-year. batteries, higher

that some mostly clip, chain. is So that's of you is pretty still gives are the sense the quite of there's growing China, but a signs different inside in inventory starting positive. we're to pickup, of for and this the EV product good by expected applications which of of production Performance that good see driven Chemicals the to see. to some But EV hopefully early lag bit lines still Certainly, where batteries at a end are because sales market market a year

our from UBS. with moment the please. question, One of Spector it for line next Josh And comes

margins. performance and So specifically to on ask I wanted

And of kind and So guidance, year. you're last talked were offsetting when to about first the talking stepped Erica, you price sequentially, cost. margins the in of forward half back you about down levels

to happens back more that And in to needs a further that prospect? year? for to guess low where is get there I Or So this the mid-teens? margins to is of what a out segment that happen scenario

question. the for Josh, Thanks, Yes.

some if maintenance -- last had inventory, talked and the So you higher I we quarter this think about reduction of impacted which recall quarter margins.

And did the business And so expected. happen. I'd that performed as say

about, modest we impact. QX expect in I some levels. inventory we the think then improvement same the as from the a wouldn't we talked level of And go forward, volume, improvement as we expect

levels. that think bit in saw would to return see you a I So the margin QX the what you maybe

the get I it's volumes. higher, think leverage to to be going on too the

I think well. holding pricing our up quite is

we we're margins et you I see costs, as just those think -- would volumes hold the as raw see improve. to overall changing so inputs, of energy EBITDA and And improve, the material cetera, able business margins, we

about I that's I the comments helpful. guess the much. talked bit? an That's for little about can in grants sizable? And Is guess of opportunity that, you your that we I on a talk that innovations, carbon and terms got maybe guess, the haven't catalyst, you

Yes, Josh.

to energy Certainly, clear sort alternative are the are technology is And a place days, there's people as right and probably quite for the and trucking, energy and hydrogen it's think forward a is of lithium-ion people hubs." although the building cells much example, batteries part overall is ahead, U.S. investment most I -- for way here. I established there. term will about to transition space. But bit and across to think mobility passenger very "hydrogen being of in long-haul of light look certainly that the view view -- it fit out hydrogen I fuel further think early the vehicle transition and fuels be the batteries for are the better there long in drive of electrification a and Europe, the so as

challenging the be more think would that batteries weight I certainly in of space.

fitting So to that hydrogen well in people tend space. view

happen. have for of are hubs factors have -- these to and I a built number out. to refueling get get So has mean built but to there infrastructure hydrogen that out

but a clear the term, definitely I it's that longer is mix. pretty part think be So one of will

we space And be innovation recognized so cell partnered and in here, space. some established players this with to as that continue in is the leader as fuel an developing

developing the a application. fuel in this support cell jointly so catalyst our And be carbon work will with our partners for

as I grant term. the of the something award important I position think development quite long is and of research this think, is for space. think in So the our I that And innovation an reflective leader

with and JPMorgan. question from line it of next our Jeff for moment Zekauskas comes One the

year-on-year volumes I a down I row, what's explain quarters have were quarter, in the but think a in for you think and region? in American you have positive decreased in dynamic that X America. Black March on North pricing X% you Can your Carbon going

Yes, sure, Jeff.

So in decline Americas, the see. which what is you the

So as North has South in particularly conditions the tire extent economic in as America by America. in replacement South America, and was South impacted driven the imports that been more America to China, where impact a that's both largely of well from lesser North

So economic in the that volumes region and, region. is towards decline we conditions South the definitely as tire that again, we I the think the in there, given imports that Americas America reported skewed -- as as well impact

forward, for market are expecting that I would be with As the we the volumes higher half hopefully, the driven sense the Americas such we'll volumes in you region. supply. in consistent at to the we by for Europe, volumes contractual of the see full think, look more respect year look region what year. If up we second And as we with like for that a the picture year But expectations volumes forecasters will stronger gives in saw then to say. customers that value LNC X% continue local Americas,

Right.

your last for much North in of grew say my that you and can good. half, in how cost But terms in sold. would follow-up, first So you America goods be if the year of

-- could co-product has $XXX of the down if the what's What you're Can was been pulling sold? penalty on the it's the the credits. about And energy $XX for far last been explain maybe in someone what is goods you goods And the comment penalty that million sold not penalty your year? quarter. about flat. cost what's cost revenues down getting dynamic so of this year? that are Your down why sold the cost that's and half, goods And of million in

Jeff. Sure,

is of know, that lower through because So material line. the as decline in I revenue costs. raw mechanisms, the you cost think pricing And of pass we goods our really sold through

and cost the you down. the in increases the So goods pass We sold in but reason going materials the price volumes in revenue revenue. because revenue, is that through we also down are have the see higher of raw

pass-through So they're what offsetting the amount.

then that is So come that's And to pricing higher that of line. you're EBIT more why that's the the Does and looks a revenue why drop help? EBIT through seeing the bit driver because flat. the the

what Yes. And about credits energy the [indiscernible]? co-product

Yes.

was last headwind, the So say, from. energy year big I would a

fiscal was If you it roughly million. at 'XX, fiscal $XX 'XX looked to

And so there's that. different the cases, difference meaningful This that we sell we're some parts in of cetera. say in of some very world. was year, different pressure. And I'd contracts not the downward cases, terms et in seeing electricity, any Again, steam,

So it impact energy year, exactly But a it's doesn't us. mirror this markets. the to always I'd year-over-year minimal say

you did so and year volume North last has And growth American been say what year Okay. your far? this

North year, last Well, America down. was

remember, good you If in we had destocking a the happening region. amount of

quite supply expectation year, be as of North say So more destocking flattish we remember you'll and there Sean a I'd would happening, in 'XX, noted, are of in year our a this in XXXX, good were disruptions volumes year. amount so strong chain and last saw America. the happening there

your is American North market share and growing North the American the flat? market seeding Is or

No, I America flat, North think for year roughly this outlook is the market.

question. the next [Operator Jefferies. line And Instructions] One moment for comes our Laurence with of it from

on This Laurence. is is Dan for

a will is Infrastructure is now. if that all? wondering that's helping I seeing something mentioned benefit any or Act that you're future? chips tailwind at any help from Or growth drive the if effect the Act, was infrastructure you You if the in that

to in from things. their in which energy of get in then as That's need governments One grid are drives there improvements yes, which X really to again, and renew principally Dan, has infrastructure, that, so impact grid. think cable I what infrastructure, the municipalities, seeing are is, alternative gets driver. And one if about renewal. is and you that space as connected wire think, really, installed, we the then

that grid. bring be wind back be So farm offshore have cables the the that and it would connect an to that then best when subsea example power there of to there's

for think incentives are think there. don't different seeing U.S., that, the CHIPS grant direct carbons meaningful. the to With respect trend range the and In the bill there's demand to stimulus -- to infrastructure most Act that respect drives measures and trickle in any of that and been clear we're impact money and of don't a awards there. the conductive so And have yet I of and -- I We're is so in current while beginning cases, there impact from that seeing, from that. not results. With amount

of happen longer the as then hold an through should more certainly in of they're grid. wire see need renewal not and And those U.S. renewal. is of see take the like been our what a has very true you where many to and and publicized investments the infrastructure U.S., mature Now I in mix examples should to of is should sustained shift stable and then in well term the think energy here to the economies impact of cable. renewables, this grid I more mean, in flowing really parts you applications over the continue over the time, certainly,

long-term a So good we to long-term tailwind as that with deployed. a alternative tailwind bump think that gets energy provides

And XX just anticipated have to term, least is it growth very the of what's the was how wondering, business your second my the then That's the EVs. given around helpful. -- capacity? question battery kind growth And build is to mean long for rate new the -- you I XX whatever where out over capacity in next there to meet years a time medium the or you is. might the in at think I

Thanks, Dan. sure. Yes, Yes.

a So certainly, grow you're that is at EV demand continues to clip. right what healthy seeing now, in pretty the batteries,

in be this XX% it's expected globally, to the think XX% somewhere to range. I year still

most China. coming of that Now in

the -- the chain. lagging growth Europe next quite stages. is well of you're kind worked picking seeing year up that's there's in production think seeing will that the with EV bit in EVs battery battery level But lag growth. the because reported. There's of this see think you're in battery this off EV battery quite what U.S. production of is inventory, at production cell that early I And and will in inventory you until is this I a lag sales, the

this out. of that balance the year, probably probably dynamic you'll So play see

of battery. heavily world's to globally, general in this today, the longer business our business the but to battery As XX% not in they term we business, look China, approximately make is business the skewed XX% just

them. So the overwhelming majority of

the half expectation and in and decade, U.S. that China this is outside coming the Europe. of and end about will China the more that by time, be over of XX-XX, Now XX%

And be that synced as to China growth build-out with make sure really between investments Europe. pacing happens rest of world. but sort the so bifurcation battery our they're that of of plants in and the to investments support the we'll we're making up and certainly customers' U.S.

would So what's we're see expect pacing we're developing sure those over a we support watching the that big and that. sort further customers of bit our make to closely capacity those closely time, and But investments and Europe things that's managing up. happening, picture sinking to U.S. in we and then of how with

our moment comes One for next question it Jeff JPMorgan. with from and Zekauskas

in lift causing And think you positive America You've 'XX. America, and last so optimistic be demand you're dynamic environment? your volumes about what to or it about North was seems had North prices in in What year in contracted like makes fiscal general flat a pricing a I 'XX, optimistic price dynamic such this in soft fiscal but year. and they'll

I here. Yes, of a things couple think

been If that that in get the have in long order time to seen have an into that return has a appropriate supply-demand you our in structural require to tight the expansions an capital of brought requirement over plants, the tire in remains back this pricing One, and period on as period as position. probably and time on of a as well period well course, What period significant long over factors. increasingly XXXX-ish balance there year. been plant the closures returns investments up that that you of change of for look have balance, tightening time environmental into supply-demand tightening time balance through place customers. And supply and U.S. as U.S. is over a competitor the from which X because here

So term the certain you there's many near a 'XX And years. In as because it, 'XX. was that has nature call demand, 'XX, that off over in structural out, people I of 'XX. sort realized saw played dynamic pointed then the think bit here, of dynamic was got in out and current in would trimmed 'XX I strong, very inventory in that a there overbuild of very, 'XX Erica

from those see you supply-demand do look And standpoint. snug a that to kind average out. years have quite is that, and really through X actually when dynamic you of So you the those

would no and So that's now. that, build I say through for the picture to in we've some you've the that destock real time certainly look long-term then there's change balance. 'XX the quite but been inventory got And supply/demand sharing to and 'XX across see the

and remarks. questions Keohane to it I back will for I the Q&A hand final queue, Sean And further conclude as see in session no the

Great. much great speaking and quarter. on us Have next day. Thank very joining call forward a of your support and continued Cabot, look we for again today for the you to

now thank you for participating, you And and may all disconnect.