Cabot : 2020 Annual Report

CABOT CORPORATION 2020

Annual Report

Cabot Corporation is a leading global specialty chemicals and performance materials company headquartered in Boston, Massachusetts, USA, that has delivered innovative performance solutions to customers for over 135 years.

We strive to be the most innovative, respected and responsible leader in our markets - delivering performance that makes a difference. As a market leader, we collaborate with customers to find innovative solutions that will help them advance their own products for a wide range of industries, from transportation and infrastructure to environment and consumer goods. Our customers worldwide trust our solutions to help them address their needs and accelerate innovation in key applications - creating value and delivering an advantage over

the competition.

Our global network consists of 45 manufacturing facilities throughout 20 countries. All are joined by our commitment and continued dedication to safety, health and environmental leadership and progress.

Our Business Segments

REINFORCEMENT MATERIALS

Rubber Blacks; Elastomer Composites

Carbon black to reinforce and optimize the performance of rubber products including: tires, hoses, belts, molded goods

PERFORMANCE CHEMICALS

Specialty Carbons and Formulations; Metal Oxides Specialty additives that enable performance in: plastics, wire and cable, toners, coatings, adhesives and sealants, electronics, batteries, inks, inkjet printing, composites, silicones, building construction materials, industrial insulation

PURIFICATION SOLUTIONS

Activated Carbon

Activated carbon for purification in various applications including: air and water, food and beverages, pharmaceuticals, catalysts

• CABOT CORPORATION

A Message to Our Shareholders

Fiscal year 2020 has been a year like no other. The world continues to struggle in response to the COVID-19 pandemic and the associated economic downturn has challenged virtually every sector of the economy. Like all companies, we at Cabot were faced with extreme and unexpected circumstances and I am immensely proud of the way our team navigated every challenge with resolve and optimism. Our corporate values of integrity, respect, excellence and responsibility are deeply rooted in our culture and they served as a guide for us as we worked together with our various stakeholders during this unprecedented time.

In our 138-year history, we have overcome many challenges. While the ongoing recovery from COVID-19 is still fragile, I can say with confidence that the power of Cabot Corporation was revealed during this crisis. Our longstanding leadership in safety provided the behavioral foundation to protect our people from the risks of COVID-19 while continuing to serve our customers with the essential performance materials they need for their applications. Our strong balance sheet and enduring commitment to an investment credit rating equipped us with the strength and liquidity to withstand a severe demand disruption during the spring and early summer months. Furthermore, we understand that a robust strategy requires us to make portfolio choices and appropriately allocate both human and financial capital. To that end, during 2020, we took important actions to strengthen our leadership positions and fund targeted growth applications, while maintaining our commitment to a strong dividend.

2020 ANNUAL REPORT

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Over the past year, I have been inspired by the dedication, resilience, and generosity

of our employees across the globe. Our top priority, as always, is to protect the safety and well-being of our employees and communities, and this was particularly crucial in 2020.

Supporting Our People and Communities

Over the past year, I have been inspired by the dedication, resilience, and generosity of our employees across the globe. Our top priority, as always, is to protect the safety and well-being of our employees and communities, and this was particularly crucial in 2020.

The onset of the global pandemic and the subsequent evolution of government policies and regulations presented a great management challenge. To address this, we established a COVID-19 crisis response team to ensure executive focus and leadership of the key activities required to protect our people and our company. Based on the best available guidance, we quickly took steps

to reduce employee density at all sites, enhance our personal protective equipment (PPE) requirements and modify work procedures. We recognized early on that success would require us to do more than simply protect our employees while on Cabot premises. We needed to educate and train our teams and their families about the risks of community spread and how our Cabot work practices should be extended to their homes. By doing so, our employees were able to not only protect themselves and their colleagues, but their families as well as their communities.

The public health crisis has spared no one and we all know family members, friends or colleagues that have been affected. Beyond the direct impact, the stress and anxiety brought on by the demands of protecting and caring for our loved ones and adjusting to new routines has been significant. To support our employees and enable them to be their best during this time, we took timely measures

to address their needs through new and expanded policies and benefits, including Emergency Leave and Pay Continuation policies and through the establishment of a global Employee Assistance Program offering a variety of services from financial counseling to confidential mental health support.

Managing Our Business

As the COVID-19 pandemic sparked a severe global recession and volumes in our core businesses declined sharply, we quickly pivoted to a posture of cost reduction and cash preservation. Speed was essential and our decisions were guided by a philosophy of protecting the company first, while maintaining our ability to emerge from the crisis ready to win.

During the year we undertook a broad range of cost management initiatives, both short-term adjustments and structural actions, which generated savings of $68 million. Included in our structural actions was the establishment of a Global Business Services organization. This new function was designed with a mandate to drive efficiency and effectiveness by bringing end-to-end ownership to our core processes of record-to-report,order-to-cash,source-to-pay and plan-to-deliver. As part of this effort, we consolidated our North American shared service activities into our existing service center in Riga, Latvia, thereby building scale and efficiency. Our next wave of improvement will be driven by the deployment of enhanced digital tools to further streamline, automate and simplify the way we do business.

• CABOT CORPORATION