Financial Data and Key Metrics Changes - In fiscal year 2025, the company achieved record adjusted earnings per share of $7.25, a 3% increase year-over-year [13] - Adjusted EBITDA for the year was $804 million, up 3% year-over-year, with a margin of 22% [14] - The company generated operating cash flow of $665 million and free cash flow of $391 million [17] - The net debt to EBITDA ratio remained at 1.2x, with liquidity of $1.5 billion [15][27] Business Line Data and Key Metrics Changes - Reinforcement materials EBIT decreased by 5% year-over-year, while performance chemicals EBIT increased by 18% [13] - In the fourth quarter, EBIT for reinforcement materials decreased by $4 million due to a 5% decline in volumes [28] - Performance chemicals saw a decrease in EBIT by $2 million in the fourth quarter, primarily due to lower volumes in Europe [30] Market Data and Key Metrics Changes - Volumes in the Americas were down 7%, while Asia-Pacific volumes decreased by 6%, but Europe saw a 5% increase [28] - The company expects light vehicle auto production in North America and Europe to decline for a third consecutive year [33] - The demand for conductive carbons is projected to grow at approximately 8% through the end of the decade [21] Company Strategy and Development Direction - The company is focused on strategic growth areas such as battery materials and has entered into an agreement to acquire Bridgestone's reinforcing carbon plants in Mexico [19] - The company aims to maintain a balanced capital allocation framework, prioritizing asset maintenance, growth investments, and returning capital to shareholders [17] - Sustainability remains a core focus, with the company receiving a Platinum rating from EcoVadis for the fifth consecutive year [22] Management's Comments on Operating Environment and Future Outlook - The management highlighted a turbulent macroeconomic and geopolitical environment impacting demand, particularly in automotive and construction sectors [13][32] - For fiscal year 2026, adjusted earnings per share is expected to be between $6 and $7, reflecting uncertainty in demand and pricing pressures [34] - The management remains optimistic about growth in targeted applications despite challenges in traditional markets [37] Other Important Information - The company paid $96 million in dividends in fiscal year 2025, reflecting a 5% increase [18] - Share repurchases totaled $168 million, reducing the outstanding share count by 3% [18] - The company is transitioning its investor relations leadership, with Robert Rist stepping into the role of Vice President of Investor Relations [11] Q&A Session Summary Question: Are you seeing any volatility in your rubber-black operating rates regionally? - The company indicated that operating rates are largely stable, influenced by elevated tire imports impacting demand [46][47] Question: Are you being impacted at all by Dow's silicone rationalization efforts in Europe? - The company is in discussions with Dow regarding their siloxanes plant closure and its impact on their fume silica plant operations [48] Question: How much do you expect 2026 tire contract prices to be down? - The company has completed roughly 25% of its contracts, which is behind last year's pace, and is facing challenges in projecting demand expectations [51][53] Question: Could you elaborate on the performance chemicals guidance for this year? - The company expects certain applications in automotive and construction to improve over time, while targeted growth areas like battery materials are anticipated to perform well [55]

Financial Data and Key Metrics Changes - For fiscal year 2025, the company reported a record-adjusted earnings per share (EPS) of $7.25, representing a 3% increase year over year [15] - Adjusted EBITDA for the year was $804 million, up 3% year over year, with a margin of 22% [16] - The company maintained a strong balance sheet, finishing fiscal 2025 with a net debt to EBITDA ratio of 1.2 times and liquidity of $1.5 billion [17][19] Business Line Data and Key Metrics Changes - Reinforcement materials EBIT decreased by 5% year over year, while performance chemicals EBIT increased by 18% [15] - In the fourth quarter, EBIT for reinforcement materials decreased by $4 million due to lower volumes, which were down 5% year over year [29] - Performance chemicals saw a $2 million decrease in EBIT in the fourth quarter compared to the previous year, primarily due to lower volumes in Europe [30] Market Data and Key Metrics Changes - Volumes in the Americas were down 7% and 6% in Asia-Pacific, while volumes in Europe were up 5% [29] - The company noted that the automotive and construction sectors are currently in a cyclical trough, impacting demand [36] - Demand for conductive carbons is expected to grow in the 8% range through the end of the decade, driven by power generation and distribution [23] Company Strategy and Development Direction - The company is focused on three capital allocation priorities: maintaining asset reliability, pursuing high-confidence growth investments, and returning capital to shareholders [19] - An acquisition of Bridgestone's reinforcing carbon plants in Mexico is expected to close in the second fiscal quarter and be accretive in the first year [21] - The company is pursuing a bifurcation strategy with tailored approaches to China and a focus on Western geographies [25] Management's Comments on Operating Environment and Future Outlook - The management expressed concerns about the macroeconomic environment, geopolitical issues, and global trade turbulence impacting demand [15][32] - For fiscal year 2026, adjusted EPS is expected to be between $6 and $7, reflecting uncertainty in end market demand and pricing pressures [33] - The management highlighted the importance of operational excellence and cost optimization in navigating the current challenges [42] Other Important Information - The company paid $96 million in dividends in fiscal year 2025, reflecting a 5% increase announced in May [20] - The company repurchased $168 million of shares, reducing the outstanding share count by 3% [20] - The company received a Platinum rating from EcoVadis for sustainability, placing it among the top 1% of companies in the manufacturing of basic chemicals [24] Q&A Session Summary Question: Are you seeing any volatility in your rubber-black operating rates regionally, or is it relatively stable? - The company indicated that operating rates are largely stable, despite elevated tire imports impacting demand [44] Question: How much do you expect 2026 tire contract prices to be down or expectations by region? - Approximately 25% of contracts have been completed, which is behind last year's pace, and the company is unable to comment on final outcomes due to ongoing negotiations [46] Question: Could you elaborate on the performance chemicals, the underlying assumptions for guidance? - The company expects certain applications in automotive and construction to improve over time, but anticipates limited material improvement into 2026 [47] Question: How did regional utilization rates perform during the quarter? - Utilization rates in North America are between 75% and 80%, higher in Europe at around 85%, while South America remains lower due to tire imports [50]