# A MESSAGE TO
OUR SHAREHOLDERS

_Source: `DeepSeekOCR_Ardian_pruned_1k/basic-materials-specialty-chemicals/NYSE_CBT_2021/NYSE_CBT_2021.mmd` · pages 3-9_

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A MESSAGE TO
OUR SHAREHOLDERS

Sean D. Keohane
President and
Chief Executive Officer

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Dear Fellow Shareholders:

There is an old saying that in every crisis lies an opportunity. While the impact of the COVID-19 pandemic was unrelenting in 2021, as I look across our businesses and growth opportunities, I feel the company is better positioned than ever before.

We believe the foundation for our success is grounded in our purpose – to create materials that improve daily life and enable a more sustainable future. Powered by this shared purpose, our teams not only demonstrated their adaptability and resilience in a difficult external environment, but also found ways to turn challenges into opportunities and achieve exceptional fiscal 2021 results.

## EXECUTING ON OUR GROWTH STRATEGY

Staying committed to a strategy in times of volatility and uncertainty can be difficult. Despite the challenges presented by the pandemic, we made notable progress against our strategy driven by our strong execution capability, our focus on commercial and operational excellence, and our commitment to delivering results.

We delivered record results in fiscal 2021, with adjusted EPS of \(5.02 \( ^{1} \)  and discretionary free cash flow of \)353 million \( ^{1} \) . We also executed on important growth investments that we believe will capitalize on compelling macrotrends and enable continued momentum from this new level of earnings. Our growth investments are focused on building from positions of strength, in areas that we believe have the most potential to create value and where we have a unique ability to win.

A great example of our growth investments at work is in Battery Materials, where fiscal year 2021 represented a breakout year. Our unmatched portfolio of conductive carbon additives for lithium-ion batteries, combined with our global footprint and strong customer focus, resulted in a doubling of revenue year-over-year. Industry growth is expected to exceed 30% per year through 2030 driven by the sustainability trend to electrify mobility, and we are excited about the potential of this application to create significant earnings and value for our shareholders. In addition, our Inkjet product line is poised to capitalize on the transition to digital printing across a range of industrial printing applications. The business achieved multiple original equipment manufacturer (OEM) qualifications for packaging applications in 2021 that we expect to underpin our growth in this large market. Finally, we advanced numerous capital efficient and advantaged capacity projects across our established product lines to support revenue growth in the coming years.

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## ADVANCING SUSTAINABILITY

Sustainability is at the very heart of how we run our company and is embedded in our purpose. We recognize that for a company to realize enduring success, the needs of our broad stakeholders must be balanced. We strive to advance across all dimensions of our sustainability framework and made important progress in 2021. Though there is much to highlight, a few key activities are noteworthy:

The selection by Newsweek to their America's Most Responsible Companies 2021 list and recognition from Investor's Business Daily as one of the 100 Best ESG Companies of 2021.

As one of the inaugural sponsors of the Future of STEM Scholars Initiative (FOSSI), an industry-lead initiative, we are helping to create pathways for students at historically black colleges and universities to enter and succeed in STEM careers within the chemical industry.

We achieved a platinum rating from EcoVadis, the world's largest provider of business sustainability ratings.

The completion of a major air emissions control project at our carbon black manufacturing facility in Franklin, Louisiana – ensuring that we can support our customers' supply needs in the long-term while substantially eliminating nitrogen oxides ( \( NO_{x} \) ) and sulfur dioxide ( \( SO_{2} \) ) emissions. We are also recovering waste heat which is used to generate up to 50 megawatts of cogeneration power without creating any additional emissions.

We also further advanced our commitment to transparency. In addition to reporting against the Sustainability Accounting Standards Board (SASB) and the Global Reporting Initiative (GRI) frameworks, we took steps to further enhance our environment, social and governance (ESG) disclosures by committing to align with the recommendations of the Task Force for Climate-related Financial Disclosure (TCFD). We engaged a third party to help us evaluate climate risks and opportunities following the TCFD guidelines and the results of this assessment are published on our website. Furthermore, we recently announced that we are working to align our sustainability agenda with the Paris Climate Agreement to achieve net zero emissions by 2050 and intend to follow the methodology established by the Science Based Targets Initiative (SBTi) to set interim greenhouse gas reduction targets.

"We believe the foundation for our success is grounded in our purpose – to create materials that improve daily life and enable a more sustainable future."

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## LOOKING AHEAD

At our recent 2021 Investor Day, we introduced the next phase of our corporate strategy "Creating for Tomorrow". Through this new strategy, we will focus on our core strengths to lead in performance and sustainability – today and into the future.

Our strategy is underpinned by three pillars: Grow, Innovate and Optimize. By executing our strategy, we expect to deliver strong financial performance and create breakout value for our shareholders. An early example of our strategy in action is our recently announced agreement to acquire the Tokai Carbon (Tianjin) facility in China, where we intend to make technology investments to enable further capacity for our Battery Materials growth vector.

## FINAL THOUGHTS

I am very proud of our accomplishments this year and excited about our future. Looking ahead, I am confident that we have a winning formula — a talented team, a leading portfolio of businesses set for growth, a culture of sustainability, and a strong balance sheet. With this foundation, I believe the potential for value creation is great.

Despite the many challenges presented by the pandemic, we achieved enormous success driven by our strong culture and our commitment to working together as a team. I would like to extend my gratitude to all our employees around the world for their resilience, dedication, and commitment to our purpose.

I would also like to thank our shareholders for the trust you have placed in us. We strive to create differentiated long-term value by driving:

• Global leadership in our chosen chemistries

• Sustainability in all that we do

• A track record of disciplined execution and earnings growth

• Strong cash flow generation to fund advantaged growth investments and return excess capital to shareholders

As we navigate through these uncertain times, you can be sure that we remain driven by our purpose and committed to the disciplined execution of our strategy.

Wishing you good health.

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