DuPont de Nemours, Inc.
CEO : Mr. Edward D. Breen
Quarterly earnings growth(YoY,%)
| Period | Revenue | Operating Income | EPS | Release Date |
|---|---|---|---|---|
| 2022 Q4 | -27.3% YoY | 0.8% | 1980.0% | 2023-02-07 |
Lori Koch says,
Net Sales
- Q4 net sales of $3.1 billion decreased 4% as reported and increased 5% on an organic basis versus the year ago period
- Global currency volatility resulted in a 5% headwind from U.S. dollar strength against key currencies, most notably the yen, yuan and euro
- Breaking down the 5% organic sales growth, 7% pricing gains were partially offset by 2% volume declines
- Continued strength in water solutions and over 20% volume gains in auto adhesives were more than offset by further softening in smartphones and personal computing within interconnect solutions, a slowdown in semiconductor and construction market, as well as continued lower-year-over-year volume from Tyvek protective garments within safety solutions
Earnings
- Operating EBITDA of $758 million increased 1% versus the year ago period despite currency headwinds and the impact of portfolio
- Operating EBITDA margin during the quarter of 24.4% increased 120 basis points versus the year ago period
- Adjusted EPS in the quarter of $0.89 per share increased 16%, driven primarily by below-the-line items as organic earnings from ongoing businesses were mostly offset by the absence of earnings from non-core divestitures as well as currency headwinds
- Full year operating EBITDA of $3.26 billion increased 3% due primarily to volume gains as pricing gains were mostly offset by continued pressure associated with higher raw material, logistics and energy costs
- Full year adjusted EPS of $3.41 per share increased 12% versus 2021
Guidance
- Expect solid top-line growth trends to continue into 2023 in businesses such as water and auto adhesives as well as stable demand across diversified industrial end markets, including aerospace and healthcare
- Anticipate lower volumes during the first half of 2023 in consumer electronics and semiconductors, resulting from decreased consumer spending, inventory destocking, and COVID-related impacts in China, largely within E&I
- Expect ongoing softness in construction end markets within W&T during 2023
- For the first quarter of 2023, anticipate continued weakness in these consumer-driven short-cycle end markets, resulting in a first-quarter net sales expectation of about $2.9 billion or down mid-single digits on an organic basis versus the year ago period
- Expect full-year 2023 net sales to be between $12.3 billion and $12.9 billion. In
Ed Breen says,
Revenue Growth
- 5% organic growth in Q4 compared to the previous year
- Strong volume in water and auto adhesives, as well as ongoing strength in industrial end markets such as healthcare and aerospace, mitigated the volume declines in consumer electronics end markets and softening conditions in North American construction markets
Pricing Growth
- Strong pricing growth in the quarter reflects actions taken largely prior to the fourth quarter to offset persistent inflationary pressures in raw materials, logistics and energy
- Over $800 million sold in year-over-year inflation headwinds for full year 2022
Portfolio Transformation
- The closing of the M&M sale was a milestone event in the fourth quarter and the last contemplated large-scale divestiture
- The transaction further transforms the portfolio to concentrate more on stable, secular, higher growth and higher margin end markets
Capital Allocation Strategy
- Authorized a new $5 billion share repurchase program in November and launched an accelerated share repurchase transaction for $3.25 billion of common stock, allowing the retirement of about 39 million common shares in the fourth quarter
- Retired $2.5 billion of long-term debt, which is due to mature in November 2023 and reduced the commercial paper balance to zero as of year-end
- Increased quarterly dividend of $0.36 per share or a 9% increase versus last year
- Deployed more than $7.5 billion of capital in 2022 through significant share repurchases, deleveraging and dividend payments, reflecting the overall balanced capital allocation strategy
End Markets
- About one-third of the portfolio is in electronics with a key presence in consumer-based end markets, namely chips, films, displays, and printed circuit board materials used in smartphones, PCs, and tablets
- Water business at 12% of the portfolio operates in markets that are expected to grow mid to high single digits, driven by the global response to concerns such as water scarcity and circularity
- Auto market at about 13% of sales is much more connected to high-growth advanced technologies, enabling long-term secular trends like hybrid and electric vehicles for items such as battery applications
Q & A sessions,
Impact of China’s PCB industry on ICS
- The PCB industry in China is expected to ramp up in the second quarter of 2023, boosting demand for ICS products.
- Their PCB fabs are currently running at low utilization rates due to lower demand caused by COVID-related lockdowns.
- Smartphone demand is also expected to increase in 2023, which will further boost demand for ICS products.
Impact of semiconductor industry on ICS
- The semiconductor industry is currently going through a downturn, with fabs running at lower utilization rates due to destocking and low demand.
- The first and second quarters of 2023 are expected to be the biggest down quarter for the chip industry.
- ICS is planning to start seeing ramp-up towards the end of the second quarter of 2023.
Industrial and water businesses outlook for 2023
- Construction markets are expected to be down all of 2023.
- All the industrial businesses are expected to remain stable in 2023.
- The water business is expected to grow in the mid to high single digits.
No bad stock 