DD - Earnings call transcript Q1 2020 | DuPont de Nemours, Inc.

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Operator

Good day and welcome to the DuPont First Quarter 2020 Earnings Conference Call. Today's conference is being recorded.

At this time, I would like to turn the call over to Leland Weaver. Please go ahead.

Leland Weaver

Good morning, everyone. us first joining conference XXXX for call. you for quarter DuPont's earnings Thank

this investors available webcast. are call We making to and via media

We posted supplement call. to and through section have during to website prepared conference our link this webcast. of our DuPont’s These the on comments are the Investor Relations slides slides

slide. Koch, statement the Officer. Please Financial on today Breen, disclaimer me Chief in are Ed Chief the our forward-looking Executive Joining call Officer; contained the and Lori read

statements regarding based During expectations we and our results make forward-looking materially our Because uncertainty, are call, about may predictions statements factors and from future. and forward-looking on our the actual risk will or assumptions performance statements. our differ that these involve current

periodic which detailed and historical significant Our principal risks cause of may financial reports exclude includes otherwise XXXX as measures current Form XX-K specified, uncertainties discussion items. differences. updated such Unless by today all presented and our

refer GAAP the measures; also a will is non-GAAP press to our measure in financial reconciliation to release. We comparable directly most included

now to call over Ed. the I'll turn

Ed Breen

operations. through are and navigate employees thank current and us. maintaining an disciplined environment, you obviously our our and is I for time, approach Leland, will and good we we protecting our and and This we walk you're Today and to of plan unprecedented safety all overall morning, well. executing hope supply safe health as joining Thanks, the everyone including the chains the

footings number well of actions, Because our to swift detail and we of a protect cash. solid balance times the strengthen uncertain prepared are will We generate liquidity, on are we ahead. handle implemented and also actions quickly to sheet our these

as overall next quarter the on as in comments for the few provide also assumptions current April, first market results, our dynamics months. will We well

clear; the beginning the of and been being of priorities employees. this pandemic, safety our well with outset have Since our

administering employees, performing protect quarantines aggressive tracing among taken have to cleaning employees, protocols, to our possible. steps and protocols implementing contact implementing work-from-home sites, access enhanced are where our where restricting needed We our

us organization in to of I want globe to acknowledge in by created vast challenges our been the and have pandemic. enabled local continue jurisdictions, customers, to determination of across maintain has the for the overcoming a have from majority the supplier sites continued employees a across deemed to our our our plant efforts be their to reliable business continuity tremendous essential and operate. The

extraordinary supply second As a of result manufacturing us dedication difficult this priority deserve our and many challenging has to incredibly chains managing necessary Their operating; particular for in and other sites our our personnel enabled these environment recognition. in keep times.

have operating In handful currently, local restrictions fact, the at operations sites. of restricted during in locations a manufacturing of over few our been manufacturing only months; global shut we down our successful two are our pandemic only past with XXX and by maintaining the base

health, have government We our done for the emphasis work overall continued non-manufacturing customers return on employees, and relevant longer all requirements, communities. the be term begun planning employees, will accordance to with for in safety of eventual and well-being which and an

and been has to liquidity balance cash. bolstering focus of our area by strong our enhancing implementing third Our position already and preserve sheet generate plans

these We a provide in detail actions more will moment. on

our to continue we part help this do pandemic. to Lastly, combat

workers. and We of thousands to XXX,XXX frontline and donated healthcare sanitizer over other garments, have Tyvek of gallons hand

masks. face to that Cummins shield shortages augment were also for and NXX the respirator supply used with use local to printing experiencing partner hospitals capabilities our help DuPont of technology filtration have We XD make to

away X of including start version production of empowering the million per of announced a by instructions. enable which of Tyvek to safe, initiatives of campaign, shifting to month to protective designs increased per X by increase of for a others X also number and from the production rapid million more million garments production primarily since million than to the DuPont access garments the non-healthcare pandemic, our with by to month per easy markets. And supply usage of have month more and Tyvek join use XX the development We garments additional protecting responders TyvekTogether frontline free by the the launching than in

support take our I These committed and essential the environment. our quickly as engaged communities are and partners, customers, are the very can our operate. unprecedented work which times, to and an to in all am the we changing business day-to-day personally to seriously, respond our designation to employees, shareholders, in we We doing our

since are of on the the against we pandemic well these positioned. ensure top remain we actions been leadership mid-March. X team operating to in senior items of Slide spiked series The have details I and daily

market We a confident an are recovers. case are scenarios also prolonged when of ensure favorably decisions making weather growth the we downturn, and right the have analyzed return to to stress unlikely equipped to and while number to we are steep being positioned

through Our Improve capital improvements certain generation and capital liquidity is strengthen structure cost straightforward: of the working playbook of deferral environment company. this cash the expenditures, position for our and optimize

color we driving of success more are each on provide will We in how these areas.

aerospace, broad was other can markets. simulated ensure and severe and cases downturn protect to the focused gas, staying the company. and risk in also we downside planning scenario on oil keenly industrial automotive, We're Our

quarter. & the suggests XX% unprecedented automotive of for industry, down particularly largest the area of first this and XX% more us, builds estimate latest be The connected global segment. global exposure in builds auto with sales Transportation our the within the numbers quarter, auto nearly is Industrial XX% the down our With will to second the in are than

developed now a In inventory into directly costs year our align Transportation in to network, provide will light slowing in the headwinds, translate term & Industrial segment inventory flow be over will earnings. will we with begin improvement supply otherwise absorbed working these in actions that demand. reductions earnings course as facilities the significant through order that certain plan capital primarily near market to of factories fixed would and quarter to idling of our in our Taking first in the this,

very charges shutdowns T&I the These result of are declines, XX% associated For auto T&I in as and decisively by expected margin but in plant confidence to critical, the we the decisions, continue a expected well year-over-year top-line move coupled in driven with this as with quickly the decline weak quarter. builds, XX% decremental price is easy as will not to and forward. approximately react second to in is mindset we

have Lori quarter. well additional it turn the on as the actions taken, me a to other few as we comments Let first on for over color

Lori Koch

Ed. Slide our liquidity position. Thanks, X highlights strong

came of a of that saw and strong focus sheet have led as the as to maturities our mid-March. well XXXX We commercial refinancing as bank certainty the into putting a of in in liquidity, valued credit motion our for downturn and bond We mindset paper actions markets firm access as initially the financing balance wheels obtain the always severity simply constrained. were plan November by

we billion that order a expire new set able in to June. replaced credit to short In $XXX revolving million XXX were secure facility day which was $X the facility,

it greater we our While to extending untapped, enlarging remain needs. provides expect and this business meet certainty general to facility

bank to next will maturity, loan delayed-draw and $X had have replaced commitment short a the I the to with path discuss which a billion we obtained bond, off November a dated pay on ensure slide. term the also since We

position, credit feel we these our liquidity. new With strong very in comfortable our facilities cash place, with and

us capital ahead and through of opportunities also from for proceeds improvements further divestitures. We cash working generation have

$XXX start key off working the have expect improvement million use We by first more in to versus we identified than the capital nice cash capital million area deliver prior in $XXX for a as improvement are to a working the by and our year. and quarter reducing of year of

of as shifting our capital model make and Within businesses SKU focus payable model rationalization and and vendors. order our receivables, through focus series Each in across accounts from their with to on to improvement, accounts stock to we to increased areas such our certain both a customers working receivable inventory a of terms including businesses. teams have reductions initiatives our to continue and accounts accounts have make targeted optimize pass-through deliver

in generating over proceeds. $XXX sale million Semiconductor In quarter, of Compound our we closed Solutions the the gross business

$XXX We buybacks approximately to late-March we million are after prudent quarter. share elected XXX pull in CapEx We a the spend taking year. our also on versus repurchased prior by in to price to mid million back certain had about action reducing the

While time in component the action remains of to critical order a a was shareholder our cash. at remuneration tactical financial solvency, conserve this

maintain Lastly, it times. confident the through remain and our to approved challenging We a will second Board recently quarter of share. dividend these dividends committed our able be we that $X.XX to are

bond Moving to previously billion facility this $X bond three launched mentioned, a secured. week, bank XXXX, offering which the I the transaction. we be of November Slide X, in replaced we a of a year to the just delayed-draw offering, newly successful provision will satisfy has proceeds last the become The bonds maturity when The due IFF maturity debt includes issued that stated close we have that maturities accelerates year. used this but as

we payment maturities by of debt With N&B With $X remain deleveraging a billion. of the several our no XXXX. the and have to IFF debt down deal, end committed from long-term will paying receipt we this until cash payment, the

to November our the improves net the our and be place as year end pay neutral of liquidity the bonds to Getting debt will position. maturities position in off significantly of

transaction. both we maintain We are position sheet balance have and the in post load amendable N&B/IFF a to strong debt a and now

the strong leading the We well. agencies to investment continue ratings rating policy and balanced of intend has from financial maintain each that hold positioned us to grade

doubling remain deliver $XXX our structural from we indicated in be would targets. Slide actions plan million In the approximately to that we $XX Turning to X, we that million. we incremental cost to March, delivering savings committed to cost XXXX

the company to savings and our we long-term targeted bulk the investment impacting We in well XXXX, of our identified a is G&A not the cost of approximately that maintain note thus that maintaining actions million are positioned which are ensure best-in-class sales recovers. These are help functional to reductions have at achieve R&D. the costs, enable structure. are plan reducing will market the planning. We functional It to $XXX growth us through we competitive of we cost to of important in R&D once level will for spend growth

lower were as addition spending number a our also These the and increases structural seeing on to forego reductions hiring actions to quickly across freeze. implementing benefits. of company. in we for seeing In We're are and a decision actions increases, the we to the XXXX back projects implemented and merit took savings, cost especially capital we cost cost pull including capital the with control

Ed, quarter Slide to first it will the turning comment X. Before on I results on

key Our solid in strong flat end price markets with our in and quarter of of sales segments. each filtration, probiotics. expectations of total electronics saw We down net garments, teams X% down billion, well protective volume $X.X above our organically across and delivered including water deliver X% core executed We down to a a and demand number X%.

the margin EBITDA XXX productivity Gross more from from on on points in T&I. E&I, price driven as a discrete favorable of of gains actions. down primarily X%. the improved than Adjusted $X.X was was ago basis EPS per our by Operating year $XX million period as share lower year-over-year down X% in well S&C $X.XX and mix and and billion volume absence benefits basis a of

detail numbers. for the Turning clear our first quarter & the are more in The on to Nutrition solid in results Bioscience Slide business segments. X

a solid growth The strongest by delivered trend in servers improvement within and to and Semiconductor of content segment & than with top-line beverage, its in the by organic personal consumer in the were increasing immune where in basis nutrition initiatives operating ever and E&I had the for foundry led margin margin above a home April. the by N&B strengthened Solutions, Strength average. logic markets, demand leverage health high generation strengthen segment new animal coupled growth to to driven technology next driven globally. double-digit for data and premium, Solid ramps recovery Likewise memory points. demand centers. food N&B single-digit we primarily was quarter a top-line growth America XXX as of EBITDA saw Probiotics robust higher demand business Technologies, implemented an care in robust result. Interconnect see and operating in in material in leverage and our market North smartphones, was X% quarter led the continue in probiotics which growth and operating also was more key

EBIT T&I anticipated than offset our strength absence prior results difficult a more in These business areas generally of had very operating gain environment were by XX%. volume. million were of The with $XX both year and of a the for as resulting decline price we of

decline the dramatically as a challenges net year-over-year volume included billion, anticipate auto X%. which further decline industry as X% of expect in pandemic. result and trend of we slows price quarter. delivered of a second COVID-XX a looking mentioned, We We Ed the As of similar forward sales pricing $X.X a the

was sales S&C in versus robust a Within last increase garment demand for protective to year. garments leading XX%

hands Tyvek including is tirelessly to team the get these and donations in many of working instances, workers, in healthcare Our protective other garments frontline of our garments.

closely increase to speed equipment and personal we We the with of prohibit great channel are are protective partners efforts opportunistic of working and pricing these supplies. vital to our taking availability

issued Despite activity the garments, Shelter weakened the the defense business Similarly, across in single-digits challenges Solutions and strength aerospace COVID-XX across by and markets stay-at-home the impacted pandemic, industry. sales orders construction Solutions demand a and gas as of declined sales as in was result the mid-single-digits, protective Safety low industrial, as globe. declined of oil

gain, Water be EBITDA price quarters was continued down prior first XX.X% mid margin continued it strong the $XX in which of due on cost to quarter. in EBIT million highest growth recognized a single-digit which absence S&C actions Demand focus was the operating operating of and the has organic in several driven drove the of by improvement, was Solutions XXXX, to been year. productivity. quarter the Versus in

Turning pricing able our per we pressure from adjusted N&B quarter. as to our which share Slide to declined bridge our $X.XX our the that adjusted not in $X.XX absence of EPS you'll as by headwind offset and in of saw first $X.XX. was the segment, Organic T&I nylon E&I, our as X% reduced actions execution as productivity EPS in X, growth the E&I prior the segments gains well top-line for adjusted S&C well further cost see and savings segments, EPS to on

by first XXX point driven our the Below quarter. increase items in rate saw base basis we the lines, tax to a discrete

rate We to the items. expect in quarter tax XX% of be to first our discrete full driven the year XX%, base range by

it back With that, turn I'll to Ed.

Ed Breen

shows been Thanks, excited very the announcing remain transaction progress mid-December, hard Since leader. last XX Slide I to these in announcement Lori. made bring together teams since create global have and at transaction N&B IFF we have the businesses to the the two a of year. work.

stand and things and in as you in work leaders legal up, integration, January, separation selection steering entity executive are key As team I told the our and including streams work and separation for planned. talent financials, progressing IT place, and are

European clearance as In we our here on of the March, with are now draft formally transaction U.S. notify we received was in the by EU and clearance. antitrust fact, have to submitted and the trust filing And April Commission XXth. working opinion

file Also, with statement will the be hold vote month and team September. new will registration in a days. shareholder coming the our this SEC intends leadership IFF later initial the We in to announced

for are teams critical XXXX the the remain a on and summary, In closing. energized all track milestones QX

on comments up quarter. April, for Let expectations what in our few second we as the a well as me wrap saw

demand garments. continuing of water some several beverage, businesses these in market these & There’s markets a such underlying probiotics, results space, undoubtedly pandemic, protective food filtration, their demand electronics robust seeing as as within in driving is markets and but well. are leaders growth as and these result We increased there key end are

low other fixed actions will mentioned for the have in to April, have near-term significant weakness. run industrial than earnings are versus through through automotive, and T&I period year. flow aerospace, by earnings. will headwinds gas, cash expected run of result we’re directly However, more demand inventory, otherwise markets. I well-known down offset would to actions the as oil Earlier strength to our as costs this and highlighted, were taking of percent to These business our we these softness last sales in areas be In mid-teens

in, pricing up Likewise, with on facilities. costs actions volume, second production to industrial to a of lead idling expect pull in to margins utilization XX% and lower in utilization, businesses back several All be associated XX% within will to lower our lower quarter segment. nylon S&C decremental pressure, range we

of decision our be would XX%. margins in our idle facilities a XX% Excluding decremental to range

will and eventually we to operations, the maintain continue balance still industry the and pandemic. sheet, return and strengthen While other predict positioned leaders will prioritize with for this safely combat In it well growth, the will markets interim, and safety stabilize our timing, impossible health our our of recovery. is be partner we employees, to our to to

I'll now turn up open it over to Q&A. to Leland for

Leland Weaver

Thanks, Ed.

our that Before we remarks call, remind statements to to you both our would apply our like to the move Q&A portion the of and following Q&A. I prepared forward-looking

instructions. will provide We per please person. question allow Operator, Q&A one the for

Operator

[Operator Instructions]. Thank you.

Morgan. Our J.P. first will with Steve from Tusa question come

Steve Tusa

of like talked about out million second something XM lot temporary like the kind or alone. that of forward. of in million, positive Honeywell of cost $XXX maybe anything companies the quarter are calling Can see that $XXX temporary frame in savings. is I billion. defend you kind $X near-term? gargantuan that kind A which obviously, cost because structural about the be talked margins the carries may can

Ed Breen

question. on the And for thanks time topic. Steve, spent lot obviously, we of Yes, a this

So, our last the or so from in as to million upped you $XXX $XX structural we savings cost know, month million.

business. to addition another $XXX that DowDuPont from remember is businesses to the million together. the structural merger we those and In of that coming a that, putting change That's out cost the have

the we about total, give in million So of have system or XXX coming take permanently. out

would $XXX facilities. merit are top at the On that have we've another about freezed T&E $XX opportunities million eliminated spend we of reduction, of that, our million we’ve I contractor increases, what call to external And hiring.

about $XX plans, into or spent was give $XXX take that get won't that the were in there's things another that million million to So baked plan. our

four DuPont benchmarked to arrived, on when out billion companies structural years benchmarking sit we're $X about we company the with and of the back we of company, costs we every of business ago, of in we merger and another took costs and look out the doing. G&A the best that are every during of billion there. have kind best-in-class top Remember presently took in getting function expenditures you So, $X when business now I the it, DowDuPont the of structural out what at

look that if I in to very I going to So, attack benchmark flaws, well this. it, structural think really And the business. so you through permanent again, we're at they're very, the wanted

cranking of all company. be said though, benchmarked to program, $XXX be? by point, which single strong it we touch think downturn the Another spending this. the we're intact we in every program, totally of spend, in our I our what's R&D come I So of out and the a R&D to programs return left totally is all is that we of X% are And the we We're lot we timing said, we're going still going make, timing not would sales very did left organizations well. We growth on through new products We’ve I out intact. machine a the very, the million the of what our running the position. very sales way, think would

this think very I balanced thing well. we’ve So

Operator

Scott question Davis Melius from Next with come will Research.

Scott Davis

least? I those does perhaps guess segment was could on you encouraged by April good question, so granularity hearing pretty far, was what numbers that by were. a on I like [comment] we're Because some result [ph] us hoping And others what at versus low-teens. I sound down from on my give

Lori Koch

Thanks, Scott.

saw QX to in kind mentioned was of the down It result that call, kind we we into mid-teens. of April. carry April as a was So, low similar on

usage space. line strength semiconductors So would continued what again you see going in N&B. E&I, more down The is increased from with E&I than what's and we strength in were continued data S&C primarily they expect we coming what QX, down with in server saw in T&I and strength as automotive. on the in were in in

a Automotive Tyvek almost kind in which XX% we up as be it half alone, garment about We're they've S&C the of quarter. historically strength QX, QX. of about XX% garments right the XX% in down And in the third, to continued Tyvek at now, are expect within to up Tyvek. versus down now about in come space,

continue And headwinds we're the are the to that and there. grow with to shrink into well some announced But construction than oil as enable aerospace nice we've as capacity that QX. expansion stay-at-home really that gas orders. offsetting in all seeing So and to more

So net-net, April down.

end mentioned market QX. about with As similar in mid-teens results low we’d saw that to very we

Operator

will with from question Next come Vincent Andrews Stanley. Morgan

Vincent Andrews

on the up & follow Transportation a just Industrials. Maybe

the but -- that in of X%. only much second You down volume performance sort that sort, you're decline such be than trade auto builds? in would loading worse actually that auto of builds that XX% XX% XQ, your Was does down to have said were some in is global your seeing quarter that reverse

Lori Koch

So down, XX% I think, recorded so we've that underneath T&I. in volume the X%

offset that strength we Healthcare saw was some weakness that there saw the Mobility segment that the in So we of in Solutions.

more the down than that been the have for would mobility quarter. results we So reported

material continue vehicle, look Having to driven given light-weighting past the we a to see auto performance we that branch we X.X vehicle. just by outpacing by build electric content we about of said see we've well as would so times just per as our towards that that, the the have driven as expect to builds exceed content in auto number

back little auto So that's primarily to polymers. to what outpace. of when lag kind and There sell you a into decline to we our see you see builds chain bit when between is where our led time with a results of

QX see downturn. were acceleration did of a their loading in as in the little we So people supply chains advance of bit

perspective. So our from in XQ market I end results seeing you're think mirror an more what will

Ed Breen

that, running on is that of time. make And to performance for add just to it we cash in truly this clear, in this business just T&I a are period

the in $XXX the chain generate million going the down hurting to as to be to are million kept and do, would million here performance $XXX the million for earnings industry, earnings our by purposely But semiconductor better. our $XX we we company. $XXX $XX of to facilities $XXX literally running in million supply they draw instance, million if So, cash we're

that. business to polymer have smart we'll more think bit decision, it's and stronger a come down be capacity and will we in I the when And little the of So, do a it uptick XX% return decision about normal. shutting things better of out right a our temporarily to

Operator

Steve question Bank Byrne your of with come from And America. next will

Steve Byrne

I Didn't urgent on if you not hear about progress an you towards made appreciate update that just any on I coronavirus. give whether that. could much the want impacted us just to front? focus PFAS that arbitration and or your the on The near-term on like issues these wondered any liabilities. the MDL a litigation collaborative getting Chemours, know little movement of with this Ohio more and

Ed Breen

Yes. Thanks for the question, Steve.

So on the there we will two cases is PFOA get of confident be case small of My know opinion And We'll a that front, us. as Ohio trials I'm behind amount there. remaining. occur. highly you personal the will had those case, in the is settlement

you to did to the go so Chemours, arbitration in here. appeal will will our Chemours the that that is arbitration. favor court. But heavily know, judge ruled occur our on that on law this As this the issue side

process like just than it's As a through I the system. quicker process I going arbitration the because court before, said

point certain that. very the will some point key very, are any multiple, years, at some good my time. that opinion we that. we be I settlement over remember very one is Steve, of will think multiple cloud amount firefighting you've see acknowledge Chemours But be sites the that over that we us, will make, with the companies. out renegotiate it's uncapped remediation would significant for us, was XX liabilities be I extensively years just We'll of play It of would in that don't do that will would at because PFOA come with than out But never be point important And about are any made a There the cases. here one over little are will guideposts that I -- So, in we have carve period. hoopla again, feel not important a then multiple that time. it in named a PFOA deal. We would firefighting bit we around We to know, an that And on it's with agreement all this, are XX other foam. not liabilities I a that a written between certainly in and probably being play year very about of a this. But will there piece foam as and of agreement out we had of lot there fair do years used that any surfactant us. up is, deal I

think think I the DuPont all out minor get in if and I So for very, be cases a and player those that thing, PFOA where rest wrap is manufacturing for we're is process very the to I in it up, the sites of very able manufacturing. biggest is the because issue the at of used limited firefighting to the we in biggest think foam,

items, some one, action next the you'll So, again, year on Chemours the I Ohio see But in the coming other two months. over there one, that so. the the play out will or think

Operator

Inch Next question Gordon will come with from Haskett. John

John Inch

guy. a a have reputation prominent deal a prominent You I'll as say -- just

you or they more lots whatever. of too that through you cost ops you of the call? guys with find processes up do different similar weeks kind opportunities about services, path, management However, Are go Motorola. Have than than at sacrificing and saves And in that early kind it more judgment quality still as few or a that productivity or I without there's financial is or little the sectors, think only lifting more I operations bit Lori coming teeth heavy the finding of more could actually double restructuring make core you folks think cut months? prior often to of on a and a often versus companies short gone start forget your down

Ed Breen

operations. John, the do what if working most, it's Thanks for to actually for maybe businesses. running That's a saying even you and thank on jump-in you than Lori like cost And reputationally question, would and like. minute the love though in also about I the I different that.

I've a keeping and believer the to talked the big really I costs mean during and lean I'm way, G&A a big believer mean. I in So here, in COVID-XX CEOs benchmarking. I'm many By company. our how actually in finding for save to potentially employees. most at in structurally impressed non-manufacturing costs stay-at-home think policy running the the of I'm the ways additional company pretty we're we're efficient

I move class we're it's some still as the intended take N&B when out our our EBITDA learn cost remember G&A So that leaves company. footprint portfolio, we leaves we're to so that the we real But and the reduce that in think more costs. company best there's always And on structure forward. to there estate in we going revenue important lessons when

what done we've the very post is are going benchmarked around to So N&B what significantly like we've transaction. really look we

company it rationalization up the on of single -- in costs really other I've of this looking the the SKUs run already every the We've was opportunity. looking of we're probably done a we're completed doing basis and the better really margins SKU and there. through at there's that points part through our business. X,XXX every in is going big rationalization the at always into a company the will a translate I've and company other taken the One water And business. significant we've which very in business and things in water

that. on So Lori kind from continue think that's of want comment? And to the are we'll in company. the and path you opportunities I that I get right the now Lori to

Lori Koch

years. our last think, a lot around COGS few of I obviously Yes, next over focus the is of area

focus So we're the COGS. towards shifting looking and

COGS, increase will we our $XX increase uptime, our definitely our $XX spend There's areas about opportunities billion opportunities to So of reliability, increase there billion, in there. are yield.

area excellent continue focus that's for us will help So us an definitely to margins. to expand that of

Operator

from Jeff Next Vertical Sprague Research. question come will with

Jeff Sprague

cycle. thinking of fairly kind the lot your about Obviously, businesses are thing. of short of this a Just trajectory

So visibility see drawdown? the does crystal sales of as April look really like of kind are the that and kind like made at terms of a pockets have. comment in none of kind low you Ed, and you here, this declines how week being unclear downturn. a maybe perspective the up and your this it's of and part of unlikely watermark think appreciate do answer auto strength But that you of bit? have kind prolonged us of up Obviously, the electronics stays on of what planning or a out steep And looking current of ball soften some maybe we much but you back would path for possibility about

Ed Breen

appreciate through planning Jeff did took Tyco level the And me and way, over I we I XXXX And let in hit the I of was the question. bankruptcy. 'XX. CEO the the brink know you this, high on by Yeah, Jeff, first 'XX, scenario the

to did for past. and So, look.” to of be look, here's for how of again. planning a do period we the down through And that. P&L one presented the than would thought have two say, actually cases And which and in want world it another we this our it an that worse XX% like did volume, lot Board we Board XX% yet, way, scenario the never would on just the we to our But ourselves I'd but I've done if on XX% I Directors. scenario, year, to did on And way, here's to the price we coming by at was I where -- a say We planning. position did scenario don't happening by We would one. would it was how But for don't XX% “Hey, down but it what all. least even we're end, scenario, one this just was the fine even plan cash the truly at practically down did a revenue anyway,

Board. way me we it the Let say to that that presented just also

a in, naïve just company longer sure run here, you make the I'm tough and don't do be the for through how a believer are things is healthy. company And period, big if

we N&B/IFF company mentioned this So $X the when very, where through the down by very going get debt. to billion scenario. and sit as we we're pay the way, comfortable in prepared of put I billion And of the deal remarks, And that liquidity of where feel Lori cash. with her we use happens, $X.X to

environment. So we'll be in a normal operating

And will DuPont. will us. have than over be current still billion is have of left that Our we of in billion $X.X to from remember, cash $X.X available that excess debt actually profile better it

to standpoint. going to a be phenomenal would Lori, more from detail? you little we're comment a just So position like in that

Lori Koch

Yes.

year. this think, second second so we the we on the to at through the point see do question quarter, lowest your as or So quarter the I

the mentioned sales I in as low down So, were April to mid-teens.

down QX We sales worse hard being have mid-teens. time seeing than a total

see point. we it as be should now, QX a low So

Ed Breen

Yes.

that I see but E&I is downturn quarter It business. indicators bit. will all bit robust are a little the that, down obviously in the It's little quarter. going could I turn in you think first running business a second also, mentioned the semi very the third into the maybe been quarter. running robust

happening. of what Lori bottom, I probably as So said, on down as we I that what revenue could but based think But know, see seeing the mid-teens we're is today. just

Operator

your come next Bank. David Begleiter Deutsche And will from with question

David Begleiter

CapEx What cut the projects of guidance targets? being so close you. running temporary growth at are CapEx back, to were Lori, deferrals? I you current maintenance projects just Are levels on -- these types Thank assume reductions. these

Ed Breen

Yes.

the So high thank David for question. -- level, you

$X.X year. So four growth spent or really same we had the $X.X that about. our and feel at D&A, And CapEx we good key three last we on spending this billion time hitting billion planned higher projects, year, on we than we're all remember, because

reason So year, $X.X high billion year $X.X higher year. this or us that's even the this for billion and for the last

reduced We $X that to have billion.

our $X the is bigger is very by to $XXX in down year, the not want come of the ones that years. year. big billion is on That on important But project the a last online By CapEx back we far, everything that that, Tyvek, this amount line was us. last all program that demand spent which Tyvek couple is a billion appropriate. will way million. it's That we're of medical $X.X of because biggest delayed And X, us. even because we [Storm] up a back when it a supplies two over fair and for simply So at these we've turn And delay, we on cut canceling to year. big, to

That we We that slowed expansion also. was and another just bit temporarily. some cap-on was our anyway, cut back just one CapEx one. on a So little of our down maintenance

the gets And what on in is I certainly of of facilities. and then One us big also all it's spending our later other this nice not an at any programs, one that's to another do touch -- level. They're besides the a months but projects maintained never we’re the would $X of billion. six efficiency is we're from the growth say the at we couple programs CapEx end we our those on, down ERP XXX% We've slowed did slowing and our safety would standpoint, thing So was have software to down world. that of some area of I the not spend down.

as pick So did. And that's see spending kind against go up to those back programs. right we of what things obviously, the big growth on we'll we buckets

Lori Koch

on mention if the quickly demand. Yes, put to current had meet is did pause in able X Luxembourg just Tyvek expansion reiterate, to we capacity comment to can to just where construction line the that taking so be remarks, place. I Tyvek were incremental prepared in an our due some we the to place in We that to regulations able

now up a about the as for million of in only incremental we through So we non-healthcare current our usually as million quarter we asset markets. XX was first XX garments, products combination well pulling to and went garments that capacity, in added, had not alone

In the us another to second million our quarter, which X campaign, X garments. allow to will add million TyvekTogether we announced

new we So in we've the regulations Luxembourg. got of up new capacity coming of start line online even the the delayed going on because though

Operator

from And our with come Oxgaard will question Jonas next Bernstein.

Jonas Oxgaard

cash you what about the specific buybacks I it? like again? about At I'm comfortable would assuming are you not was your really buybacks. but week, feel how asking thinking point for your use, wondering a

Ed Breen

haven't in certainly week about a I thought yet. it Yes,

guess X.X nice of bought of So million back the we we the at did about way come them pretty first $XXX stocks price. quarter million in a back I buyback shares and

feel that. So buyback not If the at it. about we have I of good picking we'll share suspended the And things year, up the we as look are cancelled through we said, obviously half it, again. second certainly

ago, great the a said the I’ve few IFF/N&B to transaction. cash the is in As shape. from We're going get minutes sheet balance

of So, year. that's we next at know the beginning coming

that in Board. be a strong we'll position with reassess So to the

get don't sure as coming So make for the is And low being, said, it's that we really second third time quarter to the money just maybe things here. for the the from have pick quarter, up but from and think there worse the obviously into I spend Lori us then quarter, hopefully deal.

and N&B on just Probably I'd mention also front. IFF the

as in talk everything CEO on right with Andreas with we issues. U.S. EU teams we you great are is deal, we to and The the week. We're do. the in our IFF need We no As -- every said this I remarks, prepared did antitrust to the of in approval. on are shape now on single antitrust process really know, get there track

going both is So all lot right there’s the on a of schedule, pretty at the teams are considering policy amazing now of which right work-at-home on companies.

a of the And feel the deal. So shareholder about favor And we on XX% shares also we the vote will we're great XX%, take the to close. have or of progress going voting September. and X shareholder schedule. have on February definitely in in that for I that We're right give owns

in just great So, shape.

Operator

McNulty from BMO The next question with come Capital John Markets. will

John McNulty

the whether up Can actually little demand of to yours pull? a and and through in the in of economies may there’s broader how through work incremental side. open bit. the it can was work that? take what of to you you're little seeing the I a call you're bit you with whether speak your of regard guess, the it actually long seeing some situation earlier a any channels maybe I inventory to broader kind with customers -- spoke to or that two, auto speak in to guess So to as And starting to kind you inventories

Ed Breen

part Lori I'll second of let that. answer the

coming a by data point. way, me touch one Let on And of first. interesting just Year. is China give our to back after of weeks we were kind you question, back impressive It's within John. that being was the of the running including in And part and come of able economy all China, one production first up very your three in way the The New by Wuhan the have. it facilities

were point. it full our quite China, not the In in to -- facilities near considering X% production extra back China. let our was it shut pretty actually weeks. X% are down that in close me organically you But in a sales XX few much for But good, April, give capacity. surprised we're sales to So up down quarter were a in China. first X%, with data me which we to back But our

pretty there, clearly impressive. we're things plus X X the comeback And normal or to but back So X from aren't again, is over a there. minus seeing totally to

little a in a way up kind little the And made T&I up you and give more it’s probiotics E&I growth. N&B are double-digit granularity to similar by Just is the China, in performance real is N&B to flat. is and Lori bit double-digit ago, S&C double-digit, around of that comments and

So that's of kind of the it. breakdown

-- getting of that's the to So, the work, out seeing comment? over see again everyone you economy to want their economies homes in we're Lori, the starting as numbers you China and market.

Lori Koch

The results T&I, T&I within E&I better a to the where polymer bit I chain talked Yes, as think, builds into were. that caused bit was inventory the in of discussion had and is bit potentially, in best be auto little had the than little a the QX call, pre-buy mentioned. our a you we there

at One in in key nicely into the end spiked back as kind the chain the the we see And then look did at XXs towards a that initiatives March. down level. high amount, in think XXXX. is the some the And I vehicle alert index, of and then pretty China got to of we February. normalization dealer it in measures of January we And in came it inventory

expectancy excess so of just demand auto, it, XX% lot Obviously, we're a down in as see not And having with with now auto QX. right in with the chain. issues I there's think, we inventory

probably little bit there QX, of say would to QX, I stock their supplies a side, E&I the have adequate the building is they the that some within that benefited benefiting of customers chain. On especially semi ensure safety

bit those probably of a actually spikes normal about in some and So, T&I, elevated of the in in landscape kind QX little probably inventories, E&I. were are there more,

Operator

our Bob with from next come Sachs. will Koort Goldman question And

Bob Koort

net you What wondering the am do have was comment material get T&I little mix petrochemical -- flat. bit, quarter? if the price how part see does and look S&C development if I of did some we're in softness sort you first could of Ed, raw year? try a you nylon that still guess to like -- things, backbones. bill I some in if some And middle just so seeing price other into and the the in Wondering mix

Lori Koch

Yes, so oil lower and be within the majority dynamic of T&I our would S&C. benefit from within raws the

primarily N&B we benefit perspective, within do expect based in those and some So price a full headwinds seeing some it is from year in a million two in $XXX where raw raws, it’s of if oil segments. about kind stay actually ingredients. of We're

of QX would mix So pricing down demand better And have a bit sales. X% little given thought had a nylon nylon. bit in we just was lower. we what in T&I primarily that's was better was than It little a actually

being So sell the price we last as from two and nylon nylon talked opportunistic the more unfavorable mix about headwind decreases; of one, when we pricing actual earnings components: two, we quarter nylon. did

sell so opportunistic little benefited as we bit. price So, a in much QX didn't the volume actually that

pricing. value and continue Within S&C deriving to we at really well do

overall in within see QX. declining, dynamic of QX into see we a into sequentially QX, to price continue Back We price kind see in QX. in expect S&C so T&I continue we nylon again down do sequentially. to We price lift quick, that real similar mid-single-digit T&I

think the price get we to mainly perspective. and half as the I as go should we will back a about of through most flat we the be nylon QX from year behind us headwinds be

Operator

with come Roberts question Next from UBS. John will

John Roberts

it segment was better fit was DuPont of Dow. new it thought was to after then with DuPont. moved originally to T&I part the be do Ed, a And

the with wise discussions that Just could that there you you on revisit and from preclude is anything reopening thinking would tax Dow?

Ed Breen

Yes.

Dow -- did. fit which really part them with T&I we move So, what business remember of we more what to with they exactly key a still really did the over

a is player business. So, T&I again in market, big we not of XX% auto is DuPont just in where obviously end kept T&I the and the the it's part auto,

really So other great remember the the there. strategically, T&I I other end is think the fit with of But XX% us markets. business was better

of medical, held time. period As obviously mentioned, very, them of through very well has which one up this Lori being

like just we said portfolio. I'll DuPont Having look, say overall, the where So, portfolio I is. optionality that, have always in

I for road not to it'll looks we aware they And scenario something the there. things will like value significant N&B/IFF, think possible create way being certainly out the every i.e. are. of we're us We're the down if led look. exactly

value over the to key shareholder create Our is long-term.

our in surprised It's we're very generating where we didn't cash. all, at in the focused announced deal the the time. the of in day, this announced billion. we're would is and I the value when that and value this last business, on time it in environment highlight and I to really in the just are is that, billion N&B the Having point the that of we actually at. -- where was now, range N&B on right And price on I by Lori stock but spending I'm the at of the operations not exactly deal interesting rack and note, almost said the team somewhere trading that $XX.X deal stack it's $XX.X front.

We because as tremendous X% had not again, could by N&B quarter. you So a in that business the quarter, surprised the in see, had growth the business. first organic and

think in I it deserves. I afford and those up in multiple So therefore, businesses think a hold any sector, of nice which environment, well types are extremely that to going economically,

you're and So The incredible. at out rename about that disconnect a DuPont of then it of basis. pretty trades It's when looking you called what -- really on have then you this, -- there. and at multiple written most look all when you sits

I think our year. lies a for shareholders opportunity big therein next So over the

Operator

Chris question final from Suisse. our will come And Credit with Parkinson

Chris Parkinson

in we given segments, sub-segments, just be pertains some construction should just offer framework differential it on current profile additional the potential any safety the also you're how can you growth the about as effects And to rates across that about Lori, the margin and insights the just term thinking thinking how still then margins? of on mix business? for decremental just the longer

Lori Koch

favorable XX.X%. to we're our strong seeing, that mix a so as S&C. Tyvek of a and the you margins segment our water piece we be mean, solutions it of that highlights in compare QX so margins Tyvek I was continue business. high we S&C different So businesses the when had at had The posted end within in really mentioned, across

of the that of The headwinds in acquisition as end reported So Shelter really the the for XX% we nice of growth, with the I is the margin the low made organically water X% quarter. within obviously the which at end think benefits are business.

into as where it margins, as So be would we sell and oil well and segment aerospace. below gas

primarily So be the quarter sites. decremental from company little margins some in we've mentioned down S&C for as production the the than would underlying really what a for slowing worse

we little down taking decrementals to is not continue be a to causing lower we across unit T&I through take COGS idle idle higher causing ability margin million flowing actually for for are longer see our that XX% about term which plants worse are point So we're the In within $XXX but need therefore a those than to having S&C mentioned are going million run segment into volume the the quarter $XX production that what are total bit inventory. the drive But mills to to S&C. in directly we're we had taking mills, rate, company. the we said where to what versus XX%,

Leland Weaver

Thank you our call. everyone joining for

reference your transcript the posted call. of on our be concludes copy the website. For This will DuPont's

Operator

call your conference for Thank our participation. conclude does you for today. that Again

now may disconnect. You

DuPont de Nemours (DD) 5 May 202020 Q1 Earnings call transcript