DD - Earnings call transcript Q4 2021 | DuPont de Nemours, Inc.

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Operator

Good day and thank you for standing by. Welcome to the Fourth Quarter 2021 Earnings Call. [Operator Instructions] At this time, I would now like to hand the conference over to your speaker today, Pat Fitzgerald from Investor Relations.

Pat Fitzgerald

Good morning and thank you for joining us for DuPont’s fourth quarter 2021 earnings conference call.

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

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

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

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

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

A page refer the the now website. included in turn also to to comparable financial posted measures. and of to call Investor release over non-GAAP other to measure reconciliation GAAP will the our our is Ed. directly most will We I press

Ed Breen

Thanks, for earnings joining everyone. our Thank you Pat quarter call. fourth morning and good

quarter for In of M&M progress and intended to segment. of our of fourth our on morning, results also majority our discussing this both outlook for the and Rogers acquisition divesting I will a addition process XXXX, comment the

growth global the expectations, by semiconductor XX% of in in in ahead in volume M&M W&P. demand Our X% fourth across results highlighted delivered than segment volume portfolio, and well volumes greater increase including broad-based XX% quarter quarter. top results including water. high-teens technologies auto by builds X% of the a Customer led was growth gains, ahead E&I volume a were increase in and line the

of in pricing performance $XXX also took material reflects the inflation Our raw we offset actions top line significant to quarter. million

the We in M&M. increases all of three-fourths impact in businesses are about with seeing

have year. that job cost for price costs done translating the neutral an monitoring remain into quickly teams to outstanding input and our increases price Our

costs, thank recognize logistics in lines commitment in fourth were to relentless show necessary additional to we everyday products who results quarter, headwind, taking unwavering employees and as actions face supplying which our and of in We Their that a and during $XX keep our our work solutions factories ongoing deliver offset the reported want logistic are mostly I our we running up million the supply chain today. gratitude. a to to deserves pandemic, challenges disruptions W&P. the and

transformation acquisition Rogers segment. of significant November, DuPont quartile portfolio will Corporation companies. M&M performing of hallmarks announced position on Turning divest [indiscernible] top top extremely into In growth actions innovation-led our position X, actions, portfolio and value will for XXXX heading and creating and for revenue provide allocation continue we our our margins how on as capital with Slide our to to EBITDA portion of well customers opportunity us low will all as those our a cyclicality of an employees. to focus the shareholders, intent I review update our among for and top growth, our strategic we planned multi-industrial well balanced innovating our unlocking These the

Going be water, pillars secular around our technologies, forward, industrial growth the and generation business centered high will automotive. next of protection electronics,

the the waiting world period second in In under mid-December, are the in quarter parts HSR pay the and been to hybrid well milestones these driven closing Rogers on sustainability in by and trends the see as significant underway across it in the already underway. for pillars U.S. other customer here transition The the vehicles, track regulatory the XG. expired closing. and have Our preparation move the mega strong and is after processes such teams achieved. demand acquisition water Several to of clean electric for

combining this our approve to Just which Performance Rogers’ building portfolio for electronics XX, includes our January of the acquisition Laird Excitement on business Materials. recent X voted of with shareholders ago, is weeks offerings, transaction.

the market associated E&I work expect as to could and penetration out the XG Rogers areas where next anxious addressable opportunities total of be and acquisition, lot with of to point increased technologies. the plan consumer revenue working which infrastructure, business $XXX start markets by to Laird, Rogers get keeping and has with electronics these map XX% done energy. approximately are the to into to auto, teams application of to industrial synergy sales acquisitions defense generation such vehicles, A engineers, Our our our clean cost the Combined for are we electronics teams R&D synergies at the we approximately with million. and we been electric

We line last from synergies cost of to ahead acquisition from the $XX about sight summer Laird of also target. have million is our which of

looking E&I along with procurement optimization, are to the across our acquisitions We through as well both G&A business as of synergies our maximize and footprint existing savings.

segment. We a also of M&M announced to we that have majority divest the process the initiated

here progressing is work on track and also well. Our

is a level interest this pleased market I asset process expected, the there had significant is I As of how progressing. leading am and in with

have the fourth the this of year. quarter target in first end closing a signed the agreement the is by to of Our quarter with

our dividend portfolio, addition maintaining these balance sheet that has is Today, the to policy. with In continuing a a positioning increase to grow to XX% in multi-industrial, top transform financial the as transactions XX% XX% and with a will of us earnings. dividend line the which per in company the for and approved enable range our while dividend annually Board announced share to to our we a a with performing balanced payout strong consistent commitment

core build acquisition, share Board paying value billion financing to of under of M&A as expect Rogers a our to remaining the expect well million proceeds returning shareholders the ahead down our planned on our portion with to complete areas associated After the program authorization deploy continue existing further of as quarter the remaining has $XXX to significant share to new in strength expiration. us the as M&M the $X repurchases. which a enables we additional addition, our first do we repurchase to also In authorized

from to $XXX non-core is million this the gross will of We divestiture, divestitures. our in last strong year generate proceeds the the also cash biomaterials addition which flow

balance strong additional deliver share all M&A. for in positions Our business, well investment sheet through dividends, repurchases stakeholders our and to us

peers. shareholder year quarter Finally, value focused growth through we staying will volume The for against innovation, growth at the XX% benchmarks on our delivered deliver which is the volume DuPont. of core in X% the well top we and

teams For our challenges spent the point is that an countless complex hours quarter, M&M most engineers application results up were our These solving in excluding proof their marketplace. segment advantage gains, work of XX%. volume our and who R&D alongside customers, the working are the

vehicles financial levers over the innovation electric of value outlook. innovation reduce through goals well discuss Our a focus and our of led long-term is gas our on such at capital and areas customer processes is combination well as clean core advance to as our to also as connectivity. factories and our energy, ESG details the create me as DuPont. innovation The to shareholder at balanced Lori With growth, and our portfolio product powerful sustainability emissions clean own greenhouse water, new innovations turn it in transformation, at support as strategy quarter the to of let allocation, that both that,

Lori Koch

Thanks, Ed everyone. and good morning,

mentioned, in strong end the fourth Ed quarter. As demand customer remained in our markets key

challenges chain face global to and supply unprecedented inflation. rising continue We

benefiting our above implement sales, continue earnings results actions However, a These the with contributed and factors, performance and swift we pricing EPS line net to that our on EBITDA focus are adjusted dollars operating on execution, maintaining basis. top along intense guidance. to

to shareholders In addition, dividends. we $XXX returned solid had million million the in during $XXX quarter through flow in repurchases generation over share million and in cash over and capital $XXX

billion to dividends. through in For share repurchases billion $XXX the million $X.X year, in we and than returned more in shareholders capital $X.X

non-core in perspective, double-digit per share, three $X.XX was an Slide net sales reported continued and the to of to of EPS organic all results from and tailwind single-digit to in high the fourth volume X% X% a XXXX, From broad-based the quarter. from inflationary top net up Overall, XX% Currency acquisition we of growth Turning sales reflects growth to and up are regions operating we quarter reporting quarter strong billion reflects in the A four our consists an earnings actions divestitures. headwind XX% organic growth the XX% EBITDA was of organic of X% all X% double-digit Laird impact $X.X portfolio sales basis. period. price respectively and and were adjusted segments. taking and related reflecting Organic ago fourth address of line X, headwinds X% gains, million of up versus $XXX year growth. growth pressure on

volume perspective, few provide In also EBITDA the year inflation our Kapton neutral. offsetting more and million as Ed which From with XQ. these I increased we segment about we as raw operating of price ended cost and the associated of as than gains uplift million margin costs $XX segments mentioned incremental with incremental coupled volume headwinds on E&I actions compression and offset in margin pricing cost. our and offset X% we logistics raw Laird, in a in was in material more saw delivered operating material price of raw the cost more in growth margins. higher The and quarter the about inflation in resulting the Our $XXX the XX% was gains than XX% quarter well took raw were pressured us will quarter about growth in of material pricing Net EBITDA quarter logistics earnings higher minutes. a detail impacts, costs expansion. startup the our earlier, throughout to year, material from capacity that the W&P, logistics by logistics. and margin

resulting higher we Europe. in to move was flow was $XXX were $XXX natural EBITDA flow M&M was million pricing approach in XXXX from conversion Free will our due quarter, gas activities net earnings lower declined address costs pricing We equity CapEx and million, cash inflation. cash more X% disciplined operating operating million. cash In of as than continued offset as $XXX XXX%. flow the by free in gains to remain into

the received closed about which gross the $XXX million at December. during In Technologies from quarter our we end was divestiture, proceeds addition, Clean of of

electronics robust XX% double-digit we make on reflecting in Operating segment sales and markets margin the in EBITDA organic of double-digits. on billion growth EBITDA secular water, full of of operating as and year. consists volume on increase X organic leverage, gains markets. basis. X.Xx net in that share were in year recovery in Slide all had lines our the Before reporting and Organic within comments earnings, with operating automotive, per prior also to business and XX% business XXX in reporting growth increased XX%, count a in fourth the would higher X $X.XX expansion year of margin to by grew up billion Full expense. basis impacted The Full adjusted like as XX%. all increase a three all growth performance. select our such three reflects had price up negatively impact next EPS consists customer regions our the prior sales cost along organic in XX% operating business price. about on segments and was such a in $XX.X increase year interest year, XX% of growth lower an of about end few pandemic and growth EBITDA year go lines construction inflation reflecting shows in the EBITDA in I year grew X% XX% four XXXX X quarter. all of points, share Full segments reporting X operating all incremental all the global demand lines, of from and The industrial commercial of segments. for $X.X a the X lower increased for areas margin and volume Further, during an X year slide,

our than quarter year. mainly to results inflation, offset costs the rise In XXXX, and total, margins input which largest the the fully quarter in pricing higher of $XXX our the As actions coming into quarterly expectations material million segment. reflect costs for throughout for continued fourth raw about M&M to was headwind

headwind our us EBITDA enabled While basis to significant points year to price about operating cost ago of a pricing versus XXX have the earnings, maintain margins the inflation actions period. in resulted

XX million XXX quarter logistics Offsetting of basis about of cost raws about resulted a a in and which operating volume and logistics $XX the margin, margin the in improvement the acquisition. from includes in headwind basis EBITDA headwinds and the Laird points. higher growth E&I benefit in with point associated was W&P Additionally,

and ex-M&M segment on and in performance our further quarter actions. illustrating cost planned on in an portfolio price was our emphasis operating the an our XX.X% fourth basis, margin strong logistics exclude above you the If putting headwinds the quarter, EBITDA

X, for changes Turning year-over-year provides to the quarter. the on which sales the more Slide in net detail

the from Semi in driven mentioned continue earlier, tech sales XX% pricing node led into growth growth. consist I during X% organic as growth expect by E&I ongoing mid-teens As head growth In was year transition the full of gains organic XXXX. mega more technologies by and X% volumes more of we X% demand advanced quarter for trends. technologies higher delivered sales resulting XX%. volume technologies we in segment semiconductor was the than Semiconductor MSI to electronics up for the and to volume growth outpace of gains to

electronics volume positive Vesta a Organic up and was by markets, on and seeing for in for for are we biopharma which semiconductor long-term. with demand was within mid-teens the strength in to and Caleres year Solutions medical Solutions along for Industrial during industrial silicones growth was as us end healthcare [ph] well. the for be which quarter more up We full investments and strong growth, applications. mid-teens driven the ongoing Industrial capacity, expect

growth along the the in Solutions of to As with semi in reflecting automotive the the quarter, XXXX, half down in expected, shift chip was next-generation organic softness the anticipated to impact for to first sales end-markets premium Interconnect demand shortage. related smartphones of related

XXXX. more For and the year, seasonality to in up SaaS organic a mid to was expect Interconnect our growth traditional for single-digits return full we Solutions

our film In completed polyamide project addition, Kapton materials. recently our here U.S., expands production and which flexible expansion in circuit of board the we

qualifying the second accelerate high of begin will to of will We first for materials start in half year the applications, half this in value XXXX. which

reflects Sales in in for Solutions of primarily mid significant in in industrial For XX% and end industrial sales growth gains W&P, Kevlar Solutions, XX% were volume, organic fibers. resulted global for increase including organic Nomex growth demand and strong the high-teens markets also growth, recovery businesses Year-over-year desalination high-teens in for quarter X% in gains. driven technologies, Shelter strength led continued markets. continued sales shelter air as increased gains volume Solutions X% three volume Within third water taken lines and organic Water to and and in construction during sales improvement Safety from by raw gains higher of growth North a during material all actions sequential demand organic quarry consisted pricing all the continued three quarter relate on primarily reflect and in response improvement recovery by by construction residential price commercial mid-teens quarter. and to services. pricing safety American and inflation and business W&P the in versus led in

and for Water remained strong were Safety remains growth full double digits us. for sales water X% year, for the XX% priority technologies expanding mid-single Solutions improvement The organically, the year. For on X% organic clean gains. pricing W&P volume demand our and and Shelter a up delivered low global was and up capacity digits Solutions

the organic The quarter during semiconductor XX% higher our driven material volumes. was decline inflation. slightly taken segment, supply increase offset most the chip global declines due in logistics sales to raw reflects the auto material significantly within in XX% in increase X% by constraints, price quarter by continued to M&M, by growth softness a during costs. reflect impacted portfolio price, local primarily a and within M&M production offset For XX% Volume actions shortage. raw the

M&M full delivered All greater lines of year. pricing was on higher than sales gains. organic XX% growth for and three business XX% For organic the within the year, XX% M&M volume sales XX% growth

a continue such offset was from offset from X, results to as Higher strong rate. higher lower by share primarily year logistics time $X.XX the adjusted the operating compared ago our per EPS other interest and cat items share was mainly start-up and than to count. volumes items $X.XX period, more per up year period. results in tax Laird expense ago Below-the-line costs. EPS Turning XX% of a share benefit to Slide Lower costs higher

range For to be our expect XX% tax full base the year XX%. XXXX, in of to rate we

a close few me on Slide Let with our outlook X. financial on comments

the continues sales, led demand as and the top technologies, as such demand, strength portfolio continued XXXX, areas to consistent semiconductors ongoing housing across to starts expect meet We smartphone strength by industry near operate in in industrial line capacity and filtration. water in

response, assumes plan at with remain logistics costs solid Our these we first in logistics XXXX. price which volume that the more material million of raw our In businesses, first levels are the elevated costs enable raw predominantly In offset segment. all half. in $XXX but approximately market will will XXXX, are to lead Once M&M will raw we material in be year planning lag and growth dynamics primarily us headwinds material will full on a implementing to the in again, in versus basis, will quarter. we increases year-over-year inflation XXXX, and

operating to and first We our by implementation EBITDA and the we sequentially anticipating XXXX. and operating EBITDA $XXX about quarter between $XXX with the the quarter, full billion guidance million range, flat sales acquisition between fourth volume pricing growth, operating of net million. synergies are and first billion throughout actions. At driven our margins of $X.X margins expect XXXX, productivity, be EBITDA improve quarter to expect midpoint $X.X In we

lead expect E&I cost manufacturing the by from improvement to logistics margin to sequential sequential ongoing stemming We variant and M&M headwinds Omicron in be increases decline. and as offset W&P cost

of impact billion at of approximately offset the gains logistics net volume acceleration $XX.X throughout pricing reflects billion and year, to to raw the of material of billion sales cost growth both year midpoint the the increases. additional and and For $XX.X $X.X full operating EBITDA

based from gains that increases. as well discontinued on the note operations, more of return the EBITDA call operating and DuPont scope turn price businesses as deal, Omicron me of M&M variance the Once to sign in subsides half to remaining and we levels as current closing, move to back businesses from guidance to and DuPont. is in-scope that, the XXXX the portfolio back our to synergies normalized M&M expect planned improvement, including In I let we of will impacts want margin for With acquisition today, a divestiture. full volume the reset productivity guidance actions, the will We implementation Ed. the

Ed Breen

Thanks, Lori.

DuPont. am at I close by about XXXX Let why summarizing me excited

results Our the well we logistics and volume coming our of supply customers a challenging demonstrate chain environment, tight our X% demand that and businesses the deliver delivered expectations solutions quarter. our ahead growth into

continue sustainable work closely to with teams Our business and innovative challenges customers understand and solutions. win by our to to complex their material delivering

You teams of material every to control. of pricing in through every XXXX. see can offset our delivery evident are raw inflation actions managing within and our dollar into XXXX, is also our lever This gains continue these

the to in the areas XXXX. on potential are our to as substantial look while businesses on organic turn today. a and addition balance for Pat announced dividend premier value through areas, in and staying electronics, by Rogers to strong transformation fundamentals and I stakeholders transformation share of updates of position In investment me Q&A. we multi-industrial next-generation transactions These through providing and auto. committed maintaining for we with and to in in ability company, repurchases each position strategic the DuPont of all to technologies, a progress in DuPont that, you sheet, divestiture. our to generate to our focused a complete as And will the in as finally, we let additional be these well because as track in M&M inorganic this acquisition it as protection a having areas to XXXX complete few M&A water, place, planned steps open industrial With our of forward the the we

Pat Fitzgerald

Thanks, Ed.

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

Operator

Your first Sprague comes with of from Jeff [Operator Instructions] line the Research. question Vertical

Jeff Sprague

Lori. Good you. Ed Thank everyone. morning, morning, and Good

Ed Breen

morning. Good

Jeff Sprague

for questions me. Two

valuation on were what tenor back you just M&M. market in of Ed, around of that still November, is of in the at? looking the given ballpark the we’re the First, kind discussion thinking turmoil

Ed Breen

comment good quickly the process. time, and we as we’re made No about in change people last asset, very moving Yes. Multiple interested as feeling can to very along the I the here.

announce before to end deal quarter. a the the have will of first We

Jeff Sprague

more portfolio thinking you I when of But I then lot Great. just mode organic organic get profile you should done is portfolio the the wonder maybe of after And with other have about of we’re you. different myself us if is behind done. growth I think focus don’t the of expecting sense And these a know, two and this, look the give Or moving growth moves? does could kind a be bolt-on benchmarking once you company company maybe, lot perhaps. we just a the moves work acquisition into on what a this

Ed Breen

Yes. really And Jeff, does comments. way, think by portfolio a the transform premier I it of couple into the multi-industrial. a

M&M out, at you improve If out. you And X% results, it. just if quarter the with look at grew it profile, volume XX%. M&M you It basis would the M&M was EBITDA by points by take in portfolio margin way, the XXX look if the with fourth

to stability this said definitely improve making, our going we’re as and So the with of line we we’re top move before, it.

even the in margins, And M&M increases the is in a comments, covering and a though We’re business phenomenal online, we’re of segment. business And cash great the it, I rate way, is DuPont the and a or M&M the our significant road improve little M&M by generator. XX% care clearly the think way, way, comments was portfolio, EBITDA for cost but somewhere reducing my By and commodity, it this down organic we’re going if to pricing year. cyclicality growth year unwinds. the Lori’s portfolio. significantly price were raw the by in material our getting our

at these moves probably we’re markets assuming Laird those happens and of a course, overall fixes really XX% very the in adding you And comment. the portfolio Rogers nice. look way it that So consistency the you end of by portfolio that add an secular way, of things areas, around adding the chart I secular GDP. lot talked made, DuPont are a give you of been, new one on and the When and GDP pie these the our we somewhere key about of outgrows of into and about by about after that areas five acquisition we have are XX% maybe have another

So really to we are that we really consistent secular a growth tweaking much market have end higher very organic nice exposure have company. rate in the

Jeff Sprague

you. Thank Great.

Ed Breen

Jeff. Bye,

Operator

with Your next Scott from question comes Davis Melius Research.

Scott Davis

Lori Hi, Pat. good morning, Ed, and

Ed Breen

Good Scott. morning,

Lori Koch

Good morning.

Scott Davis

with the Looks have go And going demand it of get pretty the may up that your But track, substantially is? it customer seems in M&M. think going want announcement excluding numbers to months. lumpier to another we to we’re ebbs meet switch quarter just an luck perhaps it Good customer be Or W&P, quarter? growth And in What like than big orders back because you’re price. on little couple to even to is flows. was core to in changed? some ability I the business actual this and a over

Ed Breen

of Scott. Yes. A couple things,

all, up. really nice have the weeks, the couple we’ve the of input in to business. rates order order First go had In of continued last

single-digit two all call one – if remarks. And that been So almost By in in and the the XX% the in of higher due nice through door the areas, getting backlog. and third touched one past and water before a did some that’s we a Lori continuing nice shipments out obviously quarters if have the you low we that, our, it, water business, of the we quarter, every remember growth to second in end we tough it prepared were and this her combine a you of some in markets second way, had on quarter, we the third also, on the you quarter. highlighted the in trend, that time business. it’s quarter, having had But the growth those should getting job and

where lot our the of a and got the really cleaned in up, the water a little up XX%. got cleaned some ship products, we areas So logistics of we bit port’s we

and lot So water that in that, we third said orders second flushed a robust. Having coming look the of very out quarter. still

So what out intake feeling the order to customers getting the our about company. we’re good coming door satisfy and still into we’re the

the the the of on combined pricing. ago be in which new getting portfolio, quarter you XX% a point I volume made So, on growth top and us minute Jeff, W&P E&I, will to

Scott Davis

Ed And Right. price to the logistics? strategy around price is plus and raws or raws

Ed Breen

Yes. I to think happened both. get Scott, everybody. it’s What to

October, up and wasn’t it You December. the XXXX. logistics in continuing up even was pricing, And crazy. up. getting the staying bonkers in November, started kept freight, your It going input we go ocean some It’s literally of and to up said, freight on is But especially up XXX%. XXX%, see raws, and covered XXX% we around like costs, it we’ve the costs ocean been just going

our everyone big we’re implementing quarter of our the first that, in by we’re a but businesses. have logistics it through that’s portfolio, two because costs the So other on I in way, more more And the pricing of and we’re pricing actions across still going story the the more implementing they putting pricing – W&P where chasing is well, there. part think really W&P, than side, we’re more really at

as for margin building we see as improvement the into will start year. go through So into W&P we get second keep quarter

Scott Davis

everybody. luck, Good helpful. Okay,

Operator

the And Tusa your question JPMorgan. with comes line next from Steve of

Steve Tusa

morning, guys. Hi, good

Lori Koch

morning. Good

Ed Breen

good Steve, morning. Hi,

Steve Tusa

on expectation volatile, Are market bit update M&M the but you little the for ultimately? still been – same any your know kind has for multiple a the thinking I of

Ed Breen

stick my that Yes. last made I I with comments time.

but of I a last I time. multiple said we in now shy than a asset, of little And think little will made XXXX. when I made I for my that with XX%, stick this I shy the XXXX comments, and that get multiple was think still our comment our more is XX% I

Steve Tusa

to the the bit just that’s kind of maybe new EBITDA tease you for half I dynamics kind could? know is tough seasonality sure XQ sure that’s here that I’m then to cost put of ramp. second part normal a portfolio, what this half, first I am aspect. context And little but the Great. an just price it’s if of the of seasonal out guide, in

Lori Koch

Yes.

see to in same of earnings. So out as fourth still range are the the quarter, first in probably $XX They a for quarter million. we logistics headwind the we that called

will on year those to basis So a we escalation land neutral year goes material as raw to and the on expect offset that full logistics. on,

piece half. second margin year more a the of kind of as back the improvement patterns into goes So that’s our on normal getting sequential in

of the year expect benefit and we we goes sales get that, $XX.X of guide productivity coming it’s productivity beyond the the out more just volume we get will of as Another year drift lift expecting will of that to enact layer QX as around see on, and so transaction. full billion. the to we’re that increase to the out just synergies midpoint And really a actions

actually well we million when $XX So there. really we’re doing We’ve announced the from our upped deal. expectations slightly

So we’re synergies. closer million now targeting Laid from the $XX to

of So those ramp the of things combined QX. giving coming us all are out margin what’s confidence in

Steve Tusa

a Great. lot, Alright, Appreciate thanks it. guys.

Ed Breen

Steve. Thanks,

Operator

Credit from question comes John Walsh next Suisse. with Your

John Walsh

Hi, good everyone. morning,

Ed Breen

John. Good morning,

John Walsh

midpoint inflationary a in look Maybe outperformed by on the about X% back just XXXX, face of you to the lot of guide the circling pressures. if at we EBITDA guidance, at your initial

running that should guidance? how you kind there the set forward you current about the and that’s we is chain of As we set that guide, of about anything just aware really supply DuPont be initial or is it XXXX some when think environment specific continuation

Lori Koch

I say there is wouldn’t No. DuPont-specific. anything

quarter within we the not the being caution still first to impacts headwind because able logistics on as obviously, our well around Omicron. cover production of primarily have as W&P some segment, So in

primarily has sold-out, production seen lower that in facilities lower Omicron They usually have in some W&P to some well that’s here production which U.S. seeing costs variant we’re higher as we So on our business, the the absenteeism assets overtime. labor with from January, deal leading in large rates as one some as

year basis. provide as we on the we is other XX% I QX on to more versus of have there to that any question, escalate landing anything your goes midpoint for full wouldn’t at in So margin year in how year say profile a methodology guidance company. our the the about to we different But expect XX.X%, the full

Ed Breen

it’s raw Yes, plan Lori I one and add would the year. I full inflation material where for that comment other at stays also.

that’s assumption in we So planning. our that have an

any So as again, are, cover price new we and enter the enacting all get the that we to we’ve it across logistics to covered. again, that raw inflation got here. that portfolio the year here, see. continues. That and But got to the to other And get stays up we making continue we we’re it assumption

Lori Koch

Yes.

plateau the the we’re say QX second QX, expect million range then another I’ll same plateau year-over-year, but we not half. and probably expecting in to So it decline, in about in $XXX

John Walsh

you’re think Great. Thank Thank we then volumes just like thinking as color. for about you’d speak on on that to maybe follow-up about you geography XXXX? major a how it And however or countries you. by

Ed Breen

we Yes, regions. across different again expect the robust continued growth

at actually tech in look out our you of XXXX, you company X% So that’s take growth the we’re in on in headwind divestiture from business, it, if guidance midpoint at the for X% of total a the basis. about if XXXX. clean the non-core total But

a in strength So North footprint. not portion Asia America in is the up with kind tempering of America But a all Latin we and our high little of Pacific, huge single-digit America. range in again, see Europe, Latin again

John Walsh

questions. Great. Thanks taking my for

Ed Breen

John. Thanks,

Operator

from comes Your Bank. next Deutsche Begleiter question David with

David Begleiter

Thank you. morning. Good

on how pricing this do W&P cycles? around think will you maybe sticky in prior time cycle, it be Just this versus

Lori Koch

get the in we of mean increases we digit are had in X% so price to looking kind this QX. year, mid-single in I Yes.

bit on we look second that increases QX. up half. as to you a picked a first pace and basis the It in that in lap QX the temper started half price through will in We maintain will the obviously year-over-year

we raw business. would So, M&M once what turnaround the say than We stickier expect I W&P that bit see stickiness would to the a is material the recede. in price to would little starts

we So, what we the looks raw are hoping those like that will we can price inflation maintain see environment and forward. material increases, go the we but as

David Begleiter

of on just good. removing issue? this in terms Thank overhang? on hope And Very progress for could you. Ed, any you PFAS, the update this year And what

Ed Breen

give going here extremely synced Look, outcomes Corteva you good year. make will we together. David. the to would Yes, XXXX. are just say get first very think things. some I Chemours, DuPont of I up a progress half and are in on wanting couple are I well we to of this very working

and a three just within were companies internally agreement because had signed have We structure wasting and companies. that, three one being ago we before talking the mentioned the we time time David, and not place put agreement of lot didn’t cooperation the – issues So I place. we we of think the in a valuable wasting, I up between in synced because year the that

week resolve third-parties single every really, to with discussions in are now, issues. We

calls, would big feels literally that weekly of can good make the progress. it we focus the the on Water PFAS cases Obviously, are up things. synced getting and settled be We on District side really

settlements We do have did in that Delaware. like a some we few will with states

feeling we make And going very, again, are And is some will a and progress. of conversation good presently lot that that’s so very on we productive.

David Begleiter

Thank you.

Ed Breen

of high it. list. of personally stuff personal getting way, understand on the the a importance it’s Ed that and on By time very I resolved lot Breen’s the spending

David Begleiter

That great. sounds Thank you.

Operator

the Your with of Parkinson next Chris question comes from line Mizuho.

Chris Parkinson

very much. you Thank Hi.

longer to in the for even very how for should environments? potentially recent be quickly, flowing also term? just about noise, and outlook speak could current Thank you the through the cycle competitive CapEx current ‘XX given And Just backdrop the you. ‘XX, sector investors your thinking semiconductors

Ed Breen

to piece, on CapEx the for side have X.X we about as said, here Well, are the going still. higher we years be

have projects big We of going got a on. couple expansion these

some up about run were way, biggest is X% just to the the we under goes looking we mid-Xs, which finished expansion we medium-term, going at. range. stuff CapEx. run water – that in single more years. X%, over Tyvek just X.X on the about right are the have that obviously, little bit our on Luxembourg still program, would we now winding are But are to, got that have program CapEx over but going expansion We like We big And we for Kapton on somewhere high-Xs, so in by a

we need is we going our have. where higher. where CapEx But is going to little problem a pretty good run So, much a are bit to capacity, which maybe is

Lori Koch

I And CapEx obviously, Yes. now. right semi think, capacity the the XX% is front, think on at industry about I running,

in the XXXX semi growth with to that contributing XX%. overall strong we saw So, really

digits look digits, have high-single the low-double strength in will XXXX. in this again to We maybe

as obviously space the and – capacity our semi they and So in invest portfolio. CapEx benefits

XXX outpace for points to produced basis MSI to of by amount XXX So, points. basis the we wafers tend

to in capacity continues the show and number of that in, the that as will the strength we demand going that’s in So, participate coming years well. uplift from all

Ed Breen

to plays right advantage, remember, a of little But teach-ins come to the way, been tempered we Lori’s because John of of more by our piece is, that nice on if all our growth, growth. from you is complex comment layered it to that as board. you new the fabs need lot more all has us a it, Part semiconductors, and a growth Yes. and that, gives know, now chips

a fabs of over So, it seen some looks business have in be and a couple fabs new in nice to the as the announcements next going. like are come recently on, where decade we U.S.

So, like decade. trend nice for a it next the looks

Chris Parkinson

labor-related outlook, push and say, I W&P you hit P&L just given just the to just And cost remarks. on terms abating of on prepared strong eventually something topics in pricing let’s follow-on want between the the all say, then and safety going that and the your just updated let’s thoughts forward? ‘XX us you. on Thank forward, for, shelter. us you for outlook versus give remind Could protective say let’s segment just normalized growth margins headwinds out

Lori Koch

Yes.

really from will out. we margin But called exclude material that we logistics the raw and if net QX from production than sequential headwinds we seeing XXX may see post because perspective, we that by be the as W&P, QX, driven the deceleration items had you had So in the and should we what of almost W&P headwinds. those mentioned, into headwinds a quarter better basis points are margins the

getting the so range. into more that XX% are And you

XX% should going the those margins in I profile. XX%, EBITDA think that be margin forward,

Chris Parkinson

much. Thank very you

Operator

Your next BMO John Capital. question comes with McNulty from

John McNulty

Yes. I of question. M&A it like is are off. in of what pipeline? a mountain Ed, the you come hanging speak there in to Thanks for there? sounds guess have like you should you in looks are have seen market, sold all? chunky got volatility to about mobility Can those that my once targets we It still out the be terms going with seeing we seen you at have taking the some cash you that? multiples how thinking they have Are in

Ed Breen

there, I the year hanging I Yes, are think multiples see how but the will we generally, mean, goes. in

are something proceeds window. time in that fourth from out likely missing on won’t an the most will get not want do John, are, in M&M, acquisition waiting by which We we until we be And we after the quarter.

what So, I are we right sit we things point secular in at the the By are that mentioned way, looking that of areas you. to core will see wheelhouse time. at are things where growth in five those

really existing into, expand on are expand we and we can up not it. something we bases beef to off customer that’s something it at sell know So, another we that. the in looking and we can areas stool leg already and like that our add We or technology customers feel bases opportunities and

of synergies it. that. we of will I perfect area, I the are kind and defense not in examples get something like a do but Rogers out cost Laird of two by that that when think way, am it’s saying

between for that timeline be will So, exit code in consummate in thinking M&M, year. be be, kind cash into Rogers, $X of with acquisition are we this selling sitting that’s like excess everything but buying this next that our or year else an we By ZIP of that probably could this way, of will goes just planning on cash, purposes we for – flow, possibility CapEx, somewhere it, sitting give as what the billion probably we kind we number of as two. $X take, we now, or are billion,

John McNulty

chain point? out logistical question that’s away or maybe it’s this worry you? it’s have held inflation force then at majeures have being point, will pretty helpful. Are kind what about? this whether like settle you that guess squared then? now well to that just And when you the And inflation the actual product challenges No, point, perspective this supply do or at on Got you where it. are are front. raw I you of just you a and a from and back at material – And constraints not putting have

Lori Koch

the general, dealing Yes. much pretty material I are not segment. absenteeism some of of the behind are that’s that back force would our our the but primarily are earlier is holding production. What are production at with, in is raw I what W&P they some holding constraints There impacting back Omicron had say, our mentioned majeures some with in us. the we sites U.S.

So, but we our better materially guidance, saw had get January. QX that we versus doesn’t in planned what

only where constraints the place in are really that’s seeing we So, production.

Ed Breen

way facility. is the of We would had that’s think we coming a issue one now two missed production really quarter days We Omicron a key And down. production.

ago, on lack think were up things It’s We like third it weeks the two that. of day. back staffing. was I

those overtime of us made work same we in and everyone money. hours, because are planning paying more the January, purpose, we and first But that look sometime We the and costing type that, of quarter. just that’s And subside to a from Omicron the plan here February March of obviously lot assumption will will issues. a all

John McNulty

color. the for Got it. Thanks very much

Ed Breen

Yes. Thank you.

Operator

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

Steve Byrne

share from more a price the shift? segment? not that And or Yes. in the only Thank the expansions, getting you And precludes some possible you running what if E&I with this Would Is preclude can price just you and legacy mix products also latter, capacity to volume gains? you. X% attribute your customers from declining is harder growth in the in from price?

Lori Koch

Yes.

combination just end the as of a within So, as a I some within E&I well semi share gain say would markets robust primarily it’s really space.

the mainly And It’s headwinds running because as chips favor far our on also out in more Back Electronics And price, out up quarter. the price. earlier so normalcy nodes the That’s to segment. portfolio. some the a share on that netting fabs have there that we was segment gains full are a or as comment within that benefit produced those advanced semi point some slight to chips as getting of well as are our and our being in the XX% volume. mix goes around is

that have happens across about fees industry. the That’s DuPont E&I that’s annual that so electronics And something a just across segment electronics. factor that we in the goes sized on not X%

headwinds net But that actually provided to we out, that our of take seeing you the from of pie E&I in if portfolio the did to material we within saw that E&I. raw so the the back we that offset raw in portion able E&I. some material the has is XX% slides, only on we our was of And headwinds price $XXX chart about the front, headwinds smallest quarter the are that million be to

Steve Byrne

in water remarks, and Lori, desalination. mentioned you your And industrial about markets the on end focusing technologies

question clearly of expand you, extracting it for as on purification. to hold to minerals you from to do So, brine need right the My like have do or out lithium? have platform for you technology purification the to you extraction such

Ed Breen

We are – this let me way. answer it just

is do are acquisitions. there we of really acquisition area, We ton end way, were assets the a an the I are there. growing add now to that would we like By not time area. ‘XX the all – are don’t the moved we smaller, four know, some of what here. water They but – we did in technologies to as know and portfolio. you track nice. in love out at the technologies There pick up you water in would probably and would But

feel So, secular space is great not on we Rogers to potential probably But E&I, is add there we next that the already a technology and we how little like. we coming great similar the growth adds really very to, couple really, have. existing are just areas, and us. we a got for to technologies that have would that’s that If a decades path something chunkier of into Laird in like

could area interest area. technologies definitely and some pick in those that up of of extraction an So,

Steve Byrne

you. Thank

Ed Breen

Thanks, Steve.

Operator

John with Your from comes question next Roberts UBS.

John Roberts

Thank you.

really in and XXXX, where in due to XXXX we had go You as launch comps the the comps smartphone uneven quarterly quarterly into uneven insights the through Any interconnects automotive. timings comparisons? are

Lori Koch

Yes.

create QX does more the into we Christmas So, a in as pattern create will were headwind and smartphone go be materials seasonality advance back we QX in more the being we the overall, But of in to supply the with high. normal the resolve of goes back QX will XXXX, tailwind a space on that half. highest the because XXXX, sales. in in as year will un-seasonally seasonal That a so

John Roberts

with X, continuing can you understand DuPont how that overall? million the M&M help the much that with it headwinds in DuPont part And of would So, M&M, with logistics is us or or M&M.? stays rest it Slide stay versus the is DuPont versus performing outperforming the M&M? of line of in on Then in is $XX continue DuPont,

Lori Koch

Yes.

in piece the million of front, logistics the stays W&P. being million, that about with the $XX in biggest on So, DuPont $XX of

cost And So, than in heritage and businesses. XX the is is staying the as it’s about saw primarily today. XXXX. margin Fair of was We as XX some adhesives on M&M DuPont, lower within Dow the price business with the segment headwinds multi-based M&M. profile significant far only

look to into their heading XXXX, will that We was profile slightly is. below M&M margin improve but where for

John Roberts

you. Thank

Operator

comes Your next Andrews Stanley. from with Vincent question Morgan

Vincent Andrews

Hi. Thank you. Good morning.

are in freight, are assuming to year, you expectations bit here. cleanup called Just you a you raw know that questions shape we laid correct numbers the couple as logistics, I the that the that you out in half? little for of that, sort ocean or are out, your a seeing stays of XXXX. the the of allowing through On material crazy back for same

Lori Koch

headwind XQ in it that So, $XX that in XXXX. half, in quarter fourth corrects as back the million we primarily the we lap saw

and year-over-year coming QX QX that of expect will beyond QX coming then out for in basis them one to headwind moderate. we difference through to out remain of into get on look QX QX we elevated logistics. price So, QX The is do offset and a to

Vincent Andrews

the and is to some the that to auto maybe There customers. there who just just tiers semis And you semis on in maybe and any built ordering stuff? depending there the Okay. hearing, waiting your point you across is that listening on auto for have going maybe what’s or of businesses of you inventory then are double your even out tiers the into and chatter come look seeing are back. what up view and and your as But production relationships the customer on

Lori Koch

Yes.

segment keep a a mind, in the little of bit any XXXX. mean timing into you head feeling perspective as and the builds. a not is that results volume are M&M within I create disconnect inventory between there We would from build a auto headwind

And up so XXXX, in auto with we versus significantly XX% up build X%. volumes outpaced

But feel moderate could XXXX. constrained. given hard bit channel. inventory inventory semi I respect versus overall, be it like don’t on any front, just performance the the semi a be that to is builds is in with to our building I think So, would market building in the in And auto

feel don’t there we So, either. it

Vincent Andrews

much. very you Thank Okay.

Operator

Ladies Pat and time closing have gentlemen, we the reached I back now for the Fitzgerald over allotted questions today. will for turn conference to comments.

Pat Fitzgerald

call. our joining for everyone, you, Thank

you a reference, Please March Industrial on of will concludes I to include of join our copy hope within Thank the join call. Solutions our This us. can posted your will segment. Xrd our you for DuPont line teach-in, again. transcript us business the next be E&I For which website. our

Operator

does Ladies call. conclude and today’s conference participation. gentlemen, for this you Thank your

lines. now may You your disconnect

DuPont de Nemours (DD) 8 Feb 222021 Q4 Earnings call transcript