Earnings call transcript Q2 2023

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Operator

Thank you for standing by. My name is Sydney, and I will be your conference operator today. At this time, I would like to welcome everyone to the DuPont Second Quarter 2023 Earnings Call. All lines have been placed on mute to prevent any background noise. After the speakers’ remarks, there will be a question-and-answer session. you. Thank Instructions] [Operator

may your you now Mecray, conference. begin Chris

Chris Mecray

for for conference DuPont's morning. And quarter us you thank results Good second joining XXXX call. financial

and Officer. today Chief me Ed Lori Officer; Koch, Joining Chief are Financial Executive Breen,

posted We have supplement link. and website to in prepared Please tab read the Relations the statement on disclaimer the which Investor contained our under through DuPont's remarks, slides are webcast the forward-looking slides.

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

which current Our periodic principal detailed reports, may Form differences. includes uncertainties, of cause as XX-K, such by our and discussion and updated risks

presented historical specified, on significant today Unless and continuing operations items. measures otherwise are all financial exclude basis a

also We that Investor most financial comparable GAAP refer non-GAAP to release Relations reconciliation presentation other included press the will to measures. DuPont's directly been our posted and is to measure website. A in have materials

the turn to Ed. now call over I'll

Ed Breen

you guidance. joining our ongoing And operating thank pressure volume with markets, strong electronics. better while end and mainly financial previously announced quarterly for morning, reflects morning. our results revenue XXXX second EBITDA our facing continued than review. This Good performance This communicated quarter we execution, team's and consumer-driven

revenue within from quarter, X% the period E&I. versus organic second declined Solutions lines Interconnect the declines In and of mid-teens the organic year ago Semiconductor despite business

continued to pressure. of actions We markets, along as industrial as including benefit end continue water, pricing strength with aerospace, see year well offset in last to automotive, healthcare, taken inflationary demand broad carryover

first in up nearly and were Solutions all quarter. year lift of downturn, sales saw a operating adjusted EBITDA long Interconnect margin sequentially Notably, also operating we After X%. EBITDA, sequential a EPS from

also focusing to select our cash declines on volume to while also slowdown end the given in near-term in within taking actions generation. control proactive additional impact markets, We continue be minimize of optimizing

Turning X. to Slide

acquisition Yesterday, advance completion markets. for of the critical acquisition, continue deployment. Spectrum objectives strategic announced we end adding a capital in and for our in of through Technologies value-added strategic We our innovation growth growth of to priorities healthcare customer-driven expanding with healthcare devices leader while market. the to number Industrial current fully This increasing pillar, specialty high-growth accretive aligns our topline and a offerings

being Solutions line with is of where our Spectrum sales markets with existing our franchise Packaging Healthcare with and about together above rates XX% increases Tyvek million, of revenue into our average. Industrial nicely our the total growth about in expected fits our it Liveo business Spectrum business $XXX healthcare company integrated with annual portfolio Liveo of to

are approximately Spectrum's which of estimated model year-to-date has an that operating our results and pleased include been performance with estimates, line XX%. deal solid, in margin EBITDA operating are we

We are product OEMs. the co-development opportunities, Spectrum's growth fit including specifically faster synergies and and by and and to and incremental cross-selling partnerships accounts excited new complementary leverage design complementary with our from deeper development ability

There expectation remains of good progress M&A, this transaction Delrin the business XXXX closing to year-end we with and our date. Further on to has our in planned make asset unchanged. continue around divestiture interest been

within $X.XX expect we a share the transaction repurchases, share complete last launched billion accelerated will repurchase Regarding we November month.

We to ASR authorization intend executed $X remaining be also complete billion to new a through our thereafter. shortly

Corteva, claims announced vast US PFAS-related majority comprehensively was in this that Chemours of covers starting jointly settlement district water and of population. settlement water the systems public June with the the Regarding

million, expect settlement about the we to is six expect final approval which $XXX of Our and following preliminary portion shortly. months about we approval, receive

billion deal remaining and excess of ASR M&M from last closing new the the yesterday's goals, completes cash divestiture allocation the deployment November. capital broader essentially Spectrum $X Regarding the of

significant debt November no very sound. remains XXXX. capitalization current Our maturities as we until have And reminder, a

are net forward. point We as equilibrium going Xx around target with comfortable a leverage an

that are me and it let application turn excited Lori financial engineers we our just a name visible enabled teams to I in with is new squarely review performance, to solve complex Before on over about helping remain expected their customers our challenges. innovation drivers the ongoing semiconductor focused global most who the by growth add few, technical growth fabs. To investment strong in the industry

industry Overall be growth coming to over of anticipated period. the five-year the is high single-digits semiconductor

and manufacturing sustainability significant emerging generative goals. leading and includes markets which have and support helping and technology the from to revolution. the of drive advanced next materials growth AI Within customers We generation that packaging, desalination enable in we order then continue chip the which their water, achieve

our adhesives electric and growth capture well offerings with its to positioned is vehicles. product business auto Finally, continue to

With that, Lori. to over I'll turn it

Lori Koch

and Thanks, Ed, morning. good

focus remains pleased operational in electronics. and expectations some execution, on excellence of ahead have strong financial Our our we and profitable delivered are despite to of pressure volume of in lines business results most

X. Slide Turning to on our financial highlights

X% sales decreased a the X% strength an notably key yen, organic versus and related headwind as also period. and a dollar billion X% portfolio ago currencies we in on year won results X% net changes. of quarter to from most Currency $X.X reported Second against the saw headwind basis and

a offset decline, X% the reflecting last gain taken broad-based carryover actions X% benefit to inflation. offset year down Breaking organic volume X% decline pricing was of sales a partially continued by

consumer in channel destocking primarily the weakness with softness, across some markets. demand in decline and reflects electronics inventory construction American North continued including related coupled Volume destocking

the end down and period, continued consumer aerospace mitigated strength during these X%. quarter water, up businesses within Lower remaining year construction while in volume industrial-based were was about electronics in automotive, partially ago markets markets. by Volume and end our healthcare was markets XX turbine the

first America versus X% Asia the versus in China driven basis, perspective, increased regional and XX% quarter. a demand and an organic quarter organic were Europe X%, basis, the on were an electronics mainly From North while sales X% but the the up period. were ago Pacific down sales year on by down sequentially weakness, respectively

lower versus driven $XXX XX.X% of in operating with inventory the margin EBITDA the align rates XX% production as EBITDA down pressure, volumes up volume business. mix the decreased we reduced versus operating impact rates was year margins of steady headwinds first quarter Second the a EBITDA margin were XXX of points electronics during period, ago in quarter Operating EBITDA driven and million sequential ago the and year and by reduced demand. On basis, by the production high from basis operating period, quarter.

within X% was excluding last versus taken in below $X.XX of Adjusted Decremental of the detail quarter I aggressive will margin margins to year-to-date EPS XX%, headwinds discretionary absorption was impact which for was rates XX%, decremental spend. production enabled reduced quarter year, actions the by reduce related to electronics, shortly. down per share the

quarter cash Looking and being highlight disclosure would effective into are flow have made change improve between providing cash ongoing to that conversion cash and a now of first I at is made performance. visibility change and today's continuing discontinued This flow like cash second reporting flow with separated to operations. businesses. generation results we the

operations lower reflects associated basis, during XX%. continuing million $XXX free conversion from of comparable driven of versus a by quarter inventory. flow million CapEx of on $XXX million operations This a of the last significant year resulted $XXX improvement and less cash On adjusted cash basis, flow in

flow a in Adjusted free cash $XXX still priority to about continues million be $XX related adjusted work target and and sequentially, free cash capital inventory benefit On for get to Optimizing do top to metrics have flow expect of improvement to and reduced interest to million levels flow conversion in we by year-end. headwind improved further our working us. about a cash a of included payments.

the Slide to compared lower benefits, including Adjusted interest the segment expense in X. a Turning the share results X% EPS of quarter Lower related $X.XX net and for ago a lower benefit offset more the than year decreased period. $X.XX $X.XX below count. in to to line

rate share. EPS of loss resulted and during the tax higher in quarter A per exchange $X.XX headwind adjusted

up driven by Our from quarter geographic in earnings. mix for XX.X% tax the year-ago the rate period, primarily XX.X%, of was

Turning portfolio currency to Slide impact to decreased each. of net billion beginning on organic with with segment sales X% volume, results, $X.X and along quarter XX% headwinds E&I declined and lower of XX% sales due an unfavorable X. second E&I

versus of lower due resulted from fab weak the channel. semiconductor decreased demand of in to well At Semi while decline business market volume for The Solutions line Semiconductor year rate period. decreased end Technologies continuation inventory across as a Tech as the level, XX%, the utilization XX% volume Interconnect ago de-stocking

destocking. the rates quarter was driven along channel in utilization demand XXs percentage fab basis. smartphones, second with in tablet low a in inventory averaged decline Chip PC weak and on by the Interconnect The continued

has quarter second for and in quarter, customers the was and offerings slightly PCB improved expected a China within to quarter. in see PCB a beginning about year the The Interconnect now by a of second the the been and cycle signs growth sequential first mid-XXs utilization we with in during from business, with in low. our illustrated Our which first slowdown market improvement of X% growth further sequential third are quarter rates

for areas, consumer-driven markets, tied Sales those broad-based pricing such advanced on were to strength including offset as largely markets display. OLED basis Solutions in as an applications and in industrial Industrial ongoing lower screening organic by and demand flat were electronics

period inventory with and spend. million Operating to versus better volume EBITDA lower discretionary primarily align $XXX for by the due year demand, offset of rates was declines ago E&I operating down to reduced partially

a Organic growth volumes decrease care was second as the to quarter declines reflects solutions. last in a X% by offset billion X% in of X. were currency mostly $X.X headwinds. resulting in a versus from by year growth of net taken X% last year, W&P's offset carryover impact X% due Turning to X% sales actions pricing price Slide increase of shelf segment sales flat organic of

of organic Water and mid-teens which from pricing. demand reverse filtration At up with benefits growth exchange by Solutions, along continued resins, was osmosis led the water carryover business for growth line by led ion was on sales level,

up and health EVs, with IT strength automotive an carryover on and volume Solutions market, for in and especially basis with by Tyvek care. Kevlar in aerospace were strength mid-single an pricing coupled sales driven organic digits Nomex

as Shelter we Solutions do expect de-stocking, a down construction an organic basis, impact as second de-stocking half. the were in XX% softness markets well in by driven demand from reduced although on

the W&P up pricing Operating cost XX.X%, from operating the resulted were for versus basis period. $XXX The improvement offset of primarily and control, disciplined or more points net during XXX declines. gains X% year than million, which EBITDA volume margin increased EBITDA quarter ago

our quarter a outlook X, with Slide the guidance full Turning close on comments third to and will and few year for XXXX. I

demand continue industrial environment, of we Water although, business the and demand demand in China. to moderation in our in E&I sales end-markets W&P expect slower we within steady expect most our to fairly Regarding due

stabilization sequential quarter. quarter, business. follow, in to and third Within The we some and growth the X% early our the mid-single-digit lift improvement during sequential in we in saw sales Interconnect Electronics, second Solutions expect

will half We slightly and we improve second the quarter, net-net believe, challenging second sequential in markets likely sales bottom during on a assume the basis.

ongoing second assumptions. in Given electronics tempered notably we demand rate China, have headwinds, to prior the consumer growth of half

of We demand. adjusting to our the align cadence including continue full to are inventory for actions guidance year recovery our electronics, in to account with reduce XXXX production to slower

In addition, estimated X. our third August beginning now Spectrum includes quarter guidance contribution full the year and from

full $XX.XX between expect $X.XXX year, operating billion to EBITDA $XX.XX be and billion the and per now to be For $X.XX we $X.XXX and billion, between billion sales $X.XX net and between share. be to EPS adjusted

third XXXX, approximately $X.XX billion, adjusted we approximately of and approximately $XXX operating expect revenue the For $X.XX per EPS quarter share. EBITDA of of million

your are operator open to it to to the take questions, that, the me we back pleased and let turn With

Operator

BMO from Your McNulty first comes the Markets. [Operator line question Instructions] Capital John from of

open. line Your is

Bhavesh Lodaya

the changed This And Water be a morning. China? what what you cyclical Water of on Maybe Lodaya in What maybe tends other driving to recovery softness is compared to business next quarter? there Hi. since your color last add less over for of Good Can quarters? some the bit the the Bhavesh do on maybe you kind couple expect is business, businesses. John.

Ed Breen

that's or way, had be Yeah. point, little a rebound be quarters just which half expecting little double-digit the China, and will that later the growth. in in obviously to China industrial We economy think some in at the in year bit next second but a should that, couple the slowness closed in by that it's really of of now, growth softer is the we've business that here we're right

still growth, slower So half we're just growth some just saying in the the to it's moderate of but year. second going

Remember, this quarter a pick expect grows some. That done But that nice business also. business and growth business XX% steady. quarter pretty renewable has a It improve rate I in, that's out. that clip, at China of to will up as is

So I seeing. little couple think quarters is a a China, later of what maybe in we're

Bhavesh Lodaya

some so there? order positive in Like, in for coming Electronics we inflection semis do the expect on color also an have inflection you quarter Got seeing points. this data hearing it. great are you're MSI far? And And maybe your to that electronics then you Interconnect see when in any technologies? seen Solutions, books What

Ed Breen

Yeah.

one, just So started XXXX. decline back to probably just about to the destocking and middle that the ICS of started

in been and third one it's So kind the we downturn had X% almost quarter, we And by the the pickup, sequential we're did at forecast XX for expecting of bottomed. really a first that it see pickup the in was mid-single-digit then quarter. months

So obviously, that's nicely starting come the bottom. off to

have semi we bottom the second to quarter, we the in much think We're of hit quarter the is what tell quarter. near we slightly you half. third more And one hard second upturn it's the actually the is kind see little more in The X the the in are it. tempered the month from a up bottom We Instead, very then but like we not look point inflection fourth assuming quarter. somewhere in just we're another gauging that.

did little bit fourth up it quarter, we significantly. the So in pick forecast not a the but in

thing here today. the tapped of kind the gave we that's you down So guidance when we

the the we've bottom we're negative. now. and ICS is Remember, in think seen ICS I begin still semi, lift But in seeing

but way negative year-over-year still and back a quarter it it write down be As in a compare. fourth third starting still, on to to the XX%, Those back. over and will we're come was

Bhavesh Lodaya

you. Thank time. the Appreciate

Ed Breen

Thank you.

Operator

Your from from Mizuho Christopher next question Parkinson comes Securities.

Christopher Parkinson

difference the second the between of how how few very the you, some sales been ICS China rest could some with of do year, the in to new much. late comments potential love that the as bit of how to think of been a have well about that I'd Thank terms quickly we half. in have trending a you handset so half of circle Great. versus Western the there's launches world side, If on into as customers think to about second a back

into it terms helpful importantly, kind say, how bar would renewed, Thank based on the of more some that years to lower process, second but it to half, you. seen the normalization in as I'd than in even let's more just the commentary X.X say, So of much be or think the probably so? we've about get on turns very past,

Ed Breen

Yeah.

on but want large a Let me say we're introduced this comment, - to phone cell it Lori I the turn being to customer by good I'll the couple players. and in don't by shape just names, year of new models

not from better in market in, So year. at share phones standpoint, which last we a we position we're last a than position know and we were we're year, a bad were that all in

to do know the along XG one. for timing? in a you we a new think of good we're know position technology that's the what clearly, other the those components, phones. We want I but coming a we're things the one key the of in with us, is like in the by Lori, key in. talk And just component in, But for with models you Kapton launch antenna all is feel about way, we're some

Lori Koch

Yeah.

On recovery. and consumer of the That the the second electronics that half. smartphone part was we revision had the broadly, in

to in on industry the So those smartphones smartphone our original to the on about along PCs digit. about sound in a full X%. end be supposed be basis We more and would year be expectations is down double forecast with of range down revised X% each PC expectations for markets for X% low

fourth that year-over-year in So growth does - but embed the quarter.

strong that's destock markets more and in and likely maybe returning like most then worth for a XXXX, sounds normal setting a are through market quarter normal into of up year-over-year more in in those quarter growth. the demand down the it to more of third the So one recovery and

Christopher Parkinson

helpful. follow-up, just very very as That's And quick side. on a just the W&P

did some growth comps the my out it half kind You've you of Water solid fairly understanding. pertains very, to seen some on as to difficult of very but Solutions, second the based comments have some

cadence the is expect what's of on very kind your about long Thank function - just is could you. for Just just That you in kind if a difficult on should business? helpful. continuously of of the business you'd sit hit But solely comps a just this you how Can kind term? XXXX? commentary the that in we be thinking and outlook that reacceleration - that be of and would

Ed Breen

Yes.

business look consistent, I that, think the way it that to is at choppy, some quarters. is

We a that. have big installation doing all and we're

year, past it's But high single the we that way the smooth out again, smooth kind I of So not single it pretty you to the think when on at not out of this mid kind whole that be year. consistently. growth kind grows rate. of X% it going even And every when be better But growth generally, a X% to the in quarter. to you But can had business quarter, look range digits lumpy. quarter to the that's

growth quarters quarter. just in China we've expect activity again lighter a of couple think the also think, inventory quarters. And a bit to hard I with been but of than it. of quarter, that had third we're It's since excess had I it tell consistent I And has expecting just we business. look, is it, And if will But but again, part second little it's up. in the a there's pick lighter

continue that So grow expect range. to don't it to I in

Lori Koch

you up quarter. high to And put volume, Ed's single on if the comment a stack every X digits on the lumpiness, year we're

key But forecast, So no us. it it's for drivers growth and projects requirements our the to going the around us. around strong lumpiness there's are that And the go-forward especially on there general, with sustainability comments growth of in those the sometimes going on. is work really in are for change access

Ed Breen

XX% is here replacement a key business the of then business. that's there's the And

consistency the to adds it. of that So

Operator

Credit from next question comes John Roberts Your Suisse. from

John Roberts

a It be at transaction? to equity a Delrin will fair this by seem it be year-end that is a strategic would Ed, say to do private hard for you. Thank closing to point?

Ed Breen

close We're private any point I say just at this we'll that than year-end. think confident it I equity deal. would don't more in to But want There's a has nice I Yes. strategic, it. time. highly but interest been into we'll by been get in pretty along with confident have interested we're

John Roberts

challenges is settlement. having PFAS to And settlement? with your anticipating there some through then XM been go Are to secondly, the a similar process you

Ed Breen

to John, Yes. very these here what that bigger have settlements actions. typical type happened was of class these of

look and ones, back go is that. you referring challenge I and other If any that, all what state you're to think, the always big get the you at of from AGs

by I be six what get payment. think we're the thinking be about problem in don't preliminary preliminary where approval future, will judge, near that would that remarks, we're make said a the the in after going we to and that from hearing approval and we as there's prepared it judge be with finished we our from the here very months then

Operator

next Steve JPMorgan. question comes Your from from Tusa

Steve Tusa

good Hi, morning.

Ed Breen

Good morning, Steve.

Steve Tusa

you update year. businesses of outlook bit anymore, raw beginning Can about million were call, us just -- but maybe I'm an the material most it the on $XXX the called a I an you material of just aren't bit for centric a not in on update this if give the these the of talking before? know you raw out sure the

Lori Koch

Yeah.

net headwind So price that and a was between raws.

that $XXX million increase to did about view from our of $XXX we million. So

was we've all back, got $XXX deflation. year and bit go progress. really that To of million remind benefit money a of fair saw we're room we it nice expect obviously have and a step to you, last get around we but headwind So from making a we of to to that seen up

coming energy a logistics deflation the of is Initially, side. from and lot the

in supply have in the see and that from improvement peaks of prices third last We're can we stabilization gone gas bought You quarter the the logistics. chain. nice the in the seeing year what natural

the So piece just through that through the working we're when of is that one the P&L. falls timing

those the a little into head to we second So benefits headwinds the of actually from first into been from XXXX the we've And see procurement the that drop P&L. actually bit predominantly, year, escalation a saw we'll quarter, in the we carryover from half the as a start quarter, the P&L perspective perspective. from we some back getting in

Ed Breen

we four Yes, takes it to raws a our months kind customer. five Steve, of through on system in to its the build work and way

very this, XXXX and been So obviously with it's we're consistent for a seeing procurement see of because some has now part working up basis Lori but the on to very us. team big I in and aggressively of going XXXX meet a

much taken. by E&I, on were is thing And it in a part way, the the the margins is walls that W&P. we've absorption of Steve, predominant that going charge X% there. to become E&I the as we side note, the just of And really raised not margins prices the remember, E&I, only The affected the in in

it is like E&I the the our We probably basis in margins we're second affected we're in going in for everything third make third just sure - affected quarter, to take and to in the it XXXX, up again to by that's teed the or about XXX that our fourth quarter, going in quarter points. take -

running that without in even reduced a XX, know we're volume the we absorption, business north environment. So of

feel watched we a there all our math I I you range. in very we're XX% So that EBITDA comfortable very XX%, rebound. at shape that in run as I'm good look us when confident

Steve Tusa

pricing those W&P year, to look on businesses? out in into around any there when And or in pricing anything seeing next the you is that in any you're risk aggression half second

Ed Breen

in very The markets. So the give going half forecasted up the we year of some construction-related second is price to one small. we're that the area in

to did We of those also raws what markets had very year. in significantly the raise because last

assumption there. forecast an some that the we're Otherwise, we'll pretty pricing feeling give in this up the solid across portfolio. the rest made of of we've So,

Steve Tusa

a Thanks Great. Okay. lot.

Ed Breen

Steve. Thanks,

Operator

Bank. Deutsche The question David comes from from next Begleiter

David Begleiter

did Lori, and and XXXX to add QX you. guidance? Thank how Spectrum Ed much

Lori Koch

Yeah.

of then fourth XX% across it full It's take months give little of you at months the the consistent the margin. total, pretty so $XXX a about quarter months, in sales and in third quarter. in north a two will three So million in it you'll the

loss about basis paid only year versus in function perspective, we on the income interest cash the $X.XX that really once There's it's EBITDA the of for you deal. a of From from EPS. more the factor an an full EPS an

David Begleiter

in then, Shelter do How moderating? Solutions Shelter, it. further destocking? we you you you much have end you said here where were on it's know destocking Got are? think we do think go closely And or I to just

Ed Breen

by mostly this I a of talking customers. think And end done and third quarter. couple the key destocking it's that's distributors to our of

One of the and through by regions. doing way, doing a big to that And moving process. the stores of inventory guys, they're all, box by different around it. much was it their rebalancing That's how we were pretty

think I we're So third of kind end the there. of quarter,

David Begleiter

you. Thank

Ed Breen

Thanks.

Operator

Your next Barclays. question Mike Leithead comes from from

Mike Leithead

Great, thanks. Good morning, guys.

First Corporate what than unpack this has. help and And how there? question, you historically bit Can business your forward? Retained us should quarter just in going that a just trend came happened better

Lori Koch

Yes.

build strong the within And EV It had piece, a overall segment growth really So the growth. it's M&M. in driven the by Auto EV largest growth which Corporate we is the from was really of it.

similar And in build quarter, were the XX% the piece. see up performance EV really number. we about in a have second Auto we So would posted nice

So that's primarily. what year-over-year the drove improvement

Mike Leithead

to on Great. in then finish some capital working the inventory. reducing And of to that half about how just expect degree to to you rates second, year? we production E&I, talked you out And this still be second just help Do should expect drag relatedly, manage earnings? then

Ed Breen

and million in Yes. fourth our we're the take definitely quarter absorption this $XX to the in the quarter. about same quarter, plan. No, the as going We're third

demand. very aligned really we're up well inventory with getting So

prudent to the do feel So it's now. thing we just right

that So here that's we've into what's plan today. baked the given

Lori Koch

We in sequentially in end million improvement saw as conversion. nice we in to of We'll drive that inventory Yeah, year. the into a down of about we second look a cash cash both and get $XX quarter, improvement an to the reduction. the generation had continue

to half the We'll look the continue year. get back that of to we as improve into

first we strongest Our in the bonus annual we quarter, an our the which interest because in for pay which second the and our quarter cash is quarter have fourth third have typically don't we quarter. payment generation,

clean end quarter third the perspective. from is So the that

notes, it, just move mentioned that continuing presentation And will flow. a just ops on caught sure you the the that I make to cash basis script had we in to

are all So the in the end-of-use the take escrow which funding of the funding the items. this out will at and components, point take then which in we'll of ops primarily some noise year, the second account, discontinued the place from half other

and on continuing we of, pull that So, focus generation. makes will out kind fast just

Mike Leithead

Great. Thank you.

Operator

from from question UBS. Josh Spector next Your comes

Josh Spector

Yeah, my I wanted hi. first, Thanks I XQ taking ask guess, on for the questions. to guidance.

we and at you're ICS materials flat raw with if It of sounds So mid-single look guiding bit a health. little EBITDA, be kind sales you're could up better organic about talking like but digits. sequentially

Typically with ICS up, a you there. get mix benefit

basis? So what drives EBITDA of organic on that some flat EBITDA? offsetting it keep would that the items sequentially an having up What are versus flat

Lori Koch

Yeah.

the deceleration. So first we items biggest three that mentioned, had being the water

quarter had in the primarily the So expect of a back get to off strong that quarter. in We we also Shelter the to some see some within of year, water. moderation have second half in water as we really back get price into we coming mentioned business the

we piece third, small but the smallest probably was then And destocking biopharma. within do raising something see some we're

players, we a and in business are bit little that been some video other Industrial the our pretty telegraphed within starting see to business So across the of Shanghai. it's Solution well and

Josh Spector

low-single-digits. Okay. think smartphone better And maybe growth, year. massive There's That's this but helpful. a guess organic, I full forecasted, so at look PC you're done about I XX% there's growth into math, year. I a when I not like next haven't when guess something down inflection ICS, growth, look we maybe the XXXX,

do that business back? expect that? that, could frame Or you that I overbuild you it guess, some don't relative be helpful. ICS about the Do stronger? think full to how we do bounce performing Thanks. inventory If you get so we would

Lori Koch

nicely to perform restocking Yeah. spaces. this had that in we XXXX. I potentially hard how the for headwinds have we mean those say to will We expect one in tailwind would absorption year-over-year at it could kind us happen alongside it's The those two EBITDA, happen market. point of in the that won't on a perspective

those semis of for those So XXXX. a ICS we into the happens and create us reasons as absorption predominance both tailwind head for within

Josh Spector

Okay. Thank you.

Operator

next from Morgan question Andrews comes from Stanley. Your Vincent

Vincent Andrews

you morning, Just doing Thank down about you've sundry the work $XX can future? year-to-date, then down XX, bit about expense SG&A in and a good you been at speak million president little cost of past if down kind just looking Wondering R&D statement, and income XX. I've got the the

And concerns? us can we're ones balance the how the segments, having which of they the maybe actually most what out seeing And those is? the sundry expense decreases and contextualize play macro presumably you maybe most and are and over the remind that also year kind just of

Lori Koch

Yeah.

really predominance So where don't some it's that in. It's EPS comes even operating EBITDA come of income interest asset sales also our adjusted sundry in not gains reported on in. the EBITDA operating is get or where in

primarily efforts the not our out that it's related not So investment. operating to at control all queue the when of about really a to detail spend. that's in all reflection comes are. other of what tomorrow There's our really of any specifics But discretionary

And From that we've that minimize done perspective, policing. spend doing we've a though, aggressive think to job decrementals the we been that. have control I discretionary on and been the nice very

reported the in first So were half, our as XX%. decrementals

down we've inventory that take in driving you But the the reduce to been were absorption out headwinds mid-XXs. if more the from

a of that's reflection And from we've aggressive both. taken the actions really so

able space. We to did headcount primarily small to be G&A restructuring the some a reduce in

bonus. taking So consultations our discretionary we're have and sales and been clean. And then we to really R&D reductions marketing trying or to some annual pretty keep

that would that's of And the on be as use the what headcount discretionary the in that then took And you're more reduce that. we coming would be as a seeing so line line R&D through license to spend. the small SG&A well so

Ed Breen

and is sure way, good but We're The application keep our them. travel we're traveling we've holding salespeople we're budgets. all really are and been meetings people, holding By over the entertainment trying engineers, real to management Yeah. world tensioning the that. - the are of being all

it So of while the on -- to really anything but side. put we've being tougher a hey, in out watch team, environment the come out nice, we're will we're here discretionary word just just our

Vincent Andrews

there? of on just or the year And presumably Ed, happening the for bolt-on of thoughts Okay. M&A as a the then rest nothing table any the side follow-up,

Ed Breen

think anything year. into rest obviously, don't I see and at No, this well next of least you'll the No. year

we love a think think, sheet said Lori at, mentioned did the need last going to where to we're great I on be. we've I And on call somewhere balance -- call, where in I pause. don't spot. I And good in we're Xx. got have year I feel the like anything. we That's the around action here as a leverage do want to We

So need we are we where to to we got be. --

Vincent Andrews

very Excellent. Thanks Great. much.

Ed Breen

Thanks.

Operator

from comes from Mitsch Fermium question next Research. Your Frank

Frank Mitsch

I Good RiverHouse Sunday. Hey. morning. that nice. was It very the Odette's Benedict Ed, had on

that. So, congrats on

Ed Breen

yet. it had haven't I you. Thank

Frank Mitsch

is the yet, is You one up into recommend candidate haven't M&A the it. back expect in your -- that be to highly the When I line question, Hey, And/or Auto still we into businesses? following a that had folded Adhesives item. might divestiture? on for it of corporate

Ed Breen

the phenomenal. of it's especially It's not opportunity been No, seeing a candidate have, we're have. we the growth very us. has wins and divestiture. core position EV a there, like to with lot for We rate the obviously we And

like we that So business.

of - way, And I in just got going don't want. reporting We pulling short-term there any we're everything time. this -- way make it by think run it we where new the to we've out at of on point the we're in we

won't you next couple anything the So of quarters. in see

Frank Mitsch

has on in volume And price. mean thoughts terms look up that Okay. are your if growth of then, What Thank geographically, region? I in year-over-year you. I Europe been based

Lori Koch

Yeah.

year. a So dominance the different Asia and this the Pacific, we've about really is been toughest into volume similar obvious been in has of it's us highlighting would And is growth China in for it the we general which been flat. get of as performance Europe I it's expect half

back start the wane The of the as to will we it half into year. though get price piece

that from kind would really it some in we half, as slightly be would then cut - mentioned. of primarily in negative, get QX we of that as to went have saw back we So into the to QX we QX, we flat give QX the have Shelter space and - price given and we it to

Frank Mitsch

Great. Thank you.

Ed Breen

Frank. Thanks,

Operator

comes Bank next Your America. Byrne question from from of Steve

Steve Byrne

that in comply or approval MCLs. settlement question the you would get six Yeah. could mentioned on so. with think Ed estimated the you final you. need thousand The water proposed months Thank EPA several you has districts you My is to for

view comment do might how certain Do will those you of on going? some how fraction Or them And iron exchange carbon? you you think Do a a they will expect And that water comply. districts can in? on to need mostly opt of have you they or is use RO do technologies? you employee your

Ed Breen

Yeah.

that or the So we can from look, we I'll in settlement. away a it, have, -- percent opt walk call there's

we hasn't of been a think problem. that side this. plaintiff talked So to not be high done Remember, that's districts percentage, very to up the a a This just water these a that, being vacuum. way, the in and will of get lot by by been have

along preliminary I'll get it So, way - what settlement. to to talked the they've to call been here it's this,

I all as and make that basis the approved you I hit think have that you the said, on will opt-ins we once get judge to and you a sure So by you work get shortly, then preliminary done final it approval then threshold.

each they're that So how any there. water handle in going the for it's difficulty to really to that's clean up to of PFAS districts, up

So that. want on don't to comment I

Steve Byrne

intermediary And then in renewables. do are going was your water that aggressive curious, through service changing of to you XX% an in customer more that provider? you by selling the versus fraction you I fraction is interest of force? sales mentioned have own And just getting what directly an that your business

Lori Koch

and as which where go strategy see in for in filter, its of from. don't the recurring we're province replacing direct any we change go-to-market comes is just projects the rate the the place I to customers the revenue our

around on and kind clean as to forward the for call, of had us, we this we lot as of single-digit So mentioned go a mid water. sustainability grower to access the the high -- earlier opportunities a is

Steve Byrne

Thank you.

Ed Breen

Thanks, Steve.

Operator

Arun question from Markets. next Your from Capital RBC comes Viswanathan

Arun Viswanathan

taking my electronics just on you for the here. destocking, Thanks to market guess, Great. from question. elaborate volume the the I trajectory, wanted I here. ask just Could about

this previously, expected year negative to you the volume think main hit. be I had

think next electronics Do next expect kind should be you next in Or easier You'll Thanks. facing volumes you level comps you where for grow year? to year. year? be of, do mid-single-digit say, the

Lori Koch

Yeah.

we bit of QX. we'll the growth we sequential QX. reflecting into improvement material volume quarter. don't volume sales that as we ease In But see until believe into tentative and a about primarily full E&I get the So into then year-over-year And we within see of organic we definitely, we a ICS we in continue that's XX%. sequential And mean headwind. bump improvement head segment. fourth mentioned, see overall little year We'll a the as within had to semi, start to head as that I we

a So what it's to probably XXXX call little early looks like.

have which you there's a see. pretty good think to it hard on, the would if destock that would going given won't I just is flat, even sense be the demand positive be but that

that headwind destock year-over-year. You don't have from the

are that So of we're components and tailwind into the XXXX head run recovery the further And out encouraged it from year register. as from of kind P&L, headwinds taken as the through only really market we've absorption that we'll the investor. fully the deflation key we from lapping electronics but control this our that benefit see to then, also

Arun Viswanathan

the share Great. buyback Thanks. plans. just real And quickly on

other done soon. about think So in? how Could the How we thereafter. you how the that $X ratably Would you be should that shortly you'll about Thanks. we or that? should think billion, just describe very flows commenced it be completing X.XX

Lori Koch

Yeah.

month, shortly ASR. thereafter, be a X.XX. we'll billion similar execute we'll the will guess I to that complete it then a So first structure and within a $X

upfront, take you'll will the months So now. and complete and full get about to you're that it you'll XX% the of XX% shares get of every us quarter It's back, probably then for program. usually cleanup that about taking six billion a in $X the shares

Arun Viswanathan

Thanks.

Operator

comes Your Sison next from from question Mike Fargo. Wells

Mike Sison

morning. Good Hey.

you But taking do do some historically time around between destocking the to you that? for end, terms and or that it's any restocking. Solutions, think In of after given there is plays I long Interconnect out the see so on Technologies how this think Semi a differences destocking event, regions

Lori Koch

coming it's a significant I restock to going respect to what destocking. Yeah. hard mean, do to with after is the say such everyone through

normal to So year we just likewise. might get change every their pattern

in happen probably the stabilization restocking generally, that's happening a little a too to supply year in from what's and you So probably chain Difficulty] going I'll everyone [Technical perspective. early to that. think everybody announce say

Mike Sison

historically Got above sort back and all volume it. for been the getting XX% it back? get quick And there? Is just then simply follow-up margins just E&I EBITDA of

Ed Breen

were Yes. remember over the was I Steve already It's back, think the a margins ex absorption quarter the volume on, XX%. point I two the EBITDA really in but made getting things. when earlier second

to pulling expanded is there number. charge to absorption down the So the XX.X-ish took what we

a know margins. And little and we're we price a we XX%, -- XX%. said even So said softer continue And it of you we EBITDA get we'll business volume running earlier, can in to come north as environment, throughput, as XX% volumes I back. this the run

Mike Sison

Thank it. Got you.

Ed Breen

Thanks.

Operator

comes question Citibank. from Your Cunningham from final Patrick

Patrick Cunningham

capture Hi. expect Spectrum? for And there million Is we there? Good for morning. synergy expectations the update any from in your to cadence should $XX what

Lori Koch

mean, it obviously, expect that. perspective. in probably part out. for revenue to expertise their XX will still $XX is biopharma device together I comes medical to million. more of take in no to of from XX million better portfolios us, It update verge synergy the expertise as a two Yeah, our $XX revenue get the months We synergy a with we bring opportunity

Patrick Cunningham

trend how any the destocking pockets to do And safety of There's your that companies business you both helpful. That's side? the Legacy healthcare Spectrum the seen of it. expect to some on from year, you businesses? stocks. and been commentary as deplete the Have any Got of throughout pointing

Ed Breen

Yeah.

that would Liveo the is think I companies I business other ago six think, heard heard, my We're biopharma In think quarters. Lori results make destocking last some they of were couple in seeing So biopharma. I were side. in last little And that mentioned destocking seeing our a I -- some this in the while the gut week I a there.

a little to correct bit. that Just

I those semi there. a getting a fourth CEOs from one of the And I correction was little more. but probably bit I we another healthcare And was say that's remember the need it little overshot, going just like but everyone calls of I'd like markets there's correction quarter just on there, in think a semi. and third business,

thought we they on spectrum where the kind right are numbers earlier, be. of would mentioned Lori As

So above company year the they thought our above up like GDP. the expect, healthcare were would half and average that the certainly they the And happen again, growth we here. keyed I in year, to will look second for going they're be businesses in of

Patrick Cunningham

Great. Thank you.

Ed Breen

Thank you.

Operator

now I over remarks. for call concluding Mecray the turn Chris to

Chris Mecray

everybody, call. joining for our Thanks, Okay.

reference, a to transcript of available. will our copy Thank Just once be website on posted be the a concludes call. our you. This

DuPont de Nemours (DD) 2 Aug 232023 Q2 Earnings call transcript