DuPont Reports 17% Increase in Operating EBITDA

DuPont Reports Strong Q2 2024 Financial Results and Strategic Developments

DuPont has delivered impressive financial results for the second quarter of 2024, exceeding its prior guidance. The company reported a 17% increase in operational EBITDA compared to the first quarter, driven by advancements in technology applications, particularly in AI, alongside a rebound in the consumer electronics sector. Additionally, DuPont announced its acquisition of Donatelle, a move aimed at strengthening its presence in the medical device arena. With this backdrop, DuPont has adjusted its full-year guidance upward for net sales, operating EBITDA, and adjusted EPS, reflecting a robust outlook for ongoing growth.

Key Highlights:

• Year-over-year and sequential increases in net sales and operating EBITDA.
• Strong performance in the semiconductor business spurred by demand for AI technologies and recovery in consumer electronics.
• Acquisition of medical device manufacturer Donatelle.
• Progress in the planned business separation, with expectations to finalize executive and board appointments by early 2025.
• Revised full-year guidance for net sales, operating EBITDA, and adjusted EPS.
• Managing settlements related to firefighting foam and PFAS liabilities, with DuPont covering only 3% to 7% of estimated costs.
• Positioned to meet cash flow targets, enhanced by better working capital management.

Company Outlook:

• Expected high single-digit growth in the Electronics & Imaging segment.
• The Water & Protection segment anticipated to experience flat revenues but with slight margin improvements in the latter half of the year.
• Industrial Solutions expected to show positive growth by Q3.
• Open to exploring value-creation opportunities in the water business.

Challenges:

• Sales in Industrial Solutions decreased due to ongoing destocking across some markets.
• Projected lower corporate segment income in the second half of the year.
• The solar business may encounter pressures that could impact earnings in the latter part of the year.

Positive Indicators:

• The acquisition of Donatelle expected to contribute $75 million in revenue for the year.
• Potential market opportunity of around $250 million identified in the lithium sector.
• Investment in a new European facility to capitalize on this opportunity.

Areas of Concern:

• A decrease in pricing partially offset the 10% increase in sales volume, yielding only an 8% organic sales growth.
• A 2% currency headwind that also dampened sales growth.

Q&A Session Highlights:

• DuPont is focused on resolving outstanding PFAS cases before the spin-off and maintains that it is not responsible for PFAS under certain conditions.
• No discussions have been held regarding the sale of the water business; liabilities will be allocated based on agreements with other parties.
• Visibility and lead times are improving in Water & Safety Solutions, with anticipated sequential growth in Q4.

DuPont’s strong second quarter performance exemplifies its ability to navigate market challenges while seizing growth opportunities, particularly in tech-driven sectors. With strategic acquisitions and proactive investments, the company is positioning itself for continued success, while effectively managing its liabilities. The updated guidance reflects a strong belief in its operational strategy and market foundation.