• Net Sales of $3.0 billion decreased 8%; organic sales decreased 3% versus year-ago period
• GAAP Income from continuing operations of $273 million; operating EBITDA of $714 million
• GAAP EPS from continuing operations of $0.58; adjusted EPS of $0.84
• Operating cash flow of $343 million; adjusted free cash flow of $102 million

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WILMINGTON, Del., May 2, 2023 - DuPont (NYSE: DD) today announced financial results⁽¹⁾ for the first quarter ended March 31, 2023.

“We delivered earnings in line with our expectations for the first quarter of 2023 which reflects our team’s continued strong execution despite a lower volume environment in electronics and construction-related end markets,” said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. “While sales within Semiconductor Technologies and Interconnect Solutions were down during the quarter as expected, Industrial Solutions as well as the Water & Protection segment delivered organic sales growth and we saw continued robust demand within our auto adhesives portfolio. Our businesses are well-equipped to leverage leading market positions and accelerate growth when consumer-driven, short-cycle electronics end markets recover.”

“Today we also announced a definitive agreement to acquire Spectrum Plastics Group⁽³⁾, a leading manufacturer of critical components and devices primarily into medical end-markets for highly complex, mission critical applications,” Breen continued. “This intended acquisition adds to DuPont’s industrial technologies growth pillar and strengthens our existing position in stable and fast-growing healthcare end-markets. We expect this deal to add substantial shareholder value over time through both growth and clear synergies with our existing medical-related products.”

First Quarter 2023 Results⁽¹⁾

Net sales

• Net sales decreased 8% as organic sales⁽²⁾ declined 3%, along with currency headwinds of 3% and unfavorable portfolio impact of 2%.
• Organic sales⁽²⁾ decline of 3% consisted of a 7% decrease in volume partially offset by a 4% increase in price.
  • Lower volume resulted from decreased consumer electronics spending and channel inventory destocking, along with softness in construction end-markets, partially offset by continued strength in areas such as water, auto adhesives and in industrial end-markets such as aerospace and healthcare.
  • Price increase reflects the carryover impact of actions taken in 2022 to offset broad-based cost inflation.
• 4% organic sales⁽²⁾ growth in Water & Protection; 13% organic sales⁽²⁾ declines in Electronics & Industrial; 6% organic sales⁽²⁾ growth in the retained businesses reported in Corporate.
• 5% organic sales⁽²⁾ growth in EMEA, 1% organic sales⁽²⁾ growth in U.S. & Canada and 10% organic sales⁽²⁾ decline in Asia Pacific.

GAAP Income/GAAP EPS from continuing operations

• GAAP income/GAAP EPS from continuing operations increased as the absence of an asset impairment charge recorded in the prior year related to an equity method investment, lower net interest expense and the impact of a lower share count related to our accelerated share repurchase program more than offset lower segment earnings and a higher tax rate.

Operating EBITDA⁽²⁾

• Operating EBITDA⁽²⁾ decreased primarily due to volume declines as pricing and disciplined cost control were offset by inflationary cost pressure related primarily to higher raw material costs, along with currency headwinds.

Adjusted EPS⁽²⁾

• Adjusted EPS⁽²⁾ increased as lower net interest expense and the impact of a lower share count related to our accelerated share repurchase program more than offset lower segment earnings and a higher tax rate.

Operating cash flow

• Operating cash flow in the quarter of $343 million and capital expenditures of $241 million resulted in adjusted free cash flow⁽²⁾ of $102 million. Adjusted free cash flow⁽²⁾ in the quarter includes headwinds of about $75 million for transaction costs related to the M&M Divestitures.

First Quarter 2023 Segment Highlights

Electronics & Industrial

Net sales

• Net sales decreased 16% as organic sales⁽²⁾ declined 13%, along with currency headwinds of 2% and unfavorable portfolio impact of 1%.
• Organic sales⁽²⁾ decline of 13% driven by a 15% decrease in volume partially offset by a 2% increase in price.
  • Interconnect Solutions sales down 21% on an organic⁽²⁾ basis on volume declines related to decreased consumer electronics spending and channel inventory destocking. 
  • Semiconductor Technologies sales down mid-teens on an organic⁽²⁾ basis driven by volume declines resulting from reduced semiconductor fab utilization rates due to weaker end-market demand and channel inventory destocking.
  • Industrial Solutions sales up low single-digits on an organic⁽²⁾ basis as pricing and ongoing strength in broad-based industrial markets such as aerospace and healthcare were partially offset by lower demand in consumer-driven advanced printing and lighting applications.

Operating EBITDA

• Operating EBITDA decreased due primarily to volume declines and reduced production rates to better align with demand.

Water & Protection

Net sales

• Net sales increased 1% as organic sales⁽²⁾ growth of 4% was mostly offset by a 3% currency headwind.
• Organic sales⁽²⁾ growth of 4% reflects a 6% increase in price resulting from the carryover impact of broad-based actions taken in 2022 to offset cost inflation partially offset by a 2% decrease in volume driven by Shelter Solutions.
  • Water Solutions sales up low double-digits on an organic⁽²⁾ basis on pricing and continued strong demand for water technologies.
  • Safety Solutions sales up mid single-digits on an organic⁽²⁾ basis on pricing and volume gains resulting from strength in aerospace, automotive and healthcare end-markets.
  • Shelter Solutions sales down mid single-digits on an organic⁽²⁾ basis as pricing gains were more than offset by volume declines in construction markets.

Operating EBITDA

• Operating EBITDA increased as pricing and disciplined cost control were mostly offset by inflationary cost pressure related primarily to higher raw material and energy costs, currency headwinds and lower volumes.

Outlook⁽⁴⁾

“I am pleased with our team’s focus on execution as we start the year in an environment of select volume pressure with lower volumes in electronics and construction,” said Lori Koch, Chief Financial Officer of DuPont. “We continue to expect ongoing strength throughout the year in areas such as water, automotive, aerospace and healthcare. Within electronics markets, we continue to see weakness and channel inventory destocking in the near-term.”

“Based on recent customer feedback and third-party market forecasts within electronics, we expect customer utilization rates to bottom relatively near-term and to improve during the third quarter, which is about a quarter later than previously expected,” Koch continued. “Due to the delay in electronics recovery, we are adjusting the high-end of our existing guidance ranges for full year net sales, operating EBITDA and adjusted EPS. For the second quarter 2023, we expect similar results to the first quarter as overall market conditions are anticipated to be generally the same.”
 

(1)  Results presented on a continuing operations basis. See page 5 for further information, including the basis of presentation included in this release.

(2)   Adjusted EPS, operating EBITDA, operating EBTIDA margin, organic sales and free cash flow are non-GAAP measures. See page 6 for further discussion, including a definition of significant items. Reconciliation to the most directly comparable GAAP measure, including details of significant items begins on page 11 of this communication.

(3)   Acquisition of Spectrum Plastics Group (“Spectrum”) is expected to close by the end of the third quarter 2023, subject to customary closing conditions and regulatory approval.

(4)   2023 outlook on page 3 excludes estimated impact related to intended acquisition of Spectrum. Adjusted EPS outlook on page 3 assumes that by year-end 2023, the Company substantially completes the remaining repurchase authority under its $5 billion share buyback program announced on November 8, 2022.

Conference Call

The Company will host a live webcast of its first quarter earnings conference call with investors to discuss its results and business outlook beginning today at 8:00 a.m. ET. The slide presentation that accompanies the conference call will be posted on the DuPont’s Investor Relations Events and Presentations page. A replay of the webcast also will be available on the DuPont’s Investor Relations Events and Presentations page following the live event.

About DuPont

DuPont (NYSE: DD) is a global innovation leader with technology-based materials and solutions that help transform industries and everyday life. Our employees apply diverse science and expertise to help customers advance their best ideas and deliver essential innovations in key markets including electronics, transportation, construction, water, healthcare and worker safety. More information about the company, its businesses and solutions can be found at www.dupont.com. Investors can access information included on the Investor Relations section of the website at investors.dupont.com.

DuPont™ and all products, unless otherwise noted, denoted with ™, ^SM or ® are trademarks, service marks or registered trademarks of affiliates of DuPont de Nemours, Inc.