DuPont Reports First Quarter 2022 Results

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• 1Q22 Net Sales of $3.3 billion, increased 9%; organic sales increased 9% versus year-ago period
• 1Q22 GAAP Income from continuing operations of $232 million; operating EBITDA of $818 million increased 2% versus year-ago period
• 1Q22 GAAP EPS from continuing operations of $0.42; adjusted EPS of $0.82 increased 19% versus year-ago period
• $544 million of capital returned to shareholders during the quarter through share repurchases and dividends
• Pricing actions fully offset higher inflationary costs from raw materials, logistics and energy during the quarter

WILMINGTON, Del., May 3, 2022 - DuPont (NYSE: DD) today announced financial results⁽¹⁾ for the first quarter of 2022.

“In the face of continuing unprecedented global supply chain challenges and cost inflation, further intensified during the quarter by the war in Ukraine, we delivered first quarter financial results well ahead of expectations,” said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. “These results underscore the leading market positions we hold globally and reflect our team’s agility while working closely with our suppliers and customers through challenging circumstances.”

“This solid start to the year reinforces the enthusiasm we have for our transformation as a premier multi-industrial company poised to provide high-value customer solutions in sectors with compelling long-term secular growth drivers,” Breen continued. “Our portfolio actions underway to divest a substantial portion of the historic Mobility & Materials segment and acquire Rogers Corporation are expected to enhance our financial flexibility and enable more consistent value creation for our shareholders by further focusing our portfolio on higher-growth, higher-margin and less cyclical end-markets.”

First Quarter 2022 Results⁽¹⁾

Net sales

• Net sales increased 9% on organic sales growth⁽²⁾ of 9%; portfolio benefit of 2% was offset by a 2% currency headwind.
• Organic sales⁽²⁾ growth of 9% consisted of a 6% increase in price and 3% increase in volume.
  • Price increase reflects actions taken to offset continued broad-based cost inflation.
  • Volume growth reflects continued strong demand in electronics, industrial technologies, water and construction end-markets, partially muted by continued supply chain constraints, mainly in automotive end-markets.
• 10% organic sales⁽²⁾ growth in Water & Protection; 9% organic sales⁽²⁾ growth in Electronics & Industrial.
• Sales growth in all regions globally, including high-teens organic sales⁽²⁾ growth in U.S & Canada, high single-digit organic sales⁽²⁾ growth in EMEA and low single-digit organic sales⁽²⁾ growth in Asia Pacific.

GAAP Income/GAAP EPS from continuing operations

• GAAP income/GAAP EPS from continuing operations declined primarily due to the absence of an income tax benefit recorded in the year-ago period and an asset impairment charge related to an equity method investment, partially offset by higher segment results.
• GAAP EPS from continuing operations benefitted from a lower share count versus the year-ago period.

Operating EBITDA⁽²⁾

• Operating EBITDA⁽²⁾ increased as pricing actions, volume gains, along with earnings associated with Laird Performance Materials more than offset higher inflationary costs from raw materials, logistics and energy, as well as weaker product mix in Water & Protection and the absence of a gain on an asset divestiture in the prior year.

Adjusted EPS⁽²⁾

• Adjusted EPS⁽²⁾ increased primarily due to a lower share count and higher segment earnings.

Operating cash flow

• Operating cash flow in the quarter of $209 million and capital expenditures of $251 million resulted in free cash flow⁽²⁾ of $(42) million.

First Quarter 2022 Segment Highlights

Electronics & Industrial

Net sales

• Organic sales⁽²⁾ growth of 9% driven by an 8% increase in volume and 1% increase in price.
  • Semiconductor Technologies sales up mid-teens on an organic⁽²⁾ basis as robust demand continued, led by the on-going transition to more advanced node technologies, along with growth in high-performance computing and 5G communications.
  • Industrial Solutions sales up low double-digits on an organic⁽²⁾ basis, reflecting ongoing demand strength for OLED materials, Kalrez® products and for applications in healthcare markets such as biopharma tubing.
  • Interconnect Solutions sales down low single-digits on an organic⁽²⁾ basis due to a slight volume decline. Volume gains in industrial end-markets were more than offset by declines in consumer electronics in China and the anticipated return to normal seasonal order patterns in smartphones compared to last year.
• Acquisition of Laird Performance Materials in prior year increased net sales for the segment by 11%; currency translation was a 2% headwind.

Operating EBITDA

• Increase in operating EBITDA driven by volume gains, earnings associated with Laird Performance Materials and higher pricing which more than offset the absence of a gain on an asset divestiture in the prior year, higher raw material and logistics costs and Kapton® plant expansion start-up costs.
• The primary driver of the operating EBITDA margin decline was the absence of a gain on an asset divestiture in the prior year.

Water & Protection

Net sales

• Organic sales⁽²⁾ growth of 10% driven by broad-based pricing actions across the segment. Volumes were flat as gains in Shelter Solutions and Water Solutions were offset by declines in Safety Solutions.
  • Shelter Solutions sales up high-teens on an organic⁽²⁾ basis driven by pricing gains and continued robust demand in North America residential construction, as well as ongoing improvement in commercial construction.
  • Water Solutions sales up high single-digits on an organic⁽²⁾ basis driven by ongoing demand strength for water technologies globally, as well as pricing gains.
  • Safety Solutions sales up mid single-digits on an organic⁽²⁾ basis as pricing actions were partially offset by lower Tyvek® volumes.
• Currency translation was a 2% headwind to net sales for the segment.

Operating EBITDA

• Operating EBITDA declined as pricing actions taken to offset higher raw material, logistics and energy costs was more than offset by weaker product mix.
• The primary driver of the operating EBITDA margin decline was the impact of price/cost inflation.

Outlook

“I am pleased with our strong financial results to start the year which reflect positively on the strength of our portfolio and our team’s focus on execution,” said Lori Koch, Chief Financial Officer of DuPont. “End-market demand remains strong, however, many external uncertainties still exist related to global supply chain challenges, including the impact of the ongoing war in Ukraine and new COVID-related shutdowns in China. Based on our current expectations, our full year 2022 guidance ranges for operating EBITDA and adjusted EPS on a continuing operations basis remain unchanged. We are increasing our estimated full year 2022 net sales range for continuing operations to be between $13.3 billion and $13.7 billion to reflect our current assumption for cost inflation related to raw materials, logistics and energy which we continue to expect to offset with price.”

“While underlying demand continues to remain solid and our teams have demonstrated the ability to execute in these unprecedented circumstances, we anticipate key external uncertainties in the macro environment, namely COVID-related shutdowns in China, will further tighten supply chains resulting in slower volume growth and sequential margin contraction in the second quarter 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.

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