DuPont Reports Fourth Quarter, Full Year 2019 Results

DuPont announced financial results for the fourth quarter and full year 2019.

Full year net sales totaled $21.5 billion, down 5% versus 2018. On an organic basis, net sales were down 2% with a 2% higher price being more than offset by 4% lower volume primarily from the macro conditions in automotive and electronics end markets.

Pro forma GAAP income (loss) from continuing operations totaled $(522) million, versus $237 million in the year-ago period. Pro forma operating EBITDA of $5.6 billion was down 4% versus the prior year primarily driven by weakness in automotive and electronic markets, reduced equity affiliate income and currency headwinds partially offset by strong pricing discipline and continued cost savings.

“Our full year results demonstrate our ability to offset challenging global macro conditions by focusing on the levers within our control,” said Marc Doyle, DuPont CEO. “We mitigated these headwinds through pricing and cost actions while continuing to strengthen our position in key growth areas such as water and 5G through continued innovation and investment.

“As we head into 2020, this strong internal discipline continues to be paramount as we foresee further nylon pricing declines and unfavorable nylon mix partially offsetting organic revenue growth in our other core segments,” Doyle stated. “We continue to strategically reduce spending and are taking actions to consolidate our asset footprint. These steps will ensure that our costs are right-sized for the future organization and better position us for growth.”

Net sales for the fourth quarter totaled $5.2 billion, down 5% versus the same quarter last year. On an organic basis, net sales were down 2% with a 1% higher price being more than offset by 3% lower volume. Organic sales were flat to up in all core segments except Transportation & Industrial, which was impacted by continued weak automotive markets and declining nylon price.

Operating EBITDA was $1.4 billion, down 14% versus pro forma operating EBITDA in the prior year driven by lower nylon pricing and reduced equity affiliate income from customer settlements in the Hemlock Semiconductor joint venture.

“The planned merger of our N&B business with IFF advances the strategic direction of the company and will generate value for our shareholders,” said Ed Breen, executive chairman of DuPont. “Together we are creating a global leader in high-value ingredients and solutions for Food & Beverage, Home & Personal Care and Health & Wellness markets while creating tremendous opportunities for our employees and customers.”

Electronics & Imaging reported fourth quarter net sales of $937 million, up 3% from the year-ago period. Organic sales were up 3% driven by 2% growth in volume and a 1% gain in price. Fourth quarter operating EBITDA for the segment was $293 million, a decrease of 9% from pro forma operating EBITDA of $321 million in the year-ago period, with volume gains in Interconnect Solutions more than offset by unfavorable mix.

For the year, Electronics & Imaging net sales of $3.6 billion and pro forma operating EBITDA of $1.1 billion were down 2% and 5%, respectively, from the year-ago period. The pro forma operating EBITDA decline was primarily the result of softer volumes in Semiconductor Technologies

Nutrition & Biosciences reported fourth quarter net sales of $1.5 billion, down 2% from the year-ago period. Within Food & Beverage, mid-single-digit growth in protein concentrates on growing demand in plant-based meats was more than offset by volume declines due to supply chain disruptions in sweeteners and inventory destocking in proteins for select channels.

Fourth quarter operating EBITDA for the segment was $323 million, a decrease of 2% from pro forma operating EBITDA of $330 million in the year-ago period.

For the year, Nutrition & Biosciences’ net sales of $6.1 billion and pro forma operating EBITDA of $1.4 billion were down 2% and 1%, respectively, from the year-ago period.

Transportation & Industrial reported fourth quarter net sales of $1.2 billion, down 9% from the year-ago period. Organic sales were down 8% with volume down 6% and price lower by 2%. Volumes declined primarily due to continued weakness in automotive and electronics markets with Europe and North America volumes down 8% and 6%, respectively.

Fourth quarter operating EBITDA for the segment was $277 million, a decrease of 19% from pro forma operating EBITDA of $344 million in the year-ago period with cost reductions and favorable raw material costs being more than offset by lower volumes and nylon price headwinds.

For the year, Transportation & Industrial net sales of $5.0 billion and pro forma operating EBITDA of $1.3 billion were down 9% and 14%, respectively, from the year-ago period.

Safety & Construction reported fourth quarter net sales of $1.3 billion, down 3% from the year-ago period. Fourth quarter operating EBITDA for the segment totaled $311 million, flat with the prior year.

For the year, Safety & Construction net sales of $5.2 billion and pro forma operating EBITDA of $1.4 billion were down 2% and up 11%, respectively, from the year-ago period. Organic sales were
up 3% versus the prior year.

Non-Core reported fourth quarter net sales of $404 million, down 19% from the year-ago period. Organic sales were down 9% driven by 15% volume declines offset by 6% pricing gains. The September 2019 divestiture of the DuPont Sustainable Solutions business reduced sales by 10%.

Growth in photovoltaic and advanced materials was more than offset by volume declines due to weak demand for trichlorosilane and SORONA in carpet and apparel applications.

Fourth quarter operating EBITDA for the segment was $210 million, a decrease of 41% from pro forma operating EBITDA of $358 million in the year-ago period.

For the year, Non-Core net sales of $1.7 billion and pro forma operating EBITDA of $491 million were down 15% and 27%, respectively, from the year-ago period. The decline in pro forma operating EBITDA was primarily the result of lower Hemlock Semiconductor equity earnings and lower segment volumes partially offset by a gain on the sale of DuPont Sustainable Solutions.

“For this year, we expect full year sales between $21.5 and $22 billion resulting in organic sales which are slightly up versus prior year,” said Jeanmarie Desmond, CFO of DuPont. “We expect full year adjusted EPS in the range of $3.70 – $3.90, up 3% to down 3% versus 2019 driven by lower discrete items and further headwinds in nylon pricing and mix more than offsetting strong organic growth across our other core segments and continued productivity and cost actions.”