02.06.24
DuPont announced its financial results for the fourth quarter and full year ended Dec. 31, 2023.
“In the face of inventory destocking that impacted many of our end-markets in 2023 and continued economic softness in China, our teams remained focused on sound operational execution and driving productivity and cost discipline,” said Ed Breen, DuPont executive chairman and CEO. “We delivered significant year-over-year cash flow improvement in 2023, including a strong fourth quarter finish, which underscores our ongoing prioritization of working capital management.”
“We continue to see demand stabilization within Semiconductor Technologies and Interconnect Solutions and we remain confident of a broad-based electronics materials recovery in 2024. We did, however, see incremental channel inventory destocking within our industrial-based businesses as we closed out 2023 and we are seeing similar trends continue as we enter 2024 with recovery timing expected to vary by end-market as the year progresses,” Breen added.
“We also continue to execute on our capital allocation strategy,” Breen continued. “Today we announced completion of the $2 billion accelerated share repurchase transaction launched last September, which completes our previous $5 billion share repurchase program announced in November 2022. We also announced authorization of a new $1 billion share repurchase program and a 6% increase to our quarterly dividend. These actions demonstrate our ongoing commitment to a balanced capital allocation approach focused on value creation for our shareholders.”
In the fourth quarter of 2023, net sales decreased 7% to $2,898 million, as organic sales decline of 10% was partially offset by favorable portfolio impact of 3%, primarily reflecting the Aug. 1 acquisition of Spectrum. Organic sales decline of 10% consisted of a 9% decrease in volume and a 1% decrease in price.
Lower volume was driven primarily by the impact of channel inventory destocking within Safety Solutions, most notably for medical packaging, and within Water Solutions mainly in China. There was a 15% organic sales decline in Water & Protection, and 7% organic sales decline in Electronics & Industrial.
GAAP Loss from continuing operations compared to GAAP Income from continuing operations in the year-ago period resulted primarily due to a goodwill impairment charge partially offset by a tax benefit related to internal restructuring.
Cash provided by operating activities from continuing operations in the quarter of $646 million and capital expenditures of $145 million resulted in adjusted free cash flow of $501 million.
Full year 2023 net sales were $12,068 million, down 7% on organic sales decline of 6% and a currency headwind of 1%. Organic sales decline of 6% consisted of an 8% decrease in volume partially offset by a 2% increase in price. There was an 11% organic sales decline in Electronics & Industrial; 4% organic sales decline in Water & Protection; 3% organic sales growth in the retained businesses reported in Corporate.
Cash provided by operating activities from continuing operations for the year of $2.2 billion and capital expenditures of $0.6 billion resulted in adjusted free cash flow of $1.6 billion.
“Despite significant volume pressure in 2023, we maintained sound focus on the operational levers within our control, working to minimize margin impacts while driving substantial cash flow improvement versus last year,” said DuPont CFO Lori Koch. “In addition, we acted quickly in executing restructuring actions to reduce costs that we announced this past November and will begin to realize the associated savings later in the first quarter.”
“For the first quarter of 2024, we expect sequential sales and earnings decline from the fourth quarter driven by additional channel inventory destocking within our industrial-based businesses along with continued weak demand in China,” Koch continued. “We expect sequential sales improvement and an approximate 10 percent increase in operating EBITDA in the second quarter of 2024 from first quarter driven by some inventory destocking abatement, seasonality factors and realization of cost savings.”
“Our current expectation for full year 2024 forecasts a return to year-over-year sales and earnings growth in the second half driven by anticipated electronics market recovery, including improvement in semiconductor fab utilization rates, as well as improved orders within industrial markets as customer inventory levels normalize,” Koch concluded.
“In the face of inventory destocking that impacted many of our end-markets in 2023 and continued economic softness in China, our teams remained focused on sound operational execution and driving productivity and cost discipline,” said Ed Breen, DuPont executive chairman and CEO. “We delivered significant year-over-year cash flow improvement in 2023, including a strong fourth quarter finish, which underscores our ongoing prioritization of working capital management.”
“We continue to see demand stabilization within Semiconductor Technologies and Interconnect Solutions and we remain confident of a broad-based electronics materials recovery in 2024. We did, however, see incremental channel inventory destocking within our industrial-based businesses as we closed out 2023 and we are seeing similar trends continue as we enter 2024 with recovery timing expected to vary by end-market as the year progresses,” Breen added.
“We also continue to execute on our capital allocation strategy,” Breen continued. “Today we announced completion of the $2 billion accelerated share repurchase transaction launched last September, which completes our previous $5 billion share repurchase program announced in November 2022. We also announced authorization of a new $1 billion share repurchase program and a 6% increase to our quarterly dividend. These actions demonstrate our ongoing commitment to a balanced capital allocation approach focused on value creation for our shareholders.”
In the fourth quarter of 2023, net sales decreased 7% to $2,898 million, as organic sales decline of 10% was partially offset by favorable portfolio impact of 3%, primarily reflecting the Aug. 1 acquisition of Spectrum. Organic sales decline of 10% consisted of a 9% decrease in volume and a 1% decrease in price.
Lower volume was driven primarily by the impact of channel inventory destocking within Safety Solutions, most notably for medical packaging, and within Water Solutions mainly in China. There was a 15% organic sales decline in Water & Protection, and 7% organic sales decline in Electronics & Industrial.
GAAP Loss from continuing operations compared to GAAP Income from continuing operations in the year-ago period resulted primarily due to a goodwill impairment charge partially offset by a tax benefit related to internal restructuring.
Cash provided by operating activities from continuing operations in the quarter of $646 million and capital expenditures of $145 million resulted in adjusted free cash flow of $501 million.
Full year 2023 net sales were $12,068 million, down 7% on organic sales decline of 6% and a currency headwind of 1%. Organic sales decline of 6% consisted of an 8% decrease in volume partially offset by a 2% increase in price. There was an 11% organic sales decline in Electronics & Industrial; 4% organic sales decline in Water & Protection; 3% organic sales growth in the retained businesses reported in Corporate.
Cash provided by operating activities from continuing operations for the year of $2.2 billion and capital expenditures of $0.6 billion resulted in adjusted free cash flow of $1.6 billion.
“Despite significant volume pressure in 2023, we maintained sound focus on the operational levers within our control, working to minimize margin impacts while driving substantial cash flow improvement versus last year,” said DuPont CFO Lori Koch. “In addition, we acted quickly in executing restructuring actions to reduce costs that we announced this past November and will begin to realize the associated savings later in the first quarter.”
“For the first quarter of 2024, we expect sequential sales and earnings decline from the fourth quarter driven by additional channel inventory destocking within our industrial-based businesses along with continued weak demand in China,” Koch continued. “We expect sequential sales improvement and an approximate 10 percent increase in operating EBITDA in the second quarter of 2024 from first quarter driven by some inventory destocking abatement, seasonality factors and realization of cost savings.”
“Our current expectation for full year 2024 forecasts a return to year-over-year sales and earnings growth in the second half driven by anticipated electronics market recovery, including improvement in semiconductor fab utilization rates, as well as improved orders within industrial markets as customer inventory levels normalize,” Koch concluded.