02.08.22
DuPont announced financial results for the fourth quarter and full year 2021.
“Our fourth quarter financial results reflect a disciplined focus on pricing actions and operational excellence in a sustained environment of unprecedented global supply chain challenges and rising inflation,” said Ed Breen, DuPont executive chairman and CEO.
“Sustained strong demand in key end-markets such as electronics and water, along with our continued ability to offset raw material inflation with price, were critical to our fourth quarter results. The leading market positions we hold globally, as well as our focus on execution, has led to sales and earnings growth throughout the year and will be key to our success in 2022,” Breen added.
“For the year, we returned more than $2.7 billion of capital to shareholders through share repurchases and dividends and de-levered our balance sheet with a $5 billion reduction in long-term debt,” Breen noted. “These actions, combined with our intent to complete the $375 million remaining under our current share buyback authorization and announcements today of a new $1.0 billion share buyback program and a 10% per share increase in our regular quarterly dividend, further illustrate our commitment to a balanced capital allocation approach and value creation for our shareholders.”
Fourth Quarter 2021 Results
Net sales totaled $4.3 billion, up 14% versus the year-ago period and up 13% on an organic basis, including double-digit organic growth across all four regions and high single-digit to double-digit organic growth in all three reporting segments. Organic sales growth in the quarter includes a 7% increase in price and a 6% increase in volume. The local price increase primarily reflects actions taken to offset higher raw material costs.
Volume growth reflects a continuation of strong global demand in key areas such as semiconductors and water, along with continued improvement in industrial end-markets which were adversely impacted by the COVID-19 pandemic in the year-ago period.
Operating EBITDA was $973 million, up 5% versus the year-ago period as pricing actions, volume gains and earnings associated with the July 1, 2021 acquisition of Laird Performance Materials more than offset higher raw material and logistics costs. Operating EBITDA margin was negatively impacted by higher raw material and logistics costs.
Operating cash flow in the quarter of $621 million and capital expenditures of $184 million resulted in adjusted free cash flow conversion of 100%.
Full Year 2021 Results
Full year net sales totaled $16.7 billion, up 16% versus prior year and up 14% on an organic basis, including double-digit organic growth across all four regions and in all three reporting segments. Organic sales growth for the year includes a 10% increase in volume and a 4% increase in price.
Volume growth reflects robust global customer demand throughout the year in secular growth areas such as electronics and water, along with recovery in end-markets adversely impacted by the COVID-19 pandemic in the year-ago period such as automotive, construction and industrial. The local price increase primarily reflects actions taken to offset higher raw material costs.
Full year operating EBITDA was $4.2 billion, up 21% versus prior year. Volume gains, pricing actions and the absence of charges incurred in the prior year associated with temporarily idled facilities more than offset higher raw material and logistics costs and drove operating EBITDA margin expansion of 100 basis points.
Operating cash flow for the year of $2.3 billion and capital expenditures of $0.9 billion resulted in free cash flow of $1.4 billion. Adjusted free cash flow conversion for the year of 66% was negatively impacted by higher inventories put in place to navigate the strong demand environment amid tight supply chain conditions.
Outlook
“For 2022 we expect net sales between $17.4 and $17.8 billion and operating EBITDA between $4.3 and $4.5 billion, an increase of 6% at the mid-point versus 2021, with top-line volume growth and pricing gains more than offsetting year-over-year raw material and logistics costs increases,” said Lori Koch, CFO of DuPont. “Our outlook for full year adjusted EPS is in the range of $4.60 to $4.90 per share, an increase of 10% at the mid-point versus 2021.
“For the first quarter of 2022, we expect net sales between $4.2 and $4.3 billion, operating EBITDA between $940 and $980 million, and adjusted EPS in the range of $0.94 to $1.00 per share,” Koch continued. “Consumer demand remains strong however raw material and logistics cost inflation is expected to continue to impact margins. We expect operating EBITDA margin in first quarter 2022 to be about flat with fourth quarter 2021 with continued improvement throughout 2022 to more normalized levels in the back half of the year.”
“Our fourth quarter financial results reflect a disciplined focus on pricing actions and operational excellence in a sustained environment of unprecedented global supply chain challenges and rising inflation,” said Ed Breen, DuPont executive chairman and CEO.
“Sustained strong demand in key end-markets such as electronics and water, along with our continued ability to offset raw material inflation with price, were critical to our fourth quarter results. The leading market positions we hold globally, as well as our focus on execution, has led to sales and earnings growth throughout the year and will be key to our success in 2022,” Breen added.
“For the year, we returned more than $2.7 billion of capital to shareholders through share repurchases and dividends and de-levered our balance sheet with a $5 billion reduction in long-term debt,” Breen noted. “These actions, combined with our intent to complete the $375 million remaining under our current share buyback authorization and announcements today of a new $1.0 billion share buyback program and a 10% per share increase in our regular quarterly dividend, further illustrate our commitment to a balanced capital allocation approach and value creation for our shareholders.”
Fourth Quarter 2021 Results
Net sales totaled $4.3 billion, up 14% versus the year-ago period and up 13% on an organic basis, including double-digit organic growth across all four regions and high single-digit to double-digit organic growth in all three reporting segments. Organic sales growth in the quarter includes a 7% increase in price and a 6% increase in volume. The local price increase primarily reflects actions taken to offset higher raw material costs.
Volume growth reflects a continuation of strong global demand in key areas such as semiconductors and water, along with continued improvement in industrial end-markets which were adversely impacted by the COVID-19 pandemic in the year-ago period.
Operating EBITDA was $973 million, up 5% versus the year-ago period as pricing actions, volume gains and earnings associated with the July 1, 2021 acquisition of Laird Performance Materials more than offset higher raw material and logistics costs. Operating EBITDA margin was negatively impacted by higher raw material and logistics costs.
Operating cash flow in the quarter of $621 million and capital expenditures of $184 million resulted in adjusted free cash flow conversion of 100%.
Full Year 2021 Results
Full year net sales totaled $16.7 billion, up 16% versus prior year and up 14% on an organic basis, including double-digit organic growth across all four regions and in all three reporting segments. Organic sales growth for the year includes a 10% increase in volume and a 4% increase in price.
Volume growth reflects robust global customer demand throughout the year in secular growth areas such as electronics and water, along with recovery in end-markets adversely impacted by the COVID-19 pandemic in the year-ago period such as automotive, construction and industrial. The local price increase primarily reflects actions taken to offset higher raw material costs.
Full year operating EBITDA was $4.2 billion, up 21% versus prior year. Volume gains, pricing actions and the absence of charges incurred in the prior year associated with temporarily idled facilities more than offset higher raw material and logistics costs and drove operating EBITDA margin expansion of 100 basis points.
Operating cash flow for the year of $2.3 billion and capital expenditures of $0.9 billion resulted in free cash flow of $1.4 billion. Adjusted free cash flow conversion for the year of 66% was negatively impacted by higher inventories put in place to navigate the strong demand environment amid tight supply chain conditions.
Outlook
“For 2022 we expect net sales between $17.4 and $17.8 billion and operating EBITDA between $4.3 and $4.5 billion, an increase of 6% at the mid-point versus 2021, with top-line volume growth and pricing gains more than offsetting year-over-year raw material and logistics costs increases,” said Lori Koch, CFO of DuPont. “Our outlook for full year adjusted EPS is in the range of $4.60 to $4.90 per share, an increase of 10% at the mid-point versus 2021.
“For the first quarter of 2022, we expect net sales between $4.2 and $4.3 billion, operating EBITDA between $940 and $980 million, and adjusted EPS in the range of $0.94 to $1.00 per share,” Koch continued. “Consumer demand remains strong however raw material and logistics cost inflation is expected to continue to impact margins. We expect operating EBITDA margin in first quarter 2022 to be about flat with fourth quarter 2021 with continued improvement throughout 2022 to more normalized levels in the back half of the year.”
