DuPont Q4-2019 net sales down five percent at $5.2bn

DuPont Q4-2019 net sales down five percent at $5.2bn
Published: 3 February 2020 - 5:30 a.m.
By: Martin Menachery
DuPont announced financial results for the fourth quarter and full year 2019.

“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 unfavourable 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 organisation and better position us for growth.

Full year net sales totalled $21.5bn, down five percent versus 2018. On an organic basis, net sales were down two percent with two percent higher price being more than offset by four percent lower volume primarily from the macro conditions in automotive and electronic end markets.

Pro forma GAAP income (loss) from continuing operations totalled $522mn, versus $237mn in the year-ago period. Pro forma operating EBITDA of $5.6bn was down four percent 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.

Full year 2019 pro forma operating EBITDA margins were up 10bps from the prior year more than offsetting a 50bps headwind from lower equity affiliate income.

Pro forma GAAP EPS from continuing operations totalled $0.74 versus $0.23 in the year-ago period; the decline is mostly attributable to higher significant items, a higher tax rate, currency headwinds and lower segment results partially offset by lower costs historically allocated to Dow and Corteva. Pro forma adjusted EPS decreased seven percent to $3.80, compared with pro forma adjusted EPS in the year-ago period of $4.07 primarily driven by a higher tax rate, currency headwinds and lower segment results.

Net sales for the quarter totalled $5.2bn, down five percent versus the same quarter last year. On an organic basis, net sales were down two percent with one percent higher price being more than offset by three percent lower volume. Organic sales were flat to up in all core segments except transportation and industrial, which was impacted by continued weak automotive markets and declining nylon price.

GAAP income from continuing operations totalled $191mn, versus pro forma GAAP Income from continuing operations of $310mn in the year-ago period. Operating EBITDA was $1.4bn, 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. These headwinds were partially offset by higher pricing in segments outside of T&I and cost savings.

GAAP EPS from continuing operations totalled $0.24 versus pro forma GAAP EPS from continuing operations in the year-ago period of $0.39; the decline is mostly attributable to lower segment results and a higher tax rate partially offset by lower significant items and the absence of costs historically allocated to Dow and Corteva. Adjusted EPS decreased 34% to $0.95, compared with pro forma adjusted EPS in the year-ago period of $1.43 primarily driven by lower segment results and a higher tax rate.

“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 and beverage, home and personal care, and health and wellness markets while creating tremendous opportunities for our employees and customers. In addition, we continue to bolster our portfolio through the recently announced strategic acquisitions in the high growth water space.”

I remain focused on this aspect of DuPont’s value creation opportunity, working closely with the board to assess opportunities to unlock shareholder value through portfolio refinement and differentiated investment,” Breen stated.

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