Dupont De Nemours Inc Q4 2024 Earnings Call Summary

The following is excerpted from the question-and-answer section of the transcript.

Question: Scott Davis - Melius Research - Analyst : Hey, good morning, everybody. Lori, Antonella and Chris. You guys talked -- you referenced AI-related revenues a few times in the call. Is there any -- can you size that for us at all? And kind of give us a sense of what kind of growth rates you've seen there? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, DD.N - Q4 2024 Dupont De Nemours Inc Earnings Call

Question: Scott Davis - Melius Research - Analyst : Okay. That's helpful. And then the incremental margins, 47% or so is what I was calculating is pretty strong. But you've got a little bit of price perhaps headwind in front of you, how do you think about incremental in 2025 and the sustainability kind of puts and takes of costs coming back? And I know there's going to be some noise in the transition here. But is there -- do you think there's an opportunity to keep those incremental above historic levels? Or do you see some costs coming back and some price issues?

Question: Scott Davis - Melius Research - Analyst : Okay, congrats on the year. Best of luck, guys. We'll see you.

Question: John McNulty - BMO Capital Markets - Analyst : Yeah, thanks for taking my question. So maybe just a question on Water. Obviously, there were some easy comps there, but it also it seems like it really continued even on a sequential basis. Can you help us to think about some of the drivers that you're seeing there that are really pushing that growth and how we should be thinking about them as we go through 2025?

Question: John McNulty - BMO Capital Markets - Analyst : Got it. Okay. Thanks for the color. And then with regard to Semis, there is -- it looks like there's a number of node transitions kind of especially rolling in, in the second half of '25. Can you help us to think about what that means for the cadence of growth in the semi-tech platform for you as we look through 2025?

Question: John McNulty - BMO Capital Markets - Analyst : Great. Thanks very much for the color.

Question: Stephen Tusa - JPMorgan - Analyst : Did you see any kind of pull forward in demand with regards to any concerns around tariffs or new administration in the fourth quarter?

Question: Stephen Tusa - JPMorgan - Analyst : Okay. And then I think there was a modest gain in the Electronics segment. I'm not sure if you flesh that out. How big was that?

Question: Stephen Tusa - JPMorgan - Analyst : Oh, okay, got it. All right, thanks a lot.

Question: Jeffrey Sprague - Vertical Research Partners - Analyst : Hey, thanks. Good morning everyone. Sorry if I missed just at the beginning, I was also about 10 minutes late getting on. Just on the spin and the timing now, I feel that's a pretty hard lock on November 1. And maybe any update on just kind of the cost to separate and the kind of stand up stand-alone costs associated with Electronics? Again, I apologize if you addressed that.

Question: Jeffrey Sprague - Vertical Research Partners - Analyst : Great. Then when that -- would that also encompass sort of the stranded cost? That $40 million, is that sort of the public company cost for new ElectronicsCo separate and apart from sort of stranded that you'd need to get after? Could you just kind of put a finer point on that?

Question: Jeffrey Sprague - Vertical Research Partners - Analyst : Great. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, DD.N - Q4 2024 Dupont De Nemours Inc Earnings Call

Question: Chris Parkinson - Wolfe Research - Analyst : Great, thank you so much. Just going back to the water protection, you hit on this towards the end of your prepared remarks, but could you just give us a little bit more perspective on how you see things shaping up across Safety, Shelter and Water throughout '25 as well as just kind of the key considerations that we should be looking at in terms of potential market outperformance? Thank you so much.

Question: Chris Parkinson - Wolfe Research - Analyst : Got it. And just as a quick follow-up, just on the Interconnect side. You mentioned, obviously, some AI-driven tech benefits. But could you sit on kind of the key drivers of the remainder of the portfolio? And just any differences based on geography as well? Thank you so much.

Question: Chris Parkinson - Wolfe Research - Analyst : Great color. Thank you.

Question: Josh Spector - UBS Securities LLC - Analyst : Yeah, hi, good morning. I wanted to ask on IndustrialsCo guidance, but specifically on first quarter versus the year. So in your first quarter, it seems like you're guiding for low single-digit growth. You just did mid-single-digit growth in fourth quarter and you have a pretty easy comp in first quarter. So what am I missing about why that growth shouldn't be higher in the first quarter as it relates to the year?

Question: Josh Spector - UBS Securities LLC - Analyst : Okay. And if I could just follow up on cash deployment. You guys haven't bought back stock in about three quarters now. Your leverage is low, understanding you're going through everything with the splits. But seems to be an opportunity for you to deploy some cash into buybacks. So why isn't that something that we're doing now?

Question: Josh Spector - UBS Securities LLC - Analyst : Okay, thank you.

Question: Patrick Cunningham - Citi Investment Research - Analyst : Hi, good morning. The pro forma-seemed to imply the EBITDA margin profile that corporate retained business is maybe high teens, low 20s. I mean, would you characterize these as normal levels? And does it change maybe what the long-term margin target would be for the IndustrialsCo versus W&P?

Question: Patrick Cunningham - Citi Investment Research - Analyst : Great. And apologies if I missed this, but is there any update on Kalrez? How is that business performing? We had a few quarters of sharp destocking, should we expect some rebound there in 2025, helping underpin some of the strong growth rates in the Electronics business?

Question: Patrick Cunningham - Citi Investment Research - Analyst : Thank you so much.

Question: Aleksey Yefremov - KeyBanc Capital Markets - Analyst : Thank you. Good morning, everyone. How are you thinking about Industrial's portfolio now that you decided to keep the Water business? Any further divestments or do you see any interesting bolt-ons here? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, DD.N - Q4 2024 Dupont De Nemours Inc Earnings Call

Question: Aleksey Yefremov - KeyBanc Capital Markets - Analyst : Great. And then a follow-up on Electronics. Do you have an assumption for underlying market growth in Semis and Interconnect or for her to add growth for each of these segments in '25?

Question: John Roberts - Mizuho Securities - Analyst : Thank you. Congrats on a good quarter. Are you planning to change the name of IndustrialCo? And any progress on industry reclassification?

Question: John Roberts - Mizuho Securities - Analyst : And then secondly, are you planning on keeping Water separate within IndustrialsCo that would preserve the option for a spin later on if that's what you wanted to do? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, DD.N - Q4 2024 Dupont De Nemours Inc Earnings Call

Question: Michael Leithead - Barclays Capital Inc - Analyst : Great, thank you. Good morning to you. For the Electronics still, are we 100% headed for a spin here in November? Or is there any chance of merger or selling these assets before them?

Question: Michael Leithead - Barclays Capital Inc - Analyst : Great, thank you, Ed. And then I apologize if I missed this, but did you announce your new Chief Commercial Officer will be and will they stay with Industrial still, I presume?

Question: Michael Leithead - Barclays Capital Inc - Analyst : Great. Thank you.

Question: David Begleiter - Deutsche Bank - Analyst : Lori, in Semi, you referenced flat sales in China in '25. Can you give a little more color as to why that's happening? And just how big is China for the entire semi-tech business? Thank you.

Question: David Begleiter - Deutsche Bank - Analyst : And how much of your basis is semi-tech is China?

Question: David Begleiter - Deutsche Bank - Analyst : Got it. And just on North American construction, any signs of progress in either resi or commercial? Thank you.

Question: David Begleiter - Deutsche Bank - Analyst : Thank you.

Question: Vincent Andrews - Morgan Stanley & Co. LLC - Analyst : I wanted to follow up on the divestitures discussion. And I'm just wondering with Water now staying within IndustrialsCo, is there a window between now and spin where you can get some assets out of the business without having to assign pro-rata piece of REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, DD.N - Q4 2024 Dupont De Nemours Inc Earnings Call liabilities to them? And if you don't get that done before November 1, do they presumably would have to have liabilities assigned thereafter is November 1, really the hard date on that?

Question: Vincent Andrews - Morgan Stanley & Co. LLC - Analyst : Okay. And then just on free cash flow for 2025. Obviously, you're going to have spin costs and other things that are going to be sort of clouding the underlying performance. So could you give us a sense of how had excellent conversion this year? What you think 2025 might look like?

Question: Vincent Andrews - Morgan Stanley & Co. LLC - Analyst : Perfect. Thanks very much.

Question: Mike Sison - Wells Fargo Securities LLC - Analyst : Hey, good morning. Nice quarter. So organic growth in IndustrialsCo in the fourth quarter as well as your outlook in the first quarter, appears pretty differentiated relative to traditional chemical companies where growth seems to be pretty negative. So I expect that helps our cause in getting that designation change. But maybe can you remind us of what other metrics margins, returns on capital or sort of just make the case why this should be more of a multi-industrial business than a chemical business? REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, DD.N - Q4 2024 Dupont De Nemours Inc Earnings Call

Question: Mike Sison - Wells Fargo Securities LLC - Analyst : Sounds good. And then just a quick follow-up. I think in the past, you talked about advanced nodes as a percent of Electronics, which I assume includes AI-related sales. Can you remind us how big, I guess, advanced nodes are now for semi-tech and Interconnect and then maybe what the growth rate for that subset will be in '25?

Question: Mike Sison - Wells Fargo Securities LLC - Analyst : Okay. Thank you.

Question: Frank Mitsch - Fermium Research - Analyst : Good morning. And let me echo the congrats on the quarter. You basically hit the trifecta in terms of exceeding guidance on sales, EBITDA and EPS from what you provided in the early part of November. So I'm curious as to what went right or what exceeded your expectations in November and December?

Question: Frank Mitsch - Fermium Research - Analyst : Understood. And as we sit here today in the early part of February, the segments that you thought were doing better, i.e., Water Packaging, et cetera, that has that continued at that pace, so the follow-through that you're seeing here in the early part of 2025?

Question: Frank Mitsch - Fermium Research - Analyst : All right. Thank so much.

Question: Laurence Alexander - Jefferies - Analyst : So good morning. Just wanted to follow up on the comments around the construction outlook. What specifically are you assuming for remodelling activity? And also, what's your assumption around FX?

Question: Laurence Alexander - Jefferies - Analyst : Yeah, just currency effects.

Question: Laurence Alexander - Jefferies - Analyst : Perfect. Thank you. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. FEBRUARY 11, 2025 / 1:00PM, DD.N - Q4 2024 Dupont De Nemours Inc Earnings Call

Question: Steve Byrne - Bank of America - Analyst : Yeah, thank you. Lori, you mentioned the fourth water treatment technologies in your remarks. I was curious whether any of the revenue in the water business is a service component such as monitoring or maintaining those treatment technologies or do you have an interest in adding a service component to that business to help your industrial customers reduce water usage? Is that part of your vision in that business?

Question: Steve Byrne - Bank of America - Analyst : I'm just curious about price trends in your various Tyvek products you sell them into construction, into packaging, in the personal protection. How do those end markets differ in terms of price trends at those products?

Question: Steve Byrne - Bank of America - Analyst : Okay, thank. You.