DuPont de Nemours, Inc. Q1 FY2025 earnings call

• Strategic progress on electronics business spin-off: Completed executive leadership appointments, made progress on Qnity Board composition, and submitted Form 10 registration statement. - Strong first quarter financial results: Sales grew 6% organically, operating EBITDA $788 million +16% y-o-y, margin 25.7% +240bps, adjusted EPS $1.3 +30%. - End-market demand: Broad-based in electronics, healthcare, and water. - Tariff mitigation: Estimated $500 million annualized cost exposure, currently $60 million net impact, focusing on supply chain and sourcing adjustments.

First quarter net sales were $3.1 billion, up 5% versus the prior year. Organic sales growth was 6%, offset by a 1% currency headwind. Organic sales growth consisted of an 8% volume increase and a 2% price decrease. ElectronicsCo had net sales of $1.1 billion, up 14% organically due to a 16% volume increase and 2% price decrease. Operating EBITDA for ElectronicsCo was $373 million, up 26% with a margin of 33.4%. IndustrialsCo had net sales of $1.95 billion, flat, with 2% organic sales growth offset by a 1% currency headwind and 1% unfavorable portfolio impact. Operating EBITDA for IndustrialsCo was $464 million, up 6% with a margin of 23.8%. Healthcare & Water Technologies in IndustrialsCo saw low-teens organic sales growth, while Diversified Industrials was down mid-single-digits organically.

• First quarter results ahead of prior guidance: Sales +6% organic, operating EBITDA +16%, margin +240bps, adjusted EPS +30%. - Second quarter estimate: Net sales ~$3.2 billion, operating EBITDA ~$815 million, adjusted EPS ~$1.05. - Full-year 2025 guidance maintained: Net sales $12.8B-$12.9B, operating EBITDA $3.325B-$3.375B, adjusted EPS $4.30-$4.40. Tariff impact ~$60M not included in guidance.

• Tariff uncertainties: Ongoing efforts to mitigate $500M annualized cost exposure, currently $60M net impact. - China anti-competitive review: Tyvek business under investigation, minimal impact on total company (less than 1% of sales). - Aramids business impairment: Accounting-related impairment due to segment realignment, no change in future cash flows of the business.

Q: Jeff Sprague asked about the exemption process and supply-chain optimization related to tariffs.

A: Jon Kemp said product exemptions are a small part of mitigation, with bulk from procurement and supply-chain optimization. Lori Koch added total U.S. sales exported to China for finished goods is ~$200M.

Q: Scott Davis asked about tariff numbers by business and moving fixed assets.

A: Antonella Franzen said tariff exposure split evenly between ElectronicsCo and IndustrialsCo, around 6% of COGS. Lori Koch stated no movement of fixed assets.

Q: Steve Tusa asked about sales in China and substitution.

A: Jon Kemp said ~70% of sales into China are specked-in materials with long-term contracts, making substitution difficult.

Q: John McNulty asked about water market demand and ElectronicsCo's AI exposure.

A: Lori Koch said water demand strong from desalination and various applications, Jon Kemp said Interconnect Solutions AI exposure up mid-teens with growth in advanced chips and packaging.

Q: Josh Spector asked about guidance and China anti-competitive review.

A: Antonella Franzen said guidance kept clean, ongoing China review for Tyvek with no impact on other business.

Q: David Begleiter asked about Kevlar/Nomex and semiconductor tech earnings pull-forward.

A: Lori Koch said focus on healthcare and water, Antonella Franzen said ~$30M sales pulled from Q2 to Q1.

Q: Mike Leithead asked about Aramids business impairment.

A: Antonella Franzen said impairment due to segment realignment, no change in future cash flows, accounting-related.

Q: Mike Sison asked about Qnity comparisons and AI.

A: Jon Kemp said compare to semiconductor materials/equipment firms, AI driving growth in advanced nodes and packaging.

Q: Frank Mitsch asked about IndustrialsCo growth and order books.

A: Lori Koch said Healthcare and Water growing, diversified Industrials soft in Shelter and Automotive, Antonella Franzen said order books strong in April.

Q: Arun Viswanathan asked about spin logistics and order patterns.

A: Lori Koch said no material M&A before Nov 1, order patterns consistent with expectations.

Q: Steve Byrne asked about PFAS and $200M U.S. to China shipments.

A: Lori Koch said studying PFAS action items, $200M shipments related to exports with ongoing mitigation efforts.