01—Abstract
Summary
Summary of the 10-K filed February 15, 2024. Cited figures are marked; the original filing is the authoritative source.
DuPont de Nemours, Inc. reported 2023 net sales of $12.07 billiona, down 7 percent from $13.02 billion in 2022, driven by an 8 percent decrease in volume and a 1 percent unfavorable currency impact, partly offset by a 2 percent increase in local price and product mix.
Income from continuing operations before income taxes fell to $504 millionb from $1.45 billion, largely due to an $804 million non-cash goodwill impairment charge in the Water & Protection segment's Protection reporting unit. Net income available to common stockholders was $423 million, or $0.94 per diluted share, compared with $5.87 billion in 2022, which included gains from the Mobility & Materials divestiture to Celanese. Operating EBITDA declined to $2.94 billion from $3.26 billion.
The company completed the sale of its Delrin business to TJC on November 1, 2023, and acquired Spectrum Plastics Group on August 1, 2023 for a net purchase price of about $1.79 billionc. Cash, cash equivalents and marketable securities were $2.39 billion at year end versus $4.96 billion a year earlier, reflecting the $2 billion accelerated share repurchase, the Spectrum acquisition and a $400 million contribution to the Water District PFAS settlement fund. Total debt was $7.80 billion.
The company's credit ratings were BBB+ (S&P), Baa1 (Moody's) and BBB+ (Fitch), all with stable outlooks. DuPont completed its $5 billiond share buyback program with the $2 billion ASR settlement and approved a new $1 billion program in the first quarter of 2024, with an initial $500 million ASR.
The quarterly dividend was raised to $0.38 per share, a 6 percent increase. For 2024, management anticipates an electronics market recovery and improved industrial orders, while noting continued weak demand in China and additional destocking in the first quarter.
02—Key points
Key Highlights
- Net sales of $12.07 billion in 2023, down 7 percent from $13.02 billion, with volume down 8 percent.
- Electronics & Industrial net sales fell 10 percent to $5.34 billion and Operating EBITDA fell 20 percent to $1.47 billion.
- An $804 million non-cash goodwill impairment charge in the Protection reporting unit drove income from continuing operations before income taxes down to $504 million from $1.45 billion.
- Net income available to common stockholders was $423 million, or $0.94 per diluted share, versus $5.87 billion in 2022, which benefited from the M&M Divestitures.
- Completed the $5 billion share repurchase program and approved a new $1 billion program; a $500 million ASR was initiated in the first quarter of 2024.
- Cash flow from continuing operations operating activities rose to $2.19 billion from $1.25 billion, primarily from working capital improvements.
- Quarterly dividend increased to $0.38 per share for the first quarter of 2024, a 6 percent increase, with ratings of BBB+/Baa1/BBB+ maintained.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2023filed February 15, 2024Financial Statements
FY2023 against FY2022
| Line item | FY2023FY2022 | Change |
|---|---|---|
| Revenue | $6.61B$13.02B | −49.2% |
| Cost of Revenue | $4.44B$8.40B | −47.1% |
| Gross Profit | $2.17B$4.62B | −52.9% |
| R&D Expenses | $192.00M$536.00M | −64.2% |
| SG&A Expenses | $891.00M$1.47B | −39.3% |
| Net Income | $423.00M$5.87B | −92.8% |
| EPS (Basic) | $0.94$11.77 | −92.0% |
| EPS (Diluted) | $0.94$11.75 | −92.0% |
| Shares Outstanding (Basic) | 449.90M498.50M | −9.7% |
| Shares Outstanding (Diluted) | 449.90M499.40M | −9.9% |
05—Questions
Frequently Asked Questions
Why did DuPont's pre-tax income from continuing operations fall so sharply in 2023?
The main driver was an $804 million non-cash goodwill impairment charge tied to the Protection reporting unit within Water & Protection, which was triggered by macroeconomic pressures in residential, non-residential and repair and remodel construction markets and by channel inventory destocking in healthcare and industrial end-markets. Restructuring and asset related charges were also $146 million.
How much cash does DuPont have, and how is it being returned to shareholders?
Cash, cash equivalents and marketable securities were $2.39 billion at December 31, 2023, down from $4.96 billion. In 2023 the company paid $651 million in dividends and repurchased $2 billion of stock under an accelerated share repurchase, completing the $5 billion program. In early 2024 it approved a new $1 billion repurchase program that terminates June 30, 2025, and a first-quarter 2024 dividend of $0.38 per share.
What are the main PFAS-related liabilities investors should know about?
DuPont, Chemours, Corteva and EIDP agreed to a $1.185 billion settlement with U.S. public water systems, of which DuPont is responsible for $400 million, paid into a Qualified Settlement Fund in the third quarter of 2023. A federal court granted final approval on February 8, 2024. The MOU sets a cost-sharing arrangement for future eligible PFAS costs, under which DuPont carries a $206 million indemnification liability as of year end, and the AFFF multidistrict litigation includes about 5,400 cases where DuPont is mostly named for fraudulent transfer claims.
What did DuPont acquire and divest during 2023?
DuPont acquired Spectrum Plastics Group from AEA Investors on August 1, 2023 for a net purchase price of about $1.79 billion, integrating it into the Electronics & Industrial segment. It closed the sale of the Delrin business to TJC on November 1, 2023, receiving about $1.28 billion in cash proceeds, a $350 million note receivable and a 19.9 percent equity interest in Derby Group Holdings.
What is management's outlook for 2024?
For the first quarter of 2024, management anticipates additional inventory destocking in industrial-based businesses and continued weak demand in China, with some abatement expected by the second quarter. For full-year 2024, it anticipates an electronics market recovery, including improved semiconductor fabrication utilization rates, and improved industrial orders as customer inventory levels normalize. Capital expenditures are expected to be about $600 million.
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