01—Abstract
Summary
Summary of the 8-K filed January 24, 2024. Cited figures are marked; the original filing is the authoritative source.
DuPont de Nemours, Inc. issued a press release on January 24, 2024, furnished as Exhibit 99.1 to this Form 8-K, providing preliminary results for the fourth quarter and full year ended December 31, 2023, along with an initial first quarter 2024 outlook.
The company states that its financial closing procedures are not yet complete, the preliminary figures have not been reviewed or audited, and final results may differ. Results are presented on a continuing operations basis, reflecting the November 1, 2023 Delrin® divestiture, which is treated as discontinued operations, following the earlier M&M Divestiture to Celanese. Preliminary fourth quarter 2023 net sales were approximately $2.90 billiona, with GAAP loss from continuing operations of $(370) to $(220) million and Operating EBITDA of approximately $715 million.
For full year 2023, net sales were approximately $12.07 billionb, GAAP income from continuing operations was $460 to $610 million, Operating EBITDA was approximately $2.94 billion, and adjusted EPS was $3.46 to $3.48. Adjusted free cash flow for the full year was approximately $1.57 billion. The fourth quarter GAAP results include a preliminary non-cash goodwill impairment charge of $750 million to $850 million in the Protection reporting unit within the Water & Protection segment, triggered by market conditions including channel inventory destocking.
For the first quarter of 2024, the company expects net sales of approximately $2.8 billionc, Operating EBITDA of approximately $610 million, and adjusted EPS of $0.63 to $0.65. Management, led by Chairman and CEO Ed Breen, said it expects sequential declines in sales and earnings in the first quarter due to destocking, weak demand in China and the absence of discrete items that benefited the fourth quarter, while expecting restructuring savings to begin in the first quarter and a return to year-over-year growth in the second half of 2024. Final results and 2024 outlook are scheduled for release on February 6, 2024.
02—Key points
Key Highlights
- Preliminary FY2023 net sales of approximately $12.07 billion and Operating EBITDA of approximately $2.94 billion on a continuing operations basis.
- Preliminary Q4 2023 GAAP loss from continuing operations of $(370) to $(220) million, including a non-cash goodwill impairment charge of $750 to $850 million in the Protection reporting unit.
- Preliminary FY2023 adjusted EPS of $3.46 to $3.48 versus GAAP EPS from continuing operations of $0.92 to $1.28.
- Preliminary Q4 2023 cash provided by operating activities from continuing operations of approximately $640 million, and adjusted free cash flow of approximately $500 million.
- Initial Q1 2024 outlook: net sales of approximately $2.8 billion, Operating EBITDA of approximately $610 million, and adjusted EPS of $0.63 to $0.65.
- Management expects sequential declines in Q1 2024 driven by channel inventory destocking and weak demand in China, with restructuring cost savings starting in Q1 and a return to year-over-year growth in the second half of 2024.
- Financial closing procedures are not complete and the preliminary figures are unaudited, so final results and the Q1 outlook may change.
03—Questions
Frequently Asked Questions
Why did DuPont record a goodwill impairment charge?
DuPont identified a triggering event as of December 31, 2023, driven by market conditions including incremental channel inventory destocking, and performed an impairment analysis of the Protection reporting unit within the Water & Protection segment. The carrying value of that unit includes historical DuPont assets and liabilities measured at fair value in connection with the Dow and DuPont merger. Preliminary analysis indicates a non-cash charge of $750 million to $850 million.
How did the Delrin divestiture affect the reported results?
The Delrin acetal homopolymer business was divested to TJC LP on November 1, 2023. Its results for the three and twelve months ended December 31, 2023 are presented as discontinued operations, so the reported figures refer to continuing operations. Results for the M&M Divestitures, including the Celanese transaction completed November 1, 2022, are also shown as discontinued in comparative periods.
What is the outlook for the first quarter of 2024?
DuPont expects Q1 2024 net sales of approximately $2.8 billion, Operating EBITDA of approximately $610 million, and adjusted EPS of $0.63 to $0.65. Management expects sequential declines in sales and earnings, citing destocking, weak demand in China, and the absence of discrete items that benefited Q4 2023. The company expects an approximate ten percent Operating EBITDA increase in Q2 from Q1 and a return to year-over-year sales and earnings growth in the second half of 2024.
When will DuPont release final results and hold its earnings call?
DuPont will release final fourth quarter and full year 2023 results at 6:00 a.m. ET on Tuesday, February 6, 2024, and host a conference call at 8:00 a.m. ET that day. The company is observing a quiet period until it reports.
Are the preliminary numbers final, and could they change?
No. The financial closing procedures are not yet complete, and the preliminary estimates have not been reviewed or audited by the independent registered accounting firm. The company states that final results may differ, including due to the completion of closing procedures and the annual audit, and that the Q1 2024 outlook may also change.
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