Dupont's first-quarter net sales were $3bn, down 3 per cent from a year earlier

On May 4, dupont released financial results for the first quarter of 2023. In the first quarter, dupont reported net sales of $3 billion, down 3% from a year earlier. Operating EBITDA (earnings before interest, taxes, depreciation and amortization) was $714 million.

"Our earnings were in line with our expectations for the first quarter of 2023, with strong execution by our team despite lower volume in electronics and construction-related end markets," said EdBreen, Executive Chairman and Chief Executive Officer of dupont. While semiconductor Technology and electronic interconnect Technology sales declined in the quarter, as expected, Industrial Solutions and Water Treatment & Protection all saw endogenous business growth, while demand for our automotive adhesives product line continued to be strong. Our business is well positioned to leverage leading market positions to accelerate growth as the consumer-driven short-cycle electronic end markets recover.

We also announced a definitive agreement to acquire Spectrum Plastics Group, a leading manufacturer of critical components and equipment for high-complexity, mission-critical applications in the medical end market. The planned acquisition will add to dupont's focus on the key growth area of industrial technology and strengthen our existing position in the stable and rapidly growing healthcare end-market. "Over time, we expect this transaction to deliver growth and clear synergies with our existing healthcare pipeline, creating significant value for our shareholders."

First quarter 2023 Electronics & Industrial segment

The 16% decrease in net sales was a combination of a 13% decrease in endogenous operations, a 2% unfavorable currency impact, and a 1% unfavorable business mix impact. A 15% decrease in volume was partially offset by a 2% increase in pricing.

The electronic interconnect technology business recorded a 21% decline in endogenous business, with lower consumer electronics spending and channel deinventory leading to lower sales volume.

The endogenous business of the semiconductor technology business showed a mid-teens decline. Weak end-market demand and channel deinventory led to a decrease in capacity utilization of semiconductor customer factories, which led to a decrease in sales volume.

The Industrial Solutions business showed low single-digit growth in the organic segment, with higher pricing and continued strength in broad industrial markets such as aerospace and healthcare, partially offset by lower demand in advanced printing and lighting applications driven by the consumer market.

The Water Treatment & Protection segment for the first quarter of 2023

Net sales increased 1%, with 4% growth in the endogenous business largely offset by a 3% negative currency impact.

The endogenous business grew 4%, with a 6% increase in pricing due to the carry-forward impact of extensive actions in 2022 to offset cost inflation, partially offset by a 2% decline in volume in the Construction Building Solutions business.

The water treatment business achieved low double-digit endogenous business growth, mainly driven by pricing factors and continued strong demand for water treatment technologies.

The Security Solutions business achieved mid-single-digit endogenous business growth, driven by pricing and volume growth driven by strong performance in the aerospace, automotive, and healthcare end markets.

The Construction Building Solutions business showed a mid-single-digit endogenous decline, with the positive impact of price increases offset by lower sales volumes in the construction market.

"We had some volume pressure early in the year from lower sales in the electronics and construction industries, but I am pleased that our team is focused on execution," said dupont Chief Financial Officer LoriKoch in the earnings statement. We continue to expect continued strength throughout the year in water, automotive, aerospace and healthcare. The electronic market will continue to have market weakness and channel destocking in the short term.

Based on recent customer feedback and third-party market forecasts in the electronics space, we expect customer capacity utilization to bottom out relatively soon and improve in the third quarter, which is about a quarter later than previously expected. Due to the delayed recovery in the electronic market, we are adjusting the high value of our existing guidance range, including full-year net sales, operating EBITDA, and adjusted earnings per share. For Q2 2023, we expect results to be similar to Q1, as overall market conditions are expected to be roughly the same."