PFAS Liabilities Update
Q: What's the status of state AG and PI cases?
A: Ed Breen explained that two major PFAS-related liabilities remain: state AG cases and personal injury cases. The personal injury cases have been reduced from about 6,000 to 3,000, mainly involving firefighters exposed to firefighting foam. DuPont's exposure is limited, as they are responsible for only 3% to 7% of the consortium liability and only one-third of that amount. They aim to settle as much as possible before the spin-off. [5], [6]

AI-Driven Demand Growth
Q: How is AI impacting your Electronics business?
A: Lori Koch stated that AI acceleration is contributing to recovery in both Semiconductor and Interconnect Solutions businesses. AI currently represents about $250 million in sales, with significant growth potential. Advanced nodes require more of their materials, leading to growth 200 to 300 basis points above market. [0], [3]

Earnings Guidance and Seasonality
Q: Why is EBITDA guidance only up slightly sequentially?
A: Lori explained that normal seasonality is muted due to recovery and a $30 million pre-buy in Q2, which will temper Q3 growth. Guidance reflects a cautious view, although they normally expect a $50 million to $100 million lift from Q2 to Q3. The decline from Q3 to Q4 is also muted to about $50 million due to continued recovery. [4]

Electronics & Industrial Outlook
Q: What is the outlook for E&I into 2025?
A: Lori expects high single-digit growth in E&I heading into 2025, driven by AI acceleration and a pickup in consumer electronics. Semiconductor utilization rates are projected to be in the high 70s by end of 2024, setting up a return to normal patterns. Advanced nodes should reach low 80s utilization. [13], [23]

Water & Protection Destocking
Q: Are you seeing improvement from destocking in W&P?
A: Antonella noted a lift in Q2 in Medical Packaging and Water businesses where destocking had the biggest impact. They expect continued improvement, with overall revenue relatively flat in the second half due to muted seasonality and a cautious view on the residential market. Margins are expected to be flattish to up moving forward. [7], [8]

Spin-off Reporting Structure
Q: How will reporting change with the spin-off?
A: Lori stated they intend to report in the new structure prior to the Form 10 filings, targeting early next year. RemainCo will likely have three reportable segments, including a healthcare segment comprising Tyvek, Spectrum, Liveo Biopharma, and Donatelle. They are also working to change their SIC code to reflect the diversified industrial nature of the company. [11], [12], [22]

Interest in Water Business
Q: Any interest in assets, especially water business?
A: Ed Breen indicated they haven't had conversations about selling the water business but would consider it if there's a better path to creating shareholder value. They don't plan to bolt on businesses ahead of the split. [9]

Cost Savings and Restructuring
Q: What's driving lower cost of goods sold?
A: Antonella highlighted impact from cost deflation and accelerated restructuring actions. They now expect $115 million in restructuring savings this year, up from the previous $100 million estimate, helping to reduce costs and improve margins. [27]

Donatelle Acquisition Impact
Q: Can you size the Donatelle acquisition and its fit?
A: Donatelle, with annual revenue of about $75 million, fits well with the Spectrum acquisition, adding exposure to large medical device OEMs and slightly better margins. This enhances their healthcare portfolio ahead of the spin. [24], [25]

Cash Flow Performance
Q: What drove strong cash flow in Q2?
A: Lori attributed the strong cash flow to better working capital performance, especially in inventory management. They are on track to meet their 90% cash conversion target for the year, with a 96% rate achieved quarter-to-date. [17]