DuPont de Nemours, Inc. (DD) Q4 2024 Earnings Summary

Executive Summary

Q4 delivered solid top-line and margin expansion: net sales $3.092B (+7% YoY), operating EBITDA $0.807B (+13% YoY), and adjusted EPS $1.13 (+30% YoY), driven by Electronics strength and a return to growth in Water & Protection; GAAP EPS was $(0.17) due to significant items (notably interest rate swap MTM) .
FY25 guidance embeds mid‑single digit organic growth: Q1’25E net sales ~$3.025B, operating EBITDA ~$0.760B, adj. EPS ~$0.95; FY25E net sales $12.8–$12.9B, operating EBITDA $3.325–$3.375B, adj. EPS $4.30–$4.40; EPS assumes ~~1% higher tax rate vs 2024 (~~$0.10 headwind) .
Strategic catalysts: Electronics spin targeted for Nov 1, 2025; Water retained; segment reporting realignment begins Q1’25; dividend raised 8% to $0.41 per share (payable Mar 17, 2025) .
Street vs. results: S&P Global consensus estimates were unavailable at time of analysis; however, management noted Q4 exceeded its own November guidance on sales, EBITDA, and EPS—a positive narrative catalyst into 2025 .

What Went Well and What Went Wrong

What Went Well
- Electronics momentum: E&I organic +10% YoY; Semi up low‑teens (AI adoption, China); Interconnect up low‑double digits; E&I operating EBITDA margin expanded 250 bps to 30.3% .
- Water & Protection recovery: Organic +6% YoY with Water up low‑double digits; Safety Solutions (medical packaging) up high‑single digits; W&P margin +170 bps to 26.3% .
- Actionable quote: “continued strength in electronics end-markets and a return to year-over-year top-line growth in Water & Protection” — CEO Lori Koch .
What Went Wrong
- GAAP loss in Q4: $(61)M GAAP loss (EPS $(0.17)) largely from significant items, including a non‑cash interest rate swap MTM loss ($290M pretax) .
- Corporate & Other softness: Organic sales declined 7% YoY in Q4; operating EBITDA negative $7M .
- Price headwinds: Q4 organic sales +7% was volume‑led (+8%) with a 1% price decline; management also flagged a ~1% price headwind for 2025 .

Financial Results

Consolidated results vs prior quarter and prior year

Metric	Q4 2023	Q3 2024	Q4 2024
Revenue ($B)	$2.898	$3.192	$3.092
Operating EBITDA ($B)	$0.715	$0.857	$0.807
Operating EBITDA Margin (%)	24.7%	26.8%	26.1%
GAAP EPS (Continuing) ($)	$(0.72)	$1.13	$(0.17)
Adjusted EPS ($)	$0.87	$1.18	$1.13
Cash from Operations ($B)	$0.646	$0.737	$0.564
Transaction‑Adjusted FCF ($B)	$0.501	$0.640	$0.455

Segment performance (Q4)

Segment Metric	Q4 2023	Q4 2024
Electronics & Industrial Net Sales ($B)	$1.361	$1.506
Electronics & Industrial Operating EBITDA ($B)	$0.378	$0.457
Electronics & Industrial Operating EBITDA Margin (%)	27.8%	30.3%
Water & Protection Net Sales ($B)	$1.277	$1.359
Water & Protection Operating EBITDA ($B)	$0.314	$0.357
Water & Protection Operating EBITDA Margin (%)	24.6%	26.3%

KPIs (Q4 2024 YoY)

KPI	Q4 2024
Organic Sales Growth – Consolidated	+7% (vol +8%, price −1%)
Organic Sales Growth – E&I	+10%
Organic Sales Growth – W&P	+6%
Organic Sales Growth – Asia Pacific	+11%
Organic Sales Growth – U.S. & Canada	+5%
Organic Sales Growth – EMEA	+1%

Notes: Significant items in Q4 included a $290M pretax interest rate swap MTM loss (EPS impact $(0.53)), $117M separation costs, and tax items (EPS $(0.24)) .

Guidance Changes

Metric	Period	Previous Guidance	Current Guidance	Change
Net Sales ($B)	Q1 2025E	N/A	~$3.025	Initial
Operating EBITDA ($B)	Q1 2025E	N/A	~$0.760	Initial
Adjusted EPS ($)	Q1 2025E	N/A	~$0.95	Initial
Net Sales ($B)	FY 2025E	N/A	$12.8–$12.9	Initial
Operating EBITDA ($B)	FY 2025E	N/A	$3.325–$3.375	Initial
Adjusted EPS ($)	FY 2025E	N/A	$4.30–$4.40	Initial
Organic Sales Growth – ElectronicsCo	FY 2025E	N/A	~6%–7%	Initial
Organic Sales Growth – IndustrialsCo	FY 2025E	N/A	~3%–4%	Initial
Assumed FX impact	Q1/FY 2025E	N/A	Q1: ~−1.5% YoY; FY: ~−1% YoY	Initial
Tax rate impact to EPS	FY 2025E	N/A	~$(0.10) from ~+1ppt higher tax rate vs 2024	Initial
Dividend per share	Ongoing	2024 quarterly dividend	$0.41/qtr (8% increase), payable Mar 17, 2025	Raised

Additional outlook: Expect 6–7% sequential sales lift into Q2’25 from Q1 seasonality; post‑spin DuPont (IndustrialsCo) to report Water as a distinct segment; reporting realignment starts Q1’25; Electronics separation targeted Nov 1, 2025 .

Earnings Call Themes & Trends

Topic	Previous Mentions (Q2 2024, Q3 2024)	Current Period (Q4 2024)	Trend
AI/Tech in Semi/ICS	Q2: Semi >20% organic on AI ramps; ICS low‑teens; both volume‑led . Q3: Semi >20%; ICS low‑double digits; margin +210 bps .	Continued AI demand; Semi “low‑teens” organic; ICS low‑double digits; AI‑related sales >$300M, ~30% growth .	Strengthening AI tailwind.
Water markets	Q2: Water down high‑single digits YoY; sequential improvement . Q3: Water up low‑single digits YoY; +3% seq .	Water up low‑double digits YoY; +4% seq; 2025 organic mid‑ to high‑single digits .	Recovering, accelerating.
Medical packaging / Healthcare	Q2: Medical packaging down; destocking ongoing . Q3: Med packaging +10% seq .	Return to YoY growth; med packaging and biopharma both up double‑digits .	Destocking resolved; growth resuming.
China/Regional	Q3 APAC +9% organic; China strong .	APAC +11% organic; Semi China +40% in 2024; expect flat China Semi in 2025 (normalizing) .	Strong but normalizing in Semi.
Tariffs/Prebuy	—	~+$20M prebuy in Q4 (new fab start‑ups; minor tariff timing effect) .	One‑off tailwind faded.
Portfolio/Spin	Q3: Pursuing separations plan .	Electronics spin targeted Nov 1, 2025; Water retained; new reporting structure in Q1’25 .	Accelerated timeline.

Management Commentary

Strategy and execution: “Our team’s ongoing focus on operational execution and cost discipline throughout 2024 delivered 100 basis points of margin expansion with 17% adjusted EPS growth for the full year” — CEO Lori Koch .
Guidance detail: “We estimate first quarter 2025 net sales of about $3.025 billion... operating EBITDA of about $760 million and adjusted EPS of approximately $0.95 per share” — CFO Antonella Franzen .
Spin timing and structure: “Targeting November 1, 2025, for the completion of the intended separation of the Electronics business... Water will remain in the DuPont portfolio” .
Commercial focus: “We recently hired a Chief Commercial Officer to drive consistent execution across all of our businesses” — CEO (role to remain with IndustrialsCo) .

Q&A Highlights

AI revenue sizing: AI‑related sales >$300M in 2024, ~30% growth; management expects AI to remain a key growth driver for ElectronicsCo .
2025 incrementals and pricing: 2025 incrementals modeled mid‑40s; ~1% price headwind offset by absorption and inflation dynamics (net neutral to margins) .
Water outlook: 2025 organic growth mid‑ to high‑single digits; long‑term potential from DLE and PFAS opportunities .
Semi demand cadence: Q4 included ~$20M prebuy tied to new fab start‑ups; Semi China grew ~40% in 2024 and is expected to be flat in 2025 as growth normalizes .
Separation costs/dissynergies: Total separation cash costs now “a little less” than ~$700M; dissynergies trimmed to ~$40M; stranded costs expected to be immaterial .
Capital returns: No further buybacks until completion of the separation given cash needs for the transaction .
Classification: Targeting multi‑industrial reclassification post‑spin; margin/volatility profile aligns with multi‑industrial peers .

Estimates Context

S&P Global consensus estimates for Q4 2024 (EPS, revenue, EBITDA) were unavailable at the time of analysis due to data access limits. As a proxy, management cited that Q4 exceeded its own November guidance on sales, EBITDA, and EPS, indicating positive surprise versus company expectations .
Implications: Given stronger‑than‑guided Electronics, accelerating Water/Healthcare, and initial FY25 guide above FY24 actuals, Street models may need upward revisions for segment growth, operating leverage, and cash conversion, while incorporating ~1% pricing headwind and a ~1ppt higher tax rate in 2025 .

Key Takeaways for Investors

Electronics remains the growth engine, with AI and advanced node transitions expanding mix and margins; E&I margin hit 30.3% (+250 bps YoY) in Q4 .
Water inflected to growth with sequential momentum; 2025 outlook mid‑ to high‑single digit organic growth supports IndustrialsCo thesis .
FY25 guide implies continued margin resilience despite pricing headwinds, aided by absorption, OpEx discipline, and tax headwind transparency (~$0.10 EPS) .
Spin timeline and reporting realignment are near‑term catalysts; clarity on ElectronicsCo/IndustrialsCo governance and capital structures expected in 2025 .
Balance sheet/cash: Q4 transaction‑adjusted FCF $0.455B (96% conversion); FY24 transaction‑adjusted FCF $1.806B (105% conversion) positions DD to fund separation costs while maintaining dividend (raised 8%) .
Watch Semi China normalization (flat in 2025) and any fade of prebuy tailwinds; net impact appears manageable with broader AI and Interconnect ramps .
Near‑term trading setup: Seasonally softer Q1 followed by 6–7% sequential lift into Q2; momentum in Electronics/Water and the spin path likely to drive narrative and estimate revisions through 2025 .