DuPont de Nemours (DD) 30 Jul 202020 Q2 Earnings call transcript

Good day, and welcome to the DuPont Second Quarter 2020 Earnings Conference Call. Today’s conference is being recorded. At this time, I would like to turn the conference over to Leland Weaver. Please go ahead.

Good morning, everyone. us second joining conference XXXX for call. you for quarter DuPont's earnings Thank

this investors available webcast. are call We making to and via media

We on supplement call, to through the of have during our and prepared conference webcast. to this DuPont's our website slides Investor the comments posted link Relations section are slides

slide. call statement Ed our on Breen, Officer. Financial Joining disclaimer Chief Officer; in read Executive the Please me forward-looking Chief today are the contained the Koch, and Lori

statements regarding based During expectations we and the results make forward-looking materially our Because uncertainty, are call, about may predictions statements factors and from future. and forward-looking on our the actual risk will or assumptions performance statements. our differ that these involve current

periodic which detailed and historical significant Our principal risks cause of may financial reports exclude includes otherwise XXXX as measures current Form XX-K specified, uncertainties, discussion items. differences. updated such Unless by today all presented and our

refer financial call the Ed. measures. also turn the A over will included non-GAAP release. now to press is our measure reconciliation to I'll We GAAP to comparable most in

say for Thanks, you everyone pandemic in combat I safe I out well. employees position to of quarter, to good company took ensure us. the I your the morning ones and our and part Last we thank that strengthen working. our pleased you this financial this the quick do are the for protect of to priorities unprecedented Leland, operating that actions our sites, safe operations are and laid our loved hope environment. and and am joining

priorities solid like specifics of the will results current global all of efforts face pandemic. the our quarter, deliver I'd Lori environment. in performance to to this to but the of Additionally, acknowledge the I'd our versus like tremendous employees this of discuss the quarter cover first in our

foremost, paramount. and wellbeing remains of employees safety our the and First

from to enable restrict sites, quarantines to home We execute access and employees protocols, needed cleaning continue our where where work administer our possible. to enhanced

focused as In our extra achieved second XXX% our safety maintaining performance around the our all incredible on are remain safely across XXX our response taken the focused on the plan. remained measures the safety to organization, in operations. to the we currently effort of Through in pandemic, We globe quarter. best addition manufacturing laser according employees sites have operating our to time

We also balance already bolstering sheet. priority, on progress third our strong made nice our

be year upsized As we quarter, discussed launched come used satisfy our bond and a last long-term maturities due the and facility. X will extended offering, liquidity this successful of November we billion that debt which to in

$X debt, N&B Looking plan cash will until end ahead, position using to with we on payment associated which billion pay XXXX. deal of IFF debt in a down very the the favorable us of no long-term leave special maturities and with

continue protective it for what garments needed believe combination the is products with Finally, increase of to to we which capacity of ours has the companies proud significant to thus the with improved healthcare frontline critically and to of to support other achieved significantly like workers with production on to our this in our partnering TyvekTogether others combat industry far leaders the pandemics. I important am essential campaign, supply efforts COVID-XX. we've efforts deliver

across We the also advance critical other to priorities continue company.

not the will This lives innovations every years. In XXXX With positive only towards DuPont. impact our exciting the day. inaugural in Goals, able coming our fact, report, to but week, company, I also and create are forward people's make the the across which just to company this time we an last is for progress new a our look in highlight our progress at published to our report Sustainability convey sustainability we we able are we

that with mid-March million in we the Slide We $XXX structure to I as approximately pandemic X, remain delivered the of committed cost the the pleased during are cost a playbook also implemented and to we've in best-in-class executing savings am Moving quarter, structural. progress which intensified. thirds made two

progress cost year delivering and made savings the the million towards earlier great, of to of this savings in announced structural place. $XXX we We the actions the great are have deliver majority

In place we're addition the to savings, XXXX. tail of the in realizing these put we synergies cost benefits DowDuPont restructuring also and from the actions in

structure, expenses which As aimed I've actions cost highly productive G&A noted a scaled the targeted towards the enabling size organization. to and of is before, are our appropriately at cost

continuously component structure we key innovation, optimization cost our which our drive also While through remains monitor will strategy. of will a growth for opportunities, we

R&D, invest well sales, softness, be positioned areas to continuing fully to we when are in so like emerged key growth. we capture will and We that this application development from

studying ensure some portion of savings we the more become we We in that to the structural. are changes savings to are also as temporary T&E what better such areas can experiencing understand temporary make these

approach further plus is in the scouting generate we areas new to to to initiatives, consistently hostelling Additionally asset work savings productivity evaluating our effective of driven are from potential instilled most for DuPont mindset other at are footprint way order we longer-term sharing office we drive consolidation an by improvement. the or and

$XXX the lower also made XXXX We $X approximately CapEx billion, reduce than to which about to million decision is XXXX.

environment. for and the deliver are perspective, when restarting markets our demand ensure goal. to reducing capital a reducing any developed recover. of expenditures half growth we the able detailed on we in good first made our remain safety working current our the capture projects to track not the progress are quarter, notable plans fully We have related Through From is which due to accounts the capital past year, we in

versus generated sales improvements. from majority systemic productivity the were lower we and benefits the idling of However, facilities

targeting detailed are plans for we the greater generate Our initiatives and you a will we to favorably that And developed anticipate benefits capital expect number half XXXX. than environment. impact improvement of have those macro a soft teams beyond enabled working million second in would these $XXX that a

to positions act is on we to Our so. strong sheet is generation our focus on only that returning I of well when believe we do commitment shareholders board feel not capital our to working. that playbook appropriate ensures cash balance excess us the it have and a

We within are on our levers have and plans in control. keenly focused solid all place the

We for when in of businesses strength confident positioned markets recover. the well growth fully are are our that

as hiring, at people inequality, the within right thing to Before extensive our to aimed is to improving programs equality put turning intensified we through specifically like racial DuPont, for and as My Lori, efforts on within of talent practices color and I'd discrimination development and well us eliminate individuals equity This a focus to take head of to do in it our barriers Americans training black broader is and issues communities. significant over equality confront team wants and one to for as to necessity few must supporting to to this that all rooted I agent of and are of a the progress that lasting diversity, deep The vital been confident company make as committed company any leadership. leadership long-term achieve that am will on. area. be of make inclusion. racism I and DuPont change on a that sustainable in has meaningful again once experiences comments challenge an before

to the some details Now, the over walk Lori to of let for me turn quarter. through it

Thanks, morning good Ed, and everyone.

portfolio, very their understanding dynamics that to of of business and the significant organically our results end teams our results us are down at the results water with including crisis. the appropriately. near our environment that the XX% overall staying filtration, strength the were of Our we and in the challenging for expectations semiconductors, of in close macro private me most gives May garment customers, as week us the health market protective wellness The market enabled confidence actions the enabled that responding financial dynamics global that industries since quarter we have similar diversity the provided and to term quarter in deliver exceeded These seen deliver top-line were they at first to beginning.

facilities non-core cost a our as segment. in excluding as gain Additionally, with the idling well associated

as expected and slowed the quarter. recovery. quarter, last improvement. which slight a Western our Biosciences actions X% the percentage economies decision markets offset our largest the points exposed U.S. automotive declined to versus basis second was weakness in E&I N&B we Asia, Unprecedented the to thought up in trends of adjusted to the auto businesses organic while led Our begin This $X.X Also our operating sales segments performance what margin that coupled change U.S. basis Latin and improve and and are and the consistent quarter, and with of through highly very earnings a sales in top-line and operating with pandemic the Canada, contraction Regionally, our robust taken the in have lead our Asia growth billion as versus segments XX% structure. Pacific America of approximately translated the their the as declined all well and while quarter were XXX capacity America Construction. impact is with in declines second and delivered parts of the on demand the cost soft China Latin due each and year. growth organic of share. industrial polymer significant Canada, of core expansion teens Europe respectively. in to to our margin consistent in X% In than with $X.XX in high total, EPS X% of and basis T&I organic Safety Sequentially, improved China, segments segment, particularly year-over-year showed was generated industry. quarter, These XXXX other cost we X% mid XX% respectively. in significantly EBITDA which XXX In we T&I and The points up in these in sequentially. in delivery savings and and Electronics Imaging top-line Asia our markets, second into Pacific Europe T&I EBITDA to idle declines more by Nutrition of we per to cost

greater the our the we by had low was end margin Our range anticipated. in savings approximately quarter than decremental expected at primarily driven of XX% even cost

of approximately $XX the a the $XXX decremental Non-Core million quarter, facilities, costs cash led in of our idling million the to flow the in million associated margins and $XXX approximately rate of were gain XX%. XXX%. Excluding conversion quarter Free approximately with

working year. that capital number continue have flow to balance of As to us initiatives implemented we enable of strong will conversion the Ed through drive cash a indicated, the

this our billion. our to As you morning, saw non-cash we charge impairment a $X.X release recorded T&I of segment related on

With that is of The market DuPont of As auto impairment of Tier you than segment It T&I, component closely, an goodwill XX% approximately OEMs, and of $XX down with of at sits pandemic. The value of carrying were for manufacturers. sales. IHS XX% majority intangible the know, overall global than two the today, watched significantly from resulting the the Tier T&I determined XXXX, second automotive important the recorded to the exposure tangible was this This the unprecedented assets supplied was to the equating goodwill been builds in now to the significant the combined DowDuPont value recorded. about in were and of is markets result a for of advanced and with carrying has received heritage billion assets of fair we first appropriate. half our in assets recorded with test XX% value of DowDuPont value impacted marked further intangibles that increased by segment. projections half. and the a to in balance and and the segment. we carrying and one the that the In note was the materials with was account no merger. T&I impairment our associated one connection more declines in year-over-year XXXX, impairment the merger We liabilities XXXX the more the there Specific charge dynamics market

industry the in confidence the long-term leader remain of characteristics our position market automotive and Our strong. as a

profile take on year-over-year continue when can markets detail change net our actions our the Slide structure, and sales. fully development we to recover. our so we provides more application that margin X improve in expand In cost expand expertise to addition,

The and Our protective filtration, organic offset Within net and was gas another industrial broad-based. quarter oil with data reflects end demand in markets, aerospace, growth. improvement Tyvek the in wellness. partially as saw of a mix logic E&I, semiconductors, sales servers in semi significant delivered robust XX% centers. and demand robust market technology of XXX our both strong impact market demand The leading by decline the for garments points also nodes, health Technologies other of water We and Semiconductor driven ramp basis segment. well in as weakness XX% automotive, favorable foundry the to and strength plays of which product strength margin portfolio lightly provided and advanced by and memory to more product up in semi

Our market. with very business delivered Biosciences another strong wellness across health Nutrition the resilient and & and beverage food also quarter growth and

these of XX% in X% end sales N&B markets, Our make portfolio organically in quarter. up approximately were which up the

wins demand in combined a the focus pharma applications. customer increased strongest our channels renewed demands than Pharma Growing with products initiatives demand better segment position on quarter in quarter and wellness a the New multiple through strong over-the-counter and ever. areas on and significant probiotics, personal to of weakness and XX% all growth prescription in which The in T&I. in its make health of automotive home drove within the Solutions nutrition industrial meat-free recorded weakness three more market were end and animal and contributed to up energy impact well-known markets, results. offset industrial N&B’s about top-line. strengthen and and in partially the care to continued by also strength markets businesses These applications continued XX% strong

when down first quarter global volumes builds down X% auto thought builds were our volumes trend second auto the XX%, in down Our a XX%. where quarter similar declined the were in We were XX%. while with global

few auto of outperformance key Our versus a total builds function a as T&I drivers.

First mix of with the XX% portfolio auto electronics. care as such health of and into markets is outside about selling

outperformance about chain. versus deliver Additionally, the build, in X.X while where environment more a sell to are we environment main current expect in the is supply builds inventory drivers growth we our auto into function of auto the times volume of normal

Tier Our exposure polymer and of directly whereas manufacturers, sales, our majority Tier business component were which adhesives accounts for the to sells two auto one our sold into OEM.

outperformed auto muted build. inventory the which sales build more believe recovery polymer half to we versus in in the result led a builds, to which has we for expect Our auto in channel, some back expectations

continued expected aligned and business Within both growth. personal adhesives however, a safety robust. and gas up demand and in business XX% nearly to garment more aerospace, segment in redirect business recover overall. the results, the XX% expect Tyvek that with in remained sales of oil at leading of safety directly and Tyvek the remains to recovery has pace with another orders stay-at-home we, Our business Tyvek to decline OEM. the limited quarter Shelter Water S&C, demand. organic second the Growth quarter, automotive, Solutions are build solutions across The portfolio sales protective to garments and Water the weakness supply pressured protective in therefore, with industrial protection the garment continue delivered with to auto expanded markets of Solutions of along double-digit as we globe

cost and quarter by and million savings customer on gain of bridge XX% segment. Adjusted EPS lower EPS settlement of by adjusted with the to driven down Non-Core the Slide $XX delivery Turning partially volumes the $X.XX, versus same X. was offset facilities in the costs year, last idling associated a

is lines, our contributed synergies the quarter. and and saw executed the half a share the Below share a in XX.X%. XX%. of our Ed benefits count expect second due on lower final third relating XXXX, me from as operations. let we program are coupled incremental As restructuring what DowDuPont and and it to rate transactions approximately tax an approximately actions in range savings XX% $XXX comments I XXXX N&B taking year the we foreign repurchases the cost base to million the for turn tax on continue quarter. in we Year-to-date, as well to the to actions lower we the With update that, of the some in from early base our XXXX to IFF back rate with XXXX of mentioned, in we full anticipate rate tax And to

Thanks, progress since the Lori. made the mid-December. transaction X we've IFF Slide in highlights and announcing N&B

N&B DuPont respective company, the which combined will and milestones. the key the and the and May, advancing of committee DuPont leaders. we executive initial In also with filed are named SEC. review N&B registration process include During future additional completed senior the DuPont, statements quarter, IFF key IFF

DuPont Board combined company. the In appointees two the future Directors independent addition, announced for of to company the

together. the progress energized We the approval approval is as in We IFF March for of Colombia. opportunity Earlier have milestones regarding The track critical greater jurisdictions meeting its since IFF and meaningful take IFF to on XXXX Serbia first are clearance remain as this remain relating in the place tremendous received process on regulatory have made processes and the of closing. remaining for underway. The required cleared and August to all proxy transaction. about come U.S. approval. and well China, the this businesses week, innovation shareholder growth the the The shareholder definitive are the XX. set combination I and excited teams quarter filed

Let our me will the while believe to months us. quarter several we challenging the third on that will to comments continue mark next few pandemic the be for wrap up with due the expectations quarter, bottom likely a for the second

However, our heading residential be return pandemic In gradual. will inflection certainly levels in and the our across and end construction, have vary markets into recovery third be an will pre like seen believe will automotive but quarter, measured demand we to markets.

to and Additionally gas, and oil aerospace, construction markets weakness. continue like see other commercial, industrial key significant segments

cash As match with unchanged. sites better many the a supply to approach a remain of with result, on focus operating will our generation of demand

what constraints We modest automotive and up N&B second across routine mostly to construction, quarter worth up well patterns by in that of potential to seasonal with by in some than look the enterprise supply is noting It stronger estimated sequentially the the E&I, expect inventory as offset in as residential remain within semi the sales the impact channel. quarter cautious similar elevated Tyvek holding is we recovery slightly our about third initially on we very maintenance assets. of as we perform driven

EPS of top-line. offset the of from the $X.XX second a in by associated with around lower a the the range quarter by to and decremental item driven line basis, gains recorded will the $X.XX and our idling to costs associated required due well in We quarter. operating discrete We reported the absence quarter associated costs in weaker Non-Core by be Tyvek settlement segments. estimate to Sequentially improving facilities second expect with year-over-year at absence impacted customer the and downtime the sequential increase of idling year mix S&C tax facilities with third E&I with as an our be on for in as quarter prior again as second in margins of XX% gains in slightly the

savings. an estimate second versus improvement will underlying than points on approximately sustained more decremental XXX quarter However, basis driven margins be of structural execution decremental our cost underlying of we our our basis, XX%, an margins by

to now open execution crisis, will We this on Q&A. remain from stronger company. we stay an continue confident turn emerge up for focused to and it Leland to even will that I'll

[Operator Thank will We from first take question Gordon Haskett. our ahead. from Please Inch go you. Instructions] John now

everybody. morning, Good you. Thank

Good morning, John.

strong morning, it's out. equipment, maintenance. just I summer? hypothesizing the you guys. the want this a have going not period say, and been Good I'm running would older line demand. you would one full you to like because for Tyvek in the of have to routine, Obviously, ask down about Is Or

would more color there So a be little just helpful. maybe

Europe lines in and there's Spruance basically multiple the the U.S. Luxembourg our two Yes. facility locations in in in and John, over

that program line So extremely couple a our a more way to And rates CapEx which want are to we for have of old been up had the those because pandemic it's as lines got future running make We But higher on add actually, we're than line. of more many before garments, one mentioned. we so going running demand. Lori than lines. against and at and eight

You our garment up see sales were or could XX% so.

takes be we up. cranking during of line CapEx. pandemic it the then to some some of maintenance shut towards need that the up it and And get on maintenance couple older us really we do recrank in down the We the the that. on. to up really years two, it lines, we'll we've this been delayed doing few long, to running, kind actually over that will and to So that the good down a after and we'll out we shape of as those the CapEx be have delay a just weeks is but Luxembourg, lines move the up like not from when of the and of quarter we're And through and then because year program during that government and hopefully eight we next year, in three going started for X.X rotate line had we end quite

as we'll all that capability forward. have So we move

Yes, okay.

overhaul, just which sense. So is like that makes a completely sounds it really versus maintenance major

No, no. It's just some maintenance.

That’s fine. Yes. Yes.

trends As think Ed, And put you do on conservative you're up July slightly quarter sequentially. the not of to do a third sales follow-up, extension, but by your how spot, commentary look? you how sales being with

Yes.

the into we look, of us month. the we similar orders that the pick to running starting as John, the we up orders got to middle pick saw of quarter, resi was We're July. big the kind we up starting of of were first July So our see the auto as in average sales middle got were difference for to into but kind

Lori in later, And her remarks. sit so chain a supply we – little the as but in we bit mentioned

we we're to quarter into as back the from that impact then the the more hit fourth sales go So and expecting third certainly the towards quarter. see of half

saying to on much order a are no we as two we then us, mentioned little segments. And we're also, see side. semi a in two of Lori We exactly the the the run thought little how those know makes key on in quarter just are things but are because channel. hot into and the the semi front But there's end being had I in our up. it So for some. We're it's seeing hot demand also, to we some on some because holding actually build hard there pretty continue Possibly that. are the doubt lift is might conservative? cautious quarter. markets some competitors third running softness market still is think We there tell

So the of little the the to hit certainly half I quarter. momentum in back quarter, actually conservative fourth in quarter. But be when But it's third could we number sales think tell building possibly. again, a bit hard things during its

Understand. much. Thanks very

Yes. If things add I could just some comment. by a

our more curve, that XQ, of And recovering are the in if the quickly July bit being expected, then a So sales not than little average then XQ. market we conservative we in upside. will participate

we share starts start concern order Really we manifest So – see on have call that recovery got the when our issues. just we've market when and in placement. really to that

appreciate Yes, it. guys. Thanks, sense. make I

Thanks, John.

Jeff We Vertical from will Sprague our question take Please go ahead. now from Research. next

you. morning, and Ed Lori. Thank Good

Just two me. for

On semi, a, you're ongoing the thinking, the could OEM relative seemingly I'm of kind seeing from a of there? of is just to that's going gain by particular, positioned address, there kind these you're for And the semi what how you share opportunity in how players? macro this in important electronics in the share in and some then kind of Taiwan gain standpoint And manufacturers. But positioned on you're particular, various channel. is most

a about position. very me like ours. we're think talking – I strong a customer specific Yes. is That just customers, – don't of I I but necessarily think let large in

in bit of but same it work competitor the center let usage, ours a there's saw know And just key I at So that little way. this everyone the clearly, a industry, momentum pretty data results. me misread home, the much say maybe the

last in a it's industry. So – But I the growing big quarter, The positioned that rate very at players couple is of think XX%. across-the-board. the well was we're with industry growing very

see seeing nice I they they're also numbers. So momentum their reported as

that, continue So grow just X%. those X%, don't X%, I continue like we're going to that. that, kind of growth, we Jeff, I XX% rates. mean, holding But if they like at see

I think pretty that's nice.

think still going here, the of from nicely. second think, growing I some, bit I but year, the So over would growth rates, those little do of half a there's a downdraft be to

you back you And was this in in Obviously, happens could feel industry. have half visibility at back for with improving the what QX what's you quarter maybe content? mentioned a handsets address And you the on half. tough Do like decent point? going on handset

Yes.

things coming the with all So more we XG have do the there's phones. two customers phones product because their antenna in – the our XG-enabled We've the key product season up we a and lot technology. some on. holiday got going content launches for And

So that. mention put yes, Obviously, these smartphone new phone, we'll a get for Lori, have – of and down, visibility XG from the have year-over-year might to just perspective. we content you going the difference lift non-XG a sales from in start from been and want definitely then XG. into but the to it lift launches to kind the between

Yes.

as into the we back year. of as to market As come phones third mentioned, seasonality to driven see had the the Ed half look we'll the in which the by sells new primarily smartphones, within the just quarter, sequential lift Interconnect Solutions,

expect decline we year down much the with do newer the offset versus we prior in that the be smartphones. overall that that we'll but So pretty content handset to higher have

an $X.XX phone. enabled-XG out, of expected. a be the And It's then In to that have on that phone, able way see we another of overall the expect we coming noted, Ed the dollar us $X.XX about top to handset. upwards of for offset smartphone, to normal nice decline play the $X we extra as an a within potentially we had some the models newer you on into to So up premium as sell $X.XX. get we all phone,

for it. Thanks I color. appreciate the Great.

Thanks, Jeff.

question JPMorgan. Steve We will next take our from Tusa from

Hi, guys. Good morning.

Hey, Steve.

flat year Electronics expect You is & mentioned that profits Imaging. that absent flat year-over-year? a in Does the slides a you will that have gain prior the cost delivery in that offsets year-over-year? reduction should Or of mean we margin

Yes.

of then So Non-Core, margin and we'll underlying. million a see to gains total perspective, costs flat, idling and prior I in bit about around it the think $XX that maybe takes E&I up from with the XQ so margins underlying, facilities between a year expect be

Okay.

same kind guess, you're is – that E&I, just I of So saying thing? the in

the same Yes. thing. E&I,

grows. value So the Non-Core, gains were in E&I their and

Sure.

Okay.

the that understand have just this why for quarter. you there. is T&I how be of as the understand aren't trough I parse message coming but being stuck wouldn't Or out you be to that's trough. XQ kind I wouldn't don't maybe market. mean expected, to kind understand of the be better, are the fast of mean of wouldn't I would on So bottom we why as why kind of there? kind another I'm of are quarter? at negative back here the XQ saying you're kind XQ things quite trough still kind of tough that kind trying I

we XQ see year. So definitely trough as

see T&I will we head into in QX. improvement sequential as We

we as that [indiscernible] the the the really really sell more this end more reopening see we a be of book, order else. towards assuming now, of right of nice it's function a back and continues. the It's where going than Just to into quarter anything

start OEMs we So the about you where back sell we you're in because behind again, the OEMs. seeing to a once of start quarter – usually, versus with direct customers

in that's and much sell to player and auto have number that build build that chain. kind that OEMs than the the But we auto decline. if less first we'll participate declines pull the Polymer we're mentioned as into as were think of it's back upside you of we look concerns. in had being on through have us where if sit no I So overall a we ramp, too, pretty we the volume the outperformed well because conservative function earlier, half, share as indicative, enabling

Got it.

a lot. Okay. Thanks

take now from Steve will Please America. next Byrne of Bank question our from go ahead. We

that And in hear working you to this. just with R&D productivity fraction you've during on curious see do were Was what staffing, impact your the remotely. from about the you. staffing what headquarters at headquarter curious R&D thank of from respect learned to challenge? And any Yes, and quarter

out accomplished kind to everything obviously Or staffing? You've needs with staffing the remaining about what do that that Where that of goes all working lot or the is headquarters of of do remotely. think Is locations housing that talking that changing that way down you're staffing figuring another a road? of that remote? you

great a Yes. It’s question.

use an the one So standpoint R&D and just example. from – to want to way, by

are where their using great couple scientists do Delaware work but a is that lab all work, are and thousand office Very going location they just they there, that the them people back have, lot are of doing they space biggest their in Our a station few the labs. of experimental work. into though our

are it shifts. actually set doing where up have different we We

So in labs the not is employee the time. same at every

shift we we the the in the for and goes into few of about an quite noon evening. during morning. So early hours our into And of whole have that going a we even the have the scientists second in have wee afternoon goes that a to shift nighttime then

time. can limit So of any given people we have number labs. – many, lab we at But in one keep many the many,

do lot So that They need to their of a work, functioning. in are be to those facilities that's – they and occurring.

back IFF think in offices, is about our of remotely. that I other CEO most very work people corporate working seeing the many with this we've and remotely. every office and through able despite going things and to One of to And and a is environment, work schedule it and right the by point separation really been hard on DuPont though, your deal well N&B the of massive and integration all the work tax we're remember, with and financials way,

you're lose interacting team has people. extremely put globe where single we've are should handle do day forward. do office and it a something at you people together, you be I'm – looking office footprint and term, there by with way, around think really be working the how we don't if believer we're think we a this I the in but remotely. I big long do every you'll our going really the So to And hard our

we sharing that whole of footprint on the reduce of offices and and forward. can study So we a of kind all we're as do doing move kind

So at we're year. taking look a decisions the hard, exit hard probably make we before and that some

update Ed, I Ohio can then, the you firms provide on a And law MDL you don't on know, with. had you're of working settlement? the couple any litigation that

thinking whether Or you're if there Just resolution this still an wondering about is at relatively point? anything obstacle soon?

Yes.

are the think on cases. be confident in handling resolution say, I'm there'll not-too-distant basically plaintiffs been a that. think I that a resolution let look, so be two and outstanding or me future highly I the XXX settlement. – We've in there'll just There's conversations,

you. Thank

our from We question next Please ahead. will now Scott Davis go Research. from take Melius

Lori. morning, Good Ed. morning, good Hi,

Hey, Scott.

morning. Good

to deployed predict plans cadence, kind when to or your hard it’s of these a what you I'm again know be do back instinct you'll think Ed, I T&I but, will up them things and when a you gut is have running guess, need for? I looking

Yes, yes, yes. Go ahead, Lori.

Yes.

we the underlying so and down associated QX. $XXX QX. do We less an QX with into perspective, from from taking sequentially costs then actually into idle the assets million even more mill in about see So took

up recover, have three the agile the can back we whenever weeks. So those that take fortunately, demand two pretty and flexibility assets do be we we that see in to

existing so accelerate need do that. And we our can if to plans, we

than bit QX uptime into QX So even see head then more of more as we'll you and uptime little a will QX. look

the billion how capital mean, XXXX. – structure how took more become then And to $X I it. term? just billion productivity perhaps kind knocks your intensity rate one obviously, But just how of a longer-term possibility on a know I you CapEx, closer become to for sense capital-intensive to I a there you billion-ish DuPont has less business Ed, mean, the a and role. do you think down the run $X there that play it capital-efficient is mean, the of I than And think about longer is of – levels. But $X.X could is about

that the is, think have and very by been issue. No, I and there on definitely Lori focused Yes. Scott, way, I

on As that we issue. focused and I very Lori have been

we look so period hit of Tyvek happened constrained happens where on just out a over It the businesses. they we and intense CapEx. so years, probiotics, between we As I that our Kapton, it happen three just be multiple were most can we capital capacity to think reduce very

three, also our in we some know have that couple we're to There's outsourcing on put on CapEx we couple a stuff kind feel we're can and the the get all years. details, also the somebody the can some earlier of into in of – else, CapEx down. high back portfolio model that would reduce we of and all we we just studying drift We're reduce a the I we hump and CapEx for So years, on that as – do looking And I hard, chain to the four, kind will of hitting out we are that of to at end too. that but also. do we five our of over a details, will can don't that I areas outsource don't in want end our that

So around ours it's down a focus to on that. question. a big great that a it's get importance of We consistent number of back D&A the But basis. understand

encouraging. sounds it Well,

luck good guys. Thank So you.

Scott. Thanks

ahead. take now from We from go our Please will next Sison Fargo. Mike Wells question

Hey, Nice good morning. quarter.

Thank you.

Thank you.

of you on Ed, normalized Board, What Biosciences, business Nutrition and that & how this the growth? us And that can basis you'll the XXXX for what think XXX In improvement beyond IFF rate points drove you drove improvement. be? IFF think growth remind support do margin could be combination given you

I so hit the maybe can piece first. Yes, margin

mix. it and really nice in was of by N&B driven drive So lift a margin lot just did favorable we

portfolio. about had the probiotics And definitely so, our we mentioned highest the XX%. margin were piece of That's up that

really margin helps we also And had lift. improvement actions nice with the cost there. So

reductions shared cost have that in of would saw quarter. the N&B of that portion a we $XXX million in So

just the company. of by principles. massive in capability way combo, going R&D to the on the a combined look couple And pretty key We're Yes. have

there, side. on as cutting is really is at going of the we're So synergy G&A any be most DuPont it not work doing to our

So on the to going to do products the from we're portfolio of application scale development to markets. really have customers consistently launching we're lot be a work feedback them into with We've going new to had ability nice our great extensive with have.

And up can it an that. see, So holds you as I industry, very well. very, generally as feel just very bullish on

this remarks, of play really XX% end is it mentioned in that beverage centric in prepared dragged her Lori markets the to was and the organically in. grew down portfolio, aggregate quarter really X% in which think and X% the food that I industrial we piece a

trade point So move multiple we'll that IFF that, look by I it's this on I a consistent as out, I IFF also just the we have the would last basically we the XXX points industry. deal I'd think way, of N&B sits points forward, the value in but where and below the or that to call for few DuPont value industry. call, the which players top, and the at earnings to the still at, multiple values about top IFF basis $XX XXX is a shareholder basis still announced what the billion said

revenue with combo, number we, can Again, expansion new share the customer. out And There's the case, come prove have. clearly position that So and well, out great one I price elegantly company. but success about there. we to rolling company we're synergies what with just we I opportunity we've got capability, talked that a as have IFF truly think is to the a in we believe this offer integrate the margin to and going we the

is the products – of us announced out that the has sell I DuPont products right but sell deal. five for growing business, we areas really IFF now still the we or industry. had think has industry. areas a business. it's into chart the that a or probably that one One small into five meatless And four of meat when four market that

than ability to industry it forward innovate So one use that as in that else. our innovate, just example, moves is way anybody significant just as more

be So vote awesome is XX, now on I – vote on think the done. to and date from and to the when really – next our and – another hope month be Again I August said as to X it's shareholder consummate get that'll going the get so think company, is February it year. going it merger a we as Lori

ongoing TE if for to but put the follow-up, positive right. XQ and not semi capacity would All in an a trend if that's to that a Arizona bring to And announced your a sure a FMC or latter, new U.S., business? off quick the one fab that's be in back

like gut It that. yes. is talking my that should see our more you'll customers And to be announcements

Great. Thank you.

Yep, thanks.

take will now Oxgaard question Please Bernstein. ahead. with We our from next go Jonas

guys. good morning Hi,

Good Jonas. morning,

morning, Good Jonas.

changing is given world lifetimes. couple step The a influential company, we event our diversified most the any changing you're your lot. in Hi. through I mean, was next of place probably where in living the are a hoping strategy that a back. seeing to you are years? I you're take And

working significantly, one – remember and really got the we've Not I'm out. we on report been things glad sustainability but Jonas, not of our

If now, it's our a we're on goes to from that UN working sustainability towards really lot in is products at that online, you the a take want areas R&D standpoint look of goals. an

scientists sweet – So our I things we're changing I in for, in the of think, secularly spot the think are we're working, a developing are where is world. we're of products where lot that

years, from into we of effort area. that that few kind towards thinking yes, lot the last standpoint, of redirect over our we're that so a So put

I where so we're think secularly, I about good feel investing And our money.

be of changed the say So we the areas the that's few well I can on. pandemic been on times And it's out going something I we're play wouldn't working to why last going us. for we It's kind because anything. to of years. think outgrow And GDP think normal we've in been focused

Okay.

with you European hydrogen seeing the follow-up As you're particularly Union. in from of mind, don't if a that, lot about discussion – the a

Is that guys? doubling down your something hydrogen that business opportunity you an has is to be on? the of water for some And investment is Or purification. water

people, people would well. industrial very way one it Yes, would it desalination as which by the goal. business, nicely. you goes do is. application, that we're R&D to bolt-on segments add That's of And is be love clean we growing – global to could every in a doing and by business. those saw, business one that thrilled the key both is very And we of do sustainability to that's water. space. and application And wastewater, we're across home more ones is we by adding the And to way, the in Yes. That the capability, any development that adding was strong way it portfolio, acquisitions, our that if we

can year, we I three end just and have filtration reverse of Osmosis, acquisitions at the a Resins. as the if so the Ion Exchange leader of all And types the us that really add across technology, Ultrafiltration made put

take advantage well in market. we're positioned of inflections the So to any

you. thank Okay,

Jonas. Thanks,

take question now will Please ahead. Bank. next from your We David go from Deutsche Begleiter

forward, about thinking morning. this debottlenecking Good and franchise just on And you. of Thank growth How maintenance? with doing the current are Ed given plant any recent the Tyvek. going you are Lori events? you

upside to local Yes, with when further look in doing that national even is temporary. of we just a see establish either behind upside garments, and And the their so governments lot replenish the or lot growth will and growth of and the in the we're longer-term, to to add that. stockpile, isn't that seeing the need so obviously, we we see participate we're to think I benefit the a growth, capacity given pandemic us that continue the

So once end of that line us. to the incremental restart for the capacity X the we Tyvek are will project an able at year ultimately add

garment. did half saw of Tyvek in improvements first we debottlenecking enable concerned, lot the as in that is the the that we far As to a

as So of double bringing combined assets debottlenecking, that’s garment. production to couple Tyvek new with that we initiatives online able a well where of as of some

So always capacity given the asset line the get of looking is just out. to sold incremental

very That's helpful.

Or of inventory QX? well? could could QX be Would auto build mentioned QX you Just on leak area. into end T&I, that the an that that in done by impact as

of of her that kind Lori less No, don't of the done. half significant. that It's remarks, mentioned would overly it's were think in I think our I But, autos. sales would be as not – than in downturn T&I

just said, concerned supply bit. there's lag bit, little in little but we a we're we the as chain So, we also, a

fourth would I the time of quarter, we're fine. by the going think into totally we're the quarter into third end So the

much. very you Thank

David. Thanks,

Thanks, David.

Capital now your from McNulty John Markets. BMO Please next go take question will ahead. We from

Can taking question. you like working capital sounds in a of works of $XXX It terms things for you and improving highlighted you've the than of the thanks a in kind Yes, million conversion greater types my to got cash lot improvement. speak you the of of working it lot forward? you're Like to forward? I like enhancement us help can looking targets a you're as that to that terms in said, but quantify sounds got going about in looking think how you've capital works, for

Sure, yes.

year, far even beyond got $XXX another greater for a deliver – million probably of still we've got we've then improving as underlying got and million. than we've as our this entitlement target So $XXX that productivity

in it's So we come opportunity. to $X not billion capital out one but working year, total going said, we saw

those complete be couple to we get once large a we're until two past years opportunities, they're those. that, going with improvement So

cash than targets the we've With in that of we've XX% past. greater than and flow greater the set been free conversion that at least

metric. you a dictates deliver that right that maintain to XXX% to be so, And working of history flat that our capital around is sort able

far capital. to And growth may top-line see with to ongoing negatively going as We're that as offset so any upside working that productivity. that impact have you

better opportunity inventory, through largest efforts demand where which through a inventory improving within planning. our around – reorder demand SKU targeted so productivity lot And examination, rationalization, is our are point through sits of

So larger us go for as one the that's forward. opportunities we of

big more of Lori that little a interesting this an but great big, going just about we pass around – Yes, number pandemic, the I – find put issue thought give mention had improvement around because past in I which of it thought could want environment this, have but bit through, you and I wouldn't a world, massive a I'd things or one made the due also kind I focus we've on to very as have become into Lori, might the balances and we on the actually of that, progress. personally was worried was teams

in past quarter. versus prior reduced XX% We've about due did. we by Yes, year the

looking nice reduced and really actually payments other or the there, delay miss So a Ed went lot with customers it. side pandemic, had of to to the just because of we've as payments mentioned the

So, a great performance there.

hugely helpful. narrowing. come like that in are asset optimism the of transactions asks of the follow-up, us there on It kind give Can And you out of a year? lot a as the some Got any half businesses the in update sitting in of market. lot there your looks or and it on have done maybe it. of getting terms non-core – you back sounds they've kind M&A values, maybe in terms that either the bid just That's a like in of up the

more ones. my of one been it's John, Yes, frustrating

in parties doing one interested this assets. environment people just sites, of everyone studies. negotiations and We're it's every slower in in doing visiting have the due on the We diligence environmental

don't to of So, hopefully, on but just on we'll the totally a getting in half I that year make that, the we're some progress date put want on done. I by focused have definitely get back been to. this that strategic… we line, thought finish them. done them and have we'd we hopefully talking phone Mostly but we've here the a call across parties couple

very much. it. Thanks Got

a Mostly strategic which is good sign, players, I think.

Got very it. much Thanks for the color.

Yep, thanks.

ahead. take now will question next Please We John from from our Roberts UBS. go

new the split Thank you a versus Are lot how here? a tilting the updated one You're yourself IFF on other? you. and off flexibility shares? you spinoff Any of towards thoughts giving between distribute

the I Well, I've like make depends the want people shareholder John, into We'll going year, overall, but in news is happening good decision it I look numbers fall. all that thing curious, get now, I think, is deal happening. in definitely done I say on. I earlier is spin-off, the leaning can't mean just as when we a put the and a that going yet. mean, everything on what the But get vote I always a we there. later were stick this with just know the look, don't to to month, right

on don't facts. you you So know now at from see just the a that decision And can't and time make the right again, and we're because great in what's the standpoint. we'll it is then, trading we'll at going where make shape deal

an the N&B areas And on in within then give you businesses, enzyme which weaker could Biosciences update us ethanol recently? the are the

had was within that that was in the we so the that Yes, noted XX% portfolio N&B. weaker of

the down microbial in portfolio was quarter. So with that portion of control the along significantly

but see half, look the – kind we play flattish see the think out. of a we to you would to market back in continues second half, As we'll would the how

Thank you.

Thanks, John.

take I going question. think to we're one more

next question our take Juvekar PJ from now Citi. We’ll Perfect.

is go open. ahead. Please line Your

the Hi, pandemic. is morning. I buybacks right of the perception taking and questions. there's gas companies aspect of middle there you many Ed, Thank savings Yes. buybacks know good for in also of the have it, now my deferred

So in repurchases? think from do the working release strong in share flow free your come meaningful back capital cash you with a way you can when

it’s question. Yes, PJ great a

Remember, beginning I it at think look deal a of in it. we'll going fall. $X probably get early again cash over of from kind the we're of going billion into at the to XXXX. excess the or assess Take kind IFF

the prior have so So that our in from excess question, and will the we we decent operations be some in back of sales, coming hopefully coming asset own we know to generating have non-core cash. cash just course cash that

available our position into love going until going angles really debt XXXX November cash from because no multiple I So, of have a payments and we're to XXXX.

going a to we're have of So lot flexibility.

give point some be Hopefully, And about share pandemic, ex or in said I'd on out, companies so, the right be look which that we're the repurchase. imagine buying N&B fall where a and but not think, as moving forward, the take can't make DuPont not ex at around eight I times. early multiple going at reassessing be now. not worried and that. trading I I call back here, look the I If shares we're I to eight some is we'll times the of doing at new

position. be it sheet, assess a again going fall strong balance will cash to very where a we're in again knowing I the So sitting from

Great. you or charge bit T&I but whenever now, up, would be past does And on the you about M&A recent little right opens that I T&I, Thank tough the M&A, either you. that talked that had maybe runners? in set front and one a back in E&I, the but do follow-up E&I the took with to it's in potential know market deals quick division M&A

was I any in the great had down, was up but The take well. it hey, to just. answer don't remember, there. DowDuPont no T&I. way a the great No, that. room just step pandemic It’s feel is just the charge – in there I covered auto had me it’s so to that industry took just assets and think let different – the a because be to we about wiggle Yes, Lori significantly merger we this By

If kind of we and what it's non-cash we were edge a the any step do on of had teetering – would weakness the did merger we we So to up. we because charge. when see

the So rather for be auto rebound no, nicely here. in look, And not to back about I any $XX to decent XXXX it's don't come and going here back feel I starting year think lift it. up see auto different a we're will million builds, to auto, but

to deck said, many right we're now. it's look, moving at There's looking operationally good as done, something on great the point right just So always on opportunity shareholders. for this that. a – schedule pieces hands if time. but want big have all the which structural we about deal We're our on And we not keep I with I – not feel And now. there's and at in in plate in it the our get N&B We industries. future, that too flexibility all are,

thank Great, you.

Thanks PJ.

Thank you joining for call. everyone the

our reference our your For This posted a copy on of transcript our website. call. will be concludes

now Thank and you disconnect. Ladies may gentlemen, you.