DuPont de Nemours (DD) 2 Aug 222022 Q2 Earnings call transcript

Good morning, and welcome to DuPont 2Q 2022 Earnings Conference Call. [Operator Instructions]. Thank you. Chris Mecray, you may begin your conference.

Good morning, everyone. us of joining XXXX Second for Results. Financial you for DuPont's review Quarter Thank

are Chief and statement to the Ed Lori today section the are me Joining Breen, forward-looking Investor the webcast Financial during review, Relations We slides. link. posted comments read on Koch, DuPont's Executive in Officer. prepared the our disclaimer slides website contained supplement of this which through Chief and Officer; Please

predictions statements this and future. about materially review, and statements. or make performance our During differ based factors assumptions results our actual and risks the forward-looking these current regarding are financial involve statements uncertainties, Because our forward-looking from may expectations we'll on that

to principal Unless as cause by reports, are Form risks and items. specified, directly the and otherwise now XX-K, uncertainties non-GAAP to most XXXX Our our also which significant website. Ed. historical call today such exclude comparable updated A turn release press presented the our may I'll financial the measures discussion We'll reconciliation over GAAP measures posted differences. page current periodic in of to refer and measures. Investor all other to included of includes detailed

We our a you posted Thank financial expectations Good morning. strong above second difficult quarter results for joining quarterly review. in environment.

growth volume remained in X% across a Solutions. strong our Our by year ago markets versus customer demand E&I Technologies of driven revenue X% delivered Semiconductor top period line Industrial growth ongoing the key of Overall, included solid and X%. organic increase, as strength end

expectation and We team's by risen quarter. number highlight materials, million, site in been year-over-year results end Overall, increased fully with pricing challenging complicated the lockdowns $XXX the strength to China's XXXX additional inflation, during we higher operated of the to logistics drive earnings the due and able and further and on half macro growth. tools who the our for to mid-June These in successfully were to costs that colleagues higher a broadly, our digital second year COVID lockdowns which environment, some second very difficult was productivity pleased to energy. costs, mainly was year drive and quarter costs. of raw our reflect the of to efforts markets increase results about plant our navigate of full terms by our expect We actions we and now have results In full million capacity Early have and alleviated logistics that has taken. for over to remain still offset quarter, form diligently circumstances our with to continue normalcy. China-based to of focus associated based release. and price/cost-neutral return under energy use $XXX on pricing actions investments execution as our More other and sequential continues our

builds SBTi. This Finally, line chain value existing step overall in our am gas our to protect footprint an commitment it Targets Paris initiative, the targets with with our last announced and greenhouse regards commitment the important Accord that suppliers. is or impact, to across partnership toward I reduce to by month, and we planet customers reducing with setting emissions, climate our the to carbon reducing on pleased highlight to Science-Based in sustainability,

value and you transformation our update on to creation, XXXX portfolio our initiatives capital like I'd X. Slide stakeholder balanced allocation. approach to namely key for to Turning

slide. following will I focus execution our continued the growth addition, on highlight In on

outstanding. the being China to it progress acquisition, the on as the last First, made relates the being required with regulatory Rogers jurisdiction is reviews,

third the deal the to expect We quarter. during close

in ongoing pleased were we growth to the in and business, line the we but taking, high wins in electric back potential, remain operational several full single period for growth we as the in that confident with quarter XXXX with held and expect impacted improvement forward. especially a earnings is digits, gap space. and Rogers Rogers' progress first we business top performance, and team challenges move the price/cost Rogers' we're actions Regarding satisfied by was see vehicle that the the new

the M&M transactions, the regarding around timing associated we on track For are with anticipated year-end. divestiture a to Celanese, with M&M completion

and in to We separate the continue the permanent Celanese financing last make were pleased to few necessary we secure progress the see to weeks. business,

business anniversary this plans This acquisition Laird with overall of to for XXXX. affirm of around also both lines. to performance been plan financial has marked Performance for commented the ahead us, continue July the of top acquisition and We Materials. Delrin I've on previously our on X-year expectation our and divest including move midyear forward the past completion successful X bottom how

We also on commercial synergy continue advance of noted. top synergies previously opportunities to cost

these Since multiple. end X collectively Finally, divesting the produced allocation. at we solid of $X.X XXXX, higher of over gross completed generated them noncore lower the capital May, We Shifting announced our previously and Biomaterials sale volatility growth, to billion of divestitures. value businesses, the business margins selling last the received we by business at overall was proceeds of divestitures, for earnings. low a lower in which noncore double-digit EBITDA which

excess strategy as balanced prioritizing to shareholders as includes that continue M&A. to the well of We capital pursue bolt-on a return

our share anticipate X.X% year-to-date second the represents our this we remainder existing which repurchase repurchased quarter, year. during $XXX $XXX shares of remaining on total the total authorization million completing of shares, of million million, outstanding. to the bringing program During of $XXX We

during M&M incremental also continue to will substantial, expect noted I be execute while further. magnitude time over will call, we earnings and as As can leverage accretive transactions existing to room buybacks deployment growth disciplined priority from opportunistic the key a M&A we share given the remain proceeds there our even seek that last our of divestitures, anticipated

sheet remains remains uncertain, And Finally, key a particularly in environment. volatile balance this priority, our strong. macro

Slide X. to Turning

as for end our and markets secular electronics, a protection, in Another key on execution. technologies industrial high-growth serve is basis value growth automotive innovation-led driver focus growth. sound will organic for us water, Greater next-generation

I'd continue sales, highlighted with overall in substantial pillars peers. of We here, products and within seat at total introducing our where investment have number which make continue such emphasize of that, technical in to Awards customers' financial With progress an of the in investment focus note slide, applications design to rate technologies, advancing both across we new well to also strong portfolio to highlights, batteries, This the invest around around we phases let existing with and a our our to as turn the coupled different actively with technology new discuss it our had won engineering their potential. X% that product the application best-in-class on table past X me line have is as quarter, introducing we a personnel have platforms, This in the proud are and growth of details Lori technology of the products. but R&D which as we outlook. Edison EV quarter

Thanks, Ed, good morning, and everyone.

saw previous expectations during both As additional the to team's costs. Ed markets, expectations top demand end continued estimates, pricing than fully our continued we key above with compared our intensified quarter. higher quarter for are These in but to mentioned, execution quarter. results with along well coming anticipated contributed focus, further and to strong higher factors, volumes bottom the line Cost the strong these offset inflation into actions

margin both delivered on We year-over-year a sequential operating consistent and EBITDA a also basis.

all low portfolio slightly auto. in On next-generation regions early growth construction, resulted North our in Pacific, which EBITDA higher increase volume. strong sales retained adhesive tied included former were growth the globally, in E&I regional X% acquisition stronger the single Asia ago X. year period, digits inflationary demand XX% and on acquisition tailwind volume period, X% the and China markets, $X.X up margin protective increased and sequential gains, reported than the industrial, X% in volume net primarily up in garments growth pricing partially of of despite set during for a of cost an driven was in more by key was muted Organic in for to organic second per as actions, offset XXXX Safety volumes Laird, expectations headwind was report water factors quarter In noncore of and lower dollar sales first our X for organic up up sequentially quarter X% by highlights EBITDA The segment country better into of parts euro of including U.S. Laird adjusted semiconductor, X% the a financial from currencies, quarter, slightly increases a Latin pricing million growth X% operating a increased and was government-mandated quarter share in businesses from net contribution end versus China, reflects XX%. by the W&P, gains Volume quarter divestitures, as The year $X.XX within was pressures. provided year-over-year operating the earnings perspective, the on they basis, and including continued this June. than These Solutions. on offset and sales while corporate, against X% America. namely $XXX versus XX% and the on currency X% strengthened lockdowns general delivered quarter organic Operating EPS sales basis. key sales, for Focusing yen. Slide which versus organic and M&M earlier growth the predominantly higher both From sales flat we during of an the reflects in ago X% for and Net the volumes earnings the billion America of EBITDA increased basis. and

actions basis EBITDA have have pricing fully a but inflation on impacted margins. Our offset cost dollar

and XX.X% driven points to higher EBITDA operating year exclude adjusted by productivity basis margin with higher XXX than the or volume. price/cost ago, Our

margin XX% incremental basis. was Our an as-reported on

price/cost, a demonstrating a million discipline perspective, the as inflation. related From in cash the for capital during free productivity. to of $XXX quarter $XX incremental an tight from $XX cash was of almost we quarter our of the chains secure capital expenditures incur inventory during was inventory impact cash given core and headwind million of businesses to strong Excluding operations and higher resulted XX%, continue million. operational flow additional margin cost and supply outflow Working costs

consistent cash We factoring and reduction the of with a expect our in level. capital improvement second typical pattern in during working of free the half year, flow

separations $XXX over working divesting, M&M million $XXX during in M&M year with the related XXXX capital transaction-related related the cash million we continue costs, headwinds second encourage higher and These XXXX. of combined flow. business, separate our the expenses, about expected to are the to with full to business quarter we incurred significant As costs that costs transaction M&M to in we are

adjusted of ago earnings of EPS $X.XX repurchases in share a in volumes W&P per Adjusted garment count $X.XX other compared to costs EPS headwind. share lower year gains to from A gains, per Turning partially to X. a and ongoing a $X.XX Laird rate These the below-the-line related provided a were share. EPS, $X.XX production to lower Higher to Kapton's tax increased quarter netted benefit offset XX% per exchange the provided Slide mix by benefit $X.XX share period. and start-up to while including higher per in share. adjusted items, from totaling and share plant $X.XX weaker

was given XX.X% tax for and year resulting certain up Our quarter prior from first period the discrete in ago law year, quarter the the benefits base tax notably the rate recorded up in from tax from slightly changes. XX.X%,

We XXXX of tax XX%. to rate range for the full expected year are XX% an base maintaining

low materials a OLED laminates product in gains Kalrez decreased aerospace volume increased along CapEx-related displays, led for utilization, offerings, organic semiconductor strong products for an and to communications digits Vespel Semiconductor more strength was Technologies, high care Volume applications with pricing. recovering of X. decline. centers. demand in such on sales sales on expected continued, of markets organic constraints and by volume and growth up E&I growth Turning and business from X% tubing. to semi due health and in certain benefit increase an biopharma in including global more growth beginning than the basis for led was by from Solutions, slight X% for films by offset Interconnect ongoing automotive a PC sales by for as node delivered included single X% demand serving volumes XX%, to softness XG continued order and more and pattern year transition a lower net growth continued business and smartphones. return the organic ongoing headwind organic a impacted smartphone digits, by to advanced industrial led in The which segment the and tablet Slide X% technologies Laird demand were seasonal for end including data China to to lower single last was sales results, mid-teens in Organic currency. anticipated markets portfolio E&I growth, production. ongoing due line also E&I growth normal increase as Industrial The somewhat view, XX% Within fab compared with high Solutions

Industrial growth Looking our seasonal half to forward, given and added Technologies similar in and the we continue expect interconnect, of to XXXX. Solutions expect Within capacity second for to positive organic Semiconductor into strength growth return from the we half second Kapton expansion. patterns

and higher sequential EBITDA of was partially volume material of XX.X% million due For to a are year, basis PCs and smartphones, slight XX and were basis consumer of softer $XXX price/cost. down logistics Solutions improvement to digits supply mid-single a and pricing the Operating year-over-year Interconnect as XX previous as tablets. margin gains actions basis, volumes operating up from to reflects a an raw full our organic costs. expect be EBITDA earnings to E&I we on constraints XX% from XXX-basis-point increased Operating for from decline demand by points points. basis. On headwind mute low reflects strong EBITDA This offset expectations Laird, expected for margin chain primarily

lower year chain to constraints manufacturing Water steady by filtration most and to period of as higher Turning demand during earthquake America of in negative growth garments a Pacific teens, and resulting X% Operating for on to X% points Volume and and price/cost basis a partially were muted impacting was the an Solutions, Organic given was to production. increased for From pricing W&P Japan construction volumes, lockdowns well million as Safety net sales year digits XX.X% of and digits organic an increase and other by XX% and was production. for below are ago mid-single changeovers North market by line X. offset partially applications from were offset repair- to were margins. impact organic due Solutions mid-single by actions price a gains on impact broad-based from declined line EBITDA Solutions, offset headwind growth by volume residential the the Tyvek up for Solutions. Operating XXX China sales actions as margin business headwind declines high growth led increased ongoing basis water COVID technologies, reflect driven Asia a currency. $XXX in X% continued of in Pricing pricing Shelter on our were more Safety actions Safety which was end Within by X% and of X% continued on pricing as costs headwind. demand EBITDA approximate in of overall across an W&P by quarter. shift view, demand organic Slide strength than versus actions delivered Solutions. taken of growth volume in the basis up XXX-basis-point last declines. gains reflects Sales W&P offset in pricing supply notably Shelter segment, as commercial driven remodel-related organic robust in growth an construction the as sales the sales in

the outlook close Excluding with comments was XX. on margin a Slide impact, I'll price/cost XX%. financial on operating our EBITDA few over

in sound end most solid seeing book markets. demand, of still and order is are our We our

environment by and uncertainties future strength. in continue However, macro challenging supply exist driven to dollar the U.S. chain pressure, inflationary

focused value in continue our and are on our control for execution, leverage order to concentrated Our keenly to teams remain we drive a on within shareholders.

while full XXXX, adjusted $X.XX of year maintaining We versus range share $X.XX EPS year range are share. EPS our per the our to midpoint the $X.XX of adjusted to expect per range. range full narrowing now in the previous previous of For we our $X.XX

the about end sales to updating sales between May. are 'XX million a We the along given divestiture and the $XX billion to headwinds, foreign net at net removal our Biomaterials in full business, incremental with reflecting related $XX.X be of currency range its million year $XXX of $XXX guidance billion of

to high to EBITDA headwinds operating digits. year for be incremental billion. currency $X.XX between We up EBITDA of $X.XX and growth the our and for end adjusting sales Biomaterials After year business, now we guidance the single high operating expect removal primarily XXXX full expect the be billion of continue the to organic

XXXX, third For between billion sales quarter we expect to net be and $XXX to $X.XX and operating $X.XX EBITDA billion about million. be

as the EBITDA the absence than sequential be quarter increases currency We to expect net of operating headwinds sales expected business. volume second are further quarter offset weaker to the third and Biomaterials and by be foreign slightly

on during associated digits we and operating be our screw-in midpoint a downtime organic on from impact $XX X% third expecting site year-over-year of sales a basis, from disruption up million single expect the net W&P also utility EBITDA with unplanned to Virginia quarter basis. quarter at unforeseen at are an third in third-party On We approximately high supplier. an up the

are expect approximately We share. open Q&A. adjusted $X.XX With per to your operator that, me XXXX pleased the we take let to EPS back of it and the questions, turn to quarter third

Instructions]. [Operator

Your first Jeff from Research. from comes question Vertical Sprague

Ed customer right, back resi, around line the phone and visibility or the to properly Just that's the economic of channel points, the comment you all and your the you're worry kind kind on level U.S. from what Lori, some electronic, cell relative consumer now and top partners some like? seeing guidance. of your could of dialed in that on of comfort there the the half just the

Jeff. Yes,

now down, expect them looked of remember, last over are and businesses, rates which we end to our there in. the right PCs, the that least really mentioned than I because our at only would rates months. besides we have be. of lockdowns how days that, a order And everything, little holding lightness we tablets, And things seeing some some for business our don't like board demand that, PCB true So in really The XX China. Like, week, them of seen, of the our across board, the look, bit down. is smartphones hanging the in much there. of is side, versus order know the out on is we've orders and a solid that that. significant water I weekend as which just where And is we've before, at Demand and softness in but we're some the on is longer bulk actually the is rate, of a say, order about not downdraft would of

a there. we're shorter order cycle bit little like today, hanging sit the rate. in looks things on So it as But we are

We your are good, on We obviously, be the Both commercial naive. data there. good at good. the -- up. week. still to downdraft By said seen seeing points specific I'm time, things last we're just out rates ready order see was in have was that Jeff, not planning, and not doing it. that, construction point point But piece having resi if The was do-it-yourself side. no to the the in business of recession we're soften And this do

has comfort of running that. and to regulatory in some then maybe still particularly Or on bias there's proceeds. now ultimate wait to path, And M&M it that Great. the that is the Is the perhaps until your it cash, comes of to wondering start funding get as of back little to a just we're door? cash a bit further some secured deployment down the kind Celanese

Yes, Jeff.

at with prepared just But on we're kind it, to thinking the see reiterate use repurchase and to is my do we and here time -- made, heavy both town the the and year think -- door. we internal end and But kind the ready is by regulatory, that just I'd to I So term with of our doing doing. the Celanese you gut XXXX. I in the be of the timing share to of all we're say we're was available. first what lights has right November comment by year clearly want through the the the talking of -- cash cash the Board a amount this of we green we're going the through get to to wouldn't is X about be work, comments

never So sure. know if you regulatory -- you and just -- with don't COVID but for you there's know lockdowns,

So to make just we'll I want then and a closer, decision. get final

from Your Research. Melius next question comes from Scott Davis

off a mentioned of Rogers Ed, or off remarks, 'XX kind price/cost, kind model impacts it? said, your look think at for Is in I you GAAP. it the then Is 'XX? having is you your materially deal of it challenging it

Yes.

-- issues really were, -- I'd win that to line were bad. of I'll price/cost which night really hitting the the and the been good happen, by all percent. guess say off there's By the the up and way, can really, right rate or and all is way. you control revenue impacting planning model, it's on, So the The have assumptions put the which team catch The within is looking X EBITDA for just I a fix on the will is there it that what EBITDA way, a planning those. putting are good operational is the aside, the X that them fixable, nice.

And give So by come. expect improvement we the you X. way, I'll to just

control. whole silicon side, application industry and even as them it's they them. being on really something for the One of the is is They're very high-margin can shorted not a

margin satisfy in that they're up fire that to eating they But -- other meantime, more to -- used using to example, because the of that which they're customers, even So out, up obviously, a here, but contract in bringing then into some bringing we're manufacturing facility off. online. trying back at silicon they is the give that's supply. business. trying you manufacturing, point And that more they're it one to the that contract just that'll really secure they're had And a

other there's but X that's So ones. X examples,

and worked ready launch So facility those getting in-house. that production the they're and again that's being on, things, to bring back

as in fixed. into work operational XXXX issues through hope good get We'll gut is shape that. items we So we'll that. be it's My these like going and

we're Ed's impressed on the Yes, line, areas one too really penetration their I in just that top the is to of EV. with think point

there. seen take to especially really the opportunity so with put growth DuPont we EV We'll combined the when in And our continue opportunity, it applications. they've together nice advantage of

we've think million today. generate the portfolios mentioned, of about the X I revenue in $XXX past,

can we're those we together to So what do. excited get X and see

on see on then Laird assume the steel here what Laird, just I its I is in based ahead And Right. of slides that little model? a

Yes. Both about good and And in that -- Lori We're the about really revenue we out of XX% we're able on of Laird technology identified who as ahead. play relationship revenue Laird, to. what it opportunities new are issue earnings got the customer think just And that. seems is synergies our We've direct getting Rogers, them. one excited through stream like an alluding to probably synergies. more some use resolve million that. a and going existing X and had But real sort the for in to of I I'm between out and solidly is same $XX application with a European with customer. had with another We an were was we nice just auto, DuPont revenue to

So that's of this kit the tool putting exciting together. with really kind

question Tusa Steve from Your from comes JPMorgan. next

side, prior. material I price/cost million the you the -- headwind raw what's your think year this had for estimate On $XXX now? in

just that? in Maybe like million but prior. $XXX I tough, was And And think is headwind had higher if quarter obviously, then given This than not, bit an a I update expecting. quarter, including inflation you seemed logistics also, are little two. on those a you this

Yes.

expecting materials, and now between energy costs million. about we're logistics So higher raw $XXX

from that it's earnings we a increases. still So $XXX when increase the where were fully call. with But expect we prior to we about million cover sitting did price

creates net-neutral It total be this on So the have just quarter. as margin on basis the line. telegraphed. headwinds we XXX profile in It points about we'll bottom the was

-- margins if a underlying leverage XXX, XXX we flat that out about P&L. through basis points, year-over-year. on up take actually So nice delta, we you But the held were

the The inflation you XX% XX% about you breakdown raws. raws, just using is breakdown and logistics, I'll is Steve, energy. of XX% for were is is because

see for about where to XX% our can the of you by pricing. Just it. feel kind give in you is a inflation of got phenomenal W&P segment, And we

was been materials energy through don't breaking of I line? is recorded guys through prior kind that running out you previously number cost, quarters? recall explicitly. in That that Had raw Yes. that new that the line that materials Or raw item?

the -- raws, raw in yes, the in been million. have would have it been it total wouldn't but have the would in It been $XXX

it's see So from logistics total. costs as $XXX fuel the to in not million to new the the energy the increase $XXX But current and primarily effect knock-on in the really then million is higher increase costs. prior we

Yes.

let's a that Or you do makes How sense. recession? volume look in That a I Okay. -- you last performing a kind have lot cyclical of business business? is that of takes can just of you of type say, W&P a business, hit. that that consumer of one through too the one on business that on there that housing through basis? through grow mean do see And bit kind then exposure at much how guess, a recession where I

first -- it all, how remember, depends of recession the is. deep of one Well, just Steve,

to in remember So is product which Tyvek one hard it's But line, one there, far, the answer. a sold-out the biggest of that asset. that's segments a

So we product end other markets. to can divert

trying For we right medical the we market. We're work -- speak. to market medical through now, shorting backlog that are packaging unfortunately, instance, as

the business for would to hold other well I And think think the I just -- way, in applications in water business in the a the W&P, we So sold-out use water pretty by recession. have there asset. it

there down Kevlar little So yes, we'll think see in might little some go effect of can we a hang a it. bit, go well. Nomex but would down bit. probably I pretty

you know And just the I sure. think to be statistics,

more the markets the residential rest construction repair health and end then largest about about and is commercial underneath the on of piece XX% the are XX%. side XX% In commercial, remodel. there side. So the and care is The restaurant

are those the So opportunity bulk -- they up for of the commercial make us.

comes John from Walsh from Crédit question Suisse. next Your

bit maybe Steve's to up following a side. little there, talk pricing we Just could on question the

look to back structural the see you as have forward, potentially have think we But might material And W&P. in you there pricing where strong future? where then most as you highlighted you deflation in give You pricing? the do some

is Well, question. talk it Yes. We time. about the a John, all great that

So we baked did made into were increases a, price we product that I'd say, all decision strategic the price. the all

did some are something index that tied we do like So surcharges to that. not or

is we where But our in a be clearly hit going to each much can margin how and we has been maintaining good goal, a we're on maintain the obviously, like markets. do we're So that by the feel gap, teams more come month forward And for And these to recession obviously, approach -- our of percent, help goal EBITDA our gap feel then so last a where way, is we which going the get hold commodity with down, scenarios and took. about can to commodity. we other mentioned, as we our that obviously, benefit -- would where end but we've hits with thing than our hold costs way it. gap the be on price I the Lori price/cost if been just the decrease from working the a can

extent, that's I by I what have is this but you plays as way, past, very, we to -- ours And do many that So where and hits, -- into very others, out. that this just in end companies like it that's interesting. think market, dynamic. recession different To we'll didn't for a thing if I have the one what see the won't get opportunity But the each the said.

improved or whatever -- global recession, have. many have did. biggest companies a were cutting that this is that you performance clearly And single had you you and your many, this time, You probably financial have the costs we dynamic

that's does that in going No, of what's headwind And interesting QX, see disruption? level get QX? to very confidence reverse the then that, million can in beyond W&P that a $XX perspective. their party in you're And fully third out the that kind

And a the ago. already way. up just problem we're X.X disruption. it's bringing the been weeks hit This lines this it's week. issue, safety We've So getting past -- by

when lines, We methodically cogs it the look what in all ended went down. just up go to have stuck at through, caught them being

But line process. today, bring lines a it's So again. up up some a a we we're ago, bit of bringing day a and little later

next of that Because the instance, the over of Tyvek asset. So It's one we we But is few we're for a products there. problem big make don't sold-out here -- days. out know the products up.

full which So sold But way, seasonal being of so by have lift, much, be fourth tilt that just we the fourth a we the so a we sequence quarter out. the is can is to not we're to bit you down, But We'll happening to third there little not give from don't make a running Spruance and you see only quarter, the there. problem. quarter necessarily what's the have pattern. third

also will have We hit remember, we and water quarter that line. up volume. in us our On sold-out all the give And about reverse have they the a new the volume. Kapton a asset. line electronics business up then and been you incremental telling also fourth our And which at sold-out Circleville line in give Kapton's coming product our facility, incremental osmosis and us Edina, that's coming we've business, a

So sequential marketplace. in out we're happen fourth a change the in to They the production to getting not third we where of demand be just them. necessary sold-out start expecting assets some

Markets. from comes BMO Capital Your John from question McNulty next

power I of believe of season? any pull you that of as issues Germany us you're as come to of rest the precautions EMEA and you or kind any there sales are a about and your little the exposure regard region. XX% that any if progress Can to with from give can color through taking we bit levers the your gas to

continue rationing impacted portfolio. few in headwind to W&P a going the if gas We'll now, which obviously not we're European ration the they in it, that portfolio there. an from that go-forward It's so there as businesses from don't see doesn't we impact that Remainco a in don't and impact any they we Yes. minimally M&M existing start site plant got be in now, Germany. Germany natural primarily on retained the utilization there. But in we to could see There's Europe. prices, impact They've a as on watch an Right use energy so right one have have it were plant our perspective. expecting see does M&M. plant material some a sites we

they're So again. up

last of I think so EUR they were couple days. the of or as XXX

on So we'll continue an that where to keep eye those moves. see to

it. Got

out garment rest that to on how have we big line business, the And of that reversing and much shift the it I terms should guess then guess how going the a some just And had surge on that sounds year? the we far say how be of kind on about just hit back in of or incremental you Okay. you the normal are? shifting. you also been Tyvek mix that might the but forward I that of in can would like aren't through margin thinking break headwinds

Yes.

about quarter, the second volumes in garment down were million. $XX So

able up were and increasing a So end medical But sales in with were little in the to down that $XX markets. million. of we garments total, make other

we in get too year-over-year that not on -- from XQ demand more The in other out hit the you And basis. product side, fourth a It's demand We markets expect that the year-over-year then piece to you a so headwind. to production be out the to comp garments. net shift a on start because to a end the you quarter, headwind. can again the around that of produced much

were changeovers entire the And so when just garments able the we were to lines. we minimize and the making time garments, run on

had year, to back Now pounds than have we normal lower more product a mix, to last changeovers that having therefore, we're produced. more to translating so we're

Parkinson Christopher from comes question from Mizuho. next Your

so last just margin so. W&P, for of intermediate- X.X outlook questions pretty given updated the price us to the and Can updated the mix Just would on much in forth? the and structural Just or increases, thoughts question any improving you long-term so base, helpful. a about very reliability those just on corollary be asset your there color across and numbers confidence your give product

you the give here. businesses of bigger I'll really Yes. both

And should consistently that us XX% weren't far really And then that time EBITDA margin. of I XX%, business. price where been and think that's seen and get a the and there. XX%, over cost, this quarter, run there. E&I, we a bit we can to the little that we think I about business, of this W&P of do be think XX% will able ex kind you've off of to have pretty In run more we price/cost that

we've would some pricing at on way, control our our some Now here, our as own line Tyvek, specifically we're really product maintain, commodities mentioned planning as that. in a some getting of point facilities. then is above And incremental I at our the tools implementing on W&P internally, But big improvement. side. ones things big of And we're Chris, on the the a get continued are lot helping on in heavily on a working us is you release. remarks, our the are Nomex drift by capacity water and that ago, minute release be These for so digital you be that that would facilities down, been and X% we capacity assets, that one see the working assets side, our prepared heavy on on reliability of

You get throughput. a bit of quite

on that really And So the really spending up. time working keep will kind W&P our what us playbook. we're our help excellence to that's incrementing operational of

Yes.

were half, more half. half headwinds half. XX%, see any margin I second towards first we price/cost around you movement the material away the the think the in versus XX% XX%, We when second as first take we look like the in don't

would price/cost you take to XX% XX-ish, And roughly headwind. when underlying look same we away so half, second expect the you that as have the we XX% then and

a give and expectations of follow-up. the price, on past can, so for very can extent on more the your us over commentary terms so That's in you color Delrin little number very quarters and helpful. few just versus forth? And quick a To just of bit you suitors as the

Yes, Chris.

It a was division working So on in is been what we've on division. we've Delrin a been doing standing it up.

the for of finished the to We're was fall. here little it We summer. to really a We're through up going data early in actually the work So get room. waiting launch just the us. extra process

can't that color By be of the has EBITDA But more margins. give well to any a in I It's strategics it's doing business that interested in number this would very people. way, I you environment. going XX% asset. it's think commentary this So still on detailed are

why already the of XXXX. the that's we portfolio where the asset the of And the it. that be the about that's the But -- timing is the now probably said, you're timing, getting end if middle you so to it. get that's want and would probably kind And discontinued we operations. the divestiture to deal, the by of in really that of So time close remember

of from next Bank Your question Steve from Byrne America. comes

longer-term fabs have And that way the Is pretty in that support is ask couple you fabs any mix some businesses shifting possible? of with potentially for you being fabs already drivers, semiconductor Is under a product you where other that being remain term? to the bit about construction, driver for intermediate whether are a online wanted they robust? business potential and do of coming those to I little that one semiconductor business shifting to are the other semiconductor then your a the new products. the awarded

Yes.

as product end around they the the think can make kind they changing see but first of mix the I fabs, to don't your question, markets. that part of shift on them your I

seen the we've in the those of demand weakness so advanced center where them the space is data associated consumer technologies just with to electronics portfolio, move center some to been applications, higher applications. very, end there's favorable which robust, more our market very And away given remains as the data

quarter, strong And place. through advantage taking increase so to well results in construction in we're you as our can second to the the we fabs that's of very positioned results. take continue the And the go post see in we forward

it incremental positioned. the that bring capacity comes and in now, relationships capacity. We've over X% are we're an right very great well about I with starts, got believe, the to next few fabs those putting so years, when majority wafer And we'll of on

capacity ahead growth. but it's are relationships those with coming year. this to We've putting past capacity. large lines the those results that strong very we'll players MSI XXX XXX about to while all of said had We're And those have if posting that they any hard don't in be basis in from new I points actually so continue if you we'll new say place, to in on, that maintain want know

see we And is exposure semi price a continue that's wouldn't and to posted don't do important And that. and reason the market both the why think revenue is piece. volume. the of to our I any I So volume it's function know, to

And so on price a and so impact It's that results. our can of MSI inches wafer the the be millions is semi starts That doesn't square the the really produced. focus volatile in wafer market. of

on just if discussions. Ed, litigation And curious comment PFAS update on any can you settlement

on. I conversations. Yes. judge to It's And to But have say. know, ongoing go don't the that new encouraged just as you anything

But consistent We resolve say. and to the optimistic. still conversations to pretty to issues, new continue to try nothing I'm have

comes question from Bank. David Deutsche next from Begleiter Your

EV going are on be Rogers, you large type growth your will and exposure what forward? of how looking Just with forward to

Yes.

we be So portfolio see $XXX EV a and opportunity the about our Rogers' in to between car. portfolio

So a number. really nice content

about had mentioned $XXX earlier, X the of between I we have portfolios. today, million revenue As

a have up for million our adhesives. $XXX about existing So and $XXX application million in made the in of which coming paper And from Rogers e-motor is predominantly then piece. about portfolio, we Nomex

really we've in very before, as a mentioned opportunities growth to together the rate space. So for continue drive It's come X high companies I nice too. as to a to the had opportunity, mentioned

for applications overall, Laird a in ADAS that. growing of are, ADAS than even lots the the opportunities higher mid-teens, growth. got nice applications We've acquisition, portfolio today EV with So incoming so

mix you Great. on -- is anything And online, between more capacity growing comes improve the X earnings in can until this bring or when now to keep stream? get do capacity the further out is there Line just tieback business more on on new to

release also a to get us for is opportunity Yes. to to assets. capacity That's key sold-out continue

so the portfolio, a back bit recall capacity capacity. newer for X line it X so Line production we oldest was were doesn't to have so as incremental but pandemic, up, And much is incremental little us. able the in the during as Line brought of bring it lines, a on we that

between get of XXXX. to sometime we end off new and we of try the pounds asset, as await to the Spruance more which continue the we'll all So lines around Luxembourg both Tyvek expect

Andrews question Stanley. Morgan next from from Vincent Your comes

Ed, for well you the buybacks share still with but preference is bolt-on. articulated mentioned your proceeds, that

past, update update maybe give give us just if an then you've could I bolt-ons. and sort an you sized think on on -- So what's in us the of out there

what just you bolt-on So basis. look like want a maybe on to redefine go-forward could a

Yes. question, Thanks Vincent. the for

because I one. to that be that So give seeing -- customers the X that see as talk range, something Rogers tools do, $X technology about. play Laird, be resolve any to we type in And that big our going say, electronics would as the in for us more pillars one X together let are with would that know electronics would the tied to the we just more we're really of application on engineering, with and was, the would to DuPont of be so things we're looking a not pillars like it billion, it back bolt-on in of that been example, billion we've all, issues those would me That the at toolkit first Laird benefit and bring we're portfolio. bolt-on Rogers. additional strong with of $X

would at. that be those it something in look we of that would like So pillars one

now. your in outlooks to in when manage seasonally any past, up sort than just uncertainty Okay. And we conversations to tricky be in into more destock been picking C-level macro should and whiff for get an year-end. do But of for portfolio DuPont thinking the may of we've refined going or that less sort they then typically XQ, Are could you your these -- about? just that issue anything C-level of of customers be we'd the into

trust we're we're no, seeing not and closely. me, watching No, that. we're But it not,

comes Capital Aleksey from Yefremov question KeyBanc from next Markets. Your

E&I your about kind better worse semis is in or with segment overall in outlook your of particular, or in seasonality? normal third and quarter In for line

business we respect it's one will of shipments what little Solutions I just the a within with line the seasonality, so that the this normally on the a with more on smartphone pattern. growth given last odd It's would do normal with in posting basis, to was year. return year of year-over-year say to they -- exception to start Interconnect a normal

the we the in first So volume half headwind declines. posted as you saw

in increases sequentially, second to provide the Ed basis, Solutions. We have one expect Interconnect material year-over-year usual mentioned, but the back pattern, the half no the revenue line will in the as volume on, within with no, a had of year. change exception, That's some which Kapton incremental our coming the that to half

And also fourth of of still would back outage margins W&P, the up to first the I you remember see? expectation a to margin that on quarter maybe this this an in Is is first the higher be to in 'XX? half, half similar you margins sense. back your function the delayed or into were Makes follow compared comments Because just seem expecting half. that quarter

but that think I into seen I into Yes. some the the last went mean we function margin we've improvement one, quarter, expected quarter and more headwinds we those we've a of, the out. had coming half, this It's seen. flatten year, price back maybe the as incremental

a of So lot it is that.

mentioned, W&P. year, number for So That has now overall thought be energy we of recall increase and originally materials, we back when is million. went we and majority in gave logistics guidance to that as the raw the have would only $XXX $XXX full million

margin So us. reported creates that for headwind as

comes Your UBS. question Josh next from from Spector

relative we any how different should about metrics worse looking from I business, for? industrial volume excluding you a the comment Safety Solutions, on I we might is be that out running? should Tyvek or can guess perspective there there better to is other or production materially guess thinking within be be anything

well. are with bit to a second Nomex. our raw generally in within had the performing materials those Yes. quarter little access shortfall a We of No,

wasn't an nothing access we the to increased the get as Tyvek couldn't the work on inputs Nomex far issue. as ride asset it we're the the a But So seeing to operational through change. side structural as the of It's utilization key or side really garment like product. we demand make with some aramid on issue through to changeovers

Or side still be you the is seeing I guess back well, customers are demand spending? quarter? on demand with may as the any just through on anything changing Or relatively steady? weakening pulling

markets, different in steady still is demand yes. No,

comes Mike Wells next Your from Fargo. Sison from question

quarter. Nice

remind in close gap? sales is pretty of sounds then a of the to the like in into EBITDA, type the looks coming on and somewhat growth XXXX? what plan as can you like, control within Rogers, shortfall head it's good. you of terms you versus In shortfall if us It $XXX there 'XX, million be And the bulk their will sounds it expect

they're it. Yes, control, same are items the having we which say, silicon except supply, their in we're others yes, operationally obviously having the understand But for the in the would can control, so here, I so through work issues those. are all they their

XXXX. the of single it well for XXXX. them up this first second would in in they you that, the we perform quarter. by way, The As said, say about I digits can't high on digits them year I'm top but anything for modeling, quarter. And in the tee high to, was hit hopefully the not obviously, single growth expect for allowed to line.

EV are we opportunities the point nice, that's Lori's a few really and on as to they're ago, So nice seeing side. minutes

So through operational about work that feeling good the issues.

Got you quick the sequentially it. as the for That's quarter. could would look that when up versus follow-up, historically. XXXX And your seasonally third quarter guidance imply back a fourth I guess, at midpoint the difficult, be

to better So it why could quarter third, hit fourth you be any thoughts versus on midpoint? the if were

Yes.

you So back the XQ a $XX sequential $XXX into about math increase approximately to and you're million million. about $XXX at million, then from is getting

primary at it's really don't Spruance. from the coming the outage drivers. you X have from One So is headwind

at sized that million. we had And so $XX

to that then we from that volume in have able key additions X And you're the the the then getting So capacity about that back get other that the and asset Kapton production fourth off we quarter. spoke earlier online. cap water drivers are

those change market So no X underlying items. of in

comes Citi. next P.J. Your from question from Juvekar

terms is automotive extended an see of think of And in Or 'XX and more come 'XX? can shortages? a you in snapback do recovery What how semiconductor production quickly you next Do it's back? year? it

the I XX be. high used next mean XXs to That's produced right for million year, we of below the are now where think this Yes. year. well cars I so XX still off expectations million

We But beyond heading depend into will continued X% So strength chip there's be see even still sequentially. XXXX. the that, resolving Obviously, semiconductor opportunity. growth all up third I and and shortage XX% the to expected some itself. on is is quarter mean, it

like we So chain things it supply getting as little a resolve better bit some feels issues. are there the of

engine. the talking care DuPont back mentioned, very -- the of also points earlier much weighted new production side towards The too, had portfolio that very Lori I portfolio on not about EV is things. about and was ICE P.J., to we new much

in because are the M&M more by way, ICE this also M&M We engine-related, which, I'll portfolio But nice very of the say, portfolio, was the new EV-driven. will EVs. sell

So more becomes the it's way Obviously, overall very the growth weighted that piece. go to of rate autos rate of growth but like that important. we up, even towards

Great. quickly, question And another on China.

trying I the but talked which are you under what to has exposure your You the And property market it. slowdown to been about property revive the smartphones, in is market know about what's seeing pressure. China? there? there, in What And government

that that China, saw Yes, of top we over and improvement on was extended lockdown. XQ in sequential actually XQ,

specific China. a the with on don't were we footprint the have market, So question To construction we in pleased there. your results really construction

Asia. is our The and So our U.S. it the of construction majority Japan in within wouldn't business. in impact overall

Your Mitsch next question today, Frank comes from from our Research. Fermium last caller for

actually. Just a on China, follow-up

did quarter of that third you out What X% in are seeing in came world? Obviously, on Asia. the actually you You in as was that growth concerning. progress the PMI data somewhat right part the now organic just

Yes.

into quarter. We expect again in China to see the improvement third

probably XQ. we see the we from while sequential as still flat, you improvement go so year-over-year, XQ And see to

Or driver volumes there of overall, Is that XQ? big materially that versus volumes then is expect -- And sequentially you're XQ. seeing there? most up to in businesses other the up are XQ be pick Great. you Kapton

as well. No. piece mean it. Kapton It's smartphone I a seasonality is the that of

see we and season general, prepare we high E&I within as the as head overall they smartphone very sales usually, So into in the for electronics, segment holidays. the Christmas

back call the for turn closing Chris over Mecray will to remarks. I

for the today. you, everyone, Okay. call Thank joining

Thank our reference, DuPont's you. of be posted on For call. a copy concludes your will This website. transcript this

conference This concludes call. today's

may You now disconnect.