DuPont announced financial results for the third quarter 2020 wherein its net sales totaled $5.1 billion, down 6 percent versus the year-ago period on both as reported and organic basis. Growth in Electronics & Imaging was more than offset by sales declines in the other segments primarily due to the impact of the global pandemic.

 

Its third-quarter sales in transportation and industrial business fell 14%, but rose 20% from the prior quarter.

 

Sales in its electronics and imaging business rose 7%, helped by builds in semiconductor technologies ahead of the launch of some premium smartphones.

 

On a regional basis, organic sales increased 3 percent in Asia Pacific versus the year-ago period while the U.S. and Canada declined 10 percent, EMEA declined 15 percent, and Latin America declined 3 percent. China sales in our core segments improved 14 percent versus the third quarter 2019 and 10 percent sequentially from second quarter 2020.  

 

EBITDA was $1.3 billion, down 7 percent than prior year and the impact of lower demand, cost associated with idled facilities, and portfolio changes more than offset manufacturing productivity gains, approximately $150 million of non-manufacturing cost savings and strong demand in semiconductors, smartphones, water, Tyvek protective garments, and health & wellness. 

 

Operating cash flow of $1.3 billion included improvements in working capital of more than $300 million in the quarter which was driven by lower inventories. Capital expenditures of approximately $200 million resulted in free cash flow of $1.1 billion. The sale of the trichlorosilane business and the Hemlock Semiconductor joint venture provided $550 million of additional pre-tax cash proceeds in the quarter.  Proceeds from these sales as well as organic cashflow generation enabled a reduction in commercial paper balances to less than $400 million as of September 30, 2020; a reduction of $1.2 billion in the quarter.

 

The company, which makes everything from brake fluid to fabric used in protective garments, has been cutting costs to battle weak demand in several industries due to the COVID-19 pandemic.

 

DuPont raised its cost-cut target, saying it expects to save $280 million for the year, $100 million more than its prior forecast, as it renegotiated some contracts and speeded up its workforce reduction plans.

 

“Our team remains committed to emphasizing the safety and well-being of our employees, prioritizing the needs of our customers, and executing on a playbook that enables us to quickly respond to the changing environment” said Ed Breen, DuPont Executive Chairman and Chief Executive Officer. “This commitment is evident in the results we announced today. We delivered strong performance demonstrating the value our market-leading innovation and technology provides in key end-markets such as semiconductors, smartphones, water filtration, probiotics, and personal protective equipment. The actions we have taken to right-size our cost structure and generate significant cash flow are delivering results today and we intend to maintain this momentum as we move forward.”

 

“In September, we completed the sale of our trichlorosilane business and our stake in the Hemlock Semiconductor joint venture and earlier this month we signed an agreement to sell the Biomaterials business,” Breen continued. “Execution of these Non-Core divestitures and the continued progress towards the anticipated closing of the Nutrition & Biosciences transaction in the first quarter 2021 exemplify our commitment to create both market-leading businesses and value for our shareholders.”

 

“With a continued focus on execution, we anticipate a fourth quarter underscored by additional cash generation and operating leverage across our core segments driven by additional cost savings,” said Lori Koch, Chief Financial Officer of DuPont. “We expect to deliver full-year 2020 adjusted EPS in the range of $3.17 to $3.21 on net sales of $20.1 billion to $20.2 billion.”