Industrial materials maker DuPont, once part of the erstwhile chemical giant DowDupont, has posted net sales of $5.3 billion in Q4 2020, up 1 percent versus the year-ago period as reported and flat with the year-ago period on an organic basis.

The fifth consecutive quarter of year-over-year growth in Electronics & Imaging led by strength in both semiconductors and smartphone technologies, coupled with further recovery in automotive markets, more than offset continued weakness in oil & gas, aerospace and select industrial markets which led to declines in the Safety & Construction segment.

“The leading positions we hold in automotive, protective garments, residential construction, semiconductor, and smartphones markets enabled us to capitalize on positive momentum and deliver strong fourth quarter results with sequential volume improvement in all segments,” said Ed Breen, Executive Chairman and Chief Executive Officer, DuPont.

“Operating leverage and year-over-year operating EBITDA margin expansion in each of our core segments in the fourth quarter is a proof point in our teams’ commitment to execution. Throughout the year we have focused on positioning ourselves for growth through strategic investments, streamlining our overhead structure, improving working capital, and strengthening our balance sheet. This disciplined operating model served us well in 2020 and will be our roadmap for success in 2021.”

“In addition to delivering strong financial results during the quarter, our teams remained laser focused on closing out a number of our strategic priorities,” Breen continued. “Earlier this month, we completed the separation of our Nutrition & Biosciences business and have also signed agreements to divest our Clean Technologies and Solamet businesses. These actions unlock significant value for our stakeholders, generate substantial cash flow for the company, and focus our portfolio to three core business segments moving forward. We also made a joint announcement with Corteva and Chemours regarding an agreement to settle legal disputes originating from the 2015 spin-off of Chemours from E.I. du Pont and the pending personal injury claims in the Ohio multi-district litigation. This agreement provides a measure of security and certainty for us and our shareholders regarding any potential exposures related to these legacy matters.”

For the fourth quarter 2020, GAAP EPS from continuing operations totaled $0.37 on GAAP income from continuing operations of $279 million, versus GAAP EPS from continuing operations of $0.24 on GAAP income from continuing operations of $191 million in the year-ago period.

 The improvement is mostly attributable to the absence of a prior year net charge associated with a joint venture, a favorable income tax benefit and lower integration and separation costs partially offset by higher depreciation and amortization and lower segment earnings.

Operating EBITDA was $1.3 billion, down 7 percent versus operating EBITDA in the prior year. Stronger demand in Electronics & Imaging, Nutrition & Biosciences, and Transportation & Industrial as well as approximately $130 million of non-manufacturing cost reductions contributed to operating leverage and operating EBITDA margin expansion in each of our core segments versus the year-ago period. These improvements were more than offset by the absence of prior year discrete gains of approximately $160 million, primarily associated with customer settlements in the Non-Core segment. Adjusted EPS was $0.95 in both the current and the year-ago period. Benefits associated with a lower base tax rate, lower interest expense, and a lower share count were offset by lower segment results.

Operating cash flow of $1.3 billion included improvements in working capital of more than $500 million in the quarter which was driven by improvements across accounts receivable, inventories and accounts payable. Capital expenditures of $272 million resulted in free cash flow(1) of $1.0 billion. For the year, operating cash flow of $4.1 billion and free cash flow of $2.9 billion were enabled by an improvement in working capital of approximately $850 million and capital expenditures of $1.0 billion. Strong cash flow generation throughout the year enabled a greater than $1.8 billion reduction in commercial paper balances to close 2020 with zero commercial paper outstanding.

First Quarter and Full Year 2021 Outlook

Beginning in the first quarter 2021, DuPont will reflect Nutrition & Biosciences as discontinued operations for the current and historical periods.

“For 2021, we expect net sales between $15.4 and $15.6 billion, an increase of 8 percent at the mid-point versus 2020 net sales of $14.3 billion and operating EBITDA between $3.83 and $3.93 billion, an increase of 13 percent at the mid-point versus 2020 operating EBITDA of $3.4 billion, reflecting anticipated solid top line growth and robust operating EBITDA margin expansion,” said Lori Koch, Chief Financial Officer of DuPont. “Our outlook for full year adjusted EPS is in the range of $3.30 to $3.45 per share, an increase of 68 percent at the mid-point versus 2020 adjusted EPS of $2.01 per share, reflecting the improvement in operating EBITDA, lower interest expense and the benefit of a lower share count.”

“We also expect a strong first quarter of 2021 with net sales between $3.75 and $3.85 billion, an increase of 4 percent at the mid-point versus 1Q 2020 net sales of $3.7 billion, operating EBITDA between $950 and $970 million, an increase of 6 percent at the mid-point versus 1Q 2020 operating EBITDA of $907 million, and adjusted EPS in the range of $0.75 to $0.77 per share, an increase of 58 percent at the mid-point versus 1Q 2020 adjusted EPS of $0.48 per share,” Koch stated.