DuPont de Nemours Q1 2025 Earnings Call Transcript

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Provided by Quartr
May 2, 2025
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Operator

Thank you. I would now like to turn the call over to Ed Barneus, Investor Relations.

Operator

You may begin your conference.

Edward Barna
Director - IR at DuPont

Good morning. Thank you for joining us for DuPont's first quarter twenty twenty five financial results conference call. Joining me today are Ed Green, Executive Chairman Lori Koch, Chief Executive Officer John Kemp, current Electronics Business President and CEO elect of the future independent electronics company Antonella Franzen, Chief Financial Officer. We have prepared slides to supplement our remarks, which are posted on DuPont's website under the Investor Relations tab and through the webcast link. Please read the forward looking statement disclaimer contained in the slides.

Edward Barna
Director - IR at DuPont

During this call, we will make forward looking statements regarding our expectations or predictions about the future. Because these statements are based on current assumptions and factors that involve risks and uncertainties, our actual performance and results may differ materially from our forward looking statements. Our Form 10 ks, as updated by our current and periodic reports, includes detailed discussion of principal risks and uncertainties, which may cause such differences. Unless otherwise specified, all historical financial measures presented today are on a continuing operations basis and exclude significant items. We will also refer to other non GAAP measures.

Edward Barna
Director - IR at DuPont

A reconciliation to the most directly comparable GAAP financial measure is included in our press release and presentation materials and have been posted to DuPont's Investor Relations website. I'll now turn the call over to Lori, who will begin on Slide three.

Lori Koch
CEO at DuPont

Good morning, and thanks, everyone, for joining our call. Earlier today, we reported solid first quarter results ahead of our previously communicated guidance. First quarter sales grew 6% on an organic basis on strong volume growth. Operating EBITDA of $788,000,000 increased 16% year over year, demonstrating strong leverage in the quarter. Operating EBITDA margin of 25.7 increased two forty basis points from prior year, and adjusted EPS of 1 point dollars was up 30%.

Lori Koch
CEO at DuPont

From an end market view, we saw continued broad based demand in electronics driven by strength in semi advanced nodes and AI applications and strong volume growth in our health care and water businesses. We continue to see strong order patterns through April consistent with our expectations. Regarding our strategic priorities, I am pleased with the continued progress that our teams are making on the intended spin off of our electronics business, which was announced this week as Qunity. In addition to the naming, we recently achieved several key milestones, which enabled us to remain on track for our November 1 separation date. First, we completed key executive leadership appointments.

Lori Koch
CEO at DuPont

John Kemp, current DuPont Electronics business president, was named as CEO elect. John is well positioned to lead the future independent company given his proven leadership and extensive experience in the semi space and broader electronics industry. We are pleased to have John on the call with us this morning. Matt Harbaugh was named as CFO elect. Matt has an impressive track record as a public company CFO along with deep experience in spin off transactions and will serve as a valuable business partner to John.

Lori Koch
CEO at DuPont

Next, we've made significant progress on the composition of the community board. Three existing DuPont directors as well as four external members rejoined John on the new board. This is a group of highly accomplished leaders with a global business experience, diverse industry expertise, and varying key competencies. Finally, last week, we submitted the initial filing of the Form 10 registration statement with the SEC. This document contains detailed business and financial information related to the future stand alone company as well as information related to the separation.

Lori Koch
CEO at DuPont

Turning to Slide four, which details how we are addressing tariff uncertainty. We are a global organization with presence in all key regions, including a significant manufacturing footprint in The U. S. And Asia. Our scale provides ample flexibility to adjust production and product flow, enabling us to mitigate trade risks.

Lori Koch
CEO at DuPont

Additionally, from a sourcing perspective, the vast majority of our raw material buy is purchased in the region it is consumed and is not subject to the new tariffs. Our teams have been carefully analyzing ongoing global supply chain dynamics, engaging with our customer and supplier base, and actively working on a number of tariff mitigation actions, including production shift, sourcing alternative, surcharges, and product exemption. Based on tariffs in place today, our estimated cost exposure in 2025 before mitigation actions is about $500,000,000 on an annualized basis. We have identified actions to substantially offset this potential headwind with the net cost impact in 2025 currently estimated at about $60,000,000 which primarily would impact the second half. We continue to evaluate additional measures in order to further minimize the potential impact.

Lori Koch
CEO at DuPont

Overall, we have a solid game plan to continue to consistently deliver results, and we are executing well in advancing our strategic priorities. With that, I'll now turn the call over to John, who will begin on Slide five.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Thanks, Laurie, and good morning, everyone. I am honored to be here today as CEO elect of the future independent electronics company, which we've named Qunity. The name is inspired by Q, the symbol for electrical charge, and Unity, reflecting the collaborative way we work with our customers. Qunity will be one of the largest pure play electronics materials and solutions providers in the industry with $4,300,000,000 in net sales in 2024. We have a broad portfolio and customer relationships founded on a heritage that spans more than fifty years.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

As the partner of choice for our customers, we have a seat at the design table working to advance their technology road map, enabling the next generation of advanced computing and connectivity applications. As a global technology leader, we offer a diverse portfolio serving the entire electronics value chain from chip fabrication and advanced packaging to advanced interconnects, assembly and displays. We bring material science expertise and end to end engineering solutions across the full breadth of our portfolio to deliver world class innovation to our customers. Qunity is well positioned to benefit from robust growth in semiconductor markets while leveraging a strong financial profile. With about 60% of net sales in semiconductors, the company will compete with a set of recognized global semi participants, and we expect to attract an investor base commensurate with this profile.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

We have long term relationships with all key semiconductor and other electronics OEMs in the industry and a strong history of co development and application engineering to ensure customer success. In addition, the business is well equipped to continue to participate in the AI driven growth acceleration via our advanced node semi products and advanced packaging applications for use in data centers and personal devices. We further enable key AI applications with high density interconnect products and layered thermal management solutions. We believe these leading positions will continue to drive industry outperformance for the future electronics company. As Lori previously mentioned, we continue to make very good progress on the separation, and I look forward to working more closely with our future Board.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

I will now turn the call over to Antonella to cover the financials and outlook.

Antonella Franzen
Senior VP & CFO at DuPont

Thanks, John, and good morning, everyone. I am pleased with the solid start to the year as increased volumes across many key end markets and continued operational focus by our team drove strong financial performance in the first quarter. I would also like to remind you that we realigned our segment reporting structure during the quarter given the upcoming separation, with segment results now reported as Electronics Co. And Industrials Co. Beginning with first quarter financial highlights on slide six.

Antonella Franzen
Senior VP & CFO at DuPont

Net sales of $3,100,000,000 increased 5% versus the year ago period as 6% organic sales growth was slightly offset by a currency headwind of 1%. Organic sales growth consisted of an 8% increase in volume, partially offset by a 2% decrease in price. From a segment view, both segments saw organic sales growth with Electronics Co. And Industrials Co. Up 142% respectively.

Antonella Franzen
Senior VP & CFO at DuPont

Volume gains during the quarter were led by double digit growth in our businesses serving electronics, health care, and water end markets. From a regional perspective, Asia Pacific delivered 13% organic sales growth year over year, including another strong quarter of growth in China, where organic sales were up about 20%, driven by electronics and water. Organic sales were up 4% in Europe and flat in North America, given the soft construction and auto markets. First quarter operating EBITDA of seven eighty eight million dollars increased 16% versus the year ago period as volume gains and savings from prior year restructuring actions were partially offset by growth investments. Operating EBITDA margin during the quarter of 25.7% increased two forty basis points year over year.

Antonella Franzen
Senior VP & CFO at DuPont

On a continuing operations basis, operating cash flow for the quarter of $382,000,000 CapEx of $249,000,000 and $79,000,000 of separation related transaction cost payments resulted in transaction adjusted free cash flow of $212,000,000 and related conversion of 49%. As a reminder, first quarter cash flow is inclusive of our annual variable compensation payout. We expect cash flow conversion to accelerate as we move through the year with full year conversion of greater than 90%. Turning to slide seven. Adjusted EPS for the quarter of January per share increased 30% from $0.79 in the year ago period.

Antonella Franzen
Senior VP & CFO at DuPont

Higher segment earnings of $0.19 as well as below the line benefits totaling $05 drove the year over year increase. Turning to segment results, beginning with Electronics Co. On slide eight. Electronics Co. First quarter net sales of $1,100,000,000 increased 14% versus the year ago period on both a reported and organic basis due to 16% increase in volume, partially offset by a 2% decrease in price.

Antonella Franzen
Senior VP & CFO at DuPont

Currency was flat during the quarter. At the line of business level, organic sales for Semiconductor Technologies were up low double digits on strong end market demand driven by advanced nodes and AI technology applications. Semi demand in China continued to be strong with better than expected growth driven by timing shift from second quarter into first quarter. Interconnect Solutions also posted another strong quarter with organic sales up high teens, reflecting broad based demand, volume gains from AI driven technology ramps, and continued benefits from content and share gains across layered, laminates, and metallization. Operating EBITDA for Electronics Co.

Antonella Franzen
Senior VP & CFO at DuPont

Of three seventy three million dollars was up 26% versus the year ago period as volume benefits were partially offset by continued growth investments to support advanced node transitions and AI technology ramps. Operating EBITDA margin during the quarter was 33.4%, up three forty basis points versus the year ago period. Turning to slide nine. Industrials dot gov first quarter net sales of $1,950,000,000 were flat versus the year ago period as a 2% organic sales growth was offset by a 1% currency headwind and a 1% unfavorable portfolio impact. Organic sales growth of 2% reflects a 3% increase in volume, partially offset by a 1% decrease in price.

Antonella Franzen
Senior VP & CFO at DuPont

In connection with the first quarter segment realignment, we have organized IndustrialsCo into two lines of business, health care and water technology and diversified industrial. Health care and water technologies consist of our high growth businesses of health care and water. Our health care portfolio includes Tyvek medical packaging and garment offerings, Spectrum and Donatel advanced medical device applications, and Livio Biopharma Processing and Solutions. Our water business is a leading technology provider with a comprehensive portfolio of filtration technologies, including reverse osmosis, ion exchange, and ultrafiltration. Water also has strong exposure to secular growth drivers and serves key end markets such as industrial water and energy, municipal and desalination, and life sciences.

Antonella Franzen
Senior VP & CFO at DuPont

Diversified Industrials is a leading provider of innovative products and solutions supported by well known brand names serving industrial base end markets, including construction, advanced mobility, and personal protection. For the first quarter, health care and water technology sales were up low teens on an organic basis versus the year ago period, reflecting volume gains in all business lines within health care and strength in water led by reverse osmosis. Diversified industrial sales were down mid single digits on an organic basis due primarily to softness in construction and auto end market. Operating EBITDA for IndustrialsCo during the quarter of $464,000,000 was up 6% versus the year ago period due to volume gains and savings from prior year restructuring actions. Operating EBITDA margin during the quarter was 23.8%, up 130 basis points from the year ago period.

Antonella Franzen
Senior VP & CFO at DuPont

Turning to Slide 10, which outlines our latest view on 2025 financial guidance. For the second quarter, we estimate net sales of about $3,200,000,000 operating EBITDA of about $815,000,000 and adjusted EPS of $1.05 per share. These estimates include a seasonal sequential sales lift, although muted from prior expectations given timing shifts from the second quarter into the first quarter in semi. For the full year 2025, we are maintaining our guidance at our prior outlook with estimates for net sales of $12,800,000,000 to 12,900,000,000.0 operating EBITDA of 3,325,000,000.000 to $3,375,000,000 and adjusted EPS of $4.3 to $4.4 per share. In addition, as Lori mentioned earlier, for 2025, we currently estimate a net cost impact of tariffs of about $60,000,000 or about $0.10 per share, mainly related to the second half of the year.

Antonella Franzen
Senior VP & CFO at DuPont

Our financial guidance does not include this estimated net cost impact as we continue to identify further mitigation actions as well as tariff implementation uncertainty. Overall, I am pleased with the solid start to the year and want to thank our employees for delivering these results and for their ongoing support to the separation process. With that, we are pleased to take your questions, and let me turn it back to the operator to open the Q and A.

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. Your first question comes from the line of Jeffrey Sprague with Vertical Research. Please go ahead.

Jeffrey Sprague
Founder and Managing Partner at Vertical Research Partners

Hey. Thank you. Good morning, everyone. Hope everyone's well and busy, I see. Hey.

Jeffrey Sprague
Founder and Managing Partner at Vertical Research Partners

Maybe since we have John on the call, could I start there? John, I was wondering if you could just walk us through sort of the exemption process. How many kind of different exemptions do you need or do you have? And most of what you need relative to this guide is that in hand at this point?

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Yes, Jeff, and good morning. Thanks for the question. When you look at it total, when we think about all of the tariff actions that we're pursuing in terms of supply chain adjustments, sourcing strategies, surcharges and pricing adjustments and mitigations. The product exemptions, would say, is probably the smallest of those four categories. Really, the bulk of the tariff savings and mitigation actions that we've done have really been on the procurement and supply chain optimization side of the house.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

We continue to have very constructive dialogue with both The U. S. And China authorities on the dynamics, particularly in the semiconductor industry. It's a relatively small percentage of our total mitigation strategy, and we continue to have those dialogues with the teams on the ground.

Jeffrey Sprague
Founder and Managing Partner at Vertical Research Partners

Thanks for that. And then so on the supply chain optimization side then, does that imply, you know, that you're sourcing, you know, from Europe now or trying to source from Europe now or someone somewhere else into China to get around, you know, the need for exemptions? Maybe just a little bit more color on what you're actually doing on the supply chain side and sourcing.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Yeah. So when we think about our our supply routes into China, actually very little of what we produce in China actually comes from The U. S. It's a very small percentage of the total. Most of what we buy for our products in China are actually sourced from non US, the vast majority of them.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

And so we're all sort of positioned well already given the extensive footprint across the industry and where we have supplier relationships. And in the handful of places where we do have U. S. Sourced materials, generally, have alternative suppliers that we've been working with our customers to shift to those alternative suppliers that wouldn't have difficulty with the tariff. In some cases, that's a those are materials that are already qualified.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

In some other cases, you know, there's a little bit of a timing lag to make sure that we can qualify those new material. But in general, we're really well positioned within the electronic space from a sourcing standpoint based on where we're already buying our materials.

Lori Koch
CEO at DuPont

Yeah. Jeff, the total company number for sales that we export from The US into China is only about $200,000,000. So the bulk of the growth impact that we saw is at 500,000,000 on an annual basis is us moving intermediate product into China for final completion and shipping to the customer. And so we're that's why we're able to flex our own supply chain internally to be able to mitigate a lot of that impact. It's not actually shipping finished product into China.

Jeffrey Sprague
Founder and Managing Partner at Vertical Research Partners

Right. So that those intermediates can come from other places as part of the sourcing changes and optimization then to some degree.

Lori Koch
CEO at DuPont

Correct. Yes.

Jeffrey Sprague
Founder and Managing Partner at Vertical Research Partners

Okay. Thank you for

Jeffrey Sprague
Founder and Managing Partner at Vertical Research Partners

that color. I appreciate it.

Operator

Your

Operator

next question comes from the line of Scott Davis with Melius Research. Please go ahead.

Scott Davis
CEO & Chairman at Melius Research LLC

Hey. Good morning, everyone.

Scott Davis
CEO & Chairman at Melius Research LLC

And

Scott Davis
CEO & Chairman at Melius Research LLC

congrats on all this stuff. As Jeff said, you guys have been busy here. Hey. I I wanted just to see if you could give us the tariff numbers broken down into the two business Just starting to think about DuPont as completely separate. You know, you got a few months left.

Scott Davis
CEO & Chairman at Melius Research LLC

You have that, data available to Inconity and or DuPont.

Antonella Franzen
Senior VP & CFO at DuPont

Hey, Scott. It's Antonella. So just a a couple of comments related to that. So when you look at our net exposure for 2025, it's actually split pretty evenly between Electronics Co and Industrial Co. So about $30,000,000 in each is kind of the way to think about it.

Antonella Franzen
Senior VP & CFO at DuPont

When you think about our exposure relative to a percent of our COGS, it's actually around 6% for both Electronics Co and Industrial Co. So I get, on a gross basis again, so pretty evenly split. The one other thing that I would just mention and bring up related to the impact is we talked about the in year impact being about $60,000,000. The one thing I do wanna make clear, and as Lori mentioned, that's predominantly in the second half of the year, If you kinda start to look into 2026 and assume nothing changes from where we are today, which is a big assumption, just wanna make sure that you don't walk away thinking the 60 becomes a hundred and 20 next year and that we have an incremental 60,000,000 headwind. As John briefly talked about, we do have additional incremental mitigating actions that we're looking at.

Antonella Franzen
Senior VP & CFO at DuPont

Some of it relates to qualifying certain products in different areas. So we have incremental mitigating actions that will come into play towards the end of the year that will help mitigate any further impact that we would have in 2026, assuming there's no changes from where we are right now.

Scott Davis
CEO & Chairman at Melius Research LLC

That's helpful, Antonella. And and just to follow-up on Jeff's question, that 200,000,000 of intermediate product that's being shipped to China, how, would there be a long term plan to try to to locate that, in China? Is is there IP protections? Is that one of the reasons why you're shipping it from here to there? Just trying to get a sense of, you know, of of of just Yeah.

Scott Davis
CEO & Chairman at Melius Research LLC

The the challenge of moving that asset base or or whether this a bit of a kind of permanent structural issue.

Lori Koch
CEO at DuPont

Yeah. So the 200,000,000 was the finished product export sales from The US to China. So when I talked about the intermediate, that's that's the bulk of the gross exposure of the $500,000,000 that we size. So I I know a lot of numbers flying around. So, yeah, we we believe, as Antonella had mentioned, that we've got continuing actions that we can take either on our own supply chain or favorable outcomes on the exemptions or ultimately pricing actions in excess of the surcharges that we're putting

Lori Koch
CEO at DuPont

So we're not done yet. And, ideally, we get to the place where it's really not in net impact for us.

Scott Davis
CEO & Chairman at Melius Research LLC

Okay. But it's not moving your own fixed assets? I guess that was kind of the question.

Antonella Franzen
Senior VP & CFO at DuPont

Yeah.

Scott Davis
CEO & Chairman at Melius Research LLC

Okay. Alright.

Scott Davis
CEO & Chairman at Melius Research LLC

Fair enough.

Scott Davis
CEO & Chairman at Melius Research LLC

I'll pass it on. Thank you. Appreciate it.

Lori Koch
CEO at DuPont

Okay.

Antonella Franzen
Senior VP & CFO at DuPont

Thanks.

Operator

Your

Operator

next question comes from the line of Steve Stussell with JPMorgan. Please go ahead.

Steve Tusa
Steve Tusa
Managing Director at JP Morgan

Hey. Good morning.

Antonella Franzen
Senior VP & CFO at DuPont

Good morning, Steve.

Steve Tusa
Steve Tusa
Managing Director at JP Morgan

I'm I'm just curious how much

Steve Tusa
Steve Tusa
Managing Director at JP Morgan

of these sales in China do you think you know, are you, like, specked in on with, long term contracts, you know, with your with the OEMs there or whoever is, you know, buying and and integrating your products and the finished product? What what what percentage of those sales, you know, can they kinda substitute?

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

So Steve, this is John. Good question. So when you think about from an electronics point of view, we've got roughly last year, for example, we had about $1,400,000,000 of sales into China. I would say almost half of that went to multinational company sales, and almost a % of those multinational company sales are materials that are specked in. There's an additional, probably 25 to 30% that go to the semi customers where we have, what we would call process of record identified, which means that we're specked into their particular technologies.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

So switching us out immediately for a competitor is not an easy task. It takes time, and there's a lot of cost involved in making that switch. So in general, you put those two numbers together, and we get to a point where, you know, north of 70% of our sales into China are really kind of specked in materials.

Steve Tusa
Steve Tusa
Managing Director at JP Morgan

Okay. Great. And then and then you don't really have anything that's, like, coming cross border into The US. Right? That's not really the issue here anymore when you're shipping to That's correct.

Steve Tusa
Steve Tusa
Managing Director at JP Morgan

Okay.

Steve Tusa
Steve Tusa
Managing Director at JP Morgan

Great. Thanks a lot.

Operator

Your next question comes from the line of John McNulty with BMO Capital Markets. Please go ahead.

John McNulty
John McNulty
MD - Chemicals Analyst at BMO Capital Markets

Yes, good morning. Thanks for taking my question. Maybe a little bit of a shift away from the tariff question. We've been seeing some of the water markets starting to accelerate a bit, but you guys seem like definitely at the high end of some of the results that we're seeing. I guess, can you help to unpack that a little bit as to what that demand is really stemming from?

John McNulty
John McNulty
MD - Chemicals Analyst at BMO Capital Markets

If there's any specific end markets or industries that are maybe driving that, that would be helpful. Thank you.

Lori Koch
CEO at DuPont

Yes. So we've we did have really nice results in Water in the quarter and we expect Water to be up kind of high single mid to high single digits for the year. So a piece of it is the favorable comp from last year. So last year, q one was our low point for the water business as we saw the tail end of the destocking, specifically within China taking place. But more broadly, the demand is very strong across the main technologies, whether it's RO with all of the desalination requirements as we address the water scarcity issue.

Lori Koch
CEO at DuPont

Ion exchange is where we get more diversification from an end market and application perspective, so there's a lot of opportunity whether it's in micro microelectronics for purification of water or within food and beverage for purification of water. And then there's some key key nascent technologies that we're following that aren't in our numbers today, but present nice upside for us as we go forward, especially around PFAS cleanup and the DLE, so the direct lithium extraction opportunity for us. So we're we're really excited to to have the water opportunity in the portfolio.

John McNulty
John McNulty
MD - Chemicals Analyst at BMO Capital Markets

Got it. Okay. No. That's that's helpful color. And then just another question on the Electronics Co side.

John McNulty
John McNulty
MD - Chemicals Analyst at BMO Capital Markets

I know in the past you've spoken to some of your AI exposure. You specifically called out the interconnect solution side and some of the AI driven technology ramps. I guess, you help us to understand the size of that business in Interconnect Solutions and some of the applications that you're you're helping to address there?

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Yeah. Sure. So we we I think last time on the last call, we sort of talked about sort of AI and and particularly kind of the data center and high performance computing exposure. And part of the part of that is comprised of the advanced chips that are coming from advanced nodes, whether that's, three nanometer, two nanometer coming out this year and the high bandwidth memory. And then the rest of it is sort of in advanced packaging and other interconnect technologies.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

So data center for us, is about 15% of our portfolio. And I would say in the first quarter, we had another terrific number. It was actually up mid teens in the quarter, really, with the growth across all of those categories, the advanced chip, the advanced packaging, the layered thermal materials and EMI shielding materials and then in particular some high performance laminates.

John McNulty
John McNulty
MD - Chemicals Analyst at BMO Capital Markets

Great. Thanks very much for the color.

Operator

Your next question comes from the line of Christopher Parkinson with Wolfe Research. Please go ahead.

Christopher Parkinson
Managing Director at Wolfe Research, LLC

Great. Thank you so much. Can you just hit on very quickly what you're seeing across both Semitech and ITS and how you're thinking about the China market versus just the non China market in terms of how things are evolving thus far in 2Q and how that could potentially lead to second half trends? Thank you so much.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Yeah, Chris. Sure. So in China, as we've talked about before, the China growth has really been driven by fairly strong domestic demand in China as well as a bunch of new fab startups that are taking place. And and if you recall, you know, when you start up a new fab, typically, you're running a lot of material because you're starting out with a fairly low yield. And then over time, your yields will gradually come up.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

And so as you start up new fabs, the material consumption is a little bit higher. That benefits us. And then and then this the underlying demand in China has been strong for several quarters now. As we think about think about the China demand in semi going forward, we think that normalizes to to, you know, so it doesn't have kind of the elevated. It normalizes to a a more normal demand level, and we are expecting about flat for, the full year.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

On the ICS side, those customers are operating kind of most closer to actual demand, so there's not a lot there's not really pull forward dynamics that are happening in the ICS market. It's more real time production, and that demand continues to be strong for both in China and really in the rest of the world driven from, really kind of, I would say, the the smartphone PCs, build that is happening in China as well as some of the the data centers, and the advanced packaging applications, the the OSATs, for example. And then when you go to and and when you go kind of more broadly, the rest of the world, we're expecting high single digit growth from both semi and ICS for the rest of the year. So even with a flat China, we see demand really being driven by the AI, advanced nodes, and advanced packaging applications continuing through the year, and and that's really what's fueling most of the growth. Advanced logic and DRAM continue to have high utilization rates.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

And then it's the as we talked about before, NAND and mature logic are a little bit slower. So if we I would say if we see any uptick in mature logic in NAND, that would probably give us a nice upside. And and, you know, those exact commentary is pretty consistent with what I think what you've heard from our customer base in the broader market over the last couple of weeks.

Christopher Parkinson
Managing Director at Wolfe Research, LLC

That's helpful. And, actually, you're kinda leading me into my, you know, follow-up. You know, when we think about your exposure, in packaging and circuit materials, we think about kind of the intermediate to long term trends in HPC. Can you just talk about your competitive positioning? Like what are we going be talking about as we approach November 1 as it relates to like 2627 earnings in terms of that specific business and how it's evolving?

Christopher Parkinson
Managing Director at Wolfe Research, LLC

Thank you.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Thanks, Chris. So so, you know, we're excited about our position. You know, we've got a a terrific position in both the advanced nodes and the advanced packaging, in areas like our CMP business, pads, slurries and cleans, continues to be a very strong business for us. And as we go forward into '26 and '27, '1 of the exciting opportunities that you're starting to see some of those CMP processes that are used today on the front end of the line in the semi world moving into the back end of line into some of the packaging. And and that's nice upside.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

That'll help contribute to kind of what I would call content growth in the semi process because today, you're only using those steps mostly on the front end. And as you start to see those processing steps needed on the back end, that will be some nice upside opportunity for us. On the advanced packaging side, have a broad set of materials going into market, the largest of which is metallization materials. We're well positioned on both metallization materials and thermal materials. We're working with, in particular, the some of the foundry customers to be able to scale up their 2.5 d and three d packaging technologies.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

And as we continue to see that build out, including some of the vertical scaling that may happen in some of the outer parts of the time horizon that you mentioned, that also represents additional upside for us. And as we do that, you know, we are seeing some nice share gains, in the advanced packaging space in particular, and in our interconnect solutions business. So packaging slurries, for example, packaging metallization, IC substrates are all businesses where we've seen some nice share gains over the last few quarters.

Christopher Parkinson
Managing Director at Wolfe Research, LLC

Great color. Thank you so much.

Operator

Your next question comes from the line of Josh Spector with UBS. Please go ahead.

Josh Spector
Josh Spector
Executive Director at UBS Group

Yes. Hi. Good morning. First, I just want to ask on the guidance and just kind of the logic of not changing the guidance but highlighting the tariff impact. I guess, are you messaging that there's potentially more offsets that could then get you into your original guidance range?

Josh Spector
Josh Spector
Executive Director at UBS Group

Or is it just uncertainty and you didn't want to adjust yet?

Antonella Franzen
Senior VP & CFO at DuPont

Hi. It's Antonella. Two things related to that. So one, as you very well know, it's kind of been a moving target day by day. So we wanted to keep our underlying guidance clean so you can see our operational performance.

Antonella Franzen
Senior VP & CFO at DuPont

And as we've been talking about, I would tell you the teams have been working really, really hard to offset, the impact of the tariffs. We started with a $500,000,000 annualized number. Our impact for the year currently is around 60,000,000. We're continuing to work actions. We have not stopped.

Antonella Franzen
Senior VP & CFO at DuPont

We will continue to look at that. There clearly could be some incremental mitigation actions that we have in place by the end of the year as well. So we'll continue to watch it. We'll continue to assess it. We'll see what position we're in at the end of second quarter.

Antonella Franzen
Senior VP & CFO at DuPont

And then we'll depending on where things kind of land, we'll embed it into our guidance.

Josh Spector
Josh Spector
Executive Director at UBS Group

That's helpful. And if I could follow-up on the China anticompetitive review that's going on Tyvek. One, can you comment on that beyond what you guys cut in the press release a month or so ago? And then two, if you can say anything about the potential or lack of potential for further China reviews to spread to other parts of the business. Is that a risk that you're worried about?

Josh Spector
Josh Spector
Executive Director at UBS Group

Or is it something that you're not worried about?

Lori Koch
CEO at DuPont

Yes. So on the second part of your question first, we don't see a risk of it going beyond the initial Tyvek investigation. So the investigation is kind of at a steady point. So we comply very quickly with all of their requests and are awaiting information from them. You know, as we saw when the initial news came out, if the exposure is not large, it's, you know, less than 1% of sales.

Lori Koch
CEO at DuPont

So it's not a huge number for the total company. And as mentioned, we don't see it creeping into other areas of the business.

Edward Breen
Executive Chairman at DuPont

And the documents that we turned over to them were all related to just the Tyvek business.

Antonella Franzen
Senior VP & CFO at DuPont

And the only thing I would add is while this is ongoing, there is no changes to the businesses. We are able to continue to sell to customers within the area. There's no changes to that as well.

Josh Spector
Josh Spector
Executive Director at UBS Group

Great. Thank you.

Operator

Your next question comes from the line of David Begleiter with Deutsche Bank. Please go ahead.

David Begleiter
David Begleiter
Analyst at Deutsche Bank

Thank you. Lori, are Kevlar and Nomax core to the new DuPont? I would have thought they

David Begleiter
David Begleiter
Analyst at Deutsche Bank

would be, but it sounds like they

David Begleiter
David Begleiter
Analyst at Deutsche Bank

may not be. So why is that the case? Thank you.

Lori Koch
CEO at DuPont

Yeah. So we you know, we've been talking when we made the decision to keep the water business that we would build around the high growth components of the portfolio, which are health care and water, and we would look to take complexity out over time. So I e start to reduce the, you know, end markets in which we play. So I don't wanna comment any further on the speculation around the news from the air and mid business beyond saying that we've been pretty vocal about differentially investing and driving growth around the around the health care water and market.

David Begleiter
David Begleiter
Analyst at Deutsche Bank

Got

David Begleiter
David Begleiter
Analyst at Deutsche Bank

it. And just can you quantify the impact of the pull forward of semiconductor technology earnings into q one versus q two? Thank you.

Antonella Franzen
Senior VP & CFO at DuPont

Yes. So it's Hyatt Centinela. So in total that was besides that around $30,000,000 of sales that went into the first quarter from the second quarter that's at a pretty high margin rate I would say.

David Begleiter
David Begleiter
Analyst at Deutsche Bank

Thank you.

Operator

Your next question comes from the line of John Roberts with Mizuho. Please go ahead.

John Roberts
John Roberts
Managing Director at Mizuho Financial Group

Thank you. Could you give us

John Roberts
John Roberts
Managing Director at Mizuho Financial Group

a little more granularity for the Diversified Industrials segment? And will the 10 Q have any more additional reporting within that kind of subsegment?

Lori Koch
CEO at DuPont

No. So so the diversified is primarily comprised of the shelter business, you know, which is about a billion 7 in sales, NextGen Mobility, which is our auto and aerospace exposed businesses, which are about a billion in sales, the air and mid air and air and midst business, which is about a billion 3, and the remainder is printing and publishing that came over or printing and packaging, came over from electronics, which was reported within the industrial solutions space. So those are the key components. You know, you'll see that we're disaggregating revenue for the new DuPont company at two levels. So you'll see, today, the health care and water under one segment and then diversified industrials underneath another segment.

Lori Koch
CEO at DuPont

So as we get the separation, we'll have to disaggregate that even farther. So you would see most likely the areas that I just identified for diversified, and then you would see that health care and water separately for health care and water.

John Roberts
John Roberts
Managing Director at Mizuho Financial Group

Right. Thank you.

Operator

Your next question comes from the line of Patrick Cunningham with Citi. Please go ahead.

Patrick Cunningham
Patrick Cunningham
Vice President, Senior Analyst at Citi

Hi, good morning.

Patrick Cunningham
Patrick Cunningham
Vice President, Senior Analyst at Citi

You noted share gains pretty consistently for Electronics. I'm just wondering in the current sort of environment where we're seeing normalization and tariff uncertainty, do you see any pressure on that outperformance, whether it's additional competitive dynamics or changes with customer relationships or engagement on new product introduction?

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

So thanks, Patrick. Look, it's a competitive space. Our teams have been we're fighting the battles kind of on the street, customer by customer, business by business every single day. Our teams are in constant contact with our customers, and we're watching that really closely. It is a competitive environment.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

We feel good about our competitive position. The dialogue that we have with our customers is strong. And when I think about the way in which our customers continue to work towards more advanced technologies with increasing process complexity and increasing quality requirements, the reality is that there's not as many participants who can help them to maintain the quality and the yields that they need in their facilities, whether you're talking a semiconductor chip or a printed circuit board. And we supplement that with large groups of application engineers in the local geographies where our customers are at to help them optimize their production really. Our engineers are working side by side with them in the factory to help them optimize how our products are used to maximize their performance, and that's part of the value proposition that we bring and and part of why we have kind of a seat at the design table with them.

Patrick Cunningham
Patrick Cunningham
Vice President, Senior Analyst at Citi

Got it. Very helpful. You know, in the past, I think there's been restrictions on US product shipments to China, mainly in electronics. So could fresh restrictions be a potential retaliatory measure in this trade environment?

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

I think it's you know, we we watch that closely. It's certainly a dynamic environment, and it's and it's possible. We don't have anything kind of scoped out that we're anticipating at the moment. But I think as we've seen since going all the way back to 2019, that, it continues to be a dynamic environment, and we'll continue to watch it closely. I I think teams have demonstrated an ability to navigate those changes pretty well, and we'll continue to do so.

Operator

Your next question comes from the line of Alexey Yefremov with KeyBanc Capital Markets. Please go ahead.

Aleksey Yefremov
Aleksey Yefremov
Managing Director & Equity Research Analyst at KeyBanc Capital Markets

Thanks. Good morning, everyone. In industrial, your full year sales guide is for 3% to 4% growth. That's acceleration from flat in 1Q. So what would get better this year in year over year?

Lori Koch
CEO at DuPont

Yeah. I think you're mixing as reported in organic. So in q one, our organic sales for industrials were 2% up. And for q two, we're we're kind of forecasting low single digits, so a similar profile. And then for the full year, we're seeing organic three to four, and we had mentioned that we were trending towards the lower end.

Lori Koch
CEO at DuPont

So I think, the guidance on an organic basis versus a total company reported basis. Total sales.

Aleksey Yefremov
Aleksey Yefremov
Managing Director & Equity Research Analyst at KeyBanc Capital Markets

Okay. That's helpful. So so not much of a change in trends and sounds like and No. Just going back to okay. Thanks.

Aleksey Yefremov
Aleksey Yefremov
Managing Director & Equity Research Analyst at KeyBanc Capital Markets

Going back to electronics in China, just to clarify, so so you mentioned the pull in from Q2 to Q1. And last year, you've been talking about also potential some of the givebacks from strong sales in China that you could see in 2025. Is that still on the table sometime later in 2025? Or how do you think about that dynamic, just China being so strong last year?

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Yes. So I think our guide has it normalizing kind of through the rest of the year as we continue to see kind of the customers. It's kind of flat year over year. And part of that is whatever materials they have, we expect will be consumed based on demand. But when we talk to our China customers, they continue to see fairly strong local demand and that they're not talking about hugely elevated inventories.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

We do expect that there will be some normalization, so we'll be flat year over year. But we'll have to monitor how that goes. I would go back to globally, we still expect the markets to be fairly strong, especially in some of the advanced technologies that I've talked about. For China, a lot of China's got data center activity going on. They've got a very strong EV and automotive business that they're supporting.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Their consumer electronics businesses have been fairly strong. And as we see that kind of pan out globally, we think that demand conditions what we're hearing from our customers is those demand conditions should continue.

Aleksey Yefremov
Aleksey Yefremov
Managing Director & Equity Research Analyst at KeyBanc Capital Markets

Thanks, Tyler.

Operator

Your next question comes from the line of Mike Leithead with Barclays. Please go ahead.

Michael Leithead
Michael Leithead
Director - Equity Research at Barclays

Great. Good morning, team. Appreciate it. My first question is my my understanding is water and some of the industrials businesses are often sold through distributors. So I guess, do you have any sense of channel inventories and and any impact to potential prebuying in that segment?

Lori Koch
CEO at DuPont

Yeah. So you're right. So the new new DuPont is about $50.50 between direct and distribution. It's heaviest in shelter. So, you know, that's what's kinda driving up the average.

Lori Koch
CEO at DuPont

But, you know, we in water, to your specific question, we saw all of the deselect activity, you know, kinda as we headed into the tail end of '23 and then the beginning of '24. So the inventory levels are definitely normalized, and we don't see anything building there again.

Michael Leithead
Michael Leithead
Director - Equity Research at Barclays

Okay. Great. And then second, I I wanted to follow-up on the Aramid business. I I appreciate the disclosure around what drove the timing or need to perform an impairment analysis. But can you just talk a bit more about what drove the the write down?

Michael Leithead
Michael Leithead
Director - Equity Research at Barclays

Was it volume, profitability decline? Was it recent, or was it long ago closer to when the merger occurred? Just some sort of context on that would be helpful.

Antonella Franzen
Senior VP & CFO at DuPont

Sure. It's Antonella. So just to be clear, there was actually no significant changes to the future cash flows of the business at all. What happened was really more accounting related is is how I would characterize it. So you gotta keep in mind that we as we redid our segments, we had to reidentify what our reporting units were.

Antonella Franzen
Senior VP & CFO at DuPont

So Aramids is now a stand alone reporting unit. Previously, it was part of protection. You heard us talk about that kind of in the October when we would do our annual impairment test. So there was other businesses within there as well. When you pull Aramids out on a stand alone basis, again, no changes to what was expected in terms of performance.

Antonella Franzen
Senior VP & CFO at DuPont

But when you look at the carrying value versus the fair value, the carrying value the fair value was lower, so we had to take the impairment charge during the quarter. So it all stems from the realignment of the businesses during Q1.

Michael Leithead
Michael Leithead
Director - Equity Research at Barclays

Okay. Thank you.

Operator

Your next question comes from the line of Mike Season with Wells Fargo. Please go ahead.

Michael Sison
Michael Sison
Managing Director at Wells Fargo Securities

Hey, good morning. Congrats, John. Question for you. In terms of Qunity comparisons, how should investors think about sort of the right, companies to compare you with? And the thought was semiconductor, materials and equipment folks, but you've seen a pretty significant multiple compression at Entegris and others.

Michael Sison
Michael Sison
Managing Director at Wells Fargo Securities

And then on the

Michael Sison
Michael Sison
Managing Director at Wells Fargo Securities

other side, a lot of

Michael Sison
Michael Sison
Managing Director at Wells Fargo Securities

the higher quality, you know, materials companies, like Alindi, Sherwin, Gemini, Ecolab, their multiples have held up really, really well. So how do you think about the right comps for your business and how we look to value the company post spin?

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Yes. Thanks, Mike. I still think that the industry, the semi industry pure plays are still probably the best peer set for us. So Integris is still a good peer. I recognize there's been a little there's been some compression in the short term.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

But I think over the long term, the industry dynamics are still very favorable with long term growth and where we're going broadly across the electronics space. And I think that that'll support kind of over time, that'll support a long term very nice valuation for us and for others in the electronics industry.

Michael Sison
Michael Sison
Managing Director at Wells Fargo Securities

Got it. As a quick follow-up, curious if you'd like to opine on AI. There's a lot of questions on whether we peak, whether we're continuing to grow, we're early in the potential. Obviously, that's probably a good driver for this business longer term.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

Yeah. So look, I think when I think about AI, I think we continue to believe that that we're still in the very early days of the AI the adoption of AI use cases, and that there's still a lot of opportunities for further adoption and further growth. I that's been reaffirmed a lot by the hyperscalers that have come out. And if anything, they're they're not pulling back their investment. They're increasing the size of their investment in this space.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

When we think about our, AI exposure, you know, our AI exposure, I kinda sized it with kind of the data center number that I gave earlier. It's about 15% of the portfolio, and it was up mid teens. You know, it's a big part of our advanced packaging business as well, which is about 10% of the portfolio, and it was up in the low 20s in the first quarter. So really nice growth rates for us, and we continue to see opportunities for market expansion as well as for share expansion as as that continues. And and we see more and more adoption of use cases to the extent that that AI use cases become more broadly affordable for more people, that will only accelerate the because fundamentally, it comes back down to needing more compute and more connectivity and both of those trends support growth for our business.

Michael Sison
Michael Sison
Managing Director at Wells Fargo Securities

Thank you.

Operator

Your next question comes from the line of Frank Mitsch with Permian Research. Please go ahead.

Frank Mitsch
President at Fermium Research

Hey, good morning and thanks. I wanted to drill into the Industrial Co. Side of the house. Obviously, very strong in the Healthcare and Water, did low teens. I believe that initially there was a thought that the Healthcare and Water side would grow mid to high single digits.

Frank Mitsch
President at Fermium Research

Having done low teens in the first quarter, what your thoughts are for the balance of the year? And then secondly, taking a look at Diversified Industrials, obviously down in 1Q. What your thoughts are in terms of growth rates on that side of the business? Thank you.

Lori Koch
CEO at DuPont

Yes. So Frank, we're still in the same zone for the full year growth for water and health care as you had mentioned. So health care being up more in the high single digits and water mid to high single digits. So see a lot of momentum there. We actually see them lifting as we go through the year, you know, on the water side from new system implementations being put in place in the second half and on the health care side, pick up on the med device side that's driving the growth there.

Lori Koch
CEO at DuPont

On with the first quarter being up, you know, 1411% organically for those businesses was a function of strong markets, but also the prior year comp, which as you were we had mentioned earlier in the call, the water was low from the completion of the destock, and we were still seeing the destock the So we do see those growth rates moderating as we head into the second quarter, but still very robust. And on Diversified, the 4% organic decline was really driven by shelter and automotive. So those businesses are well telegraphed to be softening, you know, shelter kind of across mainly the the largest soft it's filling on the residential side and the do it yourself side. And on the automotive side, it's saying Europe and The and The US auto market.

Lori Koch
CEO at DuPont

And the revision that came out from IHS in this last cycle since the full year goes down, you know, about a 20 basis points. So that that was reflected in the q one numbers. We do see a little bit of a pickup in the second half really around the personal protection space and the aerospace and industrial remaining strong. And then obviously continued strength, as I had mentioned, in healthcare and water.

Frank Mitsch
President at Fermium Research

Very helpful. Very helpful.

Frank Mitsch
President at Fermium Research

And just to follow-up on the Building and Construction and Auto side. How are your order books looking April, May for 2Q relative to how they are historically? I mean, are you seeing a lot less visibility? What what how could you characterize your the the order books there?

Lori Koch
CEO at DuPont

Yeah. So no change there. We had mentioned April April turned out strong for us. You know, within industrials co, we typically start with about 75% of the orders on the books for the month, and so we're in we're in good shape there. We haven't seen any slowdown in orders.

Lori Koch
CEO at DuPont

We actually usually see orders pick up as you start the year, and we nicely saw that. So no change in momentum from that perspective.

Frank Mitsch
President at Fermium Research

Terrific. Thank you so much.

Operator

Your next question comes from the line of Vincent Andrews with Morgan Stanley. Please go ahead.

Vincent Andrews
Vincent Andrews
Managing Director at Morgan Stanley

You and good morning everyone. Ed, wondering if you

Vincent Andrews
Vincent Andrews
Managing Director at Morgan Stanley

can give us an update on PFAS and whether you think there'll be any material developments between now and the November spin either in the State Attorney General or the individual litigation?

Edward Breen
Executive Chairman at DuPont

Yeah. It doesn't seem like anything big will happen until, at the earliest kinda going towards the tail end of this calendar year. You have, two things coming up. You have the Chambersburg, New Jersey trial, which starts sometime this month, but that'll it's in phases, so that'll probably most likely go through the whole summer. And then the I'd say the bigger issue that'd be nice to get settled is the personal injury ones and the first bellwether cases for that are in October of this year.

Edward Breen
Executive Chairman at DuPont

So really nothing imminent in the kind of the next six months.

Operator

Your next question comes from the line of Aaron Viswanathan with RBC Capital Markets. Please go ahead.

Arun Viswanathan
Arun Viswanathan
Senior Equity Analyst at RBC Capital Markets

Great. Thanks for taking my questions.

Arun Viswanathan
Arun Viswanathan
Senior Equity Analyst at RBC Capital Markets

Hope you guys are

Arun Viswanathan
Arun Viswanathan
Senior Equity Analyst at RBC Capital Markets

well. Maybe I can just ask a question about the logistics of the spin. So I guess is there is it possible that you could pursue any M and A ahead of the spin? Talked about growth in healthcare and water. If you were you know, possibly monetize some and could you potentially monetize any other assets ahead of the spends, or is that something that we should expect after November 1?

Arun Viswanathan
Arun Viswanathan
Senior Equity Analyst at RBC Capital Markets

Thanks.

Lori Koch
CEO at DuPont

Yeah. I would say probably nothing material before the November 1. So, obviously, I'll I'll hands on deck to get the November 1 separation complete. But we are actively looking at areas where we can either add to the portfolio in in I'll speak to RemainCo, and maybe John can talk a little bit too in the in, Qunity if they're looking at stuff. But we're always looking and have robust pipeline, but there's nothing that I would say is imminent that would that would happen before the November 1 separation.

Jon Kemp
Jon Kemp
President of Electronics and Industrial at DuPont

And I would be I I for Cunity, it would be very similar to how Lori characterized it.

Arun Viswanathan
Arun Viswanathan
Senior Equity Analyst at RBC Capital Markets

Okay. Great. And then, just as a follow-up, have you seen any change in your, order patterns among some of the industrial customers, maybe maybe in in different countries on the water side? Do you see any any change in behavior as far as pulling back or maybe extending out orders as it relates to tariffs or any other macro concerns? Or have have, you know, that momentum kind of continued?

Arun Viswanathan
Arun Viswanathan
Senior Equity Analyst at RBC Capital Markets

Thanks.

Lori Koch
CEO at DuPont

Yeah. I know we haven't seen any any oddities in the order patterns for for new DuPont. So, as I had mentioned, April was April was strong. The order book is consistent with our expectations as we see it through through the second quarter. So

Operator

Thanks. Next question will be Steve Byron, the last question for today with Bank of America. Please go ahead.

Steve Byrne
Research Analyst at Bank of America Securities

Thank you. A couple of days ago, the EPA put out their PFAS action item list, and I'm I'm really anxious to hear your view of it. It it, is quite detailed and quite a few action items. It seems to be a little bit of a different approach than the way they've, taken on to cut lots of other, environmental regs. But a couple items in there that I wonder what your view is, like, they're they're they're proposing to develop some effluent, guidelines, which, you know, Laurie, you had mentioned the potential benefit in your water business from treatment for PFAS.

Steve Byrne
Research Analyst at Bank of America Securities

Maybe effluent guidelines could could assist in that, although they might cut or change drinking water standards. And the other one they've highlighted was, the liability framework, whether or not you think that could have an effect on some of the future litigation.

Lori Koch
CEO at DuPont

Yeah. I mean, we continue to study it. I think as I had mentioned, there's no change right now on the opportunity side within the water business to address the PFAS cleanup and remediation work. And, you know, I think on the liability side, we continue to make progress within the factor on the MDL, which from our experience, our exposure is most, like, most concentrated. So we got large one out of the way, like, a year and a half ago with the water district, as Ed had mentioned.

Lori Koch
CEO at DuPont

The bellwether cases on the personal injury front start in October, so we'll see how discussions go as you get closer to that date. And then we continue to manage our own kind of state by state exposure with the attorney general. But we'll we'll read through the document and see if there's any changes to our current view.

Edward Breen
Executive Chairman at DuPont

Yeah. And remember, the personal injury case is coming coming up our firefighting foam, which we never made it. So I think the parameters we had in the last big settlement would clearly apply here also.

Steve Byrne
Research Analyst at Bank of America Securities

And then one quick follow-up. This $200,000,000 of finished goods shipments from The U. S. To China, what products are those? What business is that in?

Steve Byrne
Research Analyst at Bank of America Securities

And how are you avoiding this 25% tariff?

Lori Koch
CEO at DuPont

Yeah. So those are exports from The US to our customers, and so the tariff would be on them with respect to payment. So, you know, obviously, we're we're working to make sure that maybe all the exemptions that could mitigate that piece for them would be in place evenly at you know, that split kind of evenly between electronics and industrial code, that 200,000,000 from an export perspective.

Steve Byrne
Research Analyst at Bank of America Securities

Okay. Thank you. Mhmm.

Operator

Question and answer session for today. I will now turn the call over back to Ed Barna for closing remarks.

Edward Barna
Director - IR at DuPont

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

Operator

Ladies and gentlemen, this concludes the conference. You may now disconnect. Thank you for your participation.

Executives
    • Jon Kemp
      Jon Kemp
      President of Electronics and Industrial
Analysts
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Key Takeaways

  • DuPont delivered a solid first-quarter performance, with 6% organic sales growth, operating EBITDA rising 16% to $788 million (25.7% margin), and adjusted EPS up 30%.
  • Broad-based demand persisted across segments, led by electronics (advanced nodes & AI applications), and strong volume growth in health care and water, with robust order patterns continuing through April.
  • The company’s tariff strategy reduced a potential $500 million 2025 exposure to an estimated $60 million net cost through production shifts, regional sourcing, surcharges and product exemptions, with further mitigation actions underway.
  • Progress on the electronics spin-off (Qunity) remains on track for a November 1 separation, with executive leadership appointments, a community board in place, and the Form 10 registration statement filed.
  • Full-year 2025 guidance was maintained at $12.8–12.9 billion in net sales, $3.325–3.375 billion in operating EBITDA and $4.30–4.40 in adjusted EPS, excluding the estimated tariff impact.
AI Generated. May Contain Errors.
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