DD Q4 2025 Earnings Call Summary

Q4 2025 Performance:
- Net Sales: $1.7 billion (flat year-over-year)
- Organic Sales: Declined 1% (adjusted for order timing shifts, would have grown 1%)
- Operating EBITDA: $409 million, up 4% year-over-year
- Operating EBITDA Margin: 24.2%, increased by 80 basis points
- Adjusted EPS: $0.46, up 18% year-over-year
Full Year 2025 Performance:
- Organic Sales Growth: 2%
- Operating EBITDA Growth: 6%
- Adjusted EPS: $1.68, up 16% year-over-year
- Free Cash Flow: Strong generation noted, with expectations for continued solid performance.

Successful completion of the separation of Community Electronics, enhancing focus on semiconductor technology solutions.
Launched over 125 new products in 2025, generating more than $2 billion in sales, with a vitality index of approximately 30%.
Continued emphasis on operational excellence and productivity improvements, including the introduction of enhanced KPIs and the use of Kaizen events.
Focus on digital capabilities and AI to enhance product development and operational efficiency.
Capital allocation strategy includes a $2 billion share repurchase authorization, with $500 million executed in 2025.

2026 Financial Guidance:
- Expected Organic Sales Growth: Approximately 3%
- Operating EBITDA Margin Expansion: 60 to 80 basis points
- Adjusted EPS: $2.25 to $2.30 per share
- Free Cash Flow Conversion: Greater than 90%
Anticipated growth in Healthcare and Water Technologies driven by increasing demand in medical packaging and industrial water markets.
Mixed macroeconomic outlook: Stable demand in healthcare and water, flat automotive demand with expected growth in electric vehicles, and stabilization in construction.

Organic sales in the diversified industrials segment declined by 4% in Q4, primarily due to weakness in construction markets.
The U.S. industrial production remains soft, with expectations for flat automotive builds in 2026.
Potential headwinds from order timing shifts impacting organic sales figures.
Challenges in the shelter business, with expectations of slight declines at the start of 2026 before stabilizing.

Management indicated a positive trend in industrial orders, particularly in aerospace, suggesting a recovery in that segment.
Discussions around pricing strategies highlighted expectations for structural price increases, although some businesses may still face price reductions due to previous inflationary pressures.
The healthcare segment is expected to see mid-single-digit growth, with no destocking issues noted, indicating normalized inventory levels.
There is an ongoing focus on M&A opportunities, particularly in the healthcare sector, with a robust pipeline identified.
Management expressed confidence in their ability to navigate challenges and capitalize on growth opportunities, particularly in innovation and operational improvements.

DD — DuPont de Nemours, Inc.