DUPONT: Q2 showing weaker but still solid / Outlook murky for automotive and E&E -- K Trade Fair

08/14/2019

Plastics News by Plasteurope.com

DUPONT: Q2 showing weaker but still solid / Outlook murky for automotive and E&E

In its first quarterly report following the separation from DowDuPont see Plasteurope.com of 13.06.2019 the new DuPont (Wilmington, Delaware / USA; www.dupont.com) has forecast a decline in organic sales for full year 2019 on the back of weakening industrial markets, in particular automotive and E&E. In the years second quarter, still part of DowDuPont, organic net sales (adjusted for pricing volume and portfolio changes) receded 7% to USD 5.5 bn but newly installed CEO Marc Doyle said cost savings of USD 100m and selling price gains helped to stabilise EBITDA at the comparable 2018 level of USD 1.4 bn, under US GAAP accounting rules.

Among plastics-relevant segments carried forward from DowDuPont and encompassing some former Dow Chemical materials businesses see Plasteurope.com of 14.03.2018 are Transportation and Industrial as well as Safety and Contruction at the new DuPont. The performance of the first segment was impacted in Q2 by the growing weakness of automotive and E&E. The second segment saw its sales in part reduced by the divestment of Dows XPS (Styrofoam) portfolio to Belgian distributor and compounder Ravago (Arendonk; www.ravago.com) at the end of 2018 see Plasteurope.com of 07.02.2019.

Quarterly net revenue of Transportation and Industrial shrank by 10% year on year to USD 1.3 bn as operating EBITDA contracted 11% to USD 357m. Organic sales were down 7% as a 5% pricing improvement was wiped out by a 12% volume decline. The latter development is attributed to slower automotive business especially in China as well as deteriorating electronics demand. In European and Asian markets, DuPont said sales volumes of both segments were hit by US tariffs on Chinese goods as well as inventory destocking.

DuPonts Safety and Construction segment posted quarterly sales of USD 1.3 bn here 2% lower against the 2018 period. The XPS divestment took a 4% bite out of sales. Business overall suffered from a 3% negative currency effect. High single-digit volume gains achieved on one side of the portfolio were counteracted by softness elsewhere, the company said. Safety Solutions volumes suffered from capacity constraints in construction chemicals and aramid fibres. All in all, the segments operating EBITDA rose 29% to USD 382m.

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