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DuPont de Nemours Inc. (NYSE:DD)

This company has been moved to the archive! The financial data has not been updated since February 14, 2020.

Common-Size Income Statement

DuPont de Nemours Inc., common-size consolidated income statement

Microsoft Excel
12 months ended: Dec 31, 2019 Dec 31, 2018 Dec 31, 2017 Dec 31, 2016 Dec 31, 2015
Net sales 100.00 100.00 100.00 100.00 100.00
Cost of sales -65.34 -75.99 -80.68 -78.16 -77.57
Gross margin 34.66% 24.01% 19.32% 21.84% 22.43%
Research and development expenses -4.44 -3.56 -3.38 -3.29 -3.28
Selling, general and administrative expenses -12.38 -7.80 -6.44 -6.86 -6.09
Amortization of intangibles -4.88 -2.21 -1.62 -1.13 -0.86
Restructuring and asset related charges, net -1.46 -1.29 -2.86 -0.94 -0.85
Goodwill impairment charges -5.46 0.00 -2.39 0.00 0.00
Integration and separation costs -6.24 -2.86 -1.76 0.00 0.00
Asbestos-related charge 0.00 0.00 0.00 -2.31 0.00
Operating income (loss) -0.20% 6.29% 0.87% 7.31% 11.36%
Equity in earnings of nonconsolidated affiliates 0.39 1.16 1.22 0.92 1.38
Sundry income, net 0.71 0.69 1.55 2.72 9.56
Interest expense -3.11 -1.75 -1.73 -1.78 -1.94
Income (loss) from continuing operations before income taxes -2.20% 6.39% 1.91% 9.16% 20.36%
(Provision for) benefit from income taxes on continuing operations -0.65 -1.73 0.76 -0.02 -4.40
Income (loss) from continuing operations, net of tax -2.85% 4.66% 2.67% 9.14% 15.96%
Income (loss) from discontinued operations, net of tax 5.64 -0.01 -0.12 0.00 0.00
Net income 2.79% 4.65% 2.55% 9.14% 15.96%
Net income attributable to noncontrolling interests -0.47 -0.18 -0.21 -0.18 -0.20
Net income attributable to DuPont 2.31% 4.47% 2.34% 8.97% 15.76%
Preferred stock dividends 0.00 0.00 0.00 -0.71 -0.70
Net income available for DuPont common stockholders 2.31% 4.47% 2.34% 8.26% 15.06%

Based on: 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31), 10-K (reporting date: 2016-12-31), 10-K (reporting date: 2015-12-31).

The financial performance from 2015 to 2019 is characterized by a significant expansion in gross margins offset by escalating operating expenses and substantial non-recurring charges, leading to a decline in core operating profitability.

Gross Profitability and Cost Structure
A notable shift in the cost of sales is observed, decreasing from a peak of 80.68% of net sales in 2017 to 65.34% by 2019. Consequently, the gross margin expanded from 22.43% in 2015 to 34.66% in 2019, indicating an improvement in direct production efficiency or a change in product mix during the final year of the period.
Operating Expense Trends
Operating expenses increased steadily across several categories. Selling, general and administrative expenses rose from 6.09% of net sales in 2015 to 12.38% in 2019. Amortization of intangibles showed a similar upward trajectory, increasing from 0.86% to 4.88% over the same period. Research and development expenses also grew moderately from 3.28% to 4.44%.
Non-Recurring Charges and Restructuring
The period was marked by significant volatility due to one-time charges. Integration and separation costs escalated sharply, reaching 6.24% of net sales in 2019. Goodwill impairment charges were recorded in 2017 (2.39%) and 2019 (5.46%), while asbestos-related charges impacted 2016 at 2.31%. These items contributed to the erosion of operating margins.
Operating and Net Income Analysis
Operating income experienced a persistent decline, falling from 11.36% of net sales in 2015 to a deficit of -0.20% in 2019. While net income available for common stockholders dropped from 15.06% in 2015 to 2.31% in 2019, the 2019 result was significantly supported by income from discontinued operations, which contributed 5.64% of net sales, effectively masking the operating loss.
Financial Obligations and Tax Impact
Interest expense remained relatively stable between 1.73% and 1.94% from 2015 to 2018 but increased to 3.11% in 2019. The effective tax provision varied significantly, shifting from a 4.40% expense in 2015 to a 0.65% expense in 2019, reflecting the volatility of the pre-tax income figures.

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