DuPont de Nemours, Inc. (DD) Earnings Call Transcript & Summary

Welcome back. Welcome to the 10th Annual Crédit Suisse Industrials Conference. I'm John Roberts. I'll be hosting DuPont here in this session. With us is Ed Breen. Ed has had a long career with Motorola, Tyco, now DuPont, very well known to the investment community. Lori Koch is here as well, as Chief Financial Officer. Lori has probably been the busiest Chief Financial Officer in the industry over the past couple of years with all the transformation that's been going on at DuPont. After my initial questions during the fireside here, we'll take questions as well from the audience. So it will be like a Zoom meeting, press your -- raise your hand button here, and I'll call you in the audience here to ask a question. Ed, do you have any opening comments that you'd like to make about DuPont before we begin the Q&A?

Yes. No, sure. I'll make a few comments and maybe just punctuate. We've kind of gotten to the -- either the finish line or the beginning line, we're pretty much done with the portfolio transformation journey that we've been on for the last 5 years. So the big deal we just did was the sale of the M&M business, the Celanese, got $11 billion for that, about $10.4 billion net of tax and other issues and all that. So we announced about a month ago when we did earnings that we're paying down our debt that's due in November of 2023, $2.5 billion, we're going to pay off our CP balance by the end of the year, which is $1.3 billion. And we also announced an ASR for $3.25 billion and then another, give or take, $2 billion share repurchase that we're committed to on the tail end of that. So I think that was the portfolio transformation. We really wanted to get to a premier multi-industrial company focused on 5 core segments where we have a lot of intellectual property, a lot of R&D around it and a lot of great -- what we think is great secular growth. So electronics, protection, water, next-generation auto and industrial technology. So that's where we're focused. We have the portfolio we want. Where we sit now, even doing the share repurchase, we'll have about $6 billion or $7 billion of available cash and putting our debt level 2.75 is where we're targeted. We'd have $6 billion to $7 billion. And we'll either look over the next year an additional share repurchase or some M&A activity to tuck into 1 of those 5 pillars that we like.

Okay. So let's start actually with that capital deployment statements that you just made in. So by my math, it's at least 16% of the outstanding stock that you'll be buying back here. And as you indicated, you're going to have at least another $6 billion, maybe more of available balance sheet liquidity that's there. How do you think about the timing on the deployment of that rest of the $6 billion? You mentioned some tuck-ins and so forth. If something bigger were to come along, do you think you would pivot to that? And -- or if you don't, how long do you think it will take you to deploy the rest of the $6 billion?

Yes. So by the way, just going back to the share repurchase, we did the ASR for the $3.25 billion. So that kind of will take 8 to 9 months to consummate that. We can buy shares on top of that if we want with the other couple billion dollars. So we'll just see how we feel as things go along, how the stock is doing, how the marketplace is doing. But we -- at a minimum, we would do the tail end of that other repurchase when we get done this ASR. So that's that part of it. And we're not in any rush to do an M&A deal, I just want to make that clear. We're looking at things more in the tuck-in size like the Laird acquisition we did for a couple billion dollars. I wouldn't discount if something larger came along that really fit and made financial sense, would we look at it, of course, we would. But I don't see anything, honestly, that we would do for the next 6 months. I think maybe by the second half of 2023, there are some things we're interested in. They got to be actionable. They got to make financial sense to us. So I don't want to put a time frame on when we spend $6 billion or $7 billion, but we'll be very judicious about it. And we're obviously in no rush. And by the way, we're probably heading into a global recession here. So who knows what markets look like in another couple quarters. And I think we sit in a very attractive spot with the balance sheet we have right now.

You've called the Celanese transaction, the last contemplated large-scale divestiture. So all of the larger businesses are keepers this here. What are the common threads that tie together this new portfolio that DuPont has? Tell us how it's consistent?

Yes. There's one more piece that will -- that's in discontinued ops that we will divest, which is the Delrin business, which is, give or take, $180 billion of EBITDA, just to give you kind of a ballpark for that business, so that we will sell over the next year in the portfolio. But look, what we like about where we've gotten to is we've created a -- what I consider, a very premier multi-industrial company. We are in secular end markets that are growing nice. Half our -- a little more than half of our portfolio will outgrow GDP and the other half will grow at either GDP or industrial production. So it's a very nice, steady revenue growing company as we move forward. What we like about it is great secular areas that has a lot of sustainability play to it. It has very high intellectual property, very intense, usually R&D around it. And one of the cores of DuPont in all of these businesses I like it's very high in application engineering. So we live with our customers and do design and work, which is very different than a lot of my past life, by the way. It's a real sticky customer relationship that we have. So once we're designed into an application, whether it's in a car, it's in a cell phone, it's in a desalination plant, we're in it. And it's a long steady relationship. So to give you an example in the semiconductor space, where we have a core -- a lot of core technologies, it's a couple of billion dollar business for us, the top 10 semiconductor players are all key customers of ours, and we have teams that live with them and do the design and work on their next-generation chips.

Great. You mentioned the -- you still have the remaining plastics business to sell. You also had the automotive adhesives multi-basin Tedlar businesses, they got tucked into the corporate segment as part of this transaction. Core, noncore, how do you see those businesses fitting into the portfolio?

Yes. So definitely core. It's in corporate, but Lori actually manages them. So actually, she's not just the CFO, she actually manages some of our businesses. So yes, she's been rather busy. We're going to -- we wind up tucking it. They are definitely core and a big part of that $1 billion of revenue that sits in corporate. We were waiting for the Rogers deal to close. So then we could reposition how we present the company. Obviously, Rogers did not happen. We didn't get approval on that. So anyway, most of that is the adhesives business. It's a great space to be in our adhesives product line is going into all the EV applications in the battery. So we're getting a lot of wins there. Last quarter, I think it grew almost 10%.

Right. The adhesives volumes...

On a volume basis.

Yes, on a volumes, and it had mid-teens pricing. So that segment was fighting up against close to a 30% growth strong.

Yes, 30%, but the volume itself was like 9%, 10%. So -- and by the way, I see that over the next 5, 10 years. It's just a great space to be in. And so anyway, at the end of the day, probably around at the beginning of the year, we'll report that in one of the segments, either E&I or WP, but most likely E&I because that's where it fits.

Okay. And then maybe just to close back off some of the capital allocation comments. You still have a target of 2.7x net debt to EBITDA, that's where you eventually want to be? And is there a time frame that you think you'll get back to that?

Yes. I think it all depends on when we can do a deal that we view -- has really high returns and complete the share repurchase. So we'll end this year actually at about 1.15x because we won't have completed the full share repurchase authorization, we obviously wouldn't have done material M&A. So the 2.75x would be after you get a good deal on the table that you would then take back that $2.25 billion debt that we took out, you would see me taking that back out to finance and acquisition. But no immediate time frame on that.

I want to go through some of the individual businesses here because a lot of them have pluses and minus business parts that are stronger, parts that have got some headwinds going on right now. Let's start with the E&I or industrial -- electronics and industrial area. Volume was up 4% last quarter. So what are the areas growing faster than that 4% growth you had in the last quarter? And what are the areas that are weaker in masking some of that growth?

Yes. So semi would have been at the top end of that. So semi volumes were up in the high single-digit range, and we continue to see really strong opportunity there as we move forward. So we have signaled potentially in Q4 that semi could see some weakness with what's going on in the semi space, but longer term, there's material opportunity for us there to be in the high single-digit range. And actually, this year, even with a little bit weaker fourth quarter, we still will deliver volume growth in the 8% range. And that's opposite MSI is the key metric that we follow for that business. We're not privy to the price fluctuations that happen in the semi value chain, it’s more around the consumables that are used to produce the chips. And so MSI is the metric that we look to judge our performance against and MSI this year's believed to be in the 5% range growth, and we'll be in the 8% range, and so there's that 200 to 300 basis points of outperformance really based on our position in the portfolio. Industrial Solutions also performed above that segment average of 4% as well. So we continue to see really nice volumes underneath that segment with biopharma tubing applications. There are some -- a parts business that sells into aerospace that's still seeing a nice recovery from the pandemic levels. The business that underperformed and we saw about negative 5% growth with Interconnect, and that's where we've been telegraphing the weakness in the PCB space. So for the past probably 4 or 5 months, we have seen weakness in PCBs. We feel like the weakness has bottomed. So we've met the trough, and we expect that business to be down roughly in the same 5% range in the fourth quarter, but no signs yet of a recovery. But the good thing about the PCB space is, generally, it's not a lot of inventory being held. So when you have to work through a down demand cycle, you don't have to also work through a destock. So that business generally runs cashless the PCB provider. So whenever they -- the demand starts to come back, I think a lot of the demand was softened because of what's going on in China with the lockdown situation. So potentially, if there is some resolution there, then you should ideally start to see some demand coming back in that space.

And that business should, in a normal time, been growing like this quarter, plus 5% that it's negative 5%. And this is the second -- almost 6 months now that we've seen that downturn. So we're probably getting somewhere, you would think near the end of that pending what's going on in China.

Yes, there a real-time read on what's going on in China right now. We're obviously seeing new stories day by day in terms of some additional lockdowns.

Yes. So all of our facilities are running full out. There is a couple where we are in a closed-loop system where they're living there at the facility, but everything we have is running. There's a few hiccups here and there on the supply chain because of what's going on, but nothing that is alarming to us at this point in time.

Good. And so switch over now to the W&P segment, Water and Protection. Volume growth was 2% last quarter. What are the areas that are significantly above that and what are the areas that are offsetting some of that growth?

Yes. So it was 2% as reported, it would have been about 5% without the headwind from the Tyvek garments. And so as we went through COVID in '20 and 2021, we were primarily producing garments on the asset. And so you were just gunning out garments and not doing the normal changeovers into other applications like medical packaging. Now that the garment demand has waned, you can go back and tap into the demand that's very strong in medical packaging, but you have to change over your lines and so you lose some productivity off of the asset. So that headwind and that dynamic created about a 3% headwind for us in the quarter. So really, the volume was up 5%, if you were to take out that noise. So the strength that we saw was within the medical packaging space that I had mentioned that we can't keep up with the demand there. So we're continuing to look to see how we can get more off of the asset lines to keep up with the demand. Aerospace continues to recover. We do have a sizable Aerospace portion within W&P. And the largest grower in W&P this past quarter was Water and so we saw about 10% volume growth in water. We expect Water to be up in the mid-single digits. It's a great business for us. The majority of the revenue is recurring. And so it gives us a lot of certainty as we look into next year. And there is a significant backlog in water of about 6 months. And so if there is some type of demand deceleration in that space. You have a significant amount of backlog to work through to be able to ride it out. So -- and shelter, the last piece of W&P saw low single-digit volume growth, and so that's the one area. Shelter is about $1.8 billion of revenue. It's 40-40-20, so it's 40% residential, 40% commercial and 20% do-it-yourself. That residential piece, we are expecting to soften. We weren't materially seeing it yet, but we know that, that most likely is the case with the way that the housing market is going. Now in the U.S., it's primarily obviously a U.S. business, and it sells a lot into the big box retailers who have been signaling that they have more inventory levels than normal. So...

Why do you think it hasn't softened -- that's there. What's holding it up?

Yes. I think a lot of it we always kind of refer to the opportunity in the U.S. residential space is more like a smile. So the opportunity that we sell into is in the bottom of the U.S. And I still think there is a fair amount of housing demand as people migrate south from the north. And so there probably is still some pent-up demand and some housing shortages that go on there that's able to continue us to see growth. We saw the 1% growth in the third quarter from a volume perspective. That was down from where the first half was. So there was some sequential deceleration. And normally, 4Q is seasonally weaker because the housing market does slow down a little bit just from a seasonal perspective.

And then when do we begin comping easier on the garment side?

Next year. Yes. 4Q headwind should be less than the 3% overall that we saw in 3Q, but there still will be a headwind in 4Q.

Positive comps in the first quarter next year?

Should be. Yes.

Okay. Great. I didn't want to start the conversation with PFAS, but I need to work it in somewhere here in the conversation. So why don't you give us an update here, Ed, of where we are in the middle of the talk, and then we'll come back to some of the more fundamentals on the business after PFAS.

Well, thanks for sticking it in the middle, by the way. It definitely comes up in every meeting. So -- yes, look, we're -- and you've heard me say this now. We've been in negotiations to settle the water district cases, which is the bulk of the legal liability outstanding. And the good news is we have a sharing agreement that we signed, I don't know, 1 year, 1.5 years ago, now between Chemours, Corteva and ourself. We know how we're between the 3 companies, how we're going to pay any settlement that occurs. And I can't get into much detail, but we're in active conversations with the plaintiffs. By the way, I think this has been public knowledge that the judge is clearly told all the parties involved to start -- negotiate. Let's get this thing settled before we get the trial. They appointed a mediator recently, I think, that's public knowledge, which mediator is usually a good thing to help parties come together. And our goal is to get it settled. We're diligently working on it. And by the way, I would just -- I think many of you know this, to me, that's one of the biggest things we've got to get done over the next kind of period of time here because it's -- we've got the portfolio we wanted. I think the only negative right now on DuPont is getting that settled. That's a huge deal for us, and we will get it settled.

Lori, you mentioned 6 months of backlog in the Water business, talk about, in general, your visibility of -- into your order books and how far out you can see. And so Ed made the comment, there's a recession somewhere out there, how far ahead can DuPont see in terms of business outlook?

Yes. Overall, it's about 45 to 60 days that we can see it. It's shorter in E&I than it is in W&P. So E&I has some areas that there's not that length of visibility. But overall, it's 45 to 60 days, assuming that people aren't canceling orders, obviously. So there is significant backlog in the water business 6 months. There's a fair amount of backlog within our Kalrez parts business combined. That's about a $300 million, $400 million revenue business. It primarily sells into semi CapEx. And so if there is some downturn in that space, and it's on the equipment side. So when all of these new fabs that need to be built to be able to continue to meet up -- keep up with the demand. There's opportunity for us to sell a part. So that has a significant backlog. And then the adhesive space that Ed had mentioned sitting in corporate today will find its permanent home. It's the other piece of the portfolio that has in backlog, not the 6 months, but has some -- would be able to study you if there was some type of downturn. But overall, it's 45 to 60 days. Our order book still remains strong. So we look at it every weekend. Ed and I get a file on Saturdays to be able to see it. And minus the seasonality, it typically happens as you head into the fourth quarter, there hasn't been material moves. And so we're just reading all the news out there and planning appropriately to make sure that we're ready and not caught flat-footed. But...

And is DuPont pulling its inventories down? So balance sheets get mark-to-market 1 day, a quarter. So -- and 12/31 tends to be the most important balance sheet date of the year. So do you think we've got some extra weakness here as we get into December, just as not you and then maybe your customers downstream look to just tighten up the balance sheets for the 12/31 mark-to-market?

Well, I think you have that going on, but I think that in general -- by the way, the supply chain is nothing like 4 years ago when it was fine. It's still not good, but it's not nearly as bad as it was the last couple of years. I think people are getting more comfortable drawing down their inventory in general, which is what we're attempting to do right now. In fact, I think we announced on an earnings call, we're doing some IME this quarter. It’s costing us a little bit of profit, but help us pull down some production rates in a couple areas and hopefully help on our inventory level. I think most people -- everyone's inventory has been elevated because of what's going on. And -- but by the way, half of that is usually just the price inflation that's in your inventory, but the other half is just more volume in your inventory. So I definitely think that is going on right now.

Ed, I think on the call, you expect some optimism that raw material costs might ease in 2023. And I think of raws and energy together, maybe you might want to talk about them separately. But what's the outlook that DuPont has in 2023 for raw materials? And is that based on whether oil is up or down since a number of the raws are petroleum based?

Yes. So right now, we're not forecasting overall any material easing as we head into 2023. We don't see material escalation. So we feel like that is behind us. And so the $800 million that we saw year-over-year 2022-2021, we don't see materially resolving in 2023, but we don't see incremental headwinds right now. So we don't have a lot of petroleum-based raws anymore now that the M&M transaction is complete. So that's where a lot of that’s at. There is some, but it's not nearly as material as it was with M&M in the portfolio. So the biggest piece that we continue to keep a watch on is the energy costs. And so that was -- if you look at the $800 million, about 25% of it was energy cost escalation, a lot of that was energy costs for natural gas in Europe. And so that's where we continue to watch to see how that changes because we did see a little bit of deceleration on the raw material side, but it was muted by an escalation again this past quarter and then on the natural gas and oil side. So that's where we'll continue to look. The one piece that we are optimistic that you will see benefit as you head into 2023 is on the ocean freight rates. And so everybody has seen material reductions not back to where it was but versus where we were earlier this year in the ocean freight rates, and we're optimistic. Now that was 10% to 15% of the $800 million from an escalation perspective, but we're optimistic we continue to see some benefit there.

But just to highlight, we caught the price, we raised prices in sync with the inflation, and so every quarter, we covered ourselves. I think it says something about the portfolio that we could capture and pretty much across the whole portfolio. We got it. We didn't do any real surcharges. We baked it into the price of the product. So it will be interesting on who knows how next year goes. We're not counting on getting a benefit from it. But if there is some deflation in commodities, being able to keep some spread between cost and price will be very important to us. And we've been working with our teams to get ready for that because this is a very different potential recession we're going into. Nobody ever had 8%, 9% inflation heading into a recession in their career. And so it's a very different dynamic for those that were able to capture price during the last year with the inflation and then how do we handle that if we do start to deflate.

And even though you raised pricing kept up every quarter, I think in the very beginning when raws first started going up, maybe there was 150 bps of margin compression temporarily. Is that the order of magnitude people should think about if we actually do see a break downward in raw materials? So that's not your base case. But to the extent, let's say, oil prices drop, it starts to flow through the raw material supply chain, it's that order of magnitude of 100, 150 bps that you might temporarily pick up on margin?

Yes, if they both move at the same pace, yes. So like if at all -- like when we were seeing the headwind, we were getting price to offset costs and so there really wasn't a dollar impact, it was all in the margin, as you had mentioned, and it was 150 basis points roughly for the company. It was actually closer to 270 basis points for W&P. That's where we saw the bulk of the raw material escalation. So it's kind of hard to answer what that looks like because we really don't know what spread we're going to be able to maintain. And so we do have confidence that we will be able to maintain a spread because of the fact that we've got really sticky relationships with our customers. And in some of the spaces, the price increases weren't even all that much. Like, for example, in E&I, we had 2% to 3% price increases. So we're not a huge cost component within the overall customers' procurement buy. So I don't know that we're going to be the first place that they come back to get some deceleration. But...

And then the margins are lower in W&P versus E&I. It's not just the raw material issues that you've had there. Maybe talk a little bit about the opportunity for margins in the W&P segment and to bring those up over time?

Yes. So W&P is the business where we have the most operational improvement opportunity. E&I, look, our margins last quarter were ex price costs were 32%. We think kind of best case, it's a 33% EBITDA-type business. So we got a little bit more room. We're working on a bunch of opportunities there, but that runs pre world-class from a margin standpoint. W&P, we think we should be able to execute that business around 27% to 28% EBITDA margin. So ex price cost, we're a couple of hundred basis points away from that on a consistent basis. So once in a while, we hit it, but we haven't been consistently there. So most of that is operational improvement plans that we're working on our facility, John. These are very big assets when you're spinning and making Tyvek or Nomex and a couple percent uptime is a big deal on those assets. So we're working on a lot of digital tool implementation at those facilities to get improvements there. So this year, for instance, in W&P, one of the areas we've had great success is we've increased the output of our water assets. We have a big facility in the Midwest, [ the Dyna ] and we've really been able to get additional uptime out of those assets. And so we're sold out on that reverse osmosis asset, but we still had nice almost 10% growth in the business, again, getting more off of an existing asset. So that's what we're working on Tyvek, Nomex, Kevlar, and then we have our new Line 8 coming up in Tyvek at the end of 2023 in Luxembourg, which will give us 20% more capacity. But in the meantime, we're really working those operational improvements, and that's really where we'll get that margin lift.

Okay. And you mentioned the large expansion in the Tyvek side. Talk a little bit about CapEx maybe beyond that because that's really where the capital-intensive areas that you've spent and the rest of the site, I think, is a lot lower capital intensity?

Yes. So we target overall, the portfolio should be in the 4% to 5% CapEx as a percent of sales range. So this year, we'll be in the 5.5% range as we execute the completion of a couple of the capacity expansion. So we wrapped up the K4 expansion in the E&I business earlier this year. We'll look to wrap up the Tyvek Line 8 expansion at the end of 2023. And then there's nothing foreseeable on the horizon with any significant capacity expansion requirements.

More like 4% then, so we kind of go on to that 4.5%.

I'd say. 4.5%

4.5%, yes.

Yes, the cap on line, that Lori mentioned, was $250 million. So that was a big piece going through and then the Tyvek line is a little over $400 million. So we just had 2 -- and we're sold out of both those assets. So we just had 2 big ones that hit at the same time. It humped us up more 5.5%, 6% for a couple of years, but we don't have anything big like that then in the foreseeable future.

Okay. We've got a little over 5 minutes left. I want to make sure if there's questions from the audience, just raise your hand, and I'll call on you, but I'll continue to ask questions, if I don't see any. Tell us a little bit about the sustainability aspect of the portfolio here. It's actually kind of moved to the background. I think there's been so much noise around the economy and the portfolio and so forth. But it was a big push for DuPont, I think, it maybe continuous that's there, but we haven't heard about it as much recently.

Yes. There's 2 sides, right? So there's the external piece that's really exciting with our portfolio being exposed to high-growth areas that are benefiting from the UN sustainability goals, so water being a prime example. And so as we look to get more access to clean water across the globe, that really benefits our business. And then there's the internal piece about how do we improve our measures and primarily advance our climate goals? And so earlier this year, we had announced that we had joined the science-based targets initiatives, which if you join that group, you say that you will be in line, which is contributing to a certain reduction in the global temperature in it. There's a lot of math behind the calculation that generally says you'll be at a 50% reduction by 2030. So that's where we're targeting. A lot of the programs that we have are both capital investments, and so we spend roughly $40 million to $50 million on those types of investments annually with the largest recently being converting to a low global -- low GWP agent within our Styrofoam business. And we also execute virtual power purchase agreements that allow us to be able to reduce our carbon emissions through that exercise. So there's lots of initiatives from both the internal perspective as far as delivering against our internal goals. And externally, there's a lot of opportunity for us to continue to grow, grow the top line in a significant manner with the sustainability initiatives across our customers.

And you mentioned about half the -- a little more than half the portfolio will grow well above GDP. Maybe give us a few specific examples in terms of content that's there, whether it's cell phones as we move from one generation to the next or from 4G to 5G or however you want to frame it, EVs kind of what the content is versus other, but give us some more real-life examples that people can put in their everyday lives?

Yes. So the 2 pieces that you mentioned are prime examples for us. So within the smartphone space, in general, we're $2 in every phone. As we optimize and get volume in the 5G-enabled phones, it gets closer to $4 and so there's a really nice doubling of opportunity there. The same doubling effect happens in the auto build space. So in general, we've got $60 of content opportunity in ICE engines, but it's $130 of content opportunity on the EV side. And a lot of that is within the Adhesives business that I had talked about earlier as well as we've got nice e-motor applications in the W&P business. So those are nice content plays. A lot of the growth comes just from where we're exposed from -- an end market perspective. So semi, for example, that I had talked about earlier. So semi is one of our larger business. It’s a $2 billion business. That end market generally should be growing in the mid-single-digit range, and then we've got a 200 to 300 basis point kicker because of how we’re exposed more to the advanced nodes and all of the higher-end technologies. And so it's a nice content opportunity as well as just having premier positions in high-growth markets.

You have a question, [ Daniel ], go ahead, I'll repeat it if...

All right. So kind of a bigger longer-term strategic question for you. DuPont is in many ways synonymous with intellectual property and we hear a lot about semis. But clearly, getting -- doing business in China is not getting any easier. I'm just curious how historically have you acted to protect your IP when you're doing businesses in jurisdictions like this? And how is your view of that potentially changing? And I suppose I'm thinking a lot of what you do goes into some quite high tech and strategic sort of businesses. And the world would appear to maybe be changing and just how you're thinking about that and how you're planning, please?

Yes. So be careful how I say this, but a lot of our high-end technology is more embedded in the U.S. So most of our high -- what I'll call our high-end real intellectual property stuff is done at facilities mostly in Delaware, where our biggest scientific communities headquartered in, what's called the experimental station. So I think just from a production standpoint, that's a good thing. And it just so happens that in some countries, I'll say it that way, they don't have the high tech, for instance, semiconductor chips. They're not there. So what you sell into is more the bread and butter chips that go into a cell phone, a refrigerator that type of thing. And in fact, a lot of the high-end semiconductor stuff is just going to get built now over the next 10 years, and it's not all going to be in Taiwan anymore. A lot of that will be in the U.S. where the chip’s at, the incentives and all that. So we do our design and work just to use semi example, all our design and work is done with a customer at their key -- their scientific location with our scientists. We do the design and work there. So it doesn't matter where the fab is. So I think we're intellectual property wise, we're pretty well protected. By the way, another area, people have been trying to copy us for years is Tyvek. And a lot of the intellectual property at Tyvek is actually in the manufacturing process. Nobody has been able to really replicate that, and we've been able to keep that for -- since the 1960s.

Just 1.5 minutes here left, Ed. Help us think about the white space. As you look at bolt-ons and tuck-ins and so forth, what's the addressable market or how much -- how concentrated is the electronic materials area that you're in? How concentrated is water that's there, 2x the opportunity, 3x the opportunity that DuPont currently serves?

Yes. So -- and by the way, I hate to use the example, but we've talked about -- if we had closed the Rogers deal, the addressable market for us significantly expanded and it almost -- yes, went up 50%, 60%. By the way, when we brought Laird into the portfolio, the markets that they brought us into took us up by like another 20% for the total TAM that we could play in. So we like opportunities like that. In electronics, there just happens to be -- we're industrial technology, they kind of co-mingle. There's a lot of technology plays there that are very interesting to us. There also is, even though the water space, I would say, is a more consolidated market. There's still some really interesting areas there that would be very unique for DuPont to add on to.

Look forward to hearing about the add-ons over the next couple of years. Thank you, DuPont. Thank you for all of you for attending here today. We've got Chris Mecray and Ed Barna here from Investor Relations, if anyone has any questions, enjoy the rest of your meetings. Thank you.

Thank you. That was fun.