DuPont: Building Higher Growth, Higher Value Through Science Douglas Muzyka, Ph.D. Senior Vice President; Chief Science & Technology Officer

Transcription

1 DuPont: Building Higher Growth, Higher Value Through Science Douglas Muzyka, Ph.D. Senior Vice President; Chief Science & Technology Officer

2 Regulation G The attached charts include company information that does not conform to generally accepted accounting principles (GAAP). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the company and allows investors to better evaluate the financial results of the company. These measures should not be viewed as an alternative to GAAP measures of performance. Furthermore, these measures may not be consistent with similar measures provided by other companies. This data should be read in conjunction with previously published company reports on Forms 10-K, 10-Q, and 8-K. These reports, along with reconciliations of non-gaap measures to GAAP are available on the Investor Center of under Key Financials & Filings. Forward Looking Statements During the course of this presentation we may make forward-looking statements or provide forward-looking information. All statements that address expectations or projections about the future are forward-looking statements. Some of these statements include words such as plans, expects, will, anticipates, "believes," intends, and estimates. Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks, uncertainties, and assumptions. Some of which include: fluctuations in energy and raw material prices; failure to develop and market new products and optimally manage product life cycles; global economic and capital markets conditions; litigation and environmental matters; changes in laws and regulations or political conditions; business or supply disruptions; ability to protect and enforce the company s intellectual property rights; successful integration of acquired business and separation of underperforming or non-strategic assets; and successful completion of the proposed spinoff of the Performance Chemicals segment including ability to fully realize the expected benefits of the proposed spinoff. The company does not undertake to update any forward-looking statements as a result of future developments or new information. Developing Markets Total developing markets is comprised of Developing Asia, Developing Europe, Middle East & Africa, and Latin America. A detailed list of all developing countries is available on the Earnings News Release link on the Investor Center website at 2 2

3 Our Purpose DuPont is a Science Company We work collaboratively to find sustainable, innovative, marketdriven solutions to solve some of the world s biggest challenges, making lives better, safer, and healthier for people everywhere. National Geographic image 3

4 Science is the Growth Engine for the Company Ag & Nutrition Bio-Based Industrials Advanced Materials Seeds Traits Crop Protection Specialty Food Ingredients Enzymes Biomaterials Biofuels Biochemicals Electronic Materials Protective Materials Alternative Energy Advanced Polymers Advanced Processes $ 5.8B* new product revenue $ 0.4B* new product revenue $ 3.9B* new product revenue *2013 revenue from products introduced in the last four years 4

5 Three Strategic Priorities Drive the Value of DuPont AG & NUTRITION BIO-BASED INDUSTRIALS ADVANCED MATERIALS Extend leadership across high-value, science-driven segments of the Ag and food value chain Develop world-leading industrial biotech capabilities to create new businesses Grow leading position in differentiated highvalue materials Higher Growth, Higher Value Company Through Three World-Leading Positions 5

6 Together with Three Key Operational Priorities INNOVATION GLOBAL REACH EXECUTION Rigorous pipeline management Disciplined project execution Increasing return on R&D Driving penetration in fast-growing, developing markets Delivering ongoing productivity Optimizing resource allocation Returning cash to shareholders 6

7 Delivering Value through Innovation 7

8 Disciplined Project Management Ensures Alignment Between Science and Integrated Business Innovation Processes Stage 0 Governance & Project Execution Technology Marketing Insights Brand Ideas & Opportunity Choices Launch Management Innovation Portfolio Management 8

9 Increasing our Return on R&D Key Aspects of Measurement Process Segmentation of R&D spend into 4 categories Strict financial rigor behind R&D programs Calculation of projected returns on top R&D programs Metrics package & dashboards to assess progress versus commitments R&D Spend Distribution Discovery and Major Growth Sustain and Incremental Growth Disciplined and Rigorous Process to Measure and Improve Return on R&D 9

10 Agriculture-Discovery & Major Growth : 12% Sales CAGR, Operating Margins +600bps* Rynaxypyr Insecticide Optimum AQUAmax Hybrids Exceeded $1 Billion Revenue in Million Acres Expected in 2014 *Non GAAP Number, See Appendix 10

11 Electronics & Communications-Discovery & Major Growth Industry Leading Market Positions, Innovation Fueling Earnings Growth Solamet DuPont OLED Technology Solamet Frontside Silver Pastes Advancing Solar Cell Efficiency Two License Agreements 11

12 Industrial Biosciences-Discovery & Major Growth 1 st Half 2014 Operating Earnings Increased 37%, Operating Margins Increased 440bps* Cold Water Enzymes Cellulosic Ethanol Plant Innovation of the Year** Start up expected late 2014 Nevada, Iowa *Non GAAP Number, See Appendix **2014 Sustainable Bio Award for Bio-Based Product Innovation of the Year 12

13 Nutrition & Health-Discovery & Major Growth 1 st Half 2014 Operating Earnings Increased 45%*, Operating Margins Increased 320bps* HOWARU Protect probiotics Improved Health Products for children, adults and sports enthusiasts Probiotics Regulatory Achievements & New Capacity *Non GAAP Number, See Appendix 13

14 Performance Chemicals- Discovery & Major Growth Science Meeting Market Needs for more Sustainable Solutions DuPont Opteon YF Refrigerant Collaborative approach to development A near drop-in solution to enable regulatory compliance Expect 2014 sales of $100 million 14

15 Performance Materials-Sustained and Incremental Growth 2014 Operating Margins of 19%*, Above Long Term Goal of 16-18% Zytel RS Renewable Polymers Surlyn Ionomer Five Patents Granted, Two In Progress New Golf Ball Line *Non GAAP Number, See Appendix 15

16 Safety & Protection -Sustained and Incremental Growth 1 st Half 2014 Operating Earnings increased 24%*, Operating Margins increased 330bps* New Launches DuPont Kevlar Tyvek ThermaWrap 50 Years of Innovation *Non GAAP Number, See Appendix 16

17 Putting Science to Work: Where we are Going 17

18 Translating Science into Solutions WORLD CLASS INTEGRATED SCIENCE COUPLED WITH COMPELLING MARKET INSIGHTS TO SOLVE WORLD SCALE CHALLENGES FOOD ENERGY Integration of emerging biological sciences PROTECTION Engineering Materials Science Chemistry Biological Sciences Engineering Chemistry Materials Science Biological Sciences DuPont is on the Forefront of Another Wave of Innovation 18

19 Long Term Growth Targets 7% 12% Sales CAGR Operating EPS CAGR* Ushering in the next era of innovation STRATEGIC PRIORITIES Extended Ag & Nutrition Leadership Build Bio-based Businesses Strengthen Advanced Materials OPERATIONAL PRIORITIES Innovation Global Reach Execution *Non GAAP Number 19 19

20 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES NON-GAAP RECONCILIATIONS (UNAUDITED) JUNE 30, 2014 Note : Operating earnings are defined as earnings from continuing operations (GAAP) excluding significant items and non-operating pension and other post-employment benefit (OPEB) costs. Management believes that an analysis of operating earnings, a "non-gaap" measure, is meaningful to investors because it provides insight with respect to ongoing operating results of the company. Such measurements are not recognized in accordance with generally accepted accounting principles (GAAP) and should not be viewed as an alternative to GAAP measures of performance. Non-GAAP Reconciliations

21 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES SEGMENT SALES (UNAUDITED) (dollars in millions) SEGMENT SALES Year Year Year Year Year Q14 1Q Q13 3Q13 2Q13 1Q Q12 3Q12 2Q12 1Q Q11 3Q11 2Q11 1Q Agriculture 8,009 3,615 4,394 11,739 1,806 1,633 3,631 4,669 10,426 1,535 1,423 3,388 4,080 9,166 1,297 1,368 2,997 3,504 6,549 Electronics & Communications 1, , , , ,194 Industrial Biosciences , , Nutrition & Health 1, , , , ,403 Performance Chemicals (1) 3,287 1,696 1,591 6,932 1,671 1,781 1,837 1,643 7,450 1,644 1,794 2,043 1,969 8,055 1,923 2,209 2,065 1,858 6,245 Performance Materials (1) 3,116 1,582 1,534 6,239 1,521 1,602 1,615 1,501 6,185 1,478 1,552 1,624 1,531 6,554 1,555 1,678 1,675 1,646 6,215 Safety & Protection 1,976 1, , , , , ,001 1, ,733 Other Total Segment Sales 19,992 9,783 10,209 36,046 7,814 7,813 9,925 10,494 35,194 7,397 7,480 10,022 10,295 34,087 7,444 8,236 9,263 9,144 26,499 Elimination of Transfers (158) (77) (81) (312) (67) (78) (81) (86) (382) (72) (90) (105) (115) (406) (101) (98) (104) (103) (330) CONSOLIDATED NET SALES 19,834 9,706 10,128 35,734 7,747 7,735 9,844 10,408 34,812 7,325 7,390 9,917 10,180 33,681 7,343 8,138 9,159 9,041 26,169 (1) Prior periods reflect the reclassifications of Viton fluoroelastomers from Performance Materials to Performance Chemicals. Note: The data above provides a historical display of selected data included in our Quarterly Earnings Release financials. Non-GAAP Reconciliations

22 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES INCOME FROM CONTINUING OPERATIONS (UNAUDITED) (GAAP) (dollars in millions) SEGMENT PRETAX OPERATING INCOME (LOSS) (GAAP) Year Year Year Year Year Q14 1Q Q13 3Q13 2Q13 1Q Q12 3Q12 2Q12 1Q Q11 3Q11 2Q11 1Q Agriculture 2, ,442 2,132 (108) (102) 861 1,481 1,669 (103) (198) 682 1,288 1,566 (222) (184) 843 1,129 1,006 Electronics & Communications (38) (99) Industrial Biosciences (26) (6) - - Nutrition & Health (20) Performance Chemicals (1) , , Performance Materials (1) , , , Safety & Protection Other (176) (84) (92) (340) (91) (107) (55) (87) (412) (80) (75) (208) (49) (55) (11) (32) 22 (34) 839 TOTAL SEGMENT PRETAX OPERATING INCOME (GAAP) 4,203 1,955 2,248 5, ,777 2,241 5, ,961 2,423 5, ,024 2,183 3,373 SIGNIFICANT ITEMS BY SEGMENT - PRETAX OPERATING INCOME (UNAUDITED) (dollars in millions) SEGMENT PRETAX IMPACT OF Year Year Year Year Year SIGNIFICANT ITEMS Q14 1Q Q13 3Q13 2Q13 1Q Q12 3Q12 2Q12 1Q Q11 3Q11 2Q11 1Q Agriculture (47) (47) - (351) (196) (40) (80) (35) (469) (26) (128) (265) (50) (225) (100) (125) - - (5) Electronics & Communications (68) (68) - (131) (131) (37) (2) (157) (37) Industrial Biosciences (2) (2) (3) - (3) - - (79) (1) (61) (17) - - Nutrition & Health (8) (8) (49) (36) (13) - - (126) (4) (89) (33) - (17) Performance Chemicals (19) (19) - (74) (2) (72) - - (36) (33) (3) (56) Performance Materials (16) (16) (104) (3) (101) (310) Safety & Protection (31) (31) (58) (3) (55) (97) Other (2) (2) (126) 11 - (137) - (28) (10) (18) - - (31) TOTAL SIGNIFICANT ITEMS BY SEGMENT - PRETAX (556) (329) (112) (80) (35) (882) (92) (460) (280) (50) (411) (68) (293) (50) - (553) OPERATING EARNINGS (UNAUDITED) (dollars in millions) SEGMENT OPERATING EARNINGS Year Year Year Year Year Q14 1Q Q13 3Q13 2Q13 1Q Q12 3Q12 2Q12 1Q Q11 3Q11 2Q11 1Q Agriculture 2, ,442 2, (62) 941 1,516 2,138 (77) (70) 947 1,338 1,791 (122) (59) 843 1,129 1,011 Electronics & Communications Industrial Biosciences Nutrition & Health Performance Chemicals (1) , , , Performance Materials (1) , , Safety & Protection Other (174) (82) (92) (345) (96) (107) (55) (87) (286) (91) (75) (71) (49) (27) (1) (14) 22 (34) 870 TOTAL SEGMENT OPERATING EARNINGS 4,018 1,770 2,248 5, ,857 2,276 6, ,241 2,473 6, ,215 2,074 2,183 3,926 (1) Prior periods reflect the reclassifications of Viton fluoroelastomers from Performance Materials to Performance Chemicals. Note: The data above provides a historical display of selected data included in our Quarterly Earnings Release financials. Non-GAAP Reconciliations

23 E. I. DU PONT DE NEMOURS AND COMPANY AND CONSOLIDATED SUBSIDIARIES RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) SEGMENT PTOI MARGIN % (PTOI / Segment Sales) (1) Year Year Year Year Year Q14 1Q Q13 3Q13 2Q13 1Q Q12 3Q12 2Q12 1Q Q11 3Q11 2Q11 1Q Agriculture 27.9% 21.8% 32.8% 18.2% -6.0% -6.2% 23.7% 31.7% 16.0% -6.7% -13.9% 20.1% 31.6% 17.1% -17.1% -13.5% 28.1% 32.2% 15.4% Electronics & Communications 8.0% 3.4% 12.9% 8.0% -5.9% 15.2% 14.5% 8.0% 8.2% 6.6% -16.3% 27.8% 8.7% 13.8% 9.7% 14.3% 14.1% 16.2% 9.6% Industrial Biosciences 18.3% 18.0% 18.6% 13.9% 12.6% 14.8% 14.1% 14.2% 13.5% 13.7% 12.7% 14.0% 13.5% 0.3% 11.8% -8.9% -4.9% n/m n/m Nutrition & Health 10.6% 10.5% 10.8% 8.8% 10.0% 9.3% 7.1% 8.8% 7.9% 2.6% 7.3% 11.9% 9.8% 3.1% 6.7% -2.4% 2.9% 8.6% 1.3% Performance Chemicals (2) 13.3% 13.7% 12.9% 13.6% 13.6% 10.6% 14.6% 15.6% 24.5% 12.8% 23.2% 30.0% 29.8% 26.8% 25.8% 29.5% 27.7% 23.9% 9.9% Performance Materials (2) 30.7% 42.0% 19.1% 20.3% 18.3% 22.9% 20.6% 19.1% 17.3% 17.8% 14.4% 20.0% 17.1% 15.7% 13.4% 15.0% 16.1% 18.3% 1.3% Safety & Protection 17.9% 17.3% 18.5% 17.9% 21.8% 17.4% 16.9% 15.2% 14.7% 13.5% 9.9% 18.4% 16.9% 16.8% 13.9% 16.2% 18.0% 19.1% 16.1% TOTAL SEGMENT PTOI MARGIN % 21.0% 20.0% 22.0% 14.9% 7.8% 9.5% 17.9% 21.4% 15.3% 7.1% 6.2% 19.6% 23.5% 17.3% 10.1% 11.2% 21.9% 23.9% 12.7% SEGMENT OPERATING EARNINGS MARGIN % (Operating Earnings / Segment Sales) (1) Agriculture 28.4% 23.1% 32.8% 21.2% 4.9% -3.8% 25.9% 32.5% 20.5% -5.0% -4.9% 28.0% 32.8% 19.5% -9.4% -4.3% 28.1% 32.2% 15.4% Electronics & Communications 13.7% 14.4% 12.9% 13.1% 14.5% 15.2% 14.5% 8.0% 9.6% 6.9% 9.6% 12.5% 8.7% 13.8% 9.7% 14.3% 14.1% 16.2% 11.3% Industrial Biosciences 18.6% 18.6% 18.6% 13.8% 12.3% 14.8% 14.1% 14.2% 13.7% 13.7% 13.7% 14.0% 13.5% 11.5% 12.1% 11.9% 8.9% n/m n/m Nutrition & Health 11.1% 11.3% 10.8% 8.6% 9.3% 9.3% 7.1% 8.8% 9.3% 6.8% 8.8% 11.9% 9.8% 8.2% 7.2% 8.2% 9.7% 8.6% 2.5% Performance Chemicals (2) 13.9% 14.8% 12.9% 14.6% 13.8% 14.7% 14.6% 15.6% 25.0% 14.8% 23.4% 30.0% 29.8% 26.8% 25.8% 29.5% 27.7% 23.9% 10.8% Performance Materials (2) 19.1% 19.2% 19.1% 20.5% 19.3% 22.9% 20.6% 19.1% 19.0% 18.0% 20.9% 20.0% 17.1% 15.0% 10.4% 15.0% 16.1% 18.3% 6.3% Safety & Protection 19.4% 20.3% 18.5% 17.8% 21.4% 17.4% 16.9% 15.2% 16.2% 13.8% 15.7% 18.4% 16.9% 16.8% 13.9% 16.2% 18.0% 19.1% 18.7% TOTAL SEGMENT OPERATING EARNINGS MARGIN % 20.1% 18.1% 22.0% 16.4% 12.0% 10.9% 18.7% 21.7% 17.8% 8.3% 12.3% 22.4% 24.0% 18.5% 11.0% 14.8% 22.4% 23.9% 14.8% (1) Segment PTOI / Operating Earnings margin %'s for Other are not presented separately above as they are not meaningful; however, the results are included in the Total margin %'s above. (2) Prior periods reflect the reclassifications of Viton fluoroelastomers from Performance Materials to Performance Chemicals. Non-GAAP Reconciliations

24 Copyright 2014 DuPont. All rights reserved. The DuPont Oval Logo, DuPont TM, The miracles of science TM, and all products denoted with or M are trademarks or registered trademarks of E. I. du Pont de Nemours and Company.