Nick Fanandakis Executive Vice President and Chief Financial Officer E. I. du Pont de Nemours & Company

Transcription

1 Bank of America Merrill Lynch US Basic Materials Conference December 10, 2013 Boston Nick Fanandakis Executive Vice President and Chief Financial Officer E. I. du Pont de Nemours & Company 1

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; and successful integration of acquired business and separation of underperforming or non-strategic assets. 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 Clear Strategy, Stronger Company Superior Return to Shareholders 3

4 Three Strategic Priorities To Increase The Value Of DuPont Ag & Nutrition 1. Extend our leadership across the high-value, sciencedriven segments of the Ag and Food value chain Bio-based Industrials 2. Develop worldleading industrial biotechnology capabilities to create transformational new bio-based businesses Advanced Materials 3. Strengthen and grow our leading position in differentiated highvalue materials and leverage new sciences Higher Growth, Higher Value Company By Building And Increasing Leveraging The Three Value World-Leading Of DuPont Positions 4

5 Net Income ($B) Strong Performance Despite Pharma License Expiration $4.0 $3.5 $3.6 $0.1 $3.0 $2.5 $2.0 $1.5 $1.0 $0.5 $2.2 $0.7 $1.5 $3.5 $0.0 1/1/2008 1/1/2009 1/1/2010 1/1/2011 1/1/2012 Net Income (less Pharma) (1) Pharma Net Income DuPont Has Greatly Exceeded Pharma s Contribution In Less Than Four Years (2) (1) Income from continuing operations after income taxes, excluding significant items and non-operating pension/opeb costs (2) Pharma Net Income assumes a tax rate of 35% 5

6 DuPont TSR & CAPITAL RETURNED Significantly Outperformed Peers And The Broader Market Total Shareholder Return (12/31/08 11/29/2013) (1) Total Capital Returned to Shareholders ( ) (4) DuPont 196% DuPont 4.9% (2) Proxy Peers 109% Proxy Peers 4.5% S&P (3) Chemicals 172% S&P Chemicals 3.7% S&P % S&P % Source: Datastream as of 11/29/2013, Bloomberg, Capital IQ, FactSet (1) Proxy Peers and S&P Indices are USD market cap-weighted and assume dividends are re-invested at the closing price applicable on the ex-dividend date (2) Proxy Peers consists of 3M, Air Products, Baxter Intl, Boeing, Caterpillar, Dow, Emerson, Honeywell, Ingersoll Rand, Johnson Controls, Johnson and Johnson, Kimberly Clark, Merck, Monsanto, Proctor and Gamble, Syngenta AG, and United Technologies (3) S&P Chemicals in 2012 consists of Airgas, Air Products, CF Industries, Dow, DuPont, Eastman Chemical, Ecolab, FMC, IFF, LyondellBasell, Monsanto, Mosaic, PPG, Praxair, Sherwin- Williams, and Sigma-Aldrich (4) Calculated as the average of annual dividends + common stock repurchases / average daily market cap in each of the four years ( ) 6

7 DuPont s Portfolio Has Been Enhanced Through Major Transactions Safety & Protection 2012 Segment Sales Performance Industrial Biosciences Agriculture Coatings Performance Materials $34.8B (1) Electronics & Communications Performance Chemicals Nutrition & Health Positioning DuPont For Future Growth Higher Growth And Margins With Reduced Cyclicality And Commoditization (1) Consolidated net sales from continuing operations 7

8 And Continuous Refinement Acquisitions: Technology/Market Access Driven 7 US seed companies Solae full ownership MECS TM sulfuric acid technology Innovalight TM liquid silicon inks for PV Pannar Seed full ownership Divestitures: Slower Growth, Cyclical Businesses GLS/Vinyls (1) Professional products insecticide assets Mancozeb fungicide Liquid Packaging Systems Zenite liquid crystal polymer resins ~$8.0B of Sales Impacted by M&A 23% of Total Revenue Strategic ~$16B Of Review Sales of Impacted Performance By Transactions Chemicals Since Is Underway 2009 (1) Sale announced in November 2013, expected to close first half of 2014 pending regulatory approvals 8

9 Building A Higher Growth, Higher Value Company 9

10 DuPont s Broad Science And Innovation Capabilities Create A Large And Accelerating Growth Opportunity World Class Integrated Science Coupled With Compelling Market Insights To Solve World Scale Challenges Food Integration of emerging biological sciences Energy Engineering Materials Science Chemistry Biological Sciences Protection DuPont Is On The Forefront Of Another Transformational Wave Of Innovation 10

11 DuPont s R&D Investment Is Delivering Today Recent Science Successes Industry Recognition Represent greater than $4B in sales (2012) Optimum AcreMax Insect-control seed corn Optimum AQUAmax Drought-tolerant seed corn Plenish Healthy soybean oil Rynaxypyr and Cyazypyr insect control Y-Series High-yielding soybeans Axtra Enzymes for animal nutrition Sorona Renewably-sourced polymer Hytrel RS Renewably-sourced resin Kevlar AP Protect broadband cables Zytel Plus High-temperature polymer Solamet High-efficiency PV electrode pastes Agriculture and Nutrition Bio-based Industrials Advanced Materials DuPont receives Agrow Award for Best Crop Protection R&D Pipeline DuPont Named a Top Employer by Science Magazine for the 6th Consecutive Year Thomson Reuters Top 100 Global Innovators list for third consecutive year American Chemical Society Heroes of Chemistry Award for development of Rynaxypyr and its advancement of sustainable agriculture Patent Board ranks DuPont #1 Innovator in the chemical industry for the sixth consecutive year FORTUNE magazine ranks DuPont in Top 50 Most Admired Companies DuPont s research on producing sustainable Omega-3 oils called a tour de force by Nature Biotechnology Matching Broad Scientific Expertise With Market Needs And Global Trends Has Driven Sustained Innovation 11

12 Dividends Will Continue To Be A Priority Dividends per Share $1.78 $1.70 $1.64 $1.64 $ (1) Stability and Growth Focus Continuous dividend since 1904 No reduction in dividend in response to: Pending separation of Performance (2) Chemicals Separation of Performance Coatings Pharma license expiration 2009 recession Separation of Invista Separation of Conoco Current management team has restarted dividend growth engine Dividend yield and payout ratio are above peers Aim To Grow Future Dividends In Line With Earnings (1) Includes Q dividend paid ($0.43 per share), Q2/Q dividend paid ($0.45 per share), and Q dividend declared ($0.45 per share) (2) At separation, aggregate dividend to shareholders will not change 12

13 Cumulative Capital Returned To Shareholders ($B) To Be Complemented With Share Buybacks Capital Returned To Shareholders Comments $10B $8B $7B $10B Capital returned to shareholders has accelerated: $6B $5B Two recent dividend increases $4B $2B $0B $1B $3B YTD 2013 $1B share repurchase with Performance Coatings proceeds Cumulative Dividends (1) Cumulative Buybacks We Will Continue To Repurchase Shares In Line With Our Balance Sheet Objectives And Strategic Opportunities (1) Common dividends paid to shareholders 13

14 DuPont: Accelerating Achievement of Long Term Growth Targets Segments Long-Term Targets Sales CAGR Margins* 2012 Margins* Agriculture 8-10% 22-24% 21% Electronics & Communications 7-9% 16-18% 10% Industrial Biosciences 7-9% 16-18% 14% Nutrition & Health 7-9% 12-14% 9% Performance Chemicals 3-5% 18-20% 25% Performance Materials 3-5% 16-18% 19% Safety & Protection 5-7% 21-23% 16% 7% Sales CAGR & 12% Operating EPS* CAGR * Excludes non-operating pension/opeb costs and significant items. See company website for detailed reconciliation of non-gaap measures. 14

15 2014 Outlook 15

16 Our 2014 Macroeconomic Outlook Global growth will improve in 2014 with GDP up 3% versus about 2% in 2013 Industrial Production will rise nearly 4% as Europe and Japan recover from recessions, growth firms in China after two-year deceleration, and fiscal drag lessens in US Energy prices stable; commodity prices weaker Dollar slightly stronger 16

17 2014 Key Market Summary Expectations Global agriculture fundamentals are normalizing - Commodity prices have retreated significantly from the peak - Lower planted area is likely Global light vehicle builds expected to rise nearly 4% in 2014 after a nearly 3% increase in 2013 U.S. housing-related markets continue to recover with housing starts up about 20% Strong growth in electronics - both PV installations and consumer electronics 17

18 A Long History as a Leader of Sustainability Efforts A Focus on Sustainable Goals And Integration Into Our Strategic Focus DuPont a thought leader on sustainability for over 20 years. Initial focus: compliance and environmental footprint reduction Exceeded our goals in magnitude and timing Set new, first in industry, market-facing sustainability goals for: Sales from products made with renewable resources New products that help customers increase their sustainability Percentage of R&D spend dedicated to sustainability goals Reduced greenhouse gas emissions 72% during (1990 baseline) 25% during (2004 baseline) Our efforts in Ag and Nutrition include development of hybrid seeds intended for harsh climates that are field-tested by farmers Our expertise in Bio-Based Industrials may help make plant-based replacements for petrochemicals - a growing business that enables a shrinking carbon footprint Our insights in Advanced Materials can help to determine how solar installations that harvest more energy can be wired into the grid for a growing urban population Sustainability is a Critical Element of the Strategic Plan for Each One of Our Businesses 18

19 What You Can Expect Strategic Priorities Operational Priorities Extend Ag & Nutrition Leadership Innovation Build Bio-based Businesses Global Reach Strengthen Advanced Materials Execution 7% 12% Sales CAGR Operating EPS CAGR Long Term Growth Targets 19

20 Copyright 2013 DuPont. All rights reserved. The DuPont Oval Logo, DuPont TM The miracles of science TM, and all products denoted with or TM are trademarks or registered trademarks of E. I. du Pont de Nemours and Company. 20

21 Appendix 1 Separation of Performance Chemicals transformation continues 21

22 Building a Higher Growth, Higher Value DuPont Spin-off of DuPont s Performance Chemicals segment announced 10/24/2013 Two strong, highly competitive standalone public companies Distribute all shares to DuPont shareholders Tax-free to DuPont s U.S. shareholders Subject to customary closing conditions and IRS ruling Targeted completion in about 18 months Transaction will create two companies better positioned to increase long-term value for shareholders 22

23 Two Strong Highly Competitive Companies with Separate and Distinct Value Creation Strategies DuPont Performance Chemicals Growth Focus Science & Technology Driven Cash Generation Focus Process Technology Driven Industry Leading Technologies Science Integration Across Businesses Strong Applications Development Targets Secular Driven Growth Innovative Products; Robust Pipeline Global Reach and Productivity Industry Leading Businesses Low Cost Production Optimized Sourcing Capital Productivity Regulatory Compliance and Advocacy Mission Growth Driven by differentiated and integrated science Mission High Cash Generation Driven by low-cost processes and productivity 23

24 Two Companies with Strong Financial Profiles DuPont Prior to Separation DuPont After Separation Performance Chemicals Segment Sales $35.2B $28.0B $7.2B 2012 Revenue By Segment Perf. Mat. 18% IB 3% N&H 10% S&P 11% E&C 8% Ag 30% PChem 20% Perf. Mat. 23% S&P 14% IB 4% N&H 12% E&C 10% Ag 37% DC&F 54% DTT 46% Segment Operating $6.3B $4.5B $1.8B Earnings * CapEx $1.8B $1.4B $0.4B R&D $2.1B $2.0B $0.1B Note: Revenue, Segment Operating Earnings, CapEx and R&D figures are for 2012 *Reconciliations of non-gaap measures can be found on the company s Investor Center website at 24

25 Financial Principles for Separation Debt - DuPont maintains A/A2 credit rating - Performance Chemicals targets low investment-grade rating - DuPont s existing financial obligations to be apportioned between DuPont and Performance Chemicals in line with credit rating objectives - Performance Chemicals will assume an appropriate amount of operating cash Shareholder Return - Enable both companies to pay dividends that in total, equal DuPont s dividend at separation - DuPont aims to grow dividends in line with earnings growth - Dividends will continue to be complemented by share buy backs Capital structures tailored to support each company s value creation mission 25

26 Copyright 2013 DuPont. All rights reserved. The DuPont Oval Logo, DuPont TM The miracles of science TM, and all products denoted with or TM are trademarks or registered trademarks of E. I. du Pont de Nemours and Company. 26