dupont 4q 2012 earnings conference call -...

DuPont 4Q 2012 Earnings Conference Call


January 22, 2013



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 the Company’s fourth quarter earnings news release dated January 22, 2013, which will be furnished to the SEC on Form 8-K. Reconciliations of non-GAAP measures to GAAP results are available on the Investor Center website at www.dupont.com.

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 those risk factors 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; and business or supply disruptions. The Company does not undertake to update any forward-looking statements as a result of future developments or new information. Comments regarding first quarter and full year 2013 reference operating earnings, which exclude significant items and also exclude non-operating pension and other postretirement employee benefit costs.

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 www.dupont.com.

Regulation G

2


3

$ in billions, except EPS

4Q12 vs. 4Q11 FY12 vs. FY11

EPS

Underlying** $.11 (58)% $3.33 (6)%

Reported $.02 $2.61

Segment PTOI** $0.5 (26)% $5.7 (1)%

Consolidated Net Sales $7.3 - $34.8 3%

Volume 3% (2)%

Local Prices - 4%

Currency Impact (2)% (2)%

Portfolio / Other (1)% 3%

4Q12 4Q11 FY12 FY11

Base Tax Rate** 10.3% 27.3% 22.8% 21.3%

4Q and FY 2012 Financial Highlights*

* Results shown are on a continuing operations basis.

** See Schedules B, C, and D in the earnings news release for details of

significant items and reconciliations of non-GAAP measures.



4

Global Sales* – Regional Highlights

4Q 2012 Sales YOY % CHG 4Q 2012 Sales by Region

U.S. & Canada 35%

Developing EMEA

7%

Developed EMEA 15%

Developing Asia 16%

Developed Asia 10%

Latin America 17%

Region %

Worldwide 0

U.S. & Canada 0

Non-U.S. & Canada (1)

Developing Markets 8

Developing Asia 8

Developing EMEA 3

Latin America 10

* Company sales from continuing operations.


4Q 2012 EPS* Waterfall

5

Key

Takeaways

Lower Performance Chemicals volume, price, and plant utilization

Strong Ag performance in Latin America drove volume, share gain and price

Improved Performance Materials on volume gain, mix & lower variable costs

Higher fixed cost from Ag growth investments and higher non-cash pension

* Earnings per share from continuing operations.

** Excluding significant items. See schedules B and D in the earnings news

release for significant items and the reconciliations of non-GAAP measures.

Underlying EPS**

$.31

Reported EPS

($.01)

($.03)

($.04)

($.05)

$.12 ($.12)

$.04 ($.06)

Underlying

EPS** $.02

Reported EPS

4Q11 EPS Local Prices VariableCost

Volume Fixed Cost Currency Income Tax Pharma Other 4Q12 EPS

$.26

$.11



6

Balance Sheet and Cash December 31, 2012

Free Cash Flow* - Total Company

• $3.1B free cash flow

• $500 million contribution to principal U.S. pension plan

• ~$400 million working capital productivity

• FY capex spend $1.8B

Strong Balance Sheet

• $4.4B cash, cash equivalents and marketable securities

• $11.7B gross debt

• $7.3B net debt*

* Reconciliations of non-GAAP measures can be found on the company’s Investor Center website at www.dupont.com.

Free Cash Flow*

0.0

1.0

2.0

3.0

4.0

2011 2012

$ B

illi

on

s

0

4

8

12

16

Dec-11 Mar-12 Jun-12 Sep-12 Dec-12

$ B

illio

ns

Gross Debt Cash Net Debt*

Cash and Debt


Introducing 2013 Guidance

* Excludes non-operating pension/OPEB costs and significant items. Refer to company website for detailed reconciliations of non-GAAP measures.

7

$27.7

$33.7 $34.8 ~$36

2010 2011 2012 2013E

$3.33

$4.02 $3.77

$3.85-4.05

2010 2011 2012 2013E

Sales (billions) Operating EPS*

2013E: ~3% growth 2013E: 2-7% growth

1H13: earnings decline YoY vs. tough comp 2H13: earnings growth YoY


2013 Assumptions

8

Global GDP ~2% growth

Industrial production ~2% increase

Productivity targets ~$300 million restructuring savings >$300 million additional ongoing cost productivity

Raw material, energy & transportation

~5% increase primarily due to higher seed input costs

Currency FY: flat 1Q13: slight headwind

Tax rate 23-24%

Capital expenditures ~$1.9 billion

Depreciation & amortization

~$1.6 billion

Pension contributions ~$350 million (to plans other than principal U.S. plan)



9

Agriculture Pioneer, Crop Protection

0.0

0.5

1.0

1.5

2.0

4Q10 4Q11 4Q12

$ in

Billio

ns

4Q PTOI **

4Q Sales *

4Q10 4Q11 4Q12

-15%

-10%

-5%

0%

-150

-100

-50

0

PT

OI M

arg

in

$ in

Millio

ns

* Segment sales include transfers.

** Excluding significant items. See schedules C and D in the earnings

news release for reconciliations of non-GAAP measures.

1H and FY Outlook

Solid Ag environment and continuing momentum of seed and crop protection businesses will drive significant sales increases in 1H

1H earnings will increase moderately as margins are pressured slightly from higher seed input costs

FY low teens sales growth from volume and price

Continued growth investments in new product launches, route-to-market, production capacity and R&D

4Q Comments

Sales up 18% with volume gains of 11% and price gains of 7% offsetting the negative impact of currency

Strong growth in Latin America in both Pioneer and Crop Protection

Multiple point share gain for Pioneer in Brazil summer corn

Crop Protection growing faster than the market at 13%

Seasonal loss improved $24 million as sales growth offset additional commercial and research investments



10

Electronics & Communications

0%

4%

8%

12%

16%

20%

0

25

50

75

100

125

4Q10 4Q11 4Q12

PT

OI M

arg

in

$ in

Millio

ns

0.0

0.2

0.4

0.6

0.8

1.0

4Q10 4Q11 4Q12

$ in

Billio

ns

4Q Sales *

4Q PTOI **

4Q Comments

Sales essentially flat on higher volume offset by lower price due to metals pass-through

Continued demand for smart phone and tablets

Signs of stabilization emerging in PV market

PTOI down $18 million; 4Q 2011 PTOI included $20 million licensing income

1Q and FY Outlook

1Q sales down modestly with gradual sequential improvement as the year progresses

1Q PTOI down significantly on weaker mix

FY PV installations up in the U.S., Japan and China, offset by declines in Europe

Consumer electronics growth from smart phones and tablets






11

Industrial Biosciences

4Q11 4Q12

0%

4%

8%

12%

16%

20%

0

10

20

30

40

50

PT

OI M

arg

in

$ in

Millio

ns

4Q PTOI **

4Q Sales * 4Q Comments

Sales up 4% on 3% higher volume and 1% higher prices

Higher demand for Sorona® in carpeting

Continued growth in food enzymes; softness in the ethanol industry

PTOI increased 29% due to volume increases, realization of synergies

Full year margin up 300 basis points

1Q and FY Outlook

1Q sales up modestly on continued growth in Sorona® and food enzymes offsetting reduced demand for ethanol

1Q PTOI up substantially on sales growth, margin improvements in biomaterials and synergies

FY expect margin expansion and strong demand for Sorona® with ethanol softness

0.0

0.1

0.2

0.3

0.4

4Q11 4Q12

$ in

Billio

ns






12

Nutrition & Health

0.0

0.2

0.4

0.6

0.8

1.0

4Q10 4Q11 4Q12

$ in

Billio

ns

4Q Sales *

4Q Comments

Sales up 6% evenly split between volume and price; higher local prices partially offset by unfavorable currency

Strong demand for probiotics, cultures and enablers

PTOI of $66 million up 27% with margin improvement from higher prices and cost synergies

Full year margin up 300 basis points

4Q PTOI **

4Q10 4Q11 4Q12 0%

3%

6%

9%

12%

0

20

40

60

80

PT

OI M

arg

in

$ in

Millio

ns

1Q and FY Outlook

1Q sales up moderately driven by solid market fundamentals

1Q PTOI essentially flat as higher sales and integration synergies are offset by higher raw material costs

PTOI margins improving through the year






13

Performance Chemicals Titanium Technologies (DTT), Chemicals & Fluoroproducts (DC&F)

4Q Sales *

4Q PTOI **

0.0

0.5

1.0

1.5

2.0

4Q10 4Q11 4Q12

$ i

n B

illio

ns

0%

5%

10%

15%

20%

25%

30%

0

100

200

300

400

500

600

4Q10 4Q11 4Q12

PT

OI

Marg

in

$ i

n M

illio

ns

4Q Comments

1Q and FY Outlook

1Q PTOI and sales down substantially versus peak quarter mostly due to lower Ti02 prices and fluoropolymers demand

1Q PTOI and sales down moderately on a sequential basis vs. 4Q12

Ti02 industry fundamentals showing gradual improvement as the year progresses

FY sales down moderately with PTOI margins declining 7-9 percentage points vs. near-peak margin, primarily due to lower TiO2 prices

Sales down 15% primarily from lower TiO2 price and fluoropolymers volume decline

Ti02 volumes down slightly; customer inventory levels appear to be normalized

PTOI down 54% on lower sales and lower plant utilization

FY PTOI margins of 23%






14

Performance Materials Performance Polymers (DPP), Packaging & Industrial Polymers (P&IP)

0%

5%

10%

15%

20%

25%

0

75

150

225

300

375

4Q10 4Q11 4Q12

$ in

Millio

ns

0.0

0.4

0.8

1.2

1.6

2.0

4Q10 4Q11 4Q12

$ in

Billi

on

s

4Q Sales *

4Q PTOI **

4Q Comments

Sales down 5% with 3% higher volumes partially offsetting 5% lower price and 3% reduction from portfolio change

Stable packaging markets and strong demand in North American automotive markets

PTOI up 68% due to lower feedstock cost, higher volume, and improved mix

1Q and FY Outlook

1Q sales flat with weakness in European & Japan automotive markets offset by solid packaging demand

1Q PTOI up moderately on favorable mix

FY forecasted growth in consumer and industrial markets in Asia

FY continued North American and China automotive market growth partially offset by softness in the electronics sector

PT

OI M

arg

in






15

Safety & Protection Protection Technologies (DPT), Building Innovations (BI), Sustainable Solutions (DSS)

0%

4%

8%

12%

16%

20%

0

25

50

75

100

125

4Q10 4Q11 4Q12

PT

OI

Marg

in

$ i

n M

illi

on

s

4Q Sales *

4Q PTOI **

0.0

0.2

0.4

0.6

0.8

1.0

4Q10 4Q11 4Q12

$ i

n B

illi

on

s

1Q and FY Outlook

1Q sales down modestly with continued softness in industrial markets and inconsistent spending in public sector

1Q PTOI down moderately on weaker mix

FY sequentially improving as year progresses on increased China infrastructure spending, U.S. housing market rebound and more consistent spending in public sector

4Q Comments

Sales up 2% on 3% higher volume, partially offset by 1% lower prices due to unfavorable currency

Higher demand for Sustainable Solutions offerings and U.S. construction products

PTOI down 6% primarily due to lower plant utilization related to softness in certain industrial markets and U.S. public sector






16

Save the Date! Investor Day – May 2, 2013 • Hotel du Pont, Wilmington, DE

• 9:00 am – 2:00 pm

• More details to come



17

Industrial Chemical Prices

Total Company Volume and Local Pricing Trends

Appendix



Industrial Chemical Prices

18



DuPont Selling Prices – Worldwide*

19



DuPont Sales Volume – Worldwide*

20


21

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