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DELIVERING SOLUTIONS. DELIVERING GROWTH. Rick Olson Senior Vice President Corporate Productivity & Business Process Simplification 2011 Citi Basic Materials Symposium November 29, 2011 DuPont

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Page 1: Olson citigroup v2

DELIVERING SOLUTIONS. DELIVERING GROWTH.

Rick Olson

Senior Vice President

Corporate Productivity & Business Process Simplification

2011 Citi Basic Materials Symposium

November 29, 2011

DuPont

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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 previously published company’ reports on Form 10-K,

10-Q and 8-K. These reports along with 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,”

"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.

Regulation G

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DUPONT FINANCIAL HIGHLIGHTS

* Excludes significant items. Refer to company website for detailed reconciliations of non-GAAP measures. 3

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2010 SEGMENT SALES Pro Forma Basis (including Danisco acquisition)

0

1

2

3

4

5

6

7

8

9

Agriculture Nutrition & Health

Safety & Protection

Electronics & Comm

Ind Biosciences

Perf Coatings Perf Chem Perf Mat's

4

$B

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We are applying our science to find solutions

to some really BIG challenges…

FOOD ENERGY PROTECTION

FEEDING THE

WORLD

REDUCING OUR

DEPENDENCE ON

FOSSIL FUELS

KEEPING PEOPLE &

THE ENVIRONMENT

SAFE

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DuPont is driving critical cross-company enablers

to address these challenges and maximize our results

in the areas of: Innovation

Differential portfolio management

Productivity

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QUESTION…

7

Productivity has been an important area of focus for DuPont.

What specific actions are you taking to improve productivity and how do you

measure your success? What are your productivity goals for 2011 and 2012?

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PRODUCTIVITY Disciplined processes deliver ongoing productivity

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Focused

• Improving efficiency and effectiveness across supply chains

• Proactively anticipating market dynamics

Effective

• Standard tools and techniques to solve problems

• Eliminating inefficiencies and creating sustained value

Measured

• Measure progress enabling reduced costs and increased capacity

• Comprehensive competitive benchmarking

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FIXED COST PRODUCTIVITY

Fixed Cost* as % of Sales

2010-2012 Target: $1B Fixed Cost Productivity

2010 result: >$400 million

2011 goal: $300 million … $250 million delivered through 3Q

2012 goal: $300 million

44.6%

42.5%

41.0% 41.2%

46.2%

41.5%

40% 39%

2005 2006 2007 2008 2009 2010 2011E 2012E

* Data exclude significant items in all periods. See company website for detailed reconciliations of non-GAAP measures.

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WORKING CAPITAL PRODUCTIVITY

2010-2012 Target: $1B Working Capital Productivity

2010 result: >$700 million

2011 goal: $300 million … tracking well toward goal through 3Q

2012 goal: $300 million

NWC* Turnover: Achieved 13% Productivity in 2010

4.9 NWC Turnover

5.5 NWC Turnover

2009 2010

13% Productivity

* Excludes cash, cash equivalents, marketable securities and short term borrowings.

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WORKING CAPITAL PRODUCTIVITY

Benchmarked versus 100+ companies based on public financial statements

Trade Working Capital Productivity – DD* Average Period-end Position / Average Monthly Revenue

* Short-cycle businesses. Excludes Pioneer/DCP and Danisco 11

Inferior Disadvantaged Parity Advantaged Superior

2007

2008

2009

2010

2Q 2011

1Q 2011

DuPont

3Q 2011

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QUESTION…

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Are your expectations different for the growth businesses vs. the

performance businesses? How does your approach differ?

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5% CAGR

improvement

EXAMPLE … PERFORMANCE CHEMICALS (TiO2)

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Fixed Cost as % of Sales

Differentiated Process Technology 100% chloride technology DuPont one-step process Scale Largest in capacity All plants >100 kT per year Capital and fixed cost productivity Disciplined cost management using DuPont Production Systems (DPS) Variable Cost Productivity High conversion efficiency Substantial reduction of energy usage over last ten years

2008 2009 2010 2011E 2012E

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EXAMPLE … PIONEER Agile & effective supply chains

In-season sales represent opportunity, but require disciplined supply chain

processes

• ~10% of sales opportunities are in-season

Project Focus

• Shape demand around identified leader products

• Closely monitor inventory levels

• Optimize logistics – next day delivery

Results

• Reduced product returns (right product at the right location)

• Improved inventory management at the field level

• Increased sales and improved supply chain logistics

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QUESTION…

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The TiO2 business has been performing very well and DuPont has continued

to increase prices. Given your prior experience, where do you think we are

in the TiO2 cycle? Can margins stay at this level given escalating titanium

ore prices?

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TiO2 MARKET DYNAMICS

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Announced Capacity - DuPont

200K tonnes

Altamira expansion

(2014)

150K tonnes

Debottlenecking projects

(2012-2014)

Supply Demand

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QUESTION…

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With the purchase of Danisco complete, do you believe the portfolio

transformation is done?

Where do you see the portfolio in 5 years?

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28%

9%

11%

52%

Ag & Nutrition

Agriculture / Nutrition & Health

Electronics & Communications

Safety & Protection

Industrial Biosciences

Performance Segments

23%

8%

8%

10%

3%

48%

2010 DuPont Actual Sales

$31.5B

2010 DuPont – Danisco

Pro Forma Sales

$34.2B

DANISCO ACQUISITION Impact to the Portfolio

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15%

11%

9%

5%

60%

FOOD

ENERGY

PROTECTION

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R&D INVESTMENT 2010 pro forma R&D investment ~$1.8B

Chemistry

Engineering

Materials Science

Nanotechnology

Industrial Biotech

Ag Biotech

Increasing

Food Production

Decreasing Dependence

on Fossil Fuels

Protecting People and

the Environment

Chemicals and

Materials

Electronics

Capital Allocation Aligned with Large Growth Opportunities

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QUESTION…

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In the absence of any M&A, what are your priorities for cash use?

Following the 9 million share repurchase in 3Q, should we expect more

buybacks in the future?

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FINANCIAL DISCIPLINE PRINCIPLES Uses of Cash

• Maintain a strong balance sheet

• Invest for growth in high return opportunities

• Return excess cash to shareholders

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FINANCIAL DISCIPLINE – CASH DEPLOYMENT Past 5 years(2006-2010)

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5 yr Performance • ~$22B cash generated

• ~$19B returned to shareholders or invested for growth – while maintaining strong balance sheet

Strong Balance Sheet - - - data as of 12/31/2010 • $6.8B cash, cash equivalents & marketable securities

• $3.5B net debt*

44%

5%

39%

12%

Dividends

Share Repurchase

Acquisitions

Capital Spending

$19B

*Reconciliation of net debt can be found on the company website.

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© 2011 E.I. du Pont de Nemours and Company. All Rights Reserved.

• Attractive long-term growth from innovation driven by challenges to:

• Differential portfolio management affects capital allocation decisions,

drives growth

• Aggressive financial targets / transparency / accountability

• Ongoing cost and capital productivity

• Financial discipline

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A LOOK AHEAD

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• Feed the world

• Reduce dependency on fossil fuels

• Protect people and the environment

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DuPont Investor Day

Dec 12 6pm – 8:30pm

Dec 13 8am – 12:30pm

Wilmington, Delaware

You’re invited to join us….

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