Morgan Stanley Global Chemicals and Agriculture Conference. Paul Schickler. President DuPont Pioneer. November 14, 2013

Transcription

1 Morgan Stanley Global Chemicals and Agriculture Conference November 14, 2013 Boston Paul Schickler President DuPont Pioneer 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 on 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 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; 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 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 Leveraging Three World-Leading Positions 3

4 Population and Income Growth in the Developing World will Drive Demand World Population (Billions) Emerging Middle Class (Billions) Other North America Europe B B Asia-Pacific Less developed regions More developed regions Ag Productivity is Critical to Feeding the World Data Source: United Nations 4

5 Agriculture Segment 12% compound annual rate of sales growth and improved operating margins 500 bp from 2008 to sales up 12% through September Key Growth Drivers Product and service innovation Developing markets Strategic investments Margin expansion Sales and Margin Performance $ % $ % Sales ($B)* Operating Margins (%)** Long-Term Growth Targets: Sales 8-10% CAGR with 22-24% Margins * Segment sales include transfers. ** Excludes non-operating pension/opeb costs and significant items. See company website for detailed reconciliation of non-gaap measures. 5

6 Key Growth Markets (millions of hectares harvested) Corn 7 Sunflower 13 Oilseed Rape 2 Corn 44 Soybeans 33 Canola 9 Corn 35 Corn 15 Rice 43 Corn 17 Corn 19 Soybeans 28* ~50% of our Growth over the Next 5 Years Outside of North America * Soybean hectares represent Brazil only. 6

7 Winning in Brazil Multi-year investment strategy delivering results Strong product performance and route-to-market 3 point corn share gain in 2012 summer and 2013 safrinha End-to-end soybean model Rapid technology introduction and grower adoption Doubled sales from 2008 to 2012 Drivers of Growth Local customer focus Investment in research, production and supply chain capacity and route-to-market Optimum Intrasect dual-mode insect protection Optimum Leptra launch in late 2014, pending regulatory approval DuPont Dermacor seed treatment, a Lumigen seed sense offering in late 2014, pending regulatory approval 7

8 Growing in Russia and Ukraine Long history 26 years in Russia and Ukraine Local Investments 2010: Research expansion in Ukraine 2012: Research expansion in Russia 2013: State-of-the-art seed production plant in Ukraine Sales force expansion Product Innovation Optimum AQUAmax hybrids in 2014 Local desire to promote biotech Continued multi-crop growth Pioneer brand hybrids with the DuPont ExpressSun trait 8

9 Ongoing Innovation for India 1970: Began research and parent seed operations Primary Crop Focus Maize Rice Cotton Expansion of Multi Crop Research Centers Corn: Molecular breeding, Native Traits, Drought Tolerance Rice: Molecular breeding & Native Traits Cotton: Hybrid and Biotech Unique Route-to-Market Pioneer Pravatka PDA mobile outreach 9

10 Investing in China for Growth 1997: Established office in Beijing 1998: Tieling Pioneer Seed Research Co., Ltd. Since 2002: Two commercial JVs and one biotech research JV Local Investments Corn research station network Industry leading molecular breeding technology center 4 state-of-the-art production facilities in Western provinces Professional sales channel Strong national/provincial government relationships Local Collaboration = Innovation for Farmers Corn full product lineup Dairy forage leadership Biotech strategic relationships IP Protection Novel approaches 10

11 Applied Biotech Traits Breeding Above and Below Ground Above Ground Right Product Right Acre Innovative Technology Options, Locally Tested and Advanced, and Delivered through our Advantaged Route-to-Market Grower Need Product Options Leading germplasm Drought tolerance Disease tolerance Broad lepidopteran protection Corn rootworm protection Integrated and reduced refuge options Herbicide options Seed treatment options Preferred Integrator of Proprietary and Licensed Technology 11

12 Robust Ag Pipeline is Growing Even Stronger Seed Crop Protection Launch Optimum Leptra hybrids Pioneer brand soybeans with the Genuity Roundup Ready 2 Yield trait Pre-Launch (Phase 4) Lepidopteran/Coleopteran Protection DP 4114 Soybean Aphid Protection Canola Optimum GLY Trait Canola LibertyLink Trait Lumigen and Dermacor Seed Treatment Technologies (Insect Control) Advanced Development (Phase 3) 2008 Soybeans Asian Soybean Rust Resistance I Highly active oomycete control, new mode of action Lumigen Seed Treatment Technologies (Disease Control) 12

13 Decision Services Leader Helping growers maximize profits, minimize risk and improve sustainability by leveraging science, technology, and customer knowledge Current Offering Crop Analytics Mapped > 20 million harvest and as-planted acres* Implemented 1.5 million acres of Variable Rate Seeding (VRS) Prescriptions Grain Marketing Approximately 8,000 customers on platform Financing New Services & Added Convenience for 2014 Fertility and Irrigation Wireless Data Transfer Future State Year-Round Tailored Production & Farm Management Services * Includes >12 million harvest acres 2012 to present and nearly 8 million 2013 as-planted acres 10 13

14 2013 Corn On-farm Performance Strong, broad-based results driven by recent product advancements Continued strong performance in the Central and Western corn belt; improved results in the South Optimum AQUAmax products continue to perform rain or shine Reliable performance of Optimum AcreMax insect protection family Robust research pipeline backed by industry-leading germplasm diversity New insect protection event DP4114 performing well in research trials Solid foundation for continued growth Innovative Technology Options Right Product Right Acre Local Product Advancement Advantaged Route-to- Market Leading the way with advances in locally adapted hybrids 14

15 New Hybrids Create Value Industry leading genetic diversity, improved yield and agronomic performance protected by leading trait options Products launched since 2011 are expected to represent about 75% of 2014 sales volume New classes locally tested and advanced from about 1,300 corn IMPACT trials annually Germplasm improvement is a consistent source of price growth Source: 2013 Pioneer on-farm trial database as of October 31, Customer comparisons based on 2013 yield results including data from weigh wagon, yield monitor and PKP trials compared against all competitors. Includes all new Pioneer hybrids released in 2011, 2012 and 2013 vs. competitor brand hybrids tested in 2011, 2012 and Individual results may vary. All data weighted by comparisons within 4CRM and adjusted to 15% moisture. Product performance is variable and subject to any number of environmental, disease and pest pressures. 15

16 2013 Optimum AQUAmax Hybrids On-farm Performance Favorable Locations Water-limited Locations Continue to deliver a yield advantage in water-limited environments and top-end yield potential under more favorable growing conditions Tested in over 23,000 yield comparisons over three seasons Offers growers choices to minimize risk and maximize productivity and profitability on every acre Developed using Pioneer proprietary Accelerated Yield Technology (AYT System) Optimum AQUAmax hybrids continue to perform rain or shine Source: In 2013, Optimum AQUAmax products were grown in on-farm comparisons against competitive hybrids (+/- 4 CRM) in 775 water-limited environments; and 11,657 comparisons under favorable growing conditions. Water limited environments are those in which the water supply/demand ratio during flowering or grain fill was less than 0.66 on a 0-1 scale (1=adequate moisture as determined by Pioneer) using Pioneer's proprietary EnClass system and in which the average yield of the commercially available hybrids was less than 150 bu/acre. Moisture levels were measured at the nearest weather station. Favorable growing conditions are locations where yield levels were at or above 150 bu/acre on average, regardless of moisture levels. Product performance in water-limited environments is variable and depends on many factors such as the severity and timing of moisture deficiency, heat stress, soil type, management practices and environmental stress as well as disease and pest pressures. All hybrids may exhibit reduced yield under water and heat stress. Individual results may vary. Product performance is variable and subject to any number of environmental, disease and pest pressures. 16

17 2013 Soybean On-farm Performance Pioneer brand T Series soybeans All Pioneer brand soybeans Improved competitive yield performance in 2013 Pioneer brand T Series soybeans demonstrated improved yield potential and outperformed the competition 53 T Series varieties expected to make up about a third of North America soybean volume in 2014 Successful local testing in IMPACT trials resulted in 13 new products with the Genuity Roundup Ready 2 Yield trait expected to represent about 5% of soybean volume in 2014 Exciting future classes advancing towards commercialization Accelerating Total Soybean Performance with T Series Source: 2013 Pioneer on-farm trial database as of October 31, Customer comparisons based on 2013 yield results including data from weigh wagon, yield monitor and PKP trials for all Pioneer brand varieties compared against all competitors. Individual results may vary. All data weighted by comparison within 3RM. Product performance is variable and subject to any number of environmental, disease and pest pressures. 17

18 Delivering in 2013 in Seeds Grew corn market share more than a point in NA Soybean market share down about a point in NA Continued growth of international businesses Innovation driven pricing gains Optimum AQUAmax hybrids grew from 2 to 7 million planted acres 85% of NA above and below ground sales in the Optimum AcreMax Insect Control Family of products 30% of NA below ground only sales in Optimum AcreMax Insect Control products Continued investment to drive future growth Leading performance with seed sales up 11% through September * Segment sales include transfers. 18

19 Drivers of 2014 Growth Strong North America corn harvest results; new products offering improved performance Modest pricing gains driven by mix Continued growth of well-positioned international businesses Two-thirds of North America corn volume in Optimum AcreMax insect protection integrated refuge products Over 50 Optimum AQUAmax hybrids with trait options on over 10 million acres Approximately one-third of North America volume in Pioneer brand T Series soybeans Lower input costs improve margins Continuing to grow the Agriculture segment 19

20 Right Product Right Acre 20

21 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. 21

22 Agrisure and Agrisure Viptera are registered trademarks of, and used under license from, a Syngenta Group Company. Agrisure technology incorporated into these seeds is commercialized under a license from Syngenta Crop Protection AG. Herculex Insect Protection technology by Dow AgroSciences and Pioneer Hi-Bred. Herculex and the HX logo are registered trademarks of Dow AgroSciences LLC. Liberty, LibertyLink, the Water Droplet Design, Poncho and VOTiVO are trademarks of Bayer. YieldGard, the YieldGard Corn Borer design, Genuity, Roundup and Roundup Ready 2 Yield are registered trademarks of Monsanto Technology LLC used under license. ALWAYS READ AND FOLLOW PESTICIDE LABEL DIRECTIONS. Roundup Ready crops contain genes that confer tolerance to glyphosate, the active ingredient in Roundup brand agricultural herbicides. Roundup brand agricultural herbicides will kill crops that are not tolerant to glyphosate. Pioneer is a member of Excellence Through Stewardship (ETS). Pioneer products are commercialized in accordance with ETS Product Launch Stewardship Guidance and in compliance with the Pioneer policies regarding stewardship of those products. Crops and materials containing biotech traits may only be exported to or used, processed, or sold in jurisdictions where all necessary regulatory approvals have been granted for those crops and materials. It is a violation of national and international laws to move materials containing biotech traits across borders into jurisdictions where their import is not permitted. Growers should discuss these issues with their purchaser or grain handler to confirm the purchaser or handler's position on products being purchased. Excellence Through Stewardship is a registered trademark of the Biotechnology Industry Organization. The DuPont Oval Logo is a registered trademark of DuPont. DuPont TM and STS are trademarks of DuPont or its affiliates., SM, TM Trademarks and service marks of Pioneer PHII. 22

23 2013 Corn On-farm Performance Triple Stacks vs. Competitor Triple Stacks Double Stacks vs. Competitor Double Stacks Continued advantage of above and below ground products containing Herculex RW insect protection Growing performance advantage for above ground only insect protection Leading above and below ground insect options Source: 2013 Pioneer on-farm trial database as of October 31, Customer comparisons based on 2013 yield results including data from weigh wagon, yield monitor and PKP trials for all Pioneer brand hybrids against all competitors. Individual results may vary. All data weighted by comparisons within 4CRM and adjusted to 15% moisture. Product performance is variable and subject to any number of environmental, disease and pest pressures. 23

24 2013 Area Top Volume Leaders Package vs. All Competitors (Corn) SE ND, NO SD Yld. Adv. / % Wins / Comps P9284YHR (YGCB/HX1/LL/RR2) % 88 P9526AMX (AQ/AMX/LL/RR2) % 46 P9526YHR (AQ/YGCB/HX1/LL/RR2) % 55 P9675AMX (AMX/LL/RR2) % 56 P9917AMX (AMX/LL/RR2) % 67 South Central Nebraska Yld. Adv. / % Wins / Comps P1151AM (AQ/AM/LL/RR2) % 111 P1266YHR (YGCB/HX1/LL/RR2) % 112 P1498AM (AQ/AM/LL/RR2) % 45 P1690CHR (RW/HX1/LL/RR2) % 47 P1768AMX (AMX/LL/RR2) % mm Acres 3.9 mm Acres SW KS, SE CO, N NM, N TX, W OK Yld. Adv. / % Wins / Comps P1105YHR (YGCB/HX1/LL/RR2) % 67 P1266YHR (YGCB/HX1/LL/RR2) % 164 P1522YHR (YGCB/HX1/LL/RR2) % 127 P1625CHR (RW/HX1/LL/RR2) % 159 P1690AM (AM/LL/RR2) % mm Acres South Central Iowa Yld. Adv. / % Wins / Comps P0591AM1 (AM1/LL/RR2) % 21 P0993AM1 (AM1/LL/RR2) % 33 P1151AM (AQ/AM/LL/RR2) % 49 P1248AM (AQ/AM/LL/RR2) % 42 P1498AM (AQ/AM/LL/RR2) % mm Acres NW Illinois Yld. Adv. / % Wins / Comps P0945YXR (AQ/YGCB/HXX/LL/RR2) % 132 P0993AM1 (AM1/LL/RR2) % 142 P1215AM1 (AM1/LL/RR2) % 178 P1339AM1 (AM1/LL/RR2) % 174 P1360CHR (RW/HX1/LL/RR2) % mm Acres Southern Indiana Yld. Adv. / % Wins / Comps P0993HR (HX1/LL/RR2) % 117 P1105YHR (YGCB/HX1/LL/RR2) % 171 P1319HR (HX1/LL/RR2) % 206 P1360AM (AM/LL/RR2) % 122 P1602YHR (YGCB/HX1/LL/RR2) % mm Acres SO MO, NO AR Yld. Adv. / % Wins / Comps P0912HR (HX1/LL/RR2) % 48 P1105YHR (YGCB/HX1/LL/RR2) % 134 P1319HR (HX1/LL/RR2) % 242 P1685YHR (YGCB/HX1/LL/RR2) % 182 P1690HR (HX1/LL/RR2) % mm Acres VA, NC, Northern SC Yld. Adv. / % Wins / Comps P1105YHR (YGCB/HX1/LL/RR2) % 107 P1319HR (HX1/LL/RR2) % 134 P1456HR (HX1/LL/RR2) % 104 P1615BVT (AVBL/CB/LL/GT) % 111 P1690HR (HX1/LL/RR2) % mm Acres Source: 2013 Pioneer on-farm trial database as of October 31, Customer comparisons based on 2013 yield results including data from weigh wagon, yield monitor and PKP trials for all Pioneer brand hybrids against all competitors. Pioneer area leader package consists of a representative selection of the higher volume hybrids estimated for Individual results may vary. All data weighted by comparisons within 4CRM and adjusted to 15% moisture. Product performance is variable and subject to any number of environmental, disease and pest pressures 24

25 2013 Area Top Volume Leaders Package vs. All Competitors (Optimum AQUAmax Hybrids) EA Nebraska Yld. Adv. / % Wins / Comps P0876AM (AQ,AM,LL,RR2) % 32 P1151AM1 (AQ,AM1,LL,RR2) % 53 P1498AM (AQ,AM,LL,RR2) % mm Acres NO WS, EA MN Yld. Adv. / % Wins / Comps P9526AMX (AQ,AMX,LL,RR2) % 107 P9690AM (AQ,AM,LL,RR2) % 62 P0062AMX (AQ,AMX,LL,RR2) % mm Acres KS, SE CO, N NM, N TX, W OK Yld. Adv. / % Wins / Comps P0365YHR (AQ,YGCB,HX1,LL,RR2) % 42 P0876CHR (AQ,RW,HX1,LL,RR2) % 37 P1151AM (AQ,AM,LL,RR2) % mm Acres Southern Wisconsin Yld. Adv. / % Wins / Comps P9690AM (AQ,AM,LL,RR2) % 40 P0496AMX (AQ,AMX,LL,RR2) % 40 P0636AM1 (AQ,AM1,LL,RR2) % mm Acres WE Missouri Yld. Adv. / % Wins / Comps P0636HR (AQ,HX1,LL,RR2) % 11 P1151AM (AQ,AM,LL,RR2) % 33 P1498AM (AQ,AM,LL,RR2) % mm Acres Eastern Illinois Yld. Adv. / % Wins / Comps P0636AM1 (AQ,AM1,LL,RR2) % 51 P0945YXR (AQ,YGCB,HXX,LL,RR2) % 123 P1498CHR (AQ,RW,HX1,LL,RR2) % mm Acres Source: In 2013, Optimum AQUAmax products were grown in on-farm comparisons against competitive hybrids (+/- 4 CRM) in 775 water-limited environments; and 11,657 comparisons under favorable growing conditions. Water limited environments are those in which the water supply/demand ratio during flowering or grain fill was less than 0.66 on a 0-1 scale (1=adequate moisture as determined by Pioneer) using Pioneer's proprietary EnClass system and in which the average yield of the commercially available hybrids was less than 150 bu/acre. Moisture levels were measured at the nearest weather station. Favorable growing conditions are locations where yield levels were at or above 150 bu/acre on average, regardless of moisture levels. Product performance in water-limited environments is variable and depends on many factors such as the severity and timing of moisture deficiency, heat stress, soil type, management practices and environmental stress as well as disease and pest pressures. All hybrids may exhibit reduced yield under water and heat stress. Individual results may vary. Product performance is variable and subject to any number of environmental, disease and pest pressures. 25

26 2013 Area Top Volume Leaders Package vs. All Competitors (Soybeans) W MN, SE SD Yld. Adv. / % Wins 91Y % 92Y % P22T69R % 2.1 mm Acres NE Iowa Yld. Adv. / % Wins 92Y % 92Y % P25T51R % 1.0 mm Acres 2.3 mm Acres Ontario Yld. Adv. / % Wins 92Y % P19T01R % P25T51R % S Central Nebraska Yld. Adv. / % Wins 92Y % 93Y % P24T19R % 837 K Acres Michigan Yld. Adv. / % Wins 92Y % P22T69R % P26T76R % 2.0 mm Acres NW Illinois Yld. Adv. / % Wins 92Y % P28T33R % P35T58R % 1.6 mm Acres NO MS, WE TN Yld. Adv. / % Wins 95Y % P47T36R % P49T80R % 2.8 mm Acres Source: 2013 Pioneer on-farm trial database as of October 31, Customer comparisons based on 2013 yield results including data from weigh wagon, yield monitor and PKP trials compared against all competitors in the area indicated. Individual results may vary. Pioneer area leader package consists of a representative selection of the higher volume varieties estimated for All data weighted by comparison within 3RM. All soybean products listed contain the Roundup Ready trait. Product performance is variable and subject to any number of environmental, disease and pest pressures. 26