DuPont Performance Materials

Transcription

1 DuPont Performance Materials Tom Connelly Executive Vice President 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 Forward Looking Statements During the course of this presentation ti we may make forward-looking statements t t or provide forward-looking information. All statements t t that t address expectations or projections about the future are forward-looking statements. Some of these statements include words such as "expects," "anticipates, "plans," "intends," "projects," and "indicates. 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 economic conditions, competitive pressures, challenges associated with research and development, market acceptance of new products, and regulatory approval. We urge you to review DuPont's SEC filings, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, for a discussion of some of the factors which could cause actual results to differ materially. The Company does not undertake to update any forwardlooking 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 of

2 Performance Materials Mission Deliver earnings and cash growth through cost and working capital productivity while making selective growth investments, providing innovative materials and expert applications development that t enhance customers product performance and reduce total system cost 3 Performance Materials Key Messages Productivity it Streamline inventory and distribution Continue improvements in energy and ingredient consumption Product line optimization Innovation driven by megatrends Light weighting for improved energy efficiency Renewably-sourced materials Growth in developing markets 4

3 Performance Materials Key Growth Opportunities Sales and Margin Outlook Sales* ($B) Pre Tax Margins** (%) $ Ongoing productivity $6.6 $6.4 New products for high performance applications $6.2 $4.8 16% Renewable materials 1517% 12% 7% p g markets Developing % E 2015E 201 margins 2015 i %; 1 % sales l growth h 44-6% 6% CAGR ( E) ( E) 5 * Segment sales include transfers. * * Excludes significant items. Refer to company website for detailed reconciliations of non-gaap measures. DuPont Packaging & Industrial Polymers (P&IP) Bill Harveyy President 6

4 P&IP: Working Capital Productivity Opportunity: DPS Role: Result: Identify ineffective inventory due to process constraints LEAN mapping to identify root cause and process upgrades $10 million working capital reduction and liberated capacity for sales Order process Packaging and product release time Ocean vessel lead times This and other actions have improved IDS by >10% since 2007; expect additional 5% improvement by Business Overview: Ethylene Copolymers Copolymers Value Pyramid p P&IP operates its assets at full capacity Our flexible assets produce a diverse di portfolio tf li off specialty products We make choices of the applications li ti we d develop l and markets we serve VAMAC Elastomers Surlyn Ionomer P&IP Elvaloy Driving the value Unique Polymers Bynel Elvaloyy AC Elvax Fusabond Nucrel mpe Acrylates LDPE 8 EVA LLDPE Extrusion Polymers ACR HDPE Focus area for most of our competitors

5 P&IP Key Market Trends & Opportunities Key End Markets 2011 Market Outlook Market Growth Drivers E CAGR Food Packaging Stable market with growth in developing regions as supply chains improve Convenience, cost-reduction, enhanced performance, sustainability and down-gauging 3-6% Infrastructure & Construction Growth in developing economies, particularly for paving, mining and commercial construction Improved performance, durability, lower cost, reduced maintenance 7-10% Energy Continued high growth with photovoltaic adoption rates and oil and gas pipeline upgrades Durability, clarity and costefficiency 10-20% Consumer Modest growth across broad base of applications that improve durability or enhance design capability Consumer confidence and adoption rate for new materials 5-7% 9 P&IP Growth Opportunities: Protective Layers Market need: materials to improve total system cost, durability & performance Wood plastic composites P&IP materials extend life and reduce maintenance of decking PV encapsulants Multiple solutions to increase economic lifecycle of underlying module; with opportunities for next gen solutions Encapsulant film based on one of the following: DuPont PV5200 DuPont PV5300 DuPont Elvax Wood composite decking Other examples Golf balls, paving modifiers, detonator t cords encapsulant crystalline silicon / thin film Encapsulants for photovoltaics 10

6 P&IP Summary 2011 Actions 2011 Expectations Productivity is core to execution plan Modest top line growth from sold out assets Focus on mix enrichment and pricing Price increases offset higher raw materials Selective growth in: Packaging and protective layers Developing regions PTOI leverage from richer mix Expand superior competitive position on working capital productivity 11 DuPont Performance Polymers (DPP) Diane Gulyas President 12

7 DPP Key Market Trends & Opportunities Key End Markets 2011 Market Outlook Market Growth Drivers E CAGR Auto Increased % plastics per car + growth in Asia Desire for increased fuel efficiency and high temp performance 4-6% Industrial Consumer & Energy Continued growth worldwide, especially developing economies Improved performance, durability, lower cost, reduced maintenance, 5-7% regulatory compliance, need for potable water Electrical & Electronic New applications in broad range of handheld devices Added functionality, lightweight, impact resistance and aesthetics 5-7% 13 DPP Competitive Landscape Performance PEI PAR PES PSU PC MPPE PEK PPS *HPPA*PI *NYLON *TEEE *PBT *ACETAL *PET High performance ~$4 billion Engineering ~$23 billion ABS PMMA PP PVC LDPE PS SAN HDPE Standard ~$200 billion *DuPont Resins Cost AMORPHOUS transparency & good surface SEMI CRYSTALLINE high temperature & mechanical strength We have the broadest offering of high h value polymers 14

8 DPP Cost Productivity Hold breakeven point improvements New, more flexible assets in Asia, closer to customer Fixed Cost Productivity (as % of sales) Continue to drive product line simplification Maintain headcount reductions Continue improvements in energy utility and ingredient yield Streamline shipping lanes & warehousing E 2015E Delivering i >$100 million in savings in DPP: Collaboration for Rapid & Responsible Innovation Joint development with Takata launched DuPont Hytrel RS: the first renewably-sourced thermoplastic elastomer in an airbag system General Motors fast adoption of DuPont Zytel PLUS nylon in an engine cover earned the 2010 SPE Award for Most Innovative Use of Plastics 16

9 DPP Summary 2011 Actions 2011 Expectations Ongoing productivity Application development focused on metal replacement and key performance attributes Exploit Zytel PLUS FC as % of sales down 100 bps Growth in automotive based on auto builds and metal replacement New adoptions and growing momentum For Zytel PLUS Price increases offset higher raw materials 17 Performance Materials 2011 Priorities Sales and Margin Outlook Industry-leading productivity New products and applications Value capture & price focus Growth in electronics and PV Increase penetration in Asia Sales* ($B) Pre Tax Margins** (%) $ $6.6 $6.4 $6.2 $4.8 16% 15-17% 12% 7% 6% E 2015E * Segment sales include transfers. 18 * * Excludes significant items. Refer to company website for detailed reconciliations of non-gaap measures.