Download - Cs sept 15 final 16
DELIVERING SOLUTIONS. DELIVERING GROWTH.
Paul Schickler President, Pioneer Hi-BredA DuPont Business
September 15, 2011
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 StatementsDuring 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.
Developing MarketsTotal 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
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DUPONT FINANCIAL HIGHLIGHTS
* Excludes significant items. Refer to company website for detailed reconciliations of non-GAAP measures.
2010 Sales
2010 EPS*
$31.5B +21%$27.4 $29.4 $30.5
$26.1$31.5
2006 2007 2008 2009 2010
2010 Dividend
$2.88 $3.28$2.78
$2.03
$3.28
2006 2007 2008 2009 2010
$ in
Billi
ons
$3.28 +62%
$ pe
r sha
re$1.48 $1.52 $1.64 $1.64 $1.64
2006 2007 2008 2009 2010
$ pe
r sha
re
$1.5B
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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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© 2011 E.I. du Pont de Nemours and Company. All Rights Reserved.
DUPONT CRITICAL SUCCESS FACTORS
DIFFERENTIATED portfolio management
Growth from INNOVATION driven by megatrends
PRODUCTIVITY that out-performs peers
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INNOVATION: INVESTMENT IN MEGATRENDS2010 DuPont Pro Forma R&D ~$1.8B
15%
11%
9%
5%
60%
Decreasing Dependence on Fossil Fuels
Protecting People and the Environment
Chemicals and Materials
Electronics
Increasing Food Production
Chemistry
Engineering
Materials Science
Nanotechnology
Industrial Biotech
Ag Biotech
U.S. FarmIncome
World Stock-to-Use Ratios
CommoditiesFood Production Goals
PRODUCTION AGRICULTURE GROWTH DRIVERS
70%Production Increase
to meet demand by 2050
Prices Elevated/Volatile small supply/demand changes
equate to large impacts
Multiple Crop Ratios Flat to Down ’09 –’10
rebuild likely a multi-year process
2011 Income AboveHistoric Levels
strong 2012 income outlook
7Sources: Various industry projections. These are not specific estimates from Pioneer Hi-Bred. ©2011 PHII.
The World Growth 1990-2011 Impact on World Grains and Oilseeds
FOUNDATION FOR LONG TERM AGRICULTURE GROWTH
Population +34% [1.7%/yr]
Income +68% [3%/yr]
Crude Oil Consumption +30% [2%/yr]
Meat Consumption +60% [3%/yr]
Grains & Oilseeds +37% [2%/yr]
Grains & Oilseeds Area:+11% [0.5%/yr]9%
12%
15%
18%
21%
24%
27%
30%
33%
1,200
1,400
1,600
1,800
2,000
2,200
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
ProductionTotal useStocks / Use (Right Axis)
Source: USDA 8
Historic Soybean Yield ProgressHistoric Corn Yield Progress
HISTORIC CROP PROGRESS
9
137
142
147
152
157
162
167
May Jun Jul Aug Sep Oct Nov FINAL
2006 2007 2008
2009 2010 2011
Bu/Acre
38
39
40
41
42
43
44
45
46
May Jun Jul Aug Sep Oct NovFINAL
2006 2007 20082009 2010 2011
Bu/Acre
Source: USDA
SoybeansCorn
USDA’s ENDING STOCKS AND AVERAGE CROP PRICEMulti-Year Process to Rebuild Key Crop Stocks and Moderate Commodities
3.00
3.50
4.00
4.50
5.00
5.50
6.00
6.50
7.00
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2006 2007 2008 2009 2010 May '11 Jun '11 Jul '11 Aug '11 Sept '11
Stocks (Left Axis)Farm Price (Right Axis)
Mil Bushels $/BU
6.00
7.00
8.00
9.00
10.00
11.00
12.00
13.00
14.00
0
100
200
300
400
500
600
2006 2007 2008 2009 2010 May '11 Jun'11 Jul'11 Aug'11 Sept '11
Stocks (Left Axis)Farm Price (Right Axis)
$/BU Mil Bushels
10Source: USDA WASDE
RECENT HISTORY of U.S. CROP ACREAGECommodity Prices Are Economic Driver Deciding Acreage Distribution
2007USDA
2008USDA
2009USDA
2010USDA
2011USDA Est
Corn 93.5 86.0 86.5 88.2 92.3Soybeans 64.7 75.7 77.5 77.7 75.2Wheat 60.5 63.2 59.2 53.6 56.4Upland cotton 10.5 9.3 9.0 10.8 13.4Rice 2.8 3.0 3.1 3.6 2.78 other crops 22.1 22.8 19.5 18.0 17.0Total 254.1 260.0 254.9 251.9 257.0
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SEED BUSINESS – GROWTH MODEL Growth, Productivity and Targeted Investment
Balanced Growth
• North America corn & soybean growth
• International seed expansion
• Extensions tonew crops
Margin Expansion
• World classroute-to-market
• Production productivity
• Leverage technology into new crops
• Leverage global support services
Investing for Sustainable Growth
• Biotechnology and breeding
• Right Product Right Acre capabilities
• Global infrastructure
12©2011 PHII.
North America• #1 in Corn • #1 in Soybean• Growing Canola
SEED BUSINESS Growing the Global Business
Europe• #1 in Corn• Oilseed Rape &Sunflower Opportunity
Latin America• Brazil Corn Price &Technology Leader
• Brazil SoybeanMomentum
• Argentina Resurgence
Asia• Leading China Corn Position
• Growing India &ASEAN
Global Infrastructure To ServeAdvantaged route-to-market strategy
and robust, global supply chain
Strong Breeding & Biotech Capability
Using global breeding advancements, native traits & biotech trait optimizing local
solutions
Delivering Global Growth TODAY2011 Sales growth contribution split
evenly between International and North America Regions
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2011 Sales Growth Drivers
SEED BUSINESS Winning Strategy and Execution Continues to Deliver Industry Leading Results
2007 2008 2009 2010 2011E
CornSoybeanOther
Global Seed Sales* ($B)CAGR 2007–2010:
N.A. volume and value growth
Europe price gains and volume growth on expansion of biogas segment & oilseed
L.A. volume, Brazil price gains reflecting leading technology
Asia volume
Currency
N.A. 4Q 2010 strong comp
+
–
+
+
+
+
14Segment sales include transfers
2007 2010
Latin America Seed Sales
SEED BUSINESS - LATIN AMERICA Strong Market Position Delivered Growth; Strong Outlook
2011 Growth Drivers• Corn & soybean volume gains
• Ag fundamentals, acreage • 2nd brand expansion continues
• Technology adoption • Bt and weed control traits
2010 Accomplishments
• High teens sales growth• Value and currency gains• Growth in corn and soybean• Lower Brazil corn hectares
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SEED BUSINESS - BRAZIL CORN Continued Leadership in Value and Bt Penetration
Pioneer Sales: Bt PenetrationSummer season % trait distribution of sales
Strong Product Line-up
• >85% Bt product penetration in 2010 summer season sales
• Providing leading technology choices to farmers
• 2011 Continued strong HX1 performance and conversion
• Germplasm + native gene + Biotech trait approach
HX1 = Herculex® I insect protection by Dow AgroSciences and Pioneer Hi-Bred. ® Herculex and the HX logo are registered trademarks of Dow AgroSciences LLC. Also change Yieldgard footnote to: ® YieldGard and the YieldGard Corn Borer design are registered trademarks used under license from Monsanto Company
96%
40%
16%9%
4%
43%
14%
3%
17%
70%
86%
2%
0
10
20
30
40
50
60
70
80
90
100
2008 2009 2010 2011E
Base YG Hx1 "Double"
©2011 PHII.N.A. Seed Business 2011 Success is Clear
SEED BUSINESS – NORTH AMERICARight Product Right Acre – A Clear Differentiator
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Mid-Single Digit Net Price Increases
Share Gain in 3 Crops
InnovativeTechnology
Local Product Advancements
Advantaged Route-to-
Market
©2011 PHII.
N.A. Corn 2011 Sales Drivers
SEED BUSINESS - CORNNorth America Corn Business Growth Drivers
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Optimum® AcreMax® 1 Launch 1st corn rootworm refuge solution
in-the-baglaunched on almost 4 million acres
PROaccess℠ Business Unit StrategyAlternative distribution systemsConverting to Pioneer genetics
Providing growers choices
Pioneer® Brand Concentration of Newest Hybrid Classes 2011 performance strong
including AQUAmax™ drought
Company estimates ©2011 PHII.
N.A. Demonstrated Success
-25%
0%
25%
50%
75%
Corn Market Share%
mar
ket s
hare
2008 2009 2010 2011
30%35%
(Pioneer N.A. Corn Market share Pioneer® brand & PROaccessSM)*
32%36%
Far West• Drought
• Brittle Snap• Head Smut• Goss’s Wilt
SEED BUSINESS - CORNLeading Breeding Capabilities Enables Right Product Right Acre
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RPRA Differentiates Pioneer
Breeding Hybrids Locally to Solve Our Growers Issues
IMPACTTM Trials Supports Local Product Advancement Targeted Drought
• Drought• Fusarium
• Stress Emergence• Brittle Snap
2020
OPTIMUM® ACREMAX® INSECT PROTECTION FAMILY Suite of Integrated Refuge Reduction Products: Choice, Convenience, Yield
Integrated Single-bag Refuge for
Above Ground Insect Management
First and Only Refuge In-the-bag for Corn Rootworm Insect Management
Integrated Single-bag Refuge for Above and Below Ground Insect
Management
Launched in 2011 on Almost
4 Million Acres2012 Introduction 2012 Introduction
Herculex® Insect Protection technology by Dow AgroSciences and Pioneer Hi-Bred. ® Herculex and the HX logo are registered trademarks of Dow AgroSciences LLC. Ignite®, LibertyLinkand the Water Droplet Design are trademarks of Bayer. ® YieldGard, the YieldGard Corn Borer design, and Roundup Ready are registered trademarks used under license from Monsanto Company. LibertyLink ® and the Water Droplet Design are registered trademarks of Bayer. ©2011 PHII.
OPTIMUM® ACREMAX®
Powerful 2011 Launch with Momentum Moving Into 2012
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Herculex® Insect Protection technology by Dow AgroSciences and Pioneer Hi-Bred. ® Herculex and the HX logo are registered trademarks of Dow AgroSciences LLC. Ignite®, LibertyLink and the Water Droplet Design are trademarks of Bayer. ® YieldGard, the YieldGard Corn Borer design, and Roundup Ready are registered trademarks used under license from Monsanto Company. ©2011 PHII.
2012 Ramp Up Plans
-25%
0%
25%
50%
75%
2011 2012
Optimum® AcreMax® 1 and XTRA conversion of Herculex Xtra
Optimum® AcreMax®
5-10% Conversion of Herculex® 1 Insect Protection in 2012
Optimum® AcreMax® PenetrationPremium products on introduction
trusted by farmers
Optimum® AcreMax® 1 and XTRA~65% Conversion of Herculex® XTRA
Insect Protection in 2012
Focused on Fast “Triple” Conversion
65%
* Company estimates ©2011 PHII.
N.A. Soybean 2011 Sales Drivers
SEED BUSINESS - SOYBEANNorth America Soybean Business Continues Momentum
Strong Service OfferingSeed treatments, PRObulk® system,
agronomy support, financing, insurance
Varieties Developed LOCALLY Leading genetics with agronomics
and disease packages using AYT™ breeding techniques
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N.A. Demonstrated Success
-25%
0%
25%
50%
75%
Soybean Market Share%
mar
ket s
hare
2008 2009 2010 2011
(Pioneer NA Soybean Market SharePioneer® brand & PROaccess®)*
26%23%32% 36%
PROaccess℠ Business Unit StrategyAlternative distribution systemsConverting to Pioneer genetics
Providing growers choices
SEED BUSINESS – SOYBEAN Local Issues Drive Our Local Product Development & Advancement
NORTH & NORTHWEST
• Iron Chlorosis• Phytophthora• Cyst Nematode• White Mold
SOUTHWEST• Drought• Cyst Nematode• Sudden Death
Syndrome
WEST• Phytophthora• Iron Chlorosis• Cyst Nematode• Sudden Death
Syndrome SOUTHEAST• Cyst Nematode• Phytophthora• Root Knot
Nematode• Stem Canker• Frogeye Leafspot• Sudden Death
Syndrome
EAST & NORTHEAST• Phytophthora• Cyst Nematode• White Mold
CENTRAL• Brown Stem Rot• Phytophthora• Cyst Nematode• Sudden Death
Syndrome• White Mold
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LEADING PIPELINE OF INNOVATIONS IN SOYBEANBuilding a Stream of Innovation
24Y series contains Roundup Ready® technology. Roundup Ready® is registered trademarks of Monsanto Company. Plenish™ is a registered trademarks of Pioneer Hi-Bred. Plenish and dual mode herbicide products are not yet available for sale or use. Products, benefits and concepts described are subject to full regulatory approval. ©2011 PHII.
Y Series Soybeans
Plenish TM
High Oleic Soy
Pioneer Soybeans with Next Generation Herbicide Solutions
Pioneer Soybeans with Insect Protection
Germplasmadvancements Including disease resistance produced using AYT™ System
Plenish™ High Oleic Soybeans offering same industry leading yield with improved content
2012 Intro /Multi Yr Penetration
New Innovative Varieties Every Year
2nd Half of Decade /Offering Growers Choice
Achieve Global Growth
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• 2012 seed sales growth underpinned by volume growth and net price gains
• Drive Right Product Right Acre differentiator
• New hybrids including ramp up of AQUAmax™ drought
• Full supply supporting RPRA
• Momentum with AcreMax® Family
• Extend seed lead in international markets
• Continue investing for product and technology innovation
• Deliver key pipeline advancements
* Excludes significant items. Refer to company website for detailed reconciliations of non-GAAP measures.
SEED BUSINESS 2012 PRIORITIESExecute 2012 In Line With The Long Term Plan
AGRICULTURE & NUTRITION (Ex-Danisco)Sales Growth 8-10% CAGR (2010-2015E)
* Segment sales include transfers. ** Excludes significant items. Refer to company website for detailed reconciliations of non-GAAP measures. ©2011 PHII.
Key Growth Opportunities
PTOI Margin Expansion
• North America corn seed• North America soybean & other
crops• International seed• Crop protection products pipeline• Food & nutrition products
• Margin target 19-21%• Gross margin expansion• G&A leverage• Continued investments:
• Selling expense constant % of sales• Increase rate of R&D investment
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