Dupont De Nemours, Inc. · NYSE:DD
Dupont De Nemours — DuPont — Investor Day (November 2018)
34 slides from Dupont De Nemours's investor day presentation, Nov 8, 2018
Slide 1: DuPont: Creating a world-class specialty solutions provider
DuPont November 8, 2018 Creating a world-class specialty solutions provider
Slide 2: Ed Breen
Ed Breen Executive Chairman Elect, DuPont
Slide 3: Introducing the new DuPont – a powerful portfolio
Introducing the new DuPont – a powerful portfolio Market-leading GDP+ exposure and Balanced and global businesses secular growth diversified portfolio › Natural business combinations from › Global businesses each serving end › Balanced revenue across segments and integration of DuPont, Dow, Dow mark
Slide 4: Levers to drive shareholder value
Levers to drive shareholder value Innovation-led growth Active portfolio Balanced financial management and policy disciplined capital allocation Organization aligned Best-in-class around performance operating model 4
Slide 5: Results consistent with key metrics
Results consistent with key metrics 2016-2018E organic revenue CAGR of 5% 2016-2018E adjusted operating EBITDA margin expansion of ~240 Strong financial metrics bps Free cashflow conversion >90% Driving improvement in ROIC High performing, innovation-driven, premium specialized solutions company Not
Slide 6: DuPont is poised to deliver best-in-class performance among peers
DuPont is poised to deliver best-in-class performance among peers FISCAL YEAR 2018E Organic Adjusted Operating Adjusted Operating Adjusted Operating Revenue Growth EBITDA Margin EBITDA* Growth EBITDA Leverage** 5% 28% 13% 1.6x MMM MMM MMM MMM HON HON HON HON ITW ITW ITW ITW Strong performance across
Slide 7: Marc Doyle
Marc Doyle Chief Executive Officer Elect, DuPont
Slide 8: DuPont: Synergistic combination of world-class businesses
DuPont: Synergistic combination of world-class businesses NUTRITION & BIOSCIENCES ELECTRONICS & IMAGING 67% › Systems and Texturants › Bioactives › Semiconductor › Advanced Printing › Protein Solutions › Biomaterials Technologies › Display Technologies › Emulsifiers and › Microbial Control › Interco
Slide 9: Innovation-led growth
Innovation-led growth Market Drivers Technology Drivers Connectivity and Mobility Digital Revolution Healthy Living Biotechnology Worker Safety Sustainability Sustainable Development DuPont has distinct advantaged positions to capitalize on high growth opportunities 9
Slide 10: Innovation-led growth
Innovation-led growth DIGITAL REVOLUTION BIOTECHNOLOGY SUSTAINABILITY › Automotive Electrification › Industrial Enzymes › Light-Weighting and Energy Efficiency › Artificial Intelligence › Probiotics and Microbiome › Energy Efficient Construction › 5G Wireless and Big Data › Clean Label › Clean Water
Slide 11: Innovation-led growth
Innovation-led growth Innovation Playbook We address in chosen end markets Important Focus on lower-risk, high-return projects through and valuable application development and customer-driven customer needs innovation Align best practices for tracking innovation metrics Where create Extend our compe
Slide 12: Best-in-class operating model
Best-in-class operating model Larger, more empowered businesses as the center of gravity › Business leaders have full P&L responsibility › Return focus at business level Best-in-class benchmarking for all businesses and functions › Relentless focus on productivity › Renewed focus on driving manufact
Slide 13: Best-in-class operating model
Best-in-class operating model Innovation Excellence Commercial Excellence Operational Excellence › Disciplined pipeline › Strategic pricing and › EH&S best practices management branding › Operational efficiency › Transparent metrics › Key account › Capital planning and › Emerging innovation manageme
Slide 14: Active portfolio management and disciplined capital allocation
Active portfolio management and disciplined capital allocation Disciplined Investing Capital Allocation Priorities Capex Spending* › Investing R&D in customer-driven › Invest R&D and capex in most › Targeting spend at 4-5% of net innovations attractive highest-value sales, in line with D&A businesse
Slide 15: Active portfolio management and disciplined capital allocation
Active portfolio management and disciplined capital allocation Revenue Operating EBITDA Financial Profile ~$750 million Margin ~9% Divestiture Targets Principles 2017 2018 › Low Product › Overall goal of divesting Differentiation ~10% of portfolio › Better Owner Diagnostics Authentication Alginates*
Slide 16: Active portfolio management and disciplined capital allocation
Active portfolio management and disciplined capital allocation HIGHLY ATTRACTIVE SUSTAINABLE VALUE DIFFERENTIATED FINANCIAL INDUSTRY CREATING FOR PROFILE LEADER DUPONT › Protected product and/or › Sales growth > GDP › Unique competitive and › Investment returns above process technology › Strong EBIT
Slide 17: Organization aligned around performance
Organization aligned around performance World-class › Deep industry experience management team › Diverse backgrounds from heritage companies Performance- › New culture tenets launched in 2018 driven culture › Employee engagement and energy levels high Management incentives › ROIC framework being ins
Slide 18: DuPont has multiple levers to drive shareholder value
DuPont has multiple levers to drive shareholder value › Leadership position in key high-growth end markets Innovation-led growth › Rigorous approach to investments through customer-driven innovation Active portfolio › Return-driven portfolio decisions management › Targeting ~10% top line divestment
Slide 19: DuPont has multiple levers to drive shareholder value
DuPont has multiple levers to drive shareholder value › Lean cost structure supporting improved execution Best-in-class operating › Targeting corporate costs at <1% of revenue model › Productivity and continuous improvement mindset › World-class management team Organization aligned around › Performa
Slide 20: Jeanmarie Desmond
Jeanmarie Desmond Chief Financial Officer Elect, DuPont
Slide 21: Key metrics for the new DuPont
Organic revenue growth Key metrics Operating EBITDA leverage for the Free cashflow conversion new DuPont Return on invested capital 21
Slide 22: Synergy capture is on track
Synergy capture is on track Realized savings Met run rate target of 75% of $1.065B savings by Q3 2018 and on track for 100% by Q3 2019 ($ millions) $900 Savings breakdown: › 25% headcount-related fixed cost › 35% non-headcount related fixed cost › 40% non-headcount related variable cost $450 Long-te
Slide 23: Realizing significant improvement in employee productivity
Realizing significant improvement in employee productivity Net Sales ($ thousands) Adjusted Operating EBITDA ($ thousands) +28% +57% 782 222 612 141 Specialty Products Division Specialty Products Division Note: Represents amounts 2016 only heritage DuPont businesses 2018 based on new portfolio with
Slide 24: Disciplined operating model enabling strong financial control
Disciplined operating model enabling strong financial control Increased financial ownership by Global processes focused on Transparency is a key focus each business delivering best-in-class functions › Internal accountability for KPIs › P&L and capital deployment › Leveraged scale to deliver lowest
Slide 25: Driving returns on capital investments
Driving returns on capital investments Enabling top line growth Operating margin expansion ROIC improvement • New product innovations leading • Strong operating leverage • Portfolio balanced toward lower- to increased market penetration risk, high return investments • Productivity offsetting inflati
Slide 26: Targeting strong top and bottom line growth for full year 2018
Targeting strong top and bottom line growth for full year 2018 Adjusted Net sales growth ~8% operating EBITDA ~13%* growth › Organic sales growth of ~5%; organic growth across › Robust adjusted operating EBITDA margin of ~28% all segments › Driving >100 bps of operating EBITDA margin › Pricing stren
Slide 27: Driving strict cost control
Driving strict cost control Corporate costs 2017: ~$390 million* › Driving to less than 1% of sales at spin At separation: ~$150 million › Includes pre-commercial R&D spend and other costs directly supporting businesses 2017: ~$245 million Additional segment costs At separation: ~$170 million › Driv
Slide 28: Medium-term financial targets
Medium-term* financial targets › Average global GDP growth of 3% Organic revenue 3-5% › New products driving price and margin gains growth › Diverse set of customers and end markets Operating EBITDA › Completion of cost synergy program leverage 1.5x › Productivity gains offsetting inflation › Gross
Slide 29: Capital structure overview
Capital structure overview Targeting strong investment Expected long Expected liquidity grade credit rating term obligations ▪ Targeting rating of BBB+ ▪ ~$16 billion of long term ▪ ~$2 billion operating debt cash balance ▪ Committed to high quality credit profile ▪ ~$1 billion unfunded ▪ ~$3 billio
Slide 30: Balanced financial policy
Balanced financial policy Strong balance sheet Committed to a strong investment grade credit profile Internal investment Disciplined capital allocation to support product and market innovation Stable and growing dividend; targeting ~30-40% payout of adjusted net Dividends income Portfolio management
Slide 31: Safe Harbor Statement
Safe Harbor Statement This presentation contains “forward-looking statements” within the meaning of the federal securities laws, including Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. In this context, forward-looking state
Slide 32: Safe Harbor Statement, continued
Safe Harbor Statement, continued Non-GAAP Information: This presentation includes information that does not conform to U.S. GAAP and are considered non-GAAP measures. These measures include operating EBITDA and operating EBITDA margin, and pro forma operating EBITDA and pro forma operating EBITDA ma
Slide 33: Non-GAAP Reconciliation
Non-GAAP Reconciliation <OUPONT> Electronics & Imaging in millions 1ais 2016 +~=«3016~=—«QG | 2016 | 1017 2017 3017 40%7 | 217 | 1018 2018 3Qi8 | 2018 ro Forma Pro Forme PreForma froFoma Pro Forma |Pre Forma fro Forma Pro Forma As Reported |Pro forma |As Reported As Reported As Reported |As Reported
Slide 34: Non-GAAP Reconciliation
Non-GAAP Reconciliation <OUPONT> Electronics & Imaging lin milfions ais 2015 3ais = ais | 2016 | 1017 2017 «3017s aay | 2017 ] 1018 2018 ais | 2018 lpro Forma Pro Forma Pro Forma ProFormo |Pro Forma |Pro Forma Pro Forma FroForma As Reported |Fro Forma |AsReported As Reported As Reported |As Reported