Dupont De Nemours, Inc. · NYSE:DD
Dupont De Nemours — DowDuPont — Citi Basic Materials Conference 2018
15 slides from Dupont De Nemours's conference presentation, Nov 27, 2018
Slide 1: The New Dow: Financial Strength, Flexibility & Discipline
THE NEW DOW: FINANCIAL STRENGTH, FLEXIBILITY & DISCIPLINE Citi Basic Materials Conference November 27, 2018 Howard Ungerleider President and Chief Financial Officer, Dow Chief Financial Officer, DowDuPont
Slide 2: The New Dow: A Compelling Investment Opportunity
THE NEW DOW: A COMPELLING INVESTMENT OPPORTUNITY HIGHER EARNINGS & CASH FLOW HIGHER VALUE • Reduced cost structure • Greater financial & capital discipline • Suite of low-risk growth projects • Streamlined, focused portfolio • Cycle discipline • Lower volatility vs. peers • Lower Capex • Higher ROIC
Slide 3: The New Dow Portfolio: Powerful Scale and Leading Positions
THE NEW DOW PORTFOLIO: POWERFUL SCALE AND LEADING POSITIONS PERFORMANCE MATERIALS INDUSTRIAL INTERMEDIATES PACKAGING & SPECIALTY PLASTICS & COATINGS & INFRASTRUCTURE Packaging and Hydrocarbons & Consumer Solutions Coatings & Monomers Polyurethanes & CAV Industrial Solutions Specialty Plastics Energy
Slide 4: Our Financial Goals
OUR FINANCIAL GOALS Disciplined capital allocation and strong credit profile across the cycle LEADERSHIP Operating return on invested capital > 13% Management COMPENSATION incentives METRICS squarely • ROIC aligned with • Relative TSR Grow bottom-line faster than top-line shareholders • EBIT Growth
Slide 5: New Dow's Disciplined Capital Allocation Framework
NEW DOW’S DISCIPLINED CAPITAL ALLOCATION FRAMEWORK CREDIT GROWTH DIVIDEND SHARE PROFILE INVESTMENTS POLICY REPURCHASES • Strong investment-grade • Lower-risk capex spending • Industry-leading long-term • Share repurchases are a credit profile across the payout ratio target across consistent part of
Slide 6: New Dow Will Have a Strong & Flexible Balance Sheet
NEW DOW WILL HAVE A STRONG & FLEXIBLE BALANCE SHEET $11-12B OF AVAILABLE LIQUIDITY AT SPIN MANAGEABLE DEBT MATURITY PROFILE Cash & Cash Equivalents Revolver $4.5B term loan; $3B $5B Dow holds option to extend maturity $ billions to 12/2021 Committed A/R Securitization $1.3B $2.5 $1.9 $1.8 Bilateral
Slide 7: Driving ROIC Above Our Target on a Consistent Basis
DRIVING ROIC ABOVE OUR TARGET ON A CONSISTENT BASIS DowDuPont • ROIC target of ≥ 3% spread over our WACC, merger & business re-alignment Chlorine Dow Corning WACC chain ownership across the cycle divestiture restructure 14% + 3% Styron divestiture Introduced • Significant progress made to drive ROIC
Slide 8: Significant Near-Term Earnings Upside Potential
SIGNIFICANT NEAR-TERM EARNINGS UPSIDE POTENTIAL MULTIPLE VALUE LEVERS DIRECTLY IN OUR CONTROL… …AND MORE POTENTIAL $200MM- $600MM- $400MM • JV improvements – MEGlobal $1,100MM USGC capacity add, Sadara ramp $400MM- $750MM • Continuous productivity to at least ~$900MM offset cost inflation ~$300MM GR
Slide 9: Targeted Levers to Drive Higher EBITDA-to-CFFO Conversion
TARGETED LEVERS TO DRIVE HIGHER EBITDA-TO-CFFO CONVERSION CASH FLOW OPPORTUNITY (vs. 2018E) Merger-Related Reduce integration, separation and Costs restructuring costs ~$1B ~$100MM for every Net Working Capital Drive net working capital efficiency 1 day improvement Pension Contributions Reduced volu
Slide 10: Strong Financial Position Enables Attractive Shareholder Returns
STRONG FINANCIAL POSITION ENABLES ATTRACTIVE SHAREHOLDER RETURNS DIVIDEND PAYOUT RATIO (2013-2017 AVG) • Targeting industry-leading long-term dividend payout ratio across the cycle of ~45% of Net 45% Income S&P Chems (2013-2017 Avg)(1): 41% • Provides attractive dividend and profitable growth • Grow
Slide 11: The New Dow: A Compelling Investment Opportunity
THE NEW DOW: A COMPELLING INVESTMENT OPPORTUNITY Low-risk, profitable business growth – in our control $2B to EBITDA Upside vs. 2Q18 TTM Accelerated bottom-line growth with synergies & productivity >$3B Path to sustainably higher ROIC across the cycle >13% ROIC Target Across the Cycle Better earning
Slide 12: Thank You
THANK YOU
Slide 13: Safe Harbor Statements
SAFE HARBOR STATEMENTS Cautionary Statement about Forward-Looking Statements This communication 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
Slide 14: Safe Harbor Statements (Continued)
SAFE HARBOR STATEMENTS (CONTINUED) Cautionary Statement about Forward-Looking Statements, continued Discussion of segment revenue, operating EBITDA and price/volume metrics on a divisional basis for Materials Science is based on the combined results of the Performance Materials & Coatings, Industria
Slide 15: Definitions
DEFINITIONS Definitions Pro Forma Operating EBIT is defined as pro forma earnings (i.e., pro forma “income from continuing operations before income taxes”) before interest, excluding the impact of adjusted significant items. Pro forma Operating EBITDA is defined as pro forma earnings (i.e., pro form