WILMINGTON, Del., Dec. 9, 2010 /PRNewswire/ -- During DuPont's (NYSE: DD) 2010 Investor Day, Chair and CEO Ellen Kullman and the company's senior leaders outlined an integrated global strategy to deliver sustained growth, productivity gains, operating leverage, and disciplined execution in 2011 and beyond.
DuPont reaffirmed its 2010 earnings per share (EPS) target of about $3.10 per share, excluding significant items, and established its 2011 EPS outlook at a range of $3.30 to $3.60 per share, despite an anticipated decline in pharmaceutical royalties of about $280 million due to patent expirations. From 2010 through 2015, DuPont expects EPS growth of about 12 percent compounded annually, excluding significant items.
The company expects sales in the range of $33-$34 billion in 2011 with compound annual top-line growth of about 7 percent in the period 2010 through 2015. DuPont indicated full-year 2010 sales growth will be about 20 percent, doubling the 10 percent target set one year ago. This solid performance was driven by strong agricultural markets, industrial market recovery, market share gains and faster product introductions.
DuPont also announced it expects fixed-cost productivity gains of about $300 million and additional working capital productivity of about $300 million in 2011. In 2010 alone, DuPont generated more than $400 million in fixed-cost productivity gains, well ahead of plan, while meeting its commitment of maintaining 75 percent of its $1 billion of fixed-cost savings from 2009.
"We met or exceeded our 2010 targets and are finishing the year as a stronger company with a solid growth outlook through 2015," Kullman said.
DuPont is ending 2010 with a strengthened balance sheet and free cash flow expected to be greater than $1.7 billion, despite a $500 million voluntary contribution to the principal U.S. pension plan in September.
"Our strong balance sheet served us well through the downturn. It continues to give us flexibility to pursue growth opportunities, including acquisitions this year in our seeds and safety businesses, while still providing attractive returns to shareholders," Kullman said.
Detailed presentations by DuPont leaders specifically emphasized the tremendous growth opportunities presented by the projected increase in global population – more than 7 billion people in 2011 and more than 9 billion by 2050. This growth will translate into robust global demand for food, less dependence on fossil fuels and demand for safety and protection across a wide range of needs. DuPont is well-positioned to meet these global megatrends through science-powered innovation and collaborations connected to customer needs. About 85 percent of DuPont's R&D resources in 2010 were directed to innovations addressing the megatrends.
At the meeting with investors, DuPont leaders outlined specific growth targets, strategies and performance for each of the company's reporting segments through 2015:
- Agriculture & Nutrition (Pioneer Hi-Bred, Crop Protection, Nutrition & Health) – Continued global growth supported by solid market fundamentals and demand for higher agricultural productivity. The company expects top-line growth to continue in a range of 8-10 percent. The pre-tax operating income (PTOI) margin target was raised to 19-21 percent between 2013-2015, reflecting a pattern of continued margin expansion over a longer time horizon. DuPont announced that peak sales of its low-dose rate DuPont™ Rynaxypyr® insecticide will reach $500 million, an increase of $100 million above prior estimates.
- Electronics & Communications – The segment maintains a robust growth outlook, with 10-12 percent top-line growth reflecting a combination of DuPont innovation and a very strong photovoltaics market, with more moderate growth expectations in consumer electronics and printing markets. DuPont has raised the target on PTOI margin performance for this segment to between 17-19 percent, which is based on new product introductions at higher price points, coupled with a richer mix of end-user applications.
- Performance Chemicals (Chemicals & Fluoroproducts, Titanium Technologies) – Long-term, top-line growth outlook is 5-7 percent per year with attractive PTOI margins between 18-20 percent. The higher targets primarily reflect continued strength in the titanium dioxide market for the foreseeable future. DuPont continues to pursue a business license for its previously announced Dongying project in China and is generating incremental capacity from existing assets through production uptime and rate increases. Additionally, DuPont announced today it is evaluating a significant expansion of an existing titanium dioxide site to meet growing demand.
- Performance Coatings – Good progress was made in 2010 on margins, but further improvements are needed through productivity gains and improving the quality of the business, with lower expectations for growth. The business will drive PTOI margins toward the 10-12 percent range and is expected to hit the low end of the range by 2012.
- Performance Materials (Performance Polymers, Packaging & Industrial Polymers) – Expected revenue growth of 4-6 percent is driven by new product applications and trends in vehicle light weighting and metal replacement. PTOI margins will remain flat, between 15-17 percent but highly attractive, as cost productivity is expected to offset increased raw material costs.
- Safety & Protection (Protection Technologies, Building Innovations, Sustainable Solutions) – Strong top-line growth of 8-10 percent is expected, supported by new products and applications, ongoing productivity, and some market recovery as well. This segment lagged into the recession and only started to see improvement in aramid volume and consulting mid-year. While construction volumes still lag, healthy margin expansion is expected as markets fully recover, with benefits from operating leverage. The segment's PTOI margin target is unchanged and remains highly attractive at 23-25 percent.
"DuPont's portfolio of businesses has yet to realize its full potential. We are confident in our future outlook and remain committed to delivering sustained growth through market-driven science and innovation, differentiated management of our capital and businesses, and steadfast productivity gains linked to external benchmarks," Kullman said.
DuPont (www.dupont.com) is a science-based products and services company. Founded in 1802, DuPont puts science to work by creating sustainable solutions essential to a better, safer, healthier life for people everywhere. Operating in more than 90 countries, DuPont offers a wide range of innovative products and services for markets including agriculture and food; building and construction; communications; and transportation.
Forward-Looking Statements: This news release contains forward-looking statements based on management's current expectations, estimates and projections. All statements that address expectations or projections about the future, including statements about the company's strategy for growth, product development, market position, expected expenditures and financial results are forward-looking statements. Some of the forward-looking statements may be identified by words like "expects," "anticipates," "plans," "intends," "projects," "indicates," and similar expressions. These statements are not guarantees of future performance and involve a number of risks, uncertainties and assumptions. Many factors, including those discussed more fully elsewhere in this release and in documents filed with the Securities and Exchange Commission by DuPont, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, as well as others, could cause results to differ materially from those stated. These factors include, but are not limited to changes in the laws, regulations, policies and economic conditions, including inflation, interest and foreign currency exchange rates, of countries in which the company does business; competitive pressures; successful integration of structural changes, including restructuring plans, acquisitions, divestitures and alliances; cost of raw materials, research and development of new products, including regulatory approval and market acceptance; seasonality of sales of agricultural products; and severe weather events that cause business interruptions, including plant and power outages, or disruptions in supplier and customer operations. The company undertakes no duty to update any forward-looking statements as a result of future developments or new information.
The DuPont Oval Logo, DuPont™, The miracles of science™ and Rynaxypyr® are registered trademarks or trademarks of DuPont or its affiliates.