DD - Earnings call transcript Q1 2007 | DuPont de Nemours, Inc.

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Vincent Andrews

Thank you and good morning everyone. Welcome to Day 2 of the Morgan Stanley Global Chemicals and Agriculture Conference.

We’re pleased to have Jim Collins from Corteva with us to kick it off and I think Jim you want to go through some of the highlights from last week’s Investor Day or Inaugural Analyst Day, I guess.

Jim Collins

Inaugural Analyst Day, that’s a great way to describe it.

So, good morning everyone. here. be to Great the for opportunity. Vincent Thanks, was Yes, great. last week really the time looked where that forward is really were a the for are we’ve merger. in point share and coming down while This going to to three out that quite to sit of be strategies the able of companies we DowDuPont a

over CEOs, members of several So, from you with all heard management three a team along period. of the intended two-day the

talked we the Corteva event when So, think what I about and about.

third to described shareholder couple free that and metrics. of would We industry and that. industry the about you that was out in to all, a going line be cover was and cash One about strong one and very strongest couple market a we top in just and of the to discipline of deep We about talked First there talked and We team We would company second the for quarter days are pipeline driving that new returns. core our were focused one our a a a shareholders of was this the on innovation a a very believe bottom talked the exciting that unique bring some there are and One a be. to that lot growth company flow of advantaged to we but agriculture lot connection one operational messages pure-play shared the exceed growth and routes was return future half that that outlooks very, an That would talked also company. our press of and a to that, going company Corteva both invest global company. and to that U.S. return with emerge based we presence more was that kind releases in and have can that customers. beginning friendly growth seeing really last that light. with around about

think we we’re we So, this consolidation about only know scale have balance you were I if that Corteva we’re really of in and the stronger, much things germplasm. had much and protection. as result crop industry one We put faster, strengthened that that two the greater together greater had a both the seed into each seed were sales of had We pipelines. other both merger. We chemistry both selling organizations and today,

one And that one so, to greater we proud And plus I ones could that three. here were did really the say think we’re only able than equal that. be

and would experienced. our me love and So website, for encourage the the are loud are with be are of there. there, I my I industry, the came passion members They leadership on overview clear. industry going team that you know the and message. transcripts several charts the out kind had very their of they and

time. over other my, creation time thing rolled session priorities kind I’m – calling out first this we the for five shareholder for of at is the The we just what value

going So, business these our but we those, on priorities five we’ll execute and kind focus. the we’re to have strategies backdrop of to begin as keep

focused real performance-based One a the our was tick across culture delivering quick. off just I’ll instilling organization, on So, them strong metrics, commitments. on

invested process very capital. a boosting driving with focus Second, capital on allocation disciplined on a returns

we about. tools farmers Four, that more R&D solutions that puts and around that engine structure designed we help third that of Corteva talked we benchmarking our lot a was opportunity those productivity, of of of of this about and we lot a functions meet food targets structure a as this the in developing that’s we all that these a design mind about idea we the thing at developing being priority with did growing The produce and way. farmer this we’ve key one cost that to best-in-class innovative demand had one center for cost talked know the

best-in-class and that. with And keeping keeping will above launching growth to it structure, only focused cost our delivering I And on way that. market line organization that and the the but then earlier, us time. mentioned do top over allow bottom not line So, these as synergies

will growth. Our do to and line best-in-class cost pipeline us top allow this that and structure

looking said, we could proactively And before through folks were them team had the one you jump those we received a the we your out have kind maybe of to me conference things. They the reached So, or clarify about. finally into couple asked to talked questions. little material. five The because answer of a after questions priorities and bit us just maybe two

So, maybe answer so mind, real folks' they are I'll quickly. on just

our route about just first regional confusion multi-brand ability the that crop a through retail retail, lot a, we Pioneer about talking seed route, but market about no. Mycogen market folks, didn't were There direct brand. came really consolidate We about it was The the direct bundling, route selling and and and in, remind protection question with about chemistry it’s and is our want through about the to seed power merger answer whether was is, brand, routes our primary about to our that crop this is through multi-channel, the our germplasm for learned several seed some a of strategy. talked other strategy. sell the the address we’ve to our that protection continuing we’re and mostly just offering, and opening to up our we before. This having

will we cross-sell. So,

mentioned. pieces, was that programs industry. our in was about that market there And We of crop but then for to routes was about buying to growth confusion for top then a later X% the line royalty above the this. are presentation protection X% X.X% all unchanged. reward the can primary And some to on have will there talked We X.X%

is little bigger to a is protection. business. seed crop X.X% crop X% than X% the to protection on on X.X% Seed business. our our So, was

put forward it going to growth, is you way all market. our I just the easiest about X% just when think about top So, our X% together, think think commitment the it to above line is

So, those I to two things were clarify. wanted

Vincent Andrews

where to like great. about when you referenced one one would a yourself start I bit talked you equals and the Okay, plus it little Look three.

And and the You I does strategy before really think, how DuPont to market my salesperson a had referenced through a just can, go bit business, you you with that event comments the a ag little they multichannel the with was community changed combination what and but and used think to one the seed, Dow way talking Pioneer sort now crystallized of information understand the of it quite I about after have overall fully know people investor had company? the you and positioning the of assets thing, of doing. seed haven't now strategy. is is other strategic more Dow operational DuPont’s the you that smaller side

alternative capabilities? as brands, us your seed of a Now, piece well as just maybe that it, breeding from of the well you biotech understand as help broader the platform, as so width perspective have now R&D

Jim Collins

Right.

the made was first So, we very this decision that I multichannel. around that quick think is

it germplasm was limited. world to had pool brand developed step is Pioneer You think, been renowned, that probably Mycogen breeding was to The the It the you back germplasm more over had think the fairly is have is one DuPont talk products Mycogen can about and when the industry. you a things more you pools diversity help advance broader is germplasm And the of you pool breeder, in your friend, to they first always quickly. a of tell one the always time. breeding

So, we had two benefits here.

Latin to take divest we now were the Latin forced includes retained. that Dow have business breeding Latin First, America, America. the germplasm XXX% pool. though We we Even This also for in ability to we for pools of all North the copy of that of were the America retained breeding but America. from

this we industry-leading now together with pulled So, pool. it

a We base. broader breeding have

have develop ability because that we beginning developed the ability even We more only were unique pools across just and to we’re parent have breed with to robust discover lines properties, independently. the some those to

each of in that represented unique also before. neither them they had one to access So, some two spaces

organization So, happy. our breeding quite is

developing second, pretty better going develop We’re for Mycogen’s to now is whereas available brand “in sell to just them But pool brand limited. decide some pool was for entire whatever retail you total” that products. a through, we're

the can So, in now in brand opportunity the imagine for against brand. you have realizes, all retail Pioneer my I years, a bank same Pioneer but been years these retailer well into selling germplasm has has the who using for North that tap been America to

And so, that going we're two ways. to approach

seed competing or other, seed small XX to and across three counties, each I We all First, regional those some through were United had brands we which overlapping. XX with States actually had two brands. in of regional

brands. those regionalized we’ve and up that of all cleaned it So,

offer over So, retail done a and compete stronger brand Then before trip and in renewed now, they regions, to with to to and proprietary opportunities just those then for Mycogen brands germplasm, brand same will more sell label in the into folks these other focused licensing well. that going brands create tap and want going we're private pool we're who germplasm be out and won't we’ve never the brands. that as these to relaunch and

of example. of all stronger. two just and quick sources better examples the I’ll revenue, these. one a you a brand new That’s give two we’re of Mycogen brand just licensing stronger So, co-ordination of other and how

now, it’s whether those post, the growers offer chemistry the the it’s direct to DuPont you to channel, chemistry, all as the of a to whether We all fungicides have through chemistry or pre, Dow finally total can questions have total pipeline access add DuPont whether to breadth. of answer insecticides, we burned unparalleled a able didn’t down, but set it’s we solutions. it’s When we whether be have that sudden

preposition and solutions that to no kind together. And that a add and of so, digital really from a we’ll There presence it’s product. is Dow that’s to this you the to product too. reward have whatsoever to that. that then all digital nitrogen bring And across benefiting cross-sell really our opportunity royalty had

show nitrogen to we of them just didn't have to talking retail digital more fixing presence tool imagine whole dollars more that have help run-off protect So, how few leaching? this Well, about in this more that there they can per a some out XX Dow a Pioneer the money reps it. the nitrogen use the you to mostly can acre. that before from available nitrogen presence, chemistry soil plants by thing drive so can helps relied we And make before. to on it position applying growers this and brand-new physical longer, yield

So, probably than while, for really those I go examples. more think three. XX is good plus a illustrate one wins how that I are but greater one on the We got could some equaling

Vincent Andrews

Great.

seed if we and, things know that, with of R&D year, they the U.S. crop seeds questions know of as but prices couple are over price seeds you a XXXX, yields lot in know than come we within the one mix, Obviously, the years lot is particular a we stay well up, working. stagnant. XXXX, pretty last down that have has go the the seen you Let’s in so here get I of of about guys just in new are spending we are on money each been in

good So, some mix and portfolio. get what’s it going the soybean corn in each to take back year to to start price

Jim Collins

the feel and Certainly, and we’re and performance there, corn. commodity drive But varieties out soybeans putting of we of the that really been hybrids good do competitive about really and that it has a prices both competitiveness. lot products

to more in price, is shows We mix. So, able targeted pricing up products. for were where key that

products the not we you up just of broad you're across And yesterday, our advantage ever quality big our are we you it’s we where release and press that result the put brands. of have And of offerings. for come board seeing products a every benefit over highest history. we season when lineup you a our yielding has volume the yield And and swings competition across what up all but just add little now take range some these, their that just up pioneer XXXX single the the So, yield there come the the in the as of pioneer a product had and launched out have performance of previous yield bit. of this business off a average seeing was of

happens don't on there you or happen And we the just further were some are but yield they have sometimes soybeans it happened happened and on the on Sometimes by what have lineup. in away on and products north blown are they side, year same soybeans our performance, corn, low XXXX. that with thing exact the quite A-series this that doesn't

of talked we bushel second and Midwest in reports On farm coming our acre about. release harvesting soybean the yesterday soybean XXX out we’ve was an went now that so from And that press land. historic which regularly growers yields portfolio have across

It really commodity into real best it's the per of market acre to going encouraging tough see prices productivity and but pricing, ability or to So, have, with a to performance for one be will when so. our the to is always in out you deliver price for that the value kind lift product we good about me value. performance in ways you feel behind with deliver stand aggressive there of with tough we more

Vincent Andrews

still have as soybeans think of it cotton in the waiting And we we're the then for on Enlist obviously you trade maybe and approval side and about, know equation corn.

into sort that of licensing the your Day today. and are at this doing about You you sort last of then that of can away approval, moving get portfolio process once how talked little bringing you from begin you the that a Analyst bit week

So what entail, a long and what it little bit of would of benefit some sense would more maybe financial take, that a us – just would give be? of how the of

Jim Collins

is for around that the they we that a launch referring new imports. think trade that I import approvals, it up from if he that, countries know probably what approved to in have world is you solicit so to, major country anytime have all we that grain shows So,

outstanding So, for we’re trade, approval and was because past solution quickly is We they cultivation. on we’re China for the X.X just corn Enlist a cotton had had soy. which XXX Enlist We year, waiting Enlist give their pretty million is not really final a great. acres, needed and cotton, just approved. which And in to this Enlist

Corteva waiting working technical how part depending talks XX five that the China would go sure So, about been trade about of we is those queue of those the discussion. that the make traits U.S. and know to that and are as months on are in XX to all have they prioritized be approval. and with between the expect traits USDA that sometime answered we we’ve We any over to as the have next approved, get the and questions we’ve there these USTR of and

think loudly we don't involved I So, more now. be are we could advocating that right and

that So, experience has gone Growers we one the traits little we plants, a did a working a That with ADM, being launch bit getting in their have said, of technology. patient. well. are are commercial to crush it limited of chance very

out twofold to going go talked out is, to to maybe minute get I seed as approach we be would We planting production but have ago. to and launch up be, would one commercial the in but that And about that XXXX. have ready would got parent trade take if we than that full lines, XXXX even there, material expect could parent approval some till would field, the there cycle is have could especially, a next us with season, our that we love one in we be we license

sign and So, seed up. the other companies us approached several us said, already have of

where Second, the we through brands brands. those [Extend] versus Enlist only have we’ll bring could unique [ph] brands

move those years So, full actually have so integrate we rates five developing that would launch And there or that They or could that good about the to some that a germplasm, ramp. point, by [ph] we we're want quickly. then and years up [ph]. takes ramp the and to growers it of want some could five begin Enlist, four to into [Extend] go Pioneer those to the seen is [Extent] pretty at choice. we immediately And optionality

labels goes and Enlist and We see restrictions. with where be will EPA with we’ll fully enabled

tight. window, be XX,XXX-acre if they [ph], fields, pretty days tight. middle back days and all moved XX recently get of it could it across couple backed to trying that, days after is of a X,XXX, just which on a get those the rainy planting [Extend] And to you’re on You in you and application down saw you’re of grower the

still window won't we’ll buffer requirements. the So, and a broader have application we have much

going are area push really that in to Enlist think third Brazil. I we to hard The going be is

the the EX going glufosinate, protein you is flush control trait out it allows as the to is for back the glyphosate, think of is And to the there down which chemistry way weed and to of of construct perfect add just species for that our Conkesta a and I that us lineup trait, X,X-D insect themselves. Intacta well.

pushing excited that’s a be So, as all that construct forward about we in will is Corteva in an which presence that and Brazil, we’re soybeans of proprietary well. trait kind having

Vincent Andrews

we Okay. Maybe and audience Q&A. the the let have see and crop if on us just touch chem pipeline some will

portfolios significant about divestitures are to lines, do regulatory there divested. you an things One, get about. the guess some the You between two some of I share the back market to you to go opportunity to two think did after but have over talked

doing business so So, towards you sort sits having had talk and and years of the which molecule how three in to back you the Dow you then of it next to the of this what where have and maybe are five with molecule that for that, and long, been to want advantage do what you with portfolio what’s versus going that it and about sort just years. around the strategy sell, rest over the DuPont

Jim Collins

family, the a insecticides, spinosad we strong of very a very, competitors were they Corteva and had we to prior the call have few merger. really lineup DuPont years spinetoram. for a perspective, strong been that and products chemistry have some From the Yes. of with These Spinosyn’s out

So, to products, the it will the that molecules from two of any but still divest with us premier left DuPont we perspective, require space. trust in

really penetrated the in improvements some needed had that to quite further those. were not had constraints. those the pushed There been some there were they funding, more be investment hadn’t process of that productivity of why faster, but they were markets delivered Dow One supply decisions reasons deeply

I’m So, right just really we’ve for sales about this merger, all of on on to mean, back now mode. happy growth just to I resolved pushed way, hard, and we our say, after turned we reps issues and those supply our

supply, the So, business. us have we go get the have And they sold again. out

in do of projects So, we another to fueling set of the that. are process

got So, who a you really great chemistry, got knows market. and salesforce have you that have great

of to just them. You stay ahead got

So, we’ve is, to got moving. to part continue that one of get supply story

Second, we portfolio have broader even an now.

is we in market which the the knows world, opportunities the it constraint launched put the go find getting margin it’s a that in the higher You team of we're just supply maximum how peroxyl value have of from that into the add [ph], in make and new and everything we the really do sure field. Asia we insecticide you out to past, Asia, have

really working and that replacing It as lifting of now. that’s of the low come quality so new kind on what materials we’ll And just really just business, in, we’re keep end. that is

couple other right a molecules next. coming behind would got Now, that. be we’ve of in Isoclast

chemistry on what not we of you off years other sold that we that So, chemistry in comes well. we're as or just away patent relying older know will we when markets that of see kind look couple some and, gave of like a still

out lineup products got well, So, just and a really of great I'm to go just teams excited head-to-head. executing about there our we

Vincent Andrews

a the ask? see, if me they Let have want anybody audience to in question

Unidentified Analyst

start that gain just a the off? capacity Hi. share the spinosad talk extend that like Can more back and you ramp timeline up bit to to really to little you family about the sold

Jim Collins

ways. two Think the of Yes. timeline

is benefits quarter you we boost productivity strains have get we This these [ph] through new there so are we to routinely. improved it getting as, pretty point to and a debottlenecking and existing, But where of we productivity fermenters. strained And the new little biology. as Once fermentation that. that likely are go. a get out start Right? of strains product you need is a a just well launch we’re and can improvements which to underway is that, partly almost it the just and of think from You make we’re can

capacity. will So, big that It we that us to jump in construction have approved underway. have of years couple the projects we next a take get

from ongoing bringing we incremental basis. quarter. little or the So, big will year And on ones get small it every up bit next a productivity an the two Those a contribute are now. will almost jump single here

Unidentified Analyst

that about part ask is talk sort another Maybe of portfolio? is the one. of long your editing it I'll sort Maybe, and going to how meaningful strategy before of take gene the

Jim Collins

sprays any opportunity The new way We’re it excited but it CRISPR waxy industrial that’s over not a that DNA, obviously used corn CRISPR to the done, not introduce instance trait we’ve create Unfortunately, time using use that to nature is edit functional plant applications in a stiffness. within plant. waxy has trade more already plant produce and and non-native that to and for that the mother about produces that so for new starch things could the for genomes cardboard productive positioned to it of presents. are be the to and GMO’s or evolved

So, Mother It we nature plant. trait in has there. have it put already it. corn a the

We’re its just a has product, editing preserved market. valuable it next productivity that as plans have of is worked isolated commercial high-yield, launches, that channels the that, product of the identity so industrial regulatory expect some are starting we starch all and would very, commercial year. approvals because non-GM into launch to through for limited These one and way high the

where other output linolenic oil a oil, can that of they think a that really other point consumers in that through we of produce the the use improve to healthier of have some less little we of engineered asking editing, the beneficial the Things beneficial support the I of oils health of soybeans great healthier the have and gene also groundswell great we're contribute going of and produce is example. the we is traits. onset The so we even create solutions, products. soybeans, a and on [indiscernible] a of example And already been rancidity area where stability do to to that tools how start this can get is of reduced some about to is longevity working or waste to these be because more

construct of we on [indiscernible] we’re in working a out a So, expect years. that to be of [indiscernible] would couple higher

to going that’s with in we're accuracy. the real two, to years X be could years to X CRISPR of speed while the sometimes months benefit months, it to So, do, X take and able us and it to is do X

Unidentified Analyst

undergone great The then big deal the there, you. last a kind years this Syngenta and of over of has change industry sales few just kind with Chinese going transformation. and whole Thank Monsanto through

So, how invest you goes I is, is, suppose that the How you? had of really attract get some the dollar? or really explain you appeal to and difference do time do bored going risk a throw it that to challenge people know make on differentiate at really yourself, make the people you to can just You today? – what you to you're money compelling,

Jim Collins

to And It’s the be on first go pure-play, going resources to and to the difference to knowledgeable every the is making think point of day marketplace. XXX% the the investments. time, single focused of focused people I energy, right better being agriculture. XXX% is that’s So, of passion in more right. and the XX,XXX and

at core this. clearly thesis So, of pure-play of a is the the

the all makes just another means just go and culture. Second, of we’ve lot said, reinforced and were just of together that I let’s are which our take you it, is fairly start that companies, with what which similar which best. to think from level, in two company design on let’s We cultures right us actually way to businesses one put two brought our there conflict that between is We’ve it different enabled that the together a all less for future. the going is and and

the the breakfast. other. person come true. is new of strategy or around and, I am the of culture the didn’t I a eating know founder the team So, on new It’s of one that single part adage June X, becomes for every founder Corteva old from of you company.

and stop You same that. hearts the in hard direction. minds get to moving It’s

Third.

of And allow also that have backed I imitate partner industry. these up a this to productivity all, it, to just launch information a then we XX ability I drive service next route that has. to above more in think, buying mindset with there and tried five best but then the unique somebody producer’s with market but more Others growers drive than to we’re the The going quickly, we connection moving rather that a that and growth. of products nobody years are first to become of have else to that get topline respond we some from. and the they’re sense and that coming, that we by and up that science and in them much forward tailwinds over merger quickly, will bottom-line new finally, pipeline and us industry result have we the think backed in right. the And as our innovation

business and are with other line improve the quality two We have the like to some going put the hear $X.X the bottom areas that of you growth synergies about combination. billion that worth billion side growth of that synergies that are of the of growth when a real rarely are of asked, know to we a Things flow result the companies to through to we together, committed earlier you synergies continually business related You to but they one have that. another from worth $X.X is plus one the about were three? question Vincent really and the EBITDA talking

there. a how uniqueness So, I your answer is think I’d question there and that’s

Unidentified Analyst

the of is Maybe into to is about iteration of prior the company. most of industry of going think piece capital a sort when return lot of just, last back the that the we to which, shareholders, capital the going you’re

of the or And then in to returning So, two have that return program to two, what streamline maybe terms one, R&D parts sort of focus? how the you committed the and capital? you

Jim Collins

Yes.

where at chart about very want go talked the who Neal and the we of programs process a first. and either great Investor it could talked if idea be killed want that organization that or encourage invest we return shareholders waste a that charts. we actually those to we capital disciplined number to of and for to two He to our showed aspects disciplined don't kill look but to you projects innovation money, over he other if quickly the So, and leader capital, return very, the at that we about we we’ve not, want This about very to again, Because it know to have in Day those, want last years. value shareholders. reallocate

dividend board Now, while have policy. right now, we got a our

Investor We returning have we also, Day be we as to dividend competitive we and approach. cash but at we our established rating the into process went committed through with share develop shareholders buyback certainly credit a that approach, would will that

needs board meet share and still would and to as cash to that what buyback to we we have returning that of our that would be and amount mindset another the do. But is talk tool about come. that all Now, timing have the to that be and

Unidentified Analyst

that capital in guess be laid debt this? to just some on, you I the taking piece just You're of basically last is of going tell with huge and us burdened maybe you're this right? your structure, maybe not could

Jim Collins

Yes. That’s great.

satisfied all fund those by wind-up the DuPont the agencies through worked DuPont other unfunded the pension process, will essentially legacy will that liability around be we’ve $X the of and we But with spend. had, As we rating time billion. liability

flow that do also the gone DuPont to releases just we’ve that new out offers press company that offers cash go those so the So, create recently you’ve tender to some begin and seen financing satisfy – can that new those, to to here settle with bonds. create financing that where DuPont,

we is So, have on liability only that balance unfunded yes, the our pension liability. will the sheet essentially real

otherwise. We will be clean pretty

Vincent Andrews

interest which care of hopefully let’s could time. there. Alright, leave rates Some it over of I take

Thanks time. very much We’re out of Jim.

Jim Collins

you. Thank

DuPont de Nemours (DD) 14 Nov 182007 Q1 Earnings call transcript