DD - Earnings call transcript Q2 2018 | DuPont de Nemours, Inc.

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Operator

Good day and welcome to the DowDuPont’s Second Quarter 2018 Earnings Call. [Operator Instructions] Also today's call is being recorded. At this time, I would now like to turn the call over to Neal Sheorey. Please go ahead, sir.

Neal Sheorey

Good morning, everyone. us second joining conference XXXX for call. you for quarter DowDuPont’s earnings Thank

this investors available webcast. are call We making to and via media

We posted supplement call. to and through section have during to website prepared conference our link today’s webcast. of our DowDuPont's These the on comments are the Investor Relations slides slides

Materials Financial Specialty Chief today Jim Collins Fitterling, disclaimer divisions call the Chief release Operating on news Greg President Jim for Ed Breen, Friedman, and and forward-looking in Executive contained of Please Marc Officer; Doyle, Science, Officer; respectively and Speaking Investor slides. the are statement Howard Products read Officers DowDuPont's Ungerleider, Agriculture Chief Vice and the Relations.

these we statements and current make forward-looking on our call, involve or assumptions regarding and our factors predictions differ and may will forward-looking performance are future. actual statements statements. uncertainty, our that based expectations During from Because materially risk results our about the

detailed XX-K divisional and principal on of DuPont's uncertainties Dow's results risks will and Our include each may a such on we differences. discussion segment and comment Also, of basis. which cause a XX-Ks

measures financials please today pro-forma items. of the divisional financial and slides. on disclaimer are So where all Unless applicable otherwise take exclude basis all historical our and earnings a specified, in note release presented significant

I associated over website. will refer our contained A other We to disclosures earnings GAAP and and Ed. to reconciliation measures. on are to non-GAAP turn comparable in also now measure the most the financial directly release will our call

Ed Breen

Thanks, Neal good everyone. morning, and

delivered and digits highlights sales, second margin and a we that were we percent local operating had operating gains by volume saw, EBITDA EBITDA you The price expansion. double strong and we As grew quarter.

percent that sales growth the to and and a business for Net of enabled in each grew in making was difference shareholders. Sadara expansions we the every of Growth digits from our our in global me see synchronized focus every strength. marketplace region. quarter, key fueled in are is a were division, up investments, in We customers in for gains, second and delays demand combination indicators Gulf our Ag and are double due we for delivering people the are innovation. These strong division, sales and a quarter weather-related broad US benefits row our pricing from This and recovery based growth by capacity volume to markets. our due last that end by Coast

nearly benefit cost than of projects our at X.X savings on deliver pace been up on from billion than have to of basis our end contracts, the previous XX% our the cost to X.X include initiated. continued and also organization. from since of realized the operations million savings nearly our merger We closed years. We XXX XXX progress more increasing target total in two Savings are Examples manufacturing to synergies. synergy our year-over-year renegotiating million. rightsizing Most a of we so our more Based of And second streamlining quarter. procurement far, our on work XXX cost synergy run-rate target. billion, we remain target

business while the We’re gross of percent costs; well. as despite I up which benefits we’re synergies, very seeing and sales. with quarter, to was am it continuing declined a run SG&A, in are margin, pleased this our which our in raw seeing with teams making material progress the

each intended spins. of have Since X. on status we and separation Now call, the determining our the capital slide turn structures spins, to of of I substantial last progress the will made the

at our We expect to capital share investor this fall. events our structures

DuPont resulting will that separate in Corteva XXXX, timeline. quarter the June new end the We time. by of Dow at We remain and also you made see with new first of of the that progress this items the X, other by confident the the quarter creation on

expect first the end Form XX October. XX We in for and initial Dow for the of Corteva by file to the Form September

excited teams date focused their and for in about the industries. and Our leaders companies getting ahead this as gets see as are themselves, closer more the they opportunities can

management strong three the on realignment from results to be reflect third with JV X. you recast and and to on within advisory the books our that last members announce potential X, and July the of stakeholders call. the DuPont diversity quarter, effect, recognize month. all handover of X.X high have resulting the Imaging. committees, next tariffs these Corteva billion effective with will a each Specialty support we solutions announced addition will the control find in historical intend of quality strengthens since building to portfolio We the interested of to with JV of of of we measured and the of We the reporting This Products. announcing progress with provide many completed Starting out Hemlock new to aligned leaders of views our trade And September. focus July and I made the the policies. Semiconductor our fair EBITDA of The and earnings Also, ten with also Electronics change. We the last are effects took perspective committee work you to leadership of unfair teams operational results the completes transfer trade continue this we the them. in

material completed that actions have partly already mitigation have our the company of potential will XXXX, to and and a have impact, in taken tariffs expect asset to partly to analysis we due base. an impact We not on due the global continue

potential already trade it performance Howard volatility in to have cover market rated detail, US very reactions With to other see by continue highly to to take as any as are impacts. that and are side, increased our as the simply our amplified I’ll to also That crops. US and exports go Ag We USDA. that to global adjusting can prices, landscape. as we normally financial markets mitigate will have tensions that the turn events more to shifted in commodity reported unfold to On China said, would recognize being countries, well current monitor outlook. that, they agricultural actions we soybean over

Howard Ungerleider

Ed. Thanks,

Moving of once double X to costs. again We price our pension share, earnings XX% sales each equity per by and the Drivers local volume synergies, net second digits. of grew earnings cost summary a quarter EPS and EBITDA, currency, slide and higher and lower and gains, include: OPEB results. increase

growth of of EBITDA operating and more from operations These with the also Agriculture. was XXX with in each growth of turnaround material Materials by of our Materials X%, quarter. segment X.X with $X X% shareholders price divisions. Sadara again translated the delivering we period, every the $XXX Equity increased And led by double-digit rate by costs activity delivered in earnings X% more by all primarily in with strong margin volume regions. in and from XX% joint quarter, the guidance. and most fundamentals gains of Price in Asia and tax driven of cash Products X% and commitments, synergy which led with our growth price Specialty supply/demand Our price and demand We and a EBITDA And, drove returned XX%, gains Materials all in including healthy with delays from offset modeling higher Science, increased included line the XX% than Volume in than in regions. on EMEA. sales targeted in share to in improvement results. billion than with Science. and in gains And in quarter. all and These all every billion divisions price And gains up gains the grew we in for lower Kuwait gains divisions. driven weather-related year-ago raw led than growth majority recovery increased XX%, Local Specialty division, Agriculture verticals. volume by basis Sales growth by top-line X.X Science quarter, cost volume most Ed first in Canada Products growth. billion, first were across Regional the earnings US, drivers to year-over-year, rose line greater segments recovery quarter XX%, a nearly grew highlights Materials products continued delivered flow gains DowDuPont’s mid-single in more all top driven Specialty exceed increased key with delays $X across XX% Products local achieved collective and regions, the all as expansion by local increased another every operating a up the primarily double-digit ventures in Cash points. the a improved divisions weather-related market in region. in the of of digits its and segments in XX% Pacific gains was our billion in million XX%, quarter of cash repurchases. quarter $XXX to Science was in gains. all the demand from in our contributions continued Agriculture, million, mentioned, broad-based by regions. increased double-digit in increases end-markets X%.

$X quarter, returned We will $X.X another owners billion our target since of buybacks. merger have In the close. stock now of we third billion cash to

slide Now, our on turning X. modeling to guidance

net to expect sales the most bottom-line level, pricing demand our well continue. the of $XX.X of we we across expect $XX healthy as quarter, businesses. to be third see and At in third range For billion gains We our billion. continue growth to quarter to as company the top-

a our developments. robust the and and and of for the further end-markets and material business. seasonal across expected prepare one-time division expected improvements The percent material continued from continues as EPS year-over-year generate majeure and expects gains, in Third half expansion of Science million moderating continued pricing delivering end-market partly coming The in from supply division between are Specialty our first Gulf be headwind higher expectation is is synergies, the expects to our to contributions new The be division cost all an of quarter, loss demand offset expected Real MDI and down in growth, XXX gain segments mid-XXs the is savings. to we earnings volatile cost offset prior-year key a from range. Materials and The The headwinds by up from and plantings. a will isocyanate million for commissioning synergy costs prices Products to the be from Brazilian XXX lower in division levels. strength of Construction force costs synergies, projects, product start will includes segment. Latin price raw volume be that cost the to from raw continued to Coast of underlying equity Sadara. the America in US realize help year-over-year quarter adjusted This new growth Agriculture the expects reflecting which and EBITDA This Safety in startup impacts

division the of to favors pipeline synergy over in new continued a planted economics, soybeans. reduction area Additionally, Brazil The division plantings due expects headwind headwinds is through delivery execution anticipates to product more our current Brazil soybean portfolio to our improving which on year-over-year basis, corn that of a in market strong programs. and these a mitigate than in our corn

turning on year to the full XXXX, X. Now slide

results versus company by strong last divisions our be Despite reflect are the level, upside earnings We second-half. Agriculture to per percent Products U.S., dynamics Brazil low-XXs guidance in and we on continue in mainly now delivering by earnings growth Real. up turn synergies, growth. including the double-digit expect area full the net year, for from growth for the market We be And million. to first to in see year-over-year that, To year. conditions deliver EBITDA focus along to of sum of update savings, team challenging strong Agriculture. expect it which to now our annual share Materials cost to the our in has $XXX and half the will discrete within and delivered earnings these prior At drive raising billion price/volume an investments. we sales action very innovation to increase our and over the range the guidance stemming to division, headwinds which the DowDuPont discipline, with sales the up, year-over-year we to Jim planted in outweigh synergies, first-half higher headwinds, of performance we cost full-year to continuing some our I weakness XXXX, EPS in expect it Brazilian for in the now we year, With and our expect cover in take $X.X now the Specialty offset versus partially the the February

Jim Collins

Thanks, Howard.

Agriculture’s quarter, and and of strong, The very closed Hemisphere. with played highlights quarter the season X, in division for expected. the quarter Turning growth. as the recap was double-digit we the with as I’d out largely the to half, this then sales Northern start to we’ve the slide like second operating EBITDA second Ag planting progression out first sales largely

You planting. planting mid-May, four in rates weeks unseasonably cool may US recall the the quarter to pushed behind. essentially favorable By the by or rates bring early for showed Hemisphere when Farmers planting complete. weather up, normal impressive three fast. up May, to had in ability weather planting conditions warmed the and an that late May, field corn was progress began, returned had Northern became levels and By back

most teams a of for harvest that then, generally again since Now, field good the farmers parts start despite for yield remained products our and conditions the forecasts sales year, customer. all country. have the We to delayed. came should favorable this volume gains successfully show quickly have most late been We to as recovered way were that we the achieved deliver of our pleased together had with XX%,

on Let touch other highlights me of three the quarter.

achieved corn A-series we hybrids price and by continued new of gains, soybeans. First, penetration local driven

Second, due work supply productivity, better to delivered nearly launches. insecticides, and growth and product debottlenecking new with we in XX% on

make synergy continued target, toward to synergy cost while growth our Third, our progress we advancing work.

pipeline soybean advance Meanwhile, increased supply our unit products. RRXXtend we we quarter, rose penetration in soybeans. as new the was our the and improve germplasm, efficiency to of down, While this on to of royalty chain work continue costs bring costs our expected of the

launch that seed and products and priced our next It’s current did the for is note new discounting season. position best ever see expect not heavy and been, crop any value, as to to the products to protection product XX five in years. has our continue it pipeline important over new We we the

in natural to action to European substance, fact, receive This active last control Union. Inatreq, earnings the Septoria, parts yields believe the product disease products of many a our fermentation many new of marketplace. sources, in the which in were and has since of in use this derived Inatreq by offers we example This to from a encouraged continued innovative naturally our derived market. been bringing produced reinforces wheat reducing In call, that approval is for leadership Europe. we appeal to is farmers mode will

causes as volume volume by Ag local and division’s to sales half, nearly Turning were of first our currency the performance pressure two-fold. were for gains the the price offset flat, were declines. The

saw a reduction corn America North This both soybean seed and sales. area. planted in impacted First, reduction and crop protection

the in reduced as shortened in toward resulting summer the a corn harvest minimize as of Second, season technology delayed lower to given area impact growing acted farmers planted the well Brazil, yields, the as lower shift safrinha lower time.

as our support in X% EBITDA these of full value we expanding operating X.X both To our process, offerings and strategy. out provide for out about are Given complete product to we same up agronomic strategy, billion as year, for including a At see more the management in the our building to versus in expanding XXXX. technology the strategic invest of we solutions. building launches multi-brand, and time, research our continue customers, multi-channel We use our digital see factors, well digital farm own growth capabilities. product our

see we strategically For farmers in addition in introduced important Ag in becoming present Russia innovative and strategy example, year’s to an Brevant this is Brazil, on of and launching our Brevant path will seed the we line-up. this past in brand company. to increasingly brand fall, US seeds Ukraine, shifts well Corteva when quarter, next

trusted over to focused, about to bring products Ag we that, a to value farmers excited the better to the drive ever Materials productivity, partner I’ll acres. With their farmers cover play creating offers the ways for Science. committed right And are it our while a that are shareholders. right market future pure for We as to Jim for company, higher turn

Jim Fitterling

Thanks, Jim.

slide delivered X, to Moving stand-out quarter. Science Materials another

more the growth Job Dow, where number agile one. and results New remain Our focus of sharper mindset will demonstrate and a disciplined enterprise and the is the value

targeted with structure. our Our maintaining We to infrastructure verticals, in ability And double-digit our broad-based best-in-class position top-line I’ll start our in division by closer driving to an core optimized core market our as the delivered to our performance and our projects the moving customer also to operator, play speaks strengths packaging. and highlights. demand achieved care, end-markets of cost led organic consumer growth, growth expansion. a

the Our costs $XXX EBITDA earnings higher from joint activity. equity these year-over-year, as results $XXX strong on ahead a despite million even maintenance planned targets. by And synergy higher improvements, our million, material faster and we driven delivered cost raw of and We Sadara. our grew again of ventures more plan Kuwait impact than showed delivered

were I’ll XXX in projects two-thirds benefit million up the year-over-year JV this first start growth million. bringing with improvement, Industrial XX about quarter. very delivered half to & important Nearly contributors Our improvement earnings Infrastructure. the another The to equity Sadara. of of Intermediates shows

Looking Switching JV back-half elastomers commercial ethylene year. track contributing well in demand by the bimodal is in Up new year full first to St. at advantage shifted melt next, startup we later to which strong completed expected our this high of year-end. as the our running our And to of Gulf the deliver unit, turnaround Charles lap the facility XXX unit of gas-phase on fourth our begin index track part remains for take our and this in the to our half. facilities a debottleneck site quarter to be of operations bottom-line. will planned and its remains complex. new this year, the the Coast investments, to Texas-X on improvement all equity ELITE, of full low and to But density are NORDEL, the we this earnings to million US

as the will which construction facility, our million new X of This And in built being with wave will largest the come next support metric as next door. expansion needs. derivative the will We such, ethylene new expansion it to underway world. projects. We’re derivatives, increase recently the of online as making well incremental with late-XXXX, capacity Texas-X cracker aligned downstream expansion our its tons, on in our capacity also MEGlobal’s began the

Turning performance EBITDA gains. achieved Coatings Performance in led to operating local growth by & X%, the business quarter. of price an Materials the

Intermediates delivered on XX%. period, region. Excluding sales an double-digit in in about silicone price/volume both intermediate our Broad-based sales year-ago Infrastructure and than pricing in sale operating the increased growth, more growth, Solutions of delivered both gains products growth Industrial rose every synergies EBITDA quarter. and businesses Sadara synergies. cost upstream EBITDA acceleration earnings management again asset the & Disciplined gains in and Consumer improved by actions, results in continued Kuwait in drove strong XX%. demand equity and

more than all which in the in that of execution organic operational sum Solutions Both double-digit growth excellence, Our Demand in continued and also elastomers Customer costs; focus These to material and and in the gains industrial our broad-based in applications from Science gains focused growth, investments. costs Packaging X%, offset business through gains equity drove geographies. and value businesses delivered capacity and be quarter can strong and packaging unique eight robust was and sales demonstrated packaging with Plastics Dow This to on growth, year-over-year deliver from lower solutions Plastics by planned cost and grew led contributions benefitted than growth double-digit our captured growth, we & operational GDP, our business growth. projects; we growth raw Packaging volume growth packaging, increased rigid The XXrd in higher solid turnaround Specialty food delivered segment and geographies. Asia our time in our local cost increased the Vinyl systems Polyurethanes Polyurethanes wins and is with Industrial gains and and strength consumer up, New new marks our enabled more higher portfolio, us by due a higher the consecutive material gains double-digit The Pacific, planned Sadara. cable. the growth particularly and earnings continue The wire our at activity. Dow also costs The raw by commercial activity. offset demand in earnings; we Chlor-Alkali business to demand well capacity Specialty was turnaround volume house startup To synergies. it drivers EBITDA are all high-single-digit The were new manage gains The above price the and team. grew and gains; from operating new our delivering will including XX%. end-markets. about the prudently Materials months’ structure. investments core top- business that capturing bottom-line broad-based specialty

ahead look I our forward toward As spin, in well-defined details to roadmap. we coming sharing look the months strategic more about

ambition cash enabling exciting that an increasing free greater capital, return higher have toward on shareholder is and geared We returns. flows

Products. turn to it I’ll Now, Specialty to Marc cover

Marc Doyle

Thanks, Jim.

X, and slide to Products Turning growth quarter. again the achieved in bottom-line Specialty top- double-digit

continue by deliver customer relationships. customer to results application engine through strong focused our innovation powered We and development,

the synergies FMC advance of gains, and powerful sales segments. growth organic sales the EBITDA division net business The and cost and with integration Our division to into our in with XX%. of is Transportation the leading we Advanced the Operating businesses. the of also complete, three portfolio combination for growth from gains most double-digits, grew both continue double-digit way reported Polymers the with

freight as pension/OPEB and cost synergies, rising lower margins than expanded over and higher basis more points operating offset raw XXX increased demand, fact, material costs, by In EBITDA price costs. local

the EBITDA operating segments to Products. sales Electronics net Imaging in declined in now and actions to due Turning XXXX. Specialty and taken portfolio

EBITDA sales, by market. end continues consumer in these was operating and to lower robust, this, Strength demand Semiconductor increased. reduced growth partially and photovoltaic offset both which negatively net remain and Excluding sales PV impacted the incentives in markets were by our electronics areas China. outpace

by probiotics price growth, spending sales and Nutrition for volume offset investments. double-digits raw both were and Biosciences more pharma alkylation Industrial businesses. the businesses bioactives. and growth and growth equipment benefits, synergy acquisition material Tech Polymers outperform, attractive Industrial operating Advanced sales Biosciences Health by Health in and and cost acid and delivery excipients, than This EBITDA the of primarily was grew growth. sales growth Nutrition Operating percent pension/OPEB Health as higher as driven such grew growth and Clean up cost sales, in mid-XXs & range costs, increased characteristics. with freight driven Nutrition nearly driven again the improved control, Nutrition grew net business. X%, as grew by EBITDA the the in in to the operating lower volume actions, gains addition and strength Organic Biosciences driven segment sales electronics which in from solid from sales were with Transportation portfolio also period net to end microbial prior as portfolio Excluding and FMC by by significantly areas continues & in well costs digits, outpaced XX%. & volume and double EBITDA automotive, and and gains benefit are in builds we investing which markets. representing aerospace grew double-digits & synergies auto

EBITDA dynamics US cost looking supported benefited benefits, by currency, customers strong expanded meet pension/OPEB industry more Construction supply strength XX%, XXX offset well XX% Operating the driven raw all gains, including and increased higher freight cost points & and with tight The price products costs demand. with our pricing by higher in lower basis across businesses. strength pension/OPEB of Operating industrial growth, as position costs, in the net sales to applications. increased, driven by local execution more sales we as & favorable our Nylon and Additionally, volume Canada. as to synergies, costs, Canada in US in Safety margins synergies. market from as as than than and materials, EBITDA increased currency markets construction well, segment gains

on the year by aimed expansion Tyvek of high-growth high-return probiotics advance the we The and announced ahead, across expansions Looking our to we end the completed end-markets. to capacity track expansion be portfolio. remains the continue recently at

automotive in Additionally, extrusion Pacific demand we address capacity market. are the increasing in light weighting to Asia polymer

executing and also program drive are reliability expansion. asset sustainable to margin on We supply our enable

reflected line business, In addition portfolio to taken our to pursue as Styrofoam the continue business. decision being margins expected this to exit turn open we also European end. improve it to This quarter growth, close actions both to to drive to Q&A. growth underlying profitable over the in will top should improve transaction past is year by and now our internal to actions I’ll Greg and

Greg Friedman

Thank you, Marc.

on to your Let’s move questions.

remind would our you our First, Q&A. both provide Rachelle, to I the like prepared instructions. remarks that statements please the to forward-looking and following apply Q&A

Operator

our question Deutsche today Begleiter And first will from come David with Bank. [Operator Instructions]

David Begleiter

Ed, did XXXX you you bit. cost a cost billion by increased the savings full Why little $X.X savings increase target? of

Ed Breen

David, still have not and given working there. on increase potential looking that on, at we’re we up

some taking One back the area, big a where area we're two-thirds that on is the you and is of opportunity have coming got the which procurement know going our from the of on we we're areas X.X savings we is savings, of there. I so run chunk of another projected COGS through kind and would hope

publicly, but had almost mentioned to is the them we able address our we what by we almost have do, been about as of quarter, next – So we way, we on. all time have last in speak the that projects, comments worked XX% being we'll XXX

or Now, on well either finished way. or them their literally XX% of about are initiated already we're

the on been we've up kind expedite to timeline move and just really able of So, it.

of and XXX higher we of the really that move get some get So, it working could number again, giving we maybe X.X million -- was up not we’re a real it. on to that we're up have in hard but extra here, that

Operator

to move we’ll Juvekar J. next, with And Citi. P.

P. J. Juvekar

because the in hurricanes US and specialty was and in year despite last plastics, all of X%, up the only prices strong polyethylene since your So that. price

So, how see line, price do start half in cracker and Jim, is Texas as then is that outside polyethylene shape then of you up second the this And US US, into XXXX? impacting in it cycle the including the that or going else? something your the

Jim Fitterling

is This Jim.

plastics, price and good volume well, in did So we on North see America. good

material flattish in Europe would of bit compression not Asia Europe the growth. see based the million for pulled in growth I growing and across raw but up, things raw side, say and of worried would volume segments down there. that of strong. chain with margin higher so it's some some our I Pacific think that you volume margins plastics, materials about through saw the a and board, bit you've the had so third held $XXX We say, a are little mostly costs, softening We on got down In coming robust so it's very push the I also is all growth were kind I'm quarter, volume business over there,

States, supply cycle little just As demand enough ethylene derivative United now, a is right there the or disconnected the to Gulf goes, convert it. ethylene in Coast, bit there's not because

And the balance year that to think going of so, out progresses, the term. as short some in I you're see

turn people capacity out. not move down really it ethylene cost much some seen derivatives, to higher because You’ve there's

it, make plastics chain So isn't an ethylene. really much I think to that's market when you've at look margins, ethylene you of merchant There this not to look going at got full swing.

Operator

next, And we’ll JPMorgan. Jeff with Zekauskas move to

Jeff Zekauskas

end up single XXXX, mid-single materials forecasted the to digits. of your percent be and digits Ag of and high-teens EBITDA high sort you up that would you At thought would the be company

different sciences to up things is mid-teens. company is where material and Ag mid-single And digits now so look the

million. all your science’s XXX can Is factors? give higher? expectation XXX how Ag is that lower to materials factors? Ag it? don't is million describe about by the the internal you is I your us and original you external sciences falling XXX and How you of million, so why that materials And XXX so a EBITDA million business better what it describe would that EBITDA the Is sense has relative by, it short know, is performed original or expectations, means is of Can

Ed Breen

Yeah.

hit let in, we to. better XX thought up were We if we really Ag were whole is half. Collins, the the We pick I Let did and quarter, first the shift jump story first you on million little me going made my me it's Jim than from a did quarter -- EBITDA shift. hit might you Ag, number, million, mean, different in we actually first to of and but half fine. XX a the that over mind, second another want

with real robust good had our That XX%. we protection was So business. shipments up crop

rates And to and forecasting in as relative beginning rest a the real taken go about talked of we at the related, obviously the months, which second what little really major soy, as got a who bit if for corn half so has ended issue of these so know, it knows that's half we that move from holds. the currency, externally we've kind think higher So into as first a is season. Brazilian hurts here we're of everyone couple shift, thought I piece solid we in year, it's last the all us the the Latin America to to you secondly year. has major The of then of the

that that's So else? you anything add that really to do want the two things changed around. Jim, number

Jim Collins

more me USDA let based we that on add North in one reduction you'll the acres When reports built plan thing. we’ve had know a reduction a XXXX, acre. Yeah. corn Jeff, in original for soybean America of and

currency acres, the the that but third So in a like in of to some about this to other major that those else, from is think say along I'd we just and is market third about There everything ones. the lower then if you that the are other material Ed are and the talked corn soybeans minor in hold quarter. shift raw kind first mentioned about anticipated increases there, number, third things some Brazil, is with attributed freight lower a

Ed Breen

to you do want MatCo? Fitterling, Jim address

Jim Fitterling

Yeah.

Matco, think turnarounds the I quarter. second half, on in of in couple had we had we major Jeff the second a

to growth some to de-bottleneck is get and as and we’ll raw have fourth Charles good so have XXX,XXX the headwinds turn some I material going we'll done. Freeport new plant the some quarter, costs Charles in I gas then St. got and us, news capacity volume on capacity have by of do the still you of we then still on then quarter. less quarter. the have And fact the growth. at plus the That's in improvements St. in that expect year-over-year think turnaround coming we're that and that going fourth coming impact coming see the in additional the tons in should about but on, So quarter, down through in positive second phase new we're also we

Howard Ungerleider

half price from I a The well think get just should volume favorable the both you bit currency. so broad color MatCo. equity Howard, earnings, then well. and add When this bit help analysis JVs to Sadara XX% about more the growth, And local say, of I little the or is a we first little as as is the on in second at, quarter Jeff, key right, X than growth up the think look in JVs and your Kuwaiti were it you volume are, was maybe, the what did better drivers expected

Operator

Stanley. Next, to with we’ll Andrews move Morgan Vincent

Vincent Andrews

added you Ed, and and sort personnel do roles of think the maybe different operational be those in committee, noticed forth, a and them structure were about capital and people to are members advisory when subject talk so but of finalization of forth an board to companies are get presumably joining on bunch I so any when you going of you've a to the mentioned role? to going and you we'll

Ed Breen

Yeah.

divisions. across announced permanent board we become So committees on. new the them board each will members announced the we three of They members XX of the

will probably three that different two to. still more members You join or to see add boards we have the

to so of three have are talking that weeks working diligently to during And probably the session. way people by couple now through that strategy that the interviewing talented and we're quality are two-day really who we'll and boards very just process meeting on done to last really shortly. the high of that, to we're talking people, some I'm to thrilled and add just all So go

So members our now new are attending.

get not up the speed to They it. to they're will business. at of going the we be to once So spin well new be

So out nice there. we've really worked a process

in the and before teams would always announce to we management about going month spin. of stated are months when September. X of the of kind the the DuPont We We've that's to of Corteva do X with

going do to to be we're that. ready So

as We'll be doing hoping on kind out. and we get we’ll is of fall. see but it then the process and a and conversations that. then far rating detail come we're good in talk very You'll we're about earliest that We're capital with agencies, structure, in And fall in range as to the will out able conclude for one about and half on do one very a three days days meeting. all for MatCo that the date investor that the that in to one at so for later or SpecCo AgCo. we’ll shortly, And talk planning that

Operator

BMO John with next And to we’ll move Capital McNulty Markets.

John McNulty

to your rating there's think current excess disposal, or out more it to it when you I cash you to it valuable flow is into tied it's Maybe leave because after us more on I it, is some been stock, about turns it they can that, certainly have thoughts these you've have discussions have the that agencies so at that undervalued you, businesses, guess, think important flexibility with whether M&A, what if vocal some it when you putting the be buybacks or specific the it or to to you being out, about that? for give flexibility

Howard Ungerleider

of share we'd at me kind would very a interested on excess cash I you repurchase stock I decision, give a would be we're but board is sitting be saying, Let preface leaning, something these I if with but it in. that think would think prices,

the were need buyback to we’ll the our something we and are from a told his preliminary to another the ranges I think going me we this think we share conversations be. you it's be we're we're sit board very billion going I look to remarks be so second get structures And mentioned comparable, add to think and let capital we with do going healthy quarter, will point, in down that to Howard in where I at.

lot we'll do not cash to we're get so a I think anyway, need have need sit standpoint. is therefore, another we with of rated flexibility saying, to where we from something the is maybe so way know to some going And flexibility of it a on

flexibility three these will for We companies going out. have

So we'll address near to able the future. be in that

Operator

next, we’ll to Christopher with move And Credit Suisse. Parkinson

Christopher Parkinson

Can efforts? whether that specialty credit portfolios on portfolio just incremental are you thinking can going for products just and and you just not management you us an you on giving investors these of any how or just these your give the give plan also, about And you’re adequate any us update forward? review insight within separate believe divestitures

Ed Breen

That the We've the the of already Well, portfolio the announce the I hit highest just did that let in in going -- rates want, to let his we not divest about mean, of of the and/or XXX X% guess Marc in see to we've also. times I’ll one we're of things million sales. where that XX% was future me portfolio, highlighted returns growth returns in Marc which was, we I styrofoam business the specialty prepared on translates and many to the we it. it's in to stated And Europe. divestiture business jump in remarks

up points take So portfolio out, there's when X% business with right the out all just there. a by basis the and low happen safety full of and that that returns. And XXX you way, way the by move, the go construction that margins that

action. an they’re So,

to We that couple quite we up, are all making happen, to all be and actions on the spin, people take the of tied a few spins pre take post same because spin the the and will actions, have the teams try our work want entity that. more to but do work are to legal a going so the to CARs

up or we're see understand to them be afterward, might of front So announcements from one the we they want you the but two and bulk we us, what do and right board, but to that have with teed go. on other will ready Marc

Operator

to Steve we’ll America. Next, Bank Byrne of move with

Steve Byrne

comment Corteva, the you an between share market on that if big On gaining changes any gain? in with the on have that structural and market and Midwestern cost strategy two campuses season you that the North expect we that selling is now those acceleration legacy, your business could enabling should share American on just in what that cutting efforts is over,

Howard Ungerleider

Thanks, Steve.

they synergies see a half end back cost about XXXX and talked of of the that said second always Ag we've were that in half As into though the business, to those bit back COGS. to in XXXX. loading continue is related loaded we’ll Most we in

goods, of the a we cost and first now As benefit and in that from America. in we sell on footprint both crop in planting restructured right quarter year part fourth this our will as Latin significantly the ready production condition seed quarter of that into America we're it North get The to XXXX. fourth and

talked ’XX. we that we those in end really, and of other end So back jumped quickly a all loading, early lot ’XX that about, of of those on areas really the

for set HR, well we're said, and spin fine to footprint. to continue at, there's that our up functioning corporate we So a looking still we're treasury have IT, areas we opportunities as some begin pretty we'll That ourselves forward. with to fully some to of finance, other as tax, the ready go we areas, start tune, get set organization, some

year-over-year. you through saw we You and second XX% the growth areas. teens growth few related insecticide, in a in that so our quarter, results first percent That's the high had year-over-year mentioned half is to

our we facilities, fermentations, these of given us just it's never First, much productivity, has had before. that de-bottlenecking supply higher manufacturing which

the specialty marketplace. high those product that's would organization in there. line the is these some for products of yeah, value our better I of right positioning going products, say presence to regaining some on now head Second markets. out say with And And in other focused of key I it's the marketplace share, competition, that's the a establishing head wouldn’t the sales really in

should Parexel, Brazil else in exciting, really benefit Asia, rice the that which I If soybean controls we're nobody the at. and in Brazil from then is a asked the the Vessarya, from second industry that a excitement gets we soybean talked feeling our product that pest that acres, to also in rust products. launching going you growth new half, fungicide other also that really about premier Asian with some is that. and with you of about We're coming brand in be coming herbicide about think the which from few in It's cereal

results. best our having that about pipeline showing talked about industry the deliver, in it’s we've So, to up the starting in we’ve and talked pipeline really

Operator

with Markets. Capital RBC Next, to Viswanathan Arun we’ll move

Arun Viswanathan

could XXs just go look to or that and timeline. thinking would wanted is if units you the even or that's on about electronics that if there just I splits progress any four the their specialty, structure, to option specifically was on possibility I further at expected? change the if back been earlier Form wondering nutrition any split potential an and there's ownership potentially own within the out than spinning

Ed Breen

all Yes. Arun. side. have the to spins we've be opened here. before their options no SpecCo Thanks them the obviously the we do All question, on divisions three afterward There'll always other for highlighted the and

it have well, it's the We is way September, with an lot in really market is, it portfolio that, for realignment portfolio. with like awesome a but optionality leaders. are we that of portfolio, the Having did the distinct portfolio said we nice all the businesses

spins lot a moving happen nice these of in flexibility a with position before forward, in we do actually nothing spring. we're So the but would clearly

Operator

And next, Bernstein we’ll Research. to Oxgaard with move Jonas

Jonas Oxgaard

board If just question we the can a return to second.

can what shrinking Are and ideal You've like added number overall unbelievably of they’re – talk look board point a more would on be on board some you broadly bunch but people, planning kind little for three all they of getting spins? at a the you people, the great bit board large. look like the

Ed Breen

Yeah.

side. little originally it it Jonas, the little a confusing. X a and board the the from from Dow X was DowDuPont side DuPont way, be big, So might the By picked is

board. is XX Having size. way board this fast, extremely to is the you a in board the together each up big companies, well by and committees we're see teeing said that, it company XX can staff will decisions to has that way, when a made that's typical but board So a we into very functioned of the three or have which split have very members, on you lot we've

to to member so, maybe somewhere of kind ourselves that over of of kind to we've this board XX in XX that each up three to get actually next months kind So XX, range, got XX the on of boards. or get

SpecCo board, the separate DowDuPont the on is, last and also. of and meetings, about board committees of board, way now two we regularly, right to but them on that did during the and that running three regular strategy with which then people day go do boards the So the those all will right are AgCo the so that's just we're I we the Jonas talked we continue to going group of one of actually MatCo, session meet now the call weeks, couple meet, XX committee

So take, they we're three, it's to and XX looking not actually start running give or or things end it up, -- can members. at they'll so down XX board getting the strategically

and we so that so I can early we they to number, from work they so XX, So said, XX to moving and the have as X, day prepped our go and all understand want one. as X, ready as we're some sessions X, we're possible on strategy way to they're them up

Howard Ungerleider

And each really good industry some spins. the in adding three experience of we’re

you're each see our you have the board seeing deep of on, when that experience pretty some here. areas in So new members come three

Operator

UBS. we’ll next, to And move Roberts with John

John Roberts

still IPO to and at Sadara early start for commercial planning an Is operation. it about full thinking expansions, now they're too you. is Thank that Sadara

Jim Collins

a right IPO things with at plan IPO. that, other with that are John. plans Kingdom, going retained haven't go, for Hi, Jim. on in now optionality, in obviously, And right that. do look This We've as an expansions always a to do then now. as Aramco, is Sadara partner anything with the had It especially the we'll we take have IPO our far doesn't but Aramco, an to any has Saudi future. the all an obviously

take we test things end is we need, at pass through look at test once get get year do and we reliability order teams the expansions. feedstocks do the our need have this I other potential done think first Our the to a reliability lenders the that lenders’ hurdle, have look and at we to business of we of will that

yield on We’re is working Value the Park. an the now. Value right building Sadara Park to pipeline

build in but that neighboring the be in they They up actually some have to so the take DowDuPont may may to we're investments. of Sadara customers next not plants build to third-party and on offtake investments, looking coming of capability We building be at and Kingdom.

Operator

Alembic Hassan And Ahmed next, we’ll move with Global. onto

Hassan Ahmed

on things. the flow touched side sort guys of You whole trade of

As hearing. we're debates it pertains some these that to sort obviously of trade of

the like, pre-buying any that's have these One some from is call of a So, that. ahead of of noticed sort one of side it. and part it, two you China, tariffs question that, around

rush longer sort bit a it, of prices second market last coming term, obviously, to sort a in over the rebounding over here. greenfield of down capacity this and thereafter, manner couple was of build of prior The to mean, then I years, there oil

do prices down, I investments announced. practice natural to once of, sort came have the you have of DowDuPont, polyethylene pricing trade So in reconsidering the you obviously, and of, a gas see gone post all within potential but were oil that's again would some trends maybe imagined part bit, disconnected industry well, wave down with oil been you that been guys parcel of a of the ethylene, implications next are as would on environment, side, Do sort sort future, the did you war. internally similar XXXX

Ed Breen

So, I pre-buying trade the seen any of indications in haven't materials think, on topics, I the sector.

pretty economy has actually Chinese been in products. it’s driven the of seen fact but by most for consumer we've our I the think good growth that the good markets, downstream

I any the think we've if pre-buying or market price in what seen. kind a had we seen Pacific different dynamic seen Asia of volumes than

access in gas As now. one terms the feedstock is competitive for things versus growth, naphtha most the of feedstocks competitive we to it hydrocarbons, goes ability all on to next of growth obviously, next natural look is that liquids light right the

take to the Of China here. really course, ship there, as over is to not it as that for cheap which it US and ethane is is only build access to

that direction. anything seen in haven't I So

to some this if that to the have facility and that trade of little their will to in a partner thing whole it an have is, part other tariff have position ethylene bit players a that so a get for local discussion investors. The build makes make a you want to be is for return of you able in difficult China, and

So there are coming several wave dynamics soon. big don't at see I any play.

wave lot too. lined the US I are even increments big there and think be up projects Coast Gulf a some in there of where may next Canada for

Operator

question with final come Vertical McCarthy Partners. our will Research today Kevin from And

Kevin McCarthy

a maybe Fitterling. Jim question you, two-part Jim, for

the on the secondly, outages comment you third for Freeport you that level the planned expect unplanned related in and And example versus second First, force to the quarter? MDI then and quarter view? we've some transitory there, majeure your of about ethane more any feedstock, much is versus has volatility it wanted feedstock durable to how And your ask seen mix appreciable way. of in that in upward changed would

Jim Fitterling

Yeah.

some the announced run that we and of mechanical and close up. out scheduled requires the unit to to and MDI parts it and change us August open It's there up in half of and a are to So Freeport we to clean -- first need plant, September. the from outage some then of on an that’s it go really make

a that’s one. time consuming So

As far expansion crack to when any they're actually Charles as Coast, outages -- place. planned to we got outages. or of put around plant Gulf nothing in de-bottleneck in down really, the the coming small terms and there's need the do St. we take that, that We've

bit, little the plant plastics a than in So quarter, it'll here there to be out that, few other days and nothing fourth for maybe a speak on of. but

now. new are how terms right on of obviously, got feedstock coming capacity Exxon's up. moving, prices the In you've

quite pull big bit got you've of in So a There's rejection. a ethane. still on ethane

light ethane last see Right for running now, as high. going bit rebound here, think has foreseeable as kind future. of XXX, we're in and we're much be XXX as been we heavy that think the we're think I we but cracking situation I we're ethane as the it, down propane can about to going little to and we you're I can light, talked time from a cracking

Neal Sheorey

Thanks, Jim.

Ed call, close final it pass make Before to to the out we over remarks. some I’ll

Ed Breen

as said, was platform. I’d the say execution based and team's of a the It first across year. feel broad overall, I we the the robust with very half, in half really Yeah. pleased whole first

quarter go I very you guidance. very third think solid to our it's again If guidance, robust, also

page for get the first XX% If guidance. all so the full so it, to is going the low-XX% work five range. you to very go back, the half DowDuPont go increase way come you're where six in against at with you we year mid-teens, And growth, you you and through points year ending end EBITDA your The EBITDA to of to page going EPS study midpoint robust strong of the and if very look a that, gave very, like to of up year. when the all growth

So feeling very good.

was it up XX%. past synchronized XX%, markets Asia really world, volume and biggest there price, America said think two -- take I up it positive at at seeing we're importantly, was we quarter, North America XX%, are around This all by when Europe was if up regions, up Latin was More you end you the look it's and drivers, X%.

see the around and synchronized very help So globe. We price volume continuing to us.

that really against the comments third us here materials raw is Brazil The we corn thing shift. very things have helps been synergies offset on and the moving to soy Ag us in significant to in currency with movement those really two and in mentioned able a the

dynamics positive are way So some year teeing this us going. for negative dynamics some with that really up it's the robust

So joining thank much very for you on us today.

Neal Sheorey

later of a our today. appreciate transcript Thanks, call. Ed and concludes posted our DowDuPont’s will reference, interest for thanks on This everyone copy We DowDuPont. call. for website be your your the joining And in

Operator

thank And that for will your today's you call. We conclude participation.

DuPont de Nemours (DD) 2 Aug 182018 Q2 Earnings call transcript