EI DuPont de Nemours & Co. (DD)
Q2 2010 Earnings Call
July 27, 2010 9:00 am ET
Ellen Kullman - Chairman, Chief Executive Officer and Member of Strategic Direction Committee
Nicholas Fanandakis - Chief Financial Officer, Principal Accounting Officer and Senior Vice President
Karen Fletcher - Vice President of Investor Relations
Mark Gulley - Soleil Securities Group, Inc.
David Begleiter - Deutsche Bank AG
Jeffrey Zekauskas - JP Morgan Chase & Co
Robert Koort - Goldman Sachs Group Inc.
Edward Yang - Oppenheimer & Co. Inc.
John Roberts - Buckingham Research Associations
Frank Mitsch - BB&T Capital Markets
Laurence Alexander - Jefferies & Company, Inc.
Paul Mann - Morgan Stanley
P.J. Juvekar - Citigroup Inc
Previous Statements by DD
» E. I. du Pont de Nemours and Company Q1 2010 Earnings Call Transcript
» E. I. du Pont de Nemours and Company Q4 2009 Earnings Call Transcript
» E. I. du Pont de Nemours and Company Q3 2009 Earnings Call Transcript
Good morning. My name is John, and I'll be your operator for today's call. At this time, I would like to welcome everyone to the DuPont 2010 Second Quarter Investor Call. [Operator Instructions] It is now my pleasure to turn the floor over to your host, Karen Fletcher, Vice President of Investor Relations. Madame, you may begin your conference.
Thank you, John. Good morning, and welcome. With me this morning are Ellen Kullman, Chair and CEO; and Nick Fanandakis, CFO. The slides for today's call can be found on our website at dupont.com, along with the news release that was issued earlier this morning.
If you look at Slide 1, during the conference call, we will make forward-looking statements. All statements that address expectations or projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks and assumptions. We urge you to review DuPont's SEC filings for a discussion of some of the factors that could cause actual results to differ materially. We will also refer to non-GAAP measures and request that you refer to the reconciliations to GAAP statements provided with our earnings news release and on our website.
And finally, we've posted supplemental information on our website that we hope is helpful to your understanding of our company's performance.
Before I turn the call over to Ellen, I'd like to remind everyone that our 2010 Investor Day will be held on December 9. When the date gets closer, we'll share details on location and timing.
In the meantime, please mark your calendars, and we hope to see many of you then. Ellen?
Great. Thanks, Karen, and good morning, everyone. I'm pleased with our outstanding second quarter results, with each reporting segment and all regions turning in double-digit top line growth. Our leaders continue to be focused on execution and are delivering high-quality growth and improving the profitability of their businesses. Market-driven product innovation, coupled with strong pricing discipline contributed to impressive top line growth. Ongoing fixed and variable cost productivity and benefits from restructuring actions delivered operating leverage and strong online results.
Slide 2 recaps DuPont's 2010 directives. These focus areas are well understood across the company, with business-specific commitments that roll up in support of the metrics you see in this chart. My leadership team engages with the business leaders on a regular basis to review progress and make adjustments to ensure we deliver on our commitments. Now I'd like to take a few minutes talk about some of our key markets. I'll start with Electronics, where sales and earnings results from our Electronics & Communication business surpassed pre-recession peaks. We've often spoken about the strong growth in photovoltaics, and this quarter was no different, with sales in the PV markets growing more than 150%. Sales to markets outside of PV were up more than 25%, with the recovery broad-based across markets including cell phones, PCs and displays. Another indicator of strong markets is that global semiconductor consumption now exceeds pre-recession levels.
Automotive markets were also strong with global light vehicle builds up about 26% in the quarter. Businesses such as Coatings and Performance Polymers delivered healthy growth, along with margin expansion from productivity and restructuring initiatives. As expected, our Ag & Nutrition business had an outstanding quarter, thus concluding a very successful selling season for the northern hemisphere. The multi-year investment in our 'right product, right acre' seeds strategy focuses on our unique ability to optimize, grow a profitability field by field. This winning strategy sets us apart from the competition, with 2010 share gains in North American corn and soybeans as one measure of grower validation that our strategy is on course. Crop Protection sales were also strong, with volume growth in the high-single digits, including some share gains. Both businesses are capitalizing on high-value product innovations, including high-yielding hybrids and varieties and our Rynaxypyr family of insecticide, new products that enable our businesses to grow and differentiate themselves from the competition.
Looking at regional performance, once again, Asia was the standout region, with sales up almost 50%. Growth in developed ASEAN countries was stronger than expected, with Japan topping the list in terms of year-over-year recovery. Europe, Latin America and North America posted solid gains with strong business performance across the board. This quarter was all about execution, about starting with the diverse and rich portfolio of businesses, reaping the benefits from last year's work, reorganize and restructure those businesses to emerge stronger from the recession, introducing higher-value products to our markets and continuing with cost and capital productivity that have become part of our culture. Now I'm going to turn the call over to Nick to review details of our financial performance, and then, I'll close the call with comments on our outlook. Nick?