Du pont 3Q15 Earnings Call Notes

posted in: Notes | 0

E I du Pont de Nemours’ (DD) CEO Ed Breen on Q3 2015 Results

Agriculture remains challenging especially in Brazil

“In Agriculture near-term conditions remain challenging. Demand for seed and crop protection products primarily in Brazil further weakened in the quarter impacted by macroeconomic and competitive pressures. In Brazil where the planting season is in progress tighter grower profits and credits are causing growers to be more cautious in their spending.”

Interim CEO focused on cost structure, working capital and capital spending

“Since I took on the role of interim chair and CEO on October 16, we have been taking a hard look at our cost structure our working capital performance and our capital spending. While it is too early in our process to share a specific plan and metrics, we see opportunities for further improvement in all three areas”

We’re in a low to no growth environment, but not a disaster by any means

“look, things have clearly softened up, just look at every industrial company that’s reported this quarter. Having said that, I don’t think things are in any draconian situation. I think it’s just a low growth to no growth environment across some of the industrial spaces, that’s fine. We can operate well in that environment if we do the right things at our end that we need to do and when things pick up that’s great everybody. But, no, I don’t see a disaster out there by any means. But I think we’re in a kind of zero growth environment when you put all the pieces together and that’s fine.”

There needs to be some consolidation in the ag space

“I’m not naive about what’s going on in the ag space right now. I do think at some point there’s consolidation here that will occur. You saw some other announcements just this week from others.”

Taking a cautious view on ag in 2016

“I think the way I’d say that is were certainly taking a cautious view of 2016. We’re not expecting a big market recovery overnight. So — but we’ll talk more about the 2016 outlook and we get ready to talk about the 2016 plan.”

“everyone’s talking to everyone” in the ag industry about consolidation

“but you’ve seen all the activity in the last six months and one of the other ag players just this week saying they are looking at what they would do with their ag business and I’d also say one of them said everyone’s talking to everyone. That’s a true statement and we’re also — I am personally talking to the CEOs of some of the other companies. Something will give here on the ag side and I would say just looking at it consolidation should happen. ”

We’re in the bottom of the down cycle or hopefully close to it

“we’re in the bottom of the down cycle right now or hopefully close to it. So clearly there’s a big opportunity there. And everyone’s seen that.”

Drop off in PV solar in China

“when you look at electronics communications, consumer electronics was actually a strength in the quarter as was our Kevlar film business and the PV. Where the drop-off occurred was in the Solamet paste, also in the PV industry and largely service in AP, specifically China region. That’s where the greatest year-over-year decline occurred within the business.”