DuPont Annual Report 2013

DuPont Results: Strong Execution, Superior Returns

In 2013, DuPont executed on its strategy, achieving growth, building momentum and delivering value for our shareholders.

Strong Growth Strategy

Delivering higher value to investors.

Our management team’s focus on operational priorities of innovation, global reach and strong execution is paying off.

 Five-Year Results: 2008-2013

• Delivered total shareholder return of 214 percent since 2008, compared to 128 percent for the S&P 500 and 111 percent for our proxy peers1 during the same period.

• Excluding Pharmaceuticals, segment operating margins increased 16.3 percent in 2013 from 10.9 percent in 2008.2

• New products introduced between 2010 and 2013 generated approximately $10 billion in 2013 revenue.

• Developing market sales have grown by a CAGR of 13 percent from 2008 to 2013.

One-year Results: Building Momentum in 2013

• Achieved a solid 3 percent growth in operating earnings per share, despite a 45 percent decline in the Performance Chemicals segment and a sluggish global economy2.

• Achieved industry-leading growth in our Agriculture businesses.

• Introduced nearly 1,800 new products, including Optimum® AcreMax® seed technologies, Optimum® AQUAmax® hybrids seeds, Rynaxypyr® insect control, insecticides, Solamet® pastes, new applications of Kevlar® for conveyor belts and broadband cable protection and renewable Zytel® specialty polyamides for automotive applications.

• Made significant strides in reshaping our portfolio for higher growth, completing the divestiture of the Performance Coatings segment, and announcing separation of our Performance Chemicals segment.

• Executed a $1 billion share buyback.

• Raised our dividend by 5 percent for the second year in a row.

Targeted Investment in Higher Growth Areas

We are continuing to invest in the future.  We made targeted and strategic capital allocations in 2013 and, over the last five years, increased our reinvestment rate from $3 billion to $4 billion a year, which will result in higher growth opportunities.

Strategic moves like the $7 billion acquisition of Danisco, the $5 billion sale of Performance Coatings and the decision to separate our Performance Chemicals segment have helped us strengthen and sharpen our portfolio, as we move to a higher-growth, less cyclical, and less volatile DuPont. 

The anticipated spinoff of our Performance Chemicals segment will result in two strong public companies, each able to focus on its unique purpose and strategic priorities. Each company will utilize tailored capital structures that support how they individually create value for shareholders and accomplish that company’s strategic objectives.  DuPont will continue as a higher-growth science company, delivering shareholder value through earnings and revenue growth, and Performance Chemicals will emerge as a strong, cash-generating company that will also provide value to shareholders.

Freeing Cash, Growing Dividends

Our productivity efforts over the last five years have freed significant cash, and dividends remain a priority. In fact, we have had 438 consecutive quarters of dividend payouts for shareholders, and we recently restarted dividend increases. Our plan is to grow dividends in line with earnings growth, complemented by share repurchases consistent with our cash discipline policy.

Building a World-Class Team

It is the talent, determination and dedication of our people that have made DuPont successful since 1802. Our leaders have remained focused on our purpose as we’ve reshaped our company to respond to some of the world’s toughest challenges. Our world-class scientists help keep our pipeline filled with sustainable, innovative and marketable solutions. Each of our 64,000 employees, in more than 90 countries, contributes to making lives better, safer and healthier for people everywhere. Our “Committed to Zero” Core Values guide our company, and ensure that we deliver for our shareholders, our customers and the communities in which we operate around the world.

Purchasing Shares to Improve Returns

As we move into 2014, DuPont has positive momentum across our portfolio and is delivering value for its shareholders, customers and the communities we serve around the world. Our Board of Directors has authorized a new $5 billion share repurchase program, and we expect to complete $2 billion of the program in 2014. This repurchase plan takes into account our improved balance sheet, and reflects our ongoing commitment to provide attractive cash returns to shareholders. More important, it gives us the flexibility to continue to invest where we believe we can create advantage through our unique science expertise.

We are encouraged as we enter 2014, despite a market environment that remains dynamic. We expect the global economy to continue its gradual improvement, and we expect the U.S. economy to continue to strengthen, as well.

With a 200-year history fueling our confidence, we remain steadfast in our conviction that science-powered innovation will provide answers to some of the world’s most complex problems, deliver marketable solutions for customers and provide the superior returns shareholders expect. 

1. Source: Datastream as of 12/31/2013, Bloomberg, Capital IQ, FactSet. Proxy Peers consists of 3M, Air Products, Baxter International, Boeing, Caterpillar, Dow, Emerson, Honeywell, Ingersoll Rand, Johnson & Johnson, Kimberly-Clark, Merck, Monsanto, Procter and Gamble, Syngenta AG and United Technologies. Proxy Peers and S&P Indices are USD market cap-weighted, and assume dividends are re-invested at the closing price applicable on the ex-dividend date. 2. See reconciliations of non-GAAP measures to GAAP at the end of this document.