WILMINGTON, Del., April 16, 2015 /PRNewswire/ -- DuPont (NYSE: DD)
today mailed a letter to shareholders highlighting the growth of
DuPont's ongoing business post the upcoming separation of Chemours
and detailing the company's strategy to deliver higher growth and
higher value now while positioning the company for the future. The
letter details the success of DuPont's ongoing business, which
includes 6% segment sales growth[i] and a 19% adjusted operating
EPS compound annual growth rate since December 31, 2008[ii]. It also outlines the next
generation DuPont's strategy to build and leverage leading
positions in three highly attractive strategic focus areas where
DuPont has robust opportunities and strong, well established
competitive advantages. The letter urges shareholders to vote on
the WHITE proxy card "FOR" all of DuPont's 12 highly
qualified, experienced directors to continue DuPont's successful,
high performing strategy.
The full text of the letter follows:
April 16, 2015
Dear Fellow Shareholder,
DuPont's May 13, 2015 Annual Meeting of Shareholders is
less than one month away, and your vote is important to protect the
future value of your investment in DuPont.
DuPont has been executing a bold, multi-year strategic
transformation that is delivering higher growth and higher value
now while positioning the Company for the future. Your Board of
Directors and management are overseeing this successful strategy,
and we are committed to maintaining DuPont's strong record of
returning capital to shareholders, including through our
outstanding record of dividend payments.
In contrast, Trian Fund Management is asking shareholders to
elect a slate of nominees that would bring to the boardroom a
high-risk, value-destructive agenda to break up and add excessive
debt to your Company – an agenda that your Board has thoroughly
analyzed and unanimously determined is not in the best interests of
shareholders.
Your vote for ALL DuPont directors is a vote to continue a
strategy that is working. We ask that you review this letter
carefully and then vote on the enclosed WHITE proxy card for
ALL DuPont directors. Please note that voting a "gold" proxy
card for any reason will not count as a vote in support of DuPont's
Board and will revoke any prior vote on the WHITE proxy
card. To make sure your shares are voted in support of all of
DuPont's directors, we urge you to vote again today in this very
important election – using the enclosed WHITE proxy card. If
you have voted your shares more than once, only your latest-dated
proxy card counts.
THE GROWTH OF DUPONT'S ONGOING BUSINESS DEMONSTRATES THE
STRENGTH OF NEXT GENERATION DUPONT
As we approach the spin-off of Chemours, the ongoing business
that will comprise next generation DuPont is already delivering
higher, more stable growth, with 6% segment sales
growth1 and a 19% adjusted operating EPS compound annual
growth rate since December 31,
2008.2 Our powerful innovation platform and
embedded cost discipline are expanding margins and increasing
earnings. Under current management, the Company's segment adjusted
operating margin has improved from 9.5% to 16.9%.3 We
expect our strategy to continue to drive these trends.
Strong Earnings Growth in Ongoing Business
NEXT GENERATION DUPONT HAS A CLEAR STRATEGY THAT LEVERAGES
WORLD-LEADING POSITIONS IN HIGHLY ATTRACTIVE GROWTH MARKETS
DuPont's strategy is to build and leverage leading positions in
three highly attractive strategic focus areas where DuPont has
robust opportunities and strong, well established competitive
advantages.
As the world's population continues to grow and a rising middle
class increases consumption of scarce, but vital, resources,
science-based solutions are key to meeting the world's needs.
Across our three focus areas, DuPont develops products that
help meet the growing demand for safe, nutritious food and
renewably sourced materials and fuels to protect, transport and
power the world sustainably and efficiently. We expect to drive
above-market revenue growth by leveraging our science and
engineering capabilities, deep market knowledge and global scale to
develop and deliver highly customized solutions for customers
across the globe.
Estimated Revenue Growth, 2014-2020
(dollars in
billions)
AGRICULTURE & NUTRITION:
Delivering Innovative
Solutions from Our World-Leading Pipeline
Next generation DuPont will play an important role in helping
the world sustainably feed a growing population, including a rising
middle class seeking healthier foods. Higher agricultural
productivity, the demand for better food safety and security, and
increasing consumer interest in health and nutrition are driving
global demand. As a result, we see this market growing by
approximately 5-8% annually over the long term.
Our leading competitive position enables us to capture these
opportunities based on: our global presence and advantaged scale in
target markets; superior market access; unparalleled insights into
grower and food company needs; innovative, best-in-class science
and technology; the breadth of relevant offerings in our portfolio;
and comprehensive product development and application know-how,
tailored to local markets.
Our key Agriculture & Nutrition offerings – Seeds and
Traits, Crop Protection Products and Specialty Food Ingredients –
generated revenues of $14.8 billion
in 2014. By 2020, we estimate those revenues could total
approximately $20-24 billion.
Our robust innovation pipeline will continue to deliver
value-added solutions through important initiatives that capitalize
on clear routes to growth, including: our proprietary germplasm;
advanced biotech capabilities that deliver products with consumer
benefits like Plenish®, a soybean with a healthier oil profile and
no trans-fat; robust insect and disease control solutions such as
Cyazypyr®; and next generation products in key areas like
probiotics, cultures, and specialty proteins, such as HOWARU®
probiotics.
ADVANCED MATERIALS:
Leveraging Application-Based
Innovation
We see significant opportunities to extend our historic
leadership in Advanced Materials. Our core science capabilities in
chemistry, polymers, engineering and now biosciences enable us to
deliver highly tailored, value-added solutions to customers.
DuPont's Advanced Materials portfolio generated revenues of
$12.4 billion in 2014, and we
estimate those revenues could rise to approximately $16-20 billion by 2020. We estimate that the
Advanced Materials market will grow by approximately 3-6% annually.
We believe we can outpace this market growth by applying our
science and innovation capabilities to capitalize on: the strong
demand for light-weight, fuel-efficient materials in the automotive
and aerospace industries; the need for miniaturization of
electronics; and increasing demand for protective materials in
industry, construction, and for the military and first responders.
We also will continue to penetrate alternative energy and other
clean technologies.
Going forward, we are confident that leveraging our industrial
biotechnology and production-agriculture expertise will allow us to
capture developing opportunities for sustainably sourced, renewable
and differentiated polymers. We also expect continued growth
through additional innovation and downstream marketing – Solamet®
and Tedlar® for new photovoltaic cell designs are good examples.
Disciplined, targeted acquisitions will complement our ongoing,
active portfolio refinement.
BIO-BASED INDUSTRIALS:
Developing World-Leading
Industrial Biotechnology to Drive and Capitalize on Rapid Market
Expansion
DuPont is positioned to lead the industrial bio-based technology
revolution. Bio-based technologies are beginning to impact
virtually every industry, and we estimate this market will grow by
at least 5-8% annually over the long term. Our key portfolio
offerings in Bioactives (enzymes used in detergents, food and
animal nutrition, and corn-based ethanol), Biomaterials (including
Sorona® and other renewable polymers) and BioFuels (advanced fuels
such as cellulosic ethanol) generated revenues of $1.3 billion and delivered 25% operating
earnings4 growth in 2014. By 2020, we estimate that
these revenues will more than double to approximately $3-4 billion.
With our advanced science and technology capabilities, we are
uniquely positioned to innovate in this fast-growing area. We are
focused on creating new categories of renewably sourced, bio-based
products such as cellulosic ethanol, seed coatings and protection,
and enzymes. One notable example of this trend is energy-saving
detergent Tide Coldwater CleanTM – the first brand in
the world to use renewable cellulosic ethanol in a scalable,
commercial way to further reduce the impact of detergent on the
environment.
DuPont fully integrates value chains that are critical to
commercializing bioscience, from production agriculture to enzyme
capability and manufacturing technology. Our competitors must
resort to complex contractual arrangements to attempt to replicate
the portfolio we already have under one roof.
PROTECT THE VALUE OF YOUR INVESTMENT IN NEXT GENERATION
DUPONT – PLEASE VOTE THE WHITE PROXY CARD TODAY
This is a critical moment in DuPont's history. Next
generation DuPont is emerging as a dynamic science company
delivering sustainable, profitable growth and increasing
shareholder returns. We will continue to build on our competitive
advantages: harnessing our innovation platform to expand our
pipeline and create transformational new products; leveraging our
global reach and market insights; and maintaining our focus on
execution to reduce costs and drive efficiency.
We strongly believe that we have the right Board and the
right strategy to shape next generation DuPont and continue
building value for you, our shareholders.
Trian is asking you to replace world-class directors, who are
overseeing management's execution of a strategy that is delivering
tremendous value for shareholders, with its nominees, who are
singularly focused on thwarting this proven strategy and pursuing a
high-risk, value-destructive agenda. We urge you to protect the
value of your investment in DuPont by voting "FOR" all 12 of
DuPont's highly qualified directors on the WHITE proxy card
today.
Thank you for your support.
/s/
ELLEN KULLMAN
Chair of
the Board and
Chief Executive Officer
YOUR VOTE IS
IMPORTANT, NO MATTER HOW MANY OR HOW FEW SHARES YOU OWN
Please use the enclosed WHITE proxy card today to vote
FOR all of DuPont's highly qualified and experienced
director nominees.
REMEMBER: Please simply discard any "gold" proxy card that
you may receive from Trian. Returning a "gold" proxy card – even if
you "withhold" on Trian's nominees – will revoke any vote you had
previously submitted on DuPont's WHITE proxy card.
THE BEST WAY TO PROTECT THE VALUE OF YOUR INVESTMENT IS TO VOTE
USING ONLY THE WHITE PROXY CARD
If you have questions about how to vote your shares, or need
additional assistance, please contact the firm assisting us in the
solicitation of proxies:
INNISFREE M&A INCORPORATED
(877) 750-9501 (toll-free from the US and Canada)
(412) 232-3651 (from other locations)
|
(1) Segment sales include transfers and
exclude Performance Coatings, Performance Chemicals and Other;
Compounded Annual Growth Rate (CAGR) is calculated from
12/31/08 – 12/31/14.
(2) Adjusted operating EPS defined as diluted
earnings per share from continuing operations excluding
non-operating pension/OPEB costs, significant items, Performance
Chemicals and Pharma. EPS Compounded Annual Growth Rate (CAGR) is
calculated from 12/31/08 – 12/31/14.
Reconciliations of non-GAAP measures to GAAP are included at the
end of this document.
(3) Segment adjusted operating margin is based
on total segment sales and segment adjusted operating earnings,
excluding Performance Chemicals and Other/Pharma. Segment adjusted
operating earnings are calculated using segment pre-tax operating
income excluding significant items; calculations include certain
corporate expenses and exclude adjusted operating earnings of
Performance Chemicals and Pharma/Other. Calculation is from
12/31/08 vs. 12/31/14.
Reconciliations of non-GAAP measures to GAAP are included at the
end of this document.
(4) Segment operating earnings is based on
segment pre-tax operating income excluding significant items.
Reconciliations of non-GAAP measures to GAAP are included at the
end of this document.
Letters to DuPont shareholders and other materials regarding the
Board's recommendation for the 2015 Annual Meeting of Shareholders
can be found at www.dupontdelivers.com.
DuPont (NYSE: DD) has been bringing world-class science and
engineering to the global marketplace in the form of innovative
products, materials, and services since 1802. The company
believes that by collaborating with customers, governments, NGOs,
and thought leaders, we can help find solutions to such global
challenges as providing enough healthy food for people everywhere,
decreasing dependence on fossil fuels, and protecting life and the
environment. For additional information about DuPont and its
commitment to inclusive innovation, please visit
www.dupont.com.
USE OF NON-GAAP MEASURES:
This letter to shareholders
contains certain non-GAAP measurements that management believes are
meaningful to investors because they provide insight with respect
to operating results of the company and additional metrics for use
in comparison to competitors. These measures should not be viewed
as an alternative to GAAP measures of performance. Furthermore,
these measures may not be consistent with similar measures provided
by other companies. This data should be read in conjunction with
previously published company reports on Forms 10-K, 10-Q, and 8-K.
These reports, along with reconciliations of non-GAAP measures to
GAAP, are available on the Investor Center of www.dupont.com under
Key Financials & Filings. Reconciliations of non-GAAP measures
to GAAP are provided below.
RECONCILIATION OF NON-GAAP MEASURES (UNAUDITED) (dollars
in millions, except per share amounts)
RECONCILIATION OF
ADJUSTED OPERATING EPS
|
|
2014
|
|
2013
|
|
2012
|
|
2011
|
|
2010
|
|
2009
|
|
2008
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
GAAP EPS from
continuing operations
|
|
3.90
|
|
3.04
|
|
2.59
|
|
3.38
|
|
2.94
|
|
1.70
|
|
2.28
|
Add: Significant
Items
|
|
0.01
|
|
0.45
|
|
0.72
|
|
0.25
|
|
-
|
|
0.11
|
|
0.42
|
Add: Non-Operating
Pension & OPEB Costs / (Credits)
|
|
0.10
|
|
0.39
|
|
0.46
|
|
0.39
|
0.38
|
|
0.10
|
|
(0.28)
|
Operating EPS
(Non-GAAP)
|
|
4.01
|
|
3.88
|
|
3.77
|
|
4.02
|
|
3.32
|
|
1.91
|
|
2.42
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Less: Performance
Chemicals (a),(b)
|
|
0.82
|
|
0.86
|
|
1.50
|
|
1.79
|
|
1.09
|
|
0.52
|
|
0.59
|
Less: Pharma
(c)
|
|
0.02
|
|
0.02
|
|
0.04
|
|
0.20
|
|
0.34
|
|
0.74
|
|
0.73
|
Adjusted Operating
EPS (excluding Performance Chemicals, Pharma)
(Non-GAAP)
|
|
3.17
|
|
3.00
|
|
2.23
|
|
2.03
|
|
1.89
|
|
0.65
|
|
1.10
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a) Prior periods reflect the reclassifications of Viton®
fluoroelastomers from Performance Materials to Performance
Chemicals.
(b) Performance Chemicals operating earnings assumes a base income
tax rate from continuing operations of 19.2%, 20.8%, 24.2%, 22.0%,
19.2%, 22.1% and 20.4% for 2014, 2013, 2012, 2011, 2010, 2009 and
2008, respectively.
(c) Pharma operating earnings assumes a 35% tax rate.
|
|
|
|
|
|
|
SEGMENT
SALES (dollars in millions)
|
|
2014
|
|
2008
|
|
|
|
|
|
|
|
Total Segment Sales
(a)
|
|
35,011
|
|
26,499
|
Less: Performance
Chemicals (b)
|
|
6,497
|
|
6,245
|
Less:
Other
|
|
5
|
|
160
|
Total Segment Sales
(excluding Performance Chemicals and Other)
|
|
28,509
|
|
20,094
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SEGMENT ADJUSTED
OPERATING EARNINGS (dollars in millions)
|
|
|
|
|
|
|
|
|
2014
|
|
2008
|
Segment Pre-tax
Operating Income (PTOI) (GAAP)(c)
|
|
6,356
|
|
3,373
|
Less:
Performance Chemicals PTOI (b)
|
|
913
|
|
619
|
Less:
Other/Pharma PTOI
|
|
(391)
|
|
839
|
Less: Corporate
Expenses (d)
|
|
572
|
|
479
|
Add: Significant
Items (e)
|
|
(444)
|
|
466
|
Segment Adjusted
Operating Earnings (excluding Performance Chemicals and
Other/Pharma) (f) (Non-GAAP)
|
|
4,818
|
|
1,902
|
|
|
|
|
|
|
|
(a) Segment sales includes transfers.
(b) Prior periods reflect the reclassifications of Viton®
fluoroelastomers from Performance Materials to Performance
Chemicals.
(c) Segment PTOI is defined as income (loss) from continuing
operations before income taxes excluding non-operating pension and
other postretirement employee benefit costs, exchange gains
(losses), corporate expenses and interest.
(d) Represents total corporate expenses excluding significant
items, an estimate of DuPont Performance Coatings residual costs
and an estimate for an amount that would be allocated to
Performance Chemicals.
(e) Represents significant items included in Segment PTOI,
excluding those related to Performance Chemicals and
Other/Pharma.
(f) Segment adjusted operating margin (non-GAAP) is based on total
segment sales and segment adjusted operating earnings, excluding
Performance Chemicals and Other/Pharma.
RECONCILIATION OF
SEGMENT PRE-TAX OPERATING INCOME (PTOI) TO OPERATING
EARNINGS
|
(dollars in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Industrial
Biosciences
|
|
2014
|
|
2013
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Segment PTOI
(GAAP)
|
|
198
|
|
170
|
|
|
|
|
Add: Significant
Items Charge/ (Benefit) included in Segment PTOI
|
|
13
|
|
(1)
|
|
|
|
|
Segment Operating
Earnings (Non-GAAP)
|
|
211
|
|
169
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
FORWARD LOOKING STATEMENTS
This document contains forward-looking statements which may be
identified by their use of words like "plans," "expects," "will,"
"believes," "intends," "estimates," "anticipates" or other words of
similar meaning. All statements that address expectations or
projections about the future, including statements about the
company's strategy for growth, product development, regulatory
approval, market position, anticipated benefits of recent
acquisitions, timing of anticipated benefits from restructuring
actions, outcome of contingencies, such as litigation and
environmental matters, expenditures and financial results, are
forward looking statements. Forward-looking statements are not
guarantees of future performance and are based on certain
assumptions and expectations of future events which may not be
realized. Forward-looking statements also involve risks and
uncertainties, many of which are beyond the company's control. Some
of the important factors that could cause the company's actual
results to differ materially from those projected in any such
forward-looking statements are: fluctuations in energy and raw
material prices; failure to develop and market new products and
optimally manage product life cycles; ability to respond to market
acceptance, rules, regulations and policies affecting products
based on biotechnology; significant litigation and environmental
matters; failure to appropriately manage process safety and product
stewardship issues; changes in laws and regulations or political
conditions; global economic and capital markets conditions, such as
inflation, interest and currency exchange rates; business or supply
disruptions; security threats, such as acts of sabotage, terrorism
or war, weather events and natural disasters; ability to protect
and enforce the company's intellectual property rights; successful
integration of acquired businesses and separation of
underperforming or non-strategic assets or businesses and
successful completion of the proposed spinoff of the Performance
Chemicals segment including ability to fully realize the expected
benefits of the proposed spinoff. The company undertakes no duty to
update any forward-looking statements as a result of future
developments or new information.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
DuPont has filed a definitive proxy statement with the U.S.
Securities and Exchange Commission (the "SEC") with respect to the
2015 Annual Meeting. DUPONT STOCKHOLDERS ARE STRONGLY ENCOURAGED TO
READ THE DEFINITIVE PROXY STATEMENT (INCLUDING ANY AMENDMENTS AND
SUPPLEMENTS), THE ACCOMPANYING WHITE PROXY CARD AND OTHER DOCUMENTS
FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY BECAUSE THEY CONTAIN
IMPORTANT INFORMATION. DuPont, its directors, executive officers
and other employees may be deemed to be participants in the
solicitation of proxies from DuPont stockholders in connection with
the matters to be considered at DuPont's 2015 Annual Meeting.
Information about DuPont's directors and executive officers is
available in DuPont's definitive proxy statement, filed with the
SEC on March 23, 2015, for its 2015
Annual Meeting. To the extent holdings of DuPont's securities by
such directors or executive officers have changed since the amounts
printed in the proxy statement, such changes have been or will be
reflected on Statements of Change in Ownership on Form 4 filed with
the SEC. Information regarding the identity of potential
participants, and their direct or indirect interests, by security
holdings or otherwise, is set forth in the definitive proxy
statement and, to the extent applicable, will be updated in other
materials to be filed with the SEC in connection with DuPont's 2015
Annual Meeting. Stockholders will be able to obtain any proxy
statement, any amendments or supplements to the proxy statement and
other documents filed by DuPont with the SEC free of charge at the
SEC's website at www.sec.gov. Copies also will be available free of
charge at DuPont's website at www.dupont.com or by contacting
DuPont Investor Relations at (302) 774-4994.
4/16/15
[i] Segment sales include transfers and exclude Performance
Coatings, Performance Chemicals and Other; Compounded Annual Growth
Rate (CAGR) is calculated from 12/31/08 – 12/31/14.
[ii] Adjusted operating EPS defined as diluted earnings per
share from continuing operations excluding non-operating
pension/OPEB costs, significant items, Performance Chemicals and
Pharma. EPS Compounded Annual Growth Rate (CAGR) is calculated from
12/31/08 – 12/31/14. Reconciliations
of non-GAAP measures to GAAP are included at the end of this
document.
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SOURCE DuPont