Actions to Increase Velocity
Carl Lukach Vice President
Investor Day New York City March 14, 2008 2
Agenda
9:00 AM Opening Remarks Chad Holliday Capital Allocation Jeff Keefer Faster Revenue Growth Ellen Kullman Gains in Agriculture Tom Connelly
Productivity Richard Goodmanson
12:05 PM Q&A
12:35 PM Closing Remarks Chad Holliday
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 3
Regulation G The attached charts include company information that does not conform to generally accepted accounting principles (GAAP). Management believes that an analysis of this data is meaningful to investors because it provides insight with respect to ongoing operating results of the company and allows investors to better evaluate the financial results of the company. 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 on non-GAAP measures to GAAP are available on the Investor Center of www.dupont.com.
Forward Looking Statements During the course of this presentation we may make forward-looking statements or provide forward-looking information. All statements that address expectations or projections about the future are forward-looking statements. Some of these statements include words such as "expects," "anticipates,” "plans," "intends," "projects," and "indicates.” Although they reflect our current expectations, these statements are not guarantees of future performance, but involve a number of risks, uncertainties, and assumptions. Some of those risk factors include economic conditions, competitive pressures, challenges associated with research and development, market acceptance of new products, and regulatory approval. We urge you to review DuPont's SEC filings, particularly its latest annual report on Form 10-K and quarterly report on Form 10-Q, for a discussion of some of the factors which could cause actual results to differ materially. The Company does not undertake to update any forward-looking statements as a result of future developments or new information.
All products denoted with ™ and ® are registered trademarks of DuPont or its affiliates, unless otherwise noted.
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. F r 4Q om J 4 E a ar n n uar Next Phase of Acceleration Plan in g y s 22 Achieve Higher Rate of Growth C a ll 5 Steps • Emerging Markets • Safety & Protection • Agriculture & Nutrition • Applied BioSciences • Productivity Programs
March 14, 2008 Investor Day
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. Actions to Increase Velocity
Chad Holliday Chairman & Chief Executive Officer
2008 Investor Day New York City March 14, 2008 6 DuPont – A Market-Driven Science Company
• Leading Innovation
• Leveraging the Power of Science, Customers, and Backbone Operations
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 7
Sustainable Growth Trends
• Growth in developing countries
• Renewable energy and materials
• Greater safety and security
• Increased food production
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 8
DuPont — Chemical Industry Innovation Leader
Widening lead over competition as determined by The Patent Board™
The Chemicals Patent Scorecard™ published in The Wall Street Journal (February 26, 2008). © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 9
DuPont — Chemical Industry Innovation Leader
Widening lead over competition as determined by The Patent Board™
The Chemicals Patent Scorecard™ published in The Wall Street Journal (February 26, 2008). © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 10 DuPont — Biotechnology Innovation Leader
Nature Biotechnology Publication 2005 2006
Institution Number of Institution Number of new patents new patents University of California 99 DuPont 161 U.S. government 84 University of California 134 DuPont 75 Genentech 124 Appelera 63 U.S. government 110 Human Genome Sciences 58 Appelera 62 Genentech 54 Human Genome Sciences 59 ISIS Pharmaceuticals 42 Agilent Technologies 55 Agilent Technologies 39 Millennium Pharmaceuticals 54 Millennium Pharmaceuticals 36 University of Texas 49 University of Texas 36 Amgen 41 Doubled Patents in Biotech
Nature Biotechnology, Vol. 25 December 2007. Based on USPTO patents. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 11 A Market-Driven Science Company New Product Pipeline
Alternative Safety & Energy Renewably More & Improved Energy Security Efficiency Sourced Better Food Communications Materials Concept Feasibility Product Early Definition & Demonstration Development Commercialization Market Validation 6-10 years 4-6 years 2-4 years 0-2 years
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 12 Global Technology Centers
Eastern Europe 2009
Johnston, Iowa Wuppertal, Germany
Wilmington, Delaware Meyrin, Switzerland
Shanghai, China
Sao Paulo, Brazil Hyderabad, India
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 13
November 2005 Acceleration Plan
• Improved margin and return on capital • Repurchased $5B of stock; 12% of the stock • Increased dividend 11% • Launched DuPont Applied BioSciences
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 14
Increased Earnings and ROIC*
Segment Improved Improved ROIC** PTOI Margin 2 percentage 5 percentage points points
18% 17% 18% 16% 16% 15% 16%
14% 14%
12% 12% 11%
10% 10%
8% 8%
6% 6% 2004 2005 2006 2007 2004 2005 2006 2007
* Both metrics are shown excluding significant items and unadjusted for portfolio changes. **ROIC adjusted to reflect the exclusion of Other Comprehensive Income. ROIC Calculation = 12 mo. net income before after tax interest expense and minority interest / avg. invested capital. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 15
Rising EPS*
EPS Increase EPS* 11% CAGR
$4.00 $3.28 $3.00 $2.38
$2.00
$1.00
$0.00 2004 2005 2006 2007
*EPS is shown excluding significant items © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 16
March 2008 Acceleration Plan
Increase Velocity • Grow revenue faster • Capture gains in agriculture • Extend productivity gains
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 17
THE GOAL: From Our Letter to Shareholders - January 22, 2008
Looking beyond 2008…through 2010, we see clear potential for average double-digit earnings growth driven by advances in several strategic areas: • New science for growing agriculture markets… • Growing demand for Safety & Protection... • Springboard position in emerging markets… • Extend cost productivity gains…
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 18
Capture Gains in Agriculture
Key Actions • Capitalize on strong Ag markets • Launch/Ramp new technology • Expand globally
Grow Ag Platform PTOI >15% CAGR
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 19
Grow Revenue Faster
Key Actions • Increase resourcing in emerging markets • Expand Safety & Protection • Acquire businesses with unique synergies
Raise Revenue Growth Rate to 7–9%
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 20
Extend Productivity Gains
Key Actions • Deliver the full potential of DuPont Production System (DPS) • Complete the implementation of DuPont Integrated Business Management (DIBM) • Complete STREAMLINE Opportunity
$1.7B in Savings 2008 - 2010
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 21 March 2008 Acceleration Plan Segment PTOI* Excluding Pharmaceuticals
$6 R $900 CAG % $1,900 $5 13 AGR $4 7% C
$3 $ billions $2
$1
0 2004 2005 2006 2007 2010E
* PTOI excludes significant items and Pharmaceuticals. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 2004 also excludes Textiles & Interiors. 22
March 2008 Acceleration Plan
2007-2010E 2004-2007 Segment Sales CAGR Organic Sales* CAGR
Agriculture & Nutrition 5% 6–8%
Coatings & Color Technologies 4% 4–5%
Electronic & Communication 7% 6–8% Technologies
Performance Materials 4% 4–5%
Safety & Protection 7% 7–9%
*Organic sales represent base business volume and price growth and excludes acquisitions. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 23 How We Will Increase Earnings Velocity 2007–2010E Performance $ millions PTOI Improvement Volume growth $400 Margin expansion $500 Price, mix and cost productivity $900
Overcomes the decline in Pharmaceuticals royalties and achieves double-digit EPS growth (2008-2010).
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 24 March 2008 Acceleration Plan Earnings Per Share*
$4.30 $4 $4.05 11% CAGR
$3 ’04-’07
2008–2010 EPS* $2 • 10% earnings CAGR • Excludes acquired businesses $1
$0 2004 2005 2006 2007 2010E
*EPS is shown excluding significant items © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 25 March 2008 Acceleration Plan Sales* ($ billions)
$40 8% CAGR $38 ’07-’10 $36 5% CAGR ’04-’07
$20 Growth Trend • Organic** growth 6-7% • Acquisitions 1-2%
$0 2004 2005 2006 2007 2010E
* Net Sales excludes Textiles & Interiors in 2004 to show comparable Net Sales over the period ’04-’10E. 2.4% ’04-’07 CAGR including Textiles & Interiors. ** Organic sales represent base business volume and price growth. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 26
New Peer Group – A Higher Hurdle
The company names listed on this page are the property of the companies identified above, and some, as indicated, are registered trademarks of those companies.
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 27
New Peer Group Performance
12%
11% • Double-digit earnings 11% growth 10%
9%
• Faster top-line growth ’05-’07 CAGR 8% 8%
7% • Spending more on R&D 6% Peer EPS Peer Sales CAGR '05-'07 CAGR '05-'07
Source: Bloomberg
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 28
Delivering Sustainable Growth
• Focus on growth markets & geographies • Increase earnings and improve margins • Extend productivity improvements
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. Actions to Increase Velocity
Jeff Keefer Chief Financial Officer
2008 Investor Day New York City March 14, 2008 30
OUTLOOK
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 31
Actions to Increase Velocity
Drive Revenue Growth
Increasing Institutionalize Productivity Shareholder Value
Capital Allocation
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 32 Financial Discipline Principles
• Maintain a strong balance sheet
• Invest for growth in high return opportunities
• Return excess cash to shareholders
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 33 2004-2007 Cash Waterfall Living the Principles
$4 ($6)
$20 $14 ($6)
$10 ($6)
$ Billions `
($2)
$3 $1 $0 Cash Cash fromAssetAsset Sales/ SalesPPE & Affil.Dividends StockChg in Debt / Cash 12/31/03 Operations&Acquisitions AcquisitionInvestment RepurchaseAll Other 12/31/07
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 34 Solid Growth in Cash
Cash Flow From Operating Activities
• Solid cash generation through 2010
$5
$ Billions $4 • Productivity gains partially offset the $3 increase in working capital $2
$1
$0
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved.
2004 2005 2006 2007 2010E 35 March 2008 Acceleration Plan Cash ($ billions)
Long Term 2008-2010E Goals Plan
Drive growth in high $1.9 - $2.1/yr Capital Expenditures return businesses
Payout target: Dividend 25-45% cash from In Range operating activities
Return excess Share Repurchase cash to Offset Dilution shareholders
$1 - 3 Business Acquisitions Support growth plan Acquired Sales
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 36 Investing in High Return Businesses Capital Expenditures and R&D
A&N S&P Other* C&CT E&CT PM 12 • Highly 10 advantaged 8 technologies 6
4 • Assets in 2 emerging 0 markets 2005-2007 2008-2010E $8.6B $10-12B
* “Other” includes Applied BioSciences and other activities. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 37 March 2008 Acceleration Plan Earnings Per Share*
$4.30 $4 $4.05 11% CAGR
$3 ’04-’07
2008–2010 EPS* $2 • 10% earnings CAGR • Excludes acquired businesses $1
$0 2004 2005 2006 2007 2010E
*EPS is shown excluding significant items © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 38
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. Accelerate Growth in Agriculture
Tom Connelly Executive Vice President
Investor Day New York City March 14, 2008 40 Agriculture & Nutrition Commitment ($ billions)
Sales Growth PTOI* Growth
$10 6 - 8% CAGR $1.5 >15% CAGR $8 $1.3 5% CAGR + $0.5B $6 $1.1 • 2/3 Seed 2% CAGR • 1/3 Other Ag $4 $0.9
$2 $0.7
$0 $0.5 2004 2 20 20 2010E 2004 2005 20 2007 2010E 005 06 06 07
Robust market, strong innovation pipeline, demonstrated strength in global markets
* Excluding significant items © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 41
Key Actions to Accelerate Growth
• Capitalize on strong Ag markets • Robust global demand
• Launch/Ramp new technologies • Strong innovation pipeline
• Expand globally • Build on demonstrated strength
Ag Platform Growth: >15% PTOI CAGR 2007–2010E
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 42 New Era for Agriculture
Robust global demand Rapid Increase Of all Global Ag Commodities Population growth
Commodity Price Trends ($/bu) Affluence increasing Biofuels demand accelerating Commodity 1/13/2006 1/11/2007 1/11/2008 2/29/2008 Corn $1.96 $3.52 $4.45 $5.18 Commodity prices increasing Soybean $5.48 $6.40 $11.99 $14.38 Wheat - Winter $4.46 $5.13 $8.99 $13.04 Durum $3.30 $4.72 $18.35 $21.50 Growers focused on maximizing Barley $2.85 $4.15 $6.85 $7.20 yield and quantity Cotton(cents/lb) 51.60 49.41 49.41 72.06 Rice (cwt) $7.93 $9.81 $12.73 $14.20 GMO acceptance accelerating
Step-change in market value
Unprecedented Farm Incomes
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 43 Launch/Ramp New Technologies
Crop Protection Seed Input Seed Output
• Proprietary SU • Optimum® GAT® • Healthy oils blends • Optimum® AcreMax™ • Corn feed traits • Rynaxypyr® / • High Available • Accelerated Yield Cyazypyr™ Energy (HAE) Technology™ • High Extractable •New • New soybean Starch (HES) blockbuster platform herbicide • BioFuels • New agronomic traits • High Total • Major new Fermentables (HTF) fungicide with • Canola, sunflower novel MOA and rice • MarketPoint™
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 44 Crop Protection
DuPont SU Sales* SU Blends $ 120
• New differentiated SU blends in 100
EU and NA cereals 80
• Renewed corn and soybean 60
portfolio 40
• Expanding uses -- sugarcane 20
0 1998 2000 2002 2004 2006 2008 2010
Exceptional Crop Protection Rynaxypyr® / Cyazypyr™ 100 97
• Superior crop protection % Protection 83 80 from Leaf • Low environmental impact Feeding 65 • Wide range of crop applications 60 • Rynaxypyr® launch in 2008 40 • $100 million sales by 2010 20
0 0 Rynaxypyr® Competitor A Competitor B Untreated Control
* Indexed to 1998
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 45 Corn: Biotech Trait Penetration
• Continued advance of triple- NA Trait Acres stacks
• High penetration of Herculex®
• Optimum® GAT® • First to market with herbicide multiple modes of action
• Optimum® AcreMax™ 2004 2005 2006 2007 2008E 2009E 2010E YGCB HX1 RR GAT®® YGRW HXRW
Herculex® is a registered trademark of Dow AgroSciences LLC. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 46 Corn: Trait Delivery Triple Mode Herbicide Tolerance Refuge Reduction • Glyphosate, SUs, Liberty® • Maximize whole farm yield • Maximum grower flexibility Trait Durability • Residual activity • Multiple modes of action above Aggressive 2010 ground • Robust mode of action below Commercial Introduction ground • Meeting regulatory milestones • Triple mode herbicide • Demonstrating strong performance Grower Convenience • 1 million unit launch • Refuge in a bag • Full conversion by 2015 • Improved compliance Significant Value Capture • Royalty avoidance • Margin enhancement • Out-licensing opportunities
Liberty® is a registered trademark of Bayer CropScience
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 47 Soybeans: Improved Yields
Pioneer Brand Leadership • Market share • Yield New 2008 Class is Strongest 93Y70 in History • Competitive advantage examples: +5.5 bu/ac • 93Y70: 10.4% * vs. competitor* • 94Y70: 7.9% ** • 32 of 33 new “Y” series class available Soybean Yield Increase through Marker Technology • Full line-up penetration by 2012 1.4 1.2 Advanced Technologies Build 1.0 on Leadership Position 0.8 0.6 • Accelerated Yield Technology™ (AYT) 0.4
and molecular markers Increase Yield Grain 0.2
for defensive traits year) per (bushels per acre 0 7-Year ® ® 10-Year • Optimum GAT trait Pioneer Pioneer Non-Marker Marker • Yield genes Average Average***
* 84 comparisons, 77 versus DK38-52 ** 85 comparisons, 23 versus AG4703, 38 versus DKB46-51
*** Period since introduction © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 48 Soybeans: High Oleic The Next Generation of Healthy Oils
• Help food industry eliminate trans fatty acids HighHigh Oleic/Oleic/ HighHigh StearicStearic • High heat stability for frying HighHigh OleicOleic • Can be used as bio-based feedstock in industrial applications LowLow LinLin
• Strong intellectual property position CommodityCommodity
• Limited launch in 2009, 0%0% LinolenicLinolenic LinoleicLinoleic OleicOleic SatsSats 100%100% pending regulatory approval
TREUS™ TREUS™ TREUS™ Low Linolenic Soybean Oil: High Oleic Soybean Oil: High Oleic / High Stearic Significantly reduces trans fats Increase functionality & Soybean Oil: Low trans fats for light frying. stability for heavy duty frying shortening and margarine for and industrial use. baking.
2005 2009 2010 © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 49
Expand Globally
Seed Revenue • Increased acreage $2,000 • Shifts from OPV to 125 hybrids and from low CAGR: 12% 100 tech to high $1,500
75 • Seed share gains $1,000 $ millions • New markets, new 50 products $500 million hectares 25 • Pricing and margin improvement 0 0 2004 2007 2010E • Biotech trait penetration Europe Latin America Asia / Africa *Biotech trait growth
*ISAAA Brief 37-2007 © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 50
Global Growth in Corn
Actions Results • Increase local R&D / breeding Corn Seed Market Share • DuPont Knowledge Center - India Change: 2005-2008E • Accelerate investments in seed production Europe +3 • Focus on strong farmer access and distribution Latin America +9 channels Asia* +3 • Lead increased biotech trait adoption Africa +7 • Leverage DuPont strengths and partnerships in each region
* Excluding China © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 51
Continued Strong Growth in Brazil Seeds Target Market - Corn • Continue to gain share in 60.0
expanding high tech market 50.0
40.0 • Leading products Market Share • Strong brand recognition % 30.0 • Industry-leading farmer 20.0
access system and technical 10.0
support 0.0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 • Experienced and effective Pioneer Competitor credit / collection program • Best positioned to capture Soybean Volume Growth Bt products and expand with Herculex® Volume • Strong growth and margins in soybeans 1999 2000 2001 2002 2003 2004 2005 2006 2007
Yield, Agronomics and Service Drive Share Gains
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 52
Strong Performance in Europe
Europe Seed Consistent share growth Corn Volume • Corn market share +4 points • Volume +39% from 2002-2007
Strong future growth 39% • Leading corn position across all markets • Rapid corn expansion in high growth Eastern Europe • Expanded seed production
• Strong growth in oilseeds 2002 2007
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 53
DuPont Ag Biotechnology Drought Tolerance With Trait • Canola, sunflower, rice
• Drought resistance, nitrogen efficiency Without Trait
• Next generation insect trait
• Seed Production Technology (SPT)
• Gene shuffling
• Doubled-haploids
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 54 Agriculture & Nutrition Commitment ($ billions)
Sales Growth PTOI* Growth
$10 6 - 8% CAGR $1.5 >15% CAGR $1.3 $8 5% CAGR + $0.5B $6 $1.1 • 2/3 Seed 2% CAGR • 1/3 Other Ag $4 $0.9
$2 $0.7
$0 $0.5 2004 2 20 20 2010E 2004 2005 20 2007 2010E 005 06 06 07
Robust market, strong innovation pipeline, demonstrated strength in global markets
* excluding significant items © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. Institutionalizing Productivity
Richard Goodmanson Executive Vice President & Chief Operating Officer
Investor Day New York City March 14, 2008 56 Headlines
Beat November 2005 commitments…more to come:
• Achieved $1B fixed cost a year ahead…progress elsewhere
• $1.7B cost opportunity through 2010 (and beyond)
• Capability to sustain
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 57 Fixed Cost Productivity Fixed Costs as a % of Sales 2004-2010E
45.2 45.2 % 44.6
42.5 41.041
38–39.0%38
2004 2005 2006 2007 2010E
Note: Data excludes significant items in all periods and has been adjusted to exclude Textiles & Interiors in 2004. © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 58
Achieving World Class 2005–2007 Productivity Cost Projects Delivered ($ millions) Fixed Variable R&D / Innovation $ 55 $ 0 Sales & Marketing 124 0 Ops, Engr & Facilities 536 300 Support Functions 278 350 $993 $650
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 59 Fixed Cost History 2005–2007 ($ billions)
Currency Volume Growth Project Purch Savings G&S Growth Restruc- Invest. People turing $12.0 $11.9 Pension Inflation Portfolio 1-Time Changes Events
2005 2007
FC/Sales 44.6% $1 Billion in Fixed Cost Savings 41.0%
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 60
Achieving World Class Productivity $124 million (Fixed)
R&D / Innovation • Customer/territory redesign Sales & Marketing • Inside sales capability Ops, Engr & Facilities • Compensation redesign Support Functions • Channel optimization • Advertising/promotion optimization
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 61
Achieving World Class Productivity
$536 Million (Fixed) R&D / Innovation Sales & Marketing • Benchmark and CoE Ops, Engr & Facilities • Six Sigma Æ Lean Six Sigma Support Functions • Leverage and global sourcing • Capacity release projects
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 62
Achieving World Class Productivity $278 Million (Fixed) • Hackett benchmarks R&D / Innovation • Simplify processes Sales & Marketing Ops, Engr & Facilities • Standardize/automate Support Functions • Consolidate and centralize work • Off-shore selected activities
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 63 IT Productivity Results 2005–2007 ($ millions)
44 (135) Key Strategies: 25 • Consolidate/ $871 standardize Salaries, Growth $805 activity Inflation Project Savings • Reduce applications/ infrastructure •Off-shore 2005 2007 Hackett Group Benchmarks • Tension $ / User vendors $10,132 DuPont $9,138 8,378 Peer 9,443 9,617 World Class 9,198
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 64 Variable Cost Productivity 2005–2007 ($ billions) 2.1
Portfolio Local $14.7 Price* Currency Project $12.8 Savings
Volume
2005 2007 $650 Million in Variable Cost Savings
* Includes royalties, commissions and raw material and energy increases © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 65 Inventory/Working Capital Progress ($ millions)
Cumulative Savings Headwinds: 2005-2007 • Raws/energy pricing
Inventory (IDS) $135 • Strategic investments Receivables (DSO) 0 • Business mix Payables (DPO) 0 • Emerging markets Net $135 • A&N growth • Currency
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 66 Headlines
Beat November 2005 commitments...more to come:
• Achieved $1B fixed cost a year ahead…progress elsewhere • $1.7B cost opportunity through 2010 (and beyond) • Supply chain and support functions: $800 million Fixed Cost • Raws/Energy: $900 million Variable Cost • Working Capital: ~$1 billion through 2009 • Capability to sustain
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 67
Achieving World Class 2007–2010E Productivity Cost Projects Plan ($ millions) Fixed Variable Ops, Engr & Facilities $ 550 $ 450 Support Functions $ 295 $ 450 >$ 800 $ 900
$1.7 Billion in 3 Years
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 68 Headcount Reduction North America – Western Europe Staffing
Number of Employees
6,000
5,000 Leavers 4,000
3,000
2,000 Joiners
1,000
0 Jan 2006 Jan 2007 Jan
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 69 Variable Cost Productivity 2007–2010E ($ billions) 1.8 Key Strategies: • Consolidate/ 1.2 $16.7 standardize buy Local Project for leverage $14.7 Price* Savings • Reverse Volume auctions • Multi-source • Low-cost country sourcing
2007 2010E • Operations programs
* Includes royalties, commissions and raw material and energy increases © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 70 Inventory/Working Capital Potential ($ millions)
Cumulative Savings 2005-2007 2007-2010E Total IDS $135 $ 685-725 $ 720-855 DSO 0 85-170 85-170 DPO 0 150 150 Net $135 $825-1,040 $955-1,175
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 71 Headlines
Beat November 2005 commitments...more to come:
• Achieved $1B fixed cost a year ahead…progress elsewhere • $1.7B cost opportunity through 2010 (and beyond) • Capability to sustain: • Dramatic supply chain improvement program • Capacity without CAPEX • Integrating business processes more powerfully
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 72
Achieving World Class 2007 – 2010E Productivity Cost Projects Plan ($ in millions) Fixed Variable Ops, Engr & Facilities $ 550 $ 450 Support Functions $ 295 $ 450 >$ 800 $ 900
Revenue Upside Potential PTOI ($ millions) • Capacity liberation $200 - 600 • Customer service plus $100 Range $300 - 600
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 73 DuPont Production System (DPS)
DEPLOYMENT What it is: 35000 Uniform, integrated improvement program: 30000 • Focused on outcomes 25000 20000 • Engages and involves 15000 • Builds on and complements capabilities 10000 5000 • Proven methodology 0
• Extensive professional / Leadership # of Plants/Savings 2007 2008 2009 2010 2011 development • Staffing / training Where we are: • Diagnostic: • Proven in 2007 with pilot sites •Heat map • Scaling up in 2008 • Environment • Maximizing business impact: • Tools / training - Target capacity release • Leadership development - Productivity opportunities • Manageable mobilization • Benefits capture • Institutionalization
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 74
DPS CASE EXAMPLE – EUROPEAN PILOT Fixed costs Variable costs 2007 – 2010E (€ millions) Hidden factory *
40 - 46 (6 – 8) 5 - 8 € 60 - 69
• 42 - 43
26 - 31 4.6 2.5 2.5 4.0 € 15 - 20 1.7 4 21 - 26 11 -16
Manufacturing Energy Site Site supply M&RI Total Hidden Additional Total services chain improvement factory fixed cost improvement potential
* Plus “1-Time” potential of € 7 – 9 million.
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 75 DPS Cost Productivity Potential ($ millions) $1B $150 Variable $150 $450 Cost
$150
$200 Fixed $150 $550 Cost
$200
Year 2008E 2009E 2010E Cumulative (3 yrs)
Plants Processed 17 42 100+ 159+
Value Accelerator Projects (Plants) 45 45 40 130
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 76
DuPont Integrated Business Management (DIBM)
Business Strategy
Supply Demand Product / Technology Management Management Innovation
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 77 DIBM Earnings Benefit Potential ($ millions) Benchmarks Projected Benefits
Benchmark DIBM Companies Potential* Forecast 25-50% 15-30% 45 Accuracy Sales 2-5% 1-2% Revenue 45 ~$125 On-Time 3-40% 5-15% PTOI Delivery 35 Inventory 5-15% 5-8% Reduction 12 Variable Cost 0-3% 0.5% 2007 2008E 2009E 2010E Logistics cost (as % 2-5% 1-3% Additional yearly gains: of sales) • 1-3% on-time delivery improvement • 1-2 days inventory reduction * Source: Oliver Wight
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 78
Financial Summary ($ millions) $600
$1,700 300 $1,643 Contribution From Additional Variable 650 900 Revenues Cost
Fixed 993 Cost 800
2005–2007 Actual 2008–2010E Projects Planned Projects
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 79
Headlines
Beat November 2005 commitments...more to come: • Achieved $1B fixed cost a year ahead…progress elsewhere • $1.7B cost opportunity through 2010 (and beyond): • Supply chain and support functions: $800 million Fixed Cost • Raws/Energy: $900 million Variable Cost • Working Capital: ~$1 billion through 2009 • Capability to sustain: • Dramatic supply chain improvement program • Capacity without CAPEX • Integrating business processes more powerfully
$1.7 Billion in Savings 2008-2010E
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 80
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. Actions to Increase Velocity
Ellen Kullman Executive Vice President
2008 Investor Day New York City March 14, 2008 82 March 2008 Acceleration Plan Sales* ($ billions)
$40 8% CAGR $38 ’07-’10 $36 5% CAGR ’04-’07
$20 Growth Trend • Organic** growth 6-7% • Acquisitions 1-2%
$0 2004 2005 2006 2007 2010E
* Net Sales excludes Textiles & Interiors in 2004 to show comparable Net Sales over the period ’04-’10E. 2.4% ’04-’07 CAGR including Textiles & Interiors ** Organic sales represent base business volume and price growth © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 83 Sustainable Growth Trends
• Growth in developing countries • Expanding middle class • Global infrastructure development
• Renewable energy and materials
•Greater safety and security
• Increased food production
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 84
Global Sales Regional Highlights
2007 Sales Distribution 2007 Sales Growth
25% Emerging Markets Region %
Latin Canada America 3% Worldwide 7 11% Non-U.S. 11 US Developed Emerging Markets 18 39% Europe 24% Emerging Asia 17 Emerging EMEA 21 Latin America 17 Emerging EMEA Developed Emerging 6% Asia Asia 10% 7%
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 85
Stepping Up Growth Going Forward
Growth Drivers
Base Organic Growth 2008-2010
New Products & Applications Above Trend Line Opportunities
Capacity • Expanding markets outside the U.S. Expanding Markets • Broadening addressable markets
Acquisitions • Targeted areas for business acquisitions
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 86 Expanding Markets Outside the U.S.
Fast Growing Markets Low DuPont Penetration Country GDP Growth Forecast*
12%
0.10% 8%
4% Russia Indonesia China Brazil Mexico Argentina India S. Africa Turkey 0% 0% USA Brazil Mexico Argentina Russia Africa S. Turkey China India Indonesia DuPont Sales % GDP PPP
Latin Emerging Emerging 2007 2008 2009 America EMEA A/P
Major opportunities for growth: Rapid GDP growth & increase DuPont penetration
*Source: Global Insight and DuPont Economist's Office © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 87
Strategy to Grow Outside the U.S.
DuPont Approach: 3 Stages of Development Optimize Market 3 Presence • Industry marketing specialists • Regional technical laboratories Strengthen • Local application and product 2 Capability to Serve development • Selective regional manufacturing • Expand sales force • Leverage inside sales • Upgrade distribution/go direct • Enhance technical support • Local language eMarketing Build Market • Add regional warehouses 1 Access • Build local talent MARKET PENETRATIONMARKET • Open local sales office • Establish distributor relationships • Local language MC and sales collateral • Build base with existing offerings
EARLY DuPont Country Development MORE MATURE
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 88
Stages 1 & 2 : DuPont in Central Europe
New Sales Offices • Romania 2005 • Lithuania 2006 • Serbia 2007 • Bulgaria 2007 • Estonia 2008 • Latvia 2008
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 89 Results: Revenue Growth in Central Europe
Central Europe 900 900 Eastern Europe CAGR 20% CAGR 44% 600 600
300 300
0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
900 Turkey, Middle East 900 South Africa CAGR 22% CAGR 9% 600 600
300 300
0 0 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 90
Stages 1 & 2 : Staffing Emerging Regions
% Change in Regional Staffing % Change in Global Staffing Jan. 2005 – Jan. 2008 Jan. 2005 – Jan. 2008
Jan. 2005 Emerging 16% Asia Pacific 42%
EMEA- 62% Emerging
Developed Latin America 20% 84%
-4% U.S. Emerging Jan. 2008 22% -8% EMEA-Developed
-18% Canada Developed 78%
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 91
Stage 3 : Expanding Technical Presence in Asia
DuPont China R&D Center DuPont Taiwan Technical Center
DuPont India Knowledge Center
DuPont Korea Technical Center
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 92 Stage 3 Example: First DuPont Fluoropolymer Plant in China
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 93 Stage 3 : Optimizing Market Presence Recently Announced Investments TiO2 Refinish Kevlar® Eastern Europe 2009 Tyvek® Fluoropolymers Nomex® Photovoltaics
Shanghai, China
Hsinchu, Taiwan
Sao Paulo, Brazil Hyderabad, India Vespel® & Zytel® HTN
Polyimide Laminate
Tech Centers Plant Sites © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 94
Emerging Markets’ Rapid Growth
>$7B Emerging Market Sales Growing to >$10B
$12 13-15% $10 CAGR $8 $6 $4 $2 $0
4 7 0 0 2 2005 2006 200 2010E Latin America Emerging EMEA Emerging Asia
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 95
S&P Expanding Addressable Markets
2002 2007 2010 Product & Asset Market & Application Expanded Markets
Aramid Fibers Personal Protection, Personal Protection, Advanced Fibers Advanced Materials
Tyvek®, Sontara® Selective Barriers, Filtration Selective Barriers, Filtration
Industrial Chemicals Specialty Chemicals, C&D, Specialty Chemicals, Clean Technology Industrial Services
Counter tops Building Envelopes, Sustainable Buildings, Premium Decorative Surfaces Functional Design
Safety Consulting and Safety Training Safety Consulting Services
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 96 Example: Market-facing Business Personal Protection
Worker Safety • Advanced cut protection • Thermal, particulate and chemical resistant garments Emergency Response / Life Protection • Chemical- and fire-resistant fabrics and garments • Integrated chemical / flame protection • State-of-the-art turnout gear • Bullet-resistant fabrics Chem/Bio Agent and Contamination Control • Biosecurity kits for farm and office use • Tyvek® contamination control suits • RelyOn™ and Virkon® wipes and sprays for microbial and pathogen protection
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 97 Personal Protection Market Expansion
Where We Were Where We Are Today • Independent units with • Integrated protective apparel and ingredients services with significant global • Product and asset orientation presence, focused on end users Core Markets: Expanded Markets: • Petrochemicals • Electric Utilities • Transportation • Homeland Security • Police / Fire / Military • Biohazards
$500 $700 2007 million 2002 $2.4B million $4B
Rest of Addressable Market DuPont Revenue
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 98 Example: New Business Model Clean Technologies • Clean fuels, clean air, and clean water • Significant growth potential due to sour crudes and environmental policies • Integrated clean air and fuel solutions for refiners so they can reduce their environmental footprint • On-site Sulfuric Acid Regeneration (SAR) • Air and fuel quality control • Reduced air emissions
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 99 Clean Technologies Business Redefined
Where We Were Where We Are Today • Selling sulfuric acid • Integrated clean air and fuel to industrial customers solutions so refiners can reduce • Product and asset orientation their environmental footprint Core Products Core Products: • Bulk chemicals • Technology licensing • Equipment sales • BOOM model
$100 $300 2002 2007 million $1B million $20B
Addressable Market DuPont Revenue
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 100 S&P Expanding Addressable Markets 2002 2007 2010 Product & Asset Market & Application Expanded Markets
Aramid Fibers Personal Protection, Personal Protection, Advanced Fibers Advanced Materials
Tyvek®, Sontara® Selective Barriers Selective Barriers, Filtration
Industrial Chemicals Specialty Chemicals, C&D, Specialty Chemicals, Clean Technology Industrial Services
Counter tops Building Envelopes, Sustainable Buildings, Premium Decorative Surfaces Functional Design
Safety Training Safety Consulting Safety Consulting and Services
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 101 Key Areas for Acquisitions
Advanced Materials Personal Protection
Industrial Services Sustainable Buildings
Electronic Materials Alternative Energy
Selective Barriers Agriculture
BioSciences Sustainable Materials
• Improves Market Access • Adds to the Product Portfolio Criteria • Provides access to new Technology • Drives Productivity
© 2008 E.I. du Pont de Nemours and Company. All Rights Reserved. 102 March 2008 Acceleration Plan Sales* ($ billions)
$40 8% CAGR $38 ’07-’10 $36 5% CAGR ’04-’07
$20 Growth Trend • Organic** growth 6-7% • Acquisitions 1-2%
$0 2004 2005 2006 2007 2010E
* Net Sales excludes Textiles & Interiors in 2004 to show comparable Net Sales over the period ’04-’10E. 2.4% ’04-’07 CAGR including Textiles & Interiors ** Organic sales represent base business volume and price growth © 2008 E.I. du Pont de Nemours and Company. All Rights Reserved.