DowDuPont reported second quarter 2018 results on Aug. 2.

Financial highlights

Great momentum

“We continued to deliver strong results in the second quarter, including double-digit gains in sales and operating EBITDA,” said Ed Breen, chief executive officer of DowDuPont. “Volume growth, local price gains and operating margin expansion were the key highlights, reflecting a clear focus from the businesses on execution. Our new product launches are resonating with customers, resulting in strong demand across each of our targeted end-markets. These are indicators that our three divisions are making a difference in the marketplace and for shareholders. We have great momentum and our employees are enthusiastic about the future of our intended industry-leading companies – Corteva, Dow and DuPont.”

Second quarter division highlights

Agriculture 

Net sales of $5.7 billion increased 25% from pro forma net sales of $4.6 billion in the year-ago period, driven by sales recovered from weather-related delays to the Northern Hemisphere planting season, local price gains and double-digit growth in insecticides. Volume rose 20%, local price grew 4% and currency added 1%.

Operating EBITDA of $1.7 billion rose 45% versus pro forma operating EBITDA of $1.2 billion in the prior-year period.

Total insecticide sales continued their growth trend and increased nearly 20% in the quarter, driven by strong demand creation efforts against competitive chemistries for Spinosyn products, and new product launches.

Operating EBITDA improvement reflected volume growth in U.S. & Canada and EMEA, higher selling prices in Seed, cost synergies, currency benefits and lower pension/OPEB costs, partly offset by lower expected planted area in U.S. & Canada, higher soybean royalty costs, increased research and development spending to continue advancing the pipeline and investments in digital platforms. 

Agriculture first half 2018 results

First half net sales of $9.5 billion decreased 1% from pro forma net sales of $9.6 billion in the year-ago period. Local price improvement of 2% and currency benefits of 2% were more than offset by a volume decline of 5%. Price increases reflected continued penetration of new products, such as A-series soybeans. The volume change was driven by lower expected planted area in U.S. & Canada and a reduction in safrinha area in Brazil, partly offset by new product launches in Crop Protection. Insecticide sales in the first half continued to perform well with 17 percent growth versus prior year.

Operating EBITDA of $2.6 billion was down 2% versus the same period last year. Cost synergies, favorable currency, lower pension/OPEB costs and sales gains in Crop Protection were more than offset by higher soybean royalty costs, lower expected planted area in U.S. and Canada, a weaker safrinha season, and investments to support new product launches and digital platforms.

Nutrition & Biosciences

Nutrition & Biosciences reported net sales of $1.8 billion, an increase of 19% from pro forma net sales of $1.5 billion in the year-ago period. The increase was due to an 11% net benefit from portfolio, 4% from volume, 3% from currency, and 1% from local price. The net positive impact from portfolio-related actions was due to the acquisition of FMC’s Health & Nutrition business.

Volume growth in the segment was led by Nutrition & Health on improved demand for specialty proteins and continued gains in probiotics and pharmaceutical excipients, primarily in Asia Pacific and U.S. & Canada. Industrial Biosciences volumes grew on increased demand for bioactives in animal nutrition and home and personal care applications.

Operating EBITDA for the segment was $433 million, up 36% from pro forma operating EBITDA of $318 million in the year-ago period driven by a portfolio benefit, cost synergies, volume growth and lower pension/OPEB costs.

Outlook 

“Broad-based consumer strength continues to drive economic expansion and our underlying business growth,” said Howard Ungerleider, chief financial officer of DowDuPont. “Leading indicators, such as manufacturing output, employment, wages and consumer spending remain largely constructive, supporting increased global economic activity. We see some discrete headwinds, most notably currency fluctuations, particularly in Agriculture, and higher raw materials costs in all three divisions. Looking ahead, we continue to expect above-market growth through much of DowDuPont’s business portfolio, driven by our innovations, growth investments, geographic reach and leading market positions. We expect third quarter net sales to be up more than 10% and operating EBITDA up more than 12% year-over-year.”

Source: DowDuPont