DuPont sees sales growth rate slowing in second half - exec

11 August 2010 17:08  [Source: ICIS news]

TORONTO (ICIS)--DuPont expects 2010 second-half year-over-year sales growth to slow down from the 25% growth rate achieved in the first half, an executive said on Wednesday.

Second-half sales growth would be relatively lower because the first half compared with a weak 2009 first half, DuPont executive vice president Mark Vergnano said during a webcast investor presentation.

Also, DuPont’s second half would be “seasonally smaller” because of its agricultural business, Vergnano said. He spoke at the Jefferies Global Industrial and A&D Conference in New York.

Overall, DuPont was on track for 15% year-over-year sales growth in 2010, above its targeted compounded annual growth rate of 10% from 2009 through 2012, he said.

DuPont’s first-half sales were $17.1bn (€13bn), up from $13.7bn in the 2009 first half. Worldwide growth was led by emerging markets, which gained 32%. US sales increased 25%.

Some 60% of DuPont’s first-half sales were from outside its US home market, it said.

Regionally, DuPont’s growth through 2015 would be largely driven by soaring populations in emerging economies, Vergnano said.

As a result, DuPont was targeting three key “mega-trends” in its growth strategies – increasing food production, reducing dependence on fossil fuels, and safety and protection of life, he said.

Some 75% of DuPont’s research and development budget was targeted to those three trends, he said.

Among the specific growth targets, Vergnano highlighted seeds; crop protection; photovoltaics; products for energy-efficient vehicles and buildings; personal protection products for industrial workers and first responders; and infrastructure and industrial growth in emerging markets.

“In 2010, we are targeting 30% of our sales from new products introduced over the last four years," Vergnano said.  

"Our aggressive product launches are paying off; we're doing our market development work and we're moving faster. That's resulting in increased sales and profitability," he added.

At the same time, DuPont was working to constantly improve productivity, he said.

Fixed cost as a percentage of sales – an important productivity measure – would improve to around 41%-42% this year, and should be around 39% by 2012.

Last year, amid the recession, the measure deteriorated to 46.2% from 41.2% in 2008, as sales declined dramatically.

DuPont’s full-year earnings per share guidance is $2.90 to $3.05 per share, up from earlier guidance of $2.50-$2.70. In 2009, DuPont reported earnings per share of $1.92.

($1 = €0.76)

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By: Stefan Baumgarten
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