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DowDuPont releases its full year results

Published by , Assistant Editor
World Fertilizer,

DowDuPont, a holding company comprised of The Dow Chemical Company and DuPont, reports 4Q18 and full year 2018 results.

4Q18 financial highlights

  • GAAP earnings per share from continuing operations totalled US$0.21. Adjusted earnings per share increased 6% to US$0.88, compared with the year-ago period of US$0.83
  • Adjusted earnings per share excludes significant items in the quarter totalling net charges of US$0.56/share and an US$0.11/share charge for DuPont amortisation of intangible assets.
  • Net sales were even with the year-ago period at US$20.1 billion, as price and volume gains were offset by currency.
  • Volume grew 1% from the year-ago period. Gains were achieved in Asia Pacific, up 8%, and Latin America, up 9%, which more than offset volume declines in US & Canada, down 3%, and EMEA, down 1%.
  • Local price rose 1%, with gains in most regions. Currency decreased sales 2%.
  • GAAP net income from continuing operations totalled US$513 million. Operating EBITDA was US$3.9 billion, flat with the year-ago period, as cost synergies and local price gains were offset by margin compression in the Materials Science Division, lower equity earnings and a headwind from currency.
  • DowDuPont achieved cost synergy savings of more than US$500 million in the quarter, and since merger close has now delivered more than US$1.8 billion of cumulative savings.
  • Cash flow from operations in the quarter was US$5.1 billion compared to US$1.8 billion in the year-ago period. After adjusting for the accounting and presentation change for accounts receivable securitisation, cash flow from operations rose US$0.9 billion year-over-year.
  • The company returned US$2.3 billion to shareholders in the quarter through dividends (US$0.9 billion) and share repurchases (US$1.4 billion). DowDuPont intends to complete its remaining open share repurchases in the 1Q19. Since merger close, the company has returned nearly US$10 billion to shareholders.

2018 full-year highlights

  • GAAP earnings per share from continuing operations totalled US$1.65. Adjusted earnings per share was US$4.11, up 21% versus pro forma results in the year-ago period. Adjusted earnings per share excludes significant items totalling net charges of US$2.02/share, as well as a US$0.44/share charge for DuPont amortisation of intangible assets.
  • GAAP net sales increased 38%. Net sales increased 8% to US$86.0 billion vs. pro forma results in the year-ago period, with gains in all regions.
  • Volume grew 4% on a pro forma basis, with gains in most regions, led by double-digit growth in Asia Pacific.
  • Local price rose 3% on a pro forma basis, with gains in all regions. Currency increased sales 1%.
  • GAAP net income from continuing operations totalled US$4.0 billion. Operating EBITDA increased 13% to $18.3 billion vs. pro forma results in the year-ago period, as cost synergies; local price gains; volume growth, including the benefit of new capacity additions; lower pension/OPEB costs; and higher equity earnings more than offset higher raw material costs.
  • DowDuPont achieved year-over-year cost synergy savings of US$1.6 billion, surpassing its increased target of US$1.5 billion.
  • Cash flow from operations totalled US$4.7 billion and included discretionary pension contributions of approximately US$2.2 billion. Excluding these discretionary contributions, cash flow from operations would have been US$6.9 billion.

4Q18 highlights


  • Net sales of US$2.8 billion grew 1% in the 4Q18, driven by sales of new crop protection products and the timing of seed shipments in Latin America and US & Canada, partly offset by currency pressures in Latin America. Volume and price rose 4% and 5%, respectively, offset by currency of 5% and the portfolio impact of the Brazil corn seed remedy of 3%.
  • Operating EBITDA grew 4% in the 4Q18. Cost synergies and sales gains drove the improvement, which was partly offset by higher input costs and investments to support new product launches.
  • Full-year net sales of US$14.3 billion were even with last year as organic sales growth of 1% was offset by a portfolio impact. Organic sales growth of 6% in crop protection was driven by new product sales, which more than offset currency pressures. Seed sales declined 4% as higher local price was more than offset by reduced volume related to lower planted area in US & Canada and Latin America and the Brazil corn remedy.
  • Full-year operating EBITDA of US$2.7 billion increased 4% as cost synergies, new product sales gains in crop protection, and lower pension/OPEB costs more than offset higher input costs, investments to support new product launches and seed sales declines.

4Q18 net sales in crop protection increased 6%. Organic sales grew 10% on strong volumes, driven by new product launches (including picoxy-based products in Latin America, pasture and land management products and Enlist™ Herbicides), partly offset by a weather-related reduction in demand for nitrogen stabilisers. Higher local prices were offset by currency pressures, primarily in Latin America.

4Q18 net sales in seeds decreased 4%. Organic sales increased 8%. Strong volume growth reflected the beginning of a recovery from the sale of the Dow AgroSciences Brazil corn seed remedy, an early start to the safrinha season in Latin America and the timing of seed shipments in US & Canada. The negative portfolio impact reflected inclusion of two months of the Brazil corn remedy in last year’s quarter.

4Q18 operating EBITDA grew 4% as margin expansion from synergies and sales gains more than offset higher input costs and investments to support new product launches.

“In our first full year as a merged company, we delivered consistently strong results. Pro forma sales rose 8% with gains in every geography. We delivered a 13% increase in operating EBITDA. And we raised our cost synergy expectation by 20% to US$3.6 billion, while continuing to return significant capital to shareholders,” said Ed Breen, chief executive officer of DowDuPont.

“We remain on track for the separation of the new Dow on April 1, followed by Corteva from the new DuPont on June 1. We are excited about launching these three global companies, each set to be an industry leader with the right capital structure and now better positioned to serve customers, compete in their end markets and focus on their innovation priorities. We’ve also put in place strong leadership teams who are singularly focused on capitalising on their competitive advantages and delivering on their substantial growth and cost synergy opportunities to create value both now and over the long-term.”


“We expect global economic expansion to continue in 2019 at a moderately slower pace than 2018,” said Howard Ungerleider, Chief Financial Officer of DowDuPont. “We continue to closely monitor macroeconomic and geopolitical developments, including ongoing trade negotiations and the pace of economic activity in China. In this environment, we remain focused on the actions in our control, including capitalising on our growth investments, capturing cost synergy savings, delivering productivity actions, and advancing our spin milestones.”

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