DuPont de Nemours Inc (NYSE:DD) Q4 2014 Earnings Conference Call - Final Transcript
Jan 27, 2015 • 09:00 am ET
Thank you. [Operator Instructions] And our first question comes from Jeff Zekauskas from JP Morgan.
In going through your slides, it looks like you think your agricultural operating income will be down about $250 million in the first quarter, but you think it would be flat for the year. How might you accomplish that? And secondly, in choosing the heads of the separated companies, will there be a procedure where you go outside both Dow and DuPont to compare candidates from outside the companies as well as candidates inside the companies or will those leaders essentially be chosen from inside both companies?
Yes, Jeff. This is Ed, I'll take that your second question then turn it over to Jim Collins for the ag question. So, we will have a process in place where we will look both externally and internally in the company. We are setting up a process for that that is not just for who the CEO's will be, but there is obviously many other key public company positions that need to be staffed. I would certainly hope that some of that staffing obviously is going to be from key people in the companies, but our master is going to be best staff we can get to run the businesses. Jim, do you want to take?
Sure, thanks Jeff. You're right. When you look at full year operating earnings, we're about flat and that's primarily driven by local pricing gains in North America with new germplasms they have for Pioneer seed and corn, and transition to our T Series soybean. So we're getting some good pricing momentum there. And obviously, we're starting to see the benefit of our cost reduction efforts flow through. These are dramatically offset clearly again by the currency impact, and we are having some impacts primarily in crop protection and in soybeans in Brazil. For example, if you excluded currency for the full year, we would be up about 10% in operating earnings.
Our next question is from David Begleiter from Deutsche Bank.
Ed, just on a cost savings, ex the Dow merger, how much more you think was available to DuPont, so beyond $1 billion of savings you've targeted already?
Look, there is always cost savings. I mean I am a believer that they occur every year in a few percent range, as you keep streamlining your company, I would say. So, you are never done with it. I think where there was more cost savings, David, in DuPont was when we could get up on a IT platform because that would really streamline some of our G&A back office; unfortunately we're not; we're on a very fragmented IT system. One of the benefits it looks like we obviously get here with the Dow merger is Dow is on the IT platform that we were going through the global -- actually latest revision of the SAP platform.
And so between the work we did here on that platform and the work they -- obviously