DowDuPont Inc. (NYSE:DWDP) Q3 2017 Earnings Conference Call - Final Transcript
Nov 02, 2017 • 08:00 am ET
Good day, and welcome to the DowDuPont's Third Quarter 2017 Earnings Call. (Operator Instructions) Also today's call is being recorded.
I would now like to turn the call over to Mr. Greg Friedman, VP of IR. Please go ahead, sir.
Thank you, Rochelle. Good morning, everyone. Thank you for joining us for our third quarter 2017 earnings conference call. DowDuPont is making this call available to investors and media via webcast. We have prepared slides to supplement our comments, which are posted on the IR section of DowDuPont's website and through the link on our webcast.
Speaking on the call today are Ed Breen, CEO; Howard Ungerleider, CFO; and Andrew Liveris, Executive Chairman. Also with us in the room today for our Q&A session are Jim Fitterling, Jim Collins and Marc Doyle, COOs for DowDuPont's Materials Science, Agriculture and Specialty Products divisions; and Neal Sheorey, VP of IR.
(Forward-Looking Cautionary Statements) In addition, some of our comments reference non-GAAP financial measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our earnings release and on our website. Unless otherwise specified, all financial measures presented today are on a pro forma basis and where applicable exclude significant items.
I will now turn the call over to Ed.
Thanks, Greg, and thanks, everyone, for joining us for the first earnings call for DowDuPont.
On Slide 4, I'll cover our third quarter highlights and provide an update on three key strategic drivers; the merger, the synergies and the spins. We are making good progress on all fronts, while continuing to execute in the business.
Some pro forma highlights for the quarter include sales were up 8%, volume grew 4%, operating EBITDA rose 7% and adjusted EPS increased 10%. Overall demand indicators were strong, particularly in packaging, electronics, transportation, construction and consumer care markets. An exception was Ag, which was soft, particularly in Brazil due to the delay to the start of the summer season and lower expected planted corn area. Howard will cover the Ag segment results in further detail, but we expect a strong finish to the year for this business.
Operating EBITDA increased despite several headwinds in the quarter, including hurricanes, higher feedstock costs and start-up expenses for new assets we are bringing online to continue to meet demand growth. As you know, we closed the merger on August 31. This was a significant milestone that followed months of hard work, strong execution of a complex transaction and the completion of a rigorous regulatory approval process.
Less than two weeks later, our newly-formed Board unanimously approved the realignment of more than $8 billion in sales and approximately $2.4 billion in EBITDA from the Materials Science division to the Specialty Products division. This realignment was based on a thorough analysis completed over four months. The thoughtful, decisive actions by our Board better align the businesses with the end markets they serve, increase their competitiveness and, importantly, enhance their long-term growth potential.
We also completed two