DowDuPont Inc. (NYSE:DWDP) Q2 2019 Earnings Conference Call - Final Transcript

Aug 01, 2019 • 08:00 am ET


DowDuPont Inc. (NYSE:DWDP) Q2 2019 Earnings Conference Call - Final Transcript


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Good day and welcome to the DuPont Second Quarter Earnings Call. [Operator Instructions]. And at this time, I would like to turn the conference over to Lori Koch. Please go ahead.

Lori Koch

Good morning, everyone. Thank you for joining us for DuPont Second Quarter 2019 Earnings Conference Call. We are making this call available to investors and media via webcast.We have prepared slides to supplement our comments during this conference call. These slides are posted on the Investor Relations section of DuPont's website and through the link to our webcast.Joining me on the call today are Marc Doyle, Chief Executive Officer; Jean Desmond, our Chief Financial Officer; and Ed Breen, Executive Chair. Please read the forward-looking statements disclaimer contained in the slides.During our call, we will make forward-looking statements regarding our expectations or predictions about the future. Because these statements are based on current assumptions and factors that involve risks and uncertainty, our actual performance and results may differ materially from our forward-looking statements. Our Form 10-K, as modified by our first quarter Form 10-Q and current report, include detailed discussion of principal risks and uncertainties which may cause such difference.Unless otherwise specified, all historical financial measures presented today exclude significant items. We will also refer to non-GAAP measures. A reconciliation to the most directly comparable GAAP financial measure and other associated disclosures are contained in our press release and in the appendix of our slides. [Operator Instructions]

I'll now turn the call over to Marc.

Marc Doyle

Thanks, Lori, and good morning, everyone. Before we get started, I'd like to acknowledge the incredible accomplishment achieved by the entire DuPont organization that enabled the successful separation of Dow on April 1 and Corteva on June 1. I'd like to thank everyone for all they did over the past 3.5 years to execute our industry-defining transaction.I'd also like to specifically acknowledge Jim Fahey for his role in the integration of the Dow and DuPont electronics businesses and his more than 25 years of service. As we announced this morning, John Camp will succeed Jim as President of the E&I segment.Let's get started on the quarter on slide two . We delivered a strong quarter and navigated dynamic market conditions in select end markets by staying dedicated to our core principles of innovation-led growth and disciplined cost control. We significantly expanded both gross and operating EBITDA margins and grew pro forma adjusted EPS in the high single digits versus the year ago period. We also continued to drive returns on our innovation spend with key new wins across several high-growth trends, including auto electrification, 5G, health care, water and sustainable food sources.

Looking closely at the numbers. Total sales of $5.5 billion were down 3% on an organic basis as continued strength in Safety & Construction was more than offset by the well-documented weakness we and others are seeing in electronics and automotive end markets. Organic sales in our core segments were down by 1.7%. Regionally, organic sales were down 2% in the U.S. and Canada,