EI DuPont de Nemours & Co. (DD)
Q1 2011 Earnings Call
April 21, 2011 9:00 am ET
Nicholas Fanandakis - Chief Financial Officer, Principal Accounting Officer and Executive Vice President
Ellen Kullman - Chairman, Chief Executive Officer and Member of Strategic Direction Committee
James Borel - Executive Vice President
Karen Fletcher - Vice President of Investor Relations
Mark Gulley - Soleil Securities Group, Inc.
David Begleiter - Deutsche Bank AG
Mark Connelly - Credit Agricole Securities (USA) Inc.
Jeffrey Zekauskas - JP Morgan Chase & Co
Donald Carson - Susquehanna Financial Group, LLLP
Edward Yang - Oppenheimer & Co. Inc.
Mark Connelly - Credit Suisse
Frank Mitsch - BB&T Capital Markets
Laurence Alexander - Jefferies & Company, Inc.
Duffy Fischer - ClearBridge Advisors
P.J. Juvekar - Citigroup Inc
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Thank you, John. Good morning, and welcome, everyone. With me this morning are Ellen Kullman, Chair and CEO; Nick Fanandakis, Executive Vice President and CFO; and Jim Borel, Executive Vice President. [Technical Difficulty] All right. Thank you. Sorry, we had technical problems in this room. I'm going to start from the beginning, and I'd like to welcome everybody and apologize for our delay. With me this morning are Ellen Kullman, Chair and CEO; Nick Fanandakis, Executive Vice President and CFO; and Jim Borel, Executive Vice President.
The slides for today's call can be found on our website at dupont.com, along with the news release that was issued earlier today.
During the course of this conference call, we will make forward-looking statements. And I direct you to Slide 1 for our disclaimers. All statements that address expectations for projections about the future are forward-looking statements. Although they reflect our current expectations, these statements are not guarantees of future performance but involve a number of risks and assumptions. We urge you to review DuPont's SEC filings for a discussion of some of the factors that could cause actual results to differ materially. We will also refer to non-GAAP measures. Please refer to the reconciliations to GAAP statements provided with our earnings news release and on our website. And finally, we have posted supplemental information on our website that we hope is helpful to your understanding of our company's performance.
It's now my pleasure to turn the call over to Ellen.
All right. Thank you, Karen, and good morning, everyone. I'm pleased to report very strong results in the first quarter. They reflect disciplined execution across our businesses. And since we reorganized the company 18 months ago, we have consistently focused on market-driven innovation, differential allocation of resources and productivity, and this focus continues to pay off. Each reporting segment contributed to our robust performance this quarter. And as a result, we are raising our full year's earnings guidance.
Sales were up 18% with double-digit increases in every reporting segment and in every region. The largest volume gains were in our growth segment, Safety & Protection , Ag & Nutrition, Electronics & Communications. Success on the top line is directly connected to DuPont's innovation that our customers want, and I'd like to share a couple of examples of how our businesses are driving growth and differentiation through new products.
The first example comes from Safety & Protection. We work closely with law enforcement and military to address their needs for protection, and we took our groundbreaking Kevlar XP technology that was already commercial for law enforcement vests, and we extended its unique construction of Kevlar fibers for Hard Armor application. This new material enables weight savings up to 20%, while maintaining essential ballistic protection, a significant benefit for the soldiers and the officers who risk their lives every day.
Most importantly, this innovation allows lighter, thinner helmets than ever before and is designed to work in helmet manufacturer's existing equipment. Kevlar XP for Hard Armor is also going to benefit from the new capabilities and supply from DuPont's Kevlar facility expansion in Cooper River, South Carolina, which is on track to start up at the end of this year.
A second example is from Performance Polymer. Last spring, Diane Gulyas announced the launch of a new family of products branded as Zytel PLUS. These resins provide a step change in heat-resistant properties and opened up new opportunities for metal replacement and automotive application. Thus, they reduce weight and improve fuel economy. During the past 12 months, commercial adoption has been 75% faster than previous launches of a similar nature. And the size of the development pool is over 60 programs, which is outstanding this soon after launch.
Last fall, General Motors won an award from the Society of Plastics Engineers for the most innovative use of plastics based on Zytel PLUS. And in short, there's a great momentum with this family of resins with the innovative approach to light weighting, which is squarely in the sweet spot of the megatrend to reduce our dependency on fossil fuels.
Now there are plenty of product examples in our Ag business and since Jim's on the call today, I'm going to let him talk about how innovation is contributing to their strong performance this year.
As I mentioned earlier, growth in the quarter was broad-based. One of the standout achievements was our performance in developing markets. Many years ago, we recognized the importance of these markets, and we laid the groundwork with the basic sales force and people skilled in application development. And over the past 5 to 6 years, we added research and development laboratories in locations like Shanghai, Hyderabad and Paulinia, Brazil. Localizing the science is a very important part of our growth story. And through these labs, we were able to identify and directly service local needs tied to the megatrends of increasing agricultural productivity, reducing dependence on fossil fuels and protecting people and the environment.