May. 4, 2018
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"We delivered solid first-quarter sales and operating earnings gains, while our teams advanced the intended business separations," said Ed Breen, chief executive officer of DowDuPont.
"The Materials Science and Specialty Products divisions delivered better-than-expected top- and bottom-line growth with higher prices and volume gains, including value adding product innovations.
"Their growth more than offset weather-related delays that are expected to shift a substantial portion of our Agriculture earnings to the second quarter.
"All three divisions hit their cost synergy targets, producing savings of over $300 million as we build momentum on our $3.3 billion in cost synergies and put more focus on the $1 billion in growth synergies.
"And we continue to expect Materials Science to spin by the end of the first quarter of 2019, with Agriculture and Specialty Products separating by June 1, 2019. These will be three world-class companies equipped to further their leadership positions in attractive growth markets."
First quarter net sales decreased 25 percent to $3.8 billion versus pro forma net sales in the year-ago period, driven by weather-related delays in the Northern Hemisphere and Brazil seasons. Volume decreased 28 percent, local price rose 1 percent and currency improved 2 percent.
First quarter Operating EBITDA declined 39 percent to $891 million versus pro forma operating EBITDA in the same quarter last year.
Volume declines were driven by weather-related delays to the start of planting seasons in the Northern Hemisphere and Brazil, lower expected planted area in both North America and Brazil, and lower sales in the Brazil safrinha season due to a shift to lower-technology corn driven by the delayed summer season harvest. Agriculture sales declines were partially offset by improvements in sunflower seeds sales in EMEA and growth in global insecticide sales.
Price increases were driven by continuing efforts to capture value in established brands across the crop protection portfolio globally.
Operating EBITDA of $891 million declined 39 percent from $1.5 billion in the prior year. Weather-related selling shifts, lower expected planted area and an unfavorable mix driven by the shortened safrinha season were partially offset by cost synergies, favorable currency, higher selling price in crop protection and lower pension/OPEB costs.