2. Welcome
Investment Community
Meeting
Carl Lukach
Vice President, Investor Relations
3. 3
Agenda
9:00 AM Opening Remarks Chad Holliday
Productivity Advancement Richard Goodmanson
Capital Deployment Gary Pfeiffer
Growth Acceleration Tom Connelly
Bio-Based Materials Expansion Tom Connelly
10:00 AM Q&A
10:30 AM Closing Remarks Chad Holliday
5. 5
Regulation G
The attached charts include company information that does
not conform to generally accepted accounting principles
(GAAP). Management believes that an analysis of this data
is meaningful to investors because it provides insight with
respect to ongoing operating results of the company and
allows investors to better evaluate the financial results of
the company. These measures should not be viewed as an
alternative to GAAP measures of performance.
Furthermore, these measures may not be consistent with
similar measures provided by other companies.
This data should be read in conjunction with previously
published company reports on forms 10-K, 10-Q and 8-K.
These reports along with reconciliations of non-GAAP
measures to GAAP are available on the investor center of
www.dupont.com.
6. 6
Forward-Looking Statement
During the course of this presentation, I would like to remind
you that we may make forward-looking statements. All
statements that address expectations or projections about the
future are forward-looking statements. Some of these
statements include words such as ‘expects,’ ‘anticipates,’
‘plans,’ ‘intends,’ ‘projects’ and ‘indicates.’ Although they
reflect our current expectations, these statements are not
guarantees of future performance, but involve a number of
risks, uncertainties, and assumptions. We urge you to review
DuPont's SEC filings, particularly its latest annual report on
Form 10-K and quarterly reports on Form 10-Q, for a
discussion of some of the factors which could cause actual
results to differ materially.
7. Actions to Increase
Shareholder
Value
Chad Holliday
Chairman & Chief Executive Officer
10. 10
Productivity Advancement
Stake $1B cost improvement over 3 years
$1B reduction in net working capital over 3 years
Scope All supply chains
All support functions
Approach Significant down-payment in 2006
Extensive re-engineering for simplification
and standardization (streamlining)
Performance Quarterly Fixed Cost as % of Sales
Metric
11. 11
Discussion Structure
2006 2007 2008
Fixed Cost Tight Cost
Control
Momentum
Streamline
Lean
Supply
‘05
Chain
Costs
Support
Processes
Support
Processes
18. 18
Discussion Structure
2006 2007 2008
Tight Cost
Fixed Cost
Control
Momentum
Streamline
Lean
Supply
‘05
Chain
Costs
Support
Processes
Support
Processes
19. 19
The Bigger Opportunity –
Streamline Core Processes
Manage the Corporation & Business Portfolio
Marketing Processes
Develop New Technologies, Products, Services
Sales Processes
Provide Solutions (Supply Chain)
Manage Physical Resources
Accounting and Finance
Manage People Resources
Manage Information / Knowledge
20. 20
Cost Of Complexity – Examples
Process Status Goals
Accounts Payable • 120 payment terms in U.S. alone • < 10 terms
• Result = only 85% invoices paid w/o rework • 95+% w/o rework
• 10,000 manual exceptions/month • ~ 1,000
• 27 different IT feeder systems • 5 systems
• 63 used
Procurement • < 20
Systems
Compliance • 142 used (globally) • ~ 50 (regulations)
Processes
Custom Reports • 8,000 created (SAP) • 150 - 200
21. 21
“Tried & True” Approach
• Understand Current Processes Quick
• Identify Performance Gaps
Wins
• Use Kaizen for Improvement
• Define Simplified “Best” Process
Standardized
• Assess Conformance & Benchmarks
Approach
• Establish Standards & Metrics
• Agree Entitlement
• Shift Process Capability Transformation
• Drive Uniformity
Execution Through Six Sigma Project Teams
Execution Through Six Sigma Project Teams
22. 22
Lean Supply Chain
The Destination: Transform capability over 3-4 years:
• Retain differentiation at lower cost
• Improve service level and response time
• Be flexible / adaptive
Examples of Benefits: Lean Supply Chain Expectations
Lean Supply Chain Expectations
1200
• Waste elimination 1000
• Faster order lead times 800
Earnings
• More capacity $M M 600
NWC
Improvement
• Less inventory/obsolescence 400
• Quicker changeovers 200
• More efficient warehousing 0
2006 2007 2008
• Transport optimization
23. 23
Lean Example – One Business Unit
Pre-Lean Situation To Date
• Inventory: 103 days • 17% improved…
$81MM cash freed
• Service level outliers: 18.3% • 24% improved
• 2nd Quality sales: 5% • 29% reduced
• Distribution expenses: $145 MM • Saved $15MM YTD
24. 24
Discussion Structure
2006 2007 2008
Tight Cost
Fixed Cost
Control
Momentum
Streamline
Lean
Supply
‘05
Chain
Costs
Support
Processes
Support
Processes
25. 25
HR Example
Objectives
• Outsource transaction activities
Impact
• Implement global SAP platform
• Costs down 20-30% over
• Strengthen HR role to create more contract life
business impact
• Costs variabilized
• Stronger people
Timing
processes
11/04 - RFP
6/05 - Due Diligence
10/05 - Agreement
6/06 - Global blueprint
12/07 - Complete
26. 26
G&A Benchmarking
One SBU Key Efficiency Drivers
+ On-time project delivery
Hackett IT Value Grid + Number of help desk calls
+ Number of programming languages,
database platforms
High + Number of network protocols and
World data centers
- Business standardization and
Class adherence
IT Business Impact
- Technology infrastructure cost per
(Effectiveness)
end user
- On-budget project delivery
Key Effectiveness Drivers
+ Member of executive committee
+ Orders, payments remittances,
expense reports transmitted
electronically
+ Help desk call resolution
+ Number of hardware suppliers
- Internal SLAs met
- Project adhered to standard
methodology
Low - Planning and strategy staff and
High costs
IT Efficiency
= SBU Companies in database
27. 27
High Level Benchmarks DuPont vs.
Median
HR Staff/1000
HR
Employees 20%
IT Cost/User 30%
Finance Cost/$Revenue
25%
Sourcing Cost/$Spend
0%
World Class
Median
DuPont
28. 28
Streamlining Opportunity $MM PTOI
Supply Chain Work Plan (over 3 years):
- NWC improvement $1,000
- Annual earnings 600
Other Functions: Gap to Median
- HR $ 60
- IT 200
- Finance 90
- Sourcing 0
29. 29
Broad-Based Severance Not Required
Expected Staffing Needs Headcount
Annual attrition* ~2,000
Displacing variable staff ~1,000
Business growth & improvement projects ~1,000
Redeployment potential ~4,000
* e.g. U.S. – 2,500 fully pension eligible
30. 30
Productivity Advancement
Lead: Goodmanson
Tight Cost “Best Quartile” 2006 Operational
Streamline Projects
Control Benchmarking Planning
Hodgson Supply Chain: Johnson Operating Team
Linsenmann
Borel Sourcing: Coe Hackett Group
Giblin Facilities: Porter
Finance: Pfeiffer
HR: Borel
IT: Ridout
Capital Innovation
Deployment Choices
Pfeiffer Connelly
31. 31
Timeline ‘05 ‘06
G&A Benchmarking Oct Nov Dec 1Q06 2Q06 3Q06 4Q06
Pilot (Hackett)
Execute Pilot
Conduct Co-wide
Program
Execute Co-wide
Projects
Streamline
Design
Conduct Pilots
Execute Pilots
Extend
Processes/Projects
33. 33
Productivity Advancement
Stake $1B cost improvement over 3 years
$1B reduction in net working capital over 3 years
Scope All supply chains
All support functions
Approach Significant down-payment in 2006
Extensive re-engineering for simplification
and standardization (streamlining)
Performance Quarterly Fixed Cost as % of Sales
Metric
34. Capital Deployment
Gary Pfeiffer
Senior Vice President & Chief Financial Officer
35. 35
Capital Deployment
Stake Additional 3 point increase in ROIC
Scope All businesses with RONA < 12%
Approach Reallocation of resources (cost and capital)
aligned with shifts in strategy, business
model, mission. 18 month action plan.
Performance
After-Tax Operating Income
Metric Return on Net Assets =
Segment Net Assets
37. 37
Current State
Segment Net Assets* % with RONA
Total >12% <12%
Agriculture & Nutrition $ 7.2 74% 26%
Coatings & Color Technologies $ 3.8 66% 34%
Electronic & Communication Technologies $ 2.2 49% 51%
Performance Materials $ 3.9 43% 57%
Safety & Protection $ 2.6 72% 28%
$19.7 64% 36%
• 12 month average ending 9/30/05;
excludes significant items.
38. 38
Current State
Return on Net Assets (RONA)
Net Assets (1) RONA (2)
Above (Below)
$ % Total Average CoC
Growth Platforms $19.7 100% 15% 3 pts
(1) 12 month average ending 9/30/05
(2) 12 months ending 9/30/05;
excludes significant items.
39. 39
Current State
Return on Net Assets (RONA)
Net Assets (1) RONA (2)
Above (Below)
$ % Total Average CoC
Growth Platforms $19.7 100% 15% 3 pts
> 12% $12.5 64% 23% 11 pts
(1) 12 month average ending 9/30/05
(2) 12 months ending 9/30/05;
excludes significant items.
40. 40
Current State
Return on Net Assets (RONA)
Net Assets (1) RONA (2)
Above (Below)
$ % Total Average CoC
Growth Platforms $19.7 100% 15% 3 pts
> 12% $12.5 64% 23% 11 pts
0 - 12% 5.0 25% 5% (7 pts)
(1) 12 month average ending 9/30/05
(2) 12 months ending 9/30/05;
excludes significant items.
41. 41
Current State
Return on Net Assets (RONA)
Net Assets (1) RONA (2)
Above (Below)
$ % Total Average CoC
Growth Platforms $19.7 100% 15% 3 pts
> 12% $12.5 64% 23% 11 pts
0 - 12% 5.0 25% 5% (7 pts)
< 0% 2.2 11% (6%) (18 pts)
(1) 12 month average ending 9/30/05
(2) 12 months ending 9/30/05;
excludes significant items.
42. 42
Current State
Return on Net Assets (RONA)
Net Assets (1) RONA (2)
Above (Below)
$ % Total Average CoC
Growth Platforms $19.7 100% 15% 3 pts
> 12% $12.5 64% 23% 11 pts
0 - 12% 5.0 25% 5% (7 pts)
< 0% 2.2 11% (6%) (18 pts)
RONA < 12% Commonalities:
- Dependence on U.S. Natural Gas
- “Distressed” Market Space
- Strong Commoditization Trend
or
- Embryonic
(1) 12 month average ending 9/30/05
(2) 12 months ending 9/30/05;
excludes significant items.
43. 43
Range of Possible Actions
1. Adjust business strategy, business model and/or
resource levels to earn RONA >12% across a
business cycle
or
2. Reduce resource levels – cost and capital – to
support only “operate and maintain safely” (cash
mission)
or
3. Monetize
44. 44
Capital Deployment
Lead: Pfeiffer
Execution Plans Execution Progress Tracking
SWAT Teams (6) Donnelly Bery
Business Leaders Fyrwald
Keefer
Kullman
Naylor
2006 Operational Planning
Operating Team
46. 46
Capital Deployment
Progress Report
0 – 12 % <0%
Segment Net Assets Average Segment Net Assets Average
$B % Total RONA $B % Total RONA
09/30/05 5.0 25% 5% 2.2 11% (6%)
12/31/05
03/31/06
06/30/06
09/30/06
12/31/06
Note: 12 months ending;
excludes significant items.
47. 47
Capital Deployment
Stake Additional 3 point increase in ROIC
Scope All businesses with RONA < 12%
Approach Reallocation of resources (cost and capital)
aligned with shifts in strategy, business
model, mission. 18 month action plan.
Performance
After-Tax Operating Income
Metric Return on Net Assets =
Segment Net Assets
48. Growth Acceleration
Tom Connelly
Senior Vice President & Chief Science and Technology Officer
49. 49
Growth Acceleration
Stake $850MM growth revenue in ’06 from new products
Further 30% increase in innovation productivity
by 2010
Scope All growth technology and marketing investments
Approach Reprioritize for current realities:
- Increase resourcing of critical projects
- Shut down marginal projects
Performance Percent of revenue from new products
Metrics Growth revenue from new product sales
51. 51
Clear Momentum
Sales From New Products New Products Commercialized
8000
30% of Total Sales
7000
$ Millions
902
6000
774 3Q 2005 YTD
5000
2004 Total
4000
2000 2001 2002 2003 2004
$630 MM Top Line Growth Revenue
from New Products Commercialized in 2004
52. 52
Rich Innovation Pipeline
Selected Examples
Proof of Concept &
Adv. Development Launched
Early Development
E2Y Insecticide
GN2 Insecticides Steward ®/Avaunt®
GLY/SU Traits SU Blends
Broad Spec Fung.
Ag Stalk Rot Resist. Herculex® ECB + CRW
Yield Traits
Herculex® XTRA + Herculex® XTRA Stacks
Drought Tolerance
GLY/SU Stacks Nutrium® Low–Lin SB
Improved Feed+Fuel Enhanced Soy
Texture/Flavor
53. 53
Rich Innovation Pipeline
Selected Examples
Early Development Adv. Development Launched
FED Materials Embedded Passives Cyrel® FAST/Digital
Elect.
Fodel® for PDP
PV Enhancements
Hydrogen FC
PV Materials
Thermal Color Filters
Next Gen Refrig
Pyralux®
OLED Materials
Refrig Blends
DMFC
C-cable Resins
TYV 202
Tyvek® Roofing
High performance
Magellan M5 High
Safety sheet structures and Tyvek® Flashing
Strength Fiber filtration media
Kevlar® Adv. Ballistic
Chem/Bio Protection On-Site SAR Units
Medical Fabrics
Biofilm treatment /
Power Systems
elimination
Clean & Disinfect
54. 54
Rich Innovation Pipeline
Selected Examples
Early Development Adv. Development Launched
Zytel® HTN
Perf. Nanocomposites Green Hytrel®
Blow Molded EP
Mat. Sorona® EP
SentryGlas® Plus
Super High Solids
New Ink Jet
Coat. Global Waterborne
Dispersions and Artistri™ Digital
Technology
Colorants
HyperCure™ Clears
Radiation Cure
Laminate Grade TiO2
Powder
Super Durable TiO2
55. 55
“Top 75” Revenue Projections
3.5
Business Identified
Opportunity
Cumulative Top Line Growth
3.0
(Excludes replacement)
Risk Adjusted
2.5
(Traction Index)
2.0
Ag & Nutrition
$B
1.5
Safety & Protect
1.0 Electronics
Coatings & Color
0.5
Perf Materials
0.0
2003A 2004A 2005 2006 2007
56. 56
Growth Acceleration: Tracking Progress
Actual Targets
2005 2006 2010
2004
• Total revenue from 30% 33% 34% 35%
5 year products (4 yrs)
• Top line growth ($MM) 700 850 1,250
630
from new products*
• Twice per year Pipeline updates
* Net of cannibalization
57. 57
Growth Acceleration
Stake $850MM growth revenue in ’06 from new products
Further 30% increase in innovation productivity
by 2010
Scope All growth technology and marketing investments
Approach Reprioritize for current realities:
- Increase resourcing of critical projects
- Shut down marginal projects
Performance Percent of revenue from new products
Metrics Growth revenue from new product sales
58. Bio-Based Materials
Expansion
Tom Connelly
Senior Vice President & Chief Science and Technology Officer
59. 59
Bio-Based Materials Expansion
Stake NPV > $ 3 Billion
Scope Bio-Based materials, energy, surfaces, and
medical
Approach Create technology platform to accelerate
alliances and internal partnering
Performance Total revenue growth
Metrics New products launched
Pipeline advancements
60. 60
Bio-Based Materials
• Materials & Energy
• Polymers
• Fuels
• Chemicals
• BioSurfaces
• Personal Care
• Fabric and Home Care
• BioMedical
• Sealants & Adhesives
• Interventional
• Dental
61. 61
DuPont Bio-Based Materials
“The right science at the right time”
U S N a t . Ga s Oi l ( WT I )
P r o p y l e n e Gl y c o l Cor n
800%
700%
600%
500%
400%
300%
200%
100%
0%
1995 2000 2005
62. 62
Bio-Based Materials Strategy
Focus on transformative opportunities:
• Target areas of unique advantage
• Shape the industry with integrated
knowledge base
• Establish partnerships to maximize value
capture
63. 63
Bio-PDO™ Strategy
Apparel
Sorona®
Flooring
Polymer
Engineered
Resins
Bio-PDO™ Direct
New since
Applications
2004
Bio-PDO™
Coatings
Cell software has been
re-programmed to increase
Polyols
propanediol production by Elastomers
New since
500 fold 2004
Fibers
65. 65
Materials Pipeline
• Sorona® Polymer
NPV > $150 Million Extensions
• Bio-PDO™
Extensions
• Polyols
• Aromatics
• Sorona® Polymer
• Bio-PDO™
2007
2006 2008 2010
Source of Uniqueness
• High performance market applications
• Biocatalyst development know-how
• Renewable and sustainable feedstocks
66. 66
Bio-Based Economy
Biomass Metabolic
Feedstock Engineering
Fuels,
Materials,
Chemicals
• Environmental sustainability - energy security
• Biomass - the only renewable source of carbon
67. 67
Sustainable Energy
DOE Vision of Oil Savings
35 EXISTING EMERGING ADVANCED
Ethanol (Billions of gal/yr)
Advanced Sugar Fundamental
30
Corn Platform Advances in
Mills -New Enzymes Lignocellulose
25 -Pretreatment Processing
-Fermentation and fermentation
20
15 Cellulose
10
5
Grain
0
2000 2005 2010 2015 2020 2025
Year Re: J.D. McMillan, NREL
68. 68
Energy
NPV >$1.5 Billion
• Biomass
• BioFuels III
• BioRefinery
• Oil Recovery
• BioFuels II
• BioFuels I
2011
Present - 2007 2009 - 2013 2015
Source of Uniqueness
• Proprietary and economical biofuels
• Sustainable biofeedstocks with full value chain integration
• Novel bioprocesses as primary sources of innovation
69. 69
BioSurfaces
Combining DuPont’s Biotech & Coatings Know-How
Desired
Application
Attribute
• Uniquely specific to surfaces
• Water-borne – no solvents
Peptides/Proteins
• Non-toxic
Anchor
• Programmable placement
– On/off when desired
• Novel functionality
70. 70
BioSurfaces Opportunity / Strategy
• Target high value-in-use
– Personal care - hair, nails, oral, skin
– Home & fabric care
• Driven by unique technology
• Maximize value capture
– Partnerships
71. 71
BioSurfaces
NPV > $300 Million • Home & Personal
Care
• Skin Care Extensions
• Hair Care Extensions
• Oral Care
• Skin Care Extensions
• Hair Care Extensions
• Skin Care
• Hair Care
2010
2009 2011
2008
Source of Uniqueness
• Transformational delivery systems that capture significant market value
• Peptides/proteins improve product safety and effectiveness
• Products leverage DuPont’s biology, materials and particle science
know-how
74. 74
ActaMax™ Performance
Incumbent ActaMax™***
Products
Surgeon Needs
Prep time 30 minutes 30 sec
Set time 10 minutes 15 sec
Blood derived ingredients Viral carrier* Synthetic**
Patient Benefits
Performance 3 days 14 + days
Inflammatory responses Severe Non-detectable
Slow resorption Uncontrolled – variable Tunable 1 - 60 days
* Risk of Hep C, HIV, or BSE
** No risk of viral contamination
*** Based on pre-clinical studies
75. 75
Dental
Monomer Formulation Production Distribution Marketing
Composite Manufacturers
DuPont monomer advantage
> 33% less shrinkage
Dental composite manufacturers
formulate
Enabling proprietary technology for
differentiation
DuPont Ultramer
76. 76
BioMedical
NPV > $1.5 Billion
• BioMedical II
• Adhesives
• Dental II
• Interventional II
• Sealants
• Interventional
• Dental I
2007 2011 2013
2009
Source of Uniqueness
• Integrated science and engineering in very high value sectors
• DuPont inventions & DuPont/MIT Alliance
77. 77
Bio-Based Materials
Rich Innovation Pipeline
Early Development Adv. Development Launch
2010+ 2007-2009 2005-2006
Biomass BioRefinery
BioFuels I
BioFuels II
Sorona®
BioFuels III
Engineered Sorona®
Bio-Aromatics Polymers Flooring
Oil Recovery
Bio-PDO™ II
Green
Sorona®
Hytrel®
BioMedical II BioMedical – Interventional Apparel
BioMedical - Sealant Bio-PDO™
Bio-PDO™
Polyols
BioMedical – Dental Coatings
Bio-PDO™
BioMedical – Dental II
Derivatives
BioSurfaces – PC I
BioSurfaces – PC II
BioSurfaces – PC III
BioSurfaces – PC IV
78. 78
Bio-Based Materials Summary
NPV > $3 Billion
Sorona® ext
Bio-PDO™ ext
Polyols
BioFuels III
Sorona® ext
BioRefinery
Bio-PDO™ ext
Oil Recovery
Polyols
Sealant
Dental II
Sorona® ext
Interventional II
Biofuels I & II
Bio-PDO™ ext
Skin, Hair & Oral Care Adhesives
Polyols
Home &
Sealant
Dental I
Personal Care
Interventional I
Biofuels I
Sorona®
Skin & Hair Care
Bio-PDO™
2006 2010 2012
2008
Source of Uniqueness
• Integrated science and engineering in very high value sectors
• IP and partnerships
79. 79
Bio-Based Materials: Tracking Progress
• Total revenue growth
• New products launched
• Pipeline advancements
NPV >$3B from Materials, Energy,
BioSurfaces and BioMedical
80. 80
Bio-Based Materials Expansion
Stake NPV > $ 3 Billion
Scope Bio-Based materials, energy, surfaces, and
medical
Approach Create technology platform to accelerate
alliances and internal partnering
Performance Total revenue growth
Metrics New products launched
Pipeline advancements
