MIDLAND, Mich. & WILMINGTON, Del.--(BUSINESS WIRE)--DowDuPont™ (NYSE:DWDP) today provided an update to its previously stated
modeling guidance for the first quarter of 2019, as a result of
near-term trends and discrete headwinds in some of its key value chains
in the Agriculture and Materials Science divisions.
DowDuPont now expects first quarter 2019 net sales to be down
high-single digits percent (versus previous guidance of down mid-single
digits percent) and expects operating EBITDA to be down high-teens
percent (versus previous guidance of down low-teens percent), both
versus the same quarter last year. Key drivers of the Company’s updated
modeling guidance for the first quarter include:
-
Agriculture: Flooding during the month of
March in the Midwestern region of the U.S. has culminated in a federal
disaster declaration for the region. Transportation disruptions
throughout the region and significant road closures have halted
farming operations, limited the ability to deliver products to
customers, and delayed pre-season applications. As a result, Division
net sales for the first quarter of 2019 are expected to be down 4 - 6
percent and operating EBITDA is expected to be down $125 - $150
million, as compared to the same quarter last year. An assessment of
the full year impacts, accounting for delays in first quarter customer
deliveries along with expected recoveries, will be provided with the
upcoming first quarter earnings release.
-
Materials Science: Net sales are expected
to be down low-teens percent (versus previous guidance of down
high-single digits percent) and operating EBITDA is expected to be
down mid-20s percent (versus previous guidance of down low-20s
percent). The midpoint of the Division’s updated guidance results in
approximately $100 million lower operating EBITDA versus previous
guidance, driven primarily by greater-than-expected margin compression
globally in Packaging & Specialty Plastics.
-
Specialty Products: Net sales and
operating EBITDA are expected to be in line with previous guidance.
DowDuPont will release its financial results for the first quarter of
2019 on May 2. Analysts are encouraged to join the Company’s earnings conference
call at 8 a.m. ET. DowDuPont will release its first quarter earnings
results via press release prior to the call. Dow will also hold a
conference call for the first quarter of 2019, at 9 a.m. ET, to discuss
the Materials Science Division’s financial results within DowDuPont.
About DowDuPont
DowDuPont (NYSE: DWDP) is a holding company comprised of The Dow
Chemical Company and DuPont with the intent to form strong, independent,
publicly traded companies in agriculture, materials science and
specialty products sectors that will lead their respective industries
through productive, science-based innovation to meet the needs of
customers and help solve global challenges. For more information, please
visit us at www.dow-dupont.com.
Cautionary Statement About Forward-Looking Statements:
This communication contains “forward-looking statements” within the
meaning of the federal securities laws, including Section 27A of the
Securities Act of 1933, as amended, and Section 21E of the Securities
Exchange Act of 1934, as amended. In this context, forward-looking
statements often address expected future business and financial
performance and financial condition, and often contain words such as
“expect,” “anticipate,” “intend,” “plan,” “believe,” “seek,” “see,”
“will,” “would,” “target,” and similar expressions and variations or
negatives of these words.
DowDuPont plans to separate into three, independent, publicly traded
companies—one for each of its agriculture, materials science and
specialty products businesses (the “Intended Business Separations” and
the transactions to accomplish the Intended Business Separations, the
“separations”).
In furtherance of the Intended Business Separations, DowDuPont is
engaged in a series of reorganization and realignment steps to realign
its businesses so that the assets and liabilities aligned with the
materials science business will be held by legal entities that will
ultimately be subsidiaries of Dow Inc. (“Dow”) and the assets and
liabilities aligned with the agriculture business will be held by legal
entities that will ultimately be subsidiaries of Corteva Inc.
(“Corteva”). Following this realignment, DowDuPont expects to distribute
its materials science and agriculture businesses through two separate
U.S. federal tax-free spin-offs in which DowDuPont stockholders, at the
time of such spin-offs, will receive pro rata dividends of the shares of
the capital stock of Dow and of Corteva, as applicable (the
“distributions”). Forward-looking statements by their nature address
matters that are, to varying degrees, uncertain, including statements
about the Intended Business Separations, the separations and
distributions. Forward-looking statements, including those related to
the DowDuPont’s ability to complete, or to make any filing or take any
other action required to be taken to complete, the separations and
distributions, are not guarantees of future results and are subject to
risks, uncertainties and assumptions that could cause actual results to
differ materially from those expressed in any forward-looking
statements. Forward-looking statements also involve risks and
uncertainties, many of which are beyond the DowDuPont’s control. Some of
the important factors that could cause DowDuPont’s actual results
(including DowDuPont’s agriculture business, materials science business
or specialty products business) to differ materially from those
projected in any such forward-looking statements include, but are not
limited to: (i) ability and costs to achieve all the expected benefits,
including anticipated cost and growth synergies, from the integration of
The Dow Chemical Company and E. I. du Pont de Nemours and Company and
the Intended Business Separations; (ii) the incurrence of significant
costs in connection with the integration of The Dow Chemical Company and
E. I. du Pont de Nemours and Company and the Intended Business
Separations; (iii) risks outside the control of DowDuPont, which could
impact the decision of the DowDuPont Board of Directors to proceed with
the Intended Business Separations, including, among others, global
economic conditions, instability in credit markets, declining consumer
and business confidence, fluctuating commodity prices and interest
rates, volatile foreign currency exchange rates, tax considerations, and
other challenges that could affect the global economy, specific market
conditions in one or more of the industries of the businesses proposed
to be separated, and changes in the regulatory or legal environment and
the requirement to redeem $12.7 billion of DowDuPont notes if the
Intended Business Separations are abandoned or delayed beyond May 1,
2020; (iv) potential liability arising from fraudulent conveyance and
similar laws in connection with the separations and distributions; (v)
disruptions or business uncertainty, including from the Intended
Business Separations, could adversely impact DowDuPont’s business, or
financial performance and its ability to retain and hire key personnel;
(vi) uncertainty as to the long-term value of DowDuPont common stock;
(vii) potential inability to access the capital markets; and (viii)
risks to DowDuPont’s business, operations and results of operations
from: the availability of and fluctuations in the cost of feedstocks and
energy; balance of supply and demand and the impact of balance on
prices; failure to develop and market new products and optimally manage
product life cycles; ability, cost and impact on business operations,
including the supply chain, of responding to changes in market
acceptance, rules, regulations and policies and failure to respond to
such changes; outcome of significant litigation, environmental matters
and other commitments and contingencies; failure to appropriately manage
process safety and product stewardship issues; global economic and
capital market conditions, including the continued availability of
capital and financing, as well as inflation, interest and currency
exchange rates; changes in political conditions, including trade
disputes and retaliatory actions; business or supply disruptions;
security threats, such as acts of sabotage, terrorism or war, natural
disasters and weather events and patterns which could result in a
significant operational event for the DowDuPont, adversely impact demand
or production; ability to discover, develop and protect new technologies
and to protect and enforce the DowDuPont’s intellectual property rights;
failure to effectively manage acquisitions, divestitures, alliances,
joint ventures and other portfolio changes; unpredictability and
severity of catastrophic events, including, but not limited to, acts of
terrorism or outbreak of war or hostilities, as well as management’s
response to any of the aforementioned factors. These risks are and will
be more fully discussed in DowDuPont’s current, quarterly and annual
reports and other filings made with the U. S. Securities and Exchange
Commission (the “Commission”) as well as the registration statement on
Form 10 of Dow and the preliminary registration statement on Form 10 of
Corteva, in each case as may be amended from time to time in future
filings with the Commission. While the list of factors presented here is
considered representative, no such list should be considered to be a
complete statement of all potential risks and uncertainties. Unlisted
factors may present significant additional obstacles to the realization
of forward-looking statements. Consequences of material differences in
results as compared with those anticipated in the forward-looking
statements could include, among other things, business disruption,
operational problems, financial loss, legal liability to third parties
and similar risks, any of which could have a material adverse effect on
DowDuPont’s, Dow’s or Corteva’ s consolidated financial condition,
results of operations, credit rating or liquidity. None of DowDuPont,
Dow or Corteva assumes any obligation to publicly provide revisions or
updates to any forward-looking statements whether as a result of new
information, future developments or otherwise, should circumstances
change, except as otherwise required by securities and other applicable
laws. A detailed discussion of some of the significant risks and
uncertainties which may cause results and events to differ materially
from such forward-looking statements is included in the section titled
“Risk Factors” (Part I, Item 1A) of the 2018 annual reports on Form 10-K
of DowDuPont and as set forth in the preliminary registration statements
on Form 10 of each of Dow and Corteva, in each case as may be amended
from time to time in future filings with the Commission.
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We own or have rights to various trademarks, service marks and trade
names that we use in connection with the operation of our business. The
Dow Diamond, DuPont Oval logo, DuPont™, the DowDuPont logo and all
products, unless otherwise noted, denoted with ™, ℠ or ® are trademarks,
service marks or registered trademarks of The Dow Chemical Company, E.
I. du Pont de Nemours and Company, DowDuPont Inc. or their respective
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