DuPont CEO Ellen Kullman rejected a hedge fund operator’s demand to split up the company, citing the company’s financial strength and performance.
Trian, an investment vehicle controlled by Nelson Peltz, has met with DuPont management and has gone public with its demands.
Peltz is known for buying up a chunk of company stock and demanding changes he says will unlock value to stockholders. He is currently making the case for Pepsi to split up its beverage and snack food operations.
The company is spinning of its Performance Chemicals business.
“…we know that our businesses strongly benefit from being a part of DuPont. In addition to the benefits of our innovation platforms, market access across large customer relationships, opportunities for market penetration globally, and our favorable position with which to optimize the bio-based opportunity – our company is advantaged by our global scale and infrastructure leverage, our established brand and solid financial foundation,” Kullman wrote “ Our capital structure furthermore provides us with important financial flexibility we need to pursue strategic growth opportunities in light of regional and highly seasonal agriculture cash flows. That same strength and flexibility enabled us to continue paying a dividend through the financial crisis.”
The letter, seek link below, went on to outline the company’s strategy of investing in high-growth businesses. Click here for a link to the letter. (Adobe Acrobat Reader required).
DuPont announced third quarter 2014 operating earnings of $0.54 per share compared to $0.45 per share in the prior year.
“In the third quarter, we improved our operating margins in five of seven segments and grew operating earnings per share 20 percent, despite a weaker Ag environment and sluggish economic growth in most of the world,” Kullman stated. “Our increase in margins in a slow growth environment reflects the momentum we are building as we execute our plan, which is driving new products, portfolio enhancements and a broad initiative to redesign our operating model with a smaller cost base and a simplified support structure. We are positioning DuPont for our next stage of growth, while increasing returns to our shareholders.”
Third quarter 2014 net sales of $7.5 billion were 3 percent below last year due to portfolio changes. Increased volumes were offset by a decrease in local selling prices.
Volume grew across in most segments with decline limited to Agriculture, where higher crop protection volume was more than offset by lower seed volume.
Showing strength in operating earnings wasx Nutrition & Health, up +23 percent) and Safety & Protection, up 18 percent.
