United states securities and exchange commission
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- Bu səhifədəki naviqasiya:
- Agriculture Outlook for 2018
- PERFORMANCE MATERIALS COATINGS
- Performance Materials Coatings Outlook for 2018
- INDUSTRIAL INTERMEDIATES INFRASTRUCTURE
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Table of Contents
2017 Versus 2016 Agriculture net sales were $7,516 million in 2017, up from $6,173 million in 2016. Pro forma net sales were $14,342 million in 2017, up from $14,060 million in 2016. Pro forma net sales growth of 2 percent was led by volume gains of 1 percent and a 1 percent benefit from portfolio actions. Seed net sales grew 5 percent, driven by volume and price improvement, and Crop Protection net sales decreased 1 percent as increases in volume were more than offset by lower local price. Seed and Crop Protection volume growth was driven by an increase in sunflower and corn seed sales in Europe, increased soybean sales in U.S. & Canada, continued penetration of new crop protection products VESSARYA® and ZORVEC TM fungicides and continued demand for ARYLEX TM herbicide, ISOCLAST® insecticide, and novel seed treatment solutions. These volume increases were partially offset by higher Crop Protection inventory levels in China and a reduction in global corn planted area. Increases in local prices for Seeds, driven by continued penetration of LEPTRA® corn hybrids, were offset by a decrease in local prices for Crop Protection, driven by competitive pressures in Latin America. The benefit from portfolio actions for 2017 as compared with 2016, is due to the DAS Divested Ag Business, which is excluded from pro forma results for periods prior to the Merger, but included in reported results after the Merger and through the close of the sale of this business on November 30, 2017. Pro forma Operating EBITDA was $2,611 million in 2017, up 12 percent from $2,322 million in 2016. Pro forma Operating EBITDA increased on improved volume, cost savings, lower pension/OPEB costs, currency and portfolio benefits. Increases were partially offset by lower local price due to competitive crop protection pricing pressure and higher product costs, including higher soybean royalties. 2016 Versus 2015 Agriculture net sales were $6,173 million in 2016, down 2 percent from $6,327 million in 2015. Compared with 2015, volume decreased 2 percent, currency declined 1 percent and local price and product mix was up 1 percent. Net sales declined in all geographic regions, except Latin America, as low crop commodity prices continued to drive a slow-growth agricultural industry. Crop Protection net sales decreased compared with 2015, driven primarily by reduced demand for insecticides and herbicides, primarily glyphosate, and currency headwinds. Seed net sales increased compared with 2015, as strong demand and price increases for corn seed in Latin America more than offset the impact of product lines divested in 2015 and lower demand for sunflower and cotton seed. Operating EBITDA for 2016 was $971 million, up from $833 million in 2015. Operating EBITDA increased as benefits from lower operating costs driven by productivity initiatives and increased corn seed sales more than offset lower sales of herbicides and insecticides and the absence of earnings from product lines divested in 2015. Agriculture Outlook for 2018 Agriculture's full year 2018 Operating EBITDA is expected to increase meaningfully, as compared with 2017 pro forma Operating EBITDA driven by favorable impacts on net sales from new product introductions and favorable impacts from cost synergies. The Company anticipates net sales for the first six months of 2018 to be about equal with the first six months of 2017, which is consistent with the estimated corn area planted in North America in 2018, and reflective of the challenging price environment. The Company anticipates an increase in the favorable impacts of cost synergies in the last six months of 2018 and expects new product introductions to be fully ramped and contributing to net sales and Operating EBITDA growth in the last six months of 2018. Additionally, the Company anticipates lower pension/OPEB costs to contribute to increases in Operating EBITDA. 48 Table of Contents PERFORMANCE MATERIALS & COATINGS The Performance Materials & Coatings segment consists of two global businesses - Coatings & Performance Monomers and Consumer Solutions. Using silicones, acrylics and cellulosics-based technology platforms, these businesses serve the needs of the coatings, home care, personal care, appliance and industrial end-markets. The segment has broad geographic reach with R&D and manufacturing facilities located in key geographic regions. This segment also includes the results of the HSC Group joint ventures.
2017 Versus 2016 Performance Materials & Coatings net sales were $8,783 million in 2017, up from $6,412 million in 2016. Pro forma net sales were $8,740 in 2017, up from $6,362 in 2016. Pro forma net sales increased 37 percent compared with 2016, primarily due to portfolio actions, which contributed to 27 percent of the increase, reflecting the favorable impact of the addition of Dow Corning’s silicones business. Local price increased 8 percent and volume increased 2 percent. Local price increased in both businesses and all geographic regions. Local price increased in Coatings & Performance Monomers in response to higher raw material costs, tight supply and demand fundamentals for acrylates and methacrylates and pricing actions for architectural coatings. Consumer Solutions local price increased primarily due to pricing initiatives for silicone intermediates in Asia Pacific and EMEA. Volume increased in both businesses and all geographic regions, except Latin America and EMEA, which were flat. Consumer Solutions experienced volume growth in all geographic regions, except EMEA, which was flat, driven by strong demand in pressure sensitive packaging, construction and personal care end-markets. Volume growth in Coatings & Performance Monomers was driven by opportunistic merchant sales of acrylates and methacrylates and strong growth in specialty monomers, particularly in the U.S. & Canada. Pro forma Operating EBITDA was $2,121 million in 2017, up from $1,228 in 2016. Pro forma Operating EBITDA improved compared with 2016 as the favorable impact of earnings from Dow Corning’s silicones business, higher selling prices and increased equity earnings from the HSC Group more than offset higher feedstock, energy and other raw material costs. 2016 Versus 2015 Performance Materials & Coatings net sales were $6,412 million in 2016, up from $4,517 million in 2015. Net sales increased 42 percent from 2015, primarily due to a 53 percent increase in portfolio and other, reflecting the favorable impact from the addition of Dow Corning’s silicones business. Local price was down 8 percent, with declines in all geographic regions and both businesses, primarily in response to lower raw material costs and competitive pricing pressures. Volume decreased 2 percent compared with 2015, driven by declines in Coatings & Performance Monomers which more than offset demand gains in Consumer Solutions. Coatings & Performance Monomers volume decreased due to a strategic reduction in merchant sales of acrylic acid and increased internal consumption of acrylates which more than offset demand growth for architectural and industrial coatings driven by a strong innovation pipeline and expansion into new end markets. Consumer Solutions volume increased in all geographic regions 49 Table of Contents reflecting demand for silicone-based products and increased market share and innovation gains in the home and personal care market sectors in U.S. & Canada and EMEA. Operating EBITDA for 2016 was $1,229 million, up from $606 million in 2015. Operating EBITDA increased compared with 2015 as the favorable impact from the addition of Dow Corning’s silicones business, lower feedstock, energy and other raw material costs and higher equity earnings more than offset lower local selling prices. Performance Materials & Coatings Outlook for 2018 Performance Materials & Coatings' 2018 Operating EBITDA is expected to be essentially flat compared with 2017 pro forma Operating EBITDA, as sales gains and the favorable impact of cost synergies is expected to be offset by decreased equity earnings and increased planned maintenance turnaround spending. Modest sales growth is expected for the segment, driven by volume and local price gains in Consumer Solutions resulting from continued pricing momentum for silicone intermediates, particularly in Asia Pacific, and strong market demand in home and personal care, pressure sensitive packaging and construction end-markets. Coatings & Performance Monomers anticipates sales to be flat as overall market share growth, combined with innovative product offerings, is expected to be offset by local price declines and balanced market conditions. INDUSTRIAL INTERMEDIATES & INFRASTRUCTURE The Industrial Intermediates & Infrastructure segment consists of four global businesses: Construction Chemicals, Energy Solutions, Industrial Solutions, and Polyurethanes & CAV. These customer-centric global businesses develop and market customized materials using advanced technology and unique chemistries. These businesses serve the needs of market segments as diverse as: appliance; coatings; infrastructure; and oil and gas. The segment has broad geographic reach and R&D and manufacturing facilities located in key geographic regions. This segment also includes a portion of the results of EQUATE, TKOC, Map Ta Phut Olefins Company Limited and Sadara, all joint ventures of the Company. Dow is responsible for marketing Sadara products outside of the Middle East zone through Dow’s established sales channels. As part of this arrangement, Dow purchases and sells Sadara products for a marketing fee.
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