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Part II
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS, continued
33
INDUSTRIAL BIOSCIENCES
(Dollars in millions) 2015 2014 2013
Net sales $ 1,171 $ 1,244 $ 1,211
Operating earnings $ 203 $ 192 $ 151
Operating earnings margin 17% 15% 12%
2015 2014
Change in net sales from prior period due to:
Local Price and Product Mix (3)% 1%
Currency (6)% —%
Volume 3 % 2%
Portfolio and Other — % —%
Total change (6)% 3%
2015 versus 2014 Full year 2015 segment net sales of $1.2 billion decreased 6 percent, primarily due to the negative impact of
currency, lower prices and demand for biomaterials, partially offset by volume growth in enzymes, principally for home and
personal care, food markets and ethanol production.
2015 operating earnings and operating earnings margin increased primarily due to cost reductions and continued productivity
improvements, partially offset by lower sales.
2014 versus 2013 Full year 2014 segment net sales of $1.2 billion increased 3 percent, primarily due to increased enzyme demand,
principally for ethanol production, food and animal nutrition, driven by new product offerings. In 2014, ethanol industry
fundamentals were adjusting to a lower energy cost environment but demand for the company's novel enzymes and other functional
bio products designed to increase production rates, yield and efficiency remained steady.
2014 operating earnings and operating earnings margin increased from higher volumes and improved product mix as discussed
above.
Outlook Full year 2016 segment net sales are expected to increase in the low-single digits percent, driven by volume improvement,
pricing and the impact of new product introductions in bioactives, including increased penetration in food markets. Full year
operating earnings are expected to be about flat, reflecting cost savings and productivity improvements offset by higher product
costs and currency.