DuPont CFO Likely to Focus on Cutting Costs, Regaining Investor Confidence
February 18 2020 - 5:58PM
Dow Jones News
By Nina Trentmann
DuPont de Nemours Inc.'s new finance chief is expected to help
the industrial-materials maker cut costs and regain investor
confidence as it faces weaker demand in some of its markets.
The Wilmington, Del.-based company on Tuesday named Lori D. Koch
to the role of chief financial officer, effective immediately. Ms.
Koch, a 17-year company veteran, previously led the finances of
several DuPont businesses and most recently served as vice
president of investor relations and corporate financial planning
and analysis.
Her appointment comes as part of a wider management shuffle that
reinstalled Edward D. Breen at the top of the company and removed
Chief Executive Officer Marc Doyle and CFO Jeanmarie Desmond less
than a year after they took over.
Mr. Breen played a key role in a blockbuster merger between Dow
Chemical Co. and DuPont Co., announced in 2015, and led the
combined company from 2017. He became the executive chairman of
DuPont in 2019 after the conglomerate split into three separate
companies.
Ms. Koch has worked closely with Mr. Breen and is a successful
communicator -- a skill that could be an advantage in her new role,
analysts said.
DuPont, which produces materials for a host of products --
including solar cells, bullet-proof vests, biofuels and nutritional
probiotics -- in recent months has suffered from declining investor
confidence after it missed expectations and cut its guidance. Sales
fell 5% in 2019, DuPont said last month. DuPont's share price is
down about 16% since the beginning of the year.
The biggest challenge facing Ms. Koch will be recovering
investor confidence, said Jonas Oxgaard, an analyst at brokerage
firm Sanford C. Bernstein & Co. "Investors felt the previous
management team was not transparent enough," he said.
As head of investor relations, Ms. Koch had an active outreach
program and knew what investors wanted to know, said Scott Davis,
chairman and CEO of Melius Research LLC, a research firm.
Mr. Breen and Ms. Koch are expected to accelerate the pace of
restructuring at DuPont while exploring new areas for growth,
analysts said.
The company took pricing and cost actions in 2019, executives
said during a January earnings call. DuPont has not set out an
exact cost-cutting target yet.
"Productivity efforts will likely be supplemented by more
aggressive scrutiny of cost leakage," analysts at investment bank
Jefferies Financial Group LLC wrote in a note to clients.
DuPont in December said it would combine its nutrition and
biosciences business with International Flavors & Fragrances
Inc.
"Lori has proven to be a great partner to Ed during her time in
investor relations and they will continue to work together closely
as she takes on the CFO role," DuPont said in a statement. The
company added that "her immediate priorities are getting the
company back on a trajectory of growth, restoring operational
discipline to the organization and delivering expectations for 2020
on all financial metrics."
Write to Nina Trentmann at Nina.Trentmann@wsj.com
(END) Dow Jones Newswires
February 18, 2020 17:43 ET (22:43 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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