Industrial materials manufacturer DuPont de Nemours announced Tuesday it had hired Lori Koch as CFO. Her appointment follows the removal of CFO Jeanmarie Desmond and CEO Marc Doyle after less than a year in those roles.
Koch, along with newly reinstalled CEO, Executive Chairman Ed Breen, is expected to help DuPont cut costs and regain investor confidence amid reduced market demand, The Wall Street Journal reported.
"While we made some progress in 2019, we did not meet our own expectations and we now need to move aggressively to secure our foundation for growth," Breen said in a statement. "We have solid businesses, but, as we discussed on our recent earnings call, we need to accelerate operational improvement and make sure we are taking appropriate action to deliver on our commitments for the year."
Wilmington, Delaware-based DuPont manufactures materials for a range products, including solar cells and biofuels. Under Doyle and Desmond’s leadership, the company struggled with low sales and tepid share price, resulting in diminished investor confidence.
On a January conference call, Doyle had referenced a weaker demand for nylon, primarily used for making seat belts, as a large part of the company’s underwhelming performance. "Nylon industry fundamentals were weaker in the second half of 2019 as lower demand, coupled with improved industry supply reliability, negatively impacted our discretionary pricing power," Doyle said, according to Forbes.
Regaining that confidence, along with spurring growth and initiating a restructuring effort, will likely be Koch’s biggest obstacle.
Additionally, the company will rely on Koch’s communication prowess. "The CFO is in charge of investor relations and is the one who should have called for more transparency and different messaging," an analyst told Forbes. Desmond, he said, "from an operational performance, did okay. But as far as communication, she really didn’t."
In 2015, Breen assisted in merging Dow Chemical Co. with DuPont Co., leading the combined company from 2017 on. He became DuPont’s executive chairman last year, following the conglomerate’s split into three companies, the release said.
"Productivity efforts will likely be supplemented by more aggressive scrutiny of cost leakage," analysts at investment bank Jefferies Financial Group LLC wrote, WSJ reported.
In a statement provided to WSJ, DuPont said Koch’s immediate priorities would be "getting the company back on a trajectory of growth, restoring operational discipline to the organization and delivering expectations for 2020 on all financial metrics."
Koch has worked closely with Breen over the last four years, particularly on strategy, planning and shareholder engagement, the company said. Earlier in her career, Koch worked on the finance teams at Comcast Business Communications and Lucent Technologies. Since 2019, she has also served as a director of Aceto Corporation, a virtual manufacturer of life sciences materials and technology.
Koch has worked in DuPont’s finance department for more than 17 years, most recently as vice president of investor relations and corporate financial planning and analysis.