• Leadership
  • CFO.com | US

The Reinvention of an Industrial Titan

DuPont is again remaking itself, with a shifting R&D strategy and a pile of acquisitions and divestitures. The CFO gives his take on the transformation.

Mega-trend number three involves global efforts to protect lives and the environment. DuPont pitches in with a product lineup that includes Kevlar, used to make the bullet-resistant vests for law enforcement, and Nomex-brand fire-protective equipment and clothing. On the environmental side, the company provides sulfuric acid regeneration and sulfur gas recovery services for the refining industry and a line of environmentally friendly sulfur-based products.

Meanwhile, driving working capital reduction has been a strong focus since Fanandakis became CFO. “When you go through every business and their supply chains in a disciplined, end-to-end process, the number of inefficiencies you can find is amazing,” says Fanandakis. The company has liberated cash by reducing inventory levels, eliminating less-utilized or redundant warehouses, changing customer payment terms and reducing past-due accounts — days sales outstanding has decreased by 12 percent since 2009.

DuPont also has succeeded at delaying payments to its own vendors: days payable outstanding has increased by 11% in four years’ time.

The overall transformation efforts seem to have helped significantly boost DuPont’s business results. Its operating margin swelled from 10.9 percent in 2008 to 17.6 percent in 2012. And the company returned 182 percent of shareholders’ investments from the beginning of 2009 through mid-September 2013 through stock-price growth, dividends and share buybacks. By comparison, the average total shareholder return of S&P 500 companies was 107 percent over that time, and DuPont’s proxy-statement peer group returned just 95 percent of shareholders’ investments.

“We’re not done with our portfolio changes,” says Fanandakis, “but it’s been exciting to be a part of the transformation of this 211-year-old company. For me, driving these changes has been the high point of my nearly 35 years with DuPont.”

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