DEEP DIVE: DuPont On the Move: Big Changes as Company Announces Split, Changes Leadership, and Stays Ahead of Climate Goals

*** DuPont corporate headquarters in Wilmington, Del. Photo provided by DuPont

2024 has been a busy year for DuPont de Nemours, one of the world's leading chemical industries headquartered in Wilmington, Del. The company has announced plans to split into three new separate companies, appointed a new CEO, and released a sustainability report highlighting ahead-of-schedule progress.

The Split

On 22 May 2024, DuPont announced its plans to split into three separate publicly traded companies, a change projected to be finalized within the next two years. The market responded well to the news at the time, with shares up by 5% at the end of trading. The breakdown of the new businesses is:

New DuPont – The company carrying the DuPont name will be the largest of the three, bringing in ≈ $6.6 billion in net sales in 2023. The latest incarnation of DuPont, currently referred to as “New DuPont” by the company, will be a multi-industry company and will retain the company's well-known name brands, such as Tyvek, Kevlar, and Nomex.

New DuPont “will have a strong presence in fast-growing healthcare end-markets including applications for biopharma consumables, medical devices, and medical packaging. The company will also be a leading provider of key technologies enabling advanced mobility particularly within electric vehicles,” according to the company's press release. Finally, New DuPont will remain a provider of advanced solutions serving safety, construction, aerospace, and other industrial-based end-markets.

Electronics – DuPont’s electronic sector brought in ≈ $4 billion in net sales in 2023. The new electronic business will be a provider of “differentiated electronics materials including key consumables used in semiconductor chip manufacturing, as well as advanced electronic materials enabling reliable signal integrity, power management and thermal management.” The company should be well positioned to capture growth in the semiconductor industry.

Water – The company's water technology solutions brought in ≈ $1.5 billion in net sales in 2023 and includes a comprehensive portfolio of water filtration and purification solutions with leading technologies in reverse osmosis, ion exchange, and ultrafiltration. Its solutions “provide critical components and systems that generate clean and fit-for-purpose water across a variety of market segments including industrial water and energy, life sciences and specialties, municipal and desalination, and residential and commercial,” said the company.

In an investors call following the announcement, former CEO and current executive chairman of DuPont Edward Breen said isolating the companies into more specific industries will have several benefits. He said the more tailored, industry-specific investment strategies will allow the separate entities to grow more in value than their growth within a conglomerate company, and that the split will open new, more specific career opportunities for existing employees.

“From a shareholder view, we believe that each company will offer a distinct and compelling investment profile appealing to different shareholder bases,” Breen said. “Tailored capital allocation framework should also maximize growth outcomes while allowing flexibility to pursue portfolio-enhancing mergers and acquisitions.”

The company said it expects approximately $60 million in dis-synergies from the split.

A Change in Leadership

Also on 22 May, DuPont announced a change in leadership. Breen stepped down as CEO and moved into a full-time position as executive chairman, and Lori Koch was promoted to CEO from her role as chief financial officer.

“Lori has been a key leader within DuPont for many years,” Breen said. “I’m confident that Lori will be terrific in the new role.”

Koch participated in her first quarterly earnings call as CEO in July, discussing the company's second 2024 quarter ending 30 June. The report highlighted a general increase in net sales compared to Q1 and Q2 2023. Koch attributes the increase to a recovery in electronics sales, which have been down in the past few years but have steadily gained in 2024 compared to 2023 earnings.

“We are advancing our strategic priorities and have made progress in planning key actions and milestones related to our previously announced intent to separate our electronics and water businesses,” Koch told those joining the earnings call.

The company remains focused “on driving results and demonstrating the performance potential of our combined portfolio while furthering the plans to unlock value through our previously announced separation,” Koch said.

Antonella Franzen replaced Koch as CFO, and both women will retain their positions in the New DuPont branch of the corporate separation.

Significant Sustainability Achievements

DuPont recently highlighted some major wins in the sustainability arena, specifically a continued trend in reducing emissions ahead of 2030 goals, in its 2024 Sustainability Report. The company set out to reduce Scope 1 and Scope 2 greenhouse gas emissions by 50% from the 2019 baseline and surpassed that goal in 2024 with a 58% reduction. The 2030 goal of reducing Scope 3 emissions by 25% from the 2020 baseline was also exceeded with a 39% reduction. Additionally, the goal of 60% of power to be sourced from renewable energy sources was achieved this year by purchasing additional renewable energy credits.

“I view sustainability as an opportunity for value creation; not a risk to be managed,” said Alexa Dembek, chief technology and sustainability officer. “More than ever, we're putting sustainability at the core of our overall strategy.”

The report also highlights DuPont's safest year on record, with more than 80% of manufacturing sites reporting no injuries.

Where is DuPont Headed?

In the first few months after the announced separation, Breen said the company is on track for the separation to be successful and has been moving forward in project management progress, anticipating announcements in early 2025.

“A current priority, along with our Board, is to complete executive leadership appointments for electronics and water along with corporate governance aspects including board appointments,” Breen said.

Early progress also includes establishing the future capital structures of the three new businesses, with a redemption of $650 million from 2038 bonds.

As far as sustainability goals are concerned, the company is already ahead of some of its 2030 goals and has been recognized as a top employer for diversity and disability inclusion. According to the sustainability report, the company's sustainability goals will continue to be integrated into business strategy.

“It goes back to our purpose,” Dembek said. “Creating the innovations that help people thrive.”

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