27 June 2002 12:48 [Source: ICIS news]
WILMINGTON, Delaware (CNI)--DuPont expects its realignment into five market-oriented divisions to lead to an increased focus on organic growth and less emphasis on growth by acquisitions.
Chief financial officer Gary Pfeiffer said M&A (mergers and acquisitions) activity will be disciplined, and limited to bolt-on acquisitions that "are accretive to earnings and affordable". He was speaking at a press briefing here to celebrate the US company’s 200th anniversary.
DuPont is realigning itself into five divisions - performance materials, coatings and colour technologies, agriculture and nutrition, safety and protection, and electronic and communication technologies - as part of plans to focus on the growth areas of electronics, biotechnology, material science and safety and security.
Executive vice president John Hodgson said these five sectors all have significant organic growth potential, and will "re-accelerate the growth of DuPont".
DuPont's re-alignment has been designed to focus its R&D (research and development) effort and capital investment into higher growth, higher return-on-investment businesses, said Hodgson. Today, some 40% of DuPont’s business units have the potential to achieve sales growth of over 6%/year, he added.
Chairman and chief executive Chad Holliday said DuPont is on target to achieve a major transition and position itself for sustainable growth. The company is aiming to achieve 10%/year growth in earnings per share (EPS), and needs a 6%/year top line growth in turnover to achieve this, he said.
Holliday confirmed two further targets for the company: to bring return on invested capital (ROIC) up to percentage levels in the high teens and to bring in one-third of turnover from products launched in the last five years by 2006. To achieve this return to growth, DuPont is focusing on improved productivity, innovation and better use of knowledge intensity within the company.
Integrated science - combining biology with chemistry - will be "the heart of the company going forward", explained Holliday. He believes DuPont's innovation process will enable it to "bring unique technologies, relevant to the market place, through well executed implementation".
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