Sandvik CEO Quits Early; Faxander Given Free Hand to Build Team
Stock Chart for Sandvik AB (SAND)
Sandvik AB, the world’s biggest maker of metal-cutting tools, said Lars Pettersson will resign from his role of chief executive officer early, to be replaced by Olof Faxander, head of Swedish steelmaker SSAB.
Faxander, 40, will take the helm on Feb. 1. Pettersson, 56, said his early departure is timed with the planned retirement of several board members, giving Faxander a free hand to hire executives. His contract was set to expire in November 2014.
“The board and I think the new CEO should get the chance to build his own team,” Pettersson, who joined Sandvik in 1979, rising to CEO in 2002, said in an interview. “I totally respect the board’s views. It’s logical.”
Sandvik was the only large Swedish engineering company to post a loss in 2009 as demand from mining companies and other industrial customers plummeted during the financial crisis. Pettersson cut 9,000 jobs in response, returning Sandvik to profit in the first quarter of this year.
Faxander brings “broad” experience of intensely competitive markets undergoing change, and has proved his ability to increase the value of companies, Sandvik Chairman Anders Nyren said in a statement.
Pettersson said he felt no pressure to leave early, and his future is yet to be decided. He will continue to receive his 7.2 million-krona ($1.06 million) annual salary until November 2014, spokesman Anders Wallin said.
“I’m going to take it easy for a while,” the executive said from the company’s headquarters in Sandviken. “I’m a pretty open person, have good language skills and a good international network, so we’ll see what happens.
Pettersson said he’s most proud of Sandvik’s establishment in fast-growing markets, and the rapid expansion of the mining and construction division. That unit has doubled its sales since 2004, overtaking the tooling division as the company’s biggest business.
Sandvik’s 2.62 billion-krona loss last year was in contrast to other Swedish industrials like Atlas Copco AB. Sandvik suffered more than others because it “carried through a very intensive restructuring program, and took the costs for that in 2009,” Pettersson said.
The company also had too much inventory going into the crisis, which “caused us to under-produce a lot relative to our sales,” he said.
SSAB under Faxander in 2007 pushed through one of the bigger acquisitions made by a Swedish company when it bought North American pipemaker Ipsco Inc. for about $7.7 billion to boost output of metal used by the oil and gas industry.
In turn, Faxander will be replaced by Martin Lindqvist, head of SSAB’s European, Middle East and Africa region, the steel company said in a separate statement.
SSAB’s shares fell as much as 3.1 percent and traded down 2 percent at 104.5 kronor as of 10:41 a.m. local time in Stockholm. Sandvik rose 1.3 percent at 128.9 kronor.
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