Sulzer Proposed Chairman Wennemer Calms Fears on VekselbergPatrick Winters
Sulzer AG’s proposal that Manfred Wennemer, a former chief of Continental AG, should become chairman of the Swiss pump maker eases concern about the influence of Viktor Vekselberg.
Vekselberg, Russia’s second-richest man, owns 31.2 percent of Sulzer and 48.3 percent of Swiss engineering business OC Oerlikon AG, through his Renova companies, according to data compiled by Bloomberg. Vekselberg’s opponents have said he may try to merge the two businesses. Sulzer’s board unanimously voted for Wennemer, who is independent and not a Vekselberg representative, said Thomas Gerlach, a spokesman.
“There was a concern regarding a Renova-dependent person becoming chairman,” Fabian Haecki, an analyst with Bank Vontobel AG in Zurich, said by e-mail. “This move is positive in my view. He is very experienced indeed and independent.”
Wennemer, who will replace Juergen Dormann at Winterthur-based Sulzer, worked for auto-parts maker Continental from 1994 to 2008 including a seven-year stint as CEO, during which time the company’s market value rose to 12 billion euros ($16 billion) from 1.5 billion euros as he expanded the product range and made acquisitions.
Wennemer, 65, was chairman of the supervisory board of Hochtief AG from 2011 to 2012. Dormann, 73, Sulzer’s chairman since 2009, is stepping down because of the company’s age rules.
Sulzer CEO Klaus Stahlmann, who joined from MAN SE a year ago, presided over a 44 percent increase in its share price last year as orders for pumps to supply the oil and gas industry boomed from the U.S. to Russia. That compared with a 15 percent rise in the Swiss Market Index.
Wennemer is “clearly not being seen as from Renova” and he has a strong, independent personality and is well-regarded in Germany, Stahlmann said in an interview today.
Sulzer today reported full-year earnings before interest and taxes of 410 million Swiss francs ($444.5 million), meeting the average of analyst estimates compiled by Bloomberg. Sales rose 12 percent to a record 4.02 billion francs, beating the average estimate of 3.95 billion francs.
Sulzer’s shares were unchanged at 156.40 Swiss francs as of 1:45 p.m. in Zurich, giving the company a market value of 5.36 billion francs.
Sulzer confirmed its mid-term targets. Emerging markets and North America will probably remain the growth drivers for the business, it said in a statement. The company proposed a dividend of 3.20 francs a share, beating a Bloomberg forecast of 3 francs. Sulzer predicted “moderate” growth for orders and sales this year.
“Further growth is expected for parts of the oil and gas and for the water markets in 2013,” the company said. “Activities in the power and the transportation industries are forecast to continue at similar levels.”