Bilfinger CEO Unexpectedly Resigns After Losses Widened

  • CFO Axel Salzmann to take over until replacement is found
  • CEO departure comes after company scrapped dividend last month

Bilfinger SE Chief Executive Officer Per Utnegaard announced his surprise resignation, leaving a top management void at the German real-estate services company a month after it scrapped its dividend and reported a widening loss.

Utnegaard will leave at the end of April and be replaced by Chief Financial Officer Axel Salzmann until a permanent appointment is made, the Mannheim, Germany-based company, which has activist shareholder Cevian Capital AB as its biggest investor, said Wednesday in an e-mailed statement.

The resignation of Utnegaard after less than a year at the helm once again plunges Bilfinger into a management reshuffle. The 2010 retirement of Herbert Bodner after 12 years in charge has now been followed by two other CEOs in relatively short succession. Utnegaard replaced Roland Koch, who was ousted, after an almost year-long search.

“It’s a difficult situation, even though they say they are already in talks with potential successors,” said Jens Jung, an analyst at Steubing AG, who rates Bilfinger shares hold. “Leaving after just 11 months is quite strange. It’s fundamentally always bad when management changes after a short time. There is a lack of continuity.”

Since he took over in June, Utnegaard has announced plans to sell the power division -- the cause of a flurry of profit warnings. He already sold a water unit to China’s Chengdu Techcent Environment Group, netting proceeds of 200 million euros ($226 million), following a strategic review of assets generating 1 billion euros in output. The company scrapped its dividend last month after an almost seven-fold widening in 2015 net losses.

Cevian, which holds 26 percent of the company’s shares, has a track record of encouraging companies in which it invests to sell divisions to generate greater returns for shareholders. The Swedish investor, which also owns a stake in ABB Ltd., has two seats on the supervisory board.

Bilfinger shares fell 0.4 percent to 38.16 euros as of 12:28 p.m. in Frankfurt trading.

Talks with CEO candidates are underway and the aim is to announce the successful applicant “shortly,” Chairman Eckhard Cordes said in the statement.

The company confirmed its financial outlook for this year and said it would continue along its ‘strategic course” aimed at getting back on a path of profitable growth.

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