Getinge Drops on CEO’s Ouster After Less Than 18 Months at Helmby
Surgical Workflows unit head Lindoff appointed acting CEO
Shares drop the most in more than five weeks in Stockholm
Getinge AB slumped the most in more than five weeks in Stockholm trading following the ouster of Chief Executive Officer Alex Myers after less than 18 months at the helm of the Swedish maker of sterilization systems for hospitals.
The stock dropped as much as 6.3 percent, its steepest decline since July 14, and traded down 4.4 percent to 166.90 kronor as of 12:16 p.m. local time. The board appointed Joacim Lindoff, currently head of Getinge Surgical Workflows, as acting CEO, according to a statement on Monday. Disagreements regarding its future direction led to the decision to replace Myers, it said.
Myers had initiated an “ambitious restructuring program” that might have eventually led to the divestment of some under-performing businesses and assets that didn’t fit into the company’s strategy, Pareto Securities said in a note to clients on Monday. While the benefits from that program wouldn’t be visible until 2018-19, it was crimping orders and revenue growth in the short term, the brokerage said.
“Unfortunately, the sudden change in leadership could mean that necessary but long-term changes will not take place,” Finlay Heppenstall and Peter Oestling, analysts at Pareto, wrote in the note. “Getinge now has to start to be a seller in order to get back on the right track.”
The changes are effective as of today and the process to recruit a new CEO will start immediately, Getinge said.
Myers said “a difference of opinion” on the company’s future led to the board’s decision to replace him.
“It’s probably a logical decision when you come to that type of situation,” Myers said in an interview on Monday regarding the board’s decision to seek a new CEO. He declined to provide specific details about the nature of the disagreements or comment on the future prospects of the company. He said he’ll now take a few days or weeks to think about his future.
Myers became CEO on March 25, 2015, replacing Johan Malmquist, who had been Getinge’s CEO since 1997. In September, he announced some changes with the goal of boosting earnings before interest, taxes and amortization by 2.5 billion kronor ($298 million) to 3 billion kronor by 2019.
Since Myers took the helm, the shares have slumped 23 percent, compared with a 8.6 percent drop in the Stockholm All-Share Index.
In the second quarter, Getinge’s orders shrank 0.7 percent to 7.46 billion kronor while sales dropped 3.5 percent to 6.93 billion kronor. The Gothenburg, Sweden-based company also said it now expects “moderate” sales growth in 2016.
Lindoff has worked at Getinge since 1999, and has held positions including executive vice president of the infection-control unit.
“The board of directors and Alex Myers have different views on the future direction of the Getinge Group and the board has therefore concluded that a replacement of the president and CEO is necessary,” Getinge Chairman Carl Bennet, who controls 49 percent of the voting rights, said in the statement.