Bloomberg News

Sulzer Names Wennemer Chairman Easing Vekselberg Domination Fear

February 15, 2013

Sulzer AG proposed former Continental AG chief executive officer Manfred Wennemer as chairman, easing concerns over the dominance of shareholder Viktor Vekselberg.

Vekselberg, who is Russia’s second richest man, owns a 31.2 percent stake in Sulzer and 48.3 percent of OC Oerlikon AG, another Swiss engineering firm, through his Renova group of companies. Vekselberg’s opponents have accused him of trying to merge the two firms.

“There was a concern regarding a Renova-dependent person becoming chairman,” said Fabian Haecki, an analyst with Bank Vontobel AG in Zurich said by email. “Hence, this move is positive in my view. He is very experienced indeed and independent.”

Sulzer’s board of directors unanimously voted for Wennemer, who is independent and not a Vekselberg representative, company spokesman Thomas Gerlach said. Wennemer, who will replace Juergen Dormann, 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 from 1.5 billion euros as he expanded the product range and made acquisitions.

From 2011 to 2012 he was chairman of the supervisory board of Hochtief AG. Dormann, 73, chairman since 2009, is stepping down because of internal age-limitation rules.

Shares Soar

Sulzer CEO Klaus Stahlmann, who joined from MAN SE a year ago, presided over a 44 percent share gain last year as orders for pumps to supply the oil and gas industry boomed from the U.S. to Russia. That compared to a 15 percent rise in the Swiss Market Index.

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 confirmed its mid-term targets. Emerging markets and North America are likely to remain the growth drivers for the company, it said in a statement. The Winterthur, Switzerland- based firm proposed a dividend of 3.20 francs a share, beating a Bloomberg forecast of 3 francs. Sulzer forecast “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.”

To contact the reporter on this story: Patrick Winters in Zurich at pwinters3@bloomberg.net

To contact the editor responsible for this story: Simon Thiel at sthiel1@bloomberg.net


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