Celesio’s new CEO unveils radical shakeup
October 26th, 2011 // 12:29 pm @ jmpickett
Celesio may sell Manufacturer Solutions division
Celesio’s new Chief Executive Markus Pinger announced a radical shakeup of the drugs distributor, two months after taking the helm amid sliding earnings and discord with its biggest shareholder.
Celesio said on Wednesday it may sell its Manufacturer Solutions division to focus on distribution, would slash costs to improve earnings and expand outside its European home market to tap into faster-growing and less regulated markets.
It also slashed its outlook for a third time this year and said its finance chief Christian Holzherr will leave the company on Nov. 30 at his own request and by mutual agreement with the supervisory board.
Pinger took over as chief executive in August, replacing long-time CEO Fritz Oesterle after his relations soured with the group’s majority shareholder, German conglomerate Haniel .
Celesio is due to publish its third-quarter financial results on Nov. 10.
He said he aimed to make Celesio, Europe’s biggest drug distributor, a one-stop-shop for pharmacies by offering them distribution of specialty pharmaceuticals, warehouse management and marketing of over-the-counter drugs.
The Manufacturer Solutions division, whose units Movianto and Pharmexx offer services such as transport and marketing of pharmaceuticals to drugmakers, may be sold, it said.
The management board in charge of the loss-making division, Michael Lonsert, has already resigned and is leaving the company on Dec. 31, it added.
Last month, Celesio said it would exit its medical-insurance services joint venture with Medco Health Solutions , scrapping a project that its former CEO Oesterle had regarded as key to long-term growth.
Celesio cut its profit outlook for the full year, citing regulatory interventions in Britain and fiercer competition in important markets such as France and Germany.
It said it now expected to post full-year earnings before interest, tax, depreciation and amortisation (EBITDA) of at least 575 million euros ($800 million) this year, compared with a previous outlook for about 600 million.
Alliance Boots unit Anzag , one of the largest drugs distributors in Germany, this month said a government squeeze on pharmaceutical prices had triggered a “ruinous” price war.
Celesio plans to bundle its purchasing, halt projects with high start-up losses, and cut administrative costs to improve earnings in 2012. The package of measures will cost 100 million euros, which will hurt 2011 earnings, Celesio said.
