Lanxess AG, the German-headquartered rubber and engineering thermoplastics group, said it has reached a mutual agreement to end the contract of Axel Heitmann, chairman of its board of management. The group's supervisory board said it has appointed Matthias Zachert as his successor.
Zachert, the former Lanxess chief financial officer, had left the company in 2011 to become CFO of Merck & Co. Inc.
There will be a gap between the departure of Heitmann on Feb. 28 and Zachert's start on May 15. The company's current CFO, Bernhard Duettmann, will perform the responsibilities of chairman of the board of management until Zachert's arrival, Lanxess said.
Rolf Stomberg, chairman of the Lanxess supervisory board, thanked Heitmann and credited him with helping to transform the company, which was formed from businesses spun off by Bayer AG in 2004.
"Mr. Heitmann has played a key role in shaping the company since its creation through consistent restructuring and strategic portfolio measures. He has formed Lanxess into a leading global specialty chemicals company, achieving many noticeable successes," said Stomberg.
But he also made it clear the supervisory board considered the time had come to have someone new steering the company.
Stomberg said: "Lanxess is facing significant challenges, for example in terms of market capacities and business portfolio. Therefore, the supervisory board believes it is the right time to hand over responsibility to a new leadership in order to overcome these challenges. Mr. Zachert performed excellent work as Chief Financial Officer at Lanxess and has an outstanding reputation among employees as well as in the capital market."
Under Heitman's leadership, Lanxess has followed a twin path of cost-cutting in its operations and strategic acquisitions plus investment in better performing businesses. But the group has faced continuing difficulties in some businesses, including those serving the automotive and tire markets.
In September 2013, Lanxess said it would make 1,000 layoffs from its 17,500 workforce as part of an efficiency improvement program called "Advance." Approximately 150 million euros ($205 million) in exceptional charges will be booked in 2013 and 2014 to cover the program, but the group said it expects the program to generate annual savings of roughly 100 million euros ($136.7 million) from 2015 onward.
In November, Lanxess announced poor third-quarter results, with sales falling by 5 percent year-on-year to 2.05 billion euros ($2.8 billion) and pre-exceptionals earnings before interest, taxes, depreciation and amortization (EBITDA) falling by 26 percent to 187 million euros ($255 million). Its outlook for the whole of 2013 was pre-exceptionals EBITDA of 710 million to 760 million euros ($1.03 billion), compared with 1.225 billion euros ($1.6 billion) in 2012.
Lanxess shares increased by about 10 percent following the announcement and were trading at 48.76 euros per share in morning trading on Jan. 27 on the Frankfurt Stock Exchange.
