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Marchionne quits Lonza

Sergio Marchionne moves to SGS Keystone

Lonza chief executive Sergio Marchionne has unexpectedly announced he is quitting after leading the life sciences group to a 30 per cent gain in net profit in 2001.

This content was published on January 23, 2002 - 10:40

Marchionne, a 48-year-old Canadian, is leaving on February 1 to head the Swiss inspection services group SGS, Société Générale de Surveillance, SGS said in a statement on Wednesday.

He replaces Antony Czura, who is leaving the company.

The move has been welcomed by analysts amid hopes the management changes would end a lack of transparency for which SGS has been criticised.

Chief executive at Lonza since 1997, Marchionne said it was time for a change as Lonza neared completion of its strategic reorganisation into a pure life sciences firm from a broader speciality chemicals firm.

He will be replaced by Markus Gemeund, now head of Lonza's biologics division, as its new top executive, a move analysts said underscored the group's efforts to shift its focus to biotechnology.

Profits surge

Lonza's 2001 net profit of SFr402 million ($241.7 million) included a net after tax gain of SFr88 million from asset sales. Sales from continuing business rose 9.7 per cent to SFr1.87 billion.

Excluding one-off gains, earnings per share rose 19 per cent to SFr58.05, helped by a strong performance at its exclusive synthesis and biotech businesses as well as a share buyback scheme.

"Notwithstanding a possible further softening of the global economy during 2002, the group believes that, on the basis of its strong positions in fine chemicals and biotechnology, it will be able to improve its 2001 operating performance," the company said in a statement.

Lonza, spun off from the Algroup in 1999 when the metals and packaging company merged with Alcan, made the strategic decision last year to focus on biotechnology and fine and performance chemicals rather than a broader speciality chemicals brief.

It has already sold off its energy business.

SGS shares surge

Shares in SGS rose sharply in early trading on Wednesday after the news that Marchionne would be its new chief executive.

"He did a good job at Lonza where he worked for shareholder value. He is a strong positive personality and will be good for SGS," said Bernhard Pomrehn, an analyst at the cantonal bank of Zurich.

Shares in SGS were up 9.7 per cent at SFr282.50, while Lonza shares were down 0.7 per cent at SFr1,078, even though the group posted 2001 results at the top end of expectations.

"There is some disappointment that Marchionne is going to SGS and that is weighing on the share price," said Petra Matt, head of sales at Rahn and Bodmer Banquiers.

swissinfo with agencies

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