The current Chairman of the Board of Directors does not want to stand for re-election after seven years.
(Photo: Reuters)
Zurich Jan Jenisch, CEO of Holcim, will be given an extraordinary amount of power: At the upcoming annual general meeting, he is to move into the board of directors of the world’s second-largest cement manufacturer in terms of sales and become chief supervisor. Until his successor is found, Jenisch will remain CEO, as the company announced on Friday.
Holcim takes up to twelve months to do this. In this way, the implementation of the group strategy developed by Jenisch should be guaranteed until 2025, according to a statement.
Unlike in Germany, it is more common in Switzerland for CEOs to move directly to the top post of the supervisory body after their active time. Severin Schwan, for example, who has been the boss for many years and will soon become President of the Board of Directors at Roche, has just taken this step.
However, filling both top positions with the same person is also unusual in Switzerland – even if it is only for a limited time. Holcim therefore declared that it would introduce additional control mechanisms for the Board of Directors. The independent vice-president, Hanne Sørensen, will have a stronger role in the future.
Jenisch said of his proposal as head of the board of directors: “That is the right signal. It underlines that we have a long-term focus.” At the same time, however, the Board of Directors was aware that the Management Board team was in the middle of implementing a corporate restructuring that required quick decisions. Therefore, the board of directors asked him to remain available as CEO for a transitional period.
The step is necessary because the current Chairman of the Board of Directors of Holcim, Beat Hess, no longer wants to stand for re-election after seven years at the helm. Hess is quoted in the statement as saying: “The Board of Directors firmly believes that Jan Jenisch, based on his exceptional leadership qualities and extensive experience, is the right candidate for the position of Chairman of the Board of Directors in order to continue the rapid transformation of the company.”
Jenisch trims the building materials group to profit
Jenisch, CEO since 2017, has restructured the group, which emerged from the merger of Lafarge and Holcim, and trimmed it for profitability. The group has withdrawn from less risky and high-margin markets. Last year he sold the Indian business to the Adani group for around six billion dollars. Because the deal was settled entirely in cash, Holcim is spared the crisis at the Indian conglomerate.
The building materials giant has also left behind the times when Lafarge-Holcim was criticized for paying protection money to the terrorist organization IS for a cement plant in Syria.
Jenisch has set ambitious targets for the group to reduce CO2 emissions in cement and concrete production. Holcim aims to be carbon neutral by 2050. The production of cement and concrete is very energy-intensive.
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Jenisch is also expanding business with more complex construction services, such as roof construction systems. Since taking office, Jenisch has taken over dozens of smaller companies. In the first few weeks of this year alone, Holcim acquired seven companies.
The restructuring of the group paid off last year. Holcim’s sales increased by 12.9 percent to 29.1 billion Swiss francs – more than ever before. Pre-tax earnings (EBIT) rose by 7.2 percent to CHF 4.7 billion. The margin fell slightly, from 17.2 to 16.3 percent. “We had a remarkable 2022,” said Jenisch. “We managed to offset the hyperinflation.”
The prices for building materials had risen rapidly in 2021 and 2022. However, Holcim was able to pass on a large part of the rising raw material costs to customers. The building materials group is growing particularly strongly in the USA. The strategic focus will continue to be on this market in the future. Holcim is also strong there in the high-margin business with roof construction systems.
The figures were also well received by investors: the Vontobel analysts praised: “Holcim has delivered better results than expected.” The management restructuring is also well prepared. So far, the markets have not objected to Jenisch’s new power.
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