New synergies to drive growth
• New chief’s priorities include picking replacement MD and cross-selling group’s products
Ascendis Health’s new CEO, Danish national Thomas Thomsen, says his immediate priorities include the appointment of a South African MD and the realisation of “topdown” synergies between group companies.
Ascendis Health’s new CEO, Danish national Thomas Thomsen, says his immediate priorities include the appointment of a South African MD and the realisation of “top-down” synergies between group companies.
Thomsen took over from founding CEO Karsten Wellner last week after joining Ascendis as chief operating officer in August 2017. As part of a transition process, Wellner will remain on the board until June.
“Obviously the transition [between] myself and Karsten over the next few months is critical but I’m sure it will go smoothly,” Thomsen said.
London-based Thomsen said finding the right person to replace outgoing SA MD Cliff Sampson “is a top priority”.
Ascendis would also focus more on “top-down”, rather than “bottom-up” synergies, as part of its efforts to boost organic growth. For instance, it planned to identify distribution synergies across the group.
“We also have great sports nutrition capabilities in our Scitec manufacturing [business] in Hungary, and I can see that spilling over into SA, as one example,” said Thomsen.
The group would also look to cross-sell products between regions, although this was less of a priority. It could bring certain European products to SA and was considering exporting some wellness products from SA into Europe, he said, citing Cyprus as a target market.
Meanwhile, the company is undertaking a strategic review of its product portfolio that could result in certain products being axed. “There are no sacred cows in that process,” Thomsen said.
Further, some group companies “need a lot of attention — sports nutrition in SA is one of them, as well as the Scitec business in Europe”.
The company said last week it would shelve its acquisition strategy for 12 months in order to focus on organic growth and reducing debt. Before joining Ascendis, Thomsen did consulting work within the healthcare industry. He has held senior positions at Johnson & Johnson Consumer, Reckitt Benckiser, Novartis Consumer Healthcare and at private and listed firms.
Rayhaan Joosub, deputy CEO of Sentio Capital Management, said the market was encouraged that Ascendis was “communicating a credible turnaround strategy for the underperforming sports nutrition businesses in Europe [Scitec] and SA”.
“This includes an online strategy that will be rolled out in the US and UK. The declining whey protein price … has also reduced substantially and will allow margins to rise in this business and improve price competitiveness in a highly competitive space.”
Joosub said the market believed Thomsen was “very credible” given his experience at large multinationals.
Thomsen said Ascendis still had designs on building scale despite its shelved acquisition plan. “We are addressing the issue of critical mass in the strategic review and we are on the path to achieving it [by] growing our businesses without additional outside investment,” he said.
Owing to recent share price declines — attributed in part to concerns about tepid organic growth and cash conversion rates and high debt — Ascendis’s market capitalisation has fallen to about R6.3bn.