UPDATE 4-Panalpina hires former Kuehne & Nagel manager as CEO

Wed Apr 3, 2013 9:00am EDT

Related News

* New CEO Ulber is 28-year veteran of rival firm Kuehne

* CEO Ribar leaves after disappointing 2012 earnings

* Shares surge as much as 13 percent

* Kuehne says its attrition far below industry average (Adds comment from Kuehne & Nagel, updates shares)

By Katharina Bart

ZURICH, April 3 (Reuters) - Swiss transport and logistics firm Panalpina is replacing its chief executive with a veteran of rival Kuehne & Nagel following a spate of disappointing earnings.

Peter Ulber, who founded consulting firm Charleston Enterprise last year after running Kuehne & Nagel's sea and air logistics operations for two years, will become Panalpina's CEO from June.

Ulber held various management postings in a 28-year career at Kuehne, including in North and South America and Britain. He takes over from 53-year-old Monika Ribar, one of the highest-profile female executives in Switzerland, who has been in the job for nearly seven years but had mixed fortunes of late.

Panalpina shares surged following the news, gaining as much as 13 percent. At 1240 GMT, the stock was nearly 11.8 percent higher at 94.10 Swiss francs, bucking a 0.2 percent slide in the Stoxx 600 industrial goods and services sector.

"The management changes will breathe new life into Panalpina. This is required," said Bank Sarasin analyst Patrick Hasenboehler, citing a sharp fall in earnings recently as shipping volumes dropped off. He upgraded the stock to "neutral" from "reduce" following the announcement.

A Panalpina spokesman said Ribar was leaving to focus on non-operational management jobs outside the company. Ribar, previously a board member at Swiss private bank Julius Baer , sits on the boards of Logitech, Sika and Lufthansa subsidiary Swiss Airlines.

In an interview with Reuters, Ribar said she first approached Panalpina's board in mid-2012 to begin succession planning. While shareholders "are never happy with a poor share price performance," she said her departure was unrelated to recent earnings misses from Panalpina.

Under her management, a unit of Panalpina agreed in 2010 to plead guilty in a U.S. investigation of bribing officials in at least seven countries including Nigeria, Brazil and Russia on behalf of its oil and gas industry clients. Panalpina and five other logistics providers settled the bribery probe with a combined $236 million in criminal and civil penalties.

More recently, Panalpina has been hit by sluggish air freight trading. The company swung to a fourth-quarter loss after taking charges for restructuring, staff cuts and writing off goodwill in connection with the 2011 acquisition of Norwegian-based Grieg Logistics.

Together with Robert Erni, another former Kuehne & Nagel veteran poached by Panalpina as finance chief just over a year ago, Ulber must now restore profitability, even as shipping volumes remain low.

Analysts said the management change at Panalpina also highlighted the challenges facing Kuehne & Nagel, which has lost several high-ranking executives as both its CEO, Reinhard Lange, and finance chief, Gerard van Kesteren, near retirement age.

"Kuehne & Nagel has lost its two crown princes to Panalpina and is now still in search for replacements. This raises questions about the ability of the board to retain high level talent," Bank Vontobel analyst Michael Foeth said.

Earlier this month, Kuehne & Nagel said CEO Lange would step down in May for undisclosed health reasons.

A spokeswoman for Kuehne & Nagel said chairman Karl Gernandt would ensure continuity by acting as CEO until a replacement for Lange was appointed, adding the company's attrition rate for top talent was "far below" the industry average.

Panalpina's major shareholder is the Ernst Goehner foundation, which holds 43.6 percent of Panalpina shares. Cevian Capital, a European activist fund, holds roughly 11 percent. Both are represented on Panalpina's board.

($1 = 0.9484 Swiss francs) (Editing by Tom Pfeiffer and Mark Potter)

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