Aggreko boss sets out plans for firm overhaul
The former British Gas boss, who took the helm at the start of the year, said the boardroom overhaul comes amid a new organisational structure for the generator and air conditioner rental firm, which was recently demoted from the blue-chip FTSE 100 Index.
From the beginning of August, Aggreko’s three regional divisions – Americas, Asia Pacific and Europe, Middle East and Africa (EMEA) – will be replaced by two separate businesses.
The firm’s new rental solutions unit will incorporate its power and temperature control equipment operations in the developed markets of Europe, North America and Australia Pacific, while its power solutions arm will focus on developing economies and include its large-scale temporary power plants business, which has customers across the military, mining and oil industries.
Analysts at JP Morgan Cazenove said the move reflected how Weston – pictured, who took the top job after former Aggreko chief Rupert Soames left to join outsourcing group Serco – was “exercising his influence on the group in terms of people and structure”.
They added: “We also think the division along business rather than regional lines does make the group simpler to run.”
As a result of the shake-up, Asterios Satrazemis, currently regional director for Americas, will become president of the rental business based in the US.
Weston will take charge of the power solutions division on an interim basis until a permanent leader is found.
Debajit Das, regional director for Asia Pacific, and EMEA regional director David Taylor-Smith will be stepping down after helping with the transition to the new structure.
“In recent months we have been conducting a review into our business priorities and I look forward to sharing the output of this review,” Weston said.
“As part of this process, we have taken the decision to reorganise the business to be as efficient and as effective as we can be for our customers and our markets.”
More details about his strategy will be unveiled alongside first-half results on 6 August, and analysts at RBC Capital Markets said: “We don’t think there will be any revolution but think he will look at the power projects’ cost base, at costs in general – especially procurement – and will look at product development and clarify the balance sheet strategy.”
In a recent trading update, Aggreko said underlying trading profits for the first half were expected to be lower than last year due to higher costs, but annual earnings would be “broadly in line” with 2014.