Dis-Chem’s incoming CEO, Rui Morais, and his executive team are in line to get R750m worth of the pharmacy group’s shares from the stake owned by the Saltzman family, who founded the company 45 years ago.
On Monday, the group announced that the family’s patriarch, Ivan Saltzman, would step down as CEO in June and hand over the reins to Morais, currently the group’s CFO.
As part of the transition, Saltzman will divest 32.25-million Dis-Chem ordinary shares, 3.75% of Dis-Chem’s issued share capital, owned by his family, to Morais and a group of key senior executives to ensure “their ongoing commitment”.
The monetary value of the shares based on the company’s Monday market capitalisation of just above R20bn, is worth about R750m.
It was not immediately clear if the shares would be sold to Morais and co or if they would be given to them. The company said it would give more details on the transaction on Friday when it releases its financial results.
The Saltzman family owns about 45% of Dis-Chem, with the second biggest shareholder being Coronation with a 7% stake.
Saltzman, who together with his wife Lynette founded the company in 1978 in Mondeor, south of Johannesburg, will continue to remain an executive director and “continue to serve as an active member of the executive management team, with his role including an emphasis on the group’s commitment to accelerate retail space growth.”
“Over the course of the past 45 years, Lynette and I have grown the business from a single store to what is today, the largest retail pharmacy chain by market share in SA, with a network of over 300 retail stores and over 20,000 staff. I am confident in, and supportive of, the future leadership of the group, who share the same commitment to the brand fundamentals that Lynette and I do,” Saltzman said in a statement.
“Together with Lynette, I look forward to doing what I enjoy: spending time in the stores, and ensuring that our staff continue to provide the value and service that has made the brand what it is today. I will continue to identify opportunities to expand our store footprint.”
Saltzman courted public attention in October when, in a leaked public memo he placed a moratorium on the appointment of white staff in the company.
“It is evident that our organisation’s efforts to effect transformation in terms of our employee profile, remain inadequate in spite of the regionals making some inroads,” he wrote.
The group’s chair, Larry Nestadt, paid tribute to Saltzman.
“Saltzman is one of the extraordinary retailers of his generation, who has transformed retail pharmacy. Under his leadership, Dis-Chem evolved from a family business to a leading listed, and proudly South African, corporate business. Dis-Chem’s leadership succession has been carefully planned and very well managed by Saltzman,” Nestadt said.
Morais joined the company in 2010 and has served as CFO since August 2012. Current executive head of finance Julia Pope will succeed Morais as CFO.
Morais, who take the reins at the beginning of July, said he was honoured to be given the nod to lead the company.
“During my time with the group, I have experienced the leadership philosophy that has built the Dis-Chem brand — obsessive focus on delivering value and access to healthcare for our patients and customers. That philosophy, which is well entrenched within our management team and staff, together with recent strategic investments, underpin our ambition of building an integrated healthcare ecosystem,” he said.
Morais’s ascension is not entirely surprising as the group, which listed on the JSE in 2016, announced its succession plan in 2021.
Dis-Chem also said on Monday it expects headline earnings per share, a common profit measure for SA companies, to increase 16.5%-19% year on year to 115.6c-118c when it releases its 2023 annual results on Friday.
It sees group revenue and retail revenue excluding Covid-19 vaccines and testing rising 9% and 8.4%, respectively.
The company is also in the final stage of acquiring a 63,000m² distribution centre in Gauteng for R502m to increase its warehouse space by 75%.
“The rapid growth of the group has necessitated the need for additional warehouse capacity to service increased demand from both our own retail stores and the independent market,” the group said.
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