Cavotec has now found a replacement for departing CEO Mikael Norin in the form of David Pagels, CEO of Dellner Couplers (Swedish manufacturer of train connection systems, owned by EQT) 2013-2021. Mr. Pagels is of Swedish origin and has a history of being based abroad while working in European companies such as Xylem and Bombardier. According to Cavotec, Mr. Pagels will assume the CEO role (based in Lugano) already in May 2022, which we find positive.
Experience of driving organic growth as well as M&A
During Mr. Pagel’s tenure at Dellner, we estimate that the company achieved a 2013-2019 sales CAGR of 13% and an EBIT CAGR of 25% as margins expanded from 6.8% to 12.8% while achieving an average return on capital employed of ~25%. Thus, we believe Mr. Pagels seems to be a good fit for Cavotec at a time when focus will now be on ramping up deliveries in order to reach its targeted 10-12% EBIT margins. Dellner and Cavotec are also fairly similar in size, in terms of revenue and staff.
Positive that a good replacement was found quickly
Although we lack full insight into Mr. Pagel’s tenure at his former employers, we believe that yesterday’s announcement is positive and that Mr. Pagel at first glance seems to be a good candidate for the role.
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