End of an era as Vodafone boss Colao makes way for protege Read

Vodafone Chief Executive Vittorio Colao delivers a keynote at the Mobile World Congress in Barcelona, Spain, February 26, 2018. (Reuters)
Updated 15 May 2018

End of an era as Vodafone boss Colao makes way for protege Read

  • Last week Vodafone struck a long-expected $21.8 billion deal to buy Liberty Global’s cable TV and broadband networks in Germany and Eastern Europe
  • The urbane Colao will be replaced by Nick Read, finance director since 2014 and long seen as his successor due to his previous roles running Vodafone’s operations around the world

LONDON: Vodafone Chief Executive Vittorio Colao will step down in October after 10 years in which the Italian reshaped the world’s second largest mobile operator into a digital communications powerhouse with a string of major deals.
The urbane Colao will be replaced by Nick Read, finance director since 2014 and long seen as his successor due to his previous roles running Vodafone’s operations around the world.
He will take charge of a group that, under Colao, pulled back from its once brazen expansionist drive, most notably when it sold out of the United States with a $130 billion exit from a joint venture with Verizon.
Last week Vodafone struck a long-expected $21.8 billion deal to buy Liberty Global’s cable TV and broadband networks in Germany and Eastern Europe, the latest move to strengthen its European business.
And in India, which it entered with great fanfare in 2007, it is merging its operations with Idea Cellular to bulk up in a market that has been hit by intense competition.
“Today Vodafone is at a natural juncture, the strategic 10 -year reshaping of the group is now nearing completion,” Colao, 56, told reporters. “Nick has been the core architect of Vodafone strategy for much of my tenure.”
Analysts said the timing of the departure should come as no surprise and that investors should be reassured by Read’s appointment. The change came as the group published solid 2018 results and a more cautious 2019 outlook.
Shares in Vodafone fell almost 4 percent on the news.
“With the Liberty deal announced and India set to close, he leaves behind a strategically well-positioned portfolio for his successor Nick Read, who we think is a safe pair of hands,” analysts at Bernstein said.
End of an era
In Read, 53, investors will get a new chief executive long groomed for the job.
Read said he had been alongside Colao through the process of reshaping Vodafone, and he would now deliver the benefits for shareholders and customers.
“I think now is the time to really focus on our organic plan, really focusing on digital transformation of our business and the customer experience,” he told reporters.
“And of course there’s a big opportunity of integrating these new businesses, both Liberty and over in India.”
Having joined Vodafone in 2001, Read’s roles have included running the British and emerging market operations. He has also sat on the boards of the company’s listed operations in Africa and Qatar, its subsidiaries in India and Egypt and its joint venture in Australia.
Read will be replaced by his deputy since 2015, Margherita Della Valle. The Italian joined Omnitel Pronto Italia — which later became Vodafone Italy — in 1994.
The announcement came as the company reported a 1.4 percent rise in organic service revenue for its fourth quarter, beating analyst forecasts of a 1.1 percent rise.
Full year core earnings rose 11.8 percent to 14.7 billion euros, beating guidance for “around 10 percent” organic growth and just ahead of analyst forecasts of 14.6 billion euros.
For 2019, the group forecast a more cautious organic adjusted core earnings growth of between 1 and 5 percent, and free cash flow before spectrum costs of at least 5.2 billion euros, slightly down on the 2018 number of 5.4 billion euros.
Work to do
Chairman Gerard Kleisterlee said Colao had been an “exemplary leader and strategic visionary who has overseen a dramatic transformation of Vodafone.”
Born in northern Italy, Colao cut his teeth as a management consultant at McKinsey before he joined Omnitel in 1996.
A keen cyclist, the tall Colao has lived a quiet life in London, largely avoiding London’s corporate social scene.
Colleagues say he enjoys the cut and thrust of talking to journalists and will also happily discuss European politics. Analysts have speculated that he could move into Italian politics.
His departure follows that of Martin Sorrell at WPP after 33 years in charge, meaning the FTSE 100 has lost two of its longest-serving CEOs in a short period of time.
“It has a been a real privilege to lead the group through a decade of massive strategic transformation culminating in today’s good financial performance,” Colao told reporters.
“But it is not yet the time for goodbyes. There is still a lot to do between now and October.”


INTERVIEW: ‘We were built for times like this’, Johnson & Johnson exec Marzena Kulis says of company’s role in fighting pandemics

Updated 20 September 2020

INTERVIEW: ‘We were built for times like this’, Johnson & Johnson exec Marzena Kulis says of company’s role in fighting pandemics

  • 134-year firm searches for a vaccine while tackling other regional medical issues

Being a senior executive at a medical company during the most serious health care crisis for a century puts you at the sharp end of events, as Marzena Kulis, managing director of the medical products business of Johnson & Johnson in the Middle East, is well aware.

“We were built for the times like this. We are a company with a 134-year legacy.

“We lived through the previous pandemics of smallpox and Spanish flu, and through the financial crises, through world wars, and our business has expanded and grown,” she told Arab News.

“But it would be wrong to say that what happened in the past few months had no impact on the local, regional and global businesses,” she added.

J&J, a multibillion-dollar giant of the global health care industry, has been in the region for more than 40 years, operating via the three pillars of its business — medical devices, pharmaceuticals and consumer products.

But there is no doubt that the company’s profile has been lifted during the pandemic through its work on a potential vaccine. J&J is one of several international companies working flat out to develop a treatment since virtually the first outbreak earlier this year. 

Kulis, an economist by training who has spent almost her entire career in the health care sector, has seen that at first hand in recent months.

“I think our teams globally have been working tirelessly, without a break really, on finding the solutions and, as of now, we are saying that large quantities of the vaccine will be available in the first quarter of 2021,” she said.

“In September, we are planning to begin phase three trials on humans, which will be on a large number of the populations chosen for the trials, but we still believe that it will be early 2021 when we will be able to deliver the vaccine,” she added. Some health experts have criticized the tendency toward “vaccine nationalism” by some countries, eager to be first with a treatment in an international race, or to keep supplies of the medicine for their own people, rather than spreading it equably around the world.

“We are open to discussion with everyone,” Kulis said, pointing to agreements J&J has signed with the US and European authorities on vaccine collaboration, as well as with international organizations such as the GAVI immunization agency supported by many countries in the Middle East, including Saudi Arabia.

J&J also signed up for the “We Stand with Science” campaign to uphold the integrity of the medical scientific process in vaccine development and global regulatory standards.

Kulis is aware of the pressure to produce a vaccine “cure,” but believes safety is paramount. “Although we all would like it to be available tomorrow, the process has to take its time to ensure there are high ethical standards and scientific principles,” she said.

Meanwhile, while the world waits for a vaccine, Kulis has a business to run in the Middle East. The medical devices business in the region includes surgical equipment, and orthopedics and cardiovascular procedures — all affected by the heightened focus on COVID-19 treatments during the pandemic.

In particular, some elective surgeries have been pushed to the back of the queue by patients understandably anxious to protect their health during the pandemic. Lockdowns and economic pressure have also had an effect.


BIO

Born: Krakow, Poland

Education

  • Master’s, Krakow Economic Academy
  • MBA, Stockholm University

Career

  • HD operations officer, World Bank 
  • General manager for Pfizer, Poland and Baltic states
  • Managing director, Johnson & Johnson, Middle East

“The UAE has restored or reopened some surgeries, but Saudi Arabia is still taking a bit more time reopening for elective surgeries, with the exception of some parts of the country. So, obviously, that has an impact,” Kulis said.

The financials of the business were better than expected in the second quarter, although still some way off what they would have been without the virus. One real positive is that the J&J global supply chain has remained intact, she said.

Kulis’ job gives her a unique insight into the medical problems of the region, and one issue stands out, she says — obesity and its associated complications. J&J sees the extent of the problem in its bariatrics specialism, which deals with the causes, prevention and treatment of obesity.

“This region is leading the obesity prevalence in the world and we provide medical solution for that as well,” she said, pointing out that three of the top five most obese countries in the world in terms of obesity incidence as a proportion of the population are from the Middle East.

Oncological and gynecological surgery is also a growing part of her division in Saudi Arabia. 

In orthopedics, Kulis said with a hint of humor, “the world has been walking on our knees and our hips for decades.” But there is also an important link to obesity, too, she said, because overweight people are likely to face greater mobility challenges.

“Sooner or later, as a consequence of obesity, people require joint replacement or some other orthopedic intervention,” she said.

The third segment of the medical devices unit is also affected by obesity problems. The cardiovascular and stroke speciality focuses on remedies for heart arrythmia and stroke management.

“We’re still raising the awareness of availability of the surgical treatment for those two. It’s especially important to show that stroke is not a death or disability sentence but can be treated. People can be brought to mobility and quality of life,” Kulis said.

J&J sees as another increasing problem for Saudi Arabia — the treatment of traumatic injuries from traffic accidents.

“It’s really prevalent and a strong focus in Saudi Arabia. The treatment of road accident trauma is part of our orthopedic business. Road accidents are an important part of our work in the Kingdom,” she said.

Overall, the health benefits of Saudi Arabia’s young demographic is, to some extent, outweighed by obesity and other lifestyle issues, she said.

The Kingdom is a focus for expansion for J&J. It opened a headquarters office in Riyadh in 2017, and also has bases in Jeddah and Dammam, serving as a base not only for the medical devices business but also the consumer and pharmaceuticals units. There are about 180 employees in the Kingdom, of whom roughly 40 percent are citizens.

“We have made a conscious effort to ensure we can build up local capacity and help the local population to work with us,” she said. J&J has a local Saudi partner, takes part in official programs to promote health and lifestyle issues within the Kingdom, and has a joint flagship program with the Prince Sultan Humanitarian City Hospital. 

The health sector has been earmarked for greater private sector participation in the Vision 2030 plans to diversify the Kingdom away from the government-dominated energy sector, and J&J is keen to take advantage of any opportunities in that respect.

“We are always exploring the option for enhancement of the business and definitely Saudi is our priority market. 

We haven’t been in any discussions regarding takeover or merger activity so far, but if there are opportunities, we will put it forward to our senior management. We are looking at any opportunity to strengthen our footprint in Saudi Arabia,” she said.

Including Saudi Arabia and the UAE, Kulis’s responsibilities at J&J cover the medial needs of 500 million people in 16 countries stretching from Pakistan to Egypt. But she is keen not to lose sight of the importance of individual cases within the many thousands of patients that benefit from J&J products and procedures every year.

“What keeps me up at night is this question — how can we grow the scale of the business so that we can help more patients get treatment at the right time?

“We all know the stories of people and the families who don’t get care on time, or who wait too long for treatment. I want to shape my organization so that we can share the same dream of preventing that,” she said.