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Dis-Chem co-founder and CEO Ivan Saltzman makes way for a younger team

Dis-Chem co-founder and CEO Ivan Saltzman makes way for a younger team
CEO of Dis-Chem Pharmacies Ivan Saltzman (left) and incoming CEO Rui Morais. (Photo: Freddy Mavunda / Business Day)

Saltzman will divest 32.25 million Dis-Chem ordinary shares owned by the Saltzman family, representing 3.75% of Dis-Chem’s issued share capital, to his replacement and senior executives.

South Africa’s second largest retail pharmacy group, Dis-Chem Pharmacies, is set to gain a new CEO in July as founder Ivan Saltzman steps down as the long-time chief.

Rui Morais, the group’s chief financial officer, will take over in July. 

Morais was announced as Saltzman’s replacement in August 2021 as part of Dis-Chem’s succession planning.

Saltzman, who co-founded Dis-Chem with his wife Lynette in 1978, will remain an executive director on the board and continue to serve as an active member of the executive management team, Dis-Chem said, with his role including an emphasis on the group’s commitment to accelerate retail space growth and focus on the trade of the retail store network.

Youthful team

The group has selected a youthful team to fill Saltzman’s shoes: Morais, aged 38, joined in 2010 and has been CFO and a member of the executive team since August 2012. A company statement said he has been “integrally involved” in the development of Dis-Chem’s strategy over the past 11 years.

Julia Pope, who replaces Morais, is 42. She is the current executive head of finance. Dis-Chem said its commitment to inclusion, diversity and transformation ensured that Pope’s six years with the group have prepared her for this leadership and management role. Pope has 19 years’ retail experience.

Saltzman will be divesting 32.25 million Dis-Chem ordinary shares owned by the Saltzman family, representing 3.75% of Dis-Chem’s issued share capital, to Morais and key senior executives. 

Controversy

Dis-Chem is one of Africa’s fastest-growing companies, according to the latest Financial Times’ Africa’s Fastest Growing Companies 2023 list. Placed 91 out of 100 companies, the group has shaken off last year’s controversy triggered by Saltzman’s ban on the hiring of white staff and a threatened consumer boycott.

In March, Dis-Chem confirmed a decline of between 5% to 8% in its white, coloured and Asian chronic medicine dispensary customers, but more black customers were choosing its dispensaries to fill their prescriptions for their chronic medicine.

Trade union Solidarity has also withdrawn its case against the retailer for discrimination. This came after announcing on 24 October 2022 that it had put Dis-Chem on terms, demanding that it withdraw its racial policy.

At the time, Dirk Hermann, Solidarity’s chief executive, said: “The entire South Africa wants to know whether Dis-Chem has only withdrawn the controversial memorandum or the policy as well. Instead of providing certainty, Dis-Chem refuses to disclose information. Dis-Chem’s statements are vague and do nothing to create certainty. The question is simply this: Is there a ban on employing and promoting white employees? 

“The fact that Dis-Chem refuses to confirm the information, leaves us with no choice but to accept that the policy stands.”

Revenue up

In a trading update and statement for the period 1 March 2022 to 28 February 2023, Dis-Chem on Monday said group revenue was up 9% and retail revenue was up 8.4% (both excluding Covid vaccines and testing). Its external wholesale revenue was up 20.7%.

The group is expecting to announce earnings per share and headline earnings per share of between 115.6c and 118c – a year-on-year increase of between 16.5% and 19%.

Dis-Chem’s results for the 12 months ended 28 February 2023 will be released on Sens on Friday, 19 May.

‘Extraordinary retailer’

Dis-Chem chair, Larry Nestadt, hailed Saltzman as “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, and we are confident in the leadership team’s ability, under Morais’ stewardship, to deliver on the strategic ambitions of the group.”

Reflecting on his 45 years in the business, Saltzman said he and his wife had grown the business from a single store to what is today – “the largest retail pharmacy chain by market share in South Africa, 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. 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.”

On other future plans, Dis-Chem said it is in the final stages of entering into an agreement to acquire a 63,000m² distribution centre in Gauteng, for a purchase consideration of R502-million, which will increase its warehouse space by 75%, to service demand from both its own retail stores and the independent market. BM/DM

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  • Johan Buys says:

    That memo was relatively minor compared to the fact that this team paid themselves for the director-owned owned warehouses that they rented to the company, while refusing to pay their store landlords and gouging prices on covid goods. There are lines you don’t cross.

    The share price says it all : down 20% last five years while JSE is up 40%

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