CFO Kathrin Dahnke was supposed to prepare Ottobock for an IPO. Then everything turned out differently: The owners around board chairman Hans Georg Näder called off the IPO. The CFO and two other board members had to leave. Why?
In mid-May, a drumbeat reverberated through Duderstadt in Lower Saxony: Ottobock, the local prosthesis manufacturer, dismissed three of its most important board members within just two days. First, CFO Kathrin Dahnke, but a few hours later it was announced that CEO Philipp Schulte-Noelle would also have to leave Ottobock. Two days later, Ottobock announced yet another departure in the boardroom: Chief Technology Officer (CTO) Andreas Goppelt had to leave the company, and his duties have been taken over by COO Arne Jörn in addition to his role as head of operations. The CEO position is now held on an interim basis by Oliver Jakobi, who previously acted as Chief Sales Officer on the Executive Board. Dahnke’s successor in the CFO position is Arne Kreitz, who was already part of the expanded management team at Ottobock. How did the management shakeup come about?
Kathrin Dahnke had only joined Ottobock in September last year as the new CFO to take the family-owned company public. It sounded like a perfect fit: she brought experience from family-owned companies such as the Werhahn conglomerate as well as publicly traded companies like Gildemeister (now DMG Mori) and Osram. She was also a member of the supervisory board for the heavyweight IPO of Knorr-Bremse. Dahnke was also considered a suitable candidate because she already knew Ottobock from a previous position. At the time, the 61-year-old was given the task of contacting banks and potential investors when she took up her new position.
Ottobock IPO slips into the far distance
Since the previous CEO Schulte-Noelle was also fully behind an IPO, the step was originally considered a foregone conclusion. Last summer, the company had already mandated banks and introduced the IFRS accounting standard under the direction of CFO Dahnke. At that time, there was “no doubt” about the IPO plan, as FINANCE has learned from company circles. Ottobock’s IPO would have been one of the largest German IPOs in 2022.
But since the beginning of the year, the environment for IPOs has clouded over considerably - meaning that the valuation of 5 to 6 billion euros, which the owners had calculated in the late summer of the previous year, was also wastepaper. As a result, the mood also changed at Hans Georg Näder, who holds the majority of the shares via the holding company Näder Holding, and probably also at the minority shareholder EQT. The Stockholm-based investor has held a 20 percent stake in the prosthesis manufacturer for five years. Managers Marcus Brennecke and Johannes Reichel have since been hoping for a golden exit.
Ottobock: Seven CFO changes since 2017.
Owner Näder now explained the change of course that led to the departure of Dahnke and Schulte-Noelle by saying that the company will focus on a growth strategy in the future. “We will focus even more consistently on our operating business, strong customer demand and sustainably increasing our successful growth,” Näder said in May when announcing the personnel change.
Even if the motives for withdrawing the IPO are understandable, the manner of communication is questionable. For example, the official argument for Dahnke’s departure seems strange and pretextual - the company justified the move in May by saying that Dahnke had been the right personnel for the path to IPO readiness, and now Ottobock was “completing the planned change in the finance department earlier than originally planned.” However, it was not previously known that this change had been planned anyway. When Dahnke took office in the summer of 2021, there had been no talk of such a short term of office. In addition, the CFO position at Ottobock has become a hot seat: There have been a whole seven changes here since 2017.
Questionable communication at Ottobock
How come? “Näder makes lonely decisions that are sometimes incomprehensible,” a person familiar with the company tells FINANCE. It also fits into the picture of the headstrong Ottobock patriarch that the daily newspaper “Welt” recently cut short an interview with the entrepreneur. In the interview, Näder did not want to answer the newspaper’s central accusation. The newspaper had suggested that the Ottobock balance sheets gave the impression that the “entrepreneurial family has been taking more money out of the company than it has earned for years. Specifically, the owners around Näder would have withdrawn around 455 million euros more from the company between 2016 and 2020 than they would report in net income.
The report refers to Ottobock’s corporate structure - the Näder family holds its shares through Näder Holding. Losses are said to have been incurred in the widely ramified group of companies. Ottobock SE & Co. KGaA, where the operating business is located, however, “generated an annual net profit in the double-digit million range” in 2020, according to company information. The Ottobock Group as a whole had reported profit growth (adjusted EBITDA) from €216 million to €234 million from 2020 to 2021.
But the confusion is great, a lot of china has been smashed in recent weeks, confidence in Ottobock shaken. Kathrin Dahnke should nevertheless emerge from the fiasco relatively unscathed. She is currently focusing on supervisory board mandates such as at Knorr-Bremse, where she has been appointed until 2026 and heads the audit committee.
Info Box
Hans Georg Näder
The 60-year-old is a go-getting entrepreneurial personality. He holds the majority of shares in the Ottobock Group of Companies and served on the board for a long time. In addition to the internationalization of Ottobock, which he drove forward as early as the 1990s, he also repeatedly attracted attention with scintillating stories in the tabloids.
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