Sutherland to step down as CEO of De La Rue

Martin Sutherland’s five-year tenure as chief executive of De La Rue is coming to an end, although he will stay in the role while a successor is sought.

Sutherland has overseen the reshaping of De La Rue, pivoting away from its traditional manufacturing-focused business in banknotes and identity products like passports, and towards a service- and technology-oriented model, particularly in security features and product authentication and traceability (PAT).

“It has been a time of significant structural change in the industry and real strategic change within the business,” said Sutherland. “With a clear strategic vision now in place and being executed, now feels like the right time for me to hand over to a new leader, to take things to the next phase.”

The effects of that new direction have yet to fully kick in, however, and Sutherland’s departure comes as De La Rue revealed a drop in pretax profits for the last financial year, despite a 12 per cent hike in revenues to £517m ($653m), although operating profit rose 6 per cent to just over £60m.

The company says it is facing a tougher competitive environment – witnessed by the loss of a contract to produce the UK passport to rival Gemalto last year – but was also hit by an £18m charge caused by the Venezuelan central bank being “unable to transfer funds due to non-UK related sanctions.”

Profits will also be under pressure this year, and the company has implemented a cost-cutting drive aimed at trimming £20m off its annual spending by fiscal 2022, having already trimmed down its focus by selling off its paper and cash processing business.

Shares the company were down almost a third as investors reacted to the news, and as the company warned of “margin pressures going forwards as competition in the banknote print market intensifies.”

Sutherland told analysts and reporters today that the company is now split into two main businesses, namely authentication – which spans security features, identify security and product authentication technologies, and currency (print and polymer lines).

PAT made progress, with sales up 2 per cent to £39m but on track to double within three years, while ID solutions slipped one point to just over £78m and currency grew 16 per cent to £399m.

Within authentication, De La Rue recently secured a string of track-and-trace contacts to help countries meet the Tobacco Products Directive and World Health Organisations Framework Convention on Tobacco Control.

Last month it also signed a collaboration agreement with the Ministry of Public Security in China to co-develop identity security features and components for the Chinese domestic market.