Lendlease boss Tony Lombardo shakes up management ranks to unlock value

The newly minted chief executive of Lendlease, Tony Lombardo, is embarking on an efficiency drive as he seeks to get the giant developer moving.

Lendlease chief executive Tony Lombardo: ‘in order to more effectively harness Lendlease’s capabilities globally, we need to evolve our organisational structure to deliver greater consistency and efficiencies.’ Picture: Rendy Aryanto

Lendlease’s new chief executive Tony Lombardo has put his stamp on the company with a shake-up of top management ranks designed to unleash the company’s $110bn global development pipeline.

The group has set up new reporting lines and appointed a trio of executives to head its development, building and investment arms worldwide, as it looks to move more quickly and tap into growth in the wake of the pandemic.

The shuffle also rewards the internal contenders who missed out on the chief executive position that Mr Lombardo won when CEO Steve McCann departed. The former chief now heads James Packer’s Crown Resorts, which is dealing with multiple takeover offers.

Mr Lombardo is keen to bring greater accountability to the business and push deeper into funds management as a means of getting the group’s massive urban regeneration pipeline rolling.

“Our strategy of focusing on the development, investments and construction segments continues to be the right one for Lendlease. However, in order to more effectively harness Lendlease’s capabilities globally, we need to evolve our organisational structure to deliver greater consistency and efficiencies,” Mr Lombardo said.

He said this would help the company unlock the full potential of the group’s $110bn development pipeline, expand its investments platform, which has swelled to $38bn of funds, and complete construction work consistently in all markets.

Lendlease’s Australian operations will be consolidated and operate as one region, with veteran executive Dale Connor to become chief executive, Australia.

At a global level, David Hutton will head development, Hans Dekker will lead construction and Kylie Rampa will run investments.

A new position of global chief operating officer will be introduced to lead operational consistency between Lendlease operations in Australia, Europe, Americas and Asia, as well as driving strategic growth initiatives, with the role to be filled by Denis Hickey, who will also remain in New York running the US operation.

“These changes will allow us to take the best we have globally – our platforms, product capability and learnings – and empower our four regions to outperform our competitors and set the standards to which others aspire. And we’ll do so with no compromise on our culture of care and people’s safety,” Mr Lombardo said.

One analyst said that Lendlease’s Australian office had too much overhead and very little pipeline outside of residential projects in land and apartments, and some commercial office developments, so needed to be shrunk to reflect that.

The analyst said the company’s future lay offshore and both human and financial capital was being directed that way.

Lendlease has also grown its capital transactions and investments team to try and reach $50bn of funds under management, which the analyst said “won’t happen on the pipeline alone without some M&A and new FUM mandates”.

Mr Lombardo has skills in mergers and a deep understanding of Asian markets after a stint running Lendlease’s Asian unit.

Lendlease this week released a presentation that will be referred to for engagement meetings between chairman Michael Ullmer and major investors over coming weeks.

Macquarie analysts said the release signalling plans for cost out by the company, as well as further simplification that could see more assets beyond $200m services unit put on the block.

“With the original simplification target areas of services, engineering, telecommunication towers and solar farms either resolved or advancing, the group appears to be widening the scope of what could be considered non-core,” Macquarie said.

Lendlease recently sold a housing estate, which could mean it wants to expend less capital in this area.

“A key for Lendlease will be an ability to deploy capital back into annuity style earnings, with capital at present appearing to be directed towards the urban regeneration pipeline, where profits can take time to be realised,” Macquarie said.