How CFOs are steering firms by way of the disaster

Dusseldorf When analyzing the financial penalties of Corona, a brand new time period has grow to be established: the bath. From the perspective of many specialists, its form displays the anticipated financial improvement curve: the sudden downturn within the wake of the pandemic is adopted by an extended valley and a gradual upswing.

The essential query for firms is: how lengthy will this bathtub be? So how lengthy is it vital to maintain the cash collectively and when do you have to put money into progress once more?

The part of uncertainty calls for so much from managers: Above all, the finance administrators transfer between liquidity administration, financing requests and the required modernization.

That was evident on the primary day of the Handelsblatt CFO Summit, the summit of the CFOs. Because of the corona, the congress was held on Tuesday for the primary time in digital type: the audio system have been switched on, the contributors mentioned by way of video and chats and moderated from the Handelsblatt studio in Düsseldorf.

Even when the present scenario within the industries may be very totally different, the Chief Monetary Officer has one factor in widespread: They should steer their firm financially by way of the best disaster of the previous many years.

Mark Spieker

The CFO of the vitality group Eon about digital common conferences: “Totally different would not should be worse.”

(Picture: Eon)

The hope for a fast begin of the financial system with a V-shaped financial pattern has now evaporated. “The disaster is right here and it’ll take longer,” stated Kevin Heidenreich, who heads the International Commerce unit on the German Chamber of Commerce and Trade DIHK, on the CFO Summit. The issues shall be felt effectively into the approaching yr. In view of weak demand, investments are being in the reduction of worldwide, which notably impacts Germany.

Because the pandemic broke out, firms have been holding the cash collectively, and additionally it is vital to lift new capital. Liquidity administration continues to be the central strategic core activity for 60 % of the businesses, as a survey among the many contributors within the CFO Summit confirmed.

Most CFOs are skilled on this. The corona disaster, nonetheless, presents them with far larger challenges: right this moment, they’re now not simply the women and gents of the numbers, however strategic companions for the CEO: each type a tandem that units the tempo and path of improvement.

Wanting forward is vital as a result of the corona part may also be over sooner or later. The managers on the Handelsblatt Congress unanimously suggested to make use of the disaster as a chance. “I hope that we will all study so much from the disaster,” stated Jochen Schmitz, CFO of medical expertise specialist Siemens Healthineers.

“Corona forces us to do so much in another way than earlier than. However we even have the possibility to rethink issues, ”stated Marc Spieker, CFO of the vitality group Eon. For example, he cited Eon’s first digital common assembly, which, in response to Spieker, introduced a file shareholding. “Totally different would not should be worse.”

Bettina Orlopp

The Commerzbank CFO observes that the habits of personal prospects in banking is altering even sooner.

(Picture: Commerzbank)

The pandemic and the lockdown have proven managers that digitization will play an more and more vital function of their enterprise fashions. Commerzbank CFO Bettina Orlopp, for instance, noticed that the habits of personal prospects in banking is altering even sooner.

The pandemic affected the Heraeus Group in the course of the strategic restructuring: The family-owned firm is reworking right into a portfolio holding firm with operationally working items which can be unfold throughout many alternative industries. Because of the big selection, Heraeus is much less affected by Corona.

However Heraeus didn’t solely expertise a “push” throughout this renovation by Corona, as CFO Rolf Wetzel explains. “We used the disaster to speed up once more within the digital transformation of our enterprise areas.”

Consulting specialists additionally observe this elsewhere. “Corona has uncovered various points at firms, corresponding to that enterprise fashions are too advanced and features within the monetary sector, for instance, have to be modernized,” says Rainer Kroker, accomplice at PwC.

In his view, the chief monetary officers are struggling: the liquidity scenario and, above all, the money circulate should be carefully monitored and deliberate in view of the uncertainty. On the identical time, they’ve to organize the corporate for the following progress.

The plastics processor Röchling additionally faces these challenges. The Mannheim-based household firm clearly feels the implications of Corona: the economic and medical tools sectors have been nonetheless in a position to maintain up effectively. Nonetheless, enterprise within the automotive phase has not too long ago dropped by 35 %.

Hanns-Peter Knaebel

The Röchling CFO is experiencing the present disaster as a catalyst: staff have gotten extra conscious of the place the Achilles heels are within the firm.

“We’re nonetheless worthwhile,” stated Hanns-Peter Knaebel, CEO of Röchling, on the Handelsblatt CFO Summit. This helps to drive the digital transformation during which Röchling was earlier than Corona. Knaebel is experiencing the present disaster as a catalyst: Staff have gotten extra conscious of the place the Achilles heels are within the firm and what must be improved, he stated. “The willingness to alter is rising.”

Kneabel expects so much from a CFO – within the Röchling case, Evelyn Thome is a board member. He takes an plane cockpit for comparability: the CFO and CEO sit there collectively, however the CFO should be capable of management the plane on his personal.

In keeping with Knaebel, a CFO should presently be capable of average a contradiction: simultaneous value discount and implementation of future methods. “Even within the present part, I give you subjects that aren’t but life like,” says the Röchling boss. “Then we go right into a dialogue during which the CFO helps to steer and combat.”

Knaebel expects the complete finance division to create the best attainable transparency in regards to the scenario and fast reporting. “We mustn’t be flying blind,” he warns. That is one other problem for the CFO.

As a result of the financial scenario is so unpredictable, firms should plan in situations. Frank Platzer, Head of Technique and Controlling on the shopper electronics retailer Euronics, has developed between twelve and fourteen such situations in latest months. To date, the corona part has been an actual stress take a look at.

Platzer needs to show the corporate’s monetary space right into a “proactive, forward-looking” unit – one which not solely seems to be again, however that ought to develop and current future choices utilizing fashionable digital expertise.

This requires investments – regardless of corona-related shortages. However firms get cash. “The excellent news is that the capital markets are receptive,” observes Johann von Wersebe, Managing Director at Morgan Stanley funding financial institution. The sharply elevated share costs are an advance of belief on the a part of buyers in German firms.

Financing, stress assessments and situations are core duties of a CFO. However in the intervening time financiers in addition to the CEO even have an ethical accountability: Regardless of all of the crises, each have to provide the staff a “silver lining”, as Röchling boss Knaebel says.

“Board members are paid to evaluate dangers and face challenges, however in addition they should be assured,” says Knaebel. “If you cannot do it as a supervisor, it is best to examine whether or not you might be nonetheless proper for the place.”

Extra: Chief Monetary Officer Orlopp makes it clear that there aren’t any new merger talks with Deutsche Financial institution. Main shareholder Cerberus renews his criticism.

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