AVL CFO Dr. Yorck Schmidt – automobile technology, strategic innovation & financial stability

[MUSIC] Leading corporate transformation, the podcast by VHAU AutoBysine School of Management, powered by PWC, on the transformation of companies and their culture, from decision makers for decision makers, or from entrepreneurs for entrepreneurs. [MUSIC] Dear listeners, I welcome you very much to a new edition of our VHAU podcast, Leading corporate transformation, powered by PWC. My name is Martin Glam, I'm a professor at the VHAU AutoBysine School of Management. And with me, as always in this podcast, is Gory, Gory from Herschausen. Thanks Martin and the big hello from my side to all our listeners. Great to be back. My name is Gory from Herschausen and I'm the co-host of our podcast. I'm the transformation consultant in this talk and I lead our industry sector concerning business at PWC Germany. My background is to help our clients to optimize and transform their companies and digitization and in the whole business model reenvention. So for me today, it's a very big honor because we are at a very interesting company today. The company is called AVL and it welcomes all guests and its employees with the Hello innovators slogan that it's all over the place. And I'm happy that we are here today with Dr. Jörg Schmidt, who is the CFO of AVL and Jörg. It's great to have us here in Kratz and maybe you can introduce yourself quickly to us and who AVL is. Thank you Gory, thank you Martin for having me. I'm Jörg. Jörg Schmidt, I'm the chief financial officer of the AVL group since 2019 and being at the helm of finance in such a dynamic and innovative company is really a fascinating responsibility and I'm glad to share more this afternoon. Introducing AVL. AVL is a global leader in mobility technologies. We are focusing on the development on the simulation and testing and the automotive industry and as well beyond including sectors like marine aircraft, industrial applications and very recently in the last couple of years as well into green energy. As a family anchored company now for 76 years, innovation is deeply rooted in our DNA. In 2023 we recorded over 2 billion euros in revenues that was generated by more than 12,000 employees, passionate, passionate AVL employees. And the interesting thing is we are really a engineer in science, driven community. So to say more as a family, 68% of our employees hold a science engineering degree. Despite all the challenges we have seen through COVID and you might have as well assumed the automotive industry, our customers and ourselves will be effective as well by this. We recovered pretty fast and achieved a remarkable revenue growth over the last two years, close to 30% just looking at it with constant foreign exchange rates over the last two years. As I mentioned, innovation is really at the core of AVL and this is represented as well. You know, see if all's like to talk in figures and KPIs. We constantly reinvest approximately 10% of our revenues in our own research and development. We partner with more than 100 universities globally and we are participating or half participated in the past in over 150 European research and technology programs. Let's take a little step back and look at the company's history. A4L or AVL has a history as a technology leader in engine technology. And originally in combustion engines. The name tells this. A4L or AVL, the abbreviation stands for, I looked it up, and I've already established for the combustion engine machine. That's a very nice German term here, which indicates, you know, your origin was in the construction, originally off engines and later on the technology around the engine. Exactly. Yes, you already pointed out. I haven't looked it up specifically, but I assume that, you know, until about 10 years ago, you're probably made almost all of your revenues with combustion engine technology. It also means that the transformation of the automotive industry to electric, to electric only maybe, must have provided and probably still provides a major challenge to AVL and to the business model. Can you tell us a little bit about it how your company copes with this, you know, being a deeply engrained specialist in combustion engineering, you know, to make that move to the electric era? Oh, this is a big question, Martin. AVL has a rich history as a pioneer in the automobile engine technology, particularly in development, simulation and testing. It was founded in 1948 by Professor Hanslis, what you would call today a university spin of the technically university hand grads. When the company had approximately 500 employees, Professor Hanslis then placed the leadership in the hands of his son, Professor Hamutlis, our current chairman and CEO. And you know, we have grown, as you mentioned, from developing the first direct injection diesel engines to launching state-of-the-art battery labs in hydrogen fuel cell tests centers globally. Our 211 new patterns that were just granted in 2023 alone underscore our status as innovation leader in Austria, as we have been named by one of the leading Austrian journals as the champion in Finland. As a technology company, we focus on the development and testing processes with methods, with tools and with equipment. We create value for our customer through innovation, customer proximity and efficiency. Drawing on our pioneering spirit, we provide concept solutions and methodologies for a greener safer and as well better world. We at AVL serve our broad customer base mostly through collaborating with the development departments of our customers. So we are not a typical tier one supplier who supplies modules or components that scale and volume. This is I think very important to distinguish as well, AVL from other companies in the automotive field. And with our balanced portfolio of our broad technology base across ICE, so the internal combustion engine, hybrid electrification, H2 fuel cell, most of our activities really contribute to a greener safer and more cost effective mobility technologies. In 2023, 55% of AVL global revenues were generated with technologies that meet the ESG link defined in our credit facilities. This reflects the enormous transformation we have gone through through the last couple of years. Just another data point in 2018, the same number was 26%. Okay. So you mentioned a few new technological areas, hybrids, e-fuel, battery technology. We've also read about autonomous driving. You know, there seem to be, you seem to be branching out from pure, that's my observation as the layman looking from the distance from pure engine technology itself to several areas around the driving. That to me seems to be very demanding. You need experts in all of these areas. How do you do that? I mean, how can you handle so many different areas at once? What's the strategic reasoning behind such a broad approach? I think the core AVL strengths really lies in methods, tools and methodologies. So coming just from the starting of the company, we build our success story over the years in enhancing these methodologies. And these methodologies then could be applied on new technical questions or new applications or moving from from ICE to hybridization, from hybridization to the BF, as well from the electrified system as well into each tool of yours. As an academic, absolutely, like this scientific approach to it, that sounds really interesting as a way of structuring your approach to business. Very interesting. But looking at the broad range of different technologies that are involved now, looking at where mobility goes to. But what's your point of view when it comes to the future of mobility? Is it all these different technologies? Will it be just electric? Because looking at the European Green Deal, this is what the focus in Europe is really about. In the end, we are serving our clients in 26 countries in the world. The most regions in the world have developed their own regulatory framework and as well their own objectives, how to to contribute to reducing fossil CO2 emissions and which role individual mobility can play in this context. So we have customers, of course, in Europe who have to adhere to the decisions that have been basically put out as a regulatory framework, but these same European customers are still as well catering to other markets who have other frame conditions as well as customers of ours from Asia or North America who intend to do business in Europe. So I think our strengths is at the same time understanding the different regulatory environments and helping our customers and supporting in their technology makes, they want to apply to reaching the objectives they have basically embedded in their strategies. - Yeah, but can we say there is a future for combustion engines? Is it something we can say at this point in time? - There is a lot of research going on and clearly the ICE has its role in all sorts of hybridization. There are, there will as well long-term regions with infrastructure that will require ICE or hybrids as well as we will see for the future steps in the development of the role of the ICE. So I think it is difficult to predict a point in time in the future where the ICE would be obsolete. And at the same time when we're talking about ICE, we always have in mind the classical, a petrol or diesel propelled ICE, but we will, at the same time we are working globally or our customers, partners, they're working at eFUELS, they're working at the role of using H2 as an energy source. So going back to the advantages of using chemical energy versus electrical energy with regard to storage, mobility, safety, transportation, et cetera, it clearly has its advantages. And when you look as well, you need to keep in mind that not only passenger cars play a role, but as well commercial vehicles and special vehicles have their own use cases and requirements and therefore will have as well their technologies. - And I mean, I've seen that. You're also looking at ship motors. - Yeah, we're serving the booths. - The world out there with very different applications and the combustion engine, probably, that's my, I'm a complete layman of course, but can't be replaced easily in big ships, right? - Exactly, that's the case. So there are certain, there are different strategies of course between the ship engine manufacturers. And one element could be H2, another one could be the fuel cell, other one would be enhanced IC technology still for a bridge period of time. - I will pick up with a question from Gory earlier on, the different regulations and different parts of the world. You alluded to the Green Deal and then to European regulation. So in that bigger context, there's a lot of discussion now about Chinese producers of cars, Chinese competition in the U. There is the Americans, the American government put on the tariffs on the Chinese producers. There is a fear that fear by some that you could be loaded by by Chinese cars. Some others argue that the European car makers have already been overtaken technologically by Chinese producers. What's your view on that? I mean, you're of course an observer of the European industry and now of the industries generally, do you see a technological edge of the Chinese producers now or do you think that the German big car producers and the European car producers are still viable as competitors in the market long term? - Now, AVL has a really longstanding relationship with China and I think this represents as well our global region, our adaptability. We are currently operating with own subsidiaries in 26 countries and of course, China plays a very important role and this is significant subsidiary. But our relationship to China as AVL dates back way, way before World War II when Professor Hans List, our founder even before the creation of AVL was a professor at Tongji University in Shanghai. So this relationship goes very, very long back into the history of AVL. Today, China and therefore as well the Chinese market for AVL remains one of our key markets with our subsidiaries mostly being wholly owned. Our Chinese customer base is really invaluable to us and we deeply appreciate that continued trust and partnership. However, I think for our industry, I think it's a fact that China's dominance and clear energy technology manufacturing has created as well a new reality. And further, of course, the Chinese automotive industry has benefited as well from policy support and as well a very innovative, friendly climate. And I think one thing we always forget and this is now more from a business perspective interesting giving that there are more than 100 new BFOMs in China. There is clearly as well a willingness to take entrepreneurial risk. And I think this is something we should as well keep in mind. Now there's always this question in the room, what does it mean as well for anybody else in the industry? And of course, this creates competitive pressure. But this competitive pressure and this is now a very personal observation as Xiumit I say, terrorists can never be long term solution. I think and I think this now plays as well into the DNA of AVL that in the end, yes, there's complexity in this thing and there's a challenge, but this can as well be a further catalyst for further innovation in excellent as well outside of China in Europe, in the Americas, in Japan and Korea and other places where we're having businesses. So I think this new reality where we call it like this drives us and the industry to push the boundaries of what is possible even further. So this is at the core of what is about happening in innovation and what is as well the opportunity for AVL, supporting our customers in their competitive situation in regulatory environments and as well competitive environments to help them to execute their portfolio and technology plans. I will try to take this one step further from what you just said, the next wave of innovation maybe also with a view on China and Chinese markets and Chinese customers it is sometimes said that the new defining factor for cars for the competition in cars also would be not so much the engine itself and the engine technology itself as it was in the past with a combustion engine, but software. Software to run the cars, software to control the cars and software to entertain the people in the car. Do you think that's correct? And what does it mean for AVL and AVL's business model? - I think it is quite obvious that the automotive industry in the past has been very much defined out of I would say a mechatronic worldview and this is like adding a second leg to the body. I think now the automotive industry is standing on a mechatronics and software defined leg and the software defined leg is trained better and better and getting stronger and stronger and I think over time and this is as well the strategies we pursue at AVL that investing in software and software tools all our testing equipment is basically driven by software not only by the mechatronics from simulation to emulation to all the development software tools we have developed for ourselves as well our customers as a software product. I think it is as well representing this. And at AVL we are already now having more than 3000 employees who are having software jobs. So this has already, this has very much already arrived since years at AVL and we have put, we are really having strong investments in software and software capabilities. Taking this to the next level we do see in other industries partnerships, alliances with software houses becomes more and more important. Can you tell us a little bit about how does this partner network of the future for AVL looks like, even if you have 30000 software engineers, do you work closer with the big software development companies? So I think in China, we are what you would call still agile mid-lost aunt, even so we're we're a little bit larger but in the scale of everything else where we need to be very clear and very prudent in which skills and capabilities we invest ourselves where we can really generate USBs and differentiate and create value to our customers and where it's better to source or to collaborate. And therefore, of course, within our industry but as well for ourselves, so to say the compete and collaboration ratio with regards to suppliers, partners, et cetera, et cetera becomes a much more much more important role. Most recently last year we have as well entered a strategic partnership with Microsoft as an example but there as well others we have we have started where we basically combine the strengths of Microsoft with our own strengths. So of course, Microsoft really has cutting edge AI capabilities and software as a service, SaaS capabilities which we we're not positioned to be a second Microsoft and SaaS. At the same time really using these capabilities for us in enhancing our development speed to create new offerings to our customers, et cetera, et cetera is a perfect blend of skills with which is really helping both parties to be faster, more agile and more effective in penetrating their respective customers. Which brings me actually to one of your most innovative projects that we have heard. Yeah, that's so cool. You work together with NASA on a so-called moon rover. Is it? Can you tell us a little bit about this project? Yeah, just a little bit. Yes, this is true. We're really excited and very proud. It's a great honor for AVL to be part of an industrial consortium to contribute to realize the moon rover. It is not only the technological part is important but I think it has as well a high motivational element and it excites the overall organization and we're very proud to be part of this exciting story. And this of course will have a big software part included, right? As well, this will have as well a software component. Yeah, okay. Interesting. Fascinating. I can sympathize, you know, for working for a company that, you know, brings the people to the moon and the people driving around there and the little rover and it's the AVL rover that would be an interesting idea. I would like to get back to these notions that there are different regions in the world, different countries, different regions and different preferences for cars and also different conditions and environments, you know, big countries like the US, you know, Mika cities in China, but also different types of regulation. We talked about that earlier or, you know, briefly touched on that earlier. So these enormous differences. Does that bring a problem to AVL because it requires you to be very differentiated in your approach to different markets, different customers? Or is it an opportunity because there are many different, you know, problems to be solved and you as a technology leader are required, you know, for different things. How do you see it? No, I think variance is a significant opportunity and has been a significant growth driver as well because different regulations and different environments have as well created different test protocols and the requirement to develop as well more variances in our testing environment. So I think this has contributed significantly to the reputation because we had the expertise, the skill and the methods really as well to help the automotive industry to be compliant with these regulatory environments. And as secondly as well, it has tickled as well our innovative DNA to be really leading edge in these fields. Very good. But you can do that now in all these different fields, being leading edge and, you know, self-use and hybrid and autonomous driving. I mean, that sounds to me like, I know we touched on this earlier, but it sounds to me extremely challenging because they are also technologically demanding and, you know, as a layman, I think there are these firms in it like Google and God knows what. I think to put the record straight, we will and we cannot compete on every dimension you just mentioned. Our field is really sort of say the propulsion system. So what basically puts the mobility into the vehicle. So there are and they're basically helping in the development phase from the idea up to the prototype, from the component over the model up to the system level. And therefore now through our capabilities and methods, tools and equipment, we are able to address these different applications. And of course, every new application requires from us as well new investments, understanding the application, understanding the industrial context as well as being as well then as well the relevant player. I give you just a different example. Break testing. You know, break particles have been a topic in the past, in particular as it is as well polluted in particular in major cities. And with Euro 7, the new European regulation as well break as well as tire particle testing has been introduced as part of the regulation. So this is clearly nothing that is coming out of a tailpipe as an emission. But we have developed as well the equipment for break particle testing, which is for us so to say a new application, but we build on existing expertise, existing methods as well. And then it is for us a relatively easy step to go into a new application, use our expertise, the engineering capabilities, our access to customers to and then as well being able to relevant to build on this next step of our technology roadmap. And now from a CVO perspective as well, it is very important that we do this in a very conscious and let's call it a controlled way because if you move too fast and you are too bold, once and a while you can do this on certain technologies, but you need to have as well in mind how long is the investment case until you can develop a critical mass in a new application failed. Before we move from what you've just pointed out to that CVO perspective, I would like to touch on one other aspect of AVL, which I think is very interesting and will be interesting probably also to our readers, which is that you said that at the beginning AVL is a family firm family own family controlled firm and has been let by its owners. And you also implicitly in what you said earlier said that the firm was founded in 1948, which means it has a 76 year history and interestingly and quite extra ordinarily it has had only two COs in all that time, the original founder, Hans List and now it is hemorrhid list his son and the current CEO, which you know points out that there are documents that these two people must have been really really gifted and extremely successful engineers and scientists probably also and also entrepreneurs and businessmen. Can you speak a little bit more to this and probably more to hemorrhid list, which was your work with them at this time. So of course I think this is a very remarkable and close to unique situation that gives as well the company a lot of strengths and stability because when you observe capital market companies that are listed that have sometimes even a very broad investor group were different interests as well, center around different management appointments as well. We really benefit over a long term view with regard to portfolio, with regard to strategies, with regard to market, with regard to talent development, with regard to capital allocation. So you rarely find in a company like AVL, what I call the vanilla taste of the week where you just say okay now this week it's fashionable to do a certain thing and we need to rush out. and improve to look good our quarterly results because capital markets require this. Of course, we need to find the right balance always between portfolio and as well risk appetite on the other side. How does this match as well with our capabilities and our ambitions as well to what degree does it as well fit to our balance sheet and our funding situation? Of course, these three things always come together. But being embedded in such a strong culture that has of course been created by the two CEOs in chairman and in particular over this long period by Professor Heimuth List, this has created this company's so many opportunities as well as the Ackerman and the standing power to see things through. Very often I have seen in my previous roles and other companies I have seen people giving up to early. And this company has really a very strong rigor at really pulling through. Sometimes at the expense of being sometimes too much firefighting and the end to get it done, but has is very strong ethics towards the end and really delivering and pulling through even in adverse environments. So for example, when we entered COVID, our key questions or the topics we really discussed at length was okay, how do we protect the innovation capability of the company? How do we protect the mid and long-term investment capabilities? How do we protect the technological transformation and at the same time still stay competitive as well in the ICE world? And I bet if you would have had completely different discussions in a free-floated capitalized stock market. But of course, this brings us York to the question, what does it mean for a CFO working in such an innovative environment where so much transformation in the industry, but also within the company is going on. So this also translates into huge investments, this translates into required efficiency gains, ESE-TRA, ESE-TRA. So how is it to be the CFO of such an innovative company? Where are you saying this is something where you need to get stronger involved? Or where do you see the opportunities that are there for a CFO in such an environment? My predecessor did the same job for 20 years. So there was of course, so to say, an established role model. Over time, I gave to this role of course, some additional interpretation. But I think what is pretty clear, and I think I have my deepest respect for my engineering and innovative colleagues. I see myself, of course, in the context of achieving the overall strategic goals. And as well, advising and sometimes as well, challenging as well that we not only reach our technological ambitions, but at the same time as well balance them out with achieving as well our mid-long-term financial ambitions. Because in the end, everything we reinvest in a very capital intensive business model. We have invested over the last four years, more than 1 billion euros. We will invest another 700 up to 700 million over the next three years. So the focus on returns and the success of the investment decisions we take today, which have a mid-to-long-term return profile, is very important to have very honest and good discussion about to what degree does this really as well contribute to the success of the company. But this is broader, the CEO of O-Roll, of course, as broader. It is the financial governance part of it. It is as well providing services to the company, like professional treasury services, professional tech services, to professional administrative services, like accounting, etc., as well as at competitive cost. And at the same time making sure we are in compliance with regulatory requirements, tech requirements, tech compliance, as well as financial requirements, governance, etc., etc. And in this context as well, supporting my colleagues, as well as the owner, as well as the company, in taking the right decisions with regard how we allocate capital, and how we take decisions on maintaining our cost competitiveness, how to accomplish as well, I would say, healthy levels of profitability, and in the last but not least, and this is even more important as well to look, what is the right balance between profitability and capital employed or invested in our balance sheet and our future? So basically as well, the evolution to return on capital employed. This of course brings us to the question, how do you steer a company like AVL? What is the steering model of the company? As I mentioned before, when I took over from my predecessor, the company went through a decade of really tremendous growth. So over a decade, every year, double-digit growth. And so the focus of the company was really on growth and margin. And during COVID, we had to learn, okay, we need to reconsider our steering priorities. So looking into cost controls, looking at efficiencies, protecting the core, meaning protecting as well, a maximum of keeping as many people as we can. So even at the cost of heavily impacting as well, our results to keeping the team together, keeping the family and the AVL family together at one part, at the seventh, at the same time as well, as well protecting as well our innovative capabilities. And by doing these two, creating as well, the preconditions that after the crisis, we could bounce back with two years of significant growth in 2022 and 2023. But coming back to your question, moving from growth and margin, then looking more at cost, then we came out of COVID immediately and then experienced the supply chain crisis, with tremendous stress supply chain, as well as interest rate, highx, et cetera, et cetera, then focusing our focus much more on cash flow and networking capital. This allowed us really quite successfully in 2023 to show a significant swing in free cash flow improvement, as well as at the same time as gradually improving our profitability. And now we are at the next phase, and we have as well now agreed that our key steering KPI is return on capital employed. Rational for this, we have on the one side, we have the P&L in our focus, top line, up to EBIT. At the same time, we keep it into balance with our long-term commitments with regard to innovation and capital expenditures, which is a significant part of our balance sheet. At the same time, as well, focusing more and more on networking capital. And I think this is we have as well adjusted our incentive system, partially already, for our Austrian operations and we'll roll this out more as well internationally, what, 2025? I'm fascinated by that. That sounds so easy. You've changed your metric system within a few years from one thing, you know, growth-oriented, maybe you've done margin-oriented now on capital employed. Return on capital employed. In a big organization, you have more than what, 12,000 people worldwide, you know, many countries, how do you do that? Because, you know, you also need to educate your people in that, you know, changing the incentive system. Does that go, you know, from one day to the other? And how do you achieve that? It sounds easy and surely isn't. No, it isn't easy and in particular, you know, AVL is not a command and execution culture. It is not a top-down culture. It really, it requires a lot of conversations, a lot of listening, getting and a lot of debate. We are not fast shooters very often. We take some time to make up our minds. But once we have made up our minds, I think we're getting quite disciplined as well as executing. But I think what is very important is to have, again and again, informed dialogue to have discussions to listen, try to understand different perspectives. And I need as well to admit that there are a lot of AVL truth, whereas they say yes, they work. They're very successful, have been successful in the past, but you would never find them as a role model in a classical business book. So AVL has, because our business model is so unique, the simple boiler played answers you find sometimes in these smart short three page business scribbles somewhere wisdoms. They don't very often they do not apply. At the same time, basic economics, basic financial principles of course apply. A balance he'd never forgets. A bad business will always be a bad business. So when we invest, when we move into new businesses or we enter as well a very demanding customer project, it is always having as well the right level of debate, okay, how much commercial risk is involved, how much technical risk is involved, where is our ambition level? And at the same time as well, how strategic do we think about a certain technology markets or opportunity? What would you say, York, how digital is your finance function? How good is the technology that you apply in the back office processes like finance? Can you give us a little bit of an overview about this? The leading process. So the leading process for financing is of course based on SAP. We are currently in the process of course IT is in the lead for the technical implementation. We are in the process of evaluating the transformation to S4HANA. When I arrived at AVL, I found yes, we have I would say a landscape of different ERPs even within AVL to say different templates. We have over the last two years as well worked more on harmonization. We have more worked as well on the quality of master data. Okay. And we have as well started to experiment as well with robotic automation and accounting applications like this, where we clearly see okay, here's opportunity, one element as well to improve the cost competitiveness of our processes. Taking back a step and looking at the bigger picture, there is a lot of talk about the role of the CFO nowadays, the changing role maybe in the eyes of some people, how to stay under control in the WUKA world with very fast moving in the background of this trend towards digitization. So if you look at this, are you a business partner, are you a co-pilot, or what's your vision of the CFO? What do you think? How should the CFO in the future act and then how do you see these arguments? I'm quite hesitant jumping over this stick because this is this are as well headlines and I think the CFO role at AVL is quite unique, first of all, because of the nature of being a technology and innovation oriented family group. Secondly, of course, the role of the CFO encompasses not only these elements, but we have from the business perspective, we have very different business challenges at the same time, we have starter, we have growth, we have maturing, we have restructuring, so we have everything in here. This combined with the very capital intensive business model where we take long-term strategic decisions on how to allocate investments, how to allocate capital and then later generate value with it, together with our customers. And the one time of, on the one side of course, the CFO is a business partner and the other side he's as well a challenger to find the right balance this always has to be recalibrated water over quarter here, over here. But I think even more importantly is to have in the dialogue with CEO and chairman with my board colleagues with the MDs and the subsidiaries as well. The starting point is always this strategy. Okay, what are what what where's our place to win? Where do we invest in our portfolio? Because these are the long-term commitments we put into our business model, we put into our in the end in our portfolio and our balance sheet and as well invest in the capabilities of our employees. And this then drives as well the framework within which we can operate with regard to commitments with regard to governance with regard as well developing budgets, financial plans, funding with banks, etc. So this understanding of what is the technological environment, even so understanding that we in finance we are not the engineers, but we want to support you, but we want to support and guide as well the business in order to come to balanced outcome. Coming to the next topic area of our podcast, you look already back at the quite long career as a CFO. All right, if we look at your different stations in your career, the different points you reached high level as a kind of general manager and CFO role already at Friszenius at very early age. Can you say something how that came about? Was that luck or how do you manage to get into such a position at such a young age in the 30s, right? In my mid 30s, yes. I think for for anyone who is pursuing a role in corporate finance on the corporate side and on the banking side. In the end, there's an element of luck. You need always people who entrust responsibilities, in particular in the early phase of your careers, in giving you the opportunity to grow into sometimes even shoes which appear at mid 30 a little bit too large. And then, of course, in the end, this is a sequence of a career, it's a sequence of opportunities against you have delivered. And it is always there's an element of things you can influence. And there are elements you cannot influence. I never intended or planned when I was a student or even in my very early phase of my career, but even imagine becoming a CFO of a company this was beyond my imagination. I was happy in my group controlling role. And in the end, of course, one follow the other. York, you've worked in large multi-global, corporate companies. You've worked now in a family-owned business. What would you say? What are the biggest differences if you compare these and how was it the right sequence to move from there to here, to have this craftsmanship being built as a CFO? This is a very individual sequence. And cannot be applied to anybody else who might consider going into a CFO career. I think I benefited a lot of starting my career and controlling, then moving up as well, adding other capabilities or other responsibilities like IT or compliance, but as well, then moving into a non-finance responsibility in general management, then moving back to finance, as well as then having the experience, having worked with the Tertras Office in New York, really understanding capital markets. So having more the capital market view, as well as having the more internal functions, finance view, I think is very important for the development SSEF, as well as having the experiences of having worked in an operating business versus really having had a finance function in the operating business. I think this is as well tremendously important. And then maybe one last element that definitely helps as well is going in another country, going overseas, going into a country in another different culture, in a different environment, first of all, in particular, if you start your career in a headquarters, I think it is as well a very important experience to work outside of headquarter because this is the real world very often where the companies need to be successful are in the competitive environment and far away from as well headquarter influences. They really need to deliver on your own with your smaller teams. Secondly, of course, the cultural experiences in another language environment, in another cultural environment, with other business etiquettes as well, I think helps as well gaining additional perspective. Your. Many of our listeners are young professionals in finance and they do consider a career in finance becoming a CFO one day. What would be the attributes that you see somebody should have if she or he wants to become a CFO one day? I think the starting point is endless curiosity, the ability to learn, to sharpen the skill set in demanding and difficult assignments. To be bold in this regard, not to duck away when there are difficult or risky assignments around. I think to learn in pressure environments, in demanding environments, I think on the long run give you much more learning and experience than just taking the safe way. I think this is one learning. I think the second one is as well stay up, stay up close with the development of your field. I think I have always enjoyed staying close to academic research as well as reading publications because I think as well the business administration field, the finance field has evolved over the last couple of years tremendously. The focus of research has shifted strongly towards evidence and fact-based and I think that what is currently produced in the science environment really adds value as well to business decisions. So stay close to your academic roots, what you learned in theory and try to keep up with the new insights that are generated as well. Yark, you also have now a very stressful job. Continuously we heard that you just yesterday, for instance, came back from Tokyo. Very high stress level. How do you keep fit in this? How do you balance this with other things in life? What's your recipe for this? Yes, of course, being a CFO for larger organization is fun, of course, and it's of course a time demanding. First of all, I need to say thanks to my parents because I think they have gifted me with great DNA. So I have a certain resilience built in and at the same time, of course, it's important to be very conscious with your own time, how you use it. And of course, for me, very important is, of course, embracing time with a very close circle of family and friends. Being in nature, I think, is excellent to recharge batteries, doing sports, going running, going on hikes. But I think what helped me as well, keeping my balance, is to be curious about the things going on in our contemporary world. So being active and trying to understand what is going on in science outside of the AVL. We are not doing all the science here. What is going on in literature, who has composed, which piece of music, going into museum, going into art exhibitions. I think participating in the creativity and the topics that are relevant in our time, gives me as well a lot of balance and a lot of satisfaction. Almost naturally leads over to our last question of the podcast, which as always is the final question exactly. Do you have a recommendation for our listeners for a book that you really like and would recommend or maybe also for another podcast? I'd like to do two. One recommendation, a book I read last year, Better Simpler, Strategy by Felix Oberholzer-G. He is a Swiss-born strategy professor at Harvard Business School. Very practically written. I really benefited a lot. And then during longer runs or car rides or on the plane, I really enjoy listening to the Huberman lab. And Andrew Huberman is a Stanford professor in a Neuroscientist. And he is regularly talking with his guests about our brain and how our brain is influencing our behaviors in the other way around. That sounds very interesting. I will actually look that up myself. Thank you. Thank you. Thank you for that. And thank you generally for participating, for making your time available. We enjoyed this tremendously. Many thanks also to you listeners for your interest in our podcast. We hope you enjoyed this episode and we look forward to meeting you again very, very, very soon. Thank you very much and goodbye. Thanks for my end. It was a great pleasure. And I like to follow up with the Hello innovators say goodbye to all the innovators we're listening to the podcast. Thank you, Gauri. Thank you, Martin Fattie. That was leading corporate transformation. The podcast by VHU AutoBysime School of Management, powered by PWC. Editorial team, Marvanshuna and Zimangirlach.