Sixt SE CFO Kai Andrejewski - electric mobility, flashy advertising & US-expansion

[MUSIC] Leading Corporate Transformation. The podcast by V. Ha'ul Autobysime 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, welcome to a new edition of our V.H.O. podcast leading corporate transformation, powered by PWC. My name is Martin Clam, I'm a professor at the V.H.O. and as always, I'm doing this podcast together with Gory von Heo-Schauz. Gory. Hello listeners, good to be back and really excited about our podcast today. So as you might know, I'm leading our industry sector consulting practice at PWC. And what we do is basically we support companies in their business transformation and transformation, like always, is our key for our guest today, Professor Dr. Kai Andrievsky, from the sixth SE or sixth group. So Kai, good to have you on the podcast. I'm pleasure to be here. So Kai, let's start with a short intro of yourself and of course everybody knows sixth, but if you give us a quick intro of what the mobility provider sixth really is. The mobility provider sixth at its core is a rental car company. And we always stress the fact that this is the backbone of our business and the backbone of our company. But the backbone of course is developing. It has developed over time. And we want to serve our customers. And that's the key focus of the company when we depict our purpose. It's clearly the customer with a form of mobility, which gives him the most sense purpose for what he's calling for, be it on a short mid or long term. And the special thing about sixth is that we do that via an integrated version of our app, which connects front end and back end in our services and gives the customer the opportunity the one hand to take cars out of our offering, be it in the share, be it in the right end, as I said, mainly in the rental part, but also connected with other services from companies we work together with on our platform. For example, in the right-hating sector or in the make-romability sector. So you can rent a car, a van, or even a bike with a sixth. Oh wow, that sounds very custom oriented. Kai, you are the CFO of sixth. What brought you to sixth? From a personal perspective, a high level of curiosity. I worked 30 years in professional service for one of your competitors for a long time. And I was dealing with clients a lot of times on the auditing side, but also on the consulting side. And I really was keen to find out how it's like to work on the subject from the other side of the table. And so I got the opportunity to work for sixth, started that two and a half years ago. And I have to really to reiterate that this is an adventure on the one hand and also a privilege because it gives you the opportunity to use the skill set, which I have acquired over decades in a completely different perspective. And I clearly have to underpin and admit it is a different world of being an executive in a very inter-proneral environment in comparison to being a consultant or an auditor. Both as it's challenges, but it's completely a different world. And the main difference is I'm challenging every day. I have to face every day. And challenges, the first thing is competition is fierce. And we have to serve our customer in the most sufficient way and to really serve the customer in that competitive environment is a challenge for me as a person to deliver on. And the second thing is deciding on a level of insecurity which I have not experienced before. But that clearly makes the fun of the work. And sixth is a very special animal because on the one hand we are a listed company in the M-DUX with all the repercussions which you have out of that structure. But we are clearly a family company. We have a family who is in the core of the business, the two CEOs, Alexander and Konstantin VI, leading the company with an experience of several decades in the business and that really makes the difference for that company because you have on the one hand the dedication of a family company. You have the knowledge of long-term business experience. But you also have all the, I would say, governance structures which you need for a listed company. And that makes it a bit special animal sixth and also is somewhat the secret of our success. So that's already a lot. Let's dissect that a little bit. And let's go back to the business model. At the core of the company is the rental company. Now I suppose most of our listeners as Gori and I, we at times, Gori, you probably do that more often than I do, you know, do go to a counter and rent a company, rent a car. So we roughly know how that works. But from the other side, from the business side, what's behind that? What is driving that business? What are the most important levers? What's important for revenue generation, for cost control, and for ultimately profit? I think the basic thought, which also differentiates us from our competitors, is the idea of premium mobility. What does that mean? Premium mobility means that we want to give the most premium cars, which we define on the one hand via the brands. So the premium German brands, which we bring to our customers, and the relationship between premium experience with a form of transportation and the price that makes the difference to our competitors, because even though sometimes premium mobility seems to be a little bit more expensive, which is not really the case. But all which comes with premium mobility, the availability, the service, and the way how we treat our customers, that makes a difference. And when you drive and dig down a little bit into the way how we structure our business from the operational side, just give you one example. What is a key differentiator is that all our services are conducted out of one fleet. So if you go for a six subscription, out of the six plus product, or if you go for a six share service, or if you go for the rental service, we conduct these services out of one fleet. So we are able to really have a business model, which is flexible, but gives also the customer the utmost flexibility in that perspective. And when you look at also the specificality of our business, we believe in a diversified business. On the one hand, roughly two thirds of our business is the so-called B2C part. And one third is the B2B part. And we also have a regional split that when we look at our key three segments, one third is roughly done in the US, one third in Europe, and one third in Germany, with different focus points within the business. But here we have a really broad offering for our customer and not to be forgotten. We are in more than 100 countries in a franchise setup, so that you are able to get six services and our idea of transportation around the globe more or less. So two thirds of the customers are private individuals who do that on a one off basis. And one third is corporate customers who have behind that a customer program. Yes, when you look at the B2C, so the retail customer, how we name it, of course the retail customer has a lot of features which he can take advantage of, be it in the classic rental business, but also in the other products we are offering. But that is mainly split up. It differs a little bit from region to region. We are clearly a B2C company in the Southern European countries, even though in the last two years the B2B business also has substantially evolved there. There's also a substantial involvement of Van and Truck, which is mainly B2B business in Europe, and in the US where we really started our growth story within the COVID crisis, we are mainly a B2C business right now, but which is also evolving into the B2B part. And this internationalization, I mean, your origin is clearly in Germany. And my understanding is that you then grew into the other European countries first, and you mentioned the big expansion during COVID time in the US. But is that, you know, you're going to be a global company, a global rental company? Is that a realistic goal? I think we already are to a certain extent, but when you have a little bit of a closer look at the three markets. In Germany, we have a 40% market share. We are completely known brand, 97% rent awareness in Germany, so everybody knows six. And we have a diversified business, B2C, B2B part, Van and Truck. Very strong. In Europe, we have a market share, 20% plus percent, depends a little bit on the market, but sometimes more or less in the mid-20s. Here, of course, in the southern European countries, we have a more focused, veritail business, of course, connected to the third quarter, which is the most important for us. But that is clearly also a story which is still growing. So when I look at companies like France right now, there is a. strong Van and Truck business developing. We are starting to have the substantial B2B business now also in Italy. So it's a constant growth story in Europe. And of course we want to go into that area where we are in Germany. And when you look where we are coming from entering the market, in almost every market, we have a constant growth story over time. Completely different stories to US. And I think the US really underpins a little bit what kind of company we are. In the US, we had a roughly 1% market share before COVID. And you have to imagine in the second quarter of 2020 when COVID really hit the economy and hit the industry, you really would be in trouble as a rental car company because there's no business anymore. And here a lot of strength. Let's say strong points of six became visible. First of all, when you look at our business model, there's one key differentiator to our competitors. Almost 80% of all fleet is so-called non-risk. So we have the cars in a buyback arrangement or in a short term lease. So even though in the buyback arrangement we have on the balance sheet, we are not the risk owner of the car, which is the clear difference to our competitors. And so that makes us very flexible in building up the fleet and reducing the fleet. And you just have to imagine in the second quarter when COVID really hit the globe and the business model has died. We were able to de-fleet pretty quickly because we could give back the buyback cars, which usually have a six-month duration. But we can shorten it to three months or enlarge it to nine months. So we were actually cash rich at the end of Q2 2020, which is a very awkward situation when the whole industry really wasn't in trouble. Some of our competitors went into chapter 11. So we won a different situation. And then actually the second thing, Gory, you just asked for really kicked in. We as a family company reacted in a mode which was very intrapreneurial. I was not on board at that time, but I think it's really the proof point how this company is ticking because we did two things. The first thing was we launched a new product, 6 plus a subscription, which is something of a long-term rent, not really a long-term lease, which gives you all the benefits of just getting a car for a month or even longer. And you don't have all the hassle of ensuring it or registering it. And the second thing, much more important, we invested in the US. We got stations at bigger airports. And we also used that for acquiring fleet. So when COVID was somewhat scaling down in the US, we had a fleet. We had a station network and coming from some scattered approach in the US to a comprehensive approach. Today we are now at 43 or 50 major airports locations in the US. We have doubled our revenue line in comparison to pre-COVID levels. So we really used the momentum. And I think that's when we talk about you ask Martin for premium mobility, what is that about? It is really that you seize the opportunity in crisis times that you are not just defending yourself, what we did, of course, with all the things we had to do during a crisis, being cost-conscious and so on and so forth, but also being that interpronurable to look for a chance to expand product and also regional-wise. And that makes us a global company that we are now in a lot of European countries and also in the US and Canada as a corporate country. And besides this one, also having an extensive franchise network around the globe. So looking at your results, I mean, that's really impressive how the company is performing over the last two years and also the business outlook as far as you know. So it seems like your strategy is really playing off, right? And so my question is looking back at the US market where you have such an incredible growth, but still it's a huge market. How can Zixth play in this market? And this brings me to a second question which is around you do the rental, the share, the drive, the ride as the topics. So is it in the US the same way you go from rental to share to ride? Let me first have a few thoughts on the numbers as you see, that's always a pleasant subject to do. First of all, what never should be forgotten when I look at my 2000 and our 2019 financials, we were performing extremely well. We had an EBT margin of 12.3%, which was far above the average of the industry because our competitors are heart, we're heartling earning money at that time before COVID, we were performing extremely well. So it was a record year for us at that time. So 20, we managed to be on a black zero, which really is a very remarkable result. And in 21 and 22, we outperformed the market. We really had tremendous years. We had an EBT line of almost 20%. Of course, that was driven by a lot of factors on the one hand. There was a big appetite for our customers to travel after COVID. I don't know if it's a nice term, this so-called revenge travel that people really wanted to go out after two years of not being able to do so. And there was a shortage of cars, of course, because of the semiconductor issue. So there were a lot of ingredients which brought us to a profitability level, which was unseen. But I think now it really counts when you look at times where we are coming back to somewhat normalized travel behavior. We are still performing now better than pre-crisis levels. It will not be that exaggeration on the positive side, which we have seen in 21 and 22, but the road which we are moving on now and how the market is seeing us. We are clearly between the 2019 numbers and the 2022 numbers. So we are really on a good path. You were asking explicitly on the US, of course, it is a developing business. Right now in the US, we clearly have a focus on the short-term rent in the B2C sector. But all the other sectors, be it subscription, be it the other products of our portfolio are developing as well. But it's clearly is when we enter a market, we start with our key product, with our key business. And that is the B2C and the rental part is clearly the key part in the US right now. But maybe you can elaborate a little bit more on the different business model because the rental car business everybody understands so far. But can you tell us a little bit more about the relevance of the share and the right business model? How big are they in comparison to rental these days? I think you have to divide three sectors. The first one clearly is the rental car business, which is the major part of the business. The second thing is the subscription, which is also already a material and significant part of the business. For the subscription, it is important to mention that we do that with the same fleet as we do the rental part because that gives us the opportunity as you can imagine Q3, of course, as a strong push, be it in the US, be it in Europe, on the holiday seasons. And so we scale down sometimes a little bit the subscription business, but we are able to really push up utilization when I look at the two different parts of the business. And the share business and the right business share is also done by our own fleet. We are only in a couple of cities. There are of much more importance not from the volume side, but from the customer's stickiness side, especially when you look at the right business, which we usually do not conduct. We do that with partners. When you are around the globe, you can almost every country, you can book a ride, which is not done by a six driver or a six car, but by a partner. But it has a high level of customer stickiness because the customer is doing that with one app. And when you go through app, you have the ability to go through our key products. It's just described, but also to go with further partners. So if you want to do micromobility within a city, be it with a scooter or be it with a bike, you are also able to do that. And these are not businesses from the magnitude, which have an importance for us, but they have a high level of importance regarding the customer's stickiness and our approach of marketing, of bringing customer to our website or our app. Before we move to other topics, I have maybe one final question regarding this international dimension, which I find very, very interesting. You're a service company. And, you know, companies are very, very different. And I've seen that you are active in many, many countries, some of which are rather exotic and also you could say maybe in some cases, say problematic maybe. So if we go to places like these, would we expect the same level of service? Would it be the same kind of customer attention and everything like in Frankfurt at the airport? I think it's a three-fold approach. First of all, the core is the corporate business, where we run the business, the corporate countries in Europe, in the US. And here you have a fleet which is steered by six. You expect the premium service, which is the core of our business. That's part number one. Part number two, we have a very dense and long-running franchise network around the globe. And there are some decisive markets, like Turkey, like Portugal, like Greece, where we have a strong or Australia, very important, where we have strong franchise partners who go under the six brand, where the business from there comes into our corporate countries and we give the business into these countries. And you have the six branding, they are running on the six IT platforms. So you experience a lot of features which you experience here. The fleet is conducted and bought by the franchisees, so not by us, which is the main difference. But we take a lot of care that the standards which we are defining that they're really also followed by our franchisees. And that's key because you always see that we have to protect the brand and we have to protect our quality also in these fact and circumstances. And we have a constant process of looking at our network if we want to add another corporate country. For example, in Europe when a franchise contract comes to an end, be it in the Nordics or the pick the pick the Southern European countries, we have a look if it makes sense to make that a corporate country. And of course we're always looking abroad. Is there any opportunity to do so? But here, there's the basic thought of being prudent and if we define something as a corporate country, meaning we have a fleet there, we really have to be sure that we can handle the market and have the experience. And the third one when you were talking about exotic places, when you look at our franchise network, you come up with a lot of places around the globe, sometimes places you would not expect, be it in Africa, be it in Asia. And there are sometimes markets where we have special customers like NGOs who say we need cars in that area. So we provide them. And that's what we do. So there is a high level of interpronural spirit in that environment. But it is a constant process. And of course we are looking for new corporate countries on the long run. The youngest example is Canada. Seems to be in the first step in easy market, but it's very special markets. Canada is a seasonal business. There are only a couple of cities which make sense. But that clearly was the thing where we said, US is really developing exponentially. So Canada is the next step and we go ahead there. Looking at you as a mobility provider, we can now maybe dig deeper into the question what the relevance of e-mobility is for you. So how do you approach it basically? We could fill days with this one. But let me try it with the most important argument we always have. And the most important thing we always look at is our customer. And we do what the customer is calling for and we want to serve the customer in the best thinkable way. And that's also true for electric mobility. But electric mobility has some other features besides the customer, which is the regulator, because electric mobility is not only brought in the market by customer demand, it's also brought into the market by regulation. And this is the key factor for us. We are have a basic principle that we want to maximize electric mobility, in the vision of customer needs. And when you look at our current ratio, for half year, we were 22% EV part of our fleet, which is remarkable also in comparison to our competitors. But when you drill down a little bit into the fleet, where it is rented, you see that there is a high demand for EVs in the subscription sector, because here really the customer wants to have a grip on how is EV working. He wants to get used to it. So there's a strong call for it. And there's also a strong call from our B2B customers. Their demand is again driven by regulation, because probably will be the same with your company to fulfill your scope one and two needs. You have to go for an EV when you go on business travel. And that is really making a difference in that field. When I look at the pure B2C customer, it is different behavior because there are B2C customers who are looking for an EV, but there are a lot of customer groups who are not used so far to an EV. And that's one of the key roles we can play that we accelerate the enthusiasm for electric mobility. And we see ourselves in that position as well that we want to give the customers the opportunity. But when I look at electric mobility and I was talking about regulation, there are a couple of things which are a tough cookie, I would say, to deal with, because why do we deal with electric mobility on that big scale right now as a society? Because out of the Paris Accord, there was a clear definition to limit global warming by one and a half degrees. And because of this one, we have to change a lot of things. And one of the things we would like to change as a society, and as a within the society, a consensus regarding this one, is the way we move the way we look at transportation. And electric mobility is defined by regulation as the key thing to do so. And that is sometimes not at least in the current state, it's not that 100% correct because when you compare the footprint of a combustion engine to the footprint of an EV, the footprint of an EV is significantly higher. So if I would go for a 100% EV fleet tomorrow, I would have a higher CO2 footprint with a pure combustion fleet that will change over time. And in the long run, that's right, and you have to get used to the new form. But what that shows is that there is not a linear approach that you have to be smart, you have to build it up, you have to bring it to the market. And I did this for us as a company of utmost importance because on the one hand, the EV is defined as a taxonomy eligible asset. So it will be the basis for my refinancing capacity and also on my equity and vegetable capacity. But on the other hand, I have to deal with a negative CO2 impact, at least in the bridging period. And that's something we have to balance. And what we always see as our strongest argument, which is not really credited by regulation, is the idea of shared mobility. Because when you look at what we are doing, since more than 100 years, we are providing the most actual cost to our customers. So there are efficient on the one hand. But the key argument is that the utilization of a car, of a rental car is much higher than of a individually owned car. And it is somewhat of, I would say, astonishing that we are not getting any kind of credit for these CO2 savings. Because if you would compare a driven mile with a six car to a driven mile with your own car, in which your own car, there is a significant CO2 impact, reduction impact. And we are doing that that more than 100 years. And there's not really a sufficient recognition of this one. I will follow up with a, maybe with a bit of a critical or provocative question. You outlined that you will respond to customer needs. We know that customers are not fully, fully convinced yet in all regards of the move to electronic, electric cars. The car-based individual transportation, in a general sense, that was also part of what we discussed is under criticism. So isn't that a difficult thing for you as a rental company to develop a long-term growth strategy based on what you're doing at the moment? And let me told you I was going to be a bit provocative. How does it fit with your image? Six is known for a very distinct, let's say, flashy attitude in advertising. You advertise with premium cars, with premium combustion engine-based cars. How does that fit with a transformation story? I think both goes together. First of all, when you look at our product mix, our volume products, which is the subscription on the one hand, an utter and foremost, the rental part, that gives our customers the opportunity really to get rid of their own car. Because it's not only the B2C customers or the B2B customer, because when I look at the models which we have with big industrial customers where we are now offering mobility days instead of just a certain car. So that is the key driver from a sustainability perspective, that this thought that I'm mobile in an urban or rural center with a sixth offering that really makes the impact. And you really can calculate it down to the CO2 ton. And the second thing is when you look at immobility and that combines a little bit the two questions you ask, immobility as I point it out right now is in the beginning. And right now the ecological equation is not even. So it has to develop. There have to be a lot of steps in between where systems are working, where the optimization is working, and the opportunities are huge. When the customers use to electric mobility, the fueling of the past will be the charging of the future, and the charging can be connected with the availability of energy. As we know, there is enough renewable energy, but not at the right time at the right point. And if you can combine a fleet with this one, that clearly makes sense. Of course, we define the driving as an experience. And as you said with our Fleshy advertisement on the one hand, especially in Germany, we poke a little bit politicians and celebrities. And of course, that's part of our sometimes cheeky approach. But I think that's clearly okay and part of our DNA. But when I look at the cars, it's also a question of innovation. Because of course, you can make the argument, these are really fancy cars. And a lot of force powers be it. But I think the key thing is that we have modern innovative cars. And that will make the difference on the long run. And I think if the customer is sharing a premium mobility that sometimes also has a positive impact and just owning it. And so on the long run, I think our vision is that mobility is provided by us, not so much connected to the ownership of their own car. But also the freedom of the customer to use different perspectives of that one. Yeah, that sounds very interesting because this brings us back to what you said. So you are trying to utilize a fleet more than ever before. So you say the best contribution to sustainability basically is that we do allow the sharing of cars. We do allow the utilization going up for the cars in the fleet. So can you give us a little bit more on because being a customer of you, of course, sometimes I'm just in a situation that a train is not coming. And I need to take a car to get to my final destination. And then sometimes it's not that easy to get the car. Because when I'm then running to the station, everybody's already there. And then the cars, of course, at this train station are just a few. And they are not expecting this high demand. So how do you use from a digitization perspective, data insights to maybe even bring more cars to the demand that sometimes occur very based on infrastructure problems in other mobility areas? Maybe three levels to this one. First of all, of course, we have a broad idea of how the market is behaving in the holiday season and what are the peaks within the weeks. So we can really steer off the fleet that we have a high level of utilization. But first of all, give our customers the availability of cars. And I think when you look at the customer satisfaction level, that works actually quite fine. That's part number one, part number two, you were referring to this extraordinary occasions, which you cannot plan for. And you recall the advertisement where we celebrated the leader of a German union as our best worker because he was supporting the cases you had just described. I think here it's again the flexibility of the company to provide as much mobility in that specific circumstances. And I think not everything is perfect, but we are usually in a good possession to bring that extra mile, literally speaking on the street for our customers. The third area is actually the most interesting thing when I look at how we steer off fleet and how we look at the market, you can really feel and I'm not an expert on data analytics and artificial intelligence. But for the time being, we are working with a lot of features of data analytics, which is now moving into the first features of AI. And here you really can see that you work much more detailed with data. For example, that you are really analyzing airport data in real time, that you can anticipate in much more detail some consumer behavior based on external data. And that is something where we are dealing with the first steps, but it will be of utmost importance because that will drive utilization again. And that is again the advantage or disadvantage towards the market. And when we look at the thing we discussed before, e-mobility and the classical combustion engines have different features in the usage, be it the fueling, be it the charging, be it the availability. And here you need much more profanality in the data analytics and developing out of this one, the AI field. But I would say here we are in the beginning, but it is a substantial part of the way how we steer our business. And it's not just torque, it's really what we are putting in a lot of effort into. We have roughly 800 people on the IT development side in our company, which is a tenth of our workforce, which really underpins that how Eric Sixth mentioned a couple of years ago, that we are actually an IT company was dealing with a little bit with cars. And that's not that wrong at times. For e-mobility, one of the key challenges, of course, to provide the charging infrastructure. So we have listened to Halal Wilhelm, who said that Mercedes-Benz is now investing heavily into the charging and infrastructure for Mercedes-Benz owners. So how is it with Sixth? You are investing into the charging infrastructure too, right? Definitely. But I would see the issue somewhat broader, because we assume it's, and you can become philosophical about this one, but we always tend to think about things in a linear way. And right now we are at 22% EVs, and we say, "Okay, we want to go to 70% to 90% EVs by the end of the decades." That's our defences, the inability goal derived out of the Paris Accord and put down in the SBDI setup. But what we see right now is that there is a constant development of different features. Take the cars by itself. I see all the discussions we had a year ago regarding range of an EV. I'm really not an expert and not an engineer regarding cars, but when I read through the product development cycles, some Japanese OEMs will come up with EVs, which have a range of 1000 plus kilometers next year. So you see all of a sudden completely different business model, because when I look at our average customer, it's not driving the B2B customer, not driving 1000 kilometers. So range will not be an issue for a big perspective. So that comes back when you look at charging cars, charging, for example, you have a station with 100 cars, and there would be all electric. And to charge them all at one point in time probably would kill the grid. So you have to find a smart way to charge them probably at a different location. So what I wanted to say is it is connected with a lot of investments. We are investing in a charging infrastructure, but it's not just the infrastructure. It's do a smart charging. Get the right amount of electricity at the right point in time, which also opens up new business models, because charging is not part of our business model so far to big extent, because usually the customer brings the car back fueled. And the future, at least as long as the charging will not go so quickly, and I think that will disappear pretty soon as well. We will do that in a different way. And I personally see that very positively that all the obstacles we have right now, electric mobility will be scaled down, because they will not in a linear development of innovation. We will see some positive things in innovation, which will support that case. And that's something where we really have to look at. But the main flaw, I think when we look at electricity right now, is that we have too much regulations, and we have not enough pricing. Because if you would think regarding the pricing of the CO2 impact in a little bit more extensive way, you would change the customer behavior much more quickly when you just say you have to drive now electric. And so I see it in when I look at my capex and op-ex spend, we investing heavily in infrastructure we have to. But we should not forget that things are not just linear, we will see innovation, which will also drive then our investment there. From one perspective, we've discussed now strategy and going into operations even, fleet management and things like operational things like fueling and all these. At the same time, I think this interacts massively, I would expect at least with your role as the CFO. At least in two regards, I think the topics that we just touched on probably interact deeply with your role, and that is on the one end the data. And your IT infrastructure and making use of the data and planning for the business and controlling the business with data. And the second thing of course is the financing, right? Because with the recharging infrastructure that's a whole different animal than you're working capital management with the cars. Could you elaborate on your role as the CFO? Let me start with the financing. If you look at our balance sheet, you will see that in contrast to our competitors, as we have a risk-free, more or less risk-free fleet, we have different financing structures. We have a classical setup of bond loans and RSCF and some commercial papers and credit lies with banks, which is financing our fleet over the year with a peak fleet in the third quarter. That's a tourist business in the summer, which is really driving up our credit line. But when you look at the ratios, the fleet size is always bigger than the depth side, so we are not financing operating business here. That perspective from a higher perspective in comparison to the fleet. The key thing for us here is that the finance situation will change because when I look at the key thought of the U-regulation is that you only will be on the depth side eligible for financing whatever you might take when your fleet is meeting certain kind of preconditions being an electric vehicle. Let's see how that is evolving. There will be a higher level of transparency with a 24-closing in the CSRD. So you're talking about the taxonomy on the one side and about the data providers that provide investors with sometimes comparable, sometimes not comparable information. I just don't want to judge it. No, it's different approach. That is well known and there's a lot of discussion about that. One thing that should help the markets decide what are the new standards for reporting on ESG. Are you following this? Are you okay with what's coming from F-Frag and from the ISSB? We clearly do. And I think here the big challenge for us and all the other companies will be what is the relevant set. And even though I'm an auditor from my background, here is one of the key. I would say changes in my way of thinking. It is of utmost importance to be transparent of what you're doing. And I think that's the key rationale which we are always following here. But you have to be careful that when you look at this set of rules, you cannot follow everything because sometimes they are contradicting. But you have to describe what you're doing and you have to develop an idea. It's not only just generating the data which is a challenge by itself when you look at the thousand plus data points which you have to look for here with a recent materiality approach. I think something you can do. But you have to be in my eyes very transparent, very open what you're doing and that's what we try to do because that is again building up trust with investors on the depth and on the equity side because everybody has to be aware of what she or he is getting when he is investing in our case. But looking at the capital market at the moment, so you are doing so good in performance aspects, KPIs, like the growth of revenue compared to between 21 and 22. I think it was around about 35% something like this. So growth. All of this is doing so well. Why is the stock market development not following accordingly? A couple of reasons. Of course you can imagine I get that question quite some time. First of all, you should never forget that the overall sentiment of the market right now is not very positive. As we are a title which is clearly connected to consumer spend, there's always a question mark that is not really connected to our company and more or less to the industry. Part number two, you just gave a good depiction of this one. People are saying it has been so good. It cannot be better. Okay. That sounds a little bit awkward, but it's one of the stories we are looking at. And this is more in accordance to short term or do they do not see the perspective longer? I think as we are really in a crisis driven world, there are a lot of question marks which are not so much connected to our company and when you compare our performance towards the indices and our competitors, we are doing slightly better but not really better. And I think the key success factor for us and I think he really placed the music for our business model. Twofold on the one hand we talked about that before is with the internationalization strategy deliver as planned and I think we are demonstrating that it works. And I also think that the play on the market who is the first one who is able to digitalize their business model with all the factors we just described, beat the charging, beat the rental process and so on and so forth really has an advantage. And I think as soon as we really can demonstrate that we are ahead of the curve that should also convey into the share price and on the other hand, our shares are not that liquid. It's a small company. We should not forget that. You were mentioning again digitization and I referred earlier to data that plays an important role in steering your business. So could you maybe explain a little bit to our listeners what's going on in your finance function with regard to digitization, digital projects, the usage of digital technologies, maybe the usage of AI predictive, where are you? I think there are some basic things when you look about the development of your PR system that you all know the features in the market. And in quite interesting here we are working on that one explicitly right now. And here one of the questions we have to deal with is how an ERP system is interacting with artificial intelligence. Very interesting when you drill down into that issue because you see their differences when you look at the different solutions in the market. But that's one of the key drivers and that brings me to the second part of your question. I think as we are getting to a more real-time quality of numbers, which really can see that it's very specific to our business that we have to react on real-time to behavior within the markets. So if you take in the summer period an island in Italy, where there is for example a boom because as a festival or whatever, you have to be able to detect it early and that's what you have to fill out of your data. So the daily availability of data becomes of importance and you really can see that the way how we control and steer our businesses is connected to this one. So you need a lot of external data input which you have to connect to your internal data input. And on the other hand, the accounting number really loses importance. And that is the trend which we have seen over decades, but I think it's even accelerated because the view you have on your performance is driving your behavior. And what I also had to experience in comparison to what I've done before, what I'm doing right now is that the conversation you are having with investors and with banks is clearly referring to your current trading. Of course, you are really limited in what you are allowed to say and not what you are allowed to say. By the way, what you can derive of your current state of numbers and you have to be very, very careful that you inform everybody on the same level of density, which I think we are managing well. But that clearly gives you always the importance that you know what is going on. Of course, we have now the second week of October and Q3 is over. We are starting to get a glance what is the number. We have it not finally yet. But if an investor would ask me today, I have to be in the position to give an adjacent communication and have to benchmark it with what we've done to capital markets. And I'm saying that when accounting is really yesterday's story. And it's more, no, no, it's a bitter message for an accounting prof. No, no, it has a different purpose. I think it's not the purpose of performance. So I personally think that when you look at the structure of accounting and reporting, an MD&A report is senseless. You depicting something at a point in time where the old year is three years, three months over and looking ahead for a year which is in full gear. So that is not of any kind of importance. But I think for any kind of strategic decision, which an investor wants to do, the historical number is of importance. And also when you look at the granularity of information, here really accounting kicks in also the non-financial information kicks in. Because if you want to derive a strategic decision, do I want to invest yes or no, you have to look at current performance, but you have to look at the structure of the company. And I think here the future role of accounting and especially of non-financial information is going to play out because it's not so much the information of what's going on. That I have to do on a quarterly basis. And as you mentioned, digitalization, we will be pretty early in the situation that we can not on real time, but we can do things in a much more a more durable way and a short amount of time, not only us, the whole market. And there will be a different role of historical numbers. So much information that's absolutely fascinating. I think we may have to come back for another podcast with you just on these aspects, on the role of, you know, information in markets and so on. With view on time, we need to move on. But before we leave this section on, you know, the role of the CFO, I would like to follow up with one more aspect, which ties us back to the beginning of the interview, namely, the fact that you're a CFO of a stock listed company, which is at the same time a family around company. And I think it's fair to say that the family plays a very central role in that company. Definitely. You as the CFO, I guess you have to balance that out somewhat. You have to represent the company to the couple markets. Still, I mean, you have to, how does that work? Let me start with a few thoughts on the special situation of sixth and the family. I think it is the utmost DNA of that company, as I depicted already in a couple of examples, that the Interpronual Spirit, which is the basis for the company, is really driven by the family. And the CEOs are really on the one hand detailed in the business. On the other hand, they have a long-term experience. They also have a strategic view on the business, two characters, which are complementary with their abilities, and that is driving the company. And I have seen a lot of companies in my career before, and I have honestly to underpin that I've never seen that mixture, which is really making the positive difference on the one hand. You see that also in some other science, that the self-esteem on the one hand, there's a clear message of being humble, but on the other hand of being cheeky, being aggressive. We want to conquer the market, but always ask ourselves, and that is clearly driven by a family. And of course, you need checks and balances in a company, but that's not only the CFO. Of course, you have a role in certain perspective that's also the supervisory board, that's also the audit chairman, the other members of the board, the non-family members, and the top management team. And it is clearly the culture which you are developing on the one hand. And that's, I think, when I look at family-owned businesses, and I've done that before, the key factor is the mutual interest of the family besides the skill set. The skill set is without question. And this mutual understanding, that's the unique thing of sixth, and that's also conveyed to the management, because you need very strong persons who are leading the operational business in the corporate countries. And here you find the same features. You have a very, and we are quite outspoken about this one, experience management team on, not only on the board level, but especially also on the level below this one, and that is a little bit the secret of the success. And if you would have asked me before I've come to sixth, if that is really the differentiated event, it is, because it gives you the opportunity to take the example I made a little bit earlier, regarding how we behaved in the US regarding COVID. To have a decision on the one hand, really become cash rich by doing all what you had to do within weeks. And when you have done that, you just see the next thing is how to invest, how to go forward, that really is a very, very good example of what the spirit is like. Looking at your personal career, I mean, you've spent many years in the professional services industry, and now being in a accountable and responsible position as a CEO of sixth. So maybe is there anything what you would say that is really helpful as an advantage coming from the professional service industry, but also is there anything you needed to unlearn? Actually, you've been the senior auditor at KPMG for so many years. And that's on the other side of the business. It goes in both directions. First of all, what I said before is what you do is, which is always on a skill set. And the skill set, which you learn as an auditor, be it in accounting, be it in financing, that clearly is helpful. And I really think when what you have done before gives you a very good and broad basis for this one. And when you say what to unlearn, it's sometimes especially as an auditor, you always think when you follow the rule and make a tick mark, and that is true to a certain extent, everything is fine. And as an executive, and I make a fine distinction between an executive and an entrepreneur, because as an entrepreneur, you really have to take the personal risk of what is invested. And you really have to have a certain amount of share, but you have to think in a different way that you're not just complying with the rules. You always have to think about the repercussions of what you're doing. And that's something I had to unlearn, that you're not satisfied with getting things done, but also extensively asking the why. One of the, that's really, I would say, my sin is a hard word, but you have to educate yourself never being complacent. And that's the only chance how you can survive in a heart surrounding of the market. And I think when you are challenged by a lot of parties, that's something which you have to learn, that you, when you have achieved something, be as humble as possible and try to change yourself again and never let any kind of complacency creep to you. And I would not say that I was complacent in what I've done before, but there's always point zero when you, there's always day one. And that's what you have to keep in mind. If you would talk to somebody who wants to become a CEO one day, would you say, this is the way how you should do it. You should work in a professional service industry before and then switch gears or what would be your career advice to us, to a young student or a young executive who dreams about taking on more responsibility? Very general advice and then a specific advice. And start with the general advice. I think whatever you do, try to be as good in the details as you can be when you get a task really dig into it and try to deliver it. I learned that from one of my CEOs who's always telling us detail really matters. And I think that's one thing what you do, do it really with passion. You really understand what you do, understand the number. That's the key thing. So looking at the professional service firm, I had not intentionally, really unintentionally, I had three stations in my professional career. I started with a very mid-sized firm, which was acquired by PWC when I left the firm, but we were a hundred person accounting firm and auditing firm and I had to do everything. Tax, accounting, auditing, evaluation, small M&A's. And that was the perfect environment to come into the job. It was not that fancy, it was not that well-paid as other companies, but at that time it was really a blessing because for the first four and a half years where I did my exams, I had the opportunity to learn the whole thing. And the second stage of my career, I worked with Arthur Anderson as well in Germany, as in the US and in France. And that's also true for KPMG. It was a huge opportunity to work in a global firm and the good thing in the global firm was to work on the one hand on a very intellectual basis when you worked in the professional service department. It was the ability to work for a client abroad. It was the ability to run the sales in the coming. So you could do a lot of things and for that, these big firms were optimal. And I would say to switch gears as you said it, I think it would have been probably sometimes a bit easier to have done it a little bit earlier. Okay. I was 30 years in my career and then doing something different was a late point in time to do it, but I would do it again definitely because a change is always in the development of yourself. And if I would give advice, never be afraid of trying something new. And if you leave something, it is also important that you leave under good terms. Don't take what you have learned in a positive attitude and not saying, "Oh, I'm bored of doing it." I didn't leave the profession because I said, "I don't like it anymore. It was a great job. I really loved it." But what was really keen for me was I would have liked to experience something new. I think the positive attitude is important and then you will find the point in time when you think it's time for change or not. Okay. Thanks. Kai, that's very impressive. Very impressive. And I think we have to close at this point and we always close with a question to our podcast, guess about a book recommendation. I know that you're an avid reader and so I'm sure it won't be very, very difficult or maybe it will be difficult. I don't know what it is difficult. It is difficult. Okay, but nonetheless, the question is, you know, what kind of books can you recommend to the readers? Let me tell you a story. As you said, I really love books, love reading, and I really take a lot of effort to to have a certain kinds of entertainment and information when I'm reading books. And when I have read the book, I have this personal procedure that I have one part in my cellar where all the books are located where the top viny books which I've ever read, and I take the book which I've read and said, okay, that's belong to the top 20 books. So if you're interested, then yes, I put it in. One, the price or whatever. Or I just put it in another place. And there are actually two books I would like to mention. I'm glad you don't mention all the 20, no, no, I'm interested in the 20. I would be interested as well. And there are one of a couple of books which I've read more than twice. The first one is from Stefan Zweig. It's called "The Welt von Gasts on the World of Yesterday". Weiss that book is still today so impressive. Stefan Zweig wrote this book in the last year of his life and he was actually looking at his way from the student in Vienna of becoming this very famous writer and he's reflecting his personal experience as somebody who had a broad education and he was able to use this education to experience different countries, different worlds. And it's wonderfully written and it gives you especially when you look at current days, a certain kind of inspiration, how to deal with change and sometimes change is not always positive. He experienced a lot of negative changes but also a lot of positive changes. And so from the writing and the content, this is actually my most favorite book. And I have to name a second one which is by another author out of that time, Franz Werfel. It's called in German "Ain Blasblower Fräunschrift". I did not look up the translation. It's a very short book and there's a wonderful movie about this book which was done in the 70s by an Austrian director and it's actually dealing with a question that the main character of the book is a successful guy who's living in the 30s in Austria and he is confronted with problems in his life which is giving him the question about change. Does he have to change? And it's the movie is even better because the book is very short. It's one or something pages and the the movie goes four hours. It's really worthwhile looking with Fräunschrift von Thun as a main character and it's reflecting how to deal with the challenges which brings you at the road in a live way you have to go left or right. And actually you know when it comes to the point in time when you have to decide. These two books are read them for the first time 30 years ago, very touching still today, more than 30 years ago. And I would really recommend these books because they make you think and these are my recommendations. Wonderful, fascinating. Yeah, I think if there's something we learned today that we have heard a lot about the change in your business model, change in the way how you operate. Change in your career. And your career. Absolutely. And something that obviously connecting the dots throughout these changes is the customer's centrality. The customer's centrality of your customer's centrality by applying to new situations, focusing on what really matters. Very well summarized. And I think I wasn't sales for KPMG 10 years responsible for regions. And what I see here is and that is the most impressive thing I was when you listen to Eric Six, or Chairman of Supervisor Report, he really tells everybody it's about the customer. It is about the customer no matter what business you are in. It is about the customer and the customer can have a lot of faces and a lot of environments. And when you want to do your business in a good way, you have to be thrilled about your customer and what to do. And it has a lot of faces and you could not summarize. I could not summarize it better. Okay, perfect. So the customer of this podcast are you dear listeners. We hope you enjoyed this. We thank you Kai so much. This was absolutely fascinating and a pleasure. And we thank you dear listeners for tuning in. Yes. We hope you enjoyed it and we hope you stay loyal to us because there are more episodes coming up and they will be also very interesting. Thank you very much. Thanks everyone. Thanks a lot. Thanks Kai. That was leading corporate transformation. The podcast by VHAU Autobysime School of Management, powered by PWC. Editorial team, Marvin Shunah and Zimang Girlach.