From Football Dreams to Treasury Leader with Paulo Kubis

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to them about how they've built their careers, where they are now, where they see both themselves and the treasury profession going to next. Let's get on with the show. This week's show, delighted to be joined by Paolo Cubis, the head of treasury, and at Electrolux Professional Group. Headquartered in Stockholm, Sweden. Electrolux Professional Group is one of the leading global providers of food, service, beverage and laundry solutions, serving a wide range of customers globally, from restaurants and hotels to healthcare, educational and other service facilities. Commercial activities focus on three main geographic areas which we're going to explore a little bit more, but the Americas, Europe and Asia Pacific, Middle east and Africa. But as I say, they've been, they've got. Wow, let's look at these. Some of them was 4,000 employees, 12 manufacturing plants operating more than 110 markets worldwide. But I'm going to get Paolo to talk us through that a little bit later on in the show. He's got a truly international background, so we're going to go back to his international roots. So take us back to the beginning, if you would. You know, so how you first discovered the world of treasury because you came into finance, but then you did trading and you've got obviously, as you say, a Brazilian background and things like that. We can see that. But if you would like, take us back to your origin story. Paolo, over to you, sir.

Hello, Mike. Hello, everyone. It's an absolute delight to be part of the show. I'm a fan, I'm a listener, so really excited to be here. As any Brazilian boy, I was fascinated with football and had a dream to become a footballer. That didn't turn out to be the case, but at least football gave me scholarship to get my bachelor's degree in the us which was a great opportunity to start with. That was also where I had a chance to be introduced to finance, working for Northwestern Mutual, spent a few summer months as an intern working with financial advisory. And from that point on I knew that financial market was my passion.

Right.

So I moved back to Brazil after I graduated, had a brief experience with controlling, which was great. Gave me the opportunity to navigate further into accounting and controlling. Worked for ExxonMobil for a little bit and tried to expand my studies into the financial and capital markets, which then provided the opportunity to go into a brokerage firm, work with equities and futures, later as an investment consultant at one of the Brazil's biggest retail banks.

I want to jump in there and ask you. So then you're talking about Paola being an investment consultant, if you like, back in, well, turn of the decade, if you like. So 2011, 2013. I know there was monetary reform in Brazil. What was it like for you? Because you literally at the front end of that. What was that for like for you with all the risks to analyze and manage the things. What was it like for you?

Well, it was interesting, of course, a great school. Brazil had gone through monetary reform in the 90s which brought a cap and some stabilization on both inflation and the currency. That definitely helped. Around the time I was an investment consultant, we could still see high single digits, low double digit inflation in the country, interest rates at levels that the more mature economies weren't used to anymore. Although now in the past couple of years, with inflationary pressures in Europe and the US that suddenly is not such a distant memory. Right? But it was an interesting time. Of course, Brazil is a more regulated economy. The currency is non convertible. You have some limitations in those senses. You adapt, right? It is a huge country, big economy, a lot of opportunities. So you adapt to the nuances of the market and the economy and learn along the way. And that was actually what propelled my, my introduction to, to treasury, which was, which was a great transition, to be honest.

And when you say transition, treasury in Brazil, you know, and obviously that was where you started your journey with Electrolux. What was it presented to you? As you know, oh, here's a Treasury job. You're like really? But it was more, obviously it was more front office and trading focus at that stage. Was it just a, oh, you know, this is just working for a corporate or how, how was it for you at that stage?

It was new. Of course. I had some experience at that point on, on the sell side, right, Working for an equity broker or, or a bank. Now jumping over to, to, to the other side, on, on, on the buy side, working for corporate. Of course there was a learning curve and I can only thank the people that have been part of my career and my journey for taking a bet on me. Right. I had never been part of a corporate treasury. My first experience was front office experience, which comes with a lot of responsibility. So I need to be thankful to the people that looked at my profile, my drive and my ambition to learn and really took a bat. So it was an interesting transition. Of course, early on in that process, it was easy to realize that treasury had become a passion and would be where I expected my career to develop.

Right.

And I had the chance to really specialize working for Electrolux in Brazil in the regional treasury center there, which oversaw the whole region. Right. So coming back to your question about the economic environment then at that point in time I had the opportunity to expand beyond Brazil and work with the whole of Latin America.

Right.

And there you have a range of countries that treat economic policy and monetary policy in different ways. I had to deal with hyperinflation in Venezuela, in Argentina, for example, with capital controls in those countries. So great learning experience, great learning opportunity to expand my knowledge and really continue the path to specialize in Treasury.

And can you just again, as we do each week you were investments, but then Electrolux. Can you just give us an explanation of the company? Maybe starting with the Brazilian arm, then more generally wider and everything else, because that also. Then we'll talk later on about spinoff process and everything else. Electrolux, who are they or who were they at the time in Brazil and what was the company globally?

Absolutely. So Electrolux is one of the largest global manufacturers of home appliances and at the time also professional appliances, which is the portion of the business that got later spun off. And we'll talk about it.

What's the difference between a professional and a domestic man? Or how does it differ?

Consumer goods and domestic appliances are. Well, or kitchen appliances, the refrigerator, the. The stoves. If we go to our own laundry room in our houses and in our apartments, the appliances that you and I as retail consumers use every day. Right, professional appliances, then we're talking about serving businesses. So cooking equipment for restaurants, restaurant chains, bars, cafes, laundry equipment for laundry services, laundries for commercial laundries for hospitals, for elderly care institutions, et cetera. Right. So we are talking about different scales in terms of machinery, but also different end consumers. Right.

And when you started, when you were with Electrolux, you know, first starting there back in 2013, was it all together?

It was all together, exactly. So I entered the regional treasury center in Latam in Brazil. The focus of, of the business in Latam was consumer goods. So the professional appliance business had a small participation in the region, but yes, still one, one company. Then of course, Electrolux globally has a large presence in, in the U.S. in Europe, in. In Asia and also in Latam, where. Where I was. So from there I had the opportunity to. To work closely with. With Group treasury in, in Stockholm, where. Where Electrolux is headquartered and, and had the chance to dip my toes into an Europe.

And you just. Let's just focus on that for. So you moved 2016 from Brazil to Stockholm what was that like by the weather? Because that's a heck of a change.

Exactly. I'm from the south of Brazil, so we deal with a little bit of cold weather.

But of course, Stockholm, I've been to Sweden in those months. There's cold weather and then there's Stockholm, Sweden. Wow.

Yeah.

Wear every bit of clothing you can some of the time.

Exactly. And the darkness is probably the part that hits you the most.

Right.

In exchange, during the summertime, you get all the light you can get. So you just need to temper your expectations and make the best of each season. Which in Stockholm and in Sweden, the seasons are really pronounced. Right.

Yeah. And what was the, you know, then on a company basis for you, you know, moving from Brazil to. Then you're at the center. What did, what was that like for you as a Treasury journey? As a Treasury professional, I had the.

Opportunity to work closely with Group treasury already prior to my move. Of course, that enabled the opportunity to fill in a position when it was available at Group Treasury. We had very good interaction, very good cooperation between the Latam treasury center and the Group treasury in Stockholm. So from that point of view, the transition was as smooth as it could be. And then the learning curve applies. Right? Right. It's a different market. You're then expanding again your horizons. So in my journey had previously expanded from Brazil into latam, now into Europe and the rest of the world, to be honest, with Group treasury at Electrolux. So the learning curve there was also a very exciting journey. Had great people again involved in my personal journey that again took a chance and saw the potential of what I could become as a professional. Great colleagues over time that made sure all the knowledge around could be shared. And that's something I really appreciate and I really try to bring into my own behavior, especially now as a leader.

Right.

As head of, of a Treasury, sharing of, of knowledge must be one. One of the priorities.

How are you, you know, do you actively sort of go around the group or, you know, how do Electrolux structure it? Sorry to just chuck that question at you, but you know, I mean it because there are, you know, you say, and I know that you and I have had a pre. Call about that, but how do you share that knowledge? How are you. Is it just over a coffee or how, how are you? Is it more formally structured than that?

You need to combine both, I'll say. You need to have the, the personal interaction and sometimes the informal conversation to get to people, but also take advantage of, of the formal forums and the formal opportunities that not Only the company presents you, but that, that you present to, to the company and, and your colleagues. Right. We, we will soon get to the spin off process of Electrolux Professional, of course, and then building group functions from the ground, that knowledge sharing aspect really, really becomes paramount.

And so for the listeners today, can you then talk about. So back in 2019, as I can see, and people might not know about Electrolux, Electrolux Professional, they sort of spun off or separated. What position were you in in Treasury? And you know, what was that like for you going through that process? Because now you're the head of treasury for Electrolux Professional. Talk us through that if you would.

Absolutely. So in, in 2019, the Electrolux Group decided to spin off and separate the professional appliances business. Basically the idea there was to provide right. Focus to the specific customer groups.

Right.

Electrolux, especially now after the spin off and the separation, now specializes and is one of the largest providers of consumer appliances. Right. So the appliances you and I, Mike, use every day in our homes and Electrolux Professional is now a separate company that specializes in professional appliances. So the cooking appliances that restaurants utilize every day, the laundry equipment that hospitals, institutions and commercial laundry shops utilize every.

Day, what do they differ in finances in terms? Is it just a bigger scale, different commercial terms and things? Because they're more a commercial versus a domestic and sort of consumer focused business. Is that why? Because one's consumer focused and different drivers and one is more professional and more sort of commoditized, if that's the right way to put it. But is that why or, you know, how would you describe it?

I would say Electrolux customer base is focused on the large retailers. Right? Of course, B2C business to consumer is increasing and that is a. A channel that Electrolux captures in its strategy. But still you're talking about the large retailers when you think about consumer appliances, right? Where the shops where you go to buy your refrigerator or your stove or your vacuum cleaner. For Electrolux Professional, we have both distributors supporting the supply chain, but we also deal directly with institutions and restaurants and restaurant chains. So we have both project based sales, sales through distributors.

Right.

And I think there is where the strategy and the customer focus really differentiates itself. And one of the main reasons why the decision for the spinoff was made, another important aspect is that these are in essence, although we talk appliances, consumer and professional appliances are in essence two different industries that operate at different margin levels, that operate at different multiples. So providing the right focus. Yeah, exactly. So providing the right focus to each segment really gives both companies the opportunity to specialize on what they are best in. Right. And for us, especially at Electrolux Professional, now, it gives us the right opportunities to seek growth, to seek improvements and be your own.

And with that spin off process, I know we spoke about it before, gave you different perspectives, different priorities as you went through that. Explain that to the audience, if you would.

The spin off process was a great experience. Of course, Rolex Professional was then separated and publicly listed in, in March of 2020. Of course, prior to that, a lot of preparation took place. Being previously, in essence a business area of the larger Electrolux Group, a lot of the group functions were shared with the group.

Right.

So in order to prepare for the spinoff, we needed to build the group functions from scratch. And treasury wasn't different. So I had the opportunity to join. At the time, treasury and M and A were led by Kristen Jothio, who you actually had the privilege to interview.

Here as well, link in the show notes to his episode because it was a great one with him as well. But actually on that, yeah, but when you say that you're just doing a spin off, right, you can do. Exactly. Surely you can just mirror what. What's happened before. Copy paste. That should be just the same. Surely, you know, is it not that much tweaking needs to go on, does it? Or was it very different?

I would say both. There are aspects where of course the culture and the way things operated can. Can be replicated, but in essence the entity that was spun off was smaller in size.

Right.

So there you already need to start adapting to be practical. For example, Group treasury at Electrolux had 20 plus people. At Electrolux Professional, we started with two fully dedicated people and the head of treasury and M and A who shared treasury and M and A responsibilities. So there alone you have to adapt and scale to your new reality.

Right.

With a smaller team, you need to broaden yourself, you need to expand your reach.

Right.

Being part of the trading desk at Electrolux gave me the opportunity to be very specialized in that and moving into a front office at the time, a front office role at Electrolux Professional, actually I had to expand, I had to learn, I had to take into account more risk management aspects. I had to take middle office and sometimes even back office responsibilities. That was the case for me and the case for forever. My colleague and cash manager. We needed to wear different hats a lot of times, so that experience alone was great. First the opportunity to build something from scratch. And we managed to do that. And then to expand your reach, learn as much as you Can. And looking back now, of course there was a lot of hard work, but now we see and we reap the results. The spin offs happened in 2020, beginning of 2020, March more specifically. And that's exactly when Covid started to become an issue, right. And restrictions started to apply. And our end customers were the most hit by the crisis. Right. I mean, we ultimately serve restaurants, hotels, bars, cafes who were forced to be closed, to be shut down. So it was definitely a challenging time. But then proved once again the value in the separation process. I mean, being our own organization, we could take actions fast, we could adapt to the new scenario, we could remain profitable through a tough time. And once we started to look at the pandemic in the rearview mirror, we could go back to our growth ambitions. And that has been the case.

And just going back to that process as well, you know, just for anyone that's maybe going to go through the similar, they've got that approaching any kind of checklist, any, any things that you think you know, reflecting back on that process, get this right, first of all, is it, you know, banks, is it just your basic processes or what are the key things for? You've been a list where you are a listener, which is fantastic, but you hear me ask this quite often on the podcast. So as you reflect on it, what are the things that you would say? Right. Don't forget to do this.

Well, one thing or group management got right was that we needed to be realistic and practical. So before becoming the treasury, and in this case I'll stick to treasury because that's where I was closely involved. But before becoming the, the treasury we want to be, we need to take a step back in a separation process, building new functions. You need to first simplify and then evolve, right? So take care of the basic. Make sure you have your banking and cash management infrastructure in place. That is absolutely day one priority. So your business and your subsidiaries can be operational, right? They can perform payments, they can receive payments from customers, then in parallel, ensure the availability of credit facilities, right? Get your banking group and your credit partners on board. First of all, the story and the ambition behind the separation and the new company, how you manage depth, growth and adversity, that is extremely important. And that was actually in our case, even more important, important and capitalized by the pandemic, right? And then with time, you shift the focus to the strategic thesis, right? Go after the cash within the organization, manage working capital well, start working and looking for ways to improve, ways to automate, ways to make processes better. But the Advice that I can provide is well, do the basics right and with that foundation, soon enough you, you will evolve and see your treasury grow and be the business partner that the whole organization needs. Right. In our case, for example, like I said, we started with two people fully dedicated to treasury or head of treasury also responsible for M and A. Now we are four people fully dedicated to treasury and that would never have happened if we didn't do the groundwork and the basis solidly. Right.

And you talk that and you touched on say, the foundations of it. But also I know you and I talked a little bit about people recruitment and things and we don't always, you know. This podcast is hosted by the Treasury Recruitment Company. If you need people, call us. If you're looking for your next role, call us. A very simple lesson, but for yourself, you know, people wise and management of teams and things. Any takeaways from that? Again, you've heard it many times on the podcast and other people talking about it. What are your thoughts?

We hear often and again that people are the most important asset in, in any organization. Right. And you and I can agree that that is always the case. So you need to be strategic, you need to sometimes be fortunate, but you need to put the priority it deserves, right? During the spinoff process, of course talent from the Electrolux group was shared with Electrolux Professional in the new organization. And as time passed and we evolved as treasury and we grew as a function, then the need to recruit came and it was actually recruiting was one of the first and most important strategic tasks that I faced when I stepped up to become head of Treasury. Of course, being part of a group like Electrolux Professional, also like Electrolux previously that constantly ranks as a top employer. And when you hear people that have worked in the past for Electrolux Professional that work or want to work for Electrolux Professional, staying so many nice and good things about the company as an employer that definitely supports. So I was fortunate enough from that point of view. And then of course treasury is specialized area. You need to look for the right talent at the right time. It's not always easy. Sometimes you can be fortunate and do it with your own resources, but more often than not it's a lot easier. Exactly, exactly. You should. You should. And actually in our conversation we talked a little bit about it and your presence in the Nordics and as opposed to Europe, UK and the US where we know you do a great job. But yes, especially for treasury specialized function, you need the right talent at the right time and it's not a Function that is always well understood by other members of the organization and HR included. So if you can get a hold of specialized help, specialized support, we, we should. That. That is for sure.

And I'll chuck in. And it's not an advert for the show, but it's more. We've, you know, Katie's been doing some amazing work in, in, you know, and I started through the guys at Treasury360, started going out to Sweden and then to Finland and we've had a number of guests in the Nordics and they're great. You know, you guys are amazing to have on the show, very giving of your time and I'm very grateful. But Katie's been doing some great work in Finland, in Sweden. I'm trying to think of some of the other place does a work in Helsinki recently. In fact, we've got some really good people out there as well. So if you are listening and thinking, oh, well, actually you do cover it. Yes, we do. You know, so do come reach out and you know, we don't have, you know, it's not an advertorial. I'm not sure we, we try and avoid that. But the fact is, exactly as you and I have talked about, Paolo, that we do actually cover that and that's where we have this Nordic presence. And that's very much. Katie's leading that and doing a really good job. And it's, it's a bit like. Well, the other thing that just occurred to me before that was you say you can put everything anyone can advertise on LinkedIn. Easy. Yeah. It's massive. Spray and pray. That's all it is. And I was going with a US client the other day and they said, oh, should we go on LinkedIn? I said, yeah, yeah, go for it. Oh, right. I said, yeah, yeah. I said, you'll get the 5 to 10% of people that are actively looking for a job today, they want a job, they're dissatisfied where they are. Maybe that could be good, that could be bad. I said, but they're the 10%. Oh, yeah. I said, but you want one of the nine out of ten, don't you? And he was like, well, yeah, yeah, I do. I said, yeah, that's where we are. And people have said in the past, you know, well, what about LinkedIn? Is it competition? No, it's not. You know, it's where you might go for the first thing and then when quite quickly you get. Don't get the results, you go, oh, actually, we need a specialist. Ah, that's where we are. Otherwise we hadn't been doing for 25. So, you know, sorry, I didn't want to get on the high horse. I'll get off that very quickly. So we're approaching the.

Absolutely. And especially, especially in a, in a tight labor market like, like we are experiencing. Right. I mean, it, it gets challenging.

Yeah. And I'm just, I was just looking at some figures and some reports this morning that I think it's. The US market has 3.7% unemployment, which means, you know, and in a way that, you know, we, we feel for those people, the 3.7. But what that means is that 96.3 are employed. So you're going to have to get people from other jobs to move people around. And that reflects across the Nordic. I mean, the Nordics is probably less, I wouldn't say about the employment rates, I don't know. But the point is, in treasury, you know, I had situation earlier this year, they said, oh, have you got someone free? And I said, what do you mean? They went, well, well, you know, I think I was trying to say to them, what do you mean? Someone sitting at home now, a Treasury manager, just sitting, you know, watching the telly, thinking, oh, I hope the phone rings and another job comes up. And I was like, no, 100% of our treasury folks are employed at the moment. You know, there are people maybe finishing contracts and stuff. I said, it's not like, you know, general labor market where you might just have people floating around in Treasury. It tends to be they all come from another company. That's why we exist as well. So, again, sorry, I'll shut up. I don't want to do. Let's go back to you. Let's go back to the case.

No, it's exactly. No, but talent management. And I mean, especially depending on the position and the level of experience that is required, of course, it can become very, very challenging. Like I said in the beginning of the show, I was fortunate enough to have people taking a chance on me.

Right.

I not necessarily always had the experience required for the positions I was offered, but I think I could transpire the right drive and the right will to learn, and that definitely helped. So perhaps I am a product of that tight, specialized market that not always means people are available. So you need to reach out and look for talent, even if it's not ready and packaged to the need you have.

Right?

Yeah, yeah, well, yeah, exactly. Well, let's. We're approaching the end of the show. You hear me saying this a lot, weeks. What are the Takeaways. We'll put your LinkedIn details in the show notes. What are the takeaways you would give to people from someone that has, you know, had their career that's gone us, Brazil, now in Europe and you know, real global Treasury Professional maybe. But, you know, what are the takeaways you'd give to people?

The most important takeaways I would like to leave for the audience is first of all, put yourself up for the challenge. Apply yourself, make yourself available. At one point or another, someone will take a chance on you and you need to be ready. That was a big part of my professional history and one that I want to provide to other ambitious professionals, of course. And the final takeaway is for you as part of a Treasury organization, as head of a Treasury organization, be a business partner. That is what we need to do. That needs to be the ambition. Knowing the business, getting close to operations, understanding the needs. That is where we can really provide value. Right. Treasury can sometimes be romanticized, treasury can sometimes be perhaps left aside, depending on the climate, depending on the economic scenario. But we need to constantly be the best business partner that we can. Right. Always keeping in mind what the group, what the organization strives to do and deliver to investors.

Well, great takeaways there. I mean the one that really be up for that challenge and be prepared for it, that you can come along at any time. I think that was great. And thank you for listening each and every week as we just talked there. There'll be little bit of an edit and then you'll be live. So and everyone will listen to your amazing words. Thank you for sharing, you know, a lot of the stories about Electrolux. We'll put your LinkedIn details in the show notes. People can connect to you. Your LinkedIn network will explode. So thank you very much sir. You've been an absolute star.

Thank you Mike. And I hope we will end up with, with a nice talk and a nice product and in the end this was very exciting. I appreciate it a lot and well, I hope we, we keep in touch and I hope our own treasury organization keeps growing with, with our business and that we can work together in, in the future to, to make that possible.

Well, don't worry, you're on my speed dial now, so. Yeah, and I'm on yours. There you go. You have to now and, and for anyone listening, we do use these and actually recommended, you know we did, did a lot of recruitment for Porsche and with Wolfgang, one of our most popular podcasts which actually worth mentioning going to rerun the episode in the summer because it's amazing. But actually what I would say with you guys listening is, is he then used that and as part of the recruitment package that people were able to listen to that and you can use it the same yourself. You know, don't have to recruit me. It's nicer if you do. But Paolo can, you know, be able to use this and actually tells people why they want to be part of Electrolux. So yeah. Great job. Seth, thank you very much for your time today. Really enjoyed it. Thank you.

Thank you.

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To be closed, to be shut down. So it was definitely a challenging time, but then proved once again the value in the separation process. I mean, being our own organization, we, we could take actions fast. We could adapt to the new scenario, we could remain profitable through a tough time. And once we started to look at the pandemic in the rear view mirror, we could go back to our growth ambitions. And that has been the case.

And just going back to that process as well. Just for anyone that's maybe going to go through the similar. They've got that approaching any kind of checklist, any, any things that you think you know, reflecting back on that process, get this right. First of all, is it, you know, banks, is it just your basic processes or what are the key things for. You've been a listener, where you are a listener, which is fantastic. But you hear me ask this quite often on the podcast. So as you reflect on it, what are the things that you would say? Right. Don't forget to do this.

Well, one thing or group management got right was that we needed to be realistic and practical. So before becoming the treasury, and in this case I'll stick to treasury because that's where I was closely involved. But before becoming the treasury, we want to be, we need to take a step back in a separation process, building new functions. You need to first simplify and then evolve, right? So take care of the basic. Make sure you have your banking and cash management infrastructure in place. That is absolutely day one priority. So your business and your subsidiaries can be operational, right? They can perform payments, they can receive payments from customers. Then in parallel, ensure the availability of credit facilities, right? Get your banking group and your credit partners on board. First of all, the story and the ambition behind the separation and the new company, how you manage that growth and adversity, that is extremely important. And that was actually, in our case, even more important, important and capitalized by the pandemic, right? And then with time, you shift the focus to the strategic pieces, right? Go after the cash within the organization, manage working capital well. Start working and looking for ways to improve, ways to automate, ways to make processes better. But the advice that I can provide is, well, do the basics right, and with that foundation, soon enough you will evolve and.