Scaling Treasury From Startup to Multinational: Insights From Zalando to Lufthansa

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 treasurers about how they build 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. Welcome to this week's Treasury Career Corner podcast. Well, this is one a blast from the past, one from our archive. So I am catching up with Edwin Koopmans. When he and I last spoke, he was the head of Group treasury at Zalando, the retail group. But I actually catch up at the end of this episode with Edwin, who's now the VP Corporate Treasurer at Lufthansa, the aviation group. So what we're going to do, have the original episode edited slightly, not too much. But then we then catch up with his story, how he's moved roles when we originally spoke. Yeah. In 2021. Now we're catching up at the end of 2025. So lots of things have happened. Bigger group and everything else. Let's get on with the show. This week's show, delighted. We're joined by Edwin Copeman, the head of treasury at Zalando. Now Founded in 2008 in Berlin, Zalando is one of Europe's leading online fashion platforms, connecting customers, brands, partners. You'll see it everywhere on the Internet and everything else. Headquartered in Berlin, but also offices across Europe, Dublin and Helsinki. Platform approach, lots of different fashion and style products and 23 different countries. So very international flavor for it as well. But Edwin himself, he's got this amazing career starting in banking which we always come back to, then through treasury up to now and stuff. So as I say, each and every week I'm going to shut up and let Edwin do the talking. So take us back if you would, sir, and how you first discovered, well, let's do finance and then you discovered Treasury. So back to you, sir.

Great. Hi Mike, thank you very much for having you and having me on your show. Yes, I started off my career in banking a long time ago. Started off with as a relationship manager at ABN Amro bank in Amsterdam and I did that for a few years, learned the ins and outs of the key aspects of banking. Then I moved to ING Barings at the time and I moved to their dealing room. I was initially responsible for foreign exchange transactions with large corporate clients and then later that also included interest rate type of products. So just the direct transactions, the spots in the forwards, but then also more the derivative instruments and looking at or helping clients with longer term strategies and how can you optimize your mitigation of your exposure both from an interest rate and FX perspective. And I really love doing that. It's very exciting and dynamic work environment. And I did that for four years.

And then, sorry, I'm jumping and ask because I sometimes don't ask. Perhaps early enough in the show and some people again listening will be in a similar situation, maybe sitting within a bank then thinking, oh maybe this treasury world I've heard about on this podcast. So I think why did, why were you in banking finance? Was that just a passion of yours from growing up? You just knew, oh actually let's give this a go or what was your sort of driver at that stage? I know it was early days and a few years ago now I actually.

Before I went into banking I majored in hospitality management and I worked in hotel business for a couple of years in London and then we moved back to the Netherlands and Abe Embraer was looking for people with a hotel management background and what they were really focused on was the service aspect of people that are in the hotel industry, obviously with a certain type of educational background and financial knowledge, but changing their client service model by being more service oriented and they felt that hotel people were the ones that could significantly help. So they went out to the different schools in the Netherlands for hotel management and they developed this program and I started working. Well, I just looked into that program and I thought it was interesting and one thing led to another and that's.

Also within treasury because you and I have talked about this as well, that it's very people centric. We were just talking before the show about I'd had another conversation with a client with tax, it's very rule driven and taxes like this, but with treasury you start with an idea and then all these different directions. But obviously that gave you the people aspect and as you said, you sort of then went to ing. Then how come treasury came about, how did you make that transition?

One of my clients was Sarah Lee at the time and I had a very good relationship with them and they were looking for someone to manage their foreign exchange platform and foreign exchange exposure globally. And I loved what I was doing at ing. I thought it was a very exciting environment and very if something happens in the world, you'll see it on one of your screens right away and you feel that you're middle of a financing world. But the one thing that I was missing is I saw my clients quite often, sat down with them, talked about what their challenges were and see how we could help by providing a product type of solution, but I was missing the bigger picture and there's so much more going on rather than either the tail end or just part of what, what needed to be solved for. And so when Sara Lee was looking for that specific function or that, that role to shill, I was interested and I talked to them and I thought this is, this is something that I can definitely do and I want to do. And so that's how I got involved in more the corporate treasury side of things. I switched to Sara Lee at the time.

Again, I know the global and stuff, but there are still some people out there might not know Sara Lee, what does Sara Lee do and what was then the sort of impact on that, on Treasury.

So I think unfortunately the company doesn't exist anymore. When I joined, it was company with a market cap of about 25 billion revenue, annual revenue of about US$30 billion, that is. And they had several different areas. In Europe the main focus was on beverages, on coffee and tea. So our experts. But for a lot of Dutch and some other countries in Europe, they'll know this. But also shampoos and other household and body care products, that was what the main focus was in Europe, Australia they were very much focused on bakery type of products. And in the US there was also bakery and meats, but also retail beans brands for example. And at some point in time Coach used to be part of verily so a very large company that had a lot of different areas of retail and food type of products. When I joined that already started to streamline some of this. Coach, for example, wasn't part of the company anymore. Haynes brand was just spun off. And so they wanted to have a more core direction in some of those things. And Sara Lee originally is the name of the daughter of a baker that started the company a long time ago. So they started with bread and then it's with other bakery type of products, pies, et cetera. A lot of people in the US will know the company for that brand. But also hot dogs, ballpark hot dogs and other types of meats are part of the company. Unfortunately, they started streamlining the company more and more and then at some point they spun off other areas. They sold household and body care division to Unilever and Proctor Gamble and then the company spun off the European and the US division that now. And in the end both of them were taken over by other companies.

Yeah, just sort of, it sort of went different ways sort of thing with that split up. Yes, but again you made an international move at the time because you'd been based in the Netherlands and then made the move to one of my favorite cities in the world, Chicago. What was that like for you?

It was phenomenal. One of the things that attracted me with Fair Elise was a global international footprint in Utrecht. I was responsible for foreign exchange, but also helped with the implementation of a lot of different cash pools across Europe, which was very interesting. But then at some point the treasury in the US asked me if I wanted to join the US team. Really intrigued. And I wanted to do that. I'd been an exchange student in the US in my early days and I definitely wanted to go back there for a few years. Years. So initially the plan was to come back for three years. What I was going to do wasn't really all that clear. I was going to be a director in the treasury team. But I trusted what he had in mind and I went there. They made me responsible for the pension plans. And without having any experience in pension plans at the time, it was slightly change. So has three large, or at the time had three large pension plans, one in the US and one in the UK and one in the Netherlands, all for about one and a half billion in liabilities, obviously supported by assets. And the ones in the UK and the US fell under my responsibility. That gave me the opportunity to start doing that and work on that. It was just a phenomenal experience.

And then you were in the US and you decided to stay if you like and sort of develop, which is sometimes unusual. That's the wrong way to put it. But you decided you weren't. You didn't come back to the Netherlands. You Chicago, amazing area for treasurers and that's one of the 10 years. Speaking of the Windy City Summit, I absolutely love going out there. Not just a city, but great treasury community and everything else. What next moves did you make? Talk us through that again. I know these people can see these on your LinkedIn profile, but without being artificial about it, what then happened?

Sara Lee was spinning off a lot of different companies and I was involved with the spin off quite a bit because the pension liabilities were large liabilities that we needed to see what was going to happen. And for potential acquirer, taking on these liabilities and calculating what the liabilities are was for something that was. That was key and so I helped with that. But then the company became a lot smaller because of all of the spinoffs and my area of responsibility was very much going to be focused on just the U.S. pension plans. And while that was going on I was approached by somebody that I used to work with, somebody from AMU at the time. And ANU had just started looking at an outsourcing platform for pension plans. So person was running a team where, you know, smaller sized companies, but also larger companies, but mostly smaller sized companies, would outsource the pension plans to that team. And the team would be managing the assets and the liabilities and really making sure that the pension plans were managed correctly. And he asked me if I wanted to join the team based on my experience with Sarah Lee and the relationship that we had during that time. And so I joined and I was head of the dedicated pension practice, also was head of a team of nine consultants specifically focused on pension plans.

Pensions have become. It's funny actually, I've talked to a number of treasurers and they've said, oh, Mike, I'd run the pension. It's so fascinating, really enjoy it and everything else, but it sounds really boring. But it's not because of the assets and all the liabilities in there and things like that. Why did that make you. I mean, you and I, again, we've talked about this, about why it's not. It's actually anything but boring. What's so fascinating for you about managing a pension practice and what gets you, as you say, it was a great experience.

Why I think the. There's so much to it to manage pension liabilities. So the liabilities, they change every day and based on sometimes on drivers that you can predict or that you can mitigate and. But sometimes there are drivers that you cannot do anything about. And then you have your assets that you need to invest in an appropriate way. There's so many different things that you can explore and so many, you can take it to so many different levels. So you can just do. If you need to manage the assets, you can do what's what A lot of companies get. I just outsource the pension plan and have somebody else take care of it. But really keeping it in house and developing strategies in order to mitigate the movement of the liabilities and looking what you can do on the asset side is fascinating. You obviously want to diversify your investments, but we also used a lot of optionalities swaptions in order to mitigate some of the interest rate exposure. We used credit default swaps in order to mitigate the credit exposure and that you can take it to different levels. And if you're looking at it from a client perspective, like what we did at aluitation, some clients just want to have a straight plane. Another type of product. Other clients want to go a little bit more advanced and want to introduce derivatives in their hedging structure. So there's all kinds of different things that you can do. For me, it was more like running my own shop, my own business, because this, what I just was indicating the liabilities on the asset side. But there's regulatory requirements, requirements. Right. There's economic drivers that will impact things that are there, that are happening. There's legal aspects that you have to comply with. So there's a lot to it. And that whole picture of managing those plans, I really enjoyed doing that.

And so you'd done a couple of years within pensions, and then treasury locked in the door again. It was like, oh, come back, come back to us. What happened then took us back.

Yeah, that's actually a funny story because one of the things that I was trying to, to accomplish as well is to grow the portfolio of client portfolio of a new. And my old treasurer was working for Everest. And so the treasurer that brought me to the US and so he knew my knowledge of pension plan and he knew where I was. I said, can we talk about what type of services we can offer you? And he said, yes, of course. And then, so we talked about it. And then walking out to the elevators, he said to me, I'm leaving this company. Why don't you give me a call? And I was thrown off. And then we talked. He said, I really think this is something that you'd be interested in. Says, why don't we sit down and have a conversation? He was also the person that kind of brought me to the US without a specific role, trusted me a lot, gave me a lot of things to do, and really trusted that I could get things over the finish line. He calls and says, I have an idea and a person that is kind of, to me, was kind of my mentor. I had the conversation and one thing led to another. Talked to the cfo. She started asking me questions. He says, have you ever issued a bond before? And I was like, no, I haven't. I don't have the certain type of experience and I'm not going to be able to do this role. But we got along and we talked about how we would do it and how. What, what some of the strength, my strength and weaknesses were. And I think she was very much focused on, on, on how I was thinking and I would be leading certain type of processes rather than just having the specific knowledge that I could carry over and hit the ground running. She introduced me to other people, went through the official interviewing Cycle and I got hired, so I started in 2013 to, to work for them.

Edwin, let me just ask about that. Just digging. And I know it's a while ago now, but I've got some campaigns I'm recruiting at the moment and one of the ones, one of my clients is quite distinctly focused on certain areas that they really must have. But actually from having done the podcast and spoken to a number of different treasurers, you guys are very flexible. Exactly as you talk. You've never done a bond in your life. But the fact was it was a process and I've had it before with some capital markets activity, in particular with talking to a client. And one of them, and this was a deputy treasurer many years ago, she was going into this rush, I really want to do this. I really want to do this. And the treasurer said to me, mike, bonds are boring. I was like, what? No, you go in, you do all the structuring, get it all sorted out, you get to the really signing. You don't. You give all the paperwork to the lawyers and they say, can you leave the room, please? You go back the next day as they go out for a lovely lunch and you have to do all the paperwork. And they said, so it's, it, it's not always like that. That's tongue in cheek. But it is more of a you can just be. And a lot of clients are saying, must have this. When you were talking to that potential boss, how did you convince them that actually I don't need to have done a bond to raise a bond or to do that. What was the way you addressed that personally?

Think that it's not necessarily about what you're say, technical experiences. Now I think if you're going to be hiring somebody that's a Tesla and you want them to be able to do the job. Right. And to me, and I think the same applied to her is that if you can do 70%, if you can take on 70%, and obviously this is a hypothetical number. Right. But I mean you can start working on that right away and you can start making a difference.

Yeah.

And if you're the type of person that can learn that additional 30% quickly and if you have other skill sets which are maybe not technical but more your personality and how you fit into the company and your leadership style, etc. That are really valuable, then that 30%, if you're convinced that person can learn that and really learning the tricks of the trade, so to say, I think that's of less importance than all the other aspects That I just mentioned and I think that is also the way that she looked at it and that's the type of person that she was looking for to. To fill that. Yeah.

Amazing. And talk us through because again, so you're there, you were in Chicago, but then you made a couple of moves locationally but your role grew and grew. But you were then leading a global team of 30 plus people. So you'd gone from 10 years before again pensions and stuff like that, but you grown your responsibility. What was that like? That real step up in terms of people wise as well.

It's probably one of the most difficult things to manage seems and we've started off the conversation with that and we talked about it before as well. To me, people are the most important asset of a company and a lot of people will say that. But I personally feel that I also live by that. You cannot do anything by yourself. Right. The US that is saying there's no I in team. And I truly feel like that you accomplish something with a team. So managing a team and giving them the right level of accountability and holding this carrot in front of them that drives them and getting things across the finish line, but also seeing the reward, not necessarily a financial reward, obviously that's also very important. But giving them the credit for things that you do. So really taking them out of if they're in the comfort zone. From my perspective, you don't want to be in that comfort zone. You want to take that next level and you want to take on those challenges and helping them grow in their roles maybe also personally grow, I think is really important. That is great. And it's easy to do if you have one or two people. Well, I don't want to say it's easy to do, but it's easier to do if you have one or two people reporting to you. But if you have ultimately, at the end of my dinner with Everest, 32 people. Obviously they're not all direct reports, but you are coaching people then, not just on a technical and personal skill set, but you also need to help them work with their own challenges with that team. And it becomes very large and it becomes much more complex. I had five direct reports and then everybody else was reporting into those direct reports. But the bigger the team gets, the more difficult it becomes and the more difficult it becomes to roll out the way that you feel that things should be managed. So despite the fact that I feel it's really important, it's also very difficult to do.

Apologies we skipped past because you made the move from AEON and joined Evraz. What do Mvrez do? I know, but again, someone listening to. We should ask that. So I better ask that.

Yeah, no, yes, absolutely. Everest is a steel manufacturing company. So I was working for the North American division, which was a global steel company. Their exchange traded on the footsie. The North American divisions focused on the US and Canada and they had three large steel factories or plants as they call them there where they make different type of products. So they used slabs in order to turn those slabs into coil and then turn the coil into pipe and pipe. I'm talking about pipe that goes into the ground vertically in order to drill oil, but also pipe, the large diameter pipe that is used to transport oil and natural gas from different locations. And the other thing that they were focused on was recycling steel. So they used low scrap material, put it in electric box furnaces and then turned that into billets. And those billets were mainly turned into either smaller pipe or into rail. So a large rail supplier for the western part of the United States, a large pipe supplier for the western part.

Of Canada and for yourself, obviously. So you were there seven years, amazing experience for you. But at the same time difficult times in the markets overall. How did you. There were challenging times, not necessarily just for their company, for many different companies. You've been through ups and downs and peaks and troughs and things. How did you cope? What was your sort of way of managing coping and stuff like that? How did you keep your focus if you like?

Well, that's a very, that's a very true point. I think for specifically the steel business, the years that, that I was there was really, really tough. Right now steel prices are at very high rates, but unfortunately not when I was there. And so it becomes you're working for a company that has a lot of really great ideas in order to invest and to expand. And not just the ideas were to expand, but also to be able to be competitive in the market. Right. So there's a new type of rail that we're trying to develop and for which a new rail mill needed to be built. We were upgrading the quality of the steel so it's cleaner and the green aspect into account for certain, but also much more durable. And it also had less chance of rupturing. So much better for the ultimately for the environment and things that were absolute drivers in order to get that done. However, if your company is going to trough or through experiencing a lot of headwind, it becomes really difficult to get the capital resources for that. And so I think that was one of the biggest challenges. Part of the financing that we did was owned by a parent company, but part of the financing that we did was also not on a standalone basis. We did a lot of different things. You were just talking about the bond market. I actually found it very fascinating to do. I agree with the more boring structured aspect, or at least to me, more boring when it's. You need to read through all of the documentation in order to ensure that everything is right and not just leaving it to the lawyers because you want to make sure that you know what you're getting yourself into, but doing the roadshow and talking to investors and really understanding your company, understanding what's going on, what the company does, but also being able to take the company to that next level and looking at being honest about the headwinds, but also about the opportunities. And really maybe sell is too big of a word, but sell the company, sell the belief in the company to your investors. And whether that was for the bond investors or whether that was in conversations that we had the banks, that was something that really did, which I thought was. Was great. And building trust and solid relationship with banks that are not just going to turn the heads when things are a little bit more difficult, but together with you work on solutions. And that was definitely not easy, but it was definitely very rewarding.

Bring us more up to date sort of thing. Because obviously your time with Evraz, then you did a couple of other things and then bring us up to date with. I want to not run out of time today about Zalando and things like that. So. So talk us through then what's happened more recently with yourself, if you would.

Yeah, I had an opportunity with Everest to go to Europe and by that time I'd been in the US for more than 10 years. And so we really felt that was great to do an expert assignment. Took that expert assignment and still was responsible for my activities in the US we're in London and just really it's welcoming to be back in Europe. And we wanted to stay. We didn't want to go back to Chicago. Chicago had been great, but like I said, we've been there for quite some time now. We wanted to grasp that opportunity to stay in Europe. Unfortunately, that was not something that I could do with AirAs that meant that we had to separate ways. And so we separated ways and an opportunity came along to work for Zalando. So that initially I was thinking this is going to be a very big change for me coming from the steel industry, which is much more. It's A completely different place, a completely different type of product to an online fashion platform. And so I was definitely interested in the company and everything that the company was doing and what they had achieved, but thinking, is this going to be the right fit? I talked to, I had a lot of conversation, a lot of different people within Solomo. And it's funny how throughout the interviewing process, you're also interviewing the company and making sure that it's something that a company that you want to work for. And I was really impressed by everyone that I talked to and what Solando stood for and what they established. But they were still like, no, they established a lot. But, but from my perspective that was only the beginning and there was so much more to come. I really got eager joining them, to join them and they wanted to hire me. I started a few months ago with.

The company you just covered it actually touched on there. What do they stand for? And again, I described them just very briefly. But can you for the, again for the listeners, describe what you believe they stand for and what then convince you? Because that's exactly what people are listening to today.

Yeah. So from a product perspective, it's an online fashion platform. So you go to the website and you can buy clothes, clothing that are either white labeled or clothing that they have in their own stock or you can have access to what we call partners where you can buy that are using the platform in order to sell their product and that can be. Larger companies can also be smaller retailers. Right. So it's really using an online platform in order to be able to get all kinds of, get access to all kinds of different fashion items. They, I think some of the core values are great inclusion and diversity and also like really looking at sustainability and trying to be on top of things and want to be the leader in making sure that the fashion items are produced in a sustainable way and that there's opportunities to recycle fashion opportunities to or second hand clothing to be sold. So those are all things that value very much myself. But one of the things that you don't notice when you join a company but the entrepreneurship of the individuals that are working for the company and they have our farming mindset. So there are key criteria and things that they live by. And so one for example is to start with yes, and I really think that's a strong one, both in a personal and in a professional area where if there's an opportunity or a challenge, rather than not wanting to work on it, let's see how we can work on it and how we can actually resolve this. And like I said, the entrepreneurship. You have an idea, then show it and let's see what we can do. And really taking, embracing, embracing that and seriously looking into things to see if you can. If it can be established and if it's going to make a difference to the company, which I think is a great way of doing things. Very motivating.

And with. You've come into this fresh treasury. And I asked this question so often on the podcast, but it bears repeating for we, we get again later on in the show. But I still think that we've got time. You've walked in. What's your checklist? You walk in, you go, right, okay, where are the risks? Where's the fx? Where's this with or you've walked in as a treasurer. Again, I've had listeners say, oh, we've gone back through some of your previous shows, Mike, I'm starting a new role. I've gone back through and sort of we'll come up with a bullet point list at some stage. But for you, you're joining from heavy industry, if you like, to a fashion group house and everything else that encompasses exactly, say entrepreneurial group. What was your checklist? What was your. Okay, guys, we need to focus on this. What were you looking at?

For me, it was really key to understand the business and what they were doing and how treasury can support that business and also understand who the stakeholders or customers are from Treasury. So I think I had a very good onboarding process. I got introduced to a lot of different people and this despite the fact that everything is pretty much done remotely. I've only been to the office three times. We were able to do everything through video conferencing. But I got the opportunity to speak to a lot of individuals understanding what they were doing within the organization. So learn more about the organization, but also what they needed from treasury, what they currently were getting, and talk about other things that maybe they were aware of or were not aware of and how treasury could support that. So I think that was a very important part. But then also looking at things that were already in place and things that were not yet in place and I think from the core, things that need to be done in treasury, it's not that you go into an organization of the size of Solando and you need to like completely change everything because things have not been done correctly. Right. A lot of things were already in place and we're very solid and working very well.

Yeah.

But I think one of the key things is that Solando has indicated that they're going to be growing three times over the next four years. You know, they came from two students that are working out of their, out of their basement and selling flip flops on online to a company that is now around 10 billion in size over 12 years. And now they continue that growth path. And how can treasury support that growth? You were just talking about new countries, right? 23 different countries where Sabango is operating. What do we need from a banking perspective? What does that mean from foreign exchange perspective? But also how. What is needed in terms of working capital or capital investments in order to support that growth? How big of a player? We just became a member of the Ducks. 40. Right. How big of a player do we want to be in the capital markets? And that kind of shifts the dynamic from what the status quo was to what the status quo is going to be in two years or three years from now. And so besides getting to know what Solando did and how treasury could serve the current needs, and while serving the current needs, how is that also going to be going in the floor in the future? And what type of things do we need to do in order to be able to get there?

Yeah, amazing. Well, we're approaching the end of today's show, sir. We've covered so much. We could keep talking for a couple more hours, but we're not allowed to. We keep this to half an hour, 40 minutes. You're a busy treasurer, apparently you've got a day job job, which is weird because you could just keep on talking to me on this. But as, as I say, each week we'll put your details, your LinkedIn details in the show notes. But reflecting on all of this over it. What sort of takeaway advice? You've heard a couple of the podcasts so you know what it's about and things like that. But if someone's listening in today and they're early stage career or later stages, what are the key takeaways you would do now? There was one of my, one of my guests in the past, so I want a bit more than just she was wonderful, but she just said, be resilient and don't be afraid of change.

Change.

I was like, oh great, that was it. It was like, oh, drop the mic and walked out the room. I was like, okay, that was me. A short one. But for you, what advice would you give to some of the listeners today, if you would?

Some of the things that really helped me is don't be afraid to take on things that you have no experience in. Be Willing to learn and create that opportunity to learn. Allow yourselves to make mistakes and. But you can only do that if you have the right support. Your, your team or your direct lead or boss needs to be able to give you that opportunity to learn that. But if you have that and if you have that open mind and really want to work on those things, I think you're going to be learning a lot. And not just the technical skill sets, but it's amazing how you develop yourself personally if you do that. So that would be one of the things that I think is key. And don't be afraid to ask questions, because not asking questions can get you. Or asking them too late can get you into a much worse situation than where you should be. Just ask. Everybody needs to learn. That's. I think that's something that a lot of people are hesitant of doing because they don't want to look as if they don't know and think that people expect them to know. Yeah. So keep an open mind. And yeah, I do agree with being resilient. And I think you said diligent. That's also very important. Yeah. So that's what I would.

It's your takeaway.

Yeah.

Well, I think the work for me, well, being open to someone, perhaps who you're hiring, being more open about. Do they take every single box? Maybe not, but this is what they can grow into. But again, as you say, that sort of openness to learning once you get there yourself as a treasurer. So I think I'm amazing takeaways. I knew there would be, sir, because we had a great chat before. And Edwin, thank you very much. So we'll put your LinkedIn details in the show. Notes, notes. So people can connect to you if it's going to be good to be in their network and everything else. And I was looking forward to this because I knew it would be a great show and it has been. And just thank you very much for all the sharings and the learnings that you've shared with our audience today. Thank you very much.

It was my pleasure. Thank you.

Thank you, sir. Welcome back to our Treasury Career Corner podcast. So you have just heard the story of Edwin Koogman's. When Edwin and I last spoke, and I've known him for many years, he was previously the head of treasury, as you've heard, at Zaland, the retail group. But we're picking up his story now. I can't believe this. Actually, looking back, we last spoke back in 2021. A couple of things have changed. Edwin is now the VP Corporate Treasurer at Lufthansa. Lufthansa, everyone knows it, but just in case is an aviation group with operations worldwide plays a leading role in its European home market with over 101,000 employees. But what we're going to do is go back to Edwin and talk about what we lasted. Pick up the story if you would. When we last left you, you were at Zalando. What's happened since that? Over to you.

Yeah. Mike, first of all, thank you very much for having me back on your show.

Thank you.

I can't believe four years have already passed and we talked about this a few times to continue the story. And so I'm really excited to, to be back. Like you said, four years later. I'm now the group treasurer for, for Lufthansa. I joined joined in July 2024 after having spent three years with, with Solando. And you wanted to know how that is different.

Yeah.

One of the big things that, that I say to everyone is that the numbers are just different. There's a zero behind everything that you do. We have exposure, currency exposures in over 30 different countries that we, that we have large exposures to. We buy obviously we buy planes. We're looking to see how we be hedging both the currency and the interest rate for those planes. We manage large pension plans, strategic assets, and the numbers are just very large, which makes it really interesting and super challenging.

And you and I were just talking before the show and you just said it also makes it wider if you like your role insofar as geopolitics. Everything has an impact on the business and on your role as treasurer and makes you always busy from the sound of, of it.

Yeah, absolutely. I, I started off my career in banking and I was working on the dealing room and I time felt it was like really cool. I had four screens in front of me and with all the different charts and you know exactly what's going on in the world when you're working in, in the banking on a dealing room environment. And I've been to a lot of companies, a lot of. I've been to a few companies afterwards and things that happen in the world obviously will have an impact, but it's normally a little bit delayed. Right. So when something happens, unless it's something really big like a financial crisis or a war or something like that, but the impact is normally delayed. The impact to Lufthansa is direct because we fly to different countries in the war situation, we are no longer able to fly there anymore. Oil prices are very Volatile euro dollar has a very big impact on us. So it's really being in a department that is impacted by everything that happens on the macroeconomic geopolitical front. Right.

And you said that you've got, again, you've got a strong team, but how do you came into this new fresh team? And you said it was a good team to take over inherit and things. What was your ethos as you walked in? What was your checklist or did you write, there you go, there's the seat, off you go. What's it been like since you've driven joined?

So the people that are working in my team, the people that are reporting to me, all of them have more than 20 years of experience within Lufthansa. So they know the company very, very well. Not just in one department. Lufthansa is offering opportunities to also go. There's rotation programs that a lot of people are on. So you have opportunities to see different areas. But they know the company very well and they also know what they're doing very well. Well. So it's not directly coming in where you're bringing added value because things better. I've just talked about fuel hedging. I fully understand how it works and what different dynamics are, but I'm not an expert. The person that's driving, leading that team, he's an expert in that field, very capable in that specific area. And that is also somewhat of a change that I personally had to go through it. The people that are working in my team, because they're the experts, and I'm now more of a generalist in an expert type of field, leading these people, but then also looking at how that is actually something that, that I can build out with my experience, how that can benefit the group by looking at things maybe a little bit differently, not from the product, but more from a structured type of perspective on how you do things, things. And initially, I think it's when you come into an organization, at least for me, it's two, two ways of doing things. You want to learn, you want to learn as quickly as you as you can, but you also obviously want to add value. And you need to try to find that balance because the more expertise you have already in your team, the added value is not on the topic specific aspects, but more or other things like, like I said, creating structures or looking at processes or comparing things, how things have been done from one company to the other, and then evaluating these type of things. So sitting back and look at it without being slow in your process, I think is very Important to, to get into a role like this.

And you and I, we recently caught up at Budapest at the Euro Finance Conference and as you say, lots of different ways of looking at things from a Treasury perspective. Are there ways that you've brought that into treasury as well? And because you've had experience across a number of companies, as you say, these guys know Lufthansa inside out treasury and you're that functional expertise. What have you brought to it or what have you seen that is coming along sort of thing.

If you, if you're looking at a company like Solando, for example, my previous employer, the treasury team was relatively, was relatively new. New company is new. So treasury is initially starts focusing on, on cash management and then looking at, at how you can actually build out the cash management, then funding, asset management and those type of things come into, come into play. And in a role like that, it's very much okay, so how are you looking at enhancing the team, bringing them to a different level? Certain type of, of products we didn't do at, or transactions we didn't do, or hedging strategies we didn't have in place, helping build that out. Based on, based on, on my experience for Lufthansa, they have very sophisticated Treasury Department. But because people have worked there for a long time, it's also helpful to come up with different ideas saying, okay, this is how other companies look at certain things or identify how treasury, for example, can play a bigger role in the overall organization. So see to what extent we can have a more proactive role than a reactive role. And look where we can really add value in different teams. That's already done to a great extent. So it's more polishing up things and making things better. But there's always room in any organization to improve things.

Things.

Yeah.

And so that's what you're focusing on now rather than trying to get the team to a different level. What I was focused on before.

So you and I have talked. I've been at many conferences. I've seen you at Budapest. And one of the key themes from that I've certainly seen at some of those conferences is if someone talks technology and then they just put AI at the end of the sentence, you fill the room. And I know you and I have talked about technology and it's a theme for me. Where do you see technology? I mean, a few years ago there was blockchain. It was all the big thing that's gone away a little bit now. But where do you see technology going? AI and all that sphere of things. I know it's a big overall question, but over to you.

Yeah, I agree, Mike. I participated in several roundtable sessions or just presentations as well. And if you're looking at which sessions have the most participants, it's those sessions. Yeah, but I, I see a little bit of a difference between, you know, conversations like this two years and maybe even last year and, and, and this year, where before it was much more on education. People, you know, some people didn't know the difference between applying AI and using TMS systems. And they, they considered that as being one and the same thing. So before it was much more education and having some use cases explaining how you could deploy AI, where now I think most everyone is ready to deploy it, but they need tools, they need to know how to do it, you know, whether to hire a consultant or what the best way is, where to start. And they're looking at others as well to see, okay, so how have you done it? But most companies, what they're focused on is on forecasting, getting better at forecasting. When I started my career 25 years ago, forecasting was a problem. It's still a problem. And I think a lot of companies are relying on AI in order to improve this. And as you and I also talked about, that has been around for quite some time, but it becomes now much more of a focus point on doing this. I also feel that there's a little bit of a difference between companies. If you're looking at tech companies versus corporate, other corporates, tech companies. And also that's kind of like an obvious statement, but they're well ahead of other corporates. But the other corporates are all kind of in the same situation where they're looking to see how to start where tech companies may be well ahead. The other thing that, that I see is that at the front of the house, on the commercial side, AI is heavily deployed for a lot of different companies. Lufthansa, but also at Solando, really advanced ways of using this type of technology in order to get data or to improve sales. Where then in the supporting business units, it's still not there. And I don't want to say that TMS is Excel for a lot of different companies, but. But there's definitely quite some cases where that is lagging significantly behind. So there's a lot of room for improvement. I do see that this could be a tool that in the next few years can be really expanded and taking away a lot of operational activities. Whether that's on the cash management side, whether that's on the forecasting side, but also on the trading side, once it gets adopted and people are able to start and, and start deploying it.

And you and I talked there again, you've got these relations. Banks are now coming to you guys and we're just talking about various bits and they're really wanting to talk to you, and I know that's a key thing. And they're coming with new tools and new things. Are you seeing that they're trying to help you with that, or is it just, again, adding to the complexity?

Yeah, it depends a little bit on which bank.

Bank, yeah.

You know, but what's important for, I think for everyone, both on the banking side and the corporate side, is that this. The time that is spent adequately, you're not wasting anybody's time and resources. And I think the way that we're being served with by our banks, most of them will not pitch anything unless it's something that really adds value. And they've done their homework in order to see. And there's a. There's different things that are out there that are of interest and looking to see how things are changing and where certain type of directions are going in the future. And some of the banks have really good, good information on that and are developing really good products.

And you and I talked on our previous podcast about learning and developing as a person and how have you learned and developed or evolved, if you like, like as a treasurer, you know, since we. Not just as we last talked, you were in this new role. How would you look back and say, oh, wow, these are some of the. How have you changed?

I think in companies where I've worked for treasury was. Has always been supporting the company. And we really, in different teams, had to try to push for being involved in processes. So whether it was an M and A, maybe Treasury should be one of the first ones around the table to make sure that there's enough funding available in order to do that transaction. And in a lot of other companies, I really had to show what the expertise is of treasury and why we had to sit and have a seat on the table. That's not the case at Lufthansa. Lufthansa is very aware of the capabilities of Treasury. Obviously, Covid had a very big impact on Lufthansa and the Treasury Department. I wasn't part of that, but the Treasury Department played a very big role at the time and did some really great things in order to keep the company afloat. But not just that, but also if you're looking at what Our exposures are. One third of our cost is fuel and that is very volatile. At $10 of movement in the Brent price has a 750 million impact on us, either positive or negative. Right. So treasury is out there. So it's. They know what we're doing and how important we are. And I'm just talking about a few aspects right by planes and need to get the funding and all of those type of things that are really important for us as a company. So the biggest change is to get from a role where you're trying to show work what treasury does, your treasury can do and how you can add value that is already accepted but now becomes strategic and making sure you're helping making the best strategic decisions for the company. And there's a shift and I think it's a really great shift because that's ultimately what you want to do as a treasurer.

And. Okay. Following on from that, I've sometimes talked about the spotlight being on on treasury, particularly when it's times of crisis. We've had Ukraine conflict and war and we had all that things. And obviously, particularly, as you said, that really shines a light. But then, you know, things calm down, people get over that. But how do you then it sounds like treasury is at the heart of things enough townsa which is fantastic. But how do you then keep on adding value? Or how do you keep the spotlight? Or do you just say, actually it's quite nice to have the spotlight go away for a bit so we can get on and do other things? Or what's your. You.

Yeah, I think it's not being in the spotlight to be in the spotlight. And because that's a very important aspect, you have to add value. And there's. Because it's a big company, there's a lot of different exposures. Also things that you find out are having impact on the company, either from a balance sheet or from a P and L perspective. And then proactively take an approach of how you can resolve things, come with a solution rather than identifying a problem problem. And it's not always possible. But if that's the way that we are doing things, there's a lot of different things that you know that that's mitigating volatility. So I think one of the things you and I talked about is there's a volatile market.

Yeah.

How can you reduce that volatility in the market and building strategies in order to make sure that you don't get caught by a single move and flatten out that risk, for example. And Doing that on the proactive basis rather than just doing it to be in the spotlight and really identify what the problems are or the challenges are for a company and then contribute to a solution.

And going back to something you said earlier, you said about you've got established teams there, treasury teams that look, they've been there for many years, they know what they're doing. You've come in as a new treasurer. How have you learned and adapt, adapted your approach if you like. You've learned things in the past. You and I know each other well. You're a great people person, so you go with the them. But how have you tailored that? Again, this is for the listeners, so they might have been in a similar situation. They walked in the door. I've had a couple of treasures I talked to recently. They said I have to manage someone that's got 30 years more experience than me. I'm like. And I'm their boss. So it's quite an interesting dynamic. How have you managed that?

Yeah, I think that's really important to recognize, right.

Yeah.

Because you cannot be the best in. And when you're early in your career, you do something for a company, say you're responsible for mitigating VX exposure and you're the expert in the company and then you take that next level and the person that succeeds you in that role is reporting to you and you have that level of expertise. But at some point you cannot have expertise in everything the higher up you get in, in, in an organization. So you need to recognize that is the case and that you're not hired for being the best FX hedger or. But it's for other skills that you're. That you're hired for. So it's very important to accept that because it's a difficult aspect.

Yeah.

Being able to use the resources that you have in order to get to a better decision. And I think the way that I lead, at least that's my perception, you need to ask the people that are reporting to me whether that's also the case.

I'll do that afterwards. Yeah, I'll give them.

Okay, great. And if they don't agree, don't tell me. And if they do agree, you tell me.

I'll be telling you. Don't worry. I'm sure they will be telling me.

So I think leading with humility is a very important way of doing things. If you lead with humility, you're open to, to getting both feedback but also open to learn and you get a perspective on what the different qualities are. Of different people. I don't lead people the same way way. I don't think if you're working in a processing environment where people have standard operating procedures, it's a different story than when you're working in an environment where we're working. So getting the right information and the right support from the teams that you know that are reporting into you and vice versa, giving them the right support back where they need it, that helps to, to get to a position that you, that you're trying to create the best of both worlds goals. You don't have to be the best, you just have to get the information and then see how you're using it in order to benefit the overall objectives of the company.

Cool. And then when you and I, when we do each of the podcasts, we go through the treasury career and we've done that again and brought it up to date with you and we've touched on it a little bit about technology and AI, but what other things do you think before we get to the end of the show? But what is on your mind, if you like, what are you planning for the next two to three years that people should be be thinking about? Obviously you touched on technology there, but what else do you see as being the challenges coming along that treasurers need to be thinking about?

I think technology slash, you know, employees right now goes hand in hand and maybe even more so than, than years ago. What I think is a big challenge is that a lot of graduates don't have an opportunity to develop a certain type of, of basic level of understanding of how things work because it's very easy at this point. It's going to change, but it's going to further advance. But right now, say the first year, five years of being out of school, what you would be doing, certain type of aspects that AI can take over, that opportunity will be taken away from a lot of graduates. And now this gap is going to be created because you need people at a certain level level of understanding that do not have that, I don't want to say basic expertise because it's not just basic but the ground level. And then started to create a broader understanding. I think that's a big challenge. And also that gap will get bigger because AI will advance and then they will, there will be other things that AI is going to take over. And so how do you manage that process? At the same time there will be different things, things that, different areas where you know, these people can be deployed and finding what the right way is in order to put your resources at the right place and help your resources develop in that process I think is really, really important and very difficult. I don't have an answer to how to do that. I think being aware of it is already and acknowledging that it is coming is already very important. I heard someone say AI is like driving on the dark road road. You know that there's a road and you have your lights on. You only see for the first 50, 100 meters. You don't know what's coming beyond focus on that first fifty hundred meters because it can go a lot of different directions. And so rather than being able to say okay in five years, I want something to be here that here may be completely different than what you expect it to be. Ticket with. Be cognizant of the fact that it's coming, but take it with little steps into a direction that is the right direction.

Yeah, was just clicking actually on following up on our previous podcast, we had takeaways from there. We're going to put in your LinkedIn. Some people may have heard it but we'll put the previous one we'll as I say we have reintroduced up. What are your takeaways from today? We'll put your LinkedIn details in the show Notes thoughts for again more junior, mid level senior or across the piece. What would you tell people out there.

That I would tell them that yes, there's a lot of challenges at all kinds of different levels. But embrace these challenges and look at it from a positive perspective. Don't look at it that AI is going to take over your jobs, your job and become depressed about it. Right. If that's the case, then you will need to be agile and try to try to change in a different direction. But it can also help in a great way support you in a lot of different areas. So it can help you grow as an individual. And whether you're on on the early career level or mid career level or more advanced in your career, I think it applies, it applies everywhere. It's a changing world and we have to adapt quicker than what what we needed to be before. But don't close your eyes and look the other way and think it's not coming because it is.

And you as a treasurer, you've moved roles and things like that. For the more senior treasurers that may be listen because we get all levels of people people. What do you think those guys need to be? What was your advice to them? Maybe you would tell them over a coffee or something stronger over a beer in one of the conferences.

Yeah, it's always great to do that over a beer or a coffee as similar. There's so much more that you can do if you, if you deploy technology. And I heard someone speak that said an FTE is no longer an FTE like the way it was before. The FTE for their company is, is partially what can be covered by AI and what needs to be covered by the individual. And that's now the new FTE and that may incorporate three different people of how it was before. So for also for senior treasurers, look at it that way, look at it how you can, how you can take it as a positive aspect and deploy it and being able to do more than what you, what you did before.

Yeah. Love it. It been amazing to catch up with you. So you've given me. You're a very busy man in your new role so thank you very much and you look forward to catching up you at another conference soon. We'll put your details in the show notes. So thank you very much, sir.

Great.

Thank you very much, Mike.

Thanks.

Bye bye.

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