Talking Different Treasury Languages with Kai Bremer

Foreign.

Welcome 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.

In this week's show, delighted to be joined by Kai Bramer, the Director treasury at Autodoc. Autodot was founded in 2008 in Berlin and now are one of the leading online retailers of vehicle parts and accessories within Europe. They're a growing, profitable tech company, active in 27 countries, highly diverse team. But I'm going to get back into the beginning of Kai's career and as always, I want to shut up and let Kai take over the show. Kai, if you would take us back to the beginning. How did you first discover finance and then Treasury? Over to you.

Hi Mike. First of all, thank you for having me on the show. It's a great honor. Well, how did I get into finance? After school I did an apprenticeship with a local bank in Dusseldorf. I wanted to do something with money and with people and I thought banking seemed to be the perfect fit at the time. After the apprenticeship, I started studying in Germany and Hong Kong and moved into the corporate customers department and later to structured finance where I get to know how to do syndicated loans, shoe China or acquisition finance, things like that. And there was a time where I learned a lot about structured credit processes, documentation or how to bring a credit decision through a committee, something which helped a lot later in my career. But in 2010 I thought it was time to switch to the corporate side and I joined international retailer Aldi South Group and had the chance to see almost every aspect of treasury, be it ethics, management, investments, but also funding treasury governance. And was a great time because I had the chance to help to build the treasury function more or less from scratch into a state of the art treasury team.

And Ky, you said before you joined, well, you joined Aldi, but the great thing was with your time in banking, when we had our pre call, if you like, you talked about how that prepared you for the other side of the table, knowing what the corporates actually wanted. What was that like for you? Did you find, would you suggest that to other younger treasury professionals, maybe get some time on the other side of the table or do you think it was, you know, did you, did it really help, would you say?

Absolutely. To be honest, I would urge everybody who has a possibility to see the different sides of the table to, to see them because It's a different story if you know how to bring a credit decision through a committee or if you just heard of it. It's like fair dodging. If you've never done it, you don't know how it feels. And as well, on the banking side, you dig much deeper into credit documentation and that is clearly something you would need to know when you're the corporate treasurer. Because if you don't know about the bits and pieces of, for example, an LMA documentation, you always don't get the whole picture and there is always the danger that your banking partner is not giving you the best product at that given time. So, yeah, absolutely, you should be able to speak different languages in the corporate world, be it the corporate language, the banking language, but also consultants or lawyers.

So I remember you also saying that when you joined Audi. You know, I'd expected Audi to have a firmly well established, long established treasury team, but you were in some ways part of a startup. Although it's a very well established company. That was quite exciting times for you to sort of get in there and be part of that crumbs. Where is setting up policies, getting really involved in the grassroots. What was that like for you? Was it quite unusual, would you say, quite early on in your career?

Well, to be honest, I was lucky to have that situation at an early stage of my career. The decentralized departments were quite organized, but there was no central treasury, so no department or no head of treasury that had a look, a holistic look on the situation for Ali South Group as a whole. And that was clearly something we had to build up. Because when you have a lot of funding in different parts of the world, but also cash investments or ethics management, that is absolutely something that needs to be centrally managed. And we were in the lucky situation that we had the mandate to build up that treasury function. And like you said, we did everything. Ethics, management, investments, but also treasury governance. I think still today there are some policies and processes live within Aldi that I've written down and that is something that, yeah, I feel proud about.

And when you say that you brought in these new systems as well, because you're bringing in the sort of treasury rigor, you were looking at bringing in that technology, what was it, early stages, career, operational, getting it done and getting stuck in, what was it like for you? Were you wanting visibility on risk or where's the cash? Or what were the key things standing out to you as a Treasury professional at that stage in your career?

I think the first system we really implemented with Ali SaaS was 360t multibank trading platform for FX because we saw at that time that we needed to increase competition among our banking partners. When you have that volume of yearly FX that Aldi had at that time, it's clearly not the best idea to go with just one bank. So our idea was to have the possibility to see the the offerings from our different banking partners in one place and have it all in an audit proved manner. So for example, if you do the dealing with 360T, you have the deal blotter, you have reports, you, you see everything you did in the last quarter and you can clearly show the benefit that you brought to the company by increasing competition. That was something that was really important for us at that point of time because of the senior management. Nobody was exposed to treasury before and we needed to clearly prove the benefits. That comes when you centralize Treasury.

You spent quite a while with Audi, but then it was time for the move on and you made a couple very interesting moves, really broaden your experience. So then talk about the next move from Aldi, if you would.

Yes, sure. When I stopped working for Aldi, I moved to Pharma WestLB, the German Landesbank. And I worked for EAA which was the wind down institution for Besterby. And my role was to take care of some of the portfolio. It was a structured tax portfolio, it was a life insurance portfolio, but also film financing portfolios. And that was again a totally different story than the corporate treasury work before focusing more on portfolio risk management but also documentation again. So I got to know some other aspects of the credit world and again that helped me a lot because like I said before, it's very important that you know how to speak different languages. And being with EAA was certainly a very important part of that because I got into credit documentation in even more detail, but also on how to deal with the sale of a whole portfolio.

It's interesting you talk about this talking different languages. We're not talking formal languages per se, you know, like English, French, German or whatever it might be. You're actually talking about the people that you're working with and what they want to get out things with that role, if you like. What was the key challenge for everyone? Were they just wanting to get their hands on cash and runoff or what was the situation?

Yeah, well, it's twofold. On the one hand you're lucky if you can wind down earlier, but on the other hand you don't want to sell under price. So it's always a discussion whether to stay with their portfolio and manage it with a clear risk focus of find someone that buys a portfolio at a larger discount. That is a completely new idea that you don't think like that in corporate treasury and that is something that, that asks for a certain degree of flexibility about your own thinking. And that was something I learned at that time.

And then you joined. Well, then you moved on from there. Talk us through the next couple of moves because each of these has sort of broadened your experience with different languages. You know, you were different ways of, you know, different angle of clients and their own angle on people. She then moved into consultancy. What was that like?

Yeah, that was true. I joined Ernst and Young at that time, joined their team for financial risk management and we were, we were providing to our clients advice on how to say, for example, structure your, your ethics risk management, but also how to deal with hedge accounting. We also did some very interesting hedge accounting consultancies with our customers. And there was a part I was never exposed to before, to whole accounting topic that is completely different from the cash view you usually have as the corporate treasurer. And again that, that helped me to make my profile more complete because I am now able to speak to a lawyer, to a consultant, but also to a banker or to a corporate treasurer with confidence. I believe treasury is a very important interface function and it always helps if you are able to understand your counterpart.

And also it's like as you said earlier, you're sort of understanding their language. You know, you might have very similar levels of people, but if you're going, well, the lawyer's coming at it from this angle, there's a CFO is coming at it from this angle. So you've got that knowledge, if you like. So you've done consultancy. How did that help you in the next role or what happened next?

Well, after consultancy I moved to Max Automation, which is a smaller listed entity, a holding company for machine companies in Germany. I had the position of head of treasury and it was my task to further professionalize the treasury function of the group.

Jumping in there, did they have a Treasury or was it just you had to come and improve it? What sort of was the state of treasury when you joined? Because that was back in 2019. What was that like?

There was a colleague that did the treasury function before, but she left. But she came more from an accounting role. And so her idea of fulfilling the treasury role was quite different from my point of view, because I was focusing more on FX risk, on cash pooling, you know, the cash view of the business not so much on accounting. Something that was challenging in this role was that, you know, I had to deal with all behead of finances and the difference subsidiaries and convince them to go with me on the centralized treasury journey because I had no mandate to tell them what they needed to do. But I had to convince them that my way was the right way. That was very challenging to be honest.

And how did you do that? Did you go about it with mini case studies saying this is how much cash I can save you or what was your key to success? Because in some ways we'll have listeners that are in the beginning of that journey if you like. So they are you before you'd really got stuck in. How did you convince those sometimes quite challenging CFOs who say well hang on, I want visibility of my own cash and it's my cash. Whereas in some ways it's the business's cash, it's the wider group. How do you go convincing them?

Well, on the one hand you need to clearly show the benefits like the hard facts to say okay, your interest result will improve by this and that. But on the other hand you need to build a relation to that. People just ask questions, ask what did the former treasury guy do? What did you like about his approach? What didn't you like? What can I do for you? And if you ask people and listen, it helps you a lot because you learn about their motivation, you learn about what they really want. And in business, especially in treasury, it's dependent on people if you are able to maintain good relations. That always helps a different viewpoint as well.

And you'd gone in there, you'd convinced quite a few people to sort of come along with your way. What was it like, the development of the Treasury? As you said, there was a lady that was more treasury accounting focused. Did you bring a systems or what was the sort of role like? How did they develop over the time you were there?

Well, we implemented treasury management system which helped to centralize the view on cash. And we also started to to do cash pooling project but unfortunately I was not able to finish that project because I moved on to to ALTERDOC at that time.

And just before that you also, within that time you actually joined and went through Covid. What was that like? You know, how did you get through that? How did you find it?

To be honest, for us it was quite okay. We really didn't need to be in the office because we all had the possibility to work from home, to do phone calls, do money transfers from remote. So that was not really the problem. Something that was really challenging at that time was to stay in contact with colleagues. Usually if you are in the office and you meet in the coffee room and you have a little chit chat and you know what's going on with your colleagues but if you are staying at home and the only thing you have in front of you is your monitor and a headset, you need to be much more active to stay in contact. And that was a challenge, to be honest. Yeah, that was a challenge.

But you got through that and then you say you were, you were implementing the new system but it was time to move on. Tell us about this, your current role and bring us up to date.

Sure. I started to work for Autodoc in February 2022. This is maybe the perfect situation for a treasurer because the company is already quite big and we have strong growth and the growth is not expected to slow down. But the treasury situation is not really developed. So it's like a green field for me and I have the possibility to implement state of the art processes, modern systems, be it for trading or the treasury management system. And that is really, really a perfect situation.

And so Kali, FX risk management is obviously key to a global business like yourselves and international. What's your ethos around it? I know that's a big thing we talked about previously. How do you develop it? What's, what's your ethos?

Like I said, we sell our products to 27 European countries and 11 of those countries they don't use the euro so we have large exposure. British pounds and Swedish krona and Danish krona as we don't have a cost base in the countries. Every euro or every GBP that is generated in sales enlarges our FX position. My idea is to automate FX management as much as possible because I think when you are able to design a process that can be handled by people, it can also be handled by a system or by software and there is no need to interfere in that process or to, to have people do manual steps in that process if it's possible to do it completely in the software. And that is our idea that we want to achieve. We want to have a 100% automatic FX management where we take the revenue that is generated in the non European countries and convert that to euro on every single day, completely automatic. That is our idea towards FX management.

The things do you see where post Covid now we're into this new world and you know you're looking at treasury, we're starting to go back and do conferences and things other issues of treasury that you think peers or some other people that you might meet in and around. What are the issues you're thinking about? I think you're right. You guys need to be thinking about this or you're talking about with some of your peers maybe when you're meeting them. What are the key other things do you think treasurers should think about?

Certainly the investment of surplus cash right now is an issue because I think it has been eight years with no interest at all and now you're in a situation where you have positive interest rates on all currencies. That is definitely something you need to do nowadays. There is another topic that is, at least from my point of view, not so much considered in treasury right now and that is the payment topic. I mean we are an E Commerce platform and so obviously the customer payments is something that is very important for us. From my point of view, that area is something where corporate treasures should be involved more and more because you cannot really separate the payment service provider world from the banking world. I mean at the end of the day you want to have that amount of cash on your bank account. How that is happening is that is not the question. But you want to have control over the whole process. And I think it makes certainly sense that treasury is involved more in that area.

When you say involved, are you going to the finance team and say let me help you more or how are you getting involved in that? What's your methodology again for some of the other listeners might be saying, well yeah, you're saying about getting involved in payments, but we let those guys do it, they're handling it. What attitude have you taken to that to try and help them or get more involved in it?

Yeah, like you said, I try and help people. I talk to a lot of people within Outer Doc and listen to their situation or to their problems and try to provide a solution. And the first hundred days I spend at outerdoc, I spend a lot of time just talking to colleagues and getting to know their situation. If you are able to present a solution for a certain problem, everyone is happy. That's not really a problem.

Going in and offering your services and your help just to sort of to help them get through it, I mean. And again talks about payments. Are there any anything else you think that people should be aware of or not keeping them awake at night but they should be thinking about just in case?

I mean recruiting is certainly a very hot topic in 2023 as it was in 2022. It has been harder and harder to find new talent. If you're able to position yourself as an attractive employer, that is the least thing you can do. It's just very important to be able to attract talent when we do that.

One of the key things we've talked about, in fact there was a client recently who we chose not to work with, got to say, because we know that flexible working is a key thing and having more a hybrid arrangement. I think a lot of UK and European companies seem to have got the head around it. Us, we're still trying to work out depending on different companies. You've got different companies like Starbucks saying, right, big directive, you must be back in the office. But I don't know how thought it out it is for some of those people because that's not the way we've worked for two and a half years. Why do you need to be back there? I think there is a balance. But one of the things I noticed to say with this UK company, they recently said we're a bit more traditional with five days a week back in the office and we're very paper based and we're like, okay, well good luck then. Oh no, no, we can't help you. Because only 1 in 20 people says in our salary survey, for instance, they want to be in the office. Oh, well that's okay. We said no, we're not going to go and approach 100 people just to try and find you five people that want to be back in the office with you guys. You know, what's your ethos around? What's the balance for you guys, would you say?

I would say we are pretty flexible with regard to work from home. In fact, I live in Dusseldorf and I work in Berlin. So I would say I'm the role model for my department in that case. And that is, to be honest, the only positive thing I can think about when it comes to Covid, because before COVID this would not have been so easy. But right now most of the people have been convinced that it's absolutely possible to be productive when you work from home. In fact, I think the mixture itself between working from home and working in the office is key. Because when you don't see your colleagues face to face at all, it's hard to build up a team.

I think that's the thing. I think unless people think that through again. Another article we recently talked about is it's got to be clients and fewer people. It's got to be a shared view, you know, you've got to think about what the other person wants on the other side of the table, right back to the beginning of your career when you were originally in those early days. It's the same with recruiting. You're going to think what the other person on the other side wants and what you want as an employer and then try and match them together rather than just go, well, I'm the boss, I'm the employer, you should be lucky, have a job with me.

Those times are definitely over, period.

We're going to wrap up today's episode and we'll put your LinkedIn details in the show notes as we always do. What would you say to key takeaways for any treasury professionals out there? Maybe they're junior levels, starting out as you were a few years ago or later on in their career, more their treasures. What are the key takeaways you would give to the people listening today?

I would say always try to expose yourself to as many different areas of finance as possible and just try to find a boss that helps you in your career. Because I had the good fortune that some of my bosses really gave me the room to develop and if I had different bosses, I would definitely be not in the situation I am in now. Today there is a proverb that says don't choose a job, choose the boss. And I think there is a certain degree of truth in it and that is something I would say to every junior in Treasury.

Choose the job, choose the boss. Both, you know, I think it's a balance. But yeah, I think that's, that's key, isn't it? Because obviously you were a long time at work today. That's, you know, that's one of the key things as well. And that's a kind of amazing final words there about choosing your boss as well as a job. That's a good final sign off. Look forward to. We'll put your LinkedIn details, show notes, lots of people can connect with you and thanks for sharing some of your lessons about your career today, sir. Thank you very much for your time.

Thank you, Mike.

Hello, it's Mike here again. I hope you enjoyed this week's show. If you did, then maybe you want to follow the show or subscribe, depending on where you listen, whether that's itunes, Spotify or another great place to listen to the show from. It's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there you could even leave a quick review. Reviews and ratings are among the most important metrics for a podcast to effectively rank. And as you can probably appreciate, the podcast is a lot of hard work to produce every week and be amazing. Just take, say, 20 seconds, leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.