{"id":18191,"date":"2022-10-06T11:05:04","date_gmt":"2022-10-06T09:05:04","guid":{"rendered":"https:\/\/www.rewe-group.com\/de\/?p=26357"},"modified":"2023-04-25T14:03:04","modified_gmt":"2023-04-25T12:03:04","slug":"interview-with-cfo-telerik-schischmanow-we-will-resolutely-stay-the-course","status":"publish","type":"post","link":"https:\/\/www.rewe-group.com\/en\/press-and-media\/newsroom\/stories\/interview-with-cfo-telerik-schischmanow-we-will-resolutely-stay-the-course\/","title":{"rendered":"Interview with CFO Telerik Schischmanow: \u201cWe will resolutely stay the course\u201d"},"content":{"rendered":"\n
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Telerik Schischmanow, the new REWE Group CFO, explains why continuing to invest heavily matters, discusses the challenges associated with this strategy, and outlines why the concept of variety doesn\u2019t necessarily apply to shopping trolleys.<\/p>\n<\/div>\n <\/div>\n <\/div>\n <\/div><\/div>\n<\/div>\n\n\n\n

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Mr Schischmanow, on 1 July 2022, you took on the role of CFO in addition to your position as Executive Board Member for retail in Germany. However, you were already well-acquainted with the REWE Group from various perspectives thanks to the variety of roles you have held. So, I imagine that it didn\u2019t take you long to learn the ropes.<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0That\u2019s right. I’ve been familiar with most of the issues, processes and people involved for quite some time. I joined the REWE Group in 2006 as Head of Corporate Investment Management\/Mergers and Acquisitions and in the years that followed I developed a good understanding of the group as a whole. In the intervening period, I have been CEO, chairman, governor, advisor, or shareholder representative at around 150 different companies, so there are very few issues that I haven’t come across. I therefore feel well prepared. And apart from that, the other board members and all the employees know what to expect from \u201cthe newcomer\u201d. In my opinion, management stability and reliable decision-making are important things to have, particularly in challenging times like these.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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Prices are going up, energy is becoming more expensive and consumer spending power is shrinking. After the slight increase in GDP in the second quarter, economists now fear an imminent slump into recession. What does this scenario mean for the REWE Group?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0The air is getting thinner and we will need to adapt. But, thanks to our broad diversification, we’re well placed to weather these difficult economic times, the last two and a half years being the latest example: the start of the pandemic saw the tourism business come to a standstill, yet the food retail business was booming, especially the full-range stores and, at times, the DIY sector. We are now experiencing growth in the discount sector due to increasing customer price-sensitivity. And tourism is also reporting excellent booking figures again. Our broad portfolio protects us from major downward swings. As a cooperative group of companies, we take a long-term view and take decisions without having to adjust to stock market prices at short notice.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n

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Right now, it’s important not to panic and stop all future investments, whether in digitalisation, sustainability or climate protection. Because that is more or less cancelling the future.<\/p>\n<\/blockquote>\n <\/div>\n

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Telerik Schischmanow, Member of the Management Board – Chief Financial Officer<\/p>\n <\/div>\n <\/div>\n

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\n \"Telerik\n<\/div>\n <\/div>\n

Telerik Schischmanow, Member of the Management Board – Chief Financial Officer<\/p>\n <\/div>\n <\/div>\n<\/div>\n<\/div><\/div>\n<\/div>\n\n\n\n

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When you say that the air is getting thinner, what do you actually mean?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0Over the last two to three years, we have managed to increase our profitability and our earnings. But if we want to continue to afford high and rising investment volumes and not radically prioritise them, then our absolute earnings must further increase in the medium and long term. The food retail market is under pressure. There are gaps between producer and consumer price inflation that we as retailers are absorbing \u2013 and have to absorb! As Lionel Souque has said on many occasions: In difficult times, everyone has to shoulder part of the burden. Many people have already run out of financial wiggle room, and it’s therefore foolish to believe that we can pass cost increases on to the customer in their entirety.<\/p>\n

I am also concerned about the rapidly increasing costs in other areas. For instance, the construction sector is currently experiencing price hikes that would have been unthinkable just a few months ago. There is a shortage of technical components, such as charging stations. Previously, the delivery time for a power supply transformer was a fortnight; now, it is a year. In this context, it is vital to carefully consider which expenditure is really necessary \u2013 where proactive savings and increases in efficiency can be achieved.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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Does this mean that investment plans are also under review?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0Right now, it’s important not to panic and stop all future investments, whether in digitalisation, sustainability or climate protection. Because that is more or less cancelling the future. In the past, the REWE Group has made significant investments in order to grow its business. That was the right thing to do, and we will stay the course. We’re a hugely innovative company, and if you want to implement a range of great ideas, you need the appropriate financial resources. Nonetheless, we will need to review and discuss investments in even greater depth moving forwards.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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What was and is the focus of investments?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0We have primarily invested in technology and digitalisation, including warehouse automation technologies, self-scanning systems, Pick & Go and autonomous convenience stores such as the \u201cJosefs nahkauf Box\u201d. Investing in real estate is another priority, particularly in Germany, where we have built state-of-the-art warehouses and have begun purchasing rather than leasing our stores. This has been a shrewd decision: as owners, we have the power to decide what we do with a property and can undertake extensions or alterations, such as photovoltaic systems and EV charging stations, more rapidly. We can also secure good locations for the long term and, last but by no means least, it’s generally a more prudent business proposition for us to buy than to lease. Of course, we continue to have a leasing strategy. For instance, if an owner doesn\u2019t want to sell \u2013 which is often the case with good sites \u2013 but we really want to use the location.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n

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Companies without an active sustainability strategy will find it difficult to obtain attractive loan conditions in the future.<\/p>\n<\/blockquote>\n <\/div>\n

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Telerik Schischmanow, Member of the Management Board – Chief Financial Officer<\/p>\n <\/div>\n <\/div>\n

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\n \"Telerik\n<\/div>\n <\/div>\n

Telerik Schischmanow, Member of the Management Board – Chief Financial Officer<\/p>\n <\/div>\n <\/div>\n<\/div>\n<\/div><\/div>\n<\/div>\n\n\n\n

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Will the budget for technology and commercial real estate potentially be tighter in the future?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0No, I\u2019m not saying that. We need to continue making substantial investments in order to expand our core business and open up new areas of growth. We must also continue to consolidate and expand our leading position in the field of sustainability. For example, we will need to invest further in technology, such as refrigeration technology, heating systems, insulations, and new building materials, in order to achieve our climate target. Nor can sustainability be neglected when it comes to the finance sector. In the years to come, green finance will become significantly more important. Companies without an active sustainability strategy will find it difficult to obtain attractive loan conditions in the future.<\/p>\n

We must further enhance our profitability, however, to ensure that we do not have to prioritise too much across all of these important projects in the future. This is a challenge because personnel and material costs are rising markedly. We have achieved great results in the past two to three years, but they are not enough to continue to finance high or even growing investments. To put it bluntly, we need to make enough cash to cover our investments.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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What can the REWE Group do to increase sales and profits even in a difficult market?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0We want to grow both organically and inorganically. In the past, the REWE Group has always had a strong record of acquisitions, both nationally and internationally. We will continue to pursue this in the future if appropriate opportunities arise. To this end, we intend to continue to develop new store formats and make the ranges even more attractive, for example, by expanding our own brands and innovating. We will also push ahead with the digital and omnichannel business, establish more in-store collection lockers at retailers, promote Click & Collect and expand the delivery service.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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In recent years, the REWE Group has increased its borrowing significantly. Despite this, its debt is still considered moderate for the size and profitability of the group. Is there therefore scope to fund higher investments through loans?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0Yes, we have taken on much more debt in recent years. That is not always a bad thing. A rapidly growing corporate group can allow itself to borrow. What matters is maintaining a healthy debt-to-profitability ratio at all times. Profitability needs to be high enough to ensure that the company isn’t forced to take on additional major loans each year to fund its investments and that it can instead perhaps even begin to reduce its debts. Thanks not least to our recently improved S&P rating, as well as our sustainable direction, we do have scope for further credit financing. If necessary, we will increase our borrowing \u2013 but this must be done with caution and on the basis of a long-term strategy. We have to think very carefully about how we spend the money. In view of the sharp rise in interest rates, it will cost us significantly more than it once did. This will also mean making sacrifices.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n

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We need leaner, shorter processes, fewer contact points and more seamless media continuity. The question we need to ask is: how can we do what we do more simply and straightforwardly, more quickly and with greater automation and standardisation?<\/p>\n<\/blockquote>\n <\/div>\n

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Telerik Schischmanow, Member of the Management Board – Chief Financial Officer<\/p>\n <\/div>\n <\/div>\n

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Telerik Schischmanow, Member of the Management Board – Chief Financial Officer<\/p>\n <\/div>\n <\/div>\n<\/div>\n<\/div><\/div>\n<\/div>\n\n\n\n

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What does that mean?<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow:<\/strong>\u00a0It means scrutinising structures and processes more closely and asking: of all the issues we have, what will really make the difference to our success? From what I have seen, many issues are handled too many times before a solution is found. We need leaner, shorter processes, fewer contact points and more seamless media continuity. The question we need to ask is: how can we do what we do more simply and straightforwardly, more quickly and with greater automation and standardisation? With as much standardisation as possible, and only as much individualisation as absolutely necessary. Let’s consider shopping trolleys. Many of our competitors have no more than a handful of different models that they buy for use throughout Europe or even worldwide. Somehow, we\u2019ve ended up with over a hundred different versions across the group. Isn\u2019t there another way? For this reason, among others, we launched a successful campaign to reduce the variety of models and to initiate a group-wide tender.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div>\n\n

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A lot of challenges…<\/strong><\/p>\n<\/div>\n

Telerik Schischmanow<\/strong>: And opportunities! And to make the most of them, we still need a lot more employees. And this brings me to another point: We are heading into a demographic trap. In the coming years, we will face a staggering shortage of skilled workers. We are already seeing that our vacancies are becoming more difficult to fill. We need to keep investing in this area too. We need to become an even more attractive employer. For example, by offering flexible working more widely than we do at present. I believe that this is entirely possible. Even I work from home every once in a while, and, if my children happen to be there, then I inform the people I\u2019m speaking to in advance that they might see a balloon fly across the room in the background…<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div><\/div>\n<\/div>\n<\/div>\n\n\n\n

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Telerik Schischmanow<\/h3>\n

Member of the Management Board – Chief Financial Officer<\/p>\n <\/div>\n

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Telerik Schischmanow joined the REWE Group in 2006 as Head of Mergers & Acquisitions. From 2009 until 2011, he was the CFO of transGourmet Holding SE, in which the REWE Group held a 50% stake. In September 2011, he returned to the REWE Group as Executive Vice-President, a role in which his responsibilities included corporate development, strategy, and corporate control. Since July 2016, he has been the Executive Board Member for retail in Germany, with responsibility for administration and services. In July 2022, he also took on the role of Group CFO.<\/p>\n<\/div>\n <\/div>\n <\/div>\n<\/div>\n

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    Join the discussion on <\/h2>\n
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    Our LinkedIn feed has all the latest information from the REWE Group and the sector, with the most important developments from the worlds of retail, e-commerce, food, CSR and policy.<\/p>\n <\/div>\n

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    Telerik Schischmanow, CFO of the REWE Group, on the challenges of difficult economic times \u2013 and the company\u2019s approach to tackling them.<\/p>\n","protected":false},"author":18,"featured_media":18114,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"","_relevanssi_noindex_reason":"","nl_adhoc_sent":1,"footnotes":""},"categories":[4],"tags":[],"sales_line":[19],"focus_theme":[142],"class_list":["post-18191","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-management","sales_line-rewe-group","focus_theme-undefined"],"acf":[],"_links":{"self":[{"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/posts\/18191","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/users\/18"}],"replies":[{"embeddable":true,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/comments?post=18191"}],"version-history":[{"count":28,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/posts\/18191\/revisions"}],"predecessor-version":[{"id":18235,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/posts\/18191\/revisions\/18235"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/media\/18114"}],"wp:attachment":[{"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/media?parent=18191"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/categories?post=18191"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/tags?post=18191"},{"taxonomy":"sales_line","embeddable":true,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/sales_line?post=18191"},{"taxonomy":"focus_theme","embeddable":true,"href":"https:\/\/www.rewe-group.com\/en\/wp-json\/wp\/v2\/focus_theme?post=18191"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}