Interview for NIN (Serbia)

In April this year, Ladislav Bartoníček took over the management of the largest Czech business group PPF, following the tragic death of Petr Kellner, the head of the company and the richest businessman in the Czech Republic. In an interview he gave in the days, immediately following Kellner's death and after taking over the management of PPF, Bartoníček said: "I have lost a friend and found myself in a whirlwind of events that none of us could have imagined. Everything is very emotional and demanding. The biggest challenge is to make sure that no one drops the ball, which basically means to ensure that everyone continues working at full speed on ongoing projects.“

Although his ownership stake in PPF is only 0.535 percent, Bartoníček, being Petr Kellner's closest associate and a friend, and based on an earlier agreement for such situations, after Kellner's death, was appointed to head the company that employs almost 100,000 people, operates in  25 countries and its assets are nearly 40 billion euros. Our interview for NIN opens with a question of how satisfied he is with the group’s operations as its CEO, given the circumstances, and in particular, in light of the ongoing pandemic. 
 
How did you do last year and do the results in the first half of this year indicate a recovery or not?

The last year, the last 18 months or so actually were difficult for everyone and our group has also, to a certain extent, suffered a negative impact, brought about by the pandemic. The results were somewhat lower than expected, but what helped us in the situation is the fact that we are diversified in terms of our businesses, and the industries that we invest in, but also in terms of the geographic scope and reach. Our financial services sector suffered the greatest negative impact, especially consumer finance, particularly in China and South-East Asia. On the other hand, our other industries, such as telecommunications, the media, and real estate did reasonably well... for instance, our biotechnology was not affected. 
 
Does that mean that you are satisfied and what do the results for 2021 show? How much has COVID-19 changed the way you do business and has it reflected in all segments?

Given the circumstances, we certainly must be satisfied. This year our results have surely improved. When talking about the changes, structurally and in terms of management, things have remained stable, but we have moved much more into operating digitally, automating our processes, and working from home, just like most businesses worldwide.

I HAVE GIVEN UP TRYING TO PREDICT AND UNDERSTAND HOW THE PANDEMIC SITUATION WILL FURTHER DEVELOP. SO MANY PREDICTIONS BY SO MANY SMART PEOPLE, AND THEY WERE COMPLETELY WRONG. I AM NOT WORRIED, SINCE WE HAVE PROVEN THAT WE ARE ABLE TO COPE WITH DIFFICULT SITUATIONS. 

Are these changes here to stay or are they temporary perhaps? Are the post-Covid operations going to be different?

As for digitalization, these changes are here to stay. But, for example, working from home, which was a necessity during the pandemic, is neither a good nor a healthy solution for people in the long run. The isolation isn’t natural. That’s why we have undertaken all measures necessary to get as many people as possible back to the office. On the other hand, there are certain business segments, and in particular the telecommunications sector, where working from home has proven to be a good solution. For example, people working in call centers (sales and support), have learned how to do their work from home. We also taught and trained our salespeople in physical stores how to handle telesales activities. Thus, we managed to build their capacities and increase the span of their job, but we also helped them master some additional skills. 
 
PPF Group is recognizable in Serbia as the owner of Telenor. Can you tell us what else, besides the telecommunications companies, you have in your portfolio?

In addition to the telecommunications companies, we are active in the sectors of media, financial services, banking, biotechnology, transportation, real estate, and e-commerce, and we are slowly investing in some smaller yet new business segments. As for the geographical areas in which we are present, in addition to Europe, we also run our operations in Southeast Asia and the United States. 

The pandemic is not over yet and the business world is in an obvious fear of the uncertainty that it is faced with. What are your investment plans, given this uncertainty?

I have given up trying to predict and understand how the pandemic situation will further develop. So many predictions by so many smart people, and they were completely wrong. It is therefore best not to predict. As a group, we have proven that we are able to cope with difficult situations, and in that sense, I am not worried or concerned. Therefore, we will continue investing and looking into new opportunities, and these may be an addition to the existing businesses, but also, something completely new. 
 
What is it that you are not going to tell us?

I can only tell you that investing and researching new business opportunities is in our DNA, but it is way too early to talk about specific projects. As for the areas in which we are present, we have no immediate intention of expanding into new markets, but as far as business is concerned, we will certainly continue to invest, even in some new business segments. We have recently partnered up with the Beneteau company, the world's largest producer of holiday sailboats and we invest in sailboat chartering. This business has suffered great damage due to the Covid crisis, but we believe that long term, this is an attractive business. This joint venture will be number one in the industry, in terms of sales, with a pre-Covid annual revenue of around EUR 1 billion. 

WE ARE EXTREMELY HAPPY, BOTH WITH TELENOR AND CETIN AS WELL, AND THE OVERALL BUSINESS CLIMATE IN SERBIA, AND WE INTEND TO STAY HERE, AND EVEN SEEK NEW PRODUCTS AND SERVICES. HOWEVER, I CANNOT SAY THAT I HAVE 5 PROJECTS IN MY POCKET, JUST WAITING TO BE SIGNED. THE PPF GROUP HAS MEDIA AND TV IN ITS PORTFOLIO IN OTHER COUNTRIES, AND FOR THE TIME BEING, THIS IS NOT WHAT WE ARE PLANNING FOR SERBIA.  

As the pandemic subsides, the world is in fear of inflation, as well as of growing debts, both public and private, and even the growing number of enterprises faced with bankruptcy. What is your view of this? 

As for PPF and our operations, and primarily owing to the diversification and ability to adapt to the new circumstances, we have no concerns. With such a diversified business, and presence in various industries, and various parts of the world, the inflation then reflects differently, given that it depends on the country itself, its macroeconomic situation, but also on the industries as well.

And as for the global macroeconomic situation, in the years to come, or rather the fear of inflation and the level of debts, there are different schools in macro economy, providing different forecasts and predictions. It is far from certain that the world will face a sustained period of inflation. I believe that higher inflation rates are going to require short-term adapting, and soon after that will again see a return of low inflation rates.

THIS REGION IS OUR HOME AS 60% OF THE PPF’S EQUITY IS CURRENTLY IN THIS REGION, AND WE WILL CONTINUE TO GROW HERE, IN TERMS OF NEW INVESTMENTS. WE ARE CURRENTLY NEGOTIATING WITH ALSTOM COMPANY THE ACQUISITION OF ONE OF THEIR FACTORIES IN GERMANY, AND ONE IN FRANCE TO COMPLEMENT THE PORTFOLIO OF OUR TRANSPORTATION SYSTEMS, I.E., THE TRAIN PRODUCTION SEGMENT AND OTHER TRANSPORTATION MEANS. 

What are further plans for the CEE region?

Given the equity invested in this region, and which amounts to 60% of the PPF’s equity, this region is our home, and we will continue to grow here, in terms of new investments. We are currently negotiating with Alstom company the acquisition of one of their factories in Germany, and one in France to complement the portfolio of our transportation systems, i.e., the train production segment and other transportation means.

What about Serbia? Are you perhaps planning business expansion here as well, be it the existing one, or a new one?

In Serbia, we are in a research stage. We are extremely happy, both with Telenor and Cetin as well, as the overall business climate in Serbia, and we intend to stay here, and even seek new products and services. However, I cannot say that I have 5 projects in my pocket, just waiting to be signed. We shall see. We have also established the Cetin company, thus separating the infrastructure from the traditional telecommunication services, and we have done this not only in Serbia but in Hungary, the Czech Republic, and Bulgaria as well. We are talking about a large venture, with an EBITDA of more than EUR 500 million, which aims at further infrastructure and 5G rollout. And not only for the needs of our own telecommunication companies but for the needs of the market and other clients as well. 

A few months ago, Telenor Serbia concluded a deal with the state-owned Telecom on the distribution of media content, thus practically entering this market segment as well. Is it, perhaps, a plan to enter the media business in the future and produce the content yourself? 

Not necessarily. The PPF Group has media and TV in its portfolio in other countries, and for the time being, this is not what we are planning for Serbia.

It’s been three years since PPF bought the Norwegian Telenor in this region. When are you planning to change the company’s name?

At the end of the year, we will decide whether and when are we to change the name.