He’s been an aide at the European Commission, an associate in a Brussels law firm, a finance executive at a German privatisation agency, a venture capitalist in the speciality machinery sector, and CFO of Clearstream, the clearing house jointly owned by Deutsche Börse and Cedel International. On top of that, he’s found time to become a widely published essayist on accounting, tax and competition law, and a regular contributor to Prométhée, a Paris-based think-tank.
Since joining RTL as CFO in August 2000, Rabe has barely paused for breath. Arriving shortly after the E4 billion Luxembourg-based company listed on the London and Brussels stock exchanges, he began his new job by overseeing the adoption of International Accounting Standards. “It’s a major exercise—normally a three-to-four year process—but we did it in a matter of months,” he notes proudly.
Rabe didn’t lose any time tackling other pressing issues either, including the divestment of various under-performing assets and the installation of a new ERP system. “It’s been a very busy time,” nods Rabe. “But having done all this, we’re now in much better shape to square up to the market.”
That sort of confidence shows why there’s no better standard-bearer for the new generation of European CFO than the tireless Rabe. And he’s joined by an impressive line-up of other young rising stars who demonstrate that age is no barrier to fulfilling their vision for today’s world-class finance function. Well-travelled, multi-skilled and with a keen sense of how finance can shape corporate strategy, members of Rabe’s generation have carved out leading roles at some of the region’s most dynamic companies.
However, the finance chiefs contacted for our latest showcase of Europe’s brightest CFOs under 40 years old are keen to downplay their age. “In today’s fast-changing culture, the key is your mindset. Age has nothing to do with it,” insists Emmanuel Faber, who was appointed CFO of Danone, the E14 billion French food giant, in January 2000 at the age of 35. “The thing that makes the difference is how deeply you are prepared to listen and learn, and how fast you make decisions and implement them.”
Judging from the careers of the financial high-flyers who appeared in our first survey of this nature back in 1998, such an attitude will take Faber and his peers far. Peter Bakker, 40, is a case in point. In November last year, he was named CEO of TPG, the E11 billion Dutch postal and logistics company. Bakker had joined PTT Post, the firm’s mail division (then part of KPN), in 1991, becoming director of marketing and sales at PTT Post Logistics, where he was involved in the start-up of KPN’s first e-commerce department. Promoted to CFO of PTT Post in 1996, he played a key role in its merger with TNT Post Group and its subsequent IPO in Amsterdam to become the world’s first publicly traded postal system. Announcing his elevation to CEO, supervisory board chairman Morris Tabaksblat paid tribute to Bakker’s “broad experience” and his “key role in the international expansion and listing of the group”.
This year’s candidates are certainly no less ambitious. “Every CFO wants to be CEO, right?” muses Alexander Lopatin, the 37-year-old CFO of Svyazinvest, a E3 billion former state-owned telecoms monopoly in Russia, where he’s held the top finance post since 1999.
Like TNT’s Bakker and others before them, today’s young CFOs have supplemented their skills in ways that more than make up for what they lack in grey hair or years of experience at the finance helm. Their CVs are packed with variety. Just ask Danone’s Faber. After university, Faber took a post as a consultant with Bain & Company, before working in M&A advisory with Baring Brothers for five years. Following a four-year spell as CFO of Legris Industries, a mid-sized French mechanical engineering firm, he then spent three years as a member of the M&A and strategy team at Danone, working on over 25 acquisitions.
Faber says that it is this mix of experience that has helped him in his capacity as CFO “to change the global culture of the finance team from an expert technical to a truly operational mindset.” One way he’s done this is by holding on to his job as head of Danone’s strategy department. “The roles are incredibly complementary,” he notes. “Finance without strategy is just numbers, and strategy without finance is just dreaming.”
Charting new territory
Having now risen high up the ladder, the CFOs profiled here appear to relish their ability to explore new territory. In John Davis’s case, that meant putting together a record-breaking £2 billion (E3.2 billion) leveraged buyout just months after becoming CFO of Yell, a UK telephone directories business. When he arrived at Yell in September 2000, Davis quickly got to work on drawing up an IPO plan. But as the market grew bleaker, BT, Yell’s parent company, shelved the public offering, opting to go down the LBO route instead.
Quickly changing direction, Davis, 39, soon found himself inking the sale of Yell to two private equity firms—Apax Partners and Hicks, Muse, Tate & Furst—in June 2001. Numerous road shows and investor presentations later, Davis is still riding high, enthusing: “Being part of the biggest LBO ever done in Europe was a real thrill.”
But what sets apart the CFOs profiled in our current survey from their predecessors is that they will have a much tougher time rising further up the ladder, as they cut their teeth in one of the most hostile and unpredictable business climates in a long time. Having honed their skills during the recent boom years, these young CFOs are being challenged in all directions to demonstrate that they have what it takes to head finance in both good and bad times.
Dirk Reiche would attest to that. Last year, the 37-year-old was appointed finance chief of Intershop, the troubled German e-business software provider that was once an investment darling of the Neuer Markt and Nasdaq. Since his arrival in the top slot, Reiche has been busy executing sweeping turnaround measures. Among them, the closure of the firm’s office in San Francisco, the reduction of headcount around the world from 1,200 to 750 and the introduction of strict new spending policies for the remaining staff.
Though such measures have helped Intershop slash costs by a third in 2001, it can’t celebrate yet. The firm announced late last year that it wouldn’t break even in the fourth quarter of 2001 as expected, leaving many investors to question its medium-term liquidity. “I must be one of the few executives under 40 to have been through such turmoil!” quips Reiche.
It’s small comfort that Reiche is actually in good company. But the ranks are getting smaller and smaller. “Last year, we saw lots of CFOs in their early 30s in the new economy and start-ups,” says Stefan Koop of Russell Reynolds, a recruitment consultancy, in Hamburg. But with the bursting of the dot-com bubble, “there have been lots of failures”, with many CFOs returning to more junior positions in the old economy.
For those who survive, a firm grasp on finance fundamentals is as essential as ever. “The e-business cycle has taught us that energy and bright eyes can only get you so far,” says Tim Griggs of Penna, a human capital consultancy. “Sooner or later, business logic will reassert itself—you need to be skilled in all the old-fashioned things.”
Old economy or new, recruitment experts like Russell Reynolds’ Koop believe that interest in hiring young CFOs is not nearly as pronounced as it used to be. “Experience becomes more and more important in a downturn,” he says.
Still, their own success has caused some young CFOs to think about their obligation to the next generation of finance leaders. Olaf Berlien, the 39-year-old CFO of Carl Zeiss, the E4 billion German glassmaker, says he wouldn’t hesitate to hire a young CFO to fill his shoes after he leaves the firm in April to become joint CFO at Thyssen Krupp, the E38 billion steel giant. “It’s not a question of age,” he says. “It’s a question of personality and conscientiousness.”
Moreover, Julian Deutz, the 33-year-old CFO of Steilmann Group, a E500m German private textiles firm, says he’s “very conscious” of the need to groom a successor: “In today’s fast-changing environment, every manager should be aware that anyone should be replaceable.”
RTL’s Rabe would doubtless agree. Acutely aware of the need to keep moving, he admits to having his eyes on a more senior position. In three years, he confides, he’d like to play a key role in steering Bertelsmann (which now owns most of RTL) to its long-planned listing. Given his prodigious record of achievement to date, you wouldn’t bet against it.
Company: Elkem (Norway, sales: E1 billion)
Previously: spent a year as senior vice-president of business development at Bertel O. Steen, an E800m automotive and sporting goods importer
Education: Norwegian School of Economics and Business Administration, Bergen
Apart from a brief spell at Bertel O. Steen, Aa has been at Elkem, a metals producer, all his working life. Joining the firm in 1990, he rose up the ranks in marketing, business development and finance, including a three-year stint at the company’s operating units in the US, until he was appointed to the top seat in finance in 1998.
Mindful of his own career progression, Aa has used his CFO role to campaign for major structural changes within Elkem. For example, he counts as one of his main successes the implementation of a programme to empower the company’s manual workers that included the rollout of PCs on shop floors. Every worker at Elkem, from furnace operator to mechanic, can now log on to a PC to monitor their individual performance and be involved in budgeting and control. “It’s all about shifting the centre of responsibility from management to the shop floor,” explains Aa. “Without input at this level, it’s hard to make positive improvements. We’ve been able to cut operating costs significantly by driving this initiative.”
Company: Holmen (Sweden, sales: E2 billion)
Previously: head of treasury, Holmen, one of Sweden’s oldest and largest paper producers; joined the company in 1990
Company: Portugal Telecom (Portugal, sales: E5 billion)
Previously: director, Merrill Lynch; relationship manager, Portugal Telecom; executive director, Deutsche Morgan Grenfell and Warburg
Education: University College of London (electronic engineering); Universidade Nova de Lisboa (general management)
Company: Thyssen Krupp (as of April, Germany, sales: E38 billion)
Previously: CFO, Carl Zeiss; various roles in sales and controlling, Buderus, a heating systems maker; IBM
Education: Technical University, Berlin (PhD, economics)
Company: Grupo Sans (Spain, sales: E20 billion)
Appointed: 1997 Previously: operations controller, Grupo Sans; auditor, Deloitte & Touche
Education: Licenciado en Ciencias Empresariales (business administration)
Company: UPC (Neth, sales: E1 billion)
Age: 33 Appointed: 1999
Previously: internal M&A and strategy, UPC; communications sector specialist, Goldman Sachs
Education: Trinity College, Cambridge University
Company: Novo Nordisk (Denmark, sales: E3 billion)
Previously: vice-president of corporate finance, Novo Nordisk; COO, EAC Nutrition; chief controller, Skandia Denmark; consultant, AT Kearney and Arthur Andersen.
Education: Copenhagen Business School (MBA, master of science in economics and auditing)
Company: Egg (UK, sales: E1 billion)
Previously: commercial director, Granada Media; group controller, then finance director, Granada; Price Waterhouse
Education: London School of Economics
Company: Elan (Ireland, sales: E1 billion)
Previously: CEO, Pembroke Capital, an aviation leasing company
Education: University College, Dublin
Company: Yell (UK, sales: E1 billion)
Previously: CFO, Yahoo! Europe; CFO (US operations), Pearson; director of corporate finance/treasury, Emap; Price Waterhouse
Education: University of Kent (accounting); Stanford (MBA)
Company: Steilmann (Germany, sales: E500m)
Previously: CFO, Venturepark; head of M&A and IR, Pixelpark; head of controlling, Steilmann; S&K Consulting; Deutsche Bank
Education: WHU Koblenz (MBA, PhD in finance)
JEFF VON DEYLEN
Company: KPNQwest (Netherlands, sales: E800m)
Previously: CFO, GTS; CFO, Ebone; corporate controller, Qwest; LCI International; Arthur Andersen
Education: Miami University (business administration)
As chief controller of Qwest in 1999, Von Deylen—the only American to make our list—helped Jack McMaster, then CEO of the firm, set up a transatlantic joint venture with Dutch telco KPN. Two years later, in early 2001, Von Deylen received a call from his old friend, offering him the CFO post at KPNQwest. Von Deylen didn’t need much persuading. “It was a big job, but I had the necessary experience—12 years in alternative telecoms,” he recalls, adding that he relished the scale of the challenge. “Europe is dominated by national incumbent telcos, and many other entrants have tried, and failed, to crack it.”
KPNQwest, however, is getting closer to succeeding, having reported positive Ebitda for the first time in third-quarter 2001. “We’re starting to turn the corner,” he says. “Positive Ebitda is not the endgame, but it’s very encouraging.”
Company: Carrefour (France, sales: E65 billion)
Previously: CFO, Carrefour España; CFO, Pryca; management consultant, Pryca; Arthur Andersen
Company: Danone (France, sales: E14 billion)
Previously: M&A and strategy division, Danone; CFO, Legris Industries; Baring Brothers; Bain & Co
Education: HEC Business School
Company: Emap (UK, sales: E2 billion)
Appointed: 2000 Previously: CFO, SMG; deputy finance director, Granada; deputy finance director, Forte; senior vice-president, finance, United Distillers; group accountant, Guinness; commodities trader, Baring Brothers
Education: Glasgow University
Hughes landed his first CFO post at the age of 34, taking over the finance reins at SMG, a Scottish media company that had just begun transforming itself from a pure-play broadcaster into a diversified newspaper, radio and TV group.
The top finance job at Emap, however, presented a different challenge. When Hughes arrived in October 2000, the UK’s second biggest publisher was in retrenchment mode, backing out of a brief and unhappy foray into the US market. A year earlier, it had paid $1.5 billion for Petersen, a stable of US titles. It was a humiliating about-face when, in July 2001, Emap sold Petersen to Primedia, the US publishing giant, for a knockdown $515m. What’s more, Emap’s original acquisition had been funded with a large amount of debt, so Hughes’ first six months in the job were given over to a major refinancing and renegotiating of Emap’s banking covenants. “Putting the company on the front foot has been a major challenge,” says Hughes. “We’ve now got a much more comfortable degree of interest cover. In a tougher trading environment, it’s given us much greater flexibility.”
Company: Serco Group (UK, sales: E1.2 billion)
Appointed: 1999 Previously: group company secretary and corporate finance director, Serco Group; finance director, Serco Europe; Ernst & Young (including a secondment to the Confederation of British Industry as assistant director); Arthur Andersen
Company: Telenor Mobil (Norway, Sales: E5 billion)
Age: 35 Appointed: 2000 Previously: controller, then finance director, Telenor International; accountant, Arthur Andersen; sergeant, Royal Norwegian Airforce
Education: Norwegian School of Economics and Business Administration, Bergen
Company: Cap Gemini Ernst & Young (France, sales: E8 billion)
Previously: co-ordinator of French government welfare reform programme; administrative director of pediatric hospital in Vietnam
Education: HEC (business administration); University of Paris (law); IEP Paris (political science); ENA (public administration)
Company: SSAB (Sweden, sales: E2 billion)
Previously: finance director, SSAB Tunnplat (sheeting subsidiary); chief controller, NCC
Education: University of Uppsala (MBA); Royal Institute of Technology
Company: Dixons (UK, sales: E7 billion)
Previously: group financial controller, Dixons; finance director, PC World; CFO, Dixons US; 3i; Arthur Andersen
Company: Corus (UK, sales: E19 billion)
Previously: finance director, worldwide distribution, Corus; senior consultant, CSX Transportation; controller, tinplate operations; graduate trainee, British Steel
Company: Svyazinvest (Russia, sales: E3 billion)
Appointed: 1999 Previously: head of treasury, Unified Energy Systems
Education: PhD in economics; currently studying for an MBA, Chicago Graduate School of Business
Lopatin has had a real baptism of fire at Svyazinvest, the former Russian state telecoms monopoly. For the past two years, the chief has been knee-deep in a top-to-bottom re-organisation of the company’s 78 regional subsidiaries into seven more manageable, inter-regional operators.
With a customer base of some 140m, it’s no easy feat, but Lopatin is determined to see it through. “Once we reduce the number of units to be managed, it will be possible for us to achieve more precise co-ordination, and more depth in analysis and strategy development,” Lopatin says. As if regional unification were not enough of a challenge, Lopatin wants to introduce International Accounting Standards throughout Svyazinvest before the end of the year, and to centralise accounts payable. It’s no surprise that Lopatin considers his age to be an advantage as he wrestles with simultaneous projects: “When you’re younger, you can work much longer hours!”
Company: Panafon-Vodafone (Greece, sales: E872m)
Previously: finance director, Panafon; finance manager, Georgia Pacific; Procter & Gamble Hellas & HQ Belgium; Xiosbank
Education: Ohio State University (MBA); University of Piraeus School of Business
Company: Axel Springer Verlag (Germany, sales: E3 billion)
Previously: CFO, Random House, New York; CFO, Bertelsmann Buch; McKinsey & Co; Ford Europe
Education: Fernuniversität, Hagen (master of economics); European Business School, Paris
Company: RTL Group (Luxembourg, Sales: E4 billion)
Appointed: 2000 Previously: CFO, Clearstream; CFO, Cedel International; director, Berlin-based venture capital fund; government privatisation agency; lawyer, Brussels-based firm; EC aide
Education: University of Cologne (PhD in economics)
Company: Intershop (Germany, sales: E123m)
Appointed: 2001 Previously: CFO, Technet; real estate broker; marketing executive, Gruner & Jahr
Education: Hamburg and Lüneburg universities (business administration)
Company: Fresenius Medical Care (Germany, sales: E5 billion)
Previously: finance director, Gehe UK; VP of business development North America, Franz Haniel & Cie
Education: Harvard (MBA); University of St Gallen, Switzerland (PhD in international economics)
Company: ICI (UK, sales: E13 billion)
Previously: head of strategy and performance, ICI; Unichema; Unilever
Education: Oxford University (MA in chemistry)
Company: Senator Entertainment (Germany, sales: E133m)
Previously: CFO, Planetactive; CFO, Pixelpark; consultant, Bertelsmann’s multimedia strategy division
Education: Hamburg University (business administration)
As a veteran of the dot-com boom, Stein has a rich collection of new economy war stories. Before joining Senator in November last year, he spent a rocky 18 months at Planetactive, an online marketing and gaming company. After the firm’s flotation was cancelled in summer 2000, Stein had to race to secure two rounds of equity funding—each worth DM20m—to keep the company alive. “It was a real struggle for survival,” Stein recalls. Cutting staff numbers in half, from 140 to 70, he says, was also tough: “It was not very heroic, but I had to do it.”
Weary of the accelerated business cycles of new media, Stein took off for a five-week trek in the Andes to recharge his batteries before joining Senator. He may be young, he says, but he’s already seen his fair share of ups and downs. “One year in new media counts for seven, right?” he smiles.
Company: SMG (Scotland, sales: E484m)
Previously: group financial controller and treasurer, SMG; audit and assurance services, KPMG
Education: Glasgow University (accountancy)
Watt is spearheading a classic cost-reduction programme at the Scottish media group, clamping down on spending, while freezing recruitment and salary rises. Commenting on what he calls “the worst trading conditions in years”, he offers a sanguine view: “When you’re put forward for these roles, you expect to have to take tough decisions. It would have been nice to have come in when all was rosy, but at the same time, you learn a lot more when times are tough.”