In what ways have you refocused the portfolio?
We’re good at managing large shopping centres, mainly in the capital cities in continental Europe. Some assets don’t contribute that much to the growth we’re targeting—small high street shops, provincial shopping centres. We sold a portfolio of somewhere close to 250 shops in the Netherlands for about €744m and we sold a high street portfolio in Belgium for close to €100m.
When we spoke before, you said you’d had a firm focus on cash flow. Has the finance function’s attitude to this changed since?
Our vigilance on things like debt collection has increased. Once, we took it for granted that payments would come in. Now, we’re measuring this on a much closer basis from the corporate centre. On the treasury side, access to funding has become more of a challenge. Though it’s been much harder work than it once might have been, we signed up for €2 billion in new loans in 2008 at quite affordable rates with good maturities, and we rolled over something like €430m in bank loans.
How have your priorities as a CFO changed during the crisis?
You need to be on top of your business. You can say that’s always been the case, but in a time of crisis it’s even more important that you pay attention to the details, that you know exactly what’s going on in your organisation. Decision support is also crucial. It’s very important for me that my finance team—which includes the tax and treasury guys, the control team, the consolidation team—is very close to the positions that we are taking. When we get an investment or a divestment proposal on our desks, we need to have a total overview of the fiscal and reporting consequences to make sure there are no loose ends.
Are there lessons you’ve learned as a finance chief during this time?
Time is of the essence. The world is changing very quickly around us. Within the past couple of years, all the signs were positive. You could afford to wait and an even better situation would probably come in a month. That is no longer the case. You need to act quickly and decisively. That means you have to manage your teams tighter and work them harder.
What’s your outlook?
Our cash flow model is quite predictable. We have long-term contracts and only a very small proportion of our rental income is tied to the turnover of our tenants. So we’re quite confident in giving an outlook for 2009. We predict that the recurring earnings per share, which is a cash flow proxy, will grow by at least 7%. Over 2008 we did 8.4%, which was well received in the market. Seven percent is going to be hard work, but if we weren’t confident we wouldn’t put that number out.