Interview with Alexander Susanek, COO PALFINGER AG

ir.news: As Chief Operating Officer (COO), you have been responsible for production and product lines at PALFINGER AG since the beginning of July 2023. What was your career path before joining PALFINGER? What experience do you bring with you from your previous professional career?

Susanek: I studied mechanical and industrial engineering at TU Munich and then did my doctorate in business administration. It was clear to me from the start that if you want a company to be successful, technology and business administration must go hand in hand.

Every since, this credo has been part of my professional life. Following eight years at MAN, I’ve spent the last nine years in various positions at BMW. Among other tasks, as head of car prototype manufacturing, I worked closely with engineering and product lines before taking over responsibility for the BMW Group’s largest engine plant in Steyr. In my most recent role, I was responsible for the production of all combustion engines and electric motors. The automotive industry is characterized by highly interconnected processes that have to work together smoothly. This requires a sound understanding of the overall picture and a high level of commitment. These experiences have been very important to me and have certainly shaped me.

So I bring a broad spectrum of knowledge from my previous jobs, including some best practices that will help us at PALFINGER. However, I am also aware that, due to our business model at PALFINGER and our size, not everything can be transferred one-to-one.

ir.news: And how would you describe yourself as a person? What is important to you as a manager?

Susanek: As the father of three children, it is particularly important to me that we treat each other with respect, and that our actions are based on a long-term perspective. Being able to work together with trust, respectfulness, and openness to change is also important to me. You should first set an example yourself, of what you expect from others, which is why I also strive to attain these standards myself as a manager.

In the company, our most important task is to ensure results and create the conditions for sustainable success. Focusing on results is therefore an essential requirement for all managers. For me, this also includes stating expectations clearly and ensuring clarity and commitment.

I am convinced that companies can only be successful today if the management level works together as a team. The world is too complex for one individual to have a complete overview and always be able to make the right decisions. That is why I think it is important to have a culture in which everyone has their say and you can also initiate and handle controversial discussions. That said, once you’ve made a decision, I also expect everyone to stick to it and work consistently on its implementation.

ir.news: At the beginning of your term of office, you emphasized that it was important for you to get an insight as quickly as possible and to exchange ideas with local teams in person. How far along are you with that? Have you already been able to get a first overview? What is your conclusion?

Susanek: It was important for me to quickly get to know the products, the sites and the employees who made PALFINGER what it is today and to get an overview. As a result, I’ve been traveling a lot in recent weeks, especially in Europe and North America.

What impressed me was the many experienced and highly motivated employees who promote the PALFINGER spirit. There is a good mix of long-standing employees and those who have only joined in recent years and have brought with them experience from other companies.

PALFINGER has grown significantly over the past two decades, also as a result of many acquisitions and joint ventures. You can tell that, of course. The introduction of the GPO was a very important step in this respect. While a lot has already taken place, much still remains to be done. There is still much unused potential, particularly at the interfaces between development, purchasing and production. That is why it is important for me to continue to integrate the various locations. This will provide the basis for using synergies more successfully and further increasing efficiency.

ir.news: PALFINGER has a very high level of added value. Is it going to stay that way? Or are you often asking the question, make or buy?

Susanek: That is certainly a key question for achieving our financial goals. A high level of added value requires us to make permanent investments in maintaining our plants and committing capital to our own value creation. This has an impact on cash flow that we cannot always justify over the long term.

We have very effective manufacturing plants that are specifically designed to meet our requirements and therefore work very efficiently. At the same time we are working on strengthening our supplier base to strategically develop suppliers so that we can continue to have strong partners from whom we can buy good quality at good prices. For me, this is a prerequisite for stronger sourcing from outside.

That is why I plan to visit various suppliers over the next few weeks. It is very important for me to talk to the suppliers who are suitable for a strategic partnership. The focus from my point of view is specifically on our growth market in North America.

ir.news: At the end of July, PALFINGER presented its record half-year results. However, high investments and significantly increased working capital due to higher inventories are having a huge impact on free cash flow and net debt. What optimization options do you see to reduce working capital?

Susanek: Firstly, we are working to reduce our inventory levels. In recent years, we have seen many disruptions to supply chains as a result of the COVID pandemic. In response, we have increased the range of many materials so that we still in a position to deliver. This will change again in the future.

In addition, we have potential in supply chain management, for example through better management of material flows across the entire value chain, and the ongoing development of our organization and processes. We have already kicked-off projects in these areas, which we will now ramp up even further.

Secondly, we are also going to thoroughly review our investments, particularly in terms of our own value creation mechanisms.

ir.news: The construction industry in EMEA is declining under pressure from rising interest rates and higher costs. How can production and manufacturing be prepared for this challenge? How is PALFINGER positioned in this respect?

Susanek: In light of the economic situation, we are somewhat more cautious about expanding capacity and hiring new employees, because we want to stay focused on our long-term growth targets. At the same time, we will pay very close attention to our cost developments and review projects for the value that they contribute.

Fortunately, we continue to see a good demand situation in North America and we see that our plans for growth are taking effect. This ensures a certain stabilization of the utilization of our plants. From today’s standpoint, I reckon that instruments such as using up flexi-time credit hours and reducing overtime will be sufficient to respond to changes in demand.

ir.news: Final question: What goals have you set yourself and what can be achieved in the next 12 months?

Susanek: I am convinced that a company can only be successful over the long term if it is consistently aligned to meet the needs of its customers. This is particularly important for capital goods. That is why I am very interested in continuously developing our products and ensuring that PALFINGER is the first choice for our customers in all product lines. Digital functions and electrification are key topics here.

And, of course, I would like to contribute to making the company more efficient and to achieving our growth goals. In particular, we want to achieve our targets of EUR 3 billion in revenue, 10% EBIT and 12% ROCE in 2027. I can contribute a great deal towards achieving this with the functions in my area of responsibility. Some actions will only take effect over the longer term, but it is my clear goal to make sure that things start changing over the next 12 months.