The air has become thinner for Baywa's Chief Financial Officer
On 8 February 2023, Andreas Helber's world was still in order. On this day, Baywa celebrated its 100th anniversary with great pomp and circumstance, in a makeshift multi-purpose cultural hall in Munich, not far from the River Isar.
The CFO of Germany's most significant agricultural trade group happily joined in the celebrations. The most prominent guest from the world of politics was Bavaria's Minister President Markus Söder (CSU). The singer Sarah Connor and her band entertained the estimated 1,000 participants. And the then-CEO Klaus Josef Lutz (CEO from 2008 to March 2023) almost turned the event into a one-person show on a large stage.
This probably cost Baywa several million euros. In hindsight, the whole thing seems like dancing on a volcano. After that, things went rapidly downhill for the SDax constituent. Since mid-2023, the group has accumulated a net loss of over 200 million euros. This does not even include the figures for the past second quarter. Helber will not present these to the public until the end of September. These are not expected to contain any good news either.
The company has made a mess of its debt-financed expansion strategy. The mountain of debt amounts to almost 11 billion euros, of which financial liabilities account for more than half. Interest expenses are soaring. Added to this are extensive write-downs in the solar panel business since China flooded the world market with products at dumping prices. Baywa has become a problem case. A financial rescue package from the significant owners, the credit co-operatives in Bavaria, and the creditor banks is intended to save the company from ruin, i.e. bankruptcy.
Reacting too late
The 58-year-old manager is partly responsible for the debacle, due to his critical position on the Management Board. Like the other two board members, Marcus Pöllinger and Reinhard Wolf, he supported Lutz's aggressive growth strategy in recent years, even though the company's debts had already reached alarming levels. When the interest rate turnaround occurred, and rates rose after a long phase of cheap money, it was too late to take consistent countermeasures. Helber's biggest mistake was not sounding the alarm in time. No one else should have been better placed.
The tall business graduate is a proven expert. Helber has been the CFO of Baywa for 14 years. At the time, Lutz played a decisive role in ensuring that the Supervisory Board appointed him to the Board of Management. Prior to that, the former KPMG employee was Head of Group Finance for ten years. Helber, a tax consultant and auditor, knows the company better than anyone else at the top management level. Yet Baywa got into difficulties. The Board of Management failed. Did it lack assertiveness from the CFO – clearly necessary when a company is in danger of crashing into the wall due to its own actions.
Others hold the reins
Helber's current contract runs until March 2026. In January, and repeatedly after that, the Supervisory Board publicly expressed its confidence in him after Lutz suddenly resigned at the beginning of the year following a power struggle with his CEO successor, Pöllinger. After handing over the baton at the top of the Group, Lutz moved to the Supervisory Board, where he seamlessly took over its management. The 66-year-old was only Baywa's CEO for eight months.
Under Pöllinger's direction, the Board of Management embarked on a restructuring programme, but events came thick and fast. On 12 July, the management had to admit in an ad hoc announcement that it had reached the end of its tether. The Management Board officially declared the company a restructuring case. Since then, Helber has effectively been working with the management consultants from Roland Berger and the Baywa reorganisation coordinator from Alix Partners, who were appointed under pressure from the creditor banks. He has long since lost hold of the reins. The banks are now deciding the fate of Baywa. The reorganisation report (including the going concern forecast) from Roland Berger is due in September.
The fact that Helber is still in office despite the disaster is due to the fact that the Bavarian Volksbanken and Raiffeisenbanken urgently need him for the hot phase of a rescue solution, due to his expertise. If they were to replace him prematurely, the damage would possibly be even more significant. Nevertheless, the air has become thinner for him in the top management body. It would be surprising if the manager were to remain in office until the end of his contract.
