Issuu

€12.50 Nº05 | June 2019

magazin We design SME financing. Easy. Fast. Innovative.

Page 8

FROM REAL LIFE Special purpose machine manufacturer Manuel Möck relies on creditshelf for fast loans to finance his orders Page 14

A GLIMPSE BEHIND THE SCENES Agile project management with Scrum: How it works and what effects it has Ausgabe 2 / 2019 • creditshelf

Invest in German Are you...

SMEs with creditshelf!

yy a legitimate, professional and institutional investor and/or family office? yy Looking for new investment opportunities with an attractive risk-return profile and considering SME loans? yy looking for investment opportunities starting at EUR 10,000 for an individual loan and EUR 250,000 for a loan package with an interest rate of six to 15 percent p.a.?

Then invest in individual, clearly defined entrepreneurial projects and business models of German SMEs!

Profit fromâ€Ś

yy Direct access to audited SME credit projects via our online platform. yy Two strong factors that overlap in a meaningful way: an attractive market environment with low interest rates as well as plenty of investment needs for innovative SME projects. yy A collaboration based on a framework in which we professionally combine new asset classes, precise risk analysis and attractive returns. Our experienced team of credit analysts uses an open-scoring model to assess the creditworthiness of borrowers and supplements the quantitative rating with a comprehensive qualitative assessment. yy Transparency and security throughout the entire investment process.

We design SME financing. Easy. Fast. Innovative. 2

Further information and current credit projects can be found at: www.creditshelf.com/de/investors

Editorial

Dear Readers, Who do you think about when you hear the term modern entrepreneur? Our answer: A pioneer, visionary and thought leader. At least someone who is not intimidated by challenges and is open-minded about new trends. We are lucky to be able to introduce someone to you who perfectly matches this description in the current issue of our creditshelf magazine. Manuel Möck, Managing Director of Walter Möck GmbH, took over his father’s company after several years of preparation and was tasked with dealing with the consequences of the financial crisis right at the beginning of his “term in office”. Some ten years later, he has established the company, which has 65 employees, as a full-range supplier in special purpose machine manufacturing. What does it mean to be a managing director in the manufacturing industry and where can visionary entrepreneurship begin? Well, for instance when it comes to financing: With creditshelf, he raised capital on five occasions to pre-finance major orders – quickly, easily and above all successfully. Read his report beginning on page 8. Perhaps you will also come to the conclusion that the involvement of alternative financing partners is worth considering? According to the KfW SME Study, the approximately 842,000 owners of SMEs should definitely consider the question of how and when they should approach their succession. Discover what possibilities there are besides intra-family solutions as in the case of Manuel Möck, as well as which steps and challenges you must master along the way. But enough about challenges. Let's talk about the opportunities. Namely, those that enrich the daily life of an entrepreneur by providing efficiency and excitement. As a Fintech company, we can only report positively on the many opportunities offered by digitisation: Would you

Editorial

like to know what your current status is and what you still have to do in order to become a “smart company”? The quick check, which we present to you in this issue, will certainly provide important insights. The methods we use at creditshelf to create new and even better products are also smart. Ever heard of agile project management using Scrum? Originally from the field of software development, it has developed into a general project management method. Find out how it works and try it out right away: In the middle of the magazine you will find the tools required for this. In any case, our creditshelf employees are thrilled! And in the current creditshelf issue you will get to know some of them. Which tasks do they have? What do they do beyond their everyday work and what drives them? You will be amazed at how colourful, diverse and openminded the creditshelf team is. Not only as an employer, but also as a designer of digital SME financing – you are welcome to gain a personal impression of this. Why not simply become part of our network of SMEs, investors and partners? Visionaries and those who want to learn from them are most welcome. We now wish you enjoyable reading. And of course this is also possible in a digital format via our e-paper, which you can download at e-paper.creditshelf.com.

Dr. Tim Thabe Co-Founder and Chairman of the Board of creditshelf

Overview 3

Editorial

Table of Contents and masthead

COOPERATION PROJECTS

Cooperation with CrossLend provides new opportunities for investors and SMEs

3 QUESTIONS FOR...

Financial expert Dr. Gerhard Grebe on the consequences of Brexit for the financial industry and SMEs

FROM REAL LIFE

Special purpose machine manufacturer Manuel Möck relies on creditshelf for fast loans to finance his orders

24 18

COOPERATION PROJECTS

Release liquidity with hidden reserves: Introduction of Maturus Finance GmbH

DATES

Dialogue creates added value: Numerous events offering the opportunity to talk to experts in the field

FOCUS ON SUCCESSION

We still have time, right? Approaching succession in a timely and appropriate manner!

FOCUS ON SUCCESSION

And now for the finances: How to properly calculate the enterprise value and raise capital for the acquisition

CAREER

Board of Management: Dr. Tim Thabe (Chairman), Dr. Daniel Bartsch, Dr. Mark Währisch Chairman of the Supervisory Board: Rolf Elgeti Entered at the Frankfurt/Main District Court – Comm. Reg. no. 112087 VAT ID: DE298667279 Responsible under the German press law: Birgit Hass (Head of Marketing and Communication, creditshelf AG) Head of Advertising: Birgit Hass (Head of Marketing and Communication, creditshelf AG) Head of Subscription Service: Laura Gabriel (Marketing and Communication, creditshelf AG)

Conceptual design and implementation: ABG Marketing GmbH & Co. KG www.abg-partner.de

How creditshelf supports the promotion of young talent

Editorial office: Ilka Stiegler, Dominik Schilling, Cindy Knoblauch, Nora Körner ABG Marketing GmbH & Co. KG

A GLIMPSE BEHIND THE SCENES

TRENDS

Are you digitally established? Find out by completing the smart company test!

Layout and design: Alin Poetzsch ABG Marketing GmbH & Co. KG

28 26

Publishers: creditshelf Aktiengesellschaft Mainzer Landstraße 33a 60329 Frankfurt/Main, Germany Telephone: +49 69 348 772 40 E-mail: info@creditshelf.com www.creditshelf.com

Internal project team of creditshelf: Birgit Hass, Fabian Brügmann, Dr. Gregor Heinrich, Jan Richardson, Laura Gabriel, Nico Bleh, Richard Heller, Sebastian Seibold, Zorana Bejtovic

Agile project management with Scrum: How it works and what effects it has

masthead

CAREER

creditshelf employee Victor Lanckriet: His daily routine between university and Fintech

STIMULI

Discourse encouraged: Our influencers on current topics from the world of finance

A GLIMPSE BEHIND THE SCENES

We are growing: New members of the creditshelf team Edition 2 / 2019 • creditshelf

Print: RheinMail GmbH, Boppard Photo credits: • creditshelf AG • Jan Bürgermeister (www.fotostate.com) • Laura Gabriel (creditshelf AG) • Birgit Hass (creditshelf AG) • Company photos • Bert Bostelmann (www.bildfolio.de) Editorial deadline: 29 March 2019 Print run: 100,000 copies (1st quarter of 2019, IVW verified) Retail price: Single issue: 12.50 EUR Annual subscription: 39.99 EUR incl. shipping costs incl. VAT (domestic)

Cooperation projects

Extended workbench Cooperation with CrossLend provides new opportunities for investors and SMEs SMEs are aware of the advantages of digital credit platforms by now and are integrating them into the financing mix more strongly to complement their house bank. These so-called Fintechs, whose platform-based business models such as that of creditshelf are becoming increasingly popular with customers, have enjoyed correspondingly great success. However, with the increasing size of the platforms and the growing transaction volume, a broader refinancing mix on the part of the providers will become necessary. creditshelf set out in search of intelligent possibilities and found what it was looking for: “With CrossLend GmbH, we found a professional and reliable partner”, says Dr. Daniel Bartsch, Managing Director of creditshelf AG. The cooperation, which has been in place since December 2018, made it possible to offer digital securitisation of SME loans for the first time in Germany. CrossLend acts as an investor and purchases loan receivables as part of the regular creditshelf lending process. These are then securitised, i.e. converted into tradable securities in a flexible and transparent manner, and forwarded to selected institutional investors via CrossLend. creditshelf thus indirectly gains access to additional institutional investors. The fully automated, digital securitisation process made possible by CrossLend increases the transparency of the resulting securities, creates fungibility and keeps transaction costs low.

Managing Director Bartsch, and he continues: “This is because SME loans are generally regarded as a promising investment opportunity by investors. However, for regulatory reasons, some of them are not able to make their investment via the direct purchase route with

Securitisation instrument: “Comeback” after the financial crisis

“We are offering a new, innovative product and investment format with the flexible, digital securitisation of SME loans. In addition, the opportunities for SMEs to obtain financing will increase due to the expanded circle of investors”. Dr. Daniel Bartsch, Managing Director, creditshelf Aktiengesellschaft

New format for investors and broader pool of investors for SMEs “With the flexible securitisation of SME loans, we are offering a new, innovative product in addition to our platform-based sales, which is certainly of great interest to investors”, says

SME loans”. In addition, the expanded circle of investors increases the opportunity for SMEs to obtain financing at favourable conditions. “In this respect, we refer to the digital securitisation by CrossLend as an extended workbench”, says Dr. Bartsch.

creditshelf and are therefore looking for alternative solutions. We have created a new investment format for them, thanks to this cooperation, and have thus further facilitated access to Cooperation projects

Securitisations in the period before the financial crisis were characterised by a high degree of intransparency, anonymity and complex structures. The cooperation between creditshelf and CrossLend aims to change this: “We operate based on a hand-picked investor network; all steps of the process and each individual investor on CrossLend's part are disclosed and verified by us. We guarantee structured and transparent processes”, the Managing Director of creditshelf emphasises. When the cooperation was launched at the end of last year, an institutional investor initially invested a medium seven-figure amount in the new business of creditshelf via CrossLend every month. Beginning in the second quarter of 2019, a second investor is scheduled to join. “This development shows that the offer has been well received. We are pleased to have now found a scalable solution and an additional sales channel with the help of CrossLend, through which we can also mobilise additional investors in the future”, the Managing Director of creditshelf sums up. Marco Hinz, Chief Operating Officer at CrossLend, also praises the cooperation: “As a provider of a digital platform that offers a marketplace for loans, we attach great importance to making the credit market more efficient and transparent. To this end, we have always been looking for pioneers and partners who share our vision. We have found them in creditshelf”. 5

3 questions for...

fareWell, eu! brexit: Consequences for the financial industry and SMEs

Prof. dr. dirk Schiereck

There are plenty of issues of relevance to SMEs and the financial industry. There is a real need for experts in all fields (without exceptions) who, with their know-how, their experience and their knowledge, can provide an insight into the latest developments - as quickly, informatively and reliably as possible. Prof. dr. dirk Schiereck is a professor and head of the Corporate Finance department and, together with creditshelf, publishes the “Finanzierungsmonitor” study once a year. He knows how to ask the right questions concerning the right topics. In our new section “3 questions for...” he will interview high-ranking experts about current and burning issues in the business world. The focus of this edition: brexit. While one person is waiting and sipping tea, the others are engaged in endless debates. Some are seriously worried about the future. Justifiably so? dr. Gerhard Grebe provided answers to our questions. What impact does brexit have on the financial sector? Dr. Grebe: The financial service providers quickly started planning to relocate their European business to the mainland after the exit referendum and to apply for bank licences there in order to be able to continue their EU passporting business in the EU. The majority of the institutions have adjusted their plans in such a way that they are well prepared even in the event of a hard Brexit. Moreover, German politicians have done a great deal to make Germany a more attractive financial centre. The protection against dismissal for managers with high incomes has been reduced and changes to the general terms and conditions for institutional clients are still the subject of discussion. At present, almost 50 banks will relocate their opera-

With his company banXconsult, Dr. Gerhard Grebe provides strategic and operational consulting services to the financial services sector and acts as Chairman of the Commission for “Financial Market Policy & Precaution” of the Economic Council of the State of Hesse. The latter comments on questions of Hessian, German and European financial market policy and aims to engage in dialogue with politicians, financial institutions and other associations in the sector in order to provide impetus for political decisions. As far as Brexit is concerned, he senses growing uncertainty, which is the result of the lack of political decisions on the part of the United Kingdom regarding the negotiated withdrawal agreement.

Edition 2 / 2019 • creditshelf

tions from London to Germany. These banks will not only operate their European business from Frankfurt, but will also enter the German market. The supply of high-quality financial services will increase and competition in the corporate customer business will become more fierce. SMEs will benefit from both of these developments. What precautionary measures are SMEs taking to respond to brexit and what should SMEs urgently consider? Dr. Grebe: SMEs need to take precautions against the imposition of tariffs on bilateral trade and have begun to modify supply chains and shift additional production and value creation to the EU-27. In order to be able to deliver during the unknown transition period, inventories have been significantly increased, leading to considerable additional costs. Other issues include the validity of UK patents for the EU, especially in the pharmaceutical sector, as well as internal tax adjustments such as changes in transfer pricing, etc. How severe will the impact be, depending on whether the withdrawal from the EU will be regulated or “hard”? Dr. Grebe: The economic sentiment has already deteriorated, partly as a result of Brexit. In the case of a hard Brexit, the uncertainty will significantly increase over a longer period of time, which will lead to greater reductions in growth on both sides of the channel. A regulated Brexit would mitigate these negative effects. Appropriate transition periods would, for example, help avoid frictions within economic activity.

Three questions weren't enough? If so, dr. Grebe will be at your disposal for further questions: dr. Gerhard Grebe banXconsult GmbH Frauenlobstr. 6, 60487 Frankfurt a.M. Telephone: +49 69 707 957 11 Mobile: +49 173 661 21 38 gerhard.grebe@banxconsult.de

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w w w. m i t t e l s t a n d s p r e i s . co m Ausgabe 2 / 2019 • creditshelf

Well positioned Becoming a full-service provider with the right financing mix If there is one thing that can be said about Manuel Möck, it is that he certainly did not have the easiest start as Managing Director of his parents’ business: Half a year after taking over Walter Möck GmbH, the financial crisis cast its shadows on a company that had been operating successfully until then. Around ten years later, it is hardly noticeable any more. What did Manuel Möck learn from this, how did he make the company competitive after the economic and financial crisis and what role does creditshelf play in his business activities? Find out here! From a pure contract manufacturer to a full-range supplier Manuel Möck can proudly look out onto a company building of over 5,500 square metres with a production facility, assembly hall, administration, its own research and development department and training rooms. He has been Managing Director of Walter Möck GmbH, based in Sonnenbühl, Baden-Württemberg, since 2008. Founded in 1970, the company is a provider with a broad machine base for the complete machining of various materials in the fields of sawing, turning, milling, grinding, deep hole drilling, laser marking, which also has its own construction, including electrical and assembly departments. “Unlike the sober description of the business model, I see ourselves more as a service provider and partner who communicates with customers on an equal footing and jointly develops solutions”, adds the 39-year-old Managing Director. When he refers to solutions, he means the special machines that the SME specialises in, which are 8

Edition 2 / 2019 • creditshelf

specifically designed for and individually tailored to the customer. “We guarantee that everything, from the machined part to the fully assembled machine, stems from our company. This resonates with our customers”. They include automobile manufacturers and their suppliers, the aerospace industry, medical technology, turbine and mechanical engineering as well as the entire tool industry. “Obviously these companies could commission separate service providers for each individual production step leading up to the finished machine. But that would be hard to beat in terms of complexity, time-consuming coordination work and a lack of planning security”. So why not make it easier to handle and just commission one company for all of it? Manuel Möck also shared this view and worked intensively in recent years to establish his own company as a full-range supplier. It is therefore no surprise that he mentions a good capacity utilisation: “Large scale requests and orders with shorter delivery times are not uncommon. What kind of service provider is able to say no to this? Especially if we are the exclusive supplier for some of our major customers and also attach importance to long-term customer loyalty?” Direct path to succession The 39-year-old is more than grateful for this situation today. After all, he had to deal with the consequences of the financial crisis some ten years earlier, shortly after he started as Managing Director. “That was a tough challenge, but I was well prepared for it”, explains Manuel Möck, referring to the long and intensive succession process. The person who handed the business over was his father

From real life Walter Möck, who managed the family business for almost 40 years. “He and my mother ran the company with passion, and I grew up here with my sister Simone. In addition, I have always found mechanical engineering interesting and therefore completed an apprenticeship as an industrial mechanic in Reutlingen after high school. It was then, at the latest, that I knew for sure that I wanted to become the successor”. No sooner said than done: Immediately after graduating, he joined the company of his parents and got to know all areas of the company. “I started in production, continued into assembly and worked my way up to the management position. In order to prepare myself for assembly in special purpose machine manufacturing, I completed a PLC training course at the same time and then completed my master's degree. A degree in Business Studies rounded off the overall package: I was ready”. He was initially appointed as Managing Director of Südspan GmbH, the then subsidiary of Walter Möck GmbH, in 2006. In 2008, he finally joined Walter Möck GmbH himself. Letting go With the merger of the two companies Südspan GmbH and Walter Möck GmbH in 2009, Manuel Möck was officially appointed as the successor. The shares in the company were restructured: His sister Simone Homburger, with her commercial background, works as an authorised signatory in the human resources and accounting department. Father Walter Möck with his 75 years of age is no longer a Managing Director, but as befits a passionate entrepreneur, he continues to be an indispensable part of the company. “Among other things, he cultivates customer relationships and is responsible for facility management, insurances, repairs and patents. Above all, he advises me. I attach great importance to the know-how he has built up over many years”. What many are unable to do, Walter Möck, however, firmly adheres to with regard to an orderly succession: He gives his son free rein and does not intervene in the operative business. It is well known that letting go is a difficult step for transferors. “Instead, my father is a little relieved that he no longer has to deal with today's requirements and

trends relating to digitisation and modern merchandise management systems”. However, these were not the only construction sites he had to deal with at the beginning of his career as Managing Director. Getting used to a new role: from “little boy” to manager “Positioning myself as the new manager was a process in itself”, says the Managing Director. “After all, there are many employees who knew me as a 10-year-old boy. Understandably, having to take instructions from the ‘little boy’ is a difficult hurdle to overcome. But we have successfully mastered that”. Today, the manager and his 65 employees have grown together to form an unbeatable team. “I am proud of my employees, for whom my door is always open. At the same time, however, I also expect certain rules and hierarchies to be adhered to, and I have established good executives within the company for this purpose”. This shows what Manuel Möck understands by the term “family business”: “He refers not only to the relationship between the transferor and his successor, but also to the respectful cooperation between colleagues, the short decision paths and the communication with

“The credit process with creditshelf was surprisingly fast. This helps an entrepreneur immensely. After all, you must plan ahead and quickly determine whether or not you can accept an order or an investment”. Manuel Möck, Managing Director, Walter Möck GmbH

From real life

both customers and employees. Uncomplicated, flexible, fast and personal. That is what drives us forward”. Age and qualification of employees no criterion for exclusion Finding and retaining capable employees is a challenge for every managing director in times of a shortage of skilled workers. In Manuel Möck's opinion, some managing directors have to work on their recruitment. This begins with the selection and assessment of the applicants. He distinguishes between two pillars. On the one hand, he looks at the qualifications and technical dexterity. On the other hand, however, there are also soft skills such as reliability, the ability to work in a team, diligence or the willingness to learn. “Strong soft skills can definitely compensate for a lack of qualification. The opposite is more difficult. A football player, for example, can be the most talented player ever. But if he doesn't show up for practice on time, fails to make the most of his performance, or doesn't stand up

“Digital and personal are not mutually exclusive terms for us. SMEs are already used to having a personal advisor from their house bank alone. We apply the same principles here and supplement this aspect with a quick decision about the approval or rejection of a credit arrangement”. Richard Heller, Corporate Customer Advisor, creditshelf Aktiengesellschaft

Edition 2 / 2019 • creditshelf

for his team, the team gets very little out of it”, explains the passionate ex-football player Manuel Möck. “For this reason, I pay a lot of attention to the fundamental attitude of the applicants. That's why in some cases we've hired people over 60 who are among the most reliable employees today”. In addition to the best people, Walter Möck GmbH also needs high-quality machines in order to be able to offer a complete range of services. This was precisely why substantial investments were made until the financial crisis struck in 2008. Learning from mistakes “Like many SMEs, we were also hit hard from a financial point of view”, the Managing Director recalls. “Simply carrying on in the same way as before was no longer possible. We took the financial crisis as an opportunity to identify weaknesses in our corporate management and restructure”. The aim was to build up a buffer and to be able to fall back on alternatives in the event of another emergency. This applies to the expansion of the network of partners and suppliers as well as the reorganisation of the financing structure. In the past, Walter Möck GmbH worked with one or two house banks to secure standard capacity utilisation in the company by using long-term loans. Nowadays, the company makes use of a broad mix of multiple investors and models. Order pre-financing with creditshelf: quick and easy Today, Manuel Möck relies on three to four house banks, which constitute basic funding. What he was also looking for was a partner for granting fast, unsecured loans. The entrepreneur explains why: “We are dependent on timely deliveries of materials and purchases, but in the past we have also been confronted with situations where delivery times increased from four to twelve weeks. In order to prevent such bottlenecks and still guarantee delivery reliability for our own customers, I had to increase my stock. This ties up a huge amount of capital”. But it wasn’t just the considerable increase in stock that led to shortterm financing requirements. Delivery times of four to

From real life in cooperation with creditshelf - a mixture of short and medium-term loans with terms between seven and 36 months. “Financing requests of this volume and with these terms are quite typical for the manufacturing and processing industries. All the more so when, as is the case with Walter Möck GmbH, the company has grown by an average of eight percent each year since 2016”, says Corporate Customer Advisor Richard Heller. Will this continue in the future? In any case, Manuel Möck's plans bode well for the future. Fixed component of the financing mix 14 months and an average volume of EUR 300,000 per order alone: These conditions indicate how important it is to quickly obtain fresh capital: “With regard to delivery times, it takes a very long time until the complete sum paid by our customer arrives on our account, especially in special purpose machine manufacturing. Despite a partial payment per order, we can never avoid pre-financing on our part. This makes the challenge all the greater when our customers suddenly grow and the volume of incoming orders doubles”. It is precisely on such occasions that the Fintech company creditshelf AG supports entrepreneurs as a reliable partner. Digital yet personal The Managing Director became aware of creditshelf as a result of a simple online search. No trace of reservations towards Fintech companies: “The new players on the financing market are a great alternative for us SMEs. After all, banks are very strongly regulated and have to cover a much wider range of services. Fintechs, on the other hand, occupy special niches and thus have significantly more capacities and resources”. The entrepreneur also noticed this when working with creditshelf. 29-year-old Richard Heller was the contact person responsible for him, with whom the Managing Director built up a familiar, personal relationship right from the start. For the creditshelf team, the personal aspect in particular is at least as important as the digital, automated processes. Corporate Customer Advisor Richard Heller explains: “Digital and personal are not mutually exclusive for us, but go hand in hand. SMEs appreciate it and are used to having a personal advisor from their house bank. We apply the same principles here”. Zorana Bejtovic, Head of Risk at creditshelf, can only confirm and add to that: “The only difference is that the decision regarding the credit arrangement can be made much faster due to our technologies and algorithms”. A circumstance that Manuel Möck could personally convince himself of: “It is unbelievable how fast the credit application process went, it only took one week from the application to the credit approval. This helps an entrepreneur who must plan ahead and quickly determine whether he can accept an order or not. In addition, I was able to submit my documents digitally in an uncomplicated manner. If something was missing, my corporate customer advisor immediately contacted me. Throughout the entire process, we always had a close relationship”.

“In addition to expanding our special-purpose machine activities, I would like to digitalise our company processes and further automate workflows using specially designed systems. For example, we have developed our own machine with optimised sawing technology, which is already patented. Efficiency is becoming increasingly important for us considering short-notice customer requests and a consistently strong order situation”, says the Managing Director, whom the creditshelf Corporate Customer Advisor can only praise: “It is remarkable how Manuel Möck manages the balancing act between such a broad range of products and the strongly pronounced depth of added value. In my opinion, his drive for innovation and customer-friendly approach are exactly the right ingredients for continuing to be successful and competitive. We are excited about the future and look forward to continuing to be part of his financing mix”.

Also as a video on our YouTube channel

Multiple financing projects executed via creditshelf The enthusiasm of the 39-year-old Managing Director is also reflected in the number of financing requests. Since the end of 2016, he has carried out a total of five financing projects with a total volume of EUR 1.4 million From real life

Career

all-rounder credit analyst 4.0 The future development of the financial industry depends on bright minds who can master the challenges ahead using strategies and new ideas. creditshelf is therefore committed to providing training and future qualifications. Originally, an informative meeting with professional feedback on the training at the Finance Academy of the German Association for Financial Analysis and Asset Management was planned. As a result, creditshelf Managing Director Dr. Mark Währisch held a lecture before participants of the “Certified Credit Analyst CCrA” programme in May. The aim was to give new impetus to the training of credit analysts. “The analyst of the future is an all-rounder who has experience in the granting of credit, but above all in the field of data”, Dr. Mark Währisch explains. “Currently, many analysts take the classic route from their first day of training to becoming experienced experts. There are far too few specialists, who are qualified for credit analysis 4.0”.

CREdIT AnALYSIS 4.0 In his lecture at the DVFA Academy, Dr. Mark Währisch explained the questions that credit analysts should be able to answer in the future: y Which data do I need for my evaluation? y Which data is actually available on the customer side? y How do I expand the database on the customer side? y How do I support my customers in digitising their documents and drawing the right conclusions for their operational and financial issues? y What data do I receive from other sources in order to be able to form a solid foundation for my decision? y How do I structure my data model in order to capture data in a uniform way with a low error rate and to arrive at reliable conclusions? y How do I combine the data available to me in order to obtain reliable statements about creditworthiness? y How do I meaningfully integrate new findings into existing and already validated credit models? The aim should be that credit analysts can give qualified answers to these questions and thus develop new strategies for the analysis of credit enquiries.

Edition 2 / 2019 • creditshelf

The experts at creditshelf have been dealing with these topics for some time now and are working on corresponding models and software solutions. “Our goal is to objectify credit decisions using a wellfounded database and to make results reproducible”, explains Dr. Währisch. “This is only possible if the credit decision is made on the basis of clearly defined criteria and solid data and not - as is still common today - primarily driven by the expertise of a Senior Credit Analyst”. Modernising the training of credit analysts The management of the DVFA Academy would also like to draw on this experience and modernise the training of credit analysts. In the future, the certification programme could be more focused on topics such as data, programming, network queries and strategy. “Credit analysts must be capable of structuring the models they need themselves and of speaking to software developers on an equal footing”, says the Managing Director of creditshelf. With his keynote speech “Rethinking: Credit analysis 4.0 as an essential building block for the smart economy", the Managing Director of creditshelf wanted to encourage the prospective credit analysts to rethink in order to initiate the urgently needed change processes in the credit market. “The DVFA is a good sparring partner for us and simultaneously acts as an engine in the financial market”. In order to be able to continue to create these impulses in the future, but above all to drive its own business model, creditshelf is increasingly relying on international specialists. “All over the world there are many young people on the move who want to make a difference, develop something new and question traditional thinking. They are looking for the challenges we can offer them”, explains the credit risk expert. At the same time, these young people would be willing to respond to the needs of customers in SMEs and point the way to the future. With a technology- and data-based analysis, it is possible to offer customers added value and to offer them fast solutions for their credit problems - the core of the successful business of creditshelf.

NEW! DIGITAL! SMEs!

www.businessbuddy.info

Ausgabe 2 / 2019 Ad â€¢ creditshelf

Short sprints for a great goal By using tried and tested methods, it is possible to implement projects much more efficiently in companies. Agility is the buzzword for both project management and software development according to the Scrum model. Find out here how this contributes to the success of creditshelf here.

Edition 2 / 2019 â€˘ creditshelf

Scrum has become indispensable for creditshelf. It was used in the IT sector at an early stage. But what exactly is the secret behind this term? Scrum is a method used by many companies whose success is based on their specific distribution of roles on the one hand, and on the relatively small development steps and constant validation cycles on the other. Scrum was designed as a result of many product developments being too complex to be completely thought through and structured from the outset. â€œOne would have to be clairvoyant to be able to plan such projects and all their detailsâ€?, says Dr. Gregor Heinrich, Chief Technology Officer (CTO) at creditshelf.

A glimpse behind the scenes

project adjusted if necessary. If the requirements change, it is possible to make adjustments quickly.

“Ultimately, this work contributes to increased customer satisfaction because it enables us to deliver more quickly”, says the CTO.

Just as the process is structured, the roles of the people involved are clearly defined: The product owner sets the technical requirements and prioritises them, the Scrum master manages the process and removes obstacles, and finally the team develops the product. All these people - as well as future users and other stakeholders - meet regularly for so-called sprint reviews, i.e. reviews of the sprint that has just been completed. There they validate the implementation and, if necessary, determine further requirements. “The exciting thing about this is that adjustments to the specifications and requirements can be made for each sprint. This eliminates the need for lengthy and timeconsuming documentations of requirements. Another advantage is that customers receive something very early on”, explains Dr. Heinrich. The classic and often unsatisfactory method would be to initially specify the requirements in detail, then work on them for a long period of time and finally determine that the requirements do not correspond to the actual needs of the users. “Scrum elegantly avoids this by introducing a tight feedback loop in the sprint cycle. The method also helps to ensure that decisions are made wherever the most knowledge is available within the organisation”, the CTO points out. Suggestions for improvement from the team thus directly benefit the product. In the meetings it is also possible to adjust parameters, such as the resources in the teams. A democratic model for efficient project management.

The creditshelf software team, on the other hand, is responsible for developing the digital SME credit platform. Their primary goal is to create a good user experience. The users are both borrowers and investors as well as members of the creditshelf team.

More teams, more sprints Like during training: Small steps to success Simply described, Scrum works like a running workout: Many small sprints alternate with the evaluation of what has been achieved so far and the new definition of the next small goal. Eventually you reach your goal thanks to lots of sprints and permanent adjustments. In concrete terms this means: All project requirements are maintained, supplemented and prioritised in a list. Every two weeks, the teams meet at creditshelf after having completed a package during the sprint. They update the list, tackle the next package of subtasks and complete it. In each of these meetings, the results to date are analysed and the direction of the

Dr. Heinrich explains: “So far we have successfully used Scrum for software development. Since 2019 we have also been using the method in our data team to analyse and collect data. We have harmonised the processes between the two teams so that we can use the same procedure to define requirements”. The data team is responsible for analysing risks within the customer data, measuring the effectiveness of marketing and sales activities and ensuring the efficiency of the entire credit process. For example, the system regularly checks whether the requested documents are actually instantly available from the companies requesting the loan or whether this point leads to the termination of the request process. A glimpse behind the scenes

Scrum ensures transparency and satisfaction As previously mentioned, when using Scrum the team organises itself, which is why a steep management hierarchy is not necessary. Among other things, the popularity of the method is based on customer satisfaction and the resulting positive feedback, but also on dealing with the omnipresent dynamics of requirements and the rapid visibility of results. “Employees see clear advantages in using a structured method to identify requirements. Scrum also promotes transparency in the business, improves cooperation within teams and ensures greater satisfaction”, says Dr. Heinrich. Just like in running training, sprints strengthen performance, responsiveness and basic speed. This results in a competitive advantage that other companies could also take advantage of in their industry through the use of Scrum even beyond software development.

Our tip for the Scrum meetings: Planning Poker Every project manager and employee can confirm how difficult it is to set priorities or estimate the resources and time required for specific tasks. With Planning Poker, this challenge can be met in a playful and agile way. Unlike traditional poker, project team members do not play against each other, but with each other. You can read how it works on the detachable pages in the middle section of the magazine!

Is your company digitally established? All experts agree that SMEs should intensify their digitisation efforts in order to be prepared for the future. But where to begin?

Edition 2 / 2019 • creditshelf

Companies invest EUR 169 billion in machinery, buildings and equipment, but only EUR 14 billion in digitisation. “Digitisation projects are approached too seldom and reluctantly," said Jörg Zeuner, chief economist of the KfW banking group. In an interview with the German newspaper Handelsblatt, he described not only the lack of speed but also the narrow focus as problematic: “Digitisation projects are often only reduced to being able to increase efficiency”. At the Digital Growth Forum on 9 April, creditshelf, Google and the online marketing agency Klickkonzept sought to counteract this trend. At the event that lasted one day, experts spoke about growth and internationalisation in the age of digitisation. They asked: How can SMEs keep up? Topics such as digitisation, marketing automation, financing 4.0 or web data management were discussed in detail. The aim was to highlight digitisation processes and potential growth opportunities for SMEs.

Trends Take a test to find out where you stand when it comes to digitisation Those who were unable to attend the event can take a test to find out how smart and digital their company is. You shouldn't be put off by this: There are some quick online tests, but only a few of them were initiated by renowned institutions: University of Paderborn, Regensburg University of Applied Sciences, management consultancy KPMG and the DUB UNTERNEHMER magazine are the partners involved with the “smart company quick check”. Entrepreneurs have the opportunity to answer twelve questions on digitisation in up to five minutes. “Digitisation is the latest trend that no company should miss out on”, emphasises Nico

Bleh, head of IT at creditshelf. “This is why you should be aware of the position of your own company”. In the test, decision-makers themselves rate the surveyed activities on a scale of zero to ten - from “not applicable at all” to “entirely applicable”. Right after their assessment, they are shown the average value of the German economy in real time before the next question pops up. Stimulating continued digitisation Anyone who has completed the twelve questions will also receive a direct brief evaluation on their screen containing a selection of findings from the survey. At the same time, KPMG sends a “personal overview” to determine your

PERCEnTAGE OF COMPAnIES THAT USE SOCIAL MEdIA bY PLATFORM In GERMAnY In 2017 Multimedia portals (e.g. YouTube, Picasa, Slideshare, podcast)

14 %

Social networks (E.g. Facebook, LinkedIn, Xing)

41 %

Wiki knowledge management systems

Company blogs or Microblogging services (e.g. Twitter, Communote, identi.ca) 7%

company's current position and opportunities including all your own answers, the respective benchmark and a recommendation for action. According to the initiators of the check, this evaluation has a value of at least EUR 500. “This test stimulates people to continue dealing with the topic and to drive forward digitisation within their own company in order not to fall behind when it comes to industry 4.0, the internet of things or individualised customer communication”, explains Bleh. A look at the statistics shows just how important it is to give such impulses: Last year, six percent of companies with 50 to 249 employees did not even have their own websites. In the case of small businesses with up to nine employees, the percentage was as high as 37 percent. In other words: Only two-thirds of these companies had an online presence, the quality of which is not even determined by these statistics. The situation is even more critical when it comes to social media use: Only 41 percent used social networks such as Facebook, Linkedin or Xing. According to the IT specialist: “It is not acceptable for a company not to be online in 2019. As consumers, we are used to having information available online immediately and from anywhere. That's also why I want to clarify my question online in B2B and ideally also be able to enter into a direct dialogue with the company in question”.

ParticiPate noW!

Source: www.statista.com

Head over to the smart company quick check: smartcompanytest.creditshelf.com

Trends

Cooperation projects

sale & lease back:

MATURUS FInAnCE GMbH Contact Germany: Telephone: +49 40 300 39 36-250 Contact Austria: Telephone: +43 01 310 1192

Object-based flexible corporate financing

Maturus Finance GmbH â€“ Partner within the creditshelf network Interest rates are low, financing conditions are good, the economic situation is still quite stable - a seemingly comfortable situation for SMEs. It is precisely now that entrepreneurs should invest time in sustainably adapting the financing structure for the future and in getting multiple investors on board. Depending on the business model, the particularities and, of course, the plans for the future, it is advisable to develop a financing strategy that permanently ensures liquidity for flexibility in company management. A mix of equity and debt capital, investments, factoring, leasing and the cooperation with banks as well as additional non-bank partners increases the freedom of action. Maturus Financeâ€™s approach in the creditshelf network is to exchange information regarding these trends and cooperate with several financing partners to provide comprehensive support for SMEs.

E-mail: info@maturus.com Web: www.maturus.com

the factory floor. If these are valuable, mobile and universally deployable, additional liquidity can be generated within the scope of sheer internal financing. The company sells the objects to Maturus Finance and immediately leases them back afterwards. The purchase price is remitted and is made available flexibly without any restrictions, for example with regard to exceptional situations that regularly arise within the company. This can include investments in new business areas, the redemption of shareholders, the acquisition of companies, the implementation of company successions or the restructuring of operations. Since the valuation of the financing commitment is based on

the properties, Sale & Lease Back also works during difficult situations. The model is mainly used by manufacturing companies, such as in mechanical engineering, metal, plastic and wood processing, the food industry as well as the textile and printing industries. However, companies from the building construction and civil engineering sectors or from the transport sector also use this option to gain liquidity. The financing volume is usually between EUR 400,000 and EUR 15 million, and in some cases even more. For an initial assessment of a possible purchase price, a detailed analysis of fixed assets and leases is sufficient.

An OVERVIEW OF THE AdVAnTAGES y Fast and flexible supply of liquidity y Financing that is not dependent on creditworthiness or banks

Remaining flexible in special situations

y Internal financing from own resources by raising hidden reserves

The company has been offering asset-based financing models with Sale & Lease Back and Sale & Mietkauf Back since 2005. In this case, the focus is on the properties and their value, not on creditworthiness. Many manufacturing companies have huge volumes of fixed capital tied up in used machinery and equipment on

y Strengthening the equity ratio and thus the credit rating y Partial tax deductibility of leasing instalments as operating expenses y Free allocation of funds y No covenants

Edition 2 / 2019 â€˘ creditshelf

WORKING TOGETHER FOR A STRONG MITTElSTANd. BVMW

900,000 voices united for the SME sector. 32 strong partners in the SME alliance. 300 offices nationwide. 40 agencies in countries all over the world. Over 2,000 events for entrepreneurs every year.

BECOME A MEMBER NOW! Ad

www.bvmw.de

Dialogue creates added value In the midst of daily business, it is difficult to maintain an overview of the capital market. Are there new technologies that can accelerate financing processes? What new trends and legal frameworks need to be taken into account? The numerous events presented here will give you the opportunity to engage in discussions with experts. In any case, we are already looking forward to exchanging ideas with you! More information and bookings at www.creditshelf.com/de/events

Events with creditshelf as the (co-) organiser Finanz-Talk: Digitale Mittelstandsfinanzierung (Finance Talk: Digital SME Financing) The industry-wide digital transformation is creating uncertainty and a wind of change is blowing through the financial sector. As a result, traditional business models are increasingly under pressure to compete with the rapidly growing fintech industry. Thus, established banks and asset managers are increasingly under pressure, especially due to lower profits: The average return on equity (ROE) of German banks is up to four percent below the global average. You are sure to find the latest findings on these topics in our event series “FINANZ-TALK: Digitale Mittelstandsfinanzierung” (Finance Talk: Digital SME Financing). On the following dates we offer you the opportunity to take part in the exchange between Fintechs and established banks and to enter into a dialogue with experts from the scene. [[ Flight 1:

Trade fairs How does fast and uncomplicated credit brokering, i.e. “liquidity at the touch of a button”, via creditshelf work? How do companies benefit from the fully digital process? The experts at creditshelf will be happy to answer these and other questions at the following trade fairs: Convent Mittelstandstage (Convent SME Days): nationwide series of events The “Convent Mittelstandstage” are part of a nationwide series of events that has been implemented at German economic hubs for almost 20 years. creditshelf is a sponsor. Managing directors and board members as well as decision-makers in owner-managed SMEs with a turnover of between EUR 5 million and EUR 150 million will be present. Seize the opportunity in the following cities:  • 4. Mittelstandsforum Nordrhein-Westfalen (SME Forum North Rhine-Westphalia), Düsseldorf, 18/06/2019 • 16. Mittelstandsforum Baden-Württemberg (SME Forum Baden-Württemberg), Stuttgart, 25/7/2019 • 18. Mittelstandstag FrankfurtRheinMain (SME Congress FrankfurtRheinMain), Frankfurt/Main, 5/11/2019 • 16. Mitteldeutscher Unternehmertag (Central German Entrepreneur Congress), Leipzig, 2/12/2019 15. “Structured Finance” congress As part of the annual “Structured Finance” congress, those responsible for finance at large SMEs and listed companies report on their practical experience. We are among these CFOs, Treasury heads, bankers and selected financial service providers! Would you like to take a look behind the scenes and benefit from the experience of others? Then make a note of the following information: Where:

Internationales Congresscenter Stuttgart, Messepiazza 1, 70629 Stuttgart

When: 27-28/11/2019 20

[[ Flight 2:

• Stuttgart, 05/06/2019

• Hamburg, 25/09/2019

• Munich, 06/06/2019

• Berlin, 26/09/2019

• Düsseldorf, 19/06/2019

• Stuttgart, 16/10/2019

• Frankfurt/Main, 27/06/2019

• Munich, 17/10/2019 • Düsseldorf, 06/11/2019 • Frankfurt, 07/11/2019

Host: Luther Rechtsanwaltsgesellschaft mbH Presentation: Roland Berger GmbH Speakers: creditshelf AG, iwoca Deutschland GmbH, decimo gmbh Media partner: Markt und Mittelstand Morning Meetup In the Morning Meetup lecture series, we reveal the innovative opportunities offered by alternative forms of financing. Traditional financing methods are no longer effective on their own, especially in situations of exceptional circumstances and upheaval in companies, such as changes of shareholders or takeovers, growth phases or the challenge of digital transformation. Simple, fast and innovative financing options are in demand nowadays. Financing structures can be disrupted and reorganised, whereby the number of financing partners should remain manageable. In our series of events, we offer you the opportunity of getting to talk to representatives of various financing areas. In addition to the lectures, financing examples from the field will also be presented.  • Munich, 11/09/2019 • Hamburg, 19/11/2019 Speakers: creditshelf AG, Dr. Wieselhuber & Partner GmbH, Patrimonium Asset Management AG Media partner: Entrepreneur edition from GOING PUBLIC!

Edition 2 / 2019 • creditshelf

Dates

Investor Relations Events

External events

creditshelf AG has been a publicly listed company since July 2018. If you are an investor and would like to get to know us, then take advantage of the following opportunities:

Meet creditshelf at the Deutscher Steuerberatertag (German Tax Consultant Day) 2019! Where:

 • Prior Kapitalmarktkonferenz (Prior Capital Market Conference), Dreieich-Götzenheim, 4/6/2019

Maritim Hotel Berlin, Stauffenbergstraße 26, 10785 Berlin, booth number E17

When: 20-22/10/2019

• Commerzbank Sector Conference, Frankfurt/Main, 29/08/2019

What you can expect at the Tax Consultant Day:

• DVFA Autumn Conference, Frankfurt/Main, 02/09/2019 • Deutsches Eigenkapitalforum (German Equity Forum), Frankfurt/Main, 25-27/11/2019

• Ideas, concepts, networks: the industry's largest trade exhibition and many opportunities to celebrate and exchange ideas • Around 1,500 participants: Proprietors, employees, students, politicians, public officials and scientists

Looking back

You can find more information on the Tax Consultant Day here: www.steuerberatertag.de

Events with our partner dfv Euro Finance Group GmbH Meet creditshelf at the EURO FINANCE WEEK in Frankfurt/Main. This is where high-ranking representatives from the national and international financial industry, supervisory authorities, politicians and academics discuss current topics concerning the financial industry. The EURO FINANCE WEEK will conclude with the European Banking Congress on 22/11/2019 in the Alte Oper. Business Breakfast with CREDION, COMPEON and Fieldfisher: Henrik Felbier (Managing Director, CREDION AG), Fabian Brügmann (CFO, creditshelf AG), Tobias M. Weitzel (Managing Director, CREDION AG) (from left to right)

Where:

Congress Center Messe Frankfurt/Main Ludwig-Erhard-Anlage 1, 60327 Frankfurt/Main

When: 18-22/11/2019 From 21 to 24 January, the dfv Euro Finance Group will once again be hosting various events in Davos! creditshelf will be there when the doors of the FRANKFURT EURO FINANCE Experience Office reopen on the promenade, the events FRANKFURT meets DAVOS take place at the Steigenberger Grandhotel Belvédère and the EURO FINANCE Summit at the mountain restaurant Weissfluhgipfel. Where:

Business Breakfast with CREDION, COMPEON and Fieldfisher: Birgit Hass (Head of Marketing and Communication, creditshelf AG), Ulrike Bake (Risk Manager, creditshelf AG), Tobias Mantwill (Sales Associate, creditshelf AG), Laura Gabriel (Marketing Manager, creditshelf AG) (from left to right)

Davos (Switzerland), Locations: Steigenberger Grandhotel Belvédère, Mountain restaurant Weissfluhgipfel, FRANKFURT EURO FINANCE Experience Office

When: 21-24/01/2020

Webinars creditshelf webinar “SME financing – new opportunities!” If you would like to gain an insight into the cooperation with creditshelf, but are unable to participate in the already mentioned dates for a personal exchange of ideas, then simply benefit from our new webinar offer instead. creditshelf explains how to get a corporate loan easily, quickly and innovatively step by step. Online registration for the webinar at: www.creditshelf.com The next webinars will take place on:

Equity Lounge in Munich on 21/03/2019: Dr. Daniel Bartsch (Managing Director, creditshelf AG), Corinna Egerer (Moderator Economy and Politics), Dr. Volkhard Emmrich (Managing Partner, Dr. Wieselhuber & Partner GmbH). (from left to right)

 • Thursday, 06/06/2019 • Friday, 27/09/2019 Dates

We still have tiMe, right? How to approach succession in a timely and appropriate manner! In the article starting on page 8, you saw what an ideal succession can look like. The 842,000 owners of SMEs who, according to the kfW study, will be handing over their life's work to the next generation in the next five years, would certainly also like to ensure such a successful succession. but this is easier said than done: Some 300,000 of them expect to be forced to close their company due to a lack of successors. And also in view of the complexity of the process itself, it is all the more astonishing that many managing directors are nevertheless “putting this step on the back burner”. Tackle it straight on: We clarify what you need to think about, how to proceed and where to find the right successor. Successor, where are you? There are three options for the type of succession: either within the family, within the company (e.g. to longterm employees) or externally, usually through a sale. The majority of company successions take place within a family. However, the relationship alone is of course not sufficient, since the family's internal successor must also have the necessary qualifications and motivation, i.e. the “entrepreneurial gene”. Creating an objective requirement profile for the successor before starting the search is half the battle. If this shows that there are no suitable family members, alternatives must be considered. For example, an employee in senior management who has proven to be of value in the past. However, since long-standing employees are often “blinded by routine”, the external successor with his or her fresh impulses represents a great opportunity. In this case, performing a search on the 22

Edition 2 / 2019 • creditshelf

Chambers of Industry and Commerce's Germany-wide successor exchange www.nexxt-change.org, which contains various sales offers as well as requests, is a suitable option. In addition the house banks, professional associations or the advisors of the enterprise are good sources, since they have large networks. In the context of an external succession, mergers with other companies are also common. The new owner ideally caps the financing and takes over the strategic management, including the existing workforce. Step by step The succession process essentially consists of three steps: Preparation, implementation and transition. Preparation is similar to taking stock of the current situation: Products and services, the market, business analyses, corporate planning and objectives as well as the framework conditions for sales are analysed. At the end, the result is a comprehensive overview of the company, market situation, competition and the decision on the type of succession. This is accompanied by the company valuation, which forms the basis for determining the purchase price. In addition, the transferring entrepreneur must also understand his or her own perspective during this phase: Has he or she made sufficient provisions for old age? Generally speaking, what should his or her future life look like? If, among other things, he or she is aware of these things, letting go becomes much easier. During the implementation phase, the former owner and the successor come together at the same table. In most cases, internal structural changes are necessary when there is a change in ownership or management, and these are now initiated.

Focus on succession As part of the so-called “due diligence”, the market and competitive situation, the economic situation of the company and all contracts are examined in detail, in particular with regard to possible risks. Simultaneously, contract negotiations are already taking place, which are ultimately followed by the final purchase contract, which includes all conditions of acceptance. This is supplemented by a legal review and tax optimisation of the successor. However, the signing of the contract does not put the former owner out of work yet. A transition phase ensures that the change takes place without obstacles. A structured and planned approach is indispensable. Only then will the transition from one owner to the next have no detrimental effects

sequences. Not only personally for the owner, but also from a business and economic point of view. Numerous jobs at risk, SME know-how being lost and gross domestic product deficits: What other reasons are needed to finally tackle the issue of succession?

THE FOLLOWInG AREAS SHOULd bE TAkEn InTO COnSIdERATIOn FOR A SUCCESSIOn (EXCERPT): 1. Company y What is to be handed over? (e.g. ownership and operating company, property, machines) y When shall it be handed over? y Is it worthy of being handed over? (Market position, growth opportunities, employees, entrepreneurial income) y Is it transferable? (profitability, equity situation, contracts, legal form) 2. Persons y Who needs to be integrated? (transferor and family, successor internal/external)

on employees, customers and general operations. Transparency and a close partnership between the old and new management teams are essential, as is a clear distribution of responsibilities and decision-making powers. The importance of openly communicating about the succession with employees, customers, financiers, suppliers and business partners should not be underestimated - after all, they should remain loyal to the company. Legal and fiscal consequences From a legal point of view, there are several ways to transfer one’s business: for example by inheritance, gifting or sale. In the case of solutions within the family, the business is usually transferred free of charge, i.e. by inheritance or as a gift. This form of transfer therefore has inheritance and gift tax consequences for the transferee and is regulated by will or contract of inheritance. Further legal requirements are established by the articles of association. Company internal or external succession solutions are usually handled using the classic sale with a purchase agreement. This agreement clarifies various questions, for example: Who is liable for liabilities and existing debts of the company after the transfer? Is the sale carried out through a single payment or multiple payments? In the event of a sale, it also makes a difference which legal form the business has. The complexity and control options of this field should definitely be considered when planning the succession.

3. Law and taxes y Does the company have the “appropriate” legal form? y How does the company remain capable of acting? y How do I make provisions for my company? y Is my company share inheritable or transferable? y How should the transfer take place (against payment, free of charge) and what are the effects, for example from a tax point of view? 4. Assets and financing y What is the value of my company? y Is my retirement provision secured? y How can the succession be financed? (house bank, alternative financier) 5. Supportive communication y Who needs to be informed? (e.g. transferor, transferee, employees, shareholders, banks, customers, suppliers) y How do we communicate and what do we communicate? (website, newsletter, mailing)

Start on time, avoid serious consequences

Simon Leopold Managing Director / Business Consultant ABG Consulting-Partner GmbH & Co. KG Telephone: +49 351 437 55 48 leopold@abg-partner.de

The process of company succession is highly complex and should ideally take at least two to three years to prepare. What is important: Take a timely and thorough approach, because if the succession fails, it has far-reaching conFocus on succession

Contact

And now for the finances... Agreeing on a purchase price represents a potential source of conflict when it comes to succession. This is where two conflicting interests meet: The transferee wants to pay the lowest possible purchase price. The transferor, on the other hand, does not want to sell his company “at a knockdown price”. After all, it is about the transferor’s life's work, into which a considerable amount of time, passion and money has been invested. If the handover is also age-related, one would also like to take one’s own retirement provision into consideration. We understand both sides! Here you can read about the various methods of company valuation and the possibilities of obtaining the necessary capital.

What methods of company valuation are there? According to the current successor report of the German Chamber of Industry and Commerce (DIHK), 42 percent of all owners demand an excessive purchase price. This must be calculated correctly and transparently, taking into account all aspects of the company. Ideally, you should enlist the services of an experienced consultant. Here is an overview of the methods available for determining the “real” purchase price. There is no uniform procedure but rather a variety, which are applied depending on the purpose, size of the company and available data. Often it is a combination of these factors. Profit-oriented methods ...focus on the potential of a company to generate profits in the future. • German income approach (Ertragswertverfahren): The capitalised earnings value is calculated from the adjusted operating result of the last three to five years. As part of this procedure, the buyer wants to know whether the profits generated represent an appropriate interest rate and whether the earnings are sufficient for making payments of interest and principal as well as making investments. • Discounted cash flow method: This method does not focus on the future profit, but on the free cash flow. The latter indicates the amount that is actually available for investments, repayments or impending 24

liquidity shortages and is therefore more reliable than the capitalised earnings value. Value-based methods ...are based on the current market values of the primarily tangible company assets and are therefore particularly suitable for companies with an especially high level of fixed assets. • Net asset value method: The net asset value indicates the amount that would have to be spent at the time of the company' s valuation in order to set up a company with the same equipment. This is determined by adding up the market values of the company's assets and subtracting the liabilities.

• Liquidation methods: only worthwhile if the absolute minimum value of the company is to be determined. It is calculated from the sum of the total company assets, if these were sold at the usual market prices, minus liabilities and plus receivables. Comparative methods ...are only suitable for an initial rough estimate. This involves using companies that are substantially and structurally comparable and whose sale or acquisition only just took place. However, the calculated values are only typical average values (EBIT or revenue).

“Emotions often lead existing owners to inflate selling prices. Recognised methods of company valuation provide objective valuations”. Simon Leopold, Managing Director and Business Consultant, ABG Consulting-Partner GmbH & Co. KG Edition 2 / 2019 • creditshelf

Focus on succession

“For Managing Directors who require capital since they want to buy a company that is ready for transfer, it is worth submitting a request on our digital platform. creditshelf is backed by a network of institutional investors and family offices who see a lot of potential in SME loans”. Dr. Tim Thabe, Co-founder and Member of the Board of Management, creditshelf Aktiengesellschaft

What options for raising capital are there for transferees? Let us now put ourselves in the shoes of transferees. They face the challenge of financing the purchase price and therefore try to negotiate the lowest possible purchase price. Furthermore, in their financing concept they must also take into account consultancy fees, taxes and funds for the long-term survival of the company in addition to the purchase price. According to the current figures of the DIHK, about every second successor has difficulties in raising the necessary capital. Very important: Ideally, around 15 to 20 percent of the purchase price is available in the form of equity capital. Besides their own capital, successors can also use borrowed capital, the so-called mezzanine capital, a hybrid form, as well as other alternative solutions. An extract of various possibilities and sources is briefly presented here: • Equity capital: is provided either in the form of an open or silent investment without the usual securities. • Grants: are granted by the Federal Government, the Federal States, local authorities and the EU through numerous funding programmes listed at www.foerderdatenbank.de. • Bank loans: are used to procure both Focus on succession

investments and working capital. These include investment loans to finance the purchase price and working capital loans to finance current expenditure. • Private loans: originate, for example, from one' s family, acquaintances, customers, business partners and private investors. • Guarantees: are helpful if you do not have the necessary collateral to obtain a loan. Guarantee banks step in and assume default guarantees towards the lender for up to 80 percent of the loan and up to a maximum amount of EUR 1.25 million. • Vendor loan: In this case, part of the purchase price liabilities is converted into a loan from the transferor, who thus receives part of the purchase price at a later date. • Promotional loan: are publicly subsidised, low-interest loans from KfW and the development banks of the Federal States. • Alternative financing solutions: Hidden reserves within the company, for example in the form of machines, and the financial resources tied up in them can be released via the sale & lease back procedure. 25

In good hands Victor Lanckriet studies parttime at the Frankfurt School of Finance and has found creditshelf to be the ideal practice partner. In the interview, he explains to us what his daily routine between university and Fintech looks like. Your curriculum vitae is quite impressive considering the fact that you are 22 years old. You have been to many countries. What brings you to Frankfurt? Lanckriet: After completing my bachelor's degree in London, I worked in web and sales development. During this time I noticed that the interface between the businessrelated and technical areas of a company appealed to me and therefore decided to take a postgraduate course in management. I have been studying at the renowned Frankfurt School of Finance (FS) since August 2018. You're enrolled in the â€œMaster in Managementâ€? programme. What do you like about this course at FS? Lanckriet: It is a very practical course that offers international career opportunities due to the worldwide network of partner universities and corporate contacts. I was also convinced by the guest lectures given by experienced experts from the consulting and finance industry, the case studies and practical projects. They are a great addition to the scientific aspects of my studies. 26

Career

You have decided to specialise in "Digital Business". Why? Lanckriet: Digitisation and automation are omnipresent trends that we must prepare for and adapt to. This applies not only to our private lives, but also to the management of SMEs and corporations. As far as this topic is concerned, I am in the right place in Frankfurt. Many start-ups in the financing sector and real driving forces who have recognised the opportunities offered by digitisation are based here. â€ƒ Why did you choose creditshelf as your practice partner? Lanckriet: The business model and the network concept of creditshelf made me curious right from the start, which is why I submitted an unsolicited application. The phone call with Sebastian Seibold, Head of Business Development, was followed by an invitation to an interview. Even at this early stage, I was able to experience the refreshing start-up atmosphere in which there is a casual culture, where no one works silently behind closed doors and where an ongoing exchange takes place. I had a really positive gut feeling... ...that proved to be justified later on? Lanckriet: Definitely! I have been working for creditshelf for ten months now, and I still enjoy my work a lot. I'm employed in Business Development, but I can also take

Career

on tasks from other departments. This is mainly due to the fact that the departments are not so strictly separated from each other and we attach importance to constructive cooperation. Above all, however, the understanding and tolerance I am shown is what I find so great. If, for example, I need time to prepare for an exam or to work on a project, it is given to me. If I have problems with German, then a meeting is promptly held in English. I appreciate this flexibility and openness and feel well looked after by creditshelf. What does your week usually look like? Lanckriet: I study at FS three days a week and work at creditshelf three days a week. It's a bit stressful, but overall a balanced mix of theory and practice. I get quite a lot of technical input in the seminars, which I can apply directly. On the other hand, I get the practical perspective and can contribute this to the seminar discussions. It is precisely such study models that perfectly prepare us as young people for our everyday working lives. I am enthusiastic and can definitely recommend it to everyone.

"Master in Management" programme at the Frankfurt School of Finance: yy According to the “Financial Times Master in Management Ranking” it is ranked 28th worldwide and 3rd nationwide yy Practical learning approach yy Guest lectures by representatives of the consulting and finance industry, case studies and practical projects yy Six specialisations: Digital Business, International Business, Technology & Operations, Marketing, Strategy & Organisation, Business Analytics yy It is also possible to study using the flexible 3-day model: Study three days a week (including Saturday) and gain practical experience from the company three days a week yy International career opportunities yy Global network of partner universities and corporate contacts

MADE FOR GERMANY THE SEAL OF QUALITY FOR GERMANY With the “Made for Germany ” seal, Deutsches Business T V honours companies that have strengthened Germany as a business location and have rendered outstanding ser vices with their activities. They include companies such as KFM Deutsche Mittelstand AG, TRIGEMA, L u i g i L a v a z z a D e u t s c h l a n d G m b H , s e r v o m a t s t e i g l e r Ve r t r i e b s - u n d B e r a t u n g s - G m b H a n d m a n y m o r e . When will you get your “Made for Germany ” seal of quality? A P R O D U C T I O N O F:

For more inforCareer mation see: w w w.deutsches-business.t v

CONTAC T: M i c h a e l A s s e n E-MAIL: m a @ d e u t s c h e s - b u s i n e s27s . t v PHONE: 0 2 2 1 - 9 7 0 1 6 1 - 6

Discourse encouraged! Our influencers on current topics from the world of finance No day goes by without news in the world of SMEs, investors and financial service providers. Every minute we are given information by specialist and daily media, business newsletters and news tickers. However, the days of being exposed to one-sided information are long gone. Rather, the new means of communication offer readers the opportunity to share news, react publicly and exchange opinions. Our influencers are indispensable components of this discourse. What do you think they have to tell us about current financial topics? You can find out here!

Corinna T. Egerer, Moderator Economy and Politics, Founder FDF Conferences GmbH

Michael Hedtstück, Editor-in-Chief, FINANCE-Online and FINANCE-TV Mr. Hedtstück, IMF experts have recently predicted dark clouds are looming over the economy. Have there been any effects on the German corporate finance market? The effects are not yet clearly visible, but there's slowly growing unrest beneath the surface. Two examples: From private equity investors and their financiers, we hear that the industry is gearing up for fewer deals and more restructuring. Investors still regarded the bond market as a safe haven in 2018. But if spreads on the bond market continue to widen, the bond boom will soon end. The best scenario for the German corporate finance market is a return to a reasonable price/risk ratio with a reasonably stable deal flow. But the risk of it getting worse should not be underestimated.

Ms. Egerer, why is the professional moderation of a business event important? A business event only looks truly professional with external moderation - for several reasons: The moderator gives the programme coherence in terms of the content: He/she establishes the central theme and creates bridges. As a “neutral entity”, he/ she can strategically and credibly present messages. Personal touches can also create a unique framework for the event. All speakers are given an equal and appreciative stage. And last but not least, the moderator is an important supporting factor for the audience in order to understand the central elements of the event; namely THE “anchor person”. Read more at: www.CorinnaEgerer.de and www. frankfurtdigital-finance.de

creditshelf-Magazin NO 5-EN