Treasurer Perspectives - Karsten Kabas, Merz Pharma Group

As a treasurer, what challenges are you dealing with at the moment?

Karsten Kabas (KK): Due to the ongoing negative interest rate environment in the euro-zone, it is still challenging to manage the short-term financial investments. On the other hand, inflation and subsequently rising interest rate risks in the mid- and long-term are back on our table; and need to be addressed when managing our external funding facilities. Moreover, forex risks are always one of our major challenges due to our global footprint. After the short “COVID-19 dip” in 2020 we are generating sustainable growth again – especially in the US and in the emerging markets.

In general, as there is still a lot of uncertainty in the global markets and conditions might remain more volatile and dynamic than in the past, we need to continue to be flexible and to be prepared for different scenarios.

How would you describe the relationship between treasury and your organisation’s CEO/CFO?

KK: The relationship was close and has become even more so recently. During the pandemic, we have had very close interactions on how to manage this crisis financially. Over the past 15 years or so, whenever there has been an external global crisis, the scope and impact of the treasury role increased steadily. Today, treasury is a prime business partner and a valuable strategic advisor to our top management.

What kind of opportunities are you seeing for the company and the role of the treasury function to fulfil those ambitions?

KK: One thing we have done is drive digitalisation. It seems like I no longer sign any physical documents, everything is now either digital or, even better, automated. And when it comes to planning and forecasting, we need to continue improving accuracy and transparency by leveraging and connecting our IT systems landscape more deeply – a joint effort for the whole finance function and beyond. This will enable us, e.g., to have a higher transparency on future forex risk exposures.

How big a part does ESG play in your role?

KK: This has recently gained a lot of attention – not only for treasury. We already implemented an ESG-driven investment strategy for our long-term financial investments. And we are planning to adopt it step-by-step for the short- and mid-term investments.

Our external financing is not yet green, but we understand that we need to keep an eye on this in the mid- and long-term, so it is on our strategic agenda.

Karsten Kabas is Vice President Group Treasury of the Merz Pharma Group, a global, family-owned company headquartered in Frankfurt, Germany, with the three businesses Merz Aesthetics, Merz Therapeutics and Merz Consumer Care.