CFO-Profile: Michael Samonas of the Greek SIDMA Group
December 12, 2014
Michael Samonas (46) is CFO of the SIDMA Group, part of the SIDENOR Holdings S.A., with two companies in Greece, one in Bulgaria and one in Romania. SIDMA Group employs 250 people in total, with 180 employees in Greece. Michael Samonas (MSc, PhD, MBA and FCCA) has been its CFO since 2004.
How have your responsibilities changed since the start of the Greek Recession?
There has been a shift away from the typical CFO responsibilities, to include less pleasant duties such as extensive credit analysis of clients and finding ways to maintain our liquidity. In the last three years, we have had to become very conservative about credit issues. Banks do not lend money anymore, not to businesses, not to consumers. And we have to explain to our clients that we are not banks, we have our own problems. That is a difficult thing to do. Credit terms have gone from 140 days to 95 days, in order to decrease our working capital needs. In the same time, we tried to get more credit from suppliers. That is, we try to free some cash and improve liquidity from internal resources. But I believe that, after six years of recession, we have hit the bottom and things will get better from now on. Both IMF and the Greek government forecast a 2.9% increase in GDP for 2015. We will see what comes of it.
What personal qualities have you developed to deal with the shift?
First, to be patient. History has shown that recession on average last for six years. Second, to understand strategy and to be able to communicate it to the top management of the company. In difficult times with scarce liquidity, a business cannot grow since this would require further funds. We have to focus on the best part of our client base in order to increase profitability,, reducing at the same time the credit terms. The third is to stay calm. When it rains, you need to step back, let it rain and look at the big picture. Take a helicopter view. Then prioritize. Survival first, growth second. This CFO Survey focuses on Millennials.
Does SIDMA employ many young people?
Yes, we do. In 2014, Greece had an unemployment rate of 25 percent, with numbers as high as 50 and 60 percent amongst young people. Troika enforced salary cuts and this - in conjunction with the high unemployment rate - makes new hires cheap . Our older people take their pension when they fit the proper criteria, so they leave room for new hires. The new people we hire are young and very talented: i.e. 25 years old, with an MBA and 2 years working experience.The main thing about Millennials is that they love technology. We cherish that. We cannot give them flexible work hours, because we are in an industrial area where people work from 08:00-16:00 hours. We are not a technology company, so we cannot let them work from home. The way I motivate people is by giving them new things to learn. Such as training courses on IFRS (International Financial Reporting Standards) and the latest tax laws. These change every two or three months in Greece, so it is quite necessary to keep up to date.
What is your biggest achievement as CFO?
Setting up a very good credit control department. When I arrived in 2004, there were outstanding payments of more than a million euro. I set up a very formal process of client analysis and credit check procedures. Our insurers say we have one of the best credit control departments in the country and that is very good to hear. I have personally educated sales people to think the same way we do at credit control. Do not just sell products, but make sure you can collect the money, also. It is difficult for commercial people to keep that in mind, but they are learning. Fortunately, our commercial director supports this strategy.
There is one other achievement. I am responsible for finding liquidity sources and have had to search for new ways of finding money from the banks. Working with HSBC Bank, we have invented a new funding tool: a bond loan covered by post-dated checks. The post-dated check is a Greek invention and we have found a new way to do use it as collateral to a bond loan.