This text was translated from the Czech original and edited for clarity.
While PPF’s exit from Russia was a cut, in China, the Group has scaled back its activities gradually, says Růžička, PPF’s Chief External Affairs Officer. He adds that this has strengthened the company’s involvement in Southeastern Europe and confirms that major changes in the Group’s direction were initiated by Petr Kellner.
In Bucharest, where this interview took place, PPF Real Estate owns two office buildings in the city center, Metropolis Center and Crystal Tower. Next year, the company plans to start constructing the EUR 60 million ARC project, which will provide 30,000 sqm of modern office space. PPF also owns PRO TV, a leading television broadcaster in Romania, via its media division CME.
How much of a role Russia’s aggression in Ukraine played in PPF’s exit from Russia and instead strengthened its activities in Southeastern Europe?
PPF operates in 24 countries on three continents: Europe, Asia and America. When something unprecedented - like last February in Ukraine - happens, moral principles take precedence, and business goes by the wayside. The shareholders decided that PPF would leave Russia, and in May 2022, we sold Home Credit & Finance Bank, our largest asset in that country, and we started selling our real estate. Most divestment transactions were completed last August. The whole situation tested not only business strategies but also the characters of our decision-makers. We did what had to be done. And as a result, our business in Southeastern Europe, which we already had before the war, became all the more important. PPF is active regionally in telecommunications, media and e-commerce. Events in Russia and the whole Eurasian continent have shifted the focus to Southeastern Europe, which is even more in our sights now.
In Kazakhstan, the situation became more complicated last January after dramatic protests following a sudden, steep increase in gas prices, but the company stayed there.
That’s when the country’s telephone networks were cut, and there was no way to reach Kazakhstan from Prague. The paradox was that it was possible from Hong Kong. I was living there at the time, and there were curious moments when I would read news describing the situation in Kazakhstan to my colleagues stranded in Almaty. Fortunately, the riots didn’t last long.
We have a positive view of Kazakhstan, not only us as a company but also other businesspeople globally, and the international community. The country is in a complicated geographic location, sandwiched between Russia and China, but it is trying and making reforms, for example in digitalization of the government, called e-government. In that, Kazakhstan is already ahead of us. On the Kazakhstan market, we operate Home Credit, which is a standard retail bank comparable to Air Bank in the Czech Republic. We are also active there through Skoda Group, as we are with neighboring Uzbekistan, where we have largest contract between the Czech Republic and the Central Asian region for the delivery of rolling stock worth 320 million euros.
PPF has also been active in China, providing consumer loans under the Home Credit brand since 2007. What was the main reason to withdraw from this market?
While our exit from Russia was a cut and dried, withdrawal from the Chinese market has been a gradual winding down of activity. It was a natural reaction to the Chinese overregulation in many areas of the economy. This has been happening there for several years, and it’s not just PPF that has felt its effects, it’s also other Czech and foreign companies. The market conditions in China are simply not the same for all players. And when we can choose, we do. We began retreating from China before Covid, in fact.
PPF’s performance
In the first half of 2023, PPF generated a net profit of EUR 709 million. Companies across the Group thrived, and the Group as a whole had already absorbed most of the costs associated with exiting Russia last year.
In October this year, PPF completed the sale of Home Credit in Indonesia. It followed a transaction in the Philippines, settled in June. The assets were bought by a consortium led by Mitsubishi UFJ Financial Group (MUFG).
How would you characterize PPF’s presence in Southeast Europe?
One could say it’s our second home. Historically, the relationship between the Czech Republic and Southeast Europe has always been first-rate. Naturally, we feel that for example people in Poland like the Czechs, but few people know how popular we are in Serbia, Croatia or Romania. Also, Czech people notice developments such as new motorways and hotels in Croatia, where many go on holiday. The same can be seen in Romania. The business environment throughout the region is very good, and the countries there are moving forward. When we add up all the investments, PPF is the biggest Czech investor and one of the largest from the EU. We are present here in all of PPF’s strategic pillars—telecommunications, media, e-commerce, finance—and in Romania, also in real estate. We have almost ten thousand employees in Southeast Europe, and they’re great.
The war in Ukraine is far from over, and there is already talk of rebuilding the country. What is your involvement in this market?
Our Skoda Group, a PPF-owned maker of trains and streetcars, operates in Ukraine. In Dnipro, a city not far from the front line, we have a project studio where about 50 industrial designers work. The situation there isn’t easy. We’re trying to help those employees and their families in any way we can. Recently, President Pavel was there to visit and supported us in this way. Since the war broke out in Ukraine, PPF through our corporate foundation has been one of the biggest supporters of Ukrainian refugees in the Czech Republic. We provided more than three hundred thousand textbooks, dictionaries and teaching materials for Ukrainians to learn Czech and find their way around and integrate as best as possible into Czech society.
Are you considering investing in the media in Ukraine?
In the countries where we operate in the media, we try to do quality production. We produce series and journalism content, which requires local connections. We are proud that Voyo, our streaming platform and online video library, operates across all our markets and in the most it is the second largest only to Netflix. This is because we invest in local talent, which of course is very difficult to do in a war zone.
Do you think the late Petr Kellner would have been happy with the state of things today and the Group’s direction?
PPF is too big a ship to turn around in just a few minutes. Much of what you see of PPF today was started by Petr Kellner himself, even before Covid.
Has PPF taken on any new area that is growing?
The latest is leisure sailboat charter, which is a growing global project where we belong to the biggest players in the industry. Just as there is Uber for transportation and Airbnb for housing rentals, we are creating the same thing with small boats and yachts. PPF owns a yacht production facility in South Africa and has a charter partnership with French boat manufacturer Groupe Beneteau. We also operate marinas where yachts and catamarans are moored.
Finally, we offer a comprehensive e-commerce solution. It’s not about luxury yachts for the elite—our customers are families who want to enjoy a boating holiday in Croatia, France or elsewhere. We also have a presence in the Caribbean. You download the app, select your boat, indicate whether you need a skipper or have your own captain’s license, and everything is ready for you when you arrive. You get the keys to the boat right away and return it a week later. This is a new thing born from the Covid pandemic when holiday trends changed. We are trying to bring families joy in this way. It’s a new business area for PPF, and we’re very excited about it.
We also recently invested in InPost, a company which operates drop-off and pick-up lockers for e-shops. This investment has put us into several markets in this sector in Western Europe, including France and the UK.
PPF in numbers
Total assets – EUR 43.5 billion
Equity – EUR 10 billion
Number of employees worldwide – 52,000
source: iDnes / MF Dnes:
author: Dáša Hyklová
https://www.idnes.cz/ekonomika/domaci/ppf-petr-kellner-jan-ruzicka.A231124_161152_ekonomika_hyk?h=B704A9A1A86E1A5CC086CB5C615A0766
