KLINGER CEO Interview: “Stability Is Paramount”
Growth, but not at any price: KLINGER CEOs Christoph Klinger-Lohr and Daniel Schibli shed light on the strategy behind the latest company acquisitions. Money is not the only factor here.
With 93 locations worldwide to date, the KLINGER Group has reached a formidable size. How big can – and indeed should – a company like KLINGER become? Where are the limits to growth?
Christoph Klinger-Lohr: There are no limits. We want to grow, for as long as and as big as is healthy for the company. We focus on acquisitions that fit our profile, both financially and in terms of our organizational structure. Our strategy is one of responsible growth, but not at any price. The company’s firm footing is paramount.
Daniel Schibli: We don’t have to grow; we want to grow, and we want to do so at a sustainable rate. We cannot aspire to buy large companies. That wouldn’t be in line with our corporate and management culture. At the end of the day, whether we decide to acquire a company depends on whether it fits in with our core business.
You have already expanded your core business with recent acquisitions: thermal insulation in South Africa and water treatment in Portugal, for example. Does KLINGER want to diversify even further and reach out beyond its core competencies?
Schibli: There must always be a clear connection to what we do. The two examples you’ve mentioned demonstrate this perfectly: thermal insulation in South Africa fits in with our local strategy and represents a vertical expansion of our business model there. The same goes for water treatment in Portugal, where water is indeed one of our main segments.
Klinger-Lohr: Our core business is always about systems: we improve safety, increase efficiency and reduce emissions. There is always room to add products and services that make sense for our portfolio, and we’re always open for such additions. We can certainly expand our business when it comes to maintaining and managing systems in the best possible way.
Christoph Klinger-Lohr (left) and Daniel Schibli (right), both CEOs of KLINGER Group
How can long-standing company owners and entrepreneurs whose business you want to acquire be persuaded to place their “baby” in the hands of KLINGER?
Klinger-Lohr: Our key argument is our corporate history. The KLINGER Group has grown organically for most of its life. As a family-run business, we stand for reliability, continuity and a healthy awareness of risk. This narrative is more appealing to someone who wants or needs to sell their business than that of an institutional investor who focuses exclusively on profit.
Schibli: Eight out of ten of our acquisitions are family-run businesses. This gives us a big head start over other potential buyers. Many of our acquisitions to date have come about precisely because we were able to convince the owners with our values. Also, many owners want their company to continue to exist in some form rather than being immediately swallowed up into unfamiliar structures. Although these are all soft factors, they play at least as big a role as the all-important question of money.
Speaking of money: how are acquisitions financed? Do you take out loans or do they come out of the current budget?
Klinger-Lohr: We are currently still in a position to finance all acquisitions from our own resources. This is also because companies that want to join us are typically small and medium-sized enterprises. It is important that we are able to bear the financial burden when we acquire a company.
Schibli: The KLINGER Group is in excellent health and will remain that way. We take great care not to overstretch our budget. KLINGER is and will remain on a solid financial footing. We are and always want to be in a position to acquire companies at short notice. But beside the money, both sides must also be okay with the strategy, the values and the business model.
The interview with the CEOs was recorded as part of a video shoot and in short is published in the annual KLINGER Yearbook.
