Gabriele Galli is chief financial officer (CFO) of Amplifon, an Italian hearing-care company that operates in 25 countries. The following is an edited transcript of his conversation with Global Finance.
Global Finance: What has your experience been as CFO during the uncertain period faced by retailers worldwide?
Gabriele Galli: I am proud of our work during the Covid-19 months. Right from the start, we successfully renegotiated our debt, extending the maturities on approximately 210 million euros [$229 million], and secured new finance for an additional €380 million. We also prioritized cost management and investments while ensuring that our most important resource—our staff—was protected as well as our customers. Despite a revenue decline, we closed 2020 with a higher Ebitda margin [up 110 basis points versus 2019] and record cash generation [free cash flow rose 71.4% from 2019].
The important thing is that we managed the uncertainty during Covid-19. And it did not stop there. More recently—when we had record inflation, a war in Europe and interest rates at levels unseen by most of our younger team members—we delivered strong financial results and maintained a very low cost of debt.
GF: How has the role of CFO changed over the past 18 years?
Galli: The role of CFO evolved significantly. Today, we function as strategic partners, evaluating business trade-offs and making financially savvy decisions. We also utilize technologies such as artificial intelligence, for example, using data to predict future sales. This is achieved thanks to the continuous collection and modeling of several hundreds of business [key performance indicators] gathered daily at each country level.
GF: Why is issuing ESG-linked debt important for your company?
Galli: Issuing ESG-linked debt, as we did in early June, demonstrates our commitment to doing the right thing and aligning with environmental, social and governance factors. It helps us attract talent, meet client and investor expectations, and supports our strategy, such as promoting rechargeable hearing aids to reduce battery waste, increase energy from renewable sources and increase accessibility to hearing care via free hearing tests.
GF: How does operating in 25 countries impact your daily management?
Galli: Our operations span across the globe, with Amplifon stores open in different time zones, from Australia and Europe to the US and Latin America. Operating in multiple countries requires a global approach to navigate diverse legislations and regulations. Compliance and effective operations are crucial in our daily management.
GF: What keeps you up at night?
Galli: Currently, there is nothing that particularly worries me. However, my focus and my time as a market leader in a growing industry revolve around making critical financial decisions that shape our future. This involves evaluating long-term and short-term investments and identifying attractive acquisition targets.
GF: How much time and energy do you spend on M&A?
Galli: Future acquisitions are essential for our growth strategy. We have dedicated local teams for smaller acquisitions in countries such as the US, France, Germany, Canada and China, while larger ones exceeding €30 million involve the corporate Business Development function for effective execution, oversight and future integration.
GF: What advice do you have for individuals aspiring to become CFOs?
Galli: Ambition is crucial. Gain experience in various finance roles such as treasury, planning, accounting, tax and investor relations, and explore opportunities in different countries and organizations to gain valuable insights.