Koupí americké legendy Colt to nekončí. Jan Drahota dělá z české firmy světového lídra.

I would answer that question in three levels. First, it's great that the defense industry is one of the sectors where the Czech Republic has a final product and definitely holds the know-how in some areas. It's not just assembly, but a cycle from own R&D to final product. Today it's more visible given world events. Historically, the advantage was that companies found defined owners and started to develop. However, it would be presumptuous to say the Czech Republic is a world leader, as we don't have key technologies like fighter jets. The Czech Republic is a tiny part of global defense spending. One of the traditional companies whose acquisition you have just completed is Selier & Bellot.

Three to four years ago, after completing the Colt acquisition, we sat down and defined our group strategy. We said we want to be the recognized and undisputed leader of the small arms industry. We thought about what products to add to handguns, and ammunition was always a natural part of that. It's the innermost circle. We expected two things: first, that our customers add opex to capex, so we wanted to be in both parts of their purchasing decisions. Second, we believe there is discussion about whether current calibers are adequate for the future battlefield. We want to be part of those considerations, for business results and future R&D.

One reason we bought Selier was that we liked the management and their strategy. Radek Musil has been with the company for about 25 years and done an admirable job. So we are not thinking about changes; we need to first understand potential synergies. Discussions will always involve management. The group sets the big strategic boundaries, but individual companies have their own CEOs who are stewards of their brands.

I think what has happened is the result of about 20 years of ownership work. Mr. Holeček historically bought the company with Mr. Čeří in 2000, when the company was a fraction of its current size. They believed in it, assembled a management team under Luboš Kovařík, who brought the company back to armed forces. Then in 2014, Mr. Holeček bought out Mr. Čeří. I joined around that time. We sat down, looked at what we had, and said what we wanted. We've been executing that. You have to look at life as a film, not a photo, and the film is much longer than what you see in newspapers today.

First, it's great that the Ministry of Defense, especially, pushes for the defense industry to be a standard sector evaluated fairly by financial institutions. We have never faced a situation where we couldn't get financing for our development plans, but I'm not saying others haven't. We have always been transparent and followed all rules. The capital markets, especially ESG, have been a bigger handicap. Some investors simply couldn't invest in defense companies. I remember a conference where someone from Deutsche Bank said they couldn't buy Airbus shares because of a 15% defense exposure. Often ESG was an excuse to avoid extra work. I think that limited our international institutional interest during IPO.

We decided to go to the Prague Stock Exchange in 2020. IPO was new for us; there isn't a strong equity culture in the Czech Republic. During the roadshow, which was before the war, some people wanted us to emphasize sports use over defense use. That limited us. I wasn't fully satisfied with the IPO; we had higher expectations. Today we live in a different world; the company is much larger. But initially, ESG may have been one reason for lower foreign institutional interest. In the Czech Republic, it was less of an issue, but not zero. It's paradoxical: some banks refused to finance defense but their funds invested in our bonds, while a bank that wanted to finance our business didn't buy our equity. It can't be generalized.

The biggest stamp of approval was how many of our employees bought our shares during IPO – hundreds. That was pleasantly surprising, as they believed in the story. We now have thousands of retail shareholders. I still can't understand why there is such a preference for debt over equity when equity gives upside. I gave a presentation comparing what we paid to bondholders (about 2 billion CZK) versus the value created for shareholders (10-15 billion CZK in dividends and share appreciation). The ratio was about 1:7 or 1:8. If that's true for many business sectors in this country, it explains why we are poor. I don't understand the preference for debt.

I can't completely separate myself as a person from the CEO. As a person, I believe state intervention in the economy should be minimal and that the market and entrepreneurial mindset work wonders. If the Czech Republic could be more open and dynamic... Europe is becoming more entitlement-oriented. However, there are areas where state role is necessary, like defense. I think we underestimate how the Czech Republic has become more efficient in the last three years. Specific people have taken decisions and risks, which helped us all. The state should intervene as little as possible and leave space for entrepreneurial stories. At the same time, the state's boundaries must be clearly defined. I recently saw a newspaper headline about billions in subsidies for hydrogen and solar panel production – that's horrible when business calls for redistribution. All taxes are our money; is it good for someone else to distribute them instead of the market?

I understand your point. We as civilizations have agreed on areas the state should cover. Security, both internal and external, is one. We want to live safely; we don't want to all go armed. So we are glad the state provides internal security. External security is the same. There are bad people with bad intentions, so it's good the state takes care of external security. The state's role is clear there. However, the state should not dictate what kind of engines cars should have. Those are areas where the market should prevail. Even ardent free-market advocates like Milton Friedman did not question the state's presence in security.

First, I personally believe in the technological superiority of the West. I don't think the current war in Ukraine is what a war with Russia would look like. It would be different – if we fought with artillery, we'd be going back 80 years. When the US intervened in conflicts, it was always through air dominance. Regarding subsidies: if countries define their needs and there is clear demand with visible return on investment, the private sector will build capacity without subsidies. Europe historically underinvested in defense, so industrial capacities matched lower demand. Without the United States, the West would be in a much weaker position today.

The speed at which Ukraine uses civilian technology in combat is unprecedented. It's a huge lesson for military strategy worldwide. But we must remember this conflict lacks the air component that would be present in a Western war. Drones enable relatively cheap destruction of expensive targets, changing the value-for-money equation. In our segment, small arms are relatively inexpensive but must work in any condition. The basic mechanical weapon is always the last resort. We are also thinking about whether current calibers are optimal and how electronics can assist soldiers with targeting and situational awareness.

Let me reframe that. A combustion engine is also precision engineering, but it changed dramatically with electronics. The firearms industry is very conservative, but we see more work on fire control systems for calibers like 5.56 or 6.8 and for grenade launchers. The question is when the market will accept electronics doing part of the work for the soldier. That's something being worked on intensively.

The US has always been important for us. Our vision for 2025 was to reach €1.2 billion revenue with a 50/50 split between law enforcement and commercial. After the Colt acquisition, our presence increased. Colt is the biggest brand in the industry and has grown dramatically on the commercial side, especially revolvers and 1911 pistols. The US is and will remain a key market. We want to offer products that differentiate us from competitors.

We had the advantage of knowing Colt's management before. We started talking in November, signed in January, and closed in May – very fast. From the management side, there was no negativity. On the market side, Colt had been through a Chapter 11 reorganization, so we were seen as saviors. Employees were initially suspicious but after the deal they were enthusiastic. We still feel we owe Colt to implement the precision and quality that defined ČZ. We have work to do in the US to live up to expectations.

Each brand needs its own management. As a group, we are shareholders. My dream is to one day be able to make all products everywhere. Today, most manufacturing is in the Czech Republic; Colt is more about assembly and testing. Colt must remain made in the USA. Our job is to leverage the best of both worlds. The Colt customer is different from the ČZ customer. We can contribute to Colt's DNA and learn from Colt about the American market. The M4 platform is the most used rifle in the world, with an installed base of millions.

I don't know if I'll be thinking about one segment of my life at 90. It's important to have lived a life that left a positive mark. For me, the biggest success would be if the teams responsible for each brand and the group were so good that I could leave and it would be even better. That's my managerial legacy. Just like with children, you want them to live their own lives, not yours. I would be happy if the teams are that good.

The question doesn't have a definition. I always say energy is a more important investment than money. I invest my energy in my priorities: family is the most important, then my professional life and sports. In terms of money, I'm a bad adviser because my biggest investment is in our group. I don't have time to think about other investments. I'm a simple person. I have skin in the game.

Things I don't understand. If I can't understand why something is good, I've learned not to invest. I made mistakes buying into hype. When the hype fades, you start doubting. But when I believe in the business story, short-term price moves don't matter. For example, I'm not a fan of cryptocurrency because I can't rationalize its intrinsic value, even though many people do well from it.

Only once. I decided to play the carry trade on the Turkish lira and realized within a week it wasn't a world I wanted to be in. I haven't done anything like that since.

I've already had two careers – banking and defense. If I ever finish what I'm doing now, I'll think about the next area, but I don't know today what it would be. I have no unfulfilled investment dreams. My only unfulfilled dreams are learning to play golf or to sail at sea.