CEOInterviews.AIWhy the Swiss CEO of @BKWGruppe looks at Germany with optimism!

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Interviewer0:00

We have taken coal-fired power plants off the grid, we have taken nuclear power plants off the grid, we have adopted plans, we have made a lot of investments. [Music] That's all already happened. Mhm. And now to say, yes, a technology that no longer exists. About-face. Yes, about-face. That costs so much money. Nobody has that. How do the Swiss currently view Germany?

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Robert Itschner0:22

Yes, one is certainly a bit surprised. Um, how the economy can deteriorate so quickly. The lack of self-confidence, somehow a feeling of, hey, now we have to get it together, right?

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Interviewer0:36

Mhm.

R

Robert Itschner0:38

Because the substance is there, the good people, the trained people haven't simply disappeared. The capital isn't gone. In Germany we have a huge middle class, many family-owned companies. So there is so much substance, there is money, there are well-educated people. I think something could be made of it.

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Narrator1:00

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Interviewer2:01

Robert, were you actually a rebel, or did your parents' life plans match up well with your own?

R

Robert Itschner2:09

Yes, back then we had a bit of a tense relationship with each other during my teenage years, because I wasn't so keen on school, um, I considered other things more important, and that caused a bit of stress.

I

Interviewer2:22

What would have been more important then or is more important?

R

Robert Itschner2:23

At that time I was an enthusiastic scout. Um, I also invested a lot of time in preparing for those meetings and so on, and school was a bit of a priority, certainly priority two.

I

Interviewer2:36

Did that ever change later in the course of your career or school life?

R

Robert Itschner2:42

Um, not really. So I did an apprenticeship, um, finished school in that sense and worked. That helped, it grounds you very quickly. [Laughter] You have a boss who says you have to be here at 6:30 am. And yes, then you are. And later during my studies, I was really interested in what I was studying. That was a different starting point.

I

Interviewer3:02

What trade did you learn?

R

Robert Itschner3:04

Mechanic, so something manual. Yes. Yes. So turning, milling, filing. A lot of filing was done back then. Um, and later I studied electrical engineering. Uh, and that really interested me.

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Interviewer3:17

Okay. But would you say that it did you good, I mean doing the apprenticeship first, or was that in hindsight? Yes, I did it. I never worked in it. That's how it sounds. I then went on to study.

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Robert Itschner3:28

For me, I think it was a very good thing. A bit immature, not quite clear what the priorities are, and a structured day helps with that, [Laughter] with a supervisor, who is not the parents, then it's the boss, and you listen to him, strangely enough, right? So exactly, it's a completely different environment and it did me good. That doesn't have to be the same for everyone, of course, but I also got my Abitur. Yes, [Laughter] but also with, I did it, let's not talk about it anymore, and I actually did an apprenticeship next. So, I thought it was good, and it really straightened you out. You know, you quickly find out where the limit is. That's how it is, and as an apprentice, you also have to clean and do things that aren't really popular, and yes, that locks the door. Yes, [Laughter] that's part of it.

I

Interviewer4:20

I see. So you studied electrical engineering? Yes.

R

Robert Itschner4:23

Yes.

I

Interviewer4:24

Did you continue working in that field later?

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Robert Itschner4:26

Yes, so I then did a second degree at a university in the USA and then went to ABB and practically never left. Never left. I worked as an engineer for the first few years, but then at some point not really anymore, um, and then eventually only had organizational and management tasks.

I

Interviewer4:46

So for those who don't know ABB, a global corporation, maybe you can say a few things about it to put it in context.

R

Robert Itschner4:53

Yes, ABB is a global corporation, has over 100,000 employees in, I think, over 100 countries, and has of course contributed a lot to industry, like BKW, um, electrification of buildings, infrastructures, and consequently the step to BKW was a very good logical step, and I feel that now too. It's a lot of fun to be on the implementation side now, previously on the product side.

I

Interviewer5:22

How long have you been at BKW?

R

Robert Itschner5:24

Since October 22.

I

Interviewer5:26

Mhm. I think we need to clarify what BKW actually does, because most people will say BKW, three letters. Yes, we have a lot of companies like that. I think the brand isn't very present in Germany. In Switzerland, it's probably different in terms of brand awareness. But how many employees does it have? Let's start there to define it.

R

Robert Itschner5:44

BKW has 12,000 employees in 10 European countries. Mhm. The largest part is naturally in Switzerland, but also a very large part, over 4,000, in Germany. Okay, about a third. 120 locations in Germany. Um, and we are quite broadly positioned, from the generation of primarily renewable energy. We are also a grid operator in Switzerland, up to what we call Infrastructure Buildings. That is a service area where we are very large in planning, infrastructure construction, i.e., transmission lines, switchgear, and such things, plus an installation business that we operate in Switzerland.

I

Interviewer6:22

What is the most important branch for you?

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Robert Itschner6:26

We don't rank them in importance. We have, let me put it differently. Relevant in terms of revenue. You make about 2 billion, no, four and a half billion Swiss francs. Um, energy is of course a very large contributor to that revenue. Um, but of course we are very focused on growing in Infrastructure and Buildings as well. Um, and accordingly that is also important. Mhm. The three business areas we have should complement each other. On the one hand, a very capital-intensive energy business, the grid business is also very capital-intensive, the energy business is very volatile. In contrast, the service business we have is rather capital-light. Um, and the risks are project-related, but they are also significantly less volatile. So that is a good differentiation for us. And what we see is that we can now offer certain services from a single source for customers, large customers, um, where we use these cross-competencies to create added value, to offer an optimized energy solution.

I

Interviewer7:35

Before we dive deeper into your business model and so on, one more question. We've kind of skipped over it. What was your biggest 'aha' moment now in the nearly four years, um, since '22? You moved over, four years as CEO? What was your biggest 'aha' moment yourself, where you say, I didn't see BKW that way or didn't expect that we would do that, or where you said, oh okay,

R

Robert Itschner7:57

Well, I already knew BKW reasonably well, it's simply one of the well-known Swiss companies. So I wasn't completely surprised by what BKW does. Mhm. Of course, I learned a lot about the energy business, how it really works. Uh, there were a few experiences there, uh, how this market works, the energy market. Um, and that was also incredibly exciting to learn. Um, that was probably the steepest learning curve for me along the way.

I

Interviewer8:27

Mhm. Now you spent a long time, over 20 years, at ABB before and experienced a company in many positions. What was the biggest learning you took away from such a long time in one company, where you say, wow, I really learned that in that time?

R

Robert Itschner8:46

Yes, along the career path you learn a lot about yourself too. Mhm. So self-reflection, I think, is an absolutely essential element of your own development, and that also shows a bit in the tasks you have, or you grow more and more into organizational and personnel matters, you structure organizations, you optimize them, and those are things I have done and learned intensively, and those are now the main contents of my work: defining strategies and then setting up the organization so that we can achieve this growth when we strive for it.

I

Interviewer9:31

Mhm. That means it helps you today too. So this journey you had over 20 years is the foundation for your actions and deeds at BKW.

R

Robert Itschner9:41

Yes, of course. Although, elsewhere I would probably have learned comparable things. Uh, this was a good opportunity to be in a very large company with many opportunities for further development. Of course, it was simply a very good starting point, but I think staying curious and working on yourself, that is the basis for everything.

I

Interviewer10:07

Where or what do you look for when you hire new people in your organization? What are important points that you look at today? Must it be a hard or soft skill that they bring?

R

Robert Itschner10:21

Precisely this ability to reflect on oneself. I think I'm a bit skeptical of people who are extremely self-confident, then they might not handle it when things go differently. Um, that's one point. Um, the second is certainly professional competence. That's a given. Um, I place a lot of value on us quickly achieving a transparent dialogue about where we stand. So office politics is very abhorrent to me. Mhm. Uh, which often resonates in large organizations, they have a tendency to perhaps represent other interests. I find that extremely bad for the organization. I personally don't like not knowing exactly where the person I'm speaking with stands. Um, so these are certainly very important factors when I select someone or in the collaboration with me. So I am very straightforward, um, I say what I like and don't like, and I expect the other person to do the same.

I

Interviewer11:28

Are you open to that too?

R

Robert Itschner11:30

I think so. But you'd have to ask around a bit, [Laughter] but I do my best. We'll start a research project on you. [Laughter]

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Interviewer11:38

Okay. Um, you yourself did a manual apprenticeship, then engineering. Now, um, you just described your fields a bit to come back to that. Um, you told me you also have many craftsmen, i.e., blue-collar workers. Um, approximately how many do they make up at your company? Out of the 12,000 you mentioned earlier?

R

Robert Itschner11:57

Yes, maybe 40%.

I

Interviewer12:01

That's a lot, really a lot. Um, and what occupational groups do they fall into?

R

Robert Itschner12:04

So we have electricians, heating installers, plumbers, we have grid electricians, we have high-voltage line builders, um, switchgear builders. So we have a very broad portfolio of trades.

I

Interviewer12:32

You said 12,000 employees total, about 4,000 in Germany, and about 4,000 of these 12 are 40% a bit more, are blue-collar workers. Are they distributed equally everywhere?

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Robert Itschner12:33

No, there is a focus in Switzerland because the installation business is mainly in Switzerland, that's not the largest share, but we also have manual workers in Germany, for example in line construction. Those are people who don't shy away from climbing 60 or 70 meter high masts to pull the lines. So it's crazy, really admirable.

I

Interviewer12:55

Uh, and in various weather conditions, so that's hard work, respect indeed.

R

Robert Itschner12:59

Yes, and um, we have some very good employees who do this business for us.

I

Interviewer13:07

I, I was, actually a few weeks ago, it's been a while now, um, at the construction of the largest wind turbine plant in the world. It's here near Berlin, in Brandenburg, about an hour and a half away from here, and they were at a height of 90 meters, I think, and that's still with a boom, it's like a kind of basket at the top like a fire truck, and I went up, but I wasn't allowed, but the thing, I stood below 90 meters, it swayed 2 to 3 meters from left to right, and then whenever it was time, they would screw a bit. Yes, because it has incredible vibrations up there. So height, immense respect, working up there or on the wind turbine. I would strongly recommend doing it. It's really exciting to go up there. Let's see what's actually inside the capsule.

We should do that together.

R

Robert Itschner13:55

Yes, we can certainly do that. So we have various opportunities to do that. Preferably a wind turbine with a lift, otherwise it will be quite sporty to get up there.

I

Interviewer14:05

Do you like hiking? As a Swiss, I think you have an advantage. Then you're faster at the top.

R

Robert Itschner14:10

Yes. Although climbing a 120-meter ladder is a different story.

I

Interviewer14:16

Um, would you say that you are therefore the largest construction company in Switzerland?

R

Robert Itschner14:23

I don't think so. Um, we are certainly among the larger ones, but not the largest.

I

Interviewer14:30

Do you know how big other companies with blue-collar workers are? It sounds really gigantic for Switzerland.

R

Robert Itschner14:41

Um, but I couldn't say how big we are compared to the others. There is no ranking in that sense.

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Interviewer14:48

Yes, I don't know of any ranking in Germany either, but we of course have a few companies from the skilled trades, the largest painting company started as a painting business. Heinrich Schmied now, I think 8,000 employees, 800 million euros in revenue just from craft services, and that's not even across all trades. [Snort] So I always find it very fascinating how many hidden champions there are.

Do you know what the Americans say about us German mid-sized companies, and now maybe also take the umbrella, I think they would say the same about Switzerland and Austria. We are the only nations that always call it 'hidden champion' and not 'champion'. The American [Laughter] would never say we have hidden champions, but we have champions. We built champions. That's actually a bit of an attitude.

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Robert Itschner15:39

I always say that to every entrepreneur who sits here, we are very well known in the DACH region for our modesty, and I think modesty and a tendency towards self-criticism, yes, which the Americans really lack, I think. Yes, [Laughter] I think there are advantages to that. But I also think there are better positions for the future in today's times. Yes.

I

Interviewer16:02

Um, installation business, how should we understand that? Who is your customer? Because you just listed electrical and sanitary. Who is the customer then?

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Robert Itschner16:10

That is very diverse. We have the large general contractors, who may be our customers, but also private individuals. So we also do a lot of service, for example, when the heating at home breaks down, right down to the end customer. So, in Switzerland, yes. [Clears throat] In that business, yes. And then we would service and repair it. So our customer base is very broad. Okay. Wow. Of course, the large projects are with general contractors or large companies that do it themselves. Mm. There are also big banks that have their own competencies in construction. Um, yes, so a very broad customer base.

I

Interviewer16:48

Okay. Is that also something that challenged you, or did you say, I have respect for how diverse you are, from energy producer to the craftsman at the end customer, that's a really wide field.

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Robert Itschner17:03

Mhm. Uh, I would first have respect for the diversity.

I

Interviewer17:07

Respect, yes, I had that too, or still have. Um, but on the other hand, it's of course incredibly exciting. Mhm. So it's exciting to see how we develop this company despite this diversity.

R

Robert Itschner17:21

Um, and the second thing I find incredibly exciting, I come back to our offering. I now see how slowly but surely things in the market are coming together. So, if I have a large customer, for example a logistics company, that has a large roof, wants to install photovoltaics, is talking about it or considering maybe also installing a battery, maybe has a heating issue. We can do the planning for this customer for this entire energy system. We can also install it, build it, and we can also market it. So we have the competence to bring the electricity, the flexibility, to the energy market and thus provide this customer with an optimal energy solution. And that is becoming even more exciting, so the diversity, yes, but we can also slowly operate it as a business case and solve truly relevant customer problems.

I

Interviewer18:10

Is it more in demand and more important than ever that you have these individual, I'll call them, verticals that you operate, and thus can offer customers that in the,

R

Robert Itschner18:24

So I think this is a market that will grow now because the complexity is simply increasing quite a bit. Um, and the possibilities that such an offering naturally offers are interesting. In general, also on the planning side, we are convinced that optimized energy-optimized infrastructure or buildings must be planned from a single source. I can't just specify the architecture first, then the building services engineer comes and plans his thing, and then someone else comes, and so on. Instead, it has to be from a single source. You have to think about energy efficiency already in the architectural design, and that's how we are set up, and further developing this market is one of our goals, of course, but we also see how the demand is increasing.

I

Interviewer19:10

Are there other companies that also offer this diversity in the DACH region?

R

Robert Itschner19:15

Um, I'm going through the other large engineering firms in my head that are really big. Yes, I think by now we are one of the largest in the DACH region. Um, fundamentally, and this breadth is, I think, already exceptional.

I

Interviewer19:33

Mhm. Um, [Clears throat] so I wouldn't know how the other very large planners are set up, but I think particularly in the DACH region we are doing reasonably well. The

they would probably always lack the energy topic. So I was just going through that, if I list the Swecos and Co., then they don't have any blue-collar workers, they are just engineers, right? So planners in general can plan everything from a single source, but then they don't realize anything, and let alone energy, that's far away.

Um, okay. I find that interesting. How do you look from the Swiss perspective? Uh, you are active in Austria and Germany, so you are active in the DACH region. How do you look from the Swiss perspective at the other two neighboring countries in the DACH region regarding the current political situation? Maybe let's start with energy policy.

R

Robert Itschner20:22

Well, we are not only active in the DACH region. No, exactly. Much larger. But that is what often seems very similar.

I

Interviewer20:31

That's how I would express it.

R

Robert Itschner20:33

So all have a different starting point. Austria and Switzerland have quite a lot of hydropower, so already renewable capacity, whereas in Germany, of course, traditionally there was a lot of fossil fuel generation in the grid. They shut down nuclear power in Germany. In Switzerland, they are still operating. Mhm. So we have quite big differences in where we start.

I

Interviewer20:58

Would you say that was a clever step, or would you retrospectively look at it today? Would a few more years have done us good?

R

Robert Itschner21:06

That's how I see it. Yes, so it wasn't the best timing to implement that decision, I think. Mhm. It was too radical, wanted too much.

I

Interviewer21:15

Yes. And especially at that time, it was right around the energy crisis, one could have come to different conclusions. Whether it really had to happen then or whether one could have taken a bit more time.

What is the situation in Switzerland, and then I'll come back to that, what is the view in Switzerland on the topic of nuclear power? Is there a self-imposed date?

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Robert Itschner21:38

We adopted this energy strategy in 2017 in a popular vote, and there is no date by which nuclear power must no longer be in operation. Um, but a ban on new construction was decided at that time, and this ban on new construction is now under discussion. There will be a vote probably next winter. Mhm. where we will vote in Switzerland on whether this technology ban will be lifted, i.e., whether the option of nuclear power could possibly be possible again in the future. Um, so that is certainly a very current discussion. Uh, the second thing being discussed is how to operate the existing infrastructure, i.e., the existing nuclear power plants, for longer. So 60, maybe even 70 years, even longer. Yes, significantly longer, right? Yes, really significantly longer. Yes, compared to the assumed 40, that would be a bit longer. Yes. Um, and that is also under discussion, it is something that I think has quite good consensus in Switzerland that we want to do that. It's now just about how and what risks are to be allocated, and so on, but those are the two topics currently under discussion.

I

Interviewer22:52

Is there a feeling regarding the new construction topic? Do you have a sense of how it is perceived in the population at the moment?

R

Robert Itschner22:57

There are always surveys on where we stand. So I think there are no very clear majorities. I think it's about plus minus equal, where you see that, yes, some say yes, there are a few percent more in favor of being allowed to do it again, and others say no, that's not the case. So I think there will be a lot of opinion formation until the vote. Um, and I don't dare make a real prediction, but I think it will be rather close. There won't be very large majorities on these issues, I think.

I

Interviewer23:34

You just classified the topic of energy, wind and water. I think that's good. How important is water for you?

R

Robert Itschner23:40

Very important. Of the about 10 terawatt hours we produce, about six are hydro. Wow. Um, so that is very large, primarily in Switzerland, um, or smaller power plants in Italy, but actually everything is in Switzerland. Um, so very important, also for Switzerland very important. About 50% of generation is hydropower.

I

Interviewer24:06

Oh, okay. I thought the six already, no, no, no, no.

R

Robert Itschner24:08

Yes. Um, so it's important and we also have plans to hopefully realize one or the other project. Um, and that is a focus of ours. The wind topic, we primarily operate not in Switzerland, but in France, Italy, Germany, Norway, we are active in wind and we have some larger wind farms there.

I

Interviewer24:32

How big are they then, so that one can get a sense? We've had a few here already, Vattenfall, Robert was also here, the CEO of Vattenfall. They also operate many wind projects. How big are you? Can you classify that?

R

Robert Itschner24:47

I can't say in relation. Or how many terawatt-hours, I have to think about how much that is. In Germany we have nine wind farms. Ah yes, okay. Yes, that's about 300 megawatts of capacity, I think. Mhm. If I have that right in my head. Um, all in all, it's well over 1,000.

I

Interviewer25:05

And is that a topic for you, where you say you will go further into it?

R

Robert Itschner25:10

It's a growth market.

I

Interviewer25:11

Yes, okay.

R

Robert Itschner25:12

We want to increase there. Yes.

I

Interviewer25:14

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Then there is also a country, I said Norway or rather Germany, because I think a bit about the complexity, and here sit people who all agree that building in Germany, whether four walls or a tower, is always associated with certain challenges. Mhm. Uh, we know that well from home. Um, that is [Laughter] probably even more pronounced. I mean, Germany and Switzerland, they are both really

R

Robert Itschner26:31

Very densely populated countries. You have to accept that. Accordingly, you always have neighbors. And southern Italy is a bit less densely populated. It has many wind farms. France also has areas where there is a lot of space. So, I think we are interested in doing more in our core markets, including Germany.

I

Interviewer26:55

Mhm.

R

Robert Itschner26:56

We see all of them as very exciting and interesting, and we see a lot of potential.

I

Interviewer27:01

Is there anything where you really see outstanding potential, or the market, as you just said, Switzerland is heavily hydro-driven, Germany more wind in the north, and if you look at that, is there one that will pick up more momentum in the next 10 years than we have today?

R

Robert Itschner27:21

In all countries we have quite ambitious expansion targets for renewable generation. So I don't see a fundamental difference. I think in Germany, and Germans may not see it that way, they have a pretty good idea of where they want to go. And I think they are not moving step by step in implementing these goals. Also the grid expansion is moving forward. So we think Germany is a very exciting market for us. But of course we will also want to have some differentiation in our portfolio. We don't want to depend on a single market. So it will always be a balance. But Germany is definitely exciting for us, and it takes time everywhere for permits, that's normal.

I

Interviewer28:11

So you're not shocked?

R

Robert Itschner28:13

No, because in Switzerland we are even slower. I can say that. We have a wind farm that we've been working on for 18 years. 18 years, yes. The politicians have recognized it. They have now decided on a few measures to be faster in the future. So we have to deal with that and we can.

I

Interviewer28:36

What does it do to you when you say we would probably say NIMBYs, not in my backyard, because I feel disturbed that the wind turbine is there. Do you say we have to deal with that as a society, it's just the way it is, we can't think it away. There are people who say I don't want it, or does it bother you that we are discussing because of two people later?

R

Robert Itschner28:59

Yes, actually, they can bring such a huge project worth millions to a standstill, or at least pause it, maybe not stop it. I think we need a new consensus in society, and by the way, it's not just about energy infrastructure, it's about any infrastructure, so we don't completely paralyze ourselves. And this balance, on the one hand, to ensure that individuals can also point out process errors and lack of project quality and can do that legally. That must be guaranteed. We are in democratic systems, but at the same time it must not be that these possibilities are abused to delay projects endlessly.

I

Interviewer29:44

Mhm. That also costs money.

R

Robert Itschner29:46

It costs money. It makes investment decisions almost impossible, or if you don't know when you can realize it at all. So, I think we need to find new ways to allow that on the one hand, but on the other hand to streamline the processes and perhaps run them in parallel, so that you can do it once, but not again at every subsequent process step.

I

Interviewer30:10

Mhm.

R

Robert Itschner30:12

And that is what gives the enormous duration, when you can go to the Federal Court in Switzerland for zoning and then again for building permits, those are multi-year delays each time, and I think that's not sensible.

I

Interviewer30:27

Do you see the responsibility with the politicians to change that? The politicians have to lead this dialogue, but I think we all have to take note that there are popular votes in Switzerland on this energy strategy, and that comes at a cost.

Mhm.

R

Robert Itschner30:44

Infrastructure always costs something. And we have to be willing to bear it in the end, otherwise we simply won't move anymore.

I

Interviewer30:52

And then what happens?

R

Robert Itschner30:54

Stagnation is not an option, especially on this issue. We are on this journey of energy transformation. We are far from finished and we need to make progress.

I

Interviewer31:05

Where specifically do we need to make progress?

R

Robert Itschner31:08

If we briefly look at the premise: we want to decarbonize, we want to be a more CO2-compatible society. Then we still have many levers, like mobility, where we are not done, the whole heating issue is also in its infancy. So we will need a lot of electricity. Therefore, we need the expansion of renewables, we need the grid expansion. It's all interconnected. And if we take this goal as given, the rest is a consequence, and we have to do it, and we have to do everything somewhat simultaneously. That's not easy, but we are far from there. As the saying goes, if you want one thing, you must want the other.

I

Interviewer31:51

Exactly.

R

Robert Itschner31:52

Yes, if I want decarbonization, then I have to go full throttle on all other things, otherwise nothing happens.

I

Interviewer32:00

When you say that, are you thinking from the perspective of a Swiss and saying that for Switzerland, or are you thinking European and saying that applies to all countries in Europe?

R

Robert Itschner32:15

Yes, we have this discussion in Switzerland as well. What is our share? The contribution is relatively small, so we don't need to do anything because the big ones aren't moving. But that doesn't work. Everyone has to contribute. And of course, the larger the systems, like the EU, have a much bigger lever. The more you can move, and I see the EU moving strongly in this direction. And the EU member states as well. So I see a lot of dynamics in that direction.

I

Interviewer32:49

Mhm.

R

Robert Itschner32:50

But of course it has to be rebalanced again and again. You have a goal, but maybe not the path precisely planned. That's how it is in transformations. You have to adjust a bit here and there, and that happens.

I

Interviewer33:04

You get up in the morning and inform yourself about the events. What does that do to you? We've talked a lot about energy policy, but you are also, and all of us, every morning there is an influence from America. How do you, as CEO of such a large company, look into the newspaper or iPad in the morning?

R

Robert Itschner33:27

Well, by now you are not sure what to expect in the morning. It can be very different from what it was when you went to sleep. Yes, these erratic events are hardly possible to translate into scenarios. And accordingly, you have to think every day what all this means. What does it mean for the company, for us? That is very demanding.

I

Interviewer33:58

Mhm.

R

Robert Itschner33:58

What we do quite well as an energy company is that we collect a huge amount of data. We know weather data, we know where which installed capacity is on the grid. We know which LNG tankers are where in the world, because we can draw conclusions about gas supply. We don't do it alone, the big energy companies do it. It's a data business in the end, and it gives us a different basis to make predictions about what could happen on the energy side and what impact possible events could have on this market.

I

Interviewer34:45

But of course, if someone tweets from the White House in the morning, that can have significant impacts.

R

Robert Itschner34:55

I know that. So you employ analysts to deal with that. Now with AI, probably faster and easier than ever.

I

Interviewer35:04

We have meteorologists, in-house.

R

Robert Itschner35:06

Yes, yes.

I

Interviewer35:08

Okay, I'd like to have that person here, I'd like to ask him why I look at my phone and see the weather from 5 minutes ago, not the one that concerns sailing. What would you say is the most unusual job you have that one wouldn't expect?

R

Robert Itschner35:31

The meteorologist is certainly something where many people don't think it belongs to this business. But if you think about it, that wind power and solar power have a significant impact on the grid and on our own production, then it's maybe not so unusual to deal with the weather in southern Italy, where the wind blows or not.

I

Interviewer35:55

Mhm. So at first glance it's a bit odd, but when you think about it, maybe not so much.

I would have said it's not unusual that you deal with it, but that you employ people and don't rely on other sources. Do you have your own weather stations or do you use data from larger organizations?

R

Robert Itschner36:20

Yes, okay. We're not that far.

I

Interviewer36:22

Okay, interesting. You just mentioned we were talking about Trump and the White House a bit. There are three or four crazy people in the world, probably more, but three big ones, when they tweet or use platforms, something is always happening. You specifically mentioned America, but the others too, right? There are so many sources that can lead to shock or dramatic events, positive or negative. It's very difficult to align a large company to that, and daily adjust the strategy. Can you imagine it like that?

R

Robert Itschner37:07

I don't want to see it so dramatically. What we certainly take note of is that the certainty of how things will turn out in a year is very low. There are many conflict points, friction points between these great powers. There are political developments that can lead to completely new results much faster. That can also be in Europe. We have elections, all sorts of things, and parties that may suddenly have completely different opinions on certain topics in energy policy. So the environment will remain unpredictable, and we have to live with that. Accordingly, we have to talk more regularly about how these conditions develop and what that means for us. And I think we do that. More than 10 years ago.

I

Interviewer38:00

I can't judge that for BKW, but I believe the volatility has increased significantly. And it's certainly not a daily topic, but more regular than before.

R

Robert Itschner38:13

Yes.

I

Interviewer38:14

I find that interesting for Germany. I can speak more for Germany. I would like to hear the perspective from Switzerland as well. So many Swiss guests, we haven't had that many. We have had many Austrians. If certain parties here, the blue party, gain ground, that affects you as a company because there is a completely different idea of energy policy. You mentioned that. We now have the first state where it will likely happen in Germany. That could have effects on certain strategies, also on you.

R

Robert Itschner38:56

I'm not a very good observer of that party or how quickly such changes might come about. What might be a stabilizing element is that turning back the clock is hardly possible. Yes, we are at a point where we have to have a forward strategy, where we have to allocate our money, but going back to the state of 20 years ago is simply no longer possible.

I

Interviewer39:31

Mhm.

R

Robert Itschner39:31

And therefore it's not so easy to say it will all be different. I can't really imagine how something like that should happen. We have taken coal power plants off the grid, we have taken nuclear power plants off the grid, we have passed plans, we have made a lot of investments. That has all already happened. And now to say that a technology is gone, rollback. Rollback costs so much money. Nobody has that. And so I hear these statements, but I doubt that the freedom to do that exists.

I

Interviewer40:11

Then to behave or make that decision that it will happen.

R

Robert Itschner40:16

I always have the impression, especially in Germany, that we talk everything down and more negatively than it actually is. Now, I can say I only have a bubble of people who lead or own companies of a certain size. I think you can't think that negatively because otherwise you could close the shop tomorrow. Whether as CEO or owner, if you look at it so gloomily. How do the Swiss currently view Germany?

One wonders a bit how the economy can deteriorate so quickly. We also wonder a bit about the lack of self-confidence and a feeling of 'we have to get this done'. Because the substance is there, the good people, the educated people haven't disappeared, the capital is not gone. We have a huge middle class in Germany. Many family-owned companies have long-term interests here. They don't want to relocate their company to the Far East. So there is so much substance, money, well-educated people. I think you could make something out of it.

I

Interviewer41:46

Me too.

R

Robert Itschner41:47

Yes, so we are two. That's good, right? But this will and optimism, you don't feel it. And in Switzerland, many people perceive it that way. They think Germany is going down the drain. And I think that's neither true, nor fair, nor correct. You don't have to talk about whether it's good, but how to turn things around. There are many possibilities.

I

Interviewer42:18

How to get the motivation back in the country, and the media also contribute to this negativity. I can get up and say the glass is half full or half empty. I see it the same way. So I find it fascinating how you look from outside as a neighboring country and say, great, now you also have a relevant business here in Germany. That means you look at Germany as a private person and then as the head of a large company.

Mhm.

What is an area where you would invest, without investment advice, just where you say that's an exciting market, when you think outside your company?

R

Robert Itschner43:23

Exciting in the sense of what interests me. I am very interested in robotics, for example. Do you have anything to do with that? No, only marginally. We have a drilling robot in operation that supports tunnel construction. It drills the holes to fix the cable ducts. But that's a unique example. Otherwise, robotics is not a big topic. We have a few drones for observing our systems. But I think it's a very exciting topic, a lot of potential. Technically interesting. That would be something I could engage in. Whether there is a payback, I'm not sure. There is still a lot of groundwork to do, and I think only large companies can scale properly.

I

Interviewer44:23

Mhm. So that yes, or small ones have to become big very quickly.

R

Robert Itschner44:29

Yes.

I

Interviewer44:29

How do you see our chances in Europe? On robotics, you mentioned that. I think of Germany and Europe, Neural maybe, which is huge. Do you think we in Europe play a role in the world?

R

Robert Itschner44:46

I'm probably not the best observer of this industry. But I think we have the potential to play a significant role. What is different in Europe compared to the USA is the availability of venture capital in the phase where companies should really become big. That's one thing. And US companies have a huge home market with the same language. So those are things that help, but I think we could do more in Europe.

I

Interviewer45:23

Mhm. Yes, of course, a country, a market as big as Europe feels, and we always have a border with different regulations. That hinders. But I observe that it's no longer the ambitious goal of every founder to go to America immediately, but to find solutions for the European market, whether software, hardware, robotics, because we have many tasks to solve here. And there is capital, of course, when Google and others say they buy companies for 60 billion, then that's possible.

R

Robert Itschner46:16

We are far from that. I think it's not possible here. Nothing comes to mind.

I

Interviewer46:21

Mhm. Yes. Is there a country in the world that you look at and say that's exciting, the development of markets outside Europe, America, and China, where you feel it's a relevant environment developing, regarding energy?

R

Robert Itschner46:41

Yes, honestly, economically open, but also energy-related. The music plays in the countries you mentioned. Australia is still interesting regarding energy. Their energy policy has achieved a lot in CO2 reduction. That's really exciting. Also because it's a closed system. So I would probably look more closely at how they do it. That could be interesting. Very generally.

I am also an observer like everyone else. I get the data from the newspaper. For me, Africa is extremely exciting because of demographics. And there seems to be a new dynamic regarding industrialization. For example, the Nigerian cement producer Gote, who is driving industrialization in Africa, using his own resources. I think a lot can happen very quickly. People have been saying that for a long time, but I think we are reaching a point where so many people are young and hungry that it can really fall on fertile ground.

I

Interviewer47:56

Yes, yes, yes, that's true.

R

Robert Itschner47:57

But I think it's also about India, from a technology perspective, everything related to coding was strong in India, but always the extended workbench of Europe. We had the idea, they implemented it. That's no longer necessary with AI. A developer can do with AI what three did recently. I think markets like India are difficult to conquer in terms of doing something there. Investing there is challenging, new businesses. China, you never get your money out. So I think Africa has good potential to not be an extended workbench but to innovate itself. BKW is certainly not the ideal company to do that. We focus on the European market, and AI is also a big topic for us. We are very curious about what's coming.

I

Interviewer49:26

AI, you just mentioned the topic of data centers. How relevant is that for you?

R

Robert Itschner49:33

Very relevant. On the one hand, because all growth forecasts have been revised upwards due to the enormous expansion of computing capacity. That is not expected to flatten. It will continue to grow very quickly for a while. So on the demand side, it's a big factor. And secondly, we also offer services in planning and realizing data centers. We have some competencies. We have customers who build data centers, and we can do the planning. That's very exciting. Would you say you will operate such things yourself in the future, from construction to operation? Honestly, we are considering developing a site we have with grid capacity. I don't think we would operate it ourselves, because that requires other competencies and market knowledge, but I could well imagine realizing it. We have practically everything in-house to build something like that.

I

Interviewer50:44

Wow. Then Elon Musk would probably sit here and say he already builds them to measure. And you're still thinking about whether to build any in Europe. I find that a very exciting contrast between America and Europe.

R

Robert Itschner51:01

I also don't think it will flatten. Someone recently told me that in the business reports of companies, Meta, for example, the AI budgets that were pushed without end, the headline from Mark Zuckerberg was 'develop with AI, use AI wherever you want' has dropped by 50%. So 50% of Meta's 60 billion only for AI applications has been halved. I believe the market share will still grow exponentially, but I find it interesting to consider. What does that mean for the overall market? Because Google and Alphabet also scaled back because it costs money to buy tokens for AI applications.

I

Interviewer52:04

Mhm. I would like to read you three sentences and you can complete them.

The most beautiful place in Switzerland is clearly...

R

Robert Itschner52:17

the Engadin.

I

Interviewer52:18

Where is that?

R

Robert Itschner52:20

It's in the southeast of Switzerland.

I

Interviewer52:23

Why is it so beautiful? It came so quickly. I never ask, but it came so quickly. I always go there when I have time. It's really beautiful. Mountain view, it's in the mountains.

R

Robert Itschner52:36

Yes, recommended. Although there are many beautiful places in Switzerland.

I

Interviewer52:41

I was recently in Switzerland.

R

Robert Itschner52:43

Yes, it's always worth considering whether you want to stay longer. It's truly dreamlike.

I

Interviewer52:55

Also, the Bernese Oberland is beautiful.

R

Robert Itschner52:57

Yes, I have to say something, but there is a wide selection.

I

Interviewer53:02

Yes, yes, I completely agree.

R

Robert Itschner53:06

After a stressful week, to unwind as CEO, sports helps me. Movement, in various forms, hiking, cycling, swimming, depending on the weather.

I

Interviewer53:24

And now let's come back to the topic of energy. We at BKW look at nuclear fusion with great interest.

Okay. Well, thank you very much for the classification between world politics, current events in Switzerland, and understanding what BKW does as a group. Thank you for your time.

R

Robert Itschner53:52

Thank you very much. Yes, gladly.

Why the Swiss CEO of @BKWGruppe looks at Germany with optimism!

About Robert Itschner