Case Study: Interview with Christian Schmid, Managing Director of Commend Austria

It is truly impressive which companies operate successfully below the radar of the general public. There is a reason they are called hidden champions. Commend, based in Salzburg, is one of them. Spaceports, prisons and museums such as the Louvre in Abu Dhabi rely on Commend’s intercom technology. We spoke with Christian Schmid, Managing Director of Commend Austria, about the company, the challenges in finance and the importance of liquidity in general.

Mr Schmid, you are the Managing Director of Commend Österreich GmbH. “Security and Communication” is what the website says. What exactly lies behind that?

Behind these keywords lies a versatile range of intercom products, right through to complex, integrated security solutions. We are specialists who offer and implement the complete technical intercom equipment in infrastructure and industrial projects such as metros, airports, steelworks, buildings, safe city installations and much more. Emergency call systems, evacuation topics, announcements, video recording and so on are connected to a control centre and “married” to each other there. A complete system integration, if you like.

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We serve a wide range of industries. As a rule these are always medium-sized to large complexes in every industry you can imagine. I am talking about refineries, the pharmaceutical industry, prisons, hospitals, logistics centres and so on. Always with the same need: different systems are to be integrated in a single security control centre. Recently, for example, we also equipped a spaceport in Russia with our technology.

But that means Commend’s sphere of activity goes beyond Austria. Which countries do you currently cover?

Definitely. Commend has a production site in Salzburg where our products and solutions are developed, which are then sold through our own sales companies in 26 countries worldwide. We have been active in the market for decades and are the technological world market leader in our industry. We are often described as a hidden champion.

Very impressive! If I understood correctly, you focus mainly on B2B. So you handle classic project business?

Absolutely. Our projects have a duration of a few months up to several years. That of course depends heavily on the order volume and the complexity of the overall project.

What challenge does this business model pose for you as Managing Director?

As Managing Director of Commend Austria I am responsible not only for Austria but for 12 countries in total, including Russia. Depending on complexity and duration, the projects are a challenge for financing and ultimately also for liquidity.

In project business you have different forms of cash flows. We are active in B2B and have customers such as Skidata, Siemens and others. These are customers with whom you can reliably expect incoming payments in line with the payment terms. But as soon as you look at other countries, concepts such as advance payments are unknown or cannot be enforced. Payment flows there become ever longer and less predictable.

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That means the topic of liquidity is becoming more important?

Correct. It can happen that, because of deliveries already made and preparatory work already performed in a considerable amount, combined with incoming payments that keep being delayed, there is a lack of cash flow. In some countries we have also begun to move towards multichannel sales, and that increases our risks and also changes our cash flows, making them more volatile. Bottlenecks can definitely arise. We were not able to foresee this in this form with our existing accounting systems.

What advantages do you see for Commend from using COMMITLY?

In order to get to know the effects of delays in cash flow better and also to sharpen our thinking in this direction, we are now using COMMITLY in Austria as a first step. It helps us to think a bit differently here, not only in terms of project successes.

I am always pleased when I find innovative solutions. I have not seen cash flow management like COMMITLY in the market before.

We are of course very glad to hear that! Many thanks for your time!

Credits: Photo by Commend