Ladislav Bartoníček – Interview for Hospodářské noviny Czech business daily

In the corner is a tin sculpture by Věra Janoušková. On the wall is an oil painting by Vladimír Novák. A wardrobe displays a fanciful bust by Jaroslav Róna. Ladislav Bartoníček’s office on the fifth floor at PPF headquarters in Dejvice is full of modern art. The former co-owner of the Czech Republic’s largest financial group takes care that nothing disturbs the impression of design purity. There are no papers, folders or books on his desk, just a computer. “This is how I like it. Everything I need is on my computer,” says the fifty-nine-year-old manager, one of Petr Kellner’s closest associates for thirty years.

Bartoníček’s role at PPF has been turbulently transformed since Kellner’s tragic death two years ago. First, he took on the role of CEO, but later, Kellner’s widow Renáta Kellnerová entrusted Jiří Šmejc, and Bartoníček began to step down from the Group’s executive roles. At the end of this year’s holiday season, the company announced that Bartoníček and the other minority shareholder, Jean-Pascal Duvieusart, had been bought out of the ownership structure. Within the Group, Bartoníček retained only his position on the board of directors of the biotechnology company Sotio.

As he speaks about his new stage in life in an interview with HN, he traditionally chooses a cautious and quiet tone, making sure to get the wording right. He sips green tea and looks forward to going to the forest to pick mushroom and then wing foiling this weekend. It is a challenging, modern sport that combines riding a special board on waves and holding an inflatable wing in his hands. “It hurts already,” smiles Bartoníček.

How are you?

(A moment of hesitation) I’m fine.

How does it feel not to be a co-owner of PPF after 16 years?

Honestly, I never made that distinction, because I was in a partnership with Petr from the very beginning, since about 1991. And the discussion about consolidating the family share had been going on for a while. That said, I personally don’t see it as any great breakthrough, because the logic was clear.

What do you mean?

Petr and I had this business partnership, and when he died, Renáta and I gradually concluded that it was probably right for the family to have full ownership of the Group. This doesn’t mean a complete break with PPF, it means creating a clean solution. Historically we worked by consulting on everything, even though my share in the Group was tiny. And that couldn’t work in the long term, of course. 

From the outside, however, it looks like the end of years of close cooperation with PPF.

I ended up in an executive role when I handed over the CEO role to Jiří Šmejc, and now it’s more about consulting. I’m not going back to an executive role, I’m old.

 Fifty-nine is not old age.

Maybe. Rather, it doesn’t make sense from another perspective—for me, the most significant change happened when I handed over the executive position of Group CEO. Not that I stopped being busy, but the burden of enormous responsibility disappeared. And that, I have to say, was and is very pleasant. I’m no longer responsible for a big whole, only my specific things, and that’s a different story. And it should stay that way.

 Can this be interpreted as the end of a stage that has lasted almost 33 years?

I’m sure it is. But I mean, that would be too easy a shortcut, because it only partially relates to the sale of the share. It depends a lot more on Petr’s death—and with my departure as CEO.

 It’s more of a passing period then?

That’s a small dot.

What were the discussions around the valuation of your share like? How is it done?

We said we wouldn’t disclose the valuation.

 It won’t even appear in the annual report a year from now?

I guess it depends on Kateřina Jirásková (CFO of PPF) and how she approaches this (laughs).

We have done the basic calculation, and your share is safely worth over a billion crowns. How come you’ve never appeared in the billionaire charts?

I don’t like rankings (smiles).

How did your share come to the non-rounded number of 0.535 percent?

Originally it was half a percent. The moment Jirka Šmejc sold back his five percent, he sold it to the company. So my share and J.P.’s share increased by 35 hundredths.

 What happens now? What are you planning after the “small dot” at PPF?

I have a few things in the pipeline that I’ll be working on. Together with J.P. (Jean-Pascal Duvieusart, ed.), we have BD Partners, which is our joint business activity. We’ve been investing in all sorts of interesting things together for a while now, so we decided it made sense to formalize it and create a structure and support for investing. We’re interested in companies in Europe—America is far away and more complex. It’s about companies that are already generating revenue, and they have to be interesting and innovative in some way so that we enjoy it. One of the greatest gifts of being at PPF has been that I’ve been learning something all my life. With every new business, it’s something new, and I’m not going to stop.

 Can you elaborate on what companies you’re specifically interested in?

They should be future-proof projects, I don’t know how to say it exactly in Czech. I mean, we’re probably not interested in lignite mines or chemical plants, it’s more like technology or some technology-based projects, and there’s an interesting idea.

 What firepower do you have at your disposal?

If we’re talking about equity, let’s say up to 100 million euros. For all projects.

 Do you have anyone targeted or have you invested in anyone yet?

It has already been reported somewhere that I have invested in the start-up Advanto. I have a fairly large stake in So Concrete, which is a company that does robotic printing with UHPC, which is high-strength concrete. It’s a company that was set up by the artist Federico Díaz. It’s a nice example of something I enjoy, because it’s a combination of cutting-edge technology and cutting-edge know-how, not only in terms of the robots but also in terms of the materials used. Which is quite a science, but it’s also about great creativity and high aesthetics.

You have previously invested in the computer school Gopas, which appeared in the media this year in connection with the election of the new CEO of Czech Television.

This is a long-term investment since I have known Petr Daniel, the founder and head of Gopas, from my university days. I have got a 25% stake in it. It’s a very nice thing that makes money.

How will your life change now? Are you going to move somewhere?

I’ll stay where I am. Prague is actually a very pleasant city to live in. Compared to the alternatives, you realize how nice Prague is. It makes sense then to have a base here. Of course, it’s no problem to move somewhere if you want to and spend 14 days or a month somewhere else and come back again. Of course, you can work remotely, but Prague is good.

 The only role you have left at PPF is as chairman of the board of directors at Sotio Biotech, a biotechnology company that develops drugs for cancer. What’s behind that?

I’ve been at Sotio for a long time, though not from the beginning—from 2013. Sotio was established at the meeting, first Petr and then both of us together, Professor Jiřina Bartůňková from Motol and her colleague Professor Radek Špíšek. They had a very interesting project based on dendritic cells. They were researching at an academic level, and the word was out that we would try to make a company out of it and develop it professionally as a possible therapy. Over time, it became clear how naive we were. We entered a field that was extremely sophisticated, extremely competitive, with enormous risks. But there are also very interesting scientific opportunities, plus it has the amazing overlap that if you can get a drug developed to the end, you can save lives. That mix appealed to me and to Petr.

What was your role?

I worked there directly as CEO for a while, but mainly to set up the corporate structure, because, of course, I don’t understand the scientific part. So I knew it was a short-term thing. Today, Radek Špíšek runs Sotio, and I work on the board of directors and am kind of a “buddy” to him. What else can I call it? 

Friend on the phone?

That sounds strange, but anyway, we’re working together on strategic decisions. The day-to-day business lies with him though, and he’s doing a great job. We’ve been progressively developing a dendritic cell-based drug in several indications, and along the way, we’ve found that we need to increase the likelihood that any drugs in development make it to the commercial stage. We therefore purchased additional programmes and patents, but it turned out that a dendritic cell-based drug could not be taken to the final stage, even though we were convinced it was helping patients. However, development has taken so long and is so complex that we haven’t found a commercial model to continue with. This is a great pity, but also the reality in the pharmaceutical industry. So we stopped this programme and are continuing with the other four. All of them are in oncology, and we’re focusing a lot on immuno-oncology. 

Which of your programmes are closest to commercial launch?

The most promising and perhaps most interesting is a product in a class of drugs called antibody-drug conjugates (ADC), which is a targeted therapy for treating cancer. Unlike general chemotherapy, ADCs can target and kill cancer cells but do not touch healthy ones. It uses a monoclonal antibody that can bind directly to a protein on the surface of the cancer cell. In recent years, the research and use of ADCs has seen something of a renaissance, and we’re developing a product to treat stomach and pancreatic cancer. But it’s important to remember that when we say closest to market, it still means another five years of work.

Do you want to keep your position at Sotio in the future?

Yes, I enjoy it immensely.

You’ve been following the development of Czech capitalism from the front row for more than thirty years. How are we doing?

To begin with, it’s good to remember that we’re a small and unimportant country, and at the end of the day, things will always work here according to whether Germany or the European Union works. The Union has been lagging far behind recently compared to what’s happening in Asia and the US. We’re too slow for practically everything. The big technology companies that set the trends and the future are absent in Europe. We’re suffering from fragmentation and too much regulation from Brussels and national rules combined. It’s actually quite a miracle that we’re as well off as we are. The question is how long it will last. Plus, we lack motivation. When you compare the drive in emerging Asian economies with our European approach, it doesn’t look good for us. That’s why I am worried that unless something happens, Europe will eventually be a marginal continent. And nobody really knows what should happen.

Are we missing a clear vision then?

Yes, and not only that. We may have enough vision, but we can’t put it into practice. For me, the blackest scenario is that Donald Trump, who doesn’t like Europe very much, wins the US election. Our erosion compared to international competition will then be even faster.

PPF Group is moving from Asian and emerging markets back to Europe.

And to the United States. But this is a logical development resulting from the new geopolitical situation. There are still opportunities for good business in Europe. Asia is very difficult, and that means risky. So PPF is opting for a less risky strategy.

Are you sorry about how Home Credit ended? At one point, it was an empire from the US to China over which, shall we say, the sun never set. There’s not much of that greatness left.

I wonder if the word sorry is correct… (long hesitation). The question is what are the alternative scenarios to the fact that we have sold or are in the process of selling some parts of Home Credit? At the end of the day, when you add it all up, the Home Credit project was successful, and it was a good business plan. If you approached it from the ego only and said that this is something the sun doesn’t set on and are willing to take additional large risks and capital exposure, it could have been sustained. But that’s not the right strategy. The most pivotal moment for Home Credit was when we realized that its business could not be grown in China in the long term.

Let us return to the Czech Republic and its development. What do you think has been achieved? What are you happy about, and what are you less happy about?

I was fortunate to have lived through the 1990s when a legal framework was quickly established on which a free market could operate. Of course, there were a lot of excesses, but it was done quickly, and it started a period of prosperity. But somewhere between 2000 and 2005, we lost some of our internal momentum and have been hesitating (floundering) ever since—sometimes better, sometimes worse, depending on whether Germany is going or standing still. At the level of state infrastructure, nothing substantial has been built. I don’t just mean physical infrastructure, but mainly digitalization and better education. Simply creating an environment where new opportunities can grow again. We have a lot of educated and tech-savvy people here, but we could benefit more from them if they had better conditions. The vision of getting out of the socialist morass was fulfilled, but then nothing followed. I don’t know—what is the supporting idea for our country? Yet there are similarly sized countries, for example, Denmark or the Baltic States, which have their own ideas and greatly benefit from them.

You don’t see anything good here?

It’s amazing that despite all the negative things I’ve said, there are a lot of new businesses being created here and there are a lot of young people trying to do something good. Not just in business. Plus, Europe itself is starting to catch up with America in start-ups. Fortunately, it’s not just about Silicon Valley anymore.

When do you miss Petr Kellner most?

It’s complicated. I don’t think there is a specific situation I can define. But I think of him often. Every day. The hole that’s been left in his wake is awfully big. He was big in scope and personality, so it makes sense that he left a big hole. He filled the space around him, he was a specific person, and he also imprinted a culture on PPF that was extremely strong and attractive to a certain group of people. I miss that, too.

Will your departure change the function of the family’s advisory board?

I suppose its role needs to be redefined in some way. But that’s not up to me.

You said at the beginning that it was extremely difficult to take responsibility for the whole of PPF from the position of CEO at the time when Petr Kellner passed. How do you look back on that time?

It was definitely my most difficult period in business. Logically. It wasn’t just that Petr died, which has all the personal feelings and practicalities attached to it. At the same time, there was Covid, and then came the war in Ukraine. We had quite a lot of business in Russia. But I think in the end, I managed to do it quite well. It’s not just to my credit though—it’s the people here at PPF. It was really tough for everybody—Petr was the driver behind a huge number of projects and went into all sorts of detail. And the fact that we’ve been able to follow up without a hitch is really good. Of course, we could have done more, but overall, it created a foundation for the future. From firefighting, the Group went back to increasing activity.

How difficult will it be for the family as shareholders to continue to develop PPF?

It’s not easy, but the Group has a lot of inertia, and I think it’s going well now and the family is getting used to their new role.

Could the situation be interpreted as a shift from a rapidly managed company by one founder to a larger corporation?

It is inevitable that PPF will become a bit of a corporation. As a founder, Petr could have played much more freely with individual businesses. They were his. He invented them, paid for them, and largely ran them. The responsibility for Renáta who is very actively involved, and the second generation is different. It’s no longer a one-man company—in a good way, the shareholders will be more conservative, and the Group has to be run more like a corporation. How much? It’s always about balance. Of course, it’s a question of who on the family side will be the most involved in the future.

This text was translated from the Czech original and edited for clarity.