If you would like to earn CPE credit for listening to the show, visit earmarkcpe .com slash FPA.
Download the app, take a short quiz, and get your CPE certificate.
Finally, if you enjoy listening to FP &A today, please go to your podcast platform of choice, click the subscribe button, and leave a rating and review of the show.
And now, on to the show.
From DataRails, this is FP &A Today.
Welcome to FP &A Today.
I'm your host, Glenn Hopper.
And joining us today is Pavels Svetkovs, an accomplished finance professional with over a decade of expertise in FP &A, corporate finance, and strategic planning.
Pavels currently serves as the FP &A director at the Carlsberg Group, where he has played a pivotal role in driving the company's financial health, strategic growth, and sustainability initiatives.
With a career spanning finance roles in FP &A, supply chain, and M &A, Pavels has been at the forefront of innovation and operational excellence in finance.
He brings a wealth of experience from companies like PWC and Ernst & Young, and gained experience being a co -founder of a small startup.
We're thrilled to dive into Pavels' journey and gain insights from his wealth of experience.
Pavels, welcome to the show.
Thank you for having me here.
well let's get started let's let's dive in take me through your career and maybe going all the way back tell me how you got into FP &A and finance and take us up to where you are now yeah I think my finance career started to some extent accidentally finishing the school I was not really sure actually
where I would like to go and and then then I think how it's usually happening you look around what was the inspiration of your classmates and then and then you probably try to copy and i had one classmate who was very obsessed with investments and financial markets so i decided why don't i go actually
to to finance and so i decided to step in in the finance program in the bachelor and started with this overall understanding of how finance are organized and structured.
And very soon I realized that actually I would like to get more practical experience.
Theory is always nice.
But as you know, the practical experience is something which opens full understanding on the area where you are going to work and develop.
Somehow I got to this feeling and understanding that the good start actually would be from the consultancy, a company.
After the first grade, I actually started already working.
I managed to find a part -time job and I joined an accounting company and started my professional kind of experience in there.
Very soon, I realized that there are actually better companies or actually the better environment where you can get maybe more qualitative knowledge and experience and and one of the other companies was anste young and and that's how i i joined there so it generally i think i spent around four years
working in auditing and assurance services and and after that uh somehow realized that i'm not i'm not really willing anymore to continue with auditing field as such.
And having so many engagements or projects in that time, I had a great chance to see how many different industries are set up and especially as well as companies.
And somehow decided that probably it's the time now to move into one of the industries and start focusing specifically within one industry.
That's pretty much was my pass to FP &A.
That time, of course, it was not really explicit FP &A.
I think the first job I got was called a business controller.
So typical business controller in finance, which was doing both main functions of controlling the financial performance, but also doing some planning.
today in many organizations, this controlling is also separated from financial planning activities.
I think that your background as doing audit and then controllership, I mean, that is a foundation.
And I think you can't do good FP &A without a solid understanding of GAAP or IFRS or the accounting principles and understanding, you know, the accrual side and all the details that go into building the foundation of the data you're working with.
Do you find that doing your FP &A, do you still I know you moved on happily from audit but do you find yourself kind of looking back to those days or looking back at controllership and realizing that the skill set that you took from that is still applicable?
Yeah, absolutely. If I can say so I actually consider that the auditing experience of working for one of these big four companies is It's equally going through the finance military school.
It's actually so much information which you are exposed to, and you learn it so quickly.
I think that's actually the most efficient way of getting through the practical understanding of what is accounting, what is management accounting, and as you mentioned, international financial reporting standards or international accounting standards, So you get actually the knowledge, which is absolutely
valuable for FP &A further, I guess.
And that's what I consider as probably a base.
Because of course, at the end of the day, what FP &As does or are expected to do is to be able to read the numbers and translate them meaningful, clear way to its stakeholders and top management, of course.
Of course, it's not going to be only management reports where you extract this information from.
So you should be able, you should lead trades with international financial reporting standards.
Going straight from audit to beer drinking, I want to talk about Carlsberg Group.
Tell us about your company, what Carlsberg Group does and kind of the essential things that finance people need to know about Carlsberg and its industry.
Because, you know, when we have guests on, I love to always hear about the different kind of KPIs we track and everything and the approach at your company and just across the industry to FP &A.
Yeah, sure. It was a pleasure.
So Cosberg company, what it actually stands out from its peers, I think first is innovation and brewing, big emphasis on sustainability.
But what is also interesting to know the shareholder structure is a pretty distinct.
The company is largely controlled by Kolsberg Foundation, so that unique set up differentiates it from many of its peers in the global beer industry.
So the foundation focuses on the long term health and sustainability of the company.
Back in the days, founded by JC Jakobsen, had the mission to support scientific research and art and culture.
And also today, dividends from Kolsberg are received by foundation.
are used to fund these philanthropic activities.
So you can say that the shareholders are not only chasing the purely profit, but also support the broader societal contributions.
And I think it would be interesting to talk also about industry as such.
On your show, Glenn, there are many representatives from different industries.
And then when we talk about FP &A, then, of course, it has its own specific within the industry.
So maybe just briefly try to explain you what's so special about beer and beverage industry.
Yeah, yeah. I think, first of all, it's a highly dynamic sector.
Of course, with its own specific practices, processes, and also reporting requirements.
So beverage companies share also common financial structures with other industries, but also face distinct challenges that shape the organization and reporting.
In beverage industry, a financial organization typically aligns with global and regional scale of the company.
Its operational structure can be either centralized or decentralized.
It also probably correlates with the size of the company.
Talking about global beverage companies like us, we do have centralized finance functions at corporate level, but also regional finance teams overseeing specific geographies.
Talking about specifics in finance area, the beverage industry faces unique challenges if we compare it to some other industries.
Again, first of all, it's around inventory management.
It's about sales seasonality.
And then, of course, multi -currency operations.
So just maybe picking up some examples on revenue streams.
Often in our industry, there are a mix of revenue streams.
So it can be direct sales to retailers, distributors, or online platforms, or directly to stores, or licensing.
And typically also sales are followed by a complex discounts compilation, which requires often solid accounting guidelines and of course, good support from the systems.
When it comes to cost accounting, it can be very complex, especially when it comes to cost of goods sold.
So understanding and planning of those typically require also advanced ERP systems, which can handle complex cost allocations.
So overall supply chain finance area in the beverage industry is a very standalone, unique area.
It requires its own processes and specific techniques in how you approach the cost planning and analysis as well.
And of course, as you can imagine, the beverage companies are also capital intensive companies.
So often invest heavily in production plants, production lines and distribution networks.
So that creates necessity of having long -term demand planning on pretty granular level.
That's just to give you an overview of how complex this environment is.
Yeah. And then I guess you add in there too, I mean, with perishable items.
So you're tracking, so you have the supply chain, you're trying to forecast, you have inventory, you have timestamps on the inventory, basically of when it has to move by.
So I imagine the forecasting is very difficult on that front.
Yeah, yeah, true. And of course, the forecasting and budgeting process is the process which involves a very high level of collaboration between the departments, either within the big finance department or departments, as you mentioned, between sales and logistics and production and marketing.
So it's a pretty heavy process when it comes to budgeting here.
I think that's actually also one of the things which makes this FP &A job, specifically in this industry, very much exciting.
Yeah, yeah. And I guess let's dig into that a little more.
So we've gotten through budget season, now we're fully into 2025.
You guys are on calendar year, right?
Yes. Walk me through kind of the setup of FP &A and the sort of philosophy and outputs from your FP &A team.
I think in this case, we are pretty much consistent and pretty logical.
So a finance organization tries to render services also following the structural setup.
And so having a business partner in every function, as mentioned before, production, logistics, marketing, sales, etc.
Some business units actually may have more of business partner roles within the department, so it pretty much also correlates with the priorities and certain tasks which are defined by top management in the specific business unit.
So also, of course, as you can imagine, therefore, when it comes to output or the deliverables of FP &A, it's also different, of course.
Pretty much, if we talk about KPIs in a single function, I think the number can reach to 10, 20 KPIs.
And it's not necessarily that all these KPIs would be, you know, tracked on the very, or let's say on a top management level at the end of the day.
Of course, I think performance management reporting, which lands on the table of executive committee or board, is way more condensed.
It does contain only traditional, so to say, maybe metrics like revenue growths and EBIT margin and cost structures.
While these functional KPIs, of course, are very vital and to be tracked and analysed and also planned properly.
But this, so to say, I think it's a very operational thing.
So things related to production, to productivity or efficiency or, you know, utilization or waste or health safety and quality.
So all these metrics are all important, but they are just coming through maybe a different stage of the process.
And, you know, you mentioned business partnering.
And I know we also talked about this a little bit before the show.
And I think, you know, I've been in finance since, you know, the invention of the telephone, I think.
And so, you know, watching the field evolve over the years, it's only in recent years that we started hearing about business partnering.
And it is, like we talked about before the show, it's so important.
And I think your approach to it and the way you guys are doing it there.
Could you walk me through sort of kind of your approach to business partnering and what benefits you see from it and kind of your best secrets to really being truly embedded with the other departments and organizations?
Yeah, yeah. And maybe I would like also to explain it maybe from two angles.
First would be if you look at business partnering from the organization point of view So from the angle where you need to understand how to implement business partnering, how to make it work, what are these prerequisites, what are these conditions which you need to take care about.
So when we talk about business partnering, it sounds like it's something that you can easily adopt.
But in a way, I see that business partnering is, first of all, it's a mindset.
it's also behaviour but it's also a certain ways of working and in order to understand how it should be actually executed, what are this what is the mission of the business partner you of course need to understand as an organisation what goals you would like to be addressed by business partnering, also what would be
the governance in the company in order to also support this uh let's say concept could work another thing is of course um it's very hard to imagine how business partnering could work if you if in the organization there is no secured uh um such fundamental thing like the proper data quality and availability
of course because as you may have heard business partnering implies that finance people they they devote most of their time being sparring partner for one or another business function or unit.
It also depends on specifically which role you also consider when you talk about business partnering.
If you talk about CFO role, then of course it's first of all partnering to a CEO.
And in order to do that, you would like that support is also data -driven.
So the insights which business partner could extract, they should be also data driven.
So without this kind of ground, it's very hard to imagine how that business partnering could happen.
Talking from maybe a point of view of a business partner as a role, I think there are maybe key skills or capabilities which are required.
First of all, it's of course analytical.
Analytical capabilities should be supported by very strong business acumen, not understanding how your company is earning money, how your company is brewing, for example, how your company is delivering goods and stuff like that.
So basically, without proper understanding in details, how processes are set up, how they're interlinked, how it's all being translated again back on the paper in the ARP system, etc.
I don't see that that would make ability to provide good data -driven insights to our stakeholders.
Another skill which I find critical for a business partner role is ability to challenge, not only challenge, but also show a direct direction to your stakeholders.
And that, But that, of course, also should be supported by strong negotiation skills, of course, communication skills.
That's probably the key things which I see when it comes to business partner.
Yeah, and I think business partnering has, it's really evolved as the expectation in the role of finance and FP &A has evolved, where prior to talking about business partnering and prior to FP &A branching off from controllership and being its own division, the idea was finance, you could be in this ivory
tower of you didn't touch the rest of the business, you were just reporting the numbers.
If it wasn't in the general ledger, you didn't care.
And it was all about making sure that everything was accounted for in the right place and that everything, that we're staying within budget and then we are calling out any variances to the budget and all that.
And then I think over time, as you've seen, you know, there's a lot more automation now and there's an expectation that beyond the automation, beyond being a cost center and beyond being a backward -looking reporting group, you've got to add some value to the business.
And you're not going to do that if you don't get out and get into the business with operations, with marketing, with logistics, with, you know, all the different groups in the company.
So it's made us, as finance people, yes, we are domain experts in finance, but then we're getting out and we have to understand the rest of the business.
And I think that for a company moving to this, it's difficult at first because there can be this sort of, oh, the finance person doesn't understand what we do and they're just going to report things and they're going to make us look bad by reporting numbers that we don't agree with.
So going in that, the partnership part is a real part of it.
So you have to establish the trust of the group and they have to trust you as well.
So to be able to report, decide together, what are the KPIs?
How are we defining them?
How do we measure them and all that?
And I'm wondering if you guys have been doing this for a while, was it hard initially to establish that trust and do the groups now?
Do you feel like business partnering is working well and that the teams are happy to have a finance analyst kind of dedicated to them that understands their part of the business.
Yeah, absolutely. I agree with you, Dan.
And I think that's what I also wanted maybe to say, highlighting what are these prerequisites for business partner organizations.
So first of all, of course, top management or organization as such should foster this environment.
And Carlsberg, for example, I think it's happening in a very good way.
If you are a business partner in one of the business functions and working in the brewery, it's very appreciated, even strongly advised that you go in the field on a regular basis.
If you work in the commercial function, you go together with sales representatives, with merchandisers to see how they work.
What do they do? Then, of course, you discuss also how performance measurement is happening.
What are the struggles?
And the more questions you ask, the more knowledge you get and the better understanding you get what could be improved, what is not really working.
Equally, if it's a supply chain function, you should get to the operations.
You have to visit sites.
You have to go and understand how production lines are working, how the process is set up, what are the roles there, who is doing what and how.
And again, try to make a link with the dashboards which you see or you prepare or you analyze.
And so that you have this sequence or a logical chain built, first of all, in your head to understand, I know what each of these KPIs mean.
I know what are the consequences of having this KPI, for example, going up or down and sees these dependencies and interconnections.
So definitely, when we talk about business partnering, we are not just meaning that a strong analyst sitting in the back office and digesting millions of data points.
It's first of all a person who actually understands, who have seen with his own eyes how business is operating.
What does it mean? Exactly.
And it adds so much more value.
FP &A Today is brought to you by DataRails, the world's number one FP &A solution.
DataRails is the artificial intelligence powered financial planning and analysis platform built for Excel users.
That's right. You can stay in Excel.
But instead of facing hell for every budget, month -end close, or forecast, you can enjoy a paradise of data consolidation, advanced visualization, reporting, and AI capabilities.
Plus, game -changing insights giving you instant answers and your story created in seconds.
Find out why more than a thousand finance teams use DataRails to uncover their company's real story.
Don't replace Excel, embrace Excel.
Learn more at datarails .com.
All right. Well, I want to go into a group of questions that really, I want to get your take on FPNA in general and talk about some of your experiences.
I know we're at the time of this recording, everybody's just gotten through budget season.
We're sort of stabilizing right now and looking forward to the year and trying to figure out next steps in the projects for the year and all that.
But as we look back at budget season, one thing that's always fascinating when I talk to practitioners who've been doing this for a while, we love to hear about maybe some challenges that you've had to overcome.
And I think just right on the heels of budget season, is there a challenging budget experience that you can recall at any point in your career that you'd like to share with our listeners?
Yeah. And in that question, probably I would not have any original answer.
When it comes to budgeting, what is often a challenge is, let's say it can be very much different.
First of all, of course, would be very much dependent on the, so to say, maturity of the team, of senior team is, how many budgeting cycles you have gone already through.
That would mean that you know actually how to manage expectations.
You know how to prepare for the budgeting process up front.
Because, of course, the planning phase or activities is, I think, taking a fundamental part of the budgeting process.
I mean planning of activities.
So how you are going to exactly run the budgeting cycle, who is going to do what, how many meetings with whom you should have, and et cetera, et cetera.
And, of course, devote enough time to understand that alignment is going to take place in time and with right people, with right stakeholders.
I think when it comes to the most maybe challenging experience.
Well, I remember, of course, one year when we had to revise our demand plan five times over a few weeks time, and it was all direct consequences of recalculating your profitability top line And then being able to recalculate or to review what implications does it have on your costs, development, etc.
I believe many of FP &A professionals have had similar kind of cases.
So most probably I don't have any more exciting story in this area.
Yeah, and it's funny when you talk about that.
I mean, I think it just talking about having to redo the demand and thinking about rolling it all the way through the budget.
That's where every year you try to get that model so right.
You're trying to figure out, okay, this needs to be flexible because I'm going to have to pull out all the drivers and drop in a whole new model.
And we're going to do this 31 times over the next couple of months as we figure this out.
And it's every year a challenge.
But with technology, it's getting a little bit easier.
I mean, I did this long enough ago where we were doing everything in Excel.
You know, just with no help from really other software.
So at least tech's helping a little bit on that front.
Absolutely. I think, of course, technology today is a big enabler in efficiency in the budgeting.
It's interesting that for some people, they don't see a big difference between the budgeting and forecasting processes.
And that's what makes eventually them actually to approach the budgeting process more as a forecasting process.
So they tried, they really put their own maximum efforts on getting the accuracy close to 100%, and you know, try to detail every nitty gritty item in either it's your demand plan or your cost planning and structure, which is, of course, having its own consequences.
I mean, in a way, again, when we talk about the challenging experience, And of course, my professional career, I saw people were just burning out just because they didn't have the right approach to the process, doing more than expected or then doing more than needed and trying to go an extra mile was a very
good intention at the same time, not realizing that that's actually not the objective of the process.
It's funny when you say that.
I spent most of my career in private equity -backed companies with some PE analysts just constantly just getting all up and wanting me to explain every little thing and trying to go nine levels deeper on everything I did.
So I fell victim a lot of times in my career to, there's that saying that the map is not the terrain, but you'd spend so much time in these models that that became the reality.
And you would, rather than, you know, it was top -down or bottom -up budgeting or whatever.
The forecast became this trying to find correlations and overcomplicate it with these internal drivers and external drivers and all that and trying to fit what the business is going to do to this model rather than something that accurately represents, you know?
And then if the PE, if they're telling you this is your revenue growth target, these are your cost cuttings, so you try to model everything and then jam the real world into it.
And it can be a nightmare, but I spent probably more time than I would care to admit in living in that reality.
Yeah, and actually, I would say it resonates to how I also used to work, and actually probably currently working.
Because sometimes that much loving, the analytical part of this job is that you get obsessed with this crazy ideas that you try to build something complex, which is absolutely time -consuming exercise.
and then maybe it's not even adding value much to the process.
And again, talking about the objective of the work that you should accomplish.
But at the same time, you get so much fun and excitement out of this exercise that you sit the days and nights and working on these different models and trying to get these things in some better shape and also kind of challenge yourself on something more that eventually, again, it leads to some sometimes
negative results that not only from the health point of view, but also from the expectations point of view.
Because that's, I think, where there is maybe a thin border is that you have to understand that this is minimum requirement what is expected from me to deliver in this process.
And that are all nice to have things.
You have to balance with those.
yeah and i mean but to your point though that's why we are drawn to fpna it's like if you like the black and white nature of accounting with credits and debits and everything in a place then that's for you but if you like to geek out on statistics and in math and building out uh you know just trying
to build out these great models i mean that's part of the reason that we we come to fpna so so i get it and it is fun and honestly it would be uh that's why i i do a lot of teaching now too.
And, uh, and I love going through and explaining how to build models and use complicated, uh, forecasting techniques and, you know, seasonality and trend and, and all that that you put into models.
It is, it is fun to do that, but sometimes can be a little too, too removed from the, uh, from the real world.
But I wanted to, uh, cover a couple of other questions.
Um, so first off, you know, we talked a lot about where you've been and where your focus has been, But is there anything that's kind of top of mind for you right now?
Something you're trying to master or something you're focusing on in your career right now?
Yeah. Well, I think I have been continuously refining my financial modeling skills.
But at this point of time, I think particularly interested in exploring different techniques to uncover the relationships between all possible multiple variables and to work on this future trends prediction.
In other words, just trying to get some practical use of various regression analysis.
That's something which drives me a lot today.
Are you doing anything with AI or generative AI, any of the chat GPT or anything like that?
No, not at this point of time.
I actually tend to read a lot and hear a lot about it, But I still have not really found the practical way how to approach that.
So yeah, something to work on.
That's kind of a personal passion of mine is the only reason I ask.
And it is interesting to see.
I mean, early on people were able to see very stark applications of this is where you could use it in marketing or in other areas that are more qualitative than the sort of deterministic need that we have in finance.
But I do, I mean, there's movement there.
So it's going to be interesting to see what happens with AI and finance in the next couple of years too.
All right. Well, a couple of personal questions to close this out.
First off, we always love to ask our guests on the personal side, what's something that not many people know about you?
Something that maybe we, just by looking at your LinkedIn profile, we wouldn't know.
Yeah. I think I generally am not really a social person.
Yes, I do have some accounts in various social networks, but it's not that I'm actually living in there.
And also something maybe to work on in the future as well.
But, well, I actually love coding.
I used to do programming when I was in school over a few years.
Yeah, at some point I actually gave up.
It became somehow pointless for me.
I could not really see and I didn't have a vision why I would be continuing doing that.
But apparently, of course, going through that type of learning and understanding, forming this structural, systematic thinking, that's still left with me.
If there is a chance of writing some script somewhere in relation to one or another, you know, task, which you could actually automate, even for the personal stuff, for the private stuff, let's say, I actually take a chance and I do that.
So I really enjoy that.
Were you ever a VBA guy in Excel?
Yeah, yeah. What about Python in Excel?
No, not yet. I've gone through the course at one point of time, but then I somehow could not really find a practical use of applying these skills in my daily job.
Same, I'm fascinated by it.
And I think it is, I mean, a lot of people are going to do great things with it, but I've, you know, I'm not really a programmer, but I've done some citizen development and can use some Python.
And I haven't been able to figure out, you know, really where that use case is with Python in Excel.
But I think it's going to emerge just like Copilot in Excel.
I think Copilot right now, we don't really use it much.
It's kind of like Clippy, the old assistant from Microsoft Office.
But I think they're going to get there, and it's going to be interesting to see where it goes.
And actually, speaking of Excel, everybody's favorite question, what is your favorite Excel function and why?
I would not maybe call it a favorite.
It would sound that I'm using it every day.
But the function called indirect at one point of my professional career actually helped me a lot to progress with complexity of my modeling solutions.
So for those maybe who have not used it very much, it's a volatile function, which means that every time you open the workbook, it recalculates the data.
And it definitely has pros and cons.
So, for example, when it comes to big data files, you would not be willing to have a lot of these functions active in the workbook, just because it really slows down the work with the file.
But as the benefit of that is that you can set up the dynamic ranges.
So and I think that's really something to explore if at some point you kind of stuck with your idea and you don't see how you could progress with specifically dynamic listing or conditional selection of something, then just have a look at this function.
And especially it can be very good, widely used with other functions in combination.
Great, great. And I'm trying to think, I don't know that I've gotten that response from someone before.
And it's been a while, you know, being out of the trenches as I have the past few years, you know, in CFO type roles, I'm not building the models like I used to, but yeah, thinking back.
Indirect is a great response there.
Now I kind of want to go play around with that again.
Well, Pavels, that's about it for the time that we have today.
I really appreciate you coming on and sharing your insights and being on the show.
So thank you again.
You
