Volution CFO on benefiting from the clean air revolution

Air quality has become big business. A demand for better ventilated buildings that has been growing for years, ticked up dramatically with the onset of coronavirus this year. For companies like Volution that specialise in lightweight ventilation systems, the future looks positive.

Andy O’Brien, CFO of the UK-listed group, joined last year when he saw the growing opportunities for the firm, which listed on the London market six years ago. He says the growing trend toward energy efficiency has required better sealed residential and commercial buildings, which has necessitated better ventilation. “Regulation is encouraging the drive to more effective and sophisticated ventilation systems,” he says.

“I wanted to join a business where I could see a really compelling growth story. I certainly saw that in Volution, with everything around the drive for energy efficiency in buildings,” says O’Brien, who previously spent a decade in various finance roles at Aggreko, the provider of industrial ventilation systems.

Volution has expanded rapidly since it went public, acquiring entities across Europe and in Australasia, but the group has inevitably seen a hit this year as coronavirus impacted worldwide. The firm’s share price peaked in December at 255p, but fell away to around 160p by the beginning of May – giving it a market cap of around £320m. Adjusted 2019 pre-tax profits rose 11.5 percent to £39.9m from the previous year on revenue that increased 14.6 percent to £235.7m over the same period.

But O’Brien is positive that the group’s offer- sophisticated, lightweight systems that are ideal for hospitals as well as homes and offices, will be increasingly sought out as clean air becomes a greater priority. Volution is one of the companies supplying products to the specially built NHS Nightingale coronavirus hospitals as well as coronavirus wards of regular hospitals.

“We’re delighted we can be of help in any small way, to what’s going on. We all get a sense of pride when we see an order being delivered to the front line,” says O’Brien.

“It comes down to ventilation systems being really important, whether it’s in a new residential property or a new requirement such as the Nightingales, or whether it be replacement of old equipment, having the right ventilation is so important to having a healthy environment,” says O’Brien.

But while Volution’s contribution in the battle against the epidemic may be gaining publicity, the impact of a global economic slowdown as a result of the coronavirus lockdown, has meant that the firm has had to take a pragmatic approach.

“Our businesses are in countries that have suffered in different ways through the coronavirus crisis and are coming out of this at different speeds and different times. But as countries such as New Zealand and parts of Europe where restrictions are being lifted, we are seeing pretty good levels of activity – having a broad geographical portfolio is really helping us,” says O’Brien.

“We’ve carried on operating across all of our geographies, albeit operating on a reduced footing. But we focused very quickly on cash and liquidity positions. This is where the finance team has an enormous role to play, everyday talking to each of the finance leaders saying: ‘Is your cash performing as expected, what’s going to happen this week?” he adds.

Career path

O’Brien’s route to becoming a CFO started in an unlikely place- studying geography and town planning at the University of Birmingham, before joining Deloitte’s Cardiff office, a return to his home town.

After qualifying he was hired by Welsh utility group Hyder to join its internal audit function, but the former nationalised utility was soon faced with major threats to its business due to price deregulation in the utility markets and he was seconded to a team looking at how to restructure the business

“I spent six months going around, meeting people, trying to understand who did what, how the business at the time was structured and organised. It was quite a learning experience,” he says.

Another six months working as a commercial analyst developing price models in the government outsourcing arm of Hyder, which was gradually being broken up and parts sold off, was followed by a move to  French industrial giant Lafarge, for “a much more general, all round finance role”.

To that end O’Brien built up finance expertise in areas such as financial controlling, FP&A, reporting, analytics, but critically also contained a year in general management and operations, looking after a subsidiary in Ireland. “It meant having to make the decisions as well as just propose decisions, so it was an interesting step up for me,” he says.

A move to oil and gas services provider Vetco Gray, a private equity-owned entity spun out of Swiss giant ABB which involved a period spent in Singapore. A changed tack came after a couple of years when it was taken over by US industrial conglomerate GE.

As a result of restructuring O’Brien became finance lead for GE’s Scandinavia, Russia and Caspian oil and gas business, working out of Oslo but travelling across the region. “I had to learn and adapt and adjust to different ways of working, different styles, different cultures,” he reflects.

But the biggest impact on his career was a decade spent at Aggreko, undertaking finance director roles across Asia, Latin America, the Middle East, Russia and Africa, focusing mainly on emerging markets “in wide ranging, diverse, interesting geographies.

“That meant not quite knowing what you’re going to wake up to each day with challenges to address, but also enjoying interacting with lots of different people in different cultures.

“One of the most important things to learn was knowing which bits of the business were most in need of attention, and trying to read across to other parts of the business where perhaps people weren’t seeing issues yet.

“Building all those things together helped in recommending investment decisions, thinking where do we deploy out capital, where do we put our people and our resources, which parts of the business offer us the most potential, and which parts of the business have the biggest risks we have to focus on and address them,” he says.

Crucially O’Brien experienced very different market cycles, a high growth period in the first few years followed by several years of price and competitive pressure. “It meant working out how to tailor and adjust cost structures and capital deployment to make sure that we were still delivering good results, in face of the challenges,” he says.

Adapting to change

All that experience is now being brought to bear by O’Brien, who sees finance as playing a critical role in ensuring Volution is able to thrive in the fast-changing environment. He says the finance function he inherited last August was “delivering well on the basics, providing large amounts of data and analysis on the current and past, but I wanted to turning that into looking forwards,” he says.

“Having the information is good, and having analysis of what has happened is of course important. But I want to make sure we use that information to try to forecast what’s going to happen, to support and help and guide decision-making.

“To do that we’re increasingly looking at how we can leverage some of our systems to help support and provide that journey. I think it’s about mindset and styles and the conversations that you have with people, to encourage them to do that thinking,” he adds.

That approach is not so much AI, but “people-led analysis” across multiple geographies and multiple sectors. “It’s a question of, how do we make better use of our business intelligence platforms, more dashboard and automated reporting rather than having to dump loads of data off into spreadsheets,” he adds.

In the meantime, O’Brien says he is seeking to bolster a sense of shared teamwork and interaction in the finance team across geographies. “In finance there are issues around shared learnings and shared experiences and joining the dots and getting people to work on things together,” he says.

By enhancing communication between its country teams, Volution’s finance function has been better placed to address the challenges of the conditions brought about by the pandemic, says O’Brien. “It’s been especially helpful these last few weeks, because catch-ups focused around what’s happening and what actions we’re taking, allows people to understand what’s going on in each different geography. They are able to quickly see how somebody else is doing the same thing,” he says.

Good communication is also essential outside of the business as well, “whether with the banks, investors, analysts, auditors and advisors, and not being afraid to ask for help and ask for and take advice. No one has been through a crisis like this before and no one has all the answers, so having a good network to tap into is hugely helpful,” adds O’Brien.

This approach is well placed to underpin a business model he believes is sufficiently resilient for the months ahead. “As a business we are able to scale up and scale down our activity, being relatively flexible compared to more capital intensive industries, as we don’t have substantial costs of switching machinery on or off,” he says.

In the long run, O’Brien has a sense that coronavirus will change the way people think about their environment, with a greater appreciation for air quality. “With the current climate and the current challenges, it is only going to intensify our understanding of healthy environments people want to live and work in, with better ventilation in living and working spaces.

“One of the outcomes of this is going to be people looking more at domestic and working environments, and making sure they are as healthy and as comfortable as they can be,” he adds.

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