 Dear Gülcin, dear Hans, thank you very much for inviting again. But now also I have to do something to earn that invitation. And congratulations to you, Hans, for your birthday. Bravo. Yeah, that was it. Thank you so much. No, no, I see this will be a promotion movie now for 30 minutes. Model is, of course, an amazing name and and look at my wife and She earned it and I inherited it and This seems to be the same story also that I have inherited a business But the story is a bit more complicated in my 80s as a student of Economy, I was very much worried worried to find new markets and I was so surprised about this worry. It could mean that I could become an entrepreneur One day because when you're worried about markets It's exactly the worry that you need to probably Make your money one day in markets in free markets and still for me the probably the most surprising event in my life was Something that if I look around Most of you have shared with me end of the 80s new markets came up so the fall of the Berlin Wall meant an opening of new markets and as I carried this Unanswered question in me all these years. It was clear for me that this was the answer indeed So after my studies, it was a time coincidence again. I Went into consultant business that is in your young age when you are Unexperienced exactly the right thing to do namely to consult other people and I was in for example in Potsdam Consulting How to transform into a market society? I was consulting in the Czech Republic to transform a Sleeping skiing resort into a tourist attraction. So funny enough. That's what I did and In 91 my father called me a Saying that He was about to buy a business in France and he thought I might then manage that business Well, I was not particularly enthusiastic about France but When we negotiated the salary I Was convinced I Join the family business. So this logo that you see Is indeed a family business that is a bit particular in the sense that it was founded by my Grand-grandfather in 1882 and Every time I tell this and bring it to my mind. I'm surprised myself How that could happen and how we could survive, you know, this probability of From one generation to the other is about 5% and Multiply 5% by 5% by 5% of course you do not end up with 25% but With a much lower a figure That has some zeros after the commas and so on but it's it's a fact and he called me to do that job And I came into office in 91 And I it the transaction was not Completed and I was looking into the case again and after a study a deep study of about 43 minutes a Very deep study. I must say I Ran into my father's office to say Bad deal Let's not do it. Let's get out of it as soon as we can So the price was high and the expectations were low So in a way, I didn't think that I had to study and make a PhD in economics to have that Judgment it was such a clear case So my father agreed and it was not the last time that he agreed with my opinion It took me a couple of months to come out of these contracts that he signed And he's a good father. I mean he thought about his son and buying him a company what a decent thing to do but this son refuses it and we managed to go out and I was a sitting in an office without Anything to do except to prove it in a different way so luck came in So we are still writing the year 91 and we have maybe not a Margaret Thatcher in Power in a country that I was particularly interested, but we had a Vachlav Klaus a Prime Minister in Czech Republic elected. I think in the 1990s and I would give him some credit without really studying in detail, but He wanted to really privatize these state economy as fast as he could and by coincidence By Salomon brothers at that time. There was a dossier on on my desk with this privatization of the industry We are in so you see out of this. Oh the logo indeed shows we are in the packaging We are producing corrugated boxes and folding boxes for consumer industry So our biggest customers are chocolate our food and beverage in all kind of brand names So Vachlav Klaus at that time was Convinced that he would not be reelected in the parliament election in 1992 So he pushed through as many privatizations as he could So I'm stressing this because time was a critical factor So I was sitting there in Prague at the negotiation table with my lawyer and opposite me were 12 people six at least from Salomon brothers and six ministers and secretaries from the government and We managed to to win this global tender not by money, but by time so Elections were I think it was something about 7th or 8th of July in 1992 and we signed the contract four days before these elections and this of course was not a coincidence And we were negotiating day and night and when I set my final price This anecdote I love I have to share it with you. So I was sitting on this other table and I said the final price and Imagine no reaction on the other side No, none of all and of course I felt a bit embarrassed and such a social constellation and I was looking to my lawyer and I was sure I screwed it After one minute of complete silence Suddenly an activity started some people were going to the telephone other were discussing with each other and We couldn't interpret and it remained a red Unanswered question But the thing is that a couple of days later we flew back to Zurich the answer was we made the deal So we finalized we negotiated day and night until this I would say two days before the elections and we signed the contract and then we went into a pop in Prague and of course my first question was what was this strange reaction after my final offer and The thing was they at the same time they negotiated with an American company called International paper and they were so used to the fact that each time he he mentioned the price He would run to the telephone and call New York if this would be correct What he said and backed up by the board in my case It was not necessary. Let's assume these are the advantages of a family company So they were so used to that they thought after I set my final offer I run to the telephone and call my board and Then they realized I don't do it and they realized we can do the deal and We can do it now and not in two weeks time when Watch Love Klaus's cabinet was elected out of office The joke was of course his He was re-elected To the surprise of everybody, but we had this Company and I tell you this so lengthly of course It's not yet the hardship so to speak is that this Happening gave a lot of tailwind to my career In 95 I could become CEO of the This family business which at that time was purely Swiss-based business And we were the first company in our business to enter the former comic-con markets and Then ownership was the next question And So my father was not the majority owner there were many shareholders and So his sister for example, she wanted to sell her shares and my father had the next plan Which I opposed and that was going public I didn't like the idea of being a CEO of a public company So I was running to the banks and asking for credits The good news was they were Prepared to give me money and the bad news was but mr. Model we at least need a little little little equity So I was running back to my father saying listen father. I would get some money I cannot follow your plan of going public, but please give me something This is a very difficult starting point for negotiations but He he invented some Conditions, so we found the solution. He said okay. I give you two percent of the company But you have to waive your inheritance and you have to take your brother with him with you 50-50 I Immediately accepted these conditions And I did write so because my father will have is 86 birthday in 12 days and He is well off and I'm happy for it and I would hate myself waiting for inheriting shares So That's my Little story to come into business now Hans asked me for the hardship and By the way, this is our headquarter a little private house so to speak and Probably more more interesting is the big tree in the back This tree is a red birch and its age is about the 130 years of my of my company so This is not yet the hardship, but this one is Here I really let down my trousers, but it is It is referring to the years 2001 to 2006 The title is Daniel and Elizabeth's model together and This is an official document by my tax Consultant and here you see so I'm sorry. It's in German here. You see income Our income together and here you see a separation bund means federal tax and Tegi is to walk out. This is the canton This is that the state tax and the federal tax together. So this is To tell you frankly my income between 2001 2006 There is a slight increase because Elizabeth joined the company and she had also some income and here you see the tax income tax and here you see the percentage and This is why Switzerland is Thought to be a very attractive country income tax look at it if you you have to you know Aggregate these two figures. So you end up 34 percent 31 percent 33 and so on so you are between 31 and 33 percent Which is compared to Germany a paradise But then the real ugly stuff starts Here we have wealth So Please admire me. I'm a very wealthy person So we're talking here 79 million 88 million 90 million 89 million and so on up here 2006 Wow, we made a jump. We are close to 100 million Swiss francs of wealth But don't admire me too much. It's a it's a company value basically So we were indeed quite successful so to speak so the credits that the depths that we I have taken on To make the management buy out by that time was about to be paid off and At the same time the company was growing and growing so Indeed we created some value so to speak But then the bad news really comes in and this is the so-called wealth tax And that's the absolute figure of wealth tax We had to pay Elizabeth and me in this period and this is the percentage of the wealth tax So it's 0.5 4 4 4 4 Well, this is a this is Zurich is coming in. This is an apartment But please don't make too many photographs. It's a it's a bit but it's it's all data, okay, and So you see you see the percentage and In a political debate, you know in a parliament, they would argue, but mr. Model I mean, what is the problem? sharing point five percent of your Unbelievable wealth with the people. How can you oppose? You must be a very cold Bloody person Not being prepared to share with others well The next line is of course total income tax and wealth tax and this is the amount it's all in Swiss Frank, but Then we took the amount in percentage of our income Ladies and gentlemen, I didn't have any other income than income I don't want to go deeper into it. I just can't stand it and You are laughing. I mean, what kind of friends are you? so To to go back to facts. I mean 2001 basically I paid all my income as tax in 2002 that was really I Paid 123% of course you Of course I you might ask how could you pay it? It was a problem. So I went to the tax authorities saying guys how how shall I do it? No, I did I must say by the way the good reputation of the Switzerland has a beside Okay, I mean too high but Comparably, okay percentage of income tax here you can talk with the people and share your problem Because Switzerland is still a small country this can't on to a go I am pretty well known so to speak is a small entity of 300,000 people and we employ let's say 600 people just in this can't own so they would accept the date So I asked them and you know what their answer was I Think you can guess You have an idea. It is a possible answer. They weren't really so Unpolite They were very polite say but mr. Model you should increase your income and it's a it's a true story I'm not joking and that this is basically what you see here So I followed the advice of my robbers Here you see 2003 I increased my income quite dramatically And I could pay so why how could I pay because the years are deferred So I didn't have to pay that amount in that year, but I paid that amount Let me see sorry here the total income pack I had to pay in this year you see and I had more income So just to to answer your possible question, which you didn't ask How could you pay it? Well, I shared this sorrow with my beloved wife with my our young children and They didn't believe it. I shared this sorrow with politicians They didn't believe me I Had a discussion with the minister. He didn't believe me why because this this real sin happens They transform a company Into an amount of money and they would never believe that you don't have that money Never no chance. I gave up any discussion about it anyway So I had the minister in the canton to go also with me I told him my sorrow. He didn't believe me and he walked off the table so What did we do or what was our solution? We said we do not want to make tax issue the fate of our destiny so to speak so we stayed In Switzerland and we said we were by the way, we were living in a very nice house and so don't You know think that Our life was was terrible. It was just a bearable So we stayed We stayed and we moved only three years ago out of Switzerland and we Coincided it with our youngest daughter She left the house a big house and The house was almost emptied in and we felt this was the right moment to move So we moved to the principality of Liechtenstein. So that was the first solution to this hardship and The funny thing is though We did it so to speak out of tax reasons But we are much more practical about it because the location Liechtenstein and our headquarter and and other places which are important for us Were an advantage so After three years and I really have to look in the eyes of my wife After three years we can say we are very happy there and it has not primarily something to do with money But we are guests in a country. We do not have to Be Ergolich so so in a way be upset about their politics because The principality of Liechtenstein also has its Troubles and you are more remote from your mother country and you can watch them and you also feel not too much Involved in the problems of the daily politics. So it's a wonderful summary. I can make here That we are happy But Switzerland has the same also for foreigners So I do not want to make here a anti-switzerland promotion because as a foreigner You can come into Switzerland and make the same as we did coming to Principality of Liechtenstein namely Negotiate the terms and conditions of a flat tax agreement And that's what we did and that's why Switzerland is so highly Regarded and recommended all over the world because there are so many privileged foreigners who have a flat tax agreement with Switzerland The only people who cannot do this are Swiss people Being so unfortunate and born in that country second hardship Well, this is just an article. I think Hans has read it to Journalist then a couple of months after removed He got the information that we moved and I had the chance to make an interview and You would love it second hardship Well, Switzerland really is famous for just last year's policy change of the national bank I'm sure you know that They firmly said that they would defend the currency exchange rate at 1.2 Swiss franc against the euro To remember all of us when the euro came out it was 1.6 so Switzerland has this wonderful reputation except for the slides before and many people go into Swiss Franks and I just Had a chat with a colleague last night. He also has Even expected that the Swiss franc would strengthen further So it was 1.6. When was the euro born? 2000 or 99 2001 so 15 years ago. It was 1.6. So the the Swiss franc strengthened up to 1.2 At that time or in this period we employed 1000 people in Switzerland alone So it gave us quite some hardship, but I do not complain because a strong currency is a Good thing basically for industry. It is hard, but you you have to invest and and be a very highly automated modern Company and then you can survive. So we have the most modern corrugated factories in Switzerland Now the shock last year 15th of January was tremendous. You can see this in This chart. So this was the all the time defended 1.2 and The management was so able to announce this before the stock exchange opened So they are not really Clever people because when they had done it after the stock exchange closed Then at least some people could have slept overnight To think what they should do Nobody thought anything, but in a shock the Swiss franc went to a high of 0.85 within seconds Now if you have an industry, I don't have to tell you much more. What's happening then? The next day our customers called us and they wanted a price reduction a substantial price reduction, otherwise they would go to Non-swiss suppliers, of course So at the end of the year, which was last year the summary was quite disastrous We lost about 50 million sales We and 50% of this loss was price and 50% was volume 50 million loss out of this currency game, of course, I am not a fan of national banks But when national banks Change their policy and lose their credibility within seconds then I Must admit it was for me probably more a psychological shock than a real shock because At least you can see a little bit it recovered and you know what the the the funny thing is Swiss national banks started to intervene again Because still at the end of this year, Switzerland has lost at least 100,000 industrial workplaces At least 100,000 so they saw that and they started to intervene I I would say at the moment. I'm not up to date It's 1.08 But still it is a drop or a rise of of the value of Swiss franc of 10% within a short period of time so Swiss national bank of course could have defended that but I'm not really against their policy change. I'm I'm against the change of their How shall I say it's a They lost self-confidence and they made a shock and of course it costed millions for for us all I'm not complaining about this and I must say we are also recovering So the good news I have two good news or three of it. That's why I'm a bit hesitant to really call it the hardship one point is yeah, it recovered a little bit and We restructured our business So we are back in in black figures So I'm a bit more relaxed today than I was a couple of months ago We restructured We we took together our four production sites into one company and We reduced workforce also by Elizabeth is responsible for Switzerland 80 80 workplace the second thing I Am not so upset is maybe an Austrian school argument if you have a strong currency It's a good thing It's a good thing about value the value the culture of a society So the devaluation the loss of euro Value is the real disaster for Europe and the strong Swiss Frank actually is a compliment to the country I must admit that and the third thing Well, we made an acquisition Why we used our strong currency and we bought the huge company in Germany Because the company became 10% cheaper By decision of Swiss national bank so that was our solution to Offset all these losses. We had liquid liquidity in our Accounts and we used it to buy in Germany and By this we now have again a very Balanced portfolio in the different currencies. I can show you this All the yellows are now Factories of ours So we are in Poland in the slotty area We are in Czech Republic our biggest market today With one thousand three hundred people. We are here in the crown area Swiss Frank area and Euro area and Now we have a quite a balanced Portfolio and I can say Hardship is probably not such a bad name because it's a hardship. It's a It's a stable ship. It cannot sink so much and we managed to transform hardship into Benefits and just to give you a last hint of our company. These are all our plants I'm collecting plants and Today we employ 4200 people Four times more than in the year. I could take over. This is a green field in Czech Republic This is a green field in Poland This is a green field in Poland. This is our latest acquisition in Poland And this is the model of where Hans had the first speech after opening my little state I found it and I hope one day you will join us in the model of a Place where you can celebrate Libertarian spirits some of you have been there and I beat was there Hans was there many of you and I hope you join with me the optimism that if you Overcome hardship you can be very grateful for the hardship for the resistance. They give you Overcoming the resistance makes you stronger and with this optimism. I would like to stop here. Thank you