rb the roland berger 100 program 20050401
TRANSCRIPT
BER-97005-458-01-03-E-c.ppt 1
Berlin/Düsseldorf, April 2005
Boosting the value of your investments
The Roland Berger 100+ program
BER-97005-458-01-03-E-c.ppt 2
As a private equity or distressed debt investor, this is what you expect of your investments:… The highest possible SECURITY in terms of the target's value and opportunities
to increase it 100+ SECURITY
100+ MANAGEMENT
100+ PERFORMANCE
100+ COMMITMENT
… MANAGERS who recognize the need to take action and rigorously take any necessary steps
… A PARTNER who is able to steer the process professionally, who can offer his/her conceptual support, help with implementation and is by your side when things do not go according to plan
… A PROGRAM that sets the right course within the first 100 days, so that the expected increase in value can be achieved
BER-97005-458-01-03-E-c.ppt 3
We have developed the Roland Berger 100+ program to meet these expectations100+ SECURITY 100+ MANAGEMENT
100+ PERFORMANCE 100+ COMMITMENT
Support in making the right investment decision
Fast value increase
The right management that can be on location quickly
Professional and reliable project management
100+ PROGRAM
BER-97005-458-01-03-E-c.ppt 4
This program sets the course for increasing value within the first 100 days
10203040
50 60 70
100
8090
10203040
50 60 70
100
8090
10203040
50 60 70
100
8090
10203040
50 60 70
100
8090
10203040
50 60 70
100
8090
PROJECT START: Entire support team on location> Due diligence begins
> Results of due diligence available> Investment decision can be made
> Investment decision made> Interim management ready for
action> Performance improvement program
developed> Quick hits initiated
> Actions are being implemented – Initial results are visible> The course is set – Value gains moving full speed ahead
100+ SECURITY
100+ MANAGEMENT
100+ PERFORMANCE
100+
COMM
ITME
NT
BER-97005-458-01-03-E-c.ppt 5
In our experience, the most important elements must be addressed within the first 100 daysRESTRUCTURING SUCCESS FACTORS QUOTES FROM SELECTED
MANAGERS
…our market surveys show the same results
19%
25%
29%
39%
51%
63%
Total cost concept
Intensive project monitoringFine-tuning with works councilShareholder commitment
Management commitment
Speed"...implement faster and morerigorously.."
"...Start restructur-ing sooner..."
"...Management should be changed sooner…"
"...everything should be done sooner and more rigorously..."
BER-97005-458-01-03-E-c.ppt 6
Roland Berger is the ideal partner to successfully manage the first 100 days (1)
> WE have the expertise and the tools needed to steer the process and increase value– Proven methodology that has been successfully applied in over 1,500 restructuring
projects– A number of electronic and networked tools that help deliver efficient and valid
results (quick check, first audit, RBpoint, insolvency check, etc.)
> WE have the required experience and the trust of relevant market actors– Twenty years experience in restructuring consultancy in German-speaking
countries– Successful support for all well-known restructuring cases1)
1) Lufthansa, Metallgesellschaft, Philipp Holzmann, Kirch Media, Babcock-Borsig, Swiss Airlines, Dresdner Bank, KarstadtQuelle
BER-97005-458-01-03-E-c.ppt 7
Roland Berger is the ideal partner to successfully manage the first 100 days (2)> WE have a team that can provide professional support in all situations
> Approx. 150 professionals in our Restructuring & Corporate Finance Competence Center with many years of restructuring experience
> Approx. 250 industry specialists with restructuring experience in the internal Roland Berger network
BER-97005-458-01-03-E-c.ppt 8
The 100+ PROGRAM is divided into modules that can be applied as required
100+ SECURITY
100+ MANAGEMENT
100+ PERFORMANCE
100+ COMMITMENT
THE PROGRAM 1. SELECTED MODULES
2. COMBINATIONS THAT MAKE SENSE (EXAMPLES)
3. TOTAL SUPPORT
Implementation monitoringInterim management Classic restructuring
Total project steering
"Target"> Target search> Due diligence
"Lever"> Value increase
"Exit"> Exit strategy> Exit
Strategic due diligence Improved performance Implementation
Strategic due diligence Interim management
Strategic due diligenceImproved performance
a)
b)
9
100+ SECURITY
Helping you make the right investment decision
BER-97005-458-01-03-E-c.ppt 10
In order to make the right investment decision, you mainly need…> Access to the right targets> The highest possible level of transparency regarding the target's current
financial position
> A secure feeling concerning the validity of the target company's successful strategy and strategic development opportunities
> The greatest possible understanding of major market and competitive trends
> An initial plan for a possible exit strategy> And lastly: A valid estimate of possible opportunities to increase the
company's value and an initial assessment of what needs to be done
BER-97005-458-01-03-E-c.ppt 11
With the 100+ SECURITY module, Roland Berger can help you make the right investment decision …… BY LOOKING FOR THE RIGHT TARGETS
> Restructuring & Corporate Finance Competence Center supports 150-200 cases per year, many of them requiring new investors
> An internal Roland Berger network contains a number or potential investors
> Constant market screening for possible crisis cases
… WITH COMPREHENSIVE DUE DILIGENCE
> "Classic" due diligence that considers strategic, market and competitive factors
> Legal & financial due diligence access through our own network
> In addition, if necessary:– Evaluate target– Identify value drivers– Draw up rough targets for performance improvement– Define value increase potential and possible exit
strategies
BER-97005-458-01-03-E-c.ppt 12
Our tools allow us to constantly screen relevant markets and targetsLogic
Indicators
Auto-motive
Construct-ion PharmaIndustry
LIQUIDITY CRISIS
EARNINGS CRISIS
STRATEGICCRISIS
> Constantly screening relevant companies in relevant industries (from A to Z)
> A defined set of figures allows for a clear determination of individual companies' crisis stages
> Extensive networks on all levels guarantee efficient access to targets
> The results of regular screenings can be made accessible to 100+ Security investors> Excellent bank network
> Own internal network> Committee network (Supervisory
boards, boards of directors, trustees etc.)
ACCESS
BER-97005-458-01-03-E-c.ppt 13
COMPANY VALUATION> Calculate DCF> Assess multipliers> Determine value based on
comparable transactions
With the 100+ SECURITY module, we offer more than classic due diligence
100+SECURITY
CLASSIC DUE DILIGENCE> 2nd placement with fin. investors> Competitive development and
potential industry solutions> In addition – strategies along the
value chain (e.g. upstream or down-stream)
> Identify performance gaps based on benchmarks
> Define levers for performance improvement
> Draft rough targets
> Uncover strategic risks> Determine strategic positioning> Identify market development, trends> Assess competitive situation> Evaluate market and competitive
situation
EXIT STRATEGIES
PERFORMANCE IMPROVEMENT
BER-97005-458-01-03-E-c.ppt 14
With our network, we can steer the entire due diligence processLEGAL DUE DILIGENCE NETWORK
> Beiten Burckhardt> Freshfields, Bruckhaus,
Deringer> Clifford Chance> CMS, Hasche, Sigle> Weil, Gotshal & Manges> etc.
FINANCIAL DUE DILIGENCE NETWORK
> KPMG> Ernst & Young> PwC> Warth & Klein> etc.
INSOLVENCY SPECIALIST NETWORK
> Wellensiek & Partner> Görg & Partner> RAe Braun> RAe Piepenburg> RAe Jaffé> RAe Folger> etc.
15
100+ MANAGEMENT
Getting the right management on location quickly
BER-97005-458-01-03-E-c.ppt 16
Management can make or break an investment decision
> Current management is often burnt out and lacking the necessary energy, or is overwhelmed by the situation
> Current management follows its own investment goals and agendaLOSS OF TRUST in current management
> New management is not always immediately available; it does not have access to relevant industry experts
> New management needs time to familiarize itself with the situation and become effectiveLOSS OF TIME means that value gains cannot always be capitalized
BER-97005-458-01-03-E-c.ppt 17
The 100+ MANAGEMENT module helps you make the required management decisions quickly100+ MANAGEMENT
MANAGEMENT ASSESSMENT INTERIM MANAGEMENT
> Validated assessment of the current management's strengths and weaknesses
> Recommendations for next steps
PROFESSIONAL EXECUTIVE SEARCH
> Extensive existing network of experienced interim managers from all industries
> If desired, we can assume the main functions for a limited time
> Rapid implementation of sustainable management solutions
> Cooperation with all well-known professional executive search companies
BER-97005-458-01-03-E-c.ppt 18
Our database provides instant access to over 100 interim managers
> Roland Berger knows all the interim managers personally from previous restructuring projects (Roland Berger seal of approval)
> Ongoing, case-by-case evaluation of managers
> Ideal selection of appropriate managers based on detailed information about industry experience and qualification profiles
CEOBoard
member
Top mgmt.
Automotive
Construction
…
Pharma
POSITION
INDUSTRY
QUALIFICATION
Finance
System
s
Sales
∑ 100Approx. 100 highly-qualified managers with
experience in a number of different industries
19
100+ PERFORMANCE
Boosting value fast
BER-97005-458-01-03-E-c.ppt 20
Sustainable performance improvement is required to boost the value of your investment (1)> Once the investment has been made, potential for earnings improvements
should be determined, on the basis of the value drivers identified in the due diligence process. Once this has been done, the actions needed to boost value should be initiated
> In addition, the various problem areas within the company should be dealt with in detail and all options for action should be evaluated
> The scope of the required earnings improvement should be based on the investor's exit logic; in this way, the target sales price determines the required result improvements
BER-97005-458-01-03-E-c.ppt 21
Sustainable performance improvement is required to boost the value of your investment (2)> Speed determines success – Immediate actions must be implemented quickly
because they show initial successes. All other actions must be carried out within two months at the most, in order to avoid an erosion of earnings and liquidity
BER-97005-458-01-03-E-c.ppt 22
Our 100+ PERFORMANCE module is based on the investor's required return on investment> Investor purchase price> Internally-financed
portion> Required return
> Determine exit price> Determine exit time> Evaluate multipliers> Determine earnings
improvement
Necessary return improvement/necessary performance improvement
X
Y
TargetEBIT/
EBITDA
Current EBIT/
EBITDA
BER-97005-458-01-03-E-c.ppt 23
At the same time, we ensure rigorous liquidity management to tap the full cash potential
> Update cashflow statements on an ongoing basis
> Conduct real-time variance analyses
> Take early counter-action
CURRENT LIQUIDITY SITUATION AND SHORT-TERM CASH NEEDS
TAPPING LIQUIDITY POTENTIAL
> Validate existing cashflow statements and liquidity status
> Adjust existing cashflow statements where required and set up daily/weekly planning
> Take immediate action– Stop orders and payments– Enforce debtor management– Introduce individual approval
process, etc.
ONGOING MONITORING OF CASHFLOW
Planning security for investors; minimize liquidity burden for investor
> Determine cash requirements, incl. peaks and required screening processes
> Determine the potential of working capital management– Debtor days– Inventory days– Creditor days
> ... from divestments:– Non-operating fixed assets– Portfolio sales
> ... from process adjustments– Send reminders faster– Tighten payment terms– Introduce individual approval
process for payments
BER-97005-458-01-03-E-c.ppt 24
An initial, rough targeting process will define the main levers for improving performance
> Benchmarking
> Timeline comparisons
> Project experience and in-house database
> Exhaust sales potential
> Make-or-buy> Purchase
potential
> Outsourcing/shifting production
> Increasing productivity
> Budgeting> Reducing
comfort level > Renegotiating
> Working capital
> Balance sheet restructuring
Improvement needs
Gross profits Personnel Material costs Interest
TargetingBASIS
LOGIC
BER-97005-458-01-03-E-c.ppt 25
The actions are then defined in detail, rigorously tackling all areas
SPECIFY ACTIONS
Target
Project
Action
Concrete actions that lead to a defined result improvement within a fixed timeframe
TARGET PERFORMANCEImprovements by area
Parallel actions lead to targeted improvements
REMOVE ALL PERFORMANCE GAPS
FINANCIAL RESTRUCTURING
Elements of performance improvement
OPERATIONAL RESTRUCTURING
> Reduce working capital> Divest> Improve financing
structure
> Increase productivity> Reduce material costs> Reduce material use
STRUCTURAL RESTRUCTURING
> Realign the business model
> Outsource> Make-or-buy
> Clean up portfolio
BER-97005-458-01-03-E-c.ppt 26
The 3-step project guarantees that necessary improvements are made quickly
TARGETINGI. DEFINING ACTIONSII. MAPPING OUT ACTIONS AND IMPLEMENTATIONIII.
> Describe the starting point> Determine the details of what
caused the crisis> Determine the competitive/
market situation> Determine performance
improvement need> Establish a rough target
> Initiate quick hits
> Support target with actions
> Break actions down into individual steps
80 DAYS> Make a business plan
> Develop actions
> Determine financial needs for implementation
> Introduce the implementation structure
> Introduce project monitoring
> Ensure ongoing implementation controls
Approx. 2-3 weeks Approx. 3-4 weeks Several months
27
100+ COMMITMENT
Professional and reliable project steering
BER-97005-458-01-03-E-c.ppt 28
Professional project steering supports you during the process and ensures that targets are reached (1)> Investment processes are generally complex project management tasks; a
number of parties have to be coordinated so that the desired results can be reached in the defined timeframe
> Professional project management serves to minimize the need for investor capacities. Project managers work toward reaching goals efficiently and provide investors with progress reports along the way
> Once the investment has been made, project steering must ensure that the right decisions are made within 100 DAYS and that necessary actions are implemented
BER-97005-458-01-03-E-c.ppt 29
Professional project steering supports you during the process and ensures that targets are reached (2)> Project steering must also ensure that planned performance improvements are
achieved in the implementation process. In this way, decision makers can be informed of any deviations on time
> If the process does not run as planned, project steering must ensure that counter-actions are implemented
BER-97005-458-01-03-E-c.ppt 30
Our 100+ COMMITMENT module ensures professional project steering in the first 100 days
PROJECT MANAGEMENT PROJECT MONITORING
> Create a project structure> Involve all the necessary parties > Organize and prepare regular project
status meetings (jour fixe, steering committee)
> Introduce RBpoint project monitoring tool> Enter all actions into the tool and describe
details> Introduce ongoing implementation monitoring
– Work down a to do list– Achieve planned effects– Analyze deviation and initiate counter-
action
BER-97005-458-01-03-E-c.ppt 31
Integrating the project structure into the line organization
We ensure efficient project management by involving all parties
Dn = Division n (e.g. financing)
D1 D2 D3 Dn
Task force
Mixed project teams(employees/consultants)
PMCentral project
monitoring
Steering committee Management
BER-97005-458-01-03-E-c.ppt 32
RBpoint is a tool that ensures efficient project monitoringProject monitoring with RBpoint
> Web-based project monitoring tool that can integrate many parties
> Simple traffic light principle enables a one-stop overview of the project status
> Easy to use, as project is broken down into individual steps
> Differentiated access management to govern reading and writing rights
> Specified start and end dates and unambiguously quantified effects for each action in order to monitor progress efficiently
BER-97005-458-01-03-E-c.ppt 33
In closing, we assure you that we are 100% COMMITMEDto your successOur management team
IvoNaumannSHANGHAI
WeiZhuSHANGHAI
EURO
PE
ASIA
TOKYO
KoichiMizutome
TakashiHiraiTOKYO
Partner Principal
Karl-J. Kraus BERLIN
BERLIN
Uwe Johnen
JoostGeginatZURICH
Dr. SaschaHaghaniBERLIN
WolfgangHerrmann BERLIN
Bernd Brunke BERLIN
Michael BlatzBERLIN
Rene SeygerAMSTERD.
Max FalckenbergDÜSSELD.
DavidSternLONDON VIENNA
RupertPetry
DÜS./LOND.
Nils vonKuhlwein
Dr. Ralf Moldenhauer BERL./PARIS
Dr. UweKummMOSC./WAR.
BeatrixMorathZURICH BERLIN
Dr. Julianzu Putlitz
THE
AMER
ICAS
ThomasKunzeS. AMERICA
Wim van AckerUSA
BER-97005-458-01-03-E-c.ppt 34
Contacts
EUROPE ASIAKarl-J. Kraus, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-311e-mail: [email protected]
Uwe Johnen, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-580e-mail: [email protected]
Dr. Julian zu Putlitz, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-586e-mail: [email protected]
Dr. Ralf Moldenhauer, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-560e-mail: [email protected]
Nils von Kuhlwein, PARTNERKarl-Arnold-Platz 1, D-40474 DüsseldorfTel.: ++49-211-4389-2122e-mail: [email protected]. Uwe Kumm, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-534e-mail: [email protected]
Beatrix Morath, PARTNERNeumünsterallee 12, CH-8008 ZurichTel.: ++41-1-38481-42e-mail: [email protected]
Koichi Mizutome, PARTNER - Japan1-12-32 Akasaka, J-Tokyo 107-6023Tel.: ++81-3-35876-679e-mail: [email protected] Naumann, PARTNER - China1515 Nanjing West Road, RC-Shanghai 200040Tel.: ++86-21-52986677-828e-mail: [email protected] Zhu, PARTNER - China1515 Nanjing West Road, RC-Shanghai 200040Tel.: ++86-21-52986677-821e-mail: [email protected] Hirai, PRINCIPAL - Japan 1-12-32 Akasaka, J-Tokyo 107-6023Tel.: ++81-3-35876-687e-mail: [email protected]
Michael Blatz, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-347e-mail: [email protected] Brunke, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-527e-mail: [email protected]
Dr. Sascha Haghani, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-594e-mail: [email protected] Herrmann, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-572e-mail: [email protected]
Joost Geginat, PARTNERNeumünsterallee 12, CH-8008 ZurichTel.: ++41-1-38481-74e-mail: [email protected]
AMERICASWim van Acker, Partner - USA2401 West Big Beaver Road, Troy, MI 48084, USA Tel.: ++1-248-729-5000 e-mail: [email protected]
Thomas Kunze, PARTNER - South AmericaAv. Pr. J. Kubit., 510, 04543-906 São Paulo, BrazilTel.: ++55-11-3046-0e-mail: [email protected]
Rene Seyger, PARTNERWTC-Strawinskylaan 581, NL-AmsterdamTel.: ++31-20-7960-620e-mail: [email protected]
Max Falckenberg, PRINCIPALKarl-Arnold-Platz 1, D-40474 DüsseldorfTel.: ++49-211-4389-2301e-mail: [email protected] Petry, PRINCIPALFreyung 3/2/10, A-1010 ViennaTel.: ++43-1-53602-300e-mail: [email protected]
Dr. Robert Simon, PARTNERAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-584e-mail: [email protected]
Wolfram Weber, PRINCIPALAlt Moabit 101b, D-10559 BerlinTel.: ++49-30-39927-583e-mail: [email protected]
David Stern, PARTNERBerk. Sq. – Lansd. H., UK-London W1J 6RBTel.: ++44-207-2904-865e-mail: [email protected]