improving margins through better mi - neil morling, olswang
TRANSCRIPT
![Page 1: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/1.jpg)
IMPROVING MARGINS THROUGH BETTER MI23RD JUNE 2016
Neil Morling CFO, Olswang LLP
![Page 2: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/2.jpg)
Margin Improvement: to some a simplistic cost cutting exercise but to the more fortunate an opportunity to challenge the way an entity operates.
Pivotal to any improvement will be the M.I.
Introduction
![Page 3: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/3.jpg)
EC Harris was a traditional LLP exiting recession, while having remained profitable found the world a very different place
We were an international built asset consultancy driven to deliver positive client outcomes across an asset's lifecycle.
Background
![Page 4: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/4.jpg)
Sector consolidation was rampant driven by a blend of "survival instinct" and mega opportunities which demanded breadth and depth on a global level combined with the need for stronger balance sheets.
ARCADIS NV appeared a near perfect fit for EC Harris BUT our numbers just weren't good enough to secure full value.
Context
![Page 5: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/5.jpg)
Spring of 2011 Gross revenue of £300m: 60% UK, 20% Middle East (Dubai),
20% Asia (Hong Kong) Our EBITA was c. 3%, entry ticket was 5% with a clear three
year route to 10% Predicted revenues were not wholly reliable 80% of cost base was people, 10% accommodation
The Challenges
![Page 6: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/6.jpg)
1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN
The 4 key stages
![Page 7: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/7.jpg)
Creating an awareness – WHYAssessment
1. Challenges of growth especially global Yes2. Economic downturn and tougher trading conditions Yes3. Changes in strategy Yes4. Technological changes Yes
5. Competitive pressures incl. M&A Yes6. Customer pressures, shifting markets Yes7. Learning new organisation behaviours and skills Looming8. Government legislation Probably
![Page 8: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/8.jpg)
1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN
The 4 key stages
![Page 9: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/9.jpg)
Desired Outcomes Ability to continually invest in clients, markets,
technology and capability Clearly understood Operating Model Clear accountability for P&L performance Clarity of MI at all levels within the organisation. Improved certainty on view of future revenues A cost base managed using foresight and not
hindsight,
![Page 10: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/10.jpg)
1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN
The 4 key stages
![Page 11: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/11.jpg)
Reshaped P&L
![Page 12: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/12.jpg)
An MI Pyramid
![Page 13: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/13.jpg)
The “Fan” Chart
![Page 14: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/14.jpg)
Revenue Outlook
![Page 15: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/15.jpg)
The Business Cycle
![Page 16: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/16.jpg)
1. Creating an awareness – WHY2. Creating a vision – WHAT3. Some examples – HOW4. Embedding - WHEN
The 4 key stages
![Page 17: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/17.jpg)
Embedding ChangeWe Identified 8 steps
1. Develop a high degree of urgency2. Secure absolute support of Board3. Develop a vision4. Communicate 5. Empower6. Capture quick wins7. Do not give in, refine if necessary8. Embed, play to it at all levels at all times
![Page 18: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/18.jpg)
Twelve months to December 2011: Gross revenue £305m, Net Revenue £270m EBITA 4.2% Averaged DRO 95 days
Twelve months to April 2014 Gross Revenue £325m, Net Revenue £300m EBITA 10.1% Average DRO 80 days
The Rewards
![Page 19: Improving margins through better MI - Neil Morling, Olswang](https://reader035.vdocuments.us/reader035/viewer/2022070514/5880a14e1a28abd8158b6a93/html5/thumbnails/19.jpg)
Questions … ?