Strategically important supplier of German group in Italy is in operational and financial difficulties.
As part of the Group's participation condition, a CFO and General Manager is sought.
Company
Parent company
- Sales approx. EUR 1,500 million
- Employees approx. 18,300
Italian family business
- Sales approx. EUR 120 million
- Employees approx. 260
Initial situation
An Italian family business in the third generation substantially endangers the delivery capability of a large division of a German MDAX company through poor performance. The family has no visible interest in continuing the business, but is reluctant to sell the business. As a compromise, a minority shareholding of the German company is agreed; in addition to financial support for the company, a manager is sent as CFO to define, steer and implement the realignment of the company. Details on the condition of the company are not available or exist on the basis of visit reports. The mutual trust does not exist.
My approach
- Creation of a transparent situation (Engineering / Operation / Admin)
- Ensuring liquidity, as the company has been operating at a loss for approx. 36 months
- Structure of a product result statement, definition and executive of the necessary measures according to the result
- Recording of the necessary resources (CAPEX and employees, possibly missing know-how)
- Creation of trust with employees
- Finding a working basis with the majority owners
- Evaluation of the energy supply contract
Successes
- 100% takeover by parent company
- Takeover of parent company by Japanese company
- Temporary assumption of the chairmanship of the Executive Board until the new CEO / Technical Managing Director is hired
- Ensuring delivery by the plants in Milan and Notodden / Norway
- Containment of massive environmental damage
- Introduction of a maintenance plan and its strict implementation
- Ensuring liquidity
- Termination of the existing loan agreement with an Italian banking consortium
- Debt rescheduling to internal financing by Japanese headquarters
- Review and implementation of measures in the value chain
- Taking over the negotiations with the raw material supplier
- Deteriorating quality
- Highest market prices
- Search for alternatives worldwide (< 10producers worldwide, mostly part of an electronics group)
- Signing of a long-term material supply agreement for >50% delivery volume
- Strategic agreements with various jap. Suppliers for material supply (each <10%)
- Phase-out plan of the previous supplier
- Establishing a professional supply chain with chemicals
- Taking over the negotiations with the raw material supplier
- Restructuring of the site in Milan
- Decommissioning of unnecessary production lines
- Complete renovation of the manufacturing
- Reconstruction of a production hall as a new etching center for the new production line(s) to be built
- Reconstruction of a development laboratory
- Construction of a wastewater treatment plant to ensure compliance with environmental regulations
- Organization structure
- Creation of the purchasing, controlling and internal audit function (processes and compliance)
- Training and professionalization of sales
- Establishment of a fast-closing and monthly FC system
- Investments in the area of IT to secure the ERP system produced in-house and creation of interfaces to the Japanese reporting system
- Announcement of the closure of the plant in Notodden / Norway:
- Transparent communication to all necessary stakeholders and employees
- Motivation of employees: No strike, loyalty until closure and active support in setting up the plant in Iceland
- Establishment of the site in Iceland
- Turnaround in 24 months: Result at start approx. -10%, at end of project +12% of revenue
- With the investments in operations at the Milan site, the company has the most efficient and productive production in its market element.
- Realization of the energy supply contract in Iceland creates economic security for the next 30 (!) years
- In Iceland, together with a PE / Family-office, a state-of-the-art production was created, which is economically and process benchmark.
- The future was secured for the company (change of name from 2018) and the entire internal and external supply chain or customer relationship (approx.50% internal deliveries at the end of the project)
Share on the network