This FTSE 250 client employs over 2,300 people in 17 countries. They have one of the largest product portfolios in the industry and over 4,500 direct and indirect customers whose systems rely on their products.
In 2022, the client acquired two German businesses, extending their capabilities in Europe.
The challenge:
Oakwood Resources was asked to provide a high-level financial consultant to oversee the integration of the two German businesses into the wider business.
Over the course of a 30-week engagement, the interim manager would need to complete the Share Purchase Agreement, transition both businesses to the group's Gross Margin Analysis and produce credible budgets for the upcoming financial year.
Both businesses were profitable, however, collectively they represented only 5% of the overall group volume. Our challenge was to complete the required objectives with limited input from the client's leadership team as they were focused on other priorities.
This posed additional challenges when:
- Attempting to compare gross margins for both entities with those of the rest of the group.
- Preparing the budgets for the 2023 financial year. Neither company had produced budgets before, therefore the groundwork required was significant.
The solution:
Knowledge-sharing efforts were paramount to guide the future behaviours of the German finance team and bring the two businesses in line with the group's more mature financial processes.
To facilitate this, our consultant made five visits to Germany, both to the Schechen office and the Salach office, to build good relationships with the leadership teams there.
The outcome:
Within 8 weeks:
Credible expansion business cases were produced, supported by expected customer orders, Capex investments and a staff plan. These were turned into specific objectives that could be measured and managed for the first time.
Within 12 weeks:
The final purchase was completed to the high specifications of both the client and the previous owners. Our consultant was able to honour the terms of the SPA and complete the final purchase within three months.
Within 30 weeks:
Even when faced with the complexity of reporting group figures and the time it took to produce German numbers at the level required by the head office in Singapore, our consultant was able to transition both businesses to the group's Gross Margin Analysis within the 30-week assignment.
Several additional objectives were also completed during the consultation period. They included:
- Implementation of recommended IFRS adjustments
Grant Thornton outlined what IFRS adjustments were needed. They were implemented alongside German GAAP.
- Design and initial consultation of a standard cost accounting mechanism for manufactured products
The equivalent cost accounting exercise took over two years. Proactive work with the two German GMs led to a rationalised product portfolio that fits in the group portfolio within 30 weeks.
- Engagement of General Managers and leadership team with new objectives
Production, investment and staffing plans were turned into specific objectives that could be measured and managed for the first time.
- Support for PwC interim and opening balance audit
PwC was introduced as the group auditors to work alongside the local auditors.
The main integration objectives were completed well within the 30 weeks outlined at the beginning of the assignment. And, thanks to the skills and expertise of our consultant in building positive relationships within the client's wider business, future projects are likely.
Are you looking for a consulting solution that combines hands-on expertise with strategic framework delivery?
Then look no further than Oakwood Resources. Our unique blended approach combines the best of both worlds: the specialist expertise of interim management with the strategic vision of a consulting firm. This allows us to provide a resource-based, knowledge-led solution to drive your business forward.
Contact us today to learn more about how we can help your business succeed.
