vbmc practice overview january 2009

Introducing VBM Consulting

Overview of Practice – January 2009

www.vbm-consulting.com

www.vbm-consulting.com2

� Established 1996 in London.

� Thought leaders in the field of Managing for Value/Value Based Management.

� Specialise in helping companies to develop and implement pragmatic business strategiesand solutions designed to create and sustain maximum shareholder value.

� Our practice has developed a respected reputation amongst business leaders as result ofthe impact of our work in companies such as Barclays, Alliance Boots, Avon and others.

� A key theme that characterises VBMC’s work is a relentless focus on high qualitycommercial thinking – the key to survival in today’s challenging economic climate.

� Two books published in January 2001, The Value Mandate and Net Value (AMACOM2001). Recommended reading on MBA programmes at a number of leading businessschools.

� We have successfully adapted our approaches for Government/public sectororganisations and have established a strategic partnership within the National School ofGovernment in the UK.

Background


� Value maximising growth strategies

� Sales, marketing and channel management strategy

� Value based cost reduction

� Finding and extracting ‘missing value’ from core operations

� Organisational/ process change aimed at achieving & sustaining maximum value

� Mobilising for value creation in the public sector

� Executive & manager MFV/VBM skill development programmes

Areas Of Practice Focus


� Identify, understand and resolve major business issues.

� Develop high value impact but credible alternatives.

� Deliver measurable and sustainable improvements in business performance (i.e.

increased short and long term cash flow/ economic profit).

� Enhance the internal capabilities of our clients to manage for value on an ongoing basis.

We Work ALONGSIDE Clients To…


What Makes Us Different ?We believe that the following features of our client offer distinguish us from competitors:

� Our focus on both the ‘hard’ and the ‘soft’ drivers of an organisation’s success and our proven,

systematic approach for identifying these and for helping the organisation to mobilise around them.

� All our clients, past and present are willing and available to confirm the powerful impact our

work has had on their organisations.

� Our flexible “Associate-Based” business model allows us to draw on the best sector expertise

available through our strategic partnerships with sector specialists and with leading UK and

international business schools. VBMC at all times remains fully accountable for ultimate

delivery.

� Our proven ability to rapidly understand key issues and themes within the organisation in

which we are working and to develop breakthrough insights for our clients that will be

beneficial to their business.

� Our policy of not submitting the final invoice until our clients are satisfied that they have

received ‘value for money’ from our services.


VBMC’s Five Delta Approach

THE VALUE ENGINE FINANCIAL STRUCTURE

RevenueMaintenance& Growth

Operations/Production/Supply ChainEfficiencies

Optimal capitalstructure,financing strategy

Riskmanagement

Managing financial community perceptions re future cash flow

INVESTOR PERCEPTIONS

VBM Consulting’s proprietary methodology for maximizing value addresses all the major

sources of corporate value.

• Developing new, highestvalue internal growth

opportunities (organic)

• Growth through

partnership or acquisitionin closely related fields

(non-organic)

• Reform of marketingprocesses, approaches

to maximise value

• Permanent reform of

company’s cost base:Eliminating value-

destroying expenses,processes

• Adoption of mostefficient/ most effectiveprocesses, approaches,

organisation

• Minimisingcompany’s ongoing

cost of capital

• Changes in

business portfolio,both to simplify

operation andincrease return

• Value-optimalcapital investmentpractice

• Reducing ongoingoperational, market

and financial risk tothe company.

• Positive actions which enhancemarket’s valuation premium evenbefore a company is publicly-traded re

- simplicity, transparency ofreported performance, cash flow

- effective communication ofManaging for Value program

© 2008/9 VBM Consulting Limited All Rights Reserved

©


Consulting Capacity & Flexibility

� This is made possible through:

• our own international consulting team,

• an extensive world-wide network of associate consultants and,

• our relationships with leading international business schools.

� Our associate based business model enables us to:

• create project teams with appropriate skills and experience, rapidly

• be extremely responsive to client requirements, deadlines etc.

� All of our associates are experienced senior people with successful track records in business

and/or consulting.

� VBMC assumes full responsibility and accountability for ensuring that projects are appropriately

staffed and managed and that agreed deliverables are met to the satisfaction of our clients.

We have an extensive pool of highly experienced and qualified people with specialist

expertise on which to draw.


Issue Approach Outcome

An established leading brand with a long history in the UK

market.

How could the brand be rejuvenated to maximise its

value?

We worked with management to

understand the key success drivers for

the brand and identified channel

strategy as a key lever.

A range of alternative channels were

identified and evaluated (e.g. garage

forecourts) and a strategy to promote

the brand in new channels was

adopted.

‘The impact of the channel strategy

initiatives on the success of the Nurofen

brand in the UK market exceeded the

most optimistic expectations and

created more value than most of the

previous initiatives to grow the brand.’

Sales director, Crookes Healthcare, UK

A well established brand in the competitive laxative

product market.How could the brand be positioned to grow

its market share?

We reviewed their existing brand

strategy and identified a category based

approach for maximising the value of

the brand.

This included specific strategic above

and below the line initiatives to position

and promote the brand in it’s most

important retail channel (i.e. Boots).

The impact of the Dulcolax brand

initiatives were not only viewed as

having made the brand more successful

but also transformed Boehringer

Ingelheim’s approach to managing its

entire Consumer Healthcare brand

portfolio.

After having operated in the South African market for over

10 years there was a need to turbo charge the acceptance

and growth of the Avon brand in South Africa.

Working with senior management a

strategy to maximise coverage and

brand awareness was developed and is

currently being implemented.

It is now unanimously accepted by

management that the step change

growth strategy for the Avon brand that

has been developed will be the key to

Avon’s growth and success in the South

African market in the next 5 years.

Examples of Some Client Projects


Client Feedback

‘VBMC’s work has exceeded all our expectations and punches well above its weight in terms of positive

impact on our business transformation programme.’

‘Unlike many other consultants, VBM Consulting have a passionate commitment to helping their clients

develop the knowledge and skills required to manage for maximum corporate value. Their approach

emphasises the importance of understanding and managing key value drivers (KVDs) and is characterised by a solid understanding of the clients’ business, logical and rigorous analysis and the development of creative yet

workable alternatives.’

'Working with both senior and mid-level managers, VBM Consulting offer objective and challenging

insights and contribute to the development of creative, value enhancing alternatives. They have made a

significant contribution to the development of management thinking at WH Smith.'

‘VBM Consulting’s competitive advantage comes from the emphasis which they place on working alongside

managers to help them deliver superior value solutions to key business issues. By so doing they enable their clients to develop into better value managers. I have no hesitation in recommending them as a pragmatic, action

focused, high impact consulting team.’

‘VBMC’s input has been crucial to the development of a successful growth strategy for Avon’s South African

business. Their work is characterised by excellent commercial thinking supported by thorough analysis. They are

committed to delivering excellence and have built a strong track record in our business.’


Stephen Neill – Managing PartnerVBM Consulting (VBMC) was established in 1996 by Stephen Neill. He has

built up a successful track record in helping companies to develop and apply

growth-side and expense-side Managing for Value (MFV) programs. Stephen

has worked with a range of leading companies in various sectors across

Europe, North America, Asia and South Africa, including Coca Cola, Cadbury

Schweppes, British Telecom Adidas-Solomon, Pearson Group, Boehringer-

Ingelheim, Alliance Boots, Barclays Bank, Barclaycard, WH Smith, and Avon

Cosmetics.

Stephen is passionate about working with clients to deliver challenging value

creation goals. He has developed a unique and powerful set of methodologies

to help senior managers better understand the company’s key value drivers

in a systematic way, and then to mobilise the business around these. He

strongly believes that an understanding of a businesses’ key value drivers and

top management consensus about these is an essential basis for the

development of successful business strategies and for value maximising

commercial decision making and performance management.

Stephen is co-author (with VBMC Peter Clark), of The Value Mandate, the

leading shareholder value development guide for top management. Stephen

is also co-author of a book on Internet companies, their valuation, and

efficiency implications for Net-responsive companies, Net Value (2001). Prior

to VBMC, Stephen was a senior associate at Marakon, a leading international

Managing for Value consultancy and was Chief UK economist at the Henley

Centre. He completed a B Com (Honours) degree (first class) in Economics at

the University of Cape Town and an MPhil degree at Cambridge University.

Biography


Juliana Bacon - PartnerPrior to joining VBM Consulting Juliana worked for Dresdner Kleinwort Benson

and Andersen where she advised clients particularly from the banking and

finance sector on the restructuring of international groups, the financing of new operations and the structuring of proposed transactions. Her clients included

Endsleigh, Alcatel, Marconi and GE Capital as well as numerous European and

US banks including Merrill Lynch, Argentaria and Den norske Bank.

Since working with VBM Consulting, Juliana has been involved in projects with a variety of clients including Alliance Boots, WH Smith, Boehringer Ingelheim,

Barclays Bank and Barclaycard. She has worked with client teams to embed

MfV methodologies and mindsets within their organisations and she has also

developed a variety of sophisticated valuation tools and techniques which assist the decision making process.

She has also been extensively involved in assisting clients to identify their KVDs

and to develop insights based on these as well as to implement KVD based

actions and initiatives. Juliana has also been involved in a number of learning programmes including developing and delivering workshop content and working

alongside business schools to support application based learning.

Juliana graduated from Oxford University in 1996 with a BA (Hons) degree in

Mathematics. She is also a member of the Institute of Chartered Accountants.

Biography


Peter Clark - PartnerPeter Clark is a world-wide consulting thought and practice leader in the

shareholder value, marketing and strategy consulting fields, supporting major

companies in the UK, US, Japan and Europe. The Value Mandate (2001),

written by Peter and fellow VBMC partner Stephen Neill, has been praised by

the Financial Executives Institute (FEI), The Corporate Library and others as

one of the leading books in the value-based marketing and strategy field. His

1991 book Beyond the Deal is today one of the leading management guides

to creating through acquisitions and post-merger integration of operations

and strategy.

Peter’s previous financial sector clients include Barclays Bank, HSBC,

SocGen, Citigroup, Merrill Lynch, KKR, Blackstone, Invesco, Primark,

FHLBB (US’s Federal Home Loan Bank Board). Peter’s consulting work in

the financial institutions sector has included: strategy, financial product

marketing (both to corporate clients and retail), new programme

development, sales force performance improvement and acquisitions.

Peter’s observations are regularly cited in international business press on

issues of marketing, strategy and company value improvement. Recent

interviews and coverage include CNN-TV, Reuters, Dow-Jones, CNBC,

Forbes, Shareholder Value Magazine and TheStreet.com. Peter received the

Financial Executives Institute’s award for outstanding achievement in

corporate finance. He is a Beta Gamma Sigma graduate of Southern

Methodist University (MBA, BBA).

Biography

vbmc practice overview january 2009

Business

value creation

missing value

value mandate

high value impact

approaches valueoptimalto

value program processes

maximum shareholder

net value amacom2001