Defining and implementing actionable business plans to achieve strategic goals that highlight the group’s vision.
Strategic Planning is often viewed as a slow, painful and frustrating exercise considering the excessive energy required throughout the organization, the missed and obsolete short- and mid- term targets and the lack of flexibility to efficiently re-adjust the businesses’ roadmaps.
Missed (and overly optimistic) mid-term targets are often blamed on unanticipated events or one-off events as Business units tend to focus on short term results due to incentive schemes
Conducting real-time what-if scenarios at central level is excessively time-consuming and slow when processes depend solely on a bottom-up business planning approach
Corporate is often not adequately armed to update and adjust its mid-term plan to both unanticipated changes in market environment and the group’s latest rolling forecast
Corporate-subsidiary dialogue and controlling on targets is costly in both time and resources
Companies tend to build optimistic business plans but repeatedly miss mid-term targets (years > n+1) as they 1) remain overly focused on the short term, 2) fail to conduct postmortem analysis on unachieved goals and 3) often lack efficient tools to challenge the robustness of business unit forecasts.
Strategic plans tend to be overly focused on short term targets
Across its Corporate Finance practice, designed specifically around the strategic management cycle, YKems addresses strategic planning recurring concerns.
facilitate strategic arbitrages and scenario building at corporate level
foster dialogue and target negotiation between corporate and business units
improve communication with shareholders and financial markets.
YKems’ Corporate Finance practice has been designed around the strategic management cycle to assist strategy and finance executives in their key activities (portfolio management, strategic planning and capex allocation)
Strategic Management Cycle
YKems advises companies in streamlining their strategic planning processes and implementing exclusive and efficient tools to support the negotiation of subsidiaries’ strategic plans and financing needs, the commitment of the subsidiaries on specific value creation targets, and the definition of growth strategy scenarios and financing options.
Key added value
Known for its expertise in financial modeling and its solid strategic and operational background, YKems provides advanced and pragmatic solutions to:
Reinforce the credibility and consistency of business unit plans across departments (sales, industrial, financing) with a techno-economic modeling approach
Provide fast answers to the board’s what-if scenario requests, such as the impact of cross-activity or macroeconomic variations on the group’s consolidated accounts
facilitate strategic arbitrage and trade-offs considering timing/sizing aspects of investment options and capital allocation
build alternatives scenarios around business-specific value drivers, development options and recent market environment changes
create a solid basis for growth scenarios assessment and communication with financial markets
Main principles of a forecasting model
We address our clients’ heterogeneous concerns with exclusive solutions.
CASE 1 : A world leading integrated fertilizer company commissioned YKems to design/animate the annual strategic review process and elaborate the group’s 10-yr business plan.
In order to :
challenge every year the growth capex plan (USD 20 Bn) with alternative sequencing/sizing options (for instance delaying some capacity investments), considering:
impact on the strategic/commercial plans (YKems proprietary competitive dynamics model assessing price and market share, hence the basis for ebitda re-assessment)
financing options meeting capex requirements and respecting banking covenants
industrial revamping and network optimization
prepare the necessary information and key ratios requested by the rating agencies
CASE 2: A leading global building materials company (Net Sales: 27 Bn€) with a strong asset base in over 80 countries commissioned YKems to assist the corporate strategy department in redesigning its strategic planning process and supporting tools soon after the group had merged with one of its main competitors.
Key challenges included:
identify the relevant technical and economic value creation drivers common to both parties and distinct to each of the 4 business divisions
build tailor-made forecasting and simulation models at division and group level enabling fast scenario building, baseline adjustment to latest rolling forecast, and performance analysis required for board presentations and financial communication
assist management in quarterly financial updates, building alternative scenarios and conducting sensitivity analysis to market variations
CASE 3: A large diversified African holding, with majority stakes in 12 different industries, mandated YKems to elaborate a portfolio management-oriented strategic plan.
In order to :
highlight the financial impact of cross-activity key drivers (such as macroeconomics)
build for each business a forecast plan with scenario building capacity around key drivers
evaluate the impact and appropriate timing of divestment and diversification options for the holding
CASE 4: Some leading companies in Champagne & Liquors asked YKems to design a business plan model enabling the group to test different procurement and commercial strategies that would help maximize the company’s value in the long term
market anticipations and product mix targets per regions
minimum aging per product and stock requirements of work-in-progress and finished goods
existing and future legislation on limitation of vineyard plantations and yields (procurement capacity)
capacity constraints in logistical, production and storage activities