Turnaround and sale of the company

Electrical/Electronic Manufacturing

Manager:

Mr.D. V.

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  • Customer:

    Confidential

  • Role:

    Turnaround Manager / CEO

  • Location:

    Switzerland

  • Turnover:

    12,5 million Euro

  • Time frame:

    2,7 Years

  • No. of employees:

    MCHF 90

About the Customer

The client is an international company with approx. 330 (2014) employees creating high-quality products and services for the manufacture of electrical motors. Over 80% of its products are exported.
Stator and rotor laminations are stamped from magnetic steel strips and then joined together into ready-to-install stator and rotor stacks via in-die stacking, welding, baking, riveting and clamping processes. In subsequent steps, the rotors are cast in aluminium and the rotor shaft is inserted.
Until the sale, the company was family-owned since its founding in 1961.

Testimonial from Сustomer

–    As a result of the successful turnaround the former owner sold the company for a reasonable good price. He is very pleased, as the new owner will continue his life’s work.
–    The company value was three times the purchase price by end of my mandate. The new owner is very happy with the development of the financial performance of the company.

Situation (Challenge)

The company went almost bankrupt by end of 2014.
The reasons were “homemade”:
–    Loss-making contracts
–    Low productivity
–    Heavy structure
–    Missing cost controlling
–    Weak management
–    75 years old owner was president of the board and CEO and was overwhelmed with the difficult situation of the company
–    Weak communication

In view of this desolate situation of the company and the pressure of the banks I was engaged as turnaround manager starting with the turnaround project “Direttissima”.
A search for a CEO was running when I arrived. As the recruitment failed the owner asked me to take over this open position.
As CEO I had the necessary power the take decisions to accelerate the turnaround project “Direttissima”. The primary target of “Direttissima” was to eliminate the weaknesses mentioned above.
In addition to the recovery of the company the sales process of the company was launched.

► Success factors for the fast recovery
–    Sense of urgency was available
–    Commitment of the board, management team and banks to the necessary changes
–    Involvement of key people – Turnaround project “Direttissima”
–    Rigid project controlling
–    Speed
–    Open and honest communication

Solution (Achievement)

–    Positive EBITDA six months after start of the turnaround project
–    The financial result was about 10% EBITDA by end of my mandate (09/2017)
–    Substantial price increases minimized the number of loss-making contracts
–    Decrease of 50 employees without negative headlines in the news papers and other media

–    No Brain Drain
–    Productivity increase from 115 TCHF Contribution margin/FTE up to > 160 TCHF/FTE
–    With the help of a M&A specialist a buyer was found. The company was sold on November 18, 2016. The plan of the new owner is to continue to operate from Switzerland and to implement the new strategic alignment I developed together with the management team. Massive investments are planned to be ready for the digitalisation. I handed over to my successor by end of September 2017.

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