Post on 19-Mar-2017
transcript
Brian SharpGlobal Vice President, Commercial Excellence
Driving Stock Performance and Shareholder Value through Pricing Transformation
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FPO
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FPO
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• Engineered Solutions & Packaging Systems
• Packaging Design & Testing
• Lean Six Sigma Expertise
• Service & Support
• Packaging/Hygiene Solutions
• Engineering Plant Designs
• Full Range of Equipment/Systems
• Manage Water, Energy
• Building & Kitchen Care Services
• Infection Prevention
• Fabric Care
• Consulting Services & Consumer Brands
2013 Sales: $1.6B
24% of 2013 Adj. EBITDA, excl SARs
2013 Sales: $2.2B
21% of 2013 Adj. EBITDA, excl SARs
2013 Sales: $3.8B
55% of 2013 Adj. EBITDA, excl SARs
How We Deliver Value
The problem
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Stoc
k Pr
ice
Dai
ly V
olum
e
Volume Price
CompletesCryovac AcquisitionMarch 31, 1998
What happens when value chases volume?
AnnouncesDiversey AcquisitionJune 1, 2011
Other issues…• ~$5B of debt• Organizational malaise • Internal skepticism • Credibility with Wall Street
Self concept
Strategy
Language
Ways-of-working
Accountability
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Sustainability
Cost Competitiveness
Performance
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Self concept
Strategy
Language
Ways-of-working
Accountability
Charting a new course
ADJUSTED EBITDA MARGIN
2004 2008 2012 2016E5%
10%
15%
20%
25%
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Value for volume Value for profit
What Is Value Leadership?
Value Disciplines
ConceptualizeCreateCap
ture
CultivateOperating with a disciplined approach to value management - throughout the cycle - to achieve our full profit potential Conceptualize Value—re-imagining the
way we can impact the industries and customers we serve
Create Value—delivering break through offers which positively improve our way of life
Capture Value—capturing a fair share of the value we provide
Cultivate Value—regularly optimizing the value we capture so that we can sustainably re-invest
Two phased approach to executing the value-for-profit strategy
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Value Disciplines
ConceptualizeCreateCap
ture
Cultivate
Get Fit
Change-the-Game
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Self concept
Strategy
Language
Ways-of-working
Accountability
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We say tomato…You say… We say…
"Price Leadership” “Value Leadership”
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We say tomato…You say… We say…“Pricing” “Deals & Offers”
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We say tomato…You say… We say…
“4 P’s of Marketing” “2 P’s of Marketing”
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We say tomato…You say… We say…
“Price sensitive customer” “Easy Switcher”“Collaborative customer” “Strategic Partner”
Redefine your pricing roadmap…
Pricing
Deal & Offer Management
Sales Force Excellence (Value
Selling)
Marketing LeadershipCommercial Excellence
2011 2012 2013 2014 future
Full
Profi
t Pot
entia
l
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Self concept
Strategy
Language
Ways-of-working
Accountability
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From “little m” to “Big M”: Marketing owns & leads transformation
Authority
Decision Making
Accountability
Value LeadershipGovernance
Marketing Leaders are the Stewards of Value.Commercial Excellence begins in Marketing.
Involves ~ 200 of the 4,500global commercial employees
• Process-centered• Data-driven• Steadfast resolve
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Get Fit: See the waterfall…be the waterfall…
Own the Price Waterfall1. Price level setting2. Price realization3. Profit management
Change-the-Game: …no apologies for our ‘value quant fetish’
Obsessive Quantification of Value1. Quantify economic impact where ever it occurs2. Understand our perceived differential advantage
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Self concept
Strategy
Language
Ways-of-working
Accountability
Cleaving price decision making from Sales
MarketingSets target and walk-away
positions based on our differential value and a
deep understanding of the competitive alternatives
available to the customer
SalesCloses business based on
value and a deep understanding of
customer willingness-to-pay
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It’s called a “Performance Contract”• Not “Goals”• Not “Vision”• Not “Objectives”• Not “Target”
EBITDA: a simple metric
Lacing together the internal and external narrative
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Get yourself on the team• Partner with Investor Relations (ask if you can help)• Collaborate closely with your Legal team (build trust)• Socialize your point-of-view with the CEO & CFO (what is your
blinding insight?)
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Start writing it down• Meticulously write/re-write the narrative (even if no one follows
the script)• Keep it simple (as if communicating to 12 year olds)• Pressure test the message against the reality in the market
(would your largest customers confirm the narrative?)
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Sustain your effort• Leverage the internal and external message (as if they are one)• Check your facts (analysts are the ultimate fact checkers)• Identify and refresh the main risks and exposures (anticipate their
questions)• Anticipate the next earnings call (build a quarter-to-quarter story
line)Keep pricing relevant (it always is)
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What our shareholders think now…
Aug, 21 2012$13.26/share
Sept 5, 2014$37.21/share