Back to Profitability + SG&A reduction

BUSINESS TURNAROUND services

  • BACK TO PROFITABILITY & LIQUIDITY
  • OPERATIONAL EFFICIENCY IMPROVEMENT
  • SG&A/BACK OFFICE COST REDUCTION

ORGANISATION

Global Engineering PLC (PE-backed) €8b, 50kFTEs
MENA region €400m revenue, 2500 FTEs

SCOPE

  • Bring Region back to profitability and to positive CF
  • Significantly reduce SG&A (and other back office) costs

POSITION/ TEAM

MENA Regional CFO – managing 125 FTEs: (SSC, Finance, Procurement, Legal, IT in all 8 countries)

GEOGRAPHY

Middle East & North Africa – MENA:

  • UAE
  • Saudi Arabia
  • Qatar
  • Kuwait
  • Egypt
  • Bahrain
  • Jordan
  • Tunisia

CHALLENGES

  • Net loss in majority of countries
  • regional SG&A > 14% vs target < 10%
  • overoptimistic budgets
  • negative BCF – poor cash management
  • many low (negative) GM% projects
  • no proper collection / credit control
  • absence of structured reporting
  • non standardized procedures across region, compliance risk inefficiency
  • Stakeholder resistance to change
  • High expectations from new PE owners for rapid EBIT / BCF improv
  • Low employee morale amid restructuring / performance pressure
  • Currency devaluation /inflation pressure (EGYPT)
  • Tight timelines imposed by turnaround objectives

ACTIONS

  • Projects/sales portfolio analysis
  • low/non profitable projects repair plan
  • changing mgmt. mindset onto bottom lines (GM/ EBIT/BCF) not only top line
  • building regional controlling function
  • monthly meetings with countries GMs FDs & operations management
  • proper (meaningful) reports to address other managers needs
  • R2R, P2P, O2C process improvements
  • FSSC creation + centralization
  • Strengthen the control on planning + monthly forecasting
  • Stronger control over AR collection

DELIVERABLES

Financial Stabilization & Performance Management

  • Revised & realistic budget for the region, aligned with operational capacity and PE expectations
  • Standardized monthly P&L reporting, (GM, EBIT, BCF tracking across countries)
  • Regional financial dashboard with KPIs on GM%, SG&A %, working capital, and project-level profitability

SG&A & Cost Optimization

  • SG&A cost review by function with FTE analysis & savings opportunities
  • Cost-to-Serve model for shared functions (HR, Finance, IT)
  • Overhead benchmarking & reduction action plan (to make SG&A toward <10%)

Commercial & Project Profitability Control

  • Portfolio analysis of projects with low/negative gross margin
  • Corrective pricing actions and exit strategies for non-viable contracts
  • GM% calculator & project profitability review tool for commercial teams

Cash Flow & Credit Control

  • Regional collection plan and credit control framework
  • Cash Management dashboard – weekly visibility on collections, disbursements
  • Weekly CF forecasting template/procedure implemented
  • BCF improvement roadmap for whole region

ACHIEVEMENTS

  • EBIT improved +€15M (from -€7M to +€8M)
  • Overall GM improved, from 13% to 18%
  • G&A (Admin costs) reduced by €2,5 M/year
    • G&A reduced to 11% of sales and savings c.a. 1.5M/year on staff and €1M other savings.
  • BCF improved by +€20M
  • Regional SSC set-up, Back-office centralization
    • SSC creation, (P2P, R2R, O2C), for 8 countries, KPIs
    • accounting processes centralized, documented
    • finance personnel reduced by 55FTE (-35FTEs in finance, -10FTEs in procurement and -10FTEs in others) from original 125 FTEs
  • Improved sales/projects portfolio
    • Reduced low GM projects (contract renegotiation or resigning from non-profitable projects
  • Efficient process of forecasting/month-end reporting
    • Involved operational managers in monthly performance meetings
    • Better forecasting quality (lower month-end variances)

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