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Town meeting discussion about transformation and the impact and role of the finance function.

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Presentation on theme: "Town meeting discussion about transformation and the impact and role of the finance function."— Presentation transcript:

1 Town meeting discussion about transformation and the impact and role of the finance function

2 Pieter Verboom CFO Schiphol Group

3 Hennie Wesseling Director ICT Mail TNT

4 Frank van den Broek Director European Patent Office

5 Jouke van der Veer CFO Albron

6 Jan van den Belt CFO Océ

7 Jaarcongres Finance Transformation Jan van den Belt, CFO Océ N.V. 12 december 2007

8 8 Océ Group Profile l Founded in 1877 l Leading supplier of printing systems and document-related business services. Only European player in a global industry l Market leader in selected market segments l Direct sales and service organisations in 30 countries l 24,000 employees worldwide l 17,500 in direct sales and service l 1,800 in Research and Development l Active in over 90 countries, with revenues of € 3.1 billion Americas (43%)Europe (51%)ROW (6%) Revenues by region

9 9 Océ Group Pofile: Strategic Business Units % of MarketMarketFinancial revenues positionCAGRperformance l DDS (=< A3 size) l Corporate Printing36%2-55% l Commercial Printing21%411% l Business Services14%59% l WFPS (> A3 size) l TDS18%1-20% l DGS 3%46% l Imaging Supplies8%n/an/a -/- +/+

10 10 Major Changes in Industry during the past 10 years l Transformation from analogue to digital l Rapid growth in Colour l Commoditization of Black & White l Increased importance of Software, which has become a distinguishing feature l Rapid ascent of Japanese competitors l Consolidation in the industry l Decline and rise of the Euro l Trend to outsourcing of document management

11 11 Océ’s Financial Performance 1996-2006 Financial performance Océ requires structural improvement 9697989900010203040506 € 1 = USD1.311.141.111.080.930.890.931.111.231.251.25 EBIT ex lease (€ million)8812615514816710011021117275 RoCE %9.110.111.010.310.68.49.36.87.78.95.6 Autonomous growth revenues156714-1-3-5000 GM as % of revenues (ex lease)4141424241404141414140 OPEX as % of revenues3535353534353639393737

12 12 Strategic Objectives 2007 - 2010 l Strive for leading and sustainable positions in strategic market segments l Financial objectives 2007-2010 l RoCE: > 13% by 2010 l Average organic growth: 5% per annum l Maintain relative gross margins l Investment grade rating l Q3 2007 ytd l RoCE~ 7% l Organic revenue growth 3.7% Stable relative GM √ l Net debt/EBITDA 2.1 l Colour % revenues20% Not yet there but clearly improving in highly competitive and adverse currency environment

13 13 Competitive Products & Services Competitive Products & Services Operational Excellence Distribution Power Distribution Power In order to achieve its strategic objectives Océ is in the midst of executing a strategic re-orientation to optimize its performance in these 3 strategically critical areas Business Transformation in Océ

14 14 Business Transformation in Océ l Acquisition (2005) Imagistics USA: l full line portfolio (OEM office) and new distribution/service model l New Business activities & distribution channels through acquisition: l Outsourcing Document Management (Bus. Services in ’98) l Display Graphics (DGS in 2003) l Distribution partnerships l From only own R&D to alliances l From own products only to full line portfolio based on: l Smart mix own (2/3) and OEM (1/3) products l New high growth activities: Business Services & DGS l From in-house leasing to (off B/S) lease partners l From P&L focus to balanced view on P&L, B/S, CF l From own manufacturing to outsourcing Far East l Major restructuring (4x) & process harmonization Competitive Products & Services Competitive Products & Services Operational Excellence Distribution Power Distribution Power

15 15 Role Finance in Business Transformation (1) Competitive Products & Services Competitive Products & Services Operational Excellence Distribution Power Distribution Power Pro-active full participant in all business (transformation) processes, sometimes in the lead Finance has independent position, and should positively challenge all change processes Lead the external communication with analysts and investors

16 16 Role Finance in Business Transformation (2) l M&A: valuation, negotiation, integration, evaluation l Set up partnerships in distribution l Partnerships supply products (1/3 sales OEM products) l Outsourcing/transfer manufacturing to Far East (2008: 80% Venlo manufacturing value) l Actively support creation of natural hedges versus USD, GBP and Yen l Outsourcing lease portfolio (€ 800 mln) without disturbing business or business processes l Active role in rationalizing cost structure (~4000 FTE’s) and optimizing working capital l Active role in business process harmonization project l Ensure processes, systems (IT and information) and controls framework Competitive Products & Services Competitive Products & Services Operational Excellence Distribution Power Distribution Power

17 17 Role Finance in Business Transformation (3) l Finance is, due to independent position and specific expertise in Treasury, Tax, Audit, IR and reporting and controls, capable to perform a key role in business transformation (support and lead) l Due to recent emphasis on Corporate Governance (SOx, Tabaksblat), the role of Finance in the past 5 years tended to revert back to controls and reporting l Finance should operate outside its “comfort zone” in business transformation processes, probably as the close advisor to the CEO Even though Senior Finance staff should be high level specialists, the role of the CFO should not necessarily be filled by a Finance expert. It is even beneficial that the CFO will, more often than is the case now, be a non- finance professional with broad business experience. This will prevent a withdrawal of the Finance function into the “Finance Box” and ensure full pro-active participation of Finance in tactical and strategic business decision processes.

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19 Een non financial moet de positie van CFO bekleden.

20 De CFO van de toekomst moet minimaal twee andere disciplines binnen het bedrijf bekleden, zodat de CFO breed georiënteerd is

21 Een decentraal opgezette financiële functie heeft zijn langste tijd gehad

22 Het is niet verstandig om de CIO aan de CFO te laten rapporteren

23 Business Transformatie is niet functie afhankelijk, maar kan het beste worden uitgevoerd door talenten die in het bedrijf aanwezig zijn.

24 Eisen vanuit de statutaire verantwoordelijkheid belemmeren de leidende business transformatie rol van de CFO.

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