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Where are we? Why? What does that mean? Where are we going? Risks & Opportunities I need it now!

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Presentation on theme: "Where are we? Why? What does that mean? Where are we going? Risks & Opportunities I need it now!"— Presentation transcript:

1 Where are we? Why? What does that mean? Where are we going? Risks & Opportunities I need it now!

2 Planning, Budgeting, Reporting, Forecasting Basic Objectives: 1.Increase Shareholder Value 2.Provide the Basis for Improved Shareholder Value 3.Identify Developing Opportunities & Problems in Time for Effective Action 4.Provide Logic & Order in Financial Process

3 Planning – Tactical & Strategic Controls the Numbers Ability to Impact Develops: Mergers, Acquisitions, and Divestitures

4 Planning – Tactical & Strategic Needed Quantifiable Abilities: Modeling Skills (mechanical – economic) Presentation Skills Networking Skills –Talk to people outside the group –Get beneath the smoke –Keep internal confidences

5 Planning – Tactical & Strategic Needs: Knowledge of Business/ Industry/ Economics Management and Board Interface

6 Reporting Levels of Involvement Motivations Coordination of the #’s  1 Set –Accounting - Business Analysis –Tax - Treasury –Sales- Manufacturing

7 Reporting – Accounting/Business Analysis LOB, Overhead, Corporate Costs EVA … Base vs. Acquired Time needed for producing Reports Management Simplification

8 Lessons Learned - Reporting Protect Confidences Promote Finance to Finance Discussions Help Educate Up & Down Recognize there are Lots of No Option Deadlines Going in – be Flexible, & Manage Stress Lowes’ Theorem of “Steel Management”

9 L.L. – Reporting II Great Place to Visit/Learn –But be careful not to stay too long Get a Clear Separation of Responsibilities with Accounting Insure Continuity Drive Systems Standards Overlay Systems and Models Only if Necessary Network, Network, Network

10 Investor Relations Driven By S.E.C. Filings To Stockholders –Results of Operations –Unusual or Infrequent Items –Liquidity –Capital Resources –Significant Uncertainties

11 Investor Relations Responsibilities: See that the Company is Favorably Understood To Ensure Full and Timely Public Disclosure To Respond to Requests for Reports & Info. To Maintain Productive Relations with Firms: –Investment Bankers, Specialists, Major Broker-Dealers, and Institutional Investors To Take Direct Measures to Ensure that the Company’s Shares are Properly Valued

12 Investor Relations Communications –Strategy –Manage Management –Analyst Meetings –Annual Reports –Quarterly Reports –Buy Side / Sell Side –Employees

13 Investor Relations – Focuses On: Buy Side –Index –Value –Growth –Growth At a Reasonable Price (GARP) –Momentum (Day Traders) –Tiger –Soros Long-term Shareholders Short-term Shareholders Momentum Creators

14 Lessons Learned – I.R. Need to Educate Analysts Shutdown Problem Analysts Control Your Temper Keep Your Integrity “No Comment” is a Good Comment Help Good Analysts Sell

15 L.L. – I.R. II Careful How you Give out Business Remember the Rest of the Management Team Remember the Employees Be Careful working for CEO’s that are Not Financially Savvy Don’t Stay Glued to the Screen You Can’t Explain Every Up & Down

16 L.L. – I.R. III If you have to Disappoint or Restructure –Go Big and Never Go Back. K.I.S.S. –Convoluted Data / Discussions – Lock You In. The First Sound Bite is Very Important The Entire Style should be Bites Deal with the Issue Yourself, so you can Place the Spin

17 YUM – 3/31/00 Spin Warning Q3 Rumors New CFO

18 YUM – 3/31/00 Rumors New CFO Rumors New CFO

19 Business Analysis - From Tons of Data to Useful Information Economics -Global -Country -Industry -Business

20 Business Analysis Economics –Base Business Models –Competition – Global –Demographics Population, Birth Rate, Shifts in Distribution of Disposable Income Growing Incongruence between Economic Globalization & Political Splintering “Think Global, Act Local”

21 Business Analysis Personnel Analysts – Corporation vs. Industry Corporate – in all areas / functions / levels of Co. Management Support Role – Process Mgt. –Budgeting –Forecasts –Capital Expenditure Analysis

22 Business Analysis Skill Base –Modeling Accounting / Financial Statistics –Communications –Interpersonal / Relationships

23 Business Analysis Skill Base –Knowledge of Business –Analytical –Presentation Verbal & Written Project Management Cross-Functional Teams

24 Business Analysis Facts vs. Forecasts Forecasting Distortions –other agendas Sensitivity Analysis –Ranges vs. Single Points Conflicts

25 Business Analysis - Pitfalls Sunk Costs Ex: Toaster Strudel Incrementally Influenced Costs Residual Value Integration Costs Overhead Allocations

26 Business Analysis Q1- Too Early to Call + Opportunity & Risk Q2 – Adjust Forecast Q3 – Call Year Conservatively Base for Opportunity Forecast that’s Managed Provides the #’s for next year’s bonuses and budgets Q4 – Manage til Year End

27 Lessons Learned – Business Analysis Problem Resolution Process Focus Data Collection on Leverage Points Sort and Understand the Problem –Will Probably Require: “Thinking Outside the Box” Analytically Play with it –Develop and Play with Options Create Solutions

28 L.L. – Business Analysis II Beta Test It (Test Run) –Revise as Necessary –Sell a Larger Test –Continue Cycling through the Process Evaluate & Rethink it with New Data –Over Communicate at Critical Points –Supervise Implementation

29 L.L. – Business Analysis III Having and Knowing where your Hard Data comes from Have Lots of Qtrly Forecasts Under Promise  Over Deliver

30 If It’s Not Broken, Don’t Fix It. - Don’t spin your wheels analyzing something to death.

31 Change the Things that you Can, Accept the Things that you Cannot Change, And God Willing you Will Know the Difference.

32 Project Assessment Risk Political/Culture Change R = P(s) & $ P(s) = Amount of Change + Technical Abilities + Resources + Commitment

33 L.L. – Red Zone Get the Biggest Champion or Mentor you Can Get Protect Your People Be Careful Not to be Used & Abandoned Cover All the Bases/Options Be Ready & Armed for the Opposition –Know the Reasons for Failure & Be Able to Knock Down Objections

34 Oscar Mayer (OM) Slaughter Plant Restructuring Louis Rich - Protein Analysis Phillip Morris (PM) GF – Restructuring / Integration Kraft – Acquisition / Integration

35 Heinz (HNZ) CAPM Ketchup vs. Pickles Distribution Tracking

36 General Foods (GF) Sugar Pricing Model Coffee Logistics Burger Chef Oscar Mayer Gaines Entenmann’s Merriwether’s Gaudalaharry’s

37 Pillsbury Divestitures POGO Pillsbury Push Grand Metropolitan (GMET) Divestitures Brewing Dairy

38 GMFE National Businesses Pillsbury - U.K. Haagen Daz Burger King (BKC) Focus & Restructure International / U.S. Product Line -Get Your Burger’s Worth -French Fry

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