Overview of VBMC Practice

1. Overview of Practice – January 2009
Introducing
VBM Consulting
www.vbm-consulting.com

2. Background
Established 1996 in London.
Thought leaders in the field of Managing for Value/Value Based Management.
Specialise in helping companies to develop and implement pragmatic business strategies
and solutions designed to create and sustain maximum shareholder value.
Our practice has developed a respected reputation amongst business leaders as result of
the impact of our work in companies such as Barclays, Alliance Boots, Avon and others.
A key theme that characterises VBMC’s work is a relentless focus on high quality
commercial thinking – the key to survival in today’s challenging economic climate.
Two books published in January 2001, The Value Mandate and Net Value (AMACOM
2001). Recommended reading on MBA programmes at a number of leading business
schools.
We have successfully adapted our approaches for Government/public sector
organisations and have established a strategic partnership within the National School of
Government in the UK.
www.vbm-consulting.com
2

3. Areas Of Practice Focus
Value maximising growth strategies
Sales, marketing and channel management strategy
Value based cost reduction
Finding and extracting ‘missing value’ from core operations
Organisational/ process change aimed at achieving & sustaining maximum value
Mobilising for value creation in the public sector
Executive & manager MFV/VBM skill development programmes
www.vbm-consulting.com
3

4. We Work ALONGSIDE Clients To…
Identify, understand and resolve major business issues.
Develop high value impact but credible alternatives.
Deliver measurable and sustainable improvements in business performance (i.e.
increased short and long term cash flow/ economic profit).
Enhance the internal capabilities of our clients to manage for value on an ongoing basis.
www.vbm-consulting.com
4

5. What Makes Us Different ?
We believe that the following features of our client offer distinguish us from competitors:
Our focus on both the ‘hard’ and the ‘soft’ drivers of an organisation’s success and our proven,
systematic approach for identifying these and for helping the organisation to mobilise around them.
All our clients, past and present are willing and available to confirm the powerful impact our
work has had on their organisations.
Our flexible “Associate-Based” business model allows us to draw on the best sector expertise
available through our strategic partnerships with sector specialists and with leading UK and
international business schools. VBMC at all times remains fully accountable for ultimate
delivery.
Our proven ability to rapidly understand key issues and themes within the organisation in
which we are working and to develop breakthrough insights for our clients that will be
beneficial to their business.
Our policy of not submitting the final invoice until our clients are satisfied that they have
received ‘value for money’ from our services.
www.vbm-consulting.com
5

6. ©
VBMC’s Five Delta Approach
VBM Consulting’s proprietary methodology for maximizing value addresses all the major
sources of corporate value.
INVESTOR PERCEPTIONS
THE VALUE ENGINE FINANCIAL STRUCTURE
Optimal
Revenue Operations/ Risk Managing financial
capital
Maintenance Production/ management community
structure,
& Growth Supply Chain perceptions re future
financing
Efficiencies cash flow
strategy
• Developing new, highest • Permanent reform of • Positive actions which enhance
• Minimising • Reducing ongoing
company’s cost base: market’s valuation premium even
value internal growth company’s ongoing operational, market
Eliminating value- before a company is publicly-traded re
opportunities (organic) cost of capital and financial risk to
destroying expenses, the company. - simplicity, transparency of
• Growth through • Changes in
partnership or acquisition processes reported performance, cash flow
business portfolio,
• Adoption of most
in closely related fields both to simplify - effective communication of
efficient/ most effective
(non-organic) operation and Managing for Value program
processes, approaches, increase return
• Reform of marketing
organisation
processes, approaches • Value-optimal
to maximise value capital investment
practice
© 2008/9 VBM Consulting Limited All Rights Reserved www.vbm-consulting.com
6

7. Consulting Capacity & Flexibility
We have an extensive pool of highly experienced and qualified people with specialist
expertise on which to draw.
This is made possible through:
• our own international consulting team,
• an extensive world-wide network of associate consultants and,
• our relationships with leading international business schools.
Our associate based business model enables us to:
• create project teams with appropriate skills and experience, rapidly
• be extremely responsive to client requirements, deadlines etc.
All of our associates are experienced senior people with successful track records in business
and/or consulting.
VBMC assumes full responsibility and accountability for ensuring that projects are appropriately
staffed and managed and that agreed deliverables are met to the satisfaction of our clients.
www.vbm-consulting.com
7

8. Examples of Some Client Projects
Issue Approach Outcome
We worked with management to ‘The impact of the channel strategy
understand the key success drivers for initiatives on the success of the Nurofen
An established leading brand with a long history in the UK
the brand and identified channel brand in the UK market exceeded the
market.
strategy as a key lever. most optimistic expectations and
created more value than most of the
A range of alternative channels were
How could the brand be rejuvenated to maximise its previous initiatives to grow the brand.’
identified and evaluated (e.g. garage
value?
forecourts) and a strategy to promote Sales director, Crookes Healthcare, UK
the brand in new channels was
adopted.
We reviewed their existing brand The impact of the Dulcolax brand
strategy and identified a category based initiatives were not only viewed as
A well established brand in the competitive laxative
approach for maximising the value of having made the brand more successful
product market.How could the brand be positioned to grow
the brand. but also transformed Boehringer
its market share?
Ingelheim’s approach to managing its
This included specific strategic above
entire Consumer Healthcare brand
and below the line initiatives to position
portfolio.
and promote the brand in it’s most
important retail channel (i.e. Boots).
Working with senior management a It is now unanimously accepted by
strategy to maximise coverage and management that the step change
After having operated in the South African market for over
brand awareness was developed and is growth strategy for the Avon brand that
10 years there was a need to turbo charge the acceptance
currently being implemented. has been developed will be the key to
and growth of the Avon brand in South Africa.
Avon’s growth and success in the South
African market in the next 5 years.
www.vbm-consulting.com
8

9. Client Feedback
‘VBMC’s work has exceeded all our expectations and punches well above its weight in terms of positive
impact on our business transformation programme.’
‘Unlike many other consultants, VBM Consulting have a passionate commitment to helping their clients
develop the knowledge and skills required to manage for maximum corporate value. Their approach
emphasises the importance of understanding and managing key value drivers (KVDs) and is characterised by
a solid understanding of the clients’ business, logical and rigorous analysis and the development of creative yet
workable alternatives.’
'Working with both senior and mid-level managers, VBM Consulting offer objective and challenging
insights and contribute to the development of creative, value enhancing alternatives. They have made a
significant contribution to the development of management thinking at WH Smith.'
‘VBM Consulting’s competitive advantage comes from the emphasis which they place on working alongside
managers to help them deliver superior value solutions to key business issues. By so doing they enable their
clients to develop into better value managers. I have no hesitation in recommending them as a pragmatic, action
focused, high impact consulting team.’
‘VBMC’s input has been crucial to the development of a successful growth strategy for Avon’s South African
business. Their work is characterised by excellent commercial thinking supported by thorough analysis. They are
committed to delivering excellence and have built a strong track record in our business.’
www.vbm-consulting.com
9

10. Biography
Stephen Neill – Managing Partner
VBM Consulting (VBMC) was established in 1996 by Stephen Neill. He has
built up a successful track record in helping companies to develop and apply
growth-side and expense-side Managing for Value (MFV) programs. Stephen
has worked with a range of leading companies in various sectors across
Europe, North America, Asia and South Africa, including Coca Cola, Cadbury
Schweppes, British Telecom Adidas-Solomon, Pearson Group, Boehringer-
Ingelheim, Alliance Boots, Barclays Bank, Barclaycard, WH Smith, and Avon
Cosmetics.
Stephen is passionate about working with clients to deliver challenging value
creation goals. He has developed a unique and powerful set of methodologies
to help senior managers better understand the company’s key value drivers
in a systematic way, and then to mobilise the business around these. He
strongly believes that an understanding of a businesses’ key value drivers and
top management consensus about these is an essential basis for the
development of successful business strategies and for value maximising
commercial decision making and performance management.
Stephen is co-author (with VBMC Peter Clark), of The Value Mandate, the
leading shareholder value development guide for top management. Stephen
is also co-author of a book on Internet companies, their valuation, and
efficiency implications for Net-responsive companies, Net Value (2001). Prior
to VBMC, Stephen was a senior associate at Marakon, a leading international
Managing for Value consultancy and was Chief UK economist at the Henley
Centre. He completed a B Com (Honours) degree (first class) in Economics at
the University of Cape Town and an MPhil degree at Cambridge University.
www.vbm-consulting.com
10

11. Biography
Juliana Bacon - Partner
Prior to joining VBM Consulting Juliana worked for Dresdner Kleinwort Benson
and Andersen where she advised clients particularly from the banking and
finance sector on the restructuring of international groups, the financing of new
operations and the structuring of proposed transactions. Her clients included
Endsleigh, Alcatel, Marconi and GE Capital as well as numerous European and
US banks including Merrill Lynch, Argentaria and Den norske Bank.
Since working with VBM Consulting, Juliana has been involved in projects with a
variety of clients including Alliance Boots, WH Smith, Boehringer Ingelheim,
Barclays Bank and Barclaycard. She has worked with client teams to embed
MfV methodologies and mindsets within their organisations and she has also
developed a variety of sophisticated valuation tools and techniques which assist
the decision making process.
She has also been extensively involved in assisting clients to identify their KVDs
and to develop insights based on these as well as to implement KVD based
actions and initiatives. Juliana has also been involved in a number of learning
programmes including developing and delivering workshop content and working
alongside business schools to support application based learning.
Juliana graduated from Oxford University in 1996 with a BA (Hons) degree in
Mathematics. She is also a member of the Institute of Chartered Accountants.
www.vbm-consulting.com
11

12. Biography
Peter Clark - Partner
Peter Clark is a world-wide consulting thought and practice leader in the
shareholder value, marketing and strategy consulting fields, supporting major
companies in the UK, US, Japan and Europe. The Value Mandate (2001),
written by Peter and fellow VBMC partner Stephen Neill, has been praised by
the Financial Executives Institute (FEI), The Corporate Library and others as
one of the leading books in the value-based marketing and strategy field. His
1991 book Beyond the Deal is today one of the leading management guides
to creating through acquisitions and post-merger integration of operations
and strategy.
Peter’s previous financial sector clients include Barclays Bank, HSBC,
SocGen, Citigroup, Merrill Lynch, KKR, Blackstone, Invesco, Primark,
FHLBB (US’s Federal Home Loan Bank Board). Peter’s consulting work in
the financial institutions sector has included: strategy, financial product
marketing (both to corporate clients and retail), new programme
development, sales force performance improvement and acquisitions.
Peter’s observations are regularly cited in international business press on
issues of marketing, strategy and company value improvement. Recent
interviews and coverage include CNN-TV, Reuters, Dow-Jones, CNBC,
Forbes, Shareholder Value Magazine and TheStreet.com. Peter received the
Financial Executives Institute’s award for outstanding achievement in
corporate finance. He is a Beta Gamma Sigma graduate of Southern
Methodist University (MBA, BBA).
www.vbm-consulting.com
12