The document discusses Mekko Graphics, a tool used by private equity firms for strategic due diligence. It can create various chart types to analyze markets, competitors, customers and companies. These include Marimekko charts, bar-mekko charts, and charts with CAGR columns. Mekko Graphics supports over 75% of top private equity firms and has 15+ years of experience satisfying strategic consultants, firms and Fortune 500 strategy teams. Examples show how its charts can map markets by industry/size, track market trends over time, and present competitive positioning by industry vertical.

1. Mekko Graphics: A Tool for Strategic Due Diligence
Presented at the MIT Private Equity Symposium
April 5, 2013

2. Introduction
• Mekko Graphics is used by over 75% of the top 25 private equity firms as identified by
Private Equity International
• It plays a critical role in all stages of the strategic due diligence process:
• Market analysis
• Competitive positioning
• Customer analysis
• Company analysis
• Mekko Graphics supports chart types and features that are valuable for due diligence and
not found in PowerPoint or Excel:
• Marimekko chart
• Bar-mekko chart
• Cascade, waterfall or bridge chart
• Data rows, data columns and CAGR columns that align with the chart
• Growth lines and comparison lines
• Mekko Graphics has over 15 years experience satisfying the charting needs of:
• Strategy consultants
• Private equity firms
• Strategy and marketing professionals at Fortune 500 companies
Copyright 2013 © Mekko Graphics. All rights reserved.
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3. Market Analysis
~$900MM ~$600MM ~$600MM ~$2.9B Total = ~$5B
100%
Unpenetrated
80 Market
Opportunity
Percent of Total
60
40 Competitor
Share
20
Primary Player
Share
0
Auto Industrial Medical Other
Machinery
Use a Marimekko chart to map the market by industry vertical, identifying an unpenetrated market
opportunity.
Copyright 2013 © Mekko Graphics. All rights reserved.
3

4. Market Analysis
~$900MM ~$600MM ~$600MM ~$2.9B Total = ~$5B
100%
$1B+
80
$50MM-1B
Percent of Total
60
40
$0-50MM
Companies
20
0
Auto Industrial Medical Other
Machinery
A Marimekko chart can also map the market by company size and industry vertical
Copyright 2013 © Mekko Graphics. All rights reserved.
4

5. Market Analysis
CAGR
2002-2012
Total 4.7%
$5.0B
4.0
Other 3%
Total Market Size ($B)
3.0
2.0
Medical 14%
Industrial
8%
Machinery
1.0
Auto 5%
0.0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012
Use an area chart with a CAGR column to track market trends over time
Copyright 2013 © Mekko Graphics. All rights reserved.
5

6. Market Analysis
58MM 5.9B 28.4B 14.4B 4.4B
100%
EMEA
80
Latin
America
60
Asia Pacific
40
20
North
America
Europe
0
Area of Earth Population GDP Restaurant Meals QSR Meals
Use a 100% stacked bar to identify market opportunities.
Copyright 2013 © Mekko Graphics. All rights reserved.
6

7. Competitive Positioning
Total Market:
100%
All Other ~$2.2B
All Other Industries All Other
Industries
Industries
Rubber, Paper & Plastic All Other
Industries
80 Appliances & Housewares
Hydraulics & Fluid Handling
Fabricated Metal Products Hydraulics & Fluid
Handling
Consumer Goods
Percent of Total
60
Electronics
All Other Industries
Industrial Machinery & Equipment
Industrial Machinery &
Equipment
40 Distribution/Industrial Supplies Industrial Machinery & Distribution/Industrial
Equipment Supplies
Distribution/Industrial Supplies Medical
Medical
Medical Medical
20
Automotive
Automotive Automotive Automotive
0
Competitor A Competitor B Competitor C D E All Other Competitors
Company Revenue $800M $400M $300M $200M $50M $500M
This Marimekko chart presents market share by competitor and industry vertical. We use a
data row to show overall competitor revenue.
Copyright 2013 © Mekko Graphics. All rights reserved.
7

8. Competitive Positioning
$100
Current Marginal Cost: ~$80 Country
80
USA
Sweden
60 Canada
Previous Marginal Cost: ~$50
Unit Cost
Chile
Mauritania
Peru
40
Australia
India
Venezuela
20
South
Africa
Brazil
0
Vale SA Rio Tinto BHPB
C
s
fs
N /O
co
re
N
al
D
lif
CS
O
ar
F
et
M
C
on
m
G
M
d
CV
Sa
Ir
an
e
u
ba
el
c
es
ev
m
rt
Cl
Ku
Fo
The Bar-mekko shows competitor cost analysis. We use color-coding to differentiate countries and
average lines to highlight key costs.
Copyright 2013 © Mekko Graphics. All rights reserved.
8

9. Competitive Positioning
EBITDA %
60%
Competitor 11
Competitor 3
40
Competitor 9
Competitor 5 Competitor 2
A.C.M.E. Competitor 7
20
Competitor 16
Competitor 13
Competitor 14 Company with
higher EBITDA
0 Competitor 10
Competitor 12
Competitor 15 Competitor 6 100,000
Competitor 8 (‘000 $)
Competitor 4 Competitor 1
-20
0.01 0.02 0.05 0.1 0.2 0.5 1 2 5 10
RMS
The bubble chart contrasts earning, market share and revenue for each competitor. The competitors in the
shaded area are niche players with relatively high earnings.
Copyright 2013 © Mekko Graphics. All rights reserved.
9

10. Customer Analysis
(‘000) lt.
3,245 260 617 3,567
100% 43 8 27 237
276 37
100
86
80
173 2,066
60
2,811 BRAND 5
40 464
168 BRAND 4
161
BRAND 3
20
76 BRAND 2
935
BRAND 1
0
MODERN DISTRIBUTION DISCOUNT TRADITIONAL EXPORT
This Marimekko chart presents sales by brand and channel. You can spot opportunities for growing a
specific brand in a sales channel.
Copyright 2013 © Mekko Graphics. All rights reserved.
10

11. Customer Analysis
Revenue in $M
Total =
$50,764M $20,021M $42,107M $9,074M $121,966M
100% others
Customer3
80
60 Customer2
40
20 Customer1
0
South South -East Mid-West North/North East
This Marimekko chart presents sales by customer and region.
Copyright 2013 © Mekko Graphics. All rights reserved.
11

12. Customer Analysis
80%
0.7
70
0.7
Total Company
Contribution Margin (%)
Profitability: 65%
60
50
0%
l
al
n
e
e
ts
es
a
ar
io
ry
iv
g tic
ic
ic
uc
ar
t
ou t s
ot
en
tr
ed
dw
t
t ne
in a
od
ta
a n Pr o &
H uc
w
u i ys
dl um
m
ec
pm
en chi
M
or
ar
se
es ic er
d
Pr
to
Eq To
El
sp
an e
H
ap
pm a
Au
H Pn
al
d
al ,
ui l M
an
n s
an
l ia Pla , P
et
io od
Tr
d ,
d
Eq ria
ui c s
M
nc s t
c r
at o
cs
is be
Fl l i
er
ed
d st
re G
ni
d rau
M ub
an du
at
ec ng
at
ro
R
W
In
an yd
ic
R ti
ct
br
& por
le
H
d
an
Fa
E
pp
S
A
nd
La
i r,
A Bar Mekko is an effective way of summarizing a company’s overall profitability by breaking out its
A
components
– The bar widths in this case are customer industry segment revenues and the height
is the contribution margin
Copyright 2013 © Mekko Graphics. All rights reserved.
12

13. Customer Analysis
80%
Air, Land and Water Transportation R² = 0.68
Medical and Air, Land & Water Transportation
segments display outsized margins vs. what
Electronics would be expected for customers of that size
and Electrical
Medical
70
Customer Contribution Margin
Hydraulics
Pneumatic
and Fluid
Hardware Handling
Rubber
Paper &
Misc Plastic
60 Fabricated Products
Metal Products
Automotive
Industrial Machinery and Equipment
Appliances and
Housewares
50
Segment
Sporting Goods, Toys & Revenue
Recreational Equipment
0%
0 2 4 6 8 10 12 $14K
Average Account Size ($000s)
A Bubble Chart can be used to overlay two additional dimensions of information to the overall
profitability.
In this case, profitability is plotted against the average account size for that industry (X-axis)
and the total revenue of the segment (bubble size).
Copyright 2013 © Mekko Graphics. All rights reserved.
13

14. Customer Analysis
$14M $9M $59M
$60M Customer1
Customer8 All Other
All Other Customer3 Customer10
Customer7 All Other Customer9
$49M Customer6
50 Customer5
-$13M
40 All Other
All Other
30
Customer3
20 Customer4 Customer4
Customer3 Customer2
Customer2
10 Customer1
Customer1
Customer9
0
2011 Customer Gains Customer Losses New Product Line 2012
Use a cascade chart to track customer gains and losses.
Copyright 2013 © Mekko Graphics. All rights reserved.
14

15. Company Analysis
‘000 $
CAGR +3%
1,612 2,101
1,539 57,623 58,067
60,000 55,024
52,812
2,133
20,186 22,597 24,684
19,875
40,000
CAGR
09-12
-38.8%
20,000 PRODUCT 4
30,970 33,045 32,813 31,151 11.5%
PRODUCT 3
7.5%
PRODUCT 2
0.2%
PRODUCT 1
0
2009 2010 2011 2012
Add a growth line and a CAGR column to a stacked bar chart to track sales
by product for the last four years.
Copyright 2013 © Mekko Graphics. All rights reserved.
15

16. Company Analysis
Percent of Total Total =
$30,552,016
$1,136,232 $2,335,588
$10,162,964 $4,608,052 $2,903,704 $2,083,092 $1,641,224 $4,355,556 $1,325,604
100% CEO Office CEO Office CEO Business Analysis
Telephony /
Int ernat i onal
Support Development agemen t Assistant
Comm / Purchasi ng
Management
Web /D i st ri but i on
Man
Corporate Marketing Information
Curriculum Finance
Distribution
Technology
Ops Processes Real
Training
Risk
Estate
Treas ury Pa yroll Tax
Technic al
Su pport
Training Compen sat ion /
Ben efit s
Internat ional
Loss Prevention
80 Corporate Marketing Marketing
Misc
Design
Recruiti ng/
Staffing
Marketing Training
Man agement
Help Des k
Aviation
60
Travel/
Sales
Procure me nt
Accoun ting
Corpor ate
HQ Operations
Contract Adm/Legal
Other A dmin
40
E quipment Services
S ervices
Operations
Franchisee Accounting
Software Development
20
Recruit ing
QA
Operations Construction
Field
0
Brand 1 Brand 2 Development Human Legal Other Finance P&D
Resources
Information Technology
You can use a Marimekko chart to break out costs by department.
Copyright 2013 © Mekko Graphics. All rights reserved.
16

17. Company Analysis
Plant 1 Plant 2
84%
80 79% 80%
75%
Plant 1
Profitability: 70%
70%
70 69% 70
Plant 2
Profitability:
62%
Contribution Margin
Contribution Margin
60 60 58%
Total Custom
54% 57%
50 50
40 40
0% Automotive
0%
Automotive Recreational Equipment
H uc t /
M d u ar e
cs
Pl ub ro re
E in e ial
tr s
c /P ts
P Pa n
tr Ho hi n al
al
se ry
d er
u c r/
as b ta l
ec e
ti c er/ ti o
ar s
c ic
ic
ti er uc
ct ry
ub r a
R l P wa
ni
E l ar
e
od pe
ts
h r
ro p
In w
ac st
E l c e M a ed
R s po ic
ro
d
s/ w
a d
Pr a
d
d
ia ial M
et r
an e
M Ha
le
on u
Tr M
as b
ic
ec s/
p l tr
Ap dus
b
Pl
n
Fa
In
By using two Bar Mekkos side by side, the profitability across two divisions of a company can be shown while
retaining the relative size of each.
In this case, the profitability of Plant 1 is higher than Plant 2 even though the automotive segment is weighing it
down.
17

18. Company Analysis
4% 65%
5%
Contribution Margin (%)
3%
55%
-2%
0%
2011 Automotive Industrial Medical All Others 2012
Contribution Machinery Contribution
Margin Margin
A Cascade Chart is an effective way of showing the components of profitability change between
two points in time.
In this case, the decrease in profitability among automotive customers was more than offset by the
increases in industrial machinery, medical, and all others between 2011-2012.
Copyright 2013 © Mekko Graphics. All rights reserved.
18

19. Company Analysis
Equity Value Creation ($M)
$375 $137M $367M
350 Expense
Reduction Mgmt
300 Share
Gain
250 $108M Market Growth
200
150 $136M PE Firm
Mgmt
100 -$14M
50 PE Firm
0
Equity Value at Fees & Expenses Debt Paydown EBITDA Equity Value at
Close Improvement Exit
You can use a cascade to estimate the overall change in equity value for the investment.
Copyright 2013 © Mekko Graphics. All rights reserved.
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