F4G Workshop THE CFO SGL What we do for our Clients Corporate - PowerPoint PPT Presentation

F4G Workshop THE CFO

SGL – What we do for our Clients Corporate Finance and Outsource Strategic CFO services – on a continuous or project basis – to businesses looking to raise finance (from all sources) and add expert finance resource to their management team.

Finance Workshop Session 1 THE CFO

What is the CFO?  A business partner?  A trusted reporter?  A steward and controller?  A technical expert?

All of the Above!  A business partner  A trusted reporter  A steward and controller  A technical expert  No matter how small or big the company

This is the CFO

The Business Partner  Driving and facilitating Return on Investment KNOWING  Which parts of the business are creating value?  What are the real drivers of our performance?  Which customers and products are profitable?  How are we performing relative to the competition?  Which customers are delivering the bulk of our profit?  What is driving cash generation ?

Decision Making  CFO is a key participator and driver  Also a facilitator and inculcator

CFO Insight PAST PRESENT FUTURE INFORM- What What is What will ATION happening now happen? Happened? (Alerts) (Extrapolation) (Reporting) Best / Worst that How / Why things can happen Next Best Action? happened INSIGHT (Predict/Optimize (Recommend) (Modeling / Var) / stimulate

CFO – Business Partner Skills  For a CFO to add value and be a full business partner they need new skill sets and competencies:  Excellent analytical  not just financial analysis  customer and market analysis  statistical and also sophisticated modelling techniques  A multi-disciplinary team approach  informing key decision making  integrating inputs from diverse non-financial sources  Strong commercial acumen characterised by strong product, process and market knowledge

Decision Making – CFO Impact ANALYTICS  CFO is a key participator and driver  Also a facilitator and inculcator

CFO – Business Partner  The successful CFO  Understands the key business drivers  Develops influencing skills  And is always proactive  The CFO  Delivers shareholder value  Owns the business model and ensures it’s completely understood by the management team  Drives higher returns through efficient use of assets and capital  Executes as well as being a strategist  Provides confidence to all stakeholders

…. And Always Remember  What get Measured gets Managed  What gets Managed gets done  Keep that ticking over in your head  Apply it to your work  Use the rule when you identify KPI’s  Reflect it in the MIS you present

Return on Investment – CFO Focus Blank Ltd. Return on Capital Employed 16.3% P2022 18.1% P2021 18.8% P2020 20.4% P 2019 22.1% P 2018 22.5% B 2018 25.0% A 2017 25.0% A 2016 EBT Margin Asset Turnover 11.7% 1.4 11.8% 1.5 12.0% 1.6 12.2% 1.7 12.4% 1.8 12.9% 1.8 14.8% 1.7 χ 15.0% 1.7 EBT Revenue Assets 3,500.0 30,000.0 21,500.0 3,250.0 27,500.0 18,000.0 3,000.0 25,000.0 16,000.0 2,750.0 22,500.0 13,500.0 1,985.7 16,022.6 9,000.0 2,250.0 17,500.0 10,000.0 ÷ ÷ 2,000.0 13,500.0 8,000.0 1,500.0 10,000.0 6,000.0

The Key Views – On The Same Page  Budget  Actual  Projected  Variances  Month - Actual and last year  Year to Date – Actual and last year  Full Year – Actual + Projected and last year  All Combined to make visual and numeric sense

Dashboard Example Return on Capital Employed 2018 Actual & Projected 22.06% Budgeted 22.50% Variance -0.44% Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Projected Revenue Year Actual & Projected 1,031.0 1,069.0 1,119.0 1,192.0 1,285.0 1,336.4 1,389.9 1,431.6 1,474.5 1,518.7 1,564.3 1,611.2 16,022.6 Budget 2018 1,000.0 1,055.0 1,110.0 1,190.0 1,270.0 1,355.0 1,465.0 1,570.0 1,675.0 1,805.0 1,935.0 2,070.0 17,500.0 Variance 31.0 14.0 9.0 2.0 15.0 (18.6) (75.1) (138.4) (200.5) (286.3) (370.7) (458.8) (1,477.4) Profit before Tax Actual & Projected 154.0 161.3 172.3 181.1 194.4 197.5 179.5 167.2 159.2 146.3 141.0 132.0 1,985.7 Budget 2018 150.0 156.8 163.6 170.5 177.3 184.1 190.9 197.7 204.5 211.4 218.2 225.0 2,250.0 Variance 4.0 4.5 8.7 10.6 17.1 13.4 (11.4) (30.5) (45.4) (65.1) (77.2) (93.0) (264.3) EBITDA Actual & Projected 224.0 227.1 237.2 243.3 248.1 256.3 238.6 237.2 229.2 216.3 211.0 202.0 2,770.2 Budget 2018 220.0 226.8 233.6 240.5 247.3 254.1 260.9 267.7 274.5 281.4 288.2 295.0 3,090.0 Variance 4.0 0.3 3.6 2.8 0.8 2.2 (22.3) (30.5) (45.4) (65.1) (77.2) (93.0) (319.7)

Dashboard Example Inventory Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Actual & Projected Budgeted Variance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Working capital finance Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 Actual and projected Budgeted Variance 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 0.0 Budgeted Variance Bank and Overdraft 0% Invoice discounting 0% Line 3 0% Line 4 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 0%

Dashboard Example Contribution by Sector € Budget Actual Variance Actual Budget Actual Variance Actual Budget Projected Variance Actual Month Month Month Month YTD YTD YTD YTD Year Year Year Year Mar-18 Mar-18 Mar-18 Mar-17 Mar-18 Mar-18 Mar-18 Mar-17 Dec-18 Dec-18 Dec-18 Dec-17 line 1 0.0 0.0 0.0 line 2 0.0 0.0 0.0 line 3 0.0 0.0 0.0 line 4 0.0 0.0 0.0 line 5 0.0 0.0 0.0 line 6 0.0 0.0 0.0 line 7 0.0 0.0 0.0 line 8 0.0 0.0 0.0 Contribution by Sector % Budget Actual Variance Actual Budget Actual Variance Actual Budget Projected Variance Actual Month Month Month Month YTD YTD YTD YTD Year Year Year Year Mar-18 Mar-18 Mar-18 Mar-17 Mar-18 Mar-18 Mar-18 Mar-17 Dec-18 Dec-18 Dec-18 Dec-17 Line 1 0% 0% 0% Line 2 0% 0% 0% Line 3 0% 0% 0% Line 4 0% 0% 0% Line 5 0% 0% 0% Line 6 0% 0% 0% Line 7 0% 0% 0% Line 8 0% 0% 0%

Management Accounts Example Budget Actual Variance Actual Budget Actual Variance Actual Budget Projected Variance Actual Month Month Month Month Blank Co Ltd. YTD YTD YTD YTD Year Year Year Year Mar-18 Mar-18 Mar-18 Mar-17 Mar-18 Mar-18 Mar-18 Mar-17 Dec-18 Dec-18 Dec-18 Dec-17 Profit and Loss 0 0 0 0 Total Revenue 0 0 0 0 0 0 0 0 Cost of Sales Bought in Material - BIM Logististics In - LOGIN Production Labour Other Direct Costs 0 0 0 0 Cost of Goods Sold - COGS 0 0 0 0 0 0 0 0 0 0 0 0 Gross Margin before LOGOUT 0 0 0 0 0 0 0 0 Logistics Out - LOGOUT 0 0 0 0 LOGOUT 0 0 0 0 0 0 0 0 0 0 0 0 Gross Margin After LOGOUT 0 0 0 0 0 0 0 0 Overhead and Labour Labour Financial Depreciation & Amortisation 0 0 0 0 Total Overhead and Labour 0 0 0 0 0 0 0 0 0 0 0 0 PBT 0 0 0 0 0 0 0 0 0 Tax 0 0 0 0 0 0 PAT 0 0 0 0 0 0 0 0 Distributions 0 0 0 0 Total Distributions 0 0 0 0 0 0 0 0 0 0 0 0 Retained Profit 0 0 0 0 0 0 0 0 0 0 0 0 EBIT 0 0 0 0 0 0 0 0 0 0 0 0 EBITDA 0 0 0 0 0 0 0 0

Management Accounts Example Budget Actual Variance Actual Budget Projected Variance Actual Blank Co Ltd. YTD YTD YTD YTD Year Year Year Year Mar-18 Mar-18 Mar-18 Mar-17 Dec-17 Dec-18 Dec-18 Dec-17 Balance Sheet Total Fixed Assets 0 0 0 0 0 0 0 0 Current Assets Total Current Assets 0 0 0 0 0 0 0 0 Creditors Due Within One Year Total Current Liabilities 0 0 0 0 0 0 0 0 Net Current Assets / (Liabilities) 0 0 0 0 0 0 0 0 Creditors Due After One Year Total Creditors Due After One Year 0 0 0 0 0 0 0 0 Total Net Assets 0 0 0 0 0 0 0 0 Capital and Reserves Total Capital and Reserves 0 0 0 0 0 0 0 0

Sales Waterfall - January Sales Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 2018 Budget 1,000.0 1,055.0 1,110.0 1,190.0 1,270.0 1,355.0 1,465.0 1,570.0 1,675.0 1,805.0 1,935.0 2,070.0 17,500.0 Jan-18 1,031.0 1,065.0 1,108.0 1,150.0 1,100.0 1,135.0 1,162.0 1,201.0 1,253.0 1,302.0 1,398.0 1,450.0 14,355.0 Feb-18 0.0 Mar-18 0.0 Apr-18 0.0 May-18 0.0 Jun-18 0.0 Jul-18 0.0 Aug-18 0.0 Sep-18 0.0 Oct-18 0.0 Nov-18 0.0 Dec-18 0.0

Sales Waterfall – February Sales Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Jul-18 Aug-18 Sep-18 Oct-18 Nov-18 Dec-18 2018 Budget 1,000.0 1,055.0 1,110.0 1,190.0 1,270.0 1,355.0 1,465.0 1,570.0 1,675.0 1,805.0 1,935.0 2,070.0 17,500.0 Jan-18 1,031.0 1,065.0 1,108.0 1,150.0 1,100.0 1,135.0 1,162.0 1,201.0 1,253.0 1,302.0 1,398.0 1,450.0 14,355.0 Feb-18 2,100.0 1,113.0 1,185.0 1,216.0 1,264.6 1,315.2 1,367.8 1,422.5 1,479.4 1,538.6 1,600.2 15,602.5 Mar-18 0.0 Apr-18 0.0 May-18 0.0 Jun-18 0.0 Jul-18 0.0 Aug-18 0.0 Sep-18 0.0 Oct-18 0.0 Nov-18 0.0 Dec-18 0.0