case JBR was asked to conduct a financial benchmark for Family Office - jbr-consultancy.com

YOU CAN REACH US BY EMAIL EN PHONE

NL

Our Cases

JBR was asked to conduct a financial benchmark for Family Office

Mission

JBR was asked by the client to perform a financial benchmark for a group of legal entities within the different divisions of the client's company.

Background

As input for strategic discussions, there was a need for more insight into the performance of the various entities and how they performed compared to peer companies. The management team then decided to carry out a benchmark.

Concrete objectives of the benchmark were:

♦ Direction to growth objectives and identification of growth areas

♦ Insight into the return for all providers of capital and for the shareholder in particular

♦ To gain insight into which divisions provide the best return on investment and where the addition of equity capital will provide the best return in the future

Gaining insight into solvency/leverage of own companies and of peer companies

Problem statement

In order to perform a good financial benchmark, there are a number of challenges. First, a financial framework needs to be drawn up consisting of relevant financial KPIs. It is essential to create the right balance between the level of detail of the information and the labour intensity and possible complexity.

In addition, the most suitable peer companies should be selected whereby careful consideration should be given to the comparability of the companies in terms of, for example, product portfolio and size of the company.

The availability of data is often a challenge and should therefore be mapped out as early as possible.

Our contribution

JBR set up a financial benchmark per division, comparing the figures of each division with market peers. Five elements were important in the benchmark: realized sales growth, return on sales, capital turnover, return on equity and solvency.

The Return on Invested Capital (ROIC) was used as a benchmark to determine the extent to which a company is able to create value for its capital providers.By means of a financial model per division, the performance of the entities over the past years was compared and with the help of qualitative knowledge of the specific sectors and companies, the outcomes were explained. Insights from this benchmark were used to define concrete strategic opportunities and follow-up steps.

The result

The findings were discussed with the client at the end of each screening and then served as input for a strategic off-site meeting with the company's Supervisory Board.

 

*At the request of the client, the name of the company is not mentioned.