Electronic OEM - $240 million

A $500m t/o group was growing at around 30% pa. The European part of the group, responsible for 45% of sales, was performing poorly in profit and cash terms. This had a considerable impact on the performance of the group and on its ability to sustain required growth.

Collingwood was hired as CEO and CFO of the business with particular focus on operations and finance. The main improvements made were to:

• Re-negotiate contracts were appropriate. Previously some of the firm's contracts operated at a loss, and several at very low margin. In some cases contracts could be re-negotiated, but in other cases poor business had to be gradually replaced by profitable business.
• Improve logistics. Supplying quality product on time to large production lines made a significant difference to our customers. A new scheduling system was developed which helped make sure product was supplied on time and customer product lines functioned correctly.
• Improved receivables performance. Proactive control of receivables allowed the company to move from 35% current debt to 95% current debt.
• Rationalise stock. Previously European parts had included a considerable quantity of very old parts. In an industry where product very quickly becomes obsolete, we were able to carry out a rationalisation that allowed the company to focus on the more likely customer stock queries.
• Pan European Service Network. This was set up so that we could use local third party service personnel to rapidly resolve any product quality issues that might arise.

The result of the above was a far more profitable European operation, and one that contributed to the continued growth of the worldwide group. Shortly after the above changes, the group was sold.