At a time when capital markets are more volatile and less forgiving to underperformers, many companies feel undervalued by the markets. In our experience, well-executed strategies that reflect value creation and the appropriate risk considerations are crucial to success. We help our clients maximize value creation by aligning their corporate strategy with the capital markets’ perception of where value lies, communicating that strategic intent, and crafting a compelling story for investors. We support our clients in the following areas:

• We perform capital markets analyses to determine which strategies and business models create the most value.
• We assist with proactive portfolio management to fund corporate growth and maximize long-term value.
• We develop investor communications that clearly communicate corporate strategy, manage performance expectations, and maximize shareholder value.
• We develop innovative financing strategies.

Today, chief financial officers (CFOs) face the challenge of coping with increasingly complex demands on the finance function: providing transparency in external reporting, driving value creation, and facilitating strategic decisions. To successfully meet these demands, CFOs need to create a world-class finance function that aligns corporate, financial, and investor strategies. As part of this process, they need to address some key challenges:

We help clients better understand their capital market performance and identify strategic actions to increase shareholder value. Working with Eurosis consulting teams helps companies understand market expectations, identify primary sources of value, and develop strategic initiatives to further value creation. Our deep knowledge of finance topics and extensive library of tools and models uniquely positions us to support clients in two areas:

Capital Market Diagnostics (CMDs)

We perform diagnostics on both companies and industries. CMDs provide clients with a holistic perspective on past performance and strategies for improving future performance. They typically include three core analytical components:

• Historical capital market performance: By analyzing the returns to shareholders for a company, its competitors, and the industry, as well as valuation multiples, we help clients understand the key drivers of performance difference (such as growth, profitability, and investor expectations).
• Historical operational performance/benchmarking: We analyze profitability and returns on capital for both the company and its industry segment. This analysis helps clients understand potential improvement areas and the value of addressing performance gaps. We also analyze historical sources of growth, such as portfolio differences and M&A activity, and their impact on overall corporate performance.
• Future performance expectations: We use proprietary models to determine market expectations for growth and profitability for our clients and their competitors. We advise clients on how these expectations differ from their own existing strategies and identify potential initiatives to increase long-term value.

Valuation and Discounted Cash Flow Modeling

We use our in-depth sector knowledge to inform modeling scenarios, understand any gaps between market value and intrinsic value, and shape recommendations for action. In addition, the Eurosis Consulting provides analytical capabilities and insights on the following topics:

• Investor relations: We help clients better understand their existing investor base and strategically shape future investor communications. We advise clients on who to talk to (i.e., investor segmentation), what to talk about (i.e., disclosure best practices), and how to talk about it (i.e., channel strategy).
• M&A: We conduct a variety of M&A analyses, such as target screening and synergy assessment. We also create pro forma statements to assess the financial impact of M&A and measure the impact of a proposed transaction structure on value distribution.

Challenges

To create sustainable, long-term shareholder value, it is important to explicitly establish an appropriate shareholder value target. The key to reaching this target and achieving a competitive advantage is the alignment of business, financial, and investor strategies. Therefore, companies must address the following important challenges:

• Pressure-test financial policies to ensure that we have the right capital-structure, dividend, and buy-back policies. Setting up to weather financial storms
• İdentifying shareholders’ investment approaches
• Aligning strategies to target the right investors those that will support my medium to long-term business and financial strategy
• Integrating plans to create enough shareholder value to reach targets. Identify moves to close the gap to target

Solutions

Eurosis Consulting works with clients to optimize medium to long-term shareholder return at both the corporate and business-unit levels. We distill investor insight from structured interviews with a significant portion of the client’s shareholder base. Through proprietary regression techniques, we identify and assess the relevance of the company-specific valuation drivers and benchmark the results against those of peers. CFOs play a crucial role in aligning stakeholders so everyone sees value creation through the same lens. As the CFO is also at the helm of value-creation efforts companywide, he or she can use the finance function to test new ideas and set best practices. We support our clients in the following activities:

• Performance measurement and management: We apply rigorous analytical tools and methodologies to assess business value and performance.

• Lean finance: We use lean principles and well-tested improvement levers, such as consolidation and shared services, demand management, and organizational streamlining, to optimize the practices and performance of the finance function.

• Treasury optimization:We draw upon benchmarks and extensive experience to streamline treasury activities and transform the treasurer into a strategic partner who drives value.

• Finance talent management: We help shape the talent strategy, build talent systems, and develop leaders to create a world-class finance function.

• CFO: We help define the role, responsibilities, and agenda of the CFO.

On the basis of this knowledge, we help our clients pressure-test and reshape their financial policies around the use of cash, dividends, and share buybacks. We also challenge and refine business plans with clients to achieve the targeted shareholder return, and we help develop alternatives to the base plan that deliver stronger shareholder returns built on different combinations of business, financial, and investor strategies. In some cases, our holistic approach has yielded a shareholder return improvement of 25 percent.