The role of controlling in business management performance cycle of Business Unit T&A within WKB Kristian Vanderwaeren BU M&S director March 20, 2014 Agenda Presentation of Wolters Kluwer Presentation of Wolters Kluwer Belgium – BU & Finance Management performance at Wolter Kluwer Belgium The importance of Finance for the Business Unit in this Conclusions 2 Wolters Kluwer Worldwide WK: information & software company – 3.4 billion € revenues – 19.900 employees – AEX – Euronext 100 Wolters Kluwer Tax & Accounting Belgium 3 Kluwer Belgium NV When you have to be right ! By providing you information, tools and solutions which enables you to take better decisions and highly increase your productivity. BU Legal & Public BU Tax & Accounting Kluwer Formations BU Companies Kluwer Advertising Kluwer Publishing Kluwer Software Publishing: 60 000 clients, 3 000 experts, more than 1 500 titels a year Software: 20 000 companies, 58 % of all annual accounts deposits, nearly all accountants use our software, + presence in banking Opleidingen: 18 000 participants, 800 lecturers 4 Our customers Legal professionals • Lawyers • Notaries Public authorities • National and local administrations • Healthcare • Education • Nonprofit • Unions Financial professionals • Tax advisors • Accountants • Financial institutions • Insurance companies Companies • General management • Finance • HR • S&E • Sales and marketing • Company lawyers 5 Solutions based on needs and value chain of our clients! Customer needs and value chain Solutions Events, community interaction Inspiration Deepen knowledge Stay updated Have daily info at hand Run my job / my business Get and stay qualified Books, seminars, training … Magazines, newsletters, … Online databases, information services… Software, workflow, marketing… Training, certification, … 6 Example : the accountant; we cover the end-to-end needs of the accountant, his client and his partners: win-win Accounting Collaboration Tools Cloud/web solutions Collaboration portals Graphical reporting SME Clients ERP CRM HRM Tax • Fiscalc, Superfisc Audit • Audit Automation Practice Mgmt. Tax Advisors Accounting Tax Payroll Audit Practice Mgmt. Research Research Partners Authorities Experts Suppliers • Kluwer Account (Expert M Plus, topACCOUNT, Vero ), EVA • ACCON Plus • Kluwer Office, Winpris • Invoice scanning • monKEY.be ERP • Kluwer Admin (Briljant, Enterprise, VERO-admin) • Sector offerings CRM • Kluwer Office HRM Collab. Tools • Kluwer EasyWeb • Kluwer office 7 Agenda Presentation of Wolters Kluwer Presentation of Wolters Kluwer Belgium – BU & LSS Finance Management performance at Wolter Kluwer Belgium The importance of Finance for the Business Unit in this Conclusions 8 Wolters Kluwer: positioning of divisions & units Next slide Per country: Local Shared Services Next slide 9 Wolters Kluwer Local Shared Services Finance & Accounting Services 2013 Henri Van Engelen RMD Tax & Accounting Europe Hans Suijkerbuijk CEO Wolters Kluwer Belgium Willy Horseele Chief Financial officer Bianca Mattheus T&A Controller Tineke Heylen Controller Iris Struelens Katleen Bogaerts Management Assistant HRBP Mireille Punt Finance Manager Guy Muylaert Accounting & Reporting Mgr Martine Mathys Reporting Manager Tine Monbaliu Royalties Administr. Manager Denise Heylen Order Intake & Fulfillment Mgr Michel Van Emmerick Accounting Manager/Purchasing An Verschooten Lieve De Taeye Leentje Wouters Legal Advice & Support Alain Mousset Internal Auditor Magda Carpentier Johan Diedens Claudine Dedonder Subscription Mgt & Account Adm. Manager Administrateurs Claudio Graziano Account Receivables Mgr 10 Wolters Kluwer Tax & Accounting BU Tax & Accounting 2013 Henri Van Engelen RMD Tax & Accounting Europe Hans Suijkerbuijk CEO Wolters Kluwer Belgium Christine Moons BU Dir Tax & Accounting Kristian Vanderwaeren BU Director Sales & Marketing Anne Tosseyn Heidi Thijs Management Assistant Lars Van Sweevelt Etnia Program Manager Mark Caelen Software Solutions Manager Paul Simons (ex.) Software Development Manager Anne Tosseyn Heidi Thijs Management Assistant Miguel Lahousse Services Manager Rik Dreesen Back Office Manager Veronique Alias Publishing Manager Hilde Troosters Publisher Tax & Accounting Folio Nicole Vandevijvere Publisher Tax & Accounting Online Vannessa Giannoccari Publisher Insurance & Banking Michiel Van den Keybus Sales Manager Publishing Koen Everaet Sales Manager Software Veronique Alias Marketing Manager 11 What is should not be…. It are "The Others"! 12 What it should be… It’s all about the team… …and finance plays in the BU team… …and therefore should be a team player… …but why? http://www.youtube.com/watch?feature=player_detailpage&v=17rAxDB4Jw4 13 Agenda Presentation of Wolters Kluwer Presentation of Wolters Kluwer Belgium & LSS Finance Business management cycle at Wolter Kluwer Belgium The importance of Finance for the Business Unit Conclusions 14 The Performance Management Model What we want to be Vision Our game plan Strategy Strategic Focus Area -Measures (KPI’s) -Targets -M -M -T -T -Responsibilities -R -R -M -M -T -R -T What we need to do -R Strategic initiatives Quaterly & Monthly business reviews Operational plans, budgets and resources allocation Team and individual performance measures and targets 15 The Management Control Process Strategy Review Programming Evaluation & rewarding managers Budget Preparation & approval Reporting Execution & Measurement 16 Strategy & management cycle 3 years time horizon BDP Financial implications Current state Our markets Challenges & opportunities Vision & Strategy Our performance Topline Costs Investments Bottom line Vision = what we want to become Strategy = how to get there Results Topline Costs Investments BudgetBottom line Forecasting reporting Reviews (BRM, LE) Actions 1st year = Budget 17 The timeline Jan the BDP the Budget the LE's the BRM's Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb BDP Process Mar Apr May Jun Jul Aug Sep Oct Nov Dec BDP Process Budget Process Budget Process LE0 LE-1 LE-2 LE-3 brm01 brm02 brm03 brm04 brm05 brm06 brm07 brm08 brm09 brm10 brm11 brm12 • Yearly -> BDP: provides clarity on a 3-years strategic direction • BDP = 3 years plan based on LE1 assumptions • Yearly -> Budget: set clear objectives for the next year • Budget = 1 year plan based on LE3 assumptions • Quarterly -> Latest Estimate to headquarters • Monthly -> business reviews in the country • Monthly -> Mid-Month forecast to headquarters 18 Some advantages of model 19 Business Development Plan: provides clarity on the mid term (3 years) strategic direction and a financial basis for next year’s budget 3 years time horizon Financial implications Current state Our markets Our performance Challenges & opportunities Vision & Strategy Topline Costs Investments Bottom line 20 Mental framework of BDP: which are the business objectives and how to achieve them? Segment dynamics Segments Products Costs growth COS Which product-market combinations generate maximum revenue and growth ? Non-COS profit Which cost structure generates maximum profitability ? 21 Mental frameworkfor the BDP Which are the business objectives and how to achieve them ? Sources of growth: •Reach (more customers/users) •Value (more revenu per customer) Segment attractiveness •Size & Growth (# / €) •(un)fulfilled needs •Competitive dynamics •Competitive advantages Segment dynamics Segments Products Actions for growth: •Product development ((NPD, improvements) •GTM (channels, sales, marketing) •Loyalty, churn prevention, preventio •Pricing and business models (for reach / value) Costs growth COS Non-COS Actions for profitability: •Headcount and peco management •COS management •Operational excellence / productivity programs profit 22 Components of the BDP The current state of the business – Market view Current state Our markets Our performance Financial implications Challenges & opportunities Vision & Strategy Topline Costs Investments Bottom line „ Where are we winning, where are we losing and why? „ What is the growth of the different (micro)segments in your market? „ Which exhibit attractive dynamics? Which ones are under pressure? „ What are the most important customer trends and how do these trends impact us? „ Which are the competitive dynamics ? „ What is our market position vis-à-vis competitors within these segments? How is that changing? „ How are cyclical businesses impacted by economic situation ? „ How are technology developments affecting our market? What new players are participating in our space? 23 Components of the BDP The current state of the business – Our performance Current state Our markets Our performance Financial implications Challenges & opportunities Vision & Strategy Topline Costs Investments Bottom line „ What has been the current performance of your business both in terms of revenue and profit margin? „ How have you executed against your top 3 to 5 prior-year priorities? What has changed? „ What are the key market dynamics affecting your business? How are these dynamics changing with respect to the previous BDP? „ How has the economic context affected your different businesses? What businesses seem to be more insulated and which ones more affected by the downturn in the economy? „ What would be required to win against our most important competitors? 24 Components of the BDP Challenges and opportunities Current state Our markets Our performance Financial implications Challenges & opportunities Vision & Strategy Topline Costs Investments Bottom line „What are the key risks to our current and future business? „What are the challenges that keep you/or will keep you awake at night? „What market segments appear to offer more attractive opportunities? With which type of offering ? „Where are there opportunities to enhance your cost structure? 25 Components of the BDP Vision and strategy Current state Our markets Our performance Financial implications Challenges & opportunities Vision & Strategy Topline Costs Investments Bottom line „ What will your business look like in three years and beyond? What is the path that you are charting for your business? „ What are your top 3 to 5 priorities for your business? „ What granular segments should we enter and which ones should we consider to exit? „ How will you leverage our global presence? „ How are your products going to change to increase the value you deliver at the point of use? „ What organizational adjustments need to be made? „ What are the key changes you will make stemming from the new strategy and organization? „ What are some of the portfolio adjustments you will make to support your vision? (Investment in growth segments, Harvesting of parts of the portfolio, Acquisitions, Divestments) 26 Components of the BDP Financial implications Current state Our markets Our performance Financial implications Challenges & opportunities Vision & Strategy Topline Costs Investments Bottom line „ What will be the evolution of the revenues ? „ What will be the evolution of the ebita ? „ Which are the changes compared to previous BDP ? Why do they occur ? „ Which are the key assumptions behind the BDP related to churn, sales intake, price increases and peco costs ? „ What will be the evolution in the portfolio / media mix ? „ Which are the main investments ? „ What is the impact of cost saving programs ? „ How do FTE’s, and peco evolve ? Which are the skills we need to develop and which HR initiatives will take care of that ? 27 How is this presented in the boardroom ? Examples from BDP presentation 28 The Budget proces at Wolters Kluwer From BDP to Budget BDP provides clarity on a 3-years strategic direction BDP is the financial basis of the budget Updated LE3 assumptions are the base for the budget LE1 assumptions 6 months later LE3 assumptions BDP : 3 years plan Budget : 1 year plan BDP = Mid Long Term approach Budget = Short Term approach Mission & Vision Objectives - KPI’s - Targets 29 The Budget proces at Wolters Kluwer Business Unit Budget Proces Plan GTM Plan TOP 100 customers Budget Targets Top Line BU Strategy NPD Plan Production Plan Resources FTE’s Costs Cost of Sales Project Budget Bottom Line 30 The Budget proces at Wolters Kluwer The Budget proces at Wolters Kluwer WK Corporate L& R Global Operating Divisions T &A WK Belgium Businesss Units 31 Budget Components P & L components P&L Business unit Mio € Year Revenue 40,3 Royalties External costs Timewriting 1,2 3,9 11,4 Cost Of Sales 16,5 Margin 23,9 Margin % 59,2% M&S 1. Marketing and promotion costs 1,4 1,3 2. Sales costs / commissions Primary 4. Professional third party services 5. Office expenses 6. Computer services 7. Services provided 8. Personnel costs 9. Indirect external personnel cost 10. Depreciation fixed assets 12. Miscellaneous expenditures 0,1 26,6 1,1 2,9 0,9 -0,2 19,1 1,7 0,8 0,2 13. Capitalized costs 14. Internal Direct Labor costs -0,2 -11,0 EBITA 7,1 EBITA % 17,6% TOP-Line Revenue Budget on product level Cost Budget Cost Center FTE’s Cost of sales BOTTOM-Line 32 Budget Components Example : Revenue Drivers for Publishing Wolters Kluwer Belgium: Revenue Key Figure Drivers Revenue Revenue Type Invoice Type Product Type Subscriptions Price Pages Subscription Product # Subscriptions Subscription Price Module # Licences Licence Price Subscription Product # Subscriptions Publication schedule Time-based Subscription REVENUE Page Price Delivery Based Pages to be invoiced Unit Price Module Non-subscription Product Issue # Licences # loose order items Licence Price Page Price publication date Pages to be invoiced Unit Price Advertising Product Issue Portfolio drivers: churn sales intake migrations pruning start portfolio price TMC renewals 33 Budget Components Budget: Data used Level of detail used: Publishing BDP PC Legal BDP MF JuranNew JuranNew JuranNew JuranNew JuranNew JuranNew JuranNew JuranNew JuranNew Online OldFormats OldFormats OldFormats OldFormats OldFormats Classics Classics Classics PC Legal BDP MF MF Online Online CD-Rom Info Pack Loose Leafs MF Maintain Maintain Maintain Maintain Maintain Online OldFormats OldFormats OldFormats OldFormats Online Online CD-Rom Info Pack Loose Leafs JuranOld JuranOld JuranOld JuranOld Maintain Maintain Maintain Maintain OldFormats Classics Classics Classics journ-Newsl Books JuranOld JuranOld JuranOld JuranOld JuranOld JuranOld JuranOld JuranOld JuranOld BDP MF Migratie Migratie Migratie Migratie Migratie Migratie Migratie Migratie Migratie Online OldFormats OldFormats OldFormats OldFormats OldFormats Classics Classics Classics 6.016 price Volu other CV+ 271 RR CrossS GTM egm 30 137 CV- 553 386 -331 105 137 137 -137 105 137 137 -137 690 523 MF Online Online CD-Rom Info Pack Loose Leafs journ-Newsl Books 6.121 271 LE-2010 BRM03 price Churn% 137 -467 -5,50% #DIV/0! #DIV/0! -100,00% #DIV/0! -129,68% #DIV/0! #DIV/0! #DIV/0! -7,64% CrossS GTM egm CV- Churn% journ-Newsl Books JuranOld JuranOld JuranOld JuranOld JuranOld PC Legal LE-2010 BRM03 30 M+/282 M+/- 348 282 348 RR 695 1.882 31 85 52 78 52 73 2.577 1.677 930 2.607 5.183 116 75 42 117 233 131 52 49 101 232 4,5% 125 52 49 101 226 LE-2010 BRM03 price 5 5 5 -24 -124 #DIV/0! #DIV/0! #DIV/0! -3,42% -6,60% -148 -46 -74 -120 -268 -5,75% -2,73% -7,99% -4,61% -5,17% -23 -24 -23 -24 -23 RR 2 319 CrossS GTM egm CV- -6 4.781 5.103 231 231 82 82 82 82 -669 -675 61 61 5.164 3 3 233 2 2 83 2 2 83 -8 -8 -683 Churn% #DIV/0! -249,77% 0,00% #DIV/0! -14,00% -13,23% #DIV/0! -13,39% -13,39% -13,24% M+/- 564 CrossS CV- Churn% M+/- BDP12 -380 289 7.987 -517 -5,30% #DIV/0! #DIV/0! -100,00% #DIV/0! -111,11% #DIV/0! #DIV/0! #DIV/0! -7,08% CV- Churn% M+/- BDP12 -29 -124 #DIV/0! #DIV/0! #DIV/0! -3,87% -6,60% -3 -21 784 1.880 -152 -48 -75 -123 -275 -5,83% -2,73% -7,99% -4,57% -5,19% -24 2.664 1.841 966 2.808 5.471 CV- Churn% M+/- BDP12 85 85 -649 -649 -141 -141 3.929 3.929 2 2 87 -8 -8 -656 #DIV/0! 0,00% 0,00% #DIV/0! -14,50% -14,50% #DIV/0! -13,39% -13,39% -14,49% -141 54 54 3.983 RR 372 egm 28 GTM 164 123 137 137 -137 123 137 137 -137 701 509 7.298 1.177 323 28 164 137 137 289 price RR 33 84 33 63 33 57 2.607 1.756 941 2.697 5.304 117 79 42 121 239 95 55 67 121 217 90 55 67 121 211 CrossS egm GTM 5 5 5 -24 price BDP11 Volu other CV+ RR CrossS egm GTM -319 -144 -144 250 -69 4.474 4.473 216 216 -144 -69 58 58 4.531 3 3 219 8.124 825 Volu other CV+ 737 1.870 Volu other CV+ 323 BDP11 -3 -21 Volu other CV+ 2 2 2 Based on LE1 and business drivers — 7.175 Volu other CV+ BDP is made on media format level: — price BDP11 Sales intake Churn Migrations Price Volume NPD Per publishing unit / per cluster / per type (OL –classics –old formats) 34 Budget: Data used Budget Components Level of detail used: Publishing Budget 2010 Type of Revenue Publishing Revenue Budget: — Revenue calculation by — Based on following drivers — — Publishing Center - Product Business Unit Month per Type of revenue subscription starting position sales intake churn migration plans BU average price & price increase production planning / volume of pages Fully Bottom-Up Budget The quality of the budget will drive the quality of the forecasting 35 Budget: Data used Budget Components Budget Product templates BP/SWB-LL Productgegevens Volgnummer Editie/pg Editie Totaal pg SI/S D IR/ID D O TI (=av) Verkoopprijs abo Abo-gegevens Prijsverhoging WKB ex TMC Verkoopprijs CV Beginstand 2009 lor Abo+ Abo+ migratie AboAbo- migratie Abo Transfer Evo Eindstand 2009 Losse verkoop (aantallen) Omzetberekening WKB Gemiddelde korting Abo-omzet Losse omzet TMC omzet Advertentie-omzet Totale omzet excl Totale adv omzet incl adv Totalen CV ex TMC Beginstand 2009 CV+ CV migratie+ CV Churn CV migratieCV Transfer Evo Eindstand 2009 Evo ex TMC 1 2 # # # SI9111 3 4 5 SI9108 906 718 906 718 7 # 130 2.616 2.734 569 1 1 -3 -4 567 545 12,38 % 0,74 0,78 755,66 782,11 0,74 755,66 782,11 0,74 755,66 0,74 755,66 2.616 2.616 2.616 2.616 2.595 582 1 -1 -5 566 540 12,38 % -14 -7 546 12,38 % 1.447.723 1.483.407 1.412.063 5.232 13.670 - - 1.510.185 2.616 1.480.791 1.412.063 2.616 76.577 2.616 2.616 36.627 - - 1 12,38 % Tota al Initial s md l 3.880 13 0 0,74 755,66 755,66 2.616 755,66 2.616 0,74 755,66 3,50 0,78 782,11 2.616 2.734 2.616 1 1 -2 553 12,38 % 662 662 CV Actual vglvrofmvr CV Actual (ter (ter vgl of modular) 2.734 5 18 -1 551 3 -47 -3 551 12,38 517.377% 12,38 % 5.232 1.428.466 1.449.396 18.314 20.930 662 1.457.794 662 1.457.794 2.61 6 5.232 2.616 1.446.780 - 5 12,38 %339.127 2.616 1.441.547 - 5.232 15 12,38 % 662 2.61 6 2.616 2.616 20.930 1 12,38 % 1.986 662 18.314 34.011 12 # 548 2.616 1.446.780 11 SI9110 subs evolution 554 546 4 1 2.616 0,74 -2 -5 329.527 519.364 2.616 2.616 47.799 1.488.640 7.849 10 # Productinfo 8 553 12,38 % 326.878 264.340 2.648 10.071 329.527 519.364 9 # 952 952 0,74 0,74 0,78 755,66 8 IR9001/SI9109 1434 1304 4.010 Revenue Calculation CV 2.616 6 # 12,38 % 3.426 339.127 339.127 3.426 3.426 2.61 6 2.616 13.081 - 685 685 2.61 7 2.61 6 8.202 10.936 1.441.547 - 685 264.340 264.340 2.61 5 13.670 2.59 5 2.734 13.670 1.428.466 1.433.934 13.081 5.468 124.37 6 8,35% 1.425.732 - 8.202 - Portfolio Evolution 36 Budget: Data used Budget Components Result = KPI Budget Reports Revenue REVENUE One Off ESV Serv orders Tenders new Tenders 07 Jurisoft DB TB Advertising Import Copyrights Totaal Sales Sales Intake One Off ESV Tenders Jurisoft CV+ CV M+ Advertising Import TMC Renewal Totaal 1 296 160 70 2 287 160 12 3 337 160 75 5 429 6 441 14 50 2.964 3.849 291 49 4 391 320 12 30 23 48 3.819 3.894 320 91 71 100 14 45 2.051 3.933 361 65 12 200 23 68 4.250 3.945 574 54 15 98 194 3.783 174 49 24 47 1.185 3.821 247 53 4.839 5.835 7.788 8.948 7.069 9.567 7 180 8 261 9 561 10 555 11 469 12 627 74 1.283 3.952 38 76 70 1.933 3.960 148 65 78 150 23 82 2.396 4.001 316 61 12 150 24 85 2.216 4.053 401 84 71 200 23 85 3.020 4.111 368 56 5.602 6.438 7.667 7.579 8.402 29 300 20 107 4.874 4.136 313 107 300 10.812 B 2008 4.835 800 442 1.130 202 860 30.184 47.436 3.550 810 300 90.549 Intake: direct- indirect per type of intake 1 233 2 238 3 288 4 342 5 381 6 372 160 30 3 667 138 174 13 496 1.914 160 100 3 684 450 247 11 171 2.064 160 200 3 758 267 291 10 181 2.159 320 50 26 649 298 320 8 223 2.236 150 34 625 351 361 9 218 2.129 200 45 622 292 574 11 276 2.391 7 180 53 265 118 38 6 236 896 8 261 9 561 10 555 47 228 142 148 5 80 911 150 58 715 338 316 16 595 2.749 250 57 713 356 401 18 361 2.712 11 469 57 824 301 368 17 102 2.137 12 627 Year 4.508 59 626 203 313 10 209 2.046 800 1.130 445 7.377 3.255 3.550 135 3.148 24.347 DIRECT One Off ESV Tenders Jurisoft CV+ CV M+ Advertising Import TMC Renewal Totaal 1 64 2 78 3 92 4 126 5 160 6 139 30 3 367 104 174 100 3 402 174 247 200 3 437 152 291 50 26 386 179 320 150 34 363 203 361 200 45 347 172 574 496 1.238 171 1.176 181 1.357 223 1.310 218 1.490 276 1.753 7 52 8 82 9 152 10 170 53 150 70 38 47 123 73 148 150 58 419 204 316 250 57 421 219 401 236 600 80 553 595 1.895 361 1.878 11 129 12 168 Year 1.411 57 507 185 368 59 379 117 313 1.130 445 4.301 1.854 3.550 102 1.347 209 1.243 3.148 15.838 DIRECT One Off ESV Tenders Jurisoft CV+ CV M+ Advertising Import TMC Renewal Totaal 1 169 2 160 3 197 4 216 160 160 160 320 300 34 282 276 321 115 263 119 5 220 6 233 7 128 8 180 9 408 10 386 11 340 12 459 Year 3.097 262 149 275 120 115 48 104 69 296 134 293 137 316 116 247 87 3.076 1.401 800 13 11 10 8 9 11 6 5 16 18 17 10 135 677 889 803 926 640 638 297 358 855 833 790 803 8.509 Portfolio Evolution Start Year CV Status CV Evolution CV+ CVCV M+ CV M- 77.683 1 2 3 4 5 6 7 8 9 10 11 12 77.410 77.363 77.308 77.386 77.456 77.186 76.862 76.601 76.647 76.788 77.005 76.814 -273 -47 -55 77 70 -270 -324 -261 47 140 217 -191 667 684 758 649 625 622 265 228 715 713 824 626 -973 -776 -892 -594 -623 -928 -596 -494 -689 -604 -626 -835 138 450 267 298 351 292 118 142 338 356 301 203 -106 -405 -188 -276 -283 -255 -112 -137 -317 -326 -281 -185 B 2008 76.814 -869 7.377 -8.629 3.255 -2.872 -11,1% 37 Budget: Data used Components Portfolio drivers CHURN -11,5% -12,0% y ear -12,5% 2009 -12,6% -13,0% LE3-2010 -13,5% Budget 2011 -13,5% -14,0% -14,0% -14,5% Runrate LE3 vs 2009 -2% -16% 45% 32% 11% B2011 vs LE2010 31% 46% 44% 22% 33% Q1 Q2 Q3 Q4 year Portfolio Intake Intake Runrates 60% 46% 40% 45% 44% 33% 32% 31% 22% 20% 11% 0% -20% -2% Q1 -16% Q 2 Q3 Q4 year 38 Components Cost Budget drivers P&L Business unit Mio € Year Revenue 40,3 Royalties External costs Timewriting Cost Of Sales 1,2 3,9 11,4 Margin 23,9 Margin % 59,2% M&S 1. Marketing and promotion costs 1,4 1,3 2. Sales costs / commissions Primary 4. Professional third party services 5. Office expenses 6. Computer services 7. Services provided 8. Personnel costs 9. Indirect external personnel cost 10. Depreciation fixed assets 12. Miscellaneous expenditures 13. Capitalized costs 14. Internal Direct Labor costs 0,1 26,6 1,1 2,9 0,9 -0,2 19,1 1,7 0,8 0,2 -0,2 -11,0 EBITA 7,1 EBITA % 17,6% Total Cost 33,2 3,6% 11,8% 34,2% N° 1 cost driver = FTE’s 16,5 N° 2 cost driver = COS Ext + Roy 4,3% N° 3 cost driver = Office expenses 3,3% 8,7% 2,6% -0,7% 57,6% 5,2% 2,6% 0,6% -0,7% -33,1% N° 4 cost driver = Promo costs 39 After the Budget A Typical Planning & Control process : 40 Process After the Budget WK Belgium Forecasting The Forecasting Process — Monthly Business Review Meetings per Business Unit (BRM) Monthly MDM presentations per Divisions to Division management — Quarterly Latest Estimates to Headquarters — BRM 3° week of month Participants: — — BU MT controlling included CEO Division, CEO Country, CFO, Manager Budget & Control Objectives: — — — review last month performance vs forecast: explained by drivers discuss & challenge update assumptions: sales pipeline, marketing planning migration plans, volume & planning, NPD status stimulate initiatives 41 Process After the Budget WKB Revenue Forecasting Process Budget BRM 01 LE 0 BRM 02 BRM 03 LE I BRM 04 BRM 05 BRM = Business Review Meeting BRM 04: = based on actuals month 03 -> forecast month 04 -> 12 BRM 06 LE II ... 42 Forecasting: Data used After the Budget Monthly forecasts in BRM Updated forecast vs previous forecast Klop Budget Open IC E-learn WKB Totaal BRM 5 Open IC E-learn WKB Totaal 1 103 284 2 410 245 3 Q1 1.067 1.579 339 868 4 614 194 5 729 301 6 500 464 Q2 1.843 959 7 73 64 8 94 37 9 419 519 Q3 586 620 -18 368 -23 633 -23 -64 1.383 2.384 -7 802 -28 1.002 -14 950 -49 2.753 -8 129 131 -33 905 1 68 281 2 307 273 3 Q1 1.064 1.439 421 975 4 611 229 5 647 313 6 472 430 Q2 1.730 972 7 73 40 8 94 63 9 419 450 Q4 2.961 1.463 75 Year 6.970 3.910 75 -41 -35 -62 -48 -145 1.164 1.847 1.286 1.221 4.354 -300 10.655 -2 346 -7 573 -14 -23 1.472 2.391 -11 828 -16 944 -21 881 -48 2.653 -8 105 157 -33 836 1 68 281 2 307 273 3 Q1 1.064 1.439 421 975 4 611 229 5 638 316 6 485 446 Q2 1.733 992 7 82 40 8 77 50 9 420 450 -2 346 -7 573 -14 -23 1.472 2.391 -11 828 -11 943 -19 912 -41 2.684 -8 114 127 -33 837 1 2 4 5 -9 3 6 13 16 Q2 4 19 7 9 8 -17 -13 9 1 Q3 -7 -13 5 -1 2 31 7 30 9 -30 1 -20 Q3 586 553 10 1.399 483 10 1.399 504 11 839 509 11 839 510 12 723 471 75 12 723 472 40 Q4 2.961 1.486 40 Year 6.716 3.986 40 -41 -35 -62 -48 -145 1.098 1.868 1.287 1.187 4.342 -258 10.484 2009 BRM 6 Open IC E-learn WKB Totaal vs BRM 5 Open IC E-learn WKB Totaal 3 Q1 2009 delta Q4 2.961 1.486 30 Year 6.712 3.992 30 Q1 Q2 1.679 1.798 889 982 Q4 2.628 1.045 50 Year 6.693 3.452 50 Q1 -14% 10% Q2 -4% 1% Q3 -1% 1% Q4 13% 42% -40% Year 0% 16% -40% Year 20 540 -20 -41 -35 -62 -48 -145 1.078 1.868 1.287 1.177 4.332 -251 10.484 -64 -49 -20 -78 2.504 2.732 1.102 3.646 -211 9.984 -65% -5% -16% -2% 108% -2% 87% 19% 19% 5% -40 500 Q3 579 540 10 1.399 504 10 11 839 510 11 12 723 472 30 12 Q4 -10 -10 -10 -10 Q3 586 536 Year -4 6 -10 7 Example: Challenged by forecasting model -> Training OPEN Month: 1 2 3 4 5 6 67.622 306.983 1.064.212 610.687 637.520 485.396 7 8 9 10 11 12 271.483 189.321 29% 29% 17% 21% 32.040 -128.378 105.076 95.921 Totaal 6+ m Totaal 12 m COMMITTED REVENUE % TO BE REALIS ED NOW Best case Worst case FORECASTED GAP 0 Best case 0 Worst case FORECASTED REV 67.622 Best case 67.622 Worst case Budget 102.510 BRM 6 67.622 Not yet committed 0 82.210 100% 106% 47.816 56% 71% 164.597 37% 37% 22.813 21.675 511.130 36% 40% 3.172.419 4.438.975 367.164 190.673 396 396 535.652 166.479 3.172.419 3.172.419 3.422.751 3.172.023 -396 7.247.886 6.878.713 6.970.000 6.712.234 2.273.259 0 0 0 0 0 0 0 0 396 396 -195 -4.479 8.357 -9.329 306.983 306.983 1.064.212 1.064.212 610.687 610.687 637.520 637.520 485.396 485.396 81.805 77.521 85.357 67.671 442.812 1.430.962 441.674 1.270.543 944.429 935.274 1.090.103 913.612 409.829 306.983 0 0% 1.066.975 1.064.212 0 0% 614.366 610.687 0 0% 729.302 637.520 0 0% 499.769 485.000 -396 0% 72.879 82.000 -210 0% 93.730 77.000 29.184 38% 419.427 1.398.921 419.999 1.398.921 255.402 887.792 61% 63% 839.353 839.353 567.870 68% 722.939 722.939 533.618 74% 43 Forecasting: Data used Cfr Churn forecast Churn forecast based on FLM last year and received churn this year CHURN 1 2 3 Q1 4 5 6 Q2 7 8 9 Q3 10 11 12 Q4 Yea -1.47 2 1.47 2 1.47 2 -r -3.92 7 3.83 7 3.81 27 0 Actuals DD 10 - - - - - - - - - - - 05 2010 29 22 39 90 19 13 19 52 17 38 64 11 51 23 122 196 7 1 0 9 6 4 3 3 9 1.74 6 Budg et BRM 04 BRM 05 Delt a -32 6 29 7 29 7 Status rapport -32 0 22 1 22 1 -34 4 39 0 39 0 10/05/2010 -99 0 90 8 90 8 -27 9 23 6 19 40 6 Status data -21 5 21 5 22 813 -39 4 42 9 42 9 -88 8 88 0 85 27 3 -16 5 16 5 16 5 -15 8 15 8 15 8 9/05/2010 -25 4 25 4 25 4 -57 7 57 7 57 7 Status data -16 6 16 6 16 6 -24 0 24 0 24 0 -1.06 5 1.06 5 1.06 5 Q1 Q2 Q3 Q4 - 1.03 1.02 70 1.80 0 2 8 1 200 9Yea -r 4.56 1 Q 1 12 2 delt Q aQ 2 13 3 16 9 1 Q 4 32 9 200 9Yea r751 10/04/2009 Portfolio Churn 2010 PC HR PC S&E PC Fox PC FXI Comp Sum: 1 -118.447 -138.686 -39.927 -8.221 -305.282 2 -60.231 -139.231 -22.007 -7.533 -229.003 3 -155.091 -180.069 -54.901 -5.422 -395.483 4 -72.776 -94.270 -21.542 -2.416 -191.005 5 -41.112 -83.868 -9.039 -1.935 -135.955 6 -135.982 -45.936 -11.002 -1.515 -194.435 7 -8.846 -1.183 -7.096 -272 -17.398 8 -11.688 -20.127 -5.958 -2.329 -40.102 9 -21.384 -30.652 -11.642 -1.208 -64.886 10 -23.086 -21.242 -6.742 -1.383 -52.452 11 -7.635 -5.150 -10.206 -493 -23.484 12 -51.207 -27.212 -43.256 -8.455 -130.129 Sum: -707.485 -787.625 -243.319 -41.184 -1.779.614 1 -95.311 -147.365 -57.029 -12.818 -312.523 2 -88.109 -152.004 -34.530 -5.266 -279.909 3 -195.324 -214.117 -35.716 -4.192 -449.349 4 -117.292 -154.308 -43.627 -3.320 -318.547 5 -44.191 -95.089 -11.608 -2.027 -152.916 6 -110.537 -52.874 -37.393 -3.142 -203.946 7 -11.253 -40.589 -5.794 -289 -57.926 8 -6.548 -34.460 -6.593 -500 -48.102 9 -20.715 -22.565 -8.599 -1.942 -53.822 10 -18.123 -16.818 -5.052 -731 -40.723 11 -14.768 -11.684 -3.816 -624 -30.892 12 -71.646 -45.792 -69.388 -16.439 -203.265 Sum: -793.818 -987.666 -319.145 -51.291 -2.151.919 6 -25.445 6.938 26.391 1.626 9.511 95,3% 7 2.407 39.406 -1.302 17 40.528 30,0% 8 -5.140 14.334 635 -1.829 8.000 83,4% 9 -669 -8.087 -3.043 735 -11.064 120,6% 10 -4.963 -4.424 -1.690 -653 -11.729 128,8% Portfolio Churn 2009 PC HR PC S&E PC Fox PC FXI Comp total delta tov 2009 Freezed 1 PC HR PC S&E PC Fox PC FXI Comp total % 2009-2010 94,5% Freezed 2 78,8% Status data 2009 Freezed Freezed 3 4 82,7% 75,1% 10/04/2009 5 3.080 11.221 2.569 92 16.962 88,9% 11 7.133 6.534 -6.391 131 7.408 76,0% 12 20.438 18.581 26.132 7.984 73.136 64,0% Sum: -3.158 84.503 43.302 8.103 132.750 82,7% %09-10 89,1% 79,7% 76,2% 80,3% This year committed churn vs same period last year = FLM 44 Centralised Business Reporting & Forecasting Monthly BU & WKB dashboards Sales Intake Reports Revenue Sales Intake Portfolio FTE’s Costs Information Flow BRM Monthly meetings Review + Forecasting of all BU KPI’s (revenue, sales intake, churn, FTE’s, cocts, ...) Weekly portfolio reports & graphs Churn Sales Intake Migrations Evolution Monthly follow-up DB products Sales Intake Forecasts LE Revenue forecasting Sheets Forecasts Improvement 45 Process Continuous feedback to Business Monthly feedback at WKB MT — on consolidated BRM figures and WKB outlook and issues — on results vs forecast (revenue + drivers) Business reviews Actuals 46 Agenda Presentation of Wolters Kluwer Presentation of Wolters Kluwer Belgium - Finance Management performance at Wolter Kluwer Belgium Finance being crucial for the Business Unit… Conclusions 47 Finance being crucial… Data > Information > decision: “top controlling” Data > information Analysis > data > information Results > management decisions 48 Finance being crucial… It’s all about the team… and the matrix Controlling WITHIN the business unit Reporting to CFO Result: co-info decision & info model: — — — — Sales rebates approval Business cases M&A Forecasting “angel” http://www.dailymotion.com/video/xex9rz_gordon-gekko-greed-isgood-full-spe_shortfilms 49 Conclusion: only an integration of Finance in BU management makes us successfull… 50 THANKS… QUESTIONS? Contactgegevens Kristian Vanderwaeren BU Directeur M & S Tax & Accounting Tel: 015 36 11 56 Gsm: 0476 50 06 67 [email protected] 52
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