HOW CONTROLLING CAN SUPPORT GOAL
IMPLEMENTATION IN AN ORGANIZATION
Andrzej Derkowski Controlling Office Director
1. A few words about Neuca Group
2. The struggle for an ambitious goal in 2011 – report from the „battlefield”
3. Key succes factors, controlling role in achieving objectives in an organization – reflections
1. A few words about Neuca Group
2. The struggle for an ambitious goal in 2011 – report from the „battlefield”
3. Key succes factors, controlling role in achieving objectives in an organization – reflections
NEUCA’s history milestones
20,7% share in Polish distribution market at the end of 2008
Establishment of a holding company NEUCA and business optimisation
Establishment of a family-owned company: TORFARM 1990
IPO on the WSE
2001/ 2004
Increasing market share through organic growth
Development of new businesses: marketing and IT solutions, pharmaceuticals production
30,5% share in Polish distribution market in 2011
Acquisition of Prosper Group
New strategy – active market consolidator
2004/09/302005/01/302005/05/302005/09/302006/01/302006/05/302006/09/302007/01/302007/05/302007/09/302008/01/302008/05/302008/09/302009/01/302009/05/302009/09/302010/01/302010/05/302010/09/302011/01/302011/05/302011/09/302012/01/30
Leader in pharmaceuticals distributio
Value of Polish market of pharmaceutical distribution (bn EUR)
14 205 pharmacies in 2011
Based on average PLN = EUR exchange rate for the period
Market share of main players on the Polish distribution market in 2011
Source: Own estimations
NEUCA Group shares include AstraZeneca product sale (system of direct sale )
NEUCA has the widest range of numeric distribution in Poland:
9000 pharmacies 1.200.000 clients daily on average 150 sales representatives 700 telemarketers
1,5 BN EUR
Revenues in 2011
30,5%
Market share
300 000
24 hour output capacity of Ołtarzew warehouse
12,75 M EUR
Net profit in 2011
3 500 Our workforce, 2/3 of which are women
3 300
Pharmacies participating in partnership programs
38%
Net profit increase in 2011
17 000 Offered products
9 000 Pharmacies receiving our products
1. A few words about Neuca Group
2. The struggle for an ambitious goal in 2011 – report from the „battlefield”
3. Key succes factors, controlling role in achieving objectives in an organization – reflections
Report from the market
- Very high dymamics of the market in January +10% (goal +5%), - Exceeded sales plan in January +11% Estimated gross margin +6% according to the plan,
Decisions / Actions
- Continuation of the implementation of planned activities, - Taking advantage of a prosperous economy
- Achieving a gross margin surplus
FINANCIAL RESULTS FIRST QUARTER
SALES PLAN IMPLEMENTATION
REPORTS/ ANALYSIS CONTROLLING
- Negative trends in gross margin (increasing transaction costs, lower than expected benefits from suppliers, deteriorating sales structure )
- deteriorating profitabilty of cooperation with customers,
- the market has weakened as expected, new government regulations,
- profit forecast for 2011 on the level of 77,9% goal realization,
DECISIONS / ACTIONS
- Taking corrective actions in the organization,
- The main lines of attack:
- IMPACT on gross margin,
- costs revision,
- better implementation of strategic projects,
FINANCIAL RESULTS SECOND QUARTER
SALES PLAN IMPLEMENTATION
0.823909796
REPORTS/ ANALYSIS CONTROLLING
- deterioration of the budget results,
- gross magin (%) improvement,
- sales and market share decrease,
- increase of costs and deterioration of the results,
- earnings forecast in 2011 increases to 82,4%,
DECISIONS / ACTIONS
- consistent implementation of further corrective actions agreed in the organization,
- direct involvement of the board in supporting key corrective actions
FINANCIAL RESULTS THIRD QUARTER
SALES PLAN IMPLEMENTATION
0.959387385
REPORTS/ ANALYSIS CONTROLLING
- Seasonal increase in sales and market share,
- Increase in gross margin by 0,8%,
- Strategic projects have positive effect on financial results,
- Porofit forecast increased in 2011 to a 95,9% level
DECISIONS / ACTIONS
- Continuation of corrective actions and strategic projects,
- Preparation of special activities relating to the new reimbursement law,
FINANCIAL RESULTS FOURTH QUARTER
SALES PLAN IMPLEMENTATION NET
RAPORTS / CONTROLLING ANALISYS
- High growth in the market share in December (14,3% Y/Y), - Very good results of promotional activities in December increase in the market share by+ 0,8%, - in the IV quarter the plan was realized in 146%, - completed strategic projects, better results than expected have been achieved, - new ideas implementation to improve profitability, - Main goal- Net Profit realized in 106,9%,
1. A few words about Neuca Group
2. The struggle for an ambitious goal in 2011 – report from the „battlefield”
3. Key succes factors, controlling role in achieving objectives in an organization – reflections
KEY SUCCESS FACTORS
OPINION OF THE BOARD:
1. Quick reaction to the threats, diagnosed problems,
2. Direct involvement of the board members in key corrective actions,
3. Consistent implementation of the strategy (strategic projects)
4. Permanent efforts to improve the quality of customer service and profitable cooperation,
5. Bonus system based on the common goal,
MANAGERS OPINION:
1. Focusing on taking actions and not blaming,
2. Cooperation – the value of the organization,
3. New ideas how to improve the processes,
4. Current information about the goal, and how corrective actions are taking us closer to the end.
REFLECTIONS FROM THE CONTROLLER’S PRACTICE
1. The whole organization must be „infected” with the Controlling Approach, good example should be provided by the top … controlling implementation.
2. The better we understand reality and expectations for future the braver our decisions and actions can be–”gang effect” .
3. History must be left to accountants, we need to focus on the future and make managers think about it as well.
4. Common goals and cooperation, cooperation, cooperation.
