value chain expansion to power sales growth assessing new business in energy sector – how it works...
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Value chain expansion to power sales growthAssessing new business in energy sector – how it works7 September 2011
Ondřej Jež
Vojtěch Opleštil
Sanitized version
www.pwc.com
Value chain expansion to power sales growthPwC 2
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
7 September 2011
Value chain expansion to power sales growthPwC 3
Goal of this presentationWe will try to show you “how it works”
1. To show a real life approach to solving problem of a concrete client
2. To familiarize you with the way of work in strategic consulting
7 September 2011
Value chain expansion to power sales growthPwC 4
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
7 September 2011
Value chain expansion to power sales growth5PwC
Introduction of PwCIn transaction services we cover many industries
Worldwide
• 151 countries
• 163 000 employees
Czech Republic
• Three offices (Praha, Brno, Ostrava)
• Some 700 employees
Services
• Consulting and deals
• Audit and assurance
• Tax and legal
Consulting and deals
• Strategy
• Consulting
• Business Recovery Services
• Forensic services
• Transaction Services
• Corporate Finance (Valuation, M&A, Infrastructure, Government & Utilities)
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Transaction strategy
• Energy & Utilities
• Industrial Products
• Retail
• Financial Services
• Transportation
• Healthcare
• Other
Value chain expansion to power sales growthPwC 6
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
7 September 2011
Value chain expansion to power sales growth7PwC
Four people were involved on daily basis and also took care of relationship
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Václav PrýmekRelationship
PartnerClient`s PM
Matouš MichněvičRelationship
Manager
Daniel CappellettiPartner for
strategy
Ondřej JežProject Manager
PwC ČRProject Team
External Advisor
Value chain expansion to power sales growthPwC 8
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
7 September 2011
Value chain expansion to power sales growth9PwC
Project in briefThe project extended our audit services
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Multicriterial assessment of potential revenue opportunities
Content of the project
Core team 4 PwC people
5 client`s employeesTeam
6 weeks, then implementationTiming
An integrated mining and power generation company
Central EuropeIndustry
Value chain expansion to power sales growth10PwC
Our client, its challenges and their impact on the projectWe benefited from good knowledge of the client
• Need of deep expert knowledge
Our client• Large electricity and heat
producer• Not a part of a large group
• Good previous knowledge of the client
• Simpler project planning
How did we win the project• Prior good relationship with the
client• New ideas developed into
tangible project scope and approach • Need to analyze the
whole business model• Focusing on both costs
and revenues
Challenges the client was facing• Impact of profits by other
factors• Increasing competition• Changes in the sales field
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Value chain expansion to power sales growthPwC 11
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
7 September 2011
Value chain expansion to power sales growth12PwC
Steps within the projectWithin the 6 project weeks we focused on 7 steps
1. Technical aspects of entering the retail market
2. Demand assessment
3. Price and margin assessment
4. Definition of assumptions for the financial plan
5. Capacity related costs and variable costs assessment
6. SW assessment
7. Business plan consolidation
Content of the project
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1. Assess client positioning in the market
2. Identify areas for revenue generation and potential profits
3. Understand key internal stakeholders and owners position and expectations
4. Prepare proposal reflecting clients’ expectation and demonstrate added value
Before the project starts
Value chain expansion to power sales growth13PwC
Before the projectWhat happens before the project is even more important
1. Technical aspects of entering the retail market
2. Demand assessment
3. Price and margin assessment
4. Definition of assumptions for the financial plan
5. Capacity related costs and variable costs assessment
6. SW assessment
7. Business plan consolidation
Content of the project
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1. Assess client positioning in the market
2. Identify areas for revenue generation and potential profits
3. Understand key internal stakeholders and owners position and expectations
4. Prepare proposal reflecting clients’ expectation and demonstrate added value
Before the project starts
Value chain expansion to power sales growthPwC 14
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
Attachments
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Value chain expansion to power sales growth15PwC
Findings and recommendation
• Electricity retail could significantly increase company profits (assuming implementation in line with other market players’ performance)
• If sales to end-consumers replace current portfolio, it could make up for the losses caused by emission allowances
• Proposed support to help implement the retail functions and processes
• We have also identified another area for improvement as part of our engagement: optimization of auxiliary services and review operational model
Findings Next steps
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Value chain expansion to power sales growthPwC 16
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
Attachments
7 September 2011
Value chain expansion to power sales growth17PwC
AssessmentWe have received positive feedback from the client
Benefits for the client
• Better understanding of the project topic and its context
• Initiation of communication and unification of top-management’s view on the topic
• Quantified opportunity
Benefits for PwC
• Quality reference
• Better understanding of a specific market
• Further space for cooperation with the client and increased trust
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Prerequisites for a successful project
• Well defined project goals
• Realistic client’s expectations
• Cooperative client’s employees and clear task delegation
• Functioning project management structure
Value chain expansion to power sales growthPwC 18
Agenda
Introduction of PwC
Project team
The project in brief
How we worked
Findings and recommendation
Project assessment
Q&A
Attachments
7 September 2011
Value chain expansion to power sales growth19PwC
Thank you for your attention
Ondřej Jež
Questions
Should you have any questions do not hesitate to
contact me at [email protected] or
[email protected] September 2011
This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers Česká republika, s.r.o., its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.
© 2011 PricewaterhouseCoopers Česká republika, s.r.o. All rights reserved. “PwC” is the brand under which member firms of PricewaterhouseCoopers International Limited (PwCIL) operate and provide services. Together, these firms form the PwC network. Each firm in the network is a separate legal entity and does not act as agent of PwCIL or any other member firm. PwCIL does not provide any services to clients. PwCIL is not responsible or liable for the acts or omissions of any of its member firms nor can it control the exercise of their professional judgment or bind them in any way.