Fast fixed-costs savings in a tough market​

Challenge

A staffing and HR service company’s top-line had drastically declined due to a tough market. The company had already downsized its operations and costs – but not at the scale and speed required. This caused a significant profitability and cash flow challenge.​

Management and Board invited August to conduct a quick profit improvement program.​

Brave the Future

Company’s diverse business portfolio and complicated structure meant that the management’s visibility to financial performance and operational efficiency was limited. Thus, first task for August team was to establish a view to the actual performance of different units and businesses.​

Secondly, August team supported to identify cost savings opportunities and cash flow improvement actions, in a magnitude well beyond our initial targets.​​

After that, August supported the management to decide on the necessary right-sizing actions, by balancing the immediate imperatives and long-term business vitality. Once the decisions were made, we supported the management to plan and launch execution of the profit improvement actions.​

Along with doing fixed-costs savings, August supported to design and ramp-up a simplified organization structure that ensures stronger local accountability to manage profitability.​

Finally, August equipped the management to steer the program with our field-tested PMO practices and performance tracking tool.

Impact

August support enabled the company to quickly realize cost savings worth +3 pp. EBITDA improvement. Time-to-impact for majority of the savings was 3 to 6 months.​

Impact of the fixed-cost savings program was positively treated by the stock market, as commented by an equity analyst:

“Company’s profitability was strengthened by the efficiency improvement actions that were stronger than expected”.