INCREASING THE PERCEIVED VALUE OF A LISTED COMPANY

The largest air compressor manufacturer in Latin America was supported by Stratega in designing strategies to align its market valuation with its intrinsic value.

overview

CONTINUOUS REINVENTION

The metallurgical company has an annual turnover of R$ 2.5 billion and is structured internally in two divisions: one for compressors and the other for products for the automotive sector. Since its foundation, the company has been expanding its business in the domestic and international markets and went public 30 years ago. In 2023, a group of executives from the
manufacturer worked with Stratega to review the company’s management model to identify its weaknesses and seek opportunities for reinvention.

problem

MISALIGNED VALUATIONS
The company realised there was a 10-15% difference between its Market Cap and its intrinsic value and needed to create ways to correct the market's perception in order to converge the Valuations. The leaders believed that the solution to this gap would be to communicate their growth projections better and set out their plans without major internal changes. After the first immersive meeting with Stratega (Impact Lab), the group of executives reviewed some of their competences and orthodoxies, and identified other areas in which they could act to change the perception of the financial market.

tools used

  • Impact Compass 
  • Insights Radar
  • Strategic Portfolio
  • Value Realisation Roadmap
  • Paradoxes
  • Core Competences
  • Market Shifts
  • The Third Included 
  • If It Doesn’t Exist, Create It
  • Risks & Assumptions
  • Kanban

approach

MAXIMUM ENGAGEMENT

Carried out in six work sprints over a year and a half, the project was led by four executives, including the CFO, in a hybrid workflow with four immersive on-site sessions and monthly online follow-up meetings. The group of executives was led through the entire journey of the IDeA Framework methodology and reproduced parts of the activities internally, engaging more than 30 leaders from the two business units in search of a result that would impact the entire organisation.
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results

INTERNAL CHANGES FOR EXTERNAL IMPACT

The strategy found to increase valuation was to qualify the company’s organisational structure and build up its corporate governance to make it more attractive to investors, in other words, to make internal changes capable of influencing external perception.

In their journey of reinvention, the executives created twenty new strategic organisational domains. Of this number, six domains were selected as having the greatest impact on the company’s valuation: succession planning, risk management, human capital management, organisational strategic continuity, corporate compliance and ESG.

Action plans were drawn up for each of these areas and today the company is already implementing some initiatives, such as the creation of an investor relations area, a succession plan for managers, a roadshow with institutional investors and a new market entry.

Stratega's methodology is not just a replacement for old-fashioned strategic planning. It's more than that. It's a whole working system for thinking about the business in a different way.

Working with Stratega, the company received support to assess its current strategy and identify hidden value drivers. An important part of this project was the ideation of a set of innovative solutions that in the long term will impact the company’s perception of value to the point of increasing its market valuation.
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