14th German M&A Conference M&A in the New Unlock the … · Unlock the Value of Digital Disruption. ... Automotive Industrial Equipment Finance & Banking Consumer Goods Comms

Munich, 15th November 2016

14th German M&A Conference

M&A in the New –

Unlock the Value of Digital Disruption

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2© Accenture

Q&A5

INTRODUCTION1

MARKET OVERVIEW & CONTEXT2

SUCCESS FACTORS FOR M&A IN THE NEW3

FJORD CASE STUDY4

AGENDA






3© Accenture

INTRODUCTION

Managing Director,

Global M&A Group, Munich

Head of M&A in Germany,

Austria and Switzerland

More than 19 years in inter-

national strategy consulting

Sven Wahle

Managing Director,

Accenture Digital and

Accenture Interactive, Bonn

More than 17 years in inter-

national strategy consulting

experience

Rainer Balensiefer






4© Accenture

Accenture has a dedicated global M&A practice and functional Strategy practices

that support clients across the globe

ACCENTURE’S GLOBAL M&A PRACTICE

150+Global M&A professionals

12Global M&A Hubs

600+Transactions in the last 5 years

2,000+Professionals in functions +

regions

Accenture’s M&A professionals have large-scale

transformation experience and bring expertise across the

whole investment life cycle.

Accenture has worked on numerous large M&A deals

across many industries, including the largest transactions

in the chemicals, products, beverage, energy/utilities,

communication and high tech industries.

Our M&A specialists are spread around the globe and with

proven functional know-how, which is constantly leveraged

in dedicated workstream support within large scale Carve-out

projects, for example.

ChicagoLondon

São Paolo

Nordics

Madrid Tokyo

Singapore

Munich

ShanghaiNew York

Sidney

Paris






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Q&A5

INTRODUCTION1



FJORD CASE STUDY4

AGENDA






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Digital disruption, driven by exponential growth in computing power, big data and

combinatory innovations hits all industries resulting in increased M&A activity

DIGITAL DISRUPTION DRIVING M&A ACTIVITY

Share on digital deals on total M&A deal number increased

since 2007 on average by +5% p.a.

Largest share of digital deals in Media & High Tech industries;

followed by Consumer Products, Telecomms. and Healthcare

Often, smaller and creative (“progressive”) companies set the

tone of innovation in entire industries by developing new

technologies at high pace (e.g. Skype, Uber, Tesla, Airbnb)

Larger corporates with standardized structures & processes

cannot keep pace with this high speed of innovation

To stay on top of innovation and ahead of competition large

corporates need to partner / acquire progressive companies

541 558

443 452527 550 566

724773

2007

1.1%

2015

1.6%

2014

1.6%

2009

1.0%

2008

1.2%

2011

1.2%

2010

1.0%

No. of Deals

+5%

2013

1.4%

2012

1.3%

Number of Digital Deals Share of Digital Deals on Total Deal Number

M&A Market – Global1 Deal Counts Digital / Innovation

Note: (1) M&A global deal numbers were analyzed for the key words "Digital“, "Innovation“ or “Innovative”; Source: Thomson Financial, Accenture Analysis

CAGR Digital Deal Number

Key Insights






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Large corporates target progressive companies to improve their competitive

position in a fast changing environment across industries

M&A IN THE NEW – SELECTED TRANSACTIONS

Automotive Industrial Equipment Finance & Banking Consumer Goods Comms & High Tech

Camstar

NON-EXHAUSTIVE

Ride sharing

appTaxi

booking app

High definition maps for

autonomous vehicles

Cyber

security serviceCloud

souring

Bauer

Optimierungstechnik

Manufacturing execution system

Airconditioning /

ventilation control software

Network banking agent

Personal finance service

Asset management software

Robot asset advisor

Fitness app

Fitness app

Fitness app

Diet mgmt. app

Communication systems for

automobiles

Communication systems for

automobiles

Car charging incl. stations and

mobile app Online dating platform

http://www.bosch.co.jp/jp/

http://www.bosch.co.jp/jp/






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FJORD CASE STUDY4

AGENDA






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SUCCESS FACTORS OVERVIEW

Source: Accenture Analysis

1 Acquire and invest into progressive companies – or be disrupted

2 Go for agile deal making – or lose the battle for valuable targets

3 Enable tailored integration – or miss the value






10© Accenture

Observations of M&A with Progressive Companies

The only chance for larger corporates to keep pace with digital disruption and stay

ahead of competition are dedicated M&A activities for progressive acquisitions

ACQUIRE AND INVEST INTO PROGRESSIVE COMPANIES – OR BE DISRUPTED

85% of corporates see the existing need to acquire

progressive companies with innovative skills and

technology expertise to stay competitive

96% of companies say that investments in progressive

companies are a central part of their corporate strategy

86% of executives realize that specific capabilities and

standardized processes are required for successful

acquisitions with progressive companies

Source: Accenture Executive Survey (n=242)

1

Key Insights

A central part of corporate

strategy are acquisitions

and investments in

progressive companies

Existing need to standardize

researching process as well as

evaluating and acquiring

progressive companies

Existing need to acquire

innovative knowledge, skills

& technology to keep pace

with digital disruption

96%

4%

85%

15%

Agree Disagree

86%

14%






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% of respondents ranking objective among top 3

M&A strategies’ objectives for acquiring progressive companies are significantly

different from traditional deal rationales

GO FOR AGILE DEAL MAKING – OR LOOSE THE BATTLE FOR VALUABLE TARGETS (1/3)


Investments in progressive companies mainly target

development of new products / enhancement of

existing products and services

Transforming the own corporate culture towards more

innovation is seen as a main objective, while traditional

M&A focusses on economies of scale or market share

Take Away: In order to realize the full value of such

objectives, corporates need to act with high agility and

with deep technology expertise in the background

2

M&A Objectives to Go for Progressive Companies Key Insights

59%

Entering new markets 62%

Enhancing

existing products & services64%

Creating

new products & services69%

Realizing cost synergies 46%

Transforming

company culture

towards more innovation






12© Accenture

The identification of valuable targets confronts large corporates with challenges;

new approaches of target identification are required



For most companies alternative screening approaches

like startup networks, through VC funds or accelerators

are essential to find most valuable targets

Still, over 50% of corporates identify progressive

targets opportunistically, without a structured approach

Around 70% consider the identification of relevant

technologies and the fast changing universe of

potential targets as key challenges in target screening

Take Away: To win the race for successful progressive

companies, take quick and well informed decisions

2

Screening of Progressive Companies Key Insights

69%Identification of

relevant technologies

67%Fast universe of

changing companies

Link between strategy

and search criteria64%

74%

Start-up

Network

Screening

61%

VC fund

(Own /

Cooperation)

% of respondents ranking among top 3 methods

Approach

Challenges

% of respondents ranking among top 3 challenges

Start-up

accelerators

(Own / Cooperation)

56%






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Due Diligence processes in acquisitions of progressive companies are

technology focused and require specific capabilities to succeed



Key focus areas in Due Diligence is Technology; even

before Financial Performance

The main challenge is seen in the high expectations on

transaction speed; then new technology assessment

Deal teams with deep technology expertise and

assessment skills for target screening & due diligence

help corporates significantly in closing valuable deals

Competitive Advantage: Accelerating transaction

speed (<6 months from contact to closing) by

establishing a dedicated organization and processes

2

Due Diligence of Progressive Companies Key Insights

Innovation / R&D pipeline 49%

Financial Performance 53%

Technology 56%

Fair valuation /high prices 62%

71%Demandingtransaction speed

Assessment ofnew technologies 69%

62%Availability of dedicated financing

Assessment ofnew technologies 63%

Valuation skills &methodologies 72%

Focus

Areas

Challenges

Capabilities

% of respondents ranking objective among top 3






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Maintaining the innovative power of a target is key to leverage full value

potentials – a tailored integration approach is required

ENABLE TAILORED INTEGRATION – OR MISS THE VALUE


Main success factor is the integration of the acquired

technology and maintenance of the innovative culture

while assimilating it into the own corporate culture

A customized approach and sensible level of

integration is key for leveraging the full value potential

of investments into progressive companies

Take Away: Next to classic financial incentives, the

existing culture and work style of the target should be

maintained to keep people motivated and inspired

3

Integration of Progressive Companies Key Insights


Technology,

product / service

integration

Maintaining

the innovative

culture

Integration

Level

Integration

Success

30%34%

49% 55%

11%21%

Back OfficeFront Office

Full Integration

Partial Integration

No Integration

% of respondents ranking among top 3 success factors

% of respondents

71% 62% 57%

Assimilation

into own corp.

culture






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・・・

Large corporates change their traditional way of PMI to maintain flexibility and

pace of an acquired progressive companies

ENABLE TAILORED INTEGRATION – OR MISS THE VALUE

Source: Accenture Executive Survey (n=xxx)

3

Daimler Accenture

Daimler Group concentrates acquired companies under the mobility

service subsidiary, managing them with a different operating model

from its auto manufacturing operating model

Accenture traditionally used the common operating model in managing

acquired companies, but with Fjord, the digital design firm, we continued

using its original operating model

Daimler

Buses

Daimler

Financial

Services

Mercedes

Benz

Cars

Ride sharing app Taxi booking app

・・・

EXAMPLES

Design/digital

marketing

Mobility service






16© Accenture

Q&A5

INTRODUCTION1



FJORD CASE STUDY4

AGENDA

ACCENTURE INTERACTIVE & FJORD

ACQUISITION & INTEGRATION PERSPECTIVE

NOVEMBER 15TH 2016

18

BACKGROUND OF OUR ACQUISITIONS IN

DIGITAL-RELATED SERVICES

19

DIGITAL-RELATED SERVICES ARE DRIVING A BIG PART OF ACCENTURE’S GROWTH

RESCMT FS PRD HPS

Accenture Digital Footprint FY15

• 7b$+ revenues and 35%+ growth in digital-related

services

4,000+ clients in >49 countries

36,000+ Digital professionals

32 Accenture Interactive design studios, R&D

offices and Centers of Excellence

1,000+ developed mobile applications for 400+

clients in the past 3 years

•

MOBILE APP DEVELOPMENT

BIG DATA, DATA MGMT. &

ANALYTICS

ACCENTURE DIGITAL

ACCENTUREINTERACTIVE

CONNECTED

PRODUCTS

& DEVICES;

IOT SERVICES

20

ACCENTURE INTERACTIVE HAS PLAYED A VERY

IMPORTANT ROLE IN OUR SUCCESS IN DIGITAL

MARKETING

CONTENT

COMMERCE

EXPERIENCE

STRATEGY CONSULTING TECHNOLOGY OPERATIONS

Ad Age Datacenter produced Advertising Age’s 72nd annual Agency Report. Ad Age published the complete Agency Report 2016 online May 1, 2016.The report, which includes

rankings based on U.S. and worldwide revenue, is available online to subscribers at the Ad Age Datacenter. It is also available in the May 2, 2016 print edition.

… AND WE HAVE BEEN MAKING WAVES IN OUR

INDUSTRY AND CHANGING THE GAME A BIT

FORRESTER DIGITAL EXPERIENCE SERVICE PROVIDERS, Q4 2015

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TARGETED ACQUISITIONS PLAY A KEY ROLE IN OUR

DIGITAL CAPABILITY DEVELOPMENT

2008

Origin

Digital

2010

Cadence Quest

(now

Accenture

Customer

Insight)

2011

CAS (now

Accenture

CAS)

Maxamine (now

Accenture

Digital

Diagnostic)

2007

Digiplug

Mogenesis

Mediasenz

(part of

Media

Management)Memetrics

(now

Accenture

Digital

Optimization)

2005

Media Audits

(part of

Media

Management)

2004

Milton Merl &

Associates

2002

Edge

Consulting

2012

avVenta

Worldwide

2013

Acquity Group

Fjord

February 2015

Reactive

June 2015

Brightstep

July 2015

PacificLink

July 2015

Chaotic Moon

August 2015

AD. Dialeto

April 2016

IMJ Group

December 2015

boomerang

July 2016

dgroup

July 2016

mobgen

https://newsroom.accenture.com/industries/communications/accenture-completes-acquisition-of-fjord-expanding-digital-and-marketing-capabilities.htm

https://newsroom.accenture.com/industries/communications/accenture-completes-acquisition-of-fjord-expanding-digital-and-marketing-capabilities.htm

https://newsroom.accenture.com/industries/media-entertainment/accenture-strengthens-digital-marketing-capabilities-with-acquisition-of-avventa-worldwide.htm

https://newsroom.accenture.com/industries/media-entertainment/accenture-strengthens-digital-marketing-capabilities-with-acquisition-of-avventa-worldwide.htm

23

ACCENTURE HAS STRONG CORPORATE VALUES THAT SHAPE OUR CULTURE AND CHARACTER

STEWARDSHIP

BEST PEOPLE

ONE GLOBAL

NETWORK

CLIENT VALUE

CREATION

RESPECT FOR

THE INDIVIDUAL

INTEGRITY

Core Values

SO ACCENTURE DECIDED TO BUY

A DESIGN COMPANY (FJORD) …

WHY?

26

WHAT‘S GOING ON IN DIGITAL?

THE DIGITIZATION OF EVERYTHING

LIQUID EXPECTATIONS

CREATIVE DESTRUCTION

LIVING SERVICES

1

2

3

4

OK, SO HOW DOES ALL THIS RELATE TO DESIGN?

THE DIGITITZATION OF EVERYTHING

“THE PACE OF CHANGE WILL NEVER AGAIN BE AS SLOW AS IT IS TODAY"

MATHEW BISHOP

THE ECONOMIST’S INNOVATION FORUM 2015

CUSTOMER EXPECTATIONSARE LIQUID AND TRANSCEND TRADITIONAL BOUNDARIES

DIRECT COMPETITORS

EXPERIENTIAL COMPETITORS

Services that change customer expectations – and raise them for yours

PERCEPTUAL COMPETITORS

CREATIVE DESTRUCTION (OF THE PRIVILEGE OF LEGACY)

SILICON VALLEY MEETS THE OLD CORPORATE WORLD

...NOT ONLY AT THE BATTELFRONT OF IDEAS AND SERVICES,

BUT INCREASINGLY AS A CULTURAL TRANSFORMER

AT FJORD, WE PUT DESIGN AT THE HEART

THE BATTLEGROUND IS EXPERIENCE

The success metric is delight

Living services are complicated: simplification is hard

We start with the user

We turn dreams into reality

IN AN ERA OF LIQUID CUSTOMER EXPECTATIONS

30

A LITTLE BIT ABOUT FJORD…

ŠKODA

LEADING DIGITALTRANSFORMATION

SINCE 2014From global digitalisation strategy to delivering new products and services into

market, Fjord is turning a mass market car producer into a customer-centric

data-driven, service organisation

32

ŠKODAWhat we did and delivered

A people-centric strategic vision, roadmap and

architecture evolving Škoda‘s digital eco-system. From

responsive web platforms to a new customer profile and

portal experience through to online sales advisor tools that

match customer needs to product recommendations.

In addition establishing an innovation lab tasked with

creating pilot products and services to validate

opportunities for Škoda’s future mobility offering.

Outcomes

“Over the last two years, Fjord has been a key innovation

and digital collaborator to Skoda – helping us to

significantly grow our business platforms, while

successfully bringing in fresh ideas and initiatives across

our markets and moving us closer to our goal of becoming

a digital leader in our field”

Michael Lamm, Global Head of Digital

TAG HEUER

WATCH OUT

34

With 155 years of luxury mechanical watchmaking experience, TAG Heuer faced a

seismic threat to its business: the ascendancy of the luxury smartwatch. The watchmaker

needed a partner who could craft a smart watch interface and omnichannel ecosystem

and whose vision—and willingness to push the boundaries of convention—

complemented the company’s legacy.

Sold out of the initial 10,000 watches (at $1,500 each) immediately, with an additional 100,000

on back order.

Of onboard storage for apps and media

10K

4GB

35

TAG HEUERWhat we did and delivered

We built the world’s first luxury Android smartwatch, and

the entire ecosystem surrounding it. Picture a

completely custom version of Android Wear, designed to

perfectly align with the bold TAG Heuer hardware, along

with a robust complement of micro applications. We also

delivered a fully responsive web product exploration and

purchase experience showcasing the bold design; a

groundbreaking and innovative platform for delivering

additional functionality through connected watch faces

(overcoming the limitations of iOS-paired watches); and

a fully responsive web solution and Android companion

application for administration and support, setting the

foundation for an entirely new and deeply personalized

customer engagement channel.

Outcomes

This was TAG Heuer’s most successful launch ever,

and the company sold out of its initial 10,000 watches

(at $1,500 each) immediately, with an additional

100,000 on back order. Not only that, but TAG was the

first non-tech company to enter the connected

smartwatch market, and the Android Wear team at

Google acknowledged that it is the best product

released on their platform to date.

35

COMMERZBANK

BRINGING DESIGN WITHIN

With digital customer experience redefining competitiveness in the banking

industry, we brought design thinking in-house to create true customer-

centred thinking, and a faster and better pipeline for digital services.

36

37

Commerzbank

What we did

This project followed our belief in installing a design

culture within our clients’ businesses.

We provided the client with an experienced team,

manned with an incredibly detailed plan to a create an in-

house resource, Neugelb, which would push design as a

discipline into the boardroom and then back into every

facet of the bank’s customer experience and internal

culture.

Outcomes

Neugelb is today up and running, and has already had an

impact on one of the bank’s core strategic priorities – the

huge task of aligning the customer experience across the

bank - and they will shortly be delivering a new app to

assist their multi-channel banking strategy.

Neugelb are also working on a project with HR, which will

align the internal and external systems, bringing the same

experience that customers have online, into the branches.

372

StudiosEurope, North America,

South America and APAC

The best talent

in the world

Experts ClientsWorldwide

22 850 300

AT FJORD, INNOVATIONNEVER SLEEPS

ATLANTA • AUSTIN • BERLIN • CHICAGO • DALLAS • HELSINKI • HONG KONG • ISTANBUL • LONDON • LOS

ANGELES • MADRID • MELBOURNE • MILAN • NEW YORK • PARIS • SAN FRANCISCO • SÃO PAULO • SEATTLE •

STOCKHOLM • SYDNEY • TORONTO • ZURICH • DUBAI

38

IN SUMMARY, FJORD HAS BEEN ONE OF

ACCENTURE‘S MOST SUCCESSFUL ACQUISITIONS

SO, DID WE JUST FIND THE PERFECT TARGET?

OR WHAT, BEYOND THE ACQUISITION,

WHAT HAS HAPPENED AFTERWARDS?

STUDIES SHOW THAT 50% TO 80% OF M&AS FAIL

AND CULTURAL INTEGRATION IS THE SINGLE MOST

IMPORTATNT FACTOR OF SUCCESS OR FAILURE

40

41

SIX ELEMENTS OF A SUCCESSFUL INTEGRATION OF NEW ACQUISITIONS

SUCCESSFUL

M&As

PEOPLE & CULTURE

PROCESSES & TECHNOLOGY

OFFICES &

WAY OF WORKING

JOINT VISION

BRAND

CLIENTS / GO-2-MARKET

THIS IS HOW FJORD TENDS TO WORK

THIS IS HOW ACCENTURE TENDS TO WORK

44

Start with PEOPLE and not with the

PROCESSES and TECHNOLOGY

WE WENT ABOUT THE ACQUISITION WITH THE SAME CORE BELIEFS AS WE DO IN PROJECTS

FOR OUR CLIENTS

A UNIFIED VISIONCreate a shared belief system.

Flip tension and differences into positivitiy.

45

PROTECTING AND CELEBRATING WHAT IS SPECIAL

MAKE EVERYBODY CO-ARCHITECTS OF THE NEW

GO ON A JOURNEY TOGETHER, DO LOTS OF THINGS TOGETHER

Recognize strengths.

Recognize what to combine, what to keep distinct.

You can‘t indoctrinate culture top-down.

Change management is overrated if people are not fundamentally on-board.

Come together productively as two teams, two cultures that respect each other

but produce a combined output.

DISTINCT & CONNECTED BRANDFjord brand has a unique positioning as leader in Service Design

and Design Services around the globe. The Fjord brand is strong, distinct, and

meaningful for our existing and new talent,

as well as our clients and partners.

Consequently we have continued Fjord brand distinctively,

and connected it with Accenture Interactive, the leader for CX services.

Both support eachother, without diluting the clear positioning.

47

COMMON CLIENTS & GO-2-MARKET APPROACHWe both have our clear brand positioning and go-to-market approaches.

Yet, we consequently align our client activities, nourish and develop our target

clients and potentials together and leverage synergies in our marketing activities.

We prioritize business development activities according to our joint vision and goals,

reflecting business as well as innovation potentials with our clients.

We consequently align our services portfolio to address the real needs

of our clients leveraging our full, enriched skill portfolio.

SELECTED ASG CLIENTS

http://en.wikipedia.org/wiki/File:BMW.svg

http://en.wikipedia.org/wiki/File:BMW.svg

CREATIVE STUDIOS & SPACES ENABLE OUR WAY OF WORKING

As we enter an era of liquid expectations the battleground is experience.

We’re having to constantly adapt how we work. We put people’s needs at

the heart of our work. Our service design work is people-centric, creative,

agile, and permanently evolving. We connect and develop ideas.

This requires different office and workshop spaces, with all creative

infrastructure, and a studio-based way of working.

ONE GLOBAL FIRM –CORE VALUES AND PROCESSES

Accenture is “One Global Network”. This common foundation is established via our corporate

vales and core processes. We share the same values, and are supported by same systems and

processes, e.g. in finance, compliance, technology. With or despite our distinct

capabilities in our five businesses, we act as one global firm, in the best interest of

value creation for our clients.






50© Accenture

INTRODUCTION1



FJORD CASE STUDY4

Q&A5

AGENDA






51© Accenture

Sven Wahle

Accenture

Mobile +49 175 576 8709

[email protected]

Rainer Balensiefer

Accenture

Mobile +49 175 576 4646

[email protected]

Q&A

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14th German M&A Conference M&A in the New Unlock the … · Unlock the Value of Digital Disruption. ... Automotive Industrial Equipment Finance & Banking Consumer Goods Comms