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Business case

Financial assessment for a major French producer of sugar

Sub-industry: Sugar

Context

Our client, a major French producer of sugar, experienced a major change in all of its top management positions. The new management team sought to perform a full audit on a wide number of topics, including finance, in order to have a clear view on the current situation of its business.

Key Takeaway

The sugar industry is one with many external constraints: sugar prices are determined by the trade market and have shown significant volatility over the past few years; the cost structure is mostly made up of fixed costs; and the industry is directly exposed to climatic hazards. As a consequence, actionable levers are limited, and it is difficult to improve financial performance when economic conditions are difficult. Further, the sugar industry is capital-intensive. As a result, we decided to use return on capital employed (ROCE) for our financial audit. This is a ratio that our client had never used before, as it was only focused on its margin.

Accuracy Role

We performed a financial audit on all of the business units of our client. This led us to analyse the development of business performance over the past few years, as well as to benchmark the performance of our client with the one of its competitors.

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