CORPORATE DEVELOPMENT TODAY: DRIVING

STRATEGY, ACCELERATING GROWTH

2015 GLOBAL CORPORATE DEVELOPMENT STUDY

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TABLE OF CONTENTS

1. INTRODUCTION

2. THE STRATEGIC IMPERATIVE

3. NEW DEMANDS REQUIRE NEW SKILLS

4. GREATER RIGOR DRIVES

REASSESSMENT OF CDF STRUCTURES

5. APPLICATION

Page 2 Presentation title

 BACKGROUND

► Multinational professional services firm headquartered in London,

England and is one of the “Big Four” accounting firms.

► It has 250,000 employees in over 700 offices around 150 countries

in the world.

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SERVICES
► Business Tax Services
► Transaction Tax
► Indirect Tax Tax
Services
► Human Capital
► International Tax Services

► Transaction Support
► Transaction Tax
► Lead Advisory
Transaction
Assurance ► Valuations & Business Modelling
Services Services Advisory
Services ► Restructuring
► Operational Transaction Services

► External AUDIT
► Financial Accounting Advisory Services(FAAS)
► Fraud Investigation & Dispute Services (FIDS)
► Climate Change and Sustainability Services
(CCaSS)
Advisory ► Actuarial Services
Services ► Business Risk Services
► Financial Services Risk Management
► Information Technology Risk and Assurance Services
► IT Advisory
► Performance Improvement

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 2015 Global Corporate Development Study
► It is a multi-phase research initiative

► Targets:
1. Corporate Development Officer (CDO) or most senior person
within the organization with responsibility for M&A/transactions

2. Chief Strategy Officer (CSO) or most senior person within the

organization with responsibility for corporate/operating unit
strategy.

► surveyed more than 300 CDOs, CSOs and other C-level executives
between June and October 2014.

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2015 Global Corporate Development Study – Continuation…

► Data collection methodology:

a. Online and Telephone Surveys
b. Face-to-face Interviews
c. Group sessions similar to focus groups
d. Independent research.

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2015 Global Corporate Development Study – Continuation…

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2015 Global Corporate Development Study – Continuation…

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1. STRATEGIC IMPERATIVE
Has your corporate development function kept up with change?

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Continuation…

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Continuation…

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Continuation…

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Convergence of M&A corporate strategy and
sharing of resources

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 2. New demands
require new skills
Are you set for new challenges?

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Common skill sets
resident in the CDF:
 strategic planning
and
 Finance

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 Two leading causes of deal failure

Two leading causes of deal failure:

► Strategy
► commercial assessment
- are at the heart of all transactions, if these
fundamental processes are flawed, it is almost
impossible for the deal to succeed.
The Findings make a strong case for the
importance of a robust strategy and a formal M&A
process that includes
 detailed pre-transaction analysis, looking at
targets on the basis of a commercial as well as
financial assessment.

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 Operational assessment, multicultural
competencies:
Operational assessment (business
plan, technology, supply chain,
human resources) is another area in
which corporate development is
becoming more deeply involved.

The respondents indicate having

used external advisors or other
business units to obtain services
such as operational diligence,
modeling/business planning and
commercial diligence.

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 Operational assessment, multicultural
competencies:
Another new skill is assessing
multicultural competencies. A global
playing field has brought new players
from all over the world into the deal
space, resulting in issues of cultural fit
and requiring M&A strategists to learn
different styles of deal making and
stakeholder management.

The results show a significant

increase in the number of
respondents that plan to enter new
geographic markets in the next 12
months — 60%, up from 43% in the
last 12 months — and this will present
its share of challenges.

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 Growing involvement in portfolio
management

A major strategic challenge that CDOs will face in the

future will
be the task of re-balancing acquisitions with
divestments in a role and culture that has typically
focused more on acquisitions.

In a business environment marked by rapid

technological advances, regulatory changes, increased
shareholder scrutiny and shifts in customer purchasing
power and demand, strategic portfolio reviews are the
most important tool to optimize capital and resource
allocations and determine what decisions to make
regarding growth, restructuring or potential divestment.

The CDO’s role is central to these decisions, and our

study reveals that respondents are indeed more
involved in leading on all capital allocation decisions
than they were in 2010.

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 3. Greater rigor drives
reassessment of CDF
structures
What are the new ways to enable and
measure success?

“We try to follow a standard execution process, as

risk is not correlated to deal value”
-Transaction executive in the transportation industry

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Among our respondents, those who are most satisfied with deals
are more likely than the others to frequently use a formalized process for asset portfolio review
(81% vs. 59%), continuous improvement (80% vs. 62%), operational separation (77% vs. 60%),
benchmarking (73% vs. 61%) and big data/analytics (64% vs. 45%).

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Page 26 Presentation title
Setting up the M & A Committee

This is particularly the case in EMEA, where 45% of our respondents have
a separate M&A committee (compared to 29% overall and just 18% in the
Americas)

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 “The more structured process for linking up the transaction process
with strategy is mainly represented by the M&A council,”

- transaction executive at a European automotive company.

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Evolving performance
measures for an evolving role

Performance measurement is challenging — and an issue that

a number of our respondents consider problematic.

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 Can
“soft”measures
better assess
performance?
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The most common integration
metrics

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 RECOMMENDATION

1. Prepare to lead on strategy.

2. Take a (big) technology leap.

3. Strengthen the CDF’s in-house skill set.

4. Take a holistic approach to M&A.

5. Measure and reward performance

appropriately.

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 RECOMMENDATION

1. Prepare to lead on strategy.

2. Take a (big) technology leap.

3. Strengthen the CDF’s in-house skill set.

4. Take a holistic approach to M&A.

5. Measure and reward performance

appropriately.

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 RECOMMENDATION

1. Prepare to lead on strategy.

2. Take a (big) technology leap.

3. Strengthen the CDF’s in-house skill set.

4. Take a holistic approach to M&A.

5. Measure and reward performance

appropriately.

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 RECOMMENDATION

1. Prepare to lead on strategy.

2. Take a (big) technology leap.

3. Strengthen the CDF’s in-house skill set.

4. Take a holistic approach to M&A.

5. Measure and reward performance

appropriately.

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 RECOMMENDATION

1. Prepare to lead on strategy.

2. Take a (big) technology leap.

3. Strengthen the CDF’s in-house skill set.

4. Take a holistic approach to M&A.

5. Measure and reward performance

appropriately.

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 RECOMMENDATION

1. Prepare to lead on strategy.

2. Take a (big) technology leap.

3. Strengthen the CDF’s in-house skill set.

4. Take a holistic approach to M&A.

5. Measure and reward performance

appropriately.

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