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Vokacongres 2013 - Presentatie Olivier Dallemagne

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The document analyzes a survey of 358 Flemish companies to identify "Hidden Champions" that drive outsized growth. It finds that 8% of mid-sized companies are Hidden Champions, generating one-third of total revenue. Hidden Champions outperform in key areas like innovation productivity, employee performance, profitability, and global sales footprint. While Hidden Champions make up a small minority, the document concludes that many more Flemish companies could adopt the Hidden Champions' strategic approach to boost long-term growth.

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"Hidden Champions in Flanders" review for VOKA - Analysis of the survey findings - Olivier Dallemagne Brussels, 19 November 2013 Brussels Office 475 Louizalaan/Av Louise, Bus 15, 1050 Brussels, Belgium Tel.: +32-2-6697710, fax: +32-2-6275686 kai.bandilla@simon-kucher.com olivier.dallemagne@simon-kucher.com
Key question Can Hidden Champions drive growth in Flanders? -2-
Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -3-
Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -4-
Hidden Champions in Flanders The Hidden Champions are 8% of companies generating one-third of revenue Hidden Champions Public sector companies 0.5% 8% ~33% Private companies from all sectors 99.5% Other companies Hidden Champions account for approx. 1/3 of the revenue of all 358 investigated companies Fulfill the Hidden Champion traits Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews * mid-sized companies have revenues < 5bn -5- Revenue A sample of 3,070 private mid-sized Flemish companies* with Belgian majority shareholders, of which 358 private companies were studied in detail
Key characteristics of the Hidden Champions Hidden Champions in Flanders have the following traits which increase their longterm value: Timing Immediate value + 2.6% per annum above their sector growth (weighted average) + 5% net operating profit on average compared to the other companies in 2012 and a better resilience to crises 5 times more key patents and 13 times more "world premieres" with less R&D spending Long-term value On average more than 2 x CAPEX in Flanders (in last 10 years) Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -6- Higher long-term value!
Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -7-
Strategic gap between Hidden Champions and other companies Hidden Champions are significantly more ambitious and innovative, and they perform more strongly in general Scoring on Hidden Champions strategy (4 key axes) Other companies Hidden Champions Strong leadership with ambitious goals Hidden Champions are more ambitious and motivate their teams to perform much better High-performance employees With less R&D spending, they develop many more worldclass innovations Persistent innovation Their products and services are in more demand around the world; they grow globally Global marketing and sales Very weak Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews Very strong -8-
Key question What does more ambition mean? -9-
Strong leadership with ambitious goals % of respondents Hidden Champions aim to have the best technology and quality in the world in a specific market How would you describe your company? 85% 81% 81% Hidden Champions in Flanders Other companies in Flanders 38% 29% 21% 20% 10% Qualitative leader Technology leader Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews Most specialized - 10 - Quantitative leader
Key question Stronger employee performance? - 11 -
High-performance employees They create a competitive edge, even compared to German Hidden Champions Importance Index of competitive strength Product quality Efficiency Hidden Champions in Flanders Punctuality of delivery Closeness to customer Aftersales service Other companies in Flanders Price Distribution Cooperation w./ distributors Hidden Champions in Germany Key patents Marketing Competitive performance Source: Analysis by Simon-Kucher & Partners of 358 respondents, 30 face-to-face interviews and Hidden Champions of the 21st Century - 12 - Very weak Very strong
Top performance and expansion Hidden Champions grow faster than their industry, exceeding the 2% average growth target Hidden Champions Examples of Hidden Champions CAGR 10 years Revenue in m Additional % growth vs. industry growth CAGR 10 years +2,60% Ateliers Vlassenroot 90 80 +7% +22% 70 Christeyns 60 50 +11% 40 30 Other companies -0,25% Baeten & Co 20 +11% 10 0 2003 Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews * is weighted average with revenue of company as weight, 20032012 - 13 - 2012
Strong and durable financial position Hidden Champions are more profitable than other companies and are more resilient to crises Operating profit/operating revenue 2012 2003 15% Maximum 10% 5% 75th percentile 0% Median 25th percentile -5% -10% Minimum -15% Hidden Champions Other companies in Flanders in Flanders Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews Hidden Champions Other companies in Flanders in Flanders - 14 -
Key question More innovative? - 15 -
Stronger innovation productivity Their productivity for one euro spent on innovation is much higher: High Hidden Champions 67% had world premieres "We need 6 people to develop a world premiere; our competitors have 100 employees on it" 35 patents on average Innovation output "Weekly meetings of R&D, marketing and logistics feed into our large innovation funnel" Other companies 5% had world premieres Low "The competition lags at least three years behind us" 7 patents on average < 6% 6% > 6% R&D investment as % of revenue Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 16 -
Key question What is their global footprint? - 17 -
Go-to markets of Hidden Champions in Flanders Sales distribution of Hidden Champions in Flanders and their key priorities for the future > 20% > 10% > 5% < 5% Top priority Second priority Third priority Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 18 -
Go-to markets of other companies in Flanders Sales distribution of other companies in Flanders and their key priorities for the future > 20% > 10% > 5% < 5% Top priority Second priority Third priority Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 19 -
Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 20 -
Hidden Champions per million inhabitants Flanders has a large amount of Hidden Champions per million inhabitants but we see potential for many more # of Hidden Champions per mill. inhabitants Germany Luxembourg Switzerland Austria Flanders Sweden Slovenia Denmark Norway Finland Japan Netherlands Italy USA France United Kingdom Israel Poland Australia Canada South Korea Spain 16,0 14,0 13,9 13,8 10,5 >>>>>>>> 5,4 3,5 3,4 2,8 2,7 1,7 1,7 1,2 1,2 1,1 1,1 0,9 0,7 0,5 0,5 0,5 0,2 Source: Analysis by Simon-Kucher & Partners of 358 respondents, 30 face-to-face interviews and Hidden Champions of the 21st Century > 100 companies in Flanders have the potential to become Hidden Champions - 21 -
Key question Bottom line: Does Flanders have the right fabric for growth? - 22 -
Manufacturing sector in Flanders Hidden Champions are needed to create a strong manufacturing sector SMEs in Flanders SMEs in Germany Hidden Champions in Flanders 15% Hidden Champions 32% 55% 89% % of total revenue generated in manufacturing Source: Analysis by Simon-Kucher & Partners of 358 respondents, Hidden Champions of the 21st Century and Data base ECCBSO - 24 -
Key question The way forward? - 25 -
Findings: Does Flanders have the right fabric? Many more SMEs can grow to the next stage, as we have seen in Germany, Austria, Switzerland and Scandinavia Main findings 8% of Flemish mid-sized companies are Hidden Champions They report better results with stronger innovation and a much more international sales approach By doing so, they contribute over-proportionately to growth in Flanders By embracing the success factors of the Hidden Champion strategies, many more Flemish companies have the potential to become Hidden Champions and thus re-enforcing the Flemish industrial fabric Framework conditions can accelerate this transformation Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 26 -

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Vokacongres 2013 - Presentatie Olivier Dallemagne

  • 1. "Hidden Champions in Flanders" review for VOKA - Analysis of the survey findings - Olivier Dallemagne Brussels, 19 November 2013 Brussels Office 475 Louizalaan/Av Louise, Bus 15, 1050 Brussels, Belgium Tel.: +32-2-6697710, fax: +32-2-6275686 kai.bandilla@simon-kucher.com olivier.dallemagne@simon-kucher.com
  • 2. Key question Can Hidden Champions drive growth in Flanders? -2-
  • 3. Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -3-
  • 4. Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -4-
  • 5. Hidden Champions in Flanders The Hidden Champions are 8% of companies generating one-third of revenue Hidden Champions Public sector companies 0.5% 8% ~33% Private companies from all sectors 99.5% Other companies Hidden Champions account for approx. 1/3 of the revenue of all 358 investigated companies Fulfill the Hidden Champion traits Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews * mid-sized companies have revenues < 5bn -5- Revenue A sample of 3,070 private mid-sized Flemish companies* with Belgian majority shareholders, of which 358 private companies were studied in detail
  • 6. Key characteristics of the Hidden Champions Hidden Champions in Flanders have the following traits which increase their longterm value: Timing Immediate value + 2.6% per annum above their sector growth (weighted average) + 5% net operating profit on average compared to the other companies in 2012 and a better resilience to crises 5 times more key patents and 13 times more "world premieres" with less R&D spending Long-term value On average more than 2 x CAPEX in Flanders (in last 10 years) Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -6- Higher long-term value!
  • 7. Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews -7-
  • 8. Strategic gap between Hidden Champions and other companies Hidden Champions are significantly more ambitious and innovative, and they perform more strongly in general Scoring on Hidden Champions strategy (4 key axes) Other companies Hidden Champions Strong leadership with ambitious goals Hidden Champions are more ambitious and motivate their teams to perform much better High-performance employees With less R&D spending, they develop many more worldclass innovations Persistent innovation Their products and services are in more demand around the world; they grow globally Global marketing and sales Very weak Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews Very strong -8-
  • 9. Key question What does more ambition mean? -9-
  • 10. Strong leadership with ambitious goals % of respondents Hidden Champions aim to have the best technology and quality in the world in a specific market How would you describe your company? 85% 81% 81% Hidden Champions in Flanders Other companies in Flanders 38% 29% 21% 20% 10% Qualitative leader Technology leader Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews Most specialized - 10 - Quantitative leader
  • 12. High-performance employees They create a competitive edge, even compared to German Hidden Champions Importance Index of competitive strength Product quality Efficiency Hidden Champions in Flanders Punctuality of delivery Closeness to customer Aftersales service Other companies in Flanders Price Distribution Cooperation w./ distributors Hidden Champions in Germany Key patents Marketing Competitive performance Source: Analysis by Simon-Kucher & Partners of 358 respondents, 30 face-to-face interviews and Hidden Champions of the 21st Century - 12 - Very weak Very strong
  • 13. Top performance and expansion Hidden Champions grow faster than their industry, exceeding the 2% average growth target Hidden Champions Examples of Hidden Champions CAGR 10 years Revenue in m Additional % growth vs. industry growth CAGR 10 years +2,60% Ateliers Vlassenroot 90 80 +7% +22% 70 Christeyns 60 50 +11% 40 30 Other companies -0,25% Baeten & Co 20 +11% 10 0 2003 Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews * is weighted average with revenue of company as weight, 20032012 - 13 - 2012
  • 14. Strong and durable financial position Hidden Champions are more profitable than other companies and are more resilient to crises Operating profit/operating revenue 2012 2003 15% Maximum 10% 5% 75th percentile 0% Median 25th percentile -5% -10% Minimum -15% Hidden Champions Other companies in Flanders in Flanders Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews Hidden Champions Other companies in Flanders in Flanders - 14 -
  • 16. Stronger innovation productivity Their productivity for one euro spent on innovation is much higher: High Hidden Champions 67% had world premieres "We need 6 people to develop a world premiere; our competitors have 100 employees on it" 35 patents on average Innovation output "Weekly meetings of R&D, marketing and logistics feed into our large innovation funnel" Other companies 5% had world premieres Low "The competition lags at least three years behind us" 7 patents on average < 6% 6% > 6% R&D investment as % of revenue Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 16 -
  • 17. Key question What is their global footprint? - 17 -
  • 18. Go-to markets of Hidden Champions in Flanders Sales distribution of Hidden Champions in Flanders and their key priorities for the future > 20% > 10% > 5% < 5% Top priority Second priority Third priority Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 18 -
  • 19. Go-to markets of other companies in Flanders Sales distribution of other companies in Flanders and their key priorities for the future > 20% > 10% > 5% < 5% Top priority Second priority Third priority Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 19 -
  • 20. Key learnings from the Hidden Champions in Flanders A minority of companies create more value; their strategy is accessible to many others 1. 1 8% of mid-sized companies apply the Hidden Champions strategy and create much more long-term value 2 Flemish Hidden Champions are 1. stronger in four key domains 1. 3 Many more companies could become Hidden Champions Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 20 -
  • 21. Hidden Champions per million inhabitants Flanders has a large amount of Hidden Champions per million inhabitants but we see potential for many more # of Hidden Champions per mill. inhabitants Germany Luxembourg Switzerland Austria Flanders Sweden Slovenia Denmark Norway Finland Japan Netherlands Italy USA France United Kingdom Israel Poland Australia Canada South Korea Spain 16,0 14,0 13,9 13,8 10,5 >>>>>>>> 5,4 3,5 3,4 2,8 2,7 1,7 1,7 1,2 1,2 1,1 1,1 0,9 0,7 0,5 0,5 0,5 0,2 Source: Analysis by Simon-Kucher & Partners of 358 respondents, 30 face-to-face interviews and Hidden Champions of the 21st Century > 100 companies in Flanders have the potential to become Hidden Champions - 21 -
  • 22. Key question Bottom line: Does Flanders have the right fabric for growth? - 22 -
  • 23. Manufacturing sector in Flanders Hidden Champions are needed to create a strong manufacturing sector SMEs in Flanders SMEs in Germany Hidden Champions in Flanders 15% Hidden Champions 32% 55% 89% % of total revenue generated in manufacturing Source: Analysis by Simon-Kucher & Partners of 358 respondents, Hidden Champions of the 21st Century and Data base ECCBSO - 24 -
  • 24. Key question The way forward? - 25 -
  • 25. Findings: Does Flanders have the right fabric? Many more SMEs can grow to the next stage, as we have seen in Germany, Austria, Switzerland and Scandinavia Main findings 8% of Flemish mid-sized companies are Hidden Champions They report better results with stronger innovation and a much more international sales approach By doing so, they contribute over-proportionately to growth in Flanders By embracing the success factors of the Hidden Champion strategies, many more Flemish companies have the potential to become Hidden Champions and thus re-enforcing the Flemish industrial fabric Framework conditions can accelerate this transformation Source: Analysis by Simon-Kucher & Partners of 358 respondents representing all industrial sectors and 30 face-to-face interviews - 26 -