Restructuring/
Turnaround Programs

By Alexander Müller and Adrian Pielken

Restructuring and turnaround programs are the basis for safeguarding the future of companies in crisis or a challenging situation. A holistic and entrepreneurial framework, involving not only operational and financial restructuring but also strategic realignment, enables companies to establish a long-term competitive and profitable business model that all stakeholders can get behind.

Profit and liquidity crises present companies with existential challenges. Ensuring financial security remains an imperative in crisis management. However, times of global upheaval and technological disruption call for more than conventional restructuring approaches. The pressure for transformation is immense. So the task is to scrutinize, refine, and realign both the top line and the business model.

Transformation-centered restructuring - the Roland Berger framework

A rigorous program for restructuring and turnaround picks up on this need for a forward-looking approach and defines in what way companies must reposition themselves to remain competitive and relevant in their markets. In our consulting, we apply a transformation-centered restructuring framework constructed around three building blocks:

• Optimization of the cost and balance sheet structure (financial restructuring): This includes detailed business and liquidity planning to create transparency around financing requirements, and an evaluation of the financing instruments and arrangements needed to achieve the targeted financing structure.
• Transformation of the business model (strategic restructuring): The goal is to drive the strategic realignment and innovative evolution the company needs. The targeted positioning must be geared towards growth markets, innovation, digitalization, new technologies, and sustainability.
• Management of the top line (operational restructuring): Approaches here focus on managing the company's go-to-market plan and maximizing potential profits - always viewed in combination with the company's product and service offering, customer groups, sales concept, and pricing.

Special situations such as a corporate restructuring or turnaround call for a partner who is both crisis-tested and entrepreneurially minded and who will work in concert with the management, shareholders, and financiers to lead the company into a sustainable and profitable future. At Roland Berger, we support you in overcoming your most pressing restructuring challenges. A detailed, resilient, and coherent plan for the future is the starting point for all further steps.

We are leaders in the development and implementation of restructuring and turnaround management programs. With our extensive experience gained in hundreds of national and international restructuring projects and our in-depth industry expertise, we will be by your side as consultants and implementers to help you establish a sustainable and successful business model for the long term.

Restructuring and turnaround from a single source - our approach

Restructuring and turnaround programs are usually developed for companies in advanced profit and liquidity crises and are frequently driven by covenant breaches or refinancing. At Roland Berger, we follow a two-step process.

First: Program development

In the first step, we develop a restructuring program. In Germany, supreme court case law and recognized standards for restructuring opinions (IDW S6) provide the framework. The main content of a restructuring program encompasses:

• Starting point: Detailed analysis of the company and its assets & liabilities, profit & loss, and liquidity situation, as well as the market in which it operates, including an ESG and cyber security check
• Causes of the crisis: Analysis of the root causes of the company's crisis and the stage of crisis it is at, as well as an examination of the reasons for the business's insolvency
• Measures: Identification of financial, operational, and strategic measures to stabilize the company and overcome the profit and liquidity crisis
• Integrated business plan: Preparation of an integrated three-year business plan that takes all measures into account and presents individual scenarios
• Opinion on the possibility of turnaround: Final assessment on the viability of restructuring the company out of the crisis.

Second: Program implementation

In order to achieve rapid changes with lasting impact, we work with the company through our project management office (PMO) to implement the financial, operational, and strategic measures that have been defined. Our tried-and-tested approach facilitates a transparent and timely implementation process.

To strengthen the trust of all stakeholders - from financiers and commercial credit insurers to shareholders and labor unions - during the restructuring or turnaround phase, we support stakeholder communications and stakeholder management throughout the entire project duration.

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