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Transcript (Translated)
Bogdan Kowal (00:05):
Hello, and thank you for joining us to discuss strategy consulting with Jean-Philippe Grosmaitre and Claudio Molinaro, both partners at L.E.K. Consulting. Gentlemen, hello, and welcome to our CF News TV studio.
Jean-Philippe Grosmaitre (00:19):
Hello, Bogdan.
Bogdan Kowal (00:21):
Jean-Philippe, the first question is for you. Please briefly introduce L.E.K. Consulting.
Jean-Philippe Grosmaitre (00:26):
L.E.K. Consulting is a strategy consulting firm with 40 years of experience. It has 2,500 people worldwide, 23 offices across four continents, and 230 partners. In Paris, we have a team that has been established for about 30 years, with around 15 partners and 150 staff. We primarily serve the private equity market, working on 800 deals annually in due diligence and strategy. We also serve many global corporations, helping with strategy and performance improvement.
Bogdan Kowal (01:03):
So, strategy and transformation?
Jean-Philippe Grosmaitre (01:05):
Yes, we have two areas of expertise, with dedicated teams in each area because we believe they are highly complementary, and this is what sets us apart.
Bogdan Kowal (01:16):
Claudio, is this your value proposition—the uniqueness in the market?
Claudio Molinaro (01:20):
I’d say what differentiates us is that L.E.K.’s core business is mainly supporting large SMEs and mid-sized companies with revenue between hundreds of millions and a few billion euros. Our teams are experienced in working with management in this segment of the economy, which operates in a certain pragmatic way and requires concrete results. Our playbooks and methodologies are tailored to companies of this size.
Bogdan Kowal (01:46):
Could you give me examples of deals where your expertise shines?
Jean-Philippe Grosmaitre (01:51):
Portfolio companies often make acquisitions, a process we call “build-ups,” where they add acquisitions to merge them. We work on both the market potential and synergy aspects—what benefits they can gain from cross-sales, operational savings, shared purchasing, etc. We analyze all these areas in the acquisition process, allowing our client to sometimes bid slightly higher and secure the deal. We then assist with integration, which involves a series of operational questions to unify functions and create a cohesive model across the merged entity, and we support this throughout the process.
Bogdan Kowal (02:48):
Can we get specific examples or names?
Claudio Molinaro (02:51):
Recently, we assisted an investment fund looking to acquire a specialty chemicals company. Our strategy colleagues analyzed molecule-by-molecule, product-by-product, identifying revenue trends and potential market opportunities. Operationally, we verified that the company's production capacities aligned with growth objectives, estimated future investment needs, and workforce requirements. Our combined market and operational perspectives delivered value to the client.
Bogdan Kowal (03:34):
Are they aware of and appreciative of this?
Claudio Molinaro (03:37):
The client is increasingly aware of it. Investment funds understand that achieving returns solely through exit multiples and debt leverage isn’t enough; they need to focus on operational performance and transformation to create lasting value. By integrating our expertise early on, they can anticipate the necessary work during the holding period. There is a growing trend for investment funds to consider these aspects from the beginning, and we’re pleased to support them throughout the portfolio management phase.
Jean-Philippe Grosmaitre (04:17):
Another example is during the life of a portfolio company. The fund acquires a company, and the entrepreneur supported by the fund completes several acquisitions to foster growth. They maintain business continuity and ensure that each acquired business unit grows effectively before the exit. Often, what’s missing is a structured, unified group. We assist, often at the fund’s request or directly with management, in structuring the group into a more cohesive entity, achieving economies through a new operational model and potentially accelerating cross-sales among acquired entities. By the time of sale, most synergies are already in place, reflecting the value of our support.
Bogdan Kowal (05:23):
What are the key innovations in your industry?
Jean-Philippe Grosmaitre (05:27):
When discussing innovation, we can mention artificial intelligence, which is challenging to implement. AI poses risks of revenue disruption in products and services but also offers productivity gains through performance improvements. The main challenge is change management. It’s easy to understand the improvement potential, but implementing it involves significant change.
Bogdan Kowal (06:04):
Few people understand AI well. Are your teams trained to help companies in this area?
Jean-Philippe Grosmaitre (06:13):
We have a center of excellence dedicated to AI, providing our teams with tools to conduct proof of concept exercises.
Bogdan Kowal (06:18):
Great, Claudio?
Claudio Molinaro (06:25):
In addition to the AI center of excellence, we also have a center focused on ESG issues. There’s a real need for in-depth understanding of these topics beyond simple ESG audits for regulatory compliance. Our added value lies in helping clients understand how ESG can genuinely create value. We strive to connect value creation with key issues, whether it’s AI or ESG transformation.
Bogdan Kowal (07:03):
And do your teams appreciate this theme?
Claudio Molinaro (07:07):
We, as a firm, are highly committed to this, making it a core pillar of our strategy. Our teams are very motivated, and younger generations, in particular, are passionate about participating in these projects.
Bogdan Kowal (07:23):
Claudio, Jean-Philippe, thank you for all these insights.
Jean-Philippe Grosmaitre and Claudio Molinaro (07:26):
Thank you. Thank you.