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Munich, 15th November 2016
14th German M&A Conference
M&A in the New –
Unlock the Value of Digital Disruption
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2© Accenture
Q&A5
INTRODUCTION1
MARKET OVERVIEW & CONTEXT2
SUCCESS FACTORS FOR M&A IN THE NEW3
FJORD CASE STUDY4
AGENDA
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INTRODUCTION
Managing Director,
Global M&A Group, Munich
Head of M&A in Germany,
Austria and Switzerland
More than 19 years in inter-
national strategy consulting
Sven Wahle
Managing Director,
Accenture Digital and
Accenture Interactive, Bonn
More than 17 years in inter-
national strategy consulting
experience
Rainer Balensiefer
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Accenture has a dedicated global M&A practice and functional Strategy practices
that support clients across the globe
ACCENTURE’S GLOBAL M&A PRACTICE
150+Global M&A professionals
12Global M&A Hubs
600+Transactions in the last 5 years
2,000+Professionals in functions +
regions
Accenture’s M&A professionals have large-scale
transformation experience and bring expertise across the
whole investment life cycle.
Accenture has worked on numerous large M&A deals
across many industries, including the largest transactions
in the chemicals, products, beverage, energy/utilities,
communication and high tech industries.
Our M&A specialists are spread around the globe and with
proven functional know-how, which is constantly leveraged
in dedicated workstream support within large scale Carve-out
projects, for example.
ChicagoLondon
São Paolo
Nordics
Madrid Tokyo
Singapore
Munich
ShanghaiNew York
Sidney
Paris
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Q&A5
INTRODUCTION1
MARKET OVERVIEW & CONTEXT2
SUCCESS FACTORS FOR M&A IN THE NEW3
FJORD CASE STUDY4
AGENDA
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Digital disruption, driven by exponential growth in computing power, big data and
combinatory innovations hits all industries resulting in increased M&A activity
DIGITAL DISRUPTION DRIVING M&A ACTIVITY
Share on digital deals on total M&A deal number increased
since 2007 on average by +5% p.a.
Largest share of digital deals in Media & High Tech industries;
followed by Consumer Products, Telecomms. and Healthcare
Often, smaller and creative (“progressive”) companies set the
tone of innovation in entire industries by developing new
technologies at high pace (e.g. Skype, Uber, Tesla, Airbnb)
Larger corporates with standardized structures & processes
cannot keep pace with this high speed of innovation
To stay on top of innovation and ahead of competition large
corporates need to partner / acquire progressive companies
541 558
443 452527 550 566
724773
2007
1.1%
2015
1.6%
2014
1.6%
2009
1.0%
2008
1.2%
2011
1.2%
2010
1.0%
No. of Deals
+5%
2013
1.4%
2012
1.3%
Number of Digital Deals Share of Digital Deals on Total Deal Number
M&A Market – Global1 Deal Counts Digital / Innovation
Note: (1) M&A global deal numbers were analyzed for the key words "Digital“, "Innovation“ or “Innovative”; Source: Thomson Financial, Accenture Analysis
CAGR Digital Deal Number
Key Insights
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Large corporates target progressive companies to improve their competitive
position in a fast changing environment across industries
M&A IN THE NEW – SELECTED TRANSACTIONS
Automotive Industrial Equipment Finance & Banking Consumer Goods Comms & High Tech
Camstar
NON-EXHAUSTIVE
Ride sharing
appTaxi
booking app
High definition maps for
autonomous vehicles
Cyber
security serviceCloud
souring
Bauer
Optimierungstechnik
Manufacturing execution system
Airconditioning /
ventilation control software
Network banking agent
Personal finance service
Asset management software
Robot asset advisor
Fitness app
Fitness app
Fitness app
Diet mgmt. app
Communication systems for
automobiles
Communication systems for
automobiles
Car charging incl. stations and
mobile app Online dating platform
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Q&A5
INTRODUCTION1
MARKET OVERVIEW & CONTEXT2
SUCCESS FACTORS FOR M&A IN THE NEW3
FJORD CASE STUDY4
AGENDA
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SUCCESS FACTORS OVERVIEW
Source: Accenture Analysis
1 Acquire and invest into progressive companies – or be disrupted
2 Go for agile deal making – or lose the battle for valuable targets
3 Enable tailored integration – or miss the value
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Observations of M&A with Progressive Companies
The only chance for larger corporates to keep pace with digital disruption and stay
ahead of competition are dedicated M&A activities for progressive acquisitions
ACQUIRE AND INVEST INTO PROGRESSIVE COMPANIES – OR BE DISRUPTED
85% of corporates see the existing need to acquire
progressive companies with innovative skills and
technology expertise to stay competitive
96% of companies say that investments in progressive
companies are a central part of their corporate strategy
86% of executives realize that specific capabilities and
standardized processes are required for successful
acquisitions with progressive companies
Source: Accenture Executive Survey (n=242)
1
Key Insights
A central part of corporate
strategy are acquisitions
and investments in
progressive companies
Existing need to standardize
researching process as well as
evaluating and acquiring
progressive companies
Existing need to acquire
innovative knowledge, skills
& technology to keep pace
with digital disruption
96%
4%
85%
15%
Agree Disagree
86%
14%
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% of respondents ranking objective among top 3
M&A strategies’ objectives for acquiring progressive companies are significantly
different from traditional deal rationales
GO FOR AGILE DEAL MAKING – OR LOOSE THE BATTLE FOR VALUABLE TARGETS (1/3)
Source: Accenture Executive Survey (n=242)
Investments in progressive companies mainly target
development of new products / enhancement of
existing products and services
Transforming the own corporate culture towards more
innovation is seen as a main objective, while traditional
M&A focusses on economies of scale or market share
Take Away: In order to realize the full value of such
objectives, corporates need to act with high agility and
with deep technology expertise in the background
2
M&A Objectives to Go for Progressive Companies Key Insights
59%
Entering new markets 62%
Enhancing
existing products & services64%
Creating
new products & services69%
Realizing cost synergies 46%
Transforming
company culture
towards more innovation
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The identification of valuable targets confronts large corporates with challenges;
new approaches of target identification are required
GO FOR AGILE DEAL MAKING – OR LOOSE THE BATTLE FOR VALUABLE TARGETS (2/3)
Source: Accenture Executive Survey (n=242)
For most companies alternative screening approaches
like startup networks, through VC funds or accelerators
are essential to find most valuable targets
Still, over 50% of corporates identify progressive
targets opportunistically, without a structured approach
Around 70% consider the identification of relevant
technologies and the fast changing universe of
potential targets as key challenges in target screening
Take Away: To win the race for successful progressive
companies, take quick and well informed decisions
2
Screening of Progressive Companies Key Insights
69%Identification of
relevant technologies
67%Fast universe of
changing companies
Link between strategy
and search criteria64%
74%
Start-up
Network
Screening
61%
VC fund
(Own /
Cooperation)
% of respondents ranking among top 3 methods
Approach
Challenges
% of respondents ranking among top 3 challenges
Start-up
accelerators
(Own / Cooperation)
56%
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Due Diligence processes in acquisitions of progressive companies are
technology focused and require specific capabilities to succeed
GO FOR AGILE DEAL MAKING – OR LOOSE THE BATTLE FOR VALUABLE TARGETS (3/3)
Source: Accenture Executive Survey (n=242)
Key focus areas in Due Diligence is Technology; even
before Financial Performance
The main challenge is seen in the high expectations on
transaction speed; then new technology assessment
Deal teams with deep technology expertise and
assessment skills for target screening & due diligence
help corporates significantly in closing valuable deals
Competitive Advantage: Accelerating transaction
speed (<6 months from contact to closing) by
establishing a dedicated organization and processes
2
Due Diligence of Progressive Companies Key Insights
Innovation / R&D pipeline 49%
Financial Performance 53%
Technology 56%
Fair valuation /high prices 62%
71%Demandingtransaction speed
Assessment ofnew technologies 69%
62%Availability of dedicated financing
Assessment ofnew technologies 63%
Valuation skills &methodologies 72%
Focus
Areas
Challenges
Capabilities
% of respondents ranking objective among top 3
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Maintaining the innovative power of a target is key to leverage full value
potentials – a tailored integration approach is required
ENABLE TAILORED INTEGRATION – OR MISS THE VALUE
Source: Accenture Executive Survey (n=242)
Main success factor is the integration of the acquired
technology and maintenance of the innovative culture
while assimilating it into the own corporate culture
A customized approach and sensible level of
integration is key for leveraging the full value potential
of investments into progressive companies
Take Away: Next to classic financial incentives, the
existing culture and work style of the target should be
maintained to keep people motivated and inspired
3
Integration of Progressive Companies Key Insights
Source: Accenture Executive Survey (n=242)
Technology,
product / service
integration
Maintaining
the innovative
culture
Integration
Level
Integration
Success
30%34%
49% 55%
11%21%
Back OfficeFront Office
Full Integration
Partial Integration
No Integration
% of respondents ranking among top 3 success factors
% of respondents
71% 62% 57%
Assimilation
into own corp.
culture
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・・・
Large corporates change their traditional way of PMI to maintain flexibility and
pace of an acquired progressive companies
ENABLE TAILORED INTEGRATION – OR MISS THE VALUE
Source: Accenture Executive Survey (n=xxx)
3
Daimler Accenture
Daimler Group concentrates acquired companies under the mobility
service subsidiary, managing them with a different operating model
from its auto manufacturing operating model
Accenture traditionally used the common operating model in managing
acquired companies, but with Fjord, the digital design firm, we continued
using its original operating model
Daimler
Buses
Daimler
Financial
Services
Mercedes
Benz
Cars
Ride sharing app Taxi booking app
・・・
EXAMPLES
Design/digital
marketing
Mobility service
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Q&A5
INTRODUCTION1
MARKET OVERVIEW & CONTEXT2
SUCCESS FACTORS FOR M&A IN THE NEW3
FJORD CASE STUDY4
AGENDA
ACCENTURE INTERACTIVE & FJORD
ACQUISITION & INTEGRATION PERSPECTIVE
NOVEMBER 15TH 2016
18
BACKGROUND OF OUR ACQUISITIONS IN
DIGITAL-RELATED SERVICES
19
DIGITAL-RELATED SERVICES ARE DRIVING A BIG PART OF ACCENTURE’S GROWTH
RESCMT FS PRD HPS
Accenture Digital Footprint FY15
• 7b$+ revenues and 35%+ growth in digital-related
services
4,000+ clients in >49 countries
36,000+ Digital professionals
32 Accenture Interactive design studios, R&D
offices and Centers of Excellence
1,000+ developed mobile applications for 400+
clients in the past 3 years
•
MOBILE APP DEVELOPMENT
BIG DATA, DATA MGMT. &
ANALYTICS
ACCENTURE DIGITAL
ACCENTUREINTERACTIVE
CONNECTED
PRODUCTS
& DEVICES;
IOT SERVICES
20
ACCENTURE INTERACTIVE HAS PLAYED A VERY
IMPORTANT ROLE IN OUR SUCCESS IN DIGITAL
MARKETING
CONTENT
COMMERCE
EXPERIENCE
STRATEGY CONSULTING TECHNOLOGY OPERATIONS
Ad Age Datacenter produced Advertising Age’s 72nd annual Agency Report. Ad Age published the complete Agency Report 2016 online May 1, 2016.The report, which includes
rankings based on U.S. and worldwide revenue, is available online to subscribers at the Ad Age Datacenter. It is also available in the May 2, 2016 print edition.
… AND WE HAVE BEEN MAKING WAVES IN OUR
INDUSTRY AND CHANGING THE GAME A BIT
FORRESTER DIGITAL EXPERIENCE SERVICE PROVIDERS, Q4 2015
22
TARGETED ACQUISITIONS PLAY A KEY ROLE IN OUR
DIGITAL CAPABILITY DEVELOPMENT
2008
Origin
Digital
2010
Cadence Quest
(now
Accenture
Customer
Insight)
2011
CAS (now
Accenture
CAS)
Maxamine (now
Accenture
Digital
Diagnostic)
2007
Digiplug
Mogenesis
Mediasenz
(part of
Media
Management)Memetrics
(now
Accenture
Digital
Optimization)
2005
Media Audits
(part of
Media
Management)
2004
Milton Merl &
Associates
2002
Edge
Consulting
2012
avVenta
Worldwide
2013
Acquity Group
Fjord
February 2015
Reactive
June 2015
Brightstep
July 2015
PacificLink
July 2015
Chaotic Moon
August 2015
AD. Dialeto
April 2016
IMJ Group
December 2015
boomerang
July 2016
dgroup
July 2016
mobgen
23
ACCENTURE HAS STRONG CORPORATE VALUES THAT SHAPE OUR CULTURE AND CHARACTER
STEWARDSHIP
BEST PEOPLE
ONE GLOBAL
NETWORK
CLIENT VALUE
CREATION
RESPECT FOR
THE INDIVIDUAL
INTEGRITY
Core Values
SO ACCENTURE DECIDED TO BUY
A DESIGN COMPANY (FJORD) …
WHY?
26
WHAT‘S GOING ON IN DIGITAL?
THE DIGITIZATION OF EVERYTHING
LIQUID EXPECTATIONS
CREATIVE DESTRUCTION
LIVING SERVICES
1
2
3
4
OK, SO HOW DOES ALL THIS RELATE TO DESIGN?
THE DIGITITZATION OF EVERYTHING
“THE PACE OF CHANGE WILL NEVER AGAIN BE AS SLOW AS IT IS TODAY"
MATHEW BISHOP
THE ECONOMIST’S INNOVATION FORUM 2015
CUSTOMER EXPECTATIONSARE LIQUID AND TRANSCEND TRADITIONAL BOUNDARIES
DIRECT COMPETITORS
EXPERIENTIAL COMPETITORS
Services that change customer expectations – and raise them for yours
PERCEPTUAL COMPETITORS
CREATIVE DESTRUCTION (OF THE PRIVILEGE OF LEGACY)
SILICON VALLEY MEETS THE OLD CORPORATE WORLD
...NOT ONLY AT THE BATTELFRONT OF IDEAS AND SERVICES,
BUT INCREASINGLY AS A CULTURAL TRANSFORMER
AT FJORD, WE PUT DESIGN AT THE HEART
THE BATTLEGROUND IS EXPERIENCE
The success metric is delight
Living services are complicated: simplification is hard
We start with the user
We turn dreams into reality
IN AN ERA OF LIQUID CUSTOMER EXPECTATIONS
30
A LITTLE BIT ABOUT FJORD…
ŠKODA
LEADING DIGITALTRANSFORMATION
SINCE 2014From global digitalisation strategy to delivering new products and services into
market, Fjord is turning a mass market car producer into a customer-centric
data-driven, service organisation
32
ŠKODAWhat we did and delivered
A people-centric strategic vision, roadmap and
architecture evolving Škoda‘s digital eco-system. From
responsive web platforms to a new customer profile and
portal experience through to online sales advisor tools that
match customer needs to product recommendations.
In addition establishing an innovation lab tasked with
creating pilot products and services to validate
opportunities for Škoda’s future mobility offering.
Outcomes
“Over the last two years, Fjord has been a key innovation
and digital collaborator to Skoda – helping us to
significantly grow our business platforms, while
successfully bringing in fresh ideas and initiatives across
our markets and moving us closer to our goal of becoming
a digital leader in our field”
Michael Lamm, Global Head of Digital
TAG HEUER
WATCH OUT
34
With 155 years of luxury mechanical watchmaking experience, TAG Heuer faced a
seismic threat to its business: the ascendancy of the luxury smartwatch. The watchmaker
needed a partner who could craft a smart watch interface and omnichannel ecosystem
and whose vision—and willingness to push the boundaries of convention—
complemented the company’s legacy.
Sold out of the initial 10,000 watches (at $1,500 each) immediately, with an additional 100,000
on back order.
Of onboard storage for apps and media
10K
4GB
35
TAG HEUERWhat we did and delivered
We built the world’s first luxury Android smartwatch, and
the entire ecosystem surrounding it. Picture a
completely custom version of Android Wear, designed to
perfectly align with the bold TAG Heuer hardware, along
with a robust complement of micro applications. We also
delivered a fully responsive web product exploration and
purchase experience showcasing the bold design; a
groundbreaking and innovative platform for delivering
additional functionality through connected watch faces
(overcoming the limitations of iOS-paired watches); and
a fully responsive web solution and Android companion
application for administration and support, setting the
foundation for an entirely new and deeply personalized
customer engagement channel.
Outcomes
This was TAG Heuer’s most successful launch ever,
and the company sold out of its initial 10,000 watches
(at $1,500 each) immediately, with an additional
100,000 on back order. Not only that, but TAG was the
first non-tech company to enter the connected
smartwatch market, and the Android Wear team at
Google acknowledged that it is the best product
released on their platform to date.
35
COMMERZBANK
BRINGING DESIGN WITHIN
With digital customer experience redefining competitiveness in the banking
industry, we brought design thinking in-house to create true customer-
centred thinking, and a faster and better pipeline for digital services.
36
37
Commerzbank
What we did
This project followed our belief in installing a design
culture within our clients’ businesses.
We provided the client with an experienced team,
manned with an incredibly detailed plan to a create an in-
house resource, Neugelb, which would push design as a
discipline into the boardroom and then back into every
facet of the bank’s customer experience and internal
culture.
Outcomes
Neugelb is today up and running, and has already had an
impact on one of the bank’s core strategic priorities – the
huge task of aligning the customer experience across the
bank - and they will shortly be delivering a new app to
assist their multi-channel banking strategy.
Neugelb are also working on a project with HR, which will
align the internal and external systems, bringing the same
experience that customers have online, into the branches.
372
StudiosEurope, North America,
South America and APAC
The best talent
in the world
Experts ClientsWorldwide
22 850 300
AT FJORD, INNOVATIONNEVER SLEEPS
ATLANTA • AUSTIN • BERLIN • CHICAGO • DALLAS • HELSINKI • HONG KONG • ISTANBUL • LONDON • LOS
ANGELES • MADRID • MELBOURNE • MILAN • NEW YORK • PARIS • SAN FRANCISCO • SÃO PAULO • SEATTLE •
STOCKHOLM • SYDNEY • TORONTO • ZURICH • DUBAI
38
IN SUMMARY, FJORD HAS BEEN ONE OF
ACCENTURE‘S MOST SUCCESSFUL ACQUISITIONS
SO, DID WE JUST FIND THE PERFECT TARGET?
OR WHAT, BEYOND THE ACQUISITION,
WHAT HAS HAPPENED AFTERWARDS?
STUDIES SHOW THAT 50% TO 80% OF M&AS FAIL
AND CULTURAL INTEGRATION IS THE SINGLE MOST
IMPORTATNT FACTOR OF SUCCESS OR FAILURE
40
41
SIX ELEMENTS OF A SUCCESSFUL INTEGRATION OF NEW ACQUISITIONS
SUCCESSFUL
M&As
PEOPLE & CULTURE
PROCESSES & TECHNOLOGY
OFFICES &
WAY OF WORKING
JOINT VISION
BRAND
CLIENTS / GO-2-MARKET
THIS IS HOW FJORD TENDS TO WORK
THIS IS HOW ACCENTURE TENDS TO WORK
44
Start with PEOPLE and not with the
PROCESSES and TECHNOLOGY
WE WENT ABOUT THE ACQUISITION WITH THE SAME CORE BELIEFS AS WE DO IN PROJECTS
FOR OUR CLIENTS
A UNIFIED VISIONCreate a shared belief system.
Flip tension and differences into positivitiy.
45
PROTECTING AND CELEBRATING WHAT IS SPECIAL
MAKE EVERYBODY CO-ARCHITECTS OF THE NEW
GO ON A JOURNEY TOGETHER, DO LOTS OF THINGS TOGETHER
Recognize strengths.
Recognize what to combine, what to keep distinct.
You can‘t indoctrinate culture top-down.
Change management is overrated if people are not fundamentally on-board.
Come together productively as two teams, two cultures that respect each other
but produce a combined output.
DISTINCT & CONNECTED BRANDFjord brand has a unique positioning as leader in Service Design
and Design Services around the globe. The Fjord brand is strong, distinct, and
meaningful for our existing and new talent,
as well as our clients and partners.
Consequently we have continued Fjord brand distinctively,
and connected it with Accenture Interactive, the leader for CX services.
Both support eachother, without diluting the clear positioning.
47
COMMON CLIENTS & GO-2-MARKET APPROACHWe both have our clear brand positioning and go-to-market approaches.
Yet, we consequently align our client activities, nourish and develop our target
clients and potentials together and leverage synergies in our marketing activities.
We prioritize business development activities according to our joint vision and goals,
reflecting business as well as innovation potentials with our clients.
We consequently align our services portfolio to address the real needs
of our clients leveraging our full, enriched skill portfolio.
SELECTED ASG CLIENTS
CREATIVE STUDIOS & SPACES ENABLE OUR WAY OF WORKING
As we enter an era of liquid expectations the battleground is experience.
We’re having to constantly adapt how we work. We put people’s needs at
the heart of our work. Our service design work is people-centric, creative,
agile, and permanently evolving. We connect and develop ideas.
This requires different office and workshop spaces, with all creative
infrastructure, and a studio-based way of working.
ONE GLOBAL FIRM –CORE VALUES AND PROCESSES
Accenture is “One Global Network”. This common foundation is established via our corporate
vales and core processes. We share the same values, and are supported by same systems and
processes, e.g. in finance, compliance, technology. With or despite our distinct
capabilities in our five businesses, we act as one global firm, in the best interest of
value creation for our clients.
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50© Accenture
INTRODUCTION1
MARKET OVERVIEW & CONTEXT2
SUCCESS FACTORS FOR M&A IN THE NEW3
FJORD CASE STUDY4
Q&A5
AGENDA
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51© Accenture
Sven Wahle
Accenture
Mobile +49 175 576 8709
Rainer Balensiefer
Accenture
Mobile +49 175 576 4646
Q&A