Nicoll France

A subtle switch with far-reaching consequences

In September 2011, Frédéric Midy became COO of Nicoll France, a subsidiary of Aliaxis, a world leader in the manufacture and marketing of fluid transport solutions.

At the time, the company, which employs 1,300 people and generates sales of €200 million, was highly profitable, but saw its net income decline year on year.

Eight months later, the downward trend was reversed, and Nicoll opened up internationally.

Problems encountered

Frédéric Midy was recruited as COO to intervene in three areas:

Analysis & diagnosis

Four levers for action were identified:

Too much cash is tied up: 12,000 product references are available within 48 hours anywhere in France. Effective marketing segmentation highlights the fact that 20% of these products generate 80% of sales. A reorganization of stock focused on the top 20% of products may be appropriate.
An increase in service quality and a reduction in delivery times for these flagship products is possible.
Current partners are not the most efficient, and the company's mindset is too "French-speaking". A careful selection of foreign partners will enable Nicoll products to be sold in key countries.
A reduction in logistics costs and the outsourcing of a number of services is possible, in line with the company's strategy.

In line with the company’s strategy based on strong growth and the prospect of a sharp increase in flows between Malaysia and Europe, the CEO can reinvest cash in co-development, particularly in R&D, via local and international partnerships.

Challenges, issues & objectives

The challenge is to change mentalities in the face of considerable resistance to change, justified by the company’s excellent profitability.

The challenge is to ensure a cultural transformation of the company and to bring the whole team together towards a common goal: international development and increased leadership in France, while freeing up cash.

Solutions provided

Complete overhaul of product marketing quality.
Stock management was reorganized: from 3 months' available stock on 12,000 product references, we moved to 3 months' stock on the 2,500 most profitable references, deliverable within 24 hours, and the 5,000 least profitable references are designed to order and delivered in 2 weeks. At the same time, this inventory management is enhanced by a process efficiency plan.
The cash thus released is reinvested in key areas of the business.
Transport costs are reduced thanks to better sorting and packaging of product references.
From an external point of view, a major strategic and market study is carried out internationally to determine the top 3 countries in which to expand.
Reduced costs lead to increased international marketing expenditure
Services and activities that were not part of Nicoll's core business were discontinued.

Results

The results were immediate: in 8 months, free cash flow doubled, and the downward trend in the company’s margins was halted, rising slightly after 12 months. In 3 years, international sales increased by over 50%, from 5% to 9% of total sales.

Key success factors

The implementation of a corporate project.
The cohesion of all social partners around the project.
Transparency on projects carried out.
Unconditional support from parent company Aliaxis.
The quality of the company's men and women.

Conclusion

Strategic Cost Management is a wonderful experience, thanks to the human quality of the employees and the perfect collaboration with the social partners.