Renforcement de notre équipe « Technologies et Services industriels »
Investec a le plaisir d’accueillir Matthias Odrobina au poste d’Associé au sein de l’équipe allemande et en tant que membre senior de l’équipe internationale dédiée au secteur des technologies couvrant l’Europe, le Royaume-Uni, l’Afrique, les États-Unis et l’Asie. Il apportera des conseils M&A sur les opérations transfrontalières.
Matthias apporte une expertise sectorielle approfondie dans le domaine des technologies industrielles (avec un accent particulier sur les industries intelligentes, les logiciels B2B et la transformation numérique).
Il possède plus de 20 ans d’expérience auprès des conseils d’administration et des CEO dans le cadre de fusions, d’acquisitions, de cessions, de financements et de rachats, avec une spécialisation particulière dans le secteur industriel, les logiciels B2B et les services aux entreprises.
Contact: Matthias Odrobina
Michel Degryck, Managing Partner, figure parmi les banquiers d’affaires de référence en France selon MergerLinks (Datasite).
Cette distinction vient saluer son leadership reconnu et une exigence constante au service de ses clients.
Chaque transaction réussie repose avant tout sur une compréhension fine des enjeux, un discernement éclairé et des relations de confiance construites dans la durée.
Retrouvez les classements : Top Investment Bankers in France FY 2025
Nous sommes heureux d’annoncer une nouvelle expansion de nos services de conseil en M&A à l’international avec l’intégration de Capitalmind Switzerland sous la marque Investec.
L’équipe suisse, dirigée par Markus Decker et Thomas Ellenberger, est fière de rejoindre Investec, renforçant ainsi notre engagement commun à fournir des conseils et des solutions sur mesure en matière de fusions-acquisitions.
Il s’agit d’une étape importante pour notre équipe et nos clients, qui renforce notre présence et nos compétences à travers l’Europe.
Cette acquisition souligne notre engagement à développer nos activités de conseil, qui comptent désormais 300 professionnels des fusions-acquisitions répartis dans 17 bureaux à travers le monde, et complète l’offre intégrée d’Investec en Suisse, qui comprend la banque privée, la gestion de fortune et le direct lending.
« En réunissant nos professionnels des M&A à travers l’Europe, nous sommes en mesure d’apporter des idées nouvelles et des solutions sur mesure à nos clients en Suisse comme à l’international. »
– Markus Decker, associé gérant du bureau suisse
« Cette acquisition renforce notre présence en Suisse et améliore la collaboration mondiale, en connectant nos clients à des opportunités d’investissement internationales et locales. »
– Jonathan Arrowsmith, responsable des services bancaires d’investissement, Investec
Tous les membres de notre équipe suisse :
Markus Decker, Thomas Ellenberger, Yanik Costa, Dr. Miró Feller, Tim Graber, Kai Kiesinger, Lorenzo Mattei, Luca Stalder and Gabi Korolnyk
En savoir plus:
Retrouvez l’entretien de Michel Degryck, Managing Partner, dans le numéro de NextStep n°22 de juin 2025 consacré aux cessions d’entreprises détenues par des fonds d’investissement.
Les cessions des entreprises détenues par les fonds se font toujours au compte-goutte malgré la pression des investisseurs pour le retour de liquidité et l’allongement de la durée de détention firtant avec les sept années en moyenne. (…)
Extrait :
“”– Michel Degryck, Managing Partner, InvestecLa situation est très contrastée selon la taille des entreprises. Sur le large cap, les transactions sont gelées car les cibles sont plus exposées à l’international et aux incertitudes de l’environnement macro-économique, d’une part et à la raréfaction des acquéreurs potentiels à des valorisations conformes aux attentes des cédants, d’autres part.
Investec est fier d’annoncer que notre équipe France a reçu le Trophée d’Argent dans la catégorie Meilleure Banque d’Affaires – LBO Small to Mid Cap, lors du dernier Sommet des Leaders de la Finance à Paris.
Organisé par Décideurs Corporate Finance, cet événement met à l’honneur les acteurs les plus engagés et innovants du secteur, qui accompagnent avec succès des opérations stratégiques de grande envergure.
Nous remercions chaleureusement nos équipes pour leur engagement et leur professionnalisme, ainsi que nos clients pour leur confiance renouvelée.
Dans un marché des fusions-acquisitions de plus en plus exigeant, la question de la « préparation à la cession » (exit readiness) prend une importance croissante : stratégie, indicateurs clés, equity story, vendor due diligence – comment l’intégration précoce de la planification de la cession dans le développement stratégique de l’entreprise devient un facteur clé de succès.
Que peuvent réellement apprendre les dirigeants et propriétaires d’entreprise des rois du deal – les investisseurs en capital-investissement – en matière de préparation à la vente, afin de rendre les résultats de cession plus prévisibles et optimaux ?
Dans cet épisode de What’s up, Corporate Finance?, Thorsten Gladiator, Managing Partner chez Investec, et Sebastian Markowsky, Managing Director, échangent avec le journaliste économique Michael Hedtstück sur les enseignements que les entrepreneurs peuvent tirer des fonds de private equity en matière de préparation stratégique à la cession.
Les questions clés abordées :
- Que peuvent réellement apprendre les entrepreneurs des « Kings of deals » – les investisseurs financiers – en matière de préparation à la cession ?
- Existe-t-il un décalage manifeste entre la perspective à long terme adoptée par les fonds de private equity pour préparer leurs sorties et les horizons de planification M&A des dirigeants d’entreprise ?
- Quels sujets doivent impérativement être clarifiés en amont d’un processus M&A, plutôt que d’être laissés à l’appréciation de l’acheteur potentiel ? Dans quelle mesure est-il essentiel de bien répéter l’equity story et la présentation du management ?
- Quelle est la réalité pour les entreprises de taille intermédiaire ? Dans quelle mesure les dirigeants sont-ils prêts à s’inspirer des pratiques des fonds de private equity ?
Cliquez ici pour écouter le podcast :
What’s up, Corporate Finance? est un blog et un podcast du Finance Think Tank Network. Grâce à des analyses régulières et des décryptages approfondis sur des sujets liés au private equity, private & venture debt, corporate & investment banking, M&A, au financement et au restructuring, ils décryptent l’univers de la finance d’entreprise avec expertise et passion journalistique.
🎙 Écoutez le podcast, disponible sur toutes les plateformes d’écoute.
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Notre équipe a été reconnue comme l’une des plus actives en 2024 en LBO, M&A et Debt Advisory selon l’étude annuelle menée par CF News, le media digital de référence de l’actualité des opérations de haut de bilan.
L’équipe se place une nouvelle fois sur les premières marches des classements :
- #4 sur le segment LBO
- #5 sur le M&A Small & Mid cap (valeur de transaction de 50 à 250 millions d’euros)
- #5 sur le Debt Advisory
Sous la direction de Michel Degryck, l’équipe française forte de 40 professionnels multisectoriels, a continué à travailler sans relâche dans un environnement de marché chahuté, et à délivrer des solutions sur mesure de grande qualité aux acteurs du private equity, aux entrepreneurs, aux groupes familiaux, et aux grands groupes.
Un grand merci à nos clients et partenaires pour leur confiance renouvelée.
« Cette reconnaissance témoigne de la confiance que nos clients nous accordent et de l’engagement sans faille de notre équipe. Nous restons déterminés à leur apporter des solutions innovantes et adaptées à leurs enjeux stratégiques. »
— Michel Degryck
Investec France une nouvelle fois récompensée dans la catégorie Banque d’affaires : meilleure équipe LBO Small to Mid cap avec un Trophée d’Or, lors de la cérémonie des Trophées des leaders de la Finance de Décideurs Leaders League, qui s’est déroulée le 29 mai dernier à Paris.
Félicitations à toutes nos équipes pour leur travail remarquable, et un grand merci à nos clients pour leur confiance et leur soutien.
Lauréats 2024 – Sommet des Leaders de la Finance
The Rheingau Music Festival is one of the largest music festivals in Europe and organises over 170 concerts every year throughout the region from Frankfurt and Wiesbaden to the Middle Rhine Valley.
Unique cultural monuments such as Eberbach Monastery, Johannisberg Castle, Vollrads Castle or the Wiesbaden Kurhaus as well as picturesque vineyards are transformed every summer into concert stages for stars of the international classical music scene and interesting up-and-coming artists from classical music and jazz to cabaret and world music.
In over 30 years, the Rheingau and its festival have become a centre of attraction for music enthusiasts from all over the world in a unique interplay of culture and nature, music, enjoyment and joie de vivre.
Investec is delighted once again to sponsor the Rheingau Music Festival 2024 and invites you to join us from 22 June to 7 September 2024!
A special feature this year? For the first time, there will be two opening concerts: Traditionally, the festival opens in the Eberbach Monastery, followed by another opening concert in the Kurhaus Wiesbaden. This year’s focus artists are also particularly outstanding: violinist Christian Tetzlaff, cellist Anastasia Kobekina, pianist Bruce Liu and jazz saxophonist Candy Dulfer.
Once again this year, various themes and focuses will ensure a varied and exciting programme. Under the motto « Spot on: Hollywood », the world of film music comes to life in twelve concerts. Under the motto « Brazil! », the contrasts and beauties of the country will be explored musically. The programme is also dedicated to the works of Antonín Dvořák and a true classic: Vivaldi’s « Four Seasons ».
The stages of the 37th festival season will be graced by numerous stars from the worlds of classical and pop music. Highlights include star pianist Lang Lang, singers Álvaro Soler, Max Mutzke and Max Giesinger, violinist Anne-Sophie Mutter, opera singer Rolando Villazón and entertainer Eckart von Hirschhausen.
Investec has been a committed sponsor of the Rheingau Music Festival for more than 15 years. This long-standing partnership is characterised by our deep appreciation for the arts and a strong connection to local culture. We look forward to experiencing a rousing summer full of music together with you again this year.
You can view the detailed program here.
The landscape of IT Managed Services is undergoing a significant transformation. As the sector experiences a notable uptick in consolidation, growth and innovation, we are taking a closer look at five key trends that are shaping the future of Managed Services in the Netherlands. This insight is part of our 2024 IT Services report.
5 Key trends in the Dutch IT Managed Services market
1. Market Momentum
The Dutch IT Managed Services market is on a fast track, with robust growth projections. By 2025, the market is expected to achieve a compound annual growth rate (CAGR) of 10.2%, reaching a valuation of €12.4 billion. This momentum highlights the increasing reliance on IT Managed Services within the Dutch business ecosystem, reflecting broader global trends in the digital transformation of industries.
2. SME Dominance
Small and medium-sized enterprises (SMEs) are the backbone of the Dutch Managed Services market, accounting for over 60% of the industry. This dominance underscores the critical role that SMEs play in the national economy, leveraging IT Managed Services to enhance competitiveness, streamline operations, and mitigate risks associated with technological disruptions.
3. Data Defense
With cybersecurity increasingly at the forefront of IT strategies, the Dutch market is no exception. The cybersecurity segment within Managed Services is projected to reach €3.5 billion by 2025. Notably, in 2022, approximately 39% of companies in Europe reported experiencing at least one cyberattack, highlighting the crucial need for robust cybersecurity solutions.
5. Hybrid Solutions
For larger organizations, hybrid IT environments are becoming the strategic choice. These solutions combine the benefits of on-premise and cloud-based systems, optimizing access and enhancing security. Hybrid environments facilitate a more agile response to business needs, offering a scalable approach to managing complex IT infrastructures.
Looking Ahead
As we continue to analyze the evolving IT landscape, the pivot towards IT ‘as-a-service’ models is increasingly apparent. These models offer compelling advantages, including financial stickiness and adaptive capacity, which are essential in today’s dynamic market environment, and also key drivers for both buyers and investors.
For more information and our full 2024 IT Services report, please contact Maurits Odekerken or Ron Belt.
Interview
As we enter 2024, the M&A landscape shows signs of recovery, albeit cautiously.
In the episode of the February 20, 2024 of No Ordinary Wednesday, Jeremy Maggs in conversation with Investec experts Jürgen Schwarz, Marleen Vermeer, and Kilian de Gourcuff, Investec’s Head of Cross-Border Finance and International Advisory Charles Barlow, on what key sectors, trends and risks to keep an eye on in 2024.
Click here to listen to the podcast:
Where does opportunity lie for dealmaking in 2024? (investec.com)
Hosted by seasoned broadcaster, Jeremy Maggs, the No Ordinary Wednesday podcast unpacks the latest economic, business and political news in South Africa, with an all-star cast of investment and wealth managers, economists and financial planners from Investec. Listen in every second Wednesday for an in-depth look at what’s moving markets, shaping the economy, and changing the game for your wallet and your business.
Listen to the best of No Ordinary Wednesday: https://www.investec.com/en_za/focus/no-ordinary-wednesday-with-jeremy-maggs.html
Sustainable underlying trends, attracting interest from all market participants, coupled with high risks and investments in the development phase are paving the way for a thriving market.
The European M&A market for industrial software continues to be fuelled by consolidation across all end market segments. Ongoing trends of digitalization within the industrial sector, increasing convergence of sectors and the demand for more (factory) automation to counteract the increasing shortage of talent are just a few selected trends contributing to the growing interest from private equity firms and strategic players crossing sector and geographic borders.
Software as a solution to competition gaps
The advancement of Industry 4.0 implementation, integrating digital technologies into the manufacturing process, positions digitalization at the core of most sectors. Compliance with this trend has become inevitable for companies striving to stay at the forefront of innovation. Both micro- and macroeconomic trends, such as skilled labor shortages, ESG policies, and reshoring of complete production plants, are accelerating this process. Meanwhile, safeguarding assets is essential as the industrial system becomes more (cyber)connected and online. The German industry, accounting for approximately 25% of the country’s GDP, is considered critical infrastructure, emphasizing the need to ensure data integrity.
Market interest from different strategic angles
Software has always attracted various buyer pools with different strategic interests. Financial sponsors are particularly interested in recurring and scalable revenues combined with high-profit margins. In contrast, strategic players seek capabilities expansion and the “softwarization“ of their hardware (IoT). The industrial software market demonstrates sustainable growth underpinnings, with optimizing and modernizing the IT landscape being more crucial than the hardware itself.
Deal examples:
Growth capital unlocked for Desk by Software Partners Group
“SPG is a partner that combines excellent technology know-how and buy & build expertise, which will enable us to reach the next stage of our buy&build journey.” Volker Schneider (CEO, Desk)
wenglor sensoric group acquires Berlin based AI and Image processing Start-Up deevio
“With the acquisition of deevio GmbH, we have this opportunity to further strengthen our expertise and capability in the field of machine vision. In recent years, deevio has developed a great deal of know-how in using AI and data science for image processing applications within the automation industry, which is a considerable advantage for us.” Rafael Baur (Managing Director, wenglor)
Data (analytics) driven production: The new standard
New levels of data accessibility have been achieved, with standard APIs implemented across the entire IT landscape of the industry and collaboration between industrial technology providers. Data lakes are formed through a multi-sourcing policy from (digital twin) machinery and sensors, the IT architecture (ERP, MES, etc.), and human-generated data (quality management, observations, etc.). Recent technologies, such as AI, cloud computing, and predictive models, enable the treatment and analysis of the vast amount of generated data. Decision-makers now have access to aggregated and qualitative information for data-driven decisions.
Deal examples:
Majority investment of FSN Capital in Lobster
“In a world of exponentially growing amounts of data, complexity of data flows and application stacks, Lobster offers easy to use, economic and powerful software solutions to integrate data, applications, and processes of all forms and variations.” Robin Mürer (Co-Managing Partner, FSN Capital Partners)
The same old challenge… – make or buy
The ultimate question in growth strategies making companies consider M&A as an option is whether to make or buy. The combination of high development costs (in time and opportunity) but risky success rates is the primary rationale for market activity within (industrial) software to expand its capabilities and/or geographical footprint. The principle of Moore’s Law is still true in today’s technology ecosystem. Rapid cycles leave no room to develop everything in-house, acting as a catalyst for market activity.
Deal examples:
“Best Practice IT Solutions’ cloud-based software will complement Aptean’s current Food & Beverage ERP offering and enhance our ability to serve beverage companies.” Duane George (GM, Aptean)
“By bundling the expertise of tisoware and Persis, we create a uniquely comprehensive HR ecosystem for our customers. Together with solutions for access and building security (Security) and for optimizing production processes (MES) in the context of Industry 4.0, we offer an overall workforce portfolio for medium-sized enterprises in the DACH region.” Markus Steinberger (CEO, tisoware)
Our industrial software index outruns other indexes
Since 2019, the Industrial Software Index has risen almost threefold, while the main Industrial Technology sector has doubled. A new all-time high has been reached for market capitalization.
The main macroeconomic events over the last 5 years have similarly impacted all indexes, but industrial software market capitalizations seem to recover more quickly.
Valuations for listed industrial software companies, both EV/EBITDA and EV/Sales, remain high, with forward multiples at ca. 11x sales FY2024.
So, industrial software – hot or not?
Most checkboxes are ticked for answering the question positively:
- High valuations are fueling market activity.
- Growing interest, both from financial investors and large software consolidators.
- Sustainable market movers, with both strategic and financial rationale, are dictating most transactions.
Investec Industrial Technology
The Investec Industrial Technology index tracks daily developments in sectors such as Flow & Process Control, Robots/Motion, Electronics/Control / Connect, Integrated providers, Measurement/Vision Tech, Industrial Software, Intralogistics/System integration and Machinery.
The index includes valuations, growth projections, profitability margins and other metrics.
Would you like to learn more about valuations, buyer activity and current opportunities in the market?
Please do not hesitate to contact us.
You can find more information on our website at Industrials | Investec
Renforcement de l’équipe TMT de Investec
Investec a le plaisir d’annoncer l’arrivée de Sebastian Markowsky en tant qu’associé basé en Allemagne. Sebastian Markowsky renforcera l’équipe TMT, au sein de laquelle il intervient principalement en M&A et en corporate finance dans les domaines des services informatiques, de l’édition de logiciels, de la transformation digitale et du marketing digital.
Sebastian possède plus de 15 ans d’expérience en matière de levée de fonds et de transactions M&A tant en Allemagne qu’à l’international.
« Investec offre une solide plate-forme et un portefeuille de services très complet permettant de soutenir les entrepreneurs du secteur technologique du mid-market. Avec Investec à nos côtés, nous pouvons offrir à nos clients européens une gamme très complète de solutions variées et ciblées ».
Sebastian Markowsky, Associé, Investec
« Je suis ravi d’accueillir Sebastian. Sebastian apporte une un grande expérience de banquier d’affaires dédié aux Services IT et la transformation digitale. Son arrivée nous permet de renforcer notre équipe, dans un contexte où les enjeux digitaux prennent une place croissante dans tous les secteurs que nous couvrons.«
Ervin Schellenberg, Associé et membre du board, Investec Europe
Avant de rejoindre Investec, Sebastian a été responsable de la stratégie d’un éditeur de logiciels de gestion de la compliance aux États-Unis. Auparavant, il a est passé par différentes banques d’affaires en Suisse, et chez GP Bullhound, et a commencé sa carrière en M&A à la Deutsche Bank AG à Francfort.
La passion de Sebastian pour les technologies de l’information, la transformation digitale, et le marketing digital, se reflète dans les relations clients qu’il apporte (entreprises du mid-market, start-ups, acteurs du private equity, acteurs du capital développement, et des family offices).
Il siège actuellement au conseil de surveillance d’Advanced Blockchain AG, une société cotée à la Bourse allemande qui se consacre à l’incubation de projets de blockchain. Sebastian apporte une grande connaissance et de nombreuses connexions au sein du marché des nouvelles technologies, tant au niveau allemand qu’au niveau international.
Financial restructuring for Shareholders & Lenders
Helping clients to navigate uncertainties while putting their businesses back on track
Interview with Jürgen Schwarz, Managing Partner of Investec about Restructuring with the help of a M&A process:
- How did the market change in recent years?
- What is your approach?
- Giving an example
This video answers these questions and give you an idea and overview in a few minutes.
Sale from insolvency
Due to our pan-European presence and track record we are well placed to advise on international and cross-border restructurings.
Our international sector teams implement more than 50 transactions p.a. and in many sectors they know the active buyers, the acquisition criteria, the behaviour of individual decision makers. We also have an up-to-date overview of the market prices paid, which vary considerably over time and depending on the positioning in the sector.
Investec has direct access to numerous international equity and debt capital providers and has carried out numerous restructurings ranging from approximately 10 million Euros to several billion Euros.
You know your company best but selling it to a suitable buyer at an attractive price is often a major challenge.
Interview with Ervin Schellenberg, Managing Partner of Investec about finding the right partner for medium-sized companies:
- How to find the right partner for a medium-sized company?
- Is my company ready for a transaction?
- What is the equity story?
- Giving an example
This video answers these questions and give you an idea and overview in a few minutes.
Our wealth of experience from many years of successful transactions and our access to relevant decision-makers in national and international buyers ensure the best possible result for you.
Investec has the core competences required to sell companies and has successfully completed hundreds of transactions across all major industries.
Financing and Market trends | 2023
Why the German industry has a great need for investment.
German industry is facing significant challenges, including the effects of digitalization, the shift from analogue to digital business models, the need for environmental protection measures and sustainable production processes, as well as demographic change, which is leading to a shortage of skilled workers and an ageing workforce. In order to successfully master these processes, significantly higher investment efforts are required than in the past.
Digitalization and Industry 4.0: At present, Germany ranks at best in the middle of the EU in terms of the use of digital technologies in the economy1. German industry must invest in digital technologies and automation to remain competitive. However, in order to catch up with comparable countries, IT and digitalization investments in Germany would have to double or triple from EUR 49 billion to EUR 100 to 150 billion annually. In the SME sector alone, digitalization expenditure would have to increase from EUR 18 billion in 2019 to EUR 35 to 50 billion per year.
Sustainability and environmental protection: Companies are increasingly focusing on environmentally friendly technologies and processes in order to achieve sustainability goals and reduce their environmental impact. These investments not only serve to protect the environment, but also contribute to long-term competitiveness. A recent study commissioned by KfW puts the climate protection investments required to achieve the goal of climate neutrality by 2050 at around EUR 5 trillion or around EUR 190 billion per year1. This enormous sum makes it clear that considerably greater efforts will be required to achieve the target than has been the case to date.
Read the complete Insight here.
Thorsten Gladiator, Managing Partner Investec: As corporate finance advisors, we see the importance of ESG in general and sustainability aspects in particular in almost every transaction, both in M&A situations and in financing mandates.
Equity and debt investors place a strong focus on ESG compliant investments in the interest of their financiers and / or due to investment criteria that are binding for them.
For business sellers as well as CFOs, this has pricing and process consequences:
- A clearly defined and documented ESG strategy creates confidence among investors and the company’s other stakeholders
- The same applies to the (early) implementation of legal requirements for sustainability reporting (CSRD)
- A focus on sustainability aspects provides positive differentiation features compared to competitors and can thus have a value-creating effect
- The lack of a corresponding strategy can lead to price discounts in the valuation as well as higher financing costs
- In the due diligence phase of a transaction, lack of ESG information leads to prolonged processes, higher management burden and the withdrawal of investors with clearly defined ESG investment criteria
The following article from AIM – Advice in Motion highlights the various aspects for medium-sized companies and shows examples of successful ESG strategies.
Opportunities and challenges of sustainability for smaller and medium-sized enterprises
The sustainability performance of a company today is the decisive factor for its competitiveness tomorrow. In this context, medium-sized companies in Germany in particular are faced with tasks whose extent has not yet been fully recognized in many cases and which involve major challenges in terms of resources, time and expertise.
Even though sustainability is a ubiquitous and much-discussed topic that is omnipresent both in the media and in public debate, it is by no means a new issue. Rather, sustainability has a long and exciting history that spans centuries and has been shaped by various actors and concepts.
Where do the roots of sustainability lie?
As far back as the Middle Ages, the moral ideal of the honorable merchant played a decisive role in promoting sustainable principles. Many a family entrepreneur rightly sees himself or herself in the tradition of the honorable merchant and aligns his or her business conduct with principles such as honesty, responsibility and sustainability.
In the 18th century, the Saxon chief miner Carl von Carlowitz coined the term sustainability in his work « Sylvicultura Oeconomica. » He introduced the idea that forest resources should be managed sustainably by cutting only as much wood as can naturally grow back. What was interesting about Carlowitz’s concept of sustainability was that sustained yield was precisely not antithetical to sustainability. Rather, forestry yield acted as the cornerstone for this oft-cited source of the concept of sustainability. The mining area of the Erzgebirge was simply dependent on the sustainable use of wood for construction, mining and smelting purposes.
Another significant milestone in the development of sustainability was the Brundtland Report, published in 1987 under the title « Our Common Future ». The report defined sustainable development as « development that meets the needs of the present without compromising the ability of future generations to meet their own needs. » Here, sustainability clearly went beyond a purely economic consideration. The report emphasized the need to integrate economic, social and environmental aspects to create a sustainable future.
Since then, the understanding of sustainability has evolved to encompass a variety of dimensions. One key concept is ESG (environmental, social, governance) criteria, which encompass environmental, social and governance-related factors. Differentiation of individual sustainable development goals is achieved through the United Nations Sustainable Development Goals (SDGs), which were adopted in 2015. The SDGs include 17 global goals to promote sustainable development at the economic, social and environmental levels by 2030. These goals range from poverty reduction, health, education and gender equality to renewable energy and sustainable cities.
The SDGs are an excellent framework for linking the principle of sustainability with economic, ecological and social development and provide a suitable orientation framework for a company’s sustainability strategy:
- SDGs as guidelines for sustainable management
- Alignment of products and services with the SDGs
- Business activities can contribute directly to achieving the SDGs
Nowadays, at the current edge of development trends around sustainability, so to speak, ESG expression is thus considered a leitmotif and fundamental approach for responsible and sustainable development. It is about combining economic, social and ecological aspects in order to create a world worth living in for present and future generations.
The individual SDGs are suitable targets for integrating ESG into corporate strategies, as they are more concrete and easier to measure using indicators than the more fundamental ESG concept.
Importance of the midmarket
As the backbone of the economy, the SME sector comprises a large number of companies that operate both regionally and internationally. It is of great importance for economic performance and employment in the country. Around 2.5 million companies in Germany belong to the Mittelstand, in the definition of a small and medium-sized enterprise (SME). These range from microenterprises to medium-sized companies with up to 250 employees, which generate around one-third of total sales for Germany and employ more than half of all employees.
Expectations around an ESG expression of the SME business model arise in a wide variety of internal and external stakeholder groups. Typical stakeholders include shareholder families, employees, customers and suppliers, financiers (EC and FC), NGOs and the media, and to an increasing extent regulatory policy.
The reasons for which companies address ESG requirements also vary. The most common motives include:
- The assumption of ecological and social-societal responsibility,
- Ethical reasons and intrinsic motivation,
- Requirements of customers and employees,
- Cost reduction and expectation of increasing sales,
- Requirements of capital providers,
- And last but not least, the increasing regulatory requirements.
The majority of companies are in the early stages of sustainability management.
Pressure to act and status quo around ESG in SMEs
The pressure to develop and implement ESG strategies is immense and relevant stakeholders are demanding this. In addition to opportunities of an ESG orientation such as cost reduction, successful positioning of the company, revenue and profitability advantages, there are clear business risks of a lack of consideration of sustainability requirements up to the withdrawal of the « license to operate » (violation of regulatory requirements, exclusion from supply chains, lack of financing or perspective withdrawal of insurance coverage).
If, against this background, surveys come to the conclusion that, despite pressure to act and explicit expectations of the relevant stakeholders, only around half of the companies in the SME sector have developed and implemented ESG strategies, the question arises as to why.
A ´decisive factor is the lack of time and resources in many SMEs to deal with the challenges and requirements of sustainability. Time is traditionally a scarce commodity, especially in owner-managed companies. Teams and specialists for ESG strategies and sustainability cannot simply be plucked out of the ground: the market for ESG specialists is empty and salary expectations are correspondingly high.
Support from external consultants is the obvious choice, but here, too, capacities are stretched and for many a large consulting firm it is obvious and more lucrative to advise the large DAX companies with entire teams of consultants before they delve into the peculiarities of the business model of a geographically decentralized SME.
AIM – Advice in Motion GmbH
This is where AIM, as an independent sustainability consultancy and partner in the Investec network, can provide effective support. AIM thinks and speaks medium-sized. Their clients include medium-sized companies from a wide range of industries in Germany, France, Portugal, Luxembourg and Switzerland. AIM supports with:
- Creation, coordination and implementation of ESG strategies in medium-sized companies,
- Preparation for mandatory sustainability reporting (CSRD),
- Directive-compliant calculation of the carbon footprint of companies (CCF) and products (PC),
- Preparation of climate strategies, derivation of targets and measures from the climate footprint,
- Communication around ESG and climate protection: avoidance of reputation risks.
Examples of successful ESG implementation in medium-sized companies:
I. Initial situation: Sustainability requirements for a medium-sized company in the wood industry in Germany with around 1,200 employees. In addition to the intrinsic motivation of the shareholders, a major impetus for action arose from the initiative of the industry association, which demands the implementation of climate protection measures for all member companies. Another impetus for action was for the company, as a supplier in the value chain of a large trading house, to support its ambition (climate protection and other social goals throughout the supply chain). AIM supported the development of a climate strategy, the calculation of the corporate carbon footprint and the compensation of unavoidable emissions in order to achieve climate neutrality.
II. Initial situation: market positioning of a 5-star resort hotel in Provence with its own vineyard. A key impetus for action was to reconcile a luxury resort with sustainability requirements and climate change mitigation measures. AIM developed an ESG strategy for the resort. This was based on a selection of sustainable development goals (SDGs) to which the resort can contribute. Corresponding measures were defined and implemented. At the same time, climate neutrality was achieved for the resort by offsetting unavoidable emissions. (AIM has implemented a comparable project with a resort in Portugal, which has since been nominated for the Sustainability Award of the Portuguese Tourism Association).
III. Initial situation: product positioning for a manufacturer of high-quality competition racing bikes from Switzerland. The company wants to make competitive sports compatible with sustainability and climate protection in particular. In order to provide buyers and users of the competition bike with an assessment of the carbon footprint of the racing bike product, AIM calculated the product-related carbon footprint for the bike, taking into account all phases of the life cycle of the racing bike, from cradle to grave.
IV. Initial situation: A medium-sized holding company with around 1000 employees in Germany will be subject to mandatory sustainability reporting in accordance with CSRD for the first time from the calendar year 2024. The extended reporting affects around 15,000 companies in Germany. The company’s sustainability performance will be considered from two perspectives: the impact of sustainability aspects on the corporate business model and the impact of the company’s activities on the environment and stakeholders. At the same time, the company aims to create a comprehensive ESG strategy that brings together all the actions taken to date to support sustainability goals. AIM has worked with the company to develop an ESG strategy that is aligned and parameterized with metrics to best prepare for upcoming sustainability reporting.
The development of company specific ESG and climate strategies and the requirements associated with the expansion of sustainability reporting pose major challenges for entrepreneurs in the SME sector. We support your company effectively in the sustainable transformation to ensure together with you the future and the competitiveness of your company for you and future generations.
Author: Andreas Kuschmann, Founding Partner AIM – Advice in Motion GmbH.
Unlocking Working Capital potential to fuel operational growth
Amidst the aftermath of the COVID-19 pandemic, geopolitical tensions, and persistent inflation, it is crucial for companies to prioritize efficient working capital management (WCM) in order to navigate near-term uncertainty and foster growth during the economic recovery. We identified four key reasons that make WCM crucial:
1. Economic headwinds are expected to be persistent: Despite the recovery of most advanced economies to pre-pandemic levels of output, growth in 2023 is projected to be sluggish. Recent downward revisions in growth forecasts highlight the challenges that lie ahead. For instance, the GDP growth forecast for the EU has been reduced to around 0.75%, a mere one-fifth of the previous year’s growth1. The IMF has also predicted that Germany will be the second weakest G7 economy next year, following the UK, with an anticipated GDP contraction of 0.11%1. Moreover, recent data reveals that the German economy contracted slightly for two consecutive quarters, by 0.5% in Q4 2022 and 0.3% in Q1 20232.
2. Inflationary pressure remains high until at least 2024: The Russian invasion of Ukraine has led to skyrocketing energy and food prices, resulting in persistent inflationary pressures. Additionally, rising material costs and supply chain challenges pose a threat to inventory levels, leaving businesses susceptible to supply shortages and price fluctuations. Although the IMF predicts a decline in inflation in Germany from 8.7% in 2022 to 6.1% in 2023, a return to the 2% target is not expected until at least 2025. Consequently, some companies have turned to forward buying and speculative upstocking. However, this strategy strains working capital and depletes cash reserves.
3. Interest rate peak has probably been reached: Central banks across the world have continued to tighten monetary policy and roll back quantitative easing to defeat red-hot inflation. In Europe, the ECB has raised its key interest rate by 0.25 percentage points to 3.5% in June, marking the eighth consecutive increase since July 2023. This rate-hiking cycle is the fastest in the ECB‘s history. ECB President Christine Lagarde announced further rate hikes in July, indicating an ongoing trend. According to a survey conducted by Bloomberg, it is projected that the peak will be reached at 4% in September 2023. Consequently, financing and working capital is becoming increasingly expensive.
4. Corporate cash flows are coming under increasing pressure: According to PwC, Days Cash on Hand of companies decreased by 10% in 20214. In 2022, the intensified efforts of central banks worldwide to combat inflation by raising interest rates have significantly impacted corporate cash flows. Mounting challenges stem from factors such as cost inflation, supply chain disruptions, and geopolitical events like the war in Ukraine, which have also influenced lender sentiment and global debt markets. In Europe, institutional loan issuance suffered a decline of 42% so far in 2023 compared to the previous year (as of July)5. As a result, the management of liquidity and working capital has become increasingly important.
Thorsten Gladiator, Managing Partner Investec: Supply chain issues and increasing (raw) material prices lead to higher funding requirements in working capital. A variety of working capital financing products allows for tailor-made solutions.