The ECCO group has implemented a change in the company’s finance management The ECCO group has implemented a change in the company’s finance management from traditional management of legal and organisational units towards increased focus on global profitability management. Today, the group has established a global overview which makes the actual profitability at EBIT level visible in all material dimensions, such as customers, products, distribution channels, etc. In 2004, the situation in the ECCO group was that profitability was falling and costs were increasing. “It was a worrying situation and it was made worse by the fact that it was difficult for us to identify exactly where in our value chain profitability was falling and which specific business activities were driving the cost increases. It was necessary to establish a model which would be able to measure profitability across our value chain”, says Annemette Nøhr, CFO. The vision for profitability management at the ECCO group was established from the beginning: • Establishment of global profitability management • Possibility of reporting and analysing profitability from multiple dimensions, such as branding divisions, products, regions, customers, channels of distribution, etc. • Reporting must include forecast, budget and realised profitability with possibility of both explaining and acting. • Profitability data, analyses and reporting must be an integrated part of the ECCO group’s standard IT systems. The vision still manages the development of and the work within profitability reporting. From cow to shoe The ECCO group is a global group which owns and runs a – for this line of business – unusually large part of the value chain. “We hold on to the posi- FaCTs On ECCO ECCO is a family-owned group with a leading position on the market for casual shoes. In 2006, the ECCO group had a total turnover of DKK 4.5 bn, which is almost 600 million more than the year before. In addition, the result before taxes has more than doubled from DKK 350 million in 2005 to almost DKK 709 million in 2006. “We are delighted with the results because they reflect a handsome growth in all our areas. The growth in the USA is 20 %, whereas it has been 40% in Eastern Europe and 8% in Western Europe. That is great”, says Mikael Thinghuus, Deputy Managing Director, to the daily newspaper Børsen on 23 March 2007. He points out that the growth in turnover in 2007 will be at least 10 %. This means that in 2007, the ECCO group will reach a turnover of around DKK 5 bn. Back in 2003, when the ECCO group reached a turnover of DKK 3.2 bn, the management set up an ambitious goal to double the turnover before 2013. This goal will have been achieved already in 2010 if the group succeeds in increasing the turnover by 10%.
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