Frankfurt In recent years, Stefan Schaible has done what is expected of a head of the strategy consultancy Roland Berger: he has restructured and transformed. Only he didn’t do it for his customers, but also for his own company.
The 54-year-old put the consultancy back on course for growth. With an increase of 27 percent to 745 million euros and an operating result of 117 million euros (Ebitda), 2021 was the best financial year since the company was founded.
But that should only have been the beginning. According to the company, which was founded in Munich in 1967, its business will grow by around 15 percent in 2022. Sales of more than 850 million euros are expected for the year as a whole.
That’s not enough for Schaible and the other 300 or so partners of the consulting firm: “We want to play even more globally. For that we need an annual turnover of one to two billion euros.” The faster you grow, the better, explains Schaible in an interview with the Handelsblatt.
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In order to finance the expansion, the consultancy is looking for investors: “We plan to raise up to 400 million euros in capital,” says the boss and continues: “We are planning to invest in various sectors such as consumer goods or pharmaceuticals to be even more broadly based.” Investments in the growth areas of digitization and sustainability are also planned.
In addition to organic growth, further acquisitions should drive the expansion. “We are currently examining four takeover candidates more closely,” reports Schaible. Most recently, the “Bergers” were reinforced with the 30-strong team from Polarixpartner, a consultancy specializing in cost optimization.
The expansion is to be financed by loans or bonds. In addition, “we are also looking at a public or a private placement as an option,” says Schaible. The Roland Berger boss does not rule out the involvement of a financial investor, but takes a critical view: “We did not bring the consultancy to where it is now in order to then sell it. Our independence is part of our strategy and our success.”
McKinsey and Bain are significantly more global
Schaible, who has been running the consultancy for eight years, orients his growth plans towards the three leading international strategy consultancies. Numbers one and two, McKinsey & Company and the Boston Consulting Group, each had sales of around eleven billion dollars in 2021 and number three Bain & Company just under six billion euros. Roland Berger is a long way from these sales, but the Germans are also showing clear double-digit growth rates.
The fact that Schaible and his consultants are looking for a connection here is correspondingly ambitious, but according to industry experts it is necessary. Dietmar Fink, Professor of Management Consulting and Managing Director of the Scientific Society for Management and Consulting (WGMB), sees Roland Berger’s partners and consultants in an awkward situation: “In terms of their skills and their own standards, they undoubtedly belong in the premier league of global management consultants . Unfortunately, not everything has always gone smoothly for them in recent years. As a result, they lost touch with the global leaders – also through their own fault.”
Founder Roland Berger (84), no longer a shareholder himself, was a top international consultant for many years. His team is an elite group, and society is a constant source of quarrels. From 1997 to 1998 it was majority owned by Deutsche Bank.
Through a management buyout in 1998, partners took over responsibility. A merger with the auditing company Deloitte fell through in 2010. This was followed by a capital increase and difficult years in the operational business.
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In competition with the US competitor, Berger wanted to score points with the label “consulting with European roots”. This did not work so well at first, because many partners who did not believe in an independent future left the company and took important customers with them. Together with the realignment, this cost a lot of sales.
This phase is now over. Fink says: “As the numbers show, Roland Berger is on the up again. And that inevitably raises the question of how to deal with the new tailwind.”
After the refurbishment, expansion will follow
If Roland Berger wants to grow, then massive investments must be made now. Because: “In order to play an international role, a management consultancy needs 1.5 to 2 billion euros in sales. With less business volume, there is a lack of financial and human strength.”
Schaible laid the foundation for international expansion. He has helped restructure the consultancy over the past eight years. Locations were also given up or relocated. According to information that has not yet been officially published, equity has increased from EUR 48 million in 2014 to EUR 168 million in 2021. Important: The equity is fully attributed to the active partners, no part is attributable to mezzanine capital.
The latter was originally contributed by the company founder’s Roland Berger Foundation. Until 2017, mezzanine capital still accounted for the majority. This is a mixed form of capital in which investors are usually not granted any further voting rights. The net financial liabilities, which were still 52 million euros in 2020, have now been completely eliminated.
Roland Berger is one of the few consulting firms to publish exact business figures that can be viewed in the Federal Gazette. Accordingly, the consulting company has continuously increased its operating result for years. The consultancy now has an Ebitda margin of almost 16 percent.
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The idea of an IPO also lingers around the company. Traditionally, consultants, like representatives of other freelance professions, maintain their entrepreneurial independence and the associated control. The three leading international strategy consultancies are also pure partnerships.
One of the few listed providers in the consulting market is the French IT and technology consultancy Capgemini. In 2021, this grew by around 15 percent to annual sales of 18.2 billion euros. The Ebitda was 3.01 billion euros. On the stock exchange, the French competition is currently valued at around 30 billion euros, which corresponds to a turnover multiple of 1.6.
According to this, Roland Berger would be estimated at around 1.4 billion euros with a planned annual turnover of 850 million euros in 2022. Or determined by the Ebitda multiple of Capgemini: worth 1.2 billion euros.
More: “Strategy consulting in Germany: margins of up to 60 percent”