Case Study

Regional Profitability Performance Review for $1.2B Oil and Gas Organization in EU

"Performed detailed forensic financial and operational analysis to discover root cause of deteriorating margins in EU region following restructuring event"


  • $1.2B Oil & Gas organization in the Europe region was unable to identify root cause of eroding margins​
    • Theorized the implementation of new segment structure, efficiency of service execution, and changing forex rates were impacting financials​
  • Performed an organizational restructure that created a new business segment by integrating product lines to offer turnkey services​
  • Won of a multi-year tenure that provided the ability to forecast operations and financials within the region out ~12 years​
  • As a result of these recent events, savings and growth were expected but not realized​
    • ~8-9% GM loss over five-month period (~$11M)​
  • SLKone was tasked with performing a forensic regional financial analysis to identify root cause for underperformance

Bespoke Solutions

-Performed financial deep dive, reviewing and correlating all impact variables to establish and test six hypotheses​ - Weakening product mix, activity decline, lag to tenure goals, misaligned organization, inflexible cost structure, and adverse forex impact​

  • Developed proprietary activity analysis tool to evaluate operations and related financial outputs at lowest possible level​
    • Provided insights into operational fluctuations that explained financial impacts at a level the business was unable to reach in the past​
  • Aligned actual performance to new tenure’s original forecast​
  • Quantified true FX impact through the development of local currency P&L and an agreed upon benchmark to measure variance in USD / local currencies over analyzed period​
  • Performed Fixed and Variable cost analysis for high impact categories and key industry trends ​
  • Reviewed organizational structure utilizing spans and layers analysis correlated with financial data​
  • Provided recommendations for remediation based on Strategy, Operations, Financials, Structures, and Culture

Leading With Results

  • Through proprietary tool developed by SLKone, previously unknown inefficiencies within specific events of the operations life cycle were identified allowing leaders to implore process / org solutions​
  • Organizational deep dive disproved misalignment theory, but highlighted alterative issues stemming from the transition that would positively influence operations and costs​ -Quantified true FX impact deemed the impact was immaterial (<10% of overall variance)​
  • Costs were proven to be insensitive to revenue fluctuations based on the performed analysis​

SLKone recommendations based on findings noted:​

  • Revised S&OP ground-up discipline that cuts across all areas of the business​
  • Building of predictive algorithms and goal-seek functionality into operational planning mode​
  • Plan to implement a shift in the cultural mindset​
  • Discrete products pricing model update to be “gap-fillers” in the much longer horizon of integrated projects forecast​
  • Deploy identified structural changes to remove product line siloed operations​
  • Implement targeted vs. random organizational transition based on new tenure’s forecast
Case studies and expertise may represent projects and engagements performed by SLKone team members prior to their employment at SLKone