As a Graduate at Demant you will be given the opportunity to get responsibility early on. One example of this is a project I was involved in during the late Spring of 2022, after having been employed for a little more than half a year.
During the first months of 2022 Demant was, on paper, making money, and had positive EBIT (Earnings Before Interest and Tax), which was roughly following the budget. The profit did however not translate into any significant amount of money on our bank account, which meant the Free Cash Flow (FCF) was weaker than expected. FCF is the cash that should finance our acquisitions and share buy-back (equivalent to paying out dividend). Every DKK not coming into our bank account, instead needs to be financed through debt, thus increasing leverage and financial costs. This caught the attention of the management, who wanted to get better explanations, on a monthly basis, as to why the FCF was weak, when the business in general was healthy.
As I earlier on had shown flair for financial modelling, I was asked if I would like to take on the lead of building some reports, which were able to explain the weak FCF. A challenge I happily accepted. The reports had to be able to explain, in details, the FCF on a group level, as well as breaking each element of the FCF down to the different business areas, and all the way down to the entity level, while being as dynamic as possible. Thus, these reports would enable us to pinpoint exactly which elements were causing the weak FCF, as well as pinpointing the entities being responsible for this.
During the following weeks I built these reports, while continuously sparring with colleagues about how the optimal output should look like, and after the financial modeling had finished, the next (and more important) step began: analyzing the results. The output of the reports enabled us both to improve the level of detail in the monthly management reporting, but also to reach out to local entities, and initiate a dialogue with them, to give further explanation as to why the FCF was weak on their side. In this dialogue, multiple suboptimal processes were identified, and initiatives were quickly taken to improve these, thus creating a foundation for improving the FCF in the future. The project to improve FCF will be on-going for the foreseeable future. Through further modeling, analysis, and dialogue even more initiatives are expected to be done locally, with the assistance of the headquarters.
I liked this project because it gave me the opportunity to make a difference for Demant, while developing my analytical skills, as well as my skills financial modeling and stakeholder management.
Please reach out if you have questions to the Finance track or the Graduate life at Demant.
Anders Lynge Dissing