ESI set for reinvention with 2021 up on all metrics
Monica Schnitger
Explaining technology one designer, engineer, maker and boss at a time -- then summarizing for investors & suppliers
I've been telling you over the last few years that ESI is working on reinventing itself -- going from a services-oriented, our-people-will-find-us mentality to a company that's more outward-facing and market-responsive. That's embodied in ESI's OneESI 2024 strategy, and today we learned how 2021 set up the company to hit those goals. First, the 2021 results:
CEO Cristel de Rouvray explained the tenets of the “OneESI 2024 – focus to grow” plan, which was first laid out at the company's investor event in October (my take on it is here; ESI has a whole website devoted to it, here). The plan officially kicked into place on January 1; ESI leadership spent Q4 laying the foundations, lining up resources, and restructuring headcount. It's early days in terms of results, but Ms. de Rouvray told investors today that "stakeholders around the world are starting to experience the early benefits of this change in our ability to focus and drive results" - but it's going to take time. Most of these changes aren't expected to turn into noticeable revenue or profit impacts until 2023 or later.
And here's why: Ms. Zorgati said that anything that involves customers and customer contracts is going to take time to sort out. She said that negotiating contract changes requires reaching common ground between monetizing the value ESI provides and customer expectations -- and, as Mr. de Rouvray said, it's likely that the services-oriented ESI of old likely created as many contracts as there are customers. Rationalizing all of this for existing customers can't begin until contracts expire.
In all, 2021 was a big year for ESI. New leadership in many key roles, a redesigned sales organization with global alignment and quotas, a focus on key technology areas, and a stepping away from projects not consistent with that new core vision. A lot of ESI people have new bosses and org structures. And the company still managed to deliver on its revenue targets. And it halved its outstanding debt (something I don't write about). Impressive.
Nothing changed in the guidance ESI gave in October. The company expects Q1 and fiscal 2022 revenue to be up 4% to 6% in constant currencies.
One last thing: part Ms. de Rouvray told investors that ESI's history began with human safety (crash testing and disaster modeling) and that this focus on protecting human life remains key to the company's moral compass (my words, not hers). The last question from an investor was about Russia and Ukraine: how did the war affect ESI? She said something along these lines: "Life is complicated -- we’re committed to taking care of all who are in our perimeter. In the face of Russian aggression, we take a moment to reiterate this — our thoughts go to team members who have family in Ukraine; we hope for their safety. [ESI has no employees in Ukrain.] And we send support to ESI's 7 employees in Russia, and to our partners there. [As for the business,] abiding by international norms [sanctions, and other restrictions] is the minimum we will do. We are alert and proactive in a fast-changing global situation".
Author, Board Member, French-American Chamber of Commerce
3 年Great article Monica Schnitger !
Off to New Adventures!
3 年As always Monica captures the essence of what we said - thanks for the supportive summary!
Looking for my next adventure! Chief of Staff - PMO - M&A - Advisor - Women in Leadership Program at USF
3 年Thanks for your article Monica!