The report contains the findings of a review of the working capital performance of the largest 2.000 companies (by sales) headquartered in the US and Europe.

1. All tied up
Working capital management
report 2012

2. Contents
Study methodology of All tied up report
Key working capital results
WC performance in Belgium compared to other European countries
Cash opportunity for improvement
Main factors that can explain the reported year-on-year WC variations
Contacts
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3. Study methodology of All tied up report
►The report contains the findings of a review of the working capital performance of the largest
2.000 companies (by sales) headquartered in the US and Europe
►The analysis draws on the companies’ latest fiscal 2011 reports. Performance comparisons
have been made with 2010 and with the previous nine years
►The review on which the report is based is segmented by region, country, industry and
company. It uses metrics to provide a clear picture of overall WC management and to identify
the resulting levels of cash opportunity
►Reported global, regional and country numbers are sales-weighted
►The WC performance metrics are calculated. In order to make the figures as comparable and
consistent as possible, adjustments have been made to the data to reflect the impact of
acquisitions and disposals and off-balance sheet arrangements.
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4. In 2011, the working capital performance of companies in the US has improved, but
stalled in Europe
►Total reduction in C2C achieved since 2002 is 16% for both
US and Europe
►Relative to 2010, WC performance has improved in the US,
with C2C dropping by 3% but stalled in Europe where C2C
has remained unchanged
► For the US, the overall improvement in C2C in 2011 arose
from a combined reduction in receivables and inventories
which was partly offset by lower payables
►In Europe, receivables and payables were marginally down
Ernst & Young while inventory was slightly up 4

5. The study includes 20 companies headquartered in Belgium from 13 industries with
total turnover of more than €120 billion
Belgian Companies included in the report Belgium 2011 Change from 2010
Industry # Companies Turnover 2011 (€M) DSO 36 -10%
Building Materials 1 536
DIO 33 5%
Chemicals 3 16.220
Distillers & Brewers 1 28.090 DPO 49 -1%
Electric Utilities 1 1.188 C2C 20 -8%
Food Retailers & Wholesalers 2 28.987
Gas Utilities 1 4.126
Industrial Technology 2 4.064 Belgium Europe
Metals 2 17.969 DSO Reduction 50% 56%
Paper & Forest Products 1 697
DIO Reduction 40% 42%
Pharmaceuticals 1 3.246
Specialty Retailers 1 5.977 DPO Enhancement 35% 50%
Steel 1 3.340 C2C Reduction 55% 48%
Telecoms 3 9.440
Total 20 123.880
►Cash to cash cycle in Belgium has been decreased by 8% to 20 days in 2011
►The improvement in the cash to cash cycle is mainly driven by the increase in days of receivables outstanding
►Both days of payables outstanding and days of inventory outstanding have been deteriorated in 2011.
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6. Cash to cash cycle in Belgium has been improved by 8% in 2011 compared to the
previous year
Year on year change in cash-to-cash cycle from 2010 to 2011
25%
SPAIN
20%
15%
10%
SWEDEN
AUSTRIA SWITZERLAND
5%
LUXEMBOURG FRANCE
FINLAND NORWAY
GERMANY
0%
PORTUGAL
IRELAND
-5% UNITED KINGDOM
DENMARK ITALY
-10% GREECE
BELGIUM
-15% NETHERLANDS
-20%
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7. The Belgian companies still have up to €10 billion of cash unnecessarily tied in
working capital
Cash opportunity
Value % WC scope % sales
Country/Region Average Upper quartile Average Upper quartile Average Upper quartile
Belgium €7b €10b 18% 25% 6% 8%
Europe €270b €460b 11% 19% 4% 7%
United States $330b $590b 12% 21% 3% 6%
►The wide variations in WC performance among different companies in each regional industry
point to significant potential for improvement
►Up to €10 billion cash is unnecessarily tied up in the WC of the leading Belgian companies.
This figure is €460 billion in Europe and $590 billion in he US
►The range of cash opportunity has been defined as the sum of the WC cash opportunity
derived for each company. This has been calculated by comparing the 2011 performance of
each company’s WC components with the average (low estimate) and upper quartile (high
estimate) achieved by its industry peer group
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8. Several factors may explain the reported year-on-year WC variations
► Unusual quarterly sales patterns
►Continued focus on working capital management
► Inventory adjustments in response to deteriorating market conditions
►Stronger receivables performance
► Weaker payables performance
►Volatility in commodity prices
► Currency movement effect
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9. Glossary
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10. 38
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11. Ernst & Young Deniz Ates
Senior Manager
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Assurance | Tax | Transactions | Advisory Mobile +32 (0)472 89 71 44
E-mail deniz.ates@be.ey.com
2012 Ernst & Young Transaction Advisory Services
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PR & Communications Manager
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