EY-Parthenon Strategy
Senior Associate Recruitment
Candidate Case Preparation Pack
Prepared for
Agenda
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Page 2
Tips and Guidelines
Practice Cases (Candidate Copy)
Practice Cases (Interviewer Copy)
EY-Parthenon FAQs
Tips and Guidelines
Key Contacts
300,000+ people | $36.4b revenue | 150 countries
• Recruitment Advisor : Amee Vadher
• Amee will be your main point of contact throughout the recruitment process
• Your mentor
• Amee will have connected you with your mentor for the process
• Your mentor is a Senior Associate in the business
• Your mentor is a great source of information about the role, the business and what to expect during the interview
process
• EY Interview Scheduling team
• This team will be on hand to help with scheduling your interviews and providing you will all of the logistical
information you need
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Tips and Guidelines
What’s the purpose of a Case Study Interview?
Why is Case Study Interview relevant?
►
As a strategy practice, we are frequently required to provide views on situations or challenges for which we may initially have limited data. In such
circumstances, we can utilise a range of operational assumptions triangulated against known data points to provide initial perspectives with caveats.
What we are looking to evaluate?
1.
2.
Problem solving approach
§
Identify and understand issues
§
Ask clarifying questions and make reasonable assumptions
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Structure the problem
§
Develop and prioritise recommendations
Numerical skills
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Demonstrate financial literacy (strong understanding of P&L and Balance Sheet)
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We do not require complex analysis requiring unnecessary technical knowledge (e.g. NPV calculations)
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Ability to identify the required calculation and then complete straight forward arithmetic
3.
Creativity in developing potential solutions
4.
Ability to succinctly articulate a point of view
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§
Demonstrates clear, articulate communication
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Responds well to challenge and new information
Tips and Guidelines
What is a Case Study Interview?
What to expect?
►
►
►
1 on 1 interviews with experienced consultants
35 minutes for each interview, although interview slots will be booked as 50 mins to allow for any technical issues using teams
and a chance to meet and greet with your interviewer
Chance to ask questions about EY-Parthenon at the end
Market Sizing
Business Case
Data Dump
How to prepare?
►
►
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Preparation is key, but don’t overdo it!
Useful links:
► Victor Cheng Case Interview Practices (on YouTube)
► Harvard Business School talks, resources, emails
► ConsultingCase101 Practice Cases - https://www.consultingcase101.com/tag/free-sample-case/
Tips and Guidelines
General Tips – Case Study Interviews
1
Listen to the question and clarify the scope
–
2
Write things down!
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3
5
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Don’t just rely on standard frameworks; craft a suitable framework to answer the questions posed by the problem
–
Think about different ways to approach the problem; either at the start or at the end of the interview, brainstorm different ways you could have
approached it e.g. bottom-up instead of top-down
Think about the key underlying assumptions
Cases are only ~30 minutes, so be mindful of how you best use your time. Be efficient when integrating maths into your analysis and round
numbers when appropriate (to a degree that will still get you an accurate answer)
Drive the case, it’s your business problem to solve
–
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As you go through the case, think about what the key assumptions are (if changed, they would drastically change the answer). This shows that
you know what is driving your final answer. If solutions are not definitive explain the underlying assumptions
Manage your time carefully
–
7
The interview is testing how you think; demonstrate this to the interviewer by explaining your thought process and rationale
Think about the problem at hand
–
6
Feel free to take time to think about how you are going to approach the problem and write down your steps. Then make sure you refer back to
them during the interview so you do not miss a step
Talk out loud
–
4
Feel free to ask the interviewer exactly what the scope / definition is e.g. for market sizing, you could ask “is it ok to exclude commercial lights
when sizing the market for light bulbs”
Cases are ‘interviewer-led’ i.e. there will be specific questions for you to answer; however, you are still expected to drive the case by asking
meaningful questions, performing calculations, and making statements. Don’t expect the interviewer to tell you what to do!
Tips and Guidelines
Tips for Virtual Interviews and Case Studies
1
Make sure you’re comfortable with your environment
Take some time to ensure you conduct the interview in a place where you are comfortable, have good lighting, have enough space to take notes, and have a stable
internet connection
2
Make sure you’re comfortable with the technology
Interviews will be held on Microsoft Teams, which you will receive a link to download beforehand – make sure that you’ve installed it, check that it works properly, and
that you’re familiar with how the video call function works
3
Practice beforehand
If you can, try to practice doing a case interview virtually with someone else beforehand. This will mean you are comfortable engaging with an interviewer in this way.
You could even try recording yourself, so you can assess your performance
4
Bring an A4 notepad and pen, and calculators are not permitted
Bring along a large notepad and pen so you can show your interviewer your workings on the camera
Please do not use a calculator during this case. To make it fair for everyone, we are trusting all candidates to follow this request. Whilst we can’t police this, if we find
out you are using or have used a calculator we will have to remove you from the process with immediate effect
5
Take time
Despite this being a virtual interview, take time to think about the problems at hand, and take notes during the interview. Your interviewer will not be expecting you to
fill the silence
6
Over-communicate
Given likely technology failures, you may miss crucial bits of the case; make sure to ask clarifying questions, and also check in with your interviewer to ensure they are
able to hear you well
7
8
Make an extra effort to structure your answers
Given you will not be in the same room and the interviewer will not be able to see your notes, it is more important for you to talk out loud about the steps you are
taking. Structure your answers and present them slowly and clearly
Maintain eye contact
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As in a physical interview, it is important to maintain eye contact and remain engaged. In a virtual interview, you can do this by frequently looking at the camera
Tips and Guidelines
Tips for Case Study Interview types
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Methodology
Structure your answer - take time to put your methodology on
paper
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Market Sizing
–
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Time management
►
Understand what the business does
–
Business Case
Data Dump
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Ask questions regarding the products offered/revenue streams
Keep in mind the strategic objectives of the case
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e.g. growth and profitability
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Timeline to achieve objectives
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Time management
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Prioritise insights over analysis
–
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Structure your approach in a way that makes sense for the case
Synthesis findings rather than simply explaining charts
Agenda
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Tips and Guidelines
Practice Cases (Candidate Copy)
Practice Cases (Interviewer Copy)
EY-Parthenon FAQs
Agenda
• Tips and Guidelines
• Practice Cases (Candidate Copy)
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•
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Case 1: Protein Bars (~25 mins)
Case 2: Prison Telephony (~35 mins)
Case 3: Nurseries (~35 mins)
• Practice Cases (Interviewer Copy)
• EY-Parthenon FAQs
Page 10
Practice Cases
CANDIDATE COPY
Case 1: Protein Bars
Outline of case and advice to candidates
About the case:
•
This case is about Muscle Nutrition, a UK sports nutrition
Advice to candidates:
•
company selling protein powder, bars and tablets. Their
main consumer base has historically been body builders
If you don’t understand something, please ask for
clarification
•
There are no ‘tricks’ here – we are trying to find out what
you can do, not if we can catch you out
•
The impressive success of their recently launched protein
•
your response
bars has caught the attention of Smith and Jones Capital,
a UK based Private Equity fund who are now interested in
•
•
have engaged you to help them test their investment
thesis
Page 11
Please keep working through even as your interviewer is
taking notes
Smith and Jones believe that there is potential to take
Muscle Nutrition’s bars into the mainstream market and
Please write down your workings clearly on the sheets of
paper provided so that your interviewer can follow along
buying the company
•
Take the time to think through your answer and structure
•
Please do not open this pack until instructed to do so by
your interviewer
Practice Cases
CANDIDATE COPY
Case 1: Protein Bars
Questions
1
How would you size the total market for protein bars in the UK?
►Please
demonstrate how you would structure the market sizing
►Conduct
Page 12
the calculations
Practice Cases
Case 1: Protein Bars
Questions
2
Page 13
CANDIDATE COPY
As mentioned, the PE firm are interested in the mainstream
segment of the market for protein bars. What do you think are
the growth drivers of this segment of the market?
Practice Cases
Case 1: Protein Bars
Questions
3
Page 14
CANDIDATE COPY
Based on the data on the following slides, is there sufficient
evidence to say protein bars can go mainstream? Please
summarise in a few (3-5) bullet points.
Practice Cases
CANDIDATE COPY
Case 1: Protein Bars
Data
Q: What is most important to you when thinking about healthy eating?
Select and rank your top 3
40%
30
20
10
0
Page 15
Low calorie
Less carbs
Source: Parthenon-EY Health & Wellness Consumer Survey 2015 (n=1,061)
More protein
Organic
Nutrients added
From
a
sustainable
source
Gluten free
GMO free
Practice Cases
Case 1: Protein Bars
Data
Q: What is the main occasion when you
eat protein bars?
Page 16
Source: Consumer Survey (n=1,415)
CANDIDATE COPY
Q: What is the most important reason for
you eating protein bars?
Practice Cases
CANDIDATE COPY
Case 1: Protein Bars
Data
Q: How often do you typically exercise per week?
For all consumers who bought the protein bar brand in the past 6 months
100%
80
60
40
I don’t usually exercise
Less than once per week
One or two times per week
20
Three or four times per
week
Five or six times per week
Every day
0
Protein Bar
Manufacturers
Page 17
Source: Consumer Survey (n=1,415)
Practice Cases
CANDIDATE COPY
Case 1: Protein Bars
Data
Q: Where did you buy the [brand] bars you purchased
most recently?
60%
54%
40%
40
25%
20%
20
11%
18%
10%
8%
4%
0
% All Brands
Page 18
Source: Consumer Survey (n=1,415) :
4%
3%
3%
Supermarket
Specialist health
store (e.g.,Holland
& Barrett / Met-Rx)
Amazon
Online (excl.
Amazon)
Convenience store
Other
50%
15%
12%
15%
4%
3%
Average (excl. Muscle
Nutrition)
Muscle Nutrition
consumers
Practice Cases
Case 1: Protein Bars
Data
Q: How often do you eat a protein bar?
Page 19
Source Consumer Survey (n=1,415)
CANDIDATE COPY
Q: Are you eating more or less protein
bars than you did in the past?
Agenda
• Tips and Guidelines
• Practice Cases (Candidate Copy)
•
•
•
Case 1: Protein Bars (~25 mins)
Case 2: Prison Telephony (~35 mins)
Case 3: Nurseries (~35 mins)
• Practice Cases (Interviewer Copy)
• EY-Parthenon FAQs
Page 20
Practice Cases
CANDIDATE COPY
Case 2: Prison Telephony
Outline of case and advice to candidates
About the case:
►
This case is about Calypso, a provider of phone services to
prisons and prisoners in Europe. The company addresses
four markets:
►
If you don’t understand something, please ask for clarification
►
There are no ‘tricks’ here – we are trying to find out what you
can do, not if we can catch you out
►
Take the time to think through your answer and structure your
response
2) Multimedia: covers media content / video-calling and
messaging apps
►
Please write down your workings clearly on the sheets of paper
provided so that your interviewer can follow along
3) Prisoner self-service: self-service applications for
prisoners
►
Please keep working through even as your interviewer is taking
notes
4) Lawful interception: surveillance and storing of content
provided
over Calypso’s services
►
Please do not open this pack until instructed to do so by your
interviewer
1) Telephone systems: connects prisoners and external
parties (e.g. relatives) through telephones made available
to prisoners
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Advice to candidates:
►
Calypso generates a majority of its revenues from the use of
telephone systems by prisoners, and has not yet fully rolled
out all of its products across every market
►
A private equity investor is interested in acquiring a stake in
the business and has engaged EY-Parthenon to assess the
market and future growth opportunities for Calypso
Practice Cases
CANDIDATE COPY
Case 2: Prison Telephony
Market segmentation
Description
Market segments
►
Telephone
systems
►
Multi-media
►
Self-service
►
Lawful
interception
Page 22
Hallway and in-cell telephone
systems providing access to
national and international
calls, through landline, cell
and collect calls
In-cell multimedia terminals
which enable inmates to
communicate (through video
calls, video messaging and
video telephony) and watch and
listen to music and movies
Self-service solutions
delivered via in-cell terminals
which enable inmates to
organise their prison life,
doctors appointments and
shopping
Provides capabilities for the
listening in on conversations
and the storage of past
conversations
Buyer
Calypso’s Products
►
Prison telephones and in-cell
phone systems
►
Prisoner pays per use
►
Relatives pay for collect
calls and can fund the
prisoner’s account
►
Prisoner pays monthly fee
►
Relatives can fund the
prisoner’s account
►
CalypsoConnect for collect
calls (collect calls are calls
paid for by the recipient)
►
TV access, radio, DVD and
telephony
►
Multimedia content, video
calls and messaging
►
In-mate self service
applications
►
Prison administration
pays service fees
►
Storage of past conversations
►
Charged for on a per
prisoner basis
►
Lawful interception
capabilities
►
Prison administration
pays service fees
►
Charged for on a per
prisoner basis
Practice Cases
Case 2: Prison Telephony
Question 1
1
Page 23
CANDIDATE COPY
What is the size of the addressable market for Calypso’s services
within Europe (in terms of annual € revenue)?
Practice Cases
Case 2: Prison Telephony
Question 2
2
Page 24
CANDIDATE COPY
What are the drivers of growth for the prison telephony market?
How do you think this market is likely to develop in Europe over
the next 3-5 years?
Practice Cases
Case 2: Prison Telephony
Question 3
3
Page 25
CANDIDATE COPY
Based on the data available and your own knowledge, what are
the growth opportunities for Calypso over the next 3-5 years?
What are the potential risks?
Practice Cases
CANDIDATE COPY
Case 2: Prison Telephony
Calypso’s company footprint
Calypso’s revenue by product segment (%), FY17
Calypso revenue split by geography (%), 2017
Interception services
In the Netherlands,
Calypso generates
~20% of revenue with
products other than
telephone systems.
Self-service
Multimedia
NL
14%
DE
27%
92.0%
Telephone Systems
FR
28%
PL
9%
CZ
<1%
HU
7%
RO
8%
BG
3%
FY17
Key:
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= More than 10%
= From 5% to 10%
= Up to 5%
= None
Note: IR = Ireland, UK = United Kingdom, FR = France, SP = Spain, BE = Belgium, NL = Netherlands, CH = Switzerland, DE = Germany, CZ = Czech Republic, AT = Austria, IT = Italy, HR = Croatia, HU = Hungary, SK = Slovakia, RO =
Romania, BG = Bulgaria, PL = Poland, NO = Norway, SE = Sweden, FI = Finland
Practice Cases
CANDIDATE COPY
Case 2: Prison Telephony
Contract structure and upcoming tenders
Commentary
National vs local tender organisation
► Although the majority of revenue is paid for by prisoners themselves,
Calypso contracts with prison providers to be allowed to offer its services to
prisoners, usually as a sole provider
► A majority of contracts are won through national tenders which have unique
requirements for each country
► Tenders are lengthy and begin in advance of the actual tender period and
typically last 3-5 years with extension options
FI
► The complexity of public tenders has resulted from mandatory requirements
and a sophisticated scoring system
NO
SE
NL
IR
UK
Upcoming National Tenders in 2018 - 2019
PL
BE
DE
Country
CZ
SK
FR
AT
CH
HU
HR
IT
RO
Poland
3 years
BG
Norway
5 years
Czech Republic
4 years
Sweden
5 years
Finland
4 years
Switzerland
4 years
France
5 years
Denmark
3 years
SP
Key:
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Contract Length
= Local / regional tender
= National tender
Note: IR = Ireland, UK = United Kingdom, FR = France, SP = Spain, BE = Belgium, NL = Netherlands, CH = Switzerland, DE = Germany, CZ = Czech Republic, AT = Austria, IT = Italy, HR = Croatia, HU = Hungary, SK = Slovakia, RO =
Romania, BG = Bulgaria, PL = Poland, NO = Norway, SE = Sweden, FI = Finland
Practice Cases
Case 2: Prison Telephony
Pricing and usage patterns
Commentary
► After being accused of charging unfairly high prices due
to a lack of other telephone options in prisons, Calypso
was taken to court in Germany and forced to
substantially reduce the prices for its telephone
services
► There has been public pressure on Calypso in France
and the UK to make similar price reductions, with talks
of litigation
Page 28
CANDIDATE COPY
Telephone Usage Data, Germany
Practice Cases
CANDIDATE COPY
Case 2: Prison Telephony
Global prison demographics
Global Prison Industry,
by Number of Inmates, 2017
100%
Calypso Customer Counties 5.0%
Rest of Europe 11.1%
80
Africa and the Middle East 11.3%
South America 14.6%
60
North America 21.8%
40
20
0
Page 29
Asia Pacific 36.3%
Number of Inmates
Agenda
• Tips and Guidelines
• Practice Cases (Candidate Copy)
•
•
•
Case 1: Protein Bars (~25 mins)
Case 2: Prison Telephony (~35 mins)
Case 3: Nurseries (~35 mins)
• Practice Cases (Interviewer Copy)
• EY-Parthenon FAQs
Page 30
Practice Cases
CANDIDATE COPY
Case 3: Nurseries
Outline of case and advice to candidates
About the case:
•
•
Advice to candidates:
This case is about a Private Equity Fund who have decided
•
If you don’t understand something, please ask for clarification
to enter the market for Nurseries
•
There are no ‘tricks’ here – we are trying to find out what you
Nurseries care for children between the ages of 0-5 years
old (typically). They provide both a childcare and
can do, not if we can catch you out
•
educational function
•
Funding for Nurseries may be provided by the government
response
•
or by parents.
•
In most geographies funding is a mixture of private and
The firm would like you to help them make some investment
decisions
Page 31
Please write down your workings clearly on the sheets of paper
provided so that your interviewer can follow along
•
public funding
•
Take the time to think through your answer and structure your
Please keep working through even as your interviewer is taking
notes
•
Please do not open this pack until instructed to do so by your
interviewer
Question 1
CANDIDATE COPY
If you were considering purchasing a nursery, what are
the criteria you would assess in your purchase decision in
determining its likely future success?
Page 32
Question 2
CANDIDATE COPY
How would you prioritise across these criteria identified?
Page 33
CANDIDATE COPY
Question 3
The investor has decided to focus on an individual
geography for their nurseries investment. They have
obtained some commercial due diligence reports on three
possible geographies: the UK, Singapore and Canada
Q3: Which would you choose to enter and why? How did
you go about making this decision?
Page 34
UK
CANDIDATE COPY
Nursery market fundamentals are strong and we believe the market will grow at ~3%
CAGR over the next five years driven primarily by price growth
Commentary
UK Nursery Market Value, 2007-2021F
CAGR
CAGRCAGR
('17-21)
£8b
H
('11-17)
('08-11)
F
In the last recession, the UK nursery industry was not
impacted significantly
►
£0.6b £6.5b
6
£1.2b £5.7b
£0.2b
The market has continued to perform well in recent years
►
£0.5b
£0.4b £4.1b
4 £3.8b
-£0.1b
2%
6%
3%
Page 35
2008 Volume Price
2011 Volume Price
2017 Volume Price
• Source: Parthenon-EY Analysis, Parthenon-EY Interviews
2021
“It is no wonder that people see the UK nursery
market, particularly in London, as an attractive
investment opportunity. It is a fantastic sector which is
only expected to continue to grow”
– Sales and Marketing Director, UK Nursery Chain
UK nursery chains believe that they will continue to
grow, despite any risk of a recession
►
2
0
“This sector is extremely resilient to changes in the
economy. In the last recession, we talked for days and
days about the impact it would have on revenue and
occupancy, but this never really materialised”
– CEO, UK Nursery Chain
“If anything, in a recession, parents become more
aware of risks around job stability and therefore try
and work as many hours as possible. Mothers return to
work more quickly, and therefore require more
childcare”
– Regional Director, UK Nursery Chain
CANDIDATE COPY
UK
The previous recessionary environment slowed overall growth in the market; nursery
chains historically performed more strong than the market during the last recession
Revenue per site
CAGR (’08 -’11)
Revenue per site
CAGR (’11 -’16)
11%
2%
Commentary
Buy Bees acquired Treetops at
the beginning of 2017
19%
Bright Horizons acquired
Casterbridge and kidsunlimited
which may have boosted the
revenue per site post-recession
5%
1%
Asquith’s performance suffered
after the recession due to
underinvestment in mature sites
and opening of new sites
5%
4%
NA
3%
NA**
NA
-4%
Page 36
Company revenue*
growth compared to
growth of the market
(’08-’11)
Note: *Overall company revenue (not revenue per site) **Casterbridge was acquired by Bright Horizons in 2012
Source: Companies House; Company Websites; Nursery World
CANDIDATE COPY
UK
Despite the recent slow down in price growth, high performing chains will be able to
maintain continued price growth
Typical Weekly Nursery Fees for a Child Under 2 in England,
2008-2017*
The jump in fees in 2011 is
likely in response to the
increase in free nursery hours
from 12.5 to 15 hours a week in
2010
Commentary
Providers have reported they are planning on continuing to
increase fees in the coming years for multiple reasons
►
“The reality of 30 hours legislation is that it allows us to
increase the weighted price per hour we are charging for all
the different age groups and users”
– Sales and Marketing Director, UK Nursery Chain
►
“The National Living Wage was has come in and it has given us
a real policy we can point to and say to our customers that we
have to increase prices at above inflation rates or we won’t be
able to continue”
– Regional Director, UK Nursery Chain
►
“Fee increases are a necessity, we are a not for profit and our
business plan is too keep increasing the rate of fees at around
5% p.a. or else we won’t be able to continue running our
business” - Former Business Director, UK Nursery Chain
►
“I think so long as you can continue to point to better staffing
ratios and improved conditions in the nursery parents are
willing to accept fee increases”
- CEO, UK Nursery Chain
Nursery fees per week, Under 2
+10%
Historically, Parthenon-EY observed market price increasing
rapidly in response to higher government hours. This reflects
nurseries using fee rates to maintain daily rates and also the
increase in affordability to parents due to the larger government
subsidy
Children over 2 years old
follows a very similar pattern of
growth
Page 37
Note: *Local authorities were asked to provide costs for 25 hours and 50 hours of childcare, provided by nurseries or childminders. The former figure – 25 hours – is the typical amount of childcare
that a parent who works part-time might purchase, or a parent in full-time employment who purchases an extra 25 hours childcare on top of the 15 free hours of early years’ provision available in
England; For 2008 and 2009, the cost of nursery based on 50 hours of childcare per week were halved to be consistent. No data exist for 3-4 year olds for 2017 due to poor responses to the
collection survey
Source: Family and Childcare Trust’s Annual Survey; BBC
CANDIDATE COPY
UK
The government has a role in funding nurseries in the UK. This has recently expanded
Time of
Introduction
Eligibility
Entitlement
►
15 hours
Free
Childcare
►
September
2010
►
►
30 hours
Free
Childcare
Page 38
September
2017
All children aged 3-4 in England
Some two year olds are also
eligible, if the parents receive
certain benefits
Children aged 3-4 in England, if
parents meet the following
criteria:
► Both parents work for at least
16 hours a week, earning at
last the National Minimum
Wage
► Neither parent has a taxable
income over £100,000
► Eligible parents must register
online to qualify for the
additional funded hours
►
►
►
►
Up to 570 government funded
hours per year (15 hours per week
for 38 weeks)
Hours can be stretched across the
52 week year, averaging 11.0
hours per week
Up to 1140 government funded
hours per year (30 hours per week
for 38 weeks)
Hours can be stretched across the
52 week year, averaging 21.9
hours per week
Funding cannot be used to pay for
supplements such as food and
additional activities
Provider Requirements
►
This is an optional provision for
private providers, though most
choose to opt into the scheme
►
Funding is only available if a
nursery opts into the scheme
Private providers can limit the
number of ‘funded only’ children
Private daycare providers do not
have to offer the full 30h funding
to all children, and can offer the
hours at specific times, or as part
of ‘wrap around’ packages
►
►
UK
There are some risks based on the UK regulatory environment
Description
Risks to UK Nurseries
►
30 Hours Free
Childcare
►
Increase in the number of government
funded hours for UK 3-4 year olds with two
working parents
►
►
Brexit
►
The UK’s departure from the EU may mean
that EU nationals leave the UK
►
►
National Living
Wage
►
An obligatory minimum wage payable to UK
workers aged 25+
►
A government scheme in which the UK
government will pay £2 for every £8 a
parents pays into a childcare account – up
to £2000 per year
Tax Free
Childcare
Future
Political
Landscape
►
►
Page 39
Source: Parthenon-EY Analysis
No planned changes to childcare from
current Conservative government
Future Labour government likely to expand
the provision of childcare
Revenue and margins for private nurseries may
be eroded as parents switch their hours from a
private rate to a lower government funded rate
We expect ~50% of Local Authorities to be
revenue positive for busy bees due to the
increase in the government rate
Reduction in availability of EU nationals to
operate as teachers within nurseries
Reduction in EU enrolments within nurseries
due to immigration changes
Economic weakness reducing employment and
enrolment in nursery sector
►
Staffing costs may increase, impacting margins.
Although this will mainly affect carers rather
than nursery managers
►
Minor administrative burden from providers
switching from previous childcare voucher
scheme
Upside is that people may use this scheme to
be able to afford additional childcare
►
►
Based on recent manifestos, the Labour party
is focused on expanding places and
affordability via higher subsidies
CANDIDATE COPY
CANDIDATE COPY
UK
The market is highly fragmented
Nurseries by ownership/
structure type
100%
11,252
100%
Groups
(6+)
80
Groups
(<6)
80
Groups (6+) by number of sites, ownership and
positioning
652
263
The Co-operative Childcare
Toad Hall Nursery Group
Childbase Partnership
For Under Fives Ltd
Banana Moon Day Nurseries
Treetops Nurseries Ltd (incl. Kindercare Day
Nuerseries)
Asquith
60
NHS/Charity
60
288
367
Active Learning
Blossom Years Children's Nursery & Pre-Schools
Lily & Co Ltd
Kinder Haven Day Nurseries
Tudor House Montessori Nursery Group
Bellevue Education
Happy Days Childcare
Squirrels Nurseries
Rhymetime Nursery
Child Centred Nurseries
Bramleys Nurseries
Clowns Nursery Ltd
Heath Farm Day Nursery Ltd
Caring Kindergartens
Once Upon a Time Day Nurseries
St Aubin Nurseries Ltd
Puffins of Exeter Ltd
Little Ones Childcare
Childfirst
Countryside Nurseries Ltd
White Horse Child Care Ltd
BrightStart Day Nurseries
House of Eden
Wind In The Willows Childcare Ltd
Fisherfield Farm Nursery
The Village Nursery Group
Twinkle Totz Day Nursery Ltd
Positive Steps Children's Day Nursery Ltd
Portico Day Nurseries Ltd
A Step Ahead Ltd
Little Acorns & Stepping Stones Nurseries
Davidson-Roberts Ltd
Tynemouth Nursery Group Ltd
Bush Babies Childrens Nurseries Ltd
Mace Montessori Schools Ltd
The Eveline Day and Nursery Schools
Schoolhouse Daycare Ltd
Noah's Ark Childcare Centres
The Meadows Nursery Schools
Paint Pots Nurseries
Busy Nought to Fives Ltd
Townsend Montessori Nurseries Ltd
Paper Moon Nurseries
Snapdragons Nurseries Ltd
Little Elms Daycare Nursery Ltd
Buttercups Nursery Ltd
Hungry Caterpillar Day Nurseries Ltd
Fennies Day Nurseries Ltd
Kids Play Childcare Ltd
Clarence House Day Nurseries Ltd
Flying Start
Stars Day Nurseries Ltd
North Halifax Partnership Ltd
Pollywiggle Day Nurseries
Footsteps Day Nurseries Ltd
Brighter Beginnings Educational Day Nurseries
Tops Day Nurseries
Tinies Childcare Nurseries
Rosedene Nurseries Ltd
Tommies Childcare Ltd
Nunthorpe Nurseries Group
Little Ripley Nurseries
Little Acorns Group Ltd
Childcare East Midlands LLP
Happy Days South West Ltd
Acorn Childcare
Complete Childcare
kidsunlimited Nurseries
Minerva Education
Cherry Childcare
Magic Nurseries
Chestnut Nursery Schools Ltd
Seymour House Day Nursery
Kids Planet Day Nurseries
Sunhill Daycare (Europe) Ltd
Kiddi Caru Day Nurseries
Acorns Nurseries Ltd
Yellow Dot Nursery
Bright Horizons Family Solutions
40
Kids Inc Nurseries
40
Children 1st Day Nurseries
Tiny Toez Ltd
Alpha Nurseries
20
Independent
Nurseries
Mama Bear's Day Nursery
Nuffy Bear Day Nurseries
Just Childcare Ltd
Children's Place Day Nurseries
The Kindergartens Ltd
20
Ant
Kids 1st Nurseries
All About Children
Monkey Puzzle Day Nurseries Ltd
0
#Nurseries
More than 40
15-39
9-14
6-8
7
13
27
54
# of groups
Ant
Page 40
Source: Day Nurseries (2017)
Safehands Network
Bertram Nursery Group
0
Total = 1,570
Bright Horizons
PE-backed Groups
Non PE-backed Groups
Canada
CANDIDATE COPY
Nurseries are in the for-profit segment of regulated center-based childcare, which
spans the mid-ranged to super-premium market segments
Canadian Nursery Market Segmentation
Canada Child Care Market for Children
Ages 0-5 by Type of Setting
Segment
Toddler Fee Range
(C$ p.m. 2017)
Target Parent
Mid-ranged
> 1,000
(overlaps with
Premium in pricing,
but over-indexes on
subsidized parents)
►
~900 – 1,300
►
Premium
►
►
Super-premium
(e.g. Montessori)
1,300+
►
►
Montessori programs are highly
regarded across Canada and most
fall in the for-profit segment
Page 41
Source: CRRU; Statistics Canada; General Social Survey
Competitor
Core Competitor
Middle class, working
full-time out of necessity
Funded / working class
Upper-middle class
Funded / subsidized
families to a lesser
degree than mid-ranged
Upper-class / high networth families
Career couples
Canada
CANDIDATE COPY
The regulated center-based childcare market in Canada is ~C$5.1B and is projected to
continue growing at ~5% going forward
KPMG Regulated Child Care Market Value,
2012-2016
Future growth at a rate
of ~5% will be driven by
a combination of fee
increases, underlying
population growth, and
changes in capacity
Source: KPMG VDD Report, Parthenon-EY Analysis, ”Early Childhood Education and Care in Canada 2014”,
Statistics Canada, “Day Care in Canada” – IBIS World
Page 42
Canada
CANDIDATE COPY
There is a significant shortage of places in Canada, which has allowed providers to
consistently maintain high occupancy levels
Regulated Childcare Spaces for Children Ages 0-5
1992-2016E
Availability of spaces
increased from 12% to
24% from 1992 to 2016
Commentary
Lack of supply in the market is favourable to Ant, creating a
seller’s market and providing clear opportunity for growth
►
Ontario and Alberta have particularly low proportion of
seats to children – at closer to 20%
►
“There's a shortage of spaces to the point where they
tighten up regulation and make it harder for new entrants
to enter the market. I think there'll always be that excess
demand over supply” – Former Director, Corporate
Development, Private Nursery Chain
The infant age group is most affected by seat shortages,
driven by higher cost for this age group
►
“There is a shortage of day care across all age groups in
Canada, but in particular it’s unbelievably hard to find a
centre that has space for infants because they’re more
expensive programs to run and that comes into regulations
because your ratio for infants is lower than other age
groups. Having to employee staff is very expensive for
centres” – Director, Developmental Centre for Early
Learning
Seat shortage is set to continue in the future
►
“There is no evidence to suggest seat shortage will change
in next few years – if anything it will get harder to open new
places due to increased regulation, leading to more
problems” – Audit Manager, Large Consultancy
Government funding aims to increase the number of spaces
Page 43
Note: 2016E is estimated based on market feedback on continued space investment lagging demand growth
Source: Canadian Public Health Association; CCRU; Parthenon Interviews and Analysis
►
In 2016, Ontario announced a plan to commit ~$3.75B
into 100,000 new child care spaces over next 5 years
►
British Columbia set a goal to create 22,000 new spaces
over next 5 years
►
Alberta’s recent capped fee trial was launched with aim of
increasing spaces
Canada
CANDIDATE COPY
The government is committed to increasing funding to nurseries to expand subsidies
and increase the number of places available to parents
Strong federal leadership
1998 – 2006
Federal and provincial funding for early
child care, excl. Quebec, 1995-2006
►
Period of federal leadership began in
1997 with the National Children’s
Agenda framework and vision
►
National Child Benefit (evolved into
today’s Canada Child Benefit) was
begun in 1998
►
►
Page 44
The first Multilateral Framework on
Early Learning and Child Care was
created in 2003 and included a $935M
investment over 5 years to add new
spaces
Bilateral agreements with several
provinces followed and included
funding commitments of $200M in
2005 and $500M in 2006
Provinces drive support
2006 – 2016
Funding expansion plan of Trudeau
administration (current)
Federal and provincial funding for early
child care, excl. Quebec, 2006-2014
►
In late 2006, the newly elected
Conservative government canceled the
recently created bilateral agreements
with the provinces
►
During the period that followed,
provinces drove support for early child
care through legislation and initiatives
including Ontario’s Child Care and Early
Years Act (2014)
►
In recent years, provincial governments
have increased funding significantly –
Ontario committed $3.75B in 2016 to
add an additional 100,000 child care
spaces over next 5 years, British
Columbia is investing with the aim of
creating 22,000 new spaces over next
3 years
Source: Parliament of Canada; The Canadian Press; Province Websites; Parthenon-EY Interviews and Analysis
Additional federal funding pledged,
2017-2026
Funding Period
Total
Total pledge
through 2026
$7.5B
FY2017-18
$500M
FY2025-26
$860M
►
In 2017, the Trudeau administration
released a new Multilateral
Framework on Early Learning and
Child Care which makes a
commitment by federal and
provincial governments to work
towards further investment
►
Province negotiations allow leeway
in how funds are directed, which will
not automatically result in seat
creation
►
Today, Ontario, Nunavut, and PEI
have signed bilateral agreements
outlining priorities for funds
►
Many looking for greater federal
leadership for early child care
believe the funding and
commitments are insufficient to
make a significant impact
Canada
Funding model includes both government subsidies and private parent pay
CANDIDATE COPY
Flow of Funds to Early Child Care Centers
Funding Sources
Federal sources
Space
creation is a
key priority
across
provinces
and
federally;
funds flows
to new
centers are
not reflected
in this
illustration
Canada Child
Benefit ($17B)
Note: Includes
children 0-17;
use not
restricted to
child care
Funding Uses
Private sources
Parent income
+ federal
benefits
Center revenues
Parent-paid
fees (~$2.22.7B)
Center cost offsets
Represents total
size of Canadian
early childcare
market, excluding
Quebec which
amounts to
another $1.5B in
spend
Child Care
Expense
Deduction
($1.0B)
Canada Social
Transfer
($1.2B)
Note: Supports
a wide range of
social
programs; a
small portion is
spent on ECEC
via provinces
Page 45
Provincial / regional
sources
Total provincial
and regional
support for
early child care;
Includes some
contribution
from CST
($1.6B)
Fee subsidies
and center
funding
(~$0.8B)
Note: (*) Color indicates outlook for childcare specific funding, defining “stable” as a flat to inflationary increase; additional wage support is anticipated to parallel the minimum
wage increase in Ontario but is not guaranteed
Source: Department of Finance Canada; CCRU; AECEO; Canada-Ontario Early Learning and Child Care Agreement; Parthenon Interviews and Analysis
Wage subsidies,
other recurring
funding and
one-time
funding
(~$0.8B)
Preliminary 2018 outlook*
Shrinking - Stable - Growing
CANDIDATE COPY
Singapore
Early years enrolment has increased by ~3% over the last 3-5 years driven by
enrolment in childcare centres
Singapore Early Years Enrolment, by Centre Type, 2011-17
200K
169K
162K
CAGR
CAGR
2011-14
4%
2014-17
3%
1%
-5%
7%
9%
168K
153K
150
142K
143K
142K
100
50
0
Page 46
2011
2012
2013
2014
2015
2016
2017
GER Early Years
66%
67%
67%
73%
77%
81%
81%
Share of Enrolment
(Child Care Centres)
52%
53%
52%
55%
59%
61%
65%
Source: Singstat; Early Childhood Development Agency (ECDA); Parthenon Analysis
CANDIDATE COPY
Singapore
The sector is all privately run from more basic Anchor operators to Premium Providers
Super Premium
Premium
Mid-Priced
Partner Operators
Anchor Operators
Example
Brands
Indicative Price
•
STR (5 years
old)
•
>S$20K
•
1:7.5 or less
•
•
~70% locals, 30%
expat
Teacher Mix
•
15-20% Western
Expat teachers
Very few (if any)
Western Expat
teachers, foreign
teachers ASEAN
countries
Stand-alone bungalow
or other landed
property in premium
neighborhoods
• Mixture of landed
property in middle class
neighborhoods and in
malls and HDB shophouses
Built-to-specification
spaces for art,
movement and freeplay
• Limited built-tospecification premises
•
•
Center Type &
Location
•
Infrastructure
•
1:12 to 1:15
Student Mix
•
1:15
Malls, HDB shophouse and
a few landed propertiesgenerally concentrated in
heartland areas
•
•
~90% locals, 10% expat
• No Western Expat
teachers, foreign teachers
from ASEAN countries
•
Subsidized centers offered by
mid priced providers
• S$9.6K
S$10-15K
•
~80% locals, 20% expat
•
Page 47
S$15-20K
Likely to be repurposed
with minimal modifications
and leverage public
playground infrastructure
•
•
1:15
•
~90% locals
No Western Expat teachers,
foreign teachers from
ASEAN countries
Mostly Void decks of HDBs and
some commercial buildings
•
•
Likely to be repurposed with
minimal modifications and
leverage public playground
infrastructure
Note: EtonHouse and White Lodge have been re-classified into the super premium and premium categories respectively based on relative product configuration / market
perception
Source: Parthenon Research
•
•
$8.6K
1:20
~100% locals
No Western Expat teachers,
foreign teachers from ASEAN
countries
•
Void decks of HDBs
• Minimalist but clean
infrastructure utilizing public
play areas
CANDIDATE COPY
Singapore
Parthenon estimates the total market to be worth S$1.5B across both independent and
chain operators
Early Years Education Market, by Price Segment in Revenue, Organized vs Unorganized, 2017
Organized Providers are defined as chains with more than 3 centers
100%
S$257M
S$201M
S$551M
Unorganised
Unorganised
S$525M
Total = S$1.5B
Unorganised
80
Chiltern House
Shaws
Unorganised
Brighton Montessori
60
Odyssey
Etonhouse
40
Pat's Schoolhouse
Others
Others
Blossom
White Lodge
Mulberry Learning
Centre
Kiddiwinkie
20
Mindchamps
Maple Bear
Kinderland
0
Super Premium
($20-25K)
Organised Segment
Revenue
Skool4Kidz
E-Bridge Pre-School
My World
Busy Bees
Small Wonder
Agape Little Uni
Just Kids
Safari House
Little Footprints
Sunflower
Cherie Hearts
Star Learners
Modern Montessori
The Little Skool-House
Carpe Diem
Learning Vision
Mid-Priced ($9-15K)
G8 Education
My First Skool
Global EduHub
Nurture Ed. Group
PCF
Crestar Ed. Group
Budget (<$9K)
Overall
S1.0B
$211M
$121M
$342M
$361M
18%
19%
10%
12%
Enrolment
~11K
~11K
~46K
~101K
Average Fees
$23K
$18K
$12K
$6K
S$10K
108
138
580
1,070
~1896
Revenue Growth
(Organised)
Number of Centres
Page 48
Premium
($15-20K)
Others
12%
~168K
CANDIDATE COPY
Singapore
Market growth in mid-priced up centres has been driven by new centres rather than
existing centres
Relevant Early Years Incremental Enrolment, Mid-Priced and Above,
by New vs Mature Centres, 2014-17
50K
3K
45K
5K
New
(Post-2014)
2K
2K
34K
New centres added ~9K enrolment
25
Mature
(Pre-2014)
0
2014
Super Premium
(>S$20K)
Premium
(S$15-20K)
Mid-Priced
(S$9-15K)
New centres (established after
2014)
Page 49
New Centres
32
32
86
Enrolment per
new centre
70
70
71
Mature centres
(est. before 2014)
2017
CANDIDATE COPY
Singapore
The government has promoted budget offerings through the POP and AOP
programmes which provide some subsidies to providers and fee caps for parents
Singapore Government support to operators, By Program Type
AOP (Anchor Operator Scheme)
POP (Partner Operator Scheme)
41K in 609 centres
14K in 169 centres
Enrolment (2017)
►
Program description
►
►
Fee Cap and Growth
►
►
Financial Support
►
►
►
AOP scheme was launched in 2009 for 5 years to improve access
to quality and affordable early childhood education
Provides funding support to large preschool operators (Minimum
Enrolment Scale =~3K)
►
Fee cap of $720/month (excluding GST) for full-day child care
program
Fee increases allowed only with government approval
►
Providers receive support of upto ~70% teacher and centre salary
Capital grants covering >50% of the set-up costs
AOPs also receive grant per additional capacity added
►
►
Launched in 2016, POP supports child care operators to keep fees
affordable, build capabilities to raise quality and improve career
prospects for EC professionals
Provides funding support to mid-sized preschool operators
(Minimum Enrolment Scale = 300)
Fee cap of $800/month(excluding GST) for full-day child care
program
Fee increases allowed only with government approval
►
POPs receive ~S$240/month per child as government grant. This
grant is revised by $30/year
Preferential HDB site allocation- subsidized rent of $2-$4 per sqm
AOPs can operate out of government schools, public areas
AOP scheme also emphasized on supporting continuing
professional development and career progression opportunities
►
POPs can use shared public places like parks, swimming pools, etc.
Preferential allocation to childcare sites in HDB estates
Non-Financial Resource
Support
►
Mandates for providers
►
All AOP providers need to add 2000 seats over 5 years
►
All providers need to be SPARK(Singapore Pre-school
Accreditation Framework) certified
►
The scheme has been extended for another 5 years till 2018
given the demand and satisfaction amongst parents
►
Still in nascent phase and focus is on implementation and
improving teacher quality
►
PCF Sparkletots
My FirstSkool
My World Preschool
Skool4Kids
E-Bridge Preschool
►
Carpe Diem
Star Learners
Just Kidz
Safari House
Little Footprints
Future plan/expansion
►
►
Big Providers
►
►
Page 50
►
►
►
►
►
►
Source: Early Childhood Development
Agency (ECDA), Industry Participant
Interviews, Parthenon Analysis
CANDIDATE COPY
Singapore
We estimate that the market will continue to grow at ~12% per annum; an incremental
180 centres will be needed in the mid-priced upwards segments to meet demand
Historical & Forecasted Relevant Early Years Incremental
Enrolment, by Price Segment, 2013-21F
Local + Expat demand
Historical
Forecast
CAGR CAGR
14-'17 '17-'21F
13%
12%
150K
32K
132K
Premium
(S$15-20K)
14%
9%
Super
Premium
(>S$20K)
15%
8%
8%
6%
17%
16%
8K
100
15K
86K
3K
3K
Mid-Priced
(S$10-15K)
6K
60K
3K
2K
50
0
Page 51
Mid Priced + AOP segment
will have 40K new spaces in
AOP by 2022
2014
Super
Premium Mid-Priced
Premium (S$15-20K)(S$10-15K)
(>S$20K)
AOP
2017
Super
Premium Mid-Priced
Premium (S$15-20K)(S$10-15K)
(>S$20K)
AOP
AOP
2021F
Agenda
• Tips and Guidelines
• Practice Cases (Candidate Copy)
• Practice Cases (Interviewer Copy)
•
•
•
Case 1: Protein Bars (~25 mins)
Case 2: Prison Telephony (~35 mins)
Case 3: Nurseries (~35 mins)
• EY-Parthenon FAQs
Page 52
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Outline of case and advice to candidates
About the case:
•
Advice to candidates:
This case is about Muscle Nutrition., a UK sports nutrition
•
If you don’t understand something, please ask for clarification
company selling protein powder, bars and tablets. Their
•
There are no ‘tricks’ here – we are trying to find out what you
main client base has historically been body builders
can do, not if we can catch you out
•
•
response
The impressive success of their recently launched protein
bars has caught the attention of Smith and Jones Capital, a
•
Please write down your workings clearly on the sheets of paper
provided so that your interviewer can follow along
UK based Private Equity fund who are now interested in
buying the company
Take the time to think through your answer and structure your
•
Please keep working through even as your interviewer is taking
notes
•
Smith and Jones believe that there is potential to take
Muscle Nutrition’s bars into the mainstream market and
have engaged you to help them test their investment thesis
Page 53
•
Please do not open this pack until instructed to do so by your
interviewer
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Questions
1
How would you size the total market for protein bars in the UK?
►Please
demonstrate how you would structure the market sizing
►Conduct
Page 54
the calculations
Practice Cases
Case 1: Protein Bars
Q1: Suggested segmentation
INTERVIEWER COPY
Increasing frequency of eating protein
bars and penetration based on
exercise penetration
1
Page 55
Body Builders
§ Attend the gym daily mainly to weight lift
§ Eat protein bars almost daily
§ Will pay a premium for higher content of protein and sacrifice taste
Sports Fanatics
§ Exercise regularly but partake in other sporting activities such as
triathlons
§ Require less protein than body builders and eat less frequently
§ Value taste more than body builders but not as much as chocolate
lovers
Non-exercisers
§ Minimal interest in sport and therefore don’t have need for protein to
build muscle / improve performance
§ Buy snack bars to stave off hunger and for the taste
§ Low awareness of the benefits of protein and are willing to trade off
protein for taste and price
2
3
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Q1: Market Sizing Suggested Solution
Market Size Calculation (Do not give sheet to candidates).
Example numbers given on following page.
• Candidates should recognise each consumers have different
preferences for eating protein bars
Consumer
Segment size
û
• Candidates should make reasonable assumptions about penetration
rates across different consumer segments recognising that body
builders will have a much higher penetration level
Segment
Penetration
û
Frequency of
Consumption of
Bars
Calculate for
each segment
û
• Make reasonable suggestions for retail price based on experience of
buying protein bars or snack bars. May mention discounts.
Ave. Retail Price
Segment Size
Page 56
• Will need to make assumptions around frequency of consumption.
“Body builder” segment will consumer most frequently
Sum all
Segments
Total Market
Size
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Q1: Market Sizing Suggested Solution
1
Page 57
2
3
General Comments
Data points
Body Builders
Sports Fanatics
Non-Exercisers
• Segment based on exercise habits
• Non-exercisers are an ‘other’ category
Population
60m
60m
60m
• Try to steer them towards using 60m as easier
Segment size
10% = 6m
30% = 18m
60% = 24m
• These are just suggestions, allow different numbers but steer
towards rounded numbers but must have similar relative
proportions (i.e. body builders are small proportion)
• NB: In the real case we had 4 segments including light sports
users so the mainstream category was smaller
Segment Penetration
70% = 4.2m
50% = 9m
20% = 4.8m
• These are suggested numbers. Accept anything that has a
similar relative penetration (i.e. Segment 3 is the lowest)
• You could ask them to think about it, assess their thinking
and then ask them to use these penetrations
Ave. Frequency of
Consumption (Bars)
2 / week = 96 / year
3 / month = 36 /
year
1 / month = 24 /
year
• Lower grading if they don’t get to an annual number
• Rounding is permissible
Ave. Retail Price
£2
£2
£2
• Candidates with some experience may know that these bars
have a premium. However, £1 would be an acceptable
number to use
Segment Value
£806.4 m
£648m
£230.4m
• Suggest rounding to 100 bars for segment 1 (£840m)
• Suggest rounding to 7m for segment 2 (£336m)
Total Market Size
£1.7bn
• Alternatively (£840+£648+£338) = £1.824bn
Case 1: Protein Bars
Questions
2
Page 58
INTERVIEWER COPY
As mentioned, the PE firm are interested in the mainstream
segment of the market for protein bars. What do you think are
the growth drivers of this segment of the market?
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Questions
►
Broader trends/considerations
demonstrating commercial awareness
►
Core market drivers
Customer Driven
►
Increased participation in sports
►
Increased interest in foods that are good for
our health
►
Trend towards convenience / on-the go
products
Supply side Factors
►
Increased distribution particularly in
convenience channels
►
Availability of online
►
Marketing of the benefits of protein in
achieving sporting goals by sports nutrition
companies
►
Broader range of SKUs and increased
accessibility of flavours and price
►
Marketing of the general benefits of protein
to overall health sports nutrition companies
This list is not exhaustive, credit should be given to the candidate for any valid point raised
Page 59
Case 1: Protein Bars
Questions
3
Page 60
INTERVIEWER COPY
Based on the data on the following slides, is there sufficient evidence to
say protein bars can go mainstream? Please summarise in a few (3-5)
bullet points.
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Data
Q: What is most important to you when thinking about healthy eating?
Select and rank your top 3
40%
30
20
10
0
Page 61
Low calorie
Less carbs
Source: Parthenon-EY Health & Wellness Consumer Survey 2015 (n=1,061)
More protein
Organic
Nutrients added
From
a
sustainable
source
Gluten free
GMO free
Practice Cases
Case 1: Protein Bars
Data
Q: What is the main occasion when you
eat protein bars?
Page 62
Source: Consumer Survey (n=1,415)
INTERVIEWER COPY
Q: What is the most important reason for
you eating protein bars?
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Data
Q: How often do you typically exercise per week?
For all consumers who bought the protein bar brand in the past 6 months
100%
80
60
40
I don’t usually exercise
Less than once per week
One or two times per week
20
Three or four times per
week
Five or six times per week
Every day
0
Protein Bar
Manufacturers
Page 63
Source: Consumer Survey (n=1,415)
Practice Cases
INTERVIEWER COPY
Case 1: Protein Bars
Data
Q: Where did you buy the [brand] bars you purchased
most recently?
60%
54%
40%
40
25%
20%
20
11%
18%
10%
8%
4%
0
% All Brands
Page 64
Source: Consumer Survey (n=1,415) :
4%
3%
3%
Supermarket
Specialist health
store (e.g.,Holland
& Barrett / Met-Rx)
Amazon
Online (excl.
Amazon)
Convenience store
Other
50%
15%
12%
15%
4%
3%
Average (excl. Muscle
Nutrition)
Muscle Nutrition
consumers
Practice Cases
Case 1: Protein Bars
Data
Q: How often do you eat a protein bar?
Page 65
Source Consumer Survey (n=1,415)
INTERVIEWER COPY
Q: Are you eating more or less protein
bars than you did in the past?
Practice Cases
Case 1: Protein Bars
Q3: Mainstream evidence suggested solution
Slide No .
Mainstreaming?
1
What is most important to you when thinking about healthy eating?
Inconclusive – difficult to infer
2
What is the main occasion when you eat protein bars?
Suggests mainstream – eating as a convenience snack
as opposed to for the purpose of workouts
What is the most important reason for eating protein bars?
Suggests mainstream – Considering protein bars as a
replacement for chocolate and sweets suggests they
are considered for a much broader and common
propose than sports related reasons which are more
niche
3
How often do you typically exercise so you work up a sweat?
Suggests mainstream – Musle Nutrition bars are
generally eaten by consumers who don’t have
specialised sporting needs therefore has a broader
appeal across consumer segments
4
Where did you buy the bars that you bought most recently?
Suggests mainstream – Generally purchased in
mainstream channels, namely supermarkets, and less
so in specialist stores
How often do you eat a protein bar?
Could suggest mainstream – High frequency could
suggest not a niche product
Are you eating more or less protein bars than you did in the past?
Could suggest mainstream – Consumption of protein is
increasing suggesting its becoming a more acceptable
product
2
5
5
Page 66
Survey Question
INTERVIEWER COPY
Agenda
• Tips and Guidelines
• Practice Cases (Candidate Copy)
• Practice Cases (Interviewer Copy)
•
•
•
Case 1: Protein Bars (~25 mins)
Case 2: Prison Telephony (~35 mins)
Case 3: Nurseries (~35 mins)
• EY-Parthenon FAQs
Page 67
Practice Cases
INTERVIEWER COPY
Case 2: Prison Telephony
Outline of case and advice to candidates
About the case:
►
This case is about Calypso, a provider of phone services to
prisons and prisoners in Europe. The company addresses
four markets:
►
If you don’t understand something, please ask for clarification
►
There are no ‘tricks’ here – we are trying to find out what you
can do, not if we can catch you out
►
Take the time to think through your answer and structure your
response
2) Multimedia: covers media content / video-calling and
messaging apps
►
Please write down your workings clearly on the sheets of paper
provided so that your interviewer can follow along
3) Prisoner self-service: self-service applications for
prisoners
►
Please keep working through even as your interviewer is taking
notes
4) Lawful interception: surveillance and storing of content
provided
over Calypso’s services
►
Please do not open this pack until instructed to do so by your
interviewer
1) Telephone systems: connects prisoners and external
parties (e.g. relatives) through telephones made available
to prisoners
Page 68
Advice to candidates:
►
Calypso generates a majority of its revenues from the use of
telephone systems by prisoners, and has not yet fully rolled
out all of its products across every market
►
A private equity investor is interested in acquiring a stake in
the business and has engaged EY-Parthenon to assess the
market and future growth opportunities for Calypso
Practice Cases
INTERVIEWER COPY
Case 2: Prison Telephony
Market segmentation
Description
Market segments
►
Telephone
systems
►
Multi-media
►
Self-service
►
Lawful
interception
Page 69
Hallway and in-cell telephone
systems providing access to
national and international
calls, through landline, cell
and collect calls
In-cell multimedia terminals
which enable inmates to
communicate (through video
calls, video messaging and
video telephony) and watch and
listen to music and movies
Self-service solutions
delivered via in-cell terminals
which enable inmates to
organise their prison life,
doctors appointments and
shopping
Provides capabilities for the
listening in on conversations
and the storage of past
conversations
Buyer
Calypso’s Products
►
Prison telephones and in-cell
phone systems
►
Prisoner pays per use
►
Relatives pay for collect
calls and can fund the
prisoner’s account
►
Prisoner pays monthly fee
►
Relatives can fund the
prisoner’s account
►
CalypsoConnect for collect
calls (collect calls are calls
paid for by the recipient)
►
TV access, radio, DVD and
telephony
►
Multimedia content, video
calls and messaging
►
In-mate self service
applications
►
Prison administration
pays service fees
►
Storage of past conversations
►
Charged for on a per
prisoner basis
►
Lawful interception
capabilities
►
Prison administration
pays service fees
►
Charged for on a per
prisoner basis
Practice Cases
Case 2: Prison Telephony
Question 1
1
Page 70
INTERVIEWER COPY
What is the size of the addressable market for Calypso’s services
within Europe (in terms of annual € revenue)?
Practice Cases
INTERVIEWER COPY
Case 2: Prison Telephony
Question 1: Market Sizing – All services
Market Size Calculation
European Population
(Either 500m or 750m)
% in prison
(~0.1%)
Telephone
% using phone regularly
(~75% - optional step)
500,000 – 750,000
Prison Services
Multimedia
375,000
% using media regularly
(~50%)
250,000
Monthly cost
(€5 per month, €60 per
year)
€15m
Minutes spent telephoning
562.5m mins
p.a.
(~30m per week, 1500 p.a.)
Price per minute
(€0.2 per minute)
€112.5m
Total per year
(sum of the above)
Page 71
€177.5m
Annual cost
(€100 per year)
€50m
Practice Cases
Case 2: Prison Telephony
Question 2
2
Page 72
INTERVIEWER COPY
What are the drivers of growth for the prison telephony market?
How do you think this market is likely to develop in Europe over the
next 3-5 years?
Practice Cases
INTERVIEWER COPY
Case 2: Prison Telephony
Question 2: Business drivers
Key aspects to be covered
Give credit for any reason, well-structured response. Below are examples of good points a candidate can make. A good candidate would also
talk about the relative ranking of the drivers and consider the limitations to the drivers listed
Volume
►
►
►
Prisoners are forecast to remain stable across European markets (considers country variances) – no data to support this in materials,
but candidates should be expected to reflect on what might cause the number of inmates to grow or decline (good ones would think
about both population and incarceration rate). Increased immigration or growing economic inequality in the last few years could be one
reason that the number of inmates might rise, but overall falling crime levels and a declining population in some countries could be
reasons to expect the number of inmates to fall.
Increasing usage per inmate as the reintegration to society is of key importance in most European markets resulting in lower
restrictions on telephony usage and adoption of in-cell telephony. However, if restrictions are lifted completely and inmates are allowed
to use their own cell phones, Calypso’s product might become redundant
Increasing concerns over technology and prisoners using the services to e.g. organise crime from within prisons will increase the need
for Calypso’s interception services
Price
►
Page 73
Falling prices driven by regulation and competition which has consequently increase the volume of calls (candidates should be able to
reflect on whether this actually has an effect, or is just equaling itself out)
Practice Cases
INTERVIEWER COPY
Case 2: Prison Telephony
Calypso’s company footprint
Calypso’s revenue by product segment (%), FY17
Calypso revenue split by geography (%), 2017
Interception services
In the Netherlands,
Calypso generates
~20% of revenue with
products other than
telephone systems.
Self-service
Multimedia
NL
14%
DE
27%
92.0%
Telephone Systems
FR
28%
PL
9%
CZ
<1%
HU
7%
RO
8%
BG
3%
FY17
Key:
Page 74
= More than 10%
= From 5% to 10%
= Up to 5%
= None
Note: IR = Ireland, UK = United Kingdom, FR = France, SP = Spain, BE = Belgium, NL = Netherlands, CH = Switzerland, DE = Germany, CZ = Czech Republic, AT = Austria, IT = Italy, HR = Croatia, HU = Hungary, SK = Slovakia, RO =
Romania, BG = Bulgaria, PL = Poland, NO = Norway, SE = Sweden, FI = Finland
Practice Cases
INTERVIEWER COPY
Case 2: Prison Telephony
Contract structure and upcoming tenders
Commentary
National vs local tender organisation
► Although the majority of revenue is paid for by prisoners themselves,
Calypso contracts with prison providers to be allowed to offer its services to
prisoners, usually as a sole provider
► A majority of contracts are won through national tenders which have unique
requirements for each country
► Tenders are lengthy and begin in advance of the actual tender period and
typically last 3-5 years with extension options
FI
► The complexity of public tenders has resulted from mandatory requirements
and a sophisticated scoring system
NO
SE
NL
IR
UK
Upcoming National Tenders in 2018 - 2019
PL
BE
DE
Country
CZ
SK
FR
AT
CH
HU
HR
IT
RO
Poland
3 years
BG
Norway
5 years
Czech Republic
4 years
Sweden
5 years
Finland
4 years
Switzerland
4 years
France
5 years
Denmark
3 years
SP
Key:
Page 75
Contract Length
= Local / regional tender
= National tender
Note: IR = Ireland, UK = United Kingdom, FR = France, SP = Spain, BE = Belgium, NL = Netherlands, CH = Switzerland, DE = Germany, CZ = Czech Republic, AT = Austria, IT = Italy, HR = Croatia, HU = Hungary, SK = Slovakia, RO =
Romania, BG = Bulgaria, PL = Poland, NO = Norway, SE = Sweden, FI = Finland
Practice Cases
Case 2: Prison Telephony
Pricing and usage patterns
Commentary
► After being accused of charging unfairly high prices due
to a lack of other telephone options in prisons, Calypso
was taken to court in Germany and forced to
substantially reduce the prices for its telephone
services
► There has been public pressure on Calypso in France
and the UK to make similar price reductions, with talks
of litigation
Page 76
INTERVIEWER COPY
Telephone Usage Data, Germany
Practice Cases
INTERVIEWER COPY
Case 2: Prison Telephony
Global prison demographics
Global Prison Industry,
by Number of Inmates, 2017
100%
Calypso Customer Counties 5.0%
Rest of Europe 11.1%
80
Africa and the Middle East 11.3%
South America 14.6%
60
North America 21.8%
40
20
0
Page 77
Asia Pacific 36.3%
Number of Inmates
Practice Cases
Case 2: Prison Telephony
Question 3
3
Page 78
INTERVIEWER COPY
Based on the data available and your own knowledge, what are the
growth opportunities for Calypso over the next 3-5 years? What are
the potential risks?
Practice Cases
Case 2: Prison Telephony
Question 3: Growth opportunities and risks
INTERVIEWER COPY
Key aspects to be covered
Give credit for any reason, well-structured response. Below are examples of good points a candidate can make. A good candidate would also talk
about the relative ranking of the opportunities and consider the limitations to the opportunities listed
Opportunities
►
Increasing penetration within Multi-media, Self-service and Interception services - the company currently underserves these markets (within
revenues largely from NL)
►
Expansion to new European markets, considering different tender policies and ease of market entry
►
Expansion outside of Europe as emerging markets become more sophisticated – but probably with increased difficulty
Expansion to other services that can be sold to prisons
►
Risks
► Re-tendering of contract in France, possible to lose a large portion of revenue if this is not won again
►
Technological advancement resulting in new entrants into the market / making telephony redundant (Calypso’s core market)
►
Falling number of inmates (?) – no data to support this is materials provided, but candidate should be able to reflect on what the possibilities
are, and if so how significant this would be
Other
►
Page 79
Arguable whether falling prices is a risk or not, as experience from Germany shows lost revenue being made up with higher call volume
Agenda
• Tips and Guidelines
• Practice Cases (Candidate Copy)
• Practice Cases (Interviewer Copy)
•
•
•
Case 1: Protein Bars (~25 mins)
Case 2: Prison Telephony (~35 mins)
Case 3: Nurseries (~35 mins)
• EY-Parthenon FAQs
Page 80
INTERVIEWER COPY
Nurseries
Questions and Answers
Question
Page 81
Poor
Average
• Note the key drivers are number
of kids in the area and
affordability
• Limited grasp beyond that
Good
Q1: Nursery Location Choice
• No meaningful structure
• Significant assistance required
• Misses Major Issues
Q2: Prioritisation
• Provides an unstructured answer, • Makes some reasonably
• Structures the answer coherently
doesn’t priortise
suggestions about what you might • Notes that there are some
put first. Reasonably competent
baseline criteria (sufficient
answer
people, quality standard) that
must be a minimum and that
others are harder to assess in
isolation and require scorecard
approach
3. Country Choice
• Limited structure and reference
to slides
Excellent
• Gets the basic criteria – number of • Achieves Good
kids, affordability
• Providers better commentary that
• Makes commentary that
looks at competitive density
affordability links to the structure
(relative to population) and notes
of funding
softer factors may be important
• Notes competitive elements are
such as management/first
likely important
impressions/marketing etc.
• Notes quality (in various metrics
• Notes that future trends (e.g.
also important)
demographic changes) are as
important as the “now”
• Achieves all “good” criteria
• Notes that it depends on time
horizon to return – if you need
cash now you want a pre-existing
successful nursery. But if you
have time, you may want to look
at areas with expected growth
going forwards
• Makes some comment also on
valuation/cost
• Provides the basic insights form
• Well structured answer that elicits • Achieve all ‘good’ criteria
the slides but without synthesis or key information – such as market • Talks intelligently about the
clear view on why one geography
size, reliance on government,
relative trade-offs
over the other
market structure etc.
• Notes answer may differ on
• Provides a scorecard type
greenfield vs. acquisition and
approach and makes a decision on
which is better/worse by
that on basis
geography
• Considers time horizon for
investment intelligently
Agenda
• Tips and Guidelines
• Practice Cases (Candidate Copy)
• Practice Cases (Interviewer Copy)
•
•
Case 1: Protein Bars (~25 mins)
Case 2: Prison Telephony (~25 mins)
• EY-Parthenon FAQs
Page 82
Building a strategy
consulting career
unique to you
Strategy realised
EY-Parthenon Strategy FAQ
Next Wave
Building a world-class strategy firm under the EY Brand
300,000+ people | $36.4b revenue | 150 countries
EY has invested $0.5b
over five years
Strategy and
Transactions
(SaT)
($4.1b)
Tax
($9.5b)
Number of employees globally
Assurance
($12.6b)
7,000
6,000
5,000
4,000
3,000
2,000
1,000
0
FY15
Page 84
Consulting
($10.2b)
FY17
FY19
FY21
EY-Parthenon Strategy FAQ
Next Wave
The New EY-Parthenon Service Line
Strategy and Transactions
EY has four service lines - Assurance, Tax, Strategy & Transactions, and Consulting
EY-Parthenon sits inside of Strategy and Transactions
Strategy and Transactions (S&T) is the fastest growing service line in the EY organisation, where innovation around our clients’ needs has been central to our growth
S&T is organised around fast track value creation through our Connected Capital Solutions: Strategy, Buy & Integrate, Sell & Separate, Reshaping Results and Corporate
Finance
EY-Parthenon is where we bring together our team of strategy consultants with the focus and skills aligned with the CEO agenda
EY-Parthenon skills cover:
• Corporate and Growth Strategy
• Transaction Strategy and Execution
• Turnaround and Restructuring Strategy
In EY-Parthenon, our consultants are focused on triggering events, for example:
• A new CEO wants to embark on a strategy refresh
• A company is looking to grow through acquisition
• A company is looking to optimize their portfolio of businesses, and divestment is a
potential option
Page 85
EY-Parthenon Strategy FAQ
EY-Parthenon has three functional areas; EY-Parthenon Strategy covers the ‘Corporate
& Growth Strategy’ functional area
Turnaround &
Restructuring Strategy
Corporate &
Growth Strategy
►
►
►
►
►
►
►
►
►
Corporate and BU strategy
Purpose-led strategy and longterm value
Business model reinvention
Portfolio strategy
New market entry opportunities
Digital transformation strategy
Go-to-market strategy
Commercial diligence (buy-side)
Vendor due diligence (sell-side)
Corporate &
Growth
Strategy
Turnaround &
Restructuring
Strategy
►
►
►
►
►
Transaction
Strategy &
Execution
Transaction Strategy &
Execution
►
►
►
►
►
Page 86
►
Operational and IT diligence
Integration strategy planning and execution
Divestiture strategy planning and execution
(DivestCo and RemainCo)
Value realization and tracking
Operational and IT separation
Rapid performance improvement
Private Equity value creation
Improving liquidity and working
capital
Restructuring and turnarounds
Contingency planning and
insolvency solutions
Simplifying corporate structure
EY-Parthenon Strategy FAQ
Service Offerings
EY-Parthenon Strategy
• EY-Parthenon Strategy is strongly positioned in the marketplace to serve as a
global strategic advisor, working with companies to develop long-term growth and
investment strategies.
• We advise clients on developing and executing on strategic opportunities by
providing in-depth perspectives on the client’s market, competitors, customers,
finances and operations.
• With respect to a company’s capital lifecycle, EY-Parthenon Strategy help
determine when and where to invest and assess the viability of potential targets
to achieve strategic objectives around growth and portfolio management.
• EY-Parthenon Strategy has great strengths across EMEIA in a wide range of
practices including TMT, Life Sciences, Financial Services, Retail & Consumer
products and Education
Page 87
Key Focus Areas
Investment Strategy
Transaction evaluation
„
„
Growth strategy
„ Market diligence
„ Market entry strategy
„ Portfolio optimization
„ Strategic options assessment
„ Education innovation and reform
„ Human capital strategy
Commercial due diligence
Divestiture preparation
„ Forecast achievability assessment
„ Merger and acquisition strategy
„
Services Delivered (sometimes in collaboration with TSE and Consulting)
Corporate strategy
Value creation
„
„
Corporate/business unit strategy
„ Competitive analysis and strategy
„ Economic forecasting/modeling
„ Innovation
„ Marketing/distribution strategy
Brand audit
Cost optimization
„ Marketing mix effectiveness
„ Pricing
„ Sales force effectiveness
„
EY-Parthenon Strategy FAQ
How does EY-P Strategy differ from Consulting?
„
EY-P Strategy and Consulting work closely together in helping our clients deliver their most important aspirations and
address their most complex issues, but there are a number of important differences
EY-P Strategy
Consulting
Sets the strategic transaction and transformation
agenda
Helps clients realise their transformation agenda
Sector teams with deep strategy capability
Competence teams focused on deep implementation
capabilities
Short(er) engagements. Typically measured in weeks
Long(er) engagements. Potentially multi-year
Smaller pyramids, with heavy partner involvement in
delivery
Wider pyramids with more leverage of partner time
across the full scope
Focused on the CEO agenda
Works across the c-suite
Page 88
EY-Parthenon Strategy FAQ
EY-Parthenon Strategy
Sectors
Advanced
Manufacturing & Mobility
Education
Healthcare
& Life Sciences
Financial
Services
Private
Equity
Page 89
Energy
Retail & Consumer Goods
Technology,
Telecom & Media
Why Choose EY-Parthenon Strategy?
We provide the building blocks for a career unique to you
Page 90
Powerful firm-wide purpose
Build a Better Working World – impact our
clients, our people, and our communities
Breadth of experiences
A wide range of sectors, advising senior
executives important strategic questions
World-class training
Develop the mindset and technical skills
to become a transformative leader
Inclusive culture
Embracing the uniqueness
of who you are
A global exposure
Multicultural thinking needed to deliver
cross-border impact
Innovative and
entrepreneurial environment
Use smarts and creativity to optimise
client impact and enhance the office
EY-Parthenon Strategy FAQ
What makes EY-Parthenon Strategy different in the market?
The Industry
The consulting industry has been evolving over the past decade plus
• The traditional strategy houses which were focused on the “What?” have been going downstream in the “How?”
• The traditional operational & implementation houses focused on the “How?” have been moving upstream in the “What?”
• EY-Parthenon sits in the middle of the “What?” and the “How?” delivering strategy through execution capabilities to our clients
EY-Parthenon – STRATEGY REALISED
We combine the What and the How to help CEOs design and deliver transformative strategies to optimize stakeholder value
Connected perspectives – Unapparelled suite of services:
• EYP combines deep sector knowledge with unmatched perspectives of strategy through execution thinking, to develop future-led strategies
• We bring the full suite of knowledge from our EY capabilities to help clients make effective strategic decisions and implement subsequent operational, financial,
tax, human capital and other related changes.
• We understand the entire CEO and boardroom agenda
Connected solutions – Unmatched global scale:
• Through EY’s global reach and scale, we can help deliver on our strategies
• Well integrated across EY-Parthenon EMEIA and the US.
• Leverage EY offices in 150 countries to understand market opportunities on the ground, quickly access global information and mobilise global teams.
• With an innovation-to-execution approach, we can orchestrate multiple stakeholders to ensure successful delivery
Act as a journey partner to the CEO:
• Our focus is on building long and deep relationships with the c-suite to lead, guide and challenge them through the business life cycle
The result of our offering has been market leading growth - both in headcount and in revenue, we have outpaced the market in our growth
Page 91
EY-Parthenon Strategy FAQ
Diversity at EY-Parthenon Strategy
• We take pride in our inclusive culture which values diversity of backgrounds, experiences, and beliefs
„
At EY-Parthenon and within the broader EY organization, an inclusive culture that supports diverse teams is central to our success. Our commitment to inclusiveness is
driven not just from the top down but from the bottom up. We promote this through informal events such as:
• Brown bag lunches to discuss topics ranging from socioeconomic diversity in professional services to how our background can impact our confidence
• International Week where we celebrate the diverse mix of cultures and backgrounds that make up our team
• Women in Business breakfasts where we invite external speakers to address our team.
• Anyone can bring an idea and drive that idea forward to help make our team more inclusive
• There are number of formal networks and communities within EY which all employees are welcome to join. They're excellent ways to meet new people from across the
organisation and get notifications of events and other network activities that might be going on. They are a key part of our D&I offering and are run by passionate and
dedicated volunteers from across EY. Networks include
• EY Women’s Network
• Ability at EY – e.g. Hearing, Mobility, Dyslexia, Autism
• Life Network – e.g. Family/Parents, Military, Carers, Special Needs
• EY Race and Ethnicity – e.g. Black, Far East, South Asian, ANZAC
• Embrace – EY’s Faith and Belief Network – Jewish, Christian, Muslim, Hindu, Sikh
• Unity – EY’s LBGTQ+ Network
Page 92