Modelling of Port Services & Logistics: A Case Study

Noatum Ports, Spain.

The story

Noatum (www.noatum.com) is a leading multinational group in transport and logistics services, providing port, maritime and logistics services, with activities including Liner shipping agency, Consignment, Tramp, Projects, Freight forwarding, Customs agency, Terminals and Warehousing.

The group is divided into three main business areas: Noatum Maritime, focusing on providing maritime services; Noatum Logistics, a comprehensive logistics operator, and Noatum Terminals, the port operations division.

Noatum is owned 67% by JP Morgan Asset Management and 33% by Dutch pension fund APG.

https://www.noatum.com/en/terminales-operaciones-portuarias/

Challenge

Noatum is a new company, and there is a lack of a common language, both internally and with the new investors, shareholders, lenders and the regulator.

Partly due to the acquisition and partly due to the nature of large, regulated entities, Noatum will need to use the management accounting actuals to create a realistic long-term forecast of the business.

Internally, Noatum lacks a clear division of responsibility in operations, the regulatory complexities, and financing.  Similarly, Noatum needs to allocate responsibility to deal with the new external relationships with the regulator, the lenders, the shareholders and investors.

Noatum is not able to formulate a long-term strategic plan because the overall picture is unclear.

Furthermore, the acquisition price needs to be referenced by an enterprise valuation agreed between the stakeholders.

The solution

Lazuli specifies and builds a strategic operating model for Noatum Ports.

The results

The Lazuli model provides Noatum with a long-term strategic forecast seeded by the management accounting actuals describing the ten terminal companies in the group and the holding company structure with full financial statements for all companies.

This brings together the operational complexities, the financing requirements, the basis for the negotiations with the regulator and the strategic plan, all within a common agreed language and enterprise valuation.

The new model also creates a common vocabulary for efficient discourse both internally and externally with investors, shareholders, lenders and the regulator.

Accounting flows and cash flows now satisfy the various legal entities that make up Noatum through a system of intercompany loans.  This gives Noatum the time and clarity to plot the refinancing of the enterprise, both in terms of quantum and optimisation through type and time.

The model build process gives Noatum the opportunity to start allocating responsibility internally.  This process will enable Noatum to invest in people for better long-term relationships with investors, shareholders, lenders and the regulator.

Noatum can now formulate a strategic vision for the enterprise, through use of the long term forecast in the model and in conjunction with the external stakeholders.  The agreed enterprise valuation is the ultimate gauge of the efficiency of the strategic vision.