1. THE JOURNEY SO FAR
2009
Large budget variances
CFO initated a Rolling Forecast project
CPA looked into options
Stumpled upon Beynd Budgeting
BEYOND BUDGETING
AT ÖSSUR
2010
Presented the vision to the executive management team
LESS Conference
Created a cross functional implementation team and
Tallinn November 2012plan
formalized a
Axel Úlfarsson
Not good understanding of the BB principles within the team
and in some cases opposition to the change
Did not manage to implement RF process before budget
season kicked in
Decided to do a budget for 2011 and pick up the RF project
by start of 2011
1

2. ABOUT ÖSSUR

3. ABOUT ÖSSUR
• A global orthopaedic company
Headquarters
Reykjavik, • Headquarters in Iceland
Iceland
• Founded in 1971 by Mr. Össur Kristinsson
Össur EMEA
• Develop, produce and sell non-invasive
Eindhoven,
Netherlands orthopaedics
Össur • Listed on the OMX Copenhagen stock
Americas
California, USA exchange
• 15 Locations
Össur Asia • 1850 employees
Shanghai,China
• 400 million USD annual turnover

4. OUR BEYOND BUDGETING JOURNEY
BEFORE BEYOND BUDGETING
• Long and painful budget process
• Every department with detailed budgets
• Complex planning system
• Started preparation in May
• Heavy process during autumn
• Ended in December with a report for BOD and Executive team
• Value in the report not balanced with the effort in creating it
• Focus on actual vs. budget

5. OUR BEYOND BUDGETING JOURNEY
HOW IT STARTED
• CFO initiated Rolling Forecast project
• Searched for improved ways to do financial forecasts
• Did some research
• Introduced to Beyond Budgeting
• BBRT conferences
• Presented the vision in 2010

6. OUR BEYOND BUDGETING JOURNEY
IMPLEMENTING
• Simplified the budget process
• Pull tactic
• Shifted focus from budget to YoY improvements
• Spread the BB “gospel”
• The pull came in 2011
• First high level, 5 quarter rolling forecast in February 2012
• Cost control now with relative KPIs and trend lines
• CEO decides to abandon the budget by 2013

7. OUR BEYOND BUDGETING JOURNEY
2013…..
• Evaluate and improve
• Target setting processes
• Cost control
• Planning process
• Align the organization on Beyond Budgeting

8. WHAT HAS CHANGED
2009
2012

9. WHAT HAS CHANGED
Organic Sales Growth
7.0%
6.0%
FOCUS ON THE FUTURE 5.0% 5.0%
5.0%
5.0%
4.0% 4.0% 4.0% 4.0%
• More trend lines vs. static view 4.0%
3.0% 3.0% 3.0% 3.0% 3.0% 3.0%
3.0%
• Planning process on a higher level with
2.0%
1.0%
focus on main KPIs 0.0%
Q1 ´11 Q2 ´11 Q3 ´11 Q4 ´11 Q1 ´12 Q2 ´12 Q3 ´12 Q4 ´12 Q1 ´13 Q2 ´13 Q3 ´13 Q4 ´13 Goal
Organic Sales Growth 12M Average
• Shifting management´s focus from the past
Adj. EBITDA %
22.0%
and to the future 21.0% 21.0% 21.0%
21%
21.0%
20.0% 20.0% 20.0%
20.0%
• Cost control with relative KPIs and trend
19.0%
19.3%
19.0% 19.0% 19%
18.0% 18.0%
18.0%
lines
17.0%
16.0%
15.0%
Q1 ´11 Q2 ´11 Q3 ´11 Q4 ´11 Q1 ´12 Q2 ´12 Q3 ´12 Q4 ´12 Q1 ´13 Q2 ´13 Q3 ´13 Q4 ´13 Goal
Adj. EBITDA margin 12M Average

10. CURRENT FORECAST PROCESS
• Used to support decision making
• Consolidated high level forecast
• Down to main locations
• Supporting tools variable based on each location´s needs
• 5 Quarter view
• Updated quarterly with exceptions if needed
• Ownership of numbers with local management (MDs and
department heads)
• Ownership of process with financial controllers

11. TIME WELL SPENT
• Executive sponsorship
• Communication
• Face to face meetings
• Workshops
• Training
• BBRT

12. CHALLENGES
• Rewards/Bonus structure
• Target setting
• Braking old habbits
• Forecast reliability
• Information on external peers

13. Thank you