Bristol-Myers Wants To Juice Its Cash Flow
3 CommentsBy Ed Silverman // November 13th, 2008 // 11:14 am
In a brief presentation to the Credit Suisse Health Care conference this morning, Jean-Marc Huet, the drugmaker’s cfo, outlined a plan to strengthen the balance sheet in order to better finance acquisitions and partnerships.
As the chart hints (please look here), a big goal is to improve cash flow by $750 million to $1 billion by 2011. The gist is to manage receivables, payables and inventory. In other words, a squeeze play - delay payments going out the door while hopefully speeding payments that are expected.
Huet also described life after 2013 as the ‘return to growth’ period, given that the years between 2011 and 2013 will be challenging. During that stretch, for instance, he noted that the Abilify antipsychotic will be returned to Bristol’s Japanese partner (here is his slide show).
Doc
BMY recently announced there are changes coming in the next year or two to it’s defined benfit pension plan. The company also just announced all emplyees for 2008 who are rated at fully performing or exceeding will receive a 2% salary increase.
Now what employees would like to know from my sources is what is the senior executive team doing about their stock options and restricted stock awards, when they ask all employees to understand the financial pressure on BMY?
Stephanie
BMS has been playing the pay late game for years…so I guess now payments will be even later!
HR Executive from the 80's
I worked at BMS/Clairol in the 80’s. I attended a management meeting after a large lay off and a different finance chief suggested to the Division President that we manage cash flow by pushing back on the vendors and it was tossed out as not a true savings.
BMY should be ashamed of themselves. The way they pay vendors today is outrageous. How about creating real savings for the firm. This is just a trumpted up idiotic plan by finance to push cost back on suppliers, who in turn will raise their prices to BMY. So where is the savings? No where, but you can be assured that whoever came up with this one will be in line for more than a 2% change in their compensation plus options, restricted of course, or re-priced ones so there is no risk.
The managers of today make me sick. After all of the problems in the market, they can not come up with real ways to improve their bottom lines. No real efficiencies…….put margin improvement on the backs of the people and the suppliers.
Great move Huet……you are a genius.