Company’s turnaround by means of a continuity agreement

Context: Italian company operating in the electronics and subcontracting sector. Revenue of 8 million Euros and 80 employees.


  • Revenue decrease during the past three years.
  • Lack of company's reorganization.
  • Profitability loss connected to:
  1. Incorrect placement of the company on the target market.
  2. Type of products sold.
  3. Very tense financial position of the company.
  • Difficulty in obtaining financing from credit institutions.
  • Great internal conflicts.
  • Mishandled trade union relationships.
  • Position of partners/administrators at procedural risk.

 Main causes of the problem 

  1. The company has not progressively focussed on its core business, opening and investing on unprofitable product lines.
  2. The company’s strategy, not supported by an adequate management control, has caused severe losses.
  3. The roles and responsibilities of partners, advisors, and management seem to be poorly defined.

 Suggested solution 

  • Presence in the company of a Temporary manager acting as General Manager.
  • Study and draft of the company’s budget, divided into sales, purchase of raw materials, personnel costs, investment budgets
  • Study of causes of low marginality.
  • Analysis of profitability according to product types.
  • Reassessment of the company’s strengthening strategy, and closure of unprofitable production lines.
  • Draft of a preventive continuity agreement.
  • Re-establishment of trade-union relationships also for the purpose of the “good reputation” of the Temporary Manager/s with the parties in question.


10 months

 Results achieved 

  • Newly positive gross operating margin.
  • Optimization of existing organization.
  • Definition of three-year Business Plan and Budget.
  • Arrangement of management control with monthly reports.
  • Re-establishment of a “good company climate”.
  • Re-activation of relationships with Suppliers and banks.
  • The approval of the preventive continuity agreement obtained in 7 months.