Case Study: a leading global supplier of performance elastomer solutions achieves $8M EBITDA improvement with Synergetics

a leading global supplier of performance elastomer solutions gains $8M EBITDA with Synergetics

The customer, a leading global supplier of performance elastomer solutions, faced a significant downturn due to rising raw material costs for rubber-based polymers, which led to decreased sales volumes, increased costs, and lower manufacturing utilization. The vendor, Synergetics, conducted an extensive data mining exercise using the customer's SAP ERP system to analyze each SKU's material costs tied to gross margin, along with pricing, contract terms, and customer demographics.

Synergetics implemented a solution that involved reviewing manufacturing capacities, renegotiating vendor costs and customer contracts, and shutting down unprofitable product lines. This rightsizing effort resulted in an $8 million annualized EBITDA improvement. Although revenue decreased by 30%, all lost business had been at a negative margin, and the company went on to achieve record profitability, which ultimately led to its sale and effectively doubled the business worldwide.