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Case Study
PG&E
After natural disasters, restoring trust and security to a utility company
For oilfield services and equipment players (OFSE), business is shifting. The COVID-19 pandemic brought on demand destruction, while there is increasing pressure to decarbonize the economy to mitigate climate change. Capital is accordingly shifting from traditional oil and gas to renewable energy projects and new energy sources. For a “Big 3” global OFSE player looking to remain agile through this shift, AlixPartners was called on to help sharpen the strategy of the largest business unit, refine the business’ capital allocation process, and help reduce corporate center costs.
Our teams worked closely with business unit leadership and product and service line owners to develop a new business strategy that would improve the growth, profitability, and resiliency of the business as it navigates industry pressures and an unpredictable environment.
In addition, a new budgeting and capital allocation process was put in place to help ensure that sustaining and growth capital was funneled to the best return opportunities for the business globally. Finally, we led a large cost-takeout initiative at the corporate center to drive functional ownership closer to the business units and to improve the overall profitability of the business.
In the nine months since the initiatives were completed, the company’s total return to shareholders has appreciated by nearly 14% while the returns of its two main competitors’ have remained flat or declined slightly.
