Case Study 1: Healthcare packaging · 12 months

$10 million of EBITDA in year one — against a benchmark of three to five percent

Case Overview

The company

A private equity-backed healthcare packaging and materials science manufacturer. Roughly $800 million in revenue, $130 million EBITDA at a 16% margin, built through a decade of acquisitions.

The situation

Nothing was on fire. That was the problem — it made the real issue easy to ignore. A decade of acquisitions had produced a business with no common language. Units that had been separate companies still ran like separate companies. There was no shared operating system and no consistent frame for making decisions, so every business argued its own case with its own numbers. Leadership could not compare two divisions on the same basis, which meant capital and attention went to whoever argued best rather than to whoever earned it.

Case Study 1: Healthcare packaging · 12 months

What We Did

Segmentation

A Pareto cut across every business unit revealed something nobody expected: more than 85% of total SKUs and customers were non-core, sitting in a long, flat-margin tail that stretched further than anyone had modelled.

Simplification

Rather than a one-time cull, the tail was addressed with a standing business rule — a gross margin floor that any non-core item had to clear. In one unit the tail was running gross margins in the low forties. The floor was set at 55%, a ten-point step, and given a horizon long enough to be achievable rather than theatrical.

Redeployment

The resources freed by simplification were moved to the core rather than banked.

The result in 12 months

The company treats this as a floor rather than a ceiling. Activity in the tail has not compressed as far as it will, and the second-year number is expected to be larger than the first.

$10M+

EBITDA impact, year one

7.6%

Improvement on a $130M baseline

$7.5M

From pricing actions, realised

50%+

Ahead of the 3–5% year-one benchmark

$2.5 million from resource reallocation, with further upside still being identified
$2.3 million from a single gross margin rule in one business unit

The pattern

$800M

Revenue scale

12 months

Timeframe

N/A

Margin movement

+7.6% year one

EBITDA movement

Pricing — 75% of gain

Dominant lever

Pricing is almost always the first and largest lever.
Three-quarters of the year-one gain in the first case. Two-thirds of the gross margin gain in the second. It is the fastest money in the business and it is nearly always sitting there unmanaged.
The results scale with time, not with effort.
Twelve months produced 7.6%. Two years doubled EBITDA. Six years quadrupled the business. Same system, different horizons.
It works across industries because it is not an industry insight.
Healthcare packaging, industrial distribution, transportation manufacturing. Different products, different customers, same arithmetic.

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