1. A Multimillion
Results Journey
through
Operations
Efficiency
WELCOME!
We will be starting shortly
COVID-19
Implications for Industrial
Companies
OCTOBER 2020
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Today’s session will be recorded and will be available soon for download

2. Our
Speakers
INTRODUCING
Senior Partner,
Bain & Company
Andrea Isabella
Senior Partner,
Co-Leader Digital for
Industrials South America
José de Sá
COO,
Fedrigoni
Mario Naldini

3. • Do we have enough
visibility into our
suppliers to ramp-up
production effectively?
• Do we have the
manufacturing and
fulfillment capabilities to
get products/services to
the customer?
• What can we do now to
create a more flexible,
resilient, and
sustainable supply
chain?
Strategic Intent Customer Cost and Cash OrganizationOperations
• How do we improve
our demand ‘sensing’?
• How do we stimulate
demand after time away
and/or maintain it after a
spike?
• What changes do we
need to make to serve
our customers’
evolving needs (in
recovery and the
future), including
digital?
• Where and how do we
restructure our costs
now to compete in the
new world?
• How do we begin now to
move to a lower, more
variable cost model?
• What one-time recovery
costs and/or working
capital infusions need to
be planned for? Do
these create liquidity
problems?
• What are the right
policies, sequence and
speed to bring people
back to work safely?
• What have we learned
about ways of
working to restart an
improved operating
model?
• How do we deploy
automation and AI as
a core part of our
business model?
Scenarios What are the likely recovery scenarios we should be planning for?
What actions would we take in any given scenario and which ones apply across scenarios?
Results Delivery How do we mobilize to ensure success, including leading, deciding, orchestrating, and doing?
Digital How can we use digital technologies to accelerate transformation? How should we evolve our operating
model to enable higher innovation and higher productivity?
• What are our strategic
priorities during the
recovery and beyond?
• How can we leverage
the recovery to improve
our portfolio, gain share
and accelerate our
transformation agenda?
• Where is potential for
opportunistic M&A or
transformative M&A?
ACCELERATING THROUGH THE RECOVERY

4. ACCELERATING THROUGH THE RECOVERY
• Do we have enough
visibility into our
suppliers to ramp-up
production effectively?
• Do we have the
manufacturing and
fulfillment capabilities to
get products/services to
the customer?
• What can we do now to
create a more flexible,
resilient, and
sustainable supply
chain?
Strategic Intent Customer Cost and Cash OrganizationOperations
• How do we improve
our demand ‘sensing’?
• How do we stimulate
demand after time away
and/or maintain it after a
spike?
• What changes do we
need to make to serve
our customers’
evolving needs (in
recovery and the
future), including
digital?
• Where and how do we
restructure our costs
now to compete in the
new world?
• How do we begin now to
move to a lower, more
variable cost model?
• What one-time recovery
costs and/or working
capital infusions need to
be planned for? Do
these create liquidity
problems?
• What are the right
policies, sequence and
speed to bring people
back to work safely?
• What have we learned
about ways of
working to restart an
improved operating
model?
• How do we deploy
automation and AI as
a core part of our
business model?
Scenarios What are the likely recovery scenarios we should be planning for?
What actions would we take in any given scenario and which ones apply across scenarios?
Results Delivery How do we mobilize to ensure success, including leading, deciding, orchestrating, and doing?
Digital How can we use digital technologies to accelerate transformation? How should we evolve our operating
model to enable higher innovation and higher productivity?
• What are our strategic
priorities during the
recovery and beyond?
• How can we leverage
the recovery to improve
our portfolio, gain share
and accelerate our
transformation agenda?
• Where is potential for
opportunistic M&A or
transformative M&A?

5. 5Webinar_ Next Gen Industrial P ...TOR
Bain’s integrated approach to Digital Transformation in Operations
S T R AT E G Y
R O A D M A P
M O B I L I Z E
T E C H / E N A B L E R B L U E P R I N T
A M P L I F YS C A L EW I N
A M P L I F YS C A L EW I N
A M P L I F YS C A L EW I N
I M P L E M E N T T E C H / E N A B L E R
F O U N D AT I O N
E X E C U T E
A M P L I F YS C A L EW I N

6. 6Webinar_ Next Gen Industrial P ...TOR
Fedrigoni Group embodies excellence in specialty papers and pressure sensitive
labels production – acquisition by Bain Capital launched a huge transformation
Specialty and luxury
papers excellence
European leader for
production and sales of
special papers for
graphic use with focus on
the Luxury end-market
Converting excellence
3rd European player
for pressure sensitive
labels (also through the
acquisition of Ritrama in
2020 – ~400 M€ revenues)
Bain Capital
In 2018, Bain Capital
Private Equity, became
the main shareholder in the
Fedrigoni Group with a
90% stake
Global
footprint
The Group is worth ~1.600
M€ in revenues, with
~4.000 employees in 21
production sites in Italy,
Spain, UK, Chile, Brazil, US
and China

7. 7Webinar_ Next Gen Industrial P ...TOR
Bain & Co. for Fedrigoni: partners in a multimillion journey on Operations
Multimillion journey in Paper: success-story delivered at the COO’s side, Mario Naldini
What we are doing How we are doing it
Hands-on approach,
tied to results to crack
cases & deliver results
Working across functions with operating team:
focus on delivering results in the P&L from first year
Overall Program coordination and
Results Delivery Office
Operations
Transformation journey
on both Business Units,
focusing on “classic”
improvements as well
as digitalization
1+ Year Transformation in Paper & Labels, on direct
efficiencies (OEE, raw material) as well as step-change
initiatives (Digital)
Now working also on ESG – eg. emissions reduction

8. 8Webinar_ Next Gen Industrial P ...TOR
Fedrigoni as we started: context and challenges with clear strategic objectives
from day one
• Bain Capital launched a broad Value
creation program across functions
• Operations Excellence as a key
EBITDA growth pillar
• Launched an Operations Full Potential
program across all Value areas, with
Digital as a key enabler &
transformation lever
• From family-owned to PE owned
company
• Plant working on a standalone basis,
zero sharing of best practices
• No performance tracking: data
collection on paper, not standardized
• Pre-existing ‘Production-first belief’:
1 ton more of production is always better
Context Challenges
• Maximum value generation
• Full transformation to establish a new
way of working
• No stones unturned
• Growth and efficiency at the same time
Objectives

9. 9Webinar_ Next Gen Industrial P ...TOR
Strategic objectives within Operations: we wanted to build on three solid pillars
• Set-up an improvement muscle
that is able to identify, design and
deliver improvement on all areas:
– Cross-functional teams
– Clear accountability and timing in
each stream
– Pilot and scale approach
• Achieve financial targets by
ensuring
– Optimal use of raw material,
exploiting Value Engineering levers
every time it is possible
– Maximum efficiency: steep OEE
improvement across all machines
– Energy-efficient plants, exploiting all
available government incentives
Capabilities
Continuous improvement in
our DNA
Value from Ops
30 €M EBITDA at 2023
(+20%)
• Embed Digital in Operations:
– Exploit the power of analytics
through closed-loop and machine
learning algorithms
– Latest generation S&OP tied to
demand forecasts
– Trusted results-based partnership
to ensure we are among the first to
test innovative solutions
Technology
ecosystem generating
cutting-edge innovation

10. 10Webinar_ Next Gen Industrial P ...TOR
How we cracked it: 5 work-streams, deployed for 1+ years in cross-functional teams
Way of workingApproach
1+ year timeframe with
first 3 months dedicated
to diagnostic
O V E R A L L P R O G R A M
Cross-functional
teams to exploit
different capabilities
and align all interests
Clear RDO structure
with pre-defined stage
gate to track initiatives
progresses
Design to
value & Raw
material
optimization
1
OEE & Mills
Performance
2
Energy &
sustainability
3
S&OP and
Service Level
4
Digital/
Industry 4.0
5
Deep-dive in next slide

11. 11Webinar_ Next Gen Industrial P ...TOR
We deployed Digital Transformation in three steps
Data Lake creation Digital twin design Analytics applied to use-cases
Infrastructure/data lake is the enabler of
all digital initiatives
It increases end-to-end visibility by
integrating in a unique and consistent
digital environment
Digital use-cases or platforms that
– Generate savings across key Operations
cost buckets
> Raw Materials
> OEE/Perf. Improvement
> Maintenance and Energy
– Enable an enhanced control/productivity
(S&OP)
Design and calibrate a digital twin to
identify the full equation of productivity
and cost effectiveness
D I G I T A L D E E P - D I V E

12. 12Webinar_ Next Gen Industrial P ...TOR
Infrastructure designed focusing on key plant systems first, and then selectively
extending to the rest of PLCs installed base
WIS/Rotture
Honeywell
DCS/QCS (PM)
DCS
Automation X
Pulper
control
Starter
DMZ
Honeywell
DMZ
Automation X
DMZ
Siemens
Server
OPC - UA
OPC - UA
Automation X
OPC - UA
Siemens
Firewall
Paper Co.
Router
Central Data Lake Paper Co
(Microsoft Azure)
Phase 1 (pilot)
Phase 2
Lab Client
DNA
Historian
DNA
Report
OPC - UA
Honeywell
DMZ
VPN
Supplier’s cloud
KPI Management Platform
Other supplier’s apps
Plant systems OPC-UA First-level security
Router/switch and
second-level security
Central Data Lake
A B C D EStorage systems
D I G I T A L D E E P - D I V E D A T A L A K E C R E A T I O N
Plan network

13. 13Webinar_ Next Gen Industrial P ...TOR
Digital Twin has been built to identify relationships
among digital tags and business impacts
Key impacts
Economic
Quality
D I G I T A L D E E P - D I V E D I G I T A L T W I N D E S I G N
Flusso telino
Vuoto feltri
Vuoto tele
Potenza pompe
% secco uscita
presse
Tensione feltri
Livello H2O per
pulper
Consistenza pasta
Temperatura pasta
Portata carbonati
Potenza raffinatori
Livello tina
Temperatura
seccheria
Umidità seccheria
Rottura seccheria
Portata/consumo
vapore
Pressione calandreApertura labbro
Rapporto getto-tela
Section 1 Section 2 Section 3 Section 4 Section 5
Electricity consumpt. Electricity consumpt.Electricity consumpt. Web breaks Speed at pope
Drenaggio pasta Grammatura Spessore% secco d’uscita
% ceneri
Process

14. 14Webinar_ Next Gen Industrial P ...TOR
We developed many use cases, eg. Closed-loop optimization & machine learning
predictive models
D I G I T A L D E E P - D I V E A N A L Y T I C S A P P L I E D T O U S E - C A S E S
Closed-loop optimization to reduce raw materials Machine learning to predict web breaks
Real-time sensors & analytics model to predict quality,
adjusting machine settings to minimize over-specs
Data analytics applied to the digital twin,
enabling for example the prediction of web breaks
Analysis real-time of
machine sensors,
relating them to web
break events
Emerging evidence:
key parameters are
starting to vary a
few minutes before
the break happens
(purple line)
Our real case in Fedrigoni
largest plant (ongoing)

15. 15Webinar_ Next Gen Industrial P ...TOR
Results achieved are tangible, within and beyond our P&L
O V E R A L L P R O G R A M
€M Yearly EBITDA Impact
Other
achievements
S&OP implemented,
Stock levels reduced,
Service level boosted
Continuous
improvement
culture digested
Digital culture injected
Ecosystem of
specialized
partners created
ESG
performance
improved

16. 16Webinar_ Next Gen Industrial P ...TOR
What we learned from our journey
O V E R A L L P R O G R A M
Orchestrate effectively (with ecosystem)
Pulling together many & specific competences
requires solid partnerships
Keys to success
Stay “Value North”
Projects should be driven by business cases,
below-threshold payback time, fit with ambition
Start small, roll-out big
Start from pilot “light-house” projects, create
momentum (if successful), then roll-out
Transparency and targets alignment are
required (needs strong top-down commitment
from leadership)
Effective projects are cross-functional – difficult to
align timing, needs, targets and way of working of
all contributors
Attention points
Specific internal capabilities are required, rare
to find on the market
Eg. in Digital transformation, you require to
combine analytics and industry knowledge

17. José de Sá
jose.sa@bain.com
Andrea Isabella
andrea.isabella@bain.com
if you would like to discuss furtherContact us
Diego Garcia
diego.garcia@bain.com

18. Next Generation
Industrial Performance
Post Covid19
OCTOBER 2020