Werner Rehm

Partner/Corporate Finance at McKinsey & Company

[Werner Rehm @Werner_Rehm]

Looking forward to my conversation about Ethics in Finance for Scholars of Finance at MIT Sloan today at 7:15pm. Always a very inspiring and - often - meandering debate.

https://t.co/4z1403eqDl https://t.co/eg469cbnYV

[Werner Rehm @Werner_Rehm]

Super excited to be back at #Cornell tomorrow to teach a few classes. While I never went to the Johnson school, I spent one of the best years of my student life as a German exchange student in mechanical engineering in Ithaca in 92/93, which was really the start of my US adventur

[Werner Rehm @Werner_Rehm]

Great article about the #CEO transition that every manager should read from #Mckinsey colleagues Carolyn Dewar and Kurt Strovink

https://t.co/bsIiQ95CVP https://t.co/rTkentzAeb

[Werner Rehm @Werner_Rehm]

New in our blog for valuation practitioners: The obsession with EPS as metric for M&A success has to stop! We and others have shown for decades that there is no correlation between EPS accretion/dilution and deal sucesss or market reaction/perceptions

htt https://t.co/UeNxI1XnZG

[Werner Rehm @Werner_Rehm]

Persistantly high inflation, if it comes, will be hard for businesses to manage. Some challenges are not immediately apparent. For example, when inflation rates stay high, maintaining even previously strong operating margins won’t sustain long-term value c https://t.co/RKPWMp7FOW

[Werner Rehm @Werner_Rehm]

64% of CFOs Predict Net Profit Growth in 2023.

Recent survey from Grant Thornton:. 42% of CFOs predict growth of 6% or higher!

https://t.co/mKtL7wcweO https://t.co/odseVFhHl3

[Werner Rehm @Werner_Rehm]

New on our blog for valuation practitioners: Don’t use multiples to measure M&A success!
An increase in you company's multiple doesn't mean a deal was a success - let's continue to focus on basic value creation! https://t.co/JJl402Xc3d

[Werner Rehm @Werner_Rehm]

New on our blog for valuation practitioners: The market reaction to M&A announcements isn’t correlated with long-term value creation. So focus on getting the deal model DCF estimates right, execute against synergies, and good things will happen https://t.co/UIF8z2h21r

[Werner Rehm @Werner_Rehm]

New on our blog: Performance metrics when inflation is high
If high inflation stays around for a bit, you need to significantly increase your OM and ROIC targets to get cash flow growth to match inflation because depreciation is based on historical data! https://t.co/sFZ8K5f3Ep

[Werner Rehm @Werner_Rehm]

Best I can tell (public data), we will have ~600-700GWhrs of EV battery production capacity online by 2027-ish. At ~100kWhrs/car (high?), that's 6-7million cars - or ~50% of through cycle US new car sales. Some will go to trucks and busses, of course, but still - feels ambitious.

[Werner Rehm @Werner_Rehm]

Following up, a post on Estimating the Cost of Equity when inflation is high", our blog for valuation practioners. We continue to recommend an artificial, long term RFR as we have done for a decade since the real cost of equity has been stable ~6.5-7%

https://t.co/WV8YB9KeSC

[Werner Rehm @Werner_Rehm]

Michael Birshan, Ishaan Seth, and Bob Sternfels have written an article addressing strategic courage in an age of volatility.

In uncertain times, are you mainly cautious and defensive, hunkering down and concentrating on the threats? Using Scenario plann https://t.co/m4pI3Ph7nG

[Werner Rehm @Werner_Rehm]

Very proud to see this article being out and discussed. ESG matters now more than ever before - and it matters for companies https://t.co/3kUDSlidUE

[Werner Rehm @Werner_Rehm]

Since about 1800, stocks have consistently returned an average of 6.5 to 7.0 percent per year (after inflation). This has been true evenwith all the corrections in the past 25 years. New post on our Prime Numbers blog for valuation practitioners https://t.co/VfH4Ci8PQT

[Werner Rehm @Werner_Rehm]

Estimating the value of a company with junk debt can be difficult for the practioner as YTM and similar doesn't work well because of the potential default. Some ideas in our new Prime Numbers blog post.

What else should we tackle? Let us know https://t.co/FyXen4ktiZ

[Werner Rehm @Werner_Rehm]

Working on a new blog post for Prime Numbers.... Despite the recent drop, long term returns for the last 25 years are completely in line with returns over 200 years at 6.5-7% real. It's just how the market works https://t.co/lTM3ognqGY

[Werner Rehm @Werner_Rehm]

If you think the recen drop in the market drove multiples too low, think again - Median multiples never changed much, and weighted average is now back in line with long term averages https://t.co/xsAJdqP6Y9

[Werner Rehm @Werner_Rehm]

Peter Stumpner and I are looking into what drives the current stock market. First view: Oil and gas is the only industry that's up https://t.co/XpD3oCHWxv

[Werner Rehm @Werner_Rehm]

#PrimeNumbers post. Have you ever seen promises of lower cost of capital AND higher TSR for some strategic initiatives? This can't be true in the long run, so why we sometimes see these results?

[Prime numbers: a series for the valuation practitioner] https://t.co/SPzf6fN5XR

[Werner Rehm @Werner_Rehm]

First post on our new blog for the valuation/strategy/FP&A practitioner: Do consensus estimates accurately reflect operating performance? Maybe - but often you have to look under the hood to really work with them https://t.co/fxl7NnhzdS