Who this is for
- → Private equity firms and operating partners
- → CEOs and Managing Directors
- → Chairs and board members
- → Industrial, distribution and manufacturing businesses in Australia and APAC
EBITDA improvement in industrial distribution is not complicated. The levers are well understood. Most businesses attempt one or two and abandon the rest when execution friction builds. The ones that deliver execute all four — simultaneously and without relenting.
Why EBITDA Improvement Matters
At a 7× EBITDA multiple, every $1 of EBITDA improvement is worth $7 of enterprise value. In a $30M revenue business delivering $2.4M EBITDA, 500bps of margin improvement adds $1.5M EBITDA — $10.5M of enterprise value — before any revenue growth. Use the Run the value creation diagnostic to model the opportunity.
The 10 Levers
Pricing & Margin
- Price waterfall discipline — recover the 15–30% of revenue leaking through uncontrolled discounting
- Customer profitability management — exit or reprice the bottom 20% of customers by gross margin
- Product mix management — shift volume toward higher-margin SKUs
- Cost-to-serve visibility — assign freight and servicing costs to customers and price accordingly
Working Capital & Cash
- DSO reduction — every day of DSO reduction frees approximately 0.3% of annual revenue in cash
- Inventory rationalisation — 20–30% of inventory is routinely sub-optimal in distribution businesses
- Supplier terms extension — extend DPO through renegotiated payment terms
Operational Execution
- Weekly commercial cadence — the single highest-use structural change available
- Branch performance management — P&L visibility at the branch level with clear accountability
- Headcount productivity — revenue and gross margin per employee tracked monthly
The businesses that deliver EBITDA improvement don't do anything unusual. They execute the basics with discipline — and hold performance at that level after the pressure is removed.
Related value creation tools
Operator Insights
If this is happening in your business, let's talk.
Discuss a Mandate →Request a value creation diagnostic.
If you want to quantify the EBITDA improvement available in your business, use the Run the value creation diagnostic .
Most leadership teams underestimate this because they don't measure it properly. You can run this diagnostic in 2 minutes using the Run the value creation diagnostic .