Cantine Paololeo srl, a fifth generation family business, has produced wines since the early 1900s at Masseria Monticello, in the heart of the Negroamaro Park. Production has increased by 40% over the past three years, from 3 million bottles to about 4.2 million. The vineyards have a total area of around 24,000 sq.m. The first is located in central Salice Salentino DOC (San Donaci). The second, inaugurated in August 2020, is situated in Monteparano next to Primitivo di Manduria DOC. The facilities comprise extremely modern wine-making equipment, large cellars and an advanced bottling line capable of filling 7,000 bottles an hour. In recent years, Paololeo has reinvested part of the profits earned in R&D and innovative solutions that have modernised, with advance technology, the processing plant and equipment used. This strategy has enable the business to improve steadily the organoleptic properties and qualitative characteristics of the products put on the market. Sagres and Paololeo have collaborated successfully since 2014.

The Solution

The objective of the project devised by Sagres was to structure the new business plans of the company, monitoring and making best use of the costs incurred by the client. Working with Sagres, Paololeo has maximised cash flows and managed to dedicate financial resources to new investments. In 2018, the Sagres team developed a strategic plan for improving the ORDER to CASH process, with a view to making best use of the internal resources available and outsource low value-added activities. Together with management, Sagres prepared essential guidelines for a steady reduction in the level of DSO, seeking to enhance:

• the loyalty of sales agents, making them central to the project and providing them with all the support needed to obtain an in-depth understanding of the customers in their territories,
• their reliability and the payment terms generally practised with other suppliers.

This project included constant analysis of the entire customer portfolio. These dynamics were designed and implemented in order to ensure appropriate customer turnover, with the arrival of more reliable partners with respect to those with chronic payment delays. Sagres professionals also developed a service intended to establish direct relations between Paololeo and its sales network, thus obtaining constant updates on the daily activities of its agents. Over time, the partnership was able to identify specific, delicate cases of potential insolvency, activating internal processes for negotiating and accelerating collections without recourse to the courts. Sagres has devised a dashboard for Paololeo, enabling the Board to have an overview of the activities and cash flows of the business, as a necessary and strategic step in the processes of introducing new productive activities and planning future investments.

Objectives achieved, as measured in 2019

Financially sound increase in HoReCa sales of 15.47%. Increased cash flow and optimisation of financial charges. +21.71% (2019>2018) Thanks to Sagres, Paololeo achieved a 96% collection record without any recourse to legal action, by focusing on careful credit management. Compared with 2018, DSO in 2019 fell by an additional 12.4%. Taken together, these results have enabled the client to source the funds needed to install a new bottling line, modernise the existing winery and acquire the Monteparano production hub.