Blueprint for Cost Management Clarity”

Distinguished colleagues, esteemed business unit CFOs, finance professionals, and valued partners,

Thank you for the opportunity to address you at this pivotal finance conference. As we gather here, representing Vindaloo, a global, multi-billion dollar enterprise, we stand at a crossroads—a moment where the language we use, the strategies we deploy, and the signals we send to the market are more consequential than ever.

Let me be direct: The inconsistent application and communication of cost management strategies across our business units is not just an internal challenge—it is a public one. When we mix and match different cost reduction models without clarity or discipline, we inadvertently send confusing, and at times damaging, messages to the market about our company’s health, priorities, and future direction. This is not merely a matter of semantics or internal process. It is a matter of our credibility, our valuation, and our ability to inspire confidence among investors, analysts, and stakeholders worldwide.

The Cost Reduction Model: A Framework for Clarity and Precision

Let us ground ourselves in the Cost Reduction Model—a structured approach that delineates four distinct strategies, each with its own purpose, language, and market implications: Model Purpose & Focus Typical Context Market Signal Outcome Cost Restructuring Prioritizing cash conservation over profitability; eliminating all non-essential costs Times of distress/crisis Survival mode; urgent stabilization Ensure survival through critical financial phases Cost Take Out Business transformation; redesigning the cost structure to support strategic objectives Fundamental business shift Proactive reset; strategic repositioning Lower cost structure Cost Optimization Business-focused, continuous discipline to drive spending and cost reduction Ongoing improvement Operational excellence; efficiency Business process simplified, standardized, rationalized Cost Transformation Organization-wide change; new business identity and mindset Long-term, cultural change Innovation; sustainable competitiveness A new way of business life

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Why Language Matters: The Power of Precision

Every time we speak—internally or externally—we are not just describing our actions; we are shaping perceptions. When a business unit describes a routine efficiency initiative as “restructuring,” we risk signaling distress where none exists. Conversely, if a unit in genuine crisis downplays its situation as “optimization,” we mask the urgency and may fail to attract the support and resources required for survival.

This is not academic. It is existential.

• Investors scrutinize our disclosures for signs of stability or distress.
• Analysts interpret our terminology as clues to our underlying health.
• Employees look to our language to understand the security of their roles and the direction of the company.
• Customers and suppliers adjust their expectations and commitments based on the signals we send.

When our language is imprecise, we lose control of the narrative. We risk eroding trust, diminishing our valuation, and undermining our ability to execute our strategy.

The Four Models: When and How to Use Them

Let us revisit each cost reduction model, not as interchangeable tools, but as distinct responses to specific business realities. Each model demands its own language, its own approach, and its own set of expectations.

1. Cost Restructuring

Definition:
Cost restructuring is the act of prioritizing cash conservation above all else, often at the expense of profitability and other considerations. It is typically reserved for periods of acute distress or crisis, where the survival of the business is at stake.

Actions:

• Eliminate all non-essential costs.
• Enable management to buy time and assess broader restructuring options.

Market Signal:
We are in a critical phase. Our focus is survival. We are taking decisive, sometimes painful, steps to stabilize the business.

Proper Use:
Do not use “cost restructuring” to describe routine cost-cutting or efficiency measures. Reserve this language for moments when the very existence of the business is threatened.

Example:
Last year, our Southeast Asia division faced a sudden regulatory change that slashed revenues by 40%. The unit correctly declared a restructuring phase, enabling us to provide emergency liquidity and strategic oversight, ultimately preserving 1,200 jobs.

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2. Cost Take Out

Definition:
Cost takeout is a form of business transformation. It is a deliberate, strategic process that redesigns the fundamental cost structure of the business to support new strategic objectives.

Actions:

• Redesign business processes.
• Remove legacy costs.
• Build a cost base aligned with future strategy.

Market Signal:
We are proactively reshaping our business to compete and win in a new environment. This is not a reaction to crisis, but a bold step toward a more competitive future.

Proper Use:
Use “cost takeout” when you are fundamentally altering the business model or cost base—not when you are making incremental improvements.

Example:
Our North American logistics group recently underwent a cost takeout initiative, automating 70% of warehouse operations and reducing fixed costs by $22 million annually, supporting our shift to a direct-to-customer model.

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3. Cost Optimization

Definition:
Cost optimization is a continuous, business-focused discipline. It is about driving ongoing efficiency, obtaining the best pricing and terms, and rationalizing platforms, processes, and applications.

Actions:

• Standardize and simplify processes.
• Rationalize technology and platforms.
• Continuously seek better value for money.

Market Signal:
We are committed to operational excellence and efficiency. We are not in crisis; we are optimizing for sustainable performance.

Proper Use:
Use “cost optimization” for ongoing, incremental improvements. Do not use it to describe crisis-driven actions or fundamental business transformation.

Example:
Our IT department’s vendor consolidation project, which saved $4 million in annual licensing fees, is a textbook case of cost optimization—incremental, sustainable, and non-disruptive.

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4. Cost Transformation

Definition:
Cost transformation is about changing the very identity of the organization. It is underpinned by a new mindset, new leadership behaviors, and a company-wide commitment to cost competitiveness.

Actions:

• Drive cultural change.
• Embed cost consciousness at every level.
• Create a new business model and way of working.

Market Signal:
We are leading the market in innovation and competitiveness. We are not just cutting costs; we are redefining what it means to do business.

Proper Use:
Use “cost transformation” only when you are genuinely changing the culture and operating model of the company—not for tactical or incremental cost actions.

Example:
Vindaloo’s recent transformation in our EMEA division—where we shifted to a digital-first, agile operating model—resulted in a 35% productivity increase and a new culture of innovation.

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The Risks of Mixing and Matching

Let’s look at the facts: As of now, 60% of you are claiming to be in turnaround or restructuring mode, while the overall company is growing by 20% year-over-year. This disconnect is not just an internal misalignment—it is a public contradiction. If Vindaloo is reporting robust growth to the market, but the majority of our business units are signaling distress, what message are we sending to our investors? Are we a growth company, or are we in trouble? The market cannot—and will not—reconcile these mixed signals for us.

When we blur these distinctions—when we “mix and match” cost management strategies—we create confusion, both internally and externally. The consequences are real:

• Misaligned support: Headquarters may fail to provide the right resources or interventions because we misdiagnose the problem.
• Market confusion: Investors and analysts may misinterpret our actions, leading to volatility in our share price and uncertainty about our future.
• Cultural erosion: Employees may become cynical or disengaged if they perceive that leadership is not being transparent or consistent.

We cannot afford these risks. As a global leader, our standards must be higher.

A Call to Action: Discipline, Clarity, and Leadership

I am calling on every business unit CFO, every finance leader, every member of this organization:

Use the proper language.
Be precise. Be disciplined. When you describe your cost management strategy, ensure it aligns with the reality on the ground. Use the terms “cost restructuring,” “cost takeout,” “cost optimization,” and “cost transformation” only in their proper contexts.

Signal your needs clearly.
If you are in crisis, say so. If you are transforming your business, say so. If you are optimizing for efficiency, say so. The clarity of your language determines the type of help and support you will receive.

Send the right signals to the market.
Our reputation, our valuation, and our future depend on the trust we build through transparent, consistent communication. Do not dilute or distort our message through careless or imprecise language.

Fund Allocation and Scrutiny: A New Era of Accountability

To reinforce this discipline, I am announcing today a new approach to fund allocation and scrutiny for cost initiatives across Vindaloo. Effective immediately:

• 20% of our cost initiative funds will be allocated to genuine restructuring efforts, subject to the highest level of scrutiny and board oversight. Only units facing true existential threats will qualify.
• 30% will be dedicated to cost takeout initiatives—for those business units fundamentally redesigning their cost structures in alignment with strategic shifts. These projects will undergo rigorous ROI analysis and quarterly review.
• 5% will be reserved for cost optimization projects, reflecting their incremental nature and lower risk profile. These will be fast-tracked but closely monitored for continuous improvement.
• The largest share, 45%, will be invested in transformation initiatives—supporting bold, organization-wide changes that redefine Vindaloo’s future. These will be championed by executive leadership and tracked with clear cultural and financial KPIs.

No initiative will proceed without clear categorization, justification, and alignment with the appropriate model. This is how we ensure that every dollar spent drives the right outcome and sends the right signal.

Practical Steps for Immediate Implementation

To ensure we speak with one voice and act with one purpose, I am instituting the following measures:

• Mandatory Training: All finance leaders will undergo training on the Cost Reduction Model and its proper application.
• Standardized Reporting: All business units will use standardized templates that clearly identify which cost reduction model is being deployed and why.
• Centralized Review: The Group Finance Office will review all major cost management communications before they are released externally.
• Feedback Mechanism: We will establish a channel for business units to seek guidance on the appropriate terminology and strategy for their situation.

Closing: Our Responsibility and Our Opportunity

We are stewards of a global enterprise. Our actions—and our words—carry weight far beyond our own offices. The market is watching. Our stakeholders are listening. We owe it to them, and to ourselves, to communicate with clarity, discipline, and integrity.

Let us set the standard for the industry. Let us be known not just for our financial acumen, but for our transparency, our consistency, and our leadership.

The right language is not a luxury. It is a necessity. It is the foundation upon which we build trust, drive performance, and secure our future.

Thank you.

MB