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How we helped a construction services provider develop a defensible benchmark covering eight European jurisdictions while meeting an aggressive timeline.
Our client, a routine construction‑services provider active in the energy sector, recently reorganised its European operations. To support new intra‑group service agreements, the company needed a defensible benchmark covering eight key jurisdictions—including a mix of Eastern, Central and Western European Countries—while meeting an aggressive, one‑week turnaround.
The client faced several significant challenges that required a tailored approach:
We implemented a four-step approach to address the client's specific requirements:
Deployed ArmsLength AI to screen European databases for companies classified under construction services tied to power‑plant, pipeline and HVAC installations.
Applied negative filters to exclude entities with stock‑to‑sales ratios consistently above 10%, ensuring alignment with the client's asset‑light profile.
Delivered an initial European set (A + B tiers) in 72 hours—as promised—to let the client pre‑screen.
Build separate ranges for Western vs. Central‑Eastern Europe, jurisdictional ranges and stock-to-sales profile ranges.
Where a country yielded ≥ 6 comparables, we produced a local inter‑quartile range; otherwise we presented the full European range, clearly labelled per the client's instructions.
Split the analysis by stock‑to‑sales profile (Low < 10% vs High > 10%) to demonstrate the effect of working‑capital intensity on margins.
Prepared a comprehensive report on day 10 detailing search parameters, accept/reject matrix, statistical outputs and narrative justifications, meeting both OECD and local TP file standards.
14 Western‑European, 24 Central‑Eastern, all meeting the "pure contractor" test.
European Net Cost Plus (NCP) IQR; jurisdictional ranges disclosed where statistically reliable.
Side analysis showed contractors with High stock‑to‑sales ratios earned ~120 bps higher NCP margins—a nuance later cited by the client in internal pricing policy papers.
Preliminary file in three days; final report in ten.