The award for Best Working Capital Improvement Project in a Private Equity Portfolio Company went to Vita Group for an initiative that helped it achieve €2 million of cash flow improvements within just two months of starting term extension talks with suppliers, with a further €10 million expected by year-end.
The project – which saw Vita partner with Calculum to identify opportunities for optimising its payment terms and being more strategic about supplier negotiations – impressed judges for its strong outcomes and scalability. Vita is now well positioned for a possible supply chain finance (SCF) push.
Ambitious targets
Since being acquired by private equity firm Strategic Value Partners in 2018, Vita has been on a self-improvement journey, seeking to drive sustainability, strengthen its operational performance and optimise its working capital.
The UK-based polyurethane foam manufacturer had set itself an ambitious days payable outstanding (DPO) target for 2025, but with a complex network of vendors supplying 32 manufacturing sites across 13 countries in Europe, its Procurement team was unsure where to focus its efforts and how to track progress.
So in early 2025, Vita partnered with payment terms and working capital analytics company Calculum to gain better clarity and strategy. It wanted to benchmark its supplier terms and identify opportunities to unlock working capital across 4,000 suppliers and €600 million of spend.
AI-powered analysis
The project initially saw Calculum use its AI-powered Analytics Platform to analyse Vita’s suppliers. By applying over 10 optimisation strategies for each and integrating insights on potential payment term improvements, it identified opportunities to unlock over €2 million of cash flow.
From June 2025, work began in earnest, with Calculum using proprietary algorithms to gauge the likelihood of suppliers accepting longer payment terms and the potential financial impact for Vita.
For example, as part of its analysis of Vita’s supply chain, Calculum assessed individual suppliers’ credit ratings and cost of debt, and looked at the size of Vita’s spend to determine buyer leverage. It calculated the pre- and post-tax weighted average cost of capital (WACC) and used its Platform Calculator to determine a breakeven point for term extension.
It then used these insights to identify another €10 million of ‘low-hanging fruit’ opportunities for working capital optimisation. To determine which suppliers would be more open to term extensions and where to prioritise its term optimisation efforts, it examined which suppliers qualified as small and medium-sized enterprises (SMEs) and which had weaker credit ratings with higher debt costs. It also assessed their ultimate ownership structures and factored in country-specific legislation and regulations regarding payment terms.
Tracking and training
This helped Vita develop on the Calculum platform a phased six-month plan during which Treasury, Finance and all Procurement Category Managers could access and review their targets. The platform actively monitored their progress – including tracking each supplier’s journey from being analysed to contacted regarding term extension.
Four Regional Procurement Managers and over 10 Category Managers were also trained on how to use the platform and introduced to best practices in payment term negotiations.
Within two months of launch, Vita had successfully negotiated extended terms with more than 40 suppliers, unlocking €2 million of cash flow improvements. A further €10 million of improvements are expected by Q4 2025.
Next stop SCF
As Vita now prepares for a potential SCF programme, Calculum is helping identify which suppliers are most likely to join, based on the interest-rate arbitrage between their current cost of debt and the offered SCF rate, and calculating potential cash flow benefits for suppliers based on the number of early payment days an SCF programme would provide. Using its database of over 300,000 companies that are part of financing facilities worldwide, the platform is also flagging which Vita suppliers are already participating in other programmes.
“By employing sophisticated analytic capabilities, Vita has made huge progress towards its working capital optimisation goals in a very short period of time,” said Mike Hewitt, CEO of Working Capital Forum. “As well as unlocking significant amounts of liquidity, it has already positioned itself for a possible SCF programme – demonstrating just how much can be accomplished with a structured, data-driven approach.”