Cash & Liquidity Management

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Managing Treasury in a FTSE-100 Company Experian plc At the recent IACT (Irish Association of Corporate Treasurers) Conference in Dublin, Antony Barnes, Group Treasurer of Experian plc delivered a presentation on his experiences of running a FTSE 100 treasury function in Dublin. This article is based on the presentation and gives an insight into some of his key areas of focus.

At the recent IACT (Irish Association of Corporate Treasurers) Conference in Dublin, Antony Barnes, Group Treasurer of Experian plc delivered a presentation on his experiences of running a FTSE 100 treasury function in Dublin. This article is based on the presentation and gives an insight into some of his key areas of focus.

About Experian

Experian is a global leader in providing information, analytical tools and marketing services to organisations and consumers to help manage the risk and reward of commercial and financial decisions. Experian became an independent company in October 2006 following the successful demerger from its parent company, GUS, a long-established retail and business services group in the UK. Since then, the company has made a series of strategic acquisitions, which have extended the scope and geographic reach of its activities, such as Serasa in June 2007, which took Experian into Latin America.

Around half of annual revenues are derived from North America and a quarter in UK and Ireland, with substantial activities in EMEA, Latin America and Asia Pacific. The company employs around 15,500 people in 38 countries, supporting clients in more than 65 countries. Its annual sales are US$4.1 billion with EBIT of $938m and net debt of $2.7bn.

Experian plc is listed on the London Stock Exchange (EXPN) and is a constituent of the FTSE 100 index. Its corporate headquarters are in Dublin, Ireland with operational headquarters in Costa Mesa, California and Nottingham, UK.

Experian’s Treasury Department

Experian’s Group Treasury has a wide range of responsibilities to ensure an appropriate capital structure for the Group. These include Funding, Financial Risk Management, Cash Management, In-House Financing and Bank Relationship Management. In particular, there are a series of key principles in the way that treasury conducts its activities. During his presentation, Antony explained,

“Our aim is to fund the Group in a cost-effective way whilst minimising financial risks. Surplus cash is kept to a minimum and residual balances are invested prudently.

As a corporate treasury function, our primary consideration is to protect the interests of the company and its shareholders, not to act as a profit centre or to speculate. Furthermore, we aim not to complicate our activities, introducing financial products only where there is a clear business rationale for doing so.”

At Experian, treasury does not operate as a payments factory for commercial payments (which is managed in the shared service centre) nor does it make risk decisions on behalf of operating companies. Instead, treasury acts as an advisory function and suggests appropriate ways of mitigating risk.

Experian has a clearly delineated treasury organisation to allow for the appropriate segregation of duties (fig 1). The department manages Experian’s treasury requirements according to a defined treasury policy approved annually by the main Board, which covers the key principles, funding, cash management, approach to FX and interest rate risk. Based on the treasury policy, a Treasury Committee, comprising the CFO, Director of Corporate Finance, Group Treasurer, Head of Group Tax and Group Financial Controller meets monthly to discuss execution detail. The minutes of these meetings are also distributed to the Board and to Internal Audit. This Committee reviews the Treasury Committee Report produced by treasury, including balance and exposure information. Funding initiatives are agreed and any necessary changes to procedures and counterparty limits are discussed and approved.

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