My Life in Treasury
Luis with his daughter Sofia
An Interview with Luis Montesinos Ballesteros, Director, Tax and Treasury, Campofrio Food Group
This month, Helen Sanders, Editor, talks to Luis Montesinos Ballesteros, Director of Treasury & Tax at Campofrio Food Group, about his career in treasury and his personal and professional values and insights.
How did you first get into treasury, and what attracted you to the profession?
Although I have spent virtually my whole career in corporate treasury, I spent four years in banking. Initially, I worked for Crédit Commercial de France, which was later acquired by HSBC, two years in Madrid while finalising my university degree and then two more years in London after graduating. I then decided to take an MBA, which prompted my decision to pursue a career in finance. My first degree was in law which, together with an MBA, has proved a very useful background to a career in treasury given the range of contracts in which treasury is involved.
How did your career progress to the role you hold now at Campofrio?
Having left banking, I joined Alcatel where I spent 18 years, initially as international credit and collections manager, which was part of the corporate treasury function. This marked the start of my treasury career, and I became involved in a wide variety of activities including trade and project financing, and international export contracts. Given the global nature of the business, this involved a great deal of international travel and operating in a wide range of diverse locations. In addition, I spent two years in Italy, initially as a controller and then in trade and project financing, which also required a lot of travel, particularly to set up new financing structures.
I then returned to Spain, again as part of the Alcatel treasury team. Although I reported to the group treasurer, I became the group risk management director, which involved setting up a comprehensive risk management policy and procedures for the entire group. I was then appointed treasurer for Spain and then for Latin America and Southern Europe, but maintained my risk management role, which was complicated at times. However, this dual role gave a unique insight into the business and each part of the role complemented the other.
When Alcatel merged with Lucent in 2008, I was offered a role in Paris which was a very attractive proposition. However, I ultimately decided that the change in the business was an opportunity to broaden my horizons in a new company, so I joined Campofrio as director of treasury and tax. This proved an excellent move, as, in a smaller company, I had global, rather than regional treasury responsibilities, and could take a complete view of bank relationships, liquidity and risk, investor relationships, credit ratings etc. whereas these activities tend to be siloed across individuals or departments in a larger organisation.
I joined just after the merger between Campofrio and Smithfield Europe, which was an opportunity to build a new treasury function. Previously, cash and treasury management had been decentralised, with no co-ordinated treasury policies and processes, so we used the opportunity to create a more centralised, harmonised group treasury function at a corporate level. In 2010, we implemented a treasury management system (TMS), built a robust cash flow forecasting procedure, and set up a cash pool for our European subsidiaries. We also embarked on a series of balance sheet management initiatives, resulting in significant working capital improvements.
The timing of these activities has been key. While many Spanish corporations suffered during the global financial crisis and lost access to financing, Campofrio both weathered the storm and became stronger over this period, reflecting market confidence in the treasury approach that we had taken.
How do you think demands on treasurers have changed during your career so far, and what additional skills are required to meet these demands?
Today, the concept of an integrated treasury is more important than ever, and without this, treasury is losing value for the business. Integration takes a number of forms, including the way in which treasury activities are connected, but also the links between treasury, other group functions and the wider financial supply chain. Increasingly treasury is becoming involved in a broader range of activities that are part of the working capital cycle, as well as presenting the public face of the organisation in the capital markets vis-à-vis credit rating agencies, investors and the rest of the company’s stakeholders, so it is important to develop a wide range of skills to manage these diverse requirements.
What has been your greatest professional achievement so far, and why?
This is a difficult question as I tend to measure my success through the daily and monthly treasury cycle, which shows the result of decisions I have made. I have been involved in more than 60 financing transactions, but I would identify my time at Campofrio as the period in which I have made the greatest contribution personally. Throughout the financial crisis, the markets were against us, but we came through it well, and have recently been successful in refinancing our bonds more than halving the company’s cost of debt at a far lower coupon (3.375%) than our previous debt (8.25% in 2009) despite being a non-investment grade corporation. Furthermore, we managed to achieve this without a legal director, who had not yet been replaced following the departure of the previous incumbent, so we also undertook the legal negotiation.