“We found EBICS to be the most suitable solution.”
Treasury Director, NMPP
Lettre du Trésorier
What does the acronym NMPP stand for?
Nouvelles Messageries de la Presse Parisienne, whose activity is principally supplying press titles to agents or wholesalers and then to vendors. Set up two years after the end of World War II, the company is owned 51% by five publishing co-operatives and 49% by Hachette SA.
A few figures will give you an idea - the group which has a significant per-edition market share, distributes 60,000 titles to 180 agents, which in turn serve 29,600 points-of-sale in 20,000 locations in France. This represents 2.3bn copies per year. In a single day an area of 180,000 kilometres is covered and 1,500 tonnes of newspapers supplied.
This must generate significant cash flows. How are they handled?
PA: The sales network is built on a chain of mandates binding the partners to each other at all levels – from the publisher to the delivery company, from the delivery company to the agent – or wholesaler - and from agent to the vendor. These mandates determine, amongst other things, the sales commission collected at each level, bearing in mind that sales figures are not known until the unsold amounts have been established. The statements are drawn up on a weekly basis. Each level passes the cash on to the level above based on the net supplies after deducting their fees. Bearing in mind NMPP is a shareholder in some agents, it is easy to understand the large number of bank accounts – just over 200. In annual terms, the total inflows and outflows of cash total €8bn while the number of accounting transactions amount to 450,000.
How concentrated is the liquidity?
PA: We have set up two cash pools which operate on the principle of merged interest scales with our four cash banks, and we have developed our own systems for billing interest within the framework of treasury agreements.
By the very nature of your activities, you must have cash resources. How do you employ these resources?
PA: We decided to get out of asset management in June 2007 and to place our surpluses solely in highly secure monetary products. We invest cash surpluses in certificates of deposit, time deposits and negotiable treasury notes until we know the effects of the current work and considerations in France and other countries regarding UCITS and monetary funds.
Does Nouvelles Messageries operate solely in France?
PA: No. The group also distributes the French press in other countries so we have to handle four currencies outside the Eurozone - the Swiss franc, the pound sterling, the US dollar and the Canadian dollar. We hedge the receipts denominated in these currencies solely through forward sales. One of the difficulties of the exercise is to ascertain the amounts of flows at 60 or 90 days, something which can change quite significantly as a result of the volumes of unsold titles. Conversely, in France we distribute newspapers on behalf of foreign publishers, an activity, which as you may imagine, is subject to strong seasonal variations.