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Interview – Catherine Debray Catherine Debray discusses the treasury structure of Assystem, the company’s policy regarding investment of surpluses, and information technology and banking communication – especially the importance of forecasts.

Catherine Debray

Group Treasury Manager, Assystem

“We adjust our forecasts every month”

In which business and countries is Assystem involved?

We are a leading company in Europe in engineering and in innovation advice. Assystem is involved in two major areas: outsourced research and development in product design and process engineering involving the construction and operational maintenance of complex installations. Assystem is an industry specialist not only in nuclear power, which was at the root of the company’s creation in 1966, but also in aeronautics – with, notably, the best aerostructure department in Europe – the automotive industry, defence, and pharmaceuticals. The business gets 60% of its turnover from ten customers, major international companies including EADS, EDF, Thales and Areva. The company, which reached a turnover of EUR 613m in 2009, 30% of which was achieved abroad, employs over 8,500 people in a dozen countries. There are subsidiaries in the UK and Germany, two countries where this company’s presence is very significant, and also in Italy and Spain and even Romania and India. The company has been listed since 1995, when it took the name Assystem. Equity is negotiated by Euronext. Paris, and its market capitalisation reached EUR 216m on 17  March 2010, the day after the publication of the 2009 annual financial report.

What principles do you use in the treasury structure?

One aim over the last few years has been to centralise almost all cash flow and deal with each risk at a single point. With the centralisation of cash flow, since 2007 the company has opted for an international cash pool in euros, whereas in France we work with four cash pools corresponding to the major banks who handle our finances. This system works well and we do not have any reason right now to review it.  

One aim over the last few years has been to centralise almost all cash flow and deal with each risk at a single point.

On the other hand, we have not ruled out superimposing a cash pool in sterling. Debt is also managed centrally and its restructuring was well-timed before the summer of 2008, before the crisis had had any impact, thanks to the settlement of bilateral credit lines, the settlement of previously issued Obsar [bonds with redeemable share subscription warrants] and the issue of a new block of Obsaar [bonds with warrants and/or with redeemable share purchase warrants] with an expiration date of 2013, operations which were completed upon the granting by our five banks of an undrawn syndicated revolving credit facility of EUR 55m. On the subject of our bond debt, which amounts to EUR 91m, we renegotiated a swap and a cap at the beginning of the year which were linked to the new Obsaar, in order to take advantage of the favourable interest rates. As a result the cost of our debt is less than 3%.  

Let me add a word about our two covenants: the link between net debt and equity must be less than or equal to 1 and that between net debt and the gross operating surplus less than or equal to 2.75. Due to our capacity to generate cash-flow, the work we have put into the management of working capital requirements – 2009 saw an average nine days year-on-year improvement in the days-of-sales-outstanding ratio - and the handling of our investments, we are far from having any problems here: the net debt of the company is near 0. In addition, the total sum of our current net treasury and undrawn syndicated credit – EUR 143m - demonstrates the substantial financial flexibility from which we benefit.

Would it be correct to say that as far as your international presence is concerned, there is unlikely to be much change?

Indeed, the euro is predominantly the currency of invoicing. However, recently European clients, particularly in aeronautics, are asking us to invoice them partially in dollars. We are protected from this risk, which remains minimal, by classic forward transactions. As far as our British subsidiary is concerned, apart from the natural cash flow cover, we can turn to the classic cover of billing for the balance, as for the dollar.

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