Strategic Treasury

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Interview – Didier Lo Nobile Dider Lo Nobile chats to TMI about the challenges faced by the treasury management team at Gemalto, the world number one in digital security.

Interview - Didier Lo Nobile

EMEA Treasurer and Head of Cash Management, Gemalto Group

“It is necessary to negotiate SWIFTNet contracts in detail with each bank”

Le Lettre du Trésorier

Could you tell us about Gemalto?

Didier Lo Nobile

The poduct of a merger in 2007 between a company of French origin, Gemplus, and Axalto, a division of Schlumberger, Gemalto is the world number one in digital security, which can be in the form of objects, software or services, in areas as diverse as wiring, identification – we are talking about biometric passports - security, with bank cards, or even health, with the Carte Vitale [the French health insurance card]. The group, which has over 11,000 employees, has over 75 sites and is present in a hundred countries, achieved a turnover of €840m in the first six months, a sum which does not take into account the acquisition, in June, of Cinterion Wireless Modules, a German company which provides wireless communication modules for industrial machine-to-machine use and whose turnover rose to €145m in 2009. Gemalto is listed on Euronext, in section A, its stock is listed on the SPF 120 index and the market capitalisation was €2.8b on 21 October 2010.

How is the treasury of the group structured?

The treasury is organised in such a way that it can bring the operational structure of this very international group together. There are four regional treasury centres, one in Asia, one for each American zone and one for Europe, the Middle East and Africa. These centres come under a central treasury, located at the headquarters in Meudon, near Paris, where four people work, mostly in currency, cash management and investment – the company is structurally in surplus.

Where currencies are concerned, the decision to hedge risks, whether they are operational or economic, is done on a case by case basis, taking net exposure and cost of hedging into account. Net exposure, when we decide it is necessary to hedge, is effected through forward transactions or options, contingent on market conditions. In all, the treasury is made up of about fifteen people. In the field of concentration of liquidity, there are two identical cash pools: one in euros with BNP Paribas, which we intend to automate, the other in dollars with Citigroup. Countries that do not have access to either of these cash pools are linked up to the central treasury and are included in the global web network.

In addition to responsibility for the Eurozone, the Middle East and Africa, you are in charge of cash management for the group, its technical aspects in particular. What developments are there in this area?

We are looking at bank charges in France, for example. Therefore, with the help of the consultancy bfinance, we put out a call for bids at the end of 2008, to which six banks replied; three, who were actually already providers, were retained. The outcome of this detailed review is easy to see: annual bank charges were halved and are now less than €100,000. Currently we are putting the same system in place in Asia, where we have already organised a call for bids ourselves, with the aim of reducing our banking costs by half. This area of the business requires a lot of attention to detail and time, particularly because local banks provide very full documentation, probably three times more than in France.

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