by Hans van der Meulen, Vice President, Planning, Treasury & Tax, and Raluca Dusa, Assistant Treasurer, syncreon
The company is listed in Ireland but with its holding company and headquarters in the United States. Treasury is centred in Michigan, USA. We manage our two primary regions, United States and Europe, separately, with two primary banking relationships: KBC and its subsidiaries in Europe, and Comerica in North America. We have had a relationship with KBC spanning more than 15 years ever since we first commenced our operations in Europe, initially as part of a joint venture in Belgium. At that time, we needed financing in Europe, which was provided by KBC, and the relationship has expanded since then.
Cash management in Europe
Today, our European operations extend across Ireland, UK, Netherlands, Belgium, Spain, Germany, Poland and Hungary, with small businesses in Portugal and Italy. KBC is a member of our revolving credit facility, and supports our daily cash and account management activities across Europe. We have daily sweeps from our operating accounts into a master account that we use for borrowing or investment as appropriate. Most entities operate in multiple currencies, so we have an in-house bank to reduce FX exposure across the group and simplify the account structure. Due to regulatory restrictions in Hungary and Poland, HUF and PLZ are excluded from our cash management structures and positions in these currencies are not offset or pooled. Consequently, we made the decision to keep balances in these currencies in the local entities. However, excess euros in these entities are still swept into the European cash pool.
With such a diverse reach of European operations, there are inevitably challenges that need to be addressed, particularly in areas that have stricter regulatory controls, such as Central & Eastern Europe (CEE). For example, opening bank accounts can be a very long process, and in some countries, the process is becoming more rather than less arduous. With a direct presence in CEE through its subsidiaries, KBC has been able to leverage its expertise to streamline processes as far as possible. In addition, the depth of coverage that the bank offers has proved highly beneficial, supporting our local in-country needs as well as cross-border requirements. For example, it is very important to us to be able to rely on our bank for a full range of local services, such as payroll, direct debits etc. In addition, we benefit from competitive pricing for FX in currencies such as HUF.
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