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Cash & Liquidity Management
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Concentrating Cash and Positioning for Growth at Panini

by Peter Harris, Group Chief Financial Officer, and Fabrizio Masinelli, Group Treasurer, Panini Group

Panini has experienced very rapid expansion in recent years, in terms of both its geographic reach and the extension to its product range. Over this period, cash management has been a lower priority compared with addressing the immediate needs of a growing company. As the company matured, Panini’s senior management recognised that there needed to be a renewed focus on optimising cash and mitigating financial risks to position the company for the next stage in its development. Panini has a seasonal cash flow cycle, with large cash surpluses at certain times of year that needed to be repatriated to the head office in Italy and managed centrally, to net surpluses and deficits across the group.

Appointing a banking partner

With cash concentration a key requirement for Panini, the company was seeking a banking partner with a strong presence in each of its key markets, or a partner bank with a common commitment to product and service delivery within an integrated framework. Panini had an existing relationship with UniCredit in Italy, and made the decision to extend this relationship for cash pooling across the group, whilst maintaining its existing banking partners in each country, recognising that a multi-bank environment helped to reduce its credit and concentration risk.

Implementing a cash pool

UniCredit worked with Panini to implement cash pools across the business, with one cash pool for each major currency. In Europe, zero-balancing structures were put in place, while in the United States, target-balancing was introduced, recognising that there were two sets of very distinct needs in the business.