Published: November 01, 2010
REWE Group is one of the leading trading and travel and tourism companies in Germany and in Europe, and is active in 16 countries. In food trading, specialist stores and the tourism sector, the group of companies – including independent retail trade – turned over considerably more than EUR 50bn in 2009, employing around 330,000 staff. Unsurprisingly, liquidity forecasting within the group is a challenging task.The volumes achieved across the group are also remarkable. REWE Group manages its liquidity using up to 800 forecasts. Forecasting takes place on a daily basis, monthly basis and once every quarter and is rolling for the next 15 months.
In order to obtain an overview, the employees in the central treasury control manage all the liquidity forecasts in the Integrated Treasury System (ITS). The central finance function is based in Cologne, Germany and controls the decentralised units, develops the worldwide risk strategies and provides the subsidiaries with financing guidelines. These are linked to the ITS. Liquidity forecasting by ecofinance has been integrated into the SAP-based treasury management software.
The system transfers the cash flows, where possible, directly from SAP into the corresponding liquidity forecasts. Actual data are automatically imported from the available electronic bank statements. At the same time, the subsidiaries enter their data locally via simple data entry screens. This enables them to forecast their individual items in a differentiated way according to their operational business or to transfer the balance items to the central treasury control. The finance department gains an insight into all the relevant activities. Around 90 users at REWE Group – half of which are abroad – regularly forecast their data in detail. With up to 800 individual forecasts in the system, REWE has liquidity under control and as such can manage the risks.
The travel and tourism business of REWE Group benefits especially from the ability to forecast transactions in the respective processing currency. Cash flows are automatically converted into euros, which is the group currency. REWE automatically imports all the relevant market data and the existing hedging transactions.[[[PAGE]]]
To ensure that master data are consistent, the ITS regularly imports this data out of the SAP system. A system report in ITS indicates any changes to master data and these can then be traced in the liquidity forecasts by just a few mouse clicks. Since both the legal and organisational structures at REWE are mapped 1:1 in ITS, evaluations by company and area of responsibility can thus be run at any time. Using pre-defined templates, the treasurer can create the liquidity forecasts according to currency, company or liquidity group – at the click of a button. Forecasting is continually improved through the use of existing standard reports such as forecast-forecast and forecast-actual comparisons as well as deviation analyses. In order to implement these processes as quickly and as broadly as possible following its introduction in 2009, REWE’s employees underwent intensive workshop training. Web training courses were also organised for decentralised colleagues. The web demos provided by ecofinance formed the basis of these online courses.
Central treasury control checks all the liquidity forecasts. The alarm messages in ITS are helpful as they clearly highlight inaccurate or missing entries. The liquidity forecasts are consolidated according to structure in a cascade format. The treasurer can use the integrated data cube in ITS to break down the consolidated data transparently with regard to original forecasts.
Generally the guidelines for worldwide liquidity at REWE Group are provided centrally. The current framework utilisation is system-controlled and monitored through internal and external lines of credit at the group and subsidiary level. Debit or credit balances for individual companies are quickly recognised and settled through inter-company or external transactions. A consistent database is achieved by mirroring the cash flows. Thanks to the introduction of the Integrated Treasury System at REWE Group, the company is now in a position to control the liquidity actively, promptly and precisely. Sensitivity in terms of liquidity issues has significantly increased since the introduction of ITS.
REWE Group
Since its foundation in 1927, REWE Group has experienced sustained and long-term growth. With turnover of more than EUR50bn and around 330,000 employees across 16 countries, it up is one of the leading trading and travel and tourism groups in Europe. The group of companies employs 220,000 staff in Germany, of which around 11,000 work in markets from supermarkets (REWE, REWE Center, REWE City) and discount stores (PENNY) through to hyperstores (toom) and specialist stores (toom BauMarkt, B1 Baumarkt Discount, ProMarkt, toom Getränkemarkt) as well as travel agencies (ATLASREISEN, DER Reisebüro, DERPART), and turns over approximately EUR35bn. More than 30% of REWE Group’s total turnover comes from outside the German domestic market, and it aims to be within the top 3 companies in each country.
Outside Germany, REWE Group is represented in 15 European countries.. The travel and tourism sector is the Group’s second business segment with a turnover of EUR 4.2bn. The six travel businesses ITS, JAHN REISEN, TJAEREBORG, DERTOUR, MEIER’S WELTREISEN and ADAC REISEN hold second place in the German travel sector, with a turnover of EUR2.8bn. Despite rigorous structural reorganisation, the tourism division at REWE Group remains the leader in travel sales with its 620 travel agencies and co-operation and franchise partners.
ecofinance is one of the leading software providers in international treasury management. In its role as a professional and reliable partner to global groups, the company has been offering its Integrated Treasury System ITS since 1984. With integrated software solutions and one-to-one support, ecofinance supports companies in their treasury, cash and risk management, in financial planning, in payments management and in reporting. As Application Service Providers (ASP), financial institutions can offer their corporate clients access to professional cash management, cash pooling and treasury management with the software from ecofinance. Numerous businesses and reputable banks have been using integrated systems from ecofinance for more than 20 years.
For further information visit www.ecofinance.com.
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