Cash & Liquidity Management
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Controlling Liquidity Across the Group

by Helmut Schäfer, Head of Treasury Control, REWE Group

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.

800 forecasts

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.