Interview – Jean-François Deiss, VP Finance & Treasury, Credit Management & Insurance, Rexel
From solely bank-based financing to market financing
Can you give us some of Rexel’s key facts and figures?
Our company, with a headcount of 31,000 in thirty-seven countries and 2,000 outlets, is one of the global leaders in distribution of low and very low voltage electrical material; we are number one in North America and in Asia-Pacific and number two in Europe. In 2012, we had a turnover of 13.4bn euros, 56% of which was in Europe, 32% in North America with a net cash-flow of 627m euros. Our shares, listed on the Euronext Paris stock exchange in the A section (blue chips), are eligible for forward settlement. Our market capitalisation amounts to roughly 4.7bn euros.
How is the architecture of your Treasury department organised?
Because of the nature of our activity, the Group is operationally quite decentralised. We thus have to pay special attention to finding the correct balance between operations, which means we must have a certain leeway in local management whilst centralising risks of all types that a company of this size faces. In this capacity, finance, treasury management and their associated risks are a part of the centralised regalian domains at corporate level.
So how does that impact the field of cash management reporting?
We had to map our local resources, so that we could decide whether or not to maintain a specific treasury function, such as those we possess in Germany or in United Kingdom, without of course forgetting the United States, Canada or Australia, for example. Furthermore, we had to draw up clear and precise written procedures for our cash management. This is tedious and time-consuming to implement, but in the long term gives us much greater fluidity in operations as well as enhancing controls. This process is generally composed of a cash pool in each country, which is headed by a cash pool overlay that Mendes Gans Bank manages. This allowed us to eliminate quite a few cash pockets over the past few years through close communication with local financial officers. The dialogue was facilitated by the fact that the Group always complies with the principle of strictly disassociating compensation from local financial results.