by Helen Sanders, Editor
While there is strong competition for TMI Awards for banks and vendors, the Corporate Recognition Awards that we have been running for the past nine years are also greatly valued by the winners. We are delighted that BNP Paribas has sponsored these awards for the first time in 2014, reflecting the bank’s commitment to promoting best practices and innovation across the treasury profession. On behalf of all award winners, I would like to offer my personal thanks to BNP Paribas for this support.
We have made some changes to the Corporate Recognition Awards this year. Specifically, we have introduced a nominations process allowing wider participation in the awards. Therefore, corporate treasurers, and the banks and vendors that support them, have been invited to submit information on projects in which they have been involved to be considered for awards. In addition, all corporate articles published in TMI during the course of 2014 have been eligible for awards. We would like to thank all treasurers, and their banks and vendors, for their participation in this year’s awards, which have been of the usual high quality that has made these awards such an important part of the corporate treasury calendar.
Corporate Recognition Award for Cash Management
Awarded to: HeidelbergCement
Represented by: David Flory, Head of Group Cash Management, HeidelbergCement
TMI Article: ‘Cash Pooling Past Present and Future’ (Edition 222, February 2014)
David Flory discussed the cash management strategy he has spearheaded at HeidelbergCement, specifically the role of cash pooling in achieving the group’s cash and treasury management objectives. As he describes, although the concept of cash pooling has not changed substantially since it was first introduced over 30 years ago, the types of solution that can be implemented have evolved in response to the increasing complexity and international reach of corporate treasury, and diverse regulatory conditions in each market. David highlights that cash pooling continues to be a key component of HeidelbergCement’s treasury strategy for the years ahead as an intrinsic element of an efficient centralised treasury. For example, centralising both flows and information has been a catalyst for implementing a shared service centre (SSC) structure and harmonising ERP platforms. By achieving direct SWIFT access with core banks, the company has streamlined its information flows and facilitated automated, secure payments from the SSC. Cash pooling is also a valuable means of wallet sizing with the syndicate bank group.
HeidelbergCement’s article reflected a strong awareness of the strategic, as well as tactical benefits of cash pooling, using a well-established technique to drive focused bank relationships, a robust, streamlined technology infrastructure and an efficient treasury organisation that positions the company for future growth.
Corporate Recognition Award for Risk Management
Awarded to: Dow Corning Corporation
Represented by: Lynn Hendrick, Treasury Specialist, Dow Corning Corporation
Dow Corning’s legacy currency risk management process constrained treasury’s ability to make strategic financial decisions. This led Dow Corning to a comprehensive overhaul of each step, resulting in a best-of-breed system with straight-through processing, standardised workflows and sizeable savings, whilst freeing up treasury specialists’ time to be able to undertake more valuable activities.
The resulting environment provides fast, trustworthy and actionable information, built on fully automated and compatible components and processes. This project not only delivered leading-edge technology; it highlighted treasury’s vision and leadership on a cross-functional and multi-vendor project and showcased a unique Lean Six Sigma (LSS) project management approach with direct savings of nearly USD5 m each year. Crucially, it also freed up more than 600 hours each year of manual, non-value added activities which could be channelled into providing advanced analytics, thought leadership and act as strategic business consultants not only in treasury but within the wider context of Dow Corning.
Dow Corning Corporation submitted their project directly for consideration for the TMI Awards, and we look forward to publishing more detail on the project in TMI during 2015.[[[PAGE]]]
Corporate Recognition Award for Corporate Finance and Funding
Awarded to: MOL Group
International integrated oil and gas company MOL Group (Magyar Olaj-és Gázipari Nyilvánosan Mȕködȍ Részvénytársaság) was successful in this award for establishing joint trade finance facilities for the purchase of crude oil and oil products at a MOL Group level. The aim was to establish financing without increasing utilisation of existing bank facilities. This involved cancelling more expensive, inefficient and redundant facilities, renegotiating the pricing, restructuring financing products and refinancing the existing trade finance portfolio to create a more efficient, flexible and diversified financing portfolio. Furthermore, by negotiating at a group level, smaller entities benefited from better financing conditions than they would be able to achieve at a group level.
MOL Group’s treasury set up joint trade facilities to serve as umbrella facilities for several MOL Group borrowers. These who would access the facility co-operatively, with a parent company guarantee backed with intercompany agreements. The concept was new to many of the banks that MOL approached, which included both existing relationship banks as well as new banks. MOL created standardised financing conditions across banks by using its own documentation, ultimately cancelling three contracts and renegotiating four others as joint facilities. The new financing strategy resulted in a 20% overall reduction in financing costs, whilst meeting the specific needs of each entity in each jurisdiction.
As with Dow Corning Corporation above, we look forward to publishing more detailed information on MOL Group’s project in the year ahead.
Corporate Recognition Award for Working Capital Management
Awarded to: Liberty Global
Represented by: Fabrice Legoux, Director, Operational Finance, Liberty Global
TMI Article: ‘Implementing a Supply Supply Chain Finance Programme’ (A Treasurer’s Guide to Corporate Treasury in Germany)
Liberty Global prides itself on being an innovator in its use of technology, and the quality of customer service that it offers. This commitment to innovation and efficiency is apparent across the whole business, which includes treasury and finance. In 2012, the company started to increase its focus on trade and working capital management to improve financial efficiency and increase supply chain resilience. As a business operating largely in the B2C space with a large proportion of direct debit receivables, there was limited opportunity to optimise collections further to enhance the company’s working capital position. Consequently, Liberty Global looked to supply chain financing, resulting in innovative and highly successful supply chain finance programmes (SCF) with ING.
Liberty Global identified a number of key objectives for the SCF programme, including extending payment terms (to up to 360 days), cementing relationships with key suppliers by making the programme attractive to them, and ensuring scalability to support long-term business plans. Following a structured, disciplined implementation process, Liberty Global onboarded 95% of its target suppliers on time. With a capital expenditure spend of around $3.8bn and even larger operating expenditure each year, this represents significant working capital benefits. In addition, suppliers have welcomed the SCF programme as a means of enhancing their own liquidity position and strengthening relationships. cementing their relationship with them. ING played an important role in supporting the process, maintaining project momentum and remaining responsive to the company’s needs.
Corporate Recognition Award for Treasury Technology
Awarded to: Brightstar Corporation
Represented by: Amanda Pilipovic, Assistant Treasurer, Brightstar Corporation
TMI Article: ‘A Brighter Future for Treasury Automation and Visibility’ (SWIFT Connectivity for Corporate Treasurers, 2014)
Brightstar has a centralised treasury team based in Miami, Florida, with treasury managers also operating in all major markets outside North America. Over recent months, group treasury has been restructured to take on a range of additional responsibilities, resulting in significant expansion to the team that now includes around 20 people to support Brightstar’s growth trajectory. Consequently, treasury needed to ensure that its technology infrastructure would meet the current and future needs of the business.
Although treasury already had a treasury management system (TMS) in place, it was not fully deployed, and was supported by a combination of ancillary systems and manual processes. With more than 90 banking relationships and over 500 accounts, there was a wide variety of different banking solutions in place. The timing of the treasury technology project coincided with a global initiative to roll out a single ERP across the business and implement a shared services model to support customer needs more effectively. Consequently, treasury was able to leverage this project infrastructure and link its treasury connectivity, integration and functionality requirements as part of the wider finance transformation.
The project involved expanding the use of its TMS provided by SunGard, establishing two-way communication with the ERP, and developing bank connectivity through SWIFT. This has proved extremely successful thanks to the highly professional approach taken by Amanda and the Brightstar team. Treasury worked closely with SunGard and SWIFT, whose support and expertise was instrumental. In a fast-paced industry in which treasury needs to be responsive and adaptable, the project plays an important role in equipping Brightstar’s treasury team with the tools they need to support long-term business strategy and navigate change and complexity.
Since writing this article for TMI, Amanda has become Treasurer at Plexus Corporation.[[[PAGE]]]
Corporate Recognition Award for Treasury Transformation
Awarded to: Borealis Group
Represented by: Jan-Martin Nufer, Director Treasury & Funding, Borealis
TMI Article: ‘Treasury Insourcing as a Catalyst for Treasury Transformation’ (Edition 229, October 2014)
Leading chemicals group Borealis made the strategic decision to insource its treasury transaction execution and processing from a bank’s agency treasury. This ‘ground up’ restructuring of the treasury function has led to a transformation in the treasury organisation, culture and activities for which treasury is responsible.
The decision to insource cash and treasury management activities had a variety of implications, effectively enabling Borealis to look at its treasury as a ‘blank canvas’. Jan-Martin and his team first reviewed the treasury organisational setup, including roles and responsibilities, reporting lines, policies and processes. As it was important to use this opportunity to implement industry best practices, this included benchmarking Borealis’ treasury activities against other organisations, whilst recognising the specific needs of the business.
The project included redefining treasury technology, building talent and competences, developing a flexible organisational framework to integrate acquisitions, and firmly establishing a culture of constant improvement. Following excellent reader feedback on this article, we look forward to sharing more detail of Borealis’ transformation journey during 2015.
Corporate Recognition Award for Payments Innovation
Awarded to: Pirelli & C. SpA
Represented by: Luca Nava, Head of Cash Management and Treasury Back Office, Pirelli
TMI Article: ‘Building a Global Payments Factory at Pirelli’ (Edition 230, November 2014)
Like many companies, SEPA migration was a priority for Pirelli between 2012 and 2014. However, while many companies treated SEPA primarily as a compliance project, Pirelli took the opportunity to centralise and optimise payments processing, not only at a European level but globally. The idea of a global payments factory was conceived some years before SEPA became a reality, but by the time the implementation came about, the timing was such that SEPA instruments and formats could be incorporated at the start. Key success criteria included global reach (so far 52 companies across 40 countries), SAP- and SWIFT-based infrastructure, and the use of XML ISO 20022 standards.
Following a phased project, Pirelli has achieved a world-class, global payments processing centre with the highest standards in efficiency, control and security. Costs have been reduced considerably, whilst improving consistency and control over global payments, with a rigorous approach to efficiency and security. Furthermore, accuracy and timeliness of cash flow forecasting has been improved, enabling better financial planning and more confident decision-making.
Although Pirelli works with five banks, UniCredit has been a key partner throughout the implementation and ongoing operation of its global payments factory project, not only a banking partner, but a business partner too. The two organisations have enjoyed a long-standing relationship and Pirelli implemented the global payments factory with UniCredit first, before rolling out to its other banking partners. Pirelli found once again that it was supported by an excellent team with a very high level of commitment and expertise, particularly in SEPA direct debits (SDD) which would otherwise have been a very challenging element of the project.
Corporate Recognition Award for Credit and Collections
Awarded to: Fitness4Less
Represented by: Emma Edwards, Marketing Director, Fitness4Less
TMI Article: ‘Making Membership Services Fit for Purpose’ (Edition 226, June 2014)
Fitness4Less was founded in 2005 as a pioneer in budget health club services offering a new business model from existing providers and offering greater flexibility in membership plans for members. When the business was first founded, it used an in-house collections process, combining a variety of third-party tools. Over time, growth in its membership base, increasing costs and the desire to create a more integrated approach to member services meant that Fitness4Less needed to review its technology infrastructure and insource all aspects of its collections process.
Fitness4Less appointed Fundtech as a business partner, who developing their solution to provide the additional functionality the business required. After a rigorous development and testing process, Fitness4Less embarked on a carefully managed transition process in order to avoid interruption to its 67,000 members. The new solution now meets Fitness4Less’ current needs and provides a robust platform to support its future strategy, whilst improving the member experience, reducing costs and creating economies of scale. [[[PAGE]]]
Corporate Recognition Award for Treasury Best Practices
Awarded to: Gujarat Cooperative Milk Marketing Federation Ltd (Amul)
Represented by: R.S. Sodhi, Managing Director, GCMMF Ltd
TMI Article: ‘From Cow To Consumer: A Pioneering Cash Management Model’ (Edition 230, November 2014)
Gujarat Cooperative Milk Marketing Federation Ltd, popularly known as ‘Amul’ is India’s largest dairy product organisation. As an organisation that connects 3.5 million farmers with around one billion customers, Amul has a unique supply chain, from cow to consumer. To facilitate this, its distribution network comprises 54 sales offices, 6,000 dealers and one million retailers, one of the largest networks in India. With significant reliance on manual collection methods, particularly post-dated cheques, Amul worked with partner bank BNP Paribas to update its receivables process to improve operational efficiency and control. In addition, however, as a pioneer of best practices in India, Amul recognised that the project represented a valuable opportunity to promote electronic payment methods, with benefits across the supply chain.
Amul’s project objectives included building a robust receivables framework to handle paper-based clearing efficiently, structuring an electronic receipts solution to support distributors that pay electronically; establishing a mobile banking solution, and facilitating direct debits. To achieve these objectives, the company worked with BNP Paribas to structure a solution which included outsourcing the management of post-dated cheques to the bank. This was supplemented with an electronic receipts solution with virtual accounts (eReceipts) to enable rapid automated reconciliation and posting to distributor accounts, an interbank mobile payment service (IMPS), and direct debits through the national automated clearing house (NACH).
This has been a pioneering project undertaken in conjunction with BNP Paribas. BNP Paribas has been instrumental in providing outsourced solutions for cheque storage and processing services which, when combined with innovative electronic payment solutions, positions Amul as a leading ambassador of financial efficiency in India. Amul has already accelerated its receivables processing by two days, which is highly significant given that each day is worth $10 - $12m in working capital terms, in addition to administrative savings. Security and accuracy of processing has been increased, which improves operational efficiency and control but also leads to better supplier relationships.
Special Awards
In addition to the awards in each category, we made the decision to make three Special Awards, reflecting a unique contribution to the treasury management profession.
Editor’s Award for Technology Innovation
We were particularly impressed by CashFac Technologies’ Care Account solution, and therefore we are delighted to make a Special Award. Care Account is a cloud-based service to help local authorities, solicitors, and carers to manage money more securely and efficiently for the vulnerable and disadvantaged. Historically, managing the finances of vulnerable people has been costly to operate, time-consuming and prone to human error. In contrast, Care Account provides a consolidated virtual account infrastructure for all appointeeship, deputyship and guardianship accounts, allowing councils to easily handle payments, receipts and real-time balances.
The solution has enabled local authorities to dramatically improve efficiencies, reduce the risk of fraud and financial abuse, and ensure real-time visibility of the financial affairs of the vulnerable people for whom they are responsible. Through this solution councils now have a secure environment to manage funds as well as automatic accounting and reporting. It provides a secure, transparent and continuously auditable regime as well as providing intuitive analytics and alerts to indicate trends and activities that help to indicate possible financial abuse.
Advanced features such as remote digital signatures by a departmental manager or trustee are available and the platform has been built to enable remote audit as required by regulation. Cashfac now works with a number of bank partners who ‘white label’ the Cashfac Care Account solution to offer a high-quality service to more than 20 local authorities and thousands of individuals. With an aging population and an essential social responsibility to protect the needs of interests of vulnerable citizens, Care Account is an important tool that the judges were keen to recognise.
Special Award for Outstanding Contribution to the Treasury Profession: François Masquelier
François Masquelier needs no introduction to readers of TMI, as we continue to be fortunate enough to feature his insights regularly in these pages. In his role as Senior Vice President, Head of Treasury & Risk Management at RTL Group, Chairman of the Association of Corporate Treasurers of Luxembourg (ATEL) and Honorary Chairman of the European Association of Corporate Treasurers (EACT), François continues to play a critical role in promoting dialogue and common priorities amongst market participants to progress the interests of the corporate treasury community. François continues to be a great friend to TMI and personally, I greatly value his enthusiasm, insights and unselfish way in which he works ‘behind the scenes’ to shape and promote the treasury profession.
Special Award for Outstanding Contribution to the Treasury Profession: Richard Raeburn
Finally, the highlight of this year’s awards, is a Special Award to Richard Raeburn. Richard is well-known to most treasurers following an illustrious career at KPMG and as Chief Executive of the Association of Corporate Treasurers (ACT). In both of these roles, Richard has made a unique contribution to the corporate treasury community and furthered the practice of treasury from its nascent stages to a mature profession that plays a key role in creating and delivering on organisations’ financial strategy.
Richard has also played a key role in the EACT (European Association of Corporate Treasurers) by co-ordinating treasury opinion and representing the interests of treasurers across Europe with regulators. He has performed this role with generosity and transparency, and many readers of TMI look first of all for his articles in the EACT pages of the publication.
The depth and breadth of Richard’s financial and business acumen, his social conscience and diplomatic approach has proved essential to the wider causes to which he dedicates his time, including various housing associations, St Christopher’s Hospice and as Chair of TradeRisks Ltd.
On a personal level, I have known Richard for more than 20 years, and was privileged enough to work for him at the ACT. He has been a valuable mentor, and I greatly value his expertise, insights, professionalism and humanity. We thank him most warmly for all that he does which in one way or another has impacted on the career of every treasury professional.
