The High-Flyer With His Feet On The Ground

My Life in Treasury: Andrea Sottoriva Group Treasurer and Finance Director, SITA

Some career paths appear random while others seem to plot a made-to-measure course. And then there are those people who know how to make the best of every occasion. Throughout his years as a treasurer, Andrea Sottoriva has been able to incorporate aspects from every waypoint on his journey to date, refusing to let any opportunity go to waste.

Andrea Sottoriva enjoys rising to a challenge, but then he comes at each one in a state of full preparedness. This is an approach he has learnt to exploit across the years, and now, as Group Treasurer and Finance Director of SITA, which is the air transport industry’s IT provider, delivering solutions for airlines, airports, aircraft and governments, he is serving in an industry that needs as much skill and judgment as it can muster. It’s a case of the right person, being in the right place, at the right time.

But then since taking on his current role in January 2014, he has been ready to ring the changes, even at a personal level. At the time of his promotion it required a move from Italy to the firm’s treasury headquarters in Geneva, Switzerland. Although he had already been with SITA at that point for around seven years, the prospect of stepping up to a senior position was a strong pull for the native Milanese. He has seized the opportunity wholeheartedly.

Sottoriva’s success to date has seen him win industry accolades and confirm his status as a go-to speaker on the treasury event circuit. Perhaps most importantly, he has also been instrumental in keeping the lights burning bright within SITA, which is a key provider in an industry that has been hit harder than most by the pandemic.

SITA is a complex business – being both a co-operative that is owned by the world’s airlines and a private for-profit business. It is also truly global, having a presence in 200-plus countries and territories, covering every significant airport on the planet. While Sottoriva presides over “typical treasury activities”, SITA’s reach adds an unusual distinction not least because it deals with more than 100 currencies, giving it a considerable FX (foreign exchange) exposure.

Its vast footprint also impacts the scope of its banking relationships, covering many banks and bank accounts. A shared services centre in the Czech Republic and an outsourcing facility in India for its payments factory makes it clear that cash and liquidity management within SITA is achieved at scale.

With guarantees – including bid, performance and advance payment bonds – issued around the world to cover SITA’s big-ticket requests for proposal (RFPs), and treasury required to review and put its seal of approval on various global financial activities, it would be fair to say the team is kept busy.

But beyond the traditional roster of treasury duties, Sottoriva is charged with competition reporting, which finds him monitoring and comparing competitor financial metrics across a range of business lines. This may see SITA come up against network providers, border management firms and other airport IT service suppliers. In addition, he dives deep into SITA’s own figures, taking responsibility for calculating weighted average cost of capital (WACC), a metric widely relied upon internally to assess activities such return on investment and business case assessments.

Building experience

It’s quite a portfolio of tasks and naturally every treasurer needs to build up to this level of responsibility. In this respect, Sottoriva is no different. He has been drawing experience from different roles, businesses and sectors throughout a career that so far spans almost 30 years.

From his first professional role as junior auditor at EY, to junior and then senior risk manager at Intesa Sanpaolo and Citi respectively, he made his way into the corporate finance space as a financial planning and analysis manager at GE Capital. He joined SITA back in 2007 and has climbed the ranks, rising from regional Finance Manager to his current role. He has achieved this with the assurance of one who truly believes “everything learnt in life has an impact on how you handle your job”.

Being able to leverage each new experience in his day-to-day work has enabled Sottoriva to quickly develop an understanding of his roles, regardless of sector or duty. This, he says, has been vital in realising how his current position provides value-added support to the rest of the business.

“In my first seven years in SITA, I was based in southern Europe, taking on Controller duties,” he says. “I needed to understand the business because I was talking directly to customers and suppliers. This experience has been essential in helping me perform well in treasury.”

With several years’ banking experience under his belt, Sottoriva has also built up a detailed understanding of how to extract the most from banking relationships. “It’s a really important activity for every treasurer,” he comments. With so many banks to manage – six of which are primary banks – having a clear-sighted external view has proven invaluable in enabling him to build and maintain bridges.

He believes that the ability to articulate the issues and answer their questions in an appropriate manner comes only from accumulating broad-based international experience. Of course, the nature of SITA makes it the perfect launch pad for anyone seeking an international perspective: “We have to deal with many countries so we are naturally a very diverse and culturally aware team.”

Lessons learnt

It’s not just the more recent experiences that matter to Sottoriva; he counts his formative professional steps as having value even today. As a junior auditor he was able to see first-hand the nuances of that profession. SITA is not a quoted company but it does contract external auditors to sign-off its annual statements. “I am their point of contact for some processes, and so understanding their point of view is important,” he explains. “Sometimes they ask questions that may seem strange, but by understanding what they are trying to achieve, I am better placed to answer.”

A long and varied career path is often cited as a good training ground for treasury, especially as the role continues to broaden. “I believe that it makes for a more complete treasurer if you have experience in areas such as accounting and banking,” comments Sottoriva. But he feels that the same is true in reverse. Noting a number of colleagues who have moved into banking from treasury, having built up the knowledge, experience and contacts to be able to make the transition, he says there is a “clear and close link” between these professions.

From his own perspective, Sottoriva’s move from general auditing into the highly specialised air transport sector, via banking and the multi-faceted activities of a conglomerate, has been aided by the acquisition of a number of important life lessons.

These include fostering a flexible approach to every role, nurturing an international outlook, and building strong communication skills. The latter in particular serves every modern treasurer. “I know that occasionally we need to resort to technical language, but there is a risk that we become too technical in our approach when communicating with people outside of finance,” he notes. “Sometimes we need to be able to step back from the jargon and learn to plainly describe the challenges we face to those outside of our profession.”

Being able to simply convey what may appear to be an incomprehensible occupation to those beyond the corporate world is something Sottoriva has sought to do for most of his career. The subtleties of trading-floor risk management in particular, he admits, often drew blank expressions. “It’s a lesson for life: keep your feet on the ground so you can make yourself understood.”

Tackling troubled times

The ability for the treasurer to stay focused, clear and concise, has never been more appreciated than during the pandemic. SITA’s position in the air transport sector places it at the heart of every airline and airport operators’ activities. With large swathes of the industry on hold, the liquidity crisis that has ensued has seen many players struggle.

“Being able to generate cash became the number one priority for all companies around the world,” notes Sottoriva. “With uncertainty even around next-day trading, and the duration of the pandemic entirely unknown, airlines were burning huge amounts of cash just trying to survive. This created a golden opportunity for treasurers to show how we can support our companies during this difficult time.”

The first step as the pandemic hit was for Sottoriva and his team to prepare cash forecasts.

The next step was to assess its available cash in light of a series of necessarily pessimistic stress-test scenarios and sensitivity analyses.

The third step saw treasury look at the level and duration of its committed lines, with expiry dates very much in mind. With several renewals approaching during the most difficult period, the risk aversion of the banks at the time ratcheted up the tension somewhat. Treasury had a plan.

Even though SITA had doubled its cash balance over the past five years, Sottoriva wanted to explore longer-term financing, and, in particular, alternative sources. “It’s why we approached the Schuldschein market,” he says.

The full story is reported in TMI, but having gone to the German private placement market in early 2021 for its inaugural €75m offering, Sottoriva describes his first Schuldschein issuance as “an interesting exercise in diversification”.

The issue was oversubscribed, SITA eventually raising €95m, and it opened up new relationships with the financial community for future financing rounds. What’s more, it created a new investor relations (IR) role for Sottoriva. This gave him the entry for treasury to forge even closer connections with the rest of the business, powering his access to and understanding of its wider financials and drivers, and positioning him to communicate directly with external stakeholders.

Treasury voice

It has been said that the only time anyone outside of treasury knows of its existence is when something goes wrong. Of course, by extension, if treasury remains anonymous it must be doing a good job. But treasury is increasingly a voice that is to be heard across the business, and this has everything to do with positive achievements, states Sottoriva.

“When I joined treasury in 2014, I found that our voice was not well heard; we were not fully involved in business discussions. But we have value-added support to offer so our point of view should be taken into account,” he explains. By raising the level of treasury’s voice and proving its value, seven years later he says treasury is almost a victim of its own success. “Any issue, and people come straight to treasury.”

Of course, when the issue is a pandemic, where few if any were prepared, then getting the right help becomes potentially an existential matter. Indeed, for many businesses it has been just so. For Sottoriva and his team, being able to reassure management that the company can remain financially viable was essential to its smooth running throughout. It almost certainly helped to secure the very positive outcome with its mid-pandemic debut Schuldschein issue.

There may be a slight downside to this: management overconfidence. “If, as treasurers, we deliver exceptionally well, our CFOs may be tempted to focus on other issues. But we need to be able to explain, and keep explaining, that even renewing a credit facility in today’s environment can be very difficult,” he says. With some banks retrenching from troubled sectors such as air transport – despite businesses such as SITA proving their resilience – he knows no facility should ever be taken for granted.

Obviously treasury must ensure continuity of financing, and to do that it may need to persuasively present new opportunities. An increasingly important role today for treasury is in explaining how the business can manage its approach to ESG (environmental, social, and governance), says Sottoriva. His commitment is such that while renewing one of SITA’s credit facilities in 2020, he proposed adding an ESG clause to the contract.

He admits to “initially underestimating the administrative challenge” of setting the parameters and key performance indicators (KPIs) that are used to define and unlock lower financing fees. However, despite many other concerns to manage at the time, his determination paid off in an unexpected manner. During the roadshow for the Schuldschein issue, he reports that many investors were asking about SITA’s approach to ESG, and now it was able to respond positively.

The intention is to tackle all three elements of ESG with equal force. Well on its way to meeting its target of net-zero carbon emissions by 2022, robust KPIs and a green bond investment programme in place, the company is clearly taking affirmative action. For Sottoriva, there is still more that can be done in treasury. “We’re now talking with SITA’s global head of communications to promote a podcast we have produced about a sustainable future, and we are considering what other KPIs we can incorporate within SITA to make sure we get there.”

Curious mind

The natural curiosity of treasurers draws many to continuing education. With a Master’s degree in Social Welfare that focused on pensions perhaps not the obvious line of academic enquiry for the profession, Sottoriva explains that it has nonetheless “accidentally” proven to be very useful.

SITA has an array of pension schemes and funds and treasury is called upon to review their performance, managing any gaps and critical exposures such as interest rates movements. Although his studies were undertaken before he joined SITA, Sottoriva is able to augment his professional treasury knowledge with an academic understanding of the social welfare aspect of pensions provision. In doing so, he provides a more rounded response to decisions about this vital part of company life.

“It was not planned but it again proves that every experience we have in life can be repurposed and these experiences combine to make us who we are, how we perform in our job, and how we see and respond to situations.”

It is perhaps just as well that treasurers such as Sottoriva are open-minded about how the role is performed because the work is often unpredictable. But this is what makes it “extremely interesting” for him. It certainly demands that its practitioners be aware of the twists and turns, and how each may impact the way the work is best executed.

Belonging to treasury associations, attending events and webinars is, he feels, a basic requirement for fulfilling this demanding remit. His reasoning is simple: “You get to hear and be part of the latest discussions.”

One of the topics competing for attention at the top of the current treasury agenda is technology. Sottoriva considers it now to be “another fundamental requirement that treasurers keep up to speed with developments in technology”. Indeed, he adds, “some see technology as the future but I say it’s already here, and we need to understand it and work out how we can implement it within our day-to-day activities”.

Words of wisdom

Like most professions, being a treasurer requires certain personal characteristics to be successful. For Sottoriva, a common asset among most treasury leaders is an abundance of curiosity. Driven by “a need to be ready for every eventuality”, he believes that the urge to probe situations and find out what’s happening and why, is essential.

“Every day is different and sometimes you need to be able to face situations where you don’t know the answer but need to find ways to resolve the issue, leveraging the knowledge and contacts that you have accumulated,” he says.

As treasury becomes more central to the success of the business, particularly in an advisory capacity, it is critical to be able to work with a team forged of diverse experiences. This means being able to listen to colleagues, and being open to what they say. “This is why I believe the soft skills are among the most important for every treasurer to develop, perhaps even more so now than the technical skills.”

Of course, he knows that treasury is not for everyone and issues a challenge to prospective candidates. “If you want a job that is the same every day, don’t join treasury. But if you have an interest in how the future will look, and if you want to find out how you perform in situations that you have perhaps never encountered before, there is nothing better.”

Having travelled along a path that has set him up with a range of skills, experiences and contacts, Sottoriva created a flying start for himself. He has now arrived in a senior position that he feels best suits his world view, happy in the knowledge that the next challenge is already lining itself up.