Last year as 2,000 treasury professionals gathered in Vienna for the 16th EuroFinance International, the credit crunch was just beginning to unfold. No one could have predicted just how badly it would impact the financial system. Most companies remained reasonably confident about business at that point, although credit issues were climbing up the agenda.
Of course, that was in September when reported losses by the banks were still scant rather than the estimated billions written down now. And Northern Rock looked like the lone bank player that made a fundamental error by breaking a cardinal lending rule.
With headlines on the crisis still dominating the world over, how much more is coming your way? At the time of going to press, the US had moved into recession; the dollar was in the troughs; and sterling was taking a battering against the euro. Our own surveys show more doom and gloom from the many corporate treasurers we have interviewed in our research since the last annual event.
But whether this pessimism will be a distant memory by October, one thing is completely clear. Such crises bring home the point that treasurers can never be too careful with their liquidity and risks to it. This year’s programme will enable you to manage liquidity, risk and capital through the ups and downs. Choose from 80+ high-level, corporate case studies and sessions with a strong theme of liquidity and risk. In addition, benefit from three days and three nights of networking, knowledge and a no-nonsense approach to making sure your time is maximised.
What’s New: Highlights of The International 2008
Opening keynote panel: A year in the life of liquidity. Hear from Google and Lenovo on how treasury is managing funding and investments in this volatile environment.
Investment guru Mark Mobius tells you where to put your money in 2009.
World famous Rogue trader Nick Leeson on why betting the bank will happen again and again.
Bye bye banks: Credit woes, new third party competitors and continued mergers. Will your bank be around next year?
Are we finally seeing treasury mimic new business models?
The good, the bad and the ugly of financial supply chain management: Are your banks conning you?
SEVEN New Streams:
Building centres of excellence
FX extreme
Squeezing out more from your shared service centres
The 2009 treasury agenda: Key topics for the coming year
Supply chain interactive: Games, speed dating and more
Asset management clinic: Finding and protecting yield
AND back by popular demand, streams on risk, country and regional workshops, global liquidity, and funding.
Confirmed speakers include:
Nick Leeson (Ireland)
Brent Callinicos, Global Treasurer, Google, (USA)
Damien Glendinning, Global Treasurer, Lenovo, (China)
Andrés Gárcia Peralbo, Treasury Director, Inditex (Spain)
Andrey Rostovsky, Head of Treasury, OAO Lukoil (Russia)
Aidan Claire, Group Treasurer, Tetra Laval (Switzerland)
Christian Pullola, Group Treasurer, Nokia (Finland)
Hans Van den Bosch, Head of Treasury Operations, Unilever (Netherlands)
Paul Jonckheere, Treasury Project Coordinator, Carrefour (France)
Darsh Johal, Shell (UK)
Bob Garnett, Board Member, IASB (UK)
To view this programme in full, please click on the relevant subject category to see the session descriptions. This programme will be available in a day by day format shortly.
Betting the bank: A rogue’s story Recent events in France brought home the point that protecting a company or bank against rogue traders, fraud and other risks should always be at the forefront of a risk agenda. Nick Leeson, the original rogue trader, responsible for bringing down Britain’s Barings Bank is convinced these types of fraud will happen again and again. Leeson is one of the world’s most sought-after speakers. Antipathy, curiosity, intrigue and sympathy have been the various reactions to this man's incredible life story. The collapse of Barings and Nick Leeson's role in it is one of the most spectacular debacles in modern financial history. The loopholes are still wide open, he claims, and risk management is still too complacent.
Expert Speaker 10:00 Betting the bank: The banks’ story The 2007 credit crunch, which began in America and rippled across the Atlantic, damaged confidence in banks that poured money into investments backed by sub prime mortgages and in those dependent on short term loans. What lessons have your bank, the credit agencies and the regulators learned about unearthing and reducing systemic risk, and how are they acting on this? Do regulatory initiatives such as Basel II make banks more responsible, or merely more expensive? The blame for this crisis rests squarely on the banks; ironically it is the customers that will end up paying.
Insight 11:00 Bye bye banks? R.I.P. (rest in peace) The recent takeover of ABN AMRO, a key cash management provider to some of the largest European companies, has brought the issue of bank strategy sharply back into focus. Indeed, the risks that treasurers face in dealing with a still-consolidating bank sector are only likely to worsen going forward, given SEPA’s potential to drive an increasing number of banks out of the payments area altogether. At the same time, development in other areas of payments like mobile and third party providers is squeezing bank business. Both trade finance and supply chain solutions are another traditional bank business facing pressure from alternative suppliers. There is the lingering threat of bank collapse from the sub prime crisis which has left consumers and corporate questioning bank counter party risk as well as the banks themselves who are reluctant to lend to each other. Smart companies are taking a careful look at their partners and also at the full range of transactions a bank provides and seeing just where they can reduce their exposure. What do the banks say?
An interactive session with audience opinion and commentary
Game on It’s back and it’s even more interactive with twists and turns and the audience living and dying by their treasury knowledge and their ability to ARTICULATE it and ILLUSTRATE it. Join us for a session that’s fun but tests your global knowledge of liquidity and risk. Every five minutes the timer resets as the audience and teams of consultants, bankers and corporate treasurers pit themselves against each other in a hilarious combination game series.
Keynote panel A year in the life of liquidity and risk After a sustained period of excess liquidity in the market and cheap money, the sub-prime mortgage turmoil in the financial markets resulted in external sources of liquidity drying up or becoming prohibitively expensive for many companies. Investment policies and yield also came under fire as money moved to safer havens and the Board asked searching questions on the safety of underlying assets. A range of other factors apart from the current credit crisis have also impacted companies: interest rate changes influenced by the Fed; the growing strength of the euro against the dollar, sterling and yen; and the surge in oil prices to name but a few. Hear from this exclusive panel as they kept records during the year on their decision making in light of interest rate and currency shifts; inflation figures and recession fears and as oil prices climbed relentlessly over 100 dollars a barrel. As credit tightened and markets moved in and out of turmoil, how did treasury respond? What were the trends coming out during the year and did this environment change corporate and treasury behaviour?
As most experts agree that access to capital will be continue to be a key concern of treasurers in the coming months, how are companies coping? What plans are they putting into place with regards to working capital, funding and investment?
This panel from various regions: (Europe, the USA and Asia) and varying industries will speak about these issues and more. Meanwhile we asked corporate treasurers from around the world to keep track of factors affecting working capital and how increasing market turbulence influenced their policies on payables, receivables, inventory, working capital requirements and use of surplus funds. These results will also be reported during the session alongside audience voting to allow you to benchmark and voice your liquidity and risk concerns.
Let’s hear you out: The audience opinion Last year in Vienna over 1000 corporate treasurers cast their votes on everything from the business outlook to their use of various treasury structures and solutions. From trust in your rating agencies and banks to business confidence and outlook, what do you really think? Which country do you find most challenging for treasury operations? From FX issues to regulation, this short survey will let you benchmark where your treasury sits against your peers’. The survey will cover all the main themes of the event and guide you through the programme to find the most appropriate sessions over your three days in Barcelona.
Keynote Speakers What the experts say: Money and markets in 2009 For companies with significant dollar exposure, the US currency’s long decline has created a set of increasing dilemmas. Firstly, and most obviously, is the end in sight? While some treasurers are talking of the loss of the dollar’s standing as the global reserve currency, others are buying options on the currency in case it is has reached its bottom. At the same time, emerging market currencies that have performed strongly against the US unit (sometimes allowing companies to avoid having to find rare market or natural hedges) look less of a one-way bet – at a time when companies have never been more exposed to them and emerging market political risks are rising too. So what is the outlook for each of these crucial currency areas? Where should investments go? What are the market dynamics expected to shape the financial world in the coming 12 to 18 months? Hear from some of the world’s leading experts on the dollar, emerging markets currencies and broader investment trends for 2009.
Mark Mobius: Investor at large Few investors are better placed than Mark Mobius to make decisions on emerging markets. For more than 30 years, the Franklin Templeton fund manager has been a pioneer investor in the field. Though, Mobius is a true road warrior, travelling the world for undervalued companies in emerging markets. Named as one of the Top 100 Most Powerful and Influential People by Asiamoney.
Case study The Award Submissions for this year’s EuroFinance Annual Award for Treasury Excellence are currently being accepted. For further information on the selection criteria and submission details, please emaillholstrom@eurofinance.com
Distributed treasury: Centralised vs. decentralised is the wrong debate! This session will challenge traditional treasury models including the view of centralisation as the “Holy Grail” of treasury. The mantra of centralisation has moved on and now the conversation needs to be about which areas to centralise. As the nature of business changes and global risks increase, sometimes local market knowledge and responsibility can give companies a distinct edge. This may be in the area of funding, bank relationships, liquidity or local credit risk to name but a few. However, proponents of full centralisation say that any decentralised approach cedes control and visibility and can lead to inaccuracy, high bank charges and increased risk. This panel will look at some companies which have opted for less centralised functionality to gain better efficiencies in core areas of treasury. Companies will speak about specific solutions and experiences.
Case study Next generation treasury: The future-proof build What is a future-proof treasury? The answer could be one which the treasurer architects, builds and then hands over the transactional piece of treasury. This can include cash management (the pools) AR/AP and the in-house bank (internal accounts) to the shared service centre. This new model means that treasury goes totally strategic and can be a true partner to the business. Costs get lowered and efficiency increases as shared services becomes an internal supplier to the treasury. One step further and could the whole thing be outsourced?
Case study The new European business model: Finally, a single Europe offers treasury a singular solution The Societas Europaea (European public company model) is a quiet revolution that strikes at the heart of business models for the future. It offers a level of centralisation simply not possible within the normal confines of treasury centralisation. This business model allows you to forget transfer pricing and tax issues as well as sales agreement differentials and these are just the tip of the iceberg. Is the complexity and time involved worth the end result?
Multiple case studies How treasury can underpin the business Last year a EuroFinance treasury and business unit survey showed there was a strong willingness from treasury professionals to work more closely with their colleagues in operations, but very few were able to achieve a partnership status that benefited the entire business. At the International event in Vienna 2007 we asked a group of Fortune 500 and other large private companies to take part in a survey to measure satisfaction of the business with treasury and vice versa. This year’s session is expanded with a more comprehensive approach and some surprising results that show the treasury may well be breaking out of its ivory tower.
Companies consistently review their treasury functions, structures and performance and indeed, attend conferences like this to hear how their peers are building more efficient, cost effective and well-run treasuries. This stream will look at how companies are employing treasury models to achieve better performance. How can companies remodel or turn strategic treasury structures into business drivers? Case study The greenfield treasury They get to meetings on scooters, have free smoothies and candy on offer in the offices, and live in an environment that positively encourages creative risk-taking from product development through to sales. But someone has to be the grown up in the company and here is where treasury steps in. Although someone has to enforce the rules and mind the money, treasury has also been given a blank slate. Like elsewhere in the company’s development, without legacy policies and systems it can skip the more traditional steps and leapfrog straight to a world class structure. This has meant a jump from 7 to 50 in treasury staff, and the introduction of best practice systems and procedures. Here is the Google story. What fun for an incoming treasurer! But even if you don’t have the same freedom, flexibility and budget, there are some interesting insights to be gained.
Starting from scratch: a road map
Developing critical performance indicators for treasury
Never, never outsource intellect
Case study Payment factories: The heart of disciplined cash flow management When Inbev, the Belgian brewer with a turnover of billions of euros and operations in 32 countries, embarked on a payment factory solution, they were looking to centralise payables for western Europe and several countries in the CEE region. Not only were they hoping to reduce external costs related to cash management and treasury as well as the complexity of their AP structure, but they were also looking for a solution which would optimise their working capital. Inbev maintains a growth strategy so the payment factory needed to be flexible to allow for further expansion as the company grows.
Objectives for the payment factory
Main lessons: stumbling blocks encountered and how solved
Implementation of the payment factory : a disciplined approach to achieve targets
The shared service centre
The next step: creation of an overlay structure
Tangible benefits
Case study Extraordinary in-house banking In-house banks are popular with companies who want to use internal monies to fund and invest on behalf of their subsidiaries. Although in-house banks may seem part of the furniture these days, there are new tools and innovations driving companies to make better use of the in-house bank capabilities. This session will look at the benefits of the in-house bank and show how it can be taken to the next level to sit within a broader cash management, liquidity and risk strategy.
Establishing a shared service centre gives treasury the opportunity to re-engineer much of the cash management and transactional processes of a company. Although sometimes the SSC does not report directly into treasury, it still remains a perfect vehicle to centralise most treasury procedures and reduce risks throughout the business and finance function. It is a form of mini-outsourcing for treasury, and for some companies, it has been taken a step further with the SSC truly hived off to an outsourced partner. How can the shared service centre become the single window on all the cash and risks within the business? Can the shared service centre take on board the entire transactional chain, leaving treasury as a value-added partner at the business helm?
Case study Building and benchmarking a treasury-led shared service centre: Treasurers talk to treasurers This session will begin with the results from a EuroFinance summer 2008 survey on shared services centres including the relationship with treasury; the scope of the shared services; expansion and the difficulties in using shared services for some pieces of the transaction. What is the role of technology? Treasurers in this session will also be asking the audience for their views and metrics in order to allow delegates to benchmark the current state of their own shared services or to simply find out more about what companies do within this environment.
One size and model doesn’t fit all
How many centres, where and reporting lines
Pieces of the shared service puzzle and where they fit in
What is transactional excellence?
Outsourcing
Adding new services and expanding the scope of your shared services
Benchmarking and metrics
Case study Shared services driving cash flow In most businesses, one of the hardest tasks facing the treasurer is producing an accurate cash flow projection, even short-term. With cash flow and working capital management of increasing concern to companies, shared service centres should be able to work closely with treasurers to accurately forecast a company's cash requirements with a strong grip on payables and even collections. This means transactional business sits within the SSC freeing up management to drive business performance.
Case study Shared services: Information flow and control Only eight years ago this company was running numerous systems and processes, a legacy largely inherited from its predecessor companies. Quality and timeliness of information that the business required to allocate resources and manage performance effectively was limited. Investing in a common platform across the business, underpinned by simplified and standardised processes and a move to create a shared service operation in a single location allowed benchmarking to ensure best practice and also control and compliance. And of course, finally, cost was taken out of the business on a number of levels. The investment provided them with the opportunity to develop a more efficient finance organisation that would deliver better quality information to the business, and build a strong control environment whilst freeing managers in market to focus on driving organic growth for the business.
Case study The next evolution of shared services: Overcoming growing pains Setting up shared services doesn’t end when the operation goes live. If you want to maximise shared services multi-functionality, the organisation needs to develop and expand and maintain a strategic position within the corporate environment. How does treasury drive that forward? This case study will look at rapid expansion opportunities for financial shared services and ask how much is too much?
Positioning shared services for expansion
How to make the business case
Identifying opportunities and obstacles to growth: what services sit well in shared environments
How big can it grow and when to stop?
Case study Global shared services in the ERP and post-SEPA environment This company is a global research-driven pharmaceutical company with an annual turnover of over 5 billion US dollars. Their planned implementation of a single global ERP system and migration of payables and collections to shared service centres prompted a decision to radically streamline bank relationships and re-engineer its cash flow management processes. Realising that the cost of upgrading 100+ existing bank interfaces would run into millions, the firm resolved to use the latest technologies and standards to establish universal cash processes across its 73 countries worldwide. How can you use SWIFT to squeeze out extra from the shared services?
Case study The great treasury exodus There’s a joke in the UK about local council governments having to rename streets in Polish to accommodate the growing influx of Polish workers, but Poland is experiencing a bit of the same as more and more international companies hive off chunks of treasury back office to Polish cities offering incentives, tax breaks and skilled workers. This company’s recent move to Krakow for its accounting, payments and collections, while centralising all EMEA banking to one partner is typical of a growing wave of treasury restructuring. This company has gone so far now to move most of its treasury functions to Poland in order to support the Krakow operations.
Case study Treasury as a service centre to enhance profitability This company wanted to manage short and long-term liquidity and market risk in a volatile global financial environment and centralize treasury (to function as service centre for 50 worldwide subsidiaries). The challenge was to manage global treasury with small team and clear assessment of liquidity and risk and the effect on profit and loss. As a solution the company deployed a SAP Treasury and Risk Management application. It implemented treasury software within a tight deadline for single shared service worldwide to accelerate processes, improve quality, and reduced risks and costs.
A home to shared services: Barcelona Catalonia - and the Metropolitan Area of Barcelona in particular - has become a very attractive location for businesses seeking to consolidate their back-office and/or front-office activities in a single location in the EMEA area. The availability of highly qualified human resources and newly developed office buildings has resulted in a large number of multinationals deciding to set up their financial shared service centres here.
Foreign exchange management continues to be extremely important for treasury. There’s calculating your actual and potential risks and exposures to different currencies. Deciding when, how and whether to hedge and explaining your choice to the Board. Then there’s the choice of who to deal with. That’s not even to mention taking a leap into which reference currency you should be based in. And all that against the background of huge uncertainty on international markets. It’s no surprise that many shy away from the whys and wherefores of FX. But as the hub of risk management in your company, it pays to stay on top of foreign exchange risk. This stream will help you kick your FX into shape.
Benchmarking Panel Are your FX capabilities up to scratch? What works for you in foreign exchange and how does it differ from your peers? Look around you. How do you model your foreign exchange exposures? How has IFRS changed the way you structure your hedging policies? Evidence shows that foreign exchange derivatives remain dominated by FX swaps and forwards. These simple instruments account for 90% of average daily turnover in the market according to the latest BIS survey. Exoticism just hasn’t caught on. With boards running scared of derivatives, how do you approach them?
Treasury’s role: profit making or risk protection
Your exposures: how best to model them
Active vs. passive foreign exchange treasury
Benchmarking against your peers
EuroFinance surveyed European treasurers to find out how you benchmark your foreign exchange activity. Do you treat foreign exchange as an asset class, do you construct basket-based indices? Has the current currency market affected how you will look at your currency mix in the future? Our panel will also discuss this outcome and ask the audience to vote and share views.
The Official Interview Where next for IAS 39? IAS 39 has been deeply unpopular with companies and many feel its requirement to mark derivatives to market assumes that treasurers are traders and ignores that the use of derivatives is part of a broad corporate risk management strategy. The standard setters recognise that IAS 39 is imperfect and have been working with treasury professionals in an attempt to find a solution for a new and improved version. This snapshot session will give a brief update on the regulators’ response to the need for change.
Expert Speaker Dollar doldrums? Dollar despair: the plight of the dollar Headlines scream of high oil prices – denominated in dollars – and at the same time the dollar wallows in the doldrums. It’s a strange paradox. How does, and should, the value of the dollar affect companies around the world? With most commodities priced in dollars, what does the fate of the greenback do to you? Behind the headlines lie worries about the tectonic shifts in the world economy. In April 2007, the dollar was involved in 86% of all spot foreign exchange transactions, down from over 90% in 2001, according to the BIS. On the face of it, it’s not fundamentally changed much in decades. The currency of international bond issuance, meanwhile, is fairly evenly split between dollars and euro. Does it really matter to corporate treasury?
Dollar – how low can it go?
The underlying position – stability and change
Reserve currency trends – storm in a teacup or sterling revisited?
What happened to volatilities?
Determining the correct response
Case study Fun with functional currencies Is changing functional currency an effective response to shifts in currency markets and does it provide a good enough natural hedge to make matters worthwhile? A company that has undertaken a change in reference currency discusses the reasons, benefits and pitfalls. What are the triggers to shift your functional or presentational currency: SEPA, dollar moves, customer demand or providing a natural hedge? When is the right time? Are there good reasons to avoid it?
Feasibility studies
IFRS implications of functional currency changes
Triggers and timing
Determining the currency that most influences sales prices and operating costs
What difference does it make?
Multiple case studies A holistic approach to foreign exchange (double session) Translation, transaction and economic risk. These are terms used frequently when discussing currencies and how they affect companies. Definitions still vary, but dealing with these types of risk is as much of an art as a science. Translation risk, where accounting risks emerge on the balance sheet as currencies change and transaction risk – between entering a contract and settling it – can be mitigated by hedging. Economic risks – both in terms of profit and loss and country risks too, can be eased. How do you identify what these terms mean for your company? How do you get a long-term strategy in place? Are you hedging things that you shouldn’t be hedging? Watch out that you aren't hedging against the net value of your company. If companies spend more time on their underlying business model, they may decide that subsidiaries take their share of underlying risk. Here are practical strategies for foreign exchange risk management.
Transaction risk: identifying an IFRS-appropriate hedging strategy
Translation risk: the perennial battle with financial controllers
Economic risk: country risk and P&L risk. Put your money where your mouth is
Beyond forwards and options, what are the different ways to manage foreign exchange?
Alternative risk management strategies: back to basics in billing
Panel Adventures in electronic trading systems Faced with the choice between single bank proprietary or multibank dealing systems such as FXAll, Currenex, FXConnect, Globalink, Espeed or the simple conversational telephone links, what should a treasurer do? Portals may sound like a window into another universe, but how much do they actually bring the trading floor into your treasury? How risky is it to put all your eggs in one basket. Is it worth putting all your foreign exchange volume on a single platform? Treasurers thrash out the issues with a selection of the major proprietary and bank providers of trading platforms.
State of the art – trading in house/out of house
A volume game. How much is too much?
Trading via a prime broker – the ins and outs
Being a visible player
Regulation, strategy and challenges
Cost issues and stacking up the benefits
Case study Settling with the big league Continuous linked settlement used to be the preserve of banks. Now, certain corporations are venturing into the arena. Eliminating settlement risk in cross border payments is something the active treasury may wish to consider if it wants to ensure that delays arising from differences in time zones, legal jurisdictions and operating procedures are things of the past. Cross border currency transactions can be settled intra-day, and a level of certainty can be achieved in what are huge markets.
The benefits of direct access
Size limitations: when is it worth your while?
Challenges of operating
Continuous linked settlement and where it fits in with STP
You need a handle on liquidity to put it to use where required. Information flow, bank relationships, cash management and pooling techniques are all fundamental building blocks in creating the right liquidity management strategy. This series of case studies will demonstrate the latest techniques and processes to free up much needed liquidity in a credit starved environment. Cash flow management: Pay for performance forecasting? In the current environment investors, regulators, rating agencies and your board need a yardstick for measuring the financial health of your company. How much cash flow are you generating, and can you accurately report this? Forecasting the cash flow has become an imperative for almost every company out there, even those who in the past have been hugely sceptical about the validity of forecasts. Identifying short and long term liquidity needs are a prime component of a healthy working capital management focus.
Leading practice methods and innovative new approaches
Building the incentives package and benchmarks
Data collection within the company
Exponential smoothing/regression analysis
Managing variance: practical applications
Linking cash flow to the working capital cycle
Case study End to end cash management: Keeping on track Only a few companies have made the journey from start to finish on an end to end cash management solution. Most get bogged down in complications and minutiae and hence stop in the middle with no clear objective or end in sight. A total global approach to cash optimisation can help you release funds for a wider growth footprint. First you need one window for cash and your technology, systems and procedures have to support that. STP comes into play as does bank rationalisation and choosing the right cash structures. This best practice case study will map the route.
What is a single view of cash?
What is the final goal?
Technology, bank and liquidity support structures
Reengineering the cash management outcomes
Case study Netting renews itself While netting lost some of its traditional value-added with the introduction of the euro, the product is again on an upswing in many European regions. Faced with expensive processing costs for internal invoices, corporates are discovering the power of netting to handle these more efficiently – and slash costs as a result. An expert user shares insights into getting the most out of netting.
Types of netting and methods
Financial flows and inter-company FX
Structural and policy drivers
A checklist approach
Case study The best way to replace your bank SEPA and other developments in cash management may well mean now is the time to streamline your bank relationships or use these developments as an excuse to RFP for a new partner. Replacing cash management banks isn’t always as simple or smooth as expected – and is certainly far from any form of ‘hot swapping’. Treasurers quite often find it time-consuming and challenging to move their subsidiaries to new banks. A host of reasons can lie behind this, including customers’ reluctance to change, the sensitivity of a recent takeover, lending relationships and/or unfamiliar systems and interfaces. This session explores strategies and tactics to resolve these situations.
Drawing up the divorce settlement: what to expect along the way
Nuts and bolts of a move
Timing issues
Learning to let go of relationships: not burning bridges
Control and security issues
Case study Working capital to underpin your business funding needs Having access to adequate working capital is crucial. For companies finding credit tight or expensive, you need to go back to square one and identify sources of funds tied up throughout your internal processes. The ability to unlock sources of funds tied up in inefficient working capital practices came make the difference between growing the company and not. If you care about the long-term value of the company, working capital has to go to the top of your agenda and stay there, no matter how tight external sources of funds are.
Areas that tie up working capital and where treasury can influence
Determining working capital needs
Ways to innovate working capital
Benchmarking practices and indices
Case study Building transparent and automated pooling facilities Are you looking for an innovative, highly automated pooling solution which is truly multi currency and cross border? Can difficult countries with regulatory obstacles be included in such a process? Can you maximise available funds avoiding complex documentation, instructions and inter-company issues? This case study will look at putting into place a well-structured international liquidity solution that is transparent and appropriate for the business needs.
Automated sweeps: benefits and limitations
Investments: mobilising core balances
A checklist for applicability to companies
Hybrid structures: when you can’t always get what you want
Case study 17:10 The new face of pooling technology Do you want as comprehensive a view as your bank has of your financial picture? If you need an overview of the cash flow across borders and the company’s financial health along with the ability to move money around from entity to entity to maximise cash positions and interest earnings, this case study will show how one company’s solution gives better financial control across the company.
Account hierarchies across borders in multiple currencies with pooling
Netting, zero balancing, interest calculation across hierarchies, “balance checks”
Oh not to be a treasurer in 2008/9 with a need to refinance! So far, companies are holding up well with cash on the balance sheet and a lot of financing already secured before the credit crunch worsened. Whether you’ve got the cash or not, it pays to mind the balance sheet and proactively manage it through good and bad times.
Opening Panel The rainy day balance sheet Umbrellas are up. Now is the rainy day you’ve been preparing for. You locked in funding while the times were good. You won't have to refinance immediately. Your current cash flow is positive, but your funding profile stretches out much longer. Is this your story? If so, deciding the balance between current assets and liabilities against future assets and liabilities is key. How much is too much cash? How should you be using your immediate cash flow? The storm could last, or it could cease tomorrow. We look at the dilemmas from the perspectives of different types of company – one which generates and pays out huge amounts of cash daily and one which has a mismatch between lumpy costs and payments.
To have and to have not: that is certainly the question
Sustaining a healthy balance sheet: who has it and who doesn’t (audience vote)
Short term vs. medium and long-term objectives
Choices for corporate structure
Where’s the smart money coming from?
I know what you did last summer: a treasurer with an 08/09 maturity
Case study Mastering debt funding in turbulent credit markets How do you manage debt knowing that unexpected or unplanned events could occur?
This company will present its tips and tricks to mitigate the contagion effect of external, sudden and non-controllable market risks such as the subprime crisis or last year’s credit rating downgrading. In both cases its CP outstanding dropped significantly and the company experienced higher credit spreads, but finally its conservative financial policy positioned it to weather the storm. How prepared are you?
Identifying and mitigating market risks
Transparent approaches
Building an appropriate financial policy
What cost is acceptable
Case study Credit crunch, what credit crunch? Banks and investors’ appetite to back highly leveraged transactions has clearly weakened, but what other consequences has the continued credit situation brought to the corporate financing markets? If anything, corporate risk appears slightly more in favour than previously due to investor concern over banks’ exposures. A number of companies completed benchmark bonds and other significant debt offerings during last autumn – though spreads since have moved somewhat wider and those who completed refinancings previously still have reason to be relieved. Spring tightened further; fewer deals are being done: what will the rest of 2008 bring? This session looks at how to complete a successful deal no matter what the environment.
Case study Securitisations: Everything can go Securitisations must remain a popular source of funding because of their intrinsic efficiency and the way they allow a company not to have to treat certain assets as being on the balance sheet. As a company, you can securitise pretty much anything you are owed, but investors may fight shy of securitised deals in light of the subprime mortgage debacle. This session looks at a solid deal and how you can ensure investors understand the underlying assets. Securitisation, when your investors really understand your credit, is a good source of long term funds.
Putting weight on the covenant “Covenant-lite” was never a term that traditionalists took to. The credit crunch has all but cut these types of lightly-regulated loans, beloved of private equity companies, off at the knees. For investors, these structures stripped away certain protective layers for senior structured leveraged loans, delaying the investors finding out whether a restructuring or a default was ahead. For issuers, they provided greater flexibility. But now, has covenant-lite turned covenant heavy? Or is the issuance famine making it too tough to tell whether documentation concerns will feature highly? The devil is always in the detail.
If you are sitting on a cash pile, where are you putting your money? Corporate investment policies took flight to known quality following the beginnings of the credit crunch, but where are they now? What is the strategic thinking behind short term investment? When security has overtaken yield, what’s a company to do? Has the range of instruments in the tool kit changed? This stream will look both at investment policy and current opportunities. It will help you to formulate policy based on what is the underlying asset of an investment instrument as well as to clearly explain this to stakeholders in your business from the board to shareholders.
Panel Building a robust investment policy and performance measurement Investment can often be an afterthought. "If it earns something, fine" can be an often-employed investment strategy for short-term cash. That's not doing your shareholders or stakeholders a lot of good. This double session will look at basic considerations from outsourcing the investment management to using in-house capabilities. It will also looking at setting realistic policies bearing in mind current market conditions and the range of extended duration products becoming available. Also asset allocation strategy will be looked at more closely. A number of companies will talk about their approach because investing can never be a one size fits all solution.
Do you have a handle on cash: step number one
Outsourcing v inhouse: cost, complications and returns and what (what can you manage inhouse: credit risk, interest risk etc)
Planning your investment strategy: risk appetite
Setting and explaining the strategy
Strategic asset allocation
How safe is your money?
The underlying: learn to peel the layers on the investment onion to really know your risk
Yield and duration issues
Putting together the solution, valuation and benchmarking
Plus audience opinion, voting and benchmarking!
Multiple case studies Investment appetite and opportunities This session will look specifically at investment products, drawbacks, opportunities, risks and rewards. Treasurers must be aware of a whole host of new products and how to evaluate and capitalize on intra corporate group, local, regional and international opportunities to extended duration products, and matching those investments to the their particular needs. Treasurers will be taken through the maze of immediate cash management strategies.
A portfolio review
A walk through investment opportunities
Enhancing yield without sacrificing risk
Mapping and monitoring risk
Technology to assist investment: multibank portals and single bank solutions for MMFs
If you are not a fan of interactive experiences then this may not be the stream for you! Supply chain finance has steadily risen on the CFO and treasurer’s agenda, mainly as banks re-package their cash management solutions into the financial supply chain space. What has grown correspondingly is confusion over exactly what supply chain finance is, who the players are in this area and what solutions are on the table. This highly interactive, audience-led experience will bring together corporates and the main players in the field to debate the whole picture and drive the global solution agenda further.
Special panel The good, the bad and the ugly of financial supply chain management Is financial supply chain a big con? Some in the industry say that transaction banks have had two purposes in life: lending and processing payments between parties. Then came SEPA and other developments, meaning that some “commercial” banks in the may only have funding left. In the efforts to get more business, many banks are rebranding their traditional cash management services as financial supply chain solutions and renaming factoring as commercial credit. But are you getting anything different? There are also a number of players in the FSC space outside of the banking community. How do you sort the good from the bad? The audience will be able to participate with interactive voting, giving delegates a chance to really sort the wheat from the chaff in supply chain finance.
Technology solutions and services that link everyone in the chain.
How do you really reduce the cost of risk in the supply chain?
Definitions and redrawing the maps
FSCM and supply chain finance
Who owns the agenda?
Interdepartmental tensions – different goals
The role of banks and third parties- determining what you need.
Case study Tough credit environment: Making sure your financial supply chain supports working capital To support cutting edge working capital management, forward-looking companies are revising supply chain finance and inventory management in the light of new opportunities made possible by state-of-the-art technology and third party companies getting involved in this area. What are best-in-class tools for enabling companies to negotiate preferential purchase terms and strengthen relationships with vendors, strategic partners and key suppliers. Find out how to put the best of them into practice such that they improve your corporate financial performance.
• The next generation of working capital management
• Ever-more enabling technology
• Connecting disparate links in the supply chain
• Performance enhancing best practices Game The EuroFinance supply chain challenge trophy. Are you up to the Challenge? Teams of four to eight people will compete as a global wine production and distribution company. This session will help you to understand your underlying supply chain, the financing opportunities and solutions along the way, and risk trigger points. Through a series of interactive exercises, teams will compete to prove who has the best knowledge in the supply chain arena. Wine and cheese will be served along the way in a relaxed, fun and informative session.
The chair throughout the session will also be presenting and address the following issues: What does financial supply chain management mean to you?
Like any concept that crops up in the financial sector, supply chain finance can mean different things to different people. This session will look at some of the different definitions and ask the audience what it means to them and how they would like to view it. It will specifically look at reducing the cost of finance across the whole supply chain; dealing with risk in the supply chain; trade platform technology and tools for increasing efficiency in the supply chain.
Interactive Voting Session Speed dating: A few minutes to fix the supply chain There are a range of instruments to provide working funds throughout the entire financial supply chain, provided both by banks and third parties, from structured finance to factoring, reverse factoring and trade finance tools. What are they? Perhaps a concept better known for the singles world, this speed dating version will bring the key solutions providers together with the corporates where they have three minutes to make the perfect pitch. We are going to present you with common financial supply chain problems and ask you to cast your vote on solutions. This session is going to look at cutting edge third party providers in the supply chain financial space: who are they; what do they offer; what makes them unique to their competitors? You then vote.
Case study Using payment cards to improve data integration and business intelligence
Case study Hear me out: The supplier’s story Buyers may want to negotiate extended terms but the supplier needs an advantage. What do they really want from you? How can treasury impact the right terms? What is their understanding of the process and expectations? In this session the supplier tells you exactly what focus, collaboration and benefits make the difference.
Getting our cooperation
Why we jumped on the bandwagon
These are the benefits for us
Case study Accelerating cash with an AR purchase programme Accelerating cash flows in the order-to-cash cycle is a critical component of most companies’ liquidity management strategy. This session will identify what you need to consider when setting up appropriate structures. One size does not fit all. How can the different structures that are available be adapted to meet company-specific concerns as cash requirements, seasonality of receivables, reporting requirements, ease of administration, cost, insurance needs and credit control?
Case study An e-Bay for invoicing Companies need to cut the costs in the supply chain if they want to remain competitive, particularly against their industry peers. The fat may be all but gone physically, hence the need for increasing efficiency on the financial side. Often the views on working capital between corporate buyer and the supplier are opposed, but few companies offer solutions that address this or technology that can cope. Hear how one company is taking advantage of an electronic marketplace that offloads risk and everyone in the chain wins.
Reinforcing the relationship with your suppliers
How the electronic marketplace works
Assumption of risks
Case study E-invoicing starting to show momentum Still more talk than action, is 2008 the year of e-invoicing? Companies see scope to bring further efficiency and control to their payments infrastructure through this method (rather than scanning them, for example) – often as part of a broader rationalisation and enhancement of their supplier relationships.
How to purchase a workflow system for supplier invoices
Building the requirement list and involving the total organisation
Impacts and benefits to a company operating globally
Key issues on the corporate treasury agenda for the coming year include SEPA (much is still unknown, but we ask several companies to highlight what benefits they may have so far); SWIFT and other connectivity issues. We also take a look at various technology stories which show that companies, software providers and banks are really starting to team up in an effort to crack the STP puzzle. Panel SEPA: Is it really a change agent for treasury? This is our second apology in as many years for putting SEPA squarely on the agenda, because so often when we research with companies – they say “enough on SEPA – it is a bank issue.” But here is a new one for you: developments in the Single European Payments Area are exciting for you. Yes, really. The banks have been trying to tell treasurers that for years, but for all you on the corporate side, not a lot has been happening. After all the investment and noise, how much practical difference has it made to you, the payments user? With SCT (SEPA Credit Transfer) the new file format for mass euro payment transactions freshly minted in January, has it made a difference? What is the position in the migration from national systems in favour of SEPA? Where are we on SEPA direct debits (SDDs)? As banks fight to differentiate themselves, what will the cross-selling opportunities they chase mean for the treasurer? And if systemic risks emerge, could the brakes go on for the whole project?
Filling the SEPA information lacunae
Managing transitions: when and how to do what?
Direct debits: huge opportunities and risks
What measures should corporates take?
Working with banks
The limits to rationalisation
In 2009 the Payments Services Directive looms.
Where next for SEPA?
Case study Treasury partnerships: Offering better cash visibility for companies While companies focus heavily on building and improving their shared services, banks are in effect mimicking those actions by centralising the information that clients need to run an efficient treasury. How? Key cash management banks are building and improving their own CM portals as a key distinguishing service against their competitors. These portals can now offer not just a single window of visibility to cash but can provide all the other services available within the bank from FX dealing and other asset classes to research and analysis and real time information. Another avenue of information amalgamation comes from the marriage of third party technology with banking services, a strategy which never really took off previously but seems to be making a comeback. Banks seek to leverage third party offerings rather than investing in proprietary technology, and tech companies can cash in on a bank’s customer base. Here is a classic case of everyone working towards the same aims.
Resolution of cash forecasting – can partners help?
Using a portal to bolster cash visibility
Helpful features and uses
Case study Back on demand? We have often featured on demand software on our agenda and often reported that the numbers simply didn’t stack up for companies considering it. Plus large companies were not comfortable with the concept for a variety of reasons. But then along came Salesforce, and they were so successful with the rented software concept that finally resistance to this model seemed to be breaking down. What do companies gain from on demand software rather than buying, installing and maintaining their own software? For medium sized businesses, which have shied from the expensive installation and ongoing support of sophisticated treasury services built for the Fortune 500, this may offer an answer. Share the experience of this company, the benefits, costs and drawbacks.
Case study Digital treasury: Authenticating your money, your people, your business Corporations are increasingly concerned about the growing risk and liability associated with their global operations. Many are using internal “payment factories” where employees signing for treasury functions are not the authorised signatories, and passwords are the predominant form of authentication. Lack of transparency – both internal and external to the corporation – is driving corporations to seek increased visibility and accountability down to the individual associated with each step in the end-to-end process. As employee fraud continues to grow and more corporations are held responsible for data breaches by customers and partners, how can you protect the company with the use of a globally accepted, interoperable standard for authenticating the documents and data? This session will look at minimising risk.
Systems implementation: The right deal in a world of choices There is a world of choice out there. The ERP versus dedicated treasury management systems has been an ongoing debate that EuroFinance has put at the forefront of our agendas worldwide each year. There is the choice of whether to use on demand or buy and whether to let IT drive the decision-making process or to have treasury take control. This session is going to look at how a company makes choices, building the investment case for IT, the CFO and board, and then actual implementation timetables, costs and challenges.
Choosing the right choice for your needs
Building the business case
Setting goals, timetables
Dealing with hurdles
Evaluating cost/benefits
Extended afternoon Workshop Reengineering treasury management for Swift Swift can bring enormous advantages to corporate treasury, but it has failed to meet its targets on corporate membership. Why are companies holding out? Is it because there still remains a lack of understanding about the benefits of Swift access? Is it because many companies regard their payment flows as insufficient to justify the cost? But the 300 companies that are connected up come in all shapes and sizes, from those with simple cash management structures dealing with a few banks locally, to large corporates deploying sophisticated payments and collections factories.
This extended afternoon workshop will give the real low-down. The workshop will look at pros and cons and obstacles and initiatives to simplify cost and efficiency in the connecting up process. The opening discussion will be followed by case studies which will offer practical insights as to how and why these companies are implementing Swift to achieve similar goals of better STP and visibility to global cash.
SWIFT connections: MACUG, Score
What is the value proposition of Swift
The roles of banks and partners including ERPs, service bureaus, TMS providers, middleware providers, and consultants.
The Evaluation cycle
Building the business case
3rd party issues
The vendor view
Template issues: web based master agreements, time consuming
Risk is a theme running through every part of this treasury conference agenda -- in fact FX risk is dealt with by its own stream running over two days. But with growing interest in some specific areas, we highlight the current approach to counterparty and credit risk, as well as the increasing appetite we are seeing from treasurers to manage commodity risk, an area more traditionally left to the business units. Counterparty risk One of the biggest concerns right now for a treasurer is monitoring and controlling counterparty risk. We don’t want our banks to have the same issues as Bear Stearns or Northern Rock. And with banks themselves distrusting each other and refusing to lend onwards, treasurers may just need to revisit policies. How do you protect against adverse market conditions and related risks, particularly from your counterparty banks.
How do you develop an adequate assessment of your banks?
What is the role of the rating agencies
How far do you trust their judgment?
Building your own view
Credit risk: Driving treasury from the business partner perspective Credit risk is right back up on the agenda as companies issue profit warnings in relation to an overall slowdown. This trickles right down the chain of suppliers and increases most companies’ exposure to credit risk. Hear from one of the world’s largest medical technology suppliers on their mitigation processes and strategy. Medtronic has in combination with its cash and liquidity centralization strategy, focused on the order to cash financial supply chain with treasury as partner to the business units helping to establish firm parameters on credit risk.. Extended panel Everything treasury needs to know about commodities and shouldn’t be afraid to ask Do you know for every percent of a pence or euro rise or fall in the price of a given commodity what the impact will be on your business? Do you know how to measure your commodity exposure in an effective way? As a treasurer your experience of risk is extensive, particularly in the FX and IR areas. Can you take that risk knowledge and apply that to commodities? Some treasuries argue that the commodities field is too complex with too many products, but even in those instances treasury can assume the guiding policy role.
This extended workshop will begin with a respected economist giving a brief outlook on various commodities from basic metals to agriculture to energy. Why should treasury have a global view and an appreciation of speculation versus real price evolution? The session will then look more closely at the role of hedge funds and other investors and how they are driving commodity prices.
During the afternoon several companies will present case studies of how treasury involves itself in the commodities arena, the role with procurement, the hedging products used and the hedge accounting issues they deal with.
Outlook on basic metals, agribusiness and energy and potential business impacts
Should treasury be totally in charge of commodities or should purchasing be in charge?
Is it better to have a hybrid structure between purchasing and treasury
The Nuts and bolts of commodity exposure
Risk analysis and quantification
Risk appetite and mitigation
Hedging: structured products and what’s new
Managing risk to protect your company’s value How to best practice companies really manage risk? Often we are told that is through the treasury where the real risk expertise lies, but this happens in scant too few companies. At HP however, the treasury remit is to protect and grow the company by managing risks right across the board. How do you take a holistic risk approach to identify and mitigate?
What measurements do you use in assessing risks?
As America and Europe slow, companies are turning further and further afield for business opportunity. With opportunity comes cost and stumbling blocks whether from a transfer pricing strategy or the need to unlock cash from a closed, hostile banking or financial system. How should you cope? Rather than viewing most countries in isolation, companies are employing regional treasury solutions that try to make the best of what is available. We illustrate some best practice examples in this stream.
Chindia — China or India? India or China? Where do you put your resources and what do you get back? China and India are two of the fastest growing economies in the world. Both present a challenging environment for financial and treasury operations. Comparing and contrasting the two countries provides an insight into business operations as well as pointing to future concerns and opportunities.
Growth rates
Coping with Country Risk
When it all goes belly up
Banking issues
Regulatory and tax concerns
Case study Improving visibility across the Middle East and beyond Dubai is paving the way forward with reform in the region, but while markets are opening and relaxing norms towards liquidity and tax issues, companies still have to face a number of restrictions in the region. So how can you build tax efficient, transparent liquidity processes and move your cash more freely around? What are the concentration, pooling and sweeping structures you can put into place and what are the best tools available to manage the information? This case study will show one company’s experience of creating the best possible liquidity solution regionally.
Case study Re-engineering the treasury of the future in Asia Many companies are stuck with legacy systems, processes and policies. This case study will look at how one company embraced those challenges and set into place a blueprint for the future. This session will look at the archetypal company undergoing the strain of change: acquisitions, differing levels of performance; reliance on local treasury structures and banks and seeking to centralise to increase efficiencies. Hear about the challenging details of a complete reengineering: project objectives and the work done so far and what really happened versus expectations.
Assessing the current
Planning the future
Putting it all into practice
Stumbling blocks and challenges
Measuring results
(Restricted participant numbers) Latin America’s place in the global economy This summit table will be particularly important for companies whose investments in the region are complex and substantial. From looking at economic outlook and tax, regulatory and banking change, the discussion will centre on more effective ways of doing business in a region fraught with obstacles.
First a leading Latin American expert will lead the discussion on interest in the region: Is Latin America getting its fair share of investment as the world keeps its eyes on India and China? What is the current outlook, negative and positive? Which are the countries leading growth in this diverse area? What are the political and economic risks and what are the medium and longer term forecasts for key economies in the region? What role does Latin America play on the world stage?
Next the discussion will turn to structural markets, tax and change. Although the Latin American region could be compared to Asia in terms of its disparate markets, in EuroFinance research, most companies we talk to believe that Latam is far more complex (with the exception of China). And treasurers could be forgiven for asking: "will this ever change"? We will look at key changes in Latam countries that affect FX, payments and collections, and bank accounts. The round table will discuss any recent tax or central bank requirement changes in the main markets.
Also you might be wondering what on earth your banks are up to in the region? Who is buying who? Who is withdrawing and who is expanding; are your banks actually making any money in the region?
Finally, we will look at how companies favour a centralised approach as possible to treasury in order to keep control of all aspects of the cash cycle, no matter how many markets in which a company may operate. What does this mean in practice? Share your experiences with other companies operating in this region.
