An interview with Osvaldo Vital
What has this crisis taught you? What should treasuries prioritize?
Crises give us the opportunity to be creative, especially in Brazil where the problems we have encountered in recent decades have taught us how to deal with different situations. Treasuries fundamentally must prioritize the cash conversion cycle, asset management and currency protection (cash flow and balance sheet hedging)
How do you ensure that Treasury is aligned with the company's strategy?
Responding to internal reports generated by each local market, Corporate Treasury determines the company's capital structure as well as the measures to be pursued respecting different local legal and tax requirements.
How do you incorporate global policies in a changing local environment, marked by regulatory and tax constraints? What is the balance between global standardization and the efficiencies to be gained locally with different practices?
The balance between global standardization and local efficiencies is mainly based on creativity. That's why the company stimulates employees to think out of box. We also use the support of global Banks and their different solutions to implement or buy new ideas, always respecting the company's global policies and compliance rules.
Can you give me some examples?
- We use a trade trade finance programme called FINIMP through Assunção de Dívida . Lenovo is a major importer of components from China and I’ve been trying to negotiate a means of giving Banks the opportunity of liquidating our debt through endorsement. At the same time, Banks would need to have appetite for our customer risk. The basis for the costs equalization would be the FINIMP program (Brazilian funding to importers) with a focus on extension of payment terms. So, as long as the Banks have appetite for our customers’ risk, the FINIMP program is a way of enabling more deals for the company.
- The implementation of an import program from China in BRL instead of USD. Using local currency allows for more transparency to the company and for the elimination of the complicated true-up process.
- Capitalization without cash to sustain the adequate levels of indebtedness required to support new deals through BIDs from Public Sector companies.
How do you ensure you have the necessary liquidity when and where needed in an environment like this?
Lenovo´s global A/R and its extensive portfolio of clients (especially global and large enterprise customers) mean that the company has enough liquidity and funding at a reasonable cost.
What is your bank strategy, bearing in mind that the future of their business model is uncertain in a world of low interest rates, increased regulation and competition?
A global Bank partner is crucial, with a focus on Bank fees savings. Swift messages help a lot. Additionally, having a global Bank partner gives us access to working capital within 2 working days. There is a lot of money available in the world right now. Companies with reasonable margins, good liquidity levels and low debt can find attractive funding costs for inorganic growth.
Has the exit of some banks from the region affected you?
In Brazil, we saw the exit of HSBC and Citibank's retail segment but that didn’t affect us. Our global partner for cash management continues to be Citi and we choose Santander to deal with our payroll at local level.
What is your ideal bank partner?
An ideal bank partner operates globally and thinks locally.
What is your take on FinTechs and Blockchain?
Though seen as technological innovations, they have the potential to significantly change how we work. However, they are still some way off having the tools we can use on a day to day basis.