EuroFinance’s top articles of 2021
We have compiled a top ten list of the most-read EuroFinance news articles from 2021, as ranked by unique user views from our global corporate treasury community.
1) Airline fuel hedging during the pandemic
The costly unravelling of airlines’ fuel hedging strategies has become a widely discussed case study in the treasury community. It highlights the dangerous correlation between market risk and business risk, or the risk that a corporate activity whose input costs are hedged might disappear. In response, companies have re-evaluated their hedging strategies.
2) Should consumer goods companies hedge commodity costs amid rising inflation?
The pandemic also tested hedging policies within the consumer goods industry. The end of lockdowns brought about a surge of commodity inflation. Companies like Procter & Gamble bet that inflation would be brief, and that it didn’t need to be hedged. When inflation persisted, the decision proved a costly one.
3) Generating treasury transformation from within
Digital transformation was in danger of becoming a cliché in treasury before the pandemic, with corporates, banks and vendors all clamouring to be associated with it. What we needed was a case study showing how it actually delivered financial benefits for a corporation, and computer giant HP obliged in this widely-read profile.
4) Forecasting through disruption
Education company Pearson has gained a reputation as having one of the most innovative treasury teams. This award profile explained how Pearson retooled an existing machine learning-based forecasting system to handle the wide range of scenarios needed during the pandemic.
5) Treasury leaders call for transparency in SCF after Greensill collapse
The collapse of supply chain finance lender Greensill Capital in March 2021 sent shockwaves through the treasury community, and raised uncomfortable questions for corporates that found their receivables sold to Greensill via vendor SCF platforms. The episode added to pressures for transparency in trade finance.
6) Pushing pooling innovation through Alipay
E-commerce giant Alibaba has made a name for itself as a treasury innovator in areas such as cash pooling and virtual accounts, even as it faces an increasingly challenging regulatory environment in its home territory of China. In August, the company received EuroFinance’s Mastering Strategic Change award for treasury excellence.
7) Updating the quarterly payout
One of the world’s largest dividend payers, Shell responded to the risk and inefficiencies of its old manual approach, and built a digital payment infrastructure that enables its registrar to make direct payments. This saved millions in bank fees, preserved interest income and eliminated credit risk.
8) Volkswagen makes a €1.4 bn gain on commodity hedging
The automotive sector is transitioning to electric vehicle manufacture in response to climate change, and this is transforming the commodity supply chains needed for batteries and other key components. Volkswagen’s treasury team made a far-sighted decision to hedge these newly required commodities, leading to a windfall when prices spiked.
9) Treasurers fight working capital hit from semiconductor shortage
Electric vehicle makers not only need new sources for commodities, but they are also highly dependent on supply of semiconductor chips. A shortage of these components was a headache for many companies in 2021, adding to working capital pressures faced by treasury teams.
10) US tech giants pour cash into money funds, bitcoin in the hunt for yield
Investing cash is a core function of treasury, but since the pandemic the job has been made tougher as central bank actions have lowered interest rates and government bond yields. In response, treasurers have re-evaluated the risk return proposition, shifting assets into corporate bonds, equities and even cryptocurrency.