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Karsten Kohl / BearingPoint Switzerland AG June 11/12, 2013 Commodity Trading & Treasury Integration.

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Presentation on theme: "Karsten Kohl / BearingPoint Switzerland AG June 11/12, 2013 Commodity Trading & Treasury Integration."— Presentation transcript:

1 Karsten Kohl / BearingPoint Switzerland AG June 11/12, 2013 Commodity Trading & Treasury Integration

2 ©2013 SAP AG or an SAP affiliate company. All rights reserved.2 Content Commodity Trading Market BearingPoint‘s Service Portfolio and Expertise Challenges for Commodity Management Systems Commodity Management in SAP

3 ©2013 SAP AG or an SAP affiliate company. All rights reserved.3 Where to find Commodities … TradingHigh Tech Consumer Products Oil & Gas Mills & Mining Building Material Chemical Aerospace & Defense Wholesale Distribution Automotive Pharma Agriculture

4 ©2013 SAP AG or an SAP affiliate company. All rights reserved.4 Content Commodity Trading Market BearingPoint‘s Service Portfolio and Expertise Challenges for Commodity Management Systems Commodity Management in SAP

5 ©2013 SAP AG or an SAP affiliate company. All rights reserved.5 Credit & Trade Finance Trade Accounting Treasury Risk Management Physical and Paper Contract Management Regulatory Reporting Operations & Back Office Transportation Our Service Portfolio in Commodity Trading

6 ©2013 SAP AG or an SAP affiliate company. All rights reserved.6 BearingPoint‘s Expertise in Commodity Trading "BearingPoint has been awarded by SAP Switzerland as Solution Partner of the year 2012, especially for its expertise in Commodity Management". BearingPoint has a record dating back to 2001 in cooperating with SAP in solutions for Commodity Management. Within this period BearingPoint has joined efforts with SAP in Delivering some of the first projects in Commodity Management Co-innovating in the design of the new standard solution Testing new functionalities Developing add-on functionalities Jointly, SAP and BearingPoint will provide a strong understanding in both processes and the SAP solution that will contribute to making your project successful.

7 ©2013 SAP AG or an SAP affiliate company. All rights reserved.7 Content Commodity Trading Market BearingPoint‘s Service Portfolio and Expertise Challenges for Commodity Management Systems Commodity Management in SAP

8 ©2013 SAP AG or an SAP affiliate company. All rights reserved.8 Commodity Management Related areas Back office Invoicing Confirmation Stock valuation based on accounting rules Closing process Commodity Trading Physical trades Paper trades Pricing Operations Scheduling Transportation Planning Production Planning As-Is analysis Risk Management Exposure and position reporting P/L reporting Valuation: VaR; MtM, simulations Credit Management Credit risk Credit risk exposure Trade finance (LC’s, guarantees) Treasury and Cash Management Cash and liquidity management Foreign exchange Financing Working capital Legal and Compliance Contract management Regulations (e.g. EMIR for derivatives) Environment External Systems & sources

9 ©2013 SAP AG or an SAP affiliate company. All rights reserved.9 Commodity Trading Management The requirements on a commodity trading system are highly complex. The synchronisation of front office physical and financial commodity trades with logistics, Treasury and Risk Management is essential to establish benefits for the business, to get advantages within the commodity traded market and to be able to track and trace the single positions.  Integration of Commodity Trading within ERP system  Transparency along the entire supply chain real-time and group-wide monitoring of risk, liquidity, positions  Commodity Trading system serves as basis for being compliant Knowing the exposure of physical and paper positions in real time with a reduction of manual work End-to-end process Business ValuesProcess Advantages

10 ©2013 SAP AG or an SAP affiliate company. All rights reserved.10 Content Commodity Trading Market BearingPoint‘s Service Portfolio and Expertise Challenges for Commodity Management Systems Commodity Management in SAP

11 ©2013 SAP AG or an SAP affiliate company. All rights reserved.11 Commodity Management in SAP An integrated solution is necessary to have the full transparency of each position as well as supporting the commodity trade lifecycle. The integration of commodity trading in SAP environment facilitates a seamless front-to-back office commodity management. Interfacing front office physical and financial commodity trades with SAP Logistics and SAP Treasury and Risk Management. Purchase Contract (MM) Stock Valuation Inventory Invoice verification Delivery Sale Contract (SD) Delivery Billing Trade Finance Credit Risk Trading Contract (GTM) Pricing engine (CPE) Commodity trading Physical deals Paper deals PortfolioTrading bookValuation Hedge accounting Financial Risk for Commodities (TRM) Finance and Controlling (FI/CO) Reporting (BI) Exposures

12 ©2013 SAP AG or an SAP affiliate company. All rights reserved.12 Hypothetical Trades Paper Trades (SAP)  Commodity (paper trades) - e.g. futures, forwards, swaps, options Foreign Exchange trades (FX) - e.g. spots, forwards, swaps, options Automatic built or uploaded from various sources The Commodity Exposure The Exposure allows the full transparency, track and trace of all paper and physical positions. The exposure management is updated real-time and shows both positions: the paper as well the physical positions; manual captured positions are considered as well. The analytic reporting tool allows a more preciouses‘ planning and steering of risks/open positions. Automatically updated by in case of price and/or volume changes Aggregation of exposure positions (free definable) Sales (SAP SD) Purchases (SAP MM) Planned data (SAP APO) Physical Trades (SAP) Treasury (SAP) Other sources (e.g. Excel) Web based analytic reporting allows easily to track and trace single positions, to turn axes, drill-down, to aggregate per free-definable criteria’s for example by type of commodity, type of trade, country, region, open position. Operative Exposures (Raw Exposures) Exposure report

13 ©2013 SAP AG or an SAP affiliate company. All rights reserved.13 Commodity Trading Management Reporting Comprehensive tools are available for different reporting purposes Ad hoc reporting point & click, unified databases, position, P&L, period, cash flow Reporting tools SAP Query, ABAP List, Other 3rd- party providers, Business Intelligence (BI) Result database Portfolio hierarchy e.g. by country, region, type of commodity, drill- down, historic results Management reports Positions, performance, ratios, compliance, risk exposure, profitability Data export Flat files, excel, automatic or manual

14 ©2013 SAP AG or an SAP affiliate company. All rights reserved.14 Risk Management

15 ©2013 SAP AG or an SAP affiliate company. All rights reserved.15 Commodity Products Available products as of EhP6 Commodity Futures contracts Traded on Exchanges Commodity Options Traded on Exchanges OTC Forwards OTC SWAPs OTC Options

16 ©2013 SAP AG or an SAP affiliate company. All rights reserved.16 Commodity Products – Futures Commodity Futures Capture Deal Cash Settlement or physical settlement Matching with other Futures possible

17 ©2013 SAP AG or an SAP affiliate company. All rights reserved.17 Commodity Product – SWAPs Payer: A fixed price is paid and a floating price (index) is received (Future or OTC) Receiver: A floating price (index) is paid and a fixed price is received Basis: A basis SWAP involves swapping one floating rate index for another A commodity SWAP can be with any counterparty in which: (1) a fixed-price contract for a commodity is exchanged for its floating-price contract or (2) one commodity is exchanged for another, with an execution date (due date) at a future point in time (or multiple due dates).

18 ©2013 SAP AG or an SAP affiliate company. All rights reserved.18 Commodity Master Data Create Commodity Master Data Commidity kind: Abstract or Commodity New features available (delivery location and Incoterms)

19 ©2013 SAP AG or an SAP affiliate company. All rights reserved.19 Commodity Master Data – Price Curves Commodity Master Data is represented as commodity price curves. The system supports two types of Curves: Future Style curves – For Listed Instruments and Published commodity prices on exchanges (opening price or closing price) Forward Style curves – For OTC Products Assign the Futures Class to the Commodity Curve

20 ©2013 SAP AG or an SAP affiliate company. All rights reserved.20 Enter Commodity Forward Prices based on the price quotation style. Commodity Master Data – Forward Price Curve

21 ©2013 SAP AG or an SAP affiliate company. All rights reserved.21 Commodities Exposure Reporting Commodity Reporting A special report exists for the reporting and valuation of commodity exposures – can combine physical and paper risk positions In addition the Exposure Management functionality can be used for commodities

22 ©2013 SAP AG or an SAP affiliate company. All rights reserved.22 Subraw exposures can also split the commodity risk as well as the FX risk Raw Exposures – set the price

23 ©2013 SAP AG or an SAP affiliate company. All rights reserved.23 Valuation - Quantities in Analytical Reporting

24 ©2013 SAP AG or an SAP affiliate company. All rights reserved.24 Logistics to Treasury Integration

25 ©2013 SAP AG or an SAP affiliate company. All rights reserved.25 Logistics to Treasury Integration

26 ©2013 SAP AG or an SAP affiliate company. All rights reserved.26 Logistics to Treasury Integration

27 ©2013 SAP AG or an SAP affiliate company. All rights reserved.27 Logistics to Treasury Integration

28 ©2013 SAP AG or an SAP affiliate company. All rights reserved.28 5 Points to remember 1) An integrated solution gives you a real time view of your exposure to the market 2) Covers the whole commodity trading life cycle, including logistics, trading and accounting 3) Minimizing errors in the system by reducing manual work/intervention 4) Reducing your administrational effort 5) One system, less maintenance / interfaces.

29 ©2013 SAP AG or an SAP affiliate company. All rights reserved. Karsten Kohl BearingPoint Pfingstweidstrasse 60 CH-8005 Zürich Switzerland karsten.kohl@bearingpoint.com T +41 43 299 64 53 M +41 79 714 32 85 www.bearingpoint.com

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31 ©2013 SAP AG or an SAP affiliate company. All rights reserved.31 © 2013 SAP AG or an SAP affiliate company. All rights reserved. No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. National product specifications may vary. These materials are provided by SAP AG and its affiliated companies ("SAP Group") for informational purposes only, without representation or warranty of any kind, and SAP Group shall not be liable for errors or omissions with respect to the materials. The only warranties for SAP Group products and services are those that are set forth in the express warranty statements accompanying such products and services, if any. Nothing herein should be construed as constituting an additional warranty. SAP and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and other countries. Please see http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark for additional trademark information and notices.http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark

32 ©2013 SAP AG or an SAP affiliate company. All rights reserved.32 © 2013 SAP AG oder ein SAP-Konzernunternehmen. Alle Rechte vorbehalten. Weitergabe und Vervielfältigung dieser Publikation oder von Teilen daraus sind, zu welchem Zweck und in welcher Form auch immer, ohne die ausdrückliche schriftliche Genehmigung durch SAP AG nicht gestattet. In dieser Publikation enthaltene Informationen können ohne vorherige Ankündigung geändert werden. Einige der von der SAP AG und ihren Distributoren vermarkteten Softwareprodukte enthalten proprietäre Softwarekomponenten anderer Softwareanbieter. Produkte können länderspezifische Unterschiede aufweisen. Die vorliegenden Unterlagen werden von der SAP AG und ihren Konzernunternehmen („SAP-Konzern“) bereitgestellt und dienen ausschließlich zu Informationszwecken. Der SAP-Konzern übernimmt keinerlei Haftung oder Gewährleistung für Fehler oder Unvollständigkeiten in dieser Publikation. Der SAP-Konzern steht lediglich für Produkte und Dienstleistungen nach der Maßgabe ein, die in der Vereinbarung über die jeweiligen Produkte und Dienstleistungen ausdrücklich geregelt ist. Keine der hierin enthaltenen Informationen ist als zusätzliche Garantie zu interpretieren. SAP und andere in diesem Dokument erwähnte Produkte und Dienstleistungen von SAP sowie die dazugehörigen Logos sind Marken oder eingetragene Marken der SAP AG in Deutschland und verschiedenen anderen Ländern weltweit. Weitere Hinweise und Informationen zum Markenrecht finden Sie unter http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark.http://www.sap.com/corporate-en/legal/copyright/index.epx#trademark


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