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Topics:  Perfetti Van Melle at a glance  Perfetti Van Melle treasury redesign project  Lessons learned  Conclusions 1Perfetti Van Melle Holding B.V.,

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Presentation on theme: "Topics:  Perfetti Van Melle at a glance  Perfetti Van Melle treasury redesign project  Lessons learned  Conclusions 1Perfetti Van Melle Holding B.V.,"— Presentation transcript:

1 Topics:  Perfetti Van Melle at a glance  Perfetti Van Melle treasury redesign project  Lessons learned  Conclusions 1Perfetti Van Melle Holding B.V., Treasury Department

2 Perfetti Van Melle at a glance 2 Perfetti Van Melle Holding B.V., Treasury Department

3  HQ in Lainate (Milano) Italy. Finance / Treasury HQ in Breda, The Netherlands  Turnover: EUR 2,5 bln  Sales in 150+ countries  31 production facilities  Subs in 40 countries worldwide Facts & Figures 3 Perfetti Van Melle Holding B.V., Treasury Department

4 Situation back in 2009:  62 bank relations in 40 countries  380+ bank accounts  15+ electronic banking systems, partly central, partly decentral  Manual banking used widely  Central intranet based cash position reporting systems (weekly balances, manual entry by subsidiaries)  Treasury management system used by corporate treasury only  Cash pools in NL in 9 currencies, subsidiaries participating with non-resident accounts. Centralized execution of hedging and funding  Treasury staff of 3 FTE (FO&BO) Perfetti Van Melle treasury facts 4Perfetti Van Melle Holding B.V., Treasury Department

5 Primary goal: Cash visibility and control  New system for payment management, liquidity management and treasury management including full ERP connectivity  Bank connectivity via SWIFT for statements:  MT940 statements in FileAct  97% of cash flows & 85% of bank accounts visible daily  MT942 via FileAct on principal trading accounts (150 accounts)  Bank connectivity for payments:  XML payments (pain001) harmonization  Local CM execution, central administration and policy making  Bank rationalization (62>35)  Secondary goals Treasury redesign goals (Q2 2010) 5 Perfetti Van Melle Holding B.V., Treasury Department

6  Business case performed on high level  Business case findings: Business case not positive  Despite that, support from management  Sole reason: value of visibility and control. Treasury redesign business case 6Perfetti Van Melle Holding B.V., Treasury Department

7  All new systems operational  45 bank relations in 37 countries  325 bank accounts  76% of bank accounts reported via SWIFT from 20 banks, approx. 85% of all cash flows visible daily  Treasury live on manual payments via SWIFT  3 subsidiaries live on manual & bulk payments via SWIFT Achievements up to Q Perfetti Van Melle Holding B.V., Treasury Department

8  Statement reporting via SWIFT serves the purpose of visibility very well  When it works, it works: little maintenance on the channel  Support from SWIFT is generally very good  Good reason for bank rationalization  Underestimated total cost of maintaining connectivity via SWIFT:  Connection (Alliance Lite / service bureau fee)  SWIFT subscription fees  Messages (SWIFT), possible message surcharge Service bureau  Banks’ setup fee and messages  Corporate infrastructure setup and maintenance Lessons learned: SWIFT (1/2) 8Perfetti Van Melle Holding B.V., Treasury Department

9 We have been struggling with technology issues:  Making SWIFT alliance lite work and the subsequent migration to SWIFT service Bureau (Broadridge)  Technical infrastructure setup:  Servers  FTP connectivity  Interfaces  Functional IT:  ERP integration (SAP integrated system of Hanse Orga selected as the tool for Payment management, Liquidity mngt. and Treasury mngt.)  Interfacing with dealing platform (FXall)  Interfacing (temporarily) with intranet reporting system  Payment format setup and testing Lessons learned : SWIFT (2/2) 9Perfetti Van Melle Holding B.V., Treasury Department

10 Support and performance differs significantly between banks:  Struggling with documentation  Connectivity setup  Message types supported  Statements  Payment instructions  Direct debit  Treasury confirmations  Bank delivery times can be very long  Due to heavy investments, not a bank independent solution Lessons learned: Banks&SWIFT (1/2) 10Perfetti Van Melle Holding B.V., Treasury Department

11 Costs are not transparent up front. Completely off the scale pricing proposals seen. Negotiation pressure heavier than anticipated.  Setup fee  Maintenance fees  Message fees often overlooked Logic of pricing often not visible  Portfolio determines the price only partly  Sophistication of proprietary solutions used as SWIFT pricing argument (higher) Lessons learned : Banks&SWIFT (2/2) 11Perfetti Van Melle Holding B.V., Treasury Department

12  Impacts almost every business area: long list of stakeholders to maintain. Notably:  Audit (separation of duties and EDP audits)  Procurement (vendor master data)  Financial administration (key users)  Issues sister companies (rightly so or just as excuse)  Sense of loss of control / ownership  Complex local products not easily fit in standardized tools / formats  Legal discussions  Transfer pricing discussion  Permanent “project” = permanent support  Pilot subsidiaries necessary to show achievements to reluctant subs Lessons learned: The company 12Perfetti Van Melle Holding B.V., Treasury Department

13 Technology needs are vast. We have certainly overlooked areas.  Sophisticated payment / treasury management system  Servers, secure connections  ERP connectivity  Staff that can cover both Treasury and IT subjects (integrated project team) Lessons learned: In house technology and functional design 13Perfetti Van Melle Holding B.V., Treasury Department

14  The statement reporting via SWIFT has proven very useful in the visibility goals  SWIFT is not a solution fit for all. Whether it works for your company depends on the company’s structure and approach.  SWIFT is not plug and play, not even SWIFT Alliance Lite  Beware of marketing Conclusions on SWIFT 14Perfetti Van Melle Holding B.V., Treasury Department

15  Banks in NW Europe are highly cooperative  Banks in NW Europe show extensive knowledge  SWIFT setup with banks is not plug and play, many banks struggle with their own systems  Beware of marketing  It is not bank-independent due to the investment, especially in time. Conclusions on Banks 15Perfetti Van Melle Holding B.V., Treasury Department

16  Technological complexity has to be covered by Finance and IT together, impossible to do this without integrated treasury and IT project team.  Visibility and control are the main benefits, not cost saving from efficiency  This is not a project for us. It has proven standard process.  Underestimation of the complexity and impact.  Endless list of stakeholders. Conclusions on the Company 16Perfetti Van Melle Holding B.V., Treasury Department

17 ? Q&A 17 Perfetti Van Melle Holding B.V., Treasury Department


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