© COPYRIGHT 3V FINANCE - ALL RIGHT RESERVEDL’INFORMATION COMPRISE DANS CE DOCUMENT EST CONFIDENTIELLE.TOUTE UTILISATION OU...
© COPYRIGHT 3V FINANCE - ALL RIGHT RESERVEDL’INFORMATION COMPRISE DANS CE DOCUMENT EST CONFIDENTIELLE.TOUTE UTILISATION OU...
© COPYRIGHT 3V FINANCE - ALL RIGHT RESERVEDL’INFORMATION COMPRISE DANS CE DOCUMENT EST CONFIDENTIELLE.TOUTE UTILISATION OU...
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Titan treasury commodities

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Treasury risk software for corporate treasurers with some exposures on commodities

Published in: Economy & Finance, Business
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Transcript of "Titan treasury commodities"

  1. 1. © COPYRIGHT 3V FINANCE - ALL RIGHT RESERVEDL’INFORMATION COMPRISE DANS CE DOCUMENT EST CONFIDENTIELLE.TOUTE UTILISATION OU REPRODUCTION DE CES DOCUMENTS, SANS LE CONSENTEMENT DE LA SOCIÉTÉ 3V FINANCE, EST INTERDITE.T: +41 (0)22 548 00 60 - info@3vfinance.comwww.3vfinance.comCommodity market price volatility is an importantissue for companies investing an important part oftheir treasury in raw materials and energy fortransforming industry.In addition, as most of commodity products trade inUS Dollar there is a correlation between US Dollarparity and price of commodity products for countriesout of the US Dollar zone.Hedging currency risks of a company without includingthe commodity side can greatly reduce the hedgingefficiency depending on industrial purchase volumes.3V Finance has developed a module that allows nontrading companies to include commodity risks in TITANin order to get a global vision of company risks.Adding commodity module in treasury must beapproached as a separate project as habilitations,accounts, counterparties, data sources , third partysoftware integration are different from Currency andInterest rates operations and usually in differentlocations.TITAN™ Treasury collect commodity data from yourlocal sources (IDC-Futuresource, Reuters, WS/D,Platt’s, Heren energy…) and create an historicaldatabase .VALUATIONRISK ANALYSISREPORTINGINTEGRATION FRONT TO BACKCorporate & CoopSolutionsENERGYCOMMODITIES
  2. 2. © COPYRIGHT 3V FINANCE - ALL RIGHT RESERVEDL’INFORMATION COMPRISE DANS CE DOCUMENT EST CONFIDENTIELLE.TOUTE UTILISATION OU REPRODUCTION DE CES DOCUMENTS, SANS LE CONSENTEMENT DE LA SOCIÉTÉ 3V FINANCE, EST INTERDITE.2IMPORT OF COMMODITY AND CURRENCY POSITIONS• Forecast (purchase /sales),• Budgets (initial, revised).COMMODITIES• Cash,• Futures,• Options on futures,• Options OTC,• Swap, Swaption,• Markets : Energy, Metals, C02, Agri products.CURRENCY• Spot,• Forward,• CCS,• Options,• Non Deliverable Forward.DERIVATIVES MANAGEMENTTITAN™ Treasury enhances visibility on company risksthrough Commodity markets and Currencies• Consolidate Budgets – Forecasts (buy and sellcommodities), with regular updates,• Follow hedging derivatives ,• Follow commodity delivering for Back Officepurpose through your commodity ERP,• Create specific commodity reports,• Manage hedging transactions allocations ( bysubsidiary, by season, campaign...),• Study scenario analysis :o Stress-testing on commodity products :• Impact on MtM and P&L,• Impact on cashflows.o VaR : Historical and Monte-Carlo,o CVaR.• Visualize graphic indicators for P&L, Delta, Gamma,Vega…• Price strategies : Straddle, Strangle…• Re-valuate positions with updated market data,• Increase control and cash flow matching,• Confirmations, alerts, internal messenging service.GLOBAL VISIONAnalytic position reportingCorporates & coopENERGY COMMODITIES
  3. 3. © COPYRIGHT 3V FINANCE - ALL RIGHT RESERVEDL’INFORMATION COMPRISE DANS CE DOCUMENT EST CONFIDENTIELLE.TOUTE UTILISATION OU REPRODUCTION DE CES DOCUMENTS, SANS LE CONSENTEMENT DE LA SOCIÉTÉ 3V FINANCE, EST INTERDITE.3The Saint-Gobain Group is specialized in glazing, high-performance materials, products for construction, buildingdistribution and conditioning. With presence in 57 countries, Saint-Gobain has a 2007 turnover of 43,4 billioneuros and aims to be the world leader in housing .Commodity hedging management is really different from Interest rates and Currency markets risk management.The new developed module is therefore based on a new referential with specific setting parameters adapted toenergy markets (natural gas, fuel, electricity...), metals (tin, copper, silver...), CO2 and agricultural products (corn,wheat ...).Saint-Gobain Group’s holding is using 3V Finance solution since 2007 and enjoys the new front and back officefeatures, the FX budget forecast report and the hedging report by period and subsidiary."One of the roles of Saint-Gobain Group treasury and finance department is to reduce exposure to price volatilityof energy products used by operational subsidiaries.We hedge a part of our natural gas purchases (for Europe and United States) and fuel (in Europe).So far, the whole energy products hedging process was manually treated by DTF teams outside the Front to Backcore information system. It was therefore essential for the DTF to select and add a software matching specificneeds and constraints of a corporate company which main activity is not energy trading.The ASP technology has also quickly established itself as the solution that would allow us to extend the tool toother entities in our group. We also needed a solution that could communicate with our market data vendors tointegrate benchmark indices needed for hedging contracts.Finally, our choice for 3V Finance Titan Treasury solution has matched with our expectations. In addition, thisallowed us to implement internal control and compliance tools and automatized audit trails.With this new system, our administrative process is now optimized and more reliable"says Alexander ROESER,responsible for treasury operations management at Cie de Saint-Gobain."With the implementation of this new tool, the Cie de Saint-Gobain manages its global position on externalmarkets (Derivatives insert and valuation ), monthly provides individual information to subsidiaries to help them inhedging accountancy (provisions, judgments and Mark-to-Market) and their qualifications under IFRS norms(efficiency tests). All hedging contracts treated with banks are centralized and processed by the Direction de laTrésorerie et du Financement of Saint-Gobain Group, then they are immediately returned (by mirroring) andallocated by company using the allocation breakdown tools available in TITAN™ Treasury.Meanwhile, with the daily market data collection and storage, we can revaluate at any time our hedging contracts"comment Yann Langlais, head of Back office at Cie de Saint-Gobain.For all financial instruments covered by TITAN™ Treasury, the transactions flow is exported to the cashmanagement tools XChange™ middleware (a specific tool developed by 3V Finance to create interfaces) .3V Finance integrates market data from multiple international energy specialized vendors.TESTIMONIALCorporates & coopENERGY COMMODITIES

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