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Interactive Roundtable: A Day in the Life of Treasury Management
Finning is the largest Caterpillar dealer globally, generating ~6 billion CAD in annual revenues across various industries, with a diverse operational presence. The company employs a hybrid treasury management model, utilizing Kyriba for cash management and forecasting, enhancing global visibility and automation. Federal-Mogul LLC operates as a decentralized global supplier with ~8 billion in net sales, leveraging a treasury organization that optimizes cash management across various geographic regions.
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Interactive Roundtable: A Day in the Life of Treasury Management
- 1. DAY IN THELIFE OF TREASURY MANAGEMENT
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- 3. Finning Overview • Finningis the world's largest Caterpillar dealer delivering unrivalled service for over 80 years. • Sell, rent and provide parts and service for equipment and engines • Operate in various industries, including mining, construction, petroleum, forestry and a wide range of power systems applications • Operate in western Canada, Chile, Argentina and Bolivia in South America and UK and Ireland in Europe 3 Santiago Bolivia Argentina Chile Cannock United Kingdom IrelandBC AB YT Edmonton Vancouver head office NWT SK NU • Annual revenues ~6B CAD • 35% revenues new equipment sales, 56% product support, 9% equipment rental, used equipment sales and other • ~ 50% of revenues Canada, 35% South America and 15% UK/ Ireland • Over 12,000 employees • Global head office headquartered Vancouver, British Columbia
- 4. Treasury Organization –Hybrid Model Centralized head office Vancouver • Team of 7: • SVP Corporate Controller & Treasurer • Assistant Treasurer • Senior Manager, Cash & Risk • 4 Analysts • Responsibilities • Canada Cash & Forecasting • Global FCF consolidation, reporting and management • Global FX Management • Global Banking Relationships • Global Borrowings • Global I/C Loans • Global Investments 4 South America Operations Regional Treasury Center in Montevideo, Uruguay for all South America • Team of 5 • Treasury Director • Cash Manager • 3 Analysts • Responsibilities • Local Cash Management, forecasting and working capital management • Local borrowings, letters of credits • Local ST investments UK/ Ireland Operations Centralized in Cannock, UK • Team of 2 • Treasury Manager • 1 Analyst • Responsibilities • Local Cash Management, forecasting and working capital management
- 5. Kyriba at Finning ImplementedKyriba in 2014 – global go live 2015 • Cash Positioning and Forecasting • Cash Accounting • Financial Transactions • Payments Benefits: • Global Cash visibility • One system of record • Automation of treasury cash accounting entries (in Canada) • Easy extraction of information (outstanding financial transactions) • One system to approve payments (in Canada) Next Steps • Further automation of inputs into forecast • Further integration with ERP and other systems 5
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- 7. Company Overview • Federal-MogulLLC is a privately held global supplier of technology and innovation in vehicle and industrial products for fuel economy, emissions reduction, and safety systems • Highly diversified across end markets, industry channels, geographies and customers • The company operates as two separate segments • Powertrain - OEMs and OESs of light automotive, medium and heavy-duty commercial vehicles, off-road, agricultural, marine, rail, aerospace, power generation and industrial equipment • Motorparts - Worldwide aftermarket business • Net Global Sales ~ $8B • ~ 60 % Powertrain and ~40% Motorparts • ~75% Light Vehicles; ~15% Commercial Vehicle; ~10% Energy, Industrial & Transport • Sales are distributed between three geographic regions: North America, EMEA and ROW mostly APAC • 37% NA, 44% EMEA & 19% ROW • ~ 55k Employees in 24 countries in 122 manufacturing sites, 44 distribution centers / warehouses • The back offices are quite decentralized with some shared service centers in the U.S., Mexico, Europe & China 7
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- 9. Treasury / CashManagement Structure (decentralized treasury organization setup) US / Mexico Treasury • Treasurer • Assistant Treasurer – Cash Management • Cash Manager • 2 Treasury Analysts Responsibilities: NA Cash & Liquidity Management including Forecasting High Level Global Cash Liquidity Oversight Global Bank Relationship Global Working Capital Management Global S/T & L/T Borrowings Global I/C Loans EMEA / APAC Treasury • EMEA Treasury Centers in Germany, Romania • Treasury Manger • Treasury Analyst Responsibilities: European Cash Management Physical Cash Pooling (Europe) Notional Cash Pooling & Netting (Global) • APAC Treasury team in China • Accounting / Treasury Manager • Treasury Analyst 9
- 10. Kyriba Benefits Prior toTMS • Extensive usage of Excel Spreadsheets to prepare • Cash positioning • Forecasting • Maintaining Inventory of Bank Accounts and Signers • Unsatisfactory Global Cash Visibility • Each region to gather balances / transactions through various banking portals and weekly reporting to the U.S. Treasury via emails / SharePoint weekly • No timely validation to ensure cash position accuracy • Limited flexibility to manage / employ global cash effectively • No centralized validated depository of bank accounts & signers After Kyriba Implementation • Visibility into Global Bank Accounts, Timely & Accurate Reporting • Improvement in Global Forecasts • IHB provides Daily Visibility of I/C Balances of Physical Pool Participants • Cost Savings • Improved Management of Resources • Enhanced Controls & Corporate Oversight 10
- 11. Implementation Scope Initial Scope •Global Daily Bank Balances & Transactions Auto Pull • Centralized Reporting and Consolidation of Cash Positioning and Cash Flow Forecasting • Centralized Maintenance of Intercompany Loan Register including Documentation • Centralized Maintenance of External Debt Register including Documentation • Centralized Bank Accounts & Signers Register including Documentation Potential Future Scope • Bank Fees Analysis • Payment Management 11
- 12. Federal - MogulCash Management Cadence Utilizing Kyriba Daily • US • Balance / Review Prior Business Day Cash Transactions & Balances • Auto Reconciliation and Validation to Forecast • Executing Treasury Payment Transactions • Assessing Current Day Cash Position and Reviewing S/T Borrowing Needs • Preparing Global Cash Position and 2-Week Forecast • Europe & Asia • Balance / Review Prior Business Day Cash Transactions & Balances • Auto Reconciliation and Validation to Forecast Weekly / Monthly / Quarterly • Weekly • Preparing 2-Week Forecast; Uploading into Kyriba • Executing S/T Borrowings; Adding tranches to Kyriba • Monthly • Preparing 3-Month Forecast; Uploading into Kyriba • Quarterly • I/C Loan Register, Bank Account & Signer Validation & Certification 12
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