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Topics:. Perfetti Van Melle at a glance Perfetti Van Melle treasury redesign project Lessons learned Conclusions. Perfetti Van Melle at a glance. Facts & Figures. HQ in Lainate (Milano) Italy. Finance / Treasury HQ in Breda, The Netherlands Turnover: EUR 2,5 bln

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Topics

Topics:

Perfetti Van Melle at a glance

Perfetti Van Melle treasury redesign project

Lessons learned

Conclusions

Perfetti Van Melle Holding B.V., Treasury Department


Perfetti van melle at a glance

Perfetti Van Melle at a glance

Perfetti Van Melle Holding B.V., Treasury Department


Facts figures

Facts & Figures

Perfetti Van Melle Holding B.V., Treasury Department

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


Perfetti van melle treasury facts

Perfetti Van Melle treasury facts

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 Holding B.V., Treasury Department


Treasury redesign goals q2 2010

Treasury redesign goals (Q2 2010)

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

Perfetti Van Melle Holding B.V., Treasury Department


Treasury redesign business case

Treasury redesign business case

Perfetti Van Melle Holding B.V., Treasury Department

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.


Achievements up to q3 2011

Achievements up to Q3 2011

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

Perfetti Van Melle Holding B.V., Treasury Department


Lessons learned swift 1 2

Lessons learned: SWIFT (1/2)

Perfetti Van Melle Holding B.V., Treasury Department

  • 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 2 2

Lessons learned : SWIFT (2/2)

Perfetti Van Melle Holding B.V., Treasury Department

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 HanseOrga 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 banks swift 1 2

Lessons learned: Banks&SWIFT (1/2)

Perfetti Van Melle Holding B.V., Treasury Department

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 2 2

Lessons learned : Banks&SWIFT (2/2)

Perfetti Van Melle Holding B.V., Treasury Department

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 the company

Lessons learned: The company

Perfetti Van Melle Holding B.V., Treasury Department

  • 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 in house technology and functional design

Lessons learned: In house technology and functional design

Perfetti Van Melle Holding B.V., Treasury Department

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)


Conclusions on swift

Conclusions on SWIFT

Perfetti Van Melle Holding B.V., Treasury Department

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 banks

Conclusions on Banks

Perfetti Van Melle Holding B.V., Treasury Department

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 the company

Conclusions on the Company

Perfetti Van Melle Holding B.V., Treasury Department

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.


Topics

Q&A

Perfetti Van Melle Holding B.V., Treasury Department

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