Treasury Reporting AFTE Presentation 17th May 2019 Strictly Private - - PowerPoint PPT Presentation

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Treasury Reporting AFTE Presentation 17th May 2019 Strictly Private - - PowerPoint PPT Presentation

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Treasury Reporting AFTE Presentation 17th May 2019 Strictly Private and Confidential Agenda 1. Introduction 3 CEO Survey 2019 CFO priorities in 2019 PwC Global Treasury Survey 2. Expected Benefits of Treasury Reporting :

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SLIDE 1

Treasury Reporting

AFTE Presentation – 17th May 2019

Strictly Private and Confidential

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SLIDE 2

PwC

1. Introduction 3

  • CEO Survey 2019
  • CFO priorities in 2019
  • PwC Global Treasury Survey

2. Expected Benefits of Treasury Reporting : synthesis of dashboard architecture and illustrations of content 19

  • Cash
  • FX
  • Asset Management

3. Building your Treasury Reporting : approach details and cash use cases 68

  • How do you obtain key metrics?
  • Which difficulties can you encounter?
  • Examples of cash use cases

4. Reporting Guidelines : illustrations 82

Agenda

2

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SLIDE 3

Introduction

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SLIDE 4

PwC 4

Key messages

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SLIDE 5

PwC 5

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SLIDE 6

PwC 6

A trend shared by CEOs worldwide

9 9

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SLIDE 7

PwC 7

Data : for 10 years leaders have deplored non optimized data exploitation due to lack of qualified skills

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SLIDE 8

PwC 8

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SLIDE 9

PwC 9

Acknowledgments

*17 CFOs wished to remain anonymous

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SLIDE 10

PwC 10

Spotlight on priorities for 2019 – Cash (1/2)

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SLIDE 11

PwC 11

Spotlight on priorities for 2019 – Cash (2/2)

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SLIDE 12

PwC 12

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SLIDE 13

PwC 13

Strenghtening cash flow management by anticipating changes in situation is the primary challenge for Treasury Departments in 2019

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SLIDE 14

PwC 14

Investment strategies for 2019 are mainly driven by currently low interest rates and the expectation that they will rise

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SLIDE 15

PwC 15

Chief Financial Officers are prioritising self-funded investments in 2019

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SLIDE 16

PwC 16

Cash Prediction

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SLIDE 17

PwC Global Treasury Survey

PwC Global Treasury Benchmarking Survey

17

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SLIDE 18

PwC

Treasury Priorities

Cash Flow Forecasting

1

Cash Management Optimisation

2

Financial Risk Management

3

Cash Repatriation

4

Refinancing

5

Capital Structure

6

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SLIDE 19

PwC

CFO Priorities

Access to cash

1

Currency Risk

2

Capital Structure

3

Cash Management

4

Debt management / covenants

5

Working capital

6

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SLIDE 20

TREASURY REPORTING

Synthesis of Dashboard Architecture and Illustrations

  • f Content
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SLIDE 21

PwC

Approach

The Treasury Dashboard aims at consolidating all treasury reportings within

  • ne single dashboard, allowing users from

all departments to access up-to-date data via a simple interface. Following a Design Thinking approach, users are first interviewed to gather their needs, then take part to co-creation workshops where they are able to create their ideal dashboard. This document constitutes a synthesis of the needs expressed by users (architecture and content) for an ideal dashboard.

21

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SLIDE 22

Treasury Dashboard architecture

FX ASSET MANAGEMENT CASH

The dashboard is composed of 3 sections: FX, Asset Management and Cash. Colors indicate the level of each screen in the architecture: blue is top-level, and green is the deepest level. The home page is composed of all top-level screens in this view. The following slides will present all screens by drill down order: it will begin with the first level 1 screen, then present all its sub-screens to the deepest level, before presenting next level 1 screen.

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SLIDE 23

CASH

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SLIDE 24

PwC

CASH POSITION

Cash evolution and forecast

24

€ Currency Jan 1, 2018 – June 30, 2018 All Product line Group Division All Entity All Account Conso / Non conso

LEVEL 1

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SLIDE 25

PwC

CASH

Free Cash Flow monthly evolution

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Jan 1, 2018 – June 10, 2018 Group Division

LEVEL 1

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SLIDE 26

PwC

CASH POSITION

Cash/Liquidity report

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June 29, 2018 All Product line / BU Group Division All Entity All Account

LEVEL 2

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SLIDE 27

PwC

CASH POSITION

Credit limit usage

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June 29, 2018 All Product line / BU Group Division All Entity € Currency Conso / Non conso

LEVEL 3

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SLIDE 28

PwC

CASH POSITION

Bank and IC accounts

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June 30, 2018 SR Exotic currency All Entity Group Division All Bank All Account

LEVEL 1

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SLIDE 29

PwC

CASH POSITION

Cash evolution (cash-in-hand)

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June 29, 2018 € Currency Group Division

LEVEL 2

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SLIDE 30

PwC

CASH POSITION

Bank and IC accounts by region

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+10 € bn bn

+2 +2 $ $ bn bn +10 100 BRm

June 30, 2018 € Currency All Entity Group Division All Bank

LEVEL 1

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SLIDE 31

PwC

CASH POSITION

Limit evolution and usage including violation

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Jan 1, 2018 – March 30, 2018 All Product line / BU Group Division All Entity € Currency Conso / Non conso

Limit Violation Usage

LEVEL 2

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SLIDE 32

PwC

FORECAST

32

July 12, 2018 3510 Entity Commercial Division

LEVEL 1

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SLIDE 33

PwC

FORECAST

Historical Overview

33

Jan 1, 2017 – Dec 31, 2017 Group Division € Currency

LEVEL 2

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SLIDE 34

PwC

FORECAST

Amount Forecasted

34

July 12, 2018

  • Currency

Commercial

LEVEL 1

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SLIDE 35

FX

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SLIDE 36

PwC

HEDGING STATUS

36 2024 2024

LEVEL 1

June 30, 2018 Group Division € Currency

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PwC

HEDGING ACTIVITY

37

* By default the view is per $ only

LEVEL 2

June 30, 2018 Currency Pair Division Commercial

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PwC

PERFORMANCE & RISK

Hedge ratio vs Expected Business Exposure

38

LEVEL 3

June 30, 2018

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PwC

MARKET DATA

39

3yr s

LEVEL 4

Jan 1, 2018 – March 30, 2018 From CDS To € Currency Granularity

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PwC

HEDGING STATUS

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1 to 5 yrs

LEVEL 1

June 30, 2018 Type € Currency Instruments Division Commercial

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SLIDE 41

PwC

PERFORMANCE & RISK

Open exposure

41

LEVEL 3

June 30, 2018

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SLIDE 42

PwC

HEDGING ACTIVITY

Speed Grid

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Highlighted in green: Hedging in progress red: No hedges can currently be implemented

FXC Date

LEVEL 2

June 30, 2018 FXC Date

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SLIDE 43

PwC

PERFORMANCE & RISK

Hedge book

43

LEVEL 3

June 30, 2018

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SLIDE 44

PwC

PERFORMANCE & RISK

Hedging capacity

44

LEVEL 3

June 30, 2018

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SLIDE 45

PwC

PERFORMANCE & RISK

USD order book to open exposure

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LEVEL 3

June 30, 2018

Drill down

When clicking on each bar, detailed view appears as a table.

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SLIDE 46

ASSET MANAGEMENT

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SLIDE 47

PwC

CREDIT RISK

Exposure

47

March 29, 2018 € Currency

LEVEL 1

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SLIDE 48

PwC

CREDIT RISK

48

March 29, 2018 All banks Bank

LEVEL 2

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SLIDE 49

PwC

CREDIT RISK

49

LEVEL 3

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SLIDE 50

PwC

CREDIT RISK

Bond exposure

50

June 1, 2017 – May 30, 2018

LEVEL 4

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SLIDE 51

PwC

CREDIT RISK

Corporate bonds

51

June 1, 2017 – May 30, 2018

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SLIDE 52

PwC

PENSIONS

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December 31, 2017

LEVEL 1

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PwC

FUNDING

53

March 30, 2018

LEVEL 1

Group Division

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PwC

ASSETS & LIABILITIES

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June 30, 2018

LEVEL 2

Group Division

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PwC

PORTFOLIO PERFORMANCE

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March 30, 2018

LEVEL 3

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PwC

ASSETS

VaR of assets portfolio

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March 30, 2018

LEVEL 4

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SLIDE 57

PwC

ASSETS

Debt maturity schedule

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Jan 1, 2019 – July 30, 2019 € Bonds Debt instrument

LEVEL 2

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SLIDE 58

PwC

ASSETS

Geographic Bond Allocation

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March 30, 2018

LEVEL 3

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SLIDE 59

PwC

ASSETS

VaR detailed analysis

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March 30, 2018

LEVEL 4

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SLIDE 60

PwC

ASSETS

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March 30, 2018

LEVEL 2

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SLIDE 61

Building your Treasury Reporting : approach details and cash use cases

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SLIDE 62

PwC

« Russian doll » approach

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Approach details

Niveau 0: Vision COMEX

  • Vision synthétique restituant d’un coup d’œil l’activité de

l’entreprise avec identification d’alertes éventuelles,

  • 1 indicateur de synthèse de la performance par pilier.

Niveau 1: Vision COMEX (zoom)

  • Vision affinée de chaque pilier,
  • Plusieurs indicateurs et leur historique facilitant la

gestion de alertes et des priorités par pilier.

Commentaires

Niveaux de reporting Niveau de détail Niveau 2: Vision détaillée et commentée

  • Ensemble élargi d’indicateurs facilitant l’analyse des

causes et la gestion prospective par pilier,

  • Intégration de commentaires explicatifs en mode manuel

par le management de l’entreprise.

Prospection et analyses 2 Stratégique 1

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SLIDE 63

PwC 63

Dashboard model

Vision niveau 0 – Vue d’ensemble

Nous proposons un dashboard composé de 8 piliers :

  • Finance
  • Cash
  • Business
  • Assets
  • Sales
  • Purchases
  • IT
  • HR

Le niveau 0 du dashboard comportera une tuile d’information par pilier qui sera composée de maximum 2 indicateurs agrégés. Sur la première version du dashboard nous nous concentrerons sur les piliers Finance et Cash.

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SLIDE 64

PwC 64

Russian doll representation

1 1 2 3

L’écran d’accueil du dashboard composé de 8 piliers. Si l’utilisateur clique sur un des piliers (ici sur le pilier Cash), il sera redirigé vers la page Cash. Celle-ci comporte différents KPI concernant le Cash (Position, dette, etc.). Cela permet une vision plus affiné de chaque pilier avec plusieurs indicateurs et leur historique facilitant la gestion de alertes et des priorités par pilier. Si l’utilisateur clique sur le niveau 2, il sera redirigé vers une nouvelle page. Celle-ci représente une vision détaillée, avec un ensemble élargi d’indicateurs facilitant l’analyse.

2 3

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PwC 65

Cash use cases

La restitution attendue est la page Cash du tableau de bord CFO permettant de suivre l’activité Cash de l’entreprise. Rythme pouvant aller de chaque jour à chaque mois en fonction de la fréquence de saisie. Les informations concerneront les KPI les plus importants selon l’équipe Finance, affiché de manière agrégée sur trois vues différentes (entité, pays et BU). Des filtres que l’utilisateur pourra sélectionner directement depuis le tableau de bord lui permettront de switcher d’une vue à une autre. Les KPI demandés sont :

  • Cash
  • Dette
  • Dette net
  • Pool
  • Trap Cash
  • Leverage Ratio
  • Coverage Ratio
  • Top 10 Cash Legal Entity
  • Evolution of Cash Position
  • Actual vs Forecast
  • Bridge Flow (Actual et Forecast)

Les restitutions attendues sont des Dashboards Power BI sur les 3 niveaux de détail.

Couverture fonctionnelle

Fonctionnalités clés

CFO Groupe/BU/Entité, contrôle de gestion PDG, DG

  • Voit le dashboard Cash avec les différents KPI.
  • Voit toutes les Entités, Pays et BU.
  • Voit le niveau 2 en fonction des filtres appliqués au

niveau 1 (filtres Entités, Pays, BU et temporel).

  • Voit

les Entités/BU/Groupe inclus totalement

  • u

partiellement dans son périmètre

  • Voit les agences de sa BU

Utilisateurs cibles L’un de ces piliers concernera la partie Cash de l’entreprise. Ce Dashboard devra offrir une vision simple et fiable, de manière agrégée, des KPI les plus important en Cash (principalement cash, dette et dette net)

Drill Down :

  • La granularité la plus fine pour l’actuel sera : la facture

clients ou la transaction bancaire (à revoir avec l’équipe)

  • La granularité la plus fine pour le forecast sera : la

Balance Agée

  • La granularité la plus fine pour la dette sera : la ligne de

position de dette

3 niveaux de détail

  • Niveau 0 : Vision de la santé global de mon pilier Cash
  • Niveau 1 : Vision détaillé de la santé de mon pilier Cash
  • Niveau 2 : détaille de mes positions de cash et de dettes
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SLIDE 66

PwC 66

Cash use cases Dashboard Level 1 – Key metrics

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PwC

  • How would you build this KPI?
  • What data do you need to build it?
  • Which difficulties can you encounter

building this KPI?

67

Focus on key metrics : net debt position

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SLIDE 68

PwC 68

Net debt position

Required data and potential difficulties

  • ID_DEBT
  • CURRENCY_ISO
  • LEGAL_ENTITY_CODE
  • REC_ACCOUNT_CODE
  • BANK_CODE
  • COUNTERPART
  • TYPE_DEBT
  • AMOUNT
  • DATE

Debt Position

  • ID_DEBT
  • CURRENCY_ISO
  • LEGAL_ENTITY_CODE
  • REC_ACCOUNT_CODE
  • BANK_CODE
  • COUNTERPART
  • TYPE_DEBT
  • AMOUNT
  • DATE

Debt Schedule

  • LEGAL_ENTITY_CODE
  • LEGAL_ENTITY_NAME
  • COUNTRY
  • CURRENCY_ISO
  • BU_CODE

Entity Referential

  • CURRENCY_ISO
  • REF_CURRENCY_ISO
  • CHANGE_RATE

Currency Referential

Potential difficulties :

  • Disparity of IT systems
  • Non exhaustive list of entities / bank

accounts / external debt facilities / IC Loans / Cash pooling positions / IC current account positions

  • Limited skills of system users
  • Limited frequency of data availability
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SLIDE 69

PwC 69

Focus on key metrics : Pooled Cash

  • How would you build this KPI?
  • What data do you need to build it?
  • Which difficulties can you encounter

building this KPI?

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SLIDE 70

PwC 70

Pooled Cash

Required data

  • BANK_CODE
  • BANK_DESCRIPTION
  • COUNTRY

Bank Referential

  • BANK_ACCOUNT_CODE
  • BANK_CODE
  • CURRENCY_ISO
  • ID_COUNTRY
  • CASHPOOL
  • CASHTRAP

Bank Account Referential

  • LEGAL_ENTITY_CODE
  • LEGAL_ENTITY_NAME
  • COUNTRY
  • CURRENCY_ISO
  • BU_CODE

Entity Referential

  • CURRENCY_ISO
  • REF_CURRENCY_ISO
  • CHANGE_RATE

Currency Referential

Potential difficulties :

  • Limited skills of system users
  • Limited frequency of data availability
  • Multiple

number

  • f

currencies and/or entities

  • Low

centralisation

  • f

data / non exhaustive list of entities / bank accounts

  • Inefficiency
  • f

electronic banking systems

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SLIDE 71

PwC

  • How would you build this KPI?
  • What data do you need to build it?
  • Which difficulties can you encounter building this KPI?

71

Focus on key metrics : cash flow reporting/forecasting

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SLIDE 72

PwC 72

Cash reporting/forecasting

Required data

  • ID_PAYER
  • LEGAL_ENTITY_CODE
  • AMOUNT_TTC
  • INVOICE_DATE
  • INVOICE_NUM
  • POSTING_DATE
  • DUE_DATE
  • BILLING_SCHEDULE
  • EFFECTIVE_PAYMENT_DATE
  • AMOUNT_PAID
  • UNIT_PRICE
  • QUANTITY
  • CURRENCY_ISO
  • REC_ACCOUNT_CODE
  • ID_CUSTOMER
  • LEGAL_ENTITY_CODE
  • MONTANT_TTC
  • MONTANT_OUT
  • INVOICE_DATE
  • INVOICE_NUM
  • DUE_DATE
  • ESTIMATED_PAYMENT_DATE
  • CURRENCY_ISO
  • REC_ACCOUNT_CODE

Customer Invoice BAG Customers Bank Balance

  • LEGAL_ENTITY_CODE
  • AMOUNT
  • CURRENCY_ISO
  • DATE
  • ID_VENDOR
  • LEGAL_ENTITY_CODE
  • MONTANT_TTC
  • MONTANT_OUT
  • INVOICE_DATE
  • INVOICE_NUM
  • DUE_DATE
  • ESTIMATED_PAYMENT_DATE
  • CURRENCY_ISO
  • REC_ACCOUNT_CODE

BAG Vendors Others

  • CURRENCY_ISO
  • LEGAL_ENTITY_CODE
  • REC_ACCOUNT_CODE
  • AMOUNT
  • DATE
  • BUSINESS_PARTNER
  • LEGAL_ENTITY_CODE
  • LEGAL_ENTITY_NAME
  • COUNTRY
  • CURRENCY_ISO
  • BU_CODE

Entity Referential

  • CURRENCY_ISO
  • REF_CURRENCY_ISO
  • CHANGE_RATE

Currency Referential

  • CASH_FLOW_CODE
  • CASH_FLOW_NAME
  • CASH_FLOW_NAME_L2
  • CASH_FLOW_NAME_L1
  • CASH_FLOW_NAME_L0
  • REC_ACCOUNT_CODE

Cash Flow Mapping

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PwC 73

Cash reporting/forecasting

Potential difficulties

  • Non exhaustive list of entities/bank accounts
  • Limited skills of system users
  • Limited frequency of data availability
  • Disparity of IT systems
  • Limited skills of system users
  • Limited frequency of data availability
  • Disalignment of banking and accounting data
  • High volume of IC flows
  • Multiple number of currencies and/or entities
  • Accounting code errors
  • Booking entry errors
  • Disalignment of DPO and/or DSO with payment terms
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SLIDE 74

Reporting Guidelines : illustrations

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SLIDE 75

PwC

Accounts Receivable KPIs : DSO

  • DSO is a good KPI but whether it goes up or down does not say anything about the reasons for moves
  • More detailed and operational KPIs, giving a view on the various AR balance components, enable better

control and relevant actions launch and follow up

  • Law changes on payment terms (at least for Europe) also deserve risk and cash impact monitoring

 Illustrations:

  • 200 000

400 000 600 000 800 000 1 000 000 1 200 000 1 400 000 1 600 000 1 800 000 2 000 000

  • 20

40 60 80 100 120 140 Invoiced amount Average n°of days Turnover (€) N°of days

€ 120k invoiced with terms longer than authorised by LME 75% invoiced with terms < 30 days Best Possible DSO

0 - 30 days > 91 days

June 1 973 787

420 500 557 395 290 772 261 318 443 802 1 553 287 79% rollover 57% 72%

July 2 127 690

581 121 431 442 316 320 208 939 589 868 1 546 569 73% rollover 52% 42%

August 1 983 468

334 333 550 821 224 627 133 675 740 011 1 649 135 83% rollover 50% 67%

September 2 264 873

663 542 456 216 275 477 149 545 720 093 1 601 331 71% rollover 35% 32%

October 1 807 623

526 143 350 280 159 703 87 788 683 709 1 281 480 71% rollover 41% 67%

November 1 398 937

236 310 248 343 142 508 106 381 665 395 1 162 626 83%

Average 1 926 063

460 325 432 416 47% 234 901 56% 157 941 640 480 1 465 738 76,5% 0 - 30 days > 91 days 30% 44% Average overdue structure 31 - 60 days 61 - 90 days 16% 11% TOTAL Ledger Not due Overdue structure Overdue Overdue % 31 - 60 days 61 - 90 days

Number of terms 19 Number Value (in €) Credit notes 7 889 (3 502 905) …sales policy related 254 (2 054 345) …dispute related 7 635 (1 448 560) Invoices 162 239 38 121 232 Credit notes / invoices (excl. sales policy related credit notes) 4,7% 3,8% Total

Invoicing quality

75

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PwC

Accounts Payable KPIs : DPO

  • DPO is also a good KPI ; apart from having it by Purchases types, some other more precise KPIs would help

cash improvements

  • A better view on payment terms granted (at least for Europe) and effective payment practices would bring

additional value

 Illustrations:

Number of terms 7

10 20 30 40 50 60 70 80 90 100

  • 20 000

40 000 60 000 80 000 100 000 120 000 Immediate 10 days net 15 days net - 3% 30 days end

  • f month

45 days end

  • f month

60 days end

  • f month

90 days net Purchases (€) Amount paid (€) Average number of days

Best Possible DPO 4% 5% 4% 10% 24% 29% 8% 7% 4% 2% 1% 0% 0% 0% 5% 10% 15% 20% 25% 30% 35% Before D-21 D-20 / D-16 D-15 / D-11 D-10 / D-6 D-5 / D-1 Due date D+1 / D+5 D+6 / D+10 D+11 / D+20 D+21 / D+30 D+31 / D+45 D+46 / D+60 After D+61

Timing for payments

% amount paid % number of payments 76

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SLIDE 77

PwC

Thank you

Groupe ETC • Projet « Cash Performance »

Vincent Storai Manager Vincent.Storai@pwc.com 06 63 29 45 76 63, rue de Villiers 92 208 Neuilly-sur-Seine Cedex

Contacts:

Mariano Marcos Associé Mariano.Marcos@pwc.com 01 56 57 88 85 63, rue de Villiers 92 208 Neuilly-sur-Seine Cedex