act middle east breakfast briefing: real cash visibility

ACT Middle East breakfast briefing:Real cash visibility

Wednesday 9 May 2018

Sponsored by Hosted by

Gary Slawther FCTTreasury DirectorArabtec Holding

Chair’s opening remarks

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Khadija AliSenior Vice President –Corporates & Service ProvidersDIFC

DIFC welcome address and update

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Roger BaroutijanManaging DirectorKyriba

Kyriba welcome

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Roger Baroutjian, Managing Director

Kyriba’s 4 pillars

Know• Cash and liquidity• Bank fee analysis• Business intelligence

Grow• Supply chain finance• Liquidity performance• Receivables management (coming)

Protect• Hedging• Bank account management• Payment fraud detection

Move• Payments• Format transformation• Multilateral netting

CFO mandates, Deloitte 2017

1. Liquidity risk management

2. Steward for risk management for the company

3. Access to capital markets to finance growth

4. Strategic advisor to the business

5. Value-add partner to the CFO (e.g. support or drive M&A activity)

6. Low cost, efficient provider of services

7. Creation of scalable treasury organization to support company growth

8. Leading, governing and driving working capital improvement initiatives

9. Enhanced governance and control over domestic and overseas operations

10.Becoming a profit center (e.g. perform proprietary trading & ability to directly improve

bottom line)

Strategic challenges for treasury organisations

Deloitte 2017

Cash visibility

Liquidity

Inadequate treasury system

2018 trends

SaaS TMS is gaining significantly over on-premise TMS (32% market share)

Treasurers are expected to:

Do more to support the business strategy

Deliver greater cash efficiencies through capital management

Become a profit center

Deal with new regulations:

Hedging (ASC 815/ IFRS9)

Lease accounting (ASC 842 / IFRS 16)

Address cash security and payment fraud (2017, worst year for successful fraud attempts, $16.6B with $125k Ave/attempt)

Deploy automation and advanced analytics for cash, payments, SCF, and risk

© 2018 Kyriba Corp. All rights reserved. | Proprietary & Confidential. 13

Tomorrow20182015201020052002

Functional complexity

Tactical Strategic

Cash and liquidity

PaymentsRisk

management

Supply chain

finance

Forecasting

Fraud detection

Lease accounting

Business intelligence

SaaS platform

APIs

Machine learning

Liquidity performance

Robotic process automation

Distributed ledgers

Receivables management

Kyriba’s product vision

Debt and inv

FX

Strategic initiatives

Liquidity performance examples

BlackRock investment, ($30T) in assets

Will deploy Kyriba with its clients.

CFO’s will seamlessly “SEE CASH”, “PROTECT CASH” to “GROW CASH” with Kyriba.

CFO’s will identify a $10M currency exposure in Kyriba

Right click and hedge the exposure

A Pre-Order is created in Fxall

The trade is executed

The exposure is fully hedged

Machine learning:

Cash: reconcile automatically bank transactions and cash flows

Fraud detection: detect anomalies based on the payment history

Robotic process automation:

Automate processes between systems such as invoice matching

Distributed ledger:

Connecting to BC payment providers such as Ripple

Funded invoices, etc.

Receivable Management:

HSBC receivable funding, etc.

THANK [email protected]

Shweta BhasinGroup Financial ControllerMattex Group

Case study 1: Results day-to-day

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❖Dubai, UAE

❖Jeddah, Saudi Arabia

❖Eton, GA, USA

❖Jeddah, Saudi Arabia

❖Eton GA, USA

❖Abu Dhabi, UAE

❖Al Jubail, Saudi Arabia

AGENDA

123456

Ashish KrishnaManager Corporate TreasuryAmericana Group

Case study 3: Making the connection with your banks

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Making the connection with your banksAshish KrishnaCorporate TreasuryKuwait Food Company (Americana)

Americana: A leading food company

Network of over 1,800+ outlets

KFC, Pizza Hut, Hardee’s, T.G.I. Friday's, Krispy Kreme, etc

One of the largest food manufacturing and restaurant Companies in the MENA

RESTAURANTS FOOD

A portfolio spanning 10 leading brands

California Garden, Americana Meat, Farm Frites, Koki, etc

Decentralised treasury: the challenge

PRESENCE MANAGEMENT BASIC INEFFICIENCIES

13 countries

50-100 subsidiaries

50-100 different bank relationships

500-1000 bank accounts

Multiple versions of ERP

Bank relationships managed locally

Finance personnel are not treasury experts

No benchmarking• High and very different

bank charges• High and very different

funding rates

No cost benefits from scale

Unwanted credit facilities

Unwanted manpower

Where to start?

Cash visibility

Why cash visibility? My story

• Reduction in FX transaction Costs• Netting of exposures• Optimal hedging

What can we do with just an access to all bank statements?

Efficient allocation of cash Bank rationalisation Increases control

Pooling

Reduction in credit facilities

Close the accounts in use

Negotiate transaction charges

Track compliance to internal policies

What if ERP is integrated as well?

Cash forecasting FX exposure management Manhour reduction

Improvement in liquidity

Reduction in facilities

Netting of exposures

Reduction in hedging and FX costs

Auto bank reconciliation

Auto sales reconciliation

How to get cash visibility? Cloud? Kyriba? My perspective

What did we exactly need?

1. Not just timely access to data but a system that can be customised to present the data for a meaningful analysis

2. Easy and very fast to set up, not dependent on ERP and IT systems of the entities

3. Should be scalable and modular with the ability to add • Basic cash visibility dashboards• Bank management and comparison of charges• ERP integration for:

• forecasting cash• Identifying net FX exposure

• Credit facilities and debt management

Banks are not yet there… A proven cloud based TMS is the solution!!!

Abdessalem LassouedGroup TreasurerOiLibya

Case study 4: Building the business case

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OILIBYA Group

www.oilibya.com

OILIBYA Group

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OILIBYA is key player in the African energy industry providing

products and services for retail, commercial, aviation and

marine:

� Headquartered in Dubai

� Operates in 18 countries

� Over 1,500 diverse employees, around 20,000 indirect jobs,

� 250,000 customers per day through 1100 service stations

� 8 blending plants

� 60 Fuel terminals

� 54 Airports across Africa

� 34 Affiliates

� +100 Banks

� +20 Currencies

Challenges driving the decision

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� Treasury functions done manually and decentralized:

⇒No visibility of consolidated cash overview

� Very limited bank connectivity: the affiliates are using bank portals and alternatively physical bank statements to consult the balances and to reconcile the bank flows

⇒Not seeing all cash balances on a timely basis

� The cash position and forecasting are done manually on spreadsheet

⇒Lack of accuracy

⇒No detailed measurement of effectiveness

⇒No reliable analysis of variances

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� Cash picture and forecasts built up based on downloads from different banks and tools:

⇒Significant workload and time consuming disabling timely

⇒Significant margin of error

⇒Useless data for decision when arrived too late

� Thousands of bank entries related to charges are controlled manually :

⇒Significant margin of error

⇒No accurate control of value date

⇒No visibility on the real bank charges

Is there internal resistance to the project ?

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No internal resistance when the Treasurer – the project leader- is duly armed with:

� Detailed business case inspired from the real challenges of the Company supported by real statistics

� Realistic presentation of the expected benefits

� Detailed project charter presentation outlying all the responsibilities and roles of all the stakeholders

� Detailed project schedule

� Anticipated risks and proposed plans B & C

� Anticipated change management impacts

� Adequate Budget

Internal resistance ?

How to find-out the impact of the non-cash visibility on the business-

case ?

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Using the Japanese approach “San Gen Shugi” might be very helpful to detect out the below:

What are non-cash visibility figures in my organization ?

� Non available bank cash balances

� Not seeing daily cash position before 10 am

� No cash forecasts and late cash report

� No accuracy of data or unusable data

� Impossibility to confirm the bank charges

� No visibility on short term liquidity risk

� No visibility on real FOREX exposure

� Significant manual workload and lot of spreadsheets

How to detect weaknesses related to non-cash visibility ?

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How much does the non-visibility cost ?

� Cost of not positioning the cash in time

� Cost of not investing the exceeding cash

� Cost of not anticipating the cash needs and looking for urgent financing solution

� Cost of not controlling the financing costs applied by the bank

� Cost of not re-negotiating the financing conditions because of lack of information

� The potential saving in FTE

� Cost of probable business disruption

.

No-cash visibility cost?... Sequence to consider:

Internal buy-in.. ?

Easy buy-in.. How ?

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• Demonstrate the continuous hidden costs of non cash visibility and the global hidden costs of not implementing a Treasury System

• Real value added and tangible benefits

• Detailed outcomes

• Reasonable budget matching with the targeted savings

• Quick ROI: 3 years would be ideal

(10% of saving on financial costs ~ project cost for 2 years)

Why KYRIBA.. ?

Why KYRIBA ?

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�Matching with technical requirements related to: Cash management, Reconciliation, Reporting, Risk management, Centralization …

�Provides timely cash visibility for our multi-complex environment and centralized treasury enabling timely global overview of the treasury reporting and risk exposure

�Cloud based solution:

⇒Adequate for organization with limited IT resources

⇒Flexibility of implementation for multi-countries organization

⇒We focus on the optimization of our treasury function instead focusing on technical issues and maintenance

Expected results ?

Main outcomes

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Business case for a Treasury Management System has been established. It took a holistic approach in evaluating three key areas in OILIBYA TMS Project :

I. Risk Mitigation , Compliance & Fraud Avoidance

II. Time, Efficiency & Financial Gains

III. Total combined Financial ROI

Expected results ?

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• Improving cash visibility thanks to timely cash report

• Early detection of liquidity risk and timely treasury decisions

• Reliable budget and cash forecast management enabling adequate cash decision

• Potential financial saving: (estimate saving of 10% of financing cost)

• Better control of bank fees

• Saving time and efficiency thanks to better visibility on forex exposure and trade finance management

• Secured transfers and saving time and costs of tracking

• Workload optimization may achieve 80%

Thank You !

Facilitated by:

Gary Slawther FCT, Treasury Director, Arabtec Holding

Panellists:

Shweta Bhasin, Group Financial Controller, Mattex Group

Ashish Krishna, Manager Corporate Treasury, Americana Group

Abdessalem Lassoued, Group Treasurer, OiLibya

Mona Lockett, Head of Treasury, Webcor Group

Anjan Mukherjee, Finance Director, Al Reyami Group

Panel discussion: Is it time to abandon spreadsheets?

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Gary Slawther FCTTreasury DirectorArabtec Holding

Chair’s closing remarks

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FORTHCOMING EVENTS

ACT Annual Conference15-16 May 2018 | Liverpool

ACT Middle East Annual Dinner15 October 2018 | Dubai

ACT Middle East Treasury Summit16-17 October 2018 | Dubai

ACT Treasury Forum14 November 2018 | London

ACT Annual Dinner 14 November 2018 | London

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act middle east breakfast briefing: real cash visibility

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