Introduction

Nicolas Carrera

Group Treasurer, Metalor Technologies, Switzerland

Speaker biography

Nicolas is the Group Treasurer of MetalorTechnologies SA, Switzerland. He has performed this role since October 2013. Prior to taking the position of Group Treasurer, he worked as the European Area Treasurer for 4 years. He is an experienced finance professional with more than 14 years’ experience in Treasury and trading. He has played a key role in the implementation of the Group’s Treasury Management System.

Aniket Kulkarni

Director – Treasury & Trading, PwC, Switzerland

Speaker biography

Aniket Kulkarni leads PwC’s Treasury and trading technology practice in Switzerland. Prior to joining PwC, he worked as a global product manager for treasury and commodity risk management in SAP. Anikethas a team of experts, helping corporates and trading companies in implementing treasury and commodity trading systems and processes. He holds an engineering degree and a post graduate diploma in finance, and is certified treasury manager CTM.

Transformation of treasury processesat Mealor

Nicolas Carrera – Group Treasurer, Metalor Technologies Switzerland

Agenda Introduction

Project

Roadmap

Success factors

Introduction

IntroductionMetalor Refining

• Refining of high grade and complex precious

metal doré and scraps

• Gold, platinum, palladium, silver, rhodium

• Good delivery status on all exchanges

• Added value powders and grains and other

semi-finished products

Metalor Advanced Coatings

• Electrolytic processes and chemicals for

decorative and electronic industries

• Chemical and electrolytic silver powders for

use in electronics and solar industries

• Commodity and proprietary product portfolio

• Strong customer service component, diverse

and large customer base

Metalor Treasury and PM Management

• Important lease lines from more than 24 banks

plus other key banking relationships

• Full hedgining of all metal flows and 7 precious

metals

• Rapid and precise settlement of purchases key

to refining competitiveness

• Buy/sell and interest rate margin income

• Inventory control and management

Metalor Electrotechnics

• Manufacturer of electrical contacts for the use in

low voltage applications

• Products developed for customer specific

applications (Siemens, ABB, Schneider etc.)

• Long qualification periods followed by long

product lifecycles

Complementary but distinct businesses

at-arms-length

MetalorOverviewBusiness Structure

Refining

Distribution

Process control

Transportation

Domestic goods

Global coverage Electronics

Scrap recycling

Solar cells

Decorative coatings

Good delivery bars

Display

Connectors

Switches

Watch components

Semi-conductors

Watches

Jewelry

Consumer

Electronics

Computer

applications

Luxury

CustomersProduction

Applications Key-end MarketsManufacturing

USA

Europe

Asia

Global manufacturing network to serve diverse customer base / end markets

Electrical

Mining

Recyclers

Banks

Project

Project Drivers

8

2004 2012

Lease lines 400m 2,6bn

Banks 1 23

Regional

Treasuries1 4

Legal entities 15 25

Trade volume 4.84 bn 27.38 bn

Project coverage

9

Organisationaldesign

Policies and procedures

People Systems

Project Objectives

10

• Improve effectiveness of risk management processes

• Enhance internal control

• Increase efficiency in treasury by implementing new

and enhancing current system-based solutions

• Increase integration both within treasury and between

treasury and business lines

• Enhance business choices for customers

• Enhance flexibility for changes to business operating

model

• Provide a better base to realise more value from the

metals and FX flows in the company

Risk

Management

and Internal

Controls

Operational

Efficiency

Business Model

Approach

11

• Determine target operating model and business case

• As-is process mapping – creating baseline for change

• To-be process and system landscape – determine

future operating model

• Business case underlying the sub-project

• Roadmap and project plan

• Treasury Management System selection

• Metals and FX trading platform selection

• SWIFT service bureau selection

• Selection of 3 key banks for phase 1, 3 in phase 2

• Implementation of TMS

• Roll-out of TMS in Metalor’s subsidiaries

Solution

Assessment

Solution Design

Solution

Implementation

Project design principles and solution components

Principles Principle result Solution

1. All trade related

information

captured in

Metalor

systems (once),

STP

• All trade information in the system (leases, swaps, forwards)

• Straight Through Process (STP) in the whole chain:

- Invoicing

- Payments (single bank communication channel)

- Trading (connected trading platforms)

- Confirmations (automated confirmations where possible)

- Potential use of customer interface

• Reduced costs for payments, confirmations

• TMS

• SWIFT

• Multi-bank

trading

platforms for FX

and Metals

• Global cash

management

• Confirmation

matching

• Documenting

Group Treasury

Policies

• Customer

interface

2. Improved

internal control

• Mitigation of operational risk

• Strengthening of internal controls (preventive and detective)

and segregation of duties

3. Improved

regional and

global reporting

& analysis

capabilities

• Achieve timely and automated visibility on:

- Cash positions and short term forecast

- Lease lines and metal positions

- Bank relationship management

• Reporting capabilities will allow improve decision taking and

risk management

4. Improved

service to the

group and

clients

• Consistent ways of working and communication in the group

• Increase service to clients through additional products

• Treasury Management System will support other

projects(IFRS)

Coverage and roll-outs

70 users

7 countries

15 users

2 countries

30 users

4 countries

• Global treasury center and 3 regional / area treasuries – Single instance

• System designed to cover round the clock trading

• More than 100 users globally across 14 countries

• Global template with local regulations and specialties (VAT)

• Payments and settlements with 15 banks; 3 major banks on SWIFT in phase 1

• MT6xx messages for confirmation and settlements globally

SolutionTrading Platforms (Bloomberg, Banks)

Customer Request

Internal Request External Request

Accounting

Cash Management and Bank Reconciliation

Metals trading Treasury

Precious metals leasing and metal balance sheet

Customer Deal

Invoice

Internal trades and confirmation

Internal invoicing

Trade capture and confirmation

Trade Settlements

Banks

Why SAP? • Metalor runs a single instance of SAP globally

• Seamless integration - the key requirement from treasury and commodity management solution

• Dependency on the underlying metal and foreign exchange flows for treasury

• SAP solution could manage complex correspondence, settlement and payment messages via SWIFT network

• The only system which could achieve true STP from trade capture, confirmation, settlement, payment and accounting.

Project scope Treasury applications from SAP

SAP Treasury and Risk Management

Risk Analyzer

SAP Bank Communication Management

SAP Cash Management

Correspondence Monitor – Precious Metals and FX

Cash Management Bank Reconciliation

Market Risk

Precious Metals – Customer Quote and Deal Request Management

Money Market FX MetalsDerivatives Metal Leases

Trading P&L

Transaction Manager

Simplified user interface – Agent of change

Project planProject Workplan Steps 1 2 3 4 5 6 7 8 9 10 16

Assess

• Kick-off and detail project planning

• Requirement analysis and gapping

Design

• Business process design

• Business and solution design of Web portal

• Business and solution design of SAP Treasury and

risk management – Transaction manager

• Business and solution design of Exposure and

hedge management and market risk analyzer

• Business blueprint sign-off

• Design of interfaces

Construct

• Development of custom functionality

• Development of interfaces

Implement

• Set-up and implement Organization structure and

FICO

• Set-up and implement SAP Treasury , and risk

management, hedge management and web portal

• User training

• User acceptance testing

• Integration testing

• Roll-out templates

Operate and Review

• Cut-over and go-live preparations

• Go-live

• Roll-outs

SAP systems

Monthly status update with management

Change management

Prototypes in

Sandbox system

BP

Interfaces

System set-up –

Development

system

Training and

testing

Live

Roll-out

Sandbox Dev Quality Prod

Change management

strategyExecution

Supporting templates for the transformation

Business process mapping User Guides per Role

Business process mapping for each

treasury process, from Front Office to

Settlement and Accounting

Detailed user guides to guide users

during testing and system usage.

Roadmap

Roadmap

Payment factory: Bring all the operational payments on a single payment platform using SAP Bank communication management (BCM)

Cash concentration: Implement SAP In-house cash (IHC) for cash concentration

Analytics and Dashboards: Set-up analytical reporting and dashboards in SAP BO (Business Objects)

Future Roadmap

Success factors

Success factors

• Involvement of key internal people who are subject matter experts

• Support from Executive and senior management

• Support from IT and commitment of key IT resources

• Relationship with consultants in the project

• Engaged PwC from start (assessment) to the end (implementation and

roll-outs)

• Relationship with banks

Thank You!Nicolas Carrera

Group Treasurer,

Nicolas.Carrera@metalor.com