Adam Smith Awards
Many congratulations to all our 2023 Adam Smith Awards winners.
BMS completed its US$90bn acquisition of Celgene Corporation in November 2019, and since then, BMS Treasury has been on a transformational journey to build a best-in-class organisation. The integration presented a unique set of challenges and opportunities, as it significantly increased the size, complexity and transaction volume of the combined company. As of the close of the transaction, BMS Treasury was responsible for managing US$15bn+ in cash and investments, 500+ bank accounts, US$45bn+ debt and US$12bn+ FX and interest rate risk portfolio.
Not even ten years into her career, Franca Aeby has evolved into a highly skilled expert in the treasury arena and she is quickly becoming an industry leader. This shows in the recognition Franca has received, having achieved an Adam Smith Award for Roche’s cross-border SAR cash pooling project in 2022. She is a sought-after speaker at various industry conferences and actively participates in corporate exchanges.
We all have to make decisions daily. Some entail few risks, while others naturally require more. As Siemens Group Treasurer and a keen mountaineer, Peter Rathgeb understands risk better than most.
For the first time in our history, the Treasury Today Group are delighted to have awarded a Special Recognition award within our Adam Smith Awards 2023. This is awarded to Anita Mehra for her outstanding services to the industry as a whole and to driving innovation in corporate treasury.
In November 2021, American multinational conglomerate GE made the decision to split into three divisions focused on healthcare, aviation and energy transition. The impending spin-off presented liquidity management challenges, particularly cash extraction and bringing GE HealthCare to a level of cash required to successfully spin-off. The new company also needed to create accurate forecasting to ensure it had the right mechanisms to manage its cash needs. This meant a new system to consolidate cash effectively and reduce fragmented cash, especially in markets with underdeveloped banking and regulatory challenges.
Ryanair sought to implement a best practice cash and liquidity management structure to further drive cost savings and efficiencies which is core to the airlines principles as a low-cost carrier.
Think Big is a key leadership principle at Amazon, and the team knows how important it is to manage its capital structure efficiently at scale. While always a focus, this became even more critical as the Covid pandemic swept the globe and shoppers around the world rushed to e-commerce retailers, including Amazon, to purchase everyday goods.
Given the economic volatility of the past few years, finance and treasury professionals at LyondellBasell (LYB) have sharpened their focus on working capital efficiency as part of a firm-wide value enhancement programme. At the core of this effort is a strategy to improve the company’s days payables outstanding (DPO) performance metric. While extending payment terms is a key objective, LYB was equally concerned with the health of the supply chain, and the cash flow pressure suppliers would face from any extension of terms.
The 1GW MacIntyre wind farm spans 36,000 hectares in south-west Queensland, Australia and is a landmark project for ACCIONA Energía, as it is: (i) the largest wind farm project in the Southern Hemisphere and Australia, (ii) considered one of the largest onshore wind farms in the world and (iii) the largest ever renewable energy facility designed, built, owned and operated by ACCIONA.
Rising global interest rate environment – the increase in global interest rates was having a disproportionate impact on emerging and frontier market capital flows, USD interest rates, currency volatility and sovereign fiscal situation in most of the frontier markets where Airtel Africa operates.
The mobility industry is undergoing a paradigm shift as the next generation of consumers search for flexibility through subscriptions and pay-per-use models that enable them to access vehicles when they need to and without owning them. For original equipment manufacturers (OEMs) and their captive financing companies, one of the biggest challenges and opportunities in the industry is addressing evolving consumer needs supported by different payment methods and payment options in different countries. From a treasury perspective this means overhauling collections, funding, reconciliation, accounting, financing inventory and the supply chain.
The unprecedented demand seen once the world re-opened after lockdowns, only accelerated Nirvana Travel & Tourism’s top line growth which was already increasing at a healthy rate.
Motus is required to adhere to local exchange control regulations implemented and monitored by the South African Reserve Bank (SARB).
Line 6 of the São Paulo subway is a concession awarded by the state of São Paulo. It includes the construction and operation of a new subway line connecting the districts of Brasilandia and Freguesia de Ó to the city centre. The project will have 15 subway stations, will connect four subways lines in Sao Paolo and transport about 630,000 passengers each day. This is being funded through a public/private partnership.
Henkel has long-monitored and influenced the sustainability of its supply chain through its procurement practices. In 2021, the company went one step further when it approached Deutsche Bank to convert its existing supply chain finance (SCF) programme to a sustainability-linked SCF (SSCF) programme that went live in May 2022.
The Global Treasury and Financial Services (GTFS) Global Credit Risk team supports Microsoft stakeholders globally with the issuance of bank and corporate securities to assist with sales and other business needs. Utilising a Power Platform solution on Azure cloud services, the risk team manages billions of dollars in securities in the form of bank guarantees and corporate guarantees.
Following its formation, the company faced a complex FX environment. FX risk management was performed separately at legacy Mylan and legacy Upjohn entities with each process relying upon different systems and inputs. The global treasury team immediately kicked off a project to redesign the FX risk management framework and leverage technology to create a thorough, efficient and fully integrated risk management process.
Over the past year, Palo Alto Networks treasury was able to respond nimbly to the risks and opportunities in the market, pivoting quickly across the yield curve to make the most of their cash balances in a rising interest rate environment. This was achieved while still adhering to its investment policy principles of capital preservation, liquidity and yield optimisation.
Since GPI was introduced by Swift some years ago, Roche was attaching the unique end-to-end tracking reference (UETR) to its international cross-border payments. Despite receiving tens of thousands of feedback messages, a structured way to review this data never happened.
IKEA’s pre-transformation treasury was far from the minimalist ethos of less is more and simple for the many, complex for the few.
There are certain topics that keep a treasurer awake at night. All of them have some criteria in common: still manual, error-prone with a combination of high financial risk and missing transparency of high-value treasury payments.
On 9th November 2021, GE announced plans to form three industry-leading global public companies. In early January 2023, GE completed the separation of GE HealthCare and plans to complete the separation of GE Vernova – GE’s portfolio of energy businesses – sometime in early 2024, leaving GE Aerospace as a standalone company.
Bente Salt’s journey to becoming Group Treasurer at Rentokil Initial was quite interesting. Her first job after leaving university was as an assistant manager at McDonald’s where she had to turn her hand to everything, and it taught her to take responsibility at a young age.
Condé Nast’s (CN) treasury team identified several challenges in its effort to support the company build a new global organisational structure. Like the need to improve inefficient payment processes around inconsistent processing across markets and low levels of automation.
Decathlon Italia’s B2B clients typically paid for their products with a SEPA Credit Transfer (SCT) on a specific and unique bank account. It was a time-consuming and inefficient process because of the complexity and bureaucracy of the reconciliation of the unique bank account dedicated to this cash in process. Customers had to fulfil an identification code on the SEPA Credit transfer payment in order to allow a manual reconciliation from the finance department for every payment and for every store.
GoStudent sought a comprehensive cash management solution to address the company’s treasury needs. Rapid growth, often through acquisitions, meant GoStudent had inherited inefficient and highly fragmented legacy set-ups with multiple banking relationships, manual processes and redundant accounts. It resulted in key treasury challenges like inefficient liquidity management, a lack of visibility and access to local bank accounts, as well as decentralised payment and collection management through multiple connectivity platforms and providers. Supporting all local payment types in each country was crucial but also very challenging to manage from a single location.
In September 2020, Garrett Motion filed for voluntary Chapter 11 bankruptcy. Its treasury was tasked with operating liquidity and funding on a prefunded basis – a major constraint. To access sufficient funding throughout the Chapter 11 process, Garrett Motion raised a debtor-in-possession (DIP) financing. This was expensive and helped to exert less pressure on day-to-day cash – but placed more pressure on reporting. Treasury was required to report its financials to the DIP lenders.
Due to Brexit, the company’s existing liquidity structure would not have been fit for purpose to accommodate new EEA entities into its cash pool due to revised legislation in place. Ricoh therefore sought an alternative to its UK structure as a key objective.
Mace is multi-disciplinary and multi-jurisdictional meaning there can often be multiple entities operating in each jurisdiction. As Mace’s work is frequently project-based, the company may also exit a jurisdiction on completion of the project, which requires flexibility in the treasury structure. Due to the international nature of the business, cash visibility and mobilisation back to the centre was challenging and Mace was looking to build a global cash pool which supported maximum cash centralisation across multiple currencies whilst minimising intercompany lending/borrowing relationships to the greatest extent possible. As Mace currently does not have a TMS, reduced administration was critical.
The treasury team has been actively orchestrating a digital transformation across the organisation. The embrace of emerging technologies in data analytics and machine learning has optimised treasury decision-making processes, unlocking efficiencies in time, cost and risk management, and elevating the team’s standing within the broader organisation through more value-add insights to the existing financial goal setting processes.
Unilever’s global scale, breadth and historic growth made cash flow forecasting extremely challenging. Unilever had deployed a diverse range of cash flow forecasting processes across the enterprise: some countries effectively produced no forecasts; others – most notably countries with high interest rates and onerous penalties for overdrafts such as Brazil, Indonesia and the Philippines – produced relatively detailed forecasts that required labour-intensive manual inputs (using Excel) at a local level.
The greatest unsolved challenge for supply chain financing (SCF) has been the management of interest rate risk. This is true for all suppliers but particularly: Suppliers in highly competitive industries such as fast-moving consumer goods (FMCG) and retail. Net margins in such industries are often single digits. Smaller companies that may not have significant alternative sources of financial resilience.
Bacardi experienced limitations establishing a global supply chain finance (SCF) programme. The aim was to standardise payment terms, improve working capital and support financial resilience of its suppliers. For various reasons on both sides, ranging from IT interfacing to the level of onboarding support needed to gain scale, SCF achieved limited success when Bacardi first attempted roll out, adding just 50 suppliers. The Covid pandemic emphasised the importance of SCF programmes as a tool for the financial resilience of supply chains.
LC Waikiki (LCW) needed a solution that provided the company with financing to bridge its working capital gap between the time LCW needs to make payment to its suppliers, where orders typically must be put in months before delivery to secure production. This often includes a down payment when placing the order and the ultimate collection of proceeds from sale of goods to end customers.
The pandemic severely affected liquidity and operations of airlines globally, with many receiving financial support from their respective governments to keep trading. However, SunExpress was one of the few who managed through the pandemic without government support. The 34-year-old airline not only didn’t receive any direct government aid, but also positioned itself to fully capitalise on the pent-up demand for travel as soon as travel restrictions were relaxed.
Microsoft’s investment portfolio is a multi-asset class portfolio with more than US$100bn in assets under management (AUM) comprising assets across fixed income, equities, private equity, venture capital, real estate and commodities. Historically, the risk and scenario analysis sensitivity reported on the company filings have used an outsourced investment risk model.
Palo Alto Networks is the world’s cybersecurity leader. It’s seen year over year growth, in its most recent quarter ending April 30, 2023 it reported revenue of US$1.72bn, a 24% y/y increase.
The Brazilian government is focused on improving access to water and sanitation for 212 million people, of which 14% lack access to a reliable and safe source of water and 51% to safely managed household sanitation facilities. A new national sanitation framework aims at supplying 99% of the population with drinking water and 90% of the population with sewage collection and treatment by the end of 2033.
GEMS’ group treasury team was looking for a more enhanced view of the group’s daily total cash balances and the payments, seeking a real time view of global liquidity to inform investment decisions. GEMS overriding objective was to transform its treasury function and move to a more efficient and effective centralised treasury model that would integrate international markets in line with the company’s growth trajectory.
Vertex’s growth has resulted in a rapid rise in its cash reserves, and the company’s ability to manage liquidity and overnight cash reserves was a growing concern. Vertex required upgraded capabilities of its pre-trade compliance controls – namely understanding exposures and concentration risks – and needed to put guard rails in place to stay within its policy stipulations while reporting its position involved increased accuracy in data, accounting and timeliness of reports.
noon aimed to streamline its financial operations and support its growth. In particular, the company needed to address the following key challenges in the UAE.
Jetex encountered a multitude of challenges due to its operations in various jurisdictions and partnerships with numerous global banks. These challenges included a lack of cash visibility and control, delayed payments, and a limited range of working capital tools for supplier payments.
Prior to 2022 treasury operated via extensive use of Excel spreadsheets and manual processing across cash management, dealing, payments and accounting. With the large and complex nature of the business, including the departmental split of investments and finance teams and regulatory oversight of the Financial Sector Conduct Authority (FSCA), coupled with the legacy technology landscape, it was evident the existing model was not sustainable.
Cadbury’s operation in Nigeria is multi-banked, and the company has banking relationships with 11 commercial banks in Nigeria and 17 bank accounts. The management of the accounts across multi-banks, created operational challenges for Cadbury Nigeria as it involved the use of internet banking portals of all the banks to obtain account balances and transaction reports for treasury management.
Over the past few years, A.P. Moller Maersk has been moving into different logistics products and has been acquiring some companies around the globe, including in the Latin American region. Aligned to this strategy, A.P. Moller Maersk was looking for a one-stop shop banking partner that was able to provide a wide variety of solutions, with a focus on core cash management.
Farmers face considerable challenges when purchasing the necessary crop protection from Bayer, due to cost increases caused by geopolitical factors, such as the conflict between Russia and Ukraine. These factors are compounded by rising climate impacts which are increasing threats to farming. Farmers often need to finance the purchase of seeds and crop protection products because upfront costs are high and revenue from selling commodities isn’t available until many months after the harvest season.
Following 2021, wildfires in Greece destroyed hundreds of homes and businesses CCHBC recognised the need for an efficient centralised payment portal to collect donations from their employees across the region for those affected by the fires, and for other charitable campaigns.
Metso has made sustainability one of its strategic priorities and prioritises partnering with suppliers that embrace the same sustainability values. The company has also made tangible efforts to address its overall impact on the environment by adopting science-based targets with a view to reducing CO2 emissions throughout its supply chain, thereby effectively reducing its own Scope 3 emissions.
One of Bally’s key providers of payment services is FreemarketFX with a connectivity strategy that mandates use of a REST API for statement reporting and payment initiation automation. Bally’s uses FreemaketFX to provide payments and banking services for 19 of its companies, holding 63 active bank accounts which are used by 43 users to make on average 289 payments a month.
Heathrow Airport began its treasury transformation journey back in 2021, when it split its TMS landscape between treasury operations and accounting functions. With functional limitations in the legacy TMS systems it was left with highly manual and time-consuming processes.
Upon acquisition, Cytiva assumed greater ownership of its own treasury policies and processes. The company undertook a treasury review which identified that a material number of intercompany invoices were being settled up to 30 days after origination and sometimes later. This introduced significant FX exposure and, therefore, volatility to its balance sheet.
Valentino Korea, the Seoul-based retail arm of Italian luxury fashion house Valentino S.p.A., is responsible for the sale of Valentino products throughout Korea. While the company already has a significant market presence in Asia Pacific, Valentino is looking to further establish itself as one of the leading luxury fashion houses in the region.
Capricorn Energy PLC was left with significant surplus cash balances and it was looking for a solution that allowed the company to easily and safely diversify cash holdings across multiple high-quality names and products, whilst maximising the return on this cash in a rising interest rate environment.
To better support Omni Logistics’ robust global operations, the organisation’s treasury team recognised the need to improve its manual processes and automate how it applies investment policy criteria with the mission-critical goal of reducing risk and preserving capital.
For the small, eight-person treasury operations team at American Airlines, reliance on time-consuming manual spreadsheet-dependent processes was a strain on resources, creating tremendous inefficiencies for the organisation. Adding to the challenge, a cumbersome banking infrastructure involving hundreds of accounts spread across numerous banking partners all over the world was an administrative nightmare, not to mention involving costly fees.
The scope of the project was to set up virtual bank accounts to rationalise the cash concentration structure for the subsidiaries outside the United States, considering industry best practises while meeting local requirements and reducing costs. Before the transformation, the treasury international team was running a multi-entity multi-currency notional pool for over 40 subsidiaries located in 30 different countries.
Envision Pharma Group faced a challenge as its international footprint grew. It had dozens of bank accounts in different countries holding different currencies and serving different subsidiaries creating a complicated treasury operation.
