BMS treasury team shows its commitment to excellence, innovation and continuous improvement
Published: Sep 2024
Treasury Today’s Top Treasury Team
Highly Commended Winner
Bristol Myers Squibb
Photo of Nilan Parmar, TIS, Gerardo Gonzalez, EY-Parthenon, Sandra Ramos Alves, Bristol Myers Squibb and Didier Vandenhaute, PwC.
Sandra Ramos Alves
SVP & Treasurer
Bristol Myers Squibb Company (BMS) is a global pharmaceutical company, headquartered in Princeton, New Jersey. BMS is one of the world’s largest pharmaceutical companies and consistently ranks on the Fortune 500 list of the largest US corporations. For the fiscal year ended 31st December 2023, it had total annual revenue of US$45bn.
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Evolving the Finance Function
BMS Finance Leadership has rolled out an ambitious programme to enable simpler, faster, better processes and capabilities to drive productivity, reduce costs and enhance enterprise outcomes. This is very timely as BMS will face regulatory headwinds in drug pricing and loss of exclusivity on key brands in the next few years. However, BMS has exciting drugs as part of its Growth Portfolio and in its pipeline that the company will invest in to offset these headwinds.
Further M&A is also part of the strategy to augment their future growth – all of which requires careful cash planning. Treasury leadership identified and executed on the following major initiatives.
Working capital optimisation and establishment of Cash Leadership Office (CLO)
In 2023, BMS Treasury launched the global CLO to drive cash flow optimisation, with the goal to implement a sustainable shift in the BMS culture to focus on cash. This was underpinned by three core guiding principles: establishing cash flow accountability, fostering execution excellence, and increasing visibility to liquidity and working capital management. The CLO team established the governance framework, built capabilities to track KPIs and monitor progress and provided extensive training to various stakeholders. The consultants involved here were EY-Parthenon.
Cash forecasting process automation
As the business became more complex, the team pivoted from a highly manual cash forecasting process to an automated process leveraging a best-in-class tool. The treasury team evaluated, selected and then implemented, including design, testing and launch, TIS’s CashOptix Cash Forecasting tool in a record eight months. In 2024, BMS continues to improve its forecasting logic, roll-out of CashOptix to other teams and utilisation of the working capital module in CashOptix.
Risk mitigation and cost reduction
BMS’s insurance, pensions and cash management teams were also focused on cash flow optimisation as they looked for innovative opportunities to reduce cost and simplify processes. The insurance team simplified its insurance operation by reducing the number of captives from three to one, reduced capital requirements, reduced G&A costs by US$700,000 and repatriated cash from the captives. The pension team de-risked its Puerto Rico pension plan to a third-party at attractive economics. The cash management team executed request for proposals (RFPs) for the company’s US and European cash management services to ensure the most competitive pricing, with support from PwC.
Acquisition financing US$20bn+
Careful cash planning paved the way for key strategic activities and in 2023, BMS announced three acquisitions for a total deal value of approximately US$23bn.
Immediately after a US$4.5bn bond offering in Q423, the capital markets team worked around the clock to put together an acquisition financing plan to support ~US$17bn in funding needs for two acquisitions announced in late December. Through robust financial modelling, the team crafted a meticulous financing plan that reflected the full spectrum of the bond curve. Less than two months after the announcements, BMS conducted a successful fixed income marketing plan with 225 market participants. On the day of execution, the orderbook grew to a stunning ~US$90bn. This is one of the largest and oversubscribed order books in the history of life sciences. Furthermore, the exciting drugs acquired aim to address high unmet needs from Alzheimer’s disease to non-small cell lung cancer. The banks involved in the acquisition funding were Citi and Bank of America.
Strong leadership drives treasury team to achieve
The BMS finance leadership highly appreciated the successful implementation of these initiatives, which further emphasised treasury being a trusted partner to the business, and the key role it played in the “Finance of the Future” programme.
The team’s culture allowed it to focus on the art of the possible. The treasurer has empowered her team to look beyond the “no’s” and find ways to get to “yes”. The CLO initiative led by treasury helped shift the BMS mindset towards cash by bringing accountability and ownership to other departments in BMS.
This was no small feat and required significant effort and collaboration by the CLO team. By using technology to create dashboards, BMS can provide insight to their colleagues on how changes were impacting the working capital metrics.
Technology is always a great innovator to make change in an organisation; however, when you do not have the budget to move forward, it can quickly halt progress. When the treasurer heard the team did not have enough IT budget to proceed with the implementation of TIS CashOptix, she encouraged them to find a way to “yes”. Quick thinking led the team to use its internal budget to fund the project by offsetting the cost with additional interest income. The solution to simplify the insurance operations is unique in the industry. In addition, the pension team de-risked its Puerto Rico pension plan to an insurer with favourable economics for the participants and the company.
Programme benefits
Cost savings.
Process efficiencies.
Increased automation.
Risk mitigated.
Improved visibility.
Manual intervention reduced.
Exceptional implementation (budget/time).
Improved key performance indicator (KPI) metrics.
The sale of Irish captives has reduced the overall compliance burden with additional G&A expense savings of ~US$700K per annum on an ongoing basis. The Puerto Rico pension transaction further simplified the balance sheet and delivered additional administrative and other savings for the company.
Success in consecutive years – a fantastic achievement
In 2023, BMS was Treasury Today’s Top Treasury Team winner. To be recognised again this year is a tremendous achievement.
The submission last year centred around building the foundation from a technological perspective with data centralisation and automation as well as FX and interest rate risk management.
This year’s submission is focused on cash flow optimisation, cost savings, insurance and pension risk management.
Both submissions demonstrate the BMS Treasury team’s commitment to excellence, innovation and continuous improvement in various areas of treasury operations and is noteworthy. They showcase the team’s ability to leverage technology, build strong relationships, and drive cultural shifts within the organisation. As Sandra Ramos Alves, SVP & Treasurer says, “We are always evolving; growth and change are embedded in our core values.”
Gerardo Gonzalez
Partner, EY-Parthenon
In an industry that demands constant adaptation and solutioning to competitive challenges, innovation and regulatory pressures, the responses from the Bristol Myers Squibb Treasury Team stand out among peers. A strong example of this is the formation of the Cash Leadership Office where the team has effectively established a programme that reinforces a culture of accountability, transparency and excellence in execution with anything that touches cash flow management across the entire enterprise. The success of this initiative has positioned BMS more favourably for the future with more options and flexibility to create and enhance value for both patients and shareholders. The tangible value delivered by this programme in a relatively short timeframe is a testament to the commitment and skill of the team. Congratulations to the Bristol Myers Squibb Treasury Team!
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Eric Cohen
Global Treasury and Working Capital Leader, PwC
It’s been amazing to see the BMS treasury function continue to evolve its capabilities and drive broad, enterprise-wide value across their entire organisation. Kudos to the entire team for their laser-focus on delivering continuous value and impact. PwC is proud to be one of their trusted partners!
in partnership with
Jennifer Knutel
EVP of Global Marketing, TIS
TIS is thrilled to congratulate our client Bristol Meyers Squibb and the treasury team of Sandra Ramos Alves, Amy Szuting Chen and Abhishek Jhunjhunwala for the numerous awards they have received this past year, most recently through the 2024 Adam Smith “Treasury Today’s Top Treasury Team” award. Their successful execution on a series of challenging projects over the past few years has resulted in a complete overhaul of their global liquidity and cash management operations, as well as their funding and capital markets processes. It’s been a pleasure to partner with them to drive these initiatives forward, and we’re excited to achieve even more success and innovation alongside them in the months and years ahead.
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The Adam Smith Awards are the industry benchmark for best practice and innovation in corporate treasury. The 2024 awards attracted 389 nominations. To find out more please visit treasurytoday.com/adam-smith-awards
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