Frunk it up! Autoneum completes its treasury transformation
Published: Sep 2024
Harnessing the Power of Technology
Highly Commended Winner
Autoneum
Photo of Nino Pavesi, Fides, Janko Hahn and Fatma Karaman, Autoneum and Adrian Calin, J.P. Morgan.
Janko Hahn
Head Treasury Operations
Autoneum is the global market and technology leader in acoustic and thermal management solutions for vehicles and a partner for vehicle manufacturers around the world. The company develops and produces multifunctional, lightweight and sustainable components for optimum noise and heat protection. The innovative products and technologies make vehicles quieter, safer and lighter and therefore help to reduce fuel and energy consumption as well as emissions output. Headquartered in Winterthur, Switzerland, the company employs around 16,500 employees worldwide with 66 production facilities in 23 countries.
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The challenge
Low margins, high costs and frustrating, credit-related conversations with banks. Sounds familiar? Autoneum’s treasury challenge was encapsulated in 2019 when the company’s cash pool bank threatened to remove its zero-balancing intraday limits, introducing significant operational risk and trebling the workload for the group’s small treasury team with three people.
Over the last decade, the company, which makes everything from frunks – a trunk located in the front of electric vehicles – battery shields and carpets, has steadily transformed its treasury processes. In 2019, pressure from the EUR cash pool bank on Autoneum increased, speeding up Autoneum’s treasury transformation, and “helping” to reach its final level of treasury evolution.
Transformation at the company had already included harmonising and standardising its bank statement and payment processes, introducing a payments factory and API connectivity for real-time balance information and in-depth insights. Now Autoneum has complemented these changes by integrating the last milestone of its vision, extending its payments factory from a standard payment “in the name of” approach to a payment and collection “on behalf of” solution.
The solution
By introducing payments-on-behalf-of (POBO) and collections-on-behalf-of (COBO), Autoneum will be able to centralise all euro transactions (spanning records, payments to suppliers and collections from customers, for example) into one bank account. The approach has already started to harmonise, standardise and improve processes while allowing Autoneum’s treasury team to consolidate the company’s bank and bank account landscape to a few key partner banks which the company considers core banks.
Utilising COBO and introducing just one bank account for more than ten different legal units also means Autoneum could leverage a virtual IBAN (vIBAN) solution of Commerzbank. Thanks to other technologies such as SAP Treasury modules as the system of choice and business partner Fides for bank connectivity and financial messaging, the treasury team has been able to integrate POBO and COBO into their structures and processes and the first live transactions are now under Autoneum’s belt. The company’s Business Group Europe is foreseen to be completely live by the end of 2024, and Autoneum is already conducting a feasibility survey to determine POBO and COBO expansion to the US, Canada and Mexico.
“The message of the award arrived while I was finally finding time for my emails at the end of a day full of meetings in Shanghai – what an amazing surprise! We feel very honoured by this award which shows the external appreciation of all the hard work over the last 12 years.”
Janko Hahn, Head Treasury Operations
Best practice and innovation
Key milestones in Autoneum’s journey include selecting ISO 20022 as the standard payment format for all countries to better manage financial messaging complexity in the best and most cost-efficient way. This was already done in 2012 when “ISOfication” was not yet as spread around the globe as it is today. In 2019, the group implemented APIs with J.P. Morgan, gaining a better understanding of cash transparency and how to streamline cash repatriation. Thanks to the J.P. Morgan project structure, additional banks could be easily added to the same setup.
Autoneum’s treasury is now ready to adapt to any new or unexpected challenges. This could include adding or subtracting banks and accounts into POBO or COBO models, something that is particularly useful in the event of bank consolidations such as the one of Credit Suisse and UBS that is currently taking place in Switzerland. Autoneum was one of Commerzbank Bank’s first customers to implement a vIBAN solution for COBO. The target is now to also seamlessly integrate the legal units of former competitor Borgers Automotive, which was acquired by Autoneum in 2023, into the same setup.
Autoneum treasury transformation has enabled the company to leverage the unique Fides hybrid service bureau model for many aspects of their daily tasks: from transmission of payment files or previous day bank statements to MT300 FX deal confirmations and also payment status message updates from the banks back into their payment factory in SAP. An API pilot helped to increase the transparency of cash and this at a much faster speed. Elsewhere, it has extended its payment factory to POBO and COBO via a vIBAN solution and demonstrated how it is a consistent leader in treasury transformation.
Key benefits
Cost savings.
Process efficiencies.
Return on investment (ROI).
Increased automation.
Risk mitigated.
Improved and faster visibility on cash.
Errors reduced.
Number of banking partners/bank accounts reduced.
Manual intervention reduced.
Increased system connectivity.
Future-proof solution.
Reduction of bank dependency and counterparty risk improvements.
Autoneum’s treasury team had a vision and was able to execute that vision through hard work, innovation and finding the right technology to serve its purposes – not just for the moment, but for the future. Autoneum has consistently been a leader in treasury transformation by leveraging the unique Fides hybrid service bureau model for payments and cash visibility, adding bank-side API functionality to its daily operations, and extending its payment factory with POBO and COBO via vIBAN. We extend our congratulations to the Autoneum team and can’t wait to see what comes next!
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Adrian Calin
Head of J.P. Morgan Payments for Switzerland
It’s been a fantastic journey collaborating with Janko and the treasury team at Autoneum over the past decade. Autoneum’s commitment to embracing cutting-edge global treasury solutions sets them apart as pioneers in their field. By partnering with J.P. Morgan Payments, Autoneum has implemented API solutions that provide real-time visibility into their accounts and signers, enhancing decision-making processes and risk management. Congratulations to Janko and the entire treasury team at Autoneum on a well-deserved award! Here’s to continued success and future innovations at Autoneum.
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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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