Adam Smith Awards
Many congratulations to all our 2024 Adam Smith Awards winners.
The project, initiated in the course of the initial public offering of Siemens Healthineers in 2018, had a primary objective of establishing an autonomous Siemens Healthineers treasury operation and solution. This solution stands independently from the treasury services previously provided by Siemens AG. Its core focus is to advance digitalisation and innovation, positioning the company to thrive in the evolving landscape of the future.
The World Bank is at the forefront of combatting global poverty and inequality, providing finance to address urgent emergencies and critical, long-term development needs. But behind the 80-year-old organisation’s flagship work, as its offices and operations grew, decentralised payment processes were becoming more complex. In 2023 alone, teams in the institution’s Treasury and Controller areas supported US$8trn in cash transactions, and managed bank accounts in 146 currencies involving nearly 400 correspondent banking relationships, including 185 central banks.
Martin Schlageter, until recently the Head of Treasury Operations at pharmaceutical giant Roche in Basel, Switzerland, has embarked on a well-deserved retirement. With a remarkable career spanning over 30 years, Martin leaves an indelible mark on the corporate cash management and treasury landscape in the EMEA region.
Having accepted the challenge of combining the capital markets team with global cash and other treasury functions, Odette Rodrigues became Treasurer at Uber just over one year ago and has already made her mark in a significant way.
Since 2022, Kirsty Craig has overseen Treasury Operations in Europe, the Middle East and Africa for General Mills. Leading a team of three senior analysts, she is one of the youngest females to head a regional treasury centre for a Fortune 500 company. Kirsty’s dynamic leadership extends to managing a global supply chain finance programme of significant volume. Her constant growth, pursuit of knowledge and knack for seizing opportunities make her a strong role model for aspiring professionals in the industry.
Newell Brands prides itself on selling brands that aspire to delight consumers by lighting up everyday moments from products such as marker pens to kitchen utensils and baby buggies yet when it came to its own treasury function, it seemed to have not applied that guiding mantra. Witness 14 cash pools across six different banks; 179 intercompany loan relationships and a tangled web of 27 bank relationships. Add to that, manual processes and only 40% liquidity concentration, and the treasury team had been left at the sharp end when it came to making life easier.
Identify a means to reduce the number of bank accounts and incurred fees; eliminate overhead costs and administrative inefficiencies; minimise inaccessible cash, impacting the ability to reduce debt; minimise unnecessary borrowing costs and loss of investment returns.
In 2021, General Electric announced its plan to split into three investment-grade, industry-leading, global public companies. In 2023 new entity GE Healthcare finally spun out from GE, complete with a new standalone treasury function. It fired the starting gun on an ambitious restructure and re-organisation to hone multiple inherited complexities that included 1,000 bank accounts, 30+ key banking partners, 36 legacy treasury systems and a massive transaction volume.
The restaurant industry, one of the most competitive out there and forecasting cash flows and determining the best use of cash is a mission-critical function.
In the shipping sector, vessel owners often have limited ability or scale to negotiate with clients and service providers. This means synergies in the market are missed, along with the opportunity to improve market access, maximise vessel employment and improve efficiency.
Prior to announcing the transaction, the group had circa £17bn equivalent of debt in total maturing over the next four years with circa £4bn maturing per annum from 2024 to 2027, primarily driven by the 2017 strategic acquisition of Reynolds American Inc. A high level of near-term debt maturities led to inflated liquidity needs to backstop maturities as well as high refinancing risk as maturities would need to be funded in all available windows regardless of market conditions.
Klaviyo, founded in 2012 to provide businesses of all sizes with powerful technology that captures, stores, analyses and predictively uses their own data to drive measurable, high-value outcomes, had been weighing up when to list for several years. The company had long viewed an IPO as a crucial stepping stone on the way to building a generational software company poised for growth.
Tesco has been integrating net zero since 2009 when the supermarket first committed to Net Zero 2050 and pledged to measure and report emissions across its entire group operations. The Treasury team wanted to access cash deposits and MMFs that would support day-to-day cash management in a manner that was also consistent with sustainability policies and objectives as a group.
When GE spun out its energy business GE Vernova, the new company needed to establish its own trade finance operating model. But pulling out the relevant threads from GE’s sprawling trade finance programme across 150 countries and 50+ banking relationships to create a tailored and bespoke portfolio, all the while minimising disruption to its fledgling standalone operations, was never going to be straightforward.
Chasing late payments is a gruelling task for any collections team. It costs time and money and can hinder companies funnelling resources into new endeavours. Microsoft’s eyewatering receivables reached over US$200bn in 2023, that’s a 100% increase in the last five years. Managing such largesse comes with challenges, none more so than when large value payments come in late.
Can’t access the data you need or have issues ensuring data quality? Addressing these issues is becoming an increasing focus for treasurers to be able to leverage the latest technology and to use their technical skills.
The complex processes behind creating a new treasury function when companies are split into separate entities is keenly observed by corporate treasurers. Americana Restaurants, the iconic MENA chain that includes brands like KFC, Pizza Hut, Hardees and Krispy Kreme alongside proprietary brands, hived off Americana Foods into a separate entity, ahead of the dual listing in December 2022.
Speak to any MNC treasury team overseeing scattered, global subsidiaries and they invariably share the same goal – if they haven’t already achieved it: visibility and control of the local treasury function.
It’s not often that the phrases “treasury transformation” and “access to water” go hand in hand. But when Aliaxis, which makes pipes and fittings, the majority of which are used to transport water, overhauled its treasury function it transformed the company’s ability to finance the safe distribution, treatment and storage of the world’s most precious resource across ten LATAM countries.
For companies with a large cash base, overseeing a successful investment strategy is one of the most important roles for treasury. The team at CyberArk guard a cash balance of around US$1bn, but enhancing returns from the company’s revenues was complicated by manual processes around trade execution and remittance and reconciliation into their treasury management system (TMS).
ASML sources components for its chip manufacturing equipment from a sprawling worldwide network of suppliers. Some components are sourced from the United States and paid in US dollars, yet ASML sells its systems in euros and is exposed to EUR/USD exchange rate fluctuations. To mitigate the effect on its P&L, the company runs a purchase hedging programme but was struggling to accurately forecast US dollar inflows. Manual and labour-intensive, excel heavy processes were prone to error and the accuracy of the forecast was low at 70%.
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.
Apollo’s primary treasury transformation objective was to become fully automated and centralised around two core functions: Apollo Funds and Apollo Corporate. Systems and processes required uplift to support high volumes and accurate entity onboarding as Apollo averaged two to three net new entity onboardings per week. In addition, with account and user entitlements being a focus, Apollo required a way to optimise payment execution that ensured robust, straight through processing rates given the size and importance of their transaction flows.
The Swedish charity foundation Radiohjälpen, organises annual live events where people are encouraged to donate money via Swish, Sweden’s real-time mobile payments platform. However, the charity struggled to efficiently keep track of and display the collected sum. Adding small donations together was a manual task complete with paperwork, administrative headaches and reporting delays.
Payments giant PayPal drives strategic transformation by breaking down complex challenges into focused projects. In 2023, PayPal Treasury led two major initiatives – one strategic and one regulatory – both with tight November 2023 deadlines.
It’s fair to say few people listening to their favourite playlist or podcast spare much thought for Spotify’s hardworking receivables team. But efficiently managing account receivables at the streaming giant was a complex and, at times, costly undertaking.
3M’s new CEO Bill Brown states that he wants to drive innovation to inspire topline growth and improve performance across the supply chain at the company that has evolved from mining at the turn of the last century to selling innovation and science today. That will be made much easier thanks to the recent transformation of the group’s global treasury operation, namely establishing an in-house bank (IHB) in Dublin that has become a cornerstone to a new approach to cash management.
Fitch has made its business out of evaluating risk. But when it came to its own legacy cash management processes, they were clunky, fragmented and limited. Turning its analysis skills in-house, Fitch rewrote its approach to liquidity, cash visibility and management.
Holcim required a banking partner to support an ambitious treasury transformation plan to centralise and optimise the treasury function. This included rationalising the banking structure, reviewing cash management activities to deliver straight-through-processing to business operations teams, and gaining full cash visibility.
Crocs – the shoes famed for their comfort and practicality rather than aesthetic – feel like they’ve walked the earth for years, but the company was only established in 2002. Following two decades of growth, Crocs needed to invest in its treasury function to reduce costs and increase efficiency. A key area of focus was the company’s banking structure and treasury wanted to restructure its bank relationships to better support its borrowing needs and liquidity management.
Cash management at Viatris, formed in 2020 through the combination of Mylan and Upjohn, was underperforming. The treasury team were overseeing 950 bank accounts, 120 bank relationships and 300 legal entities in a complex landscape that left isolated pockets of cash in local markets and reduced cash availability in global pools.
Japan Tobacco wanted to combine its treasury functions with its international division, Japan Tobacco International. The group had three main treasury centres located in Japan, Switzerland and the Netherlands and it wanted to create a single operation that would usher in new synergies, streamline processes; create efficiency, risk mitigation and strategic advantages for the company. The group was particularly focused on enhancing global cash and liquidity management, and global FX management.
An accurate and reliable cash forecast is the cornerstone of any liquidity model, and Pamela Schmidt, VP Treasury & Chief Investment Officer at AmeriHealth was seeking a complete mindset shift in her finance team to better deploy the company’s large portfolio of cash and liquidity to meet the Company’s short and longer-term liquidity needs.
The treasury team at building products supplier SIG Plc were labouring under the weight of paperwork and manual processes. Witness time-consuming and inefficient tasks like downloading bank statements to spreadsheets and daily reconciliation of cash flows across 220+ bank accounts.
Speak to any company with a complex supply chain, and minimising the risk of one key supplier delaying production of a finished product is front of mind. It’s why for many companies, supporting their suppliers, particularly during times of uncertainty like COVID-19 is a priority. The treasury team at Garrett Motion knew their suppliers had felt the brunt of lockdowns and shifting consumer behaviour, as well as the slow economic recovery coming out of the pandemic and sought to support these extensive and valuable manufacturers.
Brazilian meat processing and slaughtering group Minerva was struggling to efficiently manage its working capital. Accounts receivable is the most important source of the company’s working capital and exports account for roughly 70% of its operations given the company’s more than 500 global buyers. But efficiently managing working capital was hindered by treasury and export teams manually performing tasks like invoice discounting, counterparty limits and additional risk mitigation leading to time consuming and less productivity.
Online retailer Notino was expanding across Europe and needed to optimise its working capital. One of the most pressing issues the company faced was a need to unify payment terms for all its suppliers. Because it was unsure when payments were due, Notino locked up significant finances in inventory. Moreover, the company was reluctant to tap expensive traditional bank loans to free up liquidity.
Tapping the bond market is a stressful exercise for treasury teams at the best of times. Add in just one marketing day after a four-year absence from the market; high interest rates, additional borrowing on earlier 2019 issuance, new company auditors and a tight regulatory timeline and Saudi Arabia’s giant dairy group Almarai was balancing multiple factors when it went to market with a US$750m ten-year sukuk issuance last July.
Successfully raising money in the bond market involves a fine balance of timing, pricing, and carefully nurturing investor interest to minimise financing costs. When Phoenix decided to issue 30NC10 structure for the first time, the treasury team were juggling more than the usual spinning plates.
UK advertising firm WPP applied its mantra of creative transformation to its own financing processes when it sold €1.25bn of debt in March 2024, successfully refinancing two bonds due to mature at staggered points through the year with a single transaction that showcased treasury’s brand of proactive liquidity management.
The Italian multi-utility A2A wanted to finance ambitious goals around the energy transition and the circular economy by issuing sustainable debt through both use-of-proceeds and KPI-linked financing instruments. The Strategic Plan, updated in March 2023, includes a specific target for sustainable debt to account for 90% of its issuance by 2030 and 100% by 2035. The company needed to support its ambitions with a flagship Sustainable Finance Framework.
Accessing financing for early-stage growth companies can be challenging as Enpal, Germany’s largest residential solar power company, knew all too well. Despite accelerating sales, the company’s ability to finance growth was limited, particularly given its essential focus on shoring up its supply chain to ensure it could continue to meet demand.
Relative to its peers, IDB Invest is a smaller, fast-growing development finance institution, and a relatively new issuer in the capital markets. Following the consolidation of IDB Group’s private sector activities within IDB Invest that led to a significant expansion of its development mandate, the organisation wanted to grow its funding programme, boost its branding in capital markets, and raise institutional funding in a crowded debt capital market that included big players like the EIB, World Bank and KfW.
Every corporate treasurer is mindful of the cost of hedging foreign exchange exposures, especially since it tends to get more expensive every year. But for many companies, hedging is essential, so the cost challenge became more contextual when central banks started to hike interest rates in the summer of 2021, widening interest rate differentials.
Behind every cross-border purchase we make, complex treasury processes are hard at work. Like at online marketplace eBay, where FX settlement risk was increasingly front of mind – especially in Asia Pacific. The company’s global footprint across 190 markets, plus its cash flow hedging programme, left it increasingly vulnerable to FX settlement risk, particularly during quarter-end settlements.
Medtronic was witnessing a surge in hedging costs due to the company’s significant exposure to emerging markets. It necessitated a re-evaluation of its conventional hedging strategies which were based on simplistic criteria around size and cost. The treasury team wanted an innovative solution to optimise strategy without escalating costs.
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.
Breaking up is never easy. When US solar firm Nextracker parted company from Singapore’s Flex in late 2023, Flex kept the treasury department as well as all the treasury-technology in the split – Nextracker would have to set up new treasury systems and processes as a standalone entity.
When we take a pet to the vet, we wouldn’t think about the IT infrastructure behind the practice, supporting cost savings, efficiency and a smooth user experience. But IVC’s ambitious treasury overhaul does exactly that, purring seamlessly in the background as their vets get to work.
For companies with complex invoice processes characterised by disjointed, semi-manual collection and reconciliation, Iveco Group’s new payments hub shows how getting paid is changing gears.
For a treasury manager wanting to earn a return from short-term cash like Whitbread’s Stuart Fitzsimmons, finding an investment that offers low risk but comparable returns to a conventional bank deposit or money market funds (MMFs) was challenging. Not anymore.
It’s the most important source of finance in the world but the tedious back office process behind corporate bond issuance hasn’t changed for decades. From origination to pricing and settlement, it involves manually putting data into documents, sending emails and updating systems in an undertaking that is repeated across multiple individuals and teams in front, middle and back offices, as well as legal. It can take five days between a bond being launched in the market and the cash arriving in the issuer’s bank account.
Companies all over the world are vying to both set foot in and increase their access to Saudi Arabia’s giant consumer market. adidas wanted to leverage on existing growth by opening a local subsidiary to oversee a target of 100+ in-country stores by 2025. The new structure would help the company capitalize on new flagship partnerships with KSA football clubs and the Saudi Pro League.
Spanning construction, education, electronics and logistics – amongst other industries – Dubai’s Al Shirawi Group is one of the most diversified businesses in the region. However, the company’s extensive corporate structure was posing challenges for treasury. For instance, the 40 plus entities running their own banking relationships across 138 accounts with HSBC and a lack of real-time cash visibility. Manual processes and multiple logins made financial transactions and balances opaque, leading to delays in decision-making and difficulty in tracking cash flows.
As Saudi Arabia progresses towards Vision 2030 – a strategic framework aimed at reducing the Kingdom’s reliance on oil and fostering economic diversification – key initiatives in digitalisation, automation, and innovation have become central. At Saudi Electricity Company (SEC), the urgency to modernise treasury processes has intensified.
Oceana, the South African fishing conglomerate, was hunting robust and trusted relationships with its key fish suppliers in a competitive market. Namibia’s Erongo Marine Enterprises, an Oceana Group company, trawling for mackerel out of Namibia’s commercial deep seaport Walvis Bay, wanted to offer their suppliers the benefits associated with access to liquidity and preferential financing in a challenging market buffeted by rising interest rates, weakening emerging market currencies and increasing commodity prices.
Prior to the digitisation programme, Metra’s treasury had a number of manual processes across its treasury function which were inefficient and impacted its working capital processes. These manual processes could lead to delays across a number of treasury processes which negatively impacted a number of treasury KPI’s. One specific issue was related to late payments which impacted Metra’s ability to negotiate favourable payment terms with its suppliers.
For corporates seeking how best to centralise a decentralised treasury function and reduce all the associated operational challenges and risk, Chilean food and salmon producer Agrosuper offers a valuable case study.
Payment reconciliation was a challenge for Danone’s Brazilian business. Nearly half of the food company’s customers used so-called key accounts, paying for goods via wire transfers with minimal payment details that often entailed just putting in the transaction date and payee name.
The Vista Alegre Solar Complex in Minas Gerais in south-eastern Brazil comprises 18 giant PV parks. In a flagship green energy development, Atlas Renewable Energy’s latest solar development aims to produce about 2,000 GWh yearly, which is equivalent to supplying more than a million Brazilian homes with clean, renewable energy and preventing about 154,000 tons of CO2 from being released to the atmosphere.
The treasury team at Delivery Hero, the global group that drops our favourite brands at our door, had been left waiting for a best in class investment strategy. The absence of a standardised infrastructure made it impossible for the group to scale cash management processes across its eight treasury hubs; diversify investments, mitigate counterparty concentration risk and capture the opportunity of investing in high-yielding money market funds (MMFs).
Like many corporate treasury teams, when interest rates started to climb higher in recent years, the team at Salesforce wanted to ensure their cash holdings reaped the benefits with higher yields. Bolstered by the software company’s own internal IT expertise, treasury wanted to create bespoke investment vehicles that could outperform any external provider and reduce fees. The challenge? Building the strategy around the company’s dynamic cash priorities.
Managing the FX hedging programme at AMD was a time consuming tasks for the chip manufacturer’s treasury team, exacerbated by the company’s rapid organic growth. Adding to the challenge, the ~US$50bn acquisition of Xilinx layered significant integration hurdles on top of existing issues.
FX management at Spanish utility Endesa was characterised by time consuming manual processes that meant making one payment could take half an hour.
Even the most strategic corporate treasury teams with complex FX cash flow and balance sheet hedging programmes can still sharpen their hedging strategies. Ensuring treasury is hedging risk effectively reduces FX volatility and maintains global competitiveness. Ever mindful of the significance of balancing its pricing and hedging strategies to prevent impacts on financials, the treasury team at HP sought to further tighten their strategy.
