How has the COVID-19 pandemic affected your work? Has the crisis affected your cash flows, your financial markets exposures (for example, FX, IR, commodities), and your liquidity management?
We are in the food sector so the business impact on the demand side is actually strong, and we are very focused to deliver food through various channels and reach people and households in need. We have always managed liquidity in a very prudent and proactive way, so we have strong liquidity as we speak. The situation does create FX/commodity volatilities for us as a global company.
How are you coping with your cash flow forecasting and hedging strategies during this period of great volatility?
We have continuous and even enhanced dialogues with businesses, especially related to working capital. We have systematic hedging policies and adherence is very important for us as a risk management tool.
What are your top priorities at this time? Do you find it challenging to access market liquidity and what constraints do you face in managing your financial risks?
Our top priorities at the moment are having good insights on liquidity and putting in place precautionary measures and contingency plans. I don’t think it changes any way we approach our liquidity management, but it just requires heightened precision, advanced planning and clear visibility.
How has your company reacted to the pandemic? And how do you ensure business continuity at your set-up? How are changes in work set-up affecting you and your treasury team?
We have daily calls and a crisis management team with a strong business continuity plan, and we focus on operational efficiencies to deliver the key stock keeping units to the market. Treasury is front centred in terms of liquidity and risk management, but given our past prudent management and strong liquidity and banking relationship, it’s much less of a fire drill.
Are you using technology to enable your work-from-home plans or has it been a challenge?
We use a lot of video calls and so far it’s been good. With external parties (eg rating agencies, banks, investors, insurance underwriters, pension asset managers) we’ve always used conference calls, so in this aspect it has not changed.
How are you keeping informed of global governmental decisions that could be of relevance or benefit to you?
We discuss with Tax and Government Affairs to stay tuned in to any decisions, such as specific cash tax deferral, pension contribution and so on, that have relevance to preserve liquidity.
How is treasury coping with the numerous demands from within the organisation to ensure the continuity of the underlying business and maintain optimal risk management?
Treasury has always been a core finance function. In the past its focus was on cash generation, debt capital transaction, capital allocation strategies. Now it’s liquidity and risk management. Nevertheless, it is always an influential function within the company.
Do you find it challenging to cope with your team’s morale and ensuring performance via work-from-home set-ups? In general, how do you manage the level of uncertainty amongst your staff and balance it with the need to fulfil the crucial treasury duties at work?
We actually have boosted morale with a sense of duty and mission: our company is feeding people around the world; our treasury function is preserving the bloodline (cash) for the company at this moment in need.
Is there any lesson that this COVID-19 pandemic has taught you?
Be proactive, be prudent in balance sheet management, be obsessed with strong (even excess) liquidity, it always serves in a down market. Adhere to risk management parameters, and don’t take a strong view on FX, commodities. We are first and foremost a risk management function, and should not seek to be a profit centre.
Do you think that this pandemic has further shown that the global economies and countries are distinct and different, or has it proved that we are all interconnected and dependent?
As a global company we see the trend from one country/region to another. Macro trends are much more inter-related, logistic/supply chain, and currencies, monetary/fiscal measures. We need to stay current at all times, it’s part of the job as a global treasurer.
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