Autoneum is the globally leading supplier of multifunctional and lightweight components and systems for noise and heat protection that increase automobile comfort. The company is represented at around 50 locations in over 20 countries and has a workforce of more than 11,000 employees worldwide.

When asked what his biggest learning experience working in treasury has been, Janko Hahn, Head of Treasury Operations at Autoneum has an interesting answer: “Treasury must think globally, but act locally.”

No, Hahn is not a disciple of business newspeak, but a pragmatic treasury practitioner whose previous experiences have shaped an inclusive and cooperative approach to the role. The aim: to ensure that treasury adds value to Autoneum’s business by coming together to find suitable solutions to meet their challenges.

Over the last five years, Hahn’s philosophy and treasury skills have been put to the test as Autoneum has undergone a number of enterprise-wide transformational projects in an effort to become more streamlined and efficient.

Shaping a philosophy

Like many treasury professionals, Hahn’s pathway to the profession was far from deliberate. Having obtained a Master’s Degree in Economics from the University of Augsburg in Germany, Hahn joined the Timberland European treasury team based in Schaffhausen, Switzerland as a Cash Manager in 2005 and later assumed the role of Treasury Manager in 2008.

Despite this being his first treasury role, Hahn’s five-year spell at Timberland proved to be vital in shaping his treasury philosophy – more precisely his belief that treasury must “think global, but act local.”

“The treasury department of Timberland in Switzerland was an outpost of the US parent,” Hahn explains. “All policies were driven by the treasury team in the US without much consultation of how these policies would play out locally in Europe.”

Although Hahn appreciated that this was simply the culture of the company – and he admits that for the most part, it worked well – there were times that he believed the company would have benefited by taking a more local view, especially in areas such as selecting bank partners. “Since then I have tried to keep this in mind with every project I undertake and make sure that local voices are heard during the decision-making process,” he says.

Aside from beginning to form his philosophy, Hahn’s time at Timberland also provided him with a solid grounding in how treasury operates and the skills required to be successful. As well as learning on the job, Hahn believed it was important to gain a formal treasury qualification if he was to pursue a career in the profession. He, therefore, decided to undertake the Swiss Certified Treasurer programme.

“Treasury is still quite a niche role and it is not taught widely in university, so I believe obtaining a qualification from a professional body is vital to provide a solid grounding in the profession and a toolbox of skills that can be applied in a range of treasury situations,” Hahn notes. “It will also help you take the next step forward in your treasury career.”

This was certainly true for Hahn, who a few years after obtaining this qualification was offered the chance to move to Swiss manufacturing company Rieter, in 2010. “This was an exciting opportunity because in mid-2010 the automotive division of Rieter was separated and listed independently under the name Autoneum on the Swiss Stock Exchange,” he explains. “I had the chance to prepare the spin-off and worked on splitting the cash management structure, bank accounts and cash pool. I was also involved in a new club deal to finance the newly founded Autoneum Group.”

Taking shape

Hahn was then given the opportunity to lead the treasury operations team of the newly founded Autoneum Group. Following the spin-off, he had to cope with a rather inefficient structure – especially in the area of payments, where transfers were paid either through local structured host-to-host connections, disparate e-banking systems, or even fax payments, in some instances.

Hahn also faced an outdated treasury management system (TMS), which he knew needed to be replaced if the treasury was to achieve its ambitions. “We considered several specialist TMS systems, but we soon caught wind that the company would be implementing a new ERP system,” he explains. “We could see big benefits in integrating the treasury operation with this, especially if we had a say in the design of its architecture.”

“Treasury is still quite a niche role and it is not taught widely in university, so I believe obtaining a qualification from a professional body is vital to provide a solid grounding in the profession and a toolbox of skills that can be applied in a range of treasury situations.”

Hahn and his boss quickly made sure that treasury was an integral part of the design team and began outlining his vision of a company-wide payment factory that would become a key tenet of the group’s process reengineering project, which started a few years ago and where SAP is the instrument of choice. This would see the payment flows of the group centralised and also ensure that the execution of file transfers could be conducted in a low-cost and efficient manner.

Acting local

This is a big project, with implications not only for how the treasury operated but also for the local business units on the ground who had, until recently, conducted payments themselves. “Designing the new system and making sure it worked the way we wanted to was tough, but the big challenge was controlling the change management process,” Hahn explains.

As Hahn’s previous experiences demonstrated, listening to those on the ground and ensuring that their vision is taken into account and aligned with the broader ‘global’ philosophy, leads to the best outcome. The challenge is to create a perfect blend of global and local.

“There is no ‘right’ way to do this,” says Hahn. “But clear and precise communication is key.” He stresses that this doesn’t simply mean making sure the business units understand why something is being done and the benefits this will bring – although this is important – but also listening to their concerns and finding out which areas they may feel uncomfortable with.

Interestingly, Hahn highlights that the company’s banking relationships were one topic which prompted much debate: the local entities had previously controlled these and formed strong relationships. But with over 100 bank accounts globally, and with a disparate group of banking partners, there was a need to rationalise.

“It is here where local insight really helps,” says Hahn. “In Mexico, for instance, we asked the business units to use the US-based bank that we use in the rest of North America. The business units, however, claimed this bank could not support them in some nuanced areas around tax and social security payments and suggested another bank that could. We investigated this bank and then found we could leverage the relationships in some South American countries as well, so it made sense to go with them and everybody was satisfied.”

Hahn has learnt many lessons working on this project and there are more to come as the company further investigates leveraging more advanced tools such as payments on behalf of (POBO) and collections on behalf of (COBO). But he has taken some time to reflect on his success. “It is something I am very proud of,” he says. “We now have a best in class, standardised, streamlined and efficient approach which – once the roll-out of SAP has been completed – will be used globally across our entities and helps deliver many benefits.”

Emerging challenges

Despite the SAP rollout and the payment factory project taking up a significant amount of Hahn’s time, there are always other items on the agenda – especially given the company’s presence in some of the world’s more challenging markets.

“China, for example, is a very important market for the company,” he says. “But it is a challenging place to do business for treasury.” In recent months, the biggest challenge has come from the growing use of Bank Acceptance Drafts (BADs). A BAD, which is similar to a guaranteed cheque, is a guarantee from a bank that a payment will be made on a future date that can be up to six months if issued on paper, or a year if issued electronically. Originally intended to facilitate trade, BADs are now widely used by companies as a secondary currency that helps them meet payment obligations.

“BADs dramatically extend the terms in which our customers are paying us, which puts pressure on the liquidity of the entities in the country,” adds Hahn. “They also provide a challenge from an operational perspective because of the amount of paper that needs to be processed.”

Hahn is also dealing with some less familiar countries. Autoneum, for instance, is just one of a number of global companies in talks to take advantage of the opportunities in Iran now that international sanctions have been lifted. “We will be following this closely in the coming months,” he says. “Iran might offer an attractive business potential to the company, but with many international banks still facing restrictions, it won’t be easy for treasury to operate there. We will have to explore innovative ways to transfer funds without paying high fees, to handle local currency from an FX perspective and to cope with regulatory complexity.”

Wider scope

Hahn notes that the treasury is not just dealing with nuances in country regulation: the continued growth in international regulation presents an equal challenge. “The regulatory burden is growing and I don’t see this abating any time soon,” he says. “What is more, often these regulations move beyond ‘core’ treasury topics, making them all the more complex.”

He cites the OECD’s Base Erosion Profit Shifting (BEPS) scheme as one example of this. “This regulation is coming in from a taxation angle, but the impact it will have on treasury operations will be profound,” he explains. As such, Hahn believes that treasury professionals now need to look beyond their original remit and become well-versed in peripheral areas, such as tax or regulatory changes.

Therefore, together with a former Rieter colleague, Hahn went to the IFZ in Zug which runs the “Swiss Certified Treasurer” programme and discussed this topic with them. “I realised from my own experience and that of my peers that there is limited tax or regulatory knowledge in the treasury space, but lots of demand for information,” he says. “Together with the institute and thanks to the support of the Swiss Association of Corporate Treasurers we have been able to design a short three-day course to meet this demand and help the treasury profession as a whole grow and gain additional insights in this area.” The course will debut in May this year under the title ‘Swiss Treasury Practice’.

Crystal ball gazing

As well as keeping abreast of changing regulation, Hahn also spends a lot of time surveying the evolving technology landscape. Indeed, like many treasury professionals who have been inundated with a plethora of new technological ideas in recent years, Hahn remains unsure about what will work and what won’t.

One area he is sure will be significantly impacted, however, is the world of payments. “We are already seeing some big changes here, especially around instant payments and the transfer of same-day value,” he says. “And I expect this to continue to develop. Perhaps some new payment companies will begin to eat into the banks’ business.”

Elsewhere, Hahn is seeing lots of activity in the financial supply chain space. “There are lots of companies, a mixture of fintech and banks, all working in this area,” he says. “The problem is that it is developing in hundreds of different directions so nobody can be certain about which way is right.” He believes then that there needs to be a significant amount of consolidation before the wider treasury community begins to move towards the mass adoption of these solutions.

Although the impact of fintech on corporate treasury may be limited in the short term, Hahn believes that there will be a significant impact on the banks. “In fact, how the fintech industry forces banks to adapt may just be the biggest impact that fintech has,” claims Hahn. “Not only are banks being challenged by competitors they didn’t know existed a year or two ago, they are also seeing that the corporate community may benefit from solutions where they do not have sufficient experience. The banks’ strategies are changing as a result, and they will have to continue to adapt to remain relevant to their corporate clients in the future. It is an exciting space.”

More to do

With further work to be done on the group’s payment factory, a host of in-country and extra-territorial regulation to understand, new skills to learn and a changing technological landscape to understand and digest, Hahn says he is unlikely to become bored of treasury any time soon. He also has ambitions to work more closely with the industry as a whole to drive the profession forward, just as he has aimed to do with the treasury and tax qualification.

If this wasn’t enough, having a young family is also keeping Hahn more than occupied, and in an effort to achieve a more effective work-life balance he has recently reduced his working hours to four days a week, to spend more time with them. Hahn hopes that by doing this, he will also have more time to enjoy the stunning landscapes around his new home on the Swiss border.