Corporate View: Maciej Müldner, Skanska Poland

Published: May 2009

Headquartered in Stockholm, Skanska is one of the largest construction companies in the world, with turnover of more than €14,923m in 2008. The group currently employs over 60,000 people across Europe, the US and Latin America. This month, we talk to Maciej Müldner, Treasurer, Skanska Poland, about the creation of Skanska Poland’s treasury department and its evolution from ‘police force’ to strategic partner.

Maciej Müldner


Maciej Müldner joined Skanska SA in 2002 as the Treasurer of the Polish operations. Before his time at Skanska, he worked with Deutsche Bank and Bank Austria Creditanstalt as a Senior Relationship Manager. Maciej is a graduate of the Warsaw University and the CEE Trainee Programme at Bank Austria Creditanstalt Vienna. He is also a member of the Board of the Polish Corporate Treasurers Association.

Could you give me a brief overview of the company and your role?

Skanska is number one in the Polish construction industry. The company undertakes building, road, bridge and hydro-engineering projects and also acts as a developer. In addition, Skanska participates in public-private partnership projects, such as the construction of the A1 motorway, which is a key road infrastructure project in Europe.

The treasury department’s role is very simple: we are one of the support functions; we are needed to make the business run. We have two kinds of clients that we provide services to, namely our project managers and our shareholders.

How is the treasury structured and what functions does treasury perform within the organisation?

We are a very centralised team and since the treasury function was established back in 2001, we have taken a holistic approach to our tasks. We cover more or less everything finance-related, except for the accounting and controlling side. As such, we deal with all the company’s financial institutions and arrangements: leasing, insurance, cash management, asset liability management, financial risk management, project finance and documentary business, to name but a few.

Our payment factory, which has been running since 2003, was one of the first things we set up when we chose to centralise our treasury. Many companies have different departments for all of these functions, but here at Skanska everything that is related to financial risk is serviced by one central unit. We also run an accounting shared service centre, but this is separate from what treasury is doing.

The group treasury is like the internal bank: they are responsible for financing all of the business units and they set group policies. Group treasury is based in Stockholm, but when it comes to treasury set-up and tasks, these are usually the responsibility of the local treasury, subject to approval from the internal bank, of course.

How has the treasury evolved?

Skanska purchased a huge construction group in Poland called Exbud back in 2000. This led to a restructuring process in 2001 and the establishment of the Skanska Poland treasury function. I joined the team in 2002 and our first task was really to act like a police force. What this meant was that treasury was there to safeguard the company by enforcing the financial policies and ensuring that they were obeyed. Of course, we also provided some support and services, but our main role was just to make sure that everybody knew what the company’s financial procedures were, and that they followed them.

Very soon, however, we realised that we could not do this without the involvement of the whole organisation. Treasury is a very small group of people, and Skanska Poland has more than 6,000 employees with over 100 projects under way. As a treasurer, you can’t do something like this on your own. You need to have everyone on board.

We realised that treasury needed to become more service-orientated and more client-orientated to make people work with us. This was the whole idea of changing our treasury team’s approach, to become a support function. We didn’t want to become a centre of power, but rather a team that would be there for the company to manage financial risks, to provide value-added services and to give advice as to how to do things better. With this new service-orientated approach, we used what we call our ‘pit stop’ philosophy.

“We realised that treasury needed to become more service-orientated and more client-orientated to make people work with us.”

Could you explain this philosophy?

The pit stop concept comes, of course, from Formula 1. In Formula 1 you have a driver, in our case a project manager. The driver is the person who wants to win the race in a competitive environment. For us, winning the race is delivering a good project with a decent margin. The driver cannot make it on his own: without the team and without the pit stop, the driver cannot deliver.

In our case, the pit stop consists of the ‘driver’ coming in, and instead of providing fuel and new tyres, we provide services such as guarantees, insurance and hedging. Other support functions then join in to provide technical support with a new laptop, or legal advice, or a tax declaration. These are all the things that the ‘driver’ (project manager) is not really a specialist in, but needs in order to win.

How long has this philosophy been in place and what have the benefits been?

We have been working with this philosophy for many years, but it was defined and communicated internally at Skanska in 2006. This philosophy has provided a lot of benefits for the employees, especially for the back office functions, because they can now see the overall goal that we all contribute to: the success of the company. It also helps people to better understand what is going on elsewhere in the company.

As a result of this philosophy, we are also much more client-orientated. We try to understand how the business works and we look at the processes behind it. For example, the Formula 1 pit stop needs to be very fast and very efficient, so we looked at our processes to ensure that our pit stop is as quick as possible. We began to really talk to the ‘driver’ and the project team and to ask the right questions to find out about the business environment. What are the weather conditions? How is the competition doing? The trick, of course, was to change our approach, but to keep all the financial policies in place.

What other challenges did you face in implementing this approach?

The first thing really was to make sure that we didn’t spoil anything in the existing set-up by introducing a new approach. We, therefore, had to map every small process and dig down into the details. When you know what the processes are, you can optimise them, which we did by centralising treasury.

At the same time, we downsized the team from approximately 30 people to ten people, which brought its own challenges. The reason for the downsizing was primarily to achieve efficiency, but we obviously realised cost benefits at the same time.

After changing the set-up, we needed to convince our internal clients, ie the project teams, that it would work the same way as it worked before, but better. We decided to do this via a roadshow, which was an easy way of reaching people across the company and explaining that we would provide better services at a lower cost.

How has the new approach been received by treasury’s clients?

As a support function, we are measured by an annual survey, which is published internally. Treasury is getting better and better results each year. Communication has been crucial in achieving this success, and we have been going back to the business asking, “Do you like it? Is this what you expected?” in order to make sure we have the right approach.

The shareholders are also happier. We have fewer financial risks in the business units, so we have much better control over what is going on in the financial world and how it impacts our business.

What role did TMS implementation play in this change?

Previously, our TMS was the most commonly used type: an Excel spreadsheet! We had hundreds of spreadsheets, which were incredibly difficult to monitor effectively. We had thousands of foreign currency transactions, thousands of bank guarantees and hundreds of insurance lines to work with, and fulfilling IAS requirements for hedge accounting with this system was a real nightmare. As soon as we mapped the processes, we saw what could be automated and what manual work could be avoided. This was the main trigger for downsizing the whole team.

By implementing the TMS, all the time-consuming tasks such as reporting and archiving could be handled automatically. This has led to optimised processes and the employees are also happier because they don’t need to spend so much time on the boring tasks; they can concentrate on the fun things, such as handling the management of risks.

We have our own in-house IT developers and we had our TMS made for us by them, which was a cheaper and more flexible option for us.

What advice would you give to a company looking to set up a treasury department or centralise treasury processes?

First of all, what you need to do is look at the activities that should be undertaken by the treasury department. You need to take a holistic approach to it. In a lot of companies, different tasks are split between different departments, but even if this is the case, they still need to be controlled somehow.

I would also say, start looking for the risks that may occur in your business, map the processes, then optimise them. The last step you should do is, in fact, structuring the processes and establishing a team. Most of the people I know start the other way round by structuring first, but if you do this, you may not have the optimum solution and you may be missing something. Always start with the risks.

How has the new treasury structure improved the company’s cash management capabilities?

The first improvement we have seen is straight-through processing. This certainly cuts down the number of people involved in the payment process. Before introducing the payment factory, we had 25 staff processing payments; we now have one person doing everything. Treasury also now controls all of the flows, so we are better equipped to forecast and to see where the flows are going. This gives us a much better overview of the financial risks that may occur.

“Before introducing the payment factory, we had 25 staff processing payments; we now have one person doing everything.”

What are the main challenges Skanska faces in cash management today?

Where to put our money! With many of the business units in Skanska being cash-rich, cross-border cash management is a challenge for us. This has been made worse by the financial crisis because we are not sure which banks will survive. Switching cash management from one bank to another is a huge undertaking in this environment.

We already have established electronic banking and cash pooling systems and arrangements in place, so we are starting to look at the supplier side and achieving working capital improvements, and that will be one of the major challenges and tasks to focus on in the immediate future.

How have you tailored your risk management strategies to the current financial environment?

At Skanska, coping with risks has always been at the top of the agenda as construction is a very risky business. Treasury has always been involved in screening all of our products with regard to financial risk. The financial crisis has, however, prompted us to establish a special credit crunch risk monitoring team, which is a Skanska worldwide initiative. We are now introducing new fields into risk management too, such as the risks associated with suppliers and sub-contractors. These risks are frequently forgotten, but smaller companies will be much harder hit by the crisis than large corporates such as Skanska, so it is important to consider these potential risks.

“The financial crisis has, however, prompted us to establish a special credit crunch risk monitoring team, which is a Skanska worldwide initiative.”

In order to further minimise risks, we also have the opportunity to contribute at the project design phase. Once the project is up and running we monitor the risks and deal with them when they occur. We, as corporates, don’t have all the same tools that banks have, so we need to be really open to new possibilities at the moment. To keep ahead, you need to be very close to your projects and you need to know your business. When you know how your business units work, you know how to help them.

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