It’s fair to say that most corporate treasures have moved up the career ladder via positions in cash management or assistant treasurer. But Vincent Almering landed his first job in treasury as Group Treasurer at Eindhoven-based Interfood where he has led the division for the last five years. In an unusual career path that is testimony to the merits of studying on the side Almering proves that anything is possible with a proactive approach to treasury that places understanding the business at its heart.
His first job after graduating in engineering from Eindhoven’s University of Technology was with Dutch multinational Philips in a financial analyst role in the semiconductor division. His decision to go back to university to complete a master’s in finance didn’t stop his steady progress up the ranks.
Like working in the team running the leveraged buyout of the company’s semiconductor business to a consortium of private equity businesses. A role that took him to Austin, Texas where he worked for the spin off entity, NXP Semiconductors.
“It was great to be abroad for a couple of years and work in the States for a private equity owned company,” he says.
Two and half years later, Almering moved back to the Netherlands to join ASML (another semiconductor business spun off from Philips) where he worked in the company’s supply chain and later the deal structuring team. It was at this point his growing interest in the cash side of the business started to trigger an enthusiasm for treasury. “The accounting and forecasting side of a business doesn’t reveal the cash side, and I wanted to know more about cash flows and how debt was financed,” he says.
There were no vacancies in ASML’s treasury team so when he received a call from a headhunter to join the dairy company Interfood in a finance director role he jumped ship, taking a leap of faith that a role with influence and autonomy at the smaller company would ultimately support his journey to treasury.
Almering was responsible for Interfood’s European finance operations, overseeing a team of 12. Although he was instantly comfortable in the accounting role and working across complex areas like the company’s derivative exposure, he realised a job in treasury remained out of reach without a treasury qualification. With the support of Interfood’s CFO, it wasn’t long before he was back at university, studying alongside the day job to gain a qualification in treasury that put him in pole position to step into the role of Group Treasurer when a vacancy opened up.
Studying treasury brought a raft of new skills. Like a first-time grasp of the complexities around cash pooling; how to negotiate bank relationships, IT and tooling in the treasury landscape as well as the legal aspects of the role. “My qualification was much more than a refresh,” he says. “I developed a new awareness of the fast-changing treasury landscape.”
From the new vantage of treasury, Almering got a fresh appreciation of the fast-moving dairy commodity trading sector where goods are made in developed markets and shipped to consumers in markets like Africa and China. Unlike ASML (a cash rich company with an 85% market share) Interfood is a low tech, low margin, high volume business with debt and a permanent negative cash position. Interfood may not be working in cutting edge semiconductor manufacturing, but Almering quickly understood Group Treasurer promised a thrilling ride into the capital and debt markets.
Getting to grips with change
One of his first changes involved shoring up Interfood’s banking relationships in a working capital reboot. Trading, he explains, involves buying and selling, storing and moving products; insuring them, taking positions and selling them forward. Mindful that growing Interfood’s trading volume required more cash, he set to work expanding the company’s finance facility (from €200m to over €500m) while increasing the number of relationship banks from three to six.
Expanding the banking facility was also an opportunity to negotiate more favourable conditions and ensure Interfood’s partner banks understood the company’s business model, particularly the role of collateral in supporting the corporate borrowing base. Something he believes is now bringing more banks back into commodity trade finance.
“As a treasurer, you want your banks to ask relevant questions and understand the risk. Interfood is a trading company with a large balance sheet so our banks can lend us money against assets in storage or receivables. Banks need to be aware and understand this mechanism because if you have more collateral to pledge to the banks, you can borrow more.”
Interfood’s model, he continues, is quite different to a company seeking funds to, say, build a factory. The company requires headroom to deal with sudden and unexpected spikes in volatility because if treasury is unable to provide liquidity to the trading team, the whole machine stops.
Like any commodity, dairy prices can suddenly increase – witness how they doubled in value after Russia invaded Ukraine in February 2022. At that time the cost of financing working capital also doubled, adding weight to the balance sheet and requiring much more cash in the company.
Because Almering had already built in excess liquidity, the company had access to all the cash it needed.
“If I do something, I do it because we need it for the next three years, not because we need it today. If I need it today, it’s too late. Banks will always lend, but you will end up paying for it and having to give up other terms. You need to think a couple of steps ahead and plan for the worst case that can happen – margin calls, supply chain disruptions, or even a threefold increase in prices.”
If I do something, I do it because we need it for the next three years, not because we need it today. If I need it today, it’s too late. Banks will always lend, but you will end up paying for it and having to give up other terms.
Refinancing with new banks and ensuring easy access to liquidity hasn’t just supported the company through bouts of dairy price volatility. It has also laid the foundation for growth visible in turnover growing from €1.5bn to €3.5bn – in lockstep with better access to liquidity.
The hunt for new banking partners was complicated by ABN AMRO exiting commodity trade finance in 2021. Interfood had six months to replace a €120m financing facility with the bank (around a third of its total financing facility at that time) and source a new portal for all its cash management. Almering onboarded new banks like ING and Deutsche and used the opportunity to have the treasury operations manager overhaul cash management processes by Interfood joining the Swift network.
Like all treasurers, Almering espouses the benefits of efficiency. Something that has become second nature given Interfood’s treasury team is just two people – tiny relative to the company’s €3.5bn revenue. That said, he argues the size of the team hasn’t stopped treasury being effective, something he argues should always come before efficiency – or automation.
“Do the right thing, and then get quicker,” he advises.
Almering links treasury success to a simplified landscape manifest around maintenance, axing facilities that aren’t used and introducing essential tools. His decision to dust off Interfood’s mothballed TMS which was only used as a tracking tool, is a case in point.
In the past the team used to onboard and offboard credit control colleagues in six bank portals, a process he recalls as “a hell of a job.” Rebooting the TMS has enabled treasury to replace time consuming banking portals with instant authorisation.
“Getting rid of our local banking portals was essential to doing treasury in a lean way. We have our own Swift number and use it to make host-to-host connections to our banks, so all payments, FX and approvals are centralised in TMS and the user maintenance has been reduced.”
Navigating risk
Today, Almering is increasingly focused on Interfood’s growing commodity derivatives operation that runs alongside the physical movement of goods. It’s not a new risk – the company has been trading derivatives for years – but he says the funding of commodity derivatives is a key topic in his discussions with banking partners.
Volatility in derivatives is always higher than in the physical market and trading derivatives involves a complex landscape of brokers, margin calls, counterparty risk (that may include hedge funds) and a different legal framework. Meanwhile Interfood’s derivatives desk has grown to 12 people and has a strong draw on liquidity.
“You can’t forget you have these positions on. They act as a hedge for the physical products we trade and you have to maintain them. If the positions are out-of-the-money, you need to deposit margin.”
Another risk – and opportunity – further out on the horizon but looming closer into view is sustainability and a world with fewer cows. Almering believes that over time the dairy market in more western nations will gradually shift to alternative products where milk and cheese are made with precision fermented technologies. Part of his role in the corporate development team involves learning about how the company incorporates dairy alternatives into the value chain.
He’s already seeing a role for treasury, anticipating how this type of innovation will support the company to reduce its Scope 3 emissions which, attached to KPIs, could also reduce the cost of capital. “Our banks are keen to collaborate and support these types of new products entering the market. As a treasurer, when money flows from A to B you are always somewhere in the chain.”
What he enjoys most
One of the aspects of the job he enjoys most is the ability of treasury to meaningfully fund new business opportunities or save a company money: if a new cash strategy secures a lower cost of funding, it’s easy to articulate the business case. These aspects of the job bring treasury into proximity to the C-suite, another element of the role he particularly enjoys, alongside spending time with the wider treasury community of bright lawyers and sharp bankers in an ‘always on’ culture.
“If you have a good reputation, it’s possible to get things done.”
It leads him to reflect, again, on the importance of treasurers understanding the business model so they have a firm grasp of how the business makes money – and the types of projects that are best avoided.
Reflecting on how treasury might change in the future, he first observes how little has changed. For example, treasurers still use the same sources of funding, and although he notices innovation in payments and supply chain finance, banking relationships are the same as they’ve always been.
It’s a corner of treasury he believes is ripe for disruption given new sources of finance like institutional investors, insurers or private debt markets.
APIs and algorithms (now, he says, often rebranded as AI) make the life of a treasurer easier, but he says that technology can over promise and under deliver.
It’s why integrating any new tech should be done in a careful, detailed process involving reference checks and assurances that the vendor understands the business model.
Perhaps his biggest wish is easier KYC. He suggests a more risk-based, traffic light system rather than today’s standardised, routine process, unnecessary if nothing in the relationship has changed or needs updating.
Every year the team spend hours reapproving banking relationships when he would much rather they could work on fun and meaningful projects like commodity derivatives or counterparty risk.
In October, Vincent left treasury and took up a role as Interfood’s Global Derivatives Director.
