Perspectives

Corporate View: Paul Schreurs, Intertrust

Paul Schreurs, Group Treasurer, Intertrust

Peak performance

A well-tempered work/life balance – linking a passion for preparation with a love of two wheels – is what keeps Paul Schreurs, Group Treasurer at Intertrust on top form. He tells Treasury Today how he has reached the summit of his profession.

Paul Schreurs

Group Treasurer

Intertrust logo

Intertrust Group, listed on Euronext Amsterdam Stock Exchange since 2015, provides multinational corporations, financial institutions, alternative investment funds and private clients with specialised administrative services. Headquartered in the Netherlands, it has 41 offices in 29 countries around the world. Reported 2018 revenues topped €496m.

Two years into his role as Group Treasurer at Intertrust, Paul Schreurs is still delighted to have been given the rare opportunity to establish a treasury function from a kind of greenfield situation. With an expanding client-base of multinational corporations, financial institutions, alternative investment funds and private clients, Intertrust had realised the need to create a new and dedicated treasury function and saw in Schreurs the skill and experience essential to establish operations from scratch.

Today, Schreurs and his small team are responsible for a range of traditional treasury tasks. These include internal and external financing, cash management, financial risk management, working capital, and equity-related transactions such as dividend and share buy-backs. In addition he supports the board in aspects such as capital allocation. Of course, being granted the freedom to set up treasury precisely as he wanted – including implementing a new TMS – came with huge responsibilities. These he steadfastly carried, supported on broad shoulders formed by many years’ work in the finance field.

Schreurs had come to Intertrust from international health care company, Mediq, where he had ploughed a deep furrow for five years. This provided him with a “good foundation” of how to organise the new unit, starting by replicating his own key reports and pooling structures as a means of securing a quick win in the new role.

Journey to treasury

The depth of professional experience attained by Schreurs over the years first saw him step from a business-focused university education into a ‘Knowledge Management’ consultant role with EY. “I found quite quickly that the number of assignments was limited here, so I decided to look for a more finance-oriented opportunity,” he recalls. A role in Controlling for a real-estate finance company (part of a major Dutch bank) followed.

As part of his new duties, Schreurs found himself working alongside the finance and treasury teams. Although he admits that “few people start their careers with a clear decision to be in treasury”, his exposure to the profession, especially at the point when it was decided to sell off the business, was something of an epiphany.

Schreurs describes the activities generated by the divestment as being a “pressure cooker project”, in which the whole portfolio of around €12bn had to be refinanced. “I loved that pressurised environment; I knew then that this was the direction in which I wanted to move.”

Bigger platform

Several steps later he arrived at global giant, Royal Philips, as Corporate Finance Manager. He soon moved to Philips’ lighting division, briefly taking on his first bona fide treasury position before heading back to the corporate hub to run internal financing within EMEA.

With designs on leading a group treasury within a listed company, Schreurs progressed then to Mediq where, within a few months of joining, he was thrown into the machinations of a public-to-private transaction as part of the firm’s private equity (PE) takeover. As treasurer, he was now working with significantly higher leverages, the PE mindset of “financial engineering” seeking to optimise the firm’s capital structure.

The increased pressure to make financing work efficiently was something upon which Schreurs thrived. Working closely with the investor’s team, he engaged with a number of recapitalisation projects and refinancing transactions. “There was never a dull moment under PE,” he recalls. He even found time to set up new treasury policies and reporting structures, and implement a new TMS.

With Intertrust now in the market for a skilled treasury professional, Schreurs was an obvious target, having earnt his wings through sheer hard work and a willingness to engage with challenging projects. Today, with a fully functioning treasury operation, two share-buybacks and a complete refinancing project under his belt, Intertrust’s faith has been fully vindicated. With the company also obtaining ratings from S&P and Moodys as part of a €500m/seven-year bond issuance project – its first ever – Schreurs is drawn once more to say that “there has not been a dull moment yet”.

Lessons

In his journey so far, he has observed a common association between the trio of finance and accounting, tax, and treasury. It is a “triangular relationship” that he feels is extremely important to keep in alignment because “there is always the risk that some aspect will fall between the cracks”. Although all three functions report up to the CFO, Schreurs believes that the strength of the relationship is assured only with regular communication. “There are many aspects of our work that overlap; communicating openly gives us a strong basis for the health of the overall finance function.”

Within his own department, Schreurs is an adherent to the philosophy that ‘preparation prevents poor performance’. It is particularly applicable when answering key questions from senior management. Evidence of his preparedness can be seen in his ‘standard’ treasury reports, formatted to contain “all the essential treasury facts and figures”.

Detailing core elements such as debt positions, value and location of all cash balances, hedging instruments, FX rates, interest payments, volume of equity and outstanding treasury shares is invaluable. “If I’m asked a question, I want to be able to answer it immediately,” he explains. “Having my treasury book with me at all times is a robust basis for being able to do this.”

Challenges

Although it does undertake certain treasury-related duties for clients, Intertrust’s treasury does not generally get too close to the operational side of the business, says Schreurs, adding that he does not see “too many challenges” from a business perspective.

Indeed, with stable cash flows coming out of the business, and a “very light” inventory-free balance sheet based solely on offices and people, it is indeed a “relatively easy” and somewhat “predictable” business within which to function. Not everything can be planned for though, and he sees necessity in continuing to make structural improvements. Working capital is an area of particular attention: “If you lose focus here, you lose control over it,” he warns.

Whilst many banks claim to offer essential working capital management tools, Schreurs does “not see a lot of added-value in this kind of banking product”. Instead, his attention is on improving operational processes through standardisation and centralisation. “In the past, cash collection was typically part of the client-facing role; now we are transitioning towards a more centralised function by credit managers,” he reports.

And with multiple, rather dispersed acquisitions to its name, Intertrust’s TMS is indeed affording treasury an increasingly centralised view of its global cash positions, adding strength to its decision-making. As the TMS roll-out continues, that strength will only increase.

Pressure projects

Schreurs is clearly not afraid of tackling “intense projects”. Knowing full well that this is where the real rewards are to be found, he led the company’s recent refinancing. Having developed the proposal for a hybrid financing structure, he used Intertrust’s first ever bond issuance to tap the capital markets, running this in parallel with a new bank financing programme designed to give the company a diversification of funding, and the right currency mix and extended maturities.

Preparations for bond issuance began in summer 2018 with a concurrent project with Moodys and S&P to secure the necessary credit ratings. Achieving ratings just below investment grade (Ba2 from Moodys and BB+ from S&P) was a suitably strong platform for the launch, the timing of which purposefully coincided with the release of Intertrust’s Q3 figures. “It proved to be the perfect window of opportunity for going out on the roadshow,” comments Schreurs. With London, Paris and Amsterdam trips on the agenda, the book went on to perform well, being significantly oversubscribed, enabling “a very good pricing outcome”.

Running an intense project like a complete refinancing reminds Schreurs, a keen cyclist, of climbing Mont Ventoux. “You always have to keep the summit in mind but, in the moment, you only focus on the next hairpin. Finally reaching the summit and looking back at how you got there can be very rewarding.”

Strategic intent

Asked about the ‘strategic role of the treasurer’, Schreurs recognises three specific values that treasury should bring to conversations at this level.

If financing is the foundation stone of most company growth, then liquidity and flexibility are its vital elements, he states. This notion he describes as the first “strategic pillar” of treasury.

The second pillar exists in M&A projects, these being seen as a key mechanism for growth, Intertrust having engaged in this space many times over the years. As such, Schreurs believes treasury should be involved in the process as early as possible. His reasoning is clear. There are three aspects of M&A engagement. Due diligence on the target company’s existing finance structure, cash balances and working capital, is vital, he states. Treasury should also have essential input on the financing of the deal, providing information on the impact it may have on covenants and liquidity, especially ensuring there is sufficient headroom in any such undertaking. Finally, post-merger integration benefits greatly from treasury’s involvement, he believes, ensuring that the acquired business can, for example, become part of the cash pool or that the subsequent structuring of inter-company finance is efficiently modelled.

A third strategic pillar concerns equity-related activities, where treasury should help define the corporate capital allocation policy around dividends or share buybacks, most notably in terms of balancing shareholder preferences with what’s financially best for the company.

Colour-coding

As a self-professed “analytical, dedicated and result-oriented” individual who is utterly convinced of the need for planning and preparation, Schreurs sees much value in the ‘awareness’ generated through recent Insight Discovery ‘Colour Energies’ training.

Red, yellow, green and blue represent different psychological states, loosely classified (respectively) as having a focus on results, interaction, harmony, and analysis, he explains. These colour modes inform different characteristics, and likely reactions under certain circumstances.

These behaviours are present in all individuals but according to psychiatrist Carl Jung “every individual is an exception to the rule” and as such, they are dynamic. However, it is advantageous for the individual to be able to recognise the dominant colour energies in others, and adapt their own ‘energies’ accordingly.

For Schreurs, although finance people are “typically blue”, he believes that there is a strong aspect of red in the successful treasurer. “You need each of these energies at certain times as a treasurer, but a focus on results and analytical skills is most important.”

And now, having climbed the treasury hill to the top, Schreurs has experience to spare. However, for up-and-coming treasurers, reading Stephen Covey’s ‘The Seven Habits of Highly Effective People’ is, he believes a great place to start. “In my early career, it was a very useful guide. It gave me a strong understanding of what’s important, such as being proactive and always keeping the end-goal in mind.”

Real-world approach

Reading list aside, Schreurs also suggests a practical approach based on “keeping things simple”. Abiding by his own guidance keeps him, for example, from entering into the exotic structures that some “creative bankers” may offer. “I always have to be able to explain things in simple words to the executive committee – if I cannot explain it very simply, then it is probably too complex and risky and we shouldn’t do it.”

Nonetheless, he feels that some professionals seem to be drawn to complexity. He observes, for instance, that “auditors often seek a complex and theoretically perfect implementation of a new IFRS standard even though it is entirely possible to adopt a practical and usable approach and still achieve the same results”. Pragmatism is clearly a defining feature of the Schreurs approach to treasury.

The practical approach gets things done, but Schreurs admits that throughout his career he has always been most interested in the “high impact game-changing projects” that bring him closer to the executive board. He has experienced change of ownership no less than three times, each pitching him into the “pressure cooker”, but each outcome becoming the source of professional satisfaction and pride.

The major refinancing projects too have been most agreeable, he says, especially the most recent with Intertrust. “Previously it was always someone else calling the shots; with this project, it was down to me. The excellent conclusion in terms of pricing and structure is what makes me most proud and is what keeps me going.”

Keeping the wheels on

Of course, there is more to life than treasury and Schreurs consciously seeks a healthy work/life balance. He cites Covey’s assertion that a work/life balance is about “sharpening the saw”. Taking quality time out allows that honing process to take place “so thereafter the individual can become more professionally effective again”.

Family is always important, he says, “but when I’ve been under pressure or the work has been intense, sport is essential, and for me, that means cycling. It’s the right way to keep me physically healthy and in good mental shape.”

Having conquered the notorious Mont Ventoux, Schreurs believes that anyone similarly inclined towards a two-wheel challenge may see a metaphor for the hard work but ultimate satisfaction derived from overcoming professional obstacles. Cycling certainly offers an image befitting of his own slant on treasury. Indeed, his is a career marked by a positive approach to challenges that has resulted in some rather satisfying outcomes.

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