View
216
Download
0
Category
Tags:
Preview:
Citation preview
Sales and credit, one team ?
Reality or myth ?
Topics:
• Chevron Phillips Chemicals at a glance• Product range• EMEA Credit Organization• Scoring System• Collection Activities• Conclusion
Company formed in July 2000
About Us
• Manufacturer of petrochemicals that are essential to manufacturing over 70,000 consumer and industrial products
• At end of 2012 : $9.4 billion in assets and more than $13.3 billion in annual revenues
• Trusted supplier to customers in more than 125 countries
• A highly educated & diverseworkforce of approximately
5,000 employees working on five continents across the globe
Manufacturing Locations
Saudi Arabia Qatar
Singapore
China
South Korea
Belgium
Colombia
United States
Global Significant Projects – Middle East
SAUDI POLYMERS COMPANY – SAUDI ARABIA
Q-CHEM II – QATAR
2012 Sales & Assets
End Uses
• Adhesives and Sealants • Agricultural • Appliances • Automotive • Building and Construction • Chemical Manufacturing • Dry Cleaning • Electronics • Healthcare• Household • Imaging and Photography
• Industrial • Lubricants• Oil, Gas and Mining • Packaging • Paint and Coatings • Personal Care and Cosmetics • Pharmaceuticals • Pipe• Plastics and Rubber • Solar Panels• Textiles
EMEA Credit Organization & Strategy
• Team of 4 people• Global exposure control via SAP FSCM• Unique financial scoring (implied rating)• Best practice sharing with US & Asian colleagues• Involve sales in collection activity• Tight follow-up on overdue invoices, order blocking when invoice 5
days late• Sales person takes ownership of unpaid debt• Monthly meeting with product line manager on default accounts
Implied rating
12
Investment Grade Speculative Grade
Moody's Rating Aa or Aaa A Baa Ba B Caa
S&P Rating AA or AAA A BBB BB B CCC
Very strong Strong Good Marginal Weak Very weak
1. EBIT Int Cov. *(x) 8.8 + 8.7 - 5.4 5.3 - 3.1 3.0 - 1.6 1.5 - 0.5 < 0.5
2. Funds Flow/TD*(%) 51 + 50.9 - 38 37.9 - 25 24.9 - 14.3 14.2 - 7.7 < 7.6
3. TD / TC (%) < 38 37.9 - 43.843.9 - 54.3 54.4 - 67.9 68 - 82 > 82
4. Debt / EBITDA (x) < 1 1 - 2 2 - 3 3 - 6 6 - 9 > 9
5. 4-VARIABLE Z-SCORE > 7 6.9 - 6.4 6.3 - 5.6 5.5 - 4.7 4.6 - 3.7 < 3.6
*When scores fall in more than one category, give more weight to the Coverage ratios.
Uniform rating system on corporate level
EMEA Customer Portfolio Profile
Investment grades : AAA, AA, A & BBBSpeculative grades : BB, B & CCC
BBB
A
AAAAA
BB
CCC
BSecured
Not rated
Investment grade : 70%
Speculative grade : 22%
Collection Activities
• Weekly dunning letters by email or fax
• Mid-month statement of account by email (all outstanding invoices are mentioned)
• SAP Credit check indicating overdue situation when new order is entered
14
Collection Procedure
15
5-7 day
s
• Treasury/Credit contacts the customer by email (dunning letters are sent automatically through the SAP system)
>10 day
s
• Treasury/Credit sends email to CSR with copy to sales person• CSR to contact the customer and inform Treasury/Credit/Sales person
>3 weeks
• Treasury/Credit sends email to sales person with copy to CSR and credit manager
• Sales person to contact the customer and inform Treasury/Credit/CSR
>8 weeks
• Credit and treasury manager will involve legal department after agreement with responsible sales person and product line manager
Overdue of:
EMEA Credit and Collection KPI’s
Key Performance Indicators EMEA (year 2012)
• DSO 38 days
• Delinquency 1 day
• Collection Efficiency 96 %
• Overdue at month-end < 3%
• Annual write-off < 0.1 Pro Mile
Tools of Success
• Strong communication and mutual support between credit and sales
“sales are our eyes and ears on the field”
• Involvement of sales in the collection activity and ownership of unpaid debt
• Tight follow-up on overdue invoices• Control on payment terms > risk control• Financial training provided by credit to sales’ force
17
Sales & Credit = one team & it works!
Recommended