Strictly Private and Confidential - AFTE

Treasury Reporting

AFTE Presentation – 17th May 2019

Strictly Private and Confidential

PwC

1. Introduction 3• CEO Survey 2019

• CFO priorities in 2019

• PwC Global Treasury Survey

2. Expected Benefits of Treasury Reporting : synthesis of dashboard architecture and illustrations of content 19• Cash

• FX

• Asset Management

3. Building your Treasury Reporting : approach details and cash use cases 68• How do you obtain key metrics?

• Which difficulties can you encounter?

• Examples of cash use cases

4. Reporting Guidelines : illustrations 82

Agenda

2

Introduction

PwC 4

Key messages

PwC 5

PwC 6

A trend shared by CEOs worldwide

9 9

PwC 7

Data : for 10 years leaders have deplored non optimized data exploitation due to lack of qualified skills

PwC 8

PwC 9

Acknowledgments

*17 CFOs wished to remain anonymous

PwC 10

Spotlight on priorities for 2019 – Cash (1/2)

PwC 11

Spotlight on priorities for 2019 – Cash (2/2)

PwC 12

PwC 13

Strenghtening cash flow management by anticipating changes in situation is the primary challenge for Treasury Departments in 2019

PwC 14

Investment strategies for 2019 are mainly driven by currently low interest rates and the expectation that they will rise

PwC 15

Chief Financial Officers are prioritising self-funded investments in 2019

PwC 16

Cash Prediction

PwC Global Treasury Survey

PwC Global Treasury Benchmarking Survey

17

PwC

Treasury Priorities

Cash Flow Forecasting1

Cash Management Optimisation

2

Financial Risk Management

3

Cash Repatriation4

Refinancing5

Capital Structure6

PwC

CFO Priorities

Access to cash1

Currency Risk2

Capital Structure3

Cash Management4

Debt management / covenants

5

Working capital6

TREASURY REPORTING

Synthesis of Dashboard Architecture and Illustrations of Content

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Approach

The Treasury Dashboard aims at

consolidating all treasury reportings within

one single dashboard, allowing users from

all departments to access up-to-date data

via a simple interface.

Following a Design Thinking approach,

users are first interviewed to gather their

needs, then take part to co-creation

workshops where they are able to create

their ideal dashboard.

This document constitutes a synthesis of

the needs expressed by users

(architecture and content) for an ideal

dashboard.

21

Treasury Dashboard architecture

FX ASSET

MANAGEMENT

CASH

The dashboard is composed of 3 sections: FX, Asset Management and Cash.

Colors indicate the level of each screen in the architecture: blue is top-level, and green is the deepest level.

The home page is composed of all top-level screens in this view.

The following slides will present all screens by drill down order: it will begin with the first level 1 screen, then present all its

sub-screens to the deepest level, before presenting next level 1 screen.

CASH

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CASH POSITIONCash evolution and forecast

24

€Currency

Jan 1, 2018 – June 30, 2018

AllProduct line

GroupDivision

AllEntity

AllAccount

Conso / Non conso

LEVEL 1

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CASHFree Cash Flow monthly evolution

25

Jan 1, 2018 – June 10, 2018

GroupDivision

LEVEL 1

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CASH POSITIONCash/Liquidity report

26

June 29, 2018

AllProduct line / BU

GroupDivision

AllEntity

AllAccount

LEVEL 2

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CASH POSITIONCredit limit usage

27

June 29, 2018


GroupDivision

AllEntity

€Currency

Conso / Non conso

LEVEL 3

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CASH POSITIONBank and IC accounts

28

June 30, 2018

SRExotic currency

AllEntity

GroupDivision

AllBank

AllAccount

LEVEL 1

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CASH POSITIONCash evolution (cash-in-hand)

29

June 29, 2018

€Currency

GroupDivision

LEVEL 2

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CASH POSITIONBank and IC accounts by region

30

+10€ bn

+2$ bn

+100BRm

June 30, 2018

€Currency

AllEntity

GroupDivision

AllBank

LEVEL 1

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CASH POSITIONLimit evolution and usage including violation

31

Jan 1, 2018 – March 30, 2018


GroupDivision

AllEntity

€Currency

Conso / Non conso

Limit Violation Usage

LEVEL 2

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FORECAST

32

July 12, 2018

3510Entity

CommercialDivision

LEVEL 1

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FORECASTHistorical Overview

33

Jan 1, 2017 – Dec 31, 2017

GroupDivision

€Currency

LEVEL 2

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FORECASTAmount Forecasted

34

July 12, 2018

-Currency

Commercial

LEVEL 1

FX

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HEDGING STATUS

36

2024

LEVEL 1

June 30, 2018

GroupDivision

€Currency

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HEDGING ACTIVITY

37

* By default the view is per $ only

LEVEL 2

June 30, 2018

Currency Pair

Division Commercial

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PERFORMANCE & RISKHedge ratio vs Expected Business Exposure

38

LEVEL 3

June 30, 2018

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MARKET DATA

39

3yr

s

LEVEL 4

Jan 1, 2018 – March 30, 2018

From

CDS

To

€Currency

Granularity

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HEDGING STATUS

40

1 to 5 yrs

LEVEL 1

June 30, 2018

Type

€Currency

Instruments

Division Commercial

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PERFORMANCE & RISKOpen exposure

41

LEVEL 3

June 30, 2018

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HEDGING ACTIVITYSpeed Grid

42

Highlighted in

green: Hedging in progress

red: No hedges can currently be implemented

FXC DateLEVEL 2

June 30, 2018FXC Date

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PERFORMANCE & RISKHedge book

43

LEVEL 3

June 30, 2018

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PERFORMANCE & RISKHedging capacity

44

LEVEL 3

June 30, 2018

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PERFORMANCE & RISKUSD order book to open exposure

45

LEVEL 3

June 30, 2018

Drill downWhen clicking on each bar, detailed

view appears as a table.

ASSET MANAGEMENT

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CREDIT RISKExposure

47

March 29, 2018

€Currency

LEVEL 1

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CREDIT RISK

48

March 29, 2018

All banksBank

LEVEL 2

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CREDIT RISK

49

LEVEL 3

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CREDIT RISKBond exposure

50

June 1, 2017 – May 30, 2018

LEVEL 4

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CREDIT RISKCorporate bonds

51

June 1, 2017 – May 30, 2018

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PENSIONS

52

December 31, 2017

LEVEL 1

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FUNDING

53

March 30, 2018

LEVEL 1

GroupDivision

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ASSETS & LIABILITIES

54

June 30, 2018

LEVEL 2

GroupDivision

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PORTFOLIO PERFORMANCE

55

March 30, 2018

LEVEL 3

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ASSETSVaR of assets portfolio

56

March 30, 2018

LEVEL 4

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ASSETSDebt maturity schedule

57

Jan 1, 2019 – July 30, 2019

€ BondsDebt instrument

LEVEL 2

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ASSETSGeographic Bond Allocation

58

March 30, 2018

LEVEL 3

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ASSETSVaR detailed analysis

59

March 30, 2018

LEVEL 4

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ASSETS

60

March 30, 2018

LEVEL 2

Building your Treasury Reporting : approach details and cash use cases

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« Russian doll » approach

62

Approach details

Niveau 0: Vision COMEX

• Vision synthétique restituant d’un coup d’œil l’activité de

l’entreprise avec identification d’alertes éventuelles,

• 1 indicateur de synthèse de la performance par pilier.

Niveau 1: Vision COMEX (zoom)

• Vision affinée de chaque pilier,

• Plusieurs indicateurs et leur historique facilitant la

gestion de alertes et des priorités par pilier.

Commentaires

Niveaux de reportingNiveau de détail

Niveau 2: Vision détaillée et commentée

• Ensemble élargi d’indicateurs facilitant l’analyse des

causes et la gestion prospective par pilier,

• Intégration de commentaires explicatifs en mode manuel

par le management de l’entreprise.

Prospection et

analyses

2

Stratégique1

PwC 63

Dashboard model

Vision niveau 0 – Vue d’ensemble

Nous proposons un dashboard

composé de 8 piliers :

• Finance

• Cash

• Business

• Assets

• Sales

• Purchases

• IT

• HR

Le niveau 0 du dashboard comportera

une tuile d’information par pilier qui

sera composée de maximum 2

indicateurs agrégés.

Sur la première version du

dashboard nous nous

concentrerons sur les piliers

Finance et Cash.

PwC 64

Russian doll representation

11

2

3

L’écran d’accueil du dashboard composé de 8 piliers.

Si l’utilisateur clique sur un des piliers (ici sur le pilier Cash), il sera redirigé vers la page Cash.

Celle-ci comporte différents KPI concernant le Cash (Position, dette, etc.). Cela permet une

vision plus affiné de chaque pilier avec plusieurs indicateurs et leur historique facilitant la

gestion de alertes et des priorités par pilier.

Si l’utilisateur clique sur le

niveau 2, il sera redirigé vers

une nouvelle page. Celle-ci

représente une vision détaillée,

avec un ensemble élargi

d’indicateurs facilitant l’analyse.

2

3

PwC 65

Cash use cases

La restitution attendue est la page Cash du tableau de bord CFO

permettant de suivre l’activité Cash de l’entreprise. Rythme pouvant

aller de chaque jour à chaque mois en fonction de la fréquence de

saisie.

Les informations concerneront les KPI les plus importants selon

l’équipe Finance, affiché de manière agrégée sur trois vues différentes

(entité, pays et BU). Des filtres que l’utilisateur pourra sélectionner

directement depuis le tableau de bord lui permettront de switcher d’une

vue à une autre.

Les KPI demandés sont :

• Cash

• Dette

• Dette net

• Pool

• Trap Cash

• Leverage Ratio

• Coverage Ratio

• Top 10 Cash Legal Entity

• Evolution of Cash Position

• Actual vs Forecast

• Bridge Flow (Actual et Forecast)

Les restitutions attendues sont des Dashboards Power BI sur les 3

niveaux de détail.

Couverture fonctionnelle

Fonctionnalités clés

CFO Groupe/BU/Entité, contrôle de gestion

PDG, DG

• Voit le dashboard Cash avec les différents KPI.

• Voit toutes les Entités, Pays et BU.

• Voit le niveau 2 en fonction des filtres appliqués au

niveau 1 (filtres Entités, Pays, BU et temporel).

• Voit les Entités/BU/Groupe inclus totalement ou

partiellement dans son périmètre

• Voit les agences de sa BU

Utilisateurs cibles

L’un de ces piliers concernera la partie Cash de l’entreprise. Ce Dashboard devra offrir une vision simple et fiable, de manière agrégée, des KPI les plus important enCash (principalement cash, dette et dette net)

Drill Down :• La granularité la plus fine pour l’actuel sera : la facture

clients ou la transaction bancaire (à revoir avec l’équipe)

• La granularité la plus fine pour le forecast sera : la

Balance Agée

• La granularité la plus fine pour la dette sera : la ligne de

position de dette

3 niveaux de détail• Niveau 0 : Vision de la santé global de mon pilier Cash

• Niveau 1 : Vision détaillé de la santé de mon pilier Cash

• Niveau 2 : détaille de mes positions de cash et de dettes

PwC 66

Cash use cases

Dashboard Level 1 – Key metrics

PwC

• How would you build this KPI?

• What data do you need to build it?

• Which difficulties can you encounter

building this KPI?

67

Focus on key metrics : net debt position

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Net debt position

Required data and potential difficulties

• ID_DEBT

• CURRENCY_ISO

• LEGAL_ENTITY_CODE

• REC_ACCOUNT_CODE

• BANK_CODE

• COUNTERPART

• TYPE_DEBT

• AMOUNT

• DATE

Debt Position

• ID_DEBT

• CURRENCY_ISO



• BANK_CODE

• COUNTERPART

• TYPE_DEBT

• AMOUNT

• DATE

Debt Schedule


• LEGAL_ENTITY_NAME

• COUNTRY

• CURRENCY_ISO

• BU_CODE

Entity Referential

• CURRENCY_ISO

• REF_CURRENCY_ISO

• CHANGE_RATE

Currency

Referential

Potential difficulties :

• Disparity of IT systems

• Non exhaustive list of entities / bank

accounts / external debt facilities / IC

Loans / Cash pooling positions / IC

current account positions

• Limited skills of system users

• Limited frequency of data availability

PwC 69

Focus on key metrics : Pooled Cash



• Which difficulties can you encounter

building this KPI?

PwC 70

Pooled Cash

Required data

• BANK_CODE

• BANK_DESCRIPTION

• COUNTRY

Bank Referential

• BANK_ACCOUNT_CODE

• BANK_CODE

• CURRENCY_ISO

• ID_COUNTRY

• CASHPOOL

• CASHTRAP

Bank Account

Referential• LEGAL_ENTITY_CODE


• COUNTRY

• CURRENCY_ISO

• BU_CODE

Entity Referential

• CURRENCY_ISO


• CHANGE_RATE

Currency

Referential

Potential difficulties :



• Multiple number of currencies and/or

entities

• Low centralisation of data / non

exhaustive list of entities / bank accounts

• Inefficiency of electronic banking

systems

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• Which difficulties can you encounter building this KPI?

71

Focus on key metrics : cash flow reporting/forecasting

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Cash reporting/forecasting

Required data

• ID_PAYER


• AMOUNT_TTC

• INVOICE_DATE

• INVOICE_NUM

• POSTING_DATE

• DUE_DATE

• BILLING_SCHEDULE

• EFFECTIVE_PAYMENT_DATE

• AMOUNT_PAID

• UNIT_PRICE

• QUANTITY

• CURRENCY_ISO


• ID_CUSTOMER


• MONTANT_TTC

• MONTANT_OUT

• INVOICE_DATE

• INVOICE_NUM

• DUE_DATE

• ESTIMATED_PAYMENT_DATE

• CURRENCY_ISO


Customer Invoice BAG Customers Bank Balance


• AMOUNT

• CURRENCY_ISO

• DATE

• ID_VENDOR


• MONTANT_TTC

• MONTANT_OUT

• INVOICE_DATE

• INVOICE_NUM

• DUE_DATE

• ESTIMATED_PAYMENT_DATE

• CURRENCY_ISO


BAG Vendors Others

• CURRENCY_ISO



• AMOUNT

• DATE

• BUSINESS_PARTNER



• COUNTRY

• CURRENCY_ISO

• BU_CODE

Entity Referential

• CURRENCY_ISO


• CHANGE_RATE

Currency

Referential• CASH_FLOW_CODE

• CASH_FLOW_NAME

• CASH_FLOW_NAME_L2




Cash Flow

Mapping

PwC 73

Cash reporting/forecasting

Potential difficulties

• Non exhaustive list of entities/bank accounts



• Disparity of IT systems



• Disalignment of banking and accounting data

• High volume of IC flows

• Multiple number of currencies and/or entities

• Accounting code errors

• Booking entry errors

• Disalignment of DPO and/or DSO with payment terms

Reporting Guidelines : illustrations

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Accounts Receivable KPIs : DSO

• DSO is a good KPI but whether it goes up or down does not say anything about the reasons for moves

• More detailed and operational KPIs, giving a view on the various AR balance components, enable better

control and relevant actions launch and follow up

• Law changes on payment terms (at least for Europe) also deserve risk and cash impact monitoring

Illustrations:

-

200 000

400 000

600 000

800 000

1 000 000

1 200 000

1 400 000

1 600 000

1 800 000

2 000 000

-

20

40

60

80

100

120

140

Invoiced amount

Average n° of days

Turnover (€) N° of days

€ 120k invoiced with terms longer than authorised by LME

75% invoiced with terms < 30 days

Best Possible DSO

0 - 30 days > 91 days

June 1 973 787 420 500 557 395 290 772 261 318 443 802 1 553 287 79%

rollover 57% 72%

July 2 127 690 581 121 431 442 316 320 208 939 589 868 1 546 569 73%

rollover 52% 42%

August 1 983 468 334 333 550 821 224 627 133 675 740 011 1 649 135 83%

rollover 50% 67%

September 2 264 873 663 542 456 216 275 477 149 545 720 093 1 601 331 71%

rollover 35% 32%

October 1 807 623 526 143 350 280 159 703 87 788 683 709 1 281 480 71%

rollover 41% 67%

November 1 398 937 236 310 248 343 142 508 106 381 665 395 1 162 626 83%

Average 1 926 063 460 325 432 416 47% 234 901 56% 157 941 640 480 1 465 738 76,5%

0 - 30 days > 91 days

30% 44%Average overdue structure

31 - 60 days 61 - 90 days

16% 11%

TOTAL Ledger Not dueOverdue structure

OverdueOverdue

% 31 - 60 days 61 - 90 daysNumber of terms

19

Number Value (in €)

Credit notes 7 889 (3 502 905)

…sales policy related 254 (2 054 345)

…dispute related 7 635 (1 448 560)

Invoices 162 239 38 121 232

Credit notes / invoices

(excl. sales policy

related credit notes)

4,7% 3,8%

Total

Invoicing quality

75

PwC

Accounts Payable KPIs : DPO

• DPO is also a good KPI ; apart from having it by Purchases types, some other more precise KPIs would help

cash improvements

• A better view on payment terms granted (at least for Europe) and effective payment practices would bring

additional value

Illustrations:

Number of terms

7

10

20

30

40

50

60

70

80

90

100

-

20 000

40 000

60 000

80 000

100 000

120 000

Immediate 10 days net 15 days net -3%

30 days end of month



90 days net

Pu

rch

ases (€)

Amount paid (€) Average number of days

Best Possible

DPO4%

5%4%

10%

24%

29%

8%

7%4%

2%1% 0% 0%

0%

5%

10%

15%

20%

25%

30%

35%

Before D-21

D-20 / D-16

D-15 / D-11

D-10 / D-6

D-5 / D-1

Due date

D+1 / D+5

D+6 / D+10

D+11 / D+20

D+21 / D+30

D+31 / D+45

D+46 / D+60

After D+61

Timing for payments

% amount paid % number of payments

76

PwC

Thank you

Groupe ETC • Projet « Cash Performance »

Vincent StoraiManager

[email protected] 63 29 45 76

63, rue de Villiers92 208 Neuilly-sur-Seine Cedex

Contacts:

Mariano MarcosAssocié

[email protected] 56 57 88 85

63, rue de Villiers92 208 Neuilly-sur-Seine Cedex

Documents

Strictly Private and Confidential - AFTE