www.pwc.com

Treasury Hot TopicBig-Bang Treasury Transformation

Pierre Parlongue, CelioSuzanne Hosmans, CelioDidier Vandenhaute, PwC

AgendaAgenda

1. Celio at a glance2 Issues and objectives2. Issues and objectives3. What did we accomplish

L l d4. Lessons learned

2PwC Conference Treasury Hot Topic

Celio at a GlanceCelio at a Glance

A fast growing retail company

PwC 3February 2011

Celio Celio isis a a fastfast--growinggrowing international international clothingclothing retailerretailer

866

Quick facts

Annual turnover €1 bnDouble digit growth 572

672

775866

g g

# stores > 1.000Openings: 130/year

Staff Approx 3.500270

321365

405

572

Treasury staff 3 FTE

# bank relationships 42

# b k t 7506 34 70

150170226

270

# bank accounts >7506

■ Most of our owned stores are located in Western Europe and India whereas clothes are mainlypurchased in Asia

A i t l 200 ffili t l t i

4

■ Approximately 200 affiliates are also present in Middle East, Asia and Africa

PwC Conference Treasury Hot Topic

Acquisition of Jennyfer in 2005Acquisition of Jennyfer in 2005

A i iti 2005Acquisition 2005

Annual turnover € 280 Mio

# stores 380

# bank relationships 20

# bank accounts > 250

5PwC Conference Treasury Hot Topic

Issues and ObjectivesIssues and Objectives

The Treasurer and CFO points of view

PwC 6February 2011

Main objective: Main objective: centralizedcentralized cash collection in cash collection in BelgiumBelgium

• Retail activities• Family-owned group• No external rating

ConsiderationsNo external rating

• 42 bank relationships (of which 38 local)• 42 bank relationships (of which 38 local)• Disconnection Banks vs Celio presence/needs• High banking costs & limited visibility

Key issues

• LT financing of the groupg g p• Efficiencies• Mutually beneficial relationships

Priorities

7PwC Conference Treasury Hot Topic

Many stakeholders Many stakeholders -- shared objectivesshared objectives

Treasury

CFO

Cash collection companies

Group TreasurerFO/MO/BO

T

Treasury

PwC

p

Treasury accounting

Project coordinatorBanking & Cash

Systemsi i

IT PMOIT- InterfacesAccounting

Banks

OrganisationIT-HardwareDocumentation

AP/AR

Fi Di t S it

LegalIT

System vendor

Finance DirectorsAuthorisers

Documentation

SecurityStores

Regulatory

Retail Service Bureau

Local country reps

8PwC Conference Treasury Hot Topic

Main issues related to treasury activitiesMain issues related to treasury activities

New protocols not supported ■ Bottle neck risk■ Rejected payments after deadline

Decentralised BRM■ Few economies of scale■ Out of market bank fees■ No priority status and no reciprocity

Decentralised treasury activities■ Staff inefficiencies■ Lack of visibility and poor cash forecasting■ Multiple Treasury systems

I ffi i t t l t i fl

No automated cash concentration ■ Simultaneous borrowing and lending■ Loss of value days

No formal treasury policy / processes ■ Heterogeneous treasury risk management

Multiple payment processes / systems■ Inefficient control on outgoing flows■ Heavy approval procedures■ High dependency towards banks

Few treasury / risk management tools

■ Wide use of Excel; poor information■ Few support to treasury activity growth

No formal treasury policy / processes ■ Heterogeneous treasury risk management

9PwC Conference Treasury Hot Topic

Many blocking factorsMany blocking factors

A ti

ERP1

TMS

Accounting entries

Generator 1Com

1

Com

TMS1

TMS2

Reconciliation tool 1

Commercial systementity 1

Commercial Reconciliation

1000+ stores

A ti

40+ banks

ERP2 ERP3 3 …system entity 2

Reconciliation tool 2

AccountingEntries

Generator 2

P l i t

TreasuryAccountingStores networkSecurity

IT

10PwC Conference Treasury Hot Topic

People impact

What did we accomplishWhat did we accomplish

Sweat sweat sweat…

PwC 11February 2011

3 phases covering 3 streams3 phases covering 3 streams

Strategy & organisational design

Bank & CM restructuringg

Treasury and CM systems

Implement1. Construct organisation

Select

1. Organisational and functional requirements

2. Bank(s)3. System(s)

Analyse and Design

2. Banking selection3. System selection

1. Policies and Procedures2. Banking design3. System Design

12PwC Conference Treasury Hot Topic

TTreasuryreasury system architecturesystem architecture

Local ERPs

Payment FINPaymentFactory tool

SWIFTReconciliation

FINprocessing

Converter MT 94x

MT 94x

T 10

xMT 9

TMS

Tool

FileActprocessing

ConverterM

T4x

Treasury ERP

BanksSWIFTService TMSLocal entities

13PwC Conference Treasury Hot Topic

BanksSWIFTBureauTMSLocal entities

CostCost -- benefitbenefit reviewreview

14PwC Conference Treasury Hot Topic

More balanced bank relationshipMore balanced bank relationship

15PwC Conference Treasury Hot Topic

Key lessons learnedKey lessons learned

Every project is different, but…

PwC 16February 2011

Issues (1/3)

AnalysisDesign

Selection Implementation

Issues (1/3)

No innovative solutions

Analysis & design

issues

Finance support at

dangerNo budget

Garbage out -

garbage in

PwC 17February 2011

Issues (2/3)

AnalysisDesign

Selection Implementation

Issues (2/3)

Difficult to compare

Selection issues

Difficult landing

Hard price negotiationlanding negotiation

PwC 18February 2011

Issues (3/3)

AnalysisDesign

Selection Implementation

Issues (3/3)

C Cross complexity

No priority status

Expectation not met

Implementation

Issues

Availability of

resources

Don’t sweat the

small stuff

Migration of new bank

PwC 19February 2011

We would be delighted to hear and answer your We would be delighted to hear and answer your questions!

PwC 20February 2011

Th k !Thank you!

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