Case Study: Carlsberg Takes First Step to Global Liquidity Management

Carlsberg is one of the leading brewery groups in the world with 43,000 employees and annual turnover of approximately €8bn. The Carlsberg Group’s products are sold in more than 150 markets.

In 2010 Carlsberg acknowledged the limitations of its existing liquidity forecasting procedures. The situation at the time produced inconsistent and inaccurate forecasts across many regions with limited transparency, which meant that management couldn’t always depend on the forecasts. Furthermore, the company had limited visibility of its cash balances globally and the manual workload was extremely high.

In order to effect change within the organisation, group treasury knew that it had to convert many regional processes to one global process and enhance the level of integration and automation from many different internal and external information providers. Consequently, in early 2011, Carlsberg decided to implement a dedicated cash flow automation platform.

To clarify its needs, Carlsberg set five objectives to support the goal of enabling efficient management and analysis of cash flows:

  1. Improve liquidity management and forecasting processes.
  2. Enable the subsidiaries to follow their own forecasts and outcome.
  3. Enable follow-up on produced forecasts and their quality (actual versus forecast).
  4. Produce actual cash flow data in an automated way.
  5. Produce short-term cash forecast data in an automated way.

The Project

After an initial workshop with participants from group treasury and Russian subsidiary Baltika, the existing forecasting procedures were outlined. Mapping out the processes in detail generated a good overview and understanding of opportunities for improvement. This resulted in project plan with an overall scope, deliverables, resources needed and a time plan. The project was conducted according to the plan, ensuring the deliverables.

Carlsberg decided to opt for a software-as-a-service (SaaS) solution where implementation, hosting and maintenance were taken care of by an external provider. In addition it wanted all reporting to be done through a web-based solution which could use data from different enterprise resource planning (ERP) systems.

Carlsberg chose OpusCapita to implement its web-based SaaS solution. To encourage and support the new processes, Carlsberg uses a global share point site on its intranet to ensure that all entities have access to the latest information. This promotes benchmarking: the entities can closely follow the quality of their own forecasts, as well as the work of sister entities.

During the project, internal technical resources from IT were needed to determine how data from different ERP systems could be automatically integrated. However, like so many other IT departments, Carlsberg’s IT has a heavy workload with many overriding priorities. Hence, the process took longer than planned and the project faced some delays. One of the reasons to choose an SaaS solution was to minimise IT’s involvement, in implementation, hosting and maintenance.

Even though almost all Carlsberg’s partner banks were able to provide the bank account statements automatically on a daily basis, some difficulties occurred. This was, however, solved by providing a dashboard for the group treasurer to monitor and retrieve data if needed.

Aims Achieved

Carlsberg successfully met its five objectives:

1. Improve liquidity management and forecasting processes
Carlsberg significantly improved its liquidity management with a multi-dimensional tool that provides visibility and transparency across its accounts. The forecasting process is now controlled (what, when and how) by group treasury, which enables a more accurate cash forecast.

2. Enable the subsidiaries to follow their own forecasts and outcome
The project implemented visibility tools which allow the subsidiaries to not only see their own forecasts and outcome but also benchmark with other subsidiaries within the group. The subsidiary Baltika was involved from the start of the project and is now using the tool to produce forecasts and for daily liquidity management. This is an important subsidiary for Carlsberg as the Russian market represents a significant part of the group’s total turnover. The project also included specialised reports to meet entity-specific requirements.

3. Enable follow-up on produced forecasts and their quality (actual versus forecast)
Before the project Carlsberg’s subsidiaries could not detect deviations nor compare them with other entities. Now the subsidiaries and group treasury have full visibility on how the entities are performing. Users can easily access and drill down in the data to detect deviations and forecast accurately. The subsidiaries can see that forecasts are being used and they now receive feedback on a regular basis.

4. Produce actual cash flow data in an automated way
This process is now automated and bank statements are collected on a daily basis from the different banks. OpusCapita’s SaaS solution makes the data available every morning.

5. Produce short-term cash forecast data in an automated way
The data for short-term forecasting is gathered automatically from SAP to OpusCapita, with the possibility to enter and adjust figures manually if needed.

Results: Savings and Cost Reductions

The global liquidity management project is showing positive results. By having an automated and structured solution, cash flow forecast accuracy has improved and is expected to continue to improve. This provides a reduction of net interest.

OpusCapita’s solution is uniform and rolled out globally; the subsidiaries can use it to provide structured reports. Furthermore, the cash flow automation platform also provides Carlsberg with future possibilities to improve global payment processes and other financial processes. Carlsberg global treasury has implemented a solution which will help streamline global cash management processes.

Carlsberg’s new liquidity management tool includes both cash flow processes and the cash flow forecasting solution. This provides Carlsberg with an attractive value proposition for the subsidiaries as they have their own reports, structures and processes, which motivate them to actively use the solution. In this way, group treasury has moved closer to the business as it has become a partner to the subsidiaries instead of being seen as just a demanding team from headquarters.

  • This case study is based upon an entry into the gtnews Awards for Global Corporate Treasury 2012, sponsored by Bank of America Merrill Lynch (BofA Merrill). The winners of this year’s annual awards, now in its third staging, were only revealed at a gala dinner on 24 May at the Sofitel Grand Hotel in Amsterdam, the Netherlands, after the opening of the two-day gtnews Forum for Global Corporate Treasury. To see a full report on all the Awards winners and the gala dinner on 24 May please click here.




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