2011 Global Corporate Treasury Awards – Shortlist

The gtnews 2011 Global Corporate Treasury Awards, sponsored by Bank of America Merrill Lynch, pays tribute to treasury innovation that has been fundamental to the success of a corporate’s business.

The awards present an outstanding cross-section of all that’s best in treasury. The winners are chosen by an independent jury of highly influential corporate treasurers and are totally independent; the winners remain unknown until the results are announced at an exclusive awards ceremony on Tuesday 20 September in Toronto, in conjunction with the Sibos Corporate Forum.

More than 60 corporate treasury departments from across the world entered the awards which include two new categories this year – Trade Finance and Green Treasury.

Carole Berndt, head of global treasury solutions, Europe, Middle East and Africa (EMEA), says: “Bank of America Merrill Lynch is proud to once again sponsor the gtnews Global Corporate Treasury Awards, as it acknowledges those who strive to bring excellence to the treasury sector. After the phenomenal success of last year’s inaugural awards, we are delighted to be associated with the event in its second year.

“The economic downturn has led the focus of the financial community to centre on cash management and treasury solutions, as those who work within the industry strive to bring innovation and security during this time of market uncertainty. The gtnews Global Corporate Treasury Awards helps to recognise those teams who are at the forefront of this work,” she adds.

Awards Shortlist

Treasury Technology Implementation Project of the Year

  • Dassault Systemes: going global with SwiftNet and 3Skey
  • Honeywell: leveraging the MyTreasury MMF trading platform
  • Omnicom Group: global cash control system

Cash Management Project of the Year

  • Belden: effectively managing global liquidity and risk
  • Brady Corporation: treasury transformation
  • Sun Chemical: achieving the ‘Holy Grail’ of cash management

Trade Finance Project of the Year

  • Caterpillar: weathering the financial storm
  • Nokia Siemens Networks: LC confirming in Vietnam
  • Petrovietnam Power: debt financing arrangement

Treasury Team of the Year

  • Bharti Airtel: global transformation
  • Brocade transformation programme in financial risk management
  • Nalco’s treasury transformation

Green Treasury Project of the Year

  • Kellogg: going green is GR-R-REAT!
  • Mn Services: ESG integration in broker evaluation/selection

Corporate Treasurer of the Year – Readers’ Choice Award

  • Edward Scott, Corporate Treasurer, Caterpillar
  • Peter van Rood, Group Treasurer, AkzoNobel
  • Susan Stalnecker, Vice President – Finance and Treasurer, DuPont

Treasury Technology Implementation Project of the Year

This category covers any aspect of treasury technology. The award will be given to the corporate treasury that developed and implemented an innovative IT project which solved a specific problem or established best practice within the organisation.

Dassault Systemes: going global with SwiftNet and 3Skey

Between summer 2010 and February 2011, Dassault Systemes managed a global project divided in three parts: ISO 20022 XML formats implementation (ETEBAC5 protocol); SWIFTNet implementation with all Dassault Systèmes’ bank partners; and 3SKey go-live for all payment files in SWIFTNet. The rationalisation of banks partners and, above all, the deployment of SWIFTNet allowed a smooth and rapid integration of new entities and countries, and prepared the group for major acquisitions. One judge commented: “The combination of rationalising treasury activities and introducing a tool to manage the new environment requires good project management. Having 95% of your money pooled in such a short period is a huge success.”

Honeywell: leveraging the MyTreasury MMF trading platform

Honeywell in-house bank changed its status to a financial company and was therefore allowed to use money market funds (MMFs) as an investment instrument. Given the instability in the financial markets, it needed to identify objective criteria to ensure that the funds selected complied with the treasury objectives of safety, liquidity and yield. The full market transparency provided by the trading platform helped Honeywell negotiate significantly improved terms with its fund providers. “Economic gains of US$800,000 per year and 50% re-assignment of staff illustrate the benefits of this project,” remarked a judge. “The project was rolled out iteratively, providing the opportunity to identify benefits before introducing new regions/countries.”

Omnicom Group: global cash control system

Omnicom Group maintains a decentralised structure that grants its agencies great flexibility and autonomy in its operations. However, this creates cash management, risk management and banking challenges that aren’t faced by more centralised companies. The corporate treasury wanted to fully optimise its allocation of liquidity and gain full control of all bank accounts open across the group. Similarly, it wanted to fully quantify and manage risk from local banks that were beyond its visibility. The corporate treasury demonstrated a deep level of planning, as well as consistent vigilance with regards to progress throughout the whole project, according to one judge. “All in all, a great success for treasury and for the company.”

Cash Management Project of the Year

The winner of this award will be the treasury that was best able to improve its cash management processes, whether in accounts payable, accounts receivable, cash forecasting, netting/pooling, etc.

Belden: effectively managing global liquidity and risk

“Many corporates could learn from this project,” said one judge. As Belden, one of the largest US-based manufacturers of high-speed electronic cables, was expanding globally and the need to manage cash flows consistently and effectively across the enterprise intensified. The company wanted to convert many regional processes to one global process, which would both enhance the accuracy of its forecasting and synchronise the timing of forecast results on a global basis. “Great improvement in the cash forecasting process – an area where many companies still struggle,” said the judge.

Brady Corporation: treasury transformation

Brady tripled in size through 30 acquisitions during a period of rapid global expansion. Although its growth strategy was successful, Brady saw its complexity and finance costs increasing. Financial transformation was required to position the organisation for profitable future growth. Brady developed an aggressive plan that used communication, training, senior sponsorship to overcome objections, as well as using partner expertise push a rapid conversion schedule forward. One judge commented: “Technological transformation and cultural change were well tackled. The treasury illustrated a good approach by using training in the region and at the shared service centres (SSCs) to establish relationships and confidence in the SSC staff. Active support from the CFO and CEO was also crucial.”

Sun Chemical: achieving the ‘Holy Grail’ of cash management

Sun Chemical, the world’s largest producer of printing inks and pigments, embarked on a project to implement a single application of SAP across the entire company globally, while at the same time consolidating banking relationships to a single banking partner, and transitioning to a shared service centre (SSC) environment. Sun Chemical recognised an opportunity to move from regional SSCs to a global SSC environment, providing treasury with vastly improved visibility and control. As one judge said: “Given how difficult it can be for companies to fully implement SAP throughout their organisations, the fact that this treasury reduced 150 systems in 23 countries to one centralised system globally in five years is exceptional. All key metrics indicate that all the objectives were met.”

Trade Finance Project of the Year

This award will be given to the corporate treasury that has developed an innovative trade finance project and can exhibit best practice in its relationships with its bank and business partners.

Caterpillar: weathering the financial storm

In 2010, as global economic conditions improved, Caterpillar shifted its ‘Stay Strong’ initiative from responding to the economic crisis to a more proactive focus on capital-efficient profitable growth and the development of a cash flow culture, including a project to standardise supplier payment terms enabled by a global supply chain finance (SCF) programme. It generated in excess of US$1bn cash flow from standardising payment terms, with over 7,000 suppliers enabled by the SCF programme. “Treasury developed closer working relationships with business units across the enterprise, placing a stronger focus on working capital and cash flow improvement,” said one judge. “This entry exhibits very impressive results, and the programme is especially beneficial for the participating suppliers.”

Nokia Siemens Networks: LC confirming in Vietnam

Based in Vietnam, Nokia Siemens Networks (NSN) requires any letters of credit (LCs) issued by local banks in Vietnam to be confirmed by an international bank in Singapore. NSN wanted to implement a solution to meet its requirement to ship under confirmed LCs to mitigate counterparty and sovereign risk. The solution also needed to meet the importer’s need for payments to be linked to delivery and performance milestones and build in a usance tenor for part of the payment, instead of sight payment terms. One judge said: “Partnering with key financial institutions was a critical element of their success. They have set a precedent for attaining new objectives.”

Petrovietnam Power: debt financing arrangement

Responsible for all oil and gas resources in Vietnam, PetroVietnam’s goal was to find affordable, long-term financing for its Nhon Trach 2 power plant, a project considered key to the company as well as to national planning objectives. It wanted to maximise the proportion of export credit agency (ECA)-supported financing in its total borrowings and thereby reduce the proportion of commercial bank debt. The support from the ECAs meant lower loan pricing and longer tenors, in line with the company’s objectives. “The project succeeded in getting the needed support from the ECAs to lower loan pricing and get longer tenors. Financing was successfully syndicated prior to closing, and international banks were engaged with long-term interest in Vietnam,” commented a judge.

Treasury Team of the Year

This award is for the corporate treasury team that can best demonstrate vision and innovation in terms of transforming their treasury department to meet future challenges. The winner will show excellence and resourcefulness across all treasury disciplines.

Bharti Airtel: global transformation

“Thoroughly planned and executed. The resource allocation and approach were well defined. It is best-in-class,” said one judge about this team. Bharti Airtel, an India-based telecom company, entered into a global transformation phase with the landmark acquisition of Zain’s operations in 16 countries. Given the scale and complexity, a ‘quickest’ transformation and integration of the treasury function became critical. The objectives were four-fold: setting up a global treasury organisation; defining the treasury architecture; effective measurement, monitoring and management of debt, liquidity and risk; and laying the technology platform and solutions for seamless flow of information.

Brocade transformation programme in financial risk management

Brocade treasury team transformed the company’s foreign exchange (FX) risk management by: taking a leadership role in re-engineering the FX-related business processes; gaining respect from other functions; developing and implementing programmes to support the sales organisation in growing international business; re-engineering its hedging programmes by improving the accuracy of exposure identification and reporting; and re-designing its systems strategy. “I am impressed by the fact the treasury is now considered a key partner in major business decisions. This is still not often the case, but here it has been achieved,” stated a judge.

Nalco’s treasury transformation

Nalco Company is a leading water treatment and process improvement company. Nalco’s European treasury team embarked on a variety of initiatives to position the company as best-in-class in operations and financial performance. The company has implemented a host-to-host solution and uses a single version of SAP and iDoc file for all of its payments. Standardisation and consistency have allowed the business to process all payments from Europe, Asia and the Americas through its global shared service centre (SSC) in Buenos Aires. “The treasury team clearly identified the elements required for success,” according to one judge. “They demonstrated the importance of collaboration with external service providers in designing the solutions.”

Green Treasury Project of the Year

This award will be given to the corporate treasury that has been most successful in implementing a project around sustainable business models, greening the treasury or supply chain, environmental awareness, social responsibility or a combination of the above.

Kellogg: going green is GR-R-REAT!

Kellogg Company began a ‘Go Green’ initiative in 2005, to further reduce the company’s environmental impact. The treasury and accounts receivables (A/R) teams joined forces to meet the following three objectives: eliminate many common manual processes; improve the timeliness of the bank account reconciliation process; and reduce the use of paper, which in turn impacts energy use and waste generation. The total cost savings to date is approximately US$500,000. The reduction, and in some cases complete elimination, of paper has dramatically reduced the organisation’s environmental impact. “Cost savings in all receivables areas illustrating a 39% reduction in bank fees is an impressive statistic (and annual savings). Nice ROI [return on investment],” said one judge.

Mn Services: ESG integration in broker evaluation/selection

Mn Services, a Dutch-based asset manager, is convinced that environmental, social and governance (ESG) factors improve the risk/return trade-off in the long term. Therefore, it integrates ESG factors in all investment decisions of all asset classes. Moreover, Mn Services screens all third parties on their corporate social responsibility. Since the beginning of this year, Mn Services has taken an industry unique step to integrate ESG factors in the broker selection. One judge commented: “ESG factors were built into a quantifiable analysis solution. Furthermore, Mn Services uses these scores to help determine with which brokers they will do business and how much business.”

Corporate Treasurer of the Year, Readers’ Choice

The winner of this award will be recognised by their peers as an industry spokesperson and leader – a treasurer who has overcome the challenges posed by the financial crisis and made an outstanding contribution in treasury.

Edward Scott, Corporate Treasurer, Caterpillar

Led by Edward Scott, Caterpillar has embarked on a series of cash management initiatives widely considered among the most effective and innovative strategies in the market. One of the key initiatives of Scott’s efforts – a multi-year global supply chain finance (SCF) programme launched in 2010 – has been an unmitigated success in its first year and promises to yield continuous benefits going forward. Heralded as a ‘win-win-win’, the SCF solution has enabled Caterpillar to achieve major working capital objectives.

Peter van Rood, Group Treasurer, AkzoNobel

Peter van Rood and the treasury team achieved a complete transformation of AkzoNobel’s treasury function despite some of the most extreme circumstances imaginable, including the £8bn acquisition of ICI, the need to refinance 60% (€2bn+) of the company’s external debt and having to radically cut costs, while simultaneously rebuilding a fragmented treasury with limited grasp of contemporary processes, resulting in a 31% reduction and 70% churn of staff.

Susan Stalnecker, Vice President – Finance and Treasurer, DuPont

Susan Stalnecker stands out for her leadership of the company’s treasury and merger and acquisition (M&A) teams, particularly her pivotal role in the acquisition of Danisco, a global enzyme and specialty food ingredients company. Stalnecker has forged strong external and internal partnerships in 35 years at DuPont. This served her team well in effectively navigating issues from tax, treasury, legal, audit, risk, procurement, executive management, financial institutions, ratings agencies, regulators, and key business leaders to complete the transaction.

Gold Award (Overall Winner)

This award recognises excellence in treasury management and honours the corporate treasury operating as a strategic partner to the business. The Gold Award winner will show a standard of best practices throughout a company’s treasury or on the ground-breaking nature of a particular project. The overall top score from among all the entries will win this award.

Berndt concludes: “Bank of America Merrill Lynch would like to congratulate all of the shortlisted treasury teams and we look forward to the awards ceremony itself on 20 September 2011 in Toronto, when the winners will be announced.”

To learn more about the 2011 Global Corporate Treasury Awards and to book your table for the gala dinner, please visit the awards website.

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