January 2016
Treasury Manager - Sappi International S.A
Leveraging SAP technology to support
global treasury vision.
Leo Di Amato Daniel David
Manager SAP Core - Sappi Europe S.A
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Agenda
Overview
Treasury project
Applications
Next steps
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Sappi Limited
#2 Global producer of coated woodfree paper (60% of sales)
Forecast: Capacity and demand down 1.5% through 2019*
Overview
#1 Global producer of dissolving wood pulp (15% of sales)
Forecast: Demand up 6% and capacity up 3.3% through 2016**
* EMGE March 2015 ** RISI April 2015
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Sappi at a glance
Sappi Limited
2015 Sales = US$6 billion with 12,800 employees
EBITDA : $650 million / Targeted leverage ratio of 2 times
Sappi Europe
51% 2015 sales
Graphic paper
Speciality paper
Sappi North America
25% 2015 sales
Graphic paper
Specialised cellulose
Release paper
Sappi Southern Africa
24% 2015 sales
Paper and paper packaging
Specialised cellulose
Forests
Sappi Trading
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Geographic diversification Our global presence allows us take advantage of opportunities where markets are strong
Three paper and specialised
cellulose mills
Six paper and specialised
cellulose mills
567,000ha of forests
Seven paper mills
13 sales offices on six continents
Group Treasury Structure
Treasury Manager
Cash Dealer Analyst
Executive
CEO/CFO
Board of Directors
Accounting
Manager
SAP& Systems
Manager
Group Treasurer Deputy Treasurer
Accountant Accountant
Responsibilities
- Cash management
- Foreign Exchange risk
- Interest Rate risk
- Funding
- Cash flow forecasting
- Counterparty risk
- Hedge accounting
- Treasury systems support
- Commodity hedging
- Factoring
- Securitization program
- Credit insurance
- Collection factory
- Payments solutions
- Supply chain finance
- Rating agencies
Treasury
committee
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Agenda
Overview
Treasury project
Applications
Next steps
Bank 1
GTM
(Brussels Only)
SAP# boxes
Excel (Regional Treasury Offices)
Infopool/Payment
System
Bank 2 Bank 3
Bank 4
Suppliers
Thomson Reuters
Treasury function overview : Before project )
TMS (SA Treasury Office)
Bank 1 Bank 2
Bank 3
Bank 4
SA Bank
•Multiple systems
•Non standardised
treasury reporting
•Large number of
interfaces to maintain
•Minimal IT support
•Manual payments
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Drivers for transformation & Opportunities
Absence of centralised treasury policies & processes
Inefficiencies of cash management structure
Internal Bank
Weak segregation of duties ( internal audit )
Increased demands for information / assistance from regions
Existing system licence up for renewal
Senior management support to revisit the treasury mandate
WTC WTC/SEC GTC/STC GTC/RTC RTC
Centralised Decentralised
Group Treasury Center ‘GTC’ with Satellite Treasury Centers ‘STC’
World Treasury Center ‘WTC’
World Treasury Center ‘WTC’ and Satellite Execution Centers ‘SEC’
Group Treasury Center ‘GTC’ with Regional Treasury Centers ‘RTC’
Regional Treasury Center ‘RTC’
Treasury function should be co-ordinated and executed centrally
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Group long-term Treasury vision
Treasury Vision & Strategy System Specifications
Standardised Policies, Processes and
accounting treatments
Optimise the cash management structure
rationalise the number of accounts
maximise the interest returns
Manage an in-house bank
Improved Control and Accuracy (Sarbanes
Oxley)
Treasury function executed centrally to the
extent possible
Single treasury system in line with IT group
strategy
Internal Banking Capability
High levels of Security and Segregation of
responsibilities
Comprehensive Reporting Capability –
Business and Treasury Flows
Fully integrated system offering automated
accounting link
Objective : Add value back to the Business
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Project scope
Internal Bank
Cash Management SAP Treasury module
Single external payments
platform
Internal payments
optimization
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NZD Header Account
NZD Master Account
SAPPI UK
SAPPI AUSTRIA
SAPPI GERMANY
SAPPI BENELUX
Petty cash, payroll, trade
Local payment instruments
Collection account
Disbt account
Disbt account
G L O B A L
B A N K
Local Bank Entity
Collection account
Collection account
Collection account
Disbt account
Disbt account
Disbt account
Disbt account
Disbt account
Disbt account
Entity 1, 2, 3…
SISA
Domestic, XB and Int’l Mass payments
Domestic, XB and Int’l Collections
Collection Master Account
Group Treasury
Header A/C
ZBA
Main collection account EUR int’l receipts
London-based
Active investment by currency
Funding
CHF Master Account SEK
Master Account DKK
Master Account CAD
Master Account ZAR
Master Account GBP
Master Account
AUD Master Account
JPY Collect. Master Account
In-country
SISA
SISA
USD Concentration
Account
SFPNA
USD X- regional concentration with North America
USD funding by Group Treasury CHF
Master Account SEK
Master Account DKK
Master Account CAD
Master Account ZAR
Master Account GBP
Master Account
AUD Master Account
JPY GT Header Account
USD and other currencies Collection
Master A/C for Asia Pacific
Cash Management - Target balancing structure
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SAP Treasury module
Transaction Manager
SAP Treasury functionality
Analysis
In-House
Cash Cash
Management
Market Risk
Analyser Credit Risk
Analyser
Transaction Manager
Liquidity
Planner
Money
Market Securities FX Derivatives
Financial
Acc.
R/3 Enterprise
Credit Risk Analyser
• Comprehensive limit
functionality
• Counterparty credit /
settlement risk management
In House Cash
• Intercompany
payment netting
• Current account
functionality
• Payment factory
solution
• Central receipts on
behalf
Market Risk
Analyser
• Mark to market
• FX exposure
• Interest rate
gapping
• Sensitivity reports
• Scenario analysis
Cash Management
• Link to underlying exposures in SAP
(AP, AR, Sales , Purchase orders etc)
• Cash forecasting and balance reporting
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Single external payments platform
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Internal payment optimization
Prior SAP IHB: Own In-House bank Application
Own development
EUR only
Interest calculation / Statement print out
Full integration with Factoring process (high level of automation)
No integration with SAP payment programs
No integration with SAP bank statement upload
SAP IHB:
SAP standard
Multi currencies
Interest calculation / Statement print out / Statement upload
No integration with Factoring process => need additional developments
Integration with SAP payment programs (Treasury and AP)
Integration with SAP bank statement upload (important for our zero balancing)
Cash Concentration (tax unit)
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SAP
Web Based
Banking
System
Thomson Reuters
Treasury function overview : After project
Suppliers
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Agenda
Overview
Treasury project
Applications
Next steps
Factoring
Mills Sales Org Lanaken Fin. Sappi International
Customer
Invoice
Cash
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Factoring
Mills Sales organization
Treasury Factoring entity
Interco S. org Interco Mill Customer
Customer
IHB IHB
Interco IHB mill
Interco IHB S. org
Interco IHB Fact
IHB
Citibank
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External / Internal bank integration
Treasury
Bank accts
Treasury
MT940
IHC transfer FINSTA
Pay runs
Citibank
Platform
MT940
Suppliers
Payments
IHC Affiliates
Customers
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Facts & Figures
Quantitative
1 single ERP SAP box worldwide
150 external bank accounts
99.9% bank statement upload
Very high % of automated reconciliation
200+ IHB accounts
150+ Trading partners
10,000 FX trades / year
1,000 money market deals / year
35,000+ treasury postings / year
15,000 internal payments / year
Decrease of overall banking fees
Interest returns optimization
Capex pay-back time way below target
Qualitative
Small central staff fully dedicated to
separate function to add value
Full control on bank account matrix
STP execution of treasury postings from
one central place
System roles & profiles capabilities to
meet required segregations of duties
Fasten monthly closing activities
Eliminate mistakes (zero posting error)
Plug & Play structure
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Agenda
Overview
Treasury project
Applications
Next steps
Next steps
Migration to HANA
=> Mid of November as a preparation step for Simple Finance
Single chart of Account
Preparation for Simple Finance
=> Fixing data inconsistencies
=> Enabling pre-requisites for Simple Finance (EA-FIN,…)
Simple Finance
=> Use BPC for Cash Forecast
Improve exposure report for central management
Full automation of EMIR reporting
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Thank you
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A clear strategy focusing on finance, intelligence and innovation : cross industry projects with attention to quality and long-term collaboration
INTENSUM is an independent European
consulting agency founded in 2005. Our
objective is to align business & IT through
a unique service offering combining senior
SAP & SAS competencies with solid
business expertise.
We deliver first-class implementation skills,
focusing on the optimization of the
Financial Supply Chain & Treasury
processes, Business Analytics & Planning
and process improvement through
innovative solutions.