Basisbeginselen Beursgang – Treasury for Non-Treasurers

| 21-03-2018 | Pieter de Kiewit |

Cash PoolingMet het huidige nieuws rond beursgangen (IPOs = initial public offering) heb ik gezocht op het steekwoord beursgang op treasuryXL en vond geen resultaten. Wellicht omdat de treasury beroepsgroep communiceert in het Engels. Voor Non-Treasurers ga ik bij deze kort in op de basisbeginselen van een beursgang en waarom hier zoveel aandacht voor bestaat.

Om maar te beginnen met waarom er zoveel aandacht voor bestaat. Dit is omdat het natuurlijk over het algemeen over heel veel geld gaat. En wat is zo’n beursgang eigenlijk? In den beginne is een bedrijf van één of enkele aandeelhouders. Dit zijn de oprichters, de familie of investeerders die een één op één deal hebben gesloten met de oprichters. Aandeelhouders besluiten zelf of en aan wie ze willen verkopen. Totdat de beursgang er is en aandelen vrij worden verhandeld op de beurs. Oprichters kunnen niet meer bepalen wie hun eigenaar is, iets dat Akzo Nobel en Unilever recent duidelijk hebben gevoeld.

Redenen die worden aangevoerd om naar de beurs te gaan zijn, niet uitputtend:

  • Er is kapitaal nodig voor verdere groei;
  • De eigenaren willen hun bezit te gelde maken;
  • Een notering aan de beurs geeft het bedrijf aanzien;
  • Middels een notering is het gemakkelijker in de toekomst andere soorten financiering te verkrijgen;
  • Aandelen- en optieplannen voor werknemers zijn gemakkelijker vorm te geven.

Een beursgang is niet zaligmakend. Veel van bovenstaande doelen kunnen ook via een andere manier worden bereikt: een banklening, verkopen aan een strategische partij en obligaties bij institutionele beleggers. Er komen ook zeer nadrukkelijke nadelen in beeld bij een beursgang: de rapportage eisen zijn veel hoger. Dit levert hogere kosten op. Je moet inzicht geven in je onderneming en haar plannen. Dit kan de concurrent zeker waarderen. Als je verkoopt, verlies je zeggenschap. Wie betaalt, bepaalt.

Voor treasurers is een beursgang vaak het hoogtepunt van zijn/haar loopbaan.
Weet dat als je als aandeelhouder wilt instappen, dat dit niet zonder risico is. In de hausse van beursgangen bij Facebook, AliBaba en anderen is er meer geld verloren dan verdiend. En zoals een investor laatst zei in het FD: “Waarom zou een private equity huis verkopen als de kansen voor de business case heel sterk zijn?”. Onderzoek waar je instapt en wat de motieven zijn van de verkopende partij.

Binnenkort staan er een aantal nieuwe bedrijven genoteerd aan de beurs. Ik ben benieuwd hoe de noteringen zullen verlopen. Later zullen we hier vast dieper op ingaan.

Pieter de Kiewit
[email protected] / +31 6 1111 9783

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

 

High Road or High Horse?

| 21-02-2018 | Pieter de Kiewit |

I want to include you in my search for what is right. Newspapers don’t publish what is right but what sells (for the Dutch, why did the Volkskrant publish the story of Jillert Anema this week?). Politicians don’t work from their convictions but what gets them votes. Large companies pay low level taxes in countries where they don’t manufacture & sell, and no taxes where they do. Actions that benefit the environment are not implemented because it weakens our position in global markets.

Now I am not known for being politically active or interested. Many of my clients are corporates that are in the line of fire following the whole Panama Paper affair. So understanding what is happening would make sense, perhaps I could even form an opinion. So far, this is what I see and think:

• Newspapers created news by publishing what has been known for a long time. As far as I can oversee there were no convictions in The Netherlands based upon the Panama Papers;
• Poor countries are put in off side position when it comes to receiving taxes;
• Politicians created the rules and now shout from their high horse that corporates, following their rules, lack proper business ethics;
• Large corporates are able to hire the best tax lawyers and enjoy the largest tax cuts;
• Newspapers pick the corporates with the most prominent brands as an example and do not tell the story of both sides.

This equation has (too) many variables. I think Joris Luyendijk’s remarks about being immoral or amoral (https://www.theguardian.com/sustainable-business/2016/jan/18/big-banks-problem-ethics-morality-davos) are very relevant. The difference between “I follow the rules” and “I follow the rules and think about if they are right and enough”.

Given the fact that the revenue of the large corporates is bigger than the GDP of many countries, we cannot solve the problem locally. We cannot decide for other countries but we can decide for our own. Do we want to be on our high horse and economically weak? Would that be taking the high road? I am afraid I do not oversee the full picture. If I do, am I willing to accept the consequences as a consumer, entrepreneur and employer?

Would you?
Pieter

Pieter de Kiewit
[email protected] / +31 6 1111 9783

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

This is why corporate treasury is great – The laymen introduction to corporate treasury

| 09-01-2018 | Pieter de Kiewit |

My father was a civil engineer and would have liked one of his kids to follow in his footsteps. Regretfully for him we all went in different directions, me landing an engineering degree of the wrong type. What I did like to learn from my first business management professor was about creating bridges between various functional areas. That is what I have been doing as a recruiter for almost 25 years, the last 8 solely in corporate treasury. Why treasury?

All organisations, even the small ones, can benefit from good treasury. Only the bigger ones hired permanent experts. The main three areas, perhaps oversimplified, they focus on are:

  1. Money logistics: opening and closing bank accounts, doing (bulk) payments, forecast money coming in and going out;
  2. Managing (treasury) risk: understand and manage the implications of interest or currency fluctuations. If your manufacturing costs are in Euro and you sell in Dollars and the price of the Dollar drops, what to do? What to do if you have excess cash on your current account;
  3. Funding: where do you get your money for new or current business? Bank loans, equity, mortgage, leasing?

This does not sound sexy, does it? But do understand that during the crisis treasurers found solutions for companies how to survive. They found funding to pay salaries, helped sales finding creative funding solutions to make complex transactions achievable, helped prevent companies going belly-up due to currency exposures, forced banks to offer better solutions at a more acceptable price.

Treasurers manage huge amounts of money and operate very close to the CFO. They are involved in mergers & acquisitions, reorganisations and international expansion. They act in small numbers but have huge impact if they would stop doing their work. And the job type evolves continuously. Creating new treasury bridges to traditional job types like accounting, tax, sales helps all doing a better job. The academic world is showing increasing interest. In the Netherlands the post graduate education at the Vrije Universiteit is becoming more prominent in the treasury community. Corporate treasury is very dynamic!

What I love doing is helping CFO’s, HR, internal recruitment and senior treasury managers with their staffing questions. What qualifications and personality type matches best with your current and future business situation. If you only hire one treasurer per year, what do you need to know to choose the best candidate? I hope now you can understand my passion for creating bridges in treasury and recruitment.

I look forward to your thoughts to the above and further contact,

Pieter de Kiewit
[email protected] / +31 6 1111 9783

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

The size and shape of your treasury team

| 09-11-2017 | Pieter de Kiewit |

Treasury TeamLast week I received a call from one of my clients. Over the last years, I found several members for their team. Given the transition they are in, they were looking for benchmark information to shape their treasury team and make it future proof. This has kept me thinking and I started gathering information in order to give a proper answer. As to be expected, there is no standard template resulting in an easy answer. Even for more evolved job types like sales or accounting this is a hard question, corporate treasury is too young and small for sound statistics.

To make my analysis workable, I decided to measure the size of the team in a straightforward headcount. When talking about shape, I would like to work with the main functional areas: cash management, risk management, corporate finance and support. Of course this is an oversimplification. I think the following variables are the most relevant.

To start with the obvious: size matters. Size in revenue, number of employees, number of countries active in, number of currencies used, number of payments are all related to size of the treasury team. Not 100%. Senior management requesting detailed and up-to-date information requires a bigger team. We see this especially with organizations in turbulent situations, internally or in dynamic markets. Treasury teams that recently started, do not yet have a focus on efficiency and tend to be bigger. The willingness to invest in modern IT solutions on one hand creates a bigger team: key users and treasury IT managers, on the other hand it replaces staff doing manual work.  Finally improving aspects like segregation of duties and back-up typically create a bigger team.

Moving forward to the shape of the treasury team or perhaps the size of the various functional areas, I observe that the industry and company status have their impact. Typically, companies with a dynamic balance sheet, due to distress or growth (autonomous or take overs) need a bigger corporate finance function. A longer balance sheet in a capital intense industry requires a bigger team. In this area I also see an increase in project and customer finance teams contributing in the structuring of business deals.

Companies with diverse and dynamic payment flows need bigger cash management teams. Especially corporates with an ambition towards strong centralization require extra central staff. They need stronger software support, communicate a lot with subsidiaries and have to understand the business. If achieved, central cash management can be managed by few.

I observe a decrease of number of staff working in FX and interest risk management. Corporates are more risk averse, markets are transparent and ICT enables STP processes. In parallel other types of risk increase the workload: counter party, commodities, insurance, etcetera. Big data and business modeling is having its impact.

This blog does not have the ambition to be comprehensive, the above could be more thorough. Furthermore I could elaborate on aspects like control, IT and especially back office and settlements. Should they even be in your treasury team? I think the topic deserves further attention and could be researched by more than one graduate student.

What are your thoughts? What obvious aspect should be included? I look forward to your reactions,

Pieter de Kiewit

 

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Cybersecurity & corporate treasury – not your favourite, but beware!

| 17-10-2017 | Pieter de Kiewit |

We all have these topics we know are important but never get the highest priority. Until it is too late. Cybersecurity is one of them. Do you want to be the treasurer named in the newspapers? Finding examples and input on-line is not hard. Only this morning these articles popped up through LinkedIn:

“Hackers steal $60 million from Taiwanese bank using bespoke malware”. This is about SWIFT, technology used by many in the corporate treasury environment. This is not to shame SWIFT, what can happen with them, most likely can with other service providers.

Input from this mentioned article specifically has a focus on corporate treasury. What I think is interesting in their input: it is not only about malware. They also mention “social engineering”.

Now what to do? We all know many service providers step forward to guarantee security. Your time and budget is always a restraint. 100% security is an illusion. We will not decide for you. Perhaps we can help you start by browsing through who is offering solutions:

  • The ACT is organising an event at the end of this month:
    “This highly interactive two-day course will take you through the process of building a secure treasury environment. It covers all the essentials, from the creation of a framework of policy and delegated authority, to the way treasury should be organised to ensure maximum control of its activities. You will learn about front, middle and back office functions, regulatory requirements, controls and security essential to managing treasury and you will debate the key issues of control failure. You will learn how to create a secure environment in which treasury transactions can be managed and carried out with minimum risk of fraud or error. You will, be able to judge the adequacy of any security arrangements and make or recommend necessary changes. You will also learn how to effectively plan and execute a risk- based treasury audit that adds value and helps identify early warning signals of potential problems.”
  • Software suppliers like Reval are stepping in, offering technology connected to consultancy. Their article is an easy read, gathering a first glance.
  • And of course consultants are happy to step in. This article of PwC might give you a first idea. Consultancy fees are quite steep. A known sales strategy of consultants is describing scenarios that make you stay awake at night. Are you willing to take the risk or consider “an amateur”.

We will further inform you about the topic in the future. We wish you low risk and high wisdom.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Entering the Financial Markets Data environment – Review Screen Market Event

| 12-10-2017 | Pieter de Kiewit |

Last Tuesday Screen Consultants organized her annual event for the 25th time. An excellent opportunity to put the topic of financial market data on the treasuryXL agenda trough layman’s eyes.

There are a few obvious reasons why a corporate treasurer should pay attention to market data:

  • “Using old market data is like betting on a horse after the race is run”. Buying currencies and commodities without up-to-date market knowledge is burning money;
  • Accurate market data is essential in proper bookkeeping, especially in the current regulatory framework;
  • Information is one of the essential components in the pricing of financial products;
  • Knowing about the various developments influencing markets will help you create a strategy. This applies to hedging, investments but of course for the company as a whole.

With this in mind I entered the event, expecting a very dominant presence of Thomson Reuters, Bloomberg, VDW, Morningstar, Moody’s and similar firms. I did not see them but was offered a fragmented, diversified group of companies and that reminded me of the European Fintech Awards. Bear in mind: the event’s main audience are financial service providers like asset managers. Corporate treasury is for most of the providers a small portion of their client portfolio at best. Especially for the treasury with substantial excess cash, commodity traders and other heavy users going to this event will be inspiring.

For me in many of the parallel sessions, there was most to be learned. These are a few of the eye-openers I would like to share with you. “Market data is in the top 3 cost drivers at financial service providers”, “the margins of providers did not suffer under the crisis and are relatively high”, “Regulatory changes like Mifid2 will have a huge impact on the industry”. The sessions made clear that investing in understanding how markets work before you acquire data is essential. An example that stood out is the impact analyst reports have on markets, regardless the quality of their research.

I want to conclude with two questions. First, tell us about your experience in this field, perhaps the treasuryXL readers deserve more (blogs). Second, experts in this field working in financial services are being trained and certified. I think the full training would be too much but perhaps we can ask partners to develop a tailor made corporate program. As the users know, a data terminal is easily €2,000/month. The type of investments should be managed by knowledgeable staff.

Thank you for your replies,

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

Why does Apple issue a green bond? Spoiler alert: I do not know (yet)

24-7-2017 | Pieter de Kiewit | treasuryXL |

Recently we had an “inner circle meeting” of treasuryXL in which we talk about developments and the direction we want to go. One of the invitees suggested we pay special attention to sustainable financing and related topics. I agree that this topic is quite prominent and this reminded me about a recent article in which a so-called “green bond issue” by Apple is described. This was the second issuance by them and raised $1 billion. Then my corporate treasury laymen’s mind started working and so far it has not stopped about this topic.

At the start of this year Apple was in the news because of the huge pile of cash in their books. The amounts are staggering and most likely not accurate. Repatriating this cash to the US would be suboptimal from a fiscal perspective but that is a topic for another blog. The funds raised with the green bond will be used to start projects around renewable energy and buying of safe raw materials.

The puzzle for me is: if you have all this cash, why would you do a bond issue? It is a lot of hassle, why not leverage the money you have? If you think this is a smart investment, why not invest yourself?

One of my colleagues suggested they do this from a marketing perspective. I don’t know about you, but I will not buy an Apple instead of a Samsung because of a green bond. So this is not the reason I expect. Perhaps it is a risk mitigation strategy in a project Apple will invest in anyway. My question to the corporate treasury and banking community: Do you know why?

Thank you for your answer and I will try to focus on other blog topics around sustainability and corporate treasury. I am convinced more obvious are available.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Another interesting article about funding:

Business case – Funding strategy: how Fastned uses Nxchange

Banking license Klarna & Adyen: The end of their competitive advantage?

| 5-7-2017 | Pieter de Kiewit |

Last weeks the payment service providers (PSPs) Adyen and Klarna received banking licenses. The gap between Fintech and traditional banks is being closed with the new kid on the block entering the traditional market. I can see the parallel to Amazon taking over Wholefoods and entering traditional retail. Markets are reshaped over and over. The question I ask myself is: will these new kids be able to change how traditional retail and banking is done and make a real difference?

Compliance

As to compliance in the banking sector this might be a challenge. The regulators think that by imposing new legislation on banks they will prevent all that went wrong in the past. I think this is an illusion. The effect is an increasing demand for experts who can take care of compliance. As a treasury recruiter I know bankers, also the ones with the proper expertise are fleeing the bank because compliance is demotivating a lot of them. This results in an increase in recruitment assignments and salary levels. This is not an issue relevant for Amazon.

The upside for the PSPs in comparison to Amazon is that they will be able to work with state of the art technology and challenge traditional banks who have to work with legacy systems. As far as I know, Amazon is not planning to close traditional outlets. And retail always has had a quite modern infrastructure. I cannot see yet how they would be able play the technology trump as hard as the PSPs can.

Both modern challengers do have an obvious competitive advantage. Especially for the PSPs I wonder if the extra burden of compliance will outweigh this advantage. Both client perception and cost levels will have to be monitored closely. The interesting thing of this all is that, by the time we might be able to know, the market situation might have been flipped twice again. It are interesting times, not?

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

More to read from this author: 

Interesting transfer Joop Wijn from ABN to Adyen

 

 

“Systems om je bank buitenspel te zetten” – Verslag van mijn Financial Systems presentatie

| 23-5-2017 | Pieter de Kiewit |

Dit is een verslag en korte samenvatting van mijn presentatie die ik mocht houden op het Financial Systems evenement. Afgezien van een gênante vertraging door mijn gebrekkige Powerpoint skills was het een prettige sessie afgerond met een pittige discussie tussen experts in de zaal. Eerst een korte samenvatting:

Als Feyenoord fan ben ik dit jaar gelukkig en weet veel van voetbal, ook al speel ik het niet. Daarin ligt een parallel in mijn werk als treasury recruiter. Maandelijks krijg ik van circa 100 experts persoonlijk college en zie een veelvoud aan cv’s. Ik denk dat ik hierdoor inzicht heb in systemen die worden gebruikt om treasury processen te managen en ik zie de afgelopen decennia interessante ontwikkelingen die de laatste jaren in een versnelling zijn geraakt.

Zonder namen te noemen van leveranciers, ik doe geen software sales, heb ik een lijst gemaakt van diensten en producten die de gereedschapskist van de treasurer kunnen vergroten en afhankelijkheid van zijn bank verkleinen. Toen ik deze lijst opstelde, viel me op dat er tussen de vakgebieden cash & werkkapitaal management enerzijds en funding anderzijds interessante ontwikkelingen zijn zoals bankonafhankelijke betaalplatforms, crowdfunding en het bankkosten inzichtelijk maken. In het managen van risk zie je bijvoorbeeld trade finance in blockchain en partijen die FX transacties tegen ongebruikelijk lage marges bieden.

Banken daadwerkelijk buitenspel wordt lastig en is volgens mij ook niet het streven. Banken bashen vind ik een zeer onsympathieke hobby. Daarbij is de Fintech wereld ook nog niet volwassen met alle bijbehorende consequenties. Voor de drukbezette treasurer, voor de DGA en CFO die maar incidenteel te maken hebben met het vakgebied kunnen deze ontwikkelingen nogal onoverzichtelijk zijn. Helaas is er geen oplossing die snel inzicht verschaft. Wel denk ik dat er mooie kansen liggen voor degene die vooraan wil meelopen in ontwikkelingen.

De discussie die zich ontspon tussen financiële lijnmanagers en treasury experts ging, onder andere, over de vraag of bankkosten daadwerkelijk inzichtelijk zijn en wat de toekomstige rol van de banken zal zijn. De Powerpoint presentatie is onder dit artikel opgenomen. Ik verheug me op verdere events waar discussie rond dit thema kan worden verder gevoerd.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

Klik hier als je de presentatie van de sessie wilt bekijken.

 

 

 

 

Review Dutch Fintech Awards: I’ll be back next year!

| 28-4-2017 |  Pieter de Kiewit |

Last Friday I had the pleasure of visiting the Dutch Fintech Awards. Diversity, technology, marketing and entrepreneurship are the key words that in my opinion describe the event best. Both contenders as well as audience were mainly Dutch. Although the language used was English, the communication style, also due to the moderator, was very “Dutch direct”. This kept the program entertaining during the pitches of companies of less relevance for me.

Dutch Fintech Awards

The event was not about parallel sessions or handing out brochures between presentations. One large, very representative room at the headquarter of Rabobank, a moderator who used interactive technology (on my smartphone!), a number of categories where three contenders pitched, an expert giving his opinion and a jury. At the end of the day the winners got awards and one of them won the event over all.

Pitches with various approaches

In comparison to previous versions of the event, I liked that there were no parallel sessions. There was plenty of time to network, people did not feel the need to skip presentations. One could notice that the pitches had various approaches: some of them were purely focused on the product or solutions as if to land extra clients. Others pitched as if to land extra funding. That made the task for jurors harder. Perhaps by coincidence, the less professional pitches were in the same categories.

The overall winner: BUX

The categories catered various target groups. Private persons could learn about financial planning tools & innovative on-line banking, SMEs about expenses management & crowd funding and large corporates about internet fraud & credit rating. I will not go into details about specific company pitches, you can read about them on www.fintech.nl. The only company I want to mention is the winner: Bux. The pitch had flair, a clear target group, a structured & smart approach and success was described in numbers. Both the proposition as well as the business case (funding!) were presented and questions were being answered with confidence.

I left later than planned, inspired, made new connections and met old friends. I will be back next year.

Pieter de Kiewit

 

 

Pieter de Kiewit
Owner Treasurer Search

 

 

More articles of this author:

Fintech recruitment considerations

Consider a treasury intern!