Listening to their experiences when using titanTreasury, though Users Day 2023
Discover the testimonials of our clients who have implemented the titanTreasury solution at the heart of their treasury management, to have an expert tool to manage market risks, counterparty and liquidity integrated into their TRMS and ERP accounting.
Their objectives: Securing their activity and mastering their result.
A currency risk concentrated at the holding level.
Managed by two employees, the treasury department at Somfy covers activities for France and the holding company with European cash pooling. The group is organised with production sites that charge distribution subsidiaries in their respective local currencies in order to free them from currency risk. Subsidiaries pay the holding company, who transfer the equivalent to production sites on the basis of an annual guaranteed FX spot for each currency.
The same pattern was adopted for payment of suppliers. Ultimately, it is the holding company that hedges the FX risk. To achieve this, the holding company receives a monthly budget forecast from production sites in foreign currencies, and aggregates this information with the group’s estimated purchase and other forecasts to measure net FX forecast exposure and implement the required hedges. On a daily basis, depending on market conditions and reassembled inbound/outbound accounting data, the amount and/or duration are adjusted. The holding company also answers to the business units need for liquidity and can manage their cash excesses.
FOREX: a major issue for risk hedging.
Somfy production sites are located in France (2 sites), Italy, Tunisia, Poland and China. As for the distribution subsidiaries, they are spread over sixty countries. The group’s exposure therefore spreads over twenty different currencies, with a higher currency risk in Europe. In this context, the treasury department applies cash netting positions by currency, so, limiting net exposure even with volume. Somfy has other important exposures to currencies with less transactions (AUD) but these are not eligible for netting. The treasury department uses vanilla financial instruments: FX spot, FX Forward (sometimes with accumulator) or NDF (Non Deliverable Forward). The group does not have interest rate risk since there is no debt, except for very special and specific operations.
Icade’s Finance & Treasury department’s objective is to centralize funding, Investments and Management of Financial risks (interest rates, liquidity, counterparty, etc) for the whole group.
To achieve this, the department is organized through three teams with well-defined missions to efficiently cover their areas of expertise:
1. Front Office – in charge of funding and interest rates hedging
2. Middle/Back Office – Controls and validates transactions transmitted
3. Cash/Investments Unit – exclusively dedicated to the daily management of cash and investments.
Overall these three units are managing the activity of about 300 companies, 700 bank accounts across forty banks and nearly 300 securities accounts.
A dizzying volume of operations
With complex law structures and strong legal obligations, the real estate and property business of Icade requires the opening of a bank account for each program launched. The Facility and Trustee department internally force the company to associate a dedicated bank account for each management mandate.”
Mr. Bois, can you introduce ACOSS?
Created in 1967, ACOSS is the Agence Centrale des Organismes de Sécurité Sociale (Central Agency for Social Security Organisations) who manages the treasury of the general scheme of social security. ACOSS is the national fund for Urssaf (a network of private organizations, whose main task is to collect the employee and employer social security contributions, which finance the general account of France’s social security system, including state health insurance). Our main job is to collect social security contributions for the payment of social benefits. Therefore, we have to manage on a daily basis financial flows for the benefit of the general scheme which covers 85% of the French population.
“What are the main objectives of one of the largest treasuries of France?
In a very volatile environment with large transaction volumes our objective is to balance the Agency treasury prudently and effectively. We develop diversified and secure funding solutions. On one hand, we borrow short-term to cover our cash needs by issuing negotiable securities (TCN in French), corporate treasury bills, or through Euro Commercial Paper (ECP). ACOSS cannot accept currency risk and therefore for non-EUR debt issuance and investments we use cross currency swaps. On the other hand, we are making secure investments of our cash excess with Repos.
In what context did you call 3V Finance?
Early 2015, ACOSS decided to structure its treasury activity with distinctive Front, Middle and Back Office functions. As part of this reorganisation, we decided at the same time to increase efficiency by introducing the use of a treasury management system.”
A world business with centralised management.
Organised in a small team and based in Paris, Faurecia’s Treasury Department has eight employees: three of them are in charge of cash management and back office, two are in charge of the front office, one for bank funding and one in IT systems and projects; all of which are supervised by the Director of Treasury and Finance. This department deals with all currencies and interest rate operations for the group, in which the directors of business units or regions send forecast exposures to it through an internal system. In case of specific needs, additional positions may be taken or adjusted on request via email. Thus, depending on market opportunities, the front office team hedges 80% of subsidiaries exposures at reception of information. Traded instruments are mainly FX spot transactions for one off demands, FX Forwards and some options with barriers. Additionally, the hedge accounting FVH (Fair Value Hedge) and CFH (cash flow hedge) is given the permanent objective of neutralising the artificial volatility and its impact on the income statement of hedging transactions.
More than 14 billion euros in total currency exchange.
The world presence of the group generates trading on many currencies: USD, MXN, PLN, GBP, BRL, CNY, JPY, etc. for an estimated annual volume of more than 14 billion Eur. Trading volume for hedging of interest rates is minimal and tends to balance fixed/floating rates, which requires fixing some rates with swap transactions. Finally, as the group is structurally borrowing cash, we make small investments and we issue commercial paper as part of a 1 Billion EUR program.