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Perfetti Van Melle at a glance

Perfetti Van Melle treasury redesign project

Lessons learned

Conclusions

1 Perfetti Van Melle Holding B.V., Treasury Department

Perfetti Van Melle at a glance

2 Perfetti Van Melle Holding B.V., Treasury Department

HQ in Lainate (Milano) Italy. Finance / Treasury HQ in Breda, The Netherlands

Turnover: EUR 2,5 bln Sales in 150+

countries 31 production facilities Subs in 40 countries

worldwide

Facts & Figures

3 Perfetti Van Melle Holding B.V., Treasury Department

Situation back in 2009:62 bank relations in 40 countries380+ bank accounts15+ electronic banking systems, partly central, partly decentralManual banking used widelyCentral intranet based cash position reporting systems (weekly balances, manual entry by subsidiaries)Treasury management system used by corporate treasury onlyCash pools in NL in 9 currencies, subsidiaries participating with non-resident accounts. Centralized execution of hedging and fundingTreasury staff of 3 FTE (FO&BO)

Perfetti Van Melle treasury facts

4 Perfetti Van Melle Holding B.V., Treasury Department

Primary goal: Cash visibility and controlNew system for payment management, liquidity management and treasury management including full ERP connectivityBank connectivity via SWIFT for statements:

MT940 statements in FileAct 97% of cash flows & 85% of bank accounts visible daily MT942 via FileAct on principal trading accounts (150 accounts)

Bank connectivity for payments: XML payments (pain001) harmonization Local CM execution, central administration and policy making

Bank rationalization (62>35)Secondary goals

Treasury redesign goals (Q2 2010)

5 Perfetti Van Melle Holding B.V., Treasury Department

Business case performed on high level Business case findings: Business case not

positive Despite that, support from management Sole reason: value of visibility and control.

Treasury redesign business case

6 Perfetti Van Melle Holding B.V., Treasury Department

All new systems operational 45 bank relations in 37 countries 325 bank accounts 76% of bank accounts reported via SWIFT from 20

banks, approx. 85% of all cash flows visible daily Treasury live on manual payments via SWIFT 3 subsidiaries live on manual & bulk payments via

SWIFT

Achievements up to Q3 2011

7 Perfetti Van Melle Holding B.V., Treasury Department

Statement reporting via SWIFT serves the purpose of visibility very well

When it works, it works: little maintenance on the channel Support from SWIFT is generally very good Good reason for bank rationalization Underestimated total cost of maintaining connectivity via SWIFT:

Connection (Alliance Lite / service bureau fee) SWIFT subscription fees Messages (SWIFT), possible message surcharge Service bureau Banks’ setup fee and messages Corporate infrastructure setup and maintenance

Lessons learned: SWIFT (1/2)

8 Perfetti Van Melle Holding B.V., Treasury Department

We have been struggling with technology issues:Making SWIFT alliance lite work and the subsequent migration to SWIFT service Bureau (Broadridge)Technical infrastructure setup:

Servers FTP connectivity Interfaces

Functional IT: ERP integration (SAP integrated system of Hanse Orga selected

as the tool for Payment management, Liquidity mngt. and Treasury mngt.)

Interfacing with dealing platform (FXall) Interfacing (temporarily) with intranet reporting system Payment format setup and testing

Lessons learned : SWIFT (2/2)

9 Perfetti Van Melle Holding B.V., Treasury Department

Support and performance differs significantly between banks:Struggling with documentationConnectivity setupMessage types supported

Statements Payment instructions Direct debit Treasury confirmations

Bank delivery times can be very longDue to heavy investments, not a bank independent solution

Lessons learned: Banks&SWIFT (1/2)

10 Perfetti Van Melle Holding B.V., Treasury Department

Costs are not transparent up front. Completely off the scale pricing proposals seen. Negotiation pressure heavier than anticipated.Setup feeMaintenance feesMessage fees often overlookedLogic of pricing often not visiblePortfolio determines the price only partlySophistication of proprietary solutions used as SWIFT pricing argument (higher)

Lessons learned : Banks&SWIFT (2/2)

11 Perfetti Van Melle Holding B.V., Treasury Department

Impacts almost every business area: long list of stakeholders to maintain. Notably: Audit (separation of duties and EDP audits) Procurement (vendor master data) Financial administration (key users)

Issues sister companies (rightly so or just as excuse) Sense of loss of control / ownership Complex local products not easily fit in standardized tools / formats Legal discussions Transfer pricing discussion

Permanent “project” = permanent support Pilot subsidiaries necessary to show achievements to

reluctant subs

Lessons learned: The company

12 Perfetti Van Melle Holding B.V., Treasury Department

Technology needs are vast. We have certainly overlooked areas.Sophisticated payment / treasury management systemServers, secure connectionsERP connectivityStaff that can cover both Treasury and IT subjects (integrated project team)

Lessons learned: In house technology and functional

design

13 Perfetti Van Melle Holding B.V., Treasury Department

The statement reporting via SWIFT has proven very useful in the visibility goals

SWIFT is not a solution fit for all. Whether it works for your company depends on the company’s structure and approach.

SWIFT is not plug and play, not even SWIFT Alliance Lite

Beware of marketing

Conclusions on SWIFT

14 Perfetti Van Melle Holding B.V., Treasury Department

Banks in NW Europe are highly cooperative Banks in NW Europe show extensive knowledge SWIFT setup with banks is not plug and play, many

banks struggle with their own systems Beware of marketing It is not bank-independent due to the investment,

especially in time.

Conclusions on Banks

15 Perfetti Van Melle Holding B.V., Treasury Department

Technological complexity has to be covered by Finance and IT together, impossible to do this without integrated treasury and IT project team.

Visibility and control are the main benefits, not cost saving from efficiency

This is not a project for us. It has proven standard process.

Underestimation of the complexity and impact. Endless list of stakeholders.

Conclusions on the Company

16 Perfetti Van Melle Holding B.V., Treasury Department

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Q&A

17 Perfetti Van Melle Holding B.V., Treasury Department