D1 S6 1600 Janko Hahn

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J. Hahn / Head Treasury Operations, October 2014

The fast route to centralisation

Autoneum’s project POWER

Agenda

1. Autoneum at a glance

2. Project POWER: a centralized gateway

• Starting point

• Goals

• Project DRIVE: standardized business processes with SAP

• Via SAP & FIDES to the banks (and back)

3. Outlook: the years ahead

• Outlook: payment-factory roll-out until 2017

• Formats

• SAP Treasury enhancements

4. Lessons learned

5. Q & A

Agenda



• Starting point

• Goals





• Formats


4. Lessons learned

5. Q & A

4 Eurofinance Budapest 10/2014: - The fast route to centralisation

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Product lines

• Broad range of technologies

• Innovative materials and

processes

• Customized systems and

components

• Cost effective and lightweight

solutions

• Total vehicle optimization

• Simulation tools and

measurement systems

Engine Bay

Interior Floor

Underbody

Body

Treatment






Key Facts & Figures

Net Sales 2013:

2’053.3 million CHF

Represented in more

than 20 countries

About 45 locations

worldwide

Operating result before

interest and taxes* (EBIT) Some 9’600 employees

Stock listed company

(SIX Swiss Exchange)

* before one-time expenses






Well-diversified global customer base

* Share in net sales 2013

42%*

BG North America

Agenda



• Starting point

• Goals





• Formats


4. Lessons learned

5. Q & A






Starting point

Status Quo 2012:

• Treasury organization

• Centralized Treasury Operations

• 2 FTEs (globally); based in HQ in Winterthur

• Cash management landscape:

• Larger positions of local based cash

• Large number of bank accounts globally (> 100)

• with broad variety of banks (> 45)

• System / IT landscape:

• Out-dated Treasury Management System (TMS)

• Independent / outdated ERP landscape

• No standardization in transmission of payment files & bank statements






Starting point

Status Quo 2012 – execution of payments & posting of bank statement items:

• Preparation & release of payment runs

• Local

• No transparancy for HQ

• Connection to banks for transmission

• No standard approach

• Heterogeneous systems

• E.g. Mammut, e-banking portals, local solutions

• MT940 for «Electronic Bank Statement» functionality in ERP

• None

• Manual booking of bank statement items; paper

based






Starting point

Approach before start of project POWER






Goals

Goals:

• Full daily overview over cash & liquidity

• MT940 for Treasury for (major) bank accounts

• Parallel for Accounts Receivable use locally

• Better transparency of cash flows globally (…where possible)

• «review» functionality for payments executed

• Cost savings

• Choosing «the right» banks

• Reduction of number of bank accounts

• Aligned approach to connect legal units to their banks

• One interface

• Standardized process

• «Payment Factory» as target

What is

a

Payment

Factory?






Goals

Definition payment factory:

• Centralization of payment flows for Treasury & AP payments

• Process:

• Transmission from legal unit ERP system to

central connectivity solution

• Centralized execution of file transfers in a cost &

process optimized approach

• Transfer via one central bank connection /

interface to appropriate bank relation & bank

account






Project DRIVE: standardized business processes with SAP

July 2012: Board decision for global project («DRIVE») of process re-engineering by using SAP as instrument (global roll-out of SAP FI, CO, SD, MM, etc)

Agenda: 2 – 3 Roll-Outs / year, starting with CH Legal units time frame until 2017 for Project DRIVE

Group Treasury – Project POWER:

• TMS evaluation 2nd half of 2012, SAP TRM selected as new TMS in 11/2012

• In-House Cash licensed for future use

Benefit of integration into DRIVE landscape

Consulting partner for SAP Treasury: EPROX Consulting, Switzerland

Key changes / requirements short term:

• Centralized transmission of payment runs & bank statements

• Single gateway to the banks & local benefits of SAP TRM use






Via SAP & FIDES to the banks (and back)

Status Quo:

• FIDES already in place

• Daily collection of MT940 & MT942

Potential approach for payments:

• SWIFT connectivity for non-CH / non-EUR zone Go-Lives

• Potentially EBICS where available avoid SWIFT

• Profiting from choosing «the right format»: ISO 20022 / XML

Evaluation:

• Comparison of a few service providers (e.g. «classical» SWIFT Service

Bureaus)

• Alternative: would SWIFT solution «Alliance Light» fit to our needs?







Alliance Light:

• Offers easy and cloud based linkage to the SWIFT network

• No complex and expensive IT investments required

• Allows independence from 3rd party providers

Assessment Autoneum: approach ideal if

• only a few banks to be connected

• utilization of single standard file format possible (e.g. only MT101)

• inhouse capacity to maintain format variations if necessary

• limited number of countries approached for payments







Autoneum case:

• Broad(er) variety of banks

• Complete bank landscape not yet known at project start

• Global roll-out: includes banks in «complex» countries

• (Potential) variety of formats

• Limited SAP business analyst capacity in-house

Doubts if Alliance Light «plug-in» would work for us

Unknown consulting costs for implementation

Decision to go for «hybrid Service Bureau» approach provided by FIDES







New approach with using SAP / BCM & FIDES

Middle-

ware







Payment factory roll-out until 10/2014:

2013 (CH):

• Pilot entities: 3 x Headquarter / management entities

• 1 x operational entity

2014:

• USA

• CA

Connectivity via FIDES:

• CH banks (3) via EBICS

• USA & CA: Autoneum BIC

Agenda



• Starting point

• Goals





• Formats


4. Lessons learned

5. Q & A






Payment factory roll-out until 2017

Payment factory roll-out until 2017:

2015:

• EUR: France, Spain Portugal

• Others: Poland

2016:

• EUR: Belgium, Germany

• Others: UK, Brasil, Argentina, China, Czech Republic

Bank strategy:

• one bank for EUR countries & SEPA payments

• (potentially) same bank for Poland & Czech Republic

• Brazil, Argentina & China: TBD






Formats

Bank Statements:

• Move from MT940 / MT942 to CAMT.053 / CAMT.052

• Currently not an option due to missing bank readiness

Payments:

• Evaluate change to CGI (Common Global Implementation)

• Depending on acceptance by banks

ACK/NAKs (pain.002):

• Currently received from FIDES by e-mail

• Target to implement into SAP BCM

Timeline for implementation of ACK/NAKs: Q4/2014 (depends on FIDES)






SAP Treasury enhancements

Automated confirmation of FX Deals with the banks via MT300 (SAP TRM /

New Correspondence Framework)

Treasury «Cockpit» for easier navigation across the Treasury Transactions in

SAP

EMIR & FinfraG compliance (Dodd-Frank TBD)

Graphical analysis of data & improved reports: SAP LUMIRA

Timeline for implementing further Enhancements: Q4/2014 – Q3/2015

Agenda



• Starting point

• Goals





• Formats


4. Lessons learned

5. Q & A





4. Lessons learned

Go-Live CH Legal Units 2013 (bank-connectivity)

Manage external dependencies

• FIDES (e.g. testing windows, converter settings)

• Banks - format definitions

• Knowledge of FI consultants in regards to Treasury needs

Manage internal dependencies

• Accounting team (e.g. creation of test files)

• Manage setup of several developement and testing mandates & impact on bank connectivity in SAP (e.g. middleware configuration)

Correct and uniform Masterdata is key for successful payment execution

Thorough training of ALL people involved well in advance (IT, Accounting, etc) clear definition of processes (Treasury as «black-box» for other teams)





4. Lessons learned

Go-Live preparation USA & CA 2014 (formats)

Sufficient time calculated for preparation / planning / testphases

• US/CA project involved 2 timezones and 4 different parties (bank, FIDES, Autoneum team and SAP consultants) multiplication of time needed due to complexity

• Bank internal project guidelines lead to additional time needs (e.g. several UAT cycles, testing freeze, cheque Go-Live schedules)

• Definition of ACH formats (CTX, CCD, PPD, etc.)

• MT940 used for statements – BAI2 can be avoided!

Don’t rely on local knowledge: ACH requirements («don’t know, we always paid by cheque»)

Hypercare phase must not be underestimated

Complexity to get reduction of cheques agreed on vs. timing to get reduction of cheque payments implemented





5. Q & A

Contact details:

Janko Hahn

Head Treasury Operations

Autoneum Management AG

T +41 52 244 82 13

[email protected]

Documents

D1 S6 1600 Janko Hahn