You Ain’t Seen Nothin’ Yet!

Unleashing the Power of Treasury

Robin Veariel Working Capital Advisor robin.veariel@baml.com

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Agenda

- Introductions - Treasury Transformation - What is Strategic Thinking - Components of Building a Strategic Organization - Discussion

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Introductions

Robin Veariel Working Capital Advisor Bank of America Merrill Lynch

Stephanie Allen Director of Treasury Research Now Group, Inc.

Rob Whitaker VP, Finance and Treasurer TTS LLC

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Transforming Treasury

Transactional “Transaction Processor”

• Making payments • FX purchases or sales • Cash movements

Advisory “Data Analytics Provider”

• Spend Analysis • Investment Options Analysis • Risk Management Advice

Strategic “Forward Looking Strategist”

• Cap Structure Planning • Interest Optimization • Acquisitions/Divestitures

Transform the Treasury Organization from Transactional to Strategic

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What is Strategic Thinking?

Defining STRATEGIC THINKING

The application of unique business insights and opportunities intended to create competitive advantage for an organization

According to a study published in Chief Executive Magazine, the most valued skill in leaders today is strategic thinking. However, more than half of all companies say that strategic thinking is the skill their senior leaders most need to improve. Horwath, 2014

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Strategic Thinking: a Four Piece Puzzle By Bill Birnbaum

FOCUS: Don’t try to accomplish “everything” MARKETS: Develop intimate knowledge of your markets and customers

PROCESS: Carefully manage your processes PEOPLE: Care about and nurture your people

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Building a Strategic Organization

Create an environment of

strategic thinking

Facilitate strategic thought

Develop a strategic

vision

Develop a strategic

plan

Implement the plan

Are people

empowered

to think

strategically?

Lead the

discussion!

What are your

goals?

What steps are

necessary to

meet your goals?

How do you

manage

CHANGE?

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Creating the Environment

BREAKDOWN SILOS

CREATE CROSS FUNCTIONAL TEAMS

EMPOWER AND EXPECT

BUILD TRUST/ALLOW RISKTAKING

INTRODUCE DIVERSITY

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Begin Thinking Strategically

DETERMINE PLAYERS AND GAME

PERFORM SWOT ANALYSIS

LOOK FORWARD, REASON BACK

ANALYZE DATA/FACTS

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Develop Strategic Vision

DEFINE THE GOAL

WRITE MISSION STATEMENT

GET EXCITED!

COMMUNICATE… A LOT!

INSPIRE OTHERS

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Develop Strategic Plan

WHO NEEDS TO BE INVOLVED?

WHAT RESOURCES ARE NEEDED?

WHAT ARE TASKS? BY WHOM?

WHAT IS TIMELINE?

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Implement the Plan

DETERMINE CONSTITUENTS

BUILD CONSENSUS

COMMUNICATE…A LOT!

CREATE IMPLEMENTATION TEAM

TRACK PROGRESS

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Panel Dialogue

Working Capital Improvement Initiatives

Research Now Company Snapshot Leader in Global Digital Data Collection

▪ We build and manage panels on the web and through

mobile and social media in order to capture global consumer and business professional behavior and attitudes

▪ Founded in 1999

▪ Headquartered in Plano, TX

▪ 25 offices across 17 countries

▪ 1,300+ employees

Our Brands

6+ million Enrolled panelists in 38 countries

50 million

people can be accessed globally through social media partnerships

300+

Profile dimensions

Over 3,000 customers globally and employ 1,300+ employees in 25 offices around the world Research panels with over 6 million members in 38 countries

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Seattle

San Francisco

Los Angeles

New York

Toronto

Chicago

Dallas

Mexico City

Sao Paulo

London Paris

Rotterdam

Madrid Milan

Hamburg Frankfurt Munich

Athens

Mumbai

Shanghai Tokyo

Singapore

Melbourne

Sydney Auckland

Sales and Customer Services

Sales Only

Sales and Operations Hub

Delhi

Panel locations

Research Now

Global Capabilities with Locations Worldwide

Treasury Challenges

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My Background

Treasury Manager/Asst. Treasurer – private food brokerage company

Challenge: Cash application led to Accounts Receivable and Credit Collections

reporting to Treasury

Asst. Treasurer, Capital Markets – 3rd largest hospital management company

Challenge: Large M& A pipeline led to Treasury responsible for Corporate strategic

forecasting model

Director of Treasury & Risk Management – newspaper publication company

Challenge: inherited responsibility of managing shareholder services, insurance,

Pension and 401K investment strategy

Director, Treasury – global online market research company

Cash receipts lag led to developing working capital targets and

researching billing process to reduce Cash Conversion Cycle (CCC).

Current Focus/Challenge from CFO

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To provide timely, accurate & meaningful reporting & analysis

(…..that provides management insight and informs business decisions)

“Why are we exceeding budget but having liquidity problems?”

“Why are we having such large cash outflows in working capital?”

“I don’t want happy suppliers!”

Led to responsibility of Working Capital:

⁻ New working capital report to be pushed out to Region to reflect Cash Conversion Cycle (CCC) tracking and goals

⁻ Working capital task force analyzing solution to billing process pain points

⁻ AR and AP Terms/DPO improvement (manage disconnect)

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Treasury

“Revenue is vanity…..margin is sanity……cash is King.”

- Source Unknown

Rob Whitaker – VP Finance & Treasurer

TTS, LLC – VP Finance & Treasurer (joined TTS in 2010)

Reddy Ice – Assistant Treasurer

Triad Financial – Director of Structured Finance

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Third Party Logistics Provider

Logistics Consulting Services Lead Logistics Provider

Benchmarking

Transportation Procurement

Network Analysis and Design

Professional Services Consulting

Full Transportation Outsourcing

Transportation Provider Contracting

Inbound Freight Management

Freight Bill Audit and Payment

Capacity Provider Technology

Single Source

Brokerage

Spot Market

Dedicated Fleet

On-demand TMS

Optimization

Highly Configurable

Rapid Implementation and Integration

TTS provides a comprehensive brokerage platform

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TTS Agent Footprint

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2006 through 2013 : Growth

-

10

20

30

40

50

60

70

80

2006 2007 2008 2009 2010 2011 2012 2013

Cumulative Annual Net Agents Added

($ in millions) 22% CAGR

10.0%

10.5%

11.0%

11.5%

12.0%

12.5%

13.0%

13.5%

14.0%

2006 2007 2008 2009 2010 2011 2012 2013*

$-

$100.0

$200.0

$300.0

$400.0

$500.0

$600.0

Revenue Gross Margin $ % of Revenue

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2006 through 2013 : Growth Mix

($ in m

illio

ns)

$-

$5.0

$10.0

$15.0

$20.0

$25.0

$30.0

$35.0

2006 2007 2008 2009 2010 2011 2012 2013

International Operations

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Receivables – Cash Posting Challenge

$525 million revenue – 350,000 shipments (average invoice of $1,500)

Started to see delay in posting cash receipts (manual process)

– Increase in DSO (invoice and post $10 million a week)

– Inefficiencies in collection activity

– Large unapplied cash balances

– Customer service issues

Solution – Intelligent Receivables or AR matching process to link our lockbox

and operating system

– AR detail file uploaded to bank

– Intraday process to work exceptions

– Nightly upload from bank to operating system for any matched or

resolved exceptions.

Results

– In testing last few weeks, go live this weekend

– 50% match (higher with exceptions resolved)

– Lower DSO, more efficient collections, time to work true “issues”

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Conclusion

The C-suite is asking that treasury and finance teams play a more strategic role, being a broader partner within the

organization. Treasury has opportunities to generate significant value through projects related to:

•Best practices

•Financing programs •Support of M&A transactions •Management of corporate risk

•Management of global supply chain

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Bibliography

Thinking Strategically: the Competitive Edge in Business, Politics and Everyday Life By Avinash K. Dixit and Barry J. Nalebuff, W.W. Norton, 1991 Strategic Thinking: a Four Piece Puzzle By Bill Birnbaum, Douglas Mountain Publishing, 2004 Competitive Strategy: Creating and Sustaining Superior Performance By Michael Porter, The Free Press, 1985 Elevate: The Three Disciplines of Advanced Strategic Thinking By Rich Horwath, John Wiley and Sons Inc., 2014 How Successful People Think: Change Your Thinking, Change Your Life By John C. Maxwell, Hackett Book Group, 2009

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