Strategic Treasury

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Interview: Jean-Claude Courtois, Altran Technologies We speak to the Treasurer at Altran Technologies about the group's debt management, liquid assets, and hedging policy.

Jean-Claude Courtois

Treasurer, Altran Technologies group

“The replacement of Etebac was not that complicated”

Could you tell us something about Altran?

The company, which is celebrating its thirtieth anniversary in 2012, employs just over 17,000 people, essentially engineers who give advice related to innovation and engineering. Although Altran is often considered an IT services company, this activity, developed especially in the areas of banking and insurance, only represents around 30% of the turnover: the majority of our activity is an even balance of all the big sectors of the industry - cars, energy, telecommunications, aeronautics… Our turnover comes equally from France and around 20 other countries, including Germany, the United Kingdom, Italy, Spain and the United States. The plan of action, which we unveiled at the general meeting of shareholders in June 2011, and which covers the period from 2012 to 2015, has the following objectives: a turnover of over €2bn, an operating margin of 11% to 12% at the top of the cycle and an available cash flow of 2% to 4% of the turnover. Also the company, which is listed on the stock market, on Euronext Paris, in compartment B, had [on 7 December 2011] a stock market capitalisation of €450m and is a member of the SBF 120.

How have you organised the treasury?

The whole treasury is run from head office by a team of four people including myself – one of whom works specifically with customers and in particular with forfaiting, an important financing mechanism for us, and the two others are involved with day-to-day treasury management and also with risk.

Altran has developed, over a certain period, by acquiring a multitude of smaller businesses. How was this carried out, from the perspective of the treasury?

At the beginning of the millennium, it became apparent that it was absolutely necessary to centralise liquid assets which were distributed among numerous subsidiaries. Between 2003 and 2005, we did several things at once. One such operation involved the putting in place of a zero balancing cash pool, in France, in Europe and in the US. The results proved spectacular: the amount of cash held by each subsidiary decreased more than tenfold. At the same time, we significantly reduced the number of bank accounts.

Does the company have debts, and if so, which types?

The company’s debt is represented by a convertible bond issue due on 1 January 2015, for €132m, and by a mid-term syndicated credit, €73m of which is yet to be paid off, negotiated with our four large banks – BNP Paribas, Société Générale, Crédit Agricole and Natixis. In addition, we have recourse to forfaiting, a method of financing which has the advantage of smoothing the variations in growth in activity, for amounts which are currently a little over €150m. This is with three main local forfeiters, under conditions which we consider comparable to short-term classic credits – it’s a matter of non-recourse factoring in France and Germany. Regarding commercial debt - the good management of which is of course of great importance to us as one day of DSO costs us about €5m - the average payback period for all countries combined is 87 days, a figure that has not worsened in recent times.

Is the debt hedged? What is your policy when it comes to exchange rate fluctuations?

The debt is hedged by caps lasting until 2012 and 2013, in the event that interest rates begin to rise again when things begin to improve.. When it comes to exchange rate fluctuations, hedging is very marginal, because in our non-Eurozone subsidiaries there is a balance between income and expenses, which consist mainly of salaries. In the future, it is possible that certain big principals, especially in the aeronautical sector, will generally give invoices in dollars in order to optimise their natural hedging: this would necessitate ad hoc interventions; but we aren’t there yet.

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