Cash & Liquidity Management

Page 1 of 3

Treasury Transformation through Troubled Times Webasto developed a new treasury vision with three elements: an in-house bank; closer partnerships with subsidiaries; and better corporate governance. Consequently, cash flow forecasting has been improved and refinancing has been successfully achieved. Treasury operations have been streamlined, and treasury established as a partner to the business units. Future plans include further centalisation and a revised netting process.

Treasury Transformation through Troubled Times

by Andreas Weindel, Group Treasurer, Webasto AG

The past two years have witnessed troubled times in many sectors, with the automotive industry being one of the worst affected. As a supplier to car manufactures, Webasto  has seen a dramatic decline in demand resulting from the severe drop in sales across the European Union, USA and Japan. Although there has been state support for some of the major car manufacturers, this has not helped all suppliers. Many have experienced serious liquidity issues as orders are reduced or cancelled. We have seen competitors become insolvent and also Webasto  suppliers’ liquidity situation is partly very vulnerable. Inevitably, banks have been nervous about how much support they can give to companies operating in this industry. That was a concern to us with financing due for renewal in 2010.

A vision for treasury

Webasto had enjoyed international growth over the years with a good number of group companies operating in a fairly independent way in the treasury area. With over 50 subsidiaries globally, it became a business imperative to centralise and co-ordinate financial activities more closely. There was a clear desire to strengthen financial policies, procedures and operational capability of the company; for example, we had no treasury guidelines in place at that time. We also lacked a treasury management system, so it was impossible to achieve an intra month overall liquidity position across the company. There was too little financial interaction across group companies, which made it difficult to co-ordinate a group-wide approach to treasury.

With over 50 subsidiaries globally, it became a business imperative to centralise and coordinate financial activities more closely.

I joined Webasto having had experience in industry-leading treasury departments at companies such as Siemens AG and Nokia Siemens Networks GmbH, so my aim was to bring these experiences to Webasto and develop a treasury department that demonstrated best practices and brought efficiency and control to the company’s financial activities. There were three key elements to our treasury vision: firstly, we wanted to establish treasury as an in-house bank which would provide shared services on behalf of the group; secondly, we wanted to partner more closely with subsidiaries so that we could gain a central view of cash and set a consistent liquidity strategy; finally, we wanted to improve  corporate governance by developing best practice policies and procedures.

Next Page   2 3 

Save PDFs of your favorite articles, authors and companies. Bookmark this article, or add to a list of your favorites within mytmi.

Discover the benefits of myTMI

 Download this article for free