Cash & Liquidity Management

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Pumping Cash to the Centre DAB Group's treasury department turned to Banca Nazionale del Lavoro (BNL), part of BNP Paribas Group, to refresh its cash management structure, providing a host of visibility benefits and handing control back to the business.

Pumping Cash to the Centre

Pumping Cash to the Centre

By Ben Poole, Columnist


When treasury at DAB Group in Italy needed to refresh its cash management structure, it turned to Banca Nazionale del Lavoro (BNL), part of BNP Paribas Group, to provide much-needed visibility and control. Here, Francesca Salmazza, Accounting Shared Services Officer – Treasury/Fixed Assets at DAB Pumps is joined by Fabrizio Conti, Cash Management Solution Sales at BNP Paribas/BNL and Alexandra Oberheid, Solution & Design Implementation – Senior Project Manager at BNP Paribas/BNL, to explain DAB Pumps’ successful journey towards cash centralisation.

 

Francesca Salmazza

Francesca Salmazza
Accounting Shared Services Officer – Treasury/Fixed Assets, DAB Pumps

DWT Holdings and DAB Pumps are the Italian counterparties - sub-holding and subsidiary respectively - of a Denmark based world leader in development, production and commercialisation of hydraulic pumps for industrial and civil sectors. Over in Italy the DAB Pumps Group, which has consolidated revenues of more than €300m, was looking for a new banking partner to better support the company’s cash management need.

Francesca Salmazza, Accounting Shared Services Officer – Treasury/Fixed Assets at DAB Pumps, explains: “Our goal was to have one cash management platform for all of our sub-companies in order to significantly improve cash visibility and control. This was especially important given that treasury manages 14 companies across 23 bank accounts. So, in 2017, we started our search for a banking partner to help us achieve our goals – and met with BNL to discuss their credentials.”

Fabrizio Conti, Cash Management Solution Sales at BNP Paribas/BNL, was involved in the initial meetings and explains the approach: “When we met with DAB Pumps, we wanted to show them how we could help them, not just in Italy but around the world, thanks to the BNP Paribas network,” he says. “With the visibility and control challenges DAB Pumps were facing, we were keen to demonstrate our channel offering, Connexis Portal, an all-in-one e-banking solution to monitor balances and to carry out transactions worldwide.” The bank also outlined how it could help to improve the company’s international cash pooling solution, transferring it across from DAB Pumps Group’s previous banking partner.

So compelling was the Connexis demonstration and the cash pooling set-up that DAB Pumps signed up to work with BNL and soon began the implementation – starting with creating a host-to-host (H2H) connection and implementing Cash and Reporting modules. Salmazza continues: “Running everything from one banking platform is the best way for us and for all our financial managers. We have a lot of sales all over the world and so any software that can help us manage this in the best way is very welcome, and we quickly understood that Connexis was an excellent solution. The implementation was extremely smooth and, thanks to the H2H connection, we have now integrated Connexis with our treasury software so that we can see all of the bank transactions for all of our subs via a single platform.”


Replacing an international cash pool

While implementing the e-banking channel, the Group decided to transfer across the international cash pool from our Italian banking partner. At the time, the structure covered Italy, the Netherlands, Belgium, Germany, Spain, Hungary and the UK.

Alexandra Oberheid, Solution & Design Implementation – Senior Project Manager at BNP Paribas/BNL was in charge of the switchover. “With such an important structure being shifted between banking partners, it was vital that this should happen without interruption to day-to-day treasury operations,” she explains.

Fabrizio Conti

Fabrizio Conti
Cash Management Solution Sales, BNP Paribas/BNL

It was made more challenging because, while DAB had its pooling structure with another Italian bank, the Danish parent group had a master account with BNP Paribas. Says Oberheid: “We could not immediately set up direct poolings to the Danish parent group. First off, we needed to open up all of the bank accounts required by DAB Group companies, in order for them to be connected to the cash pool structure. Therefore, initially we did centralise the cash from the third party bank structure to a DWT overlay account in BNL. This was necessary because we required a temporary solution while setting up the structure that would work from the minute that DAB Pumps transferred from its Italian banking partner.”


Expanding and improving

The transfer of the international cash pool optimised the liquidity management within the Group. “Previously, the Italian cash pool between DAB Group and its Danish parent group wasn’t zero balancing because the Italian structure was held by another Italian bank and the master account was managed in Denmark by BNP Paribas,” says Conti. “Now that BNP Paribas/BNL manages 100% of the flows, zero balancing has been fully achieved.”

More countries have meanwhile added to the international e-banking platform – notably Poland, Russia, South Africa, the US. The final country, Australia, is currently being connected and will also be integrated in the Cash Pool.

Great benefits have come from the Connexis implementation “Having every country on the same page when it comes to cash management has been very helpful to DAB Pumps treasury,” Conti comments.

 

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