Sofitel Luxembourg Europe

October 7, 2009

Optimize your Liquidity & Treasury

with the Treasury applications from

SAP

Michael Diet

Director, Intensum Luxembourg

© SAP 2009 / Page 2

Agenda

1. Treasury Applications from SAP

1.1. Issues impacting the Treasury function

1.2. SAP’s Value Proposition

2. Optimize Payment & Bank Communication

2.1. SAP In House Cash & Bank Communication Management

3. Manage Cash & Liquidity

3.1. Cash Management (Cash Position & Liquidity Forecast)

3.2. Liquidity Planning & Forecasting

4. Optimize Debt, Investment & Hedging Strategies

4.1. Front-to-Back Office and Accounting System

5. Manage Global Financial Risks

4.1. Risks Analyzers

4.2. Hedge Management

3

About Intensum

Founded mid-2005

3 Legal entities : Luxemburg & Belgium

Current activities : Luxemburg, Belgium, Switzerland & France

Target

Senior team with excellent cross-competencies

Focus on bridging the gap between business & IT

Focus on SAP

Our added value

30 Experienced/Senior consultants

Proven business experience

Coverage of complete project lifecycle

A solid quality reputation

Recognized by SAP

• SAP Financial Supply Chain Management / SAP Treasury

• SAP NETWEAVER (XI/PI – Integration)

• SAP Business Intelligence

4

About Intensum

Clear positioning …

© SAP 2009 / Page 5

Issues impacting the Treasury

Function

5

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SAP Creates Values for

Your Enterprise

6

© SAP 2009 / Page 7

Optimize Finance with Treasury

Applications from SAP

7

Manage Global

Financial Risks

Optimize Debt &

Investment Strategies

Manage Cash &

Liquidity

Optimize Payments &

Bank communication

© SAP 2009 / Page 8

Managing Treasury & Financial

Risks

8

Key Stakeholders & Objectives

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Optimize Payments and Bank

Communication

9

SAP In House Cash

SAP In House Cash is a solution for global operating companies to manage their intra-

group and external payment transactions more efficiently.

The In House Cash Center is a virtual bank setup at the group headquarter where

subsidiaries have current accounts.

SAP In House Cash allows companies to minimize the actual flow of cash and therefore

reduce the number of bank accounts and save bank fees.

SAP Bank Communication Management

SAP Bank Communication Management enables customer to track the entire payment life

cycle, and significantly improve straight through processing rates and internal compliance.

SAP Bank Communication Management enables corporate customers connecting via SAP

NetWeaver Process Integration to the SWIFT Net Interface.

SAP Bank Communication Management includes SAP Integration Package for SWIFT and

is available since SAP ERP 6.0 – Enhancement Package 2

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Optimize Payments and Bank

Communication

10

SAP In House Cash – Functionalities

Processing of internal payments

(intra-group) without physical cash transfer

Central processing of external

payments (Payment on behalf)

for participating affiliates

in multi-system/heterogeneous

system landscape (SAP/Non SAP)

Routing of payment orders to local

subsidiaries to avoid cross-border payments

Account management with creation and

provision of account statements to

account holders, managing conditions

(interest scale, charges) and limits

Delivery of financial status to cash

management and tracking of payment status

Periodic activities such as cash concentration,

account balancing, interest compensation.

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Optimize Payments and Bank

Communication

11

SAP In House Cash – Business Benefits

Reduce amount of physical cash transfers by internal netting

Reduce number of bank accounts

Reduce administrative overhead

Minimize netting process times

Improve inter-company reconciliation

Save bank fees for bank accounts and payment transactions

Avoid cost for external cross-border payments

Reduce float and value-date losses

Gain more interest by keeping cash within the group

Reduce hedging deals concentrating exposure within the group

Improve debt and investment strategies

Improve competitive position in external money markets

Lower

Internal

cost

Lower

External

cost

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Optimize Payments and Bank

Communication

12

SAP Bank Communication Management– Functionalities

Logical structuring of payments

into batches

Multiple approval levels for

outgoing payments

Audit trail for payment approval

decisions along with digital

signatures for internal audit

Analysis of payment status

information and full payment flow

transparency (Payment Monitor)

Bank Statement Monitoring

SWIFTNet interface integration

using SAP Integration Package

for SWIFT

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Optimize Payments and Bank

Communication

13

SAP Bank Communication Management– Process Flow

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Optimize Payments and Bank

Communication

14

SAP Bank Communication – Monitoring tools

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Optimize Payments and Bank

Communication

15

SAP Integration Package for SWIFT – Features

SWIFTNet integration

Inbound and outbound support of FileAct and FIN

Integration with SWIFT architecture (SWIFTAlliance access and gateway)

Management of local authentication and integrity between SAP NetWeaver Process

Integration and SWIFTAlliance access and gateway

Standard mappings in SAP NetWeaver Process Integration for ISO20022

messages

Customer credit transfer initiation

Customer direct debit transfer initiation

Payment status report

Tight integration with SAP software

Available for SAP R/3 4.6C and above

Support of various status messages in conjunction with SAP Bank

Communication Management (prerequisite: SAP ERP 6.0)

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Optimize Payments and Bank

Communication

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SAP Bank Communication Management– Benefits

Increase Financial Visibility

Optimiziation of Bank connectivity through a Swift connection allows corporate the build a Global

Cash Management view

More control & visibility on the cash available into the group. Impacts on investments and

borrowing strategies and therefore on financing fees.

Simplification

Reduce the number of proprietary payment standards & bank communication systems and setting

up a single communication channel to SWIFTNet.

Allow harmonization of payment processing

Cost Reduction

Reduce maintenance cost by communicating with all the banking partners through this one

channel.

Compliance

Increase straight-through-processing (STP) rates

Ensure full payment flow traceability & transparency (get accurate and real time monitoring)

Strong & Secure interface between SAP & SWIFT (collaborative development)

Compliance with SEPA , ISO20022 and new payment file format (XML)

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Managing Cash and Liquidity

17

CASH MANAGEMENT

… is focused on short-term cash

position by value date & currency

Cash Position with information on

the current Bank Account Status

Liquidity Forecast including A/R

and A/P open items as an

Indicator of future cash flows

(deterministic) based on accounts

/ business partners

Logistic data is shown highly

aggregated

Target user is Cash Manager, ..

Not Planner

LIQUIDITY PLANNER

… is focused on medium to long

term Liquidity planning

… includes functions to

determine Actuals (cash already

received or spent) and forecast,

structured by uses and sources in

the enterprise

core system

… can be used to obtain the data

for a Statement of Cash Flows

(Direct Method)

Support of different Planning

Scenarios (e.g. on a rolling

monthly basis) and reporting

functionality in a global enterprise

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Managing Cash and Liquidity

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Managing Cash and Liquidity

19

SAP Cash Position Report

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Managing Cash and Liquidity

Suite Analytics

20

Operational Analytics within SAP ECC System (using local BI Client)

Selection of Suite Database Info bypassing the BI Infrastructure (no Data Warehouse)

Business Query can access Data Sources directly via Info Set

Multiple Reporting Front-end Tools based on same infrastructure

Available Enhancement Pack 5

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Managing Cash and Liquidity

Suite Analytics

21

New Dashboard for Cash Management with SAP Business Objects (Crystal /

Xcelsius)

Available Enhancement Pack 5

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Optimize Debt, Investment &

Hedging Strategies

22

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Optimize Debt, Investment &

Hedging Strategies

23

Funding Requests

from Subsidiaries

Available Credit

Lines

Best Option

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Manage Financial Instruments

Transaction Manager

24

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Manage Financial Instruments

Transaction Workflow

25

Exposure analysis

Decision support

Easy Trade input

Exercise Rights

On-line limit check

Position reporting

Open infrastructure for

integration with

dealing platforms

Instrument Pricing

Risk Analysis

Sensitivity Analysis

Flexible process

Definition

Master Data

Management

Deal Enrichment (SSI)

Deal Validation

Correspondence &

Matching

Interest rate fixing

Netting

Payments

Alert monitor

Hedge Management

Referencing

Posting of Trade

Perform Accruals

Perform Amortization

Perform Valuation

according to

several GAAP’s in

parallel areas

Hedge Accounting

Standard reporting

Ad-hock reporting

Controlling

Limit reporting

Management

reporting

Straight-Through Processing

Processes dependent on Financial instruments

Role based concept & Authorizations

Auditing Acceptability & Segregation of duties

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Manage Financial Instruments

Trade entry

26

Template trade input screen according to the type of transaction via a unique transaction.

Fast trade entry screen

Full audit trail on each transaction data.

Different status depending of the stage of the deal management process

Possibility to generate the deal ticket and confirmation in various formats (email, Swift

message, paper and fax)

The Payment Scheduler tool facilitates / automates the payment process

Mirroring function for inter-company transactions

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Manage Financial Instruments

Back Office Functions

27

Mappings are delivered for the following SWIFT formats

Outgoing messages: MT300, MT320, MT395, MT399, MT518, MT502, MT540, MT541, MT542, MT543

Incoming messages: MT300, MT320, MT395, MT399, MT509, MT515, MT535, MT536, MT544, MT545,

MT546, MT547, MT548, MT566, ACK & NACK.

Confirmation Matching System

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Manage Financial Instruments

Accounting

28

Integration with SAP General Ledger

Straight through processing of financial deals is achieved in combination with a highly flexible

accounting engine.

Real time update of your accounting positions (full integration between TRM and SAP Financial

Accounting).

Automatic posting (standard interface) incl. flexible account determination (many criteria available to find

the account that the position or result has to be posted to).

Hedge Management & Hedge Accounting according to the IFRS (IAS39) and FAS133 rules.

TRM supports several accounting standards IN PARALLEL. Transactions can be valued individually for

each valuation area and the results can be written into the financial accounting.

© SAP 2009 / Page 29

Manage Global Financial Risks

29

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Manage Global Financial Risks

Reporting

30

Market Data Shift

Scenarios

Sensitivity Analysis

FX sensitivity analysis (with EUR currency shift of 1%)

Interest rate sensitivity analysis (with yield curve shift of 1%)

© SAP 2009 / Page 31

Manage Global Financial Risks

Hedge Management

31

Hedge Management & Hedge Accounting

Hedge Categories

Fair value hedge

Cash flow hedge

Net Investment hedge

Hedging Instruments

FX swap, FX forward

FX options

Interest rate swap

Cross currency interest rate swap

FRA, Caps, Floors, Collar

Effectiveness Calculation Methods

Present Value Methods

Cash Flow Methods

Hypothetical Derivative Method

Correlation Method

Regression Analysis

© SAP 2009 / Page 32

Key points to Take Home

32

“Treasury” is not a single module, it’s a solution portfolio

All treasury applications are an integrated part of ERP Financials

SAP has a treasury roadmap in place and will continuously invest in the

treasury applications

Using an integrated treasury solution supports the overall IT trend of

harmonizing the system landscape and the application variety

Implementing SAP’s treasury applications leverage your overall SAP

investments you have made

Be compliant and gain efficiencies by using an integrated approach for

treasury management

Thank you!

p r e s e n t a t i o n

INTENSUM LUXEMBOURG

70 VAL SAINTE CROIX

L-1370 LUXEMBOURG

INTENSUM BELGIUM

180 CHAUSSEE DE LA HULPE

B-1070 BRUSSELS

WWW.INTENSUM.COM