At the end of 2013, the Cerberus investment fund entered into advanced discussions to acquire the "Interior Systems" branch of the Visteon group. The group itself would be renamed Reydel Automotive on the day of the sale. During this period, Thierry Albrand was recruited to take charge of creating the Treasury Department. In particular, to establish a cash culture within the company. We gathered his testimony about the key stages of his mission.
Taking up the position and actions taken to create a Treasury department
“Before their emancipation, the entities that today make up Reydel Automotive depended on Visteon Corporation in terms of treasury. To make the new company autonomous, we therefore had to create the Group Treasury Department from scratch.
To do this, I started by taking stock of the situation.
First, by creating an Excel questionnaire that I asked all Visteon SI entities to complete. This allowed me to gather key information on banking relationships, volumes involved, customer and supplier payment terms, ERP, cash flow software… ».
→ Among the actions carried out, some were particularly important
"In particular these:
- Understand the needs for our scope and prepare the schedule of actions to be implemented. This is with the aim of being ready for the closing date of October 31, 2014 (“Day One”). This was made possible thanks to weekly conference calls starting in April 2014 with the Treasurer of the Visteon Group.
- Work closely together with Visteon Corporation teams to negotiate a TSA (Transfer Service Agreement). This allows us to maintain certain banking and IT services, such as cash pooling, for three years. It was not possible to repatriate it under our responsibility in such a short period of time.
- Inventory all accounts in detail held by the group's various subsidiaries. Then establish a new list of signatories for each of their accounts.
- Contact a wide range of banks to free ourselves from the banks of Visteon Corporation.
Then prepare, in association with the buyer, a quantified Company Info Package describing our activity and our financial forecasts.
And I wanted to bring the banks to our place, especially to show them our showroom. So that they could see the products we manufactured, and those that they could sometimes finance!”
Reassure partners
"In order to reassure our partners about the new Reydel group, it was necessary to act with the greatest possible transparency. And to show banks, as well as other partners (credit insurers, suppliers, etc.), what we were building with our perspectives.
During a call for tenders, we renegotiated the existing factoring line by doubling its amount and integrating several foreign subsidiaries. We also contacted credit insurers so they could improve our rating. This was to provide more coverage options to our suppliers."
Implementation of cash flow forecasting software
"Another major challenge was implementing the cash flow forecast, which had previously been done manually in Excel. We installed dedicated software (13-week forecasting), which required the involvement of a large number of operational staff from different backgrounds. This also led to the establishment of a cash culture within the company."
The main difficulties encountered
"In a company with a long-standing culture of management control, it wasn't easy to establish this cash-based approach. This was dear to the investment fund and necessary for the effective implementation of a Group Treasury. To move from a BU culture to a Corporate culture, we made the existing teams aware of the need for the approach we were undertaking. And to not see it as new constraints but as opportunities.
A lot of effort was therefore made to, on the one hand, understand each person's job, and on the other hand, explain to everyone how this project would be beneficial for the Group, and by extension, to all operational staff. The task was all the more complicated because it was necessary to adapt to the cultural differences of each person across the 17 countries in which Reydel is established (Europe, Asia, Latin America).
Then, the need to document all aspects of Cash Management and write and then communicate all the operating rules, policies and procedures represents very important and essential work.
Key success factors
“The human dimension plays a key role because implementing precise processes and tools such as cash flow forecasting is essential, but nothing replaces the cooperation of all operational staff. It is essential to gain the trust of all employees by practicing pragmatic teaching and involving them in the implementation and execution of processes, while explaining to them why and how the objectives will be achieved.
To successfully carry out this type of mission, everyone needs to understand that Treasury is no longer the ivory tower it once was, but a collective project involving the entire company. Once the scope of the project was understood, the operational staff came back to us to explain their challenges. Whatever the mission, when people come back to us after our visit, it means we've won!
This enabled us to be ready for Day One to manage our own treasury independently. To do this, the entire organization had to carry out significant and sustained work over the past 15 months. This success was achieved thanks to the energy deployed, but above all thanks to collaborative work and the construction of a cash culture."
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