Client stories: Bayer

Global liquidity management for Grupo Antolin

“The innovative liquidity enhancing solutions have decreased the burden on our treasury staff, allowing us to reallocate resources more efficiently.”

Luis Vega, CFO, Grupo Antolin

Spanish company Grupo Antolin is a major supplier to the global auto industry, with a product range that includes headliners, seats and door panels. By constantly adapting to the demands of a sector in continuous development, the company has expanded globally, with operations in 23 countries and annual sales exceeding EUR 1.6 billion. Continuing to improve operational efficiency, while pursuing growth, is a key priority for the company.

The challenge: to create a fully automated cross-currency pooling solution

In 2005, we implemented a cross-border pooling solution for Grupo Antolin’s operating companies in the eurozone, enabling its Group Treasury to manage a consolidated euro position. Grupo Antolin was keen to take the next logical step and extend the solution to other currencies which reflects a growing trend in liquidity management. Companies that started off by centralising their euro positions are now seeking to extend that single currency structure to incorporate other European currencies and, subsequently, US dollars. There is also a strong demand for including Asian currencies, reflecting the region’s emergence on the global trade map. That way, organisations can optimise balances across several currencies, taking their liquidity management to the next level.

Grupo Antolin’s vision was of a single, automated liquidity management solution that would include additional European currencies, such as sterling and Czech koruna, as well as its US dollar positions. The inclusion of the dollar cash positions held by its US operating companies – across five states – was particularly significant given the importance of the US auto industry to Grupo Antolin.

There were a number of reasons why Grupo Antolin mandated us to develop the new solution, not least the success of the existing euro cross-border pooling structure.

The company was also impressed by our leading capabilities in liquidity management, commitment to excellent client service and extensive global network. Another factor was the strong institutional relationship: we are Grupo Antolin’s largest international bank, providing a full range of services to their subsidiaries around the world.

Ensuring the most efficient transaction processing

Using a combination of automated, global cash concentration tools and an innovative, transparent cross-currency pooling solution, we extended the existing pooling solution into a fully automated cross-currency structure.

Grupo Antolin’s operating companies throughout Europe and the US continue to manage their payments and receipts in their local countries, thus ensuring the most efficient and cost-effective transaction processing. All accounts are managed through RBS’s systems including accounts in countries covered through partner bank agreements, such as Citizens in the US and MBCP in Portugal. The resulting balances on the accounts in Europe and the US are automatically swept to a cross-currency pool – located in the Netherlands – on an end-of-day, same-dayvalue basis, despite the different time zones involved. The various credit or debit balances across the different currencies are automatically offset without the need for any FX transactions.

Centralising the group’s entire funding and investment activity

The solution provides a number of benefits for Grupo Antolin. First, by eliminating the need for manual sweeps across regions, the company can reduce its operating costs. In addition, the solution minimises the need for FX activity – and the associated costs and administration – to match opposite currency positions, as these are automatically offset. It also means there is no longer a need to invest or fund individual currency positions, as the group’s entire cash position can now be managed through a single transaction in one currency. Crucially, the company’s entire funding and investment activity can be centralised, offering the prospect of an improved overall interest result.

The solution considerably simplifies Grupo Antolin’s banking network, enabling it to reduce its reliance on local banks and introduce centralised SAP reporting. With an improved view of its positions around the world, it can truly take charge of its treasury function and free up resources to focus on activity that adds value.

In addition to this innovative liquidity management structure, we provide Grupo Antolin with a banking infrastructure that allows the company to centralise the management of its payment and collection business across Europe and the US. These two services combine to provide a completely integrated solution into SAP that meets the company’s demand for centralised control over transaction initiation, receivables management and group liquidity that can be extended to other countries and currencies as its business expands.

Key benefits:

• Reduced operating costs by eliminating manual sweeps across regions
• Minimises the need for foreign exchange activity to match opposite currency positions and reduces the associated administration
• Centralised group funding and investment activity – the entire group cash position can be managed through a single funding/ investment transaction in a single currency
• Improvement in overall interest result
• Increased control over the treasury function, freeing up resources to focus on other value added projects

Next steps

We are committed to continuously improving the solutions we offer. We work with clients over the long term to extend and enhance the structures we have developed for them as our product range expands and their businesses grow. Our relationship with Grupo Antolin is a prime example of this approach to client service. We are currently exploring how we can further support the company in its operations in CEE and Asia.

For more information about how we can support your business needs, please contact your relationship manager.