FR

Famar group

« At last! French and international subsidiaries and group treasury teams have a manageable and fluid tool. Fidrys is a quick and simple cash management solution, and moreover the only one on the market to offer a proper debt management module. The product implementation was efficient thanks to an effective team. »

Axel Van Craeynest
Director of Treasury and Financing

 
 
About the Famar group

The Famar Group is a leading supplier to major international pharmaceutical production laboratories and of galenic production services of ranges such as Rx, OTC amongst others. They predominantly focus on the subcontracting of manufacturing and development.

Represented on both a European and global level by its turnover and production volumes, the Famar group has 3500 employees across five countries and eleven sites producing more than 5500 references (over 770 million boxes) to more than 80 countries, in 33 different methods.

2011 sales: € 414 million
2013 sales: € 450 million

The present system

The tools used by the subsidiaries to manage their cash flow is primarily based on banking portals. The finance departments of each of the European entities are autonomous in their third party payments and their cash-flow and debt management.

Cash-flow management conducted on Excel consumes a lot of time and resources. The requirement was to automate the financial reporting in order to model a short-term forecast of cash flow, factor and debt positions, therefore facilitating an estimation of net debt based on entity and consolidation.

Another major constraint is that the information system of Famar (and all its subsidiaries) is not compatible with for the SEPA weighing machine.

The requirements

The Group Treasury function at Famar was implemented for the following reasons:

  • To facilitate fluid intercompany transfers
  • To centralise the management of bank and intercompany loans in order to formalize consolidated net debt positions or subsidiaries.
  • To provide a common working method in all subsidiaries (facilitated by the sharing of a common treasury management software) and to lead significant changes across five countries
  • To establish an international bank communication via SWIFT
  • To send all European subsidiaries to SEPA without using other accounting software (therefore reducing cost)
  • To secure third party payments with an appropriate workflow validation, one not available in the other available standard tools
  • To set up an internally controlled "target balancing" cash pool

Given its global implementations, the choice of SWIFTNet for the entire group must guarantee bank exchange by transmission and reception for all managed entities.

  • To facilitate fluid intercompany transfers
  • To centralise the management of bank and intercompany loans in order to formalize consolidated net debt positions or subsidiaries.
  • To provide a common working method in all subsidiaries (facilitated by the sharing of a common treasury management software) and to lead significant changes across five countries
  • To establish an international bank communication via SWIFT
  • To send all European subsidiaries to SEPA without using other accounting software (therefore reducing cost)
  • To secure third party payments with an appropriate workflow validation, one not available in the other available standard tools
  • To set up an internally controlled "target balancing" cash pool

Given its global implementations, the choice of SWIFTNet for the entire group must guarantee bank exchange by transmission and reception for all managed entities.

Each subsidiary manages its own realized daily flows and forecasted daily flows and manages its third party payments. The central treasury ensures the smooth flow of liquidity and monitoring of positions of net debt.

The chosen solution must allow flexible configuration of the group's standards, ensure exchanges via SWIFTNet with nearly two dozen European banks. The daily cash management as well as the modeling of short-term debt, a debt factor and a monetary debt, intended to monitor a net debt position with desired levels of consolidations.

To allow the SEPA migration, the platform must be able to integrate payments under existing European formats (non-SEPA), ensure validation workflow adapted to group procedures and send payments via SWIFTNet in formats aside from bank formats.

 
 

The main features requested by the Famar Group:

«I insist on having a debt modeling tool, which is not a strong feature of competing offers.”
Axel Van Craeynest
Director of Treasury and Financing

  • To have a SWIFTNet bank communication unique to all companies
    • Retrieve account statements in CFONB120, MT940 and MT942 (intraday)
    • Pay according to the TBS and MT101 formats
    • Get protocol and application acknowledgments
  • To dematerialize all third transfers
    • Import orders of third transfers from different ERPs
    • Enter occasional transfer orders on a third base validated in cash tool
    • Apply validation workflow tailored to each type of flow: third party transfers: double validation (financial and operational), intercompany transfers: simple validation (financial), Intracompany transfer without validation.
    • Unify the internal validation workflow payments
  • To fully dematerialize the signatures/confirmations to banks
  • To unify cash management across all subsidiaries
  • To manage an internal cross-border "target balancing" cash pooling
  • To have a simple tool for short-term prevision for the daily management of operational flows related to financial transactions
  • To have a complete treasury reporting tool (reporting and budgetary) including debt modeling
  • To have a cash management and reporting tool progressing towards a foreign exchange management

On finishing the project:

The Famar Treasury team consists of ten people spread over five countries (including Spain, France, Greece, Holland, and Italy). It is therefore necessary that the offer will be able to meet the requirements of each region with an operational simplicity and adaptability to their expectations.

Advantages :

  • Swift before/after
    • Very stable banking Communication whether in FIN or FileAct
    • Ability to connect through a single channel with all the Group's banks (plus all the advantages that this represents in maintenance and monitoring of protocol changes)
    • Independent access to the SWIFT network network (we do not pass through a single bank nor do we go through a single software vendor centralizing the Banking Communication).
    • Ability to dematerialize the validation of orders before sending them to the bank without the requirement of a certificate or token
    • Reception of ACK & PSR payments having immediately after sending orders to banks.
  • ACK
    • Due to great help during the test/development and Go Live phases: it automatically identifies the rejected or inadequate formats (FIN) or redelivers the files to the bank via the Swift network.
    • The same thing every day,
    • Providing a "just-in-time" management of inventory this feature (amongst others) is indispensable.
    • Coupled with intra-day reporting, it allows a large amount of information on the execution of orders sent the same day.
  • MT 942
    • Increased responsiveness for treasury teams in the support they can now provide to operational teams (supply chain, collections, suppliers etc.)
    • Management of a cash pool ZBA taking into account intra-day flow allows fine adjustment of positions and allows a close management of the balancing within one day via a cash pivot.

What Fidrys Treasury brought to the Famar organisation

  • Total visibility (and detail of transactions) on the set of group accounts, clear visibility of the group treasury and therefore excellent reactivity
  • Regarding debts modeled in the tool (and in a local finance management context) Fidrys Treasury allows detailed modeling of all debts and blankets, thus a good understanding of these (differing in their form and operation) by the treasury group
  • Establishment of a daily cash reconciliation processes for greater control of cash flow and a close monitoring of banking positions
  • A tool shared by the whole treasury group team in each subsidiary: : finally everything can be understood simply and quickly
  • The interoperability established between accounting and cash management software has eliminated a number of manual steps, including low value-added tasks, and has reduced data manipulation thus reducing the risk of fraud
  • Similarly, the exclusive use of cash Fidrys Treasury software (and its associated validation workflow) allows (i) to bring the whole group to a standard in terms of validation of orders and (ii) minimizes the risk of fraud (internal and external) related to written confirmations
  • Each cash flow is characterized in line with the budget nomenclature of the Famar group.This allows, a detailed analysis of cash flow in nature on both a realized and budgeted leve,. The exercise is helpful if attention is focused on a particular type of expenditure (for example COGS, CAPEX, OPEX, etc. ..) and constitutes a high added value in the area of budget control
  • The usability of Excel reports (unique to Fidrys/Diapason), provides the reporting tools with the flexibility to model the Net Debt of the Group with axes analysis in order to meet the expectations of the business and the General Management.
 
 
The Fidrys Treasury response

Fidrys is now reserved for a support call from four treasury managers, being the only company who are able to respond to the project as a whole.

Responding to the need of exchange with the Euro-SSB Information (Swift Alliance Access in XMLV2) ensuring STP management (without intermediate treatment) for the sending payments in FIN or FileAct aswell as for returns (ARA and PSR)

The implementation teams of Euro-information related to Famar and the tripartite communication Famar/Fidrys /Euro-Information is very fluid. There are no blind areas in the distribution of roles: an effective formula in implementation of daily functions.

Interruptions of exceptionally rare services: the Banking Communication is not a regular concern.

 
 
Distinguishing factors

An immediately accessible and very facilitating hotline (without a ticket system or need for subscriptions)

A global expertise on the tool, concentrated within available, responsive, competent andprofessional individuals, thus making the support simple and efficient.

Genuine flexibility from project management teams

"In conclusion, the flexibility of supply from Fidrys Treasury, alongside the overall quality of the project team, has enabled us to implement a solution with a functional perimeter, flexibility and simplicity for management and that achieves the goals of the specifications. A major contrast with the usual frustration of project completion that everyone knows or has experienced.

In our case, we are more than satisfied. Although Fidrys is so well known compared to the leaders of the field, the end result is of no comparison." said Axel van Craeynest, Treasurer of Famar Group and manager of this project.