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Key presentation showing difference between Dynamic Discounting and Supply Chain Finance IQPC Treasury Exchange MunichTRANSCRIPT
1 © 2014 PrimeRevenue, Inc.
KEY SUCCESS FACTORS IN SUPPLY CHAIN FINANCE
Nicole Bjugger, Former Director Supplier Financial Solutions at AB Volvo Phone: +46-150-343-016, Email: [email protected]
Frank Bickerle, Strategic Account Executive, PrimeRevenue, Inc. Phone: +49-170-828-6161, Email: [email protected]
Follow us: @PrimeRevenue Tweet: ♯SupplyChainFinance
2 © 2014 PrimeRevenue, Inc. 2
of the Fortune Global 500 are focused on working capital management and state it as a high priority. Source: CFO Magazine
8 % 1
3 © 2014 PrimeRevenue, Inc. 3
WHY FINANCING WORKING CAPITAL NOW?
IG SIG
Post “crisis” environment is still challenging for SME Suppliers
CDS Spreads
Source: Bloomberg
Δ150bps
Δ1000bps
§ On avg. 60% investment grade Buyers spend with sub-investment grade suppliers
§ Government intervention – EXIM Bank, White House Supply Chain Finance initiative
§ Health of the supply chain – Managing of Cash “Crisis” mode to managing growth and supporting SME suppliers
§ Powerful solution to reduce risks in the supply chain
4 © 2014 PrimeRevenue, Inc. 4
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BEFORE IMPLEMENTING AND MANAGING A SUPPLY CHAIN FINANCE
PROGRAM
AFTER IMPLEMENTING AND MANAGING A SUPPLY CHAIN FINANCE
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SUCCESS FACTORS IN SETTING UP AND ARRANGING SCF PROGRAMS
5 © 2014 PrimeRevenue, Inc. 5
SUPPLY CHAIN FINANCE
DYNAMIC DISCOUNTING
OPTIONS FOR FINANCING THE SUPPLY CHAIN
5 © 2014 PrimeRevenue, Inc.
DYNAMIC DISCOUNTING
5
6 © 2014 PrimeRevenue, Inc. 6 6 © 2014 PrimeRevenue, Inc.
SUPPLY CHAIN FINANCE DYNAMIC DISCOUNTING
Decrease payment terms for suppliers
Decrease payment terms for suppliers
Financing provided by external funder (bank or non-bank)
Financing provided by you
Main Goal: Improving working capital, while offering early payment terms to suppliers
Main Goal: Improving margins, while offering early payment terms to suppliers
Attractive financing terms for suppliers. (1-3% per annum)
Financing terms not very attractive for suppliers. Your goal is to use your free cash to improve your yields. (5-50% per annum)
WIN-WIN SOLUTION VS. INCREASING INEFFICIENCIES
SUPPLY CHAIN FINANCE
DYNAMIC DISCOUNTING
DYNAMIC DISCOUNTING
OPTIONS FOR FINANCING YOUR SUPPLY CHAIN
6
7 © 2014 PrimeRevenue, Inc. 7
SUPPLY CHAIN FINANCE
OPTIONS IN SUPPLY CHAIN FINANCE
7 © 2014 PrimeRevenue, Inc.
OWN BANK 3rd
Party
OPTIONS IN SUPPLY CHAIN FINANCE
7
8 © 2014 PrimeRevenue, Inc. 8
Using Open Multi-Bank Model with specialized platform and
service provider
Buyer sets up its own Supply Chain Finance Platform and manages the liquidity with
corresponding banks
OWN BANK 3rd
Party
OPTIONS IN SUPPLY CHAIN FINANCE
Buyer uses Supply Chain Finance Platform from
relationship bank
Platform Platform
9 © 2014 PrimeRevenue, Inc. 9
IMPORTANT POINTS TO CONSIDER
Funding is uncommitted.
Global supply chains in different jurisdictions/currencies
Supply Chain Finance facilitates your cash flow gain
Support from your partner for Procurement &Treasury is crucial for the success of supply chain finance
10 © 2014 PrimeRevenue, Inc. 10
Transactions in 50+ countries Available in 17 currencies No limitations in terms of jurisdictions, currencies, suppliers, invoices
CUSTOMERS PROCESSED VOLUME/YEAR FUNDERS AVERAGE PAYMENT TERM IMPROVEMENT FOR BUYERS
INVOICE VALUE SOLD BY SUPPLIERS PER DAY
NUMBER OF TRANSACTIONS/MONTH
Europe 2012 2012
PRIMEREVENUE IS THE LEADER IN SUPPLY CHAIN FINANCE TODAY
10
Atlanta (HQ)
Paris London
Frankfurt Prague
Melbourne Hong Kong Monterrey Cape Town
Operation Centers Offices Deployment Partners
10 10 © 2014 PrimeRevenue, Inc. 10
11 © 2014 PrimeRevenue, Inc. 11
2 OF THE 3 LARGEST TIRE
MANUFACTURERS
LARGEST CEREAL MANUFACTURER
LARGEST TOMATO PROCESSOR IN THE WORLD
2 OF THE 3 LARGEST TRUCK MANUFACTURERS
AUSTRALIA’S 3rd LARGEST PUBLIC
COMPANY
2ND LARGEST CHAIN OF SUPERMARKETS
IN THE UK
LARGEST ELECTRONICS DISTRIBUTION
COMPANY
2 OF THE TOP 5 EU TELECOM COMPANIES
2 OF THE 3 LARGEST AUTOMOTIVE
AFTERMARKET CHAINS
15,0
00+
CLIE
NTS
50
+ PA
RTN
ERS
3 OF THE 4 LARGEST AUSTRALIAN
AND NEW ZEALAND BANKS
5 OUT OF 10 LARGEST US BANKS
2 OF THE 3 LARGEST FRENCH
BANKS
2 OF THE 3 LARGEST UK BANKS
2 OF THE 3 LARGEST JAPANESE BANKS
LARGEST MEAT PROCESSOR IN THE WORLD
LARGEST CAR MANUFACTURER IN
THE NORDICS
2 OF THE 3 LARGEST
CANADIAN BANKS
WORLD’S LEADER IN BUILDING EFFICIENCY
1 OF THE TOP 3 WORLD LEADERS IN
AIR FILTERS
LARGEST DUTCH BANK
SERVICING THE GLOBAL MARKET
2ND LARGEST HOME IMPROVEMENT
RETAILER
12 © 2014 PrimeRevenue, Inc. 12
Nicole Bjugger Former Director Supplier Financial Solutions at AB Volvo Phone: +46-150-343-016 Email: [email protected]
Frank Bickerle Strategic Account Executive, PrimeRevenue, Inc. Phone: +49-170-828-6161 Email: [email protected]
Follow us: @PrimeRevenue Tweet: ♯SupplyChainFinance