Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 11
Decision-makers have moved
their focuses on LIQUIDITY and
BALANCE-SHEET strength (B/S) to (1)
CAPITAL ALLOCATION and (2) VALUE
They
have
ofalso
reinforced
their
B/S
strength
since
2008.
Now,
it
is
time
to
focus
on
creating value for
relative
weights
debt
and equity).
Fortunately,
pressures
for deleveraging
and maintaining
liquidity levels
stakeholders.
Lots
of
firms
security
have
developed
their
oare
wn
sophisticated
methods
to
allocate
capital
optimally.
These
methods
include
quantitative
elements,
qualitative
judgement
and
forward
estimates.
By
better
allocating
capital,
a
firm
should
create
more
value.
CAPITAL ALLOCATION
CAPEX
M&A
Growth initiatives
R&D
Dividend Pay--‐out Share--‐Buy Backs
- NOV / DEC /
N°99
-
and eventually destroys shareholder value. Liquidity is not
M&A operations versus dividend pay-outs or even shareanymore a real issue. There are liquidities in the market and
buy backs.
It seems that a minority of corporations have
Focus has move towards creation of value via better capital allocation
the cost of liquidities is rather cheap. However, companies
defined a clear financing and capital allocation strategy. In
overdlast
years,
(over)reaction to
The
Global
(GFC)
started
a
factivism
ew
years
fter
piled
quasi
up
a
dliquidities
ecade,
what
o
we
have
in
noticed
the meanwhile,
weFinancial
have alsoCrisis
noticed
shareholder
toago.
Ahave
the
GFC.
They
have
also
reinforced
their
B/S
strength since
invest in
or tto
distribute
cash
(back).
The
economic
uncertainty,
erm
of
company
financial
management?
Decision--‐makers
have
moved their focuses on LIQUIDITY
2008. Now, it is time to focus on creating value for stakeholthe cost
of debt (cheap these days) and the cost of equity
and BALANCE--‐SHEET strength (B/S) to (1) CAPITAL ALLOCATION and (2) VALUE CREATION.
The
capital
ders. Lots of firms have developed their own sophisticated
are the key drivers of a corporate and investment strategy. A
is
scarce
and
remains
expensive
(although
cheaper).
Therefore
efficient capital process is paramount.
methods to allocate capital optimally. These methods include
company needs to find the right balance between alternative
Conversely,
inefficient
capital
allocation
pressures
the
B/S
quantitative
and
eventually
destroys
shareholder
value.
and forward
elements,
qualitative
judgement
sources of funding to maximize capital structure and miniLiquidity
i
s
n
ot
a
nymore
a
r
eal
i
ssue.
T
here
a
re
l
iquidities
i
n
t
he
m
arket
a
nd
t
he
c
ost
o
f
l
iquidities
is
should create
estimates.
By
better
allocating
capital,
a firm
mize cost of financing (i.e. Weighted Average Cost of Capital /
cheap.
However,
companies
have
iled
up
and
liquidities
over
last
years,
in
(over)reaction
to
the
GFC.
more
value.
WACC rather
depending
on cost
of debt,
tax rate, cost
ofpequity
LE MAGAZINE DU TRESORIER / TREASURER MAGAZINE
cash.
Credit spreads are historically low, as well as interest rates, balance--‐sheets have been
restructured and cash balances are at record highs.
Still,
companies
face
number
of
challenging
It isfor
therefore
to optimize
capital
funding
instruments
available
maximize
capital
structure
dilemma's
such
as
the
nto
eed
to
optimize
capital
structure
avanishing.
nd
to
invest
growth
recommended
against
necessity
to
structureaof
the
company.
has never
been higher
(e.g.cequity,
hybrid,
maintain
adequate
ushion
subordinated
of
liquidities
tdebt,
o
face
future
downturns
nd
potential
scarcity
of
funding.
The
equity-linked
project
bond,the
etc...).
The decision
choice
isolutions,
s
complicate
between
different
funding
instruments
nd
tmove
he
use
of
cash
creation
for
M&A
of
operations
Focusahas
towards
value
process can be difficult. As result of this conservative apversus
dividend
pay--‐outs
or
even
share--‐buy
backs.
It
seems
via
that
a
minority
oallocation
f
corporations
have
defined
better
capital
proach, corporates have accumulated piles of cash. Credit
a
clear
financing
and
capital
allocation
strategy.
In
the
meanwhile,
e
have
also
noticed
hareholder
The GlobalwFinancial
Crisis
(GFC)sstarted
a few years ago.
spreads are historically low, as well as interest rates, baactivism
t
o
i
nvest
o
r
t
o
d
istribute
c
ash
(
back).
T
he
e
conomic
u
ncertainty,
t
he
c
ost
o
f
d
ebt
(cheap
these
in term of comAfter
quasi
a
decade,
what
do
we
have
noticed
lance-sheets have been restructured and cash balances are
days)
and
Still,
the
ccompanies
ost
of
equity
are
the
key
rivers
of
a
corporate
nd
investment
strategy.
A
company
pany afinancial
management?
Decision-makers
have moved
at record
highs.
face
number
ofdchallenging
their
BALANCE-SHEET
needs
to
fas
ind
the
right
alance
bcapital
etween
structure
alternative
of
focuses
funding
on
to
LIQUIDITY
maximize
and
capital
structure
and
strength
dilemma's
such
the
need
toboptimize
andsources
to (1)
ALLOCATION
ando(2)
CREATION.
to invest
for growth
necessity
maintainAadequate
minimize
cost
against
of
financing
(i.e.
to
Weighted
verage
Cost
of
(B/S)
Capital
/
WCAPITAL
ACC
depending
on
cost
f
dVALUE
ebt,
tax
TheFcapital
is scarce
and remains
expensive a
(although
cushion
of liquidities
to face
future
downturns
rate,
cost
of
equity
and
relative
weights
and
of
dpotenebt
and
equity).
ortunately,
pressures
for
deleveraging
nd
cheaper). Therefore efficient capital process is paramount.
tial scarcity
of funding.
The choice
is lcomplicate
between It
is
therefore
maintaining
security
liquidity
evels
are
vanishing.
recommended
to
optimize
capital
Conversely, inefficient capital allocation pressures the B/S
the different funding instruments and the use of cash for
structure
of
the
company.
JAN 2018
CREATION.
Return to shareholders
The
best
and
optimum
measure
of
financial
performance
remains
the
most
important
quest
for
CFO's.
Companies
often
focused
on
book
values
and
accounting
measures
(a posteriori)
e.g.
ROA,
ROE,
EPS
growth
and
profit
margins.
On
the
other
side,
some
firms
focus
on
market-based
measures,
e.g.
long
term
stock
performance
(more
a
prospective
view).
At
the
end
of
the
day,
the
solution
may
be
median,
11
Table des matières de la publication Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018
COUVERTURE
SOMMAIRE
EDITORIAL
FINANCIAL HIGHLIGHTS Luxembourg Tax News
INTERVIEW with Dick Oskam, Head of Sales for Transaction at ING
FOCUS
Value generation - How to create (more) value for the company with a better capital allocation
Managing bank accounts, the Cinderella of treasury management
Treasury on the Digital Front Line
FORUM
Implementation of EU Tax Rules
Innovative payments solution
Construction de portefeuille : combiner gestion active et passive
Decision Time: Investing in Money Funds after EU Reforms
Payments as a Strategy
Are asia’s corporates ready to repo?
The evolving role of treasurers
THE FINANCIAL RISK OBSERVATORY
NEWS
LIFE BEYOND NUMBERS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - COUVERTURE
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 2
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - SOMMAIRE
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 4
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - EDITORIAL
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - FINANCIAL HIGHLIGHTS Luxembourg Tax News
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 7
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - INTERVIEW with Dick Oskam, Head of Sales for Transaction at ING
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 9
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Value generation - How to create (more) value for the company with a better capital allocation
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 11
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 12
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 13
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Managing bank accounts, the Cinderella of treasury management
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 15
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 16
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 17
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 18
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Treasury on the Digital Front Line
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 20
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 21
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Implementation of EU Tax Rules
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 23
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Innovative payments solution
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 25
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Construction de portefeuille : combiner gestion active et passive
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 27
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Decision Time: Investing in Money Funds after EU Reforms
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 29
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Payments as a Strategy
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 31
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - Are asia’s corporates ready to repo?
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 33
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - The evolving role of treasurers
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 35
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 36
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - THE FINANCIAL RISK OBSERVATORY
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 38
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 39
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 40
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - NEWS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 42
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 43
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 44
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 45
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 46
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 47
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 48
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 49
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 50
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 51
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 52
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - LIFE BEYOND NUMBERS
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 54
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 55
Trésorier/Treasurer magazine - N°99 - Nov/Dec/Jan 2018 - 56
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