Sergio Dalla Riva:
I'm Sergio Dalla Riva, Head of Product Development, Global Transaction Banking, IMI Division, Corporate & Investment Banking.
Today we're joined by Dr. Andrea Balboni, Head of Group Financial Planning and Treasury at the MAIRE Group.
Good morning, Andrea.
Andrea Balboni:
Good morning, Sergio.
Sergio Dalla Riva:
Thank you.
The MAIRE Group was the first adopter of the Multi Currency Optimizer, an Intesa Sanpaolo solution designed for corporate treasury departments.
Andrea, in the context of an international group with foreign subsidiaries, multiple currencies and centralized liquidity management, is this the ideal environment for the Multi Currency Optimizer?
Andrea Balboni:
I'd say yes. In our case, Sergio, I'd describe it above all as a journey.
It's a journey that our Group Treasury started several years ago with Intesa Sanpaolo and our other relationship banks, with the objective of building a centralized treasury and liquidity management model.
How did we get there?
We first adopted a notional cash pooling system for euro and US dollar balances.
So, when you introduced the MCO, it immediately struck me as the ideal solution to complement this journey, because it enables us to rebalance the currency mismatches that can naturally arise through cash pooling within an industrial business model like ours.
Sergio Dalla Riva:
Absolutely.
So, although this is a complex environment and a sophisticated solution, has it had any strategic impact on your area of responsibility? I'm thinking, for example, of risk management policies or financial planning.
Andrea Balboni:
Certainly.
The first effect was that we significantly reduced spot foreign exchange conversions between euros and US dollars.
We achieved this without changing the nature of our project finance support model.
What do I mean?
MAIRE is an industrial group, and our projects generate foreign currency cash flows that naturally follow each project's industrial milestones.
We hedge those foreign currency cash flows using FX Forward derivatives.
As Group Treasury, we cannot alter the maturities of those derivatives or fail to honor them.
However, doing so could create inefficiencies at treasury level in order to comply with project requirements.
This is precisely where MCO supports us. It rebalances these positions for the benefit of Treasury, offsetting the potentially distorting effects generated by the projects.
The other strategic impact has been on financial planning, because MCO now has a significant influence on our short-term financial planning, typically over a one- or two-month horizon.
Overall, it has had a very important impact on the way we work.
Sergio Dalla Riva:
Of course.
So there have been strategic benefits, but what about day-to-day operations? Your teams are responsible for carrying out all treasury activities, and operational efficiency is just as important as strategic effectiveness.
Have you seen operational changes following the introduction of the Multi Currency Optimizer?
Andrea Balboni:
Yes, definitely.
I oversee both Financial Planning and Treasury, and I'm responsible for both departments.
Following the adoption of MCO, I had to make the two teams work even more closely together.
We introduced a weekly meeting, lasting no more than one hour, during which Financial Planning presents the projects' requirements and short-term planning needs, while Treasury brings all the available tools to the table, including the MCO limits that are still available.
Together, we decide the week's liquidity strategy and determine how much of each individual MCO limit should be used.
This has had a direct operational impact on our weekly workflow and on the liquidity profile we need to manage.
Sergio Dalla Riva:
That's extremely interesting.
Looking at the implementation project, which—because you were the first adopter—was understandably quite lengthy, as it was a genuine pilot project, what advice would you give to a Group Treasurer at another company similar to yours who is considering implementing this solution?
Andrea Balboni:
First of all, my main recommendation is that MCO should be viewed as part of a broader treasury strategy.
You need to have a clear vision of building a centralized and advanced treasury function.
Within that framework, MCO fits perfectly, as I've tried to explain.
My second piece of practical advice concerns the contractual phase.
Because the contractual documentation—especially the initial draft between the bank and the client—is fairly complex, given that this is a structural solution, having an in-house legal team, as we do at MAIRE, with expertise in financial risk can make a real difference and significantly speed up the initial stages.
My third and final recommendation is to ensure that Financial Planning and Treasury work in close coordination.
Otherwise, you won't be able to fully leverage all the capabilities offered by MCO.
Those would be my recommendations.
Sergio Dalla Riva:
Andrea, first of all, thank you for taking the time to be with us today.
Thank you for the many valuable insights you've shared with us and with everyone watching this video, and thank you for the projects we have developed together and those we will continue to develop in the future.
Thank you very much.
Andrea Balboni:
Thank you for your collaboration over all these years.
Thank you, Sergio.
