Séverine Le Blévennec’s (Director EMEA Treasury at Honeywell) presentation at the Eurofinance Barcelona had it all: real detail, superb positioning and understanding of what liquidity management is all about PLUS an explanation of how they ruthlessly focus on the implementation of their policy and strategy.

Overall policy and strategy:

• at a corporate business level: only be in good positions in good industries (where they are delivering on its Five-Year Plan and outperforming industrial peers in a slow-growth global economy)
• international treasury strategic themes: simplify, standardise, automate and globalise AND their credo is to ‘stay on strategy’

Liquidity strategy is based on the basic principles and processes:

• Cash: 
  • process & systems focus on the sources of cash inflow, amount/location. % invested / yields, and economic deployment
  • one key bank per country
  • daily visibility in one treasury database (see figure below)
• Investment based on Global Investment Policy and metrics focused on policy compliance, % invested, return by country and eliminating negative carry
• Liquidity is monitored regionally, and by country combined with active management of the aggregated counter-party exposures. 

Source & Copyright©2013 -  Honeywell Inc.

Impressive asides
This presentation was full of important asides giving impressive details of how they to do it, examples included:

• comparison of the merits of a one bank strategy v. multi-bank strategy. Not surprisingly Honeywell choose the best of both
• bank account rationalisation and elimination of obsolete accounts policy which all corporate treasury departments have. The difference is that Honeywell means it, e.g. over a period of 10 years, Honeywell inherited about 1000 accounts from some 20 acquisitions; they also added 16 countries compared to our original footprint both from organic and external growth, AND thanks to constant monitoring and elimination of redundant bank accounts, after 10 years the number of bank accounts is only 50 more than a decade earlier!!
• 82% of EMEA active legal entities are connected to a cash pool
• the in-house bank has direct contact with 143 legal entities in the Honeywell Group
• capital preservation is the first priority in their investment strategy and in practice, they use a combination of: diversification between low risk instruments and counter-parties, competitive bidding through electronic trading platforms and SOX compliance.

The central role of the TMS is to be the central straight through processor and straight-through reconcilor:

Source & Copyright©2013 -  Honeywell Inc.

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After her final slide on the role of the TMS, Sévrine commented, "This is how we leverage technology to support the human touch". Absolutely. This presentation is what the effective corporate treasury department is all about.