Topics Perfetti Van Melle at a glance Perfetti

Topics: Perfetti Van Melle at a glance Perfetti Van Melle treasury redesign project Lessons learned Conclusions 1 Perfetti Van Melle Holding B. V. , Treasury Department

Perfetti Van Melle at a glance 2 Perfetti Van Melle Holding B. V. , Treasury Department

Facts & Figures HQ in Lainate (Milano) Italy. Finance / Treasury HQ in Breda, The Netherlands Turnover: EUR 2, 5 bln Sales in 150+ countries 31 production facilities Subs in 40 countries worldwide 3 Perfetti Van Melle Holding B. V. , Treasury Department

Perfetti Van Melle treasury facts Situation back in 2009: 62 bank relations in 40 countries 380+ bank accounts 15+ electronic banking systems, partly central, partly decentral Manual banking used widely Central intranet based cash position reporting systems (weekly balances, manual entry by subsidiaries) Treasury management system used by corporate treasury only Cash pools in NL in 9 currencies, subsidiaries participating with non-resident accounts. Centralized execution of hedging and funding Treasury staff of 3 FTE (FO&BO) 4 Perfetti Van Melle Holding B. V. , Treasury Department

Treasury redesign goals (Q 2 2010) Primary goal: Cash visibility and control New system for payment management, liquidity management and treasury management including full ERP connectivity Bank connectivity via SWIFT for statements: MT 940 statements in File. Act 97% of cash flows & 85% of bank accounts visible daily MT 942 via File. Act on principal trading accounts (150 accounts) Bank connectivity for payments: XML payments (pain 001) harmonization Local CM execution, central administration and policy making Bank rationalization (62>35) Secondary goals 5 Perfetti Van Melle Holding B. V. , Treasury Department

Treasury redesign business case Business case performed on high level Business case findings: Business case not positive Despite that, support from management Sole reason: value of visibility and control. 6 Perfetti Van Melle Holding B. V. , Treasury Department

Achievements up to Q 3 2011 All new systems operational 45 bank relations in 37 countries 325 bank accounts 76% of bank accounts reported via SWIFT from 20 banks, approx. 85% of all cash flows visible daily Treasury live on manual payments via SWIFT 3 subsidiaries live on manual & bulk payments via SWIFT 7 Perfetti Van Melle Holding B. V. , Treasury Department

Lessons learned: SWIFT (1/2) Statement reporting via SWIFT serves the purpose of visibility very well When it works, it works: little maintenance on the channel Support from SWIFT is generally very good Good reason for bank rationalization Underestimated total cost of maintaining connectivity via SWIFT: Connection (Alliance Lite / service bureau fee) SWIFT subscription fees Messages (SWIFT), possible message surcharge Service bureau Banks’ setup fee and messages Corporate infrastructure setup and maintenance 8 Perfetti Van Melle Holding B. V. , Treasury Department

Lessons learned : SWIFT (2/2) We have been struggling with technology issues: Making SWIFT alliance lite work and the subsequent migration to SWIFT service Bureau (Broadridge) Technical infrastructure setup: Servers FTP connectivity Interfaces Functional IT: ERP integration (SAP integrated system of Hanse Orga selected as the tool for Payment management, Liquidity mngt. and Treasury mngt. ) Interfacing with dealing platform (FXall) Interfacing (temporarily) with intranet reporting system Payment format setup and testing 9 Perfetti Van Melle Holding B. V. , Treasury Department

Lessons learned: Banks&SWIFT (1/2) Support and performance differs significantly between banks: Struggling with documentation Connectivity setup Message types supported Statements Payment instructions Direct debit Treasury confirmations Bank delivery times can be very long Due to heavy investments, not a bank independent solution 10 Perfetti Van Melle Holding B. V. , Treasury Department

Lessons learned : Banks&SWIFT (2/2) Costs are not transparent up front. Completely off the scale pricing proposals seen. Negotiation pressure heavier than anticipated. Setup fee Maintenance fees Message fees often overlooked Logic of pricing often not visible Portfolio determines the price only partly Sophistication of proprietary solutions used as SWIFT pricing argument (higher) 11 Perfetti Van Melle Holding B. V. , Treasury Department

Lessons learned: The company Impacts almost every business area: long list of stakeholders to maintain. Notably: Audit (separation of duties and EDP audits) Procurement (vendor master data) Financial administration (key users) Issues sister companies (rightly so or just as excuse) Sense of loss of control / ownership Complex local products not easily fit in standardized tools / formats Legal discussions Transfer pricing discussion Permanent “project” = permanent support Pilot subsidiaries necessary to show achievements to reluctant subs 12 Perfetti Van Melle Holding B. V. , Treasury Department

Lessons learned: In house technology and functional design Technology needs are vast. We have certainly overlooked areas. Sophisticated payment / treasury management system Servers, secure connections ERP connectivity Staff that can cover both Treasury and IT subjects (integrated project team) 13 Perfetti Van Melle Holding B. V. , Treasury Department

Conclusions on SWIFT The statement reporting via SWIFT has proven very useful in the visibility goals SWIFT is not a solution fit for all. Whether it works for your company depends on the company’s structure and approach. SWIFT is not plug and play, not even SWIFT Alliance Lite Beware of marketing 14 Perfetti Van Melle Holding B. V. , Treasury Department

Conclusions on Banks in NW Europe are highly cooperative Banks in NW Europe show extensive knowledge SWIFT setup with banks is not plug and play, many banks struggle with their own systems Beware of marketing It is not bank-independent due to the investment, especially in time. 15 Perfetti Van Melle Holding B. V. , Treasury Department

Conclusions on the Company Technological complexity has to be covered by Finance and IT together, impossible to do this without integrated treasury and IT project team. Visibility and control are the main benefits, not cost saving from efficiency This is not a project for us. It has proven standard process. Underestimation of the complexity and impact. Endless list of stakeholders. 16 Perfetti Van Melle Holding B. V. , Treasury Department

Q&A ? 17 Perfetti Van Melle Holding B. V. , Treasury Department