How to Build a Strategic, High-Impact Treasury Team – Lessons in Process, Progress and People

Mike fundamentally for all of us, we need to work out how to improve the processes and push work down the teams to enable ourselves to elevate and take on the new and unusual stuff that's coming down the pike from above. You know, the organization is always constantly thinking about doing things differently and therefore we as a Treasury function needs to be able to respond to that. And at each level within the team, it's important to try and develop capacity for looking at their projects, looking at the unusual things that come along and then obviously the most fundamental one for any of us is just the power of the team. So being part of a strong and high performing team means that you need to have trust between the team members, you need to have the right skill set, you need to have diversification, but most importantly, you need to have camaraderie. You need to have an opportunity to enjoy working together. You need to be able to push and challenge and test each other as well. And that's upwards as well as downwards.

This week's show we got something special for. We got Adam Richmond, who just heard a moment ago. Adam and I have known each other for 20 plus years. Adam is now the treasurer of Smith and Nephew, one of the top 100 companies in the UK, a Footsie 100 company. But when I first met and recruited for Adam, he was at GE Capital where he was head of or was treasurer for Real Estate Europe. I then actually recruited for Adam and I recruited his team for him. Fantastic, stayed in touch. Then a few years later I placed Adam at a company called Shanks Waste Management Group or Shanks Group, which then evolved change name to Renewal, which was again Waste Management. So he was one of my first original guests on the podcast when he was at Renewing. And then four years later we caught up with him because Renewal changed. His role had broadened. He'd gone to become gone from treasurer as I placed him at Shanks, to director of Investor Relations, treasury and Insurance at Renewing. So expanded his role. Everything else. You hear that transformation, which is what want you guys to listen to and then from there, more recently, 18 months ago or just over, he joined and became the treasurer for Smith and Nephew Group in the uk. So you're going to get to hear everything beginning of Adam's career up to Ranieri and then four or five years later as he took a more responsibility and then we catch up again. It's my, he's my, I say a double guest. He's not, it's a triple guest. I've never had one of these before. So enjoy the show, it's great. And there's lots of stuff for you guys, treasury, corporate, treasury professionals to really enjoy in the show. So enjoy the show as always. If you want to connect with me, reach out to me anytime. But let's get on with the show.

In this week's show, I'm delighted to be joined by Adam Richford, the group treasurer of Renewee prc. Renewee is a leading European waste management company focusing on the European and North American markets. Renew collects waste and recycles it back into usable materials. So you've got recycled paper, metal, plastic, glass, wood, and then that comes out as energy contributing, as they say, in a concrete way to a circular economy. Their mission, simply stated, is waste no more. The Renewee Group was actually created in 2017 following the merger of the UK Corporate Shanks Group with the Netherlands based company Van Ganswickel Group. They're listed on the London Stock Exchange, have more than 8,000 employees spread over nine countries, 200 sites across Europe and North America. Now for some of my shows I've given increasingly long overviews, like me chatting away of my guest careers, but I'm stopping that. I want my guests to tell their stories more than anything. So Adam, originally you started your finance career with ey, the global accounting firm, perhaps kick us off there and how you started your journey.

Yeah, thank you, Mike. So, yes, absolutely. I started my career at Ernst and Young at a sort of fairly typical way into finance, doing the chartered accountancy qualification initially after university in a major big four company and getting a good exposure to lots of different clients and different experiences there. And like many people after qualification I looked to do something a little more interesting than auditing afterwards and joined the consulting practice within Ernst and Young, focused on turnaround and that was really the first exposure that I had then to treasury functions. So a lot of underperformance end up in the Treasury's lap for responsibility to manage the cash flow and other issues through difficult situations. So that was sort of the first glimpse into a Treasury function was there in the consulting environment which I then followed on into a corporate environment with a fallen angel Telco, which is my first line of responsibility for a Treasury function, a company called Energist back in the day. And then that led into a career in treasury thereafter, which was start started in GE Capital where I worked for about 10 years and then got a Coral group before now joining Renew eplc.

Okay.

And with the, you know, so going through from those early times, energists and things, that was your first Real experience of Treasury. What was it that grabbed you about Treasury? You, how come you got the role or how were you recruited into Energist? And say, right, can you come into treasury, please? And you're going, what's Treasury? Or you know, give us, give us. Was that.

Yeah, sure. So, I mean, I think what I particularly like about treasury from the very beginning and still do today, that it sits high up the corporate agenda. So a lot of the strategic activities that are being considered by the company have a Treasury implication or requirement. Whether that's as it was in some of my early assignments around turnaround and underperformance, or more recently in terms of growth and corporate acquisitions and M and A and mergers, where, you know, in each case the treasury activity that needs to be managed, there's, you know, an impetus to doing it is strategically important for the business to be successful in doing that. And that provides a lot of dynamic activity and a lot of excitement, a lot of interest and therefore a lot of scope to add a lot of value to the organization that you're supporting, which is also then coupled with the more routine aspect of the treasury function to manage on a day to day basis as well. But it's certainly for me, it's the dynamic elements that keep me most interested and excited by the career and Treasury.

And then you went to ge, working within their real estate business. Explain how treasury was structured there and team wise and what was the role like?

Yeah, so GE is a massive company. It had a large financial services business and for an appropriately large corporate treasury function, the majority of which was led out of the US so it might have been around 500 people in total. My role in that context was much more sitting within a business unit, helping them think about the treasury issues associated with all of their activity. And in the period that I was there, we did a lot of corporate acquisitions and acquisitions and disposals of real estate properties and real estate portfolios. Initially starting with creating a single treasury function. Following a couple of delisted companies that were taken private by GE in the early 2000s, we established a Treasury function. We grew that portfolio both in the UK and Europe. And then during the financial crisis, we then diversified that into a lending product. So we bought a number of lending portfolios, particularly from distressed sellers like Bradford and Bingley and others at the time. And so it was always evolving in terms of the strategy for the real estate business. And sitting there within the treasury function was all about listening to what the business was doing, helping them understand the implications from a funding perspective, from A financial perspective, from an interest rate risk or FX perspective, to contribute to that deal team and make sure that those deals happened and were managed successfully and.

In the business, like GE, GE's massive, you know, and everything else. And someone listening might think, well, hang on, you know, how hands on was he when they were surely just sitting back telling people what to do? And I know, for instance, it wasn't because we recruited for you at the time and stuff, but what was your ethos around treasury then and how did you get your hands on it?

Yes, I mean, I think in an M and a driven environment, as the real estate business was, it's very much understanding the idiosyncrasies of each of the individual transactions being a key part of the deal team involved heavily in the due diligence of the assets that are being acquired, to understand the cash flows of those assets, the exposures that are associated with that. I think treasury particularly came into its form as we migrated from looking at owning buildings to lending against buildings. A number of the portfolios that we were acquiring had fixed rates loans and therefore embedded within them there was a mark to market on the interest rate of the loans themselves as well as a recoverability issue associated with the value of the property relative to the value of the LO loan itself. So, you know, that was one of the things that we did in those first acquisitions was to really get under the skin of what the embedded value of the interest rate risk was and then how that influenced the recoverability of the loans, particularly over time. So, you know, being very much, as you say, sleeves rolled up, working very much as part of the team to look at the details of each of the transactions and make sure that we understand, you know, what we could do to manage those effectively or influence the price at which we've been prepared to buy those assets or indeed what we would want to sell otherwise.

And team wise, I think you had a team of four in London. What were you like as a leader for those guys or what was the team sort of structure?

Yeah, so we had coverage for the European real estate business at ge, the treasurer based in Paris and some guys based in the UK as well, covering the entire European area. Individually, the teams were mostly focused on a particular segment of the portfolio. So country based basis was how it was structured. So the French trader would look after the majority of the French transactions. What we would try to do is give the teams good exposure to all of the activity in those particular country divisions, make sure they had the skills and capabilities to review those transactions and that they could discuss those with the broader team and make sure that they got their input as to what the key issues and risks were, to be able to manage those effectively and advise the business appropriately.

And then from there, GE changed quite radically and sort of exited a lot of their change from being a big financial service in GE Capital and changed that to actually be an industrial company now. And obviously that then impacted you guys. Talk us through how you managed that.

Yeah.

So I think, you know, GE picked up a SIFI designation during the financial crisis. So it proves that it was a significant financial institution in the. And with that came a lot of regulatory requirements to report and manage the financial services business in a very careful fashion, which became quite burdensome and distracting for GE as a company. And they chose to therefore exit the financial services business, which was a very large financial services business. And so they exited the real estate business, amongst many others, and dispersed the assets to new owners. And the team is obviously to the four wind as well. So a lot of teams, colleagues that are in many, many other financial institutions these days, because the business no longer exists in that place.

And then you made a move to Gala Coral. Some people will not know, certainly outside of the uk, they're not going to know the Gala Coral Group. Maybe explain what that was, if you would.

Yeah. So Gala Coral, a licensed betting office and online gaming and a bingo and betting shop business, which was in private equity ownership, a high leverage structure under that private equity ownership, very much focused that point in. In its evolution. When I joined on looking at the exits for the private equity firm, whether that would have been, you know, an IPO or as it was in the end of trade sale in terms of transaction with Ladbrokes.

And throughout that period you were obviously doing lots of different activity because by the end of it, had the group sold or what had actually happened by the end when you finished with the role.

So when, when we finished there, it was agreed in terms of the transaction with Ladbrok, subject to competition approval. The Competition Authority approval in that context was a phase two competition authority process which was requiring some remediation, whereby if they had too much density of licensed betting officers within a local market, they would need to sell a number of those assets to somebody else to ensure they didn't have a too strong a competitive positioning within a micro market. So that process is expected to then take a year or so to conclude in terms of the response from competition authority in terms of that process, and then a disposal process to be managed thereafter. So that was likely to be A long period of time, and hence a good opportunity at that point to move elsewhere throughout that period.

As if you weren't busy enough, you think you were studying your mct, which are the sort of the top level of treasury exams you can do within the UK association of Treasurers, and you were even a prize winner and top of the class. So you've got a family, you got all those demands and some people say, oh, and I've got to study as well. But you, you cope with both. Talk us through that, if you would.

Yeah, look, I think there was. There's definitely a big commitment for the mct, but I think it's certainly been worth it in my mind. So when I read the materials that said you were going to spend 10 to 15 hours a week studying for a period, 15 months, I thought, that can't possibly be true, it can't take that much time at all. But they were absolutely right, of course. And thankfully my wife was very supportive and so I was able to do that at a more senior point in my career. And actually doing that, having had a lot of experience at that point, was really good because it helped solidify some of the things that I had seen and put a bit more theory around some of those things, and actually was well positioned in anticipation of some of the future things that I've done since then, actually to think more strategically about the funding of the organization and how to practically think about those funding decisions and how to manage the sort of strategic treasury questions, which a lot are oriented around the funding and financing decisions in that context. So it was a very valuable experience, I thought. Also the content was useful, but also the approach was really useful and working closely with a cohort of other treasurers. A lot of the material was done online and interactive, giving feedback to each other on our responses to case studies, which was really an interesting way to learn from other people's experience and exposure. But to your original question, you're obviously quite challenging to fit in in the context of a busy job and a busy family life, but thankfully, well worth it in the end. I think from my perspective, at the.

Time you were finishing your mct, you weren't busy enough. I actually secured you the role at renew. Talk us through that new position and that move.

Yes, I think Renew was a really interesting move for me. So this was a move from a private equity environment into a PLC environment. A very interesting challenge in that context. Shanks, as was at the time, had a very small treasury function, a very decentralized approach to Treasury, a lot of obligations, obviously as a PLC in that context and, you know, some strategic challenges to manage as well in terms of the market size of the company in total, but also the positioning within the markets, which we were subsequently able to address. In the transaction with Bank Answers Income.

You talk about how you restructured treasury, so talk us through the past, present and future. You know, where have you taken. You know, there was a, at the time you would join Shanks, but then there was the coming together of the Treasuries. Take us from the Shanks Treasury. And what you did, you walked into a Treasury that perhaps needed refreshing. How did you approach that?

Yeah, so I mean, the treasury function when I joined it was fairly basic, fairly manual, spreadsheet oriented, I think, fair to say, and fairly decentralized. So that was quite different to what we've now created, which is a much more centralized treasury function, which involves a high degree of automation. With the implementation of a Treasury management system, we've taken control over some of the cash responsibilities of the group, we've transformed the funding structure, we've grown the team size, we've improved the capability of the treasury function, which has really enabled us to deliver a lot of high value add opportunities over the last couple of years and make it a much more resilient treasury function than the one I inherited a number of years ago. So in that sense, we've moved the treasury function forward very significantly.

In that context, your ethos around treasury, some people have sort of said, oh, it's all about de risking everything. What's your reason behind Treasury? What's your message, if you like?

Yeah, I mean, I think for me what's been particularly successful is really trying to focus on how treasury can add value. And thinking about that in a very clinical fashion in terms of what the value add opportunities are through different projects and making sure that we spend the limited time that we have on the things that have the maximum value. And to be able to do that, necessarily trying to reduce the focus of time and effort on the lower value activities and therefore to try to really improve processes where possible, to improve automation, to improve homogeneity and consistency across the group, to make those things that would otherwise distract and take time and effort to deliver, to become less so, to free more time, to be able to deliver the things that are very important and add a lot of value. And then I think within that context, also, once we have something that we want to deliver, I think it's also a very practical approach to implementation, which is not spending a long time trying to Generate something fancy that you hope will work, but trying to get on with it. And I always think of that as a sort of iterative approach where you start something and you start to implement it with the full knowledge that it can be improved over time. But the important step is getting it up and running in the first place and then making sure that the focus remains to continue to implement it, rather than waiting for a perfect solution to come along. And I think by doing that, we've enabled us to really focus on some very high value items, but also to get a number of projects up and running that would otherwise have died if we had waited for the eventual solution to be perfect.

And you've been with the group three years and you've been through a merger and you've seen teams come together and everything else, what would you say has been the, you know, that aside or maybe part of that, what's been the biggest challenge for you, looking back over the time you've been there, think, whoa, that was horrible. This is how we got through it, or what was the biggest challenge?

I think we've had a number of different challenges, I think bringing Shanks and Van Ganzwinkel together, major corporate transaction companies of approximately the same size, so sort of a merger of equals. In the context of that perspective, it's quite difficult to bring different organizational cultures together across different countries in Europe as well. So that, that's always represented some challenges. And we're still very much in that post merger integration phase at the moment of trying to create their single way of working, the one unified way of being renewing. So that's, that's the ongoing challenge for us that we've been working on quite extensively over the last few years. I think also there's been a number of other challenges along the way, particularly as a result of the acquisition. The leverage is also at a relatively high point at the moment. So we have to manage that carefully and communicate that carefully with our investor base and look to bring that down over time. It's following a trajectory that would be expected given the merger, but it also makes it a more sensitive period from a Treasury perspective. So we need to carry on managing that carefully over time.

What do you like as a boss? What's your ethos around team management and running those treasury guys or helping them?

Yeah, so I think helping them strongly the right description, actually. So I like to be supportive to the team and give them a lot of opportunity with a lot of space to be able to deliver projects. So giving them very clear responsibility for specific projects and trying to make sure that they have the space to be able to take ownership for those and deliver those. For example, one of the team are at the moment delivering the cash management transformation project that we're working on, which is to centralize all of our cash responsibility, implement a cash pooling approach and implement the treasury management system as a payment gateway for all of our activity and forecasting. So it's a fairly significant project, but they get a good opportunity to run that on a day to day basis and keep me informed and they ask me for my input where they think it'd be valuable. And that works very well, I think, in terms of giving them the opportunities to grow and the space to grow and feedback along the way to make it successful.

Are they all based in the UK or no?

We've got the team split between the UK and the Netherlands as well, which is sort of typical for the entire renewing business. The majority of our business is based in the Netherlands and Belgium. About 90% of the operations are there. So unsurprisingly, we have a presence in the Netherlands and Belgium as well for most of our functional activities.

So how do you manage those guys remotely? You know, is it one a quick call on the phone every week? How, how do you manage those guys when they're X amount of miles away from you?

I think it's important to be present with the team on a regular basis. We've got one of our colleagues over here today, for example, from Reindhoven, but personally I'm probably in the Netherlands and Belgium most weeks to make sure that I spend time with the team, but also the broader network of people that we work with internally and externally, the banks, but also our colleagues within the renewee business. So it's really important to get as close as possible from my perspective to the business, to understand what's going on to the advisors, to the lenders, to understand their issues and concerns and to develop a strong relationship with each of them to be able to be effective for all the things that we're trying to do. So there's a lot of effort goes into maintaining those relationships and there's a fair few air miles generated, even though it's only a short hop over to the Netherlands.

Yeah, but face to face actually helps as well. But when you're in that recruitment phase, what is it you're looking for? I mean, looking at your background, you've got this great history, you know, A levels, great degree, then you know, qualified accountant, treasury exams. Actually, I want someone just like that. Or what's your ethos around recruitment? What, when you're looking at someone and you're sifting through resume cv, what are you looking for? What's the standout factor for you?

Yeah, I mean, I think for me diversity is really important, so a carbon copy of myself is not going to be a good team mix at all. So rarely do I look to recruit in my own mold and if I get biased towards that direction, I normally come back from it quite quickly, actually. So. But, but that said, I think there's components that are relevant. You know, I think having appropriate qualifications for the role that you're doing, whilst it doesn't necessarily help you to do the day job, it also does show that you have a commitment to continuous education and to learning and to trying new things and to learn from those experiences, which I think is an important characteristic. So that's certainly important. And then I think there's obviously different roles within treasury that require different sorts of skills. So making sure that the people that we're hiring have the right skill set for the role that we want, and sometimes that's going to be a very detail oriented and routine processing activity and sometimes that's going to be a more expansive role where people can run out big projects and make them their own and deliver them. So very much a sort of horses for courses approach to recruitment and making sure that we get the right people for the right situation and then making sure that the candidates fit well within the organizational context as well. So making sure that they're going to be somebody who can communicate effectively, particularly with the rest of the business, is very important, particularly in the small teams that we have. So to understand the business, to be able to communicate treasury and to be able to understand what's going on in the business and reflect on that and how we manage the treasury function, some of the important skills from my perspective.

And when you look to those people that are able to communicate, what's been the standout factor for you or how have you assessed that when you've interviewed them or spoken to them or spoke to them throughout the process? What's been the. Oh, actually, that's the person we want. How have you assessed that, as it were?

I think an important part of the assessment is the treasury function is very capable of assessing the treasury capability and requirements. And in some ways, whether you can communicate with somebody outside of treasury is a very important test and therefore an important part of the recruitment process from my perspective. So meeting with the broader finance team, whether that's within the controlling team or FP and A or elsewhere. To be able to have a conversation with those team members particularly and not get lost in treasury detail as some people can and be able to come across well to those people and therefore be people that the broader team can work with effectively on a day to day basis is one of the key things that we were able to do here.

And have you ever struggled to find those people or what's been the, what have been the challenges for you?

I think one of the recruitment challenges for us is just an out of town location, whether they're in the UK or in the Netherlands. So that insurance is the candidate pools quite significantly. Certainly in my past when I've been recruiting in London, it's been a broader slate of candidates and therefore better able to do that. I think one of the key differentiators for renewing in that context is the purpose of the company is such a positive purpose that it's a very attractive company to work for in terms of what it does and the contribution to society that comes from that, the contribution to the environment that comes from that. And we certainly emphasize that. We've emphasized that through our funding structure and making it into a green financing as a visible way of describing that. But also it does translate through to how passionate people feel within the organization about the value of what we're doing for our customers, which is otherwise not necessarily very glamorous.

And you've been in treasury now 20 years. How have you seen it change?

I mean, it's difficult to comment. I think I've worked in lots of different treasury functions and lots of different capital structures and in different industries. So it's not been a linear path for me in that context. So I haven't grown up in a Treasury function in the same way as some of the other people you may have interviewed have. But I think certainly in the current context looking process improvement, but the use of systems and automation within that context is a valuable part of what we're doing at the moment. But some of the skills in treasury are timeless that they don't change in terms of looking at the capital structure and managing the cash flows carefully and projecting that as best you can and managing the relationships with the banking group or developing relationships with the advisors, the lawyers, the corporate finance advisors, the risk management advisors, et cetera, I think are fairly timely and changing. And it's perhaps just a little bit more in terms of the sophistication of how we do that and progressively making each of the treasury functions that we work in progressively more sophisticated over time. And more efficient over time as well.

Yeah, I think it's. Well, certainly from the conversations I've had, you talk about derived value there maybe of what a treasurer does. I've sometimes felt on a couple of the shows that people have said, well, we're going to be replaced by robots or everything. Technology is taking over and, and streamlining the jobs and we'll be streamlined out of a job where actually, as you say, it's about much more than that. And that's certainly what I found from talking to treasurers like yourself for the past 20 years, that actually you're not just, you know, guys that switch on the PC and feed in the data and out comes the results.

Thanks very much.

It's all about, yes, there's a part of that, but actually it's about all the other stuff you do, all the relationship and all the other things that you actually add value on as well. And you see that, you know, there's a lot of. Go on.

I think that's right. There's also a lot of, you know, interpretation of information. It's not just the generation of information. So the systems and automation help generate some information in a better, cleaner fashion, which becomes more actionable and more intuitive to use and more reliable. But absent that, actually the treasurer skills are even more in demand, which is to try to make sense when, you know, some of the indicators are not as clear as you would like them to be. But we've been implementing some robotization in our shared service center, and I really like the description that our shared service center leader uses, which he thinks of the robots as employees, that they have sick days and they go wrong occasionally. They need care and maintenance in the same way that employee does. So I don't think it's a utopian answer that automation will be able to survive without the input of experienced users, to manage and control, to configure, to make them work properly and to fix them when they go wrong as well. So I think there's still a huge role to do even when you are on a processor of automation as well.

I hope you guys enjoyed that amazing podcast with Adam when he was the treasurer of renui. Well, actually he still is, but we are four years later. His role has obviously, over this past four years, hasn't stood still, been through a pandemic, been through all the stuff that's happened. Adam's role has evolved. And that's where we're going to pick up the story from now, from 2019. Now we're in 2023. We'll go from where he was then to where he is now, where he sees it going to next as well. Adam, if you joined us once again, thank you for your time. Adam, you thank but to pick up the store your own story if you would. Hopefully you understand it. Back to you Adam, where are we now or where were we when we.

Last left you on the show and.

Everyone'S just heard over to you sir.

Great. Thanks Mike and nice to be on the show again this morning and get.

A chance to catch up on what.

Has been an amazing four years for sure I think back in 2019 renewe was still very much focused on post merger integration, having brought the company together in 2017 and the treasury function very similarly. So we were focused on creating a centralized treasury function, building out the team, putting in place systems and that continued and completed during the course of the last four years and we've continued to focus on obviously funding the company with bond issuances in 2019 and 2021 and then more recently European private placement issuances and European investment bank facility, an exploration of USPP and other funding instruments as well. So it's been a very active period over the last four years on the funding front, but very much in a sort of steady state fashion. So with the mantra of good orderly financing of the company rather than doing anything on a hurried or emergency basis. Obviously with the exception of having to manage through the crisis of COVID and the concerns that I had for every business around the underlying performance and from a Treasury perspective of course the covenant profile of the business and looking for leniency from the banks during that period of uncertainty which we managed to achieve. But it was a fairly painful experience in that first summer of COVID where we had our year end going out with a March year end. Covid's timing was pretty bad for the auditors to get comfortable in the main, absolutely essential that we had the support of our banking group at that point in time. But you know, as we roll forward to today, the group itself has completed its post merger integration and the performance of Renewee and its balance sheet is much stronger than it's ever been in last year the Profit increased by 83% so very strong performance. Revenue is up strongly as well and even advance further in the first half of this year. So that certainly helps as a backdrop to provide a period of calm and enabled Renewe to then focus more on investing in the portfolio, both organic growth and M and A as well. So completing a tuck in acquisition in the middle of last year to Strengthen the portfolio.

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We whiz through those four years and they were certainly challenging. I just wanted to re reflect when we were on the last episode we talked to then you were talking about some of the keys to managing a team remotely and to getting the best out of them. But then you, you know that was a voluntary thing and then it was an involuntary thing through Pandemic. How did you get through that again? Because then I want to bring up today because your role as a vulnerable. But before we get to that, what was that like? You were as you said, you were recruiting the team, getting them sorted. Great, all the right direction. Here we go, guys in the office and they said right now, you know, the office is locked now. How did you get through that?

What was, what was that like for.

You guys as a team?

I think the core team transitioned very well to their working from home environment and have the utmost respect for my colleagues who were managing young families who had demands of their own when they were also trying to work at home. And they did that admirably, working flexibly through the early stages of the pandemic. Obviously glad that that then calmed down and settled down in due course and schooling and nurseries returned back to normal and they were able to get back to a more normal functioning and they transitioned very well to the more hybrid model where many days are spent working at home and very effectively so. But also many days are spent now in the office and collaborating with colleagues and sitting next to one another and making sure that the connections are close. I think like many companies we probably had the experience of trying to hire during the pandemic. We hired a Treasury analyst, somebody that we hired remotely, onboarded remotely and then decided to leave. So we never met the guy. We learned very much from that experience, the importance of, of close connections for the team and being physically present. So when we hired a replacement treasury analyst, the team shifted gears at that point in time to deliberately spend two days a week in the Office and to make sure that that onboarding, that interview process and the successful collaboration was done in person as well as remotely. And I think that really made a huge difference. And it was really almost the perfect illustration of how significant, how important it is to be in person with people and very much been part of our ethos, if you like, as a group for a very long period of time. Given that the business is in the Netherlands and Belgium principally, most of our six and a half thousand people are there. So I'm always saying to my treasury colleagues, it's very important to get on a plane, go out and visit the teams, go and see the sites, because it's through those interactions that you really get a deeper understanding of the individuals you're interacting with, with the priorities and competing priorities that they have to manage and therefore where you fit within that. And also get to know what the business is, what it does, and expand the network beyond the immediate context that you need to be able to do your day to day job, which gives you that broader perspective that's always necessary in treasury to be able to think about what's happening in the business, be able to think about how that reflects into the requirements for the funding of the organization or the operational requirements for the business. And that's certainly something that the team have adopted very well and transitioned successfully into that hybrid model.

And with yourself, you just touched on there that the evolution of treasury, you got the team, the treasury engine, if you like, functionally powering well, and then you sort of took on other responsibilities and evolved your role, if you like. And I know that a number of listeners will, you know, the more senior end in particular be looking right, got treasury working, Treasure Ops. That's great. That's all going to. How did you then sort of take on that? Were you putting your hand up saying, great, give this to me, what can I do? Or how did it all happen from there? Because again, people will be listening to staging.

I'd like to do that.

How did Adam manage to wrestle those other interesting parts into his role?

Yeah, so I mean, if we roll forward to today, I look after investor relations. I spend probably the majority of my time focused on investor relationship as well as leading the insurance team and the treasury team as well. As you sort of allude to the permission comes from getting treasury running like a sewing machine and running very effectively and working closely with the colleagues. And it's not to say that I step out of the treasury function entirely. I still am very much involved in all of the strategic funding aspects and all of the key relationship management pieces with our key the relationship banks as well. But increasingly that takes less time and therefore there's capacity generated, which is obviously the objective of focusing on trying to push work down the team to give the team development opportunities. And that creates capacity for me to then add more value by doing more valuable things. And investor relations is the perfect example of that. So I was able to start helping out the CFO on investor relations back in 2019. Very much starting off really in a sort of bag carrying capacity. I think I'd probably describe that. So just sort of helping out where possible with preparation of year end materials, for example, the investor presentations and then slowly building that up into supporting attending conferences on the buy side with equity investors, hearing how we describe the company to the market and that certainly getting closer to the equity story was very valuable in terms of communication with the debt investors as well, because you understand the performance of the business better as a result of that and how to talk about it. And then over time that's evolved into creating an investor relations function. So back in 2019 and prior the CFO was the investor relations function. So what we have done over a period of time is create more resilience for renui by creating a function of that that's included improving a lot of different aspects of investor relations. But the simple output of that is that in 2020 the share price was 180pence and last year it hit 850pence. So that's the visible output of all of that process. But there's a lot of shoe leather and hard work that goes into making that happen. So one of the big critical success factors that we've been able to deliver is to increase the amount of coverage on the sell side. So the number of equity analysts that are writing about Renewee, that are talking about Renewee in the market, that are generating interest in investors on the buy side to want to buy the shares. And we've increased the sell side coverage from from three firms to nine over that period of time, which in a post Mifid II world where they make less money from doing equity research, that's a notable achievement and sort of illustrative of how well positioned Renewee is within the thematic of impact investing circular economy, ESG sustainability, but also reflective of the fact that the financial performance of the business has improved as well. And therefore it's a more interesting story to sell into the investors on the buy side.

Well, you say that you know, ESG is front page is every, you know, is everything at the moment is, you know, going like that. Obviously you guys were at the forefront of it. Did you, did you feel that you were right, let's ride this wave. Are you nervous about it sort of going off the boil or you just see it continuing sort of thing? Particularly given that sort of IR perspective sort of thing?

Oh, I'm not, not remotely concerned about it going off the boil.

No.

I think it's a long term secular focus on what's important, which is preservation of the planet. And anyone that thinks it's short term in nature would appear to be fairly misguided from my perspective anyway. So I'm a true believer in that context. And certainly for renewee, I see enormous opportunities coming from the transition of consumer consciousness to be more focused on climate related matters, including recycling and circularity. So that's really important. But then also consumer behavior which is being driven by legislation in the broadest sense, including disclosure legislation such as TCFD and other requirements, CSRD in Europe and the likes, which is really promoting companies to really focus on how they are impacting the planet and their carbon commitments. And many have made net zero commitments and signed up to science based targets, for example. And that's all helping drive demand for secondary materials, particularly the low carbon secondary materials that renewed produces and puts back into the economy for reuse. And then also particularly at the governmental level and at the EU level, there's a lot of progressive legislation focused on trying to do things better. So fit for 55 is the process the EU. And then if you translate that into national policy and particularly within the waste market, then there's been a real focus on eliminating landfill, which has happened sort of 10, 15 years ago in the Netherlands and Belgium, down to less than 1% of waste arising. And then a real focus now in terms of shifting away from incineration, which is a definition of the linear economy. So you produce, consume, destroy, release the carbon at the end of that process and the incineration is the release of carbon, which is the description of the bad element essentially. And so what they've done is introduce taxation on incineration, which creates more space economically to be able to recycle. It makes it more advantageous to try and put materials back into reuse. And then more recently legislation in Flanders, which is half of Belgium, has introduced legislation where you can no longer put recyclable materials into incinerators. So you must have of sorting and treatment processes prior to that which enable you to remove those materials. And we're investing fairly heavily off the back of that legislation to be able to meet the requirements of that with new infrastructure that enables us to support it. So very strong drivers from consumers, corporates and from governments, which underpins investment opportunities for us. And it's a long term, some secular shift that's going to happen if you then also reflect it back into the asset management industry, particularly so on the buy side and also on the lending side. Corporates and asset managers are looking to use the EU taxonomy to talk about the alignment of their portfolios to sustainability. And I think that'll be another important driver over the next few years. My expectation is that renewal will fall into a fairly unique category of companies where the vast majority of the activities are aligned with climate objectives. So very simple terms, renew these purposes to put materials back into reuse. And that itself is a sustainable purpose. And therefore that puts us into a very unique universe of investment propositions that are impact investing. And that impact investing category is something that funds will be raised to be deployed against impact investing. And then if the universe is relatively small, then if renewal fits into that story, it's a very helpful additional factor to growing the number of investors who are investing in renewing from an ESG and sustainability perspective. So I certainly see for Renui, that's a long term secular change. It's impacting behaviors not, as I said, corporates, consumers, legislators, banks, asset managers and all of that impacting positively for our business and for our activities.

So you know that that brings us up to date with the company. That brings us up to date with where you guys are set up for the future with yourself. Where do you see it now sort of evolving? Because you've got this. You were treasurer, you still are, but you're treasurer plus IR plus treasurer plus plus plus where do you see it next? Or for you as a treasurer, what are you thinking about next sort of thing?

Yeah, I mean, I think I'm still trying to build out the investor relations function for renewee. It's still relatively nascent. We've just taken on a first member of staff. We've implemented a system to manage our interactions with investors. There's still a shareholder rotation going on. The share price is still not a valuation that I like particularly. I would like to see it higher, particularly relative to other comparables in the markets. There's a lot of hard work required on the investor relations side and it's an important piece because if the share price is below where market transactions are operating in terms of multiples, then it's very difficult to do any transactions that require equity to grow. So it limits the growth ambitions unless we can get this shareholder rotation to happen successfully. More support from institutional investors that are focused on small and mid caps and building out that equity story further and demonstrating a longer track record of performance for Renewing will be a key part of that. That is all happening, it's all underway, it's all ongoing and it should follow naturally over the course of the next year or two that continues that progression. So it's all set fair and set well for the future, but still a lot more work to do on the investor relations side. On the treasury side, there's always work to be done around the funding and always work to be done to maintain our reputation in the insurance markets, particularly around pdbi. So property damage and business interruption, as well as the motor cover, where we have exposures that are important to manage carefully and to invest to protect the assets for the insurance business. So lots to do at Renewy, but last year we had a CFO transition, so the previous CFO left in March and the new CFO joined us in June. That was a nice opportunity to step up into some of the CFO responsibilities, including, you know, delivering the results to the city, which we do in May, so preparing all the investor materials, the roadshow activities, and supporting and delivering the results with CEO on the day. So that was a nice glimpse of some of the CFO responsibilities and, you know, gives a view as to where I might look to head in due course.

So I hope you enjoyed that episode so far. We talked to Adam a couple of times throughout his journey at Renewee and we'd gone through his previous career. I'm rejoined by Adam today. Adam, you were at Renewee, leading Treasury and investor relations. You've moved roles. New fresh challenge over to you. So what bring us up to date with your story?

Yeah, no, thank you, Mike. It's great to connect again and to have the opportunity to speak again on the podcast, I think when we last spoke, I was at Renewee, which just as a reminder, was a listed recycling company looking after investor relations, treasury insurance, as you mentioned. I'm pleased to report that Renewee has had a good outcome in the end. So it's now been acquired by Macquarie. Share price of £8.70, up nearly five fold from the low of £1.80 when I took over investor relations. So very happy to see that resolution for renewable. And a reward for all the team who worked so hard over the last years since 2016, when the merger was completed to double the size of the group. So a Successful outcome. I'm pleased to wrap that up. And then I joined Smith and nephew about 18 months ago now. So Smith and Nephew is a medtech company focused on orthopaedics, on women care, on sports medicine. Around 6 billion of revenue, a billion of trading profit and a market cap of $15 billion. A long history as a UK company originating in Hull in 1856 and now derives over 50% of the revenues from the US and sells its products in 100 markets around the world and has manufacturing locations in the uk, in the us, in Malaysia, in Costa Rica, China and Switzerland. So a different sort of organization to Renewing, but a very interesting one to sort of turn my. Turn my head to. And as Smith and Nephew, I'm responsible for treasury corporate finance, pensions and insurance, which is a team of around 10 people. And from a Treasury perspective, just to orientate those that like numbers, it's a little over 4 billion of facilities, net debt of around 2.7 billion and leverage of around 1.8 times.

And how does that compare in terms of, as you say, the structure, complexity and priorities that we've talked about before when you. And it was great. You've just given a lovely segue from Renewee to then Smith and Nephew, quite different. And you and I were just talking before the show. What's that like for you as a treasurer? A fresh new challenge, but also different as well. What are the differences?

Yes, I mean, obviously, functionally I'm looking after different areas of responsibility. Renewing, I spent a lot of time looking at investor relations, particularly in the last few years whilst I was there, and now we have a very good team looking after investor relationships with the Nephew, so I don't need to be involved with that. So it's mostly focused on treasury and, you know, it's a. It's a bigger organization than Renumi, so FTSE 250 to FTSE 100, albeit obviously I have experience of working in big companies previously when I was working at GE back in the day. So it's familiar from that perspective. Teams bigger, balance sheet is bigger, but challenges are very similar. You know, the things that derive value, the opportunities that we can deliver as a Treasury function, significant as well. But the scale and international reach of the business is quite different. So it's been an interesting comparison to go from one to the other and to see there are lots of differences from being a bigger organization, but also how familiar that is as well in terms of the things that we're focused on.

As we said, you then had left renewee you joined 18 months ago to Smith and Nephew, a really quiet time in the markets, you know, plain sailing, you know, nothing can't waters. It wasn't like going. The market's going crazy with tariffs and everything else. So you arrived in this period when everything's blowing left and right. How have your fx, you know, how have you coped in FX funding, Treasury, you know, and how has it evolved in your new role sort of thing? Because it, you know, a challenging time to arrive in a new job as well.

Yeah, look, I think it, it has been a challenging time, albeit for Smith and Nephew. I think the challenge has been to, to get back to the delivery it was achieving prior to Covid. Obviously Covid resulted in a lot of elective surgeries being cancelled and particularly relevant in the orthopedics business where you're replacing people's knees and hips and things. So actually the turnaround for Smith and Nephew has been ongoing for three years and I think we announced our results for the half year earlier this week, which are very well received by the market. Shares up 15% and announced a buyback of half a billion. So, yes, we're in volatile markets, but Smith and Nephew is performing very well in that context and certainly incredibly grateful that when I arrived, the team had spent so much time on funding the organization before I arrived. So.

As you said, you could just.

Sit back, you know, they'd done all.

The hard work, they had done a bond issuance just before I arrived and refinanced the revolving credit facility in the prior year. So on the funding side, the only activity I've had in the last 18 months has been to activate the plus one on the RCF. So exactly. A huge amount of stuff to do there. And we've been long cash for the entire period as well, so a very comfortable funding position to be in. And hence the buyback is entirely funded from cash that we just announced this week as well. So half a billion of shares that we're buying back. So look, I think it has been volatile in the markets and there has been things we've had to think about in terms of the implications of tariffs, of changes to rates and foreign exchange environments, but they are less significant than the overall trend for Smith and Nephew, which is an improvement profile as part of the turnaround plan and treasury fits into that story. So what that's really led to for me is it's given me a bit of a room to breathe, a bit of a space to get into a new organization, get to know that organization and get to work out the things that we can and could and should be doing differently to add value to the organization. Which is, if you've listened to some of the previous podcasts, what I typically try and focus on.

Yeah, which is great. And then you just touched on there earlier that you said you were Footsie250, then Footsie100, obviously you're stepping into a higher level role. Is that different as well? Would you say, you know, more focused or diff, you know, what the differences and things, again, this is for someone listening today and they go, oh, I'm, I've got that coming up. Or, you know, know, what's that been like?

Yeah, look, I think the team size is different. So it's a team of 10 folks in total here relative to, you know, two or three in the previous organization. So much more about making sure that the team are effective and make sure we've got the right people in the right places, doing the right things and supporting them to be successful. Obviously, the objective of all of that is to make sure that, that the machine is working well and that the team know what they're doing and are managing all the activities efficiently so that we can generate the sort of headspace at the top of the team for all of the things that come down the pike that are different and unusual and require us to think and to do things we haven't done before, necessarily. So I think that that is very similar one organization to the next, but having a larger team helps to make that more possible. And we've had a little bit of rotation around the team, which has helped us to improve the mix of the organization a little bit. And certainly we've taken the opportunity to hire a couple of people internationally in our local markets in Asia and in Latin America, which has really added capability to the team as well. So there were new roles that didn't exist before that have helped us to reach out into the organization and to try and address some of the treasury requirements that perhaps were underserved previously.

Yeah, and you're actually helping in those, as you say, having someone ingrained in that market. I know, I've spoken way back in the day with Steve Medhurst at Omnicom and he had India was a big thing for him. And you mentioned that actually having someone in, in place locally really helps with the local relationships, doesn't it?

Yeah, I mean, it helps us to understand the cash flow performance of those businesses better. It helps us to be more proactive to what's happening in those markets, hearing about things quicker. In the process and obviously from a time zone perspective, particularly for Asia, the crossover time for Europe is quite short. So having somebody in the region that can spend their full working day talking to the teams in the region is quite different to trying to cover that out of the UK and only having one or two hours of crossover time. So it makes a huge difference. And I think we're, even though those team members, when you joined us in February and in May, we've definitely started to get a big advantage from having those folks in the market and they're starting to identify the sort of value adding opportunities that we expected existed in those markets and now starting to move from that position of identification of the opportunities into the delivery of those opportunities as well. So definitely making a big difference having those extra roles in the team.

Obviously in your previous role, you know, ESG green finance, I know that you had that green financing framework and I was looking back this morning actually my notes and things and sustainably sustainability linked financing across the sectors. Has you, have you seen that momentum slowing down or, you know, now you're in this different role. You've been, you know, fully, you're at the coal face of it with renewing recyclables now. Now you're here at Smith and every different kind of company. But do you see that across bleeding into treasury still?

I think it's still a relevant theme for all treasury functions to be focused on. I think the two organizations, Renewie and Smith and Nephew, have a commonality that they have a purpose that's positive in both cases. So in one case Renewee around the circular economy and in the second case Smith and Nephew with the strap line of Life Unlimited is about improving patient outcomes. So they're very, they're both similar organizations and they have a positive purpose. You know, you don't necessarily need a green finance framework to prove that you don't need to have that to be a good company. It was a way of drawing attention to the company being a positive purpose company at Smith Renewing particularly, which is very, very helpful. And at Smith and Nephew we haven't got any instruments that are ESG linked directly. So that's maybe something for us to think about for the future.

Yeah, it's this sort of thing. And then I know before you and I talked very much about digital digitization as well. Is tech and automation still on your mind? I mean, you know, you were leading a lot of that before and now it's like, you know, just today is chat. GPT5's come out and We've got agents, you've got all this. And, you know, it's the, it's the talk of the town. Whenever you and I go to conferences. Is that on your roadmap or what are you thinking or what are you looking at?

Technology?

Yeah, look, I think it's interesting. We've spent some time over the last year as a team trying to define what our treasury technology roadmap looks like. So we have an existing technology landscape which is working really well. So it's not a problem. There's nothing broken. But it's still important to think about how that should change and might change over time. I think we're relatively early in our stage of thinking around the use of AI and how that might transform the function and opportunities that come from that. Obviously, that is largely around data management and like many organizations, that data management sometimes relies on the organizational building blocks in finance, like the ERP landscape. And I think we have a fairly pastiche landscape at the moment. So there's an opportunity there to be more consolidated at an ERP level, which is less of a Treasury level activity, more of broad organizational wide transformation. That needs to be considered. Treasury could slot into that. So I think treasury technology is something that we're watching closely, that we're talking about a lot, that we're thinking about how to change over time, but from a position of strength where there's nothing that's fundamentally broken. We're just trying to work out where new opportunities might exist, where we might be able to leverage those and get better outcomes as a result. Answer that.

And I want to just explore the roadmap for the next, you know, again, for the next 12 to 18 months, you know, not going further than that in a second. But before I do, I know that we're gonna, as we've said before, we have takeaways. We've taken some of the takeaways off of the previous episodes. People can go back and listen if they want, they're not too dissimilar. But just before we get to that stage, 12 to 18 months or what are you, what's your roadmap sort of thing, and, you know, what do you see as the priorities that then other treasurers should be thinking about as well? If you're sitting having a, you know, you and I met at a couple of conferences. You came to our treasure career corner live. When you're having that, that coffee with people, what were you, you know, what were you talking about? What you interested in blended knowledge, if you like, what were you thinking?

Yeah, look, I think there's a number of themes that we're thinking about and looking at as an organization. So I guess that there's all the constancies of treasury around the funding needs for the organization, around the optionality that you're creating for the organization to do corporate finance type activities. So that continues as a, as a theme. We've had a big focus in the last year around foreign exchange. So we've changed our foreign exchange hedging program substantially as a major activity of work. So it took us sort of 6 or 12 months to get the new policy defined and implemented but has successfully reduced the hedging notion of by over 50%, extended the duration from 12 months to 3 years and has saved us a lot of money in the process. So that is something that we're continuing to sort of embed into the organization within the next 6 to 12 months as well. I think we've got more to do around the other sort of hedging topics around interest rates and what have you. So there's work to be done there. I think for us the organization continues to be a key area of focus. We've had a number of new hires so trying to make sure that the group comes together and that we're all focused on delivering the highest value added opportunities from a Treasury perspective. So there's plenty to go for I think is the simple version of that so that the new hires in Brazil and in Singapore have got a big opportunity to add value to the organization. So we're working on that and trying to create a better link with the businesses in Asia, in Latin America as a result of that as well. On treasury technology, look, I think there's a number of changes to technologies where for example, vendors are retiring systems and that forces you to change and to think about what you want to do going forward as well. So we have a number of areas like that that we're managing at the moment and then starting to think about the longer term requirements for, for treasury as well in terms of systems and how that might be implemented impacted by AI. I think we're relatively early days in those considerations.

Fair enough.

Well, you've been very kind with your time today. Again we're going to put as we have done before, your LinkedIn details in the show notes. Flood of people trying to connect to you, takeaways from you today. Again you'd reflect on some of the previous ones and you said they've just not really changed but, but maybe just evolved or you know, if you're listening Today and wherever you might be, wherever in the world, what are your, your advice for those treasury professionals that were yourself 20 years ago or yourself 10 years ago and now those level of treasury folk.

Look, I think it is, it is very similar to what I said when we last spoke a couple of years ago, Mike, which is fundamentally for all of us. We need to work out how to improve the processes and push work down the teams to enable ourselves, elevate and take on the new and unusual stuff that's coming down the pike from above. The organization is always constantly thinking about doing things differently and therefore we as a Treasury function needs to be able to respond to that. And at each level within the team, it's important to try and develop capacity for looking at their projects, looking at the unusual things that come along and to be able to do all of that, you need to be able to do the routine things very efficiently and very well and very comfortably so that you have that space and capacity to be able to think about it and to look around corners and to anticipate what might need to happen in the future. And certainly as you do all of that, I think there's a significant power to the external networks that we have within treasury, particularly so whether that's strong relationships with your banks, where you're listening carefully to what they're saying to you and helping to reflect that back into the organization, whether it's working closely with, with advisors and consultants who can help us to achieve the projects that we want to. So being able to manage and draw on those external resources makes us effective in our roles. And then obviously the most fundamental one for any of us is just the power of the team. So being part of a strong and high performing team means that you need to have trust between the team members. You need to have the right skill set, you need to have diversification, but most importantly, you need to have camaraderie. You need to have an opportunity to enjoy working together. You need to be able to push and challenge and test each other as well. And that's upwards as well as downwards I think as well. So important that we develop the team and that each person can make their full contribution and be heard and progress in their careers at the same time.

Thank you, sir. Amazing to rejoin you. Thank you very much for your. We're giving more time. You know, I'm very grateful over the past few times, the third time lucky.

There you go.

You know, we finally go. Thank you.

Thanks very much.

Thank you.

Thanks Mike. Appreciate it.

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