How to Diversify Your Skills as a Treasurer with Anthony Buchanan

Foreign welcome to this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to treasurers about how they built their careers, where they are now and where they see both themselves and the treasury profession. Going to next this week's show, Delighted to be joined by a very old friend and drinking partner, Mr. Anthony Buchanan, the treasurer at Asahi Breweries Europe. Established in April 2017, Asahi Breweries are the European wing of Asahi Group holdings, traditional Japanese producer of beer, whiskey, wide range of fruit products with rich history tracing back to 1889. You can see we got a lot of that from the website and things. Fifteen breweries, the oldest one dating back 1615. But I'll get Anthony later on the show to describe a bit more out of sight because they're a great group and everything else, but some suffice to say we love their products. 43 million hectare litres of beer every year. That's mental. 9,000 professionals, rather across the world. But let's start back at the beginning for Anthony and his career. I'm going to get you to discuss it, mate, because you know it so much better than me. Take us back to the beginning and how you first got your sort of introduction to finance and then treasury and then bring us back. I know we were actually friends back then and I've helped Anthony throughout his career, so we've been mates for many, many years. So over to you, sir.

Thanks, mate, that's a nice introduction. Yes, and always happy to be supporting the brands, of course, and catching up.

Try our hardest.

Chilled beer. Wow. Early career going back quite a few years now, so even my university days, I worked at an investment bank over my summer holidays, so I was lucky enough to experience the back and the middle office side of things. A bank which was mainly, well, it was purely focused on foreign exchange trading pre euro, so. So that was an interesting time and it came interested in that finance related world and treasury and so on. Spoke to the MD and the banks were starting to struggle a little bit and I was just finishing my degree, wondering what to do and it was a toss up between ma, go traveling or try and find a job. And he said, actually go traveling, take the advantage now. Great advice. But by the time I actually got back, the banks were really struggling, so. So with the economics degree and some experience in the bank, I was actually quite lucky to find a role in a US org business. So back in the day, sort of talking mid 90s, there wasn't many treasuries based in the UK. At that point. So started the stepping stones of moving through the different areas in the sort of back office credit side of things. And then looked for an opportunity to move to London and joined what was Granmet and rapidly became Diageo, which gave me the opportunity to move into the front office side of things. More on the trading side, looking at some of the M and A deals, getting experience in foreign exchange as well as debt and in terms of products.

You were obviously you started so Philips Petroleum, you started big numbers I'm assuming, or sort of oil and gas.

Yes, sizable. But we were talking cargo ships of oil. So it was interesting sizes when you've just come out of university. But in today's world actually sort of four or five million dollars worth of shipments is probably not the size that we're used to on trading side.

But still, you know, sort of you come out of a uni relatively fresh and you suddenly got responsibility or interaction with that. Followed by Grand Met and again for people that don't know Grand Metropolitan, which became Diageo drinks business. There's a theme going on there, but.

It does become a theme after that one. And then. Yes, so Granmet then Diageo, which is made up of Guinness and Granmet, so a large spirits and lager based at that time, but has broadened its portfolio. Then had a couple of years at Hewlett Packard in the treasury consulting world and then decided actually preferred it in the drinks world to move to Sab Mellah back in 2006 and had various roles moving through different areas of treasury from regional treasurer in the Americas which although based in the uk I was traveling out across Latam and North America and then took over Europe to see the different interaction. Now our US business or Latin American business was a huge growth engine for the group throwing off loads of cash whilst Europe was struggling stagnated markets, problems with unemployment and not strong economic growth. So you had these different extremes where people we were unable to get cash out of countries and trying to think of ways of doing that tax efficiently. And then on the flip side is how are we funding our various businesses, keeping them afloat, looking at debt, capital structures to ensure we maintain that business, keep it moving forward with the right investment in Capex and so on. And then after, well just over a decade the ABI stepped in to take it over. I stayed with them for a very short period to help on a few projects in the world of procurement actually. So that was an interesting one to see. I'd been working in procurement at SAB Muller with The treasurer's hat on. But looking at procurement from that angle and working capital commodity risk did a six month contract with ABI and then the opportunity came to move to Asahi Breweries and look after the Central European business which has now expanded and we actually had, at that time we had a business in Korea as well. So it's interesting to get again different extremes between the Korean operating model and treasury related issues to Central Europe and now more Western Europe as well with Pyronia and Grolsch on board.

And so what I want to do is I want to jump around but try and make it in a logical order perhaps with your background because as said before the show to Anthony that we got sort of an interesting mix of listenership, if you like, on the show. So Europe and UK tends to be more again you guys listening treasury managers trying to work your way up through to in the US a lot more sort of treasurers and wanting to hear some war stories maybe from answer which I want to bring out as well. But when you made those original moves at Diageo, when you were growing your career starting 97, you finished there.04, you made those moves. But you know, how did you make those moves? Was was it just a very aspirational environment or were you always pushing for the next thing? I know yourself on a personal level, but how would you say that you sort of grew into your treasury, you know, through your treasury spurs, as it were.

When I first joined I went into the middle office, I'd been studying ACC exams, acca sorry and I was looking at various areas of treasury accounting in the world of grandma and then with the merger between the two businesses that gave me the opportunity to get into the front office after quite a short period of time. So normally after that I was looking at sort of three year cycles and it was a very, and I'm sure still is quite an aspirational environment where they are pushing you to push yourself and expect you to be looking for that next move and growing yourself and looking for new opportunities. So once I was in the front office, you start with the basics of cash management, then broaden into management to FX risk management and then with that came the opportunity to take over the whole what was class this market and execution team. So the whole front office trading and we are talking a long time ago, but we also had the opportunity to have discretionary trades which was a small portfolio which we used to get approval every six months to continue with this but also ensure the team was very focused on the markets. We had huge Volume. Lots of this was all done on telephone to ensure the guys were focused on what was happening. We also had this discretionary book where we were taking positions in the market and that kept the guys focused, kept us all developing ourselves and looking at new opportunities. So by the end of it, I was starting to look at sort of pension risk within the group and different areas of focus and there was different avenues of opportunity even within Diageo. But then this chance came at Packard to look at this EMEA based Treasury consulting role.

But before you made that move, Diageo was one of the top treasury places to be. I know a lot of the ex treasurers like yourself moved on to different places. Peter, Matt, Antonio did lots of different people. And I got to meet all these guys early in my career. All you guys early in my career. So these. Sorry, I'm going back here to the beginning of my career. I got introduced to everyone in the team. Hi, this is the Diageo team. And I met this group of talented treasury professionals. I thought, I just want to sit on everyone's coattails here, you know.

That's very nice. I'm not sure everyone clusters as talented, but yeah, yeah, I would. Yeah.

Well, I placed Peter Russell, I placed him as the head of global treasurer, Travelex and he's been on the show before. Matt Antonio made some other great moves. You yourself, you know, you've got this great career. All these were sitting together, working together and you know, there was so many other good guys and I was just like, whoa. And then I was meeting other treasury teams going, oh, okay, they're not quite as, as you say, they weren't market leading, they weren't. What, what caused that?

Well, I mean, I mean, just learning from other individuals. So you named some great guys there. Then you've got Peter Buxton who then went up his own business. You had a guy called Ian Simpson, had an mba and then we had quant Adrian who you could actually learn off. And these guys are rocket scientists. So when you were looking at the company position modeling, we could do our own Monte Carlo simulation to look at different ways of hedging that risk. We had board approval to be trading options, selling and buying at that point, as well as lots of different ideas from a sort of tax effectiveness, from debt creation, capital structures. You have very strong teams which gave the younger members the opportunity to learn and understand a very broad spectrum of market exposure. I think, I mean, it certainly helped my CV over the years. I still keep in touch with many of those guys you mentioned because everyone's moved around and we still share ideas and discuss about different opportunities and what we're seeing now. I mean I think the market has materially changed what we've accounting standards and so on and I just think a more conservative approach to risk. I think we have had to see some changes in the world of treasury but back in the day it was. Yeah, it's not like the heyday of the banks, but we were pretty out there at the time. Given the opportunity to look at different ways of managing risk for the corporate.

As you say, you drifted away from drinks for just a short while.

Yeah, had to test it.

Yeah, just. Just to test out and joined hp. What was that like? That was sort of a very different role because you've been markets execution and then were more treasury consulting. Was that sort of rounding out some of the experience? Did you find?

It was. I mean it gave me an opportunity and again to meet some great lunch guys, so. And some who are still in the world of finance to this day. So yeah, working with the team you had more in depth accounting analysis which was an area I certainly needed to strengthen. I think I was moved or when they read my cv they like my foreign exchange background and that trading st. So for some of these M and A deals which HP was very interested in expansion and looking and even spinning off some parts of the business which probably happened the bigger ones before I joined. But then using those funds to reinvest gave me an opportunity to broaden my skill set more in the world of consulting rather than just sort of front office trading and get better understanding of the bigger business HP and therefore hopefully develop more a commercial awareness rather than just be Treasury. It's all about the money and the currency risk and in this day and age working capital and commodities to actually see how the business joins some of those negotiations. When we were trying to put together pricing packages for say large supermarkets, how are we going to price if we're producing stuff in China to sell into our European business to then sell to a UK business? How do we manage those FX flows as a commercial agreement and work with people actually some of who I knew on the other side in other corporates in treasury, some we'd sit with the sales guys trying to hash together some of these opportunities, as you say.

I knew they split it between the operational side and the consulting side, but they called consulting, as you say, sort of the other business streams basically was everything out of ops in some ways and you know, a good role sort of. You did it a couple of years and it sort of rounded out some of that experience before the move to sab. Back to sab. What was that like? Sort of. And what triggered that move?

Actually, it was meeting up with a mate of mine who worked at the bank who said he'd just spoken to a beer business who was setting up in Woking. Oh. And it happened to be down the road from me.

So, yeah, Window start.

Yeah. And for me, Diageo was great and it was hq. So to get a decision done, it was pretty quick. HP gave me the broad consultancy interests. But all the decisions when you get to a certain level were made in the us. So it didn't mean if we went out to Palo Alto a few times. And it was always great to meet the team, but it sometimes created the delay and that could be frustrating. So to then have an opportunity to move to another HQ down the road, a bit of travel, probably sooner than I would have planned to move, but when the opportunity is there, you've got to go for it. And so, yeah, I went through the interview process and was lucky enough to get the regional role, looking after the America started the 2006, the journey there.

And again, SAB men are for South African breweries, you know, and things explain the sort of. The growth. If you were from, you know, what was it then? What size was SAB then?

So there was four of us. So when I joined, I was number three. So we had the treasurer, assistant treasurer who had come in and as the contracted supports and we had the PA looked after the team and. But also interacted and knew the business a bit better and some of the people around the group. And then, yeah, I came in probably a week or two before the head of debt joined as well. So we went from two to four. And then when I eventually left a decade later, it was a team of 60. So rapid expansion.

So talk us through if you maybe. Maybe pick out some of the highlights for you, the SAB stuff, you know, there were, you know, when I looked through your CV resume, there were some achievements there and things like that, but you guys were exceptionally sort of focused on different, as you said earlier, on different markets. And what was amazing was Latin America was one region and it had all these twists and dials and then you went to another and it was like, oh, totally different. Set, control board, something. Was that one of the things you took from it?

Yeah, absolutely. I mean, I think the bigger picture for treasury as a whole, and we went from a totally decentralized team and that's how the business had been Run. So they had expanded rapidly through M and A. Soon as South Africa opened up, they headed to the UK to set up business here to help with the M and A dream and had just been going around and picking up these businesses, but just let them run themselves. You sort of brew locally to sell locally was the big motto. But then certain teams did deserve to be centralized and actually learnings could be made around the group. So David Malik, who's the treasury, came on board to sort of start that had this sort of focus of trying to centralize Treasury. And I just came in at the right time as the regional treasure of America's to help with that agenda and look to work with the local teams. Now it was somewhat frowned upon in Latin America to have some guy flying out of the UK to come and tell them what needs to be done and so on. So yeah, there was a huge amount of relationship building once you got there and were able to explain here to help basically that all these businesses had currency risk from importing raw materials to make the various beers, from packaging exposures, they had commodity risk and so on. So when you're there to explain that, trying to help stabilize some of your volatility and help with the numbers, looking at centralized cash. Yeah, and you build up relationships with the FDs. And then, yeah, rather than. That's one of the FDs originally called me, the policeman from the UK is then you start demonstrating, okay, I can add some value to your business and therefore help your bottom line. And that, yeah, it just generated that. You then get to know other parts of the business. And it gave me the opportunity to work with the team in Europe. And by that stage the treasury had been totally centralized for Europe into the Woking office with a single cash pool structure, single bank cash pool, multi currency. All the risk management was run out of Woking for the European business. So you were there as their sole individual for any treasury issues. You'd go there and sit there with the FDS and talk through all the cash, talk through currency, look at the various exposures, work with them so that they felt comfortable when they were looking at their budget numbers and preparing for the year, that they did have the necessary support and policies that were put in place to manage these risks were actually helping them. And then the group obviously was then carrying on with its centralization of treasury. But we started doing regional sensors. So we had one eventually set up in Colombia where I used to travel a lot to. Then we had South Africa set up Hong Kong. And then the final stepping stone was actually Some work I'd been doing with our Swiss business and where we had set up our procurement team looking at commodity risks for the group and eventually after a year plus of discussions the agreement was yes, we'll look to centralize the what we class as treasury risk or financial risk within Kuwemont but the deal was that they wanted the team locally based in Switzerland so that gave me the opportunity to move abroad with the family and relocate out to Switzerland for a few years to work in procurement although reporting into treasury to look at the various commodity related risks embedded effects within supplier agreements working capital opportunities through supply chain and that was a globally centralized business and how big?

Well I know, I know this because we've talked about it over a beer and stuff like that how big a portion, you know with this procurement and some of the aluminium and some of the numbers numbers and some of the commodities, you know again for people listening in I know that that shifted the needle but explain that to the listener.

With the whole support of the team. So there was treasury, the broader team so I could rely on the working basis There was basically three of us based in Switzerland so I had two traders, one on metals and packaging, the other one grains. We would look to try and branch into other areas when we had time and then but they had like a. It was a $7 billion exposure of spend that they had under management with impurement of which was obviously thrown off fx. So I was working with them to ensure we contract risk was visible because sometimes these contracts were priced in local currency but when you actually dig into the contract you realize the catalog is based in euros of dollars and just refixing at month end and the local business might think oh I've only got debt crowd exposures but suddenly their prices go up by 5% because their currency devalued and they didn't realize they had an underlying risk and then. So I was working on that we went through the Fosters acquisition so I had some working capital focus we needed to generate cash to maintain the credit rating and therefore being based in procurement I could sit with suppliers to discuss the working capital opportunities using that time a bank platform in Europe then we set up in Latin America actually the Colombian team in Latin America had already set up and built their own system which was expanded into Peru and then Central America. We did other working capital tools Australia had one and this was all helping the sort of cash generation requirements for the business and having this sort of centralized opportunity I was there face to face with procurement. So when they're Having those negotiations with key suppliers, they could drag me into the room to be sitting, upset my counterpart or a finance representative. And that's the thing I've always said with working capital, yet two procurement teams going head to head, they don't always understand the value of money. When you've got two finance people saying, look, I can offer you this tool, it's going to offer you a discount rate of X if you're interested, does that look attractive compared to you going to your standard bank facilities? Then you can have a decent discussion negotiation, whether it's the local CFO or treasurer. And often that ended up with a quick result. The best one, I think it took me in a procurement lead an hour to negotiate some very workable payment terms and offering the supplier some very early cash settlements through supply chain financing. And it was a one hour call and it was done and contract was signed a week or two later. Probably the biggest success. Yeah, that was.

And then Asahi sab, 60 people to zero everywhere.

Yeah, start it all again. So I had the six month opportunity being based in Switzerland, working with abi, looking at some key projects, but it was always a set period of time. So part of that I wanted to. My family had relocated back to the UK and I wanted to be relocated, having obviously worked with some of the Central European team. The Asahi Breweries Europe is actually the old SAB Miller. Well, it was originally the Central Central European businesses which were sold as a group, which Asahi stepped in. They had already bought Pioneer GROSS and the UK business and that was Asahi Europe Ltd. And then they looked to expand a year or so later and picked up the rest of the business, but kept them managed separately. So I happened to know the CFO or the individual who was to become the cfo, had the discussion and said, yeah, I'm keen to work. Our headquarters are actually in Prague, but having just moved the family, the discussion was about location. So the agreement was with we could be based here actually. Of course, if you think about treasury, your key suppliers of the banks, they're all based in London, so there's no, no point me being over in Prague. My key contacts are up in London. And then on the flip side of that, to be able to sit down with the CFO and other team members, I'd just commute out to Prague every month or so to be with everybody and catch up and when required. Yeah, projects are kicking off, you might go more frequently, but it's an easy hop to get out there, so. Well, it used to be an easy.

Hop and when We've had some discussions. I've been incredibly impressed with the. The differentness of Asahi and their openness to some of the ideas you've had. As a treasurer, I know that Anzi had the beer and said, oh, yeah, I got involved in this idea about reward structure. I'm like, what, you're the treasurer? No, no, no, Stick with. Stick with what? You know, buddy. Oh, and then I'm doing this and then Asahi asked us about this. It's a very different kind of company, you know, maybe you could describe it for the listeners.

Yeah, I mean. And I think, well, there's two different angles there. There's the Asahi Group, which we are a part of, and there was obviously a slight concern about how much freedom. Having worked for a business where I had to go elsewhere to get agreements for everything, how much freedom would I be allowed to set up, like you said, start a new Treasury? We had nothing. No systems, no people, start from scratch, build everything. We had elements of the old SAB Miller cash pool structure, but that's the only thing we kept. We had no system to tie into and therefore how much freedom would be. I be able to recreate, put new policies in place, model it for the new business. So there's no point using SAB meta policies when we had a massive global exposure, when I'm now more focused on Central Europe and the FX risk and different commodities and so on. The Japanese team were very flexible to actually let us move ahead to what we had some restrictions around debt, which is fair enough. Having just raised 10 billion euros themselves for the two acquisitions, they were a bit nervous about us going off and doing our own thing. So that was controls around that and actually we were throwing off a lot of cash, so that wasn't the issue. And then from a group perspective with the new board, yeah.