How to Transition into Treasury Seamlessly with Toby Shore

Foreign.

So, welcome back to our archive. We are going Back to episode 1, 2, 3, way back in October 2020 with the amazing Toby Shaw. Toby Senior Director, Group Treasury Risk and Insurance. He's actually taken on some more responsibilities since then at Emirates Global Aluminum. Amazing guy. Really enjoyed talking to Toby. He's a lovely, lovely guest. We actually catch up at the end of the show. What you need to do is you can listen to it, but also maybe visit our YouTube channel. That's right, go to Treasury TV and you'll find it in there as well. And that's where I did a video interview with Toby to catch up with him post Pandemic to talk about where the world has gone for those guys. And again, it's a superb episode. It's got more great takeaways. You get some through the show, you get some even more at the end from an exceedingly successful treasurer. So enjoy the show and let's get on with it.

This week's show, delighted to be joined by Toby Shaw, Senior Director, Group Treasury Risk and Insurance at Emirates Global Aluminium. The group is the world's largest premium aluminium producer and biggest industrial company in the UAE outside oil and gas. Now, I've got lots of stuff here about Baux Mining and everything else. I'm not going to go into that. Toby wants to talk about that later in the show. Feel free. Just you can you pile into there? Just before the show, we were having a really good chat about Toby's background, which is really different to a lot of treasurers. Didn't come up through the sort of treasury analyst, manager and everything else. Actually jumped in from insurance and risk and lots of other areas and things. So it's going to be a great show. Toby, take us back to the very beginning when you're, you know, you're a young lad and everything else. First getting into finance and everything else. Talk us through it because. Amazing background. Over to you, sir.

Thanks, Mike. Look, yeah, I think. Great to be here for a start and yeah, thanks for the summary. I think I'm a big advocate that every story has to have a beginning, middle and end. And so I think way back in the beginning, as a young lad, finished my university degree in international business. Why I did that, I've got zero idea today and I don't think it actually qualified me to do anything. But my first job out of the university, apart from pouring beers and a bar and living on a resort island and on the Great Barrier Reef, was actually working for the Indonesian government, of all things, doing customs clearance from Australia So that was really involved around mining, metal, agricultural products that Australia was actually sending up to Indonesia. And the whole idea back then was to clear the goods from, in a customs perspective, to hopefully stamp out graft and corruption on the docks in Indonesia. So I've got a very, very, very quick baptism of fire into international trade, into commodity trade and into geopolitical politics between Australia, Indonesia and elsewhere around the world. Moved from there into a credit insurance company, part of now QBE called Trade Indemnity. Head Office was in Canary Wharf. I think it was one of the first entities down in Canary Wharf there. And it was a niche part of the insurance industry. So niche that my manager at the time tells me that when he actually applied for the job, he was a big Samoan guy, played rugby, said, ah, I thought the actual job said undertaker, not underwriter. And so he thought he was applying for an undertaker's job, ended up as a credit insurance underwriter. So spent four or five years doing that is like one of those things you never wish ill on people. But I was very fortunate that we had a couple of crises at the time. We had the Asian crisis, we had the Russian crisis. So I spent two and a half years circumnavigating the globe restructuring corporate debt profiles, negotiating insolven proceedings, doing all the things that you'd love to be doing as a, as a young 27, 28 year old. And that took me from the Philippines to Latvia to Czech Republic into the States. From there I actually moved into the Australian Government Export Credit Agency Ethic, Export Finance Insurance Corporation, doing exactly the same thing for the Australian government, except two years later. So all in all, I've probably spent about four or five years just circumnavigating the globe, doing some, what was probably on, in hindsight, some silly things on occasions and going into some difficult situations. But in terms of the life experiences as well as the general economic and financial experiences that was given to me at that time was it was unparalleled.

So when you say that, you know, you were gaining again, these are treasury guys again, hang on, you know, Toby's our Treasury, you know, well, this is different. But what was it giving you in terms of international finance and understanding of relationships? Because you know, again, for some of these guys, they're like, oh no, I should always stay in Treasury. What, what has it given you?

So I think that, and that's actually an excellent question, so I think that grounding really gave me the ability to do three things. One was to have a keen understanding of financial balance sheets and how resilient businesses are. And you don't always see a resilient business through the balance sheet. It's the ownership, it's the structure, it's actually understanding what the whole business is about, who they sell to, what their customers are like, what keeps the owners awake, what keeps the CFO awake at night. And it's really having a deep understanding of that. Second, I think certainly living in Dubai now, but I've always worked in a multicultural environment. I've worked in Asia, I've worked in Australia, I've worked in the UK and now in the Middle East. And I think that actually gives you an enrichment and as a treasurer, to really look to understand the different dynamics that people can bring and from different cultural backgrounds. And I think that too often in life we don't necessarily appreciate that cultural richness. And then thirdly, it's the ability that's brought me the ability to be quite resilient to myself. My bosses have always been overseas, most of the time on the other side of the world, and autonomy. And really, it's those three aspects that have really tried to take that and actually mold that into my treasury career.

And then you sort of continued. And again, we talked before the show and Toby's got this great background in risk management, insurance and understanding how that feeds into treasury, but that's built out. Then you did a tradius and then started to sort of discover the world of treasury, if you like. So sort of an evolution or revolution, you know, talk us through how you then went through those and what that was like, because it's, again, really different with trade credit. Sure. Is that really different to some of the others?

So at the time I was working in Sydney for Atreides Credit Insurance, running their Southeast Asian Claims Underwriting and Recovery section, which means we went all the way up to Singapore, Thailand, across to the Philippines, Southeast Asia, South Pacific, again, giving me an enormous amount of a richness around insurance, around risk management, around financial resilience. Fielded a call at one stage and saying, what do you know about Dubai and what do you know about aluminium? And I actually said, not a lot about either one of them. Six months later, I'd moved my family up here and I had the job. So it was actually quite a bizarre, bizarre situation. Again, never one to actually let a good crisis go to waste. About four weeks after I arrived in Dubai, the global financial crisis hit. Literally, it was four weeks. We were in Beirut and Lebanon for a conference. We got called back early by the CEO saying basically the Proverbials hit the fan and this is when Lehman was going down. The whole world was in chaos.

Yeah.

So we spent like 18 months, two years just trying to navigate our way through that. It was at that time that the existing treasurer was looking to retire and they said, look, Toby, you know, we've been grooming this for two years and we want you to take over treasury risk and insurance.

Just explain the, you know, you made that. So we, we skated across. Tell us a bit more about that group, you know, as a company sort of thing. You said you did two years challenging time and stuff like that, but what were the dimensions of the group or, you know, size? Just for. Again, someone listening. Reference is in Wisconsin, you know, they're going what? You know.

So at that time, at that time and again it was. So I joined the company at that stage was that was Dubai Aluminum Dubal. We were producing just on 1 million tonnes of primary aluminium, which made us the largest single site producer of aluminium in the world. Not so bad for Dubai. And certainly it's an interesting segment when most people don't associate heavy industry or heavy manufacturing with a place like Dubai. But we celebrated 40 years last year, so what was that? We were 30 odd years old when I joined, owned by the government of Dubai, that's selling the metal right around the world and at that stage, and it'll become relevant in a little while. But we were selling probably at 50 to 60,000 ton, 2 to $250 million worth of aluminium into the States. And so that market almost dried up for us overnight, as did Europe. So a lot of our metal was then diverted to Asia, to the Middle east, et cetera. And so for us at that stage it was about economic growth in terms of where our customers were sitting, but also the financial risk management of those as well. And from the treasury perspective, it was about cash preservation, cash conservation. We were always at that stage, we had a small debt portfolio, so it was really just a cash machine.

Yeah.

So I took on the treasury role in 2010. We were doing what, two and a half, $3 billion worth of revenue at that stage and our treasury system was an Excel spreadsheet. So. So I said, look, hey look guys, you know, we've got to do something different here. So we put our first TMS in Sun Guards Quantum in 2011 and actually got some very bright guys to come and join us. And some of the stuff we did with that was, was really cutting edge. We had deal books, we had full backwards integration into 360, see hedge accounting hedge, relationship management, all that stuff we put through in 2011. And the whole mantra at that stage for me was fat finger Thursdays. And the number that we were dealing with that the volumes weren't large but the numbers were big. And a typical shipment for us is 1, 2 million dollars. So the propensity for a keystroke error, or as I say, a Fat finger Thursday error, was just too great. And so really from that point on, from 2011 to now, we're on our second TMS and it's just been a constant revolution in terms of a constant evolution of technology, always looking to make things more automated, how we can actually push the barrow further. So that took us probably up until 2014. At that stage. We had a joint venture with Mumbadala Development Corporation from Abu Dhabi, which is one of the big wealth funds in Abu Dhabi, owned by the Abu Dhabi government. And we had a 5050 JV with them on a new smelter, a Greenfield smelter we were building in Abu Dhabi called Emirates Aluminium Emaar, that now is a 1.6 million tonnes smelter, the largest smelter in the world. And so combined capacity today is 2.6 million tonnes, which makes us the third largest producer of aluminum in the world outside of China. If we include the Chinese, we're fifth, which is not so bad from the Middle East. Combined revenues today are about five and a half $6 billion depending upon where commodity prices are. And we are the largest joint venture between the Emirates of Abu Dhabi and the Emirates of dubai. It's a 50, 50 JV.

What's it like being the treasurer of that group? As we said, you came with this totally different background. You know, some guys have come up through the treasury route and you know, Treasury, Treasury, Treasury. Oh, and I'm the group treasurer. You came from this risk background and you know, that's a real fundamental of you and your background. What's it now like being the treasurer of it?

There's no two days of the same. So look, we employ 8,000 people. So in 2014 we confirmed the merger. We spent probably two years doing the integration, getting that done. And one thing is that my shareholders are very ambitious and quite challenging of management, which is great. So most companies would probably do one or two mega projects every 10 years. We decided to do two mega projects at the same time. So we embarked upon a three and a half billion dollar spend on an alumina refinery. And to make aluminium very quickly for your listeners, you take a red bauxite type mud clay material out of the ground called bauxite, which has got a higher alumina content. You crush that and then you refine that, that bauxite through in a refinery and you produce alumina, which is a talcum powder type material. Then you take that alumina, you throw it into a big bathtub, you throw some anodes and cathodes and a bucket load of power through it, and then you make molten aluminium. So we decided at that time in 2014 that we were going to be vertically integrated upstream, and we kicked off a three and a half dollar spend on an alumina refinery in Abu Dhabi. At the same time, we decided that we also wanted to go as far upstream as bauxites. And so we'd already had an existing partnership with a number of partners in the Republic of Guinea in West Africa, on a bauxite mine concession. We took a preemptive position over that and purchased 100% of those shares in 2013, 2014. And so we decided that we would actually kick start that project almost at the same time. And that was about a billion and a half dollars spent. And so we had two mega projects of about $5 billion capex going at the same time. So from a Treasury perspective, we had a lot of balls in the air. I think probably what served me best during that time was the historical risk management approach, rather than being overawed or stressed about, A the debt levels that we were taking on board, B, continuing the operations, because don't Forget, we had 1.6 million tonnes of aluminium we were producing at the same time. That it was really prioritisation, it was really about continuing innovation in our technology on the treasury front and the continuing education and upskilling of our, of our people. And that's all a risk management approach. And I think that was really what I learned from the last 15, 20 years coming into that role. Not saying you couldn't have done that, but I think if you'd come up through the normal treasury ranks with what we had going on at the time, it would have been completely different. And so that, that variability, that ability to be in Slovakia one day and the United States the next, dealing with something completely different, really stood me in good stead during that time. And I think that's how we actually managed that period.

And you talk there, and I want to pick out the education and upskilling of the guys, because there will be people listening today going, they've got teams, they might be in some different locations. Treasury, if you like, is a mature industry in the uk. It's mature industry in the us, it's semi mature across different bits of Europe. In some bits it's mature and other bits it's not in the Middle East. It's still developing rapidly. There's a lot where for the ACT you do a lot of speaking and stuff like that, but I want to come back to that separate thing. But the education upskilling, you see that as key. What was it like when you got there and what did you then, how did you then approach it and sort of develop the guys?

Look, when I first came, I think that's very right. The ACT had only just started their presence here, I think, in 20 2008, 2009, probably again, against the backdrop of GFC, it wasn't a great time to do that, although there was a big support from some of the big treasurers. And so very early on I looked at the treasury qualifications of my team and that was what, a team of 10, 12 people at that stage they were either finance graduates, they were either accounting graduates, et cetera. And that was great. But it didn't give them that basis of pure theoretical Treasury. And some of these guys have been working in that team for 10, 15 years, cash management, liquidity management, FX interest rates, ET cetera. But it was quite obvious that they'd learnt the practical side of it, but not necessarily the theory underpinning that. And so we quickly embarked upon a program of the heavy support of the act qualifications. And I think today was that 10 years later, just about everyone in the treasury team now has one, if not multiple, of the treasury or the act treasury qualifications. My assistant Treasurer is just doing the MCT final exam, I think yesterday. That's been an 18 month battle for him against the extreme busy backdrop of having a normal life, a family and just what we've got going on. But the personal growth I've seen with him over that 18 months has been tremendous.

Do you mean by that when you say it made him just a better.

Treasurer, a better person?

What would you pick out?

Look, I think it's made him more aware of risks, more aware of Treasury. Don't get me wrong, this guy is a rock star in terms of his intellect, his ability to manage treasury, but he was just not quite getting the strategic side of it. Yeah, and that's fine, but he had an enormous amount of experience. This has just opened his eyes up to a different stratosphere of what treasury is and where you can actually go with it. I would encourage maybe not the mct, but the amct and I Apologize. I know that the ACT have changed all their acronyms now in the way that they do their courses. But every week for any aspiring treasurers or people just starting off in the industry, have a look at the ACT or similar qualifications in your own areas. Because I really can't stress enough is the satisfaction and the understanding that you'll get. That's not easy courses and that's what I like. But all my team have actually grown exponentially through that formal qualifications in specific treasury areas. Not accountancy, not finance, not statistics or stochastic models in actual core fundamental Treasury.

And I'll tell you what I'm going to do. I'm going to point people. We'll put in the show notes to treasuryskills wheel.com that's something we put up there. It's like a training assessment tool for people. It's free. It was when I was doing the Chicago speech a couple of years ago, a year and a half ago. It was from my first 70 podcast with people just like you. My ex colleague, she got to go through all of this stuff and Summarize what the 70 Treasurers have said was key and exactly as you just said there was about risk management and everything else. But studying, you couldn't take it away from you. Sarah Jane hall at GlaxoSmithKline said exactly what you've just said there. Get as many studying things under your belt. But one of the key things that did it also highlighted some of the other bits in the reel which I'm going to come back into with you, Toby, because I've noticed this very much. But guys, just go there. There's the skills word itself. So you can actually mark up where you need to exactly as Toby says there. You can then assess where you're up to in qualifications and do you need to do more? What do you need to do? And look at some arrows. And it's a really good. It basically broke down the soft hard areas like the qualifications. But then we go into the outer circles which were the softer areas. I'm not saying Mr. Shaw's soft, you know, he's anything but. But the softer skills were about speaking and speaking communication, as I said to the. I've said a couple of times, I broke out my usual pitch and I said, you know what? I don't like speaking, I don't like public speaking. Why would I stand in front of 80, 100 people as I was and just like cast a game. Oh, look at me. You know. But it made me a better communicator we get more business and we've grown our profile different for yourselves, you know, but you've elevated your profile as a treasurer and you very much embrace this sort of, you know, getting on the speaking circuit. You've done Euro finances, which. And I've seen some of your speeches. Brilliant. A lot of the time, more technical areas, but a lot of the time, you know, with the financial times, with. Why do you feel that is, you know, bar the free booze. That's it. I'm joking. But why do you feel that's important to you as a treasurer, to get out there on the road? Surely you could just put your feet up and, you know, away you go sort of thing.

Yeah, look, you could. I mean, one is, I enjoy actually interacting with other people, and two, and this might sound a wee bit flippant, but I do actually think that we all have a responsibility in the industry to give back and to share our knowledge, to share our experiences. And I do find myself incredibly grateful for the company that I work for, that they've given me the license to do what we've done. And there's not too many other parts in the world or too many other companies in the world that would embrace the speed of change in which we put things through in. In Treasury. And we were talking to some treasurers the other day from some FTSE listed companies in. In the UK about robotics and RPAs, and they were only just getting around to actually thinking about them and they were absolutely dumbfounded when we said we had 60 RPAs or bots already in treasury and we had a target for up to 100 by the end of the year. And that's the sort of speed of change that we're doing, because we simply couldn't do the volumes of transactions that we do today without an army of 30 or 40 or 50 people. I've got 15, which is still a big treasury team. But in terms of the volumes that we do, the risks that we run, the fastest growing area, unfortunately for me, is Covenant compliance and governance.

Oh, sexy areas.

Wow.

It was not a sexy area. But look, I think we had a conversation with either you, Michael, or someone else before that. Treasury accountancies or accountants are in big demand, and I think they are, and I think that's a great skill. I would also countenance that in saying treasury corporate governance and compliance people will be in greater demand going forward. And so everyone wants to work on the front desk, the dealing, the trading desk, et cetera, which is great. That's the sexy part of It. But in terms of really understanding treasury and how it all hangs together, is that accountancy side or the compliance side is never going to go away.

Yeah. And it's amazing, actually. And with you as a treasurer, you've got all these bots, you know, have you got a bit of an understanding yourself or how have you developed that knowledge yourself?

I'm glad you phrased it that way. I have a bit of an understanding of how I do it.

You don't have to. The reason being, I don't know if you met Severin from Honeywell, she's an amazing lady, but she's actually trained herself to do that robotic stuff. So when one of the guys, one of the techies was sitting there going, oh no, you know, you can't do it like this. She went, hang on. She leapt in the desk and was, oh yeah, blah, blah, blah. And I went, how do you know that? She went, I've trained myself for the past year. I actually sat there, went, I don't know how you do that because it's just completely out of my wheelhouse. But amazing to just do that stuff.

I have a good conceptual understanding. Yeah. And again, I can think of that comes back from the risk management perspective, from the different backgrounds. A lot of what we've done, as I say around the straight through processing, around the FTPs, we've now moved on to seamless integration now between our, our SAP, which is our ERP system, and our bank payment platform. So we're not using STPs or any of the bank platforms anymore. We're taking all our payments from SAP. We've got rid of local footprints, which is where the file was actually downloaded and uploaded, because that was causing a bit of a security risk for us. So we've got a virtual handshake now, all these things, that was our strategy now. Now can I actually implement that? No. But I'm quite good with the vision saying this is what we need to achieve. And we're even rolling that out now into West Africa, into our operations in guinea, trying to actually then the next step is take everything that we developed at center and roll that out into our overseas operations.

And you're moving, as you say, if you constantly move in that direction, you know you're going to keep getting more compliant, getting more robust and everything around it. So, yeah, that's brilliant. And looking at the future, you know, with yourself and as you see it evolving, obviously we've got that robotic side, you know, getting that in place and you know, as you very well rightly put, you know, if you're listening today and you're into governance compliance, call me. Don't call Toby, you know, I need the people. He might need people. But anyway, but joking aside, you know, I've definitely seen that and that's been actually something that again was on the treasure, because about this sort of technical side, you don't have to go and study robotics, but having an understanding of how you might bring together those now it's different people. Ten years ago it was bringing in SAP experts, as you say, and getting that implemented and everything else. Now it's like, right, yeah, we've done that next stage, which is amazing. Other areas or where else do you see treasury sort of growing, developing? Because as you say, you've got this again. I talked about it in one of my videos recently about there are some treasures that just turn the handle cash managers, da, da, da. And then we've got thought leaders slash visionaries. Not blowing too much smoke up your mind, but you're looking at that direction. What else do you see as being key? What do you else do you see as developing something?

I think the next two big areas for treasurers to really look to focus on, in my view at least anyway, and it doesn't really particularly matter which order the risk transfer mechanisms, that is insurance, what's your strategy around that? And taxation, where is your tax liabilities, where is your tax exposures? And if I can spend two minutes on both of those, is the insurance industry is changing and it's ripe for some sort of mega trend and mega change. It can't continue as it is. And if you speak to most insurance brokers, Lloyds have been there for 400 years. We can't deal without the trading room in Lloyds or we've got to be in Lloyd's, we've got to be in Leadenhall Market having a pint at four o'clock in the afternoon. And that's where we do our business. Well, the last six months has actually proven that they can do their business from home. And I think it's really an industry ripe for disruptive technology and disruptive financing. And so my advice, if you're running big insurance programs, which we do of many billions of dollars, is really look to understand those programs, understand where your risks are and understand your risk transfer strategies around that, and spend some time strategizing about what that might look like in the next five years. Then on the taxation side, with the OECD BEPS legislation coming in a few years ago, the tax landscape has Changed considerably. People might sit there, sitting. Are we sitting there In Dubai, the UAE, you don't pay tax, etc. Well, well, we are starting to. We had a vat introduction in 2018. We were a global company, so we create taxable presences in many different countries. And it's an often underlooked area of finance. But I think that there is a natural fit there with the treasury team in terms of financial risk management, reputational risk management and, of course, really understanding how the business does its business. And so part of my wider portfolio happens to be group insurance and group tax. And I find that a nice neat way of actually tying in everything. We had some discussions around, as a prime example of that, with our operations in guinea, around the thin cap legislation. Now, okay, so that was raised by treasury, but they had to work very closely with the tax team to actually understand the implication, understand the legislation, understand the tax position around that. So there is a nice synergy between those areas.

Amazing. The worst bit about this is, well, number one, there's Toby, who's about to tuck into a Bloody Mary because he's. And you can hear the lovely, lovely sound of the palm trees and stuff. I wish you guys on the, you know, could hear this, but we could just talk for ages because this is just, just brilliant content. But unfortunately we can't because we try and keep the shows every week to sort of half an hour, 40 minutes, which used to be everyone's typical commute time. Doesn't happen anymore. No one's commuting. Exactly as you say. You mentioned about Leadenhall. I wish we were back there, but exactly as you say. I think it has proved that, you know, homeworking is here to. And you don't need to be, you know, shaking the hand of this guy and that guy. But again, I'd love. I've got three or more questions, but I don't have time for them. What I'm going to do is we're going to move towards the end of this show and we're going to have to get Mr. Shaw back on. I think we'll do a special edition with a few other treasures because I think there's some great stuff to be chatting about and we'll do that in the future. But for today's show, we will put your details, your LinkedIn profile in the show notes. But if you can summarize for some of the people listening today, you know, you've got that different background, which I think is brilliant because it gives a totally different angle to a lot of Other people. But what would you say are the top two or three tips you would give to people listening today sitting there? They might be a Treasury analyst, you know, thinking oh what do I do? Or deputy treasurer thinking oh okay, maybe I should do the mct or they're a treasurer out there saying oh you know, world of wars. What are the things that you would sort of give them as tips? If that's the right way over to you Toby.

Yeah, thanks Michael. Look, I think my top three tips for anyone aspiring to progress their career within treasury is be courageous. Treasury is not like the other parts of finance. Finance, it's more dynamic and there is a lot you can actually do in that space if you give yourself the opportunity to be courageous. Think about out of the box thinking how can you make your processes better? Whether it's through robotics, whether it's through restructuring or redesign. Treasury should and is a dynamic segment of finance. Much more so than be bound up by ifrs accounting rules. And so that there's a lot of to actually play in that space. Second is really take control of your own education. If you're a chartered accountant, if you're a financial analyst, you're a business degree major. Fantastic. That gives you a great fundamental basis. But you really do need to actually have those specific core treasury theoretical knowledge. And without that you may actually struggle in the long term to understand the intricacies of cash management. And you'd be never surprised me in terms of people, senior people I work with around the world that really don't understand or acknowledge the intricacies of actually making sure that your cash liquidity profile is accurate. And there's a never ending balance between yield returns on your money market deposits and actually having money available to pay salaries. Is it in the right bank account? Where is your cash? It's a complicated part of treasury which people don't give enough credit to in my view. And third, I think really it's look at those areas of treasury with some interest. I just mentioned cash management, but compliance, governance, I mean that is an extremely interesting area area. You get to delve into the loan documents, you get to look at the complete debt profile, you understand the business, how it's structured, you understand your leverage ratios, you interact with the banks on a daily basis. Again, it's not the sexy part of treasury which is the so called trading desk and wheeling and dealing on the front which we don't do, we don't do prop trading, just have to actually put that in there. It is quite a fascinating area as well And I think those sorts of things is what makes treasury really dynamic and fundable.

Yeah. And again, I would pick out there. I think all of those point to the future, if that's the right way to put it. Talk about the dynamism, you know, controlling your education and moving it towards, you know, future proofing yourself, you know, and that's ideal. Mr. Shaw, amazing chat. And, yeah, I'm seeing you there, sitting there, you know, it's getting hotter and hotter. He. He needs to retire to a bar somewhere. It's, you know, we've had enough of this. He's. He's very kindly. I've got a coffee. He's got, you know, water in his hand and he's been very good. But now he needs to adjourn. He's taking time out of his weekend, so I really apprec it. Mr. Shaw, that was amazing. If you want to connect to Toby and it's part of the, you know, the network, as it were, we'll put the LinkedIn profile in the show notes so you guys can connect. Thanks for today's show. Absolutely brilliant. We'll. We'll definitely have you on in the future. Thank you, sir.

Perfect. Thanks, Mike. And pleasure to be here.

Thank you, sir.

So there you go.

That's.

That was an amazing podcast with Toby Shaw, but I am absolutely thrilled for you guys listening today to be able to bring you up to date. Toby is live with me, actually, on video. So, sorry. You know, if you're listening on the podcast, hope you enjoy it. But you can also see some of our video live as well. Look for it on the stream and everything else. But when Toby and I last spoke, well, I was laughing with Toby at the beginning when I was doing a briefing then. How treasurers navigate international crises with Toby Shaw in October 2020. If only we knew then what we know now. Goodness gracious, Toby, I'm going to throw it over the microphone. Over to you, sir. Talk us through what's it been like, how, you know, we went in and out of a global pandemic. How's it been for you and the. The team at EGA and everything else and yourself?

Yeah, thanks, Mike. Nice to be back.

Back.

Look, I think when we speak, last time, 2020, it's a little over 18 months ago now. Look, I think first up, most of 2020 and 2021 seem like one year, one very, very long year, very, very much indistinguishable, I think, certainly from a risk landscape for us. We've handled the pandemic here in the uae, and in Dubai in particular, where I live, very, very pragmatic. We've needed to keep the borders open as much as we can. Dubai is obviously a service based economy. So I think certainly from a perspective of living from working here in the Emirates, it's been relatively okay compared to if I see my colleagues in Melbourne, in Australia, which were locked down for many, many months and nearly 18 months, et cetera. So I think from a personal perspective, it was one of the better places to ride out the global pandemic. Professionally, obviously we've had people working from home, home. We're now all back in the office, I think at almost 100% and we'll get onto that a bit later. But I think more importantly, the business continued as uninterrupted, as practical. We face challenges mainly I think around for us the supply chain. And that's been well written about in many, many financial presses in terms of the financial or the supply chain disruption that continues to date and causes us all sorts of, of logistical challenges. Obviously, we, we're an exporting company. We export about 85% of our product to 42 different markets. So logistics is a big, big part of our business. We had to change the way we did it last year. A significant portion of our business which was up until that point all containerized, we had to look at break bulk shipments, moving product in a different form.

Right.

So that's created challenges, obviously, obviously, with delays in logistics and shipping, working capital comes under pressure. We have more product in the pipelines, we have more product on the high seas. The working capital is something that people can actually lose sight of on occasions because it gets buried on the balance sheet until your shareholders start asking you why aren't you giving them a better return and what's all this capital doing on the balance sheet? So I think that was probably our biggest challenge last year from a Treasury perspective was the management of that working capital facilities and that working capital number. Then really it was about how do we continue to progress and continue along the transformation journey we started many, many years ago, because otherwise it was all too easy just to sit and say, oh my gosh, the pandemic's here, we can't do anything. And so it was really about keeping people motivated, keeping the new ideas flowing through, keeping think the momentum up in terms of what we're trying to achieve as a Treasury team and as an organization. And I think by and large we've achieved that. It hasn't necessarily been to the timeframes that we would have achieved. Pre2020, we implemented Swiftnet last year. We moved all our payments onto Swift, which has been fantastic for us. We've got a lot more granular detail and greater insight into where our payments and our receivables are coming from and going to. It makes the payment mechanisms a whole lot smoother and we're going to be gradually rolling that out. So if we could roll that out last year through the pandemic, that's quite a very, very big achievement for us.

One of the things recently caught up with Felix Mayor from ABB and we were talking about exactly as you said, one of the. An interesting thing for him. He's very much focused on the technology automation side. I know that was. I just re. Listened to our podcast and that was as a key thing for you, that you really want to automate a lot of process and everything else. Felix actually made the comment he said previously, getting everybody in the office in one place, oh, I've got to be in the office. It can't be that. He said, actually it was quite nice in a way, you know, despite the situation, he said, because people are going to say, oh, I can't hop on a virtual. Oh, yeah, I can, you know. So he said from his point of view and project management, that they were able to keep on pushing forward with these. Now, as you said, there have been logistical and challenges and stuff. How have you prioritized that you know this, but at the same time knowing that there was all these other challenges for people versus automation, making progress in Treasury. How have you balanced the two, would you say, as you've come through these challenging couple of years sort of thing?

Yeah, look, I think there's a quite important question. Obviously the first and foremost priority is to maintain the business, maintain liquidity, maintain our cash forecasting capabilities, maintain our core operational readiness. We're quite lucky that we're fairly well down the path in a lot of that, as well as actually having a team that's very much concentrated on continuous improvement. So once everyone buys into that, it almost creates its own momentum and I think certainly bringing on some of the junior members of the team and giving them some responsibility, it enables them to actually be a bit more visible. Certainly, if I'm looking for a positive of the pandemic through zoom calls and remote working, et cetera, you can have 10 people on a call. Now, not all of them might not be contributing, but they're all visible. They're all actually at least participating. And I think that's probably been one of the biggest advantages or the biggest outcomes of where we have been for the last two and a half years is it's got some of those younger team members engaged in these projects and actually being able to drive these projects forward, forward. And I think that's been quite invaluable for them as well as us, for an entity as well. It creates talent, it builds talent and it just widens that talent pool.

And now as we move forward, you and I were both talking before the show about this new, new way of working, you know, working from home, balance. And, you know, that's enforced in different areas of the world. You know, in the UK we're still, you know, trying to get that right balance and different parts of the world and us. And you mentioned there about seeing a role in Australia that was fully remote, which is a, you know, brand new thing, wouldn't have happened, you know, a few years ago. How are you finding it with you guys and what's your sort of post, you know, as we move out of this phase and into this new way of working, what's your ethos as treasurer and, you know, as a finance leader? What are you seeing?

So look, we're slightly different.

Yeah.

The mainstay of our business is 247 operations. So, you know, close on 75, 80% of our workforce, if not more, have to come to the office because we can't turn the smelters off. So we've always tried to balance the fairness between our blue collar workers having to come to the office and the white collar workers, the corporate staff that can actually sit at home and continue to do their job. So, I mean, where we are now is probably a good compromise for that. We do have flexible working hours. And I was just saying to you before, Mike, that the UAE has recently enshrined that in our labour law in terms of flexibility, gender equality and that that whole work life balance. And it's one of the very few countries in the world that I do see that enshrined in the labor law. So, you know, our office is now what, 70, probably about 95% full, which is great. People are coming to the office willingly, you know, that they are happy, they're enjoying that interaction. We do offer flexible working hours and I think that's great for those employees with families or those employees that do have some time to travel to work. Certainly over the last six or seven months, Dubai has been booming with expo, so the traffic has come back and the traffic jams are back, et cetera. So all the things that we didn't miss for 18 months has been great. I think probably what has been unspoken of, and I'm not sure that we spoke about it earlier, is that just before Christmas we were notified as it came country that we were changing our working week. So historically we've worked Sunday through to Thursdays and now from the 2nd of January we work Mondays through to Fridays. So as a, as an opportunity to embrace work life, balance, etc, the corporate guys close the office at 12:30, one o' clock on a Friday. So in essence you're getting a two and a half day weekend every weekend.

Yeah.

That doesn't mean that productivity is, has elapsed. We still require people to do the same amount of hours. I'm very, very keen on that. But we're just looking to change the work life pattern and to give people more ability and more time back to actually enjoy the personal aspects of their being rather than just concentrating purely on work. And I think that's probably been more thoughtful and better well received than whether I give someone a day off or some flexible hours, et cetera. The future.

Yeah.

Right. So the future you've talked about, the flexible working. Where are you seeing things going now, how you know, the business sort of recovering and going forward, you know, what's, what's looking in your crystal ball? I know, you know, if you have the lottery numbers, give those to me as well. That'd be great.

Yeah, just every time I think that we're going to start with something that is going to be a sense of enlightenment and positivity, I figure out that there is no such thing as black swan events any anymore. They occur far too regularly. So you know, certainly we came into 2022 with a sense of optimism. We came in with a sense of excitement that at least the worst of the pandemic was behind us. That lasted for about four or five weeks until the events in Russia and Ukraine took over and unfolded there. Yeah, and that certainly put the cat amongst the pigeons. And I don't mean that in any way disparagingly about the, what's happening there, but just in terms of, of where we thought 22 was going to go and certainly turned our whole expectations upside down. So for us that period of time from a Treasury side was quite uncertain and I think if you talk to most bankers, most treasury guys, the sanctions were very unclear between the eu, between the UK and the us. The velocity in which they were rolled out was unprecedented. And I think we were left like a lot of people scrambling to figure out what we could do, what we couldn't do and try to marry those with obviously our contractual and our commercial obligations. And this is relationships that we'd had for many, many years. A caveat all those our exposure to Russia is not big, but we still have to manage those relationships, we still have to manage the sanctions, and we still have to be, in effect, a good corporate citizen. And so trying to actually navigate what was fairly an unclear territory. If you'd asked me that six weeks ago or even three weeks before that said, absolutely not, okay, there is talk, there is smoke, but would it actually develop into what is essentially a war.

Between the two countries?

Absolutely not. So I think that was probably a big shock for us. The resultant impact upon that has been quite shocking. On the upside for us, aluminum prices are at record highs, which is not great. You don't like to make hay while others suffer. But certainly the commodity markets have reacted extraordinarily strongly. We've gone back into a big lockdown of China's second largest city, 27 million people, whatever it might be, all locked up in Shanghai is having an impact upon on again, supply chain disruptions, but also the commodity business as well. So Chinese proverb of may you live in interesting times, I think can be also a curse. And saying that every time that we think that life has gone back to normality, we start to question what that normality might look like. And as I said, that old axiom of Black Swan events probably needs to be rethought because these events are happening more and more regular and the Black Swan is no longer a Black swan in terms of something, it's becoming every 18 months more and more regular.

So we usually wrap up each week's podcast, and we did before, and you gave some amazing advice about being courageous within the dynamic changing environment of Treasury. This is from earlier in the show. Take control of your education and gain breadth of treasury experience across different areas. Now, I'm not going to ask you for your further tips because it would be disingenuous. And going back to, oh, yes, give us some more tips. What I was going to ask really was more for just an observation, really, from you or some recommendations. You know, we've got people watching today that are going to look at this. They're going to have listened to this amazing show that we did, you know, before, which was a great educational lesson for treasury guys out there, professionals, yourself. You brought us up to date. Now you just talk there about treasurers and the way, as you say, Black Swan events a regular thing now. So they're not Black Swan One, they're out the window where they're regular things. What advice would you give to the people watching today or listening and say, look, if you are in treasury, if you are listening, these are the things you need to plan for or these are the things you need to think about, you know, just as, as takeaways. If they're sort of, a lot of people say they're listening in the car or they, you know, listen on their way to work and everything else and they're thinking, right, actually, yeah, that's a good thing to think about. What should they have in their back pocket?

Would you say now that the world is starting to open up, people are coming back into the offices either part time, full time or some sort of hybrid, dust off those networks, start networking again. People have been isolating for two years for good reason and certainly we've been no different. It takes a real change in mindset to go out and meet people again. And that's your bankers, that's your insurers, that's your colleagues, that's your other industry peers, that you can't lose sight of the power of networking and not just for job opportunities, but for professional growth, for swapping ideas and just to actually have that connection. People buy people and you get more out of a 35 minute phone or 35 minute meeting with someone, someone in an hour, zoom call, at least I do anyway. It tends to be a bit more natural and you start to swap stories rather than just what's the point? So certainly I think that would be the biggest thing I would urge you listeners to concentrate on this year. It's far too easy for us to sit at home and to say, well, we'll get on a Zoom call, etc. And I find that even in the office now, a guy at the other end of the floor will zoom, come down and talk to me. So those sorts of things. So number one, I think in that respect would be really looking to reinvigorate those networks, those relationships on a personal perspective. Secondly, I can't re emphasize enough education if the listeners here haven't taken the opportunity of working from home or remote working for the last two years to do some sort of professional education in that treasury space. It's probably a lost opportunity because you're not necessarily going to get those one, two or three hours of commute time back, especially if you go back into the office, but if you are sitting on a train in your car, whatever, take the opportunity to study something. The treasury space has changed. It will continue to evolve And I think it's certainly beholden amongst all of us to stay abreast of those. And that's really important as a Treasury professional. And then I think thirdly real really is don't be complacent. I said, every year I wake up 1st of January, it's going to be a new year, it's going to be, this is my plans for the year, etc. Invariably it's either one week or six weeks into it. My year is shot, say day two.

Yeah.

It has been on day two and day three on occasions.

Yeah.

I think it's really about. I always expect the unexpected. I was planned for that unexpectedness. Don't think today is going to be like tomorrow tomorrow or it was going to be like yesterday. Really think about, you know, what could impact upon your business. Be a bit more thoughtful, be a bit more courageous, again using that word, courageous about things that may impact your business, your, Your liquidity profile, your working capital and start putting plans in place today because tomorrow it could be too late and it could cost you.

Yeah, exactly.

Amazing advice there. I mean, I am going to jump back in on one thing because usually I say I can't wait to see you in person, which I can't as well. Well, that's, you know, zoom is all right but you know, over a bar and a beer is much better. But the good thing, actually just this morning I was talking to my colleague about, and again to reflect what you said there, Toby, that we are going to be networking and I can't wait to do the real thing, you know, September, we just, we've just put. We're going to see everyone at Euro Finance in Vienna. We're then following up with AFP in Philadelphia and actually we're planning our own event in November in London to Treasury Career Corner Live, maybe even getting lovely Toby across.

You never know.

We'll try and persuade over horrible wet London, Dubai. No, okay, let's move on. But joking aside, exactly, you're right, we can't wait to see people and I really concur with that. So amazing, sir, as always, thanks to have you and a great update and look forward to again at one of those events or somewhere else. Seeing you very soon.

Excellent. Thanks, Mike.

Cheers.

Hello, it's Mike here again. I hope you enjoyed this week's show show. If you did, then maybe you want to follow the show or subscribe depending on where you listen, whether that's itunes, Spotify or another great place to listen to the show from. It's totally free and means that you'll be the first to see each and every week when we release a new show. And maybe whilst you're there, you could even leave a quick review. Reviews and ratings are among the most important metrics for a podcast to effectively rank and and as you can probably appreciate, the podcast is a lot of hard work to produce every week. It'd be amazing. Just take, say, 20 seconds. Leave a quick review of my amazing guests and their great career stories. We'd really appreciate it. Thanks very much and I can't wait to see you soon.