Technology, Data and Treasury Skills with Patrick Baumann

Foreign.

To this week's Treasury Career Corner podcast where I interview treasury professionals about their treasury careers. Each and every week I talk to them about how they've built their careers, where they are now, where they see both themselves and the treasury profession going to next. Let's get on with the show. This week's show, delighted to be joined by Patrick Bauman, the VP Treasurer and at Tupperware Brands. Founded in 1946, Tupperware's signature container created the modern food storage category that revolutionized the way the world stores serves and prepares food. Everyone knows Tupperware, everyone's got it in their cupboards. But what a great way we're going to get into some of the Tupperware products and, and talk about some of the different things that, you know, have happened with the brand, if you like, in recent years. But we're going to go back to Patrick's early story. First of all, Patrick, if you would take us back to the beginning of your career, how you discovered finance and Treasury. Back to yourself, sir?

Yeah. Thank you, Mike. Thank you for hosting me and delighted to be on the show. There's not really a good solid path for treasury professional and stuff like you study in school like science or math or accounting. The way I went into treasury was through finance, accounting class and exposure to different professional during my studies at the university when I went to grad school.

And talk me through when you say you went to grad school, how did you then discover finance? Talk us through each of the moves from there sort of thing.

It was an interesting discovery for myself. Being from Switzerland, we always associated with investment banking and finance. And early on my career I had dreamed to become a product manager, you know, like managing a Procter and Gamble soap or detergent or chocolate. And I did my internship at the time with Xerox in Zurich and did some an exchange student program overseas and then went back to Zurich for grad school. And there I met a couple of friends. One of my dearest friend, Rich Mullen, he was at Citibank at the time. And then really we kind of connected and talked a lot about finance, international finance. And he shared with me some of his work and some of his passion for finance. And ultimately by the time I graduated I just ended up working for a bank. And that, that was really the introduction for me in the finance world. And then after working for on the bank sector I went to work for a defense contract company. But it was, it was also in the finance and there I got exposed to treasury indirectly in dealing with our Treasury Group. And that's where I developed my love and pass for treasure.

Explain that when you say you just developed it, how did you do that? Were you thrown in at the deep end or how did I know you and I talked about this the other day. So talk me through.

Yeah, to a certain degree I think that the fact that you have a background in finance accounting is very helpful or even though nowadays with artificial intelligence data management of Fintech. For me really it was the journey started when I was running the finance the domestic and international finance for one of the subsidiaries and I started traveling around the world. I was exposed to foreign exchange to capital market securing, leasing and payment terms for some of the clients and also working with the Export Import bank of the United States as we were leveraging some of the program guarantee that our government is providing to compete with with other export credit. And so really was to be exposed in the capital market in this world, which is very fascinating. In addition to that to the investment side with the. The retirement plan defined benefits for one care.

And with that you sort of as. As you said you sort of were discovering treasury if you like. Walk me through it a bit more because you've got this international side your career at the time you were. Where. Where were you then?

So I. I joined a Melbourne based company at the time was Harris which. Which is now L3Harris technology. And it was a company that was very diversified between commercial and. And defense contract. And I was hired at the time to run the international finance for one of the commercial subsidiaries selling broadcasting equipment for the multinational. And therefore our client were either the Minister of communication education, depending on the countries that they were basically granting license to operate either a television or a radio network. And so going around the countries and assisting our engineer in providing finance terms. Because some of those stations, you know there were significant contracts and they needed to have long term projects. So structuring their finance for the acquisition of those products actually led me to joining the treasury group at the time at Harris. And I started when I was in my 30s, mid-30s, actually working on a Treasury group. And it was an amazing experience because I was brought with the experience having worked with the Firth and then exposed to the intercompany bank that is managing excess cash that you earn from different subsidiaries and ultimately managing one location in order to provide liquidity. Therefore you're going to have a foreign exchange exposure that you will have to deal with. And then at the same time, because we were an international operation with significant exposure overseas and staff overseas, we also have different Pension plan to manage ngovseas. And so through the years the company transitioned from commercial pure play, was involved in a lot of M and A activity. And that kind of further exposed me to different treasury instruments, specifically derivative be foreign exchange, the option or be interest rate swap, etc.

Just going back and stepping back a stage if you like. I think we skipped past it and I know that you've been part of our conversation before, but you were based in Switzerland and you have made. And when you said Melbourne, let's just clarify that for people. It's Melbourne, Florida, old Melbourne, Australia. There are two different, you know, so can you just talk us through the international moves for you? Because that was quite different.

No, absolutely. I mean, listen, growing up in Switzerland, one of the benefits obviously is it's, it's almost like a melting pot. It's a small country, you know, it's like 7 million people, three different languages, having a reputation, mainly service industry, including definitely finance and investment. Earlier really felt attracted to the United States. I mean I was always looking at the United States as a role model, as a country that I really would like to live and participate in a dream. And I was able to move to the United States ultimately become a US Citizen and have a family and live the dream that I had expected, which was an amazing, which is still an amazing experience. And so this background brought kind of unique set of quality and asset that a lot of companies may be attracted because you know, the fact that you are multilingual, number one, that you exposed to different currencies early on, you know, as you travel, you know, and you take the train and half an hour from where you live, you're going to be in France and Italy and Germany and the time, it was not the year. Also you had different currency, different expectation mentality, languages, et cetera. And that was a unique experience that basically I was able to leverage especially in my interaction earlier in my banking career when I was managing a portfolio of foreign owned subsidiaries in the United States that were headquartered overseas. But we were banking the subsidiaries and providing bank services. And also that kind of led to a very successful career working with multinational based in the United States but having activities overseas.

A lot of people ask me, can you make the move to the U.S. can I move? Do you have links there or can you explain that to people?

I'm a first generation and I think a lot of us, early on you make a decision that is kind of leave the family and actually transition in a different country and sometimes that different countries just next door, you Know us, Canada, Mexico to the US for others it's really leaving Europe and moving to the United States. It's a little bit easier when you are in your 20s and you just have to look after yourself rather than having additional responsibility like a family, et cetera. So I think it's much easier as I educated if you make the move earlier or you associate it with multinational companies like for instance in Switzerland in those days was not uncommon if you're working with like a Credit Suisse or ubs, a financial institution, or even though a consumer product like Nestle that you'd be assigned overseas for two or three years, but then the expectation is you will go back home. And to me while that was very appealing because there will be an infrastructure that is provided for you, at the end of the day you had this commitment. Ultimately you will have to go back. And in my case I really wanted to pursue my dream to really live and work in the United States.

And so you've, you've been there ever since and done that since many years. So yeah, I reckon for L3 was now L3 Harris. Yeah, yeah, Aerospace and you were doing that and then talk us through the next couple of moves to bring you up to Tupperware and things.

That's part of the working in the treasury group, right? I mean you have a passion for what you do. And the way I kind of look at the treasury is one of those areas within the firm that allow you to expand and to continue further your education. So earlier we talked about dealing on a capital market structuring bank deal, credit facility, be credit facilities such as a revolver term loans, issuing debt, working on the M and A or a divestiture for an acquisition, meaning integrating the business and also the treasury workstation or whatever system they have. I mean that's one aspect to it. The other aspect and I kind of briefly mentioned was working on the pension side beyond the defined benefit or the defined contribution. And so my journey in that regard was exposed to a lot of charter holder that were managing our asset. And that was something that I was very fascinated. I mean here you are, all those bright individual who are able to pick stocks and either they use a fundamental approach or quant or a hybrid or both and then being associated with until suddenly working on a peripheral with them for more than 10 years plus led me to do a lot of research and then wanted to go and explore more into this world. And that's where a lot of those fund manager typically had the CFA designation. And even though I went to GRAD school I decided to work and earn my license as a charter holder which I did in 2015 team and then I want really to have a chance to run money. And then this is again another dream of mine that became a reality in 2018. I joined basically an affiliate, the Wells Fargo which is a finite at the time. And then the goal was really to go independent as an RA as they say in a business and run basically portfolio and a strategy for that firm which was an amazing experience because there was. It's only, you know, you're dealing with real life and life matters because those are, you know, institutional but also private client that basically entrust you in picking stocks that basically will give them a certain revenue so they can retire and.

Have peace of mind and making that step from treasury where you're looking after the corporate's money and the flows and everything else and stepping into that private wealth management and being the chief investment officer there. Because again to explain that to everyone, what were the common pieces and what were the differences?

I think the approach was very common in the sense that you work with process. There's a lot of process involved, right? Process meaning that obviously you will have a policy like an investment policy. You will have a step that. That you explain from a research standpoint and then. And the way you invest your those assets. So. So for instance, you may, you may look at in the US and then have a position that you want to have a broad market exposure like the S&P 500. And one of the benefits instead is running 500 company like in an index you made pick different company in a certain sector that you believe could add value and could be more beneficial. Another screen that we were using is the fact that we wanted to pick companies that will increase their dividend and they were not subject to potential third party preventing them of paying a dividend. For instance, if you invested in a company and you had the expectation of paying a dividend, it just happened to be the financial institutional, right? And you have the crisis of 2008 and then the government intervened and provided. Remember in 2008 with the banking crisis, the government in the US intervened and provided capital to the bank, but they were also limited in paying dividends. Well, if you had expectation to have a dividend payment because you invested in the bank and you were in that situation, you will not receive a dividend. Similarly, if you look at Covid and then you had exposure to companies and I'm thinking about oil and gas company overseas, they were significantly impacted with the COVID and a Lot of those companies basically asked similar to the 2008 financial crisis for government assistance. The government in the UK and Europe basically said sure, yeah, we happy to support because they had a national interest to support those companies. But one of the requirements was for those companies to cut the dividend. And so the idea and some of the research that we spend a lot of time was to find companies but also sector that basically could be immune to some of those regulatory requirements that would basically force company not to pay a dividend. And so again this is just for illustration purpose. You know, a lot of companies we were screening for are companies that for the past 10 years would pay a dividend, that the dividend will increase over time. And so that no matter what will be the financial condition of the country that you're living in, you will have a steady income. And then that income will be actually hopefully beat what whatever benchmark was determined, BDS and P500 or the Russell 1000 etc.

And so you did that role for well, three and a half years or just over and. But then treasury comes knocking at your door again. You can't get away. He claws you back in what happened and well, why come back?

I think it's a lot has to do with personal choice and your passion. I mean corporate finance and treasury is something that I really enjoy and I like. In addition, you know, working for a multinational company that has exposure overseas is very challenging and that's one of the reasons I get up in the morning and it keeps you on your toe and you know, you have to factor some of the geopolitical issue depending where you have your operation. You know, a decision from the central bank in Europe could have an impact in your business, a geopolitical event for instance, or even though the demographic, I mean, I mean we're seeing that you're depending on the sector, if you're on the consumer sector side and you're going to look at and depending on the level of confidence for the consumer that that will have an impact. And you're going to be very sensitive to, you know, maybe some of the index such as the inflation, interest rate and some of the move from the central bank and I think that's a fascinating world. Right. Try to understand the cause and effect of in the United States, for instance, I mean we've seen that immediately post Covid the interest rate dropping significantly to stimulate the economy and then starting about 15, 16 months ago, with the Fed ratcheting up and being extremely hawkish and putting a brake on the economy and trying to live through that. And that's only in the United States. But then you multiply that with country. I mean, we deal in 17 countries and you're going to be exposed to different system and different process as well.

I think you, well, I'm not sure you we really answered it for some of the listeners there, sort of. Why back into treasury, though?

Because I mean, this is one of the passion that I really enjoy and you know, the investment world is fascinating. However, I have a greater fulfillment working on a Treasury and dealing with, I think there's a lot of variances in your daily work. For instance, you know, you're dealing with, with foreign exchange. For instance, you're dealing with the capital market. You know, you're, you're supporting me. I mean, our clients basically are our market, our operation. And you're dealing daily, you know, supporting your operation in different market. And I think that's very fascinating and that's very fulfilling.

So tell us again, I think most people know Tupperware, but can you maybe just explain for the listeners who Tupperware are, but also then that that leads us into how you structure treasury at the, you know, at the company?

Yeah, no, absolutely. I think very like any other company, we involve in an overseas market. So even though you're based in the United States, you know, we, a lot of our revenue are generated overseas. Right. Similar to any other company in the United States. And so you do have to realize that a lot of revenue, if you bring back the United States, you're going to be, you will have an exposure from a foreign exchange standpoint because most of your revenue, your expense overseas and then ultimately your company is listed in the United States and the United States is US Dollar. Right. And so the first aspect under treasury to me is how do you deal, first of all is how do you assess your exposure, your foreign exchange exposure or your risk and what tool do you have available to me to get that exposure? So I think that's, that's one of the area that is very fascinating because then you have to work with different banks who can provide you with not only the credit facility to support foreign exchange hedging and also hopefully to try to assist you in shaping your foreign exchange policy. Right. Are you going to hedge against, for instance, the reporting currency or against the functional currency at the entity level? So those are some of the strategic decision that needs to be made first. And then how are you going to execute that? I mean, and then over what period are you going to cover? So there's a whole world and universe around that. And then of course all depends on and you've seen some very extreme over the past six to seven months depends on which market you involve. Like for instance, if you are in Argentina and you see a significant devaluation of the pesos, how is that going to impact your business and your hedging strategy and also the cost of hedging similarly. So that's on a hedging standpoint then you're looking at on the capital market, your current debt structure and some of the relationship you want with the bank. And again, what I think is fascinating is the Fed reserve indirectly has a profound impact on a having access to the capital market, but also in shaping the lending practice for some of the bad. If you have a group that is more based like regional bank, given this current environment that we're facing, it could be quite challenging. For instance, you've seen in the press that you had Silicon Valley bank failing. Well, if you were depending solely in one bank and that bank was the type of Silicon Valley, you could be in a very serious predicament. So trying to diversify your bank group very key. The other aspect is how do you deal on if you have for instance retirement plan, right? Do you transition? Maybe you have a defined benefit plan and then you want to transition to a defined retirement plan like a 401k, what is the right way to transition? And then if you in Fact have a 401k, what should be the lineup that you have in order to meet the restart requirements? So I think those are some of those decisions that are very important in your daily life and you're going to be exposed and really challenges us not only to be up with the legal regulation pertaining to all those situations, but also working closely with our legal team on securing the necessary agreement. When we talk about the foreign exchange, you may want to have an ESDA in place to identify the counterparties. If you deal with a pension plan, you may have fiduciary responsibilities that you need to be fully aware and also make sure that you're meeting those obligations. So there's a lot of complexity in all those daily tasks.

And just if you reflect back maybe if you would for us some of the we get listeners across the scale. So junior treasury folks more, you know, mid level these if they're listening today. Obviously we've immediately jumped to sort of more of the senior stuff and you know, a lot of the global cash management that you do and things. But what advice are you giving to those maybe members of your team that are more Junior if they're thinking about what they, how they should build their careers, what are you suggesting they should.

Be able to do, right. I think I'd be looking at the future, right. Because maybe the path that we had in the past, maybe not a reflection of some of the talents that you want and what you want now and what you're going to look for. I think the future for the treasury is really in technology. Right. And I think the key is relying on technology for process improvement, but also for scale. I mean we talk about the need to diversify from a bank standpoint, not relying on the bank. Well that itself means that you need to have multiple banks. So you need to have a credit agreement with multiple bank and more likely you're going to have different bank accounts not only in the US but around the world. So you need a tool to basically provide you with, you know, a global cash management reporting. Now you can argue there are some technology that exists, but here you need somebody like an analyst for instance, who can work with that technology and who can basically generate report leveraging the technology from a Treasury management system that we have that we're going to be more surrounded by data, right? Because data will be more available and the data is the foundation for some of our decisions from a strategic standpoint. And so the ability to manage those data is going to be critical. And so maybe historically a lot of the treasury professionals came from accounting and finance and to a certain degree of cnn. Now the future leader or a good way to go in treasury from, you know, from. Because you don't have, as we discussed academically there's not a study path for Treasury. So I would think the future for the analyst will come from, you know, fintech or accounting. Accounting definitely. Finance, MBA Business administration with the concentration in, in computer science. And you've seen that working with some of the university we based in Orlando, but you've seen that with UCF for instance or the Florida Tech Institute. We all come up with program not only in finance but in computer science where we try to merge the two of them and then provide a skill for the student and the analyst to come on board of companies and being able to make a significant impact they want because they can manage the data, because they have the analytical skill. And I think those are the skill set that we would want on the go forward.

And I'm talking about this at a number of conferences coming up. One in particular where at the international conference we're talking about how educating new young treasury talent things. Are you then saying that treasury analysts, we should be looking for them in the computer science and data area or finance should be embracing bringing more computer courses into the area. What do you think?

Ideally, what you want in your treasury team is diversification. Right. Personally, that's what I would be looking for. Created a team of different background and that's key, including educational. Right. Because each of them will bring something to the table. And there's so many different tasks as we explain so many different complexities in your daily activity that I think it's very important that you can rely on team member that can manage data. So computer science will be a good way to do it. And so the question then to your point is, okay, what is. And if you want to look for your typical or your ideal candidate, is it somebody who's trained in finance and accounting and then has exposure to computer science, or is it somebody in computer science, right. That has an undergraduate in computer science and then he or she goes into finance and accounting? I don't know if I have that answer, but I think the success typically is successful candidates. Successful analyst and treasurer professional are those who get basically can be analytical and have a combination of both. Right. Embrace technology, data and also can work as a team and understand accounting, finance, FP as well.

And just with that. So then, if you're in a role now and you're a Treasury manager, so you've made a couple of steps, you're a few years into your career, should you be thinking, not about retraining, but how are you upskilling yourself? What are you needing to. Or are you thinking, right, actually hire someone to work alongside you. What are you thinking is key?

I think what scares people like you, Mike, right. I mean, material. No, but in a genuine way, first of all is increase the visibility of treasury. Right. I mean, that's number one. But also provide an ecosystem that will allow treasury professionals to develop through a networking. So for instance, in the United States, we have the association of Financial Professional, right? And I encourage all the analysts and everybody that I talk to to basically take the exam and sit for the ctp. Set up a Treasury profession that itself will give you the basic tools to understand the concept that you're going to be facing daily. So back to you, an example, you're the treasury manager and you're looking at how do I go from a Treasury manager to the next step? Get the designation that's key to me. So get your certified treasury professional ctp, join the association of Financial Professional, actively participate into those conferences, start NETWORKING and then LinkedIn is a good way to do that, be familiar with, you know, not only the technology, but some of the path from different successful professional that you can see. And so continuing education and network is number one. Number two, depending on your academic education, you may have an undergraduate and you're thinking about the next step. Okay, so now is that an MBA in like business administration or is it a master in finance? Or you go through the route of accounting and you become a CPA now and then the goal ultimately is to come back into Treasury. That could be, you know, a lot of treasury professional have the CPA designation from an accounting and because they were accountant and they moved to treasury, authors may say, and similar to what I did, it's like, okay, I did the certified treasury professional and that kind of helped me to go to the next level from a manager to a director. But then how do I go to the next level? Because you have to incorporate it the capital market investment. And I again, I'm a strong believer with the CFA charter. I think that honor really gives you, you know, an additional level of understanding just because of some of the diversity of the program and the requirement. Right. And obviously in order to have your charter you have to go through the three level and successfully pass the three level. But just if you in grad school turn wool and take level one, I mean that is a good exposure to for instance economic accounting statistics and that will be a good introduction and maybe a good benchmark for you to see if you're really interested in continuing in your professional career interestly or you may want to accounting or something.

Good advice. I mean other, other wrapping up advice. I think we'll put your LinkedIn details in the show notes and, and everything else, you know, other takeaways for people before we, you know, wrap up today's episode.

Yeah, I think the other key is mentoring. Right. Trying to network and trying to, to have a mentor. I mean earlier in my life I was privileged to have southern mentor and when I was at Harris I was cfo. I was always looking at a CFO to be my mentor. And they were great example and they always had a lot of good advice and I think that was very critical. So having networking, finding a mentor, asking people to be a mentor, that doesn't mean. And that's another thing that I realized. It's to be very outgoing and express what you want. So if you want a career in treasury, for instance, or should be any other professional, but treasury specifically, and you're working in an organization, don't be shy, just ask, be the treasurer or somebody in the team and ask for advice. And you will notice a lot of those people, they would take the time because we all started somewhere and I think we all had a chance and somebody was there to give us a helping hand and also guiding us.

Fantastic. As I say, we'll put your LinkedIn details in the show notes. I know people are going to want to connect to you, which is fantastic. Thank you for sharing some of that and yeah, I look forward to seeing you at one of the next events soon. It'll be great to catch up.

Absolutely. Mark. And thank you so much for hosting me and I really appreciate it. Thank you.

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