Treasury in the Private Equity Space with Julie Fabris

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've built their careers, where they are now and where they see both themselves and the treasury profession going to next. In this week's show, I'm joined by Julie Fabbris, the treasurer at Britax Childcare Group Ltd. Now, for those who don't know, Britax is a British manufacturer of childcare products, car seats, push chairs, high chairs and automotive safety equipment. For many, many years, throughout the 70s, they grew and grew and grew, headquartered in the UK, they've got divisions based across the world. And later on we'll get Julie to explain exactly how Britax runs and everything else, because a really interesting business as well. But Julie herself, many, many years experience, which is great, and an active member of the act, the UK association of Treasurers. So she works, you know, does panel discussions, joins in, really great networker. She was also pleased to say on our Bounce Back program, where treasurers, you know, improve their profiles and stuff like that. She was wonderful on it. Thank you. Julie, let's start your career. So you, well, training accountant Menzies. So you first ever thought, oh, do my levels, do my levels, I want to be an accountant. How did it all start? Take me back.

Well, I know, well, it goes back to obviously school and what I wanted to do with my life when I left. I was good, arithmetically. I did some work experience at a retail bank, a local branch, and I must say that after a week there, I decided that retail banking probably wasn't going to be for me for one way or the other. So I then, you know, chose the accountancy route, wanted to become an accountant and had some very good advice from a teacher at school that says, you know, I was going to go for this, the lower profession rather than the elite chartered accountancy route. And she said to me, why, why don't you just aim high? And then what's the worst can happen? So that's what I did. So I was very successfully trained as a chartered accountant and it went from there because after I got my chartered accountancy, went round few audits en route and thought, actually, I don't want to stay in the profession, I'd like to go out into industry and into working for companies, thought that a small family sized business where I could fit in with the people and help them would be great. Then I got the call saying, well, how would you like to be treasury accountant for Redland And Redland at the time, Redland plc was in about number 52 in the FTSE 100. And I thought to myself, they're not that small. And they said, well, the treasury team, the treasury team, small, so go along and have a chat. Really. That's where it took. It took off because I was just so excited and so interested in the work that treasury encompassed that I really never looked back from there. So I started off as the treasury accountant.

So I was going to say for people that don't know, maybe explain what Redland do and how that then impacted on, you know, the work you did in Treasury. You know, what was their.

Well, they were a multinational building materials company. I mean, their annual turnover was around two and a half billion. They had operations globally of uk, us, Europe and the Far east. And its UK head offices were in London. Had a Treasury team of about half a dozen people at the time. And that helped me because I really lent on the treasury people to learn the skills. Because I came in as an accountant looking at an interest rate swap and thinking, how do you do a mark to market value on that? How does that work? It was really kind of the team, there were quite. The team, there were quite elite in terms of they were pioneering at the forefront of the swaps market at the time and other sort of financial instruments. Within three months of joining Redland did a hostile takeover of another PLC company and then six years later became. Was defending a hostile takeover by Lafarge, the French building materials materials company, which they was unsuccessful, unfortunately. So during my time there, I got to see at the head office in the treasury and the finance function sort of like the big picture of companies and the strategies and as well as sort of learning my treasury skills, took my association to corporate treasury, did a little bit of work abroad as well. You know, there were different cultures within the organization as well, which I found fascinating.

Just diverting off for a moment, you say about doing the ACT exams. So that was really in the earlier days of the ACT exams. Now they're much more. More well established, you know, 20 years. What was it like then? What were they? Were they just, here's the exam, off you go and stuff like that?

No, no, not at all. I mean, I gained a couple of exemptions from being a chartered accountant looking at the corporate finance. And one story I've got, I went along to the lecture hall, the lecturer sort of had a set of accounts up on the board and he said, right, I want you to have a look at the ratios of this balance sheet, you know, and Tell me what the, you know, what you think the value of the company is. And so we all worked know debtors days and now all this kind of stuff on their balance sheet. And what he did, he took a big back mark and he goes right and he just scrolled across a lot of it and he said that's so wrong. He said that's historical cost accounting. He said that tells you nothing about the future value of the company or very little.

Yes.

And that was kind of wow. And again another big moment for me is where treasury is at this, looking at the future. Of course they're quite costly examples though.

No, well, it's.

Very good. I'm not, I'm not a natural exam taker either. If you want to progress in treasury then my one advice is that you, you need them.

Yeah. So you did that and then you were at Redland, your Treasury manager and then you moved on. What happened?

I did. Well, completely different company. So this is a London UK based property company, gained a large PLC, the fourth largest property company had assets 4 billion on its balance sheet. And so a very different perspective. So there was a lot of capital markets activity. They had very long dated debt instruments with very long dated swaps against them. And at that time the sort of investment property world was changing and MEPC wanted to develop a strategy whereby it sort of had business parks or owned business parks and almost managed the space for the business parks for individual tenants and turning over those parks, sort of stewing up the properties and then renting them out and having that sort of like turnover of tenants and building the parks and very successful at doing that, I have to say. So in my time there we had a lot of bilateral bank facilities which we renegotiated and then I was very fortunate to go into the capital markets world and raise the euro medium term note programme started off at a billion euros and then went to 2 billion. And at that time we could sort sourced some very cheap money from Japan. There was a time when a lot of the Japanese investors were in the market and crazy, crazy money because on the swap we'd do a currency swap on the back of that. So you'd have an all in sterling funding cost of some really low rate. So it worked very well for us, the medium term loan program because it's kind of investor driven. Rather than you going to the market and saying I want to raise, I want to raise half a billion, you wait and the investors are there and they say well actually I want to invest in 50 million, you know, 20 million or whatever. And so that was really interesting. And then what happened was the company itself was taken private and then it basically meant that there was less capital markets activity to do and the Treasury Department itself was no longer really needed. It got swallowed up by the sort of like the funds that bought the company. So then I was made redundant.

And then you took some time out and also lectured for coming back into Treasury.

Yeah, that was quite strange again through somebody I knew who was leaving, was halfway through doing a sort of SEMA course for adult students and said, well, we need someone to fill in. And it was an evening role. So I was on maternity leave looking after girls. So I did that. And what that taught me was whilst it's probably a very rewarding career for most, it wasn't really something that I wanted to progress. Great experience again though, I feel nothing ventured, nothing gained in life sometimes that was good.

And then you joined. Well, we were just talking before the show. My first ever school job, if you like, was at Woolworths and I said, I'm, you know, scarred by the turquoise and bright orange tie that you had to wear and everything else. But you joined it a few years later and you were the group treasurer of Woolworths, what was that like?

I joined it, fortunately, at the last stages of Woolworths existence. Really that was very interesting because as I was joining, it was September 2007 and they just completed an asset backed lending facility which was a great funding facility for a retail company. As you can imagine, all of the stock is bought in preparation for the Christmas trading period. A lot of it was very seasonal and therefore having having sort of money lent against your stock as it builds up then sort of like works from a timing perspective. So the facility was great. Unfortunately the markets weren't. The high street was not and, you know, it. It became a casualty. It had. It also had a logistics arm called Entertainment UK at the time, which was applying gains and the videos, etcetera, To Woolworths as well as other stores and the credit insurers as well at that time were also getting hit and running for the hills a little bit and all that put pressure on cash. So my, my real role at Woolworths was aside from sort of bedding down the new facility and how it operated and worked was cash management, it was cash forecasting, it was liquidity, it was. And it became more and more detailed as things got more and more difficult. And at that time, what I learned, I mean, I learned an awful lot from, I have to say, not something that you'd want to particularly repeat, but some things you just become a little bit more resilient and learn as a treasurer where your role and responsibility ends and where it starts and where it ends. And I think it's important to make the board aware of that and your boss, assist, CFO or whatever aware of that, because you are propelled into a spotlight situation when everyone is fighting, when everyone wants cash. So it was a really interesting time and like I say, not something else want to repeat, but a good experience, really good experience.

And you then moved on joining Glue Foods, who became Nomad, but you know, they were private equity owned and you talk there about cash and everyone sort of says to me, a lot of the time, oh, private, just about cash, cash, cash, cash. Where's the cash? Bring it out. And, you know, I want clarity, cash, clarity, great. You know, that's what treasurer does. But was it like that or, you know, how do you. Then you therefore worsened, joined this new group. What were they like?

Well, it was really interesting because after sort of, I suppose, yes, I joined in in February, so I had two months off where I was kind of recovering from Woolworths, if you like, went for an interview for Bird's Eye. So it's Bird's Eye, the frozen food group that everyone knows in the uk, Igloo Foods from Europe. And whilst it's private equity and everyone thinks of private equity as being a highly geared company, they did have lots of cash. And that was the one thing that I was sort of sighing a relief for. I was thinking, crikey, I'd like to have work for an organization actually, you know, is able to use cash. So that was great. But having said that, it's private equity at a world of which I'd never been in before and. And it was again, really interesting. It's so dynamically different from a PLC organization is what I found anyway. And it took a little while for me to get used to the ways of working in private equity. It is different and it's different in terms of the decision making, in terms of the board makeup, in terms of the focus. You know, with a PLC company, it's sort of bottom line private equity, it's about EBITDA multiples and cash. But, you know, you can make real differences within private equity. The decision making is very quick. So, yes, whilst focus was on cash, they did have cash and we did some several sort of refinancings, recapitalization, acquisition of the Findix Italy group as well. So there was lots going on within treasury, you know, there's a lot of debt to manage and FX as well. So within that time I was able to also hook up with the supply chain and purchase managers, for example, and trying to get a more more efficient way of understanding their FX exposures, something they hadn't looked at before. And I thought, actually, you know, we need to set a policy so that we do proper risk management here and that everyone understands. And so sort of presented a few board papers on it.

Awesome. And with that, so just, I want to get back onto that private equity thing. How does the relationship work, you know, with you as a treasurer? Is it that you. Because I've had mixed reports, I'm not specifically focusing on your private equity fund and stuff like that, but is it that you describe the relationship and how it was as a treasurer, how did he feel?

Well, I think you have to very much get the fact that in private equity the treasurer is in a slightly different. Has a slight different perspective. I think it's very much a case of you have to roll your sleeves up. There's no hiding under any rocks. Private equity run a very lean finance function. In fact, I know quite a few private equity companies don't have treasurers, for example, because they have the CFO as a count. And of course the PE houses themselves are very finance orientated. So getting the fleas rolled up and getting them to understand, well, what can you bring to the party? You know, what can you bring? Show them the risk that they have within the company. Are they hedging themselves outside or do they need your help in hedging or do they help. Need your help in the cash? Because cash is still key and the focus to them. So, you know, working capital management, finding liquidity solutions there. When it gets to the big refinancing and capitalisations, you'll find that the PE house will bring in their people to help you, but you can get involved as much as you like. I talk about quick decisions. We did a floating rate note. We issued a floating rate note in the market. We'd never done it before. Within 30 days from start to finish, we had to get the prospectus, the information memorandum, prospectus out and everything from start to finish. I remember having a call and they actually brought the time forward rather than extended it for us. I mean, it was, it was, yeah, 30 days, within 30 days from start to finish is quite something. And we got there and it was an achievement and it was great. So you do get help with the, with the higher end sort of funding and financing, however, sort of within your Day to day treasury job. It's very much up to you to kind of like, this is what I see risks are in the business and this is what we need to manage. And very much put yourself there in front of your CFO and help them.

To help them achieve and everything else and then shine and everything else. So you did that till 2015 and then you joined Britax. How did that come about or what happened?

I did. I mean, it was five years and I think you mentioned at the start of the call, I've got a quite a varied career. I think you sort of, you, you come in, you do your job, you get to a certain stage and then think to yourself, okay, right, what more can I add here or do I'm. Am I looking for another new challenge? And I think with me it's was the latter, it's looking for another new challenge now. So I then became the treasurer for Bruce. That's where I am now and that was exciting. They're a global manufacturer of car seats, like you said, and manufacturing based company, PE based as well. Location was good for me because it was out of London as well with sort of youngish kids still. That was quite attractive. So again, we've done some interesting things there. We did the rebase, the policy FX hedging structure strategy and I've become much more involved in a slightly smaller organization, much more involved in the regional FDS activities and, you know, become, you know, a sort of support for them there. And you know, again on the purchasing side with suppliers, we've got a huge supply chain out in China, which you can imagine in the last six months has been quite interesting times. So we have a big China partner out there and also a supply chain finance solution, something we put in place last year. Last year. And then unfortunately, Britax went through for some time, its revenue wasn't coming through. There was competition out there, various other, other reasons, and it actually went through a restructuring recently, a sort of debt for equity swap type arrangement now. So we have new owners as of.

The beginning of the year, just team wise. You've got some, I know you've got some members of the team there.

Yeah, it's quite a small team though at Britax and in private equity, like I say, you know, it was. It's really sort of two of you. It's very small and it's fine. I think with a bigger organization they afford more treasury people. I think at private equity, again, it's less. So it is important that, you know, you work well together. Being a small Team, especially with the, with the rest of the finance team as well. With your tax, you know, and your financial controllers.

Yeah, I think. And there's a lot of people listening actually today that have similar sized teams. So. So it's. I was just going to ask, how do you then, you know, sort of balance the activities? Is it that the other person is more day to day ops and you're sort of the biggest strategic stuff or a mixture of both or you just get stuck in or you know, how do you run it?

I mean I suppose I end up sort of like with the higher level presentational stuff to the board etc. And then the person helps with a bit more of a day to day task. But we do muck in. We have to. From a cover perspective, I have to do everything they do, you know what, what key is, as you say, with a lot of treasurers that are in smaller teams and organizations, it can be pretty lonely. You know, you have your own language, nobody else understands. Sometimes the things that you talk about, which is where the act comes in, especially for me anyway.

Yeah, yeah. Sort of. It's someone else to talk to, if that's the right way to put it.

Everything I think, you know, it has the fundamentals of knowledge and understanding for its qualifications but also regular up to date contacts via, you know, the webinars reach recently no one can excuse themselves from not attending the webinar from home, you know and support through a network as well as the keeping up to date with all the regulation especially you know, at times like now where we have lobbying with the governments around the support packages for companies. I think the act is very much at the forefront of discussions with the bank of England and the government and keeping abreast of what's happening out there is also key.

And when you using the act sort of angle, if that's the right way qualifications, you know, they've obviously supported you in your background and you are a contributor to the act and everything else. How key have you seen those? I know that when our first ever podcast years ago, a year and a half ago nearly and it was Sarah Jane at gsk she said, Mike, do every qualification you can because you never take away that bit of paper. And she supported that in particular in treasury as well as well as, you know, MBAs and things. You know, she was agnostic about what it was but she actually very pro Act. Are you similar? Do you think that's something you should do? I like the bit where you talked about actually doing accounting qualification versus Treasury. What Are your thoughts around that?

Yeah, I mean, it depends what you want to do. I mean, I did accountancy because I didn't really understand that treasury was out there, to be honest. A chartered accounting was a well established route for anyone with numbers that wanted to get a sort of professional qualification. And like I said before, I'm like Sarah Jane. I'm not a lover of taking exams. In fact, Mike, I tried to get away with not doing the full treasury exams with the act. I thought with the AMCT qualification I could probably just stay there maybe, but it wasn't to be. I think if you want to become a treasurer, you probably need. You need that piece of paper. You absolutely do. And having gone through and done the exams, I do understand why. I mean, it is a key skill and requirement if you want to be a treasurer. Yeah. I mean, getting as much qualifications as you can. I'm not sure, to be honest. I mean, the ACT qualification itself is great and it stands out there for if you want to be a corporate treasurer. Would I do an mba? Probably not. Because I believe that, you know, there's experience as well that you learn when you're on the job. And you don't stop learning either. You don't stop learning. Every company I've joined, I've learned a lot from them. And the interesting thing about treasury and what I love about being corporate treasury, is that the fundamental skills that you take take with you from company to company. It doesn't matter what industry you're in. The fundamental skills are the same around risk management, cash flow forecasting management, liquidity management, funding, etc. What's different is the cash flow drivers within each business, the strategy. It's like, what does that business do? Where does it generate its cash? How does that interpret into it, into my forecast process? That's what's interesting. That's why. That's what sort of gets me going. So I go across different industries and I think that's really key.

Yeah. I mean, just to clarify, she wasn't so saying, at the exception of all others, what she was saying is when people came to me say, oh, should I do an mba? Should I do act? She was just pro study and depending on where you wanted. You know, I get a phone call sometimes and people say, oh, should I do the ACT or should I do ctp? And I said, well, where are you going to work? And they're like, well, I might work in Europe or am I working? You know, ACT is much more recognized and known in the UK because lots of people have done it. But, you know, you go to Middle east and CTP is rapidly growing. You know, go to America, amct. They're like, what, ctp? Yes, it's just different. They're all great qualifications. So don't get me wrong, and I'm not knocking it, but, you know, it's a different one. And taking that and sort of. And perhaps then looking towards the future. We've just come out of this, or on the way out of this pandemic and everything else. I still see the cartoons, which I do love. And, you know, someone mentions Brexit, oh, thank goodness. You know, like new letters that we can go on about, rather than Covid, Covid, Covid. Going back into treasury and looking at the future of treasury, what are the things coming up that you think treasurers need to plan for over the next 6, 12, 18 months, 2 years? Is it right, let's cope with the crisis and what that's done? Is it. Maybe it's all of these. Is it Brexit? Is it developing markets? Is it it? What are the things that are on your mind as a Treasury?

A really interesting question because I think most treasurers have been rather busy of late sorting out state aid funding where they can, looking at their company's liquidity profile, getting through, as you say, this first initial phase. And what's interesting is what happens afterwards for me, because I can see that perhaps boards and companies are going to develop a different strategy. And I think a corporate treasurer just needs to adapt to the changing strategy of the companies that you're working for. Are they going to change TAC in terms of the industry they're in? Are they, you know, are they going to make a whole load of people redundant, Are they going to refinance? Because, you know, the state aid loans and the packages are going to in the next sort of 6 to 12 months, not least if we don't have a second wave pandemic towards the winter. So I think, you know, the treasury, it needs to adapt, really. I think as a Treasury, you just need to adapt and just change and just focus on making sure that, you know, your boss doesn't need to worry about cash every day. So you need to. Alternatively, if there is a problem, then it needs to be flagged. You can't afford to sit at your desk and, you know, and just work away. I think those days are long gone anyway, with the treasurer, you know, you need to feel strong enough to be able to challenge your boss and the board, perhaps, perhaps by making them realize that if you Go along this route and you come out. And maybe companies that come out of this and bounce back are going to have perhaps a working capital draw on the cash as revenue picks up. So looking at that cash flow profile is very key in making sure that you can see ahead, if you like, potential problems that you can then flag.

Cash is king again, but sort of not the only B. Got the rest of the chessboard as well?

Well, yes.

Yeah, I'll have that one after. I just made that up on the hoof. It was it. Because it is. It's funny because, you know, I'm doing these conversations every day with treasurers and I say, what's your. What's your hotspot? Or what's the hotspot for your company? And all of them are different. All of them are different except for. Well, the underlying theme is business capitalism. You know, it's, it's, you know, if we don't have money coming in, money going out, out without a business, you know, so cash is king, but not to the degree that it's the only thing, you know, you've got to look at your fx, you got to look at risk, you're looking staffing, you get fascinating. I love it. So that's. That's why I do it so much. So now, Julie was amazing on our Zoom podcast or Zoom Calls when we did our Bounce Back program. She asked some very insightful questions and everything else, and she gave some very good tips, I think, for people, and it sort of came out through her experience. What I wanted to do is sort of move on to a couple of tips you might have. If someone's looking at your LinkedIn profile and they're going back through and they're saying, oh, do you know what? That's a really, you know, really interesting that she's done the private equity move and Britax and, you know, you've done some other bits in there and Woolworths and survived it and all that stuff. What are the tips you would, you know, someone sits with you and they might be college leaver, they might be a treasurer and they say, julie, what do you think I should be focusing? Or what are the three things? Two or three things?

Yeah, that's a good question. Okay, so I think first and foremost, be passionate. It's got to be something that you really want when you're going for an interview, when you're going for a job, you know, you want to try and understand whether that company is going to fit. Do you want this, this role? Are you willing to learn because are you willing to think on your feet? Because treasury is a very varied profession. One day I could be knee deep in legal paperwork and deciphering clauses of debt contracts. Another time I could be building up my cash forecasting or modeling up interest rate exposures or doing a presentation for the Board on supply chain. You know, so you've got to sort of be willing to learn and adapt. And I think that's another point is that adapt and change as well with the environment. And also I would say that the ACT and the network that you get from the ACT and the education from an association, there's others obviously out there. I'm very UK biased talking about the associate corporate trainers, but, you know, it really is, you know, something that come on board with and the company should be supportive of you in terms of your training.

Awesome. And any others or, you know, do you think that's the passion to, you know, be passionate about it because it's not going to scare you off and then you've got a variety of work that comes with it.

Exactly. I mean, nobody's going to expect you to know everything. And I would say if I'm an interviewer, then I don't expect people to know everything, especially on the, on the more junior positions within Treasury. So, you know, you are getting a feel for the fact that they are passionate and willing to learn. I mean, no one is expected to know everything. As I said, I went to my different jobs, I mean, each and every one of them, I was like pretty clueless from day one. But you learn that's not a top tip.

Just go in and be clueless. No, it's like, no, no, no, no, no. But you've shown a passion. But as you say, that'll carry you through because you get it and you get Treasury. That's the key thing.

Absolutely, yeah.

Julie, fabulous. Amazing as I thought it would be. Thanks for your time Today we'll put Julie's LinkedIn profile in the show notes so you can connect to her if it's worth her having you in the network and vice versa. So, you know, as long as you're a Treasury related person, she wants to in this. She's been amazing today. Thanks for your time and you'll be great fun and much appreciated.

No, thank you very much.