Defining a medium-and long-term financing strategy

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Defining a medium-and long-term financing strategy

Interview with Adrien DUPIN de SAINT CYR, Cash Modeling user

About the company

 

Consisting of 17 regional institutions, EFS (Établissement Français du Sang, i.e. the French Blood Institute) manages activities relating to the collection, preparation, certification and distribution of labile blood products, and supplies over 1900 health care facilities (hospitals and clinics) throughout France. Its presence extends across the entire country, with 148 sampling sites and 40,000 mobile blood drives organised each year. Its primary activities involve blood donations, plasma donations and platelet donations.

Through the generosity of blood donors, the professionalism of its staff, and the efforts of a vast network of volunteers, it meets the needs of one million patients annually. EFS also provides the LFB Group with plasma that it uses to create plasma-derived medicines.

EFS is home to about 9,800 employees, and earned € 860 million in revenue in 2013

Adrien Dupin de Saint Cyr, Cash Flow and Financing Director

Background context and origins of the project

Financing at EFS: a complex equation

Over 90% of EFS’s revenue consists of fees regulated by the Official Journal, which leaves little room to manoeuvre in terms of changes to our fees. In a highly-restricted economic context, particularly with regard to health-related expenditures, fee adjustments are not made on a consistent basis, and access to external sources of financing remains limited. EFS has to focus on streamlining its costs and production processes in order to free up sufficient financial resources to ensure its ongoing development. So we have quite a complex equation to solve, and one which requires us to monitor our cash flow generation very closely in order to increase our share of self-financing.

We use CashSolve to manage our medium-term vision for our cash flow to optimise our investment horizons, and the longer-term vision for our strategic plan to make sure we’re maintaining a healthy and sustainable financial trajectory.

Why did you choose CashSolve?

When I arrived at EFS three years ago, there were short-term forecasts in SAP that gave us a good overview of our cash flow for a 6-week window, but we didn’t really have any tool to predict cash flow beyond those 6 weeks.

We didn’t want to use a spreadsheet-based forecast model due to the inherent limits of that approach: changing our assumptions and managing a library of huge and complex files would have quickly become impossible and significantly increased the risk of errors.

Why did you choose CashSolve?

We put out a public invitation to tender and a number of different bidders responded: audit firms, IT services companies and software publishers, including CashSolve. CashSolve was a perfect match for the functional needs we had identified, and the fact that it was already being used in other similar-sized companies was a decisive factor in our decision to go with CashSolve. I had also heard some good reports about it in conversations with treasurers who were members of the AFTE (Association Française des Trésoriers d’Entreprise, the French Association of Business Treasurers).

Cash flow and debt forecasts that play an essential role in decision-making

For the Executive Committee, it’s essential to have a clear view of the cash flow impact of the strategic decisions being made. EFS has to constantly re-examine its approach with regard to issues involving invitations to tender, financing and balancing our budgets.

For the EFS Cash Flow and Financing department, the top priority is to preserve our overall financial framework, and especially to minimise our financial expenses, by optimising our financing policy over a period of 3 to 5 years.

For external financial actors: we work with large French banks that require us to provide them with reports, forecasts, etc. We wanted a tool that would allow us to report on actual performance as well as providing useful modelling of future cash flows.

What are the main benefits of Cash Modeling for EFS?

  • A very powerful monitoring tool

Cash Modeling has a monitoring role that gives me a fine-grained view of the short and medium term. More than ever in the current economic context, visibility, prediction and reactivity are essential factors in the decision-making process. 

  • Extremely fast and highly reliable 

I’m impressed by the fact that we can produce highly reliable forecasts extremely quickly. There’s a tangible increase in our speed at producing different scenarios, leaving us that much more time for analysis. I also really like the tool’s modelling capabilities, especially when working with very large volumes of data.

  • A valuable tool for strategic decisions

Cash Modeling is also a tool for making budget-related decisions. It lets us refine our scenarios and talk with the Executive Committee and administrators about the strategic decisions we need to make.

  • A great tool backed by a great team

Cash Modeling also comes with its own support team. I’ve been very satisfied with the work of the CashSolve consulting team, their technical abilities, and their availability to listen to our needs. I also frequently use their e-learning videos, which are very well-made and provide a useful way to quickly develop my skills with many of the platform’s different features.

To conclude

Cash Modeling is a budget planning tool focused on cash aspects. It allows finance teams to refine scenarios and to talk with administrators and the Executive Committee about the strategic decisions to be made. Adrien Dupin de Saint Cyr, Cash Flow and Financing Director

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