Biotech & Medical
Biotech & Medical
Pharmaceutical Case Study
A pharmaceuticals distributor, recently acquired by private equity, was aware their systems were insufficient to provide visibility and process, but could not decide with confidence whether a Treasury Management System was a viable investment.
The main challenges were:
- Cash balance reporting, cash flow forecasting, liquidity management and FX risk management were unachievable within desired time frames.
- Their processes lacked a consistent sourcing and calculation process to achieve key actionable insights.
- A Treasury management system investment size and implementation timeframe would not produce enough return on investment and they were unsure of alternative options.
Rochford’s solution included:
- Rochford first isolated multiple workstreams for design and development within Excel that would have the highest value impact.
- We ensured stakeholders stayed informed of development work and implemented updated processes wrapped in the system across three continents.
- We continued to provide ongoing active management based on system outputs, from cash balance reporting through to M&A and Capex funding advice.
Outcomes:
- We now have a weekly Treasury reporting process and have reduced time spent compiling monthly Board reports by 85%.
- Rochford’s tools, processes and advice enable proactive cash management previously unavailable, eg funding M&A transactions through multiple revenue currencies while minimising trapped cash and required draws on revolver credit facilities.
BioTech Case Study
A biotechnology business, heavily focused on R&D
for years, was now experiencing rapid sales growth but was without a robust policy framework to protect against it’s also rapidly growing risk profile.
The main challenges were:
- Increasing cash flow forecasts of a publicly listed entity meant that the size of potential losses from otherwise typical market moves was rapidly increasing.
- The finance team and Board did not have direct experience developing an appropriate treasury policy.
Rochford’s solution included:
- Rochford consulted with the CFO and presented a proposed hedging policy to the Board for approval.
- We then worked with the finance team to execute an initial hedging strategy that ensured base compliance.
- Ongoing proactive hedging decisions are now advised by Rochford with an appropriate product mix to ensure compliance, which we report on a monthly basis.
Outcomes:
- Investors can encourage the Engineering, Sales and Finance team to focus on growing commercial opportunities with confidence their risk management program will scale alongside them.
- Heightened revenue certainty from a smoothed earnings profile has reduced the business’ cost of capital and risk premium applied by investors, generating increased gains to enterprise value.