karsten kohl / bearingpoint switzerland ag june 11/12, 2013

Short Presentation TitleJune 11/12, 2013
Commodity Trading & Treasury Integration
© 2013 SAP AG or an SAP affiliate company. All rights reserved. 2
Content
Challenges for Commodity Management Systems
Commodity Management in SAP
Where to find Commodities …
Trading High Tech Consumer
Aerospace
& Defense
Wholesale
Distribution
Automotive
Pharma
Agriculture
Content
Credit & Trade
Our Service Portfolio
in Commodity Trading
BearingPoint‘s Expertise in Commodity Trading
"BearingPoint has been awarded by SAP Switzerland as
Solution Partner of the year 2012, especially for its
expertise in Commodity Management".
BearingPoint has a record dating back to 2001 in cooperating with SAP in solutions for Commodity Management. Within this period BearingPoint has joined efforts with SAP in
• Delivering some of the first projects in Commodity Management
• Co-innovating in the design of the new standard solution
• Testing new functionalities
• Developing add-on functionalities
Jointly, SAP and BearingPoint will provide a strong understanding in both processes and the SAP solution that will contribute to making your project successful.
Content
Commodity Management Related areas
Back office • Invoicing • Confirmation • Stock valuation based on accounting rules
• Closing process
Operations • Scheduling • Transportation • Planning
Production • Planning • As-Is analysis
Risk Management • Exposure and position reporting
• P/L reporting • Valuation: VaR; MtM, simulations
Credit Management • Credit risk • Credit risk exposure • Trade finance (LC’s, guarantees)
Treasury and Cash
Legal and
• Environment
External
Systems
sources
Commodity Trading Management The requirements on a commodity trading system are highly complex.
The synchronisation of front office physical and financial commodity trades with logistics, Treasury and Risk Management is essential to establish benefits for the business, to get advantages within the commodity traded market and to be able to track and trace the single positions.
Integration of Commodity Trading within ERP system
Transparency along the entire supply chain real-time and group-wide monitoring of risk, liquidity, positions
Commodity Trading system serves as basis for being compliant
• Knowing the exposure of physical and paper positions in real time with a reduction of manual work
• End-to-end process
Business Values Process Advantages
Content
Commodity Management in SAP An integrated solution is necessary to have the full transparency of each position as well as supporting the commodity trade lifecycle.
The integration of commodity trading in SAP environment facilitates a seamless front-to-back office commodity management. Interfacing front office physical and financial commodity trades with SAP Logistics and SAP Treasury and Risk Management.
Purchase Contract
accounting
Exposures
Hypothetical
Trades
options
options
sources
The Commodity Exposure The Exposure allows the full transparency, track and trace of all paper and physical positions.
The exposure management is updated real-time and shows both positions: the paper as well the
physical positions; manual captured positions are considered as well. The analytic reporting tool
allows a more preciouses‘ planning and steering of risks/open positions.
Automatically updated
and/or volume changes
single positions, to turn axes,
drill-down, to aggregate per
free-definable criteria’s for
open position.
Exposure
report
Commodity Trading Management Reporting Comprehensive tools are available for different reporting purposes
• Ad hoc reporting point & click, unified databases, position, P&L, period, cash flow
• Reporting tools SAP Query, ABAP List, Other 3rd- party providers, Business Intelligence (BI)
• Result database Portfolio hierarchy e.g. by country, region, type of commodity, drill- down, historic results
• Management reports Positions, performance, ratios, compliance, risk exposure, profitability
• Data export Flat files, excel, automatic or manual
Risk Management
Commodity Products
• Commodity Futures contracts Traded on Exchanges
• Commodity Options Traded on Exchanges
• OTC Forwards
• OTC SWAPs
• OTC Options
Commodity Products – Futures
• Cash Settlement or physical settlement
• Matching with other Futures possible
Commodity Product – SWAPs
Payer: A fixed price is paid and a floating price (index) is received (Future or OTC)
Receiver: A floating price (index) is paid and a fixed price is received
Basis: A basis SWAP involves swapping one floating rate index for another
A commodity SWAP can be with any counterparty in which:
(1) a fixed-price contract for a commodity is exchanged for its
floating-price contract
(2) one commodity is exchanged for another, with an execution
date (due date) at a future point in time (or multiple due dates).
Commodity Master Data
Commodity Master Data
• New features available (delivery location and Incoterms)
Commodity Master Data – Price Curves
Commodity Master Data is represented as commodity price
curves.
•Future Style curves – For Listed Instruments and Published
commodity prices on exchanges (opening price or closing price)
•Forward Style curves – For OTC Products
Assign the Futures Class to the Commodity Curve
Enter Commodity Forward Prices based on the price quotation style.
Commodity Master Data – Forward Price Curve
Commodities Exposure Reporting
Commodity Reporting
• A special report exists for the reporting and valuation of commodity exposures – can combine
physical and paper risk positions
• In addition the Exposure Management functionality can be used for commodities
Subraw exposures can also split the commodity risk as well as the FX risk
Raw Exposures – set the price
Valuation - Quantities in Analytical Reporting
Logistics to Treasury Integration
5 Points to remember
1) An integrated solution gives you a real time view of your exposure to the market
2) Covers the whole commodity trading life cycle, including logistics, trading and accounting
3) Minimizing errors in the system by reducing manual work/intervention
4) Reducing your administrational effort
5) One system, less maintenance / interfaces.
© 2013 SAP AG or an SAP affiliate company. All rights reserved.
Karsten Kohl
www.bearingpoint.com

karsten kohl / bearingpoint switzerland ag june 11/12, 2013

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