Structure

60 subsidiaries

Modules

Financial Status
Cash Flow Forecasting
Derivatives
RiskSuite

INTERFACES

SAP
XMAP
Planning tools

Risk reporting in TIP – The RiskSuite makes it possible.

About Rheinmetall Automotive

Rheinmetall Automotive AG is the management company of the automotive division of Rheinmetall. This division includes the air supply, emission control and pump segments as well as the development, manufacturing and after-market supply of pistons, engine blocks and plain bearings. The company employs around 12,000 personnel at 36 production sites in Europe, North and South America as well as Japan, India and China.

Status quo and objectives

The annual results of Rheinmetall Automotive are subject to exchange rate fluctuations due to the nature of its operations. Depending on the segment in question, exchange rate changes can be passed on to customers within three months or only four to five years later. This risk needs to be measured in order to be able to take appropriate action.

TIP implementation

A special, currency-differentiated exposure plan spanning a period of three years was prepared in order to measure the risk exposures. An appropriate risk horizon (delay until price increases can be passed on) was calculated for each subsidiary. The TIP RiskSuite module uses this to calculate the cash flow at risk using a computation module programmed by SLG. The results can be displayed at the subsidiary, sub-group and group levels, and can easily be analysed in depth by means of a report with a drill-down function.

Outputs

It is now possible to display the FX risk exposures of Rheinmetall Automotive.
It is also possible to analyse the origins of FX risks meaning that, in future, details will exist as to which currencies and subsidiaries the risks arise in.
Appropriate hedges and the consideration of correlation effects can also be tested.
Existing derivatives are taken into account making it possible to calculate risk exposures before and after hedging.

„TIP is a very smart system, not a standard tool, very easy to modify to reflect our corporate structures, extremely flexible and additional modules (FX, commodities, EMIR) can be added at any time – the Swiss Army Officers’ Knife for treasurers.“

Roland Preisler,

Director Finance & Treasury, Rheinmetall Automotive AG

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