For Richard Walker, group treasurer of Nomad Foods, treasury and transformation go hand in hand. Transforming treasury at a key moment in the company’s journey has been Walker’s focus in more than one of his previous roles.
And today, fully supported by senior management, Walker is halfway through a comprehensive initiative to transform many aspects of treasury for Nomad Foods, which was formed only five years ago with the amalgamation of several well-known frozen-food brands.
While no two routes into treasury are the same, Walker’s career path is perhaps more unusual than most – both because of his legal background, and because his journey into treasury meant that he has only ever held group-level treasury positions.
At Liverpool University, Walker studied law, gaining a Bachelor of Laws (LLB) and Master of Laws (LLM). “As part of that, I did a thesis on foreign direct investment and expropriation of foreign-owned assets,” he says. “I always felt that I didn’t want to be a lawyer, and there was something about financial markets that interested me.”
After leaving university, Walker’s career began at a small fund management house in Liverpool, followed by a stint at an investment trust in London, focusing on securitisation. In 2005, he took the role of asset-backed funding manager at GMAC RFC, with a focus on structuring mortgaged-backed assets.
There he remained until 2008, when the financial crisis began. As Walker remarks: “That wasn’t a great time to be working in mortgage-backed assets.”
From there, Walker was ready for a change.
“At the time, I had some conversations with recruitment consultants to work out where I should go next,” he says. “I’m not sure I was set on treasury, but the advice was that while I had exposure to bank facility structuring and negotiation, asset modelling and cash forecasting, what I didn’t have was exposure to direct financial market derivatives.”
This was addressed in Walker’s next appointment, which was to take responsibility for fuel price risk management at Thomas Cook, and subsequently also for the full financial risk portfolio, including interest-rate, FX and commodity risk.
In addition, he provided principal treasury support to the group treasurer for all refinancing activity in the period 2011-13, including the company’s 2012 £1.4bn bank refinancing and subsequent capital markets issuances and equity offering. He was also lead on the treasury transformation programme.
During his time at Thomas Cook, Walker also wrote the teaching manual for commodity risk management for The Association of Corporate Treasurers (ACT), which was then taught and examined as part of the financial risk paper at the time.
After seven years at Thomas Cook, Walker was keen to move into a group treasurer role, which he duly did – first at logistics and supply chain company Marken, and then at Bridon-Bekaert The Ropes Group, a supplier of cords and ropes, which was at the time a joint venture. In both cases, the focus was on overseeing treasury transformation and refinancing ahead of a sale: Marken was acquired by UPS in 2016, while Bekaert took full ownership of Bridon-Bekaert The Ropes Group in 2018.
In November 2018, Walker moved into his current role as group treasurer of Nomad Foods – a frozen-foods company headquartered in the UK, which includes well-known brands such as Birds Eye, Findus and iglo.
The NYSE-listed company was formed in 2015, following the acquisition of the iglo Group, and recent acquisitions include Goodfella’s and Aunt Bessie’s. The company’s treasury team is centralised and comprises a treasury manager, senior treasury analyst and an intern, with technical treasury support provided from the financial reporting team.
Walker says his role at Nomad Foods is something of a departure from his most recent roles, which have tended to involve financing restructure within a stressed leverage environment. “The treasury function at Nomad is already very well established, but it needed to increase its level of sophistication to match the increase in size and complexity of the group,” he says.
One area of focus has been to streamline processes as a result of the integration of acquired businesses. “We had a number of companies coming together with prior differences in ways of working and policies that reflected the needs of individual businesses, but needed to be future-proofed for a group with the ambition of Nomad,” Walker says.
Consequently, a key focus for the transformation process has been on centralising activity and decision-making capabilities – first by reviewing the existing situation, and then by drafting a treasury transformation plan.
“We spent a lot of time working out ways of how we wanted our future state to look, from our capital structure all the way through to the processing of payment,” Walker explains.
“We were then able to identify and ensure full stakeholder engagement with a vision of what we wanted to do, with a heavy focus on automation and improvement of process, to allow us to become a true value-adding business partner.”
To achieve this, the treasury team also required support via further education and development, with much of Walker’s focus on making sure the team is both engaged, empowered and visible throughout the organisation.
“I want a treasury function that is seen to be bringing financial and operational value at all levels of the company,” he says.
This type of change doesn’t happen overnight, and Walker says the transformation is expected to be a two-year journey.
At the halfway point, many of the team’s goals have already been achieved: the company has secured a rating from Fitch, and has implemented Bloomberg to inform the valuation and hedge effectiveness of cross-currency interest-rate swaps.
New policies have been implemented, including cash investment and FX, with work ongoing regarding cash flow and currency forecasting processes.
“We have widened our banking group, and are taking some actions relating to capital structure,” Walker adds, noting that what he expects from the banking group is not only support for the company’s future needs, such as M&A, funding and credit, but also for the ability to help with internal process efficiencies.
“We aim to focus our time on value-adding tasks, such as the assessment of financial markets and mitigation of risk, with non-value-added tasks addressed where possible via system automation and standardisation.”
Another component of the project involves refining the company’s cash-pooling structure. “We had some cash pools that were not fully integrated, meaning we were not as efficient as we could be in terms of interest-cost optimisation or liquidity planning,” Walker says.
“Refining that structure also allows us to integrate future acquired businesses more easily.”
There was something about financial markets that interested me
The arrival of the COVID-19 pandemic has, of course, brought some challenges where treasury is concerned, although the frozen-foods sector is one that has seen greater demand during the crisis, with people spending more time at home.
“Our balance sheet is very strong and we hold a lot of liquidity, so from a COVID-19 perspective our story is probably a little different to a lot of other sectors that have had a tough time,” Walker says.
“But similar to many others, dislocated working is not easy, and the team has had to find a way of making sure we are connected both to each other and to the wider organisation.”
Despite these challenges, the transformation project continues apace. Still on the to-do list is the transition to IFRS 9 for hedge accounting, further improvements in end-to-end FX risk management, and implementation of a comprehensive programme to support the company’s supplier base, which will incorporate supply chain finance, dynamic discounting and corporate cards.
“So it may be that the largest suppliers are offered supply chain finance; mid-tier suppliers can access dynamic discounting – and the corporate card programme will cover lower tier expenses and other travel-related spend,” Walker explains.
While work was already under way on this project before the COVID-19 crisis began, Walker notes that its importance “has only grown in light of the liquidity challenges that may be faced within our indirect and direct supply chain structure – it comes back to how we see treasury as the business partner for many things, including procurement and working capital efficiency”.
Looking back at his career so far, Walker says that his legal training has stood him in good stead, particularly when it comes to navigating documentation.
“Documentation can be quite fulsome, whether you’re talking about a senior facilities agreement, bond indenture, intercompany funding, external guarantees or commercial contracts – anything where the first point of call might be to your internal or external counsel,” he comments.
“I have found it helpful to be comfortable with the details of legal documentation without needing to have counsel sat on your shoulder, as it were.”
In his current role, Walker says he particularly enjoys variety and the challenge involved in making change and promoting new ways of working. An important aspect of this is the ability to harness a positive team dynamic. “I have quite a heavy focus on people,” he says. “I have an incredible treasury team, and we work hard to challenge what has gone before, while remaining present and fit for purpose in what we do.”
Summing up the treasurer’s role, Walker says the treasurer should be expected to both own and be accountable for all technical treasury topics.
In addition, he says the breadth of the treasurer’s role requires comfort with topics as diverse as project management, legal, accountancy, sales, relationship management, commercial trade negotiation, strategy and others.
“To succeed, the treasurer requires a strategic mindset with a focus on detailed execution, and a strong commercial and people focus,” he concludes. “Above all, a high level of energy, optimism and resilience for the challenges that will inevitably be faced.”
What I value most about the ACT is… two things. It is the benchmark reference guide for all technical treasury skills.
Most of us have never had experience in some areas, and so it is always helpful to have a little guiding hand!
Secondly, in all the events, training sessions and networking opportunities that it puts together, the ACT brings together all treasury professionals to share knowledge and experience.
What I like best about treasury is… the variety and scope. Gone are the days of treasury being considered as a cost centre responsible only for making payments.
The modern treasurer should be seen as the custodian of several business risks and the interplay between internal business aspirations and an ever more complex external marketplace. In developing the wider role, the treasury function can become both a value creator and strategic business partner for all levels of the organisation.
The work challenge I would most like to fix is… inefficiency and resistance to change. We can all become settled in our ways and be comfortable with the way things are done, simply because they have always been done that way!
I am passionate about the people I work with, their engagement and the value they can bring. However, often that means they need to be empowered to look up, develop and implement new ideas and better ways of working, rather than becoming stuck in a rut that leads to disengagement.
2018–present
Group treasurer, Nomad Foods
2017–2018
Group treasurer, Bridon-Bekaert The Ropes Group
2014–2017
Group treasurer, Marken
2008–2014
Group head of financial risk management, Thomas Cook
2005–2008
Asset-backed funding manager, GMAC RFC
• AMCT (2014)
• LLM (1998)
• LLB (1994-1997)
Rebecca Brace is a freelance journalist specialising in treasury and banking
This article was taken from the August/September 2020 issue of The Treasurer magazine. For more great insights, log in to view the full issue or sign up for eAffiliate membership