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Unlock the Value of Your Balance Sheet with Supply Chain Finance APRIL 29, 2020 3:00 PM - 4:00 PM BROUGHT TO YOU BY SFNet Crucial Conversations Webinar Series Unlock the Value of Your Balance Sheet With Supply Chain Finance APRIL 29, 2020 3:00 PM - 4:00 PM Presented by: Paul Cronin, Head of Asset Based Lending and Restructuring Finance, Santander Bank, N.A. Chris Bozek, Head of Working Capital Solutions, Santander Bank, N.A. Robert Altman, Head of Trade and Supply Chain Finance, Santander Bank, N.A. Disclaimer Today’s webinar is for information purposes. It is open to SFNet members and outside participants, which may consist of media representatives, related authorities and other interested parties. Comments made by individuals participating in this meeting are not intended to represent the views of their respective companies. It is expected that information shared in this forum will be within the boundaries of best practices and based on publicly available information and in no way should be considered giving legal or business advice. This program is being recorded for the benefit of our members and will be available at SFNet.com along with copies of all materials presented. Chat comments will not be recorded or attributed to individuals. No participant may be quoted without express written consent by the individual. We invite participants to continue the conversation after the meeting by joining the SFNet Discussion Group at SFNet.com. © 2020 Secured Finance Network Brought to you by: 2 Disclaimer Opinions expressed are those of the speakers individually, not necessarily any Santander entity, are for general information and teaching purposes and shall not constitute securities or investment advice or offers of any kind. Santander is a marketing name for Banco Santander, S.A., Santander Bank, N.A. and other affiliated entities (collectively, "Santander"). Santander performs a wide range of financial, commercial, banking, securities, and derivative activities worldwide. Banking products in the United States are offered by Santander Bank, N.A. Certain products mentioned herein may be offered by either Santander Bank, N.A. or other affiliated entities. This document was prepared solely for informational purposes and may only be used as a working document for discussion. The information presented herein is strictly confidential and cannot be reproduced, distributed, or quoted by the recipient, used for any purpose, published, or included in any document without our prior written consent. Santander takes no responsibility for any damages resulting from the distribution or use of this document. Santander does not guarantee, explicitly or implicitly, the accuracy, comprehensiveness, or sufficiency of the information contained herein and Santander, its administrators, members, managers, and employees disclaim any responsibility for any loss or claim that might arise from the use of this document or its contents, which is intended solely as an introduction for the direct recipient hereof. This presentation does not constitute an offer, proposal, commitment, or understanding by Santander to lend, arrange, or underwrite any financing or purchase any security, but is merely an indicative summary of certain types of financing discussed herein. Any commitment on the part of Santander would be subject to comprehensive due diligence, internal approvals, negotiation, and acceptance of the final terms and conditions, and the execution of a written commitment letter and/or final documentation by all parties involved. This document was developed, compiled, prepared, and arranged by expending substantial time, effort, and money and contains valuable intellectual property and trade secrets which are the property of Santander. All right, title, and interest in and to this document belongs to Santander and cannot be used without Santander’s prior written consent. Santander does not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein is not intended or written to be used or relied upon in connection herewith, including, without limitation, for the purpose of avoiding U.S. tax-related assessments or penalties. The products described herein may not be suitable for all recipients of these materials. This information is not intended to provide, and should not be relied upon as providing, accounting, legal, regulatory, tax, or investment advice. Each recipient should independently evaluate these materials with their own accounting, legal, tax, and investment advisors. Santander Bank, N.A. is a Member FDIC and a wholly owned subsidiary of Banco Santander, S.A. ©2020 Santander Bank, N.A. All rights reserved. Santander, Santander Bank, and the Flame logo are trademarks of Banco Santander, S.A. or its subsidiaries in the United States and other countries. All other trademarks are the property of their respective owners. © 2020 Secured Finance Network Brought to you by: 3 The Expanding Applications of Supply Chain Finance Host: Paul Cronin, Head of Asset Based Lending and Restructuring Finance, Santander Bank, N.A. As head of Asset Based Lending and Restructuring Finance, Paul is responsible for growing Santander’s national ABL business serving Santander’s corporate and commercial banking clients. He was most recently at KeyBank, where his focus on improving client value, expanding debt capital markets support, and strengthening underwriting processes led ABL and Dealer Finance to significant growth during his tenure. Previous experience includes senior positions in capital markets, ABL and commercial banking at HSBC, RBS and ABN AMRO. Paul earned an MBS in finance from University College Dublin in Ireland, and is qualified as both a chartered accountant and a CPA. Speakers: Chris Bozek, Head of Working Capital Solutions, Santander Bank, N.A. As head of Working Capital Solutions, Chris leads a team that is focused on enabling businesses to streamline and digitize payment processing, manage currency and counterparty risk and optimize working capital. He delivers solutions to both commercial and corporate clients and has over 25 years of experience in global trade, supply chain finance, working capital management and electronic payments. Previously, Chris was head of Global Trade Product at Bank of America. He was appointed by the U.S. Secretary of Commerce as the inaugural Chair of the Trade Finance Advisory Committee, and holds a Masters degree in Finance from the Rutgers Graduate School of Management. Robert Altman, Head of Trade and Supply Chain Finance, Santander Bank, N.A. Robert leads Trade and Supply Chain Finance for Santander’s U.S. commercial bank. Based in New York, he has over a decade of experience in executing transactions in the global banking space. He specializes in structured trade transactions and is responsible for a variety of Santander Commercial Banking’s trade and supply chain financial solutions. Robert has held positions at HSBC and most recently Deutsche Bank, where he was Vice President of their Financial Supply Chain business. He holds a BA in Economics from Colgate University. Opinions expressed are those of the speakers individually, not necessarily any Santander entity, are for general information and teaching purposes and shall not constitute securities or investment advice or offers of any kind. © 2020 Secured Finance Network Brought to you by: 4 Covid-19 Reaction Pricing in traditional financing market is subject to a premium, Supply Chain Finance is not immune . Payments to suppliers remain key . Particular segments/industries are becoming riskier . Banks/Finance Providers are closely monitoring terms of SCF programs . Are program terms representative of the industry? . Size, Sector and Tenor matter Current market different than 2008 financial crisis • Supply chain is slowing and will continue • Need for working capital enhancement important if companies can initiate today, but also important to be able to initiate in order to restart economy © 2020 Secured Finance Network Brought to you by: 5 Cash is King – Now More than Ever Covid-19 Pandemic causing global economy to experience volatility not seen since 2008 Financial Crisis . Liquidity is top priority for companies large and small . Traditional financing to manage liquidity (revolving lines of credit) are drawn at higher levels as companies prepare to weather the storm over the next several months . Gov’t packages instituted to assist smaller companies with administrative cash needs . Larger corporates may have access to Commercial Paper funding, however, this market has been subject to its volatility and pricing premiums as well . Where does this leave small and mid-sized companies that may not have the levers and tools made available to large corporates? © 2020 Secured Finance Network Brought to you by: 6 Excess Liquidity – Where to Deploy Debt Paydown / Acquisitions Reinvest in Return Cash to Create Lending (and Divestments) Growing the Equity Holders Capacity Business Reduce leverage and R&D / Capabilities Organic Growth Share Repurchase cost of debt New Geographies New Products and Markets Dividends Create debt capacity Enhance asset value Improved ability to service long Infrastructure One-time payouts before sale term, strategic debt *Key focus in current environment © 2020 Secured Finance Network Brought to you by: 7 Getting Cash Early or Holding Cash Longer The most common ways of enhancing working capital are to minimize one’s cash-conversion cycle (Days Sales Outstanding + Days Inventory Outstanding – Days Payable Outstanding) . Shorten asset turnover days (DSO/DIO) . In the control of the Seller/Originator . In theory,
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