Automation of a corporate treasury’s workflow

Mondelez International Inc. is an American multinational confectionery, food, holding, beverage and snack company headquartered in Chicago. One of the largest companies of its kind in the world, Mondelez had annual net revenues in 2024 of approximately $36 billion. Mondelez has operations in around 80 countries.

Mondelez’s treasury has become a leader in FX workflow automation, maximising efficiency while enabling the team to change focus from simply managing transactions to optimising risk management. Mondelez initially built a complete risk management framework, which was designed to respond quickly to market conditions. FXall plays a key role in this integrated framework.

Business challenge 

Companies looking to thrive in competitive markets are continually challenged by factors such as market volatility, economic and geopolitical uncertainty and the cost of hedging and trading. A lack of pricing transparency in certain currency regions, along with high hedging costs for longer maturities, can put multinational businesses at a disadvantage. 

As a growing company operating in multiple markets, Mondelez needed an efficient, reliable, comprehensive and scalable treasury function, where high levels of automation accelerate and simplify end-to-end workflows, improve performance and cut costs.

Workflow automation is an important way for the company to become more efficient, while accurate and reliable data is vital for forecasting and effective risk management strategies, which include the utilisation of FX options.

Lyubomir Apostolov, Regional Head of FX at LSEG in Zurich, said, “In the last few years, we observe an increasing reliance on FX option strategies amongst corporations as this client segment seeks greater flexibility in risk management and a more cost-efficient hedging alternative to traditional instruments like FX Forwards.”

Solution

LSEG’s FXall was chosen so that Mondelez could:

• Access a wide range of liquidity providers, including specialist emerging market FX options providers, across the large number of G20 and emerging market currencies they trade, to meet their liquidity needs 
• Ensure seamless integration with the company’s existing Treasury Management System, improving price transparency, increasing efficiency in the team and achieving cost savings
• Implement an effective FX options hedging programme at scale while enabling the treasury team to efficiently manage its FX options portfolio on a daily basis

Why LSEG FX?    

LSEG FX offered Mondelez a genuine collaboration, maintaining an open dialogue on the development of an advanced trading workflow suitable for Mondelez and other large corporations.

Access to Liquidity

The depth of liquidity, range of supported currencies, and the variety of liquidity providers were amongst the key reasons why Mondelez International chose to collaborate with FXall. 

Access to emerging market FX options liquidity was also an essential factor. This reflects the global footprint of Mondelez, with currency exposure in most of the 80 markets in which it operates. 

Ease of integration and an end-to-end workflow

Mondelez and FXall established a robust, scalable and flexible interface allowing seamless order upload from Mondelez’ Treasury Management System (TMS) into FXall for execution. 

An end-to-end workflow implementation ensures not only a direct trade download back into the TMS, but also an automatic trade confirmation with Mondelez’ relationship banks through FXall’s Settlement Center. It was critical that all systems aligned so that all transactions go through Mondelez’ TMS to ensure maximum efficiency and visibility. 

FX Options  

With FX options recognised as offering greater flexibility in terms of risk management, Mondelez took the strategic decision to implement a comprehensive FX options programme involving daily executions through FXall. 

The options pricing and trading tool was one of the key reasons why FXall was selected. Options Pricer is an integrated tool which allows netting, defining target premium or solving for strike and trading FX options strategies with or without delta hedge. 

This tool has allowed Mondelez to automate its FX options execution, giving the global treasury team an innovative capability to manage a large and complex FX options portfolio daily. LSEG continues to work in close co-operation with the team to provide additional enhancements and ensure that the FX options pricing and trading functions meet customer needs.

Adam Jarawka, Director Treasury Operations at Mondelez International in Zurich, said, “Our risk management framework and high levels of workflow automation have allowed us to increase the volume of FX options tenfold. This would not be possible if trading was still manual.”

The benefits  

The high level of automation which FXall has brought to the Mondelez treasury operation has largely eliminated the use of spreadsheets and time-consuming manual processes, freeing the treasury team to concentrate on other, higher value tasks. Without automation, it would be impossible for the relatively small team to execute the desired volume of trades.

By implementing FXall, Mondelez has seen better and more consistent pricing as well as a wider range of liquidity providers to choose from, which is particularly important in emerging market currencies.     

Automation of processes brings time-saving benefits and reductions in the likelihood of human error. Where errors do occur, the team has the time and ability to identify any manual trades and evaluate the cause of the error and the solution going forward.

Increased transparency along with more frequent and accurate valuations are additional benefits. Mondelez confirms that risk reporting and analytics have improved significantly, with automated statistics allowing the treasury team to measure their performance and more easily revise plans.  

The increased market transparency offered by FXall allows Mondelez to focus on managing overall risk rather than simply managing transactions, increasing efficiency and benefiting the company as a whole.

 

Looking forward 

LSEG and Mondelez International are working together to create an industry-leading automated FX trading service for corporate treasuries. 

With a goal of 95% FX transaction automation, Mondelez is continuing to refine its ‘best practice’ risk management framework. In parallel the company works together with LSEG to benefit from increased visibility across all assets, e.g. in the area of commodities, and it is exploring possibilities of adding AI components to the framework in order to identify trends more efficiently and further automate the processes.

The most recent milestone of the collaboration between Mondelez and LSEG has been the successful implementation of FXall’s Settlement Center, which enables FX options trade confirmation via SWIFT Network, premium netting and intelligent matching criteria, recognising the economics of different FX options.

The company’s ultimate goal is the implementation of a single LSEG platform which will link with Mondelez’ TMS and include LSEG Workspace, risk valuations, options calculator, trade monitoring, execution and pre- and post-trade TCA.