Lagardère Travel & Retail: Feedback

The Challenge

Lagardère Travel & Retail, a major player in transport retail, operates in many countries around the world. This increased international presence has increased its exposure to foreign exchange risks. In 2023, the company hedged €90 million in inter-company flows, which led to significant currency fluctuations, making the management of these risks more complex. Anthony Levy, Head of Duty Free Treasury at Lagardère Travel & Retail, found that exchange rate fluctuations created significant variances at financial close, impacting the accuracy of financial reporting.

This growing exposure to currency fluctuations highlighted the need for a more robust and reliable solution to manage currency risk, optimise currency conversions and reduce potential losses. Lagardère Travel & Retail was looking for a tool that would provide real-time visibility of its foreign exchange positions to effectively manage its multi-currency operations.

The Solution

Lagardère Travel & Retail turned to DeftHedge, which provided them with a SaaS platform capable of consolidating foreign exchange exposures, generating detailed reports on financial positions, valuing hedging portfolios, and evaluating gains or losses due to currency fluctuations in real time. Integration with Lagardère's systems, such as their Diapason TMS, enabled a smooth implementation, ensuring efficient consolidation of financial data and currency transactions.

According to Levy, the simplicity of the platform enabled Lagardère Travel & Retail's treasury team to adopt the solution quickly. ‘We were impressed by DeftHedge's ease of use and the ongoing support from their teams, which was key to a successful transition,’ explains Levy.

This visibility allows me to choose the ideal timing to come as close to, or even outperform, our budgeted rates.

The Results

Since implementing DeftHedge, Lagardère Travel Retail has enjoyed a number of benefits. The company has been able to monitor exchange rates in real time, enabling it to compare these rates with the benchmark rates in their annual budget and seize the best opportunities to convert foreign currencies into euros. This increased visibility optimised the timing of currency sales and enabled them to meet or exceed budgeted rates.

Before DeftHedge, Lagardère Travel & Retail often operated with limited visibility when contacting banks to sell currencies. Now, Anthony Levy can assess the exact exchange rates against their target rates in real time, enabling him to make informed decisions about the optimum time to execute transactions.

DeftHedge has also improved the transparency of banking interactions, giving Lagardère Travel & Retail a better understanding of the commissions included in the conversion rates offered by the banks, strengthening their negotiating position.

Customer Quotes: ‘Thanks to DeftHedge, we have a better understanding of our currency exposures and the ability to react quickly to market fluctuations, allowing us to optimise our hedging strategies,’ - Anthony Levy, Head of Duty Free Treasury, Lagardère Travel & Retail.

Key results:

• Better decision-making thanks to real-time monitoring of exchange rates.
• Optimised timing of foreign currency sales, maximising profitability.
• Rapid return on investment thanks to optimised management of exchange rate risks.
• Greater transparency in banking negotiations, ensuring competitive conversion rates.

Olivier Lechevalier, CEO of DeftHedge, also pointed out that ‘DeftHedge helps customers reduce information asymmetry with banks, thereby ensuring more advantageous exchange conditions.’

Overall, DeftHedge has enabled Lagardère Travel & Retail to effectively manage, control and optimise its exposure to foreign exchange risks, demonstrating the positive impact of the solution on its financial operations.