Commercial Financial Services: Industry Specialization and Solutions for Working Capital Issues. October 6 th, 2014

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Richard Anderson
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1 Commercial Financial Services: Industry Specialization and Solutions for Working Capital Issues October 6 th, 2014

2 Who we are: Vision Always earning the right to be our clients' first choice. Strategic goals To be the undisputed leader in financial services in Canada To build on our strengths in banking, wealth management and capital markets in the United States To be a premier provider of selected global financial services Values Excellent service to clients and each other Working together to succeed Personal responsibility for high performance Diversity for growth and innovation Trust through integrity in everything we do 2

3 Industry Accolades Best Retail Bank in the World by Retail Banker International Financial Services for Manufacturers

4 RBC s Capabilities Leveraged for the: Client Relationship Management Team RBC Royal Bank Financing solutions Investment solutions Banking operations Personal Banking RBC Wealth Management Investments Trust services Estate planning Private Banking RBC Capital Markets Private Placements M&A Public Debt Issues Asset Based Finance RBC Global Services Cash Management Securities services Custodial services Transaction services Global Banking RBC Insurance Reinsurance Creditor insurance General Insurance 4 Our Commercial Relationship Managers can leverage the considerable resources of RBC Financial Group to provide businesses with a full service partnership.

5 Industry Expertise Key to Client Service Supply Chain Not-for-Profit Real Estate Public Sector Agriculture Aboriginal Client Knowledge Based Industries Retail Goods & Services Business & Professional Services Health Care Professionals RBC s industry-specialized approach means we already speak the client s language. 5

6 Our commitment to you " We offer: Experienced manufacturing specialists who work with similar companies every day, and can provide relevant advice and financial solutions Commercial account manager will act as your single point of contact and leverage the entire RBC team of specialists to meet the client s needs Global capabilities to help you take your business around the world with confidence 6 Financial Services for Manufacturers

7 What s on your mind and how can we help? Accessing to capital to improve productivity and remain competitive in an increasingly aggressive environment " Term Loans and Leases " Commercial Mortgages " Operating Loans " Asset Based Lending (ABL) Maximize your cash flow and minimize costs & financial risk " RBC Express online cash management " Electronic Receivables (pre-authorized collections) 7 Financial Services for Manufacturers

8 What s on your mind and how can we help? " Letters of Credit Achieving success in global trade " Import, Export, Documentary Collections, Guarantees and Standby LC s " Lockboxes Managing the effects of a fluctuating Canadian dollar on your bottom line " Foreign Exchange Services " U.S. and other Foreign Currency Business Deposit Account " Forward Currency Hedging 8 Financial Services for Manufacturers

9 What s on your mind and how can we help? Business transition & succession planning " Advice for mergers and acquisitions Our mid-market corporate finance team can assist with acquisitions, divestitures and strategic options analysis " Business Succession Plan Having a business succession plan is key to protecting the future for Business Owners, their family and their business. Ask us for a copy of How to Succeed With Business Succession Planning guidebook. As part of the Business Owner s advisory team, we can help build their plan and support the business transition. 9 Financial Services for Manufacturers

10 Solutions to specific client issues Starts with understanding the company strategy and ability to generate cash 10 Lack of assets to secure necessary financing Cash-flow lending: Leveraged Buy-outs, Financing intangibles Increase margin on available assets (A/R insurance, guarantees) High leverage will not allow for traditional secured lending structure leading to higher costs Asset Based Lending Working with partners (i.e. EDC, BDC/FCC, Sub-debt lenders) to structure a unique financing structure Financing of foreign operations and/or projects Leverage existing assets in combination with LC from foreign banks and/or EDC guarantee to achieve borrowing under Canadian Opco Start-ups Use of CSBFL s, Shareholder guarantees and partner financing to enable credit facilities

11 Case Study Solutions to working capital financing of foreign receivables Specifics Logistics material supplier Client won a large foreign contract which effectively more than doubled sales for the year Required significantly larger financing of A/R and inventory Challenge was that A/R was overseas with specific payment term on the project which made traditional financing difficult Brought in our EDC partner to work out $4MM+ solution which: increased their Operating Line to match cash needs arrange performance guarantees (via LG facility) provides additional support for FX hedge risk 11

12 Disclaimer The strategies, advice and content of this presentation are provided for the general guidance and informational purposes only and are not intended to provide specific advice on operating a business. Not all methods described herein will be appropriate in all cases. Before implementing a strategy, you should speak to an expert about the particular business and create a plan which is designed to suit your requirements and to ensure that individual circumstances have been considered properly and it is based on the latest available information. Registered trademarks of Royal Bank of Canada. RBC and Royal Bank are registered trademarks of Royal Bank of Canada. All other trademarks are the property of their respective owner(s). 12 Financial Services for Manufacturers

Michael James VP Commercial Banking, RBC. Patrick Murphy Senior Account Manager, EDC. Julia Lee Account Manager, BDC

Michael James VP Commercial Banking, RBC Patrick Murphy Senior Account Manager, EDC Julia Lee Account Manager, BDC Contract signing 9 months Delivery 60 days Final payment Risk of non-payment (70%) Security