Commodity Trading and Risk Management - SAP · “CPOs and Supply Management Leaders Drive Value Through Raw Material Commodity Management” by Gartner, Richard Adams, September

Rich Weiss & Rob Cilento

Commodity Trading and Risk Management

© 2017 SAP SE OR AN SAP AFFILIATE COMPANY. ALL RIGHTS RESERVED. 2

Customers Cross Section

Many customers have elected to move to SAP for Commodity ManagementCompanies in various stages of implementations• North American coffee roasting company

• Asian agricultural businesses

• North American food ingredients company

• North American sugar producer• South African precious metals refining and smelting company

� North American grain cooperatives� North American wholesale oil and gas distribution

� Latin American agriculture cooperatives

� European sugar manufacturer

� North American Poultry company

� Many Others

Customers live with SAP software� North American Agricultural Co-Op

� European consumer products companies� European metal converters

� European mining company

� Latin American grain processing companies� Central American mining company

� European petrochemical entity� Swiss-based oil trading company

Companies in staged implementations and going into live operations

� Global mining leader� Multiple North American Oil Refiners & Agricultural


Sample of Commodity Trading and Risk Management Customers

Cooperativa Agroindustrial Bom Jesus

Arterris

Apex Oil Company, Inc.


Complex Pricing for Commodities

• Commodity pricing engine

• Market price based

• Formula driven

• Quality characteristics

• Formula editor

• Reusable

• Security based roles

Customer Success


Aurubis AG: Excelling in price-risk hedging with SAP Commodity Risk Management

CompanyAurubis AG

HeadquartersHamburg, Germany

IndustryMill products – primary metals

Products and ServicesCopper production and recycling, alloys, strips, multimetal recycling, precious metals, sulphuric acid, iron silicate stone, electronic scrap recycling, and nonferrous metal

Employees6,500

Revenue€12.3 billion

Web Sitewww.aurubis.com

PartnerSAP Consulting organization

“The investment in SAP Commodity Risk Management paid off when Aurubis was able to comply with the European Market Infrastructure Regulation.”Thomas Goerdt, Head of Group Treasury, Aurubis AG

10MinutesTo conduct mass valuation for all commodity instruments, using internally sourced valuation, algorithms, and data instead of relying on external sources

7MonthsTo implement and begin supporting the hedging of 17 base and precious metals, completing the project on time and within budget

1.1MillionTons of copper production hedged using SAP Commodity Risk Management

30929 (14/08) This content is approved by the customer and may not be altered under any circumstances.


Nizi: Enabling transparency and revenue growth with SAP Commodity Management

CompanyNizi International S.A.

Headquarters Capellen, Luxembourg

IndustryMill products – metals

Products and ServicesDistribution of base metals, ferroalloys, and foundry products

Employees150

Revenue€1 billion

Web Site www.nizi.com

“With our ambitions to become a leading global distributor of metals, we went for SAP as the global leader in integrated systems to get a core infrastructure in place which would support our growth.”Ulf Berg, CEO, Nizi International S.A.

25%Increase in base metal trading revenue resulting from the new aluminum business

80%Less time to prepare ad hoc mark-to-market reports

3 WeeksTo bring a new commodity on board

29799 (14/04) This content is approved by the customer and may not be altered under any circumstances.


SAP Commodity Management delivers

SAP has a unique integrated end-to-end commodity

management, logistics, and ERP solution

SAP is taking next steps and believes in the power of customer

collaboration

SAP has delivered leading-edge innovations including

commodity risk management


The adoption strategy for an integrated solution that brings industry best practices will provide Customers a reduction in total cost of ownership (TCO). The TCO reduction is particularly affected by the reduction of maintenance cost of specific systems.

In a recent study, renowned analysts concluded that the TCO is typically lower than 20% to 30% for an integrated solution when compared to an equivalent combination of point solutions or isolated systems.

Our analysis, conducted with thousands of benchmarking records from SAP Users Association (ASUG), confirms this conclusion and indicates that IT costs tend to decrease as you increase the standardization and harmonization of systems.

Punctual solutions and internal developments

Source: Benchmarking ASUG/SAP

Harmonized platform

IT spending as a % of Revenue Reduces with Standardization

Lower total cost of ownership (TCO)

Why SAP?


SAP Commodity Management – analyst coverage

https://www.ctrmcenter.com/blog/vendor-news-blog/sap-commodity-management-update-2/“Commodity Management and ERP”by ComTechAdvisory, Gary Vasey, November 2015 (White paper)

“Perspective: A Closer Look at SAP Commodity Management“by IDC, Heather Ashton, September, 2014

“CPOs and Supply Management Leaders Drive Value Through Raw Material Commodity Management”by Gartner, Richard Adams, September 30, 2014

“A Closer Look at how SAP is Addressing Commodity Management”by IDC, Heather Ashton, July 31, 2014

“SAP and Commodity Management”by ComTechAdvisory, Gary Vasey, May 30, 2014

“Key Considerations for Managing Commodities in Your Supply Chain”by Gartner, Paul Lord, February 19, 2014

“The New Year in SAP-land: Selling Customer Success (Part I)”by EAC, Josh Greenbaum on January 14, 2014

Publicly available

Publicly available

Publicly available

Publicly available

Publicly available


Key links for more information www.sap.com

� Press releases- SAP Helps Companies Address Global Instability, Rising Commodity Prices (October 8, 2013)

- New Enhancement Packages for SAP® Business Suite Consolidate Innovations for Customers (August 20, 2013)

- New Round of Enhancements Leads SAP® Business Suite Software Innovation Strategy (November 7, 2011)

� www.sap.com

� Road map on SAP Service Marketplace (requires login data)

� SAP’s Release Strategy on SAP Service Marketplace (requires login data)

� SAP Service Marketplace (requires login data)

Training and education• Ramp-up Knowledge Transfer Learning Map on SAP Service Marketplace (requires login data)

• Commodity management training for customers, partners, and SAP employees

Thank you


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Commodity Trading and Risk Management - SAP · “CPOs and Supply Management Leaders Drive Value Through Raw Material Commodity Management” by Gartner, Richard Adams, September

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