Balancing Digital Aspirations While Addressing Risk Management Fundamentals: Observations From Citi Treasury Diagnostics

26 While the role of treasury differs by company, more than 80% of treasuries are involved in working capital management to some extent. 31% are held directly responsible requiring full visibility over their commercial business and supply chain dynamics. Only 19% reported that they were not directly involved. All companies that reported the use of supplier financing exhibited higher average DPO with consumer and healthcare business showing the biggest gains. WORKING CAPITAL MANAGEMENT: FINANCING PROGRAMS Held directly responsible and or significant oversight Ad hoc advisory capacity Not directly involved Treasury’s Role in Working Capital Management 19% 31% 50% 81% Working Capital Financing: Driving the Benefits 36% 36% 33% 18% 16% Sales of Receivables Supplier Financing Dynamic Discounting Commercial Cards Distributor/ Customer Financing Use of Working Capital Optimization Programs Companies That Adopt Supplier Finance Exhibit Higher Average DPO Measures Used to Evaluate Working Capital Improvement Approaches DPO of respondents that use Supplier Finance DPO of respondents that do not use Supplier Finance Consumer and Healthcare 73% 96% Energy, Power and Chemicals 52% 61% Technology, Media and Telecommunications 53% 66% Industrials, Metals and Mining 44% 58% Weighted average cost of capital (WACC) 41% Marginal cost of short term funds 41% Cost of long term debt 35% Internal hurdle rate 19% Other (cash cycle/ leverage ratio) 9% Minimize cost of goods (COGS) 7%