Driving more profitability from the same business ATM Cash Management: Driving more profitability from the same business Presented by: Mike Plante, Head of Business Development Daniel Cramer, Senior Analyst

Presentation Overview 1) Introduction 2) Cash Management Cycle 3) Case Study: Bank 4) Case Study: Independent ATM Deployer 5) Key Points Presented by: Mike Plante, Head of Business Development Daniel Cramer, Senior Analyst

Introduction

1991 20,000 28 Countries About CMS $56BN CMS was founded 20,000 Sites managed including FX bureaux, ATMs, vaults, banks & shops. Industries we work with $56BN Cash ordered/sold by our systems every year ATMs Foreign Currency Financial Institutions Vaults Skilled team of consultants & mathematicians CMS manage sites across 28 Countries

The Assumption: The cash supply chain is a series of fixed costs Introduction Interest Rates Operation Choke Point Supply Chain Constraints EMV Cash Management Savings Phone Card Revenue DCC Revenue With the cost of EMV and the potential for rises in interest rates, revenue streams such as DCC and phone cards won’t make up for the expense. You have to look to your cost base: Identify costs that ATM deployers cannot alter. Assumptions are made that cash management is a fixed cost; more intelligent cash management will adjust it to a variable cost. Aim: Maximum availability at lowest possible cost The Assumption: The cash supply chain is a series of fixed costs Reality: Intelligent cash management allows you to turn your supply chain into a variable cost Cash management will be the single biggest impact you can have on your business in 2015.

The Assumption: The cash supply chain is a series of fixed costs ATM Fixed Costs Processing Fees Staff Equipment & Software Maintenance Comms Rent Insurance Intelligent cash management allows you to turn your cash supply chain into a variable cost. Cash Management? Utilities Security With the cost of EMV and the potential for rises in interest rates, revenue streams such as DCC and phone cards won’t make up for the expense. You have to look to your cost base: Identify costs that ATM deployers cannot alter. Assumptions are made that cash management is a fixed cost; more intelligent cash management will adjust it to a variable cost. Aim: Maximum availability at lowest possible cost The Assumption: The cash supply chain is a series of fixed costs Reality: Intelligent cash management allows you to turn your supply chain into a variable cost

Gain a competitive advantage Industry Benchmarking Comparing costs against your peers isn’t the right way to benchmark your business… Gain a competitive advantage

Cash Cycle Management

Cash Cycle Management Forecasting Traditional approach

Cash Cycle Management Forecasting Bank Cash Center Replenishment ATM Residual

Forecasting Forecasting Bank Cash Center Cash Center Rebanking targets Residual costs Replenishment Cassette management Residual Lead time analysis ATM

Global withdrawal limits Bank Forecasting Bank Cash Center Cash Center Global withdrawal limits Replenishment Lead times Residual Cash costs ATM

Cash Center Depot-by-depot performance levels Forecasting Bank Service level agreements Cash Center Cash Center Emergency cash replenishments policy Depot-by-depot performance levels Replenishment Lead times Residual Recycling ATM

Replenishment Forecasting Bank Performance management Cash Center Single ATM Schedule Comparison Schedule Options Simulations to optimize schedules Replenishment Forecasting Bank Performance management Cash Center Cash Center Prices per visit Route management Traditionally replenishment schedules are based on a 7 day cycle. What you really want is a schedule with greater flexibility. How can you forecast effectively when you don’t have a schedule? Proper schedule is vital to effective cash management Replenishment Simulations to optimize schedules Residual Time windows ATM

Proximity to alternatives ATM Type of ATM/site Capacity Forecasting Bank Availability levels Cash Center Cash Center Volatility of demand Proximity to alternatives Replenishment Risk policy Residual Denomination profile ATM

Residual Forecasting Bank Cash Center Cash Center Replenishment Example Residuals Reduction Residual analysis Residual Forecasting Bank Cash Center Cash Center Residual analysis ATM balance Replenishment Price per visit Residual Collection profiles ATM

Cassette management/auditing Cash Center Forecasting Bank Cash Center Cash Center Reconciliation Cassette management/auditing Replenishment Cost of residuals Residual Lead time analysis ATM

Areas of Control Forecasting Reduce your overall cost of cash Bank Cash Center Replenishment ATM Residual Forecasting Reduce your overall cost of cash Improve operational processes and remove unnecessary administration work Maximise cash availability Reduce cash balances Improve supplier service levels Alleviate the daily demands & pressures placed upon internal staff

Case Study: Bank

Case Study: Bank Mid-sized US bank Fully outsourced armored transport (multiple carriers) Internal cash management solution in place The Business High transport costs - Current solution does not seek out cost savings and efficiencies. The Challenges

Case Study: Bank Scheduling Improvements Rank Simulate Armored Simulate and model scheduling options Simulate Work with armored carriers to implement most efficient option Armored Carriers Cross-reference scheduling options with demand Demand Rank options by cost Rank

Scheduling in line with demand Case Study: Bank Intelligent Scheduling Scheduling in line with demand Reduce bandwidth issues Improve delivery success rates

Case Study: Bank Outcomes Increased profitability of operation Balance reductions of 30.5% Total supply chain cost savings of 27.8% Increased profitability of operation

Case Study: Bank Monitoring Intelligent scheduling is a continuous process Evolving simulations for changing demand profiles and constraints Armored transport monitoring and reaction. Depot and route service level monitoring

Independent ATM Deployer Case Study: Independent ATM Deployer

Case Study: IAD 100 ATMs Internal Armored Transport Limited Cash Supply Cost of Cash: 10% The Business Wanted to reduce costs, grow network without extending line of credit and increasing staff levels The Challenges

Case Study: IAD The Before and After of Supply Chain Optimization Forecasting Bank Cash Center Replenishment ATM Residual The Before and After of Supply Chain Optimization

Case Study: IAD Forecasting Before After Impact Forecasting the day before Before Forecasting Bank Cash Center Replenishment ATM Residual Daily reforecasting to monitor demand After Balance Reductions Cost Savings: All Supply Chain Costs Impact

Case Study: IAD Bank Before After Impact Going multiple times a week wasting time and money Before Forecasting Bank Cash Center Replenishment ATM Residual Designated days with optimized withdrawal amounts After Efficiency Increases Cost Savings: Note Supply Impact

Case Study: IAD Cash Center Before After Impact Excessive amounts withdrawn and lack of robust processes Before Forecasting Bank Cash Center Replenishment ATM Residual Excess reduced; Process implemented After Balance Reductions | Time Savings Cost Savings: All Supply Chain Costs Impact

Case Study: IAD Replenishment Before After Impact No clear indication of when the next replenishment would take place Before Forecasting Bank Cash Center Replenishment ATM Residual Replenishment on optimum route and with more advanced notice After Efficiency Increases Cost Savings: Armored Transport Impact

Case Study: IAD ATM Before After Impact Excess cash in ATM – High average balance Before Forecasting Bank Cash Center Replenishment ATM Residual ATM average balance reduced After Balance Reductions Cost Savings: Interest & Insurance Impact

Case Study: IAD Residual Before After Impact Excessive residuals Forecasting Bank Cash Center Replenishment ATM Residual Optimized residuals for each ATM After Balance Reductions Cost Savings: Banking & Interest Impact

Case Study: IAD Cash Center Before After Impact Lack of accurate reconciliation process Before Forecasting Bank Cash Center Replenishment ATM Residual Robust and transparent reconciliation process After Time Savings Efficiency Increases Impact

Case Study: IAD 36.0% 35.2% 34.0% Balances Costs Efficiency Balance reductions of 36.0% Costs Cost savings of 35.2% Efficiency Load reductions of 34.0% Pre cash management Post cash management Savings (%) Reductions Balances $848,908 $543,300 36% $305,607 Costs $141,227 $91,512 35% $49,715 Loads 5,564 3,672 34% 1,892

Optimization = A Platform for Growth

Platform for Growth Cash Resource An efficient cash cycle will enable network growth within existing constraints Cash Resource Additional capital for 49 ATMs Sample data requirements ATM details (location, name, security limits, customer account) Daily ATM withdrawals by ATM for 12 months Replenishment amount, by date, for the past 12 months Current scheduled replenishment days Lead time from ordering to replenishment Daily cash balances by ATM for 12 months Costs: Cost per ATM replenishment (scheduled and emergency fill) Cost for note supply Cost of rebanking Interest costs Desirable but not essential: Global level cash in network Monthly armored transport budget Monthly banking budget

Armored Transport Constraint Platform for Growth An efficient cash cycle will enable network growth within existing constraints Armored Transport Constraint Optimized replenishment schedule allowing bandwidth for 45 ATMs Sample data requirements ATM details (location, name, security limits, customer account) Daily ATM withdrawals by ATM for 12 months Replenishment amount, by date, for the past 12 months Current scheduled replenishment days Lead time from ordering to replenishment Daily cash balances by ATM for 12 months Costs: Cost per ATM replenishment (scheduled and emergency fill) Cost for note supply Cost of rebanking Interest costs Desirable but not essential: Global level cash in network Monthly armored transport budget Monthly banking budget

Interest Rates Stress-testing for the impact of interest rate rises should be a priority

Interest Rates Stress-testing for the impact of interest rate rises should be a priority

Interest Rates Stress-testing for the impact of interest rate rises should be a priority Potential savings of $250,000

Key Points to Take Away

Key Points to Take Away Cash management is far more than forecasting. Look at each element in isolation Create individual profiles for each machine in your network Use simulation techniques to stress test your supply chain Sample data requirements ATM details (location, name, security limits, customer account) Daily ATM withdrawals by ATM for 12 months Replenishment amount, by date, for the past 12 months Current scheduled replenishment days Lead time from ordering to replenishment Daily cash balances by ATM for 12 months Costs: Cost per ATM replenishment (scheduled and emergency fill) Cost for note supply Cost of rebanking Interest costs Desirable but not essential: Global level cash in network Monthly armored transport budget Monthly banking budget Cash management should be one of the key driver s for profitability!

please contact Mike Plante, Head of Business Development: Thank You If you would like to speak to CMS about this presentation or about the Free CMS Cost of Cash Audit, please contact Mike Plante, Head of Business Development: UK t. +44 (0) 1925 420 781 mplante@cashmanagement.co.uk www.cashmanagement.co.uk US t. +1 312-288-8431 mplante@cms-cashmanagement.com www.cms-cashmanagement.com