Case Study

Michelin Centralised automated solution improves efficiency and control over sensitive payroll payments

As the world’s leading tyre manufacturer, Michelin brings better mobility solutions to millions of customers around the globe.

Strategic AmbitionsMichelin is one of the largest tyre

manufacturers in the world, selling to

over 170 countries. Given the nature

of its business, it has a large

employee base of over 100,000

employees worldwide, with over

50,000 in Western Europe alone.

In 2006, Michelin embarked on

a project to reorganise its treasury

and centralise many aspects of its

financial operations including cash

management. Due to its sensitive

nature and separate local processes,

payroll was not included in the

original project. This meant that

Michelin were not yet able to reap

the full benefits of bank provider

consolidation, as it still depended on

a number of banks to make payroll

payments across the many countries

it operated in, each with its own

formats, platforms, reporting and

security standards.

Making payroll payments for its

local and expatriate employees

remained problematic for Michelin.

After consolidating and centralising

other functions such as Accounts

Payable (A/P), Michelin sought

a centralised solution for its payroll

payments through a single provider,

channel and file format.

Collaborative PartnershipCiti has a longstanding relationship

with Michelin and has deepened its

partnership with the company as it

rationalised its banking partners

across the region.

Michelin had worked closely with

Citi in their treasury centralisation

project, and a combined project team

had worked together to migrate all

of Michelin’s supplier payments to

a centralised, automated cash

management solution. For the next

phase, the joint Michelin and Citi

project team worked concertedly to

migrate its payroll flows to a central

solution with Citi, which required

diligent focus, due to the sensitive

and complex nature of payroll.

Citi’s Integrated Payment Services

allowed Michelin to consolidate and

centralise its payroll disbursements

across the region. Michelin sends

high volume salary payments across

multiple countries, including France

– its home market, through a single

file format and single host-to-host

connectivity with Citi. Michelin also

leveraged Citi’s WorldLink solution

to achieve a centralised salary

disbursements solution for its

international employees, which Citi

has integrated with Michelin’s chosen

third-party payroll provider for

seamless end-to-end processing.

Key features of Citi’s solution included

customised entitlements to maintain

confidentiality of sensitive payroll

information and authorisation

profiles to suit Michelin’s needs.

In addition, Citi designed and

implemented a payroll monitoring

service for Michelin to ensure timely

processing of salary payments

to employees.

Since implementation, Citi has

successfully supported Michelin’s

payroll payments for many years.

Global Transaction Services www.transactionservices.citigroup.com

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Delivering ResultsCiti’s highly integrated, end-to-end

technology solution has simplified,

standardised and automated

Michelin’s domestic and expat

payroll payments across the region

and harmonised it with Michelin’s

overall cash management structure.

Michelin’s centralised treasury group

know how much cash is available,

how much is needed to cover

payment runs and the amount of

excess balances that can be invested

or repatriated, due to having its

full regional cash management

structure, including processing of

sensitive salary payments, supported

through Citi.

Michelin now requires just a single

file format, which includes payroll

payments across multiple countries

and currencies to make domestic

salary payments to employees

across multiple countries. Using Citi’s

global platform reduced complexity,

increased visibility and control,

leading to operational efficiencies

and increased error-free straight

through processing. Additionally,

Citi’s unique payroll monitoring

service provides an extra level

of reassurance that Michelin’s

employees are paid on time,

every time.

“We have been very satisfied with

Citi’s reliability on these sensitive

flows overall. In partnership with

them, we have been able to build

a cost-effective and integrated

solution that has met our goals,”

says Paul Orsoni, Group Treasurer at

Michelin. “We look forward to

working with Citi, as regulations,

market standards and technology

evolve to enable further optimization.”

Paul Orsoni, Group Treasurer,

Michelin