As part of a new series looking at different treasury roles, Louise Tatham interviewed Ondrej Sehnal, Treasurer, Kiwi.com in November to discuss the unique challenges he faces as the company evolves from a small start up to a global business.
Six months on from Ondrej's initial interview, we catch up with him to see how his projects have progressed.
The air travel market continues to evolve at a rapid pace driven by continuous improvements, including technology developments. Kiwi.com, being a travel technology company, is at the forefront of these changes. The supply side of air travel remains difficult to predict. Though airline seat capacity is nearly at pre-COVID levels, there are significant stresses in the airline supply chain (such as aircraft being grounded due to engine reliability issues) that lead to network changes, cancellations and disruptions. These issues give rise to anxieties for travellers and why they really value the Kiwi.com guarantee promise.
At Kiwi.com we are constantly creating or evaluating new technology across all aspects of our business, covering flight ticket procurement all the way to refund processing in the event of cancellations. All areas ultimately touch cash and that’s where treasury steps in ensuring a robust, standardised, automated and scalable control environment around the company’s cash. Systems and automation are key to make it all happen in an efficient and controllable way. Recently the company finished implementing its treasury management system with system enforced processes that maintain alignment with operational risk policies and also provides a fast and secure payment platform thanks to connection to company bank partners via the SWIFT network.
The treasury is also an important stakeholder in deciding on key relationships with financial partners that can grow and support us over the next five to 10 years. Over the last two years we have secured a close group of banks as well as selected and integrated in payment and outpayment partners that will help us deliver our global ambitions. These relationships were built around highly competitive RFP processes to ensure all our needs were covered. We identified the best partners for the company and also delivered the best commercials.
Recently the company signed a committed credit facility amounting to EUR 40 million to support our working capital needs which is on top of a EUR 100 million convertible bond issued in 2022 from a preeminent global institutional investor. Our excess liquidity is AAA rated money market funds operated by blue chip partners. Our CFO has a mantra never to chase yields and ‘if it sounds too good to be true you can be certain it is’.
Lastly, we strengthened our risk management processes and introduced a Board approved FX hedging programme covering our Czech Crown operating expenses. Kiwi.com is a global company selling flights in over 150 countries and earning revenues in many currencies while the vast majority of our overheads are denominated in Czech Crowns. In recent years we have seen considerable volatility in CZK versus our functional currency EUR and therefore have removed some short term volatility and given greater certainty to our annual costs under this hedging programme.
Exciting times to be part of this journey and an invaluable experience!