Financial and Legal Report 2012-13: Quarter 1 (Jun – Sep): Executive Summary Key achievements and strategy analysis Project Description: Sustainable Financial Management of AI. Invest organizational resources towards AIESEC 2015 MoS achievement. Managing Legality of AI Impact on team purpose: Allow s AIESEC International to operate.
Budget – Quarter 1 Profit & Loss Overall € 25k surplus in quarter Costs in line with budgets Global Partner revenue is healthy but down from 12 months ago See P&L for quarter here (MCPs only) Cost control Expense lines generally on budget External Audit will probably be an expense this year which will be taken from AI operational reserves (around € 15k), due to ending of sponsorship of service Few or no unexpected operational costs in the quarter Revenue and sales Sales revenue € 27k above break-even budget for the quarter Projected sales result € 100k above minimum budget (down from € 250k last year)
Investments Quarter 1 investments made NPS Pilot phase € 5,5 k Strategic Project: Process Optimization - Better analysis menus for improved matching and supply and demand alignment: € 12k Business Development delivery (Y2B and partners’ dinner and corporate video): € 9,1 k Strategic Project: Online Presence and Engagement - PR/Marketing (student video): € 0.8k Strategic Project: Brand evolution – Redesign for visual brand elements: € 12k Global Strategy meetings [Brand, Talent Capacity, ER principles, Customer Experience Delivery GCDP, Steering Team]: € 15 k Upcoming: NPS phase 1 implementation: € 30 k Expansion investments: € 5-10k Long term evolvements: Under consideration renewal with TCS for myaiesec.net NPS Customer Feedback system in global budget around € 65k per year
Cash and liquidity Corporate Receivables € 187k as of 30.09.2012 (€ 69k older than 90 days) Improved situation from 12 months ago – still a focus Entities in debt: (payment over last 12 months compared to simulated year fee) Ireland:€ 20,590 (€ 5000 paid back; Simulated yearly fee € 5,596): 89% UAE: € 12,983 (€ 300 paid back; Simulated yearly fee € 4,223): 7% Botswana: € 2,865 (€ 1,400 paid back; Simulated yearly fee € 1,580): 88% Rep. of Macedonia: € 970 (€ 712 paid back; Simulated yearly fee € 1,394): 51% Cash flow: € 300,000 positive cash flow Q1 (mainly due to Member Committee Fees paid) Net cash end of Q1: € 2m (includes Global Funds and AI investments and reserves) Operational Reserves (end 11-12 fin year): € 1,171m (12 months operations)
Legality of AIESEC International Tax
No outstanding issues with Tax authorities Corporate Tax agreement process started with lawyers
Employment All employees legally working and residing in the Netherlands Articles of Association To be re-legislated and approved at IPM 2013 to be in accordance with AIESEC Way – were on hold due to various issues since IPM 2009 Trademark Global Trademark Survey shows large gaps in trademark registration of logo and name across the world Y2B trademark registration again a discussion on AI team would like repeated conversation with SG on it
Finance and Legality: Long Term Evolution towards 2015 Key strategy breakdown
Global ER principles revision Why? For AIESEC to be able to capitalize better on MNC market for GIP growth To align incentives of MCs and AI on global sales To harmonize products and pricing for global partners across markets for better delivery and faster growth through internal sales To avoid competition between AIESEC entities in sale to MNCs How? Pilot 1: Harmonized products and pricing in developed markets for consistent product delivery and sales Pilot 2: Lower margins and higher volume in fast growing markets to succeed in bringing current global partners focus to these areas and raise global partners from these markets Simulation: Research on the financial impact of any revision on entities particularly dependent on revenue from Global Partners What? From October to December, AI will pilot with the 11 entities (US, FRA, BEL, NED, GER, INDIA, CHI, PHI, MAL, INDO, BRA) for harmonized and regionalized pricing and delivery structure of Global Exchange Products to multinationals Will be tested both with current and prospective partners. Global Strategy meeting in December to evaluate and bring proposals for legislation. If successful, next steps will be to see how the standardized model can be implemented into the new Global ER principles and legislated upon at IPM in Serbia 2013.
Global Distribution Model revision The global distribution model defines how global fees (AI budget and other investments) are distributed between the Member Entities. Currently it contains internal factors (Exchanges, Local Committees, Individual Members) and external economic indicators (GDP/PPP per capita) Overall Strategy meeting April 2012 with framework for revised model that should contain following factors. o Members in TMP/TLP programmes o Realized Experiences in GIP and GCDP o External market potential of entity (student population) These factors are still to be adjusted according to external economic indicator GDP/PPP per capita (other factors are better in theory, but in practice prove hard to measure and find as objective) Current State Simulations for past 3 and next 3 years projected performance and growth to see the effects of these factors Decisions to be taken: weighting of the factors against each other Target Condition: A revised distribution model to be legislated by IPM 2013 Model should represent higher payment of entities with more ability to pay which are currently underpaying due to external factors and vice versa Would align overall investment ability of global plenary with specific entities ability to invest
Global Finance Legal Board During IC 2012 a Global Finance and Legal Board was established through legislation. It is established as a permanent virtual unit to provide constant and consistent support and development around Financial and Legal issues to the AIESEC network. It reports to AI VP Finance, but is run independently. It currently has 4 divisions: 1. Education: Training 2. Education: Consultancy 3. Standards 4. Statistics Work is starting as of the 6 October 2012. One or several physical meetings may take place to build capacity of the unit.