Innovation and adaptability
have enabled DLL to come through the global financial crisis and
move forward. Carlo van Kemenade, DLL’s chief commercial officer
for vendor finance, tells Claire Hack how.
Go deeper with GlobalData
Netherlands-based leasing and consumer finance provider De
Lage Landen (DLL) has experienced considerable change in recent
times, especially within the vendor finance team. Almost six months
ago, Carlo van Kemenade took the reins as chief commercial officer
for vendor finance. During the same period, William Stephenson
became chairman, Amy Nelson was made chief financial officer, and
Timothy MacCarrick was appointed chief operating officer. The
management reshuffle was part of a recovery plan to offset the more
than 50% drop in profits at the company in 2009, as the banking
crisis hit global markets. Van Kemenade says: “Through the crisis,
I was interim head of global risk management. We pulled the
executive senior management people from different disciplines into
one interim risk management function.
“It meant speedy decisions could be
taken because there was an appropriate executive there at a senior
level, with sufficient experience and expertise. We also
strategised with customers to prepare for different scenarios.”
Coming out of the crisis, van
Kemenade, who has been at DLL for more than 20 years, then became
vice-chair of vendor finance and CCO worldwide.
He says: “I’ve been working for
this company since 1990, back when De Lage Landen was still small
and starting to make its first steps into going abroad, in Belgium
and Germany.
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By GlobalData“Back then, De Lage Landen still
had consumer finance and factoring as well as leasing, and it was
focusing on growing abroad, as well as developing the vendor
finance concept.”
Now, present in 35 countries across
the world, the company is focused on “healthy growth”, says van
Kemenade.
“We’ve reshaped our strategy for
the next three years. There’s focus on healthy growth and growing
in our existing industry verticals. There’s also more focus on an
optimised business mix, increasing activities in agriculture in
particular, because it’s more stable, but more importantly,
aligning with the focus of [DLL’s parent bank] Rabobank.
“We’ve gone from being everything
to everybody, to clearly making choices and being more streamlined,
focused on developing certain industries and geographies based on
certain needs,” explains van Kemenade.
This includes being more discerning
in terms of choosing which regions to enter.
Van Kemenade says: “We try to
follow our vendors. If our vendors want us to move in certain
geographies and projects, then we can, but we wouldn’t go into
Malaysia, for example, for a vendor doing just a fewm. There has to
be a business case.”
In recent months, DLL has also
shifted to a new way of working in its head office, known as
Place2Be, which encourages staff to move around within departments
and never use the same desk twice in a row.
Van Kemenade explains: “Place2Be is
built on an open environment, on sharing knowledge and on creating
employment flexibility.
“It provides much more opportunity
for better communication and it also triggers discipline in terms
of the way we work with each other. It fits perfectly within the
development of De Lage Landen.”
DLL is well on the road to a
successful first quarter, says van Kemenade; March was a record
month for global vendor finance.
It is also on track to complete the
roll out of its single, global, standardised and automated
system.
“The global standard is now 85%
functional for the rest of the world [outside the US],” notes van
Kemenade.
It is not the case that DLL has had
an altogether easy ride since the global economy first went into
meltdown three years ago.
The company suffered a significant
dip in annual net profit in the wake of the economic crisis,
dropping 52.3% from €235m in 2008 to €112m in 2009.
“When the crisis hit Europe, it hit
hardest in Ireland, the UK and Spain to begin with,” van Kemenade
says. “However, despite this, and because of the multi-discipline
risk function, which I held for two years myself, we were able to
manage risk cost to a level that still resulted in an acceptable
profit.”
Profit climbed back to €201m in
2010 as pressure on the economy began to ease, and van Kemenade
maintains bullish confidence for 2011, saying it could well be the
company’s “most successful year in history”.
Nevertheless, there is a note of watchfulness at
DLL.
Van Kemenade says: “We are sharply
following and monitoring developments as we cannot be certain yet
that the economic recovery is sustainable.”
According to van Kemenade,
innovation and adaptability are crucial at DLL, as it works to
understand how its vendors cope with an ever-changing market.
He says: “There’s much more need
for flexibility. This might mean paying for usage – so cost per
copy, cost per print, cost per mile. If there’s higher usage, then
there are also higher revenues.”
Unlike many of his peers, van
Kemenade sees the impending introduction of the new lease
accounting standard as presenting potential opportunities, despite
the burdens it may place on both lessors and lessees.
“The new lease accounting standard will allow De Lage Landen to
make it part of its value proposition. We have a team of subject
matter experts working on this, and we’re already working with our
vendors on what this means for the landscape of financing,” he
says. “By being proactive, we’re working out solutions with
vendors.”
