With its focus now squarely on international vendor finance, DLL appointed three new members to its executive board. Marc Dierckx, Ab Gillhaus and Tom Meredith detail their new roles while providing insight into the direction of the company.
With operations in more than 30 countries, DLL is one of the major players in the equipment finance space and a recognized leader in global vendor finance. This time last year, the wholly-owned subsidiary of Rabobank had to contend with market rumors about its future, including speculation that the business was for sale. That notion was quickly dispelled, however, with the announced sale of its European car leasing business, Athlon International. This move clarified that both Rabobank and DLL were doubling down on the global vendor finance business.
Fast forward to December 2016. With the sale of the car leasing business finalized, DLL continued sharpening its vendor finance focus with the appointment of three new executive board members: Chief Financial Officer Marc Dierckx, Chief Risk Officer Ab Gillhaus and Chief Commercial Officer Tom Meredith. All three are DLL and Rabobank veterans with prior commercial experience.
New-Look Leadership Team
This common thread of commercial experience is not lost on CEO and Chairman of the Executive Board Bill Stephenson, who emphasizes that the company’s sales training program is available to all employees, regardless of their position.
“At our core, we are a sales and marketing organization that happens to have finance as its product. To have every single board member — whether it’s the CFO, CRO, COO, CCO or even the CEO — possess experience in sales and general management is an absolute plus for our company and for our customers,” Stephenson says. “I think it will bring a tremendous dynamic to our team and ensure that our customers, whether manufacturer, dealer, distributor or end user, are at the center of every decision and action we take.”
Chief Operating Officer Carlo van Kemenade is equally optimistic about the new leadership team and the future outlook of DLL.
“Along with our renewed focus on vendor finance, we have a strong and experienced team in place to steer our company in the right direction and help us achieve our growth ambitions,” van Kemenade says.
CCO Tom Meredith, who joined DLL in 2010, was previously president of the Global Food and Agriculture business unit. A 35-year veteran of the industry, Meredith formerly led the construction finance businesses at Deutsche Financial Services, CitiCapital and GE.
“Tom has done a fantastic job building the team and broadening our footprint in the food and agricultural sectors across our entire global network,” Stephenson says. “He has tremendous experience in all types of business, whether retail or commercial finance, and his statesmen-type approach to the business really brings that strong commercial aspect and oversight to the team.”
As CCO, Meredith’s primary responsibilities are establishing a strategy for the company’s approach to all of the industries it serves and looking for new ways to provide service solutions to these industries.
“My experience has been grounded in the agriculture and construction industries, but a lot of the things that apply to one business in one industry also apply to others,” Meredith says.
Another common theme the executive board members mentioned is DLL operates from the position that one solution won’t fit all needs. Take, for instance, the company’s decision to split the chief financial and risk officer position into two separate roles.
“If you look at the financial services environment over the last five to six years and the increased regulatory oversight, what worked in the past will not work in the future regarding risk, the importance of risk and the role it plays,” Stephenson says. “We felt it was important to have dedication in light of the new realities we live in.”
Ab Gillhaus, the new CRO, spent the previous 13 years as chief credit officer for DLL parent Rabobank but served on DLL’s executive board from 2000 to 2003, responsible for the company’s vendor finance business across the entire European region. A 31-year industry veteran, Gillhaus has spent the entirety of his career with either Rabobank or DLL, serving in the Netherlands and completing several stints managing different business units in the UK, Brazil and Australia.
“If you are in a risk environment where I was, it meant you were responsible for not only the largest credit decisions, but the authority of the individual operations,” Gillhaus says. “You get a broad view on how companies and financial institutions operate and perform.”
Newly appointed CFO Marc Dierckx joined DLL in 2004 and most recently served as deputy CFO. Prior to joining, Dierckx experienced DLL’s dedication to its commercial clients, having been one himself.
“Marc was the CFO of one of our customers in Europe, and he saw firsthand how DLL aspired to become a long-term and true strategic partner to its clients. He was outspoken about what we did well, but also candid on where our opportunities for improvement existed,” Stephenson says. “When we had an opportunity to bring him on board, I put him in the role of president of our Office Technology group, which gave him the commercial experience that will serve him well now as our CFO. He understands better than anybody the financial aspects of our business, but also complements that with a very strong view on customer advocacy and commercial development.”
During the initial 30 years of its existence, DLL was a company with a regional focus. Although it was active in diverse markets and in different countries, it remained tethered to this regional outlook. In the last decade, DLL has taken strides toward a more global position, which it is uniquely set up to accomplish compared to other major vendor finance and equipment leasing companies.
The company’s Global Account Management strategy provides its vendor partners with a single point of contact who helps manage their portfolio and business activity across the entire globe. “Our partners have consistently told us they view this as a strength, dealing with ‘one company’ even when working with DLL in multiple countries,” Meredith says.
The reshaping of the executive board is also part of this process, with each member having extensive experience and understanding of what it takes to compete successfully on a global scale.
Gillhaus may provide the most global perspective to the board, having worked for Rabobank and DLL in a number of roles and countries.
“If something happens in a certain part of the world, it’s good to have a view on what that means to that country but also to the institutions and corporates that operate within that country,” Gillhaus says. “My experience in these areas, I think, is definitely complementary to DLL, and our diverse portfolio, spread across multiple business sectors and geographies, continues to provide a distinct advantage.”
If Gillhaus is the most globally experienced, Dierckx is not far behind, having worked for companies based in South Africa, Scandinavia and Japan, while also speaking four languages.
“Looking back on my career, I think I’ve worked in very changing and dynamic countries,” Dierckx says. “If you look at our client base, it is rich and diverse, spanning from suppliers of software and services to manufacturers of capital equipment, both big and small. DLL has relationships with vendors in Europe, Asia and the Americas. That diversity in the business, and my desire to understand the differences, is what gives me energy.”
While van Kemenade, Gillhaus and Dierckx are based in the Netherlands, they are focused on the world outside of their home base.
“We are not a Dutch company. We are a global vendor finance company,” van Kemenade says. “Our perspective is global, our partners are global and our staff is distributed across a network of over 30 countries. Technology plays a key role in keeping us all connected and productive. We are truly a 24/7 global company.”
“During my original stint with DLL, the organization was set up differently, in a regional business model. At that time, we were already working on an international vendor finance business model, but it was not yet as mature as it is today,” Gillhaus says. “The company I returned to is truly a global player. I think DLL has become stronger in terms of the industries in which it operates, as well as the structure and maturity of its relationships with vendors. That is one of the reasons I was excited to rejoin this winning team.”
Meredith provides even further depth to the team with his work and experience in both the global food and agriculture and construction finance sectors.
“When I was the global president of the food and agriculture business here at DLL, it opened my eyes to the fact that one solution doesn’t always fit everyone’s needs. You have to value the differences and keep an open mind on how to work with people of different cultures, different business conditions and so forth,” Meredith says, adding that growing a global brand is more than just expanding internationally. “It’s looking at the new products and the new geographies that we may want to expand into, as well as planning for expansion within the countries we’re already in. We’re in more than 30 countries today, and I think there’s still a lot of room for growth in many of those countries. We will continue to sharpen our focus and develop plans to build the business in those markets.”
Dealing with Regulation
Stephenson says that DLL’s medium-term plan is divided into six pillars: delivery optimization, product development, digital transformation, strategic flexibility, organizational development and regulatory compliance. That last pillar can be particularly challenging, especially when mixed with DLL’s global appetite, but the new team was built with each pillar in mind. Separating the CRO and CFO positions into two distinct roles had a lot to do with keeping up with regulations (DLL previously consolidated these functions into a single CFRO role).
“The reason for the split is that the discipline of risk has continued to expand in both breadth and depth due to the regulatory environment in most of our key markets,” Gillhaus explains. “Requirements on Rabobank and in turn, DLL, continue to become more complex, which is the reason to separate this work and create specialized focus and expertise.”
To ensure that DLL remains compliant to increasing and constantly updated regulations, Gillhaus has made an adherence to best practices a critical part of his new role.
“You want to be the best in class? Well, then you should also apply the best practices in the industry and environment in which you operate,” Gillhaus says. “If you succeed at that, then the development of the business is more secure.”
Dierckx is keen on keeping a sharp grip on regulatory compliance as well.
“If you look at the regulatory impacts on this sector and our company in the last 10 years, it’s amazing,” Dierckx says. “So we are ensuring we are able to digest it all, not only the facets of data, reporting and modeling, but also making sure we have the right talent in place. If we do this well, it can also be translated, to some extent, into a business value.”
Dierckx’s desire to emphasize close attention to regulations stems from his experience during the Great Recession, when DLL was able to survive the wave of uncertainty.
“In the last 12 years, what has happened with the industry and our company is staggering,” Dierckx says. “In 2004, when I joined DLL, the market was flooded with money. There was high liquidity, new players coming in, many with low pricing and unsustainable residuals. Then we had the financial crisis in 2009, which made people realize that funding and capital was indeed a vital and sometimes scarce resource. It was a major reality check for many companies. I thought it was very interesting to have that transformative shift in our industry. And I proudly look back on those periods, and know that DLL truly showed its strength by continuing to be a key player in the market and standing by our vendor partners.”
What’s on the Horizon?
By all accounts, DLL is well-positioned for future success. Stephenson says the evolution from a company of three pillars — vendor finance, car leasing and financial services, which handles the domestic leasing and financing needs for Rabobank customers in the Netherlands — to a “pure play” vendor finance firm foreshadows growth both in terms of geographic presence and capabilities.
According to van Kemenade, “We are now able to focus the might of our organization, all of our resources and investments, on vendor finance. For example, we no longer require IT systems that can support consumer loans and car leasing.”
“It simplifies and sharpens our focus as a management team and as a company and enables us to focus on our core business and the verticals in which we have specialized knowledge built over the past 40 years,” Stephenson adds.
Much of this transition has been dictated by success on the commercial side. Meredith uses the food and agriculture business as an example, noting that while the industry is shifting from a culture of ownership toward more of a usage-based mentality, and the market for large tractors is down, DLL is able to quickly adjust and continue to grow. In this case, it might be via food processing and packaging equipment or via the financing of farm inputs such as seeds or fertilizers.
“We continue to grow, even in the down markets, which is a testament to our business model, and the goal is to keep it moving in that direction,” Meredith says. “One of the things I really enjoy about DLL is that it’s a pretty entrepreneurial company with a lot of room to grow and be innovative, to look at things differently than we have in the past. As we move forward, I think that’s going to be even more important because all of these markets are changing and we have to continue to evolve with our customers and look for new ways of helping them sell more products.”
With the anticipated growth, the executive board sees opportunities to add and develop staff across its channels and to reexamine its own financial needs.
“I think DLL will continue to play a leading role in a very fast-moving and developing market, not only from a product development perspective, but also in terms of geographic presence. We’re going to keep on growing — that’s important,” Dierckx says.
“One of the key elements of DLL’s success is that we rarely deploy a cookie cutter approach to the business of our partners,” Meredith says. “We go in and speak with our vendors, get to know them, get to understand their issues, their concerns and their opportunities. Then we create solutions to help them achieve those goals. That is what strategic partnership is all about, and why DLL continues to enjoy success.”
“With our new leadership team intact and the full support of our parent to grow our global vendor finance business, we look forward to enhancing our relationships with manufacturers, dealers and distributors across the globe,” Stephenson says. “Our value proposition remains unchanged. We will continue to focus on the business of our partners, specializing in their markets and helping them sell more products and services with finance and leasing. That has been the key to our success for more than 40 years and will continue to be for decades to come.”
Asset sale lease-backs are not a new idea. However, it is an idea that makes good sense today. Corcentric’s Patrick Gaskins and Mike Hamilton go over the basics to explain why this strategy might work to your advantage in current market conditions.
Moritt Hock & Hamroff counsel Theresa Driscoll takes a look at the recent Second Circuit Momentive decision and uses it to examine the importance of clarity in drafting loan documents and understanding what loan documents say, especially when a lender needs to enforce its rights.