THE ROAD GOES ON

THE ROAD GOES ON

October 2014

THE ROAD GOES ON ...

01 | THE KLEYN GROUP

The Kleyn Group 04Family tree 05

02 | THE KLEYN ORGANISATION

Purchasing 06Workshop, Grounds and Logistics 06Sales 08ICT 08Marketing 09Organisational Chart 09Financial and Commercial Administration 10Management 10

03 | THE KLEYN MARKET

Strengths and Weaknesses, Opportunities and Threats 12Market 13Inventory 13Competition 14

04 | PAST, PRESENT AND FUTURE

History 16Concrete Plans for the Future 17The Road Goes On … 18

In the economics of today’s road transport sector, the second and even third or fourth phase of the life cycle plays an important role in the service life of a truck or delivery van.

The Kleyn Group, whose mission is to be the leading global distribution network for second-hand commercial vehicles, is currently the largest independent commercial enterprise specialising in European trucks and delivery vans. At this point in the life cycle of a commercial vehicle, Kleyn works as a partner for suppliers and buyers of second-hand vehicles. Every year, around nine thousand trucks, semi-trailers, trailers and delivery vans change hands through the Kleyn Group.

These vehicles are purchased from business partners (transport companies, fleet owners, leasing companies, dealers and, in recent years, from banks) across Europe and occasionally from suppliers outside of Europe. They are then sold to buyers in around 150 export countries.

As the link between supply and demand, the Kleyn Group works with a team of around 100 professionals (80 FTE), each with his or her own specialty and the expertise and

tools to bring together supply and demand and, in doing so, ensure the right quality, delivery time, administrative handling and service. Kleyn has a permanent stock of an optimal mix of trucks and delivery vans from various brands, types and price brackets, suitable for a wide range of uses and tailored to diverse groups of buyers in different markets.

The Kleyn Group has three active subsidiaries: Kleyn Trucks B.V., Kleyn Vans B.V. and Kleyn Services B.V.

Kleyn Trucks specialises in tractors, trucks, semi-trailers and trailers, while Kleyn Vans sells light commercial vehicles and Kleyn Services provides repair, maintenance and logistic support, among other services. Plans to establish a fourth subsidiary called Kleyn Trailers are at an advanced stage.

The foundation for the Kleyn Group was laid in 1919. In other words, the enterprise has nearly one hundred years of experience behind it. More important than the past, of course, is the future - and the future of the Kleyn Group holds excellent promise thanks to rapidly growing global marketing channels for high-quality European commercial vehicles.

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02THE KLEYN ORGANISATION

KLEYN TRUCKS BV KLEYN SERVICES BVKLEYN VANS BV

KLEYN GROUP BV

01 | THE KLEYN GROUP

that is made available to potential buyers. Digital pens on paper make it possible that the results can be accessed both buyers and sellers the moment they are written down. Kleyn refers to this as the ‘known quality’ concept, defined as clarity regarding the condition of all trucks and vans of-fered. To ensure that this system remains effective, Kleyn works together with TÜV Nord of Germany, which conducts bi-weekly inspections and random checks.

A team of fifteen mechanics in the workshop makes sure that all trucks and vans are ready for delivery. They also carry out the necessary work to render the vehicles ready for sale, as well as all overhauling activities. Although most defects are repaired prior to delivery, it can some-times be of greater commercial value to buyers to omit the repair work, since this may be less expensive to have done in their country than by Kleyn. It is also becoming more and more common for purchased vehicles to be delivered directly to the buyer from the purchase location, instead of being transported first to Kleyn. In this case, the vehicle undergoes a technical test and is prepared for sale at or near the purchase location, since the concept of ‘known quality’ also applies to trucks not delivered through the Vuren location.

The fully equipped Kleyn workshop can also adapt the vehicle body to specific customer needs, carry out APK periodic motor vehicle tests (Ministry of Transport tests - Kleyn has its own official inspectors), approve cooling en-

gines (two certified mechanics), and maintains close con-tact with the Dutch Department of Road Transport (RDW), which visits the company regularly. Customers often take advantage of Kleyn’s expertise to adapt vehicles to make them more transport-friendly, such as stacking the vehicles to lower the cost of transport to the export country.

GROUNDS AND LOGISTICSThe logistics team at Kleyn is responsible for transpor-

ting all purchased vehicles to the Vuren and other locati-ons, and dispatching the vehicles in consultation with the buyer. The most of the transport movements are done by own truck and trailer combinations. Kleyn also has a client car available to transport passengers. The grounds and ar-rival employees are also responsible for all internal logis-tics, which includes transporting vehicles to the washing location, workshop, photo studio and back again. It is also their responsibility to make sure that the inventory on the grounds remains in good condition and that the more than ten hectare large ‘outdoor showroom’ is properly stocked.

To compete successfully in an international market requires an organisation in which various disciplines are perfectly coordinated. The Kleyn organisation has various teams for its purchasing, sales, workshop, grounds & logistics, ICT, marketing, financial and commercial administrative activities. The daily management of Kleyn is in the capable hands of the managing director and his management team.

PURCHASINGKleyn purchases dozens of used trucks and vans every

workday. This is the responsibility of six buyers at Kleyn Trucks while, at Kleyn Vans, a staff of two handles purcha-ses of light commercial vehicles. An important percentage of purchased trucks originate in various Western European countries, from the Netherlands, Belgium and Germany to France, Italy and Spain. The number of vehicles from new EU member states is also on the rise. Most vans are purchased in the Dutch market and, to a lesser extent, in Germany, Belgium and France.

Short communication lines between buyers and the rele-vant board members and sellers ensures that Kleyn buyers always have a clear overview of the market, are able to appraise the value of a second-hand commercial vehicle quickly, and can get straight to business. Kleyn’s Manage-ment Information System (MIS) plays an important role

02 | THE KLEYN ORGANISATION

in this. It offers buyers (and sellers) an up-to-date over-view of current inventories, vehicles ordered but not yet received, purchasing prices, recent selling prices and other relevant information. Wherever Kleyn makes its purchase, the goal is always to create and maintain a good relati-onship between important parties on the supply side and Kleyn employees. Years of experience in these markets has enabled Kleyn to establish a solid reputation among pro-viders where it concerns transparent business transactions and proper financial and administrative procedures. Its size makes Kleyn an excellent partner to large-scale fleet ow-ners that prefer to work with a regular buyer.

WORKSHOP, GROUNDS & LOGISTICS With a total staff of 48 (around 35 FTE), the Workshop,

Grounds and Logistics departments, which all fall under Kleyn Services BV, form the technical and logistical heart of the Kleyn Group.

THE WORKSHOPThe used vehicles purchased by Kleyn are transported

to Vuren, where a technical team subjects the trucks and vans to a quality inspection in the workshop and, as part of the ‘arrival procedure’, washes, polishes and photographs them. The vehicles are then evaluated and tested for all aspects important for future users. Tablet computers are used to record the test results in an inspection report

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SALES Once purchased, all trucks and vans from Kleyn’s stock

are offered for sale to buyers around the world. A team of 18 salesmanagers has a network of business ties that has already grown to 150,000 buyers and potential buyers. Intensive contact is maintained with many of these business partners, with every sales representative visiting his or her market area at least once every quarter to ensure that Kleyn is always up-to-date on the current demand for various vehicles in a particular area and to assess how that demand will develop in the short term. As with the purchasing departments, the sales departments also boasts employees from a wide range of nationalities and sales professionals who speak the languages of their markets, so that they can conduct business with buyers of Kleyn Trucks and Kleyn Vans in their own language.

Buyers have several options when contacting Kleyn. The continuously updated website (with webcam), which attracted more than 40.000 visitors a week (appr. 30% are new visitors), always shows the most recent vehicles on offer and the latest special offers. Market and customer knowledge acquired through the years has put Kleyn in a position to offer vehicles actively and in a targeted fashion. This is done through sending specific mailings with special offers in keeping with the preferences of the various buyers.

Every day, ‘New in stock’ e-mails showing ‘Today’s new arrivals’ to those business partners who have indicated an interest. The offers are segmented by country and/or type of business relationship. For example, vehicles are only offered in Russia that can be imported in compliance with current legislation and regulations, and brand dealers in the clientele portfolio are only offered ‘their’ brands.

As with purchasing, Kleyn has also built up an excellent reputation for its sales service, one that contributes significantly to the organisation’s continuity and growth. A transparent approach to conducting business, the ‘known quality’ concept and after-sales service are only a few of the reasons why numerous customers come back to Kleyn time and again.

ICTThe Kleyn ICT Department is of vital importance

for Kleyn. The staff of three is not only responsible for keeping the Kleyn network ‘in the air’, but also for keeping all systems fully up-to-date, including three important IT pillars: ERP, CRM and MIS packages.

The ICT team also devises and builds commercial software applications that allow Kleyn to stand out among the crowd. An example of this is the APP currently under development that enables customers to track the location of the vehicles they have purchased.

OPTIMAL MIX OF PURCHASING-DRIVEN SELLING AND SALES-DRIVEN PURCHASING

Considerable attention is devoted to ‘purchasing-driven selling’ and ‘sales-driven purchasing’ within the Kleyn Group. The Kleyn Group’s MIS plays an essential role in this. Kleyn buyers each work with an individual purchasing budget, which they access via the MIS. Within that budget, their buying limits are determined in part by the value of unsold vehicles in ‘their’ stock. In addition to a salary, they also receive a bonus, based primarily on the gross margin they have earned for the company. They can also lower the price of vehicles that have been in stock for less than thirty days if they deem this necessary (after 30 days, the decision rests with management). This system makes it possible for buyers to ensure that sellers can sell the vehicles at market-going rates.

The sellers are in daily contact with buyers, chiefly those they know buy vehicles of interest for their specific market. Sales and deliveries are updated online and in real time in the MIS. Kleyn buyers can access the sales section of this system and can keep track of both their own performance as well as that of their colleagues. Their bonuses, which are calculated and paid out every three months, are based directly on quantities sold.

The non-commercial supporting staff also works with a bonus system. This system was developed in 2009 together with Deloitte and is based on the total number of vehicles delivered by Kleyn, combined with specific tasks assigned to employees. This bonus is paid out on an annual basis.

ERPIn 1998 Kleyn implemented the One World (JD Edwards)

ERP package, which, at the time (Kleyn was the launching customer) was custom-made for Kleyn. At this point, the commercial (including inventory management) and financial administration were fully integrated. One World, currently Oracle, still forms the core of the Kleyn system, naturally after the necessary adaptations and updates have been made. Wincar (Reynolds & Reynolds), which if fully compatible with One World, is also used for workshop administration.

CRMIn 2005, One World was linked to a new CRM package

from Microsoft. Since then, all of Kleyn’s 50,000 business partners can be finely segmented based on various criteria and products can be offered selectively to these partners.

InternetKleyn launched its first website (kleyn.com) in 1995. In

2010, the fifth version of this site was introduced. It goes without saying that the latest version is more advanced than the previous ones. It is now even possible to buy and pay online. And also this year our website has been updated.

MISKleyn implemented a Business Intelligence system

for management information (MIS) in 2005. This system continued to be developed in-house and is currently a 24/24 application of the company intranet, where not only the board of directors, but also the management of every department can access all key performance indicators in

real time. This gives the various Kleyn departments their own ‘power steering’.

MARKETING With its staff of five, including a database specialist, the

Marketing Department makes sure that Kleyn remains clearly visible in both ‘new’ and ‘old’ media. ‘Old media’ refers to a wide range of global advertising methods, including ads in local papers and trade shows, often combined with targeted sales campaigns. ‘New media’ refers to CRM activities, including database management, mailings and online customer marketing. The marketing staff works together closely with ICT, making sure to create greater visibility online through SEO (Search Engine Optimisation) using individualised partner data from the CRM system and the data on markets and market shares (based on Dutch export figures) entered into the MIS system monthly. This department is becoming more and more important. It is our ambition to separate this department in four sections: online marketing, marketing intelligence, web technology and data science.

08 09KLEYN GROUP BVGeneral Manager Dave Nijssen

KLEYN TRUCKS BV

WAREHOUSES

PLANNING DRIVERS PLANNING

MECHANICSON-CALL/DRIVERS

ARRIVALS

ON-CALL/HOLIDAY HELP

WORKSHOP GROUNDS LOGISTICS

KLEYN VANS BV KLEYN SERVICES BV

EXECUTIVE SECRETARYE-COMMERCE/

MARKETING

FINANCIAL ADMINISTRATION

COMMERCIAL ADMINISTRATION

RECEPTIONISTS

ICT

FINANCIAL AND COMMERCIAL ADMINISTRATIONFinancialThe financial administrative team of three is responsible

for all financial accounting and record keeping for the companies in the Kleyn Group, including drawing up monthly reports and preparing annual accounts. The department also takes care of payroll records, personnel administration and handles the insurance portfolio. Another important task is to take care of all payment transactions involving the buying and selling of vehicles, including documentary credits.

CommercialThe commercial staff of three sees to a wide range of

administrative activities involving the vehicles, including export documents, registration, license numbers and various permits. The department also maintains contact with the Department of Road Transport of the Netherlands (RDW), since Kleyn issues license numbers personally, as well as Customs. Cash transactions - down payments and cash payments for vehicles - are also handled by this department.

MANAGEMENTThe management of the Kleyn Group is in the hands

of Dave Nijssen, managing director, supported by his management team: manager Purchase Trucks & Trailers - Niels van Kooten; manager Sales Trucks & Trailers and Vans - Bob van der Laan;manager Finance & Control - Gerrit Stuurman; manager ICT en E-Commerce - Bart Deenik.

The Kleyn Group manages the three subsidiaries: Kleyn Trucks B.V., Kleyn Vans B.V. and Kleyn Services B.V.

Dave, 42, is married (four children) and, after completing secondary school and attending IVA, spent 17 years working for Kleyn, originally as a salesman in the Russian and Middle East markets, a position he combined with his purchasing activities. He then became the director of Kleyn Trucks BV and, since early 2007, has been the Managing Director of the Kleyn Group.

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03THE KLEYN MARKET

MARKET

Total exports trucks and trailers between EU countries and to countries outside the EU:

2013 361,000 2012 380,000 2011 323,000 2010 310,000 2009 298,000 The Netherlands is the second largest exporter in the EU after Germany. This may seem surprising considering the number of vehicles with Dutch license plates on the road, but is a direct result of the fact that huge numbers of vehicles are imported into the Netherlands for the sole purpose of export.

Total exports from the Netherlands worldwide:

trucks vans 2013 45,700 34,200 2012 43,800 33,800 2011 40,700 30,500 2010 37,300 26,200 2009 35,300 22,000

Kleyn’s percentage in Dutch truck exports has fluctuated in recent years in numbers between 12% and 15%. The financial market share fluctuates because of the higher average prices between 16% and 20%. Most exports are made to Eastern Europe, South America, Africa and the Middle East. Interestingly, the top five export markets involve different countries every year.

On both the supply and demand side, the markets in which

Kleyn Trucks and Kleyn Vans are active have experienced significant fluctuations in both supply and demand. Since developments on the demand side in particular are difficult to predict, it is important for Kleyn to remain distinctly visible and accessible worldwide.

Kleyn aims to acquire a market share of at least 15% in

trucks and trailers and 5% in vans in every Dutch export markets with an annual total of more than 250 vehicles. Kleyn Vans is a major player in the home market of the Netherlands. Even after a major increase in the number of vehicles sold, Kleyn Vans continues to sell 50% of its vehicles in the Netherlands. The situation is different for Kleyn Trucks, with 10% of turnover being achieved in the Netherlands. The remainder of vehicles sold is destined for export.

INVENTORY Maintaining a large inventory is a unique selling point

for Kleyn, but naturally involves risks. Reason enough for the Kleyn management to devote ample attention to inventory and value appraisals. In the MIS, all inventory can be tracked online and in real time. This involves all vehicles bought but not yet received and all unsold and sold vehicles within the company. An important indicator here is the number of days on lot for sold and unsold vehicles. The inventory and inventory mix are a daily topic of conversation between management, buyers and sellers.

Voor de voorraad wordt een streng afschrijvingssysteem

03 | THE KLEYN MARKET12 13

STRENGTHS AND WEAKNESSES, OPPORTUNITIES AND THREATS

Strengths: - Largest brand-independent dealer in second-hand commercial vehicles in the world - Worldwide reputation - Trusted since 1919 - Purchase and sales network ranging from Vladivostok to Santiago de Chile - Professional, flexible and transparent organisation - Highly qualified and motivated staff - Extensive database of customers and potential customers - One-stop-shopping system - Large inventory - Hit & Run - Pioneering spirit

Weaknesses: - Large inventory - Continuously high turnover rate needed - Follow-up in existing markets; percentage of follow-up purchases can be higher - Use of social media

Opportunities: - Increasing sales through e-commerce alongside traditional business approach - Using social media to reach new and, until now, unknown customer groups - Establishing collaborations with large-scale parties like fleet owners, manufacturers and banks in order to play a key role in the entire logistics process - Cross trading - Opening new markets

Threats: - Pressure on margin due to more transparent market - Expected shortage resulting from financial crisis and geopolitical situations - Internet also enables smaller parties to position themselves as ‘large’ parties - Influence of manufacturers on local legislation and regulations

A strict depreciation system is used for the inventory: 60 days after the purchase of a vehicle, a depreciation value of 5% is registered and another 2% every month afterwards. Even over the last financial years, when Kleyn faced with the largest sudden price drops of its history, this same depreciation rate has been maintained.

COMPETITIONThe competition consists primarily of a large number

of smaller dealers of the ‘father and sons’ type. These companies often focus on exports to one or only a few countries. They also sell through larger dealers like Kleyn. Other competitors are a number of larger independent companies active within Europe. This includes Van Vliet in the Netherlands and ALGA in Germany. Van Vliet’s inventory of trucks and vans is around 35% the size of Kleyn’s.

Manufacturers also do their own trading, usually in close collaboration with their dealers. This concerns vehicles available for trade-in originating from leasing companies dominated by manufacturers. In the Netherlands, BAS Trucks of Veghel (Volvo) is a successful dealer of second-hand commercial vehicles.

Although Kleyn is the largest independent party in Europe, the organisation does not hold a dominant position due to a highly fragmented market.

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04PAST AND FUTURE

HISTORY1919-1974: Growth and diversificationThe Kleyn car company, which was established in Asperen

and relocated to Vuren in 1969, grew from a garage opera-tion to an enterprise with a range of activities in the auto-mobile industry, specialising in trade in private cars, com-mercial vehicles, buses and construction machinery. Kleyn grew to become a diversified automotive company.

1974-1995: International expansionFollowing the first export to Persia (currently Iran) in

1974, international sales grew quickly. The year 1976 was the first year in which more than 1,000 vehicles were sold. In 1977, the first foreign branch was opened in Belgium and, from 1990-1995, Kleyn opened sales offices in Ger-many, Spain, Hungary, Bulgaria, Chile and Peru. Starting in 1991, the Kleyn family gradually began retiring from the company and shares were sold in tranches to the manage-ment board at the time.

1996-present: Computerisation and concentration on core activitiesNew opportunities presented by the computer and Inter-

net quickly changed the way in which business in second-hand trucks was conducted internationally. In 1989, the first digital photographic materials were used for the sales process. In 1996 Kleyn began using a photo hall in order to effectively respond to the rapidly growing significance of the Internet in the sales process. From 1999-2006, vir-tually all foreign branches were sold or closed due to the advent of the Internet and the resulting superfluity of this

network of branches. In 2009, the last foreign business unit in Bulgaria was closed.

Kleyn began to concentrate more emphatically on its core business, namely the purchase and sale of used trucks and vans. The following were important milestones in this development: - The start of a joint venture in 1998 with Autobus fabriek BOVA, followed in 2004 by the sale of shares in Kleyn-BOVA Bussen Holding BV to the VDL Group. - Start of collaboration with GE for the sale of trailers in 1997, a success story that continues to this day. - Sale of private car department to Hakkesteeg Auto’s BV in 1999. - Start of informative collaboration with Mercedes Benz in 2001, also a continued success story. - Sale in 2005 of Intercam Export BV and Construction Equipment Department to management. - Optimisation of housing in 2006, relocating all sales staff to a new trading home. - Start of collaboration with ING lease in 2008: in addition to providing expertise, the Kleyn ICT department built and delivered the ING system. - Separation between Trucks and Vans business units in 2009, each of which now works with their own corporate identity and dedicated teams. - Start of collaboration with ABN-AMRO lease in 2010. - The first online transaction without intervention of a sales manager in 2012. - Certified Twitter user account since 2013. - Since 2014 www.kleyntrucks.com is certified as an European webshop by Trusted Shops®

CONCRETE PLANS FOR THE FUTUREEstablishment of Kleyn TrailersIn the past, Kleyn Trucks traded in a substantial num-

ber of trailers in addition to trucks. In recent years, this market has suffered considerably as a result of the econo-mic downturn. Now that the market is recovering, Kleyn is often approached regarding trailers in bulk, and has es-tablished that there are few major parties active in this specific market segment. In other words, there is a gap in the market. This is why the Kleyn Group plans to group all activities involved in the purchase and sale of trailers in a separate organisation.

Growth in trucks and vansKleyn works with a prognosis in which higher turnover is

achieved by trading larger numbers of trucks and vans. In connection with this, the sales teams are to be expanded further over the next few years. Kleyn Trucks will grow from a team of thirteen to sixteen sales professionals, while the sales team at Vans will grow from four to six sales person-nel. This can also result in a slight increase in the number of employees at Purchasing and Services.

Continuing and expanding the online advantage Kleyn’s advantage in terms of conducting business on-

line remains a key component. Expanding the posting of all vehicle information, accompanied by pictures and test

04 | PAST AND FUTURE16 17

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reports, followed by contact by e-mail, Skype or compa-rable videophone networks with customers, potential and otherwise, makes the world a lot smaller and enables Kleyn buyers and sellers to maintain more intensive contact with their customers and suppliers than ever before.

THE ROAD GOES ON…There are numerous factors that have contributed to Kleyn

becoming the global trade organisation that it is today.

This includes a highly qualified staff working within an excellent organisation in which buyers, sellers, technical and support professionals all collaborate efficiently and effectively. A transparent approach that is greatly

appreciated by selling parties in conducting transactions with the buyers at Kleyn has resulted in regular suppliers and partners. Another factor is the philosophy of ‘known quality’ that has enabled Kleyn to acquire an excellent reputation among tens of thousands of buyers across the world and has contributed to a significant level of repeat business. The organisation devotes considerable attention to ICT in its business processes, resulting in a state-of-the-art online presence for offering commercial vehicles and an extensive database of potential customers on the supply and demand side, global road transport, and companies active in this sector and works on the intranet with a management information system that offers real-time up-to-the-minute information.

Kleyn has now reached a size that enables it to partner up with providers and buyers of trucks and vans of every type and size. Thanks to all of these factors, Kleyn is well positioned for the future and ready to achieve a further expansion of its leading position as a global independent business specialising in second-hand commercial vehicles.

Kleyn Group B.V.Industrieweg 2 | 4214 KZ Vuren | The Netherlands Tel. +31 183 66 82 22 | Fax +31 183 63 33 80 info@kleyn.com | www.kleyntrucks.com

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