42
the Caribbean. “Nice businesses to The sale to ABN Amro in 2004 naturally market provides excellent growth potential
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have and to visit,” he says, “but I came changed many things – not least, says Alfons and also a level of diversification that is
to the conclusion it was better for local van der Aa, the focus on cash. Typical of a fundamental if economic conditions do
management to own them. I am glad to say family owned business property was largely deteriorate. “The OEM branch tends to come
we still have a good trading relationship.” In owned. “We sold off the real estate, and also earlier in the economic cycle, the MRO
total the sell-offs represented around 20 generated a lot of cash in other areas of the somewhat
million euros revenue. Currently FABORY turns
over 270
million
euros, a
90 million euros
growth in real terms. “In 2001-2003 the business. Combined with the strong growth of later, so we have an important balance here.
growth potential was not good. Yes, the the FABORY Centres this helped us to sell the We are a ‘two-trick pony’, whereas many of
economy was not so strong but the potential company again.” our peers have only the one trick, which
and mechanisms for growth were not there in means they are more influenced by the
the business. Now we are on a level of 8 to Most private equity ownerships have a time economic cycle.”
10% autonomous growth annually.” Part of defined exit strategy. In this case, though, the
that strategy was enacting a clear focus into initiative clearly emanated from Alfons van OEM business is profitable for FABORY. “We
the two distinct but interlinked ‘branches’ of der Aa. “In private equity timing is key. You make benchmark level margins,” says van der
business – direct supply to OEM on one hand, can run a great company but if there are no Aa, “We do this because we choose not to
characterised by defined, high unit volume buyers nothing happens. I strongly believed, focus on the very big customers, like
ranges, and MRO, with a massive inventory twelve months ago, that the timing was right automotive. Our customers are slightly
supplying a high number of small, relatively to sell. Looking back I am sure of it.” smaller, still very large, but ones where we
low volume individual transactions. One of the have better leverage and can focus strongly
keys to both businesses was the existing, Alfons van der Aa acknowledges that the on service. Price will always be part of the
highly automated, warehouse and logistics hybrid nature of the FABORY business, 50% equation but if the customer puts it top of the
centre at Tilburg handling some 50,000 OEM, 50% MRO, put off some fastener list it is not a good fit for FABORY. May be
fastener articles and another 30,000 tools and industry buyers. “The fact we could attract a they are good customers for other people, but
‘C’ part lines. major financial buyer, like HG Capital, is a not for us as our focus is on cost saving in the
clear indication that there is still plenty to fastener acquisition process. Our logistics
leverage and capability is a major strength, as is our global
improve in the presence, in North America and China as well
business. They as throughout Eastern and Western Europe.”
could clearly see
the top line “The other strong branch we can grow is the
growth FABORY Centres,” he continues. “Particularly in
opportunity, in Eastern Europe the opportunities are ample
particular the although we have also succeeded here in
growth of our Benelux, France and in Portugal. We added
FABORY Centre over 50 centres in the last two years; this year
concept.” we expect to add more.”
Alfons van der Aa FABORY has tripled Eastern Europe sales over
is emphatic that the last five years and continues to push the
the two pronged boundaries. It opened in Romania in
approach to the 2006. “Now we have two Centres and
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