Posts Tagged UK
D’Ieteren, the parent of auto glass repair and replacement (AGRR) behemoth Belron, offered some insight into the current state of affairs at Belron in a press release last Friday. Even the strong can have some problems. The title of the press release was, “Annual impairment testing and profitability improvement measures / Update on group’s FY 2014 outlook / Early views on 2015” You can download the release via this link. It provides some interesting insight.
When you read the details of the press release pay particular attention to the section titled ”IMPAIRMENT AND RESTRUCTURING CHARGES”. This section provides an in-depth discussion of the non-cash charges and actions that D’Ieteren is taking.
First of all the release states that “Since 2010, Belron has been facing adverse market conditions in the UK with the vehicle glass repair and replacement market down by circa 40% over the period (-12% in 2014) together with price deflation. This has led to an erosion in profitability during the period.”
“Belron entered the Chinese market in 2009 and expanded its network to 39 branches through a number of acquisitions, all of the businesses having both a wholesale glass and a fitting activity.”
“Experience to date has shown that Belron’s high business standards were not compatible with the carrying out of a profitable wholesale business in the region. Given the relative size of this activity in many of the existing branches, the discontinuation of the wholesale business means that these are no longer viable in the long term and will be either closed or sold. Following the closure of 31 non-profitable locations, Belron’s footprint in China will be concentrated on 8 branches.”
“This change will result in EUR 7 million unusual costs as well as a non-cash goodwill impairment charge of EUR 9 million, all provided for at year-end.”
“In Italy, following a decline in the vehicle glass repair and replacement market of circa 8% in 2014 and the decision of one of the major insurance partners to cease its collaboration and to establish its own network for fulfilling glass claims during the year, Belron has decided to implement a number of efficiency improvement measures. This will encompass merging the back offices of Carglass Italy and Doctor Glass, its franchise operation, as well as reducing administrative work in several branches thanks to the roll out of the new remote advisor system. The resulting EUR 4 million unusual costs will be fully provided for at the end of this year and will generate savings that should partially compensate for the reduction in sales.”
“In the Netherlands, vehicle glass repair and replacement market has halved in the last 5 years following the roll out of a new road surfacing technology that resulted in the vehicle glass breakage rate reverting to the European average while it was previously significantly higher. Profit improvement measures are currently being implemented both centrally and in the field operations that will require EUR 4 million unusual costs to be fully provided for at the end of this year.”
“In addition to its classical fitting business, Carglass Germany runs a separate activity offering glass repair and replacement for heavy commercial vehicles, notably buses and coaches. The profitability of this business has deteriorated in recent years due to the contraction in this market segment and will be negative by EUR 3.5 million in 2014. The decision has been made to close this business for total unusual costs of EUR 9 million.“
The value of the goodwill allocated to Brazil (EUR 20 million) is still under review.”
In the press release section titled, “TRADING UPDATE FOR THE PERIOD ENDING 30 NOVEMBER 2014” you’ll read the following:
“At Belron, year-to-date sales were up 1.3% on 2013 at the end of November, consisting of a 0.4% organic increase and 2.1% growth from acquisitions, partially offset by a 0.8% negative currency translation effect and a 0.4% decline due to fewer trading days. Total repair and replacement jobs have increased by 1.7% to 10.3 million.”
“In Europe, despite share growth, sales were down 4.8%, consisting of an organic decline of 6.6% due to severe market declines following an exceptionally mild 2013-2014 winter weather in Northern Europe, and a 0.6% decline due to fewer trading days, partially offset by 1.8% growth from acquisitions and a 0.6% positive currency impact.”
“Outside of Europe, sales were up 8.3%, consisting of an organic growth of 8.4% predominantly due to the extreme winter weather in the eastern US at the beginning of the year, and 2.5% growth from acquisitions, partially offset by a 2.4% negative currency translation effect and a 0.2% decline due to fewer trading days.”
During the early to mid 1990’s I held senior management positions at Windshields America, Belron’s retail subsidiary in the United States. I was fortunate to have worked with the greatest group of people that I’d ever had the opportunity to have been associated; the company grew from 50+ stores to 274 stores with exceptional sales and bottom line performance. Great people make all the difference in any organization. (December 16, 2012 blog post “What’s Your Line-up?”) The growth in store count and profitability was made possible by the performance of Autoglass. The Managing Director of Autoglass rightly boasted at the time that his company was providing the fuel (British pound profits) to help drive the growth of Windshields America and other areas of the world of Belron. True. It wasn’t his choice, but it was his view that he could have used those profits to further the goals that he had for Autoglass in the United Kingdom. Possibly true. Perhaps today Safelite profits could be diverted to help Belron around the world? If that does happen Safelite would have less money to spend in the United States to further their goals. Also a possibility.
So this week when you have a few minutes to consider the “strengths, weaknesses, opportunities and threats” (SWOT analysis) that could affect your business in the upcoming year and decide on what actions you will take to ensure that 2015 achieves the success you desire, know that even the dominate player in the AGRR industry in the world is having their share of problems. Some of their problems are market driven, so not necessarily self-inflicted. But some of them are strategic and tactic driven, so those are self-inflicted. Regardless they are not going away so don’t rejoice, but there is hope.
Courtesy of http://www.TomFishburne.com
It’s always an interesting exercise looking at automotive aftermarket retailers that excel in the industry they compete to understand reasons for their success. It doesn’t matter where in the world a company operates; be it in the United States, Canada, Brazil, the United Kingdom or elsewhere in the world. Those companies that do standout and outclass rivals, take on market leaders in the industry they compete and are recognized for the high levels of service they provide to customers, deserve our admiration, respect and emulation. One such company is based in the United Kingdom. Auto Windscreens is headquartered in Derbyshire, in a town named Chesterfield 150 miles north of London. Originally formed in 1971 Auto Windscreens has gone through a number of evolutions to get the company to where they are today. Auto Windscreens is the United Kingdom’s fastest growing and most dynamic provider of (auto) glass repair and replacement services (AGRR). Suffice it to say that the company has a lot of things going for it right now.
Auto Windscreens has won several prestigious awards over the past several years. Among them:
- At this year’s 2014 British Insurance Awards Winner Auto Windscreens won top honors for two award categories:
- Both in 2014 and 2013 they were recognized by The Sunday Times being selected as one of the “Best 100 Companies to Work For”.
- Auto Windscreens was ranked second in the United Kingdom and when the received recognition as a “Top 50 Call Centres for Customer Service” in 2011. At the same time they were also named the “Best Newcomer” and the “Best Service Provider”.
These are very impressive awards for any company. George Bernard Shaw said, “Imitation is not just the sincerest form of flattery – it’s the sincerest form of learning.” I think that there is a lot automotive retailers can learn from Auto Windscreens.
Chris Thornton is the Managing Director (the U.K.’s version of Chief Executive Officer) of Auto Windscreens and I thought hearing from him on a number of topics would be interesting to readers of this blog. Chris took over as Auto Windscreens’ Managing Director earlier this year.
DR: Thank you for taking the time to talk Chris.
CT: My pleasure David. I like nothing better than talking about Auto Windscreens
DR: Auto Windscreens has certainly seen some great successes of late. What do you believe are key the reasons for the company’s successes?
CT: It’s all about being the best at everything we do in delivering the finest service possible to our customers. And in order to do so every member of the team has to play their part. As we offer a Customer Satisfaction Survey to every customer, we can see exactly where and when we are delivering this outstanding service and where we may have some improvements to make
DR: What were some of the issues (positive and/or negatives) you and your management team faced in moving the company forward after you joined Auto Windscreens in 2013?
CT: The atmosphere and approach within Auto Windscreens is outstanding. Everyone knows what we are looking to achieve and how to get there. I am a firm believer in clear and regular communications within the business.
Our biggest challenge is maintaining this as we expand. Many of the UKs biggest insurers and fleets are in discussion with us at the moment as we are clearly THE automotive glass company to be dealing with.
That expansion impacts across our business and one critical area is recruiting and developing technicians to work at the same high standards as we do now. At the end of the day we are a people business.
DR: Of the issues you’ve mentioned which one do you feel made the biggest difference in getting everyone focused on providing customer excellence?
CT: Communication and training is essential.
From the moment we take the customer call, the focus is on finding the right appointment to fit the customer needs. Our automated system generates a selection of appointments for the customer to choose from and once selected the appointment is guaranteed. We spend a lot of time training our contact centre agents in both call handling and technical skills.
Auto Windscreens has the only accredited training centre in the UK. Our facility not only provides an excellent workshop environment for new starters but on-going training, development and advancement to higher qualification.
All our technicians are kept fully up to date with the latest information. All work is processed on Personal Digital Assistants (PDAs) which have a detailed Technical and Training programme on them to support the technician. In addition our Training department supports the technicians with a team of field based trainers and a 24 hour support line.
DR: How have the partnerships Auto Windscreens has made with insurance and fleet customers improved your customer service?
CT: Both insurers and fleets have recognized the quality Auto Windscreens have brought to the industry. We demonstrate this through leading Management Information and more critically through Customer Satisfaction Surveys and Net Promoter Score.
Our surveys are both offered by Auto Windscreens and through an independent survey analyst which creates total transparency for our clients. In turn they have total confidence in Auto Windscreens in our service delivery.
DR: Can you provide an understanding how your value proposition is resonating with your customers? How does your relationship with your customers differ from what other competitors offer?
CT: In 2011 we noticed that customers were regularly getting in touch with us to thank us for the quality of the work they had received. This told us we were doing something right.
From this we created the Praise Log, an internal document sent to everyone in the business each month showing where customers had called to say “Thank You”. And our people love to see their names on there.
This has expanded as customers write about their experiences on review sites such as reviewcentre.com. This is totally independent and Auto Windscreens have a 96% recommendation rate. It is the consumer trust in our brand that is making the difference.
DR: Your company focuses a great deal on providing management information systems to customers to help them find ways to reduce costs and operate more efficiently; how do you feel that helping them understand their windscreen losses is a winning strategy for Auto Windscreens?
CT: Management Information is critical in every business and we support our clients by providing them with the information they need to enhance customer experience and in doing so boosting customer retention.
The information also helps reduce wastage and controls cost but our clients are now being driven by quality rather than cost alone.
DR: How does Auto Windscreens use social media (Facebook, Twitter, YouTube, Google+, etc.) to interact with its customers? Do you feel it is time well spent for anyone operating in the retail automotive after-market?
CT: The world of communications has changed significantly in the last decade and like many businesses we have had to adapt. Our marketing department manages our social media accounts not only promoting our business but monitoring and responding to any questions.
It is very worthwhile as it brings us closer to our customers and helps identify trends before our competitors
DR: How many fitting centres, mobile service units and employees does the company currently have?
CT: We have over 40 branches covering the UK (it’s a lot smaller than the USA) more than 350 mobile service units and over 500 staff in total
DR: Do you see further growth for Auto Windscreens in the United Kingdom? With the success you’re enjoying, are there any thoughts of growth outside of the United Kingdom?
CT: Our focus in firmly on the UK for the foreseeable future. It offers great opportunities for us as we expand. We will not get distracted by expansion alone, the key is to continue delivering the best service in the industry.
DR: With the great success Auto Windscreens has found in recent years while facing a large competitor, can you offer some advice to those who also find themselves competing against companies bigger than they are in a market or country?
CT: I believe you need to set your stall out and get your team on board in delivering this. Our message has been Total Customer Satisfaction from our beginnings which meant everybody has to play their part.
DR: Do you use radio or television to reach customers?
CT: We have in the past but not currently.
DR: What is the most effect way to reach targeted customers?
CT: If you win the corporate accounts then the volume will come. If those clients will support you as the only option for replacement glass and repairs then the business is as good as guaranteed.
DR: Auto Windscreens was a winner in the 2006 Commercial Fleet World Honours – The Environment Award. I know that you and your company have a strong commitment to green initiatives by recycling 100% of the windscreens that you replace. When did this initiative begin and what has been the response from Auto Windscreens’ customers?
CT: 2006! That was a few years back but we are as proud of our environmental credentials now as we were then. We are in a world where recycling is promoted greatly and we have always led in our industry with green policies. Our customers have always been supportive of this approach which started more than 20 years ago. Our resources are finite so we must use them wisely
DR: I read on your web site that 40 replaced windscreens that you recycle fit on a skid, while the materials required for 40 repairs can fit in the palm of a hand. By your commitment to repairing windscreens Auto Windscreens is providing great value to its customers while also fulfilling your green initiative strategy to help reduce the effect replacements have to the environment. That is a strong endorsement for repairing over replacing. How do your customers view your commitment to repair? Can you give us a range of repair rates you see in the United Kingdom?
CT: The repair rates vary by customer type but can be up to 50% of our work. Our customer base encourages repair over replacement and so wherever we can safely make a repair we will.
DR: During my career I spent a fair amount of time in the United Kingdom and I greatly value all that I learned from those I worked with while in country. There is one service component that is offered by your company (and other windscreen companies in the United Kingdom) that hasn’t caught on in the North America and that is 24/7/365 service* with mobile units. Your web site touts that, “Our fitting centres are open from 8:30am till 5:30pm Monday to Friday and on Saturdays from 8:30am to 12:30pm. Outside these hours, work is carried out by our team of mobile technicians who are on call 24 hours a day every day of the year.” Can you provide the reason why this type of service is offered in the United Kingdom and what percentage of work is done outside of the normal fitting centre operating hours?
* Since 1981 windscreens in the U.K. have been laminated. Prior to that date tempered glass was used for some windscreens.
CT: It has been customer led and is for “emergency” work such as broken rear and side glass. We cannot allow customers to be left stranded in a vehicle that cannot be driven or is insecure. Such urgent requests may be low in volume but very high in importance.
DR: What do you feel are the strengths and weaknesses of Auto Windscreens and what are you doing to take advantage or fix them?
CT: Some of our IT infrastructure was getting old so we have created a data centre, 24 hour IT monitoring team and issued new PDAs to all technicians. This significant investment will cover our requirements for the next 10 years.
Our strengths are many. Our independence allows us to develop the business as we need without interference from head offices, shareholders or partners. Our clear leadership in high quality service provision is proving very difficult for our competitors to get close to and as we further develop this, the gap will increase.
And as technology becomes more prevalent in windscreens, companies who cannot demonstrate and prove that they have the proper training processes in place will fall away.
DR: I know that you focus a great deal of time and effort on training Technicians. You obviously feel that you’re reaping dividends on these initiatives. Can you give us a brief overview of your company’s approach to training?
CT: By having highly skilled technicians we have created a team that is prepared to go that extra mile and takes pride in its work. The training starts from the moment a technician, either skilled or a new recruit, joins the business and that training never ends.
It may take place at our Technical Training Centre or through field accompaniments. All technicians are assessed annually to ensure they continue to work to the standards expected of them whether a repair technician , replacement technician or a master technician.
DR: You have an amazing Net Promoter Score (NPS) that is off the charts in the mid 90’s. That is the highest number I’ve ever seen in our industry. As a company how have you been able to achieve that result?
CT: We are very proud of Net Promoter Score and Customer Satisfaction results. It has not been easy but by creating a customer centric culture as mentioned previously we have all staff aligned in delivering an outstanding service
DR: With that high level of NPS you’ve been earning a great deal of new business and contracts with fleets and insurers alike. How was Auto Windscreens able to garner this new business from the incumbents?
CT: That’s a question our customers would have to answer but I would say it’s down to the breadth of service we can offer at a rate which works for everyone. As a progressive business with a clear vision we will attract like minded businesses.
DR: I have been very impressed with what you and your team(s) have accomplished at Auto Windscreens. I firmly believe that that some of the strategies and tactics that Auto Windscreens has been employing can be exported to other countries and used by those who are interested in growing and/or making a difference with their company. I appreciate your taking the time to talk with me. I wish you and Auto Windscreens continued great success.
CT: It’s been a pleasure David.
Auto Windscreens is a great case study in how to turn a company around and make it into a world class service provider. It takes great leaderships and dedicated teams throughout the business, but I believe that Auto Windscreens has shown how to take on competition (big or small) and consistently win against them by focusing on the needs of each and every customer. I applaud Chris and all at Auto Windscreens for all they’ve accomplished.
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GQA Level 2 NVQ Certificate in Windscreen Repair (QCF) (GQA Qualifications Limited)
GQA Level 2 NVQ Certificate in the Principle of Windscreen Repair (QCF) (GQA Qualifications Limited)