services in order … now
let’s get the job done!”
David van Mechelen (aged 45) took up his post as CFO of Royal FloraHolland on 1 October 2018.
He and CEO Steven van Schilfgaarde together make up the company’s management. Van Mechelen previously worked for KLM, where he most recently held the positions of Senior Vice President Group Controller and Business CFO in the airline’s Passenger division.
You have been CFO of Royal FloraHolland for six months now. What have been your findings so far?
Both Royal FloraHolland and the industry have turned out to be even more interesting than I thought.
This is a company filled with driven, enterprising people, and I find my colleagues to be very professional. I am impressed by their commitment, passion and sense of pride. I’ve become aware of just how dynamic and eventful these last few years have been, and continue to be, for both the organisation and its people. This is an organisation in transition, and that kind of challenge appealed to me when I took on this job.
How do you view the company’s financial performance?
Auction volumes are declining – this is a trend that has been ongoing for several years. This has had an impact on our earning capacity, as our services are closely linked to our auctions. The upside is that the industry as a whole is growing, so that’s where the potential opportunities come into focus.
We also plan to develop new services over the next few years that will allow us to start creating value for our customers again. We will then once again be able to help them grow their business, along with our own.
We have already significantly improved efficiency as part of a cost-saving exercise. This is evident in several departments, particularly in Operations. I am convinced that we can further drive down costs; this is fully in line with the strategy we have been pursuing since early 2018. The management is looking to further raise professional standards within the company. This includes transparent decision-making and contracting processes, detailed supporting arguments for business cases, and the actual measurement of financial and non-financial performance in the implementation of these processes.
Royal FloraHolland is a cooperative with thousands of members. How does this affect the way the organisation is funded?
The cooperative is funded in a solid, diligent and very careful manner. Our venture capital is relatively substantial when we consider our structure, which is based on member certificates. The mix of borrowed capital – provided by both the members and the banks – ensures a solid foundation.
The bank loans we receive add that essential bit of outside scrutiny you need and keeps us on our toes. This also means our members don’t need to invest quite as much of their own capital – money they can invest in their own business instead. This mix of funds provides us with a solid, well-balanced foundation, giving us the resilience we need.
‘’Our strong positioning, clear strategy and the growing confidence and trust of our customers, members and employees have boosted confidence greatly.’’
Finally: how do you regard the future of Royal FloraHolland?
We currently have a clear-cut strategy in place that will lead us in the right direction. The initial stages of the implementation process have been successful, and we are currently also working hard on getting the basics right. This means excelling at what we do, seeing projects through to the end, abiding by the first-time-right principle and ensuring efficient and high-quality delivery. There are many improvements still to be made in that regard – yet another opportunity! We are therefore working hard right now on accelerating the implementation of the strategy and fine-tuning this strategy. We are doing this on the basis of a specific long-term action plan. What will we do when? What won’t we do? When is something done? How much does it cost, and how will it benefit us?
This gives us even more clarity and focus: both outside the company for our members and within the company for our employees. We will be working hard on this over the next while.
I believe that getting the basics right (that is, perfecting the things we do best) and our long-term action plan (doing the right things in the correct order) are crucial for the company’s financial health and medium and long-term profitability. Based on our recent history and current state of play, I expect we will encounter quite a few challenges in the short term when it comes to our financial performance. Over the next few years, we firmly intend to both generate profits and continue to invest in our strategy and future. Our strong positioning, clear strategy, willpower and the growing confidence and trust of our customers, members and employees have boosted Steven’s and my confidence greatly. The strength of the cooperative, our digital and physical marketplace and the solid financing structure all form a solid foundation for these future plans.