T4 With Channa KYP

T4 with Channa
BVS Fleet Maintenance

Company
KYP
T4 with Channa at Wisdom
T4 with Channa
T4 with Channa
Personalized attention is our theme, and we
will have an individual discussion for each
paper you write. We will have about 10 mocks
for May 2013 session.
KYP
This is known as Know Your Pre-seen (KYP)
issued by T4 with Channa.
KYP is a repetition of the pre-seen and the
objective is to make reading the pre-seen
user-friendly.
There are few slides included outside the preseen and they have been marked with an e.
Next step..
TCP will issue below documents after the KYP
231 short questions on the pre-seen, this is as a
test, to ensure you have reviewed the pre-seen
well (Our answers will be issued once you
attempted all the questions)
Industry review on Fleet Maintenance
Pre-seen Analysis
Industry Background
Many companies worldwide operate and
manage a fleet of vehicles.
They can be either:
Leased or
Owned
The Types range from:

Executive cars
Large articulated trucks to lorries
Industry Background
Management of the vehicle fleet in companies
done
Mostly by own in-house fleet management
department
or
Outsourcing
What is fleet management?

It is a function which companies undertake in order to reduce the risks and
the costs associated with a range of activities including:
Vehicle investment
Vehicle acquisition and de-fleeting
Vehicle financing
Vehicle maintenance
Driver management
Speed management
Fuel management
Improving the efficiency of the fleet
Providing compliance with respective regulations on vehicle safety and
road-worthiness
Health and safety management
Wikipedia about Fleet Management
Fleet management is the management of a company's

transportation fleet. Fleet management includes commercial motor
vehicles such as cars, ships, vans and trucks, as well as rail cars.
Fleet (vehicle) management can include a range of functions, such
as vehicle financing, vehicle maintenance, vehicle telematics
(tracking and diagnostics), driver management, speed
management, fuel management and health and safety
management.
According to market research from the independent analyst firm
Berg Insight, the number of fleet management units deployed in
commercial fleets in Europe will grow from 1.5 million units in 2009
to 4 million in 2014.
To Note
Although there are number of revenue
segments inside the Fleet Management
industry, currently BVS Private Limiteds
business only focused on Fleet Maintenance
and does not encompass the many other
aspects of fleet management, such as the cost
and selection of vehicle acquisition.
Vehicle Maintenance
All vehicles need to be maintained in order to:
Meet regulations
Maintain operational efficiency
Reduce running costs
Reduce breakdowns and therefore provide greater
degree of operational efficiency
Importance of Vehicle Maintenance

With the pressure on companies to reduce
operational costs and to increase efficiency, it is more
important than ever for vehicle fleet costs to be better
managed.
Prospects in Europe
Within Europe alone, the number of commercial
vehicles deployed in company fleets is forecast to grow
to four million vehicles by 2014.
European Fleet Market Trend
Fleet Maintenance practices

Many companies operate their own in-house fleet
management department but choose to outsource
the maintenance of their vehicles to one, or more,
specialised fleet maintenance companies.
Importance of Fleet Maintenance

Fleet maintenance is crucial in order to run a safe,
efficient and cost effective transportation operation.
The penalties for a company failing to meet regulations,
which are becoming increasingly more complex, are
severe.
For the earlier reasons most companies choose to
outsource their fleet maintenance requirements to
specialised fleet maintenance companies, which are able
to deliver a one-stop service to meet all their needs.
Fleet Maintenance Companies

Needs met by fleet maintenance companies:
Typically routine servicing of vehicles,
Mechanical repairs
Tyre replacement
Fleet Maintenance Companies

Types:
Fleet maintenance departments of large
multi-national companies
Specialised fleet maintenance companies
Large multi-national companies

There is a range of large multi-national companies
which operate their own fleet maintenance
departments.
Some of these large companies offer a maintenance
service to other companies.
Specialised fleet maintenance

companies
There are many specialised fleet maintenance
companies which offer services to small fleets of 30 or
fewer vehicles, as well as to larger fleet operators with
over 5,000 vehicles.
Top 10 UK Fleet Management

Companies
Position Company
1
2
3
4
5
6
7
8
9
10
Lex Autolease
LeasePlan
Alphabet
Arval
ALD Automotive
Volkswagen Group
Leasing
Mercedes-Benz
Financial Services
Lombard Vehicle
Management
Arnold Clark Finance
GE Capital
Fleet size (Number

of vehicles)
268,240
134,115
109,236
85,612
74,614
59,936
Parent company
Lloyds Banking Group

LeasePlan Corporation
BMW AG
BNP Paribas
Socit Gnrale
Volkswagen Financial
Services
55,000 Daimler Financial Services
AG
49,884 N/A
49,483 Arnold Clark Automobiles

43,685 GE (General Electric)
Top 10 US Fleet Management

Companies
BVS
Number of Vehicles - Breakdown
90,000
81,000
80,000
Number of vehicles
69,600
70,000
60,300
60,000
50,000
40,000
54,900
47,500
50,700
55,000
Other
customers
42,600
13,400
18,600
24,800
32,200
JAR
30,000
Total
20,000
34,100
32,100
30,100
28,100
27,000
26,000
Mar-11
Mar-12
Mar-13
Mar-14
Mar-15
10,000
Mar-10
Note - The forecast for 31 MarchT42013

is that
other customers fleets will have
with Channa
at Wisdom
grown to comprise 33,200 vehicles
Some of European Fleet

Management Companies
BT Group vs JAR
BT Group plc is a British multinational telecommunications
Services Company headquartered in London, United
Kingdom. It is one of the largest telecommunications
services companies in the world and has operations in over
170 countries. Through its BT Global Services division it is a
major supplier of telecoms services to corporate and
government customers worldwide.
BT is the worlds oldest telecommunications company. BT's
origins date back to the founding of the Electric Telegraph
Company in 1846.
http://en.wikipedia.org/wiki/BT_Group
BT Fleet vs JAR FM
BT Fleet represents the specialist fleet management arm of the BT Group and manages over 75,000 vehicles. It has
a 500 garage network, of which over 63 are owned by BT Fleet.
Products
Fleet management
Service, maintenance and repair
UK-wide network of BT Fleet owned garages
24/7 emergency assistance for tyre and glass replacement and roadside assistance
Comprehensive management information
Savings on franchised dealer costs
MOT and Lifting Operations and Lifting Equipment Regulations (LOLER) testing
Single phone number for bookings and repairs
Wide range of vehicle types - cars, commercial vehicles, plant and equipment
Total transparency and an industry-leading service
Vehicle management
Risk management
Vehicle funding
Accident management
Consultancy
Vehicle hire
BT Fleet vs JAR FM
BT Fleet about them!
We are consistently pushing the boundaries of technology,
environmental awareness and service to make sure our customers run
their fleets in not only a responsible manner, but an effective one,
again delivering cost savings in everything we do.
You can be confident that all of our processes are built with you in
mind, driven by our ISO 14001, environmental management, and ISO
9001, quality management accreditation.
http://www.btfleet.com/AboutUs/AboutUs.aspx
Company Profile
Industry Fleet maintenance

Name - BVS
Home country Europe
Legal status Private limited
Formation - 2010
Key Years throughout the History

Year
Key event
Before 1994
JAR was a state owned company.
1994
2005
Restructuring of JAR.
were given profit targets to meet over the next 5 year.
2006
Continuous loss making of JAR FM.
2007
Despite the profit target set, operating losses continued of JAR FM,
this prompted the main Board of JAR appoint a new CEO, Toby
Baum for the JAR FM.
2008
JAR FM has reduced its operating losses to 3.0 million, the lowest
level for many T4
years
.
with Channa
at Wisdom
JAR was privatised.

JAR managed its own in-house fleet.
In-house fleet split into two separate subsidiary companies .
fleet procurement and fleet maintenance.
Fleet maintenance company named as JAR FM

Year
Key event
2009
Secured new 6 vehicle fleet operators

Recorded a Operating profit of 0.5 million for the first time for
many years.
June 2009
Due to pressure to increase group profits and to concentrate on

its core activities Board was decided to sell off, or close
subsidiary companies, including JAR FM.
started to seeking a trade buyer for JAR FM.
Early 2010
Finalised the MBO and new company named as BVS

Toby Baum
- 17.5%
Leo Willems - 7.5%
Phillip Back - 7.5%
Annika Larsen - 7.5%
Private Equity Provider (PIE) - 60%

Year
Key event
2011
Business plan was set up to achieve a growth in revenues from

84 million to 140 million by 31 March 2015 .
operating profit was lower than planned at 0.5 million.
2012
Employee numbers had grown slightly to 890 employees.

Operating profit was higher than planned at 4.4 million.
2013
The latest forecast is higher than planned operating profit at 6.6

million for the JAR FM.
Financing of BVS
Finance Sources
Million
Assets
Million
Equity
5.1
Non Current Assets
Non Current Liabilities
1.4
Current Assets
19.7
LESS Current Liabilities
(16.4)
TOTAL
6.5
Assets
Net Current Assets
3.3
TOTAL
6.5
3.2
Finance Sources
3.2
3.3
5.1
0%
20%
40%
1.4
60%
80%
BVS uses a more conservative approach to Financing as Net current assets are
financed by more permanent source
financing
based on rough estimates.
T4 withof
Channa
at Wisdom
100%
Year of 1994
Before 1994;
state-owned industry in its home European
country.
1994 onwards;
Privatised as JAR
Established separate fully-owned subsidiary
companies for the various parts of its business
JAR
A large telecoms company.
To support the telecoms business, JAR owned
and operated a large fleet of vehicles.
JAR
established
separate
fully-owned
subsidiary companies for the various parts of
its business.
JAR had managed its own in-house fleet, then
it was split into two separate subsidiary
companies.
JARs in-house fleet operation

In-house fleet
Fleet maintenance
Fleet procurement
(JAR FM)
Restructuring of JAR FM
JAR FM had been loss-making for many years,
as its facilities were under-utilised and badly
managed.
Therefore JAR FM has been restructured in
2005.
In order to improve company-wide
profitability. JAR FM, were given profit targets
to meet over the next 5-year period from
2005 onwards.
Continuous Losses
Despite the operating profit targets the level
of operating losses continued at the same
level as previously.
Appointment of New CEO

Continuous losses prompted the main Board of JAR to
recruit a more experienced CEO for the JAR FM.
Appointment a new CEO for JAR FM named Toby
Baum.
Toby Baum started a review of business activities and
made changes in the way the company operated.
Although he tried to reduce headcount, he was unable

to reduce headcount due to opposition from trade
unions.
Reducing Losses
By 31 March 2008, JAR FM had reduced its
operating losses to 3.0 million, the lowest
level for many years.
At this stage, JAR FM had only 2 new fleet

maintenance customers, in addition to the JAR
fleet of vehicles.
Recording Profits after many years

JAR FM achieved an Operating profit of 0.5
million for the year ended 31 March 2009.
This was the first time JAR FM had been
profitable for many years.
Toby Baum was able to secure further 6
vehicle fleet operators, and this resulted
improve workshop utilisation levels and
generate substantial revenues.
June 2009
The Board of JAR was under pressure to
increase group profits and to concentrate on
its core activities,
So the Board of JAR made a decision to sell off,

or close, a number of its subsidiary
companies, including JAR FM.
It was started to seeking for a trade buyer for
JAR FM
Management Buy-Out (MBO)

Toby Baum considered that this Boards decision
would be a good opportunity for a Management
Buy-Out (MBO).
He considered that a particular area of weakness
was the lack of management information and
financial control of the business .
Mainly due to a weak and ineffective Finance

Director who had worked in JAR FM for many
years.
Management Buy-Out (MBO)

Toby Baum discussed his ideas of a MBO with his
2 key operational colleagues, Leo Willems and
Phillip Beck, and received confirmation.
They agreed that new company (post MBO)

would require a new Finance Director .
Toby Baum identified an experienced accountant,
Annika Larsen through a recruitment advisor ,
and appointed her as a consultant
Valuation of MBO
The agreed valuation was 4.0 million for the
MBO.
This included;
1. 120 specified workshops that would be
transferred and managed by BVS.
2. Liabilities for 860 employees that would
transfer to the new MBO company.
3. Inventory of materials and spare parts.
Payment of MBO Price

The agreed acquisition price of 4.0 million,
payable to JAR in 4 installments;
2.5 million on the date of acquisition, 1st April
2010.
3 further installments of 0.5 million each in
31st March 2011
31st March 2012
31st March 2013
Establishing BVS
MBO deal was finally reached.
The new MBO company was to be called BVS.
Toby Baum persuaded a private equity
investor, PIE, to take a 60% stake in the
Company.
Shareholdings
The shareholdings are as follows;
Shareholder
Number of shares held at Percentage shareholding

31 March 2012
%
Toby Baum
70,000
17.5
Leo Willems
30,000
7.5
Phillip Beck
30,000
7.5
Annika Larsen
30,000
7.5
PIE
(private
provider)
equity 240,000
60.0
Borrowings
Toby Baum was able to negotiate and obtain a
bank loan for 1,400,000
Interest rate of 12% per year
Repayable on 31 March 2015
The bank also agreed to an overdraft facility to
help meet the peak demands in working
capital
Interest of 14% per year.
Exposure of 4 Executive Directors

Corporate Level
Bank loan for 1,400,000 at an Interest
rate of 12%.
Personal Level
Personal loans secured against their homes to
generate the required level of financing for the
MBO.
Work Shops & Employees

Description
Before the
MBO
Transferred to Remaining
BVS
with JAR
Work shops
260
120
140
Employees
1500
860
640
Responsibility of closure costs of the other 140

workshops and remaining employees of the JAR FM
that BVS has not acquired was held with JAR.
Overall structure
Overall structure of the book value of finance
provided at 1 April 2010 was as follows:
Management
0.8 million
PIE private equity
1.2 million
Bank loan financing
1.4 million
Agreement between JAR & BVS

A 5-year maintenance agreement was also
agreed for JARs fleet of vehicles at a fixed
price.
BVS would commence trading with a

guaranteed 5-year contract for JARs fleet of
vehicles, which covered 34,100 vehicles.
Business Plan for BVS

In 2011 it was Set up a business plan, to
achieve a growth in revenues from 84 million
to almost 140 million by 31st March 2015.
Description
2011
million
2012
million
2013
million
2014
million
2015
million
Revenue
84.0
92.2
102.6
118.1
139.8
Operating Profit
1.2
3.8
5.1
7.2
10.0
No. of Vehicles
50,700
54,900
60,300
69,600
81,000
Performance Related Pay (PRP)

Toby Baum established performance related
pay (PRP) for all employees in 2011.
PRP based on operating profit was not paid for
BVSs first year i.e 2011
For the first time PRP paid in respect of the
year ended 31 March 2012.
It is forecast that PRP will be paid in respect of
the current year ending 31 March 2013.
Year of 2012
Employee numbers had grown slightly to 890
employees, due to additional work carried out
by Head Office staff.
Operating profit was higher than planned at

4.4 million, an increase from business plan of
0.6 million.
Summery of Financials
Description
Extract from BVSs financial

statements
million
Year ended
31st March
2011
Year ended
31st March
2012
According to the 5 year Business Plan

million
Year ended
31st March
2013
Year ended
31st March
2014
Year ended
31st March
2015
Revenue
84.9
93.9
102.6
118.1
139.8
Operating
Profit
0.5
4.4
5.1
7.2
10
0.6%
4.7%
5.0%
6.1%
7.2%
OP Percentage
Summery of Financials ( million)

160.00
139.80
140.00
118.10
120.00
102.60
100.00
93.90
84.90
80.00
60.00
40.00
20.00
-
0.50
2011
4.40
2012
7.20
5.10
2013
Operating Profit
2014
Revenue
10.00
2015
Latest forecast for 2013

The latest forecast for 2013 has higher than
planned operating profit at 6.6 million due to
an increase in the vehicle numbers.
Description
Revenue
Operating Profit
OP %
No. of vehicles
Latest Forecast
million
Business Plan
million
% Increase
122.9
102.6
20%
6.6
5.1
29%
5.4%
5%
82,100
60,300
36%
In 2015
As per the business plan, it was planed to
achieve a revenue of 140 million by 31 March
2015, which is a growth of 65% from 2011.
The planned operating profit for the 2015 is

10 million.
The Business Plan
The Business Plan

Grow the existing vehicle fleet maintenance
business and to expand its geographical
coverage of maintenance workshops to two
neighbouring European countries.
One-stop service to fleet managers operating
vehicle fleets across three countries.
Planned to deliver this service through the use
of own managed and outsourced workshops.
Principles behind BVSs Business Plan

Develop the
strategy
Operational
planning
Monitor
performance

Develop the
strategy
Vision
Strategic analysis
Business strategy
Monitor
performance
Profitability analysis
Strategy reviews
Operating reviews
Customer responses
Operational
planning
Sales planning
Resource planning
Capacity limits
Planned improvements
Adapt and change

Develop a strategy
Vision
Strategic analysis
Business strategy

Monitor performance
Profitability analysis
Strategy reviews
Operating reviews
Customer responses

Operational planning
Sales planning
Resource planning
Capacity limits
Planned improvements
Adapt and change
BVSs Business Plan
Percentage Analysis of No. of Vehicles

No. of
VehiclesEnd year
31 sty
March
2011
31 sty
31 sty
31 sty
31 sty
March 2012 March 2013 March 2014 March 2015
JAR
63%
55%
47%
39%
32%
Other
37%
45%
53%
61%
68%
BVSs Business Plan
Business Plan
Growth in revenues from 84 million to
almost 140 million by 31 March 2015
Challenging, but achievable
Core business
Vehicle servicing at a Fixed annual price, per
type of vehicle,
price per
vehicle
type of
vehicle
expected
mileage
Core business
Customer requirements
Vehicles are serviced on time
High standard of maintenance work
Core business
Frequency of vehicle servicing depends on,
Mileage and type of vehicle
Vehicle manufacturers recommended service
frequency
Environmental
conditions
in
different
geographical regions
Revenue streams
Fixed price
maintenance
service
Mechanical*
repairs
Replacement
tyres
Additional fleet
management
services**
Mechanical repairs*
BVS charges its customers based on labour
time as well as the cost of bought in parts,
with a small mark-up on parts
BVS does not provide vehicle crash repairs at

its own, or its outsourced, workshops
Additional fleet management

services
Additional fleet management services

Offers a range of administrative services
Additional services are at an extra cost to
customers
Many fleet managers want to outsource them
to a specialised company

Fleet administration services
Provision of vehicle management information
Management of vehicle road testing
certificates
Accident management and arranging for
vehicle repairs at specialist repair facilities.

Management of vehicle insurance claims
Breakdown recovery service
Reporting of vehicle mileage and carbon
emissions
New findings
Many company fleet managers wanted to
outsource much of their fleet operational work
BVSs customers were under pressure to control
and reduce their fleet operating costs
Seeking a one-stop outsourcer
- provide key management information on each
vehicles operating efficiency other than servicing
and maintaining
- This information can be gathered using Telematic
technology
Telematic Technology.
A piece of electronic equipment which is
installed in each vehicle which allows the
vehicles fleet management department, and
its outsourced maintenance supplier (such as
BVS), to gather a range of data on each
vehicles operation.
Telematics
Telematics is also known as information and

communications technology (ICT), which refers to the
combined use of telecommunications and technology. It is
used in various devices, such as global positioning systems,
wireless communications and vehicle tracking systems.
It uses GPS technology to identify, locate and maintain

contact with one or more company vehicles in real time.
Instant access to the location history of vehicles enables
businesses to plan routes more economically and make
adjustments as needed due to changing traffic and road
conditions
or
other
factors.
Some Telematic service providers
Current operations of BVS

Majority of BVSs work is generated from
vehicle servicing, vehicle repair work and tyre
replacement.
Additional fleet management services are a
growing area.
BVSs Fleet Maintenance IT System

(FLIS)
Provides necessary information to BVSs
customers fleet managers, to closely monitor
their fleet vehicles
Identifies the need for regular checks
Provides reports on vehicles that are due for
any safety related maintenance work.

BVSs customers fleets include vehicles which
use,
- A mix of fuels including bio-diesel, electric
vehicles and hybrid vehicles.
- BVS has had to adapt to the changing needs of
its customers fleet vehicles and offer a wider
range of maintenance services.
- Enabled BVS to expand its skills and provide
training for some of its employees.
Outsourced suppliers
Leo Willems
Selecting and appointing a range of
outsourced workshops to undertake BVSs
customers vehicle maintenance in the
geographical areas where BVS did not retain
its own managed workshop
Why ?
Only 120 workshops were retained by BVS
after the MBO
With BVSs expansion into two neighbouring
countries, it was necessary to appoint reliable
outsourced companies which have the vehicle
capacity and experience to meet BVSs strict
criteria for maintenance and repair work.
5
outsourced
suppliers
for
vehicle
maintenance
Undertake maintenance work for BVSs
customers vehicles at over 320 locations
Independent chains of garages and workshops
which have spare capacity
Presented to customers as BVSs partners
BVSs signage and BVSs logo on all paperwork.
BVSs customers would not necessarily be able
to distinguish between any of BVSs own
managed workshops and an outsourced
workshop.
All work undertaken by all of the outsourced
workshops is updated on BVSs FLIS.
Payments to outsourced suppliers

An agreed fixed hourly rate plus an agreed
mark up on parts bought and used for
customers vehicles
Contracted hourly rate with BVS is lower than
the normal rate charged from other customers
Outsourced costs are invoiced to BVS at the
end of each calendar month
Analysed by vehicle and by outsourced
workshop
Work allocated to outsourced workshops
depends on,
Geographical location
Customers selection of the workshop
The overall number of vehicles BVS is
responsible for maintaining
Business plan expects,

Utilisation levels of 120 own managed
workshops to rise from 90% to 92% by Year 5.
High growth in the number of vehicles being
maintained.
Much of the increased volume of work to be
undertaken by outsourced workshops.
Business plan expects,

Forecasted number of vehicle hours planned
to be outsourced.
FYE 31 March 2011
fewer than 300,000

hours
FYE 31 March 2015.
over 1,000,000 hours
BVSs New IT systems
New system for BVS

A lack of operational and management
information provided by JAR FMs IT systems,
which had not been updated for many years.
When the MBO was approved Toby Baum

appointed a global IT consultancy company to
select and implement new IT systems for BVS.
BVSs New IT System

Until new IT systems were operational, at various dates
during BVSs first year of trading, JAR allowed BVS to
use its existing IT systems for a small licence fee.
By selecting the best available software solutions and
integrating these systems together, BVS was able to
reduce the implementation time for these new
systems.
BVS now incurs annual software licencing fees of 0.24
million each year. This is included in administrative
expenses.
Components of BVSs IT system

A multi-currency nominal ledger including
integrated sales and purchase ledgers and a
fixed assets register.
A fleet maintenance IT system, called Fleet

Information System (FLIS).
A cash flow forecasting modelling system.
Fleet Maintenance IT System (FLIS)

Provides management information tailored for the needs of;
Workshop managers
Head Office staff
The senior management team
BVSs customers
Installed at all workshops;

Both BVSs managed workshops and
Outsourced workshops
Provides BVSs customers with;

Improved reporting on fleet repair costs,
Vehicle downtime,
Mileage data and more

FLIS incorporates detailed reporting with the capability to track the
maintenance needs for all of BVSs customers vehicles.
FLIS holds;
statutory data, including vehicle taxes

mileage and maintenance
repair data
carbon emission monitoring data
FLIS also provides a range of management information reports, analysed

by;
vehicle,
customer,
each engineer and
managed workshop or outsourced workshop.

FLIS can also be remotely accessed by BVSs
customers for them to book their vehicles for
maintenance and repairs and to access
information on vehicle status whilst in for
servicing or repair.
This allows a seamless interface for customers,

irrespective of whether the vehicle is maintained
by one of BVSs managed workshops or by an
outsourced workshop.
New IT systems costs

Planned for hardware and software licensing
2.0 million
Incurred Final cost (net of the agreed payment received from
outsourced suppliers, for installing FLIS at all of the outsourced
workshops)
2.3 million
Accounting for the cost Administrative expenses
Charged in full against the profits in

year ended 31 March 2011
New IT systems costs

Jonas Kral, PIEs representative on the BVS
Board, was not happy with this cost over-run.
But he was re-assured by Toby Baum that the
IT systems were robust and that they were all
fully operational by the planned completion
date.
IT systems training
During the year ended 31 March 2011, all
employees and outsourced workshop
personnel were trained extensively in the use
of these new IT systems.
Additionally, they all receive regular annual
training in respect of FLIS system updates and
any new features it offers.
Customers fleet profile
Main categories of vehicles maintained

by BVS
Vans
Cars
Articulated lorries
Other vehicles (e.g. Street lightning trucks, earthmoving plant vehicles)
Main categories of vehicles maintained

by BVS
Less than 10%
Vans and Cars

Articulated lorries and
Other vehicles
More than 90%
Number of vehicles at inception of BVS

in 2010
Total = 47,500
34,100 JARs fleet
13,400 Other customers fleet
Size of fleet - more than 300
Size of fleet - less than 300
10 Customers including one large

fleet operator with
4,500
T4 with
Channavehicles
at Wisdom
84 Customers
Customer marketing
Over the first 2 years of trading, Phillip Beck was proactive in speaking to company fleet managers to win
new business.
He has been promoting the services that BVS offers
to its customers, its quality of service and
maintenance standards as well as the range of
management information that BVS can provide to
help each fleet manager run his or her fleet as cost
effectively and efficiently as possible.
Customer marketing
Phillip Beck considers that BVS offers a competitive
service, clearly priced with good levels of service and
quality of work.
BVSs geographical expansion to cover 2
neighbouring countries, as well as its home country,
also enabled it to attract fleet managers who were
looking for a single outsourced fleet maintenance
company across these 3 countries.
Customer marketing
Phillip Beck has worked closely with regional
and central government departments in BVSs
home country over the last year in order to try
to win the fleet maintenance work for some of
the governments fleet of vehicles, including
emergency vehicles such as police cars.
Contract with Central Government

A contract for 20,800 vehicles which was
signed in June 2012.
Maintenance work commenced from 1
October 2012.
The contract was for a rolling annual contract
with the possibility for a further 12,000
vehicles to be added in future.
Business Plan Number of Vehicles

Phillip Beck has had a real challenge to
achieve the high growth in new sales, to meet
the agreed business plan vehicle and sales
revenue targets.
Contract with JAR

JAR had signed a 5-year contract with BVS for
maintaining its entire vehicle fleet.
The contract is for 34,100 vehicles at 1 April
2010.
This 5-year contract gave JAR assurances that
its vehicle fleet would continue to be
maintained (as it had been previously by JAR
FM).
It generated a large revenue stream for BVS.
Contract with JAR

However, JARs fleet size is forecast to reduce,
as part of JARs planned cuts and efficiency
improvements, to 26,000 vehicles by 31
March 2015, as included in BVSs business
plan.
Procurement
Procurement function A critical

success factor
The speed of delivery of spare parts for repairs
is of great importance as the down time of
customers vehicles whilst being repaired is
crucial for its customers businesses.
Procurement function - Responsibility

Leo Willems is responsible for all areas of
procurement, including:
Negotiations of prices with outsourced suppliers
Procurement contracts with a range of suppliers of
vehicle parts and tyres.
Procurement of spare parts

BVS has in operation a large number of
contracts with large, as well as small, vehicle
parts suppliers.
These suppliers are normally able to meet the
time-critical demands for getting spare parts
delivered to BVSs managed and outsourced
workshops in the shortest possible time,
which is usually the same day as the order is
placed.
Procurement of tyres
BVS fitted over 500,000 tyres in the year to
March 2012 for its customers.
BVS considers that the cost, as well as the
quality of these tyres, is very important.
Some customers specify which manufacturers
tyres they require to be fitted, whereas other
customers leave the choice of tyre to BVSs
expertise based on quality and value for
money.
Procurement of tyres
BVS has a contract with a large European tyre
manufacturer which attracts a good volume
discount.
The reduced tyre cost is passed onto BVSs

customers, giving them a reduction in their
fleet maintenance costs.
BVS Employees
BVS Employees
895
890
885
880
875
870
Employees
865
860
855
850
845
1-Jan-10
1-Apr-10
1-Jul-10
1-Oct-10
1-Jan-11
1-Apr-11
1-Jul-11
1-Oct-11
1-Jan-12
Employee number has grown due to additional work carried

out by Head Office staff, in order to provide an efficient
service to its customers.
BVS Employees
Current Employees
19%
(166
employees)
Workshop based
Head Office
81% (724
employees)
BVS Employees
Toby Baum the BVS Board recognise the
important role all employees contribute
towards the companys success and the need
to deliver high quality of service to customers.
BVS Employees
Account
Manager and
Support team
A point of contact for

customers
Provide for customers on their

vehicles:
1. Support
2. Management information
Ensure Customer satisfaction
Customer 1
Customer 2
Customer 3
BVS Employees
Some of BVSs account managers provide
support to many customers, especially those
customers which have small vehicle fleets.
Regular customer surveys are carried out and

the general feedback is positive.
BVS has not lost any of its customers to date.
Performance Related Pay (PRP) for

employees
Why?
To try to ensure goal congruence
to help BVS to succeed
Established by whom?
Toby Baum established the performance related pay (PRP)
For whom?
for all employees
Since when?
from 1 April 2010
Specific objectives for PRP

1. All employees the achievement of the annual business
plan operating profit.
2. Workshop based employees the achievement of a
satisfactory, or better, assessment of the quality of work
carried out within each of BVSs managed workshops
based on customers assessment of their maintenance
work at each workshop.
3. Sales employees and customer account managers the
achievement of high levels of customer satisfaction as well
as the number of new customers vehicles for which BVS
acquires the maintenance work for each year.
Terms of PRP
If BVS;
meets,
or exceeds,
the business plan annual operating profit, then;
a proportion of the annual profits will be paid to all
employees,
Assumption: The assessment of their work has shown

them to be satisfactory or better.
Any employee with a poor assessment will not receive

any PRP
PRP history
Year ended 31 March 2011

PRP not paid
Year ended 31 March 2012

PRP Paid
PRP breakdown (FYE 31.03.2012)

Most of BVSs managed workshops met the satisfactory
assessment requirement and the employees at these
workshops received PRP.
All of the sales and customer account managers
received PRP for the higher than planned levels of new
customers vehicles to be maintained by BVS, although
there are some customer service issues still to resolve.
It is forecast that PRP will be paid in respect of the

current year ending 31 March 2013.
BVS
Financial
Overview
BVSs Business Plan

No. of vehicles-End year
No. of Vehicles- End year

90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
-
81,000
69,600
47,500
50,700
2010
2011
54,900
2012
60,300
2013
2014
2015
2010
2011
2012
2013
2014
2015
JAR
NA
32,100
30,100
28,100
27,000
26,000
Other
NA
18,600
24,800
32,200
42,600
55,000
BVSs Business Plan

2011
Revenue
COS
GP
OP
NP
2012
2013
2014
2015
84.0
92.2
102.6
118.1
139.8
64.9
71.6
79.7
91.9
109.5
19.1
20.6
22.9
26.2
30.3
1.2
3.8
5.1
7.2
10.0
0.7
2.5
3.4
4.9
6.9
Figures in Euro Millions

BVSs Business Plan

Planned Performance
160
139.8
140
118.1
Euro millions
120
100
80
84
64.9
92.2
71.6
102.6
109.5
91.9
79.7
Revenue
COS
60
40
20
GP
19.1
20.6
22.9
2011
2012
2013
26.2
30.3
2014
2015
0
BVSs Business Plan

Planned Performance
35
30.3
30
26.2
22.9
Euro millions
25
20
19.1
20.6
GP
OP
15
10
5
0
PAT
10
3.8
1.2
0.7
2011
2.5
2012
5.1
3.4
2013
7.2
4.9
2014
6.9
2015
Plan vs. Actuals

Figures in Euro Millions
2011
Budget
2011
Actual
%
Change
2012
Budget
2012
Actual
%
Change
Revenue
84.0
84.9
01.07
92.2
93.9
01.84
COS
64.9
66.2
02.00
71.6
72.8
01.68
GP
19.1
18.7 (02.09)
20.6
21.1
02.43
0.2
00.00
Dist. Cost
Ad Cost
0.2
0.2
00.00
0.2
17.7
18.0
01.69
16.6
16.5 (00.60)
OP
1.2
0.5 (58.33)
3.8
4.4
15.79
Fin Cost
0.2
0.2
0.2
0.2
00.00
PBT
1.0
0.3 (70.00)
3.6
4.2
16.67
Tax
0.3
0.1 (66.67)
1.1
1.3
18.18
PAT
0.7
0.2
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2.5
2.9
16.00
00.00
Plan vs. Actuals

100
90
92.2 93.9
84 84.9
80
Euro Millions
70
71.6 72.8
64.9 66.2
Revenue-Budget
60
Revenue-Actual
50
COS-Budget
COS-Actual
40
GP-Budget
30
20.6 21.1
19.1 18.7
20
10
0
2011
2012
GP-Actual
Plan vs. Actuals

5
4.4
4.5
4
3.8
Euro Millions
3.5
2.9
3
2.5
2.5
PAT-Actual
1.2
1
0.5
OP-Actual
PAT-Budget
2
1.5
OP-Budget
0.7
0.5
0.2
0
2011
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Revised 2013 Business Plan

No. of vehicles by contracts (Year End 2013)
JAR
Government Contract-New ( Oct 2012)
Other
Capacity
28100
28100
20800
32200
33200
Original Plan Revised Forecast
Utilization @ Managed Locations

Outsourced Contracts (Vehicle hours)
Description
Revenue
91.0%
91.5%
516
851

102.6
122.9
COS
79.7
98.5
GP
22.9
24.4
OP
5.1
6.6
3.4
4.5
PAT
(Euro-Millions)
2013- Original Plan vs. Revised

Forecast
90000
82100
80000
Euro Millions
70000
60000
60300
50000
40000
30000
33200
32200
28100
28100
20800
20000
10000
0
0
Plan
Total
Forecast
JAR
Other
Government

Forecast
Capacity Utilization in Revised Forecast
Percentage increase
Managed Locations
0.50%
Outsourced Contracts
64.92%
1000
Vehicle Hours
851
800
600
Capacity at Managed
Workshops(Plan)
516
8.5
9.0
400
Capacity at Managed
Workshops(Forecast)
Utilised
200
Idle
0
Plan
Forecast
Outsourcing
91.0
91.5

Forecast
30
140
122.9
25
120
102.6
Euro Millions
Euro Millions
22.9
98.5
100
79.7
80
24.4
60
20
15
10
40
6.6
22.9 24.4
20
0
5.1
4.5
3.4
0
Revenue
Original Plan
COS
GP
GP

Revised Forecast
Original Plan
OP
PAT
Revised Forecast
2011 vs. 2012- Actual

(Vertical Analysis) Figures in Euro Millions
2011
Actual
2012
Actual
Change
(,millions)
%
Change
Revenue
84.9 100.00
93.9 100.00
9.0
10.60
COS
66.2
77.97
72.8
77.53
6.6
09.97
GP
18.7
22.03
21.1
22.47
2.4
12.83
0.2
00.24
0.2
00.21
0.0
00.00
18.0
21.20
16.5
17.57
(1.5) (02.38)**
OP
0.5
00.59
4.4
04.69
3.9 780.00
Fin Cost
0.2
00.24
0.2
00.21
0.0
PBT
0.3
00.35
4.2
04.48
3.9 1300.00
Tax
0.1
00.12
1.3
01.38
1.2 1200.00
PAT
0.2
00.23
2.9
03.10
2.7 1350.00
Dist. Cost
Ad Cost
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at Wisdom
**Admin costs reduced from 2011
to 2012
by 1.5 million which is 02.38%.
00.00
2011 vs. 2012- Revenue

0.2
2011
0.2
0.1 0.2
0.2 0.2
1.3
2012
2.9
18
16.5
72.8
66.2
COS
Fin Cost
Adm Cost
Tax
Dist Cost
PAT
COS
Fin Cost
Adm Cost
Dist Cost
Tax
PAT
Ratio Analysis - 2012

Profitability Ratios
Efficiency Ratios
Days
Gross Profit Margin
22.47%
Asset turnover
4.100
Operating Profit Margin
04.69%
Inventory turnover
06.3
58.240
Net Profit Margin
03.09%
Receivables turnover
60.1
6.078
ROCE (4.4/(5.1+1.4)
0.6769
Payables turnover
68.7
5.314
Working Capital
Liquidity Ratios
WC cycle
3.3 million
(02.3)
Current Ratio (19.7/16.4)
1.201
Quick Ratio((19.7-1.6)/16.4)
1.104
Investor Ratios
Cash Ratio (0.3/16.4)
0.018
EPS (2.9/0.4)
7.25
Assets / share (Book Value)
57.25
Gearing Ratios
Gearing (D/A) (1.4/22.9)
06.11%
Debt/Equity (1.4/5.1)
27.45%
Interest Cover (4.4/0.2)
22
Important Financial Data

Topics of 2012
Equity of BVS
Debt of BVS
Non Current Assets
Non Current Assets vs. Current Assets
Current Assets vs. Current Liabilities
Financing of BVS
Equity of BVS
Shareholders
No. of
Shares
%
Holding
0.50
@PAR
4.50
Sh:Prem
Toby Baum (MD)
70,000
17.5
35,000
315,000
Leo Willems (OD)
30,000
7.5
15,000
135,000
Phillip Beck (SD)
30,000
7.5
15,000
135,000
Annika Larsen (FD)
30,000
7.5
15,000
135,000
240,000
60.0
120,000
1,080,000
400,000
100.0
PIE
(Private Equity
Provider)
TOTAL
* Par Value of a share
0.50
** Share Premium
4.50
200,000 1,800,000
Investor Ratios
EPS
Assets / share (Book Value)

7.25
57.25
Equity of BVS
Shareholders
%
Holding
Toby Baum (MD)
17.5
Leo Willems (OD)
7.5
Phillip Beck (SD)
7.5
Annika Larsen (FD)
7.5
PIE (Private Equity Provider)
TOTAL
Shareholding
17.5
7.5
60
7.5
60.0
100.0
7.5
Toby Baum (MD)

Leo Willems (OD)
Phillip Beck (SD)
Annika Larsen (FD)
PIE(Private Equity Provider)
Equity of BVS
Equity 2012
Million
Issued Share Capital
0.2
Share Premium
1.8
Retained Earnings
3.1
TOTAL
5.1
0.2
1.8
Equity
Issued Share Capital
Share Premium
3.1
Retained Earnings
Debt and Cost of Debt of BVS

Description
Amount
( Million)
Loan
Gearing Ratios
1.4
Financial Cost 2012
0.2
LESS Loan Interest

(1.4M*12%)
( 0.168)
Other finance costs
0.032
0.032
Gearing (D/A)
06.11%
Debt/Equity
27.45%
Interest Cover Ratio
22
Finance costs
Loan interest
0.168
Other finance costs
Non Current Assets 2012

Description
Amount
( Million)
As @ 31/03/2011
3.4
ADD Purchases
0.2
LESS Depreciation
( 0.4)
As @ 31/03/2012
3.2
Non Current Assets vs. Current Assets

Description
Amount
( Million)
Non Current Assets
3.2
Current Assets
19.7
Inventory
Trade Receivables
1.6
17.8
17.8
Cash and Cash equivalents
0.3
Total Assets
22.9
Assets
3.2
NonCurrent
Assets
Current Assets
0.3 Current Assets 1.6
19.7
Inventory
Trade
Receivables
Cash and Cash
equivalents
Non Current Liabilities vs.

Current Liabilities
Description
Amount
( Million)
Non Current Liabilities
Trade Payables
Tax Payables
0.5
16.4
0.5
14.6
14.6
1.3
Total Liabilities
17.8
1.4
Debt Liabilities
Non Current
Liabilities
Current Liabilities
1.3
1.4
Current Liabilities
JAR(For acquisition)
Current Liabilities
JAR(For acquisition)
Trade Payables
Tax Payables
16.4
Current Assets vs. Current Liabilities

Description
Amount
( Million)
Current Assets
19.7
Current Liabilities
16.4
25
20
19.7
Euro Millions
16.4
15
10
5
0
Current Assets
Current Liabilities
Key Personnel
Toby Baum- Managing Director

Aged 48.
Recruited as the new chief executive of JAR FM in
August 2007.
Previously had worked as a Fleet Maintenance
Operations Director
in a small profitable Fleet
maintenance company.
Toby Baum- Managing Director

Instrumental in preparing the business plan and
finding a private equity investor PIE to form BVS on
1st April 2010.
Holds 17.5% of the shares of BVS.
Leo Willems- Operations Director

Aged 55.
Has worked for several companies in the middle
management positions involved in fleet maintenance
and fleet management.
Joined JAR in 2005 when the company recruited new
management personnel to improve operational
efficiency and profitability.
Holds 7.5% in BVS

Phillip Beck Sales and Customer support

Director
Aged 40.
Was recruited in November 2007 .
Role was identify new external customers and to
markets to sell JAR FMs fleet maintenance services.
Had worked as a fleet manager for 8 years responsible
for large fleet of vehicles.
Phillip Beck Sales and Customer support

Director
Has brought in and retained many large customers
thereby increase the revenue levels with a little impact
on the fixed cost.
Holds 7.5% of shares of BVS.
Annika Larsen Finance Director

A qualified accountant aged 40.
Initially joined as a business consultant to arrange and
establish MBO.
Had previously worked in an international business

consultancy firm and had held senior finance roles in
retail and distribution industries.
But has no experience in fleet maintenance industry.
Holds 7.5% shares of BVS.
Jonas Kral Non Executive Director- PIEs

representative
Aged 45.
Extremely experienced in helping new businesses
and MBOs to achieve their business plan and had
worked as a board representative many times
before.
Role is to ensure that BVS delivers the levels of
cash flows and profitability included in the
business plan.
Jonas Kral Non Executive Director- PIEs

representative
Also it is his role to steer BVS towards flotation so
that PIE can exit and realise his investment.
PIE owns 60% of shares of BVS.
Jan Grein IT Manager

Aged 32 and was recruited by Jonas Kral in April 2010
to help implement and manage BVSs newly
established IT systems .
Previously worked as an IT manager in a competitors
fleet maintenance company.
Has established good relationships with many

workshop managers who believe that he is
approachable and helpful when they experience IT
problems.
Carmen Kemp- Human Resources Manager

Aged 55.
Recruited in April 2010.
Summary of Key Personnel

Name
Position
% of
Age
shares
Past Experience
Toby
Baum
Managing
Director
17.5
48
Fleet maintenance
operations Director
Leo
Operations
Willems Director
7.5
55
Middle manager in Fleet

Management and
Maintenance
companies
Phillip
Beck
7.5
40
fleet manager for eight

years
Sales and
Customer
Support
Director
Summary of Key Personnel

Name
Position
% of
shares
Age
Past Experience
Annika
Larsen
Finance
Director
7.5
40
Consultant and senior

financial positions
Jonas Kral
45
Board Representative
in many businesses
Jan Grein
NEDRepresentat
ive of PIE
(60%)
IT manager -
32
IT manager
Carmen
Kemp
HR
Manager
55
N/A
Key Features of Key Personnel

Similarities
All the shareholders (Toby Baum, Leo Willems, Phillip
Beck, Annika Larsen) except for the PIE has borrowed
and invested in the company.
Toby Baum, Leo Willems, Phillip Beck, Annika Larsen

has equal shareholding (7.5%) in the BVS.
Toby Baum, Leo Willems, Phillip Beck are former
employees of JAR FM.
Comparison between Director Board

Most senior director in the company is Leo Willems
(55).
Youngest member in the Director Board is Jan
Grein(32).
Managers who have prior experience in fleet
maintenance industry or similar industry.
Toby Baum
Leo Willems
Phillip Beck
Jan Grein
Comparison between Director Board

Directors who come from JAR FM,
Toby Baum (Since August 2007)
Leo Willems (Since 2005)
Phillip Beck (Since November 2007)
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BVS Fleet Maintenance

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The Types range from:

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What is fleet management?

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Wikipedia about Fleet Management

Fleet management is the management of a company's

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Importance of Vehicle Maintenance

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European Fleet Market Trend

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Fleet Maintenance practices

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Importance of Fleet Maintenance

Fleet Maintenance Companies

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Fleet Maintenance Companies

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Large multi-national companies

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Specialised fleet maintenance

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Top 10 UK Fleet Management

Fleet size (Number

Lloyds Banking Group

49,483 Arnold Clark Automobiles

Top 10 US Fleet Management

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Note - The forecast for 31 MarchT42013

Some of European Fleet

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Industry Fleet maintenance

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Key Years throughout the History

JAR was a state owned company.

Continuous loss making of JAR FM.

JAR was privatised.

Key Years throughout the History

Secured new 6 vehicle fleet operators

Due to pressure to increase group profits and to concentrate on

Finalised the MBO and new company named as BVS

Key Years throughout the History

Business plan was set up to achieve a growth in revenues from

Employee numbers had grown slightly to 890 employees.

The latest forecast is higher than planned operating profit at 6.6

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Non Current Assets

Non Current Liabilities

LESS Current Liabilities

Net Current Assets

JARs in-house fleet operation

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