LKQ Europe: New leadership for a new direction?

In 2022, LKQ Europe ended the year with organic growth of 5%. The 2023 landing should see this level of growth exceeded for the subsidiary, which announced nine-month sales of €4.4 billion, an increase of 8%. Mission accomplished for Varun Laroyia, whose roadmap included accelerating growth. We knew that the appointment of Varun Laroyia, who came from Chicago with a solid background as the Group's chief financial officer, was not a long-term one. He temporarily took over the helm of the European subsidiary in October 2022 to replace Arnd Franz, initiator of the One LKQ consolidation plan, who threw in the towel after three years to become managing director of the German company Mahle. A sort of interim position before finding the ideal CEO. And so it is Andy Hamilton, a connoisseur of the European market (via Euro Car Parts) and of the Group's inner workings, who will have to pursue the Group's consolidation plan at European level. Will he amend the plan so as to leave his mark, and speed up the process? LKQ still has a long way to go to finalise the harmonisation of its European bases. What about progress on streamlining the back office, logistics and purchasing? This is a complicated exercise, with five entities that are strong in their own zone, all of which need to be brought into a single mould, while preserving the trade specifications of each market. This squaring of the circle requires time, a concept not much appreciated by companies listed on the stock exchange (Nasdaq in this case), which demand quick results!

In the meantime, LKQ Europe has announced only one major external growth deal for 2023: the strategic acquisition of the Rhenoy group, a Dutch supplier of remanufactured engines and reusable parts. This will add a new building block to the European circular economy, which currently consists solely of the Dutch remanufacturer VEGE and the Swedish company Atracco for reusable parts. Under Andy Hamilton's leadership, will the Group continue to add new 'business' building blocks, or will it return to densifying its network? While the goal set for the zone bosses is to place LKQ in the Top 3 by country, there are still regions to be conquered, particularly in Eastern Europe, the Baltic States and, of course, the South with the Iberian Peninsula, where the Group cannot afford not to set up operations. "The issue today is to position ourselves to meet the challenges of the future. The technological transition, the need to address European fleets, incorporate garages... The world has changed, and we need to turn the corner. We're here to build a different model, one that's sustainable and profitable", recalled Alex Gelbke, LKQ's head of France and Benelux, a few months ago.