DCC PLC · LSE:DCC
DCC — Investor Presentation (May 2015)
34 slides from DCC's investor presentation, May 2015
Slide 1: Company Overview Presentation
Company Overview Presentation
Slide 2: Disclaimer
Disclaimer This presentation does not constitute an invitation to underwrite, subscribe for or otherwise acquire or dispose of any shares or other securities of DCC plc (“DCC”). This presentation contains some forward-looking statements that represent DCC’s expectations for its business, based on cu
Slide 3: DCC
DCC DCC is an international sales, marketing, distribution and business support services group operating across four divisions Profit* by division (YE 31 March ‘15) Profit* by geography (YE 31 March ‘15) DCC Energy 6% 15% UK 18% DCC Technology 8% ROI 54% DCC Healthcare 22% Continental 77% Europe/Oth
Slide 4: Long History of EPS Growth
Long History of EPS Growth... EPS (£ pence) 209.2 191.2 21year CAGR * 12.2% 173.1 171.2 157.9 10 year CAGR 139.7 142.0 10.3% 115.9 5 year CAGR 5.8% 97.5 84.5 78.4 73.6 64.9 58.3 50.4 41.9 37.7 29.9 32.3 25.9 22.1 18.8 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 20
Slide 5: Strong Cash Flow Generation which Supports Development Activities
…with Strong Cash Flow Generation which Supports Development Activities 21 Year • Free cash flow* of £2.3bn 1 April 1994 – 31 March 2015 £m CAGR • Free cash flow conversion of 104% and Operating profit 2,195 13.0% CAGR of 13.9% Decrease in working capital 214 Depreciation 614 • Revenue increased fro
Slide 6: 21 Year Review
21 Year Review 7 years to 31 7 years to 31 7 years to 31 Total £ millions March 2001 March 2008 March 2015 21 years Operating Profit 260 669 1,266 2,195 EBITDA 348 861 1,600 2,809 Operating cash flow 328 715 1,930 2,973 Free cash flow* 228 493 1,552 2,273 Free cash flow conversion 87.7% 73.7% 122.5%
Slide 7: Consistent dividend growth
…. along with consistent dividend growth Dividend Growth (pence sterling) 84.5 76.9 21year CAGR * 14.6% 67.6 69.9 63.2 10 year CAGR 59.8 12.8% 51.5 5 year CAGR 39.8 7.2% 33.5 29.2 25.4 22.5 18.0 15.1 12.9 11.3 10.0 8.1 8.6 6.1 7.1 4.8 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
Slide 8: DCC's Strategy
DCC’s Strategy Our Objective: To continue to build a growing, sustainable and cash generative business which consistently provides returns on total capital employed significantly ahead of its cost of capital Our strategic priorities: • Creating and sustaining leading positions in each of the markets
Slide 9: Leading Market Positions
Leading Market Positions Division Market Positions • # 1 oil distributor in Britain with 18% of the market (the next largest competitor has c. 3%) • # 1 independent oil distributor in Sweden (16% market share) • # 2 oil distributor in Denmark (12% market share) and Austria (13% market share) DCC Ene
Slide 10: Acquisitions
Acquisitions Cash spent on acquisitions By Division 180 169 160 Energy, £700m 144 137 140 124 4% Technology, 120 7% £200m 109 100 15% Healthcare, 86 £m 83 £224m 80 72 66 58% 64 Environmental, 60 48 45 50 16% £88m 40 31 Food & Beverage, 21 20 11 £47m * 0 2009 2012 2000 2001 2002 2003 2004 2005 2006 2
Slide 11: The Business: By Division
The Business: By Division
Slide 12: DCC Energy
DCC Energy (54% of FY 2015 Group Profit) DCC Energy is the leading oil and liquefied petroleum gas (“LPG”) sales, marketing and FY 2015 distribution business in Europe • Oil distribution for transport, heating and industrial / agricultural processes Revenue £7,624.1m • LPG distribution for heating,
Slide 13: DCC Energy – Business of Scale
DCC Energy – Business of Scale Market Geography Volume Market Share Business Statistics FY 2015 (inc. acquisitions announced) Position Britain – Oil c. 5,350mL c. 18% – oil #1 Britain – LPG c. 260kT c. 30% – LPG #2 Volumes c. 13.5 billion Litres Britain – Retail & Cards c. 1,200mL Ireland – oil c. 8
Slide 14: Acquisition of Butagaz
Acquisition of Butagaz DCC ait
Slide 15: Transaction Highlights
Transaction Highlights • Acquisition of the second largest LPG business in France, with market share of 25% and the leading brand in the market • Market leader in the cylinder and small bulk market segments • Sells directly or indirectly to over four million customers • Significantly increases the s
Slide 16: Transaction Highlights – Key Financials
Transaction Highlights – Key Financials • Valuation of €464m (£338m*) on a debt-free, cash-free basis • Underlying EBITDA**: €123.6m (£89.9m) – EBITDA multiple of 3.8 • Underlying EBIT: €74.2m (£53.9m) – EBIT multiple of 6.2 • Excellent record of cash flow conversion – cash payback c. 6 years • Sign
Slide 17: Strategic Rationale
Strategic Rationale Acquisition of a leading market position in a large consolidated market: Consistent with DCC’s strategy to have leading market positions in the sectors in which it operates 25% market share, well positioned to grow market share following recent market changes Particular foc
Slide 18: Strategic Rationale
Strategic Rationale Operating in a stable market: Slow decline in mature western markets to flatten as 1) LPG seen as cleaner fuel 2) roll out of natural gas grid largely complete 3) electricity prices increasing LPG becoming cheaper relative to oil – B2B oil to LPG conversions B2C demand led
Slide 19: Business Mix
Business Mix No.1 No.1 Packed / Cylinder Small bulk Large bulk Autogas Overview LPG in cylinders mainly Customers with low annual Customers who purchase Used as a fuel for used for cooking and forklift usage (<80T), mainly 80 tonnes or more of LPG transportation trucks by commercial domestic and sma
Slide 20: Butagaz Supply Chain
Butagaz Supply Chain Secondary Primary Storage / Points LPG supply and tertiary Customers transport filling of sale transport 26,000 packed points Norgal 3 Mandataires(2) and of sale (principally > 4,000,000 Grand Nord supermarkets and Packed end users hypermarkets) Donges 168,000 domestic & 42,000
Slide 21: LPG in France
LPG in France Butagaz 6% 2% 25% Totalgaz (Disposal by Total to UGI announced in 2014. Deal 19% expected to close H1 2015 subject to competition review) Antargaz (UGI) Primagaz (SHV) 23% 25% Vitogaz (Rubis) • Total LPG volumes in France - c. 1.8 million tonnes (2014) • Second largest market in Wester
Slide 22: Butagaz - Potential within DCC
Butagaz - Potential within DCC • Integration of Antargaz & Totalgaz may create opportunities to grow market share • Leverage the strong Butagaz brand in related energy sectors • Greater B2B focus e.g. Oil2LPG and LNG • Expand the domestic bulk market • Continued cost reduction • Development of a nat
Slide 23: Butagaz - An Excellent Fit for DCC
Butagaz - An Excellent Fit for DCC Strong competitive position in the French LPG market Potential value creation opportunities Established and through brand trusted Butagaz brand monetisation Experienced and ambitious Strong profitability management team and cash generation with a clear strategy del
Slide 24: Timetable
Timetable • Expected transaction timetable: – 19 May 2015 Acquisition announcement – September 1. Works council consultation finalised 2. Sign SPA 3. EC Competition / French Ministry of Economy filings – Calendar Q4 2015 Completion
Slide 25: DCC Energy – vision & strategy
DCC Energy – vision & strategy DCC Energy’s vision is to be a global leader in the sales, marketing and distribution of fuels and related products and the provision of services to energy consumers: Oil •Continue to consolidate existing markets to drive greater customer density & logistics efficienci
Slide 26: DCC Technology
DCC Technology (22% of FY 2015 Group Profit) FY 2015 Leading route-to-market partner for global consumer Revenue £2,350m and SME technology brands Operating profit £49.3m ROCE 25.5% DCC Technology operates under the brand 14,000+ 350 industry customers Consumer & In the home leading SME In the offic
Slide 27: Technology Distribution – Integral part of the supply chain
Technology Distribution – Integral part of the supply chain Technology distribution represents c. 22% of the global ICT market Allows suppliers to concentrate on core activities including product development and end user marketing How delivers value for partners: – for Suppliers • Ability to m
Slide 28: DCC Technology – leading route to market partner
DCC Technology – leading route to market partner Products Market Computing (including PC's, servers, tablets) Market 14% DCC Technology Geography Communications Position 30% Britain No. 1 Printers, consumables and IT 8% peripherals Ireland No. 1 Storage and networking 10% • In the home France No. 7
Slide 29: DCC Technology – vision & strategy
DCC Technology – vision & strategy FY 2015 DCC Technology’s vision is to be the leading European route to market and supply chain partner for global consumer and Revenue £2,350m SME technology brands Operating profit £49.3m • Delivering an industry-leading service offering ROCE 25.5% • Generating hi
Slide 30: DCC Healthcare overview
DCC Healthcare overview (18% of FY 2015 Group Profit) Sales, marketing and distribution of FY 2015 pharmaceuticals and medical devices Revenue £486.7m and provision of services to health & beauty brand Operating profit £39.7m owners ROCE 16.6% 10 year operating £203.4m • Well positioned to benefit f
Slide 31: DCC Healthcare overview – Our Business
DCC Healthcare overview – Our Business Revenue Split FY 2015 DCC Vital • Most comprehensive sales channel coverage in DCC Vital Britain and Ireland, including 29% • #1 in hospital supplies in Ireland 71% DCC H&BS • #1 in GP supplies in Britain • A leading generics player in Britain DCC Health & Beau
Slide 32: DCC Healthcare – vision & strategy
DCC Healthcare – vision & strategy DCC Healthcare’s vision is to build a substantial European healthcare business principally focused on sales, marketing and distribution of pharmaceuticals and medical devices and provision of services to health & beauty sector brand owners • With strong local marke
Slide 33: DCC Environmental – our business
DCC Environmental – our business (6% of FY 2015 Group Profit) FY 2015 Geography Market Position Revenue £143.6m # 1 hazardous waste management Operating profit £13.3m Ireland business ROCE 9.7% A leading recycling, waste management 10 year operating profit £95.5m and resource recovery business – CAG
Slide 34: DCC Environmental – vision & strategy
DCC Environmental – vision & strategy DCC Environmental’s vision is to continue to build on its market position as one of the leading providers of recycling, waste management and resource recovery services in Britain and Ireland Strategy • Position the business to take advantage of the trend towards