Dcc Plc · LSE:DCC
Dcc — FY2015 Earnings Presentation
24 slides from Dcc's earnings presentation, May 2015
Slide 1: Results for the year ended 31 March 2015
Results for the year ended 31 March 2015
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: Financial & Operational Highlights
Financial & Operational Highlights Results reflect very strong operating performance: • Group operating profit of £228 million up 10.1% (10.5% on a continuing basis) – upper end of company guidance • Operating profit growth in each of DCC’s four divisions • Excellent operating profit to free cash fl
Slide 4: Highlights
Highlights 2015 20141 % change £m £m Revenue – continuing2 10,606 11,045 -4.0% Operating profit3 – continuing2 221.7 200.7 +10.5% Group operating profit3 228.2 207.3 +10.1% Profit before net exceptionals, amortisation 199.6 186.9 +6.8% of intangible assets and tax Adjusted EPS3 – continuing2 202.2 p
Slide 5: Business Overview: Divisional Results
Business Overview: Divisional Results By Division 2015 20141 % change 6% DCC Energy 18% DCC Technology £m £m 54% DCC Healthcare Operating profit2 – continuing3 22% DCC Environmental DCC Energy 119.4 110.5 +8.1% DCC Technology 49.3 48.1 +2.6% By Geography DCC Healthcare 39.7 30.4 +30.6% DCC Environme
Slide 6: Acquisition & Capital Expenditure
Acquisition & Capital Expenditure Acquisitions Capex Total £m £m £m DCC Energy 457.7 40.7 498.4 DCC Technology 39.7 8.0 47.7 DCC Healthcare 54.3 5.8 60.1 DCC Environmental - 8.2 8.2 DCC Food & Beverage* 2.4 0.6 3.0 Total 554.1 63.3 617.4 * Now discontinued 6
Slide 7: Cash Flow
Cash Flow £’m * Cash conversion of 138% Depreciation Operating Capital 400 Cash Flow & Other Expenditure Working 350 Capital 47.0 63.3 Free Cash Flow * Interest & Tax 102.6 377.8 Free 300 314.5 60.0 Cash Flow after Operating Interest and Tax 250 Profit 200 254.5 228.2 150 100 50 0 7
Slide 8: Acquisition of Butagaz
Acquisition of Butagaz DCC SHGn s
Slide 9: 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 10: 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 – c. 6 year cash payback • Signi
Slide 11: 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 12: 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 13: 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 14: Financial Impact (Pre-Placing) & Timetable
Financial Impact (Pre-Placing) & Timetable • Pro-forma full year impact: – Operating profit + €74m (£54m*) or 24% of DCC FY15 (continuing) – Adjusted EPS + c. 58c (c.42p*) or c.21% of DCC FY15 (continuing) • Cash payback of approximately six years • Pro-forma DCC Group net debt / EBITDA at seasonal
Slide 15: Proposed Placing
Proposed Placing • DCC remains ambitious to continue the growth and development of the Group • Modest year end net-cash position, but c.£465 million of development expenditure now committed to be paid in FY16 • Placing will maintain acquisition capacity and momentum • Strong balance sheet a very sig
Slide 16: Summary
Summary • Very pleasing FY15 performance across all key metrics • FY16 outlook at this early stage - operating profit and adjusted EPS very significantly ahead of the prior year, assuming: – Completion of Esso Retail France and Butagaz acquisitions within expected timeframes – Normal winter weather
Slide 17: 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 18: The strategy has delivered results over the long term
The strategy has delivered results over the long term EPS (£ pence) Dividend Growth (£ pence) 84.5 21 year CAGR* 21year CAGR * 209.2 76.9 12.2% 191.2 14.6% 69.9 67.6 173.1 171.2 63.2 157.9 59.8 139.7 142.0 51.5 115.9 39.8 97.5 33.5 84.5 78.4 29.2 73.6 64.9 25.4 58.3 22.5 50.4 18.0 41.9 15.1 37.7 12.
Slide 19: Appendix - Results
Appendix - Results
Slide 20: DCC Energy
DCC Energy 2015 2014 % change Volume (Litres) 10.8 bn 10.2 bn +5.7% Revenue £7,624.1 £8,243.7m -7.5% Operating profit £119.4m £110.5m +8.1% Return on capital employed 19.8% 17.5% Excellent year for growth and development in DCC Energy Profit by Sector Operating profits 8.1% ahead of prior year, 10.3
Slide 21: DCC Energy
DCC Energy 2015 2014 % change Volume (Litres) 10.8 bn 10.2 bn +5.7% Revenue £7,624.1 £8,243.7m -7.5% Operating profit £119.4m £110.5m +8.1% Return on capital employed 19.8% 17.5% LPG: • Good growth in commercial and industrial sector in UK & Ireland, with autogas strong in Benelux Profit by Sector •
Slide 22: DCC Technology
DCC Technology 2015 2014 % change Revenue £2,350.3m £2,264.0m +3.8% Operating profit £49.3m £48.1m +2.6% Operating margin 2.1% 2.1% Return on capital employed 25.5% 21.1% Satisfactory result with operating profit up 2.6%, 3.7% on a constant currency basis UK & Ireland: • Strong growth across reselle
Slide 23: DCC Healthcare
DCC Healthcare 2015 2014 % change Revenue £488.1m £406.5m +20.1% Operating profit £39.7m £30.4m +30.6% Operating margin 8.1% 7.5% Return on capital employed 16.6% 14.2% Excellent year for DCC Healthcare with operating profits growing by 30.6% (40.4% excluding Virtus Inc., disposed in March 2014) Rev
Slide 24: DCC Environmental
DCC Environmental DCC Environmental 2015 2014 % change Revenue £143.6m £130.6m +9.9% Operating profit £13.3m £11.7m +13.2% Operating margin 9.3% 9.0% Return on capital employed 9.7% 8.6% DCC Environmental recorded a strong result with operating profit increasing Revenue Split by 13.2% and ROCE also