DCC PLC · LSE:DCC
DCC — H1 FY2007 Earnings Presentation
21 slides from DCC's earnings presentation, Nov 13, 2006
Slide 1: Interim Results: Six months ended 30 September 2006
Interim Results Six months ended 30 September 2006 13 Nov 2006
Slide 2: Introductory overview
Introductory overview • DCC is a sales, marketing and business support services group • Focused on the energy, IT & entertainment products, healthcare, food & beverage and environmental markets • Approximately 5,500 employees • Listed in Ireland and London - Business Support Services • Market capita
Slide 3: Strong and consistent growth
Strong and consistent growth Adjusted EPS (cent) – years ended 31 March 157.2 158 144 137.2 130 121.9 Adjusted EPS CAGR 116 111.0 5 yrs 13.2% 98.3 10 yrs 17.3% 102 88 84.7 74 68.8 57.2 60 45.4 46 37.5 32 18 4 -10 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Interim Results 2006 3
Slide 4: Financial highlights
Financial highlights Six months ended 30 September 2006 Change on € prior year Revenue 1,803.3 m + 18.1% Operating profit* 45.2 m + 17.1% Share of associates’ PAT 4.7 m - 16.0% Profit before exceptional items, 44.5 m + 8.3% amortisation of intangibles & tax Profit before tax 40.4 m + 20.2% Adjusted
Slide 5: Results highlights
Results highlights • DCC Energy, DCC SerCom and DCC Environmental all achieved excellent profit growth • DCC Healthcare achieved strong revenue growth - revenue mix, certain product shortages and developing activities reduced operating margin • Excellent performance in Food & Beverage businesses in
Slide 6: Business overview
Business overview Six months ended 30 September 2006 Change on €’m prior year DCC Energy 12.3 + 14.4% DCC SerCom 11.0 + 45.3% DCC Healthcare 10.0 - 0.7% DCC Food & Beverage 7.3 - 1.4% DCC Environmental 4.6 + 64.4% Operating profit 45.2 + 17.1% Share of associates’ PAT 4.7 - 16.0% Net financing costs
Slide 7: DCC Energy
DCC Energy Six months ended 30 September 2006 Change on 2006 2005 prior year Revenue €996.3m €822.0m + 21.2% Operating profit €12.3m €10.7m + 14.4% • Excellent profit growth 58 Operating profit (€m) 54 CAGR 51.8 56.0 50 - 5 years: 20% 45.8 • Good organic growth 46 - 10 years: 18% 42.3 42 • First tim
Slide 8: DCC SerCom
DCC SerCom Six months ended 30 September 2006 Change on 2006 2005 prior year Revenue €529.2m €448.9m + 17.9% Operating profit €11.0m €7.6m + 45.3% Operating margin 2.1% 1.7% 36Operating profit (€m) 34.0 32.9 • Excellent profit growth 32 CAGR 30.5 30.4 - 5 years: -6% • SerCom Distribution 28 - 10 yea
Slide 9: DCC Healthcare
DCC Healthcare Six months ended 30 September 2006 Change on 2006 2005 prior year Revenue €112.2m €101.6m + 10.4% Operating profit €10.0m €10.1m - 0.7% Operating margin 8.9% 9.9% Operating profit (€m) 21.6 • Strong revenue growth CAGR 19- 5 years: 3% 18.5 • Reduced operating margin due to revenue mix
Slide 10: DCC Food & Beverage
DCC Food & Beverage Six months ended 30 September 2006 Change on 2006 2005 prior year Revenue €136.5m €139.7m - 2.3% Operating profit €7.3m €7.4m - 1.4% Operating margin 5.4% 5.3% 15.5 • Good profit growth in Irish activities offset by difficult Operating profit (€m) 15 CAGR trading conditions in UK
Slide 11: DCC Environmental
DCC Environmental Six months ended 30 September 2006 Change on 2006 2005 prior year Revenue €29.1m €15.3m + 90.5% Operating profit €4.6m €2.8m + 64.4% Operating margin 16.0% 18.5% Operating profit (€m) 5.5 5.5 • Excellent profit growth CAGR 5.0 - 5 years: 37% • Tracey performed ahead of expectations
Slide 12: Associates
Associates Six months ended 30 September 2006 Change on 2006 2005 prior year Share of associates’ PAT €4.7m €5.7m - 16.0% • As expected, planning delays have caused a short-term reduction in the contribution from Manor Park Homebuilders, DCC’s principal associate. These delays, also as expected, wil
Slide 13: Management
Management • Successful management of diversity over many years • Depth of specialist knowledge in each division • Management stability throughout the Group • Combination of entrepreneurial and professional management • Management motivated to maximise shareholder value • Continuing focus on managem
Slide 14: Sales and marketing – a core competence
Sales and marketing – a core competence Selected Leading Brands DCC’s sales and marketing businesses represent over 80% of the Group operating ENERGY profit. In these businesses DCC applies similar skills and disciplines to drive growth for leading brands in different IT & markets ENTERTAINMENT PROD
Slide 15: Acquisition skills – a core competence
Acquisition skills – a core competence • Structured acquisition search process Acquisition summary: generates a continual flow of opportunities 6 mths to 30/09/06 €’m • Acquisition negotiation and structuring DCC Energy DCC Healthcare 28.2 8.8 DCC Environmental 25.8 • Depth of experience in acquisit
Slide 16: Strategy for continuing growth
Strategy for continuing growth • Continued focus on two broad business activities: - Sales, marketing and distribution - Business support services • Increased focus on procurement and supply chain management skills • Constantly seek to maximise organic growth • Constantly seek complementary bolt-on
Slide 17: Progressive dividend policy
Progressive dividend policy Dividend (cent) – y/e 31 March 42.85 Dividend CAGR 37.26 5 yrs 15.2% 32.40 10 yrs 17.2% 28.18 24.50 21.12 17.60 14.66 12.19 10.16 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Interim Results 2006 17
Slide 18: Shareholder enhancing buybacks
Shareholder enhancing buybacks Aggregate of 11.61% bought back to date FY No. of shares Average Price Cost * 2001 2,563,045 €9.50 €24.6m 2002 2,275,000 €9.25 €21.3m 2004 2,305,875 €10.70 €25.0m 2005 2,065,000 €12.80 €26.8m 2007 1,038,311 €17.90 €18.8m Total 10,247,231 €11.23 €116.5m * incl commissio
Slide 19: Excellent shareholder base
Excellent shareholder base Nth American Institutions 26.0% Euro / Asia Institutions At 30 September 2006: 11.3% Institutions Nth America 26.0% UK 24.1% Cont Europe + Asia 11.3% 61.4% Irish 22.5% 83.9% Irish UK Institutions Institutions Retail 9.1% 24.1% 22.5% Management 7.0% 100.0% Management Retail
Slide 20: Focused on growth
Focused on growth “The Board’s expectations for the full financial year have improved. The Board now believes that DCC will achieve approximately mid-teen operating profit growth in its seasonally more significant second half, driven by expected strong profit growth in DCC Energy, DCC SerCom, DCC He
Slide 21: Strong and consistent growth
Strong and consistent growth Adjusted EPS (cent) – years ended 31 March 157.2 158 144 137.2 Adjusted EPS CAGR 130 121.9 5 yrs 13.2% 116 111.0 10 yrs 17.3% 98.3 102 84.7 88 74 68.8 57.2 60 45.4 46 37.5 32 18 4 -10 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 Interim Results 2006 21