Dcc Plc · LSE:DCC
Dcc — Investor Presentation (November 2021)
68 slides from Dcc's investor presentation, November 2021
Slide 1: Company Overview
Company Overview November 2021
Slide 2: Contents
Contents 1 Introduction to DCC 02 2 Purpose, stakeholders and sustainability 13 3 Our business 18 4 Division-by-division 22 5 Enabling energy transition 53 6 Disclaimer 67 1 DCC overview – November 2021
Slide 3: Introduction to DCC plc
Introduction to DCC plc
Slide 4: H1 FY22 highlights
H1 FY22 highlights Strong trading performance with very good organic growth Operating profit growth + Adj. operating profit up 11.2% to £195.8m across each division + Strong growth in seasonally less significant first half of year + Reflects resilient business model, given volatile macro backdrop Co
Slide 5: Our business today
Our business today DCC is a leading international sales, marketing and support services group operating across four divisions Revenue Operating profit Locations Market cap £13.4bn £530.2m Employees 21 14,200 c.£6.0bn ROCE Adjusted EPS countries across 3 continents 17.1% 386.6p Profit by geography Pr
Slide 6: Proven record of growth, development and value creation
Proven record of growth, Operating Profit Growth development and value creation 27 year CAGR1 14.2% Dividend Growth 27 year CAGR 13.9% Free cashflow conversion 27 years 2021 104% 2018 2018 Healthcare 2015 2009 LPG Europe 2007 LPG, Hong Kong Total Shareholder Return 2001 LPG Healthcare 27 years 6,640
Slide 7: A consistent strategy since flotation, deploying a proven business model
A consistent strategy since flotation, deploying a proven business model Our strategic objective To continue to build a growing, Creating and sustaining sustainable and cash Financial discipline market-leading positions generative business which consistently provides returns on capital employed well
Slide 8: Why diversity works for DCC
Why diversity works for DCC Significant operating profit growth across all divisions since 2008 Operating profit FY08 – FY21 (£’m) CAGR: 14.0% ‘08 – ‘21 CAGR ROCE ‘21 500.0 DCC Technology +7.5% 12.3% 400.0 DCC Healthcare +13.1% 18.7% 300.0 DCC Retail & Oil +12.6% 19.2% 200.0 100.0 DCC LPG +20.2% 17.
Slide 9: Our framework for capital allocation
Our framework for capital allocation Organic Acquisitions Growing development at ROCE well returns to and investment ahead of WACC shareholders • Investment in capex and • Remains a core • Progressive dividend working capital as we grow competence approach core to investment case • Supports organic
Slide 10: Consolidating and compounding
Consolidating and compounding The DCC way 2021 Extending our Driving organic geographic footprint growth Europe, North America and Asia Operating profit1: £530m 530 494 461 383 2001 345 Scaling presence Executing bolt- in adjacencies ons in market 285 UK & Ireland 189 208 176 170 Operating profit1:
Slide 11: Extending our geographic footprint: M&A
Extending our geographic footprint: M&A Record of integrating >300 acquisitions over 27 years 3yr avg: Acquisitions £m (1994 – 2021): total of £3.5bn £305m 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 10 D
Slide 12: Highly cash generative business model
Highly cash generative business model 2021 27 Years Excellent Cash Flow £m £m FCF conversion Operating profit 530.2 4,728.8 Decrease in working capital 177.7 586.3 Depreciation and other 134.4 1,204.9 Free cash Operating cash flow 842.3 6,520.0 conversion of 130% Net capex (146.9) (1,585.6) in 2021,
Slide 13: Strategy continues to deliver
Strategy continues to deliver 27 year CAGR1 27 year CAGR Operating profit (£m)1 EPS (pence) 14.2% 530 11.9% 387 494 461 358 363 318 304 383 345 257 285 209 191 173 171 208 158 176 189 140 142 155 170 139 116 131 98 85 97 74 78 62 68 78 58 65 49 54 61 42 50 32 37 46 30 31 38 15 16 19 20 26 19 22 26 1
Slide 14: Purpose, stakeholders & sustainability
Purpose, stakeholders & sustainability
Slide 15: DCC's purpose: Enabling our stakeholders to grow and progress
DCC’s purpose: Enabling our stakeholders to grow and progress Customers Employees Investors Communities Government & Suppliers & Environment & Regulators • Developed new • Launched annual • Raised dividend • Supported athletes • Engaged with innovative solutions Group-wide by 7.5% to compete in rece
Slide 16: DCC is committed to sustainability
DCC is committed to sustainability We have a net zero emissions target by 2050 or sooner for our own operations; 20% reduction by 2025 15 DCC overview – November 2021
Slide 17: We are guided by a consistent set of core values
We are guided by a consistent set of core values Core Values 16 DCC overview – November 2021
Slide 18: DCC is committed to excellence in sustainability
DCC is committed to excellence in sustainability Ranked AAA and a DCC improved 15 Assigned highest leader among its points in the last two Governance rating category (industrial years: from “high” conglomerates) risk to “medium” risk Disclaimer Disclaimer 17 DCC overview – November 2021
Slide 19: Our business
Our business
Slide 20: Our markets
Our markets Energy Healthcare Technology Our energy businesses are We provide specialist services to Our technology businesses lead leading providers of energy international health & beauty by providing an extensive range solutions to a broad range of brand owners, principally in the of products and
Slide 21: Essential products and services, keeping economies moving
Essential products and services, keeping economies moving 20 DCC overview – November 2021
Slide 22: Divisional introduction
Divisional introduction DCC LPG DCC Retail & Oil DCC Healthcare DCC Technology 44% of operating profit; ROCE: 17.4% 27% of operating profit; ROCE: 19.2% 15% of operating profit; ROCE: 18.7% 14% of operating profit; ROCE: 12.3% Volume (tonnes) Operating profit Volume (litres) Operating profit Revenue
Slide 23: Division-by-division
Division-by-division
Slide 24: DCC LPG
DCC LPG —_——
Slide 25: DCC LPG
DCC LPG A leading liquid petroleum gas FY2021 (“LPG”) sales and marketing Volumes (tonnes) 2.3mT* business, with a developing Operating profit £231.3m business in the retailing of ROCE 17.4% natural gas and green electricity Employees 3,600 FY21 volumes by geography FY21 volumes by customer segment
Slide 26: Recurring revenue, cash generative & high ROCE business
DCC LPG Recurring revenue, cash generative & high ROCE business LPG is used by a Global business with significant varied customer market presence in 10 countries in base for: Europe, Asia and the US • Heating Over 40 years industry experience • Cooking Partner of choice for oil majors in asset dives
Slide 27: Operating model
DCC LPG Operating model DCC LPG Value Chain Our major brands 26 DCC overview – November 2021
Slide 28: Business of scale with global presence
DCC LPG Business of scale with global presence Large Market Positions: #2 France, Britain and Ireland; #1 Norway, Sweden, Netherlands Volumes Customers Trucks Employees Facilities Business Statistics FY 2021: 2.3m 940k* 2,000 3,600 302 Tonnes *excludes consumers who purchase our cylinders from retai
Slide 29: Up to 6th in US LPG
8 WASHINGTON 2 OREGON MICHIGAN CONNECTICUT WYOMING 5 2 14 2 23 INDIANA UTAH 6 4 ILLINOIS WEST COLORADO VIRGINIA KANSAS 8 3 MISSOURI KENTUCKY 12 NORTH CAROLINA 23 TENNESSEE 11 3 10 5 SOUTH CAROLINA ALABAMA MISSISSIPPI GEORGIA 1 DCC Propane location 2 2 2-9 DCC Propane locations FLORIDA 10 or more DCC
Slide 30: LPG delivering growth
DCC LPG LPG delivering growth Driving organic Scaling Extending our growth in adjacencies footprint Growing Natural gas & green Bolt-on acquisitions market share electricity in existing markets Driving Refrigerants Oil2LPG conversions Entering new growth geographies Innovation & Renewables: solar, b
Slide 31: DCC Retail & Oil
DCC Retail’& Oil as
Slide 32: DCC Retail & Oil
DCC Retail & Oil FY2021 Becoming a leader Volumes (litres) 10.2bn in low emission liquid fuels Operating profit £144.8m and energies; and related ROCE 19.2% products and services Employees 3,400 FY21 volumes by geography FY21 volumes by customer segment 6% 13% Commercial & Industrial Britain 3% Reta
Slide 33: Recurring revenue, cash generative & high ROCE business
DCC Retail & Oil Recurring revenue, cash generative & high ROCE business Retail stations and fuel cards Established market for consumers and commercial position in nine countries customers with a platform to grow Liquid fuel distribution for: the business across • Transport Europe • Heating • Indust
Slide 34: Operating model
DCC Retail & Oil Operating model DCC Retail & Oil Value Chain Our brands 33 DCC overview – November 2021
Slide 35: A business of scale
DCC Retail & Oil A business of scale Business Statistics FY 2021 Volumes Customers Trucks Employees Facilities 10.2bn 0.9m* 1,000 3,400 280 Litres Refuelling sites operated (1,143) / supplied (2,609†) Britain France Sweden Norway 865 456 363 249 Austria Ireland Denmark 280 159 237 EV chargers on ret
Slide 36: Retail & Oil driving growth
DCC Retail & Oil Retail & Oil driving growth Driving organic Scaling Extending our growth in adjacencies footprint Differentiated fuels Lubricants Development of retail strategy network Driving Adblue Penetration of premium Development of HGV & growth fuels EV Charging & road side bulk fuels offer s
Slide 37: DCC Healthcare
DCC Healthcare
Slide 38: DCC Healthcare
DCC Healthcare A leading healthcare Revenue FY2021 £655.4m business, providing products Operating profit £81.7m and services to health & ROCE beauty brand owners and 18.7% healthcare providers Employees 2,700 Revenue by sector Revenue by geography 16% Britian H&B brand 43% owners US 57% Ireland 57%
Slide 39: Strategically well placed for growth
DCC Healthcare Strategically well placed for growth Market dynamics Increasing Lifestyle Trend to Government Increasing Fragmented Demographics Innovation demand factors outsourcing policies regulation markets Growth opportunities DCC Health & Beauty Solutions DCC Vital B2B contract services related
Slide 40: DCC Health & Beauty Solutions – What we do
DCC Healthcare DCC Health & Beauty Solutions – What we do Our Services DCC Health & Beauty Solutions Builds long term partnerships with international health & beauty brand owners, providing specialist services including NPD, formulation, manufacturing and packaging in Europe and the US Product devel
Slide 41: DCC Health & Beauty – product categories
DCC Healthcare DCC Health & Beauty – product categories Facial and Bodycare Suncare and Sport, Diet Self Tanning and Active Lifestyles Nutritional Stay Well / Haircare Enhance Healthcare Cream & Liquids Health Beauty Men’s Health Women’s & Grooming Health OTC and Medical Devices Baby and Children’s
Slide 42: DCC Vital – What we do
DCC Healthcare DCC Vital – What we do Our Suppliers DCC Vital Sales, marketing and distribution of own and third party medical and pharmaceutical products to Third party brand owners Own brand/licence products providers across all sectors of the healthcare market in Britain, Germany, Switzerland & I
Slide 43: DCC Vital – Own & third party products
DCC Healthcare DCC Vital – Own & third party products Own brands Exclusive Partners 42 DCC overview – November 2021
Slide 44: Healthcare delivering growth
DCC Healthcare Healthcare delivering growth Driving organic Scaling presence Extending our growth in adjacencies footprint Positive market New H&B Bolt-ons in existing dynamics product formats markets Driving growth Innovation Expanding own-brand Geographic expansion medical products Capacity invest
Slide 45: European platform in medical products
FY21 case study: DCC Vital acquires Wörner European platform in medical products • Wörner - focused on the primary care sectors in Germany and DCC Healthcare (H&B and Vital) has an Switzerland – is DCC Vital’s first acquisition in continental Europe. excellent record of organic growth. • The acquisi
Slide 46: Sustainability initiatives
DCC Healthcare Sustainability initiatives DCC Health & Beauty: Our facility in Wales has installed two wind turbines and almost 900 solar panels Our UK businesses have all switched to 100% renewable sources of electricity Our UK beauty business recycle 30,000 pallets a year, saving 7,500 trees being
Slide 47: DCC Technology
DCC Technology
Slide 48: DCC Technology
DCC Technology FY2021 A leading route-to-market and Revenue £4,483m supply chain partner for global Operating profit £72.4m technology brands ROCE 12.3% Employees 4,000 DCC Technology operates in 19 countries, across the consumer, B2B and enterprise markets and principally under the brand. 50,000+ C
Slide 49: At a glance
DCC Technology At a glance Our Business Product focus & breadth Market insight The obvious partner for datacentre, security, IT, and alignment, a new supplier to access mobile, AV home, music public sector, business, Retail and B2B markets smart home, cloud Logistics, supply chain, Channel specialis
Slide 50: An integral part of the Tech supply chain
DCC Technology An integral part of the Tech supply chain Creating value for customers and suppliers 2,400+ Proactive sales & Category product & technical Product sourcing, website & category Product lifecycle solutions Retail Etailers global marketing expertise management technology brands and manuf
Slide 51: Footprint across Europe, North America & Asia
DCC Technology Footprint across Europe, North America & Asia 50 DCC overview – November 2021
Slide 52: Technology delivering growth
DCC Technology Technology delivering growth Driving organic Scaling presence Extending our growth in adjacencies footprint Differentiating through Strong specialist capabilities Enhanced capabilities in customer value in Retail, B2B, Pro AV, existing geographies Mobile, Enterprise Driving Providing
Slide 53: Sustainability initiatives
DCC Technology Sustainability initiatives UK UK Nordics • Installed solar panels to • Provides a second-life to used • Investing in new box folding provide c.40% of our electricity and unwanted phones, and sealing machines, lowering requirement for the National reducing the number of units the amoun
Slide 54: Enabling energy transition
Enabling energy transition
Slide 55: Leading Energy Transition – Bringing solutions to energy customers
Leading Energy Transition – Bringing solutions to energy customers Customer Multi-energy Key Market agility Remaining focus solutions partnerships disciplined • We leverage our • We deliver real, • As a distributor, • There is no one- • An experienced understanding of practicable we are the size-fit
Slide 56: Leading energy users through complex decarbonisation challenges
Leading energy users through complex decarbonisation challenges Commercial and Domestic customers Mobility customers industrial customers • Experiencing increased net • Hard to abate, off-grid with • Providing lower carbon fuels zero commitments and considerable inertia and energies across retail &
Slide 57: Commercial solar solution in action
C&I solution “We had confidence in our partners. We spoke the same language.” Alain Vallée, Managing Director of the Super U at Craon Case study 1: Commercial energy solution in France Commercial solar • In France, following our recent acquisition, DCC installs solar arrays on the roof or on the gro
Slide 58: Energy management solution for commercial property
C&I solution Case study 2: Commercial power solution in France Energy management • DCC’s commercial electricity business in France has started a company to provide a full energy efficiency, green electricity and energy for commercial management solution for owners of multi-unit commercial buildings
Slide 59: Lowest carbon solution for biomethane
C&I “Gas to grid injection is a comprehensive renewable energy solution, so we needed to find a way solution to generate our own reliable, power supply whilst keeping costs down. We also wanted to make sure we were using a low carbon fuel, minimising our impact on the environment. That’s why we deci
Slide 60: Oil to LPG turnkey heating solution
“BaxiHeating has been supplying products and sharing its expertise of heating and hot water C&I solution solutions to Flogas and its partners since 2019. We are pleased to be the key supplier for initiatives that will help to reduce carbon emissions and meet the UK's environmental targets.” Karen Bo
Slide 61: DCC the first to bring SAF to Danish market
“So far, air traffic here in Denmark has primarily only been able to offer carbon offset C&I solution arrangements. However, with the introduction of sustainable jet fuel, we can target our efforts on reducing flight emissions. This initiative is a small but very important step towards reducing CO2
Slide 62: Biofuel solution for HGV fleet
“Our fuel supplier guaranteed access to Case study 6: Commercial HGV fleet solution in Sweden our need for 800 cubic meters of HVO (produced by Neste) per year. Then we switched directly from fossil to renewable, and overnight our CO2 emissions were Biofuel solution reduced by 90%, 2,200 tonnes a ye
Slide 63: Renewable solution for domestic heating
Case study 7: Residential heating solution in the UK Renewable solution for domestic heating CO2e reduction for our customer: c.90% • Our UK fuels business launched a biofuel offer for domestic off-grid heating customers this winter • Biofuel is an elegant solution for customers - especially for les
Slide 64: 100% Biopropane customer offer
Case study 8: Residential heating solution in France 100% Biopropane customer offer CO2e reduction for our customer: c.60% • A tailored solution for the environmentally- conscious French consumer, particularly in colder Northern regions • We offer biopropane through our partnership with TotalEnergie
Slide 65: Accelerating EVs on our French motorway network
"We are very proud that Certas Energy France has partnered with us to accelerate the Mobility solution deployment of charging stations for electric vehicles on the French motorway network.” Yann Rolland, CEO of ENGIE Solutions Case study 9: Mobility network solution in France Accelerating EVs • Exp
Slide 66: DCC invests in low carbon fuel across French retail network
Case study 10: Mobility network solution in France DCC invests in low carbon fuel across French retail network CO2e reduction for our customer: c.60% • DCC is investing £2m to roll out E85 (85% ethanol) petrol on 45 retail sites in France. • This provides our rural PCV customers with the optimal low
Slide 67: Improving our own environmental sustainability
Improving our own environmental sustainability Some key highlights Energy Group-wide Increased the supply of 74% of all invoices sent to biofuel for our own fleet in customers are transmitted the UK in digital form Healthcare Technology Our manufacturing facility 6,000 sqm solar array in Wales is no
Slide 68: 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