DCC PLC · LSE:DCC
DCC — FY2014 Earnings Presentation
42 slides from DCC's earnings presentation, 2014
Slide 1: Results for the year ended 31 March 2014
21 Results for the year ended 31 March 2014
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 - Year ended 31 March 2014 Results reflect the continued successful delivery of the strategy: • Operating profit up 11.5% to £208 million despite the impact of a very mild winter. Approximately 50% of this growth was organic. • Operating profit growth achieved acro
Slide 4: Highlights
Highlights - Year ended 31 March 2014 2014 2013 % change £m £m Revenue 11,231.7 10,572.7 +6.2% Operating profit* 208.4 186.9 +11.5% Profit before net exceptional items, amortisation of 187.0 172.8 +8.2% intangibles and tax Adjusted EPS* 191.20 pence 171.20 pence +11.7% Free cash flow 278.1 207.2 Div
Slide 5: Business Overview: divisional results
Business Overview: divisional results - Year ended 31 March 2014 By Division 2014 2013 % change DCC Energy 6% 4% £m £m 14% DCC Technology 53% DCC Healthcare Operating profit* 23% DCC Environmental DCC Energy 110.5 106.2 +4.0% DCC Food & Beverage DCC Technology** 48.1 41.5 +15.9% DCC Healthcare 30.4
Slide 6: Acquisition & Capital Expenditure - £154.7m
Acquisition & Capital Expenditure - £154.7m - Year ended 31 March 2014 Acquisitions Capex Total £m £m £m DCC Energy 50.5 48.4 98.9 DCC Technology 4.8 7.4 12.2 DCC Healthcare 25.4 6.0 31.4 DCC Environmental 1.5 7.5 9.0 DCC Food & Beverage 1.9 1.3 3.2 Total 84.1 70.6 154.7 6
Slide 7: DCC Energy
DCC Energy 2014 2013 % change Volume (Litres) 10.2 bn 9.6 bn +6.1% Revenue £8,243.7m £8,112.1m +1.6% Operating profit £110.5m £106.2m +4.0% Return on capital employed 17.5% 18.5% Robust performance with operating profit 4.0% ahead of the prior year despite the impact of the very mild winter weather
Slide 8: DCC Energy
DCC Energy 2014 2013 % change Volume (Litres) 10.2 bn 9.6 bn +6.1% Revenue £8,243.7m £8,112.1m +1.6% Operating profit £110.5m £106.2m +4.0% Return on capital employed 17.5% 18.5% LPG: • Strong performance benefitting from acquisitions in the prior year Profit by Sector and synergies achieved from th
Slide 9: DCC Technology
DCC Technology 2014 2013 % change Revenue £2,264.0m £1,850.3m +22.4% Operating profit £48.1m £41.5m +15.9% Operating margin 2.1% 2.2% Return on capital employed 21.1% 16.4% • Excellent result with operating profit increasing by 15.9% and return on capital employed increasing to 21.1%, driven by sign
Slide 10: DCC Healthcare
DCC Healthcare 2014 2013 % change Revenue £406.5m £320.6m +26.8% Operating profit £30.4m £22.2m +36.9% Operating margin 7.5% 6.9% Return on capital employed 14.2% 13.1% Excellent operating profit growth in DCC Vital and DCC Health & Beauty Solutions Revenue Split DCC Vital - Strong profit growth dri
Slide 11: DCC Environmental / DCC Food & Beverage
DCC Environmental / DCC Food & Beverage DCC Environmental 2014 2013 % change Revenue Split Revenue £130.6m £116.1m +12.5% Operating profit £11.7m £10.9m +7.8% 39% Operating margin 9.0% 9.4% 61% Return on capital employed 8.6% 8.3% DCC Environmental: Operating profit up 7.8% driven by: • Improved mar
Slide 12: Revenue/Gross Margin/Operating Costs
Revenue/Gross Margin/Operating Costs 2014 Change 2014 Gross Change 2014 Revenue Margin Operating (£m) costs (£m) DCC Energy 8,244 +1.6% 4.57ppl -0.12ppl 354 Group excl. DCC Energy 2,988 +21.4% 11.4% -0.4% 244 Total 11,232 598 • Energy volumes up 6.1% (down 3.0% organically) • Average selling price d
Slide 13: Summary Group P&L
Summary Group P&L 2014 2013 Change Change (£m) (£m) (£m) (%) Operating Profit 208 187 +21 +11.5% Finance Costs (21) (14) +7 Profit before net exceptional items, 187 173 +14 +8.2% amortisation of intangible assets and tax Effective Tax Rate 14% 17% • Operating profit growth – approximately 50/50 betw
Slide 14: Cash Flow
Cash Flow - Year ended 31 March 2014 £’m * Cash conversion of 133% 400 Depreciation Operating Capital & Other Cash Flow Expenditure 350 53.4 70.6 Working Capital 348.7 Free cash flow * 300 Interest & Tax 86.9 Free 278.1 53.0 cash flow after 250 Operating interest and tax Profit 200 225.1 208.4 150 1
Slide 15: 20 Year Review
20 Year Review 20 Year • Free cash flow of £2.0bn 1 April 1994 – 31 March 14 £m CAGR • Free cash flow* conversion of 100% and Operating profit 1,968 13.2% CAGR of 14.0% Decrease in working capital 112 Depreciation 554 • Revenue increased from £0.2bn to £11.2bn Other (39) Operating cash flow 2,595 13
Slide 16: 20 Year Review
20 Year Review 5 years to 31 5 years to 31 5 years to 31 5 years to 31 £ millions March 1999 March 2004 March 2009 March 2014 20 years Operating Profit 144 348 585 891 1,968 EBITDA 199 449 746 1,128 2,522 Operating cash flow 185 441 666 1,303 2,595 Free cash flow* 130 319 480 1,030 1,959 Free cash f
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: Outlook for year to March 2015
Outlook for year to 31 March 2015 The outlook for the year to 31 March 2015 is based on the important assumption that there will be normal winter weather conditions. At this very early stage, the Group anticipates that its operating profit and adjusted earnings per share will be approximately 10% ah
Slide 19: The strategy continues to deliver results for the long term
The strategy continues to deliver results for the long term Strong operating profit growth (£’m) Consistent dividend growth (pence) 76.9 208 69.9 187 187 63.5 20 year CAGR 60.5 20 year CAGR 157 55.0 13.6% 147 151 14.9% 10 year CAGR 136 10 year CAGR 50.8 11.8% 13.1% 46.2 5 year CAGR 5 year CAGR 7.8%
Slide 20: Appendix: Company Overview Presentation
Appendix: Company Overview Presentation
Slide 21: DCC
DCC DCC is an international sales, marketing, distribution and business support services group operating across five divisions Profit by division* Profit by geography* DCC Energy 4% 6% 11% DCC Technology UK 14% 13% Continental Europe DCC Healthcare 53% ROI 23% DCC Environmental 76% DCC Food & Bevera
Slide 22: Long History of EPS Growth...
Long History of EPS Growth... EPS (£ pence) 191.2 20 year CAGR * 173.1 171.2 12.3% 157.9 139.7 142.0 10 year CAGR 10.0% 115.9 5 year CAGR 97.5 6.5% 78.4 84.5 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 2010 20
Slide 23: ...with Strong Cash Flow Generation which Supports Development Activities
…with Strong Cash Flow Generation which Supports Development Activities 20 Year • Free cash flow of £2.0bn 1 April 1994 – 31 March 14 £m CAGR • Free cash flow* conversion of 100% and Operating profit 1,968 13.2% CAGR of 14.0% Decrease in working capital 112 Depreciation 554 • Revenue increased from
Slide 24: ...along with Consistent Dividend Growth
...along with Consistent Dividend Growth Dividend Growth (pence sterling) 76.9 69.9 20 year CAGR * 63.5 14.9% 60.5 55.0 10 year CAGR 50.8 13.1% 46.2 40.2 5 year CAGR 35.0 8.3% 30.4 26.4 23.0 20.0 17.2 14.4 12.0 9.9 7.2 8.3 5.2 6.4 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Slide 25: 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 26: 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 (18% market share) • # 2 oil distributor in Denmark (12% market share) and Austria (12% market share) DCC Ene
Slide 27: Acquisitions
Acquisitions Cash spent on acquisitions By Division 180 169 160 Energy, £658m 144 137 140 4% 7% Technology, £184m 120 109 15% 100 Healthcare, £166m 86 £m 83 80 72 58% 66 64 16% Environmental, £83m 60 50 48 45 40 31 Food & Beverage, 21 £45m 20 11 0 15 Year Total: £1.1 bn • Spent £1.3bn on acquisition
Slide 28: The Business: By Division
The Business: By Division 28
Slide 29: DCC Energy
DCC Energy (53% of FY 2014 Group Profit) DCC Energy is the leading oil and liquefied petroleum gas (“LPG”) sales, marketing FY 2014 and distribution business in Europe Revenue £8,243.7m • Oil for transport, heating and industrial / agricultural processes Operating profit £110.5m • LPG for heating, c
Slide 30: DCC Energy – Business of Scale
DCC Energy – Business of Scale Market Geography Volume Market Share Position Business Statistics (FY 2014) Britain – oil c. 6,350mL c. 18% – oil #1 Britain – LPG c. 260kT c. 28% – LPG #2 c. 10.5 billion Litres Volumes Ireland – oil c. 900mL c. 11% – oil #5 (annualised including acquisitions) Ireland
Slide 31: DCC Energy – vision & strategy
DCC Energy – vision & strategy Volumes DCC Energy’s vision is to be a global leader in the sales, (Billion litres) marketing and distribution of fuels and related products 9.6 10.2 and the provision of services to energy consumers: 7.9 7.1 6.2 • With strong local market shares • Operating under mult
Slide 32: DCC Technology
DCC Technology (23% of FY 2014 Group Profit) FY 2014 Leading route-to-market partner for global consumer Revenue £2,264m and SME technology brands Operating profit £48.1m ROCE 21.1% DCC Technology operates under the brand 12,000+ 350 industry In the home customers Consumer & leading SME In the offic
Slide 33: 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 delvers value for partners: – for Suppliers • Ability to ma
Slide 34: DCC Technology – leading route to market partner
DCC Technology – leading route to market partner Products Market Computing (including PC's, servers, tablets) Market DCC Technology Geography Communications Position 17% 33% Britain No. 2 Printers, consumables and IT peripherals 7% Ireland No. 1 Gaming consoles, • In the home France No. 7 peripheral
Slide 35: DCC Technology – Vision & Strategy
DCC Technology – Vision & Strategy Operating Profit (£m) DCC Technology’s vision is to be the leading European route to 5 Yr. CAGR 10.6% market and supply chain partner for global consumer and 48.1 SME technology brands 41.6 41.5 36.2 • Delivering an industry-leading service offering 32.7 • Generati
Slide 36: DCC Healthcare overview
DCC Healthcare overview (14% of FY 2014 Group Profit) FY 2014 Sales, marketing and distribution of Revenue £406.5m pharmaceuticals and medical devices Operating profit £30.4m and provision of services to health & beauty ROCE 14.2% brand owners Operating Profit (£m) 5 Yr. CAGR 19.1% • Well positioned
Slide 37: DCC Healthcare overview – Our Business
DCC Healthcare overview – Our Business Revenue Split Geography Market Positions FY 2014 Britain • A leading position in sales, marketing & distribution of pharmaceuticals and medical devices 29% • #1 Health & Beauty contract manufacturing DCC Vital service provider DCC H&BS • A leading value added h
Slide 38: 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 39: DCC Environmental – our business
DCC Environmental – our business (6% of FY 2014 Group Profit) FY 2014 Geography Market Position Revenue £130.6m # 1 hazardous waste management Operating profit £11.7m Ireland business ROCE 8.6% A leading recycling, waste management Revenue Split and resource recovery business – market leading positi
Slide 40: 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, Operating Profit (£m) waste management and resource recovery services in Britain 5 Yr. CAGR 6.6% and Ireland 12.3 11.7 Strategy 10.9 9.9 • Pos
Slide 41: DCC Food & Beverage – our business
DCC Food & Beverage – our business (4% of FY 2014 Group Profit) Category Market Position FY 2014 Healthy Foods # 1 in ambient healthy foods in ROI Revenue £186.9m Operating profit £7.7m # 1 independent wine distributor in Ireland Wine ROCE Strong position in off trade in UK 11.8% Logistics Leading f
Slide 42: DCC Food & Beverage – vision & strategy
DCC Food & Beverage – vision & strategy DCC Food & Beverage’s vision is to to continue to build on its market position as one of the leading suppliers of food and beverage products in Ireland Operating Profit (£m) 5 Yr. CAGR -4.9% • With strong market shares 9.8 9.3 • Generating high levels of ROCE