Dcc Plc · LSE:DCC
Dcc — H1 FY2012 Earnings Presentation
39 slides from Dcc's earnings presentation, Nov 8, 2011
Slide 1: Interim Results
Interim Results Six months ended 30 September 2011
Slide 2: Highlights – Six months ended 30 September 2011
Highlights – Six months ended 30 September 2011 Change on prior year € Reported Const Currency † Revenue 4,395.0m +10.8% +14.4% Operating profit* 58.3m -14.2% -11.4% Profit before net exceptional items, 50.0m -17.3% -14.4% amortisation of intangibles and tax Adjusted EPS* 47.53 cent -17.6% -14.7% Di
Slide 3: Operating Profit by Division and Geography
Operating Profit – Six months ended 30 September 2011 By Division By Geography 10% Energy 17% UK 32% SerCom 14% Healthcare 14% ROI Environmental 69% 18% Food & Beverage Rest of World 26% 3 Interim results 2011
Slide 4: Acquisition & capital expenditure - €145.8m
Acquisition & capital expenditure - €145.8m* Acquisitions Capex Total €’m €’m €’m DCC Energy 78.2 15.5 93.7 DCC SerCom - 1.3 1.3 DCC Healthcare 10.5 2.3 12.8 DCC Environmental 31.2 5.3 36.5 DCC Food & Beverage - 1.5 1.5 Total 119.9 25.9 145.8 * Includes acquisitions committed to from 1 April 2011 up
Slide 5: Business overview – Six months ended 30 September 2011
Business overview – Six months ended 30 September 2011 Change on prior year Constant €’m Reported Currency † Operating profit* DCC Energy 18.7 -37.8% -35.1% DCC SerCom 15.2 +6.7% +10.3% DCC Healthcare** 10.5 +0.6% +2.8% DCC Environmental 7.9 +12.2% +17.0% DCC Food & Beverage 6.0 +11.0% +11.5% Group
Slide 6: DCC Energy
DCC Energy 2011 2010 Reported Const. Curr. Revenue €3,133.3m €2,808.6m +11.6% +15.4% Operating profit €18.7m €30.1m -37.8% -35.1% Challenging first half driven by a very mild first quarter • Operating profit decline of 35.1% H1 - Volume Split • Significantly warmer than 30 year average • Mild weathe
Slide 7: DCC Energy (continued)
DCC Energy (continued) 2011 2010 Reported Const. Curr. Revenue €3,133.3m €2,808.6m +11.6% +15.4% Operating profit €18.7m €30.1m -37.8% -35.1% LPG – weak demand in heating products coupled with impact of less favourable product pricing environment H1 - Volume Split Good first half in the Fuel Card bu
Slide 8: DCC SerCom
DCC SerCom 2011 2010 Reported Const. Curr. Revenue €910.5m €799.2m +13.9% +16.9% Operating profit €15.2m €14.3m +6.7% +10.3% Operating margin 1.7% 1.8% Strong growth driven by excellent performance in Distribution H1 - Revenue Split SerCom Distribution 16% • Strong growth in Retail distribution as a
Slide 9: DCC Healthcare
DCC Healthcare* 2011 2010 Reported Const. Curr. Revenue €153.8m €153.9m +0.0% +3.1% Operating profit €10.5m €10.4m +0.6% +2.8% Operating margin 6.8% 6.8% * Continuing activities (i.e. excluding Mobility & Rehabilitation) Modest constant currency operating profit growth in continuing activities again
Slide 10: DCC Environmental
DCC Environmental 2011 2010 Reported Const. Curr. Revenue €65.4m €53.4m +22.5% +27.1% Operating profit €7.9m €7.0m +12.2% +17.0% Operating margin 12.0% 13.1% Excellent operating profit growth benefiting from the acquisition of H1 - Revenue Split Oakwood Fuels 15% Satisfactory performance in Britain
Slide 11: DCC Food & Beverage
DCC Food & Beverage 2011 2010 Reported Const. Curr. Revenue €132.0m €138.3m -4.5% -3.5% Operating profit €6.0m €5.4m +11.0% +11.5% Operating margin 4.5% 3.9% H1 - Revenue Split Operating profit increase of 11.5% on back of strong performance in 27% Indulgence Foods • Benefit from acquisition of Good
Slide 12: DCC Strategic Focus
DCC Strategic Focus To grow a sustainable, diversified business through: • Focus on businesses with established or potential to establish leadership positions; • Organic growth and acquisitions to strengthen market positions and geographic footprint; • Continued deployment of a devolved management s
Slide 13: Outlook for year to March 2012
Outlook for year to 31 March 2012 • As DCC enters its seasonally more significant second half, the economic environment within the principal geographies in which the Group operates remains challenging and has become increasingly uncertain. The outlook for the full year to 31 March 2012 is framed aga
Slide 14: EPS growth – strong year on year growth since flotation
EPS growth – strong year on year growth since flotation Cent per share Adjusted EPS* (cent) 203.2 17 year CAGR 13.2% 178.0 10 year CAGR 169.1 165.1 9.5% 5 year CAGR 143.5 10.4% 124.0 115.1 106.0 101.5 94.9 82.2 65.3 55.4 44.4 37.5 31.9 24.8 28.4 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11
Slide 15: Appendix - About DCC
Appendix - About DCC 15 Interim results 2011
Slide 16: DCC
DCC DCC is a sales, marketing, distribution and business support services Group, operating across five divisions • DCC Energy • DCC SerCom (IT & entertainment products) • DCC Healthcare • DCC Environmental • DCC Food & Beverage Operating Profit Split By Geography – YE 31 Mar 2011 13% UK 15% ROI 72%
Slide 17: DCC - History
DCC - History 1976 - 90 Founded by Jim Flavin as a venture and development capital company, with clear focus on return on capital employed and operating profit. Generated a compound annual return on investment of 23% over this period. 1990 - 94 Transition to diversified group focused on 5 sectors –
Slide 18: Why these businesses?
% of Why these businesses? Strategic Characteristics profits YE Mar ‘11 Market leadership positions Oil No. 1 in Britain (16% market share); No. 2 in Austria & Denmark; Leading player in Ireland LPG: No. 2 in Britain & Ireland Growth & acquisition potential UK market consolidation a key fe
Slide 19: Why these businesses?
Why these businesses? % of profits Strategic Characteristics YE Mar ‘11 Market leadership positions No. 1 position in Hospital Supplies & Services in Ireland and growing position in Britain No. 1 UK based service provider in Health & Beauty DCC 10% Healthcare Growth & acquisition potential
Slide 20: Operating Profit and ROCE - history since flotation
Operating Profit and ROCE - history since flotation Op Profit €m ROCE % 250.0 60.0% Operating profit* 229.6 €’m 200.0 17 year CAGR 192.8 50.0% ROCE 14.7% 180.4 19.9% 10 year CAGR 167.2 40.0% FY 2011 10.7% 150.0 5 year CAGR 140.1 13.7% 121.0 30.0% 109.3 101.6 97.2 100.0 91.1 83.3 20.0% 67.0 53.5 41.5
Slide 21: Shareholder Returns - strong dividend growth since flotation
Shareholder Returns - strong dividend growth since flotation Cent per share Dividend 74.2 (cent) 17 year CAGR 67.4 15.6% 62.3 10 year CAGR 56.7 13.4% Since Flotation: 49.3 • Dividends of 5 year CAGR €429 million 11.6% 42.9 • Share buybacks 37.3 of €115 million 32.4 28.2 24.5 21.1 17.6 14.7 12.2 7.8
Slide 22: Balance Sheet Strength
Balance Sheet Strength Figures to 31 March 2011 2010 €M €M Net Debt / EBITDA 0.8 Fixed assets 395 358 0.7 Working capital 138 121 0.6 0.6 Other net operating liabilities (120) (132) 0.5 0.4 0.4 Net tangible assets 413 347 0.3 0.2 Goodwill / intangible assets 636 595 0.2 0.2 Capital employed 1,049 94
Slide 23: Cash Flow FY 2000 – FY 2011
Cash Flow FY 2000 – FY 2011 12 Year € m CAGR Operating profit 1,567 12.9% • Free cash flow (before interest and tax) of Increase in working capital (31) €1.4bn Depreciation 421 • Revenue increased from €0.8 billion to Other (31) €8.7 billion. CAGR of 22.1% Operating cash flow 1,926 12.8% Capex (490)
Slide 24: Acquisitions
Acquisitions Cash spent on acquisitions By Division 200 177 Food & 180 Beverage, €53m, 6% Environmental, 160 €76m, 8% 140 134 Healthcare, 120 105 €114m, 12% 102 €‘m 100 88 81 78 80 Energy, €538m, 56% 59 60 55 38 Sercom, 40 €176m, 18% 26 20 14 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010
Slide 25: The Business: By Division
The Business: By Division 25 Interim results 2011
Slide 26: DCC Energy
DCC Energy Marketing and selling oil and liquefied petroleum gas (LPG) • Leading oil and LPG distribution business in Britain and Ireland and developing oil business in continental Europe • Oil for transport, heating and industrial / agricultural 2011 processes Revenue €6,129.8m • LPG for heating, c
Slide 27: DCC Energy
DCC Energy Oil – Britain & Ireland LPG - Britain & Ireland • No. 1 Britain • No. 2 Britain 16% share 20% share 600,000 customers 125,000 customers 220 facilities 45 facilities c. 6.0 Bn. Lts. • No. 5 Ireland • No. 2 Ireland c. 9% share 37% share 90,000 customers 18,000 customers 21 facilities 5 faci
Slide 28: DCC Energy – Sales volumes and cent per litre operating margin
DCC Energy – Sales volumes and cent per litre operating margin (cpl) Litres Volumes & Cent per Litre Cent per (billion) Litre 8.0 5.00 7.0 4.50 4.00 Strong growth in 6.0 volumes, with 3.50 consistent 5.0 3.00 margin per litre 7.1 4.0 6.2 2.50 1.93 1.87 1.85 1.90 1.84 3.0 1.75 2.00 5.3 1.50 2.0 4.2 2
Slide 29: DCC Energy – Operating profit & % ROCE
DCC Energy – Operating profit & % ROCE €’m ROCE 160 5 Year Operating Profit 90% CAGR 20.2% 80% 140 137.3 120 70% 113.1 60% Excellent profit 100 100.7 growth with high 50% 80 ROCEs 74.3 40% 60 54.8 59.5 30% 40 24.5% 24.9% 26.5% 26.9% 20% 22.7% 20.6% 20 10% 0 0% 06 07 08 09 10 11 Growth Rate 8.2% 8.5%
Slide 30: Strategy
Strategy • Drive organic profit growth through leveraging the scale of the business – Prioritise growth in the transport fuels segment • Retail petrol stations (supply) • Marine • Aviation – Expand sales of differentiated products e.g. fuel economy diesel, premium heating oil – Cross sell “add-on” p
Slide 31: DCC SerCom
DCC SerCom SerCom Distribution Marketing and selling IT and entertainment products to: • the Retail market - No 1 specialist distributor of consumer IT and entertainment products in Britain, Ireland and France to retailers, e-tailers and catalogue retailers 2011 • the Reseller market - Leading distr
Slide 32: Structure of European IT Distribution
Structure of European IT Distribution Western European IT market - €300bn Western European IT Distribution market - €65bn Indirect Tier 1: VARs Sales Tier 2 : Distribution DCC SerCom Distribution IT Vendors Systems integrators VAR / ISV Corporate reseller Direct Sales Dealers Internet / mail order S
Slide 33: SerCom Distribution Full end to end service model
SerCom Distribution Unique offering of supplier and customer focus and expertise SUPPLIERS PRODUCTS SERCOM CUSTOMERS END-USERS Home entertainment, Etail, retail, RETAIL (41%) CONSUMERS peripherals, catalogue accessories, CE Desktop and VAR, Reseller, Vendors consumer IT RESELLER (39%) SME / SOHO Dea
Slide 34: Strategy
Strategy • Retail: – Build the leading specialist retail distribution business in Western Europe • Vendor portfolio expansion • Service expansion • Establish the business as the obvious partner for a new vendor to access European retail – Acquisition and organic expansion to Germany, Benelux and Nor
Slide 35: DCC Healthcare
DCC Healthcare Broadly based service provider to medical, pharmaceutical and health & beauty sectors brand owners • Hospital Supplies & Services - Provision of sales, marketing, distribution and other services in Ireland and Britain to medical and 2011 pharmaceutical brand owners and to healthcare p
Slide 36: Strategy
Strategy • Expand product portfolio and service offerings in Medical and Pharma • Medical acquisitions – bolt on in Ireland, specialist distributors / related service providers in Britain • Pharma acquisitions – principal focus on service based and specialist / niche businesses in Britain; bolt on a
Slide 37: DCC Environmental
DCC Environmental Waste management and recycling services to the industrial, commercial, construction and public sectors in Britain and Ireland • Britain • William Tracey: Leading recycling and waste management business in Scotland with 11 licensed facilities – materials recycling, hazardous waste t
Slide 38: DCC Food & Beverage
DCC Food & Beverage Marketing and selling own and 3rd party brands to retail and foodservice sectors in Ireland and UK • Segment focus: health, indulgence, frozen/chilled logistics • Strong market positions in Ireland: • No.1 in ambient healthy foods and in freshly ground coffee in retail and No. 2
Slide 39: Shareholder base
Shareholder base October 2011 Lending / Market Makers Institutions 6.9% Management 2.9% North America 29.5% UK 28.6% Retail Nth America 11.7% 29.5% Cont Europe + Asia 11.0% 69.1% Irish 9.4% Irish 78.5% 9.4% Retail 11.7% Management 2.9% Lending/Market makers 6.9% Cont Europe / Asia UK 100.0% 11.0% 28