INVEST IN
WHAT THE WORLD NEEDS
Annual Report and Accounts 2024
We know what the world needs to
Grow and Progress
THE WORLD NEEDS
SOLUTIONS
for cleaner energy, lifelong health, and the technology to make progress happen.
WE INVEST AND REINVEST IN WHAT THE WORLD NEEDS Future-focused businesses and people with the enterprise and innovation to make progress happen.
WE RETURN WHAT THE WORLD NEEDS
The world needs shared value that grows and grows. Our purpose and strategy generate value for our investors - and for our colleagues, our customers, the societies we serve and the planet.
We have been doing this for 30 years as a listed company.
Contents
STRATEGIC REPORT | FINANCIAL STATEMENTS | |||
1 | Highlights of the Year | 156 | Statement of Directors' | |
4 | At a Glance | Responsibilities | ||
6 | Chair's Statement | 157 | Independent Auditor's Report | |
8 | Chief Executive's Review | 164 | Financial Statements | |
12 | Strategy | |||
14 | Business Model | SUPPLEMENTARY INFORMATION | ||
16 | Growth and Progress in Action | 244 | Principal Subsidiaries and | |
22 | Business Reviews | Associates | ||
22 | DCC Energy | 248 | Shareholder Information | |
32 | DCC Healthcare | 250 | Corporate Information | |
40 | DCC Technology | 251 | Independent Assurance Statement | |
48 | Key Performance Indicators | 253 | Alternative Performance Measures | |
52 | Financial Review | 258 | 5 Year Review | |
60 | Sustainability Review | 259 | Index | |
82 | Risk Report |
GOVERNANCE
- Chair's Introduction
- Board of Directors
- Group Management Team
- Corporate Governance Statement
- Governance and Sustainability Committee Report
- Audit Committee Report
- Remuneration Report
- Report of the Directors
Highlights
Adjusted operating profit
£682.8m | +4.1% |
2024 | £682.8m |
2023 | £655.7m |
2022 | £589.2m |
Carbon intensity
Adjusted EPS | |
455.01p | -0.3% |
2024 | 455.01p |
2023 | 456.27p |
2022 | 430.11p |
Dividend per share
74.4gCOe/MJ | 196.57p | +5.0% | |
2024 | 74.4 | 2024 | 196.57p |
2023 | 74.9 | 2023 | 187.21p |
2022 | 76.4 | 2022 | 175.78p |
GROWTH AND
PROGRESS
1. All references to 'adjusted operating profit' and 'adjusted earnings per share' included in the Strategic Report are stated excluding net exceptionals and amortisation of intangible assets. Other 'Alternative Performance Measures' ('APMs') are detailed on pages 253 to 257.
Operating profit
£529.4m +3.4%
2024 | £529.4m |
2023 | £512.0 |
2022 | £458.4m |
Free cash flow
£681.1m
EPS | |
330.24p | -2.4% |
2024 | 330.24p |
2023 | 338.40p |
2022 | 316.78p |
Return on capital employed
14.3%
2. Return on capital employed excludes the impact of IFRS 16 Leases. See APMs on page 256 for further information.
2024 | £681.1m | 2024 | 14.3% | |
2023 | £570.4m | 2023 | 15.1% | |
2022 | £382.6m | 2022 | 16.5% |
DCC plc Annual Report and Accounts 2024 | 1 |
Highlights of the Year
This year, DCC celebrates 30 years as a listed company.
Over that time, we have delivered safe and reliable products and services to millions of customers, we have provided rewarding careers to thousands of colleagues, and have generated a total return to shareholders of 6,413%.
30 | 6,413% | |
Years as a Listed Company | Total Shareholder Return | |
since Listing |
2 DCC plc Annual Report and Accounts 2024
Strategic Report | Governance | Financial Statements | Supplementary Information |
We are working with our suppliers and customers to deliver the lower carbon energy solutions that the world needs.
Our ambition is to double the profitability of our energy business between 2022 and 2030, while also halving the carbon produced by the energy we sell - reducing it from approximately 40 mtCO2e to 20 mtCO2e.
Services, renewable and other income ('SRO') accounted for 35% of EBITA in DCC Energy this year, up from 28% in the prior year.
20m
Our Scope 3 carbon emissions reduction ambition between 2019 and 2030 is 20m tonnes CO2e
35%
Proportion of services, renewables and other ('SRO') EBITA in DCC Energy this year
WE INVEST IN WHAT THE WORLD NEEDS
To Enable People and Businesses to
Grow and Progress
£490m
Capital committed to acquisitions this year
17
Businesses acquired this year
Investing in entrepreneurial businesses that deliver products and services that the world needs is a key part of our business model.
In the year to 31 March 2024, we committed £490 million to acquiring 17 new businesses. Each of these businesses expands our capabilities and opportunities to deliver growth and progress.
This year, our investment was concentrated in the energy sector, enabling DCC Energy's transition to low carbon energy products and services.
DCC plc Annual Report and Accounts 2024 3
At a Glance
OUR OPERATIONS
We are focused on growth and enabling progress.
We acquire, improve and grow diverse businesses that provide solutions for what the world needs.
We do this in 22 countries across four continents creating long-term value for our investors, our people and customers, society and the planet.
SUSTAINABILITY
Employees
16,600
Over the past decade, DCC generated total returns of more than
124%
Compared to 76% for the FTSE 100 index
Countries
22
Continents
4
We want to add value for everyone we deal with and we are clear on where we can do this.
Climate Change and Energy Transition
Our goal is net zero. We are committed to leading our customers in their energy transition by providing innovative and cleaner energy solutions, reducing carbon emissions.
People and Social
Our goal is to provide a vibrant, diverse and innovative place to work and be a positive member of the communities we serve. DCC is a people business, and developing and investing in our people is a key strategic objective.
Safety and Environmental Protection
Our goal is no accidents. Safety must be grounded in a culture that encourages every DCC employee and contractor to identify and raise concerns.
Governance and Compliance
Our goal is to operate in accordance with the highest standards of ethics, compliance and corporate governance.
4 DCC plc Annual Report and Accounts 2024
Strategic Report | Governance | Financial Statements | Supplementary Information |
What we do
We invest in growth and progress in three transformative sectors
DCC ENERGY
The trusted partner for commercial and industrial energy customers, reducing the complexity of the energy transition and delivering energy solutions across processes, heating and fleets.
DCC Energy is leading the transition for off-grid homes, making decarbonisation simple and affordable.
- READ MORE PAGES 22 TO 31
Volumes (litres)
15.2bn -2.2%
Adjusted operating profit
£503m +9.9%
Employees
8,789
DCC HEALTHCARE
A leading healthcare business, partnering with consumer brands to create and manufacture high quality health and beauty products, and supplying primary and secondary care providers with essential products and services.
- READ MORE PAGES 32 TO 39
Revenue
£859.4m +4.6%
Adjusted operating profit
£88.1m -4.0%
Employees
3,269
DCC TECHNOLOGY
A leading specialist distribution partner for global technology and appliance brands and customers, providing reach, simplicity and scale.
- READ MORE PAGES 40 TO 47
Revenue
£4.8bn -9.3%
Adjusted operating profit
£91.7m -13.6%
Employees
4,562
Profit by division | Profit by geography | ||||
13% | DCC Energy | 11% | Continental Europe | ||
DCC Healthcare | UK | ||||
13% | DCC Technology | Rest of World | |||
20% | Ireland | ||||
43%
74%
26%
DCC plc Annual Report and Accounts 2024 5
Chair's Statement
DCC reaffirmed its position as a leading enabler of growth and progress, delivering strong financial results and progress against strategic objectives.
MARK BREUER
Chair
THE WORLD NEEDS GROWTH AND PROGRESS
DEAR STAKEHOLDERS,
I am pleased to present, on behalf of the Board, DCC's Annual Report and Accounts for the year ended 31 March 2024.
In our 30th year as a listed company, DCC reaffirmed its position as a leading enabler of growth and progress, delivering another strong set of financial results and further progress against our strategic objectives.
Financial Performance
Adjusted operating profit increased by 4.1% to £682.8 million. Free cash flow conversion was 100%. The Group's return on capital employed remained strong at 14.3%.
This performance allowed the Board to recommend a final dividend to shareholders of 133.53p per share which, when added to the interim dividend paid in December, provides a total dividend of 196.57p, representing an annual increase of 5%.
DCC has now increased its dividend to shareholders in every one of the 30 years since the Company listed, growing its dividend at a compound annual rate of 13.2%.
Strategy
The fundamental components of DCC's strategy have remained very consistent over the years:
- We buy, integrate and reinvest in businesses in sectors that provide attractive long-term growth opportunities.
6 DCC plc Annual Report and Accounts 2024
Strategic Report | Governance | Financial Statements | Supplementary Information |
• | We empower and support |
entrepreneurial management teams to | |
grow and develop those businesses, | |
principally organically and then | |
through further capital deployment. | |
• | We invest in our people, enabling |
them to grow and develop. And we | |
bring in new talent to build the diverse | |
teams needed to deliver our future |
DCC's strong, liquid balance sheet and established M&A capability remain essential enablers of our strategy.
success. | |
• | We focus on creating growth that is |
sustainable. We concentrate our | |
sustainability efforts in areas where | |
we can make a real contribution, | |
such as decarbonisation, safety and | |
supply chain integrity. We want to | |
ensure all our stakeholders benefit | |
from dealing with DCC. | |
• | This approach results in a growing, |
sustainable and cash-generative | |
business that consistently provides | |
returns on capital employed | |
significantly ahead of our cost of | |
capital. |
These Group-wide priorities are directly reflected in the market-focused strategies of each of the Group's three divisions. DCC Energy, DCC Healthcare and DCC Technology each have a very clear set of strategic objectives and the resources in place to achieve them.
I was particularly pleased this year by the growth and progress achieved by DCC Energy, which increased its
M&A Activity
DCC's strong, liquid balance sheet and established M&A capability, honed over nearly 400 acquisitions, remain essential enablers of our strategy.
Approximately £490 million was invested in 17 value-adding acquisitions during the year under review. Among the acquisitions made during the period were Progas in Germany, one of the leading liquid gas distributors in the country, and Next Energy in the UK. These are good examples of how the Group's M&A expertise is being utilised to support the implementation of DCC Energy's growth and decarbonisation strategy.
The Group's M&A capabilities are also utilised to divest businesses when appropriate. Opportunities to transfer businesses that are no longer aligned with the Group's strategic objectives and that will do well under new ownership are considered every year.
Evolving Board Leadership
The role of the Board is to provide strong governance and strategic oversight, enabling the Group to continue delivering value for our shareholders and other stakeholders.
David Jukes, who was appointed a non-executive Director in March 2015 will retire from the Board and as Chair of our Remuneration Committee at the conclusion of our AGM on 11 July. As we announced in December last year, Katrina Cliffe will become Chair of the Remuneration Committee at that point. I would like to thank David for his very considerable contribution to the work of the Board and the Remuneration Committee.
Ensuring that the Board continues to have the expertise and experience needed to guide the evolution of the Group is a priority for me as Chair and an area where I continue to devote considerable time.
adjusted operating profit by almost
10% to £503 million, while also actively diversifying its activities away from fossil fuels, in line with its stated strategy.
DCC Technology and DCC Healthcare demonstrated remarkable resilience during the year, adapting to the evolving needs of their sectors, despite difficult conditions in some markets, and continuing to make improvements in their existing operations, which will position them well for growth this year.
Dividend (pence) | |||||||||
Years ended 31 March | 196.57 | ||||||||
76.9 | 84.5 | 97.2 | 111.8 | 123.0 | 138.4 | 145.3 | 159.8 | 175.8 | 187.2 |
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 |
Sustainability
The Group's Scope 1, 2 and 3 greenhouse gas emissions all reduced during the year. Scope 1 and 2 emissions reduced by 13.6% in the year and we remain on track to reduce our Scope 1 and 2 emissions by 50% between 2019 and 2030. Scope 3 emissions reduced by 3.1%, reflecting the strategic shift being implemented by DCC Energy away from more carbon intensive forms of energy.
Our commitment to sustainability is not just about meeting environmental objectives: it is also about running our businesses safely, creating a more equitable and inclusive workplace, and sourcing from responsible suppliers. Key metrics on safety, employee engagement and supply chain integrity were all positive. However, these are areas where we want to continue to improve.
Above all, safety takes priority over every other objective that we might set.
Thank You to Our Employees
Throughout the challenges of the last year, it was our people who made the difference and delivered the performance of the Group. I extend the gratitude of the Board to our 16,600 colleagues, led by Chief Executive Donal Murphy and his Group Management Team, for their unwavering commitment, hard work and resilience. Your dedication to our customers, your passion for innovation, and your commitment to DCC's values are the driving forces behind the Company's continued and future success.
Conclusion
I conclude by thanking our existing and new shareholders for your support for DCC throughout the year.
MARK BREUER
Chair
13 May 2024
DCC plc Annual Report and Accounts 2024 7
Chief Executive's Review
DCC's purpose is to enable people and businesses to grow and progress. During the year, our people, our greatest asset, yet again demonstrated our purpose in action.
DONAL MURPHY
Chief Executive
OUR FUTURE FOCUS IS CLEAR
Q It has been another year of growth and progress for DCC. What were the key features of this?
Thanks to the exceptional work of my 16,600 colleagues, this was another year of growth and progress for DCC.
Our adjusted operating profit was up 4.1% to £682.8 million, with free cash flow conversion remaining strong at 100%.
The progress made by DCC Energy was a feature of the year. But it was also notable that DCC Healthcare returned to organic growth during the second half of the year.
I was very pleased that we achieved this growth while continuing to reduce our reliance on fossil fuels and achieving another reduction in total carbon emissions, in line with our strategic ambitions.
DCC became a publicly-listed company in 1994. As we reflect on three decades of growth and progress, I am confident that DCC's clear purpose and strategy, deep capabilities and values-driven culture position the Group well for further success.
8 DCC plc Annual Report and Accounts 2024
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DCC plc published this content on 12 June 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 June 2024 06:18:03 UTC.