REG - DCC PLC - Interim Management Statement

DCCAnnouncement

08/02/2022 07:00

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RNS Number : 9476A  DCC PLC  08 February 2022

 

8 February 2022

 

DCC plc

 

Interim Management Statement

 

Trading in line with expectations

 

DCC plc, the leading international sales, marketing and support services
group, is issuing this Interim Management Statement for the third quarter
ended 31 December 2021.

 

Third quarter ended 31 December 2021

Group operating profit for the third quarter ended 31 December 2021 was in
line with expectations and ahead of the prior year. The Group delivered a good
trading performance and benefitted from acquisitions completed in the prior
year. The growth was achieved notwithstanding the anticipated adverse impact
of currency translation. The Group continued to develop during the period and
completed the acquisition of Almo, DCC's largest acquisition to date, at the
end of the quarter.

 

DCC LPG traded robustly and in line with expectations during the third quarter
of the financial year, notwithstanding the significantly increased cost of
product which remained a headwind during the quarter, particularly in the
natural gas and power segments of the division. Demand conditions improved
relative to the prior year, although some regions continued to experience
restrictions which impacted commercial customers, particularly in the
hospitality and leisure sectors. DCC LPG made further progress in expanding
its energy transition offering for customers during the quarter, including in
renewable electricity, solar and energy management solutions.

 

DCC Retail & Oil again delivered strong operating profit growth, driven by
a very strong performance in Britain and Ireland. The business benefitted from
good procurement and cost control, as well as growth in non-fuel income,
lubricants and roadside services. The division continued to develop its
service offering during the period, making further progress in the roll-out of
lower carbon fuels, electric vehicle charging and other services.

 

DCC Healthcare delivered good growth, driven by a very strong performance from
DCC Vital. Elective medical procedures and GP consultations continue to be
impacted by the pandemic, however DCC Vital has continued to support
healthcare systems with their product and service needs. In addition, Wörner,
acquired in April 2021, has performed strongly since acquisition. DCC Health
& Beauty Solutions performed well in the face of ongoing disruption to
business operations and supply chains as a result of the pandemic.

 

DCC Technology delivered very strong growth in North America and Continental
Europe, offset, as expected, by a weaker performance in the UK market. In
North America, the business delivered very good growth across its product
portfolio and in particular in Pro AV and Pro Audio products. The UK business
continued to experience a difficult market, with well-publicised labour,
logistics and product availability challenges. The business was also impacted
during the quarter by the implementation in late summer of a new warehouse
management system, although this is now operating effectively. The business in
Continental Europe delivered good growth, particularly across the B2B channel.
 

 

Year ending 31 March 2022

DCC continues to expect that the year ending 31 March 2022 will be another
year of strong operating profit growth, in line with current market consensus
expectations, notwithstanding the adverse impact of currency translation and
the significant increase in the wholesale cost of energy products.

 

Sustainability

Sustainability is embedded in DCC's strategy, business model and culture. In
December 2021 DCC retained its 'AAA' ESG rating with MSCI and achieved a 'B'
score from CDP, an increase of two grades from its previous 'C' score.

 

Development activity

Including the acquisition of Almo (detailed below) and recent bolt-on
activity, DCC has committed approximately £560 million to new acquisitions
across Europe and North America since DCC's annual results announcement in May
2021. In December 2021, DCC also completed the previously announced
acquisition of Naturgy Ireland, a supplier of renewable power, natural gas and
energy services to large commercial and industrial customers in Ireland,
following receipt of competition clearance.

 

ALMO Corporation

DCC Technology completed the acquisition of Almo Corporation ("Almo" or the
"Business") on 14 December 2021. The acquisition was based on an initial
enterprise value of approximately $610 million (£462 million) on a
cash-free, debt-free basis. Almo is one of the largest specialist Pro AV
businesses in the United States and is a leading national distributor of
consumer appliances, consumer electronics and lifestyle products selling to
integrators, resellers, dealers, retailers and e-tailers nationwide.

 

The Business is headquartered in Philadelphia and employs approximately 660
people across the United States. In its most recent financial year, the
Business recorded revenues of approximately $1.3 billion (£1.0 billion) and
had underlying EBITA of approximately $75 million (£57 million).

 

The transaction represents DCC's largest acquisition to date and is a major
step in the continuing expansion of both DCC and DCC Technology in North
America. Since entering the market in 2018, DCC Technology has expanded
significantly, through strong organic growth and acquisition activity.
Together with DCC Technology's existing platform, the acquisition of Almo will
create the leading specialist Pro AV business in North America. Further
details on the acquisition can be found in DCC's stock exchange announcement
of 15 December 2021.

 

Upcoming events

Investor events

DCC Technology senior management will host a presentation and webcast for
investors and analysts on 15 February 2022 at 2pm GMT. Registration and access
details are available on the DCC website at www.dcc.ie (http://www.dcc.ie/) .
DCC will also host an investor event focused on the energy sector in the
second quarter of 2022.

 

Year end results

DCC expects to announce its results for the year ending 31 March 2022 on 17
May 2022.

 

Investor enquiries:

Kevin Lucey, Chief Financial Officer
 
                Tel: +353 1 2799 400

Rossa White, Head of Group Investor
Relations
                Email: investorrelations@dcc.ie
(mailto:investorrelations@dcc.ie)

 
    Web: www.dcc.ie

 

Media enquiries:

Powerscourt (Eavan Gannon/Genevieve
Ryan)
                            Tel: +44 20 7250 1446

 
   Email: DCC@powerscourt‐group.com

 

About DCC plc

DCC is a leading international sales, marketing and support services group
with a clear focus on sustainable growth. DCC is an ambitious and
entrepreneurial business operating in 21 countries, supplying products and
services used by millions of people every day. Building strong routes to
market, driving for results, focusing on cash conversion and generating
superior sustainable returns on capital employed enable the Group to reinvest
in its business, creating value for its stakeholders.

Headquartered in Dublin, the Group operates across three sectors: energy,
healthcare and technology, employing approximately 15,000 people. DCC plc is
listed on the London Stock Exchange and is a constituent of the FTSE 100. In
its financial year ended 31 March 2021, DCC generated revenue of £13.4
billion and operating profit of £530.2 million.

DCC has an excellent record, delivering compound annual growth of 14% in
operating profit and generating an average return on capital employed of
approximately 19% over 27 years as a public company.

 

Forward-looking statements

This announcement contains some forward-looking statements that represent
DCC's expectations for its business, based on current expectations about
future events, which by their nature involve risk and uncertainty. DCC
believes that its expectations and assumptions with respect to these
forward-looking statements are reasonable, however because they involve risk
and uncertainty as to future circumstances, which are in many cases beyond
DCC's control, actual results or performance may differ materially from those
expressed in or implied by such forward-looking statements.

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