17 July 2020
Interim Management Statement
Resilient first quarter trading performance
DCC plc, the leading international sales, marketing and support services group, is issuing this Interim Management Statement in advance of the Company's AGM to be held in Dublin at 11.00 am today.
First quarter ended 30 June 2020
Since DCC's last trading update on 19 May 2020, which covered the first six weeks of the year ending 31 March 2021, the trading performance of the Group has continued to improve in the seasonally less significant first quarter. Trading for the first quarter was resilient and ahead of the Group's expectations at the time of the last update, although behind the prior year due to the severe lockdown restrictions in place during April and May.
Operating profit in DCC LPG was behind the prior year due to weakness in commercial and industrial volumes, particularly in Britain and Ireland. Notwithstanding a relatively warmer start to the year, the increase in time spent at home by consumers meant domestic and retail cylinder demand was strong during the quarter across most of DCC LPG's markets.
DCC Retail & Oil performed well in the quarter, driven by good performances from both the British and Danish businesses. The good performances reflected strong demand from agricultural customers and very strong demand in the domestic sector, where customers sought to secure supply during the uncertain lockdown period. Although overall volumes for the quarter were well behind the prior year due to the reduced demand for transport fuels, the positive mix impact of the strong domestic and agricultural performance, the gradual recovery in transport fuels volumes through the second half of the quarter and a good cost performance delivered operating profit modestly ahead of the prior year.
Operating profit in DCC Technology was behind the prior year, although trading improved steadily through the quarter. The business benefited from good underlying demand for consumer technology products in the e-tail and non-traditional retail channels. B2B demand has been impacted more significantly, in particular for products dependent on resellers or integrators accessing business premises.
DCC Healthcare performed strongly during the quarter, with operating profit well ahead of the prior year. DCC Health & Beauty Solutions saw strong demand for nutritional products and benefited from the first-time contribution from the prior year acquisitions in the US of Ion Labs and Amerilab. DCC Vital experienced very strong demand for Covid-19 related products, which offset the impact of substantially lower routine hospital procedures and in-person consultations.
Whilst the sustained uncertain environment created by the pandemic continues to impact all economies, DCC has a diverse and very resilient business model as demonstrated during the quarter, leading market positions and an extremely strong balance sheet. The Group is well positioned to continue its growth and development into the future.
Commenting on the performance, Donal Murphy, Chief Executive, said:
"The global measures being taken to mitigate the impact of the pandemic continue to have a significant impact on our employees, customers and business operations. All DCC business units have operated effectively during the quarter, ensuring our customers continue to receive the range of essential products and services we provide. Our number one priority remains keeping our employees safe and well and I am especially proud of all our people who continue to work tirelessly through these exceptional times.
Although a seasonally quieter period for the Group, I have been pleased with the performance of each of DCC's divisions during the quarter. The trading performance of the Group has been very resilient, considering the significant challenges presented by the necessary restrictions. The improving performance through the quarter has meant we have recommenced selective organic development capital expenditure to ensure we are in a position to capture any opportunity for market share gains during this period.
DCC's diverse, resilient business model and financial strength ensures the Group is in a very strong position to navigate through the ongoing uncertainty. DCC remains active from an acquisitive development perspective and the Group continues to have the platforms, opportunities and capability for further development across each of our four divisions."
As previously announced, Fergal O'Dwyer, Chief Financial Officer, will retire from DCC and from the Board following today's AGM. Kevin Lucey will join the Board and succeed Fergal as Chief Financial Officer at the conclusion of the AGM.
Date for Interim Results
DCC expects to announce its interim results for the six months ending 30 September 2020 on Tuesday 10 November 2020.
Donal Murphy, Chief Executive
Fergal O'Dwyer, Chief Financial Officer
Kevin Lucey, Chief Financial Officer Designate
Telephone: +353 1 2799400
Lisa Kavanagh / Victoria Palmer-Moore
Telephone: +44 20 7250 1446
About DCC plc
DCC is a leading international sales, marketing and support services group with a clear focus on performance and growth. It operates through four divisions: LPG, Retail & Oil, Technology and Healthcare.
DCC is an ambitious and entrepreneurial business operating in 20 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, employing approximately 13,000 people, DCC's four divisions are:
· DCC LPG - a leading LPG sales and marketing business with operations in Europe, the US and Asia and a developing business in the retailing of natural gas and electricity;
· DCC Retail & Oil - a leader in the sales, marketing and retailing of transport fuels and commercial fuels, heating oils and related products and services in Europe;
· DCC Technology - a leading route-to-market and supply chain partner for global technology brands and customers; and
· DCC Healthcare - a leading healthcare business, providing products and services to healthcare providers and health and beauty brand owners.
DCC plc is listed on the London Stock Exchange and is a constituent of the FTSE 100. In its financial year ended 31 March 2020, DCC generated revenue of £14.8 billion and operating profit of £494 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 26 years as a public company.
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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