Business Review
DCC Energy

no.1. • oil distributor in Britain. • oil distributor in Northern Ireland and a leading oil distributor in the Republic of Ireland. • in the “agency” fuel card business in Britain. no.2. • oil distributor in Austria and Denmark. • LPG distributor in Britain and Ireland.

Revenue €6,129.8m. Operating profit €137.3m. Return on total capital employed 26.9%.
DCC Energy is the leading oil and liquefied petroleum gas (LPG) sales, marketing and distribution business in Britain and Ireland and one of the leading oil distribution businesses in Austria and Denmark. In the year ended 31 March 2011, DCC sold 7.1 billion litres of product to c.800,000 customers from its extensive network of 261 facilities.

DCC Energy currently employs 3,524 people.

Performance Management – key performance indicators 2011 2010
Volumes 7.1 bn litres 6.2 bn litres
Organic volume growth -1.0% -7.8%
Operating profit per litre (constant currency) 1.86 cent 1.84 cent
Operating cash flow €147.1m €178.8m
Return on total capital employed 26.9% 26.5%
10 year operating profit CAGR 19.9% 19.3%

Business and Markets

DCC Energy’s oil distribution business supplies transport fuels, heating oils and fuel oils to commercial, domestic, agricultural and industrial customers in Britain, Ireland, Austria and Denmark. DCC Energy sells oil under a portfolio of strong brands including Bayford, Brogan, Carlton Fuels, CPL, Emo Oil, Gulf, Scottish Fuels, Shell and Texaco.

DCC is the largest oil distributor in Britain, selling approximately 4.4 billion litres of product per annum on a proforma basis which gives DCC approximately 14% of the market.* DCC has been a consolidator of the highly fragmented oil distribution market in Britain having first entered the market in September 2001 with the acquisition of BP’s business in Scotland. DCC Energy is one of the largest oil distributors in Austria and Denmark with respective market shares of 12% and 13%. In Northern Ireland, DCC Energy is the largest oil distributor with a market share of approximately 20%, while in the Republic of Ireland DCC Energy has approximately 6% of the market.

DCC Energy is the second largest LPG sales, marketing and distribution business in Britain and Ireland. The LPG business supplies propane and butane in both bulk and cylinders to domestic, commercial, agricultural and industrial customers for heating, cooking, transport and industrial processes. Trading under the Flogas brand, DCC has approximately 19% of the market in Britain and approximately 37% of the market in Ireland. Unlike the oil market, which remains highly fragmented, the LPG market in both Britain and Ireland is relatively consolidated. The LPG business also distributes a wide range of LPG fuel appliances such as mobile heaters and barbecues.

Fuel Cards
DCC Energy is one of the leading sales and marketing businesses for branded fuel cards in Britain. The business now sells in excess of 500 million litres of motor fuel annually via its portfolio of fuel cards under the BP, Esso, Shell, Texaco, Total and Diesel Direct brands. Fuel cards have become an essential tool for commercial organisations to manage their transport fuel costs. DCC Energy provides its customers with access to the breadth of the UK retail petrol station and bunker networks through its portfolio of branded fuel cards while giving them detailed information on their fuel utilisation to enable them to minimise their spend on transport fuels.

DCC Energy purchases its oil and LPG from the major oil companies with which it has established excellent long standing relations. DCC Energy’s supply strategy is to maintain a portfolio approach to the sourcing of its oil and LPG products. DCC’s significant financial strength provides DCC Energy with a significant competitive advantage in building long term partnerships with its suppliers.

Performance for the Year Ended 31 March 2011

DCC Energy’s operating profit was 17.2% ahead of the prior year on a constant currency basis. This was another year of excellent growth and the business benefited from the successful integration of a number of acquisitions completed in prior years and another extremely cold winter overall, particularly in the last six weeks of the quarter ended 31 December 2010. However, trading in the fourth quarter was adversely impacted by the milder weather conditions, particularly relative to the same period in the prior year.

DCC Energy sold 7.1 billion litres of product, an increase of 15.5% on the prior year. While the division achieved good organic volume growth in the nine months ended 31 December 2010, this was negated in the fourth quarter primarily as a result of the mild weather conditions. For the full year, volumes were approximately 1% behind the prior year on an organic basis.

On a constant currency basis, the operating profit per litre for the year was 1.86 cent, broadly in line with the prior year of 1.84 cent.

The Oil distribution business had another excellent performance in Britain, benefiting from the integration, consequent synergies and strong performance of recent acquisitions. DCC further strengthened its position within the British market through the acquisition of Pearts (a 190 million litre business in Northern England, completed in May 2010) and the acquisition of two oil importation and storage terminals in Inverness and Aberdeen in Scotland (completed in June 2010). In February 2011, as previously announced, DCC Energy reached conditional agreement to acquire the entire issued share capital of Pace Fuelcare, a British oil distribution business. In its last financial year Pace Fuelcare sold 515 million litres of fuel to independent retail petrol stations and a broad range of commercial, industrial, agricultural and domestic customers. The acquisition is subject, inter alia, to clearance from the UK Office of Fair Trading. DCC is the clear market leader in oil distribution in Britain and on completion of the acquisition of Pace Fuelcare, would have a market share of approximately 15% and is well positioned to further consolidate what remains a very fragmented market.

DCC Energy’s oil distribution businesses in continental Europe (Denmark and Austria) performed strongly and made an important contribution to the division’s overall result. Having reached conditional agreement in February, the scale of the Group’s oil distribution business in Austria was increased when DCC Energy completed the acquisition in April of the trade and certain assets of Top Oil GmbH, a 140 million litre oil distributor based in Northern Austria for a modest consideration. Despite the continued weak economic environment in Ireland, there was a modest recovery in the profitability of the Irish oil business reflecting cost reductions achieved in the prior year.

The LPG business performed satisfactorily in the year achieving market share growth in Britain, particularly in the commercial sector, although volumes in Ireland declined primarily due to the difficult Irish economy. The overall result was adversely impacted by a challenging product pricing environment, reducing the operating profit of the business.

The Fuel Card business had another excellent year, driven by the additional contribution from the acquisition of the Brogan fuel card business (completed December 2009) and good organic volume growth.

Strategy and Development

DCC Energy’s vision is to be the leading oil and LPG sales, marketing and distribution business in Europe:-
• with strong local market shares;
• operating under multiple brands;
• generating high levels of ROCE;
• expanding into other geographic regions with attractive market characteristics; and
• developing a presence over time in the green/renewable energy sector.

In oil distribution, DCC’s strategy is to achieve a 20% share of the British market. With a particular focus on the non heating dependent segments of the market (including dealer operated retail petrol stations, the marine market and the aviation sector) and on national accounts, DCC Energy aims to leverage its extensive nationwide operational infrastructure to drive high levels of organic profit growth. During the year DCC acquired two marine importation and storage terminals in Inverness and Aberdeen. These will support the strategic aim of growing in the marine market and will also provide a platform for further such development over time. DCC Energy is also focused on selling differentiated products and cross selling add-on products and services such as lubricants and boiler maintenance services to its extensive customer base.

In the LPG market, DCC Energy will continue to leverage its strong market positions to drive organic profit growth on a sector by sector basis in both Britain and Ireland.
In fuel cards, DCC will continue to target high levels of organic growth through its extensive portfolio of branded fuel cards by investing in new telesales teams and cross selling fuel cards to its extensive oil distribution customer base. DCC Energy will continue to position itself as the partner of choice for all the providers of branded fuel cards in both the retail and bunker card networks.

DCC Energy made the first important strategic steps in developing the business into continental Europe through the acquisition of Shell’s oil distribution businesses in Austria and Denmark in the year ended 31 March 2010. The scale of the Austrian business was increased by the acquisition of the trade and certain assets of Top Oil GmbH in April 2011, while the Danish business acquired a small lubricant distribution business during the last financial year.

DCC is developing a presence in the renewable energy sector with the focus being to provide energy solutions to customers across the division, allowing them to understand and maximise the benefits of investments in alternative energy products and to support them in reducing their carbon footprints.


The outlook for DCC Energy for the year to 31 March 2012 is set against the significant assumption that there will be a return to a more normal weather pattern compared to the extremely cold winter last year. Consequently it is anticipated, at this very early stage, that operating profit, on a constant currency basis, in DCC Energy for the year to 31 March 2012 will be behind the prior year.

* The market is defined as fuels sold to the domestic, commercial, agriculture, industrial and haulage sectors of the transport fuels market (i.e. excluding the retail petrol station market).

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Oil - Bayford*, Brogan*, Carlton Fuels*, CPL*, Emo Oil*, Gulf, Scottish Fuels*, Shell, Texaco.
LPG - Flogas*.
Fuel card - BP, Esso, Diesel Direct, Fastfuels, Shell, Total.

* DCC owned brand

DCC Energy

DCC Energy’s vision is to be the leading oil and LPG sales, marketing and distribution business in Europe

Volume Split. Oil Volume Split by Product.