Group Strategy

Our Objective

Our objective is to build a growing, sustainable and cash generative business which consistently provides returns on capital employed significantly ahead of its cost of capital.

We will achieve this by focusing on five strategic priorities as illustrated.

Successful delivery of this objective will result in:

  • the creation of shareholder value through growth in share price and dividends;
  • enhanced levels of customer service;
  • strengthening of the relationship with our suppliers;
  • increased employment and development opportunities for all our employees; and
  • a positive impact on the wider communities in which we operate. Business Model

Strategic Priorities

Market leading positions

What this Means
DCC aims to be the number one or two operator in each of its chosen markets. This is achieved through a consistent focus on increasing market shares organically and via value enhancing acquisitions. We have a long and successful track record of acquisitions which have strengthened our market positions and generated attractive returns on capital invested.

Progress in 2016
The Group maintained or increased market share in the primary markets in which it operates. The most significant acquisitions completed during the year were Butagaz, Esso Retail France and DLG in DCC Energy, Design Plus in DCC Healthcare and Computers Unlimited in DCC Technology. These businesses are market leaders with returns on capital employed above the Group’s cost of capital.
Read more: Strategy in action on pages 18, 20 and 22. Case study on page 37.

Priorities for 2017
The Group will continue to pursue growth organically and through value enhancing acquisitions. The acquisition of the Danish oil distribution and retail assets (‘Dansk Fuels’) formerly owned by Shell is expected to complete in the second half of the calendar year 2016. The completion of the acquisition is conditional, inter alia, on EC competition clearance.

Operational efficiency

What this Means
DCC strives to be the most efficient business in each of the sectors in which it operates. We continuously benchmark our businesses against those specific KPIs we judge are important indicators in our drive for superior returns on capital in the short, medium and longer term.

Progress in 2016
During the year the Group successfully completed the integration of acquisitions made in prior years including the two largest acquisitions ever completed by the Group in Butagaz and Esso Retail France.
In DCC Healthcare we leveraged our increased scale to consolidate certain back office facilities and activities and also completed the integration of our Swedish tablet manufacturing and packing operations into our larger tablet manufacturing facility in Britain.
DCC Technology continues to significantly upgrade its ERP and logistics infrastructure and has largely completed the construction of a new purpose-built national distribution centre in England which will increase efficiency, provide extra capacity and support increasing demand for flexible delivery solutions.

Priorities for 2017
DCC Healthcare’s streamlined activities, particularly in pharma, will deliver improved operational efficiency and facilitate an increased focus on the sales and marketing of higher margin products, especially in our portfolio of own licensed pharmaceuticals. The relocation of DCC Technology’s UK businesses to the new national distribution centre is planned to complete on a phased basis from the second half of the year ending 31 March 2017. The first phase of the new ERP system is planned to go live during the year ending 31 March 2017.

Extend our geographic footprint

What this Means
In recent years we have been expanding certain of the Group’s businesses into Continental European markets we believe provide good opportunity for future growth. We will look to further develop our businesses in these markets and to enter new geographic markets on a selective basis in the coming years.

Progress in 2016
The Group completed its second major acquisition in the European unmanned petrol station market through the acquisition of Esso Retail in France. In addition, DCC Energy entered the LPG market in France for the first time through the acquisition of Butagaz, a market leader in France. DCC Technology completed the acquisition of CUC, a cabling distribution business with operations in France and Germany.
Read more: Strategy in action on page 18.

Priorities for 2017
Subject to competition clearance, DCC Energy expects to complete the acquisition of Dansk Fuels in the second half of the calendar year 2016. The Group remains disciplined in its approach to acquisition spend and the development strategy remains unchanged.
Read more: Strategy in action on page 25. Case study on page 29.

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