DCC Energy – Volumes

12.8bn litres

2015: 10.8bn litres

DCC Energy – Operating profit

£205.2m

2015: £119.4m

DCC Energy

DCC Energy DCC Energy operates through three distinct businesses: LPG, Oil and Retail & Fuel Card. In LPG, DCC Energy is market leader in Norway, Sweden, joint market leader in the Netherlands and strong number two in France, Britain and Ireland. DCC Energy is the market leader in oil distribution in Britain and Sweden and one of the leading players in Austria, Denmark and Ireland. In Retail & Fuel Card, DCC Energy is a leading operator of unmanned retail petrol stations in Europe with operations in France, Sweden, Britain and Ireland and is the leading reseller of fuel cards in Britain.

DCC Energy’s LPG business supplies LPG (propane and butane) in both cylinder and bulk formats to commercial, domestic, agricultural and industrial customers across seven countries in Europe. The product is used where there is no natural gas grid for agricultural and industrial processes and for space heating, hot water and cooking. It is also used as road fuel (autogas), as an aerosol propellant and for powering fork lift trucks. Unlike the oil distribution markets which remain highly fragmented, the LPG markets across Europe are relatively consolidated and DCC Energy LPG has a leading position in each market in which it operates.

LPG – France
On 18 May 2015, DCC Energy reached agreement with Shell to acquire Butagaz S.A.S. (‘Butagaz’) and the initial consideration for the business was paid on 2 November 2015. With a total expected acquisition cost of approximately €437 million, Butagaz was DCC’s largest acquisition and represented a major step forward in the expansion of DCC’s LPG business. Butagaz is the second largest LPG distribution business in France where the market size is approximately 2 million tonnes. Butagaz has a market share of approximately 25% and operates from 46 depots nationally, distributing to 250,000 customers and to 26,000 points of sale. We estimate that Butagaz cylinders are used by approximately 4 million end user customers annually. Butagaz has a strong supply base and sources LPG from a number of supply points across France and also from Belgium, Spain and Germany. The business has an experienced management team and a high quality sales, marketing and operating infrastructure.

LPG – Britain
Flogas Britain is the clear number two LPG distributor in Britain. Since the successful integration of BP’s LPG operations acquired in 2012, the business has consistently focused on organic growth, and in particular the switching of large commercial customers from using oil as their prime energy source to LPG. Today the business has a market share of circa 30% of the addressable market of approximately 800,000 tonnes, served through a nationwide infrastructure of 56 locations. In addition to LPG, the business has continued to develop its position as the leading distributor of liquefied natural gas (‘LNG’) as an energy solution primarily to large industrial businesses. Flogas Britain also distributes a wide range of LPG fuel appliances such as mobile heaters and barbecues, as well as renewable products such as biomass boilers and solar panels. Furthermore, the business has recently entered the market for the distribution of natural gas to commercial users.

LPG – Ireland
Flogas Ireland, operating in both the Republic of Ireland and Northern Ireland, is the number two LPG distributor in Ireland and has continued to grow organically to an estimated 40% share of the addressable market of approximately 200,000 tonnes. The business operates from 6 depots throughout the country including 3 importation facilities. In addition, Flogas Ireland has established a leading position as a distributor of natural gas to the commercial market and also markets a range of heaters and barbecues and is currently developing a renewables offering.

LPG – the Netherlands
In the Netherlands, where DCC Energy’s LPG business trades under the Benegas brand, the business has an overall market share of 26% of the addressable market of approximately 320,000 tonnes and is joint market leader. Operating from one central depot and a number of third party locations, the business delivers to commercial, industrial, agricultural and domestic customers in the Netherlands and Belgium and is also a significant player in the sale of LPG for aerosol and autogas use.

LPG – Sweden & Norway
In Sweden and Norway, Flogas operates from 6 third party operated locations which include 3 key importation facilities. Flogas is the market leader in both these markets with 54% and 38% market shares in Sweden and Norway respectively. The addressable market is estimated to be approximately 340,000 tonnes in Sweden and 190,000 tonnes in Norway.

DCC Energy’s oil distribution business sells transport fuels, heating oils and fuel oils to commercial, retail, domestic, agricultural, industrial, aviation and marine customers in Britain, Ireland, Denmark, Sweden, Austria and Germany. In Britain, DCC Energy has been a consolidator of the fragmented oil distribution market since 2001. DCC Energy sells oil under a large portfolio of leading brands in Europe.

Oil – Britain
DCC Energy has been the consolidator of what was, and continues to be, a highly fragmented oil distribution market in Britain. DCC Energy first entered the market in September 2001 with the acquisition of BP’s business in Scotland and since then has acquired and integrated 39 businesses including the oil distribution businesses of Shell (2004), Chevron Texaco (2008) and Total (2011). DCC Energy has grown to become, by far, the largest oil distributor in Britain. DCC’s addressable market in Britain comprises transport fuels and heating oils to commercial, industrial, domestic, agricultural and dealer owned petrol stations. The market size has increased significantly in the year, as oil majors have sold retail networks to independent dealers, thereby expanding DCC’s addressable market to 34 billion litres (from 30 billion litres last year). In the year ended 31 March 2016, DCC Energy’s oil distribution business in Britain sold 5.4 billion litres of product, giving a market share of approximately 16%.

The total retail petrol station market in Britain is approximately 36 billion litres with 44% of volumes sold through supermarket sites, 18% through company owned and operated stations and 38% through independent dealer owned stations. DCC Energy operates in the independent dealer owned segment of the retail market and now has 500 Gulf branded retail sites to which DCC supplies in Britain. DCC Energy has a market share of circa 3% of the total market and supplies to approximately 10% of the dealer network.

Oil – Continental Europe
DCC’s Swedish oil distribution business, Swea, is the market leader in Sweden with a share of approximately 14% of the addressable market which is estimated at 2 billion litres. The addressable oil distribution market in Austria is estimated at 5 billion litres and DCC’s subsidiary, Energie Direct, is number two in this market with a share of 12%. In Denmark, the addressable oil distribution market is estimated at 2 billion litres, of which DCC Energi Danmark has a market share of 16% making it the number two oil distributor. The oil business in Denmark will be further expanded by the agreement to acquire Shell’s commercial and aviation fuels business (as announced by DCC on 23 March 2016). With the oil majors continuing to divest of oil distribution assets, DCC Energy is well placed to continue its growth in Continental Europe through acquisitions.

Oil – Ireland
Emo Oil is one of the leading oil distributors in Ireland with a market share of 9%. DCC’s addressable oil market in Ireland is estimated to be 9 billion litres.

DCC Energy’s Retail & Fuel Card business operates 694 retail petrol stations in France, Sweden, Ireland and Britain and sells and markets branded fuel cards in Britain.

DCC Energy is one of the leading resellers of branded fuel cards in Britain. The business sells approximately 1.0 billion litres of transport fuels annually and provides its customers with access to the breadth of the British retail petrol station and bunker networks through its portfolio of fuel cards under the BP, Esso, Shell, Texaco and Diesel Direct brands. As well as selling fuel cards, which are an essential tool for commercial organisations to manage their transport fuel costs, DCC also provides an innovative range of value added services to help further minimise spend on transport fuels.

On 24 June 2015, DCC Energy completed the acquisition of Esso’s retail petrol station business in France. The business comprises the Esso unmanned retail petrol station network (272 stations) and the Esso motorway concessions network (47 stations). The business sells approximately 1.9 billion litres of diesel and petrol to consumers across France. The business operates from its office in Paris and the retail hub based in Drogheda, north of Dublin, Ireland. The functions of the retail hub include pricing, procurement and back office activities. The retail hub has developed state of the art IT infrastructure which provides a significant platform to add new geographies to our retail business. The change in control from Esso to DCC was a very material and complex but seamless transition.

Trading under the Qstar brand, DCC Energy is the fifth largest petrol retailer in Sweden, selling 330 million litres of product per annum. Qstar provides national coverage through a network of 330 unmanned forecourts which is complemented by an additional 57 dealer operated retail petrol stations trading under the Bilisten and Pump brands.

On 23 March 2016, DCC Energy announced that it had agreed to acquire 139 Shell branded retail petrol stations (and contracts to supply 66 dealer owned sites) in Denmark. This acquisition should complete in the second half of the year to March 2017 (subject, inter alia, to EC competition clearance) and will be integrated into DCC Energy’s pricing, supply and back office hub in Drogheda, Ireland.

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