INVEST IN
WHAT THE
WORLD NEEDS
Annual Report and Accounts 2023
CONTENTS
STRATEGIC REPORT
2 Highlights of the Year
4 At a Glance
6 Chairman’s Statement
8 Chief Executive’s Review
12 Strategy
14 Business Model
16 Business Reviews
16 DCC Energy
24 DCC Healthcare
32 DCC Technology
40 Key Performance Indicators
44 Financial Review
52 Stakeholder Engagement
58 Sustainability Review
77 Risk Report
GOVERNANCE
86 Chairman’s Introduction
88 Board of Directors
90 Group Management Team
92 Corporate Governance Statement
108 Governance and Sustainability
Committee Report
112 Audit Committee Report
118 Remuneration Report
142 Report of the Directors
FINANCIAL STATEMENTS
146 Statement of Directors’ Responsibilities
147 Independent Auditor’s Report
154 Financial Statements
SUPPLEMENTARY INFORMATION
232 Principal Subsidiaries, Joint Ventures
and Associates
236 Shareholder Information
238 Corporate Information
239 Independent Assurance Statement
241 Alternative Performance Measures
246 5 Year Review
247 Index
WE KNOW WHAT
THE WORLD NEEDS
TO GROW AND
PROGRESS
1DCC plc \ Annual Report and Accounts 2023
HIGHLIGHTS OF THE YEAR
WE ENABLE
PEOPLE AND
BUSINESSES
TO GROW
AND PROGRESS
The world needs shared value that grows
and grows. Our purpose and strategy
generate value for our investors – and for
our colleagues, our customers, the societies
we serve and the planet.
DCC delivered strong growth
in a volatile macro environment,
demonstrating the resilience
of our diverse business and
the commitment of our teams
throughout the Group.
DONAL MURPHY
Chief Executive
HIGHLIGHTS
2023
2022
2021
£589.2m
£655.7m
£530.2m
ADJUSTED OPERATING PROFIT
£
655.7m
+11.3%
2023
2022
2021
430.11p
456.27p
386.62p
ADJUSTED EPS
456.27p
+6.1%
2023
2022
2021
76.4
72.1
76.5
CARBON INTENSITY
72.1gCO
e/MJ
2 DCC plc \ Annual Report and Accounts 2023
2023
2022
2021
175.78p
187.21p
159.80p
DIVIDEND PER SHARE
187.21p
+6.5%
2023
2022
2021
£458.4m
£512.0m
£422.9m
OPERATING PROFIT
£512.0m
+11.7%
2023
2022
2021
316.78p
338.40p
297.04p
EPS
338.40p
+6.8%
2023
2022
2021
£382.6m
£570.4m
£687.8m
FREE CASH FLOW
£570.4m
2023
2022
2021
16.5%
15.1%
17.1%
RETURN ON CAPITAL EMPLOYED
15.1%
1. All references to ‘adjusted operating profit’ and ‘adjusted earnings per share’ included in the Strategic Report are stated
excluding net exceptionals and amortisation of intangible assets. Other ‘Alternative Performance Measures’ (‘APMs’) are
detailed on pages 241 to 245.
2. Return on capital employed excludes the impact of IFRS 16 Leases. See APMs on page 244 for further information.
3DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
OUR OPERATIONS
We are focused on growth and enabling
progress.
We acquire, improve and grow diverse
businesses that provide solutions for
what the world needs.
We do this in 22 countries across four
continents creating long-term value for
our investors, our people and customers,
society and the planet.
Employees
16,100
Countries
22
Continents
4
Over the past decade,
DCC generated total
returns of more than
160%
COMPARED TO 74%
FOR THE FTSE 100 INDEX
Climate Change and Energy Transition Safety and Environmental Protection
People and Social Governance and Compliance
We want to add value for everyone
we deal with and we are clear
on where we can do this.
Our goal is net zero. We are committed to leading our
customers in their energy transition by providing innovative
and cleaner energy solutions, reducing carbon emissions.
Our goal is to provide a vibrant, diverse and innovative place
to work and be a positive member of the communities we
serve. DCC is a people business, and developing and investing
in our people is a key strategic objective.
Our goal is no accidents. Safety must be grounded in a culture
that encourages every DCC employee and contractor to
identify and raise concerns.
Our goal is to operate in accordance with the highest
standards of ethics, compliance and corporate governance.
SUSTAINABILITY
4 DCC plc \ Annual Report and Accounts 2023
AT A GLANCE
WHAT WE DO
We invest in growth and progress
in three transformative sectors
DCC ENERGY DCC HEALTHCARE DCC TECHNOLOGY
A leading specialist distribution
partner for global technology
and appliance brands and
customers, providing reach,
simplicity and scale.
– READ MORE PAGES 32 TO 39
A leading healthcare business,
partnering with consumer brands
to create and manufacture high
quality health and beauty
products, and supplying primary
and secondary care providers with
essential products and services.
– READ MORE PAGES 24 TO 31
The trusted partner for commercial
and industrial energy customers,
reducing the complexity of the
energy transition and delivering
energy solutions across processes,
heating and fleets.
DCC Energy is leading the transition
for o-grid homes, making
decarbonisation simple and
aordable.
– READ MORE PAGES 16 TO 23
Volumes (litres)
15.5bn -2.1%
Adjusted operating profit
£457.8m +12.4%
Employees
7,816
Revenue
£821.5m +7.4%
Adjusted operating profit
£91.8m -8.6%
Employees
3,438
Revenue
£5.3bn +13.3%
Adjusted operating profit
£106.1m +29.9%
Employees
4,847
Profit by division
DCC Energy
DCC Healthcare
DCC Technology
70%
16%
14%
Profit by geography
Continental Europe
UK
42%
26%
24%
8%
Rest of World
Ireland
Profit by division
DCC Energy
DCC Healthcare
DCC Technology
70%
16%
14%
Profit by division
DCC Energy
DCC Healthcare
DCC Technology
70%
16%
14%
Profit by geography
Continental Europe
UK
42%
26%
24%
8%
Rest of World
Ireland
Profit by geography
Continental Europe
UK
42%
26%
24%
8%
Rest of World
Ireland
Profit by geography
Continental Europe
UK
42%
26%
24%
8%
Rest of World
Ireland
5DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Dividend (pence)
Years ended 31 March
2018
201720162015
2014
2013
2019 2020 2021 202 2 2023
69. 6
76.9
84.5
9 7. 2
111.8
123.0
138.4
145.3
159.8
175.8
187.2
DEAR SHAREHOLDERS
I am pleased to report on your
company’s performance during the year
to 31 March 2023.
Performance
The Group delivered another strong set
of financial results, with adjusted
operating profit growing to
£655.7 million, an increase of 11.3% over
the prior year. Return on capital
employed remained over 15%.
This performance allowed the Board to
recommend a final dividend to
shareholders of 127.17 pence per share
which, when added to the interim
dividend paid in December, provides a
total dividend of 187.21 pence per share,
representing an annual increase of 6.5%.
This extends the Group’s unbroken track
record of increasing its dividend to
shareholders to 29 years.
The Group delivered against other key
performance indicators as well. We
reduced our Scope 1, 2 and 3 carbon
emissions. We increased the proportion
of renewable energy provided to our
customers. We maintained our strong
safety performance, in line with the prior
year. We increased our workforce
engagement scores. And our divisions
made good progress against their own
market strategies.
Strategy
DCC’s clear strategy and business
model are the foundation of the Group’s
performance. Creating sustainable
long-term value for our shareholders
and other stakeholders remains the
primary objective of the Board and
management.
1. We buy, invest in, integrate and
improve businesses in sectors –
energy, technology and healthcare
– that provide attractive long-term
growth opportunities.
2. We empower and support
entrepreneurial management teams
to grow and develop those businesses.
3. We invest in our people, enabling
them to grow and develop. And we
bring in new talent to build diverse
teams to support our future success.
4. We have integrated our growth and
sustainability strategies in recent
years and our eorts are focused on
areas where we can make a real
contribution like decarbonisation,
safety and supply chain integrity.
5. This approach results in a growing,
sustainable and cash-generative
business that consistently provides
returns on capital employed
significantly ahead of our cost of
capital – our core strategic objective.
In all cases, we invest to generate
returns. This means financial returns for
our investors, with the objective of
delivering sustainable returns on capital
employed of over 15%. It also means
wider returns in the form of reduced
carbon emissions, safe operations and
attractive careers for diverse groups of
people.
Optimising the performance of the
businesses in the Group – financially
and in relation to areas like safety,
carbon eciency, people and
governance – is a key strength of DCC.
We reinvest a proportion of the returns
generated by Group businesses in
organic growth and in acquisitions; and
we return approximately 40% of
adjusted earnings to shareholders each
year.
The M&A capability of the Group, honed
over 400 acquisitions, remains a key
strength. We use this expertise to divest
components of the Group when they no
longer fit with strategy.
6 DCC plc / Annual Report and Accounts 2023
CHAIRMAN’S STATEMENT
WE INVEST
IN MORE
THAN
BUSINESS
Our integrated approach to growth and
sustainability helps us fulfil our purpose
of enabling people and businesses to
grow and progress.
MARK BREUER
Chairman
7DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
This approach to sharing the returns
that DCC generates in improving and
building the Group and in supporting
a progressive approach to dividends,
provides a solid foundation for
long-term success. We have clear
capital allocation priorities, but we
remain agile in our approach. If we have
excess capital, then we can increase
returns to shareholders, but we remain
enthusiastic about the scale of organic
and M&A investment opportunities
available to us and the future growth
trends that support them.
Our integrated approach to growth and
sustainability helps us fulfil our purpose
of enabling people and businesses to
grow and progress.
Business Performance
Each of the Group’s three divisions
made good progress against their
strategic objectives during the year
under review.
The formation of DCC Energy added
considerable momentum to the Group’s
decarbonisation activities, while also
generating very strong financial returns
and opportunities for sustainable
growth in the future.
The evolution of DCC Energy’s activities
was enhanced by several acquisitions
over the course of the year, including
PVO in the Netherlands. PVO is a leading
European distributor of solar panels and
related equipment. A number of other
smaller acquisitions in the solar industry
in France further enhanced our still
modest but growing presence in this
important sector.
DCC Healthcare also made some
important strategic investments during
the year. These included the acquisition
of Medi-Globe which considerably
enhances DCC Healthcare’s presence
in the medical devices sector in Europe
and provides the Group with attractive
new opportunities for organic growth
and acquisitions. Recent investments
by DCC Healthcare in manufacturing
capabilities for gummy-format
nutritional products are also coming into
operation and will deliver strong returns,
accelerating its growth having given
back this year some of the gains made
during the pandemic
DCC Technology continued to focus on
growing in carefully selected market
segments where it can profitably add
value to the suppliers and customers it
serves. Its performance in the year was
aected by a decline in consumer
demand for some products. But its
increased presence and capability in
North America provides the Group with
a significant platform for growth.
People
The Group’s strong operational
performance and strategic
development was achieved thanks to
the continued dedication, innovation
and focus of the Group’s 16,100
employees, led by Donal Murphy, his
Group Management Team and
leadership teams in businesses across
the Group. The depth of leadership and
management skill across DCC – a
product of our devolved operating
model – is a key asset. I would like to
express the appreciation of the Board
to everyone who works in DCC for their
contribution throughout the year.
The Board continues to develop to
reflect the current and future needs of
the Group. We were very pleased to
welcome Katrina Clie as a Director and
as a member of the Remuneration
Committee with eect from 1 May 2023.
She brings expertise in the design and
marketing of consumer services from her
time in the financial services sector as
well as broad boardroom experience.
Pamela Kirby and Tufan Erginbilgic
retired from the Board during the year.
They took with them the thanks of the
Board for their service to DCC and our
best wishes for the future.
Securing directors with the diverse skills
and experience needed to support the
development of the Group will remain a
priority for me and a key element of the
work of the Governance and
Sustainability Committee.
Looking Ahead
As we announced on 9 May, Donal is
currently taking a few weeks o to
address a health matter. He has the
very best wishes of all of us on the
Board and everyone across DCC and
we expect to see him back for the AGM
in July.
DCC’s purpose-driven strategy, strong
culture and agile business model allow
us to respond eectively as our
stakeholders’ needs change, including
through dicult periods. This was
reflected in the Group’s excellent
performance during the year covered
by this report. It is also reflected in our
confidence about the future
development of the Group.
I conclude my report by thanking all of
our investors for your continued support
for DCC.
MARK BREUER
Chairman
15 May 2023
CHIEF EXECUTIVE’S REVIEW
8 DCC plc \ Annual Report and Accounts 2023
Q. DCC delivered another robust
performance during the year.
How was this achieved?
DCC performed very strongly, despite
turbulence in many of the markets where
we operate. We demonstrated once
again the resilience of our diversified
business model and the commitment
and excellence of our teams.
We increased operating profits by 11.3%
to £655.7 million and delivered a return
on total capital employed of 15.1%. This
was driven by strong organic growth
in DCC Energy and by a number of
successful recent acquisitions.
We continued to invest in what the
world needs for the future. We deployed
c. £360 million on value-creating
acquisitions over the year in line with
our capital allocation priorities. We
developed innovative new product
formats and manufacturing lines in DCC
Health & Beauty Solutions and new
infrastructure for decarbonisation in
DCC Energy. We significantly expanded
our growth platform in global medical
devices by acquiring Medi-Globe.
We continued to invest in our people.
We saw an improvement in engagement
scores in our Employee Engagement
Survey. We continued to build the Group
Management Team. Fabian Ziegler
joined as CEO of DCC Energy on
1 November. Clive Fitzharris, who led the
development of our Pro Tech and Life
Tech businesses, stepped up to become
CEO of DCC Technology. And Eddie
O’Brien was appointed to the
newly-created role of Chief Strategy
& Sustainability Ocer.
The decisions we make today will have
long-term social, environmental and
financial eects.
We want those eects to be positive:
returns for our investors, cleaner energy
for everyone, lifelong health and
progressive technology.
We invest and reinvest in businesses that
deliver sustainable positive outcomes for all
our stakeholders. As we grow, we generate
more and more opportunities for further
investment, development and growth.
This enables progress for all of our
stakeholders, in line with our purpose.
WE’RE
FOCUSED
ON THE
FUTURE
We invest and reinvest in businesses that have the
opportunities and capabilities to deliver sustainable
growth and value for all our stakeholders.
Our core strategic objective is a growing, sustainable
and cash-generative Group which consistently provides
returns significantly ahead of our cost of capital and which
enables our people and businesses to grow and progress.
DONAL MURPHY
Chief Executive
9DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
We continued to invest in sustainability.
We took further significant steps in
reducing our Scope 1 and 2 carbon
emissions. The renewable content of the
energy we sold increased from 4% to
6.3%. And we maintained our strong
overall safety performance, maintaining
the frequency of lost-time incidents
below a rate of 1 day lost for every
200,000 hours worked.
Q. You announced a new
energy strategy during the year.
What progress are you making
against it?
The world needs to decarbonise and
DCC Energy is playing its part. As we
stated last year when launching our
strategy for the energy sector, DCC
Energy will provide access to
sustainable and aordable solutions for
people and business to decarbonise.
We are bringing a low-carbon future
closer through our domestic and
commercial energy solutions and
multi-fuel mobility networks.
During the year our profits from services,
renewables and other non-fossil
activities increased from 22% to 28% of
our energy profits. The growth in
renewables was helped by a significant
increase in our sales of Hydrotreated
Vegetable Oil (‘HVO’), which is a
renewable substitute for diesel. We are
now a leading HVO supplier in many of
our key markets, including Ireland, UK,
Austria and Sweden. HVO is being
embraced by many customers,
particularly B2B climate leaders. For
example, Amazon recently announced it
would switch backup generators in its
Irish data centre to sustainable biofuel
supplied by Certa Ireland, a DCC
business.
Energy transition requires a wide range
of solutions including new electricity
supply models. Our French solar
business has built a national position in
just three years. This is generating real
impact with our customers in France
and provides us with experience
relevant for other markets. The
acquisition of PVO, a leading European
distributor of solar panels and related
technologies, bolsters our unique
position in the growing European solar
market.
We have also developed leading
consultative capabilities for our
customers in new heating technologies
through the acquisitions of Protech
Group, a provider of renewable and
energy ecient heating solutions to
commercial customers in the UK, and
Freedom Heat Pumps, one of the UK’s
largest distributors of air source heat
pumps.
LPG remains an important transition
fuel, given its lower carbon emissions
relative to other fossil fuels. But we are
also committed to decarbonising LPG.
To that end, we have partnered with
Oberon Fuels, to create a platform for
renewable dimethyl ether (‘rDME’)
production plants in Europe. We are
currently working together to assess the
availability of sustainable and scalable
supply chains of renewable feedstocks
and to identify possible locations for
production plants. We will supply the
rDME produced in these plants to our
customers across Europe.
We will further scale our renewable
products and services in the year
ahead, as we look to double the size of
DCC Energy by 2030, while also making
substantial cuts in our carbon emissions.
Q. What is DCC’s wider purpose
in society and what are you doing
to fulfil it?
DCC’s purpose is to enable businesses
and people to grow and progress.
We fulfil our purpose by making sure
that everyone we deal with – our
colleagues, our investors, our suppliers
and customers, the societies we serve
and the planet – benefits from what
DCC does.
Delivering returns for our shareholders is
essential and we remain as focused as
ever on that. But we are just as clear on
the need to operate safely, to support
a healthy workforce whose diversity is
valued, to provide innovative and
ecient services to our suppliers and
customers and to reduce our impact on
the planet, most notably through
decarbonisation. Our growth and
sustainability strategies are fully aligned
on these objectives and will deliver
long-term measurable growth and
progress – for our people, shareholders,
customers, suppliers, society and the
planet – in line with our purpose. We are
investing in what the world needs and
are excited by the opportunities and
broad range of returns this generates.
Our three divisions are very clear on
what the world needs to grow and
progress: cleaner energy for everyone,
lifelong health and technology that
enables progress. We are leading
the energy transition, working with
customers towards a cleaner energy
world. We are building a healthy world,
improving patient health and customer
health at home and in clinical settings.
We are creating a progressive world
through the delivery of innovative
technology solutions.
Q. The year was a tough one
for many people and businesses,
with lots of disruption and cost
of living increases. What is DCC
doing to help?
I never fail to be impressed and
enthused by the energy, expertise and
commitment of my colleagues across
DCC. This year, despite the volatile
environment and pressures they were
under, our people delivered for our
suppliers, customers and each other.
The success of the DCC Group and
every business within it is very largely
down to them. And I am deeply grateful
for everything they do.
We saw the pressure that many people
and businesses were under during the
year because of the cost of energy and
inflation crisis they faced. So, we always
think about aordability when
considering price changes and, more
generally, where we can help. We take a
long-term view of these relationships.
Our UK energy business Certas
identified customers who were
struggling financially because of the
inflation shock and economic downturn
in the UK. We oered easier ways to
pay, discount vouchers and provided
information so that customers could
fully access the energy subsidies
provided by the UK Government. Also in
the UK, Flogas Britain unveiled similar
initiatives as part of its Live Life
Connected oer, focusing on its rural
customer base o the gas grid. Butagaz
put similar supports in place for
customers in France.
Last year also highlighted the
importance of maintaining reliable
supplies of energy while reducing
carbon emissions. We are playing our
part as the world navigates the energy
trilemma of energy security, aordability
and sustainability.
For our own people, we continue to
ensure our salary increases are
competitive and in line with the
respective markets we operate in.
Our businesses are embedded in their
local communities and champion
local initiatives. At Group level, we are
proud to mark the 13th year of our
support for Social Entrepreneurs Ireland
(‘SEI’) and ongoing support of the
LauraLynn Foundation in Ireland.
Highlights of our wider stakeholder
engagement are regularly shared
through our social media channels.
Q. Buying and integrating new
businesses is an important part
of the DCC business model. What
were the highlights this year?
Acquisitions are a key pillar of DCC’s
growth strategy. The year ended
March 2023 was another successful
year from a development perspective.
Since our results in May 2022, we
committed approximately £360 million
to acquisitions, with good progress
made in delivering our priorities to build
a material position in the European
healthcare sector and to ensure we
are leading the decarbonisation of
our energy customers.
Highlights during the year include the
acquisition of Medi-Globe, an
international medical devices business
focused on minimally invasive
procedures. Medi-Globe is DCC
Healthcare’s largest acquisition to date.
It significantly expands and enhances
DCC Vital’s position in the medical
devices sector, creating an international
platform of scale in single-use devices
with strong development capability.
Medi-Globe has been successfully
integrated into the Group and we are
executing a clear value creation plan
which will provide meaningful synergy
opportunities, in particular through
leveraging DCC Vital and Medi-Globe’s
respective product portfolios,
commercial infrastructures and
complementary regional coverage.
During the year, DCC Energy expanded
its services and renewables oering and
capability by acquiring PVO, a leading
distributor of solar PV and associated
products, such as energy storage and
EV chargers, across continental Europe.
The acquisition leverages PVO’s
established market position in the
fast-growing solar PV market and DCC
Energy’s knowledge and experience in
transitioning customers to cleaner
energy. DCC Energy can also leverage
the extensive experience and capability
of the Technology division in technology
product distribution and supply chain
management. The business has been
successfully integrated into the Group
and provides an excellent platform to
build a pan-European business in the
distribution of solar PV and related
products and services helping us
transition our customers to net zero.
In addition to PVO, DCC Energy
completed a number of bolt-on
acquisitions providing renewable energy
solutions and services to customers,
including Protech Group which provides
energy ecient heating solutions to
commercial and industrial customers
across the UK and Freedom Heat
Pumps, one of the UK’s largest
distributors of air source heat pumps.
These acquisitions support DCC
Energy’s strategy to provide
multi-energy and multi-service
oerings to its customers.
The key priority for DCC Technology
in the past year was the integration
of Almo into the Group, which
encompassed completing the
successful integration of DCC
Technology’s existing platform in the
United States to create the leading
specialist AV business in North America.
The acquisition of Almo provides DCC
Technology with a scale platform ideally
positioned for growth in large and
attractive North American markets.
Over the past three years, DCC has
spent £1.3 billion on acquisitions. We
have successfully integrated these
acquisitions into the Group and our
management teams are executing
upon clearly defined value creation
plans to drive long-term sustainable
growth and returns.
10 DCC plc \ Annual Report and Accounts 2023
CHIEF EXECUTIVE’S REVIEW CONTINUED
Q. What are the key strategic
priorities for DCC over the next
few years?
DCC’s strategy has been consistent
and successful for a very long period.
We invest and reinvest in businesses
that have the opportunities and
capabilities to deliver sustainable growth
and value for all our stakeholders.
At the centre, we support our diverse
businesses with what they need to
innovate and grow, including expertise
in a range of relevant areas and a focus
on strategic development. Within our
businesses, we build talented,
entrepreneurial and purpose-focused
leadership teams who can deliver
growth in their markets.
By doing this, we achieve our overall
strategic objective to continue
building a growing, sustainable and
cash-generative business which
consistently provides returns on capital
employed significantly ahead of our
cost of capital. We also fulfil our
purpose to enable people and
businesses to grow and progress.
The shape of the Group has evolved
in recent years and it will continue to
evolve. We have now deployed around
30% of our capital in North America,
having entered that market only five
years ago. Today, profits are split
roughly evenly between, on one side,
traditional and lower carbon energy
products, and, on the other side, income
from Technology, Healthcare, and
renewable energy products and
services. Our 2030 vision for the Group
is to both double profits and have up to
75% of profits generated by Technology,
Healthcare, and zero-carbon services
and renewables in DCC Energy.
I am more enthusiastic than ever about
the future growth prospects of DCC.
The strong alignment of our growth
and sustainability strategies, the deep
financial and management capabilities
of the Group, and the wide range of
opportunities available in the markets
where we operate provide us with a
wider range of development options
than ever before.
DONAL MURPHY
Chief Executive
15 May 2023
OUR ENERGY
STRATEGY IS TO
ACCELERATE
THE NET ZERO
JOURNEY OF
OUR CUSTOMERS
11DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
GROWTH TRENDS
– Businesses that provide what the world needs
today and in the future.
GROWTH POTENTIAL
– Talented, entrepreneurial, values-driven
management teams.
– Opportunities for organic and inorganic
development.
SUSTAINABLE GROWTH
– People, products and services that can deliver
progress for investors, the societies we serve and
the planet.
WE MAKE
FUTURE-FOCUSED
DECISIONS
WE LOOK FOR
A STRATEGY
FIT FOR THE FUTURE
We invest in businesses with solutions
that the world needs and with future
growth potential.
We reinvest and optimise the
performance of those businesses,
providing the support they need
to enable their future success.
KEY ENABLERS
Market leading positions
Operational excellence
Extend our geographic footprint
WE LOOK AHEAD
TO INVEST AND
REINVEST IN
FUTURE-FOCUSED
BUSINESSES
THAT CAN MAKE
PROGRESS
HAPPEN.
12 DCC plc \ Annual Report and Accounts 2023
STRATEGY
CAPITAL ALLOCATION
– Invest to generate returns well in excess of our
cost of capital.
– Convert profits to cash.
– Reinvest cashflows to enable further sustainable
growth.
– Remain an attractive buyer of new businesses.
OPTIMISING PERFORMANCE
– Proven processes for financial management and
strategic development.
– Central support in key areas such as strategy,
M&A, HR, sustainability and risk management.
ENERGY
CLEANER
ENERGY WORLD
Our Ambition: to give all customers the
power to choose a clean energy future
today with inclusive and independent
energy solutions.
– READ MORE ON PAGES 16 TO 23
HEALTHCARE
HEALTHIER
WORLD
Our Ambition: to enable people to lead
healthier lives, throughout their lives.
– READ MORE ON PAGES 24 TO 31
TECHNOLOGY
PROGRESSIVE
WORLD
Our Ambition: to make progress happen in
every industry we enter with enhanced
technology solutions.
– READ MORE ON PAGES 32 TO 39
WE GROW
FUTURE- FOCUSED
BUSINESSES
WE CREATE
SUSTAINABLE
VALUE
WE ENABLE PEOPLE AND BUSINESSES
TO GROW AND PROGRESS.
WE FOCUS ON
We invest and reinvest to deliver returns
that are well in excess of our cost of
capital and that add value for all of
our stakeholders.
This future-focused strategy delivers
long-term, sustainable value in line
with our purpose.
Innovation
Development of our people
Financial discipline
13DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
OUR RESOURCES
AND CAPABILITIES
WE ALLOCATE CAPITAL
14 DCC plc \ Annual Report and Accounts 2023
BUSINESS MODEL
A DIVERSIFIED AND
DEVOLVED BUSINESS
We operate in diverse sectors and
geographies through agile and expert
management teams. This creates resilience,
drives a culture of excellence and leads to
more opportunities for growth.
WE INVEST IN WHAT
THE WORLD NEEDS TO
GROW AND PROGRESS
People
A multinational and multicultural
skilled workforce of 16,100 colleagues
with shared values and a common
purpose.
Partnerships
We are a trusted partner to millions
of customers and the world’s leading
energy, healthcare and technology
companies.
Financial
The Group has a strong and liquid
balance sheet which enables us to
react quickly to commercial
opportunities.
Infrastructure
We have robust operating platforms
and a diverse geographic footprint.
Intellectual
The combined expertise within
the Group, together with the strength
of our own brands, third-party
brands, licences and business
processes provides competitive
advantage.
The sectoral and geographic diversity of our businesses gives us
optionality in capital allocation. Our compounding business model
combines organic growth with leading M&A capability.
SECTORS
We invest in three diverse,
resilient and sustainable sectors
where demand for products and
services continues to grow.
BUSINESSES
We invest and reinvest in a
diversified range of businesses
which provide solutions that the
world needs.
This facilitates continued investment
through economic cycles and access
to multiple new growth trends.
GEOGRAPHIES
We have a diverse geographic
footprint across 22 countries in
4 continents.
This facilitates access to new
markets and growth trends and
provides resilience to economic
shocks.
– READ MORE BUSINESS REVIEWS ON PAGES 16 TO 39
ENERGY
TECHNOLOGYHEALTHCARE
EMPOWER DIVERSE TEAMS
THE SHARED VALUE
WE CREATE
OPTIMISE PERFORMANCE
CONNECT SUPPLIERS AND CUSTOMERS
WE SUPPORT BUSINESSES
WITH EVERYTHING THEY
NEED TO GROW
WE ENABLE
GROWTH
& PROGRESS
15DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Our devolved structure supports
our local management teams
with central expertise.
This
gives entrepreneurs and
innovators the resources they
need to excel.
It inspires a growth mindset and
a culture of excellence, creativity
and innovation and allows local
teams to be more agile.
We promote a culture of best
practice and high performance
through:
– Our financial discipline which
creates eciencies, stability
and resilience to drive organic
growth.
– Our expertise in strategy, M&A,
risk, tax, treasury, compliance
and sustainability.
– Our proven ability to operate
and grow customer-focused
sales, marketing and support
services businesses.
By operating globally, locally:
– We ensure deep local
knowledge and focus.
– Our suppliers stay closer
to our customers.
– We better understand
our customers’ current
and future needs.
WE REINVEST TO GROW
– READ MORE ON
FINANCIAL REVIEW PAGE 44
STAKEHOLDER ENGAGEMENT PAGE 52
SUSTAINABILITY REVIEW PAGE 58
Suppliers
£20.7bn
GOODS AND SERVICES SUPPLIED
Employees
83%
EMPLOYEE ENGAGEMENT
Investors
15.1%
RETURN ON CAPITAL EMPLOYED
Communities and the Environment
5.1%
REDUCTION IN SCOPE 3 EMISSIONS
Governments and Regulators
£88m
CORPORATE TAXES
16 DCC plc \ Annual Report and Accounts 2023
BUSINESS REVIEW
THE WORLD
NEEDS
CLEANER
ENERGY FOR
EVERYONE
Our ambition is to double
profits through strong
carbon leadership. We are
already on our way with
over a quarter of profits
coming from non-fossil
sources. We bring
decarbonisation closer
through domestic,
commercial and mobility
solutions.
17DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
ENERGY TRANSITION
Momentum is accelerating for the
transition to clean energy solutions,
driven by increasingly ambitious energy
and climate policies, technological
progress and renewed energy
security concerns. Global clean
energy investment reached c.$1.4 trillion
in 2022, however a further c.$1.3 trillion
of additional annual investment will
be required by 2030 to meet expected
demand. To provide solutions to all
sectors and to bridge the renewable
supply gap, a multi-energy model
is needed.
GLOBAL TRENDS
I was especially grateful to join DCC Energy during the year
as CEO. It is a company that I have admired for many years for
its customer focus, ability to create meaningful partnerships
across energy and its pursuit of growth. I believe deeply in the
opportunity for DCC Energy to become a fully renewable energy
company and have a significant impact on reducing emissions
in the markets in which we operate.
FABIAN ZIEGLER
CEO, DCC ENERGY
BUSINESS REVIEW CONTINUED
ENERGY SOLUTIONS
COMMERCIAL AND INDUSTRIAL We are the trusted
partner of commercial customers, reducing the complexity
of transition and delivering energy solutions across
processes, heating and fleets.
DOMESTIC We will lead the transition for o-grid homes,
making decarbonisation simple and aordable.
KEY BRANDS
Benegas*, Brogan*, Bronberger & Kessler*,
Butagaz*, Butler Fuels*, Campus*, Carlton Fuels*, Certas*, DCC
Energi*, Emo Oil*, Energie Direct*, Flogas*, Gaz de Paris*, Gulf, Jones*,
Hicksgas*, Northeast Oil*, Pacer Propane*, Pacific Coast Energy,
Propane Central*, QStar*, Saveway Petroleum*, Scottish Fuels*, Shell,
Swea*, TEGA*, Texaco, Top Oil* (in Austria) and United Propane Gas*
* DCC-owned brands.
ENERGY MOBILITY
We are the leading multi-fuels network focused on:
RETAIL NETWORK We operate a network of retail
forecourts on motorways and in urban areas providing fuel
and EV charging.
FLEET SERVICES Multi-fuel bunkering and value add
services for small/mid-sized fleets.
KEY BRANDS
Retail brands
Certa*, Emo*, Esso, Great Gas*, Gulf, QStar*, Shell, Spritkonig
Fuel Card brands
Allstar, BP, Certas*, Diesel Direct, Esso, Fastfuels, Gulf, QStar*, Shell,
TruXtop*, UK Fuels
* DCC-owned brands.
TO GIVE ALL CUSTOMERS
THE POWER TO CHOOSE A
CLEAN ENERGY FUTURE, TODAY
DCC ENERGY BUSINESSES
AMBITION
We will deliver this through our two businesses:
18 DCC plc \ Annual Report and Accounts 2023
PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2023
DCC Energy recorded an excellent trading performance, with
operating profit increasing by 12.4% (10.0% constant currency).
Both our Solutions and Mobility businesses recorded strong
growth. Organic operating profit grew 8.3% and ROCE
increased to 19.0%.
DCC Energy Solutions performed very well during the year and
grew operating profit by 9.7% (6.7% constant currency). Half of
the operating profit growth was organic, despite the pervasive
inflationary cost pressures and the milder than average winter
conditions, which impacted demand. There are four operating
regions within DCC Energy Solutions: continental Europe, UK &
Ireland, North America and the Nordic region. All regions
performed strongly during the year.
In continental Europe, we recorded good profit growth and
experienced robust demand from customers, despite high and
volatile wholesale energy prices and the headwind of milder
weather. Government eorts across the region to lower energy
consumption, given energy security concerns, also influenced
demand. In France, our business performed strongly, albeit it
saw lower demand for lower carbon LPG, natural gas and
power given the headwinds mentioned above. The business
saw strong demand for solar solutions and completed
further bolt-on acquisitions which have broadened regional
coverage. The wholesale cost of natural gas and power was
very volatile and made for a challenging trading environment
in this segment, but the business managed this challenge very
well. The Austrian business had an excellent year, where it
benefited from good demand and our strong supply position.
We also delivered strong growth in the UK & Ireland. With
weaker demand for traditional fuel products, the profit growth
in the year was driven by good demand for our energy
services and renewables (particularly in Ireland), as well as
good demand for lower carbon products, such as LPG. We
rolled out Hydrotreated Vegetable Oil (HVO) biofuel across our
UK & Ireland fuel network and we are using the fuel to power
our own truck fleet. This creates strong visibility with our own
customers. Demand increased for HVO from customers across
the UK & Ireland, including from large commercial customers
such as data centres.
In North America we achieved strong profit growth during the
year, despite the weather being warmer than average.
We continued to invest in the operating and management
infrastructure in the region. This will provide the capacity
to further develop our presence in the region in the future.
In the Nordics, our business recorded good growth, driven
by the provision of solutions to commercial and industrial
customers. We delivered renewable Dimetyl Ether (rDME, a
drop-in renewable replacement for LPG) to our first customers
in the region during the year and our aviation business
recovered as travel resumed. We continue to lead in the
region in sustainable aviation fuel initiatives.
DCC Energy Mobility grew operating profit by 20.6% (20.1%
constant currency), almost all of which was organic. There
was significant volatility in the wholesale price of fuels in all
markets during the year. We experienced supply disruption
due to the energy crisis and industrial action at various
refineries in France. Against this backdrop we continued
to make good progress in adding further capability to the
business, increasing our oerings in renewable fuels and
fleet solutions and investing in locations where we see an
EV charging opportunity.
In France, our business recorded strong profit growth. Volumes
were rowbust, despite the market experiencing supply
disruption through the year due to industrial unrest. We also
fully integrated the adjacent Luxembourg network which has
brought a strong convenience capability. Our business also
had a very strong year in the UK market. We saw strong
growth in demand for our range of HGV services, where we
continue to expand our truck-stop network and grew our
tech-enabled parking and services oering for customers.
The company-owned and operated retail network in the UK
also performed strongly and saw good growth in non-fuel
income. In Scandinavia, we delivered a robust performance.
Operating profit declined in Sweden, following a very strong
performance in the prior year, but we saw good growth in
Norway and a robust performance in Denmark.
We continued our focus on organic development during the
year to improve our oering to our retail and fleet customers.
Our locations oering EV charging increased from 55 to 98.
We continued to roll out biofuel at the pump for HGVs in the
Nordics and we opened our first purpose-built mobility hub
at Mandal in southern Norway.
15.5bn
15.9bn
Volume (litres)
15.5bn
-2.1%
13.9bn
2023
2022
2021 £376.1m
£457.8m
£407.1m
Adjusted operating profit
£457.8
m
+12.4%
2023
2022
2021
2.71ppl
Adjusted operating profit per litre
2.95ppl
2.57ppl
2.95ppl
2023
2022
2021
Return on capital employed
19.0%
18.6%
19.0%
18.1%
2023
2022
2021
10-year adj. operating profit CAGR
15.7%
18.8%
15.7%
12.4%
2023
2022
2021
£573.9m
£518.4m
Operating cash flow
£573.9
m
£674.9m
2023
2022
2021
19DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
BUSINESS REVIEW CONTINUED
Our strategy is to lead the energy
transition, bringing decarbonisation closer
for our customers through commercial,
domestic and mobility energy solutions.
ENERGY SOLUTIONS
Energy transition is creating a range of opportunities for
DCC Energy to continue to win with customers through their
transition journey, while also bringing our capabilities and
experience to new customers in fragmented renewable
energy sectors. We are excited about further expansion
in biofuels, solar, and energy services, as well as further
developing our leadership positions in LPG.
Our commercial and industrial customers are small, medium
and large business that typically use traditional fuel to
run industrial processes and heat buildings. Growing
engagement amongst these customers in the Net Zero
agenda is driving the demand for cleaner fuel options. We are
responding to this need through growth in our LPG oers – an
important lower carbon transition fuel – and leading the way
in renewable molecular energy through biofuels including
leading positions in HVO distribution. We combine this with
growing expertise in decentralised power oerings such as
solar in France and broader energy consultancy in the UK.
Our domestic clients are mainly rural customers using
traditional fuels to heat their homes. The transition of
their homes to a low and zero carbon future requires a
multi-pronged approach. We believe biofuels have a
significant role to play for customers that cannot aord
a full energy system change in the short-term. For those
looking to transition their heating from liquid energy sources
to hybrid or electrification we have been building our heat
pump capabilities. Aordability, reliability and the cost of
retro fits are key barriers to change which we are well
positioned to help overcome.
ENERGY MOBILITY
Our mobility business is focused on building networks
of multi-energy transport hubs for customers using cars,
vans and trucks. We are creating distinctive multi-energy
networks by using our deep knowledge of mobility networks,
existing partnerships and our growing suite of value-added
services. On our Retail networks we have been investing in
EV charging capability and new site formats focused on
multi-fuel solutions. Our Mobility services business is building
more capabilities to advise customers on the transition of
their fleets.
STRATEGY
Strategy in Action
CREATING LEADERSHIP
POSITIONS IN BIOFUELS
From modest positions in 2022,
we grew our position significantly in
biofuels in 2023. Our businesses in the
UK, Ireland, Austria and Sweden have
developed leadership positions in the
marketing and supply of HVO products,
with more to come. Customers in the
haulage, transport and construction
sectors have been first-movers on
these fuels, to decarbonise heavy
equipment and fleets. Other high
profile opportunities have included
a successful partnership with Amazon
on their backup generation for
data centres.
During the year, we also announced
our partnership with Oberon Fuels
as we look to lead a similar journey in
the decarbonisation of LPG. Oberon
has real world experience in the
development of rDME, a drop-in
renewable molecule to decarbonise
LPG, in North America and we are
excited to partner with them for
development of the molecules
in Europe.
20 DCC plc \ Annual Report and Accounts 2023
Our Energy Solutions business provides a wide range of
energy solutions to domestic and commercial customers
across 12 countries.
ENERGY SOLUTIONS CONTINENTAL EUROPE
Energy Solutions Continental Europe operates in France, The
Netherlands, Belgium, Austria, Germany and Hong Kong
& Macau.
France
Butagaz is the second largest LPG distribution business in
France. Butagaz operates from 50 depots nationally,
distributing to 140,000 bulk customers, 16,000 points of sale
(cylinder resellers) and 8,500 B2B cylinder customers. We
estimate that Butagaz cylinders are used by approximately
4.4 million end-user customers annually. Butagaz has a strong
supply base and sources LPG from several supply points across
France and from Belgium, Spain and Germany.
Butagaz is building a strong position in the photo-voltaic solar
installation market in France. In the last two years, four business
have been acquired, giving Butagaz significant coverage
across the country and positioning Butagaz as a multi-energy
and multi-services energy solutions provider.
Gaz Européen is a specialist retailer of natural gas and
electricity, focused on supplying energy management solutions
to companies, apartment blocks (with collective heating
systems), public authorities and the service sector in France.
Gaz Européen supplies approximately 7.2 TwH of natural gas
and power to c.25,000 B2B sites across France. A key aim of the
company is to improve energy eciency for its customers by
providing a range of innovative services.
The Netherlands & Belgium
In the Netherlands, where DCC LPG’s business trades under
the Benegas brand operating from five depots and several
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.
In November 2022, DCC completed the acquisition of PVO
International BV (‘PVO’), a leading distributor of solar panels,
invertors, batteries and accessories used in the commercial,
industrial and domestic energy sectors across continental
Europe. PVO was established in 2014 and has grown rapidly
to become one of the leading solar solutions suppliers in
Europe, with a market-leading position in the Benelux region,
and growing positions in eight other European countries
including Germany, Poland and Finland. The company has
approximately 400 active customers including installers, EPCs,
corporates, solar developers and wholesalers. The business
is headquartered in Rosmalen, the Netherlands, and employs
approximately 50 people.
Austria & Germany
The Austrian and German activities managed by Energi
Direct are in bulk liquid fuel distribution and retail, with its
own company-owned and operated portfolio with a strong
convenience oer on a modest number of sites under the
Spritkonig brand. Energie Direct is number two in this market.
Energie Direct also includes Bronberger & Kessler, a liquid
fuel distribution business in Bavaria, Germany.
TEGA is an LPG and refrigerant gas distribution business with
four operating sites based largely in southern Germany,
delivering c.50,000 tonnes of LPG and c.3,000 tonnes of
refrigerants annually. The refrigerants business supplies OEMs,
wholesalers and service contractors related to air-conditioning,
commercial cooling systems and refrigerators, whereas the LPG
business services c.25,000 domestic and commercial
customers.
Hong Kong and Macau
DSG Energy is the market leader in Hong Kong, supplying piped
LPG under long-term supply agreements and continues to
expand its operations and service oering. The business has
a customer footprint of over 107,000 households based in very
large residential complexes. DSG Energy has a number one
position in the cylinder market and supplies autogas through
Shell’s retail network. It also has a market leading position in the
smaller Macau market.
The business is supplied via the Shell terminal on Tsing Yi Island
located next to DSG’s filling and storage facility and distributes
c.45,000 tonnes of Shell-branded LPG annually under a
long-term Shell brand licence agreement.
ENERGY SOLUTIONS BRITAIN & IRELAND
Britain
Energy Solutions Britain provides energy to domestic and
commercial customers across the country from a nationwide
infrastructure of 170 operating locations. The business is the
leading liquid fuels (both liquids and LPG) distributor in Britain.
Flogas Britain is the clear number two LPG distributor in Britain
operating through a nationwide infrastructure of 60 operating
locations. Flogas Britain has successfully grown the LPG market
by switching oil consumers in several industrial sectors to LPG,
and by supplying LPG to support the generation of
biomethane, which is injected into the gas grid. 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. The business
significantly increased its solution and services oering in the
current year with its acquisition of Protech Group, which
provides a wide range of renewable and energy eciency
solutions to commercial and industrial customers.
In Britain, Certas Energy has been a consolidator of the
fragmented oil distribution market since 2001 and has grown
to become, by far, the largest oil distributor in this market. Our
customers are mainly in mobility and heating energy in the
commercial, industrial, domestic, agricultural, retail and fuel
card sectors. The business is a leading supplier of HVO to the
British market and expanded its renewable oering through the
acquisition of Freedom Heat Pumps, a distributor of air source
heat pumps during the year. In addition to fuels, the business
has a significant market presence in lubricants manufacturing,
marketing and distribution for a number of leading brands and
in AdBlue.
MARKETS AND MARKET POSITION
ENERGY SOLUTIONS
21DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Ireland
Energy Solutions Ireland provides energy to domestic and
commercial customers across the country through our two
businesses, Flogas Ireland and Certa.
Flogas Ireland is the number two LPG supplier on the island of
Ireland. It supplies bulk and cylinder LPG to a wide range of
industrial, commercial, and domestic customers, serviced by a
developed network of authorised distributors and six depots.
The LPG business has experienced strong growth in customer
numbers in recent years, as new o-grid customers switch from
oil to LPG to avail of the increased energy eciencies and
reduced carbon emissions oered by LPG.
Flogas Ireland has built a natural gas and electricity business
for both domestic and commercial customers. This business
was initially built organically, with the growth being accelerated
in recent years through selective acquisitions. Through Flogas
Enterprise Solutions, the business is a market leading supplier of
renewable electricity, natural gas, biogas and energy services
to large energy users in Ireland and Northern Ireland. Today,
Flogas Ireland has a platform for a carbon neutral dual fuel
oering to residential, SME and large commercial customer
segments throughout Ireland. In the year to 31 March 2023, the
business supplied 4.4 TWh of natural gas and electricity to
approximately 160,000 customers across Ireland.
Certa is one of the leading oil distributors in Ireland. Certa has
developed a market leading HVO supply position in the Irish
market, supplying to commercial customers and developing
a home heating oering. The business acquired Jones Oil and
Campus Oil in recent years and, following the successful
integration of these businesses, it fully rebranded under the
Certa brand in 2023.
ENERGY SOLUTIONS NORDICS
Energy Solutions Nordics operates across three countries:
Denmark, Sweden and Norway.
DCC Energi Denmark is the number two liquid fuels distributor,
with a growing business in energy services. DCC Energi
Denmark, in partnership with Shell, is also the second largest
operator in the Danish aviation market, operating in seven of
the eight largest Danish airports. The business is deploying
capital into a significant roll-out of electric vehicle chargers in
partnership with Shell, and can oer e-mobility solutions from
home, oce, forecourt and public spaces.
In Sweden and Norway, Flogas operates from five locations,
which include two key importation facilities. Flogas is the
market leader in both of these markets, distributing LPG
predominantly to large steel and industrial customers.
ENERGY SOLUTIONS NORTH AMERICA
DCC Propane is headquartered in Illinois, operates in 22 states
and services 280,000 customers. The business is now the
number seven LPG business in the US by volume following the
successful integration of the UPG business acquired in
December 2020 and is actively looking to extend its footprint
further in what is still a relatively unconsolidated market.
The business trades under seven key regional brands –
Hicksgas, Pacer Propane, Propane Central, Pacific Coast
Energy, Saveway Petroleum, Northeast Oil and United
Propane Gas.
DCC Energy adjusted operating profit
Energy Solutions
Energy Mobility
73%
27%
DCC Energy adjusted operating profit by product type
Traditional (>65 kgCOe/GJ)
Lower Carbon
(≤65 kgCOe/GJ)
Services, renewables
and Other (≤65 kgCOe/GJ)
27%
45%
28%
DCC Energy volumes by customer segment
Commercial
& Industrial
Domestic
Mobility
58%
12%
30%
DCC Energy volumes by geography
Solutions – CE
Solutions – UK&I
Solutions – Nordics
Solutions – US
Mobility
22%
32%
12%
4%
30%
22 DCC plc \ Annual Report and Accounts 2023
BUSINESS REVIEW CONTINUED
DCC Energy’s Mobility businesses operate across six countries
developing networks that provide a wide range of energies
and related services for road users.
France & Luxembourg
The Esso Retail France business comprises an extensive
network of 276 Esso-branded, unmanned retail petrol stations
(63 of which include car washes), 46 Esso motorway stations
and a further 124 Esso-branded dealer-owned stations. At the
end of FY23, the business had 114 chargers at 27 Motorway sites.
During the year, the business established a partnership with
ENGIE to roll out electrical chargers on 16 strategically located
motorway sites in France, continuing our commitment to invest
in lower emission energy. Our Mobility business in Luxembourg
consists of 11 company-owned, company-operated (‘COCO’)
sites, three company-owned, dealer-operated (‘CODO’) sites
and five dealer-owned, dealer-operated (‘DODO’) sites,
primarily operating under the Gulf brand. The COCO shops all
operate Shoppi branded convenience stores. Shoppi is part of
the Cactus Group, the largest grocery retailer in Europe. The
sites are mainly in urban locations with a number being
identified as suitable for an EV charging oering, leveraging our
experience in Norway and France.
The business operates from its oce in Paris, with pricing,
supply and back oce support provided by the retail hub
based in Drogheda, north of Dublin, Ireland.
Sweden
The QStar retail network is the fifth largest retail network in
Sweden, with a nationwide footprint of 345 sites. In addition
QStar is a leading HVO supplier in Sweden.
Norway
Activities in Norway include a well located Esso branded retail
network and an Esso branded bulk distribution business. The
Esso retail network in Norway comprises 118 company-operated
stations with convenience stores operated in partnership with
Norgesgruppen, the largest grocery retailer and wholesaler in
Norway, a growing unmanned network of 54 stations and 76
Esso-branded dealer-owned stations. In addition, the business
has been successfully deploying electric vehicle charging
stations, with 229 chargers currently operating across 35 sites
with a strong pipeline of additional locations. The business
operates from its oce in Sandvika in Norway, with pricing,
supply and back oce support provided by the retail hub
based in Drogheda, north of Dublin, Ireland.
Denmark
DCC Energy’s Mobility business in Denmark is the fifth largest
player in the Danish retail petrol station market. The business is
deploying capital into a significant roll-out of electric vehicle
chargers in partnership with Shell, and can oer e-mobility
solutions from home, oce, forecourt and public spaces.
UK
DCC Energy’s Mobility business in the UK operates our retail
network along with supply to a significant portion of the retail
dealer market. The business also has an extensive fuel card
business for commercial customers, along with an innovative
digitally based SNAP business providing solutions to truck fleet
managers in the UK and Europe.
Strategy in Action
BUILDING FOR AN eMOBILITY FUTURE IN NORWAY
We are excited for the opportunities
presented by an eMobility future as
drivers adopt electric vehicles. We
have been following the market
trends in Norway for some time,
where EV adoption leads the way.
We have been adding charging
capacity rapidly across our network
in recent years.
This year, we have been innovating
ahead of the trends and have
developed formats focused around
alternative fuels, with traditional
fuels now a smaller footprint on the
site. In March, we opened a new
Mobility Hub in Mandal, with
under-canopy EV charging, biofuel
pumps and premium convenience
oerings.
ENERGY MOBILITY
23DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
24 DCC plc \ Annual Report and Accounts 2023
BUSINESS REVIEW
THE WORLD
NEEDS
LIFELONG
HEALTH
People are living longer.
But whatever stage of life
they’re at, we want them
to be healthy too. So we
support everyday health
and wellness, as well as
providing products that
enable practitioners to
diagnose and treat illness.
25DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
AGEING POPULATIONS
Life expectancy has increased, yet
healthy life expectancy has stayed
proportionally the same. This means
that we are spending more years in
poor health, creating a greater need for
healthcare services.
SELF-CARE
To stay healthy for longer, more people
are taking personal control of their
wellbeing. Making positive lifestyle
changes could enable us to enjoy an
extended period of good health.
Long-term global trends underpin the growth opportunity for
DCC’s Healthcare division. In consumer health, global health and
beauty, brand owners are increasingly partnering with
outsourced manufacturers, and value the full range of services
and variety of formats DCC Health & Beauty Solutions provides
through eight industry-leading, well-invested facilities in the UK
and US. Following the acquisition of Medi-Globe in October 2022,
DCC Vital is now a leading partner to health systems across the
UK, Ireland, Europe and beyond. This expanded geographic
coverage, together with our comprehensive product portfolio
and sales channels across hospitals, community care, primary
care and other fragmented healthcare settings, are excellent
platforms for the growth of DCC Healthcare.
CONOR COSTIGAN
CEO, DCC Healthcare
GLOBAL TRENDS
DCC VITAL
PATIENT HEALTH
WHAT WE DO We help to improve patient outcomes by
providing products and services that enable healthcare
providers to diagnose and treat illness.
HOW WE DO IT We supply healthcare providers with
high-quality medical and diagnostic products for use
in hospital and primary care settings.
KEY BRANDS
BioRad, Carefusion, CSL Behring, Comfi*, Diagnostica
Stago, Espiner Medical*, Endo-Flex*, Fannin*, ICU Medical, Fannin LIP*,
Martindale Pharma, Medi-Globe*, Medisource*, Mölnlycke, Neo*, Nova
Biomedical, Rosemont Pharma, Siemens, Skintact*, Smiths Medical,
Smith & Nephew, SP Services*, Williams Medical*, Wörner Medical*,
Urotech*, Urovision*, VacSax*.
* DCC-owned brands.
DCC HEALTH & BEAUTY SOLUTIONS
CONSUMER HEALTH
WHAT WE DO We help people to maintain and improve their
health and wellbeing, enabling them to live well every day
with self-care products.
HOW WE DO IT We develop and manufacture nutritional
supplements and beauty products for brand owners in a
growing health and beauty market.
KEY BRANDS
Alliance Pharma, Apoteket, DSM (i-Health), Elemis,
Estée Lauder, Force Factor, Golden Hippo, GOLO, Glanbia, Groupe
Rocher, Haleon, Healthspan, Holland & Barrett, Iovate Health
Sciences, Lintbells, Nature’s Way (Schwabe Group), Nestlé Health
Science, Omega Pharma, Oriflame, P&G Health, Quincy Bioscience,
Ren, Unilever, Space NK, Target, Vitabiotics.
TO ENABLE PEOPLE TO
LEAD HEALTHIER LIVES,
THROUGHOUT THEIR LIVES
DCC HEALTHCARE BUSINESSES
AMBITION
We will deliver this through our two businesses:
BUSINESS REVIEW CONTINUED
26 DCC plc \ Annual Report and Accounts 2023
PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2023
DCC Healthcare recorded revenues of £821.5 million,
up 7.4% (4.3% constant currency). The constant currency
growth was driven by the acquisition of Medi-Globe
which completed in October 2022. Revenues declined
by 2.2% organically, principally due to lower demand in
DCC Health & Beauty Solutions.
DCC Vital
DCC Vital performed robustly and in line with
expectations during the year. The anticipated reduction
in Covid-related sales was oset by a good trading
performance across the business, particularly in our
British medical devices and primary care operations.
We ensured that rising product costs were recovered
in the market.
Primary care recorded strong revenue and profit growth
in both Britain and Germany. While patient visits to
surgeries remain below pre-pandemic levels, activity
continues to improve. In medical devices, underlying
trading in recurring product sales was strong despite
activity levels in the UK and Irish healthcare systems
being constrained by stang challenges. As expected,
in medical devices we experienced less demand for
Covid-related products and PPE. Following the
expansion of our primary care business into continental
Europe in 2020 through the acquisition of Wörner, our
medical devices platform completed the material
acquisition of Medi-Globe. Medi-Globe, headquartered
in Germany, has a strong position in minimally invasive
devices for gastroenterology and urology. It has
performed in line with expectations since acquisition
and the integration of the business is progressing well.
DCC Health & Beauty Solutions
DCC Health & Beauty Solutions experienced a very
challenging year, following record organic growth in
recent years. We entered the year with strong demand
from customers, while managing labour and supply
chain challenges. As the year progressed, demand from
customers weakened substantially and our order books
declined in the US and particularly in Europe. This was
driven by destocking throughout the supply chain, with
retailers and our customers seeking to reduce inventory
levels, as experienced by the broader market. Despite
this we recorded good sales growth in eervescent
products for leading US nutritional brands. In recent
months we have seen order books stabilise and expect
that order books will grow as destocking unwinds during
the year.
The nutrition market has been a long-term growth
market and is projected to grow strongly in the future,
benefiting from the secular trend of increasing
consumer interest in improving health and wellbeing.
We continue to invest in growing our capacity and
capability and will have our gummy production
commercialised in the US and Europe in the coming
year. We are also expanding capacity in our
eervescent facility, to ensure we can meet increasing
customer demand for this product format.
10-year adj. operating profit CAGR
15.9%
18.5%
16.7%
15.9
%
2023
2022
2021
£81.7m
£91.8m
£100.4m
Adjusted operating profit
£91.8
m
-8.6%
2023
2022
2021
12.5%
11.2%
13.1%
Operating margin
11.2
%
2023
2022
2021
£102.4m
£106.8m
£110.2m
Operating cash flow
£102.4
m
2023
2022
2021
18.7%
Return on capital employed
13.0%
20.5%
13.0
%
2023
2022
2021
£821.5m
£765.2m
Revenue
£821.5
m
£655.4m
+7.4%
2023
2022
2021
27DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
BUSINESS REVIEW CONTINUED
DCC Vital helps improve patient outcomes
by providing high-quality medical and
diagnostic products and services for use
in hospital and primary care settings.
The business has a strong track record of growth, operating
margin improvement and increasing returns on capital
employed. This has been achieved through improving the sales
mix (increasing the proportion of higher value-added products
and company owned brands), consolidating support function
activities and relentlessly driving eciency in its operations.
Targeted acquisition activity by DCC Vital coupled with strong
valuation discipline and integration execution has resulted in:
– An international own-brand medical device business
focused on mid-tech single use medical devices for
minimally invasive surgeries and related procedures;
– A leading position in the supply of medical consumables,
equipment and services to GPs and other primary care
providers in Britain, Germany and Switzerland; and
– An unrivalled position in the supply of healthcare products
in Ireland.
DCC Vital aims to continue this track record of sales
growth through:
– Expanding our own-brand medical products range
organically (through new product development) and by
acquisition;
– Growing our portfolio of third-party agency products;
– Continuing to grow our international presence and
infrastructure, including through acquisitions;
– Continuing to invest in technology; and
– Developing our talent and empowering our team to drive
growth in DCC Vital.
Strategy in Action
WIDER RANGE OF MEDICAL
PRODUCTS FOR LONGER,
HEALTHIER LIVES
DCC Vital’s range of medical products is expanding
rapidly to meet the growing demands of a healthcare
sector coping with ageing populations. Having started
more than 30 years ago with Fannin Healthcare,
a leading distributor in Ireland, we have extended
our operations into the UK and Europe through
acquisitions and organic growth.
Previous acquisitions include Leonhard Lang UK (2013),
Espiner (2015) and VacSax (2019). We have also
expanded through new product development, selling
own-brand medical devices through our growing
distributor network. Most recently, the acquisition in
October 2022 of Medi-Globe, a German based
medical devices supplier, has supported our
international strategy, especially in the clinical areas
of gastroenterology and urology.
STRATEGY
DCC Healthcare’s growth strategy is to build a substantial
international healthcare business leveraging its key growth
platforms in contract manufacturing of nutritional
supplements, medical devices and primary care supplies.
DCC VITAL
28 DCC plc \ Annual Report and Accounts 2023
DCC Health & Beauty Solutions
partners with brands to develop and
manufacture nutritional supplements
and beauty products for greater health
and wellbeing and has a long-term
record of strong growth.
The scale of the business has increased significantly over the
last five years through a combination of market growth driven
by increased consumer demand, new product development
for existing customers, new customer acquisitions and a focus
on higher value, more complex products, in addition to highly
complementary acquisitions.
DCC Health & Beauty Solutions aims to continue this
growth through:
– Continuing to oer industry-leading service levels which
builds long-term partnerships with customers;
– Driving continued organic sales growth with existing
and new customers through our innovative product
development capability, well invested facilities and highly
responsive, flexible customer service;
– Investing in our facilities to expand both our capability
and capacity as demand for our services increases;
– Enhancing and expanding the service oering, organically
and by acquisition, with a particular focus on innovative
nutritional product formats; and
– Further expanding the geographic footprint of our
operations in the US, Europe and selectively targeting
other regions.
AMERILAB DELIVERS
EFFICIENCY IMPROVEMENTS
Supplements play an important role
for people in maintaining their health.
Amerilab Technologies (‘Amerilab’) is the
leading US contract manufacturer of
eervescent nutritional supplements,
one of the fastest growing segments in
the US supplements market over recent
years. Following DCC’s acquisition
of Amerilab in March 2020, we have
supported and helped to accelerate
eciency and process improvements
in the company.
Amerilab recently completed a capital
investment to reconfigure its eervescent
tablet manufacturing and packaging
process, streamlining a highly manual
process which required three phases
(tabletting, packing into tubes, and
labelling of tubes) into a single, fully
integrated and semi-autonomous
process. As a result, Amerilab was able
to significantly increase eciency,
capacity and enhance its product
quality and customer service standards.
Strategy in Action
DCC HEALTH & BEAUTY SOLUTIONS
29DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
BUSINESS REVIEW CONTINUED
Suppliers of medical products to healthcare providers
DCC Vital has a broad range of high quality own and
third-party products and comprehensive market coverage
in Ireland, Britain, Germany and France across a range of
healthcare settings including hospitals, primary care,
community and other fragmented healthcare settings. DCC
Vital’s own-brand medical device portfolio encompasses
products across the areas of urology, gastroenterology,
laparoscopic surgery, theatre consumables, cardiac monitoring
and wound care. In primary care, DCC Vital is a major supplier
of medical products to GPs, laboratories and other fragmented
healthcare settings in Britain, Germany and Switzerland.
In addition, DCC Vital has long-standing agency distribution
relationships with a range of leading international medical
device companies.
The primary and secondary care markets in which DCC Vital
operates are large, growing and typically government funded.
The Covid-19 pandemic and the significant re-purposing of
healthcare systems to urgently respond to Covid-19 resulted in
the curtailment of normal healthcare activity including medical
consultations and elective surgery. As countries move on from
managing healthcare in a pandemic and seek to return to
more normal activity, health systems are experiencing capacity
pressures from a backlog of procedures and pent-up demand
for treatment. Additionally, public healthcare policy has
been moving towards shifting the point of care to the most
cost-eective location, usually away from expensive hospital
settings and into primary and community care settings.
Healthcare systems are focusing more on earlier identification
and diagnosis of acute and critical illness, to allow greater
focus on prevention and illness management as opposed
to urgent and acute intervention.
The adoption of technology to support this across DCC Vital’s
customer and supplier base has accelerated over the past few
years. DCC Vital is very well placed to benefit from these trends
given its scale, its investments in technology and people, the
strength of its relationships with international suppliers and
manufacturers and its deep understanding of the supply chain.
DCC Vital is a leader in the sales, marketing and distribution
of medical products in Germany, France, Britain, Ireland and
a number of other countries; it also has a growing presence in
other international markets through a combination of its own
on-the-ground sales forces and a strong distributor network.
DCC Vital significantly enhanced both its product oering
and geographic footprint with the acquisition of Medi-Globe
in October 2022. Medi-Globe is an international single use
medical devices business involved in the development,
manufacture and distribution of gastroenterology and urology
products for use in acute care settings. Medi-Globe is one
of the largest manufacturers of single use endoscopy and
urology devices and has a state-of-the-art clean room
manufacturing facility in Hranice, Czechia along with significant
R&D capability. The Business sells in over 120 countries with
a direct sales presence in six countries.
DCC Vital is the market leader in the supply of medical
consumables, equipment and services to the primary care
sector in Britain, Germany and Switzerland and has a growing
presence in other fragmented healthcare settings. DCC Vital
provides its customer base of c.9,000 British GP surgeries with
excellent service, increasingly leveraging its digital capabilities.
In recent years, DCC Vital has strengthened its leading position
in Britain through complementary bolt-on acquisitions. In April
2021, DCC Vital established a European growth platform with
MARKETS AND MARKET POSITION
DCC Vital pro-forma gross profit by product*
Own Brand
Third-party
46%
54%
DCC Healthcare pro-forma sales split*
DCC Vital
DCC Health &
Beauty Solutions
42%
58%
DCC Healthcare pro-forma sales by destination*
Continental Europe
and Rest of World
Ireland
US
29%
37%
21%
13%
UK
DCC Vital pro-forma gross profit by channel*
Life sciences
& distributors
Hospitals
Primary care
13%
30%
57%
DCC VITAL
* Medi-Globe is included on an annualised basis.
30 DCC plc \ Annual Report and Accounts 2023
Our services for health and beauty brand owners
DCC Health & Beauty Solutions provides outsourced product
development, manufacturing, packing and related services
to Health and Beauty brand owners, specialist retailers and
direct sales organisations in Europe and the US, principally
in the areas of nutrition (health supplements) and beauty
products. It operates eight high-quality contract
manufacturing facilities. Our manufacturing capability
encompasses soft gels, tablets, capsules, eervescents,
gummies, creams, liquids, powders and sprays across a range
of packaging formats.
The business operates well-invested facilities – five Good
Manufacturing Practice (‘GMP’) certified facilities in Britain,
four of which are licensed by the Medicines and Healthcare
Products Regulatory Agency (‘MHRA’) and three facilities in
the US which comply with FDA current Good Manufacturing
Practices (‘cGMP’) standards and are also certified by
leading third-party regulatory bodies including NSF and
USDA Organic.
The business has strong market shares in Britain, Scandinavia
and Benelux, and is building market share in the US and in
other Continental European markets.
The development of our presence in the US nutritional
contract manufacturing market has been a key strategic
focus in recent years. The US, the world’s largest nutritional
supplements market, is dynamic and growing and the
contract manufacturing base is highly fragmented. These
features provide significant opportunities to a growth
orientated, acquisitive business like DCC Health & Beauty
Solutions for organic growth (supported by capital
investment) and further acquisitions.
With its three well-invested facilities in the US and additional
management capability to support our growth, DCC Health &
Beauty Solutions is leveraging its broad and complementary
nutritional product strengths to pursue cross-selling and other
synergy opportunities.
DCC continually invests in its manufacturing facilities to
expand capacity, add flexibility and enhance its service
oering to customers. Gummy nutritional products represent
a high growth category within the nutritional market and
DCC Health & Beauty Solutions is investing in gummy
manufacturing and production capability in the US and
Britain. These investments will enable the business to meet
growing demand for gummies and support our customers to
develop innovative and complex products. DCC Health &
Beauty Solutions also made multiple other investments to
support organic growth during the year, including increasing
tableting and coating capacity to support higher customer
demand in both the US and Europe. The business has a strong
programme of continuous capital investment to enhance
capability and improve operational eciencies across all
our facilities.
Competitors in the nutritional products sector include
International Wellness Group, Catalent, Aenova and many
smaller manufacturers in Europe and the US. Competitors in
the beauty products sector include Meiyume, KDC/One and
numerous smaller manufacturers of cosmetic creams and
liquids in Britain.
DCC Health & Beauty Solutions sales by country
US
UK
Rest of World
51%
16%
33%
DCC Health & Beauty Solutions sales by category
Nutrition
Beauty
24%
76%
the acquisition of Wörner, a leading supplier of medical and
laboratory products to the primary care sector in Germany,
Europe’s largest healthcare market, and Switzerland.
Wörner sells a broad product range to approximately 20,000
customers annually, including GPs, primary care centres,
specialist medical centres and laboratories. Wörner provides
an excellent platform for organic and acquisitive growth across
the DACH region.
DCC Vital is focused on expanding its portfolio of own brand
medical products, through investing in new product
development and complementary acquisitions. DCC Vital’s
gastroenterology and urology product range includes leading
brands such as Endo-Flex and UroTech; while its operating
theatre product range includes Espiner (tissue retrieval bags
for minimally invasive surgery), Skintact (electrodes and electro
surgical equipment), VacSax (disposable suction devices used
in operating theatres and hospital wards), Fannin IV sets and
a range of equipment used to support anaesthetics. These
products are marketed by DCC Vital’s sales teams and a range
of international distributors. DCC Vital also continually expands
its portfolio of third-party agency products.
Competitors in this market include global healthcare
companies as well as a large number of smaller medical,
surgical and pharma brand owners and distributors.
DCC HEALTH & BEAUTY SOLUTIONS
31DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
32 DCC plc \ Annual Report and Accounts 2023
BUSINESS REVIEW
THE WORLD
NEEDS
PROGRESS
MAKERS
We are progress makers.
Whatever the industry.
Whatever the challenge.
We make technology
provide the solution.
Acting as an enabler between
global technology brands
and the people and businesses
who use their products,
we create solutions that
enhance experiences, save
time, and improve lifestyles.
33DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
SMARTER TECH
FUTURES
The digital transformation
of our lives is set to
accelerate. Virtual reality,
artificial intelligence,
smart homes and smart
energy will dramatically
improve the way we live
and work.
DEMAND FOR
BETTER LIVING
People are spending
more time in their homes,
and so are focusing more
attention on them – from
living spaces to oce
spaces to outdoor
spaces. In every space,
energy-ecient
smart technology is
increasingly important.
SUPPLY CHAIN
INSECURITY
Climate change and
political instability are
negatively aecting
businesses in industries
across the world,
with major implications
for the security of global
supply chains.
GLOBAL TRENDS
Progressive technology improves our lives and the world
we live in. Across DCC Technology, in partnership with our
suppliers, our people are enhancing outcomes for our
customers with leading technology products and solutions.
I am excited about the growth opportunities this fast-paced
world oers us.
CLIVE FITZHARRIS
CEO, DCC Technology
BUSINESS REVIEW CONTINUED
34 DCC plc \ Annual Report and Accounts 2023
MAKE PROGRESS HAPPEN
IN EVERY INDUSTRY WE ENTER
WITH ENHANCED TECH SOLUTIONS
DCC TECHNOLOGY BUSINESSES
AMBITION
We will deliver this through our three businesses:
PRO TECH
INFO TECH
LIFE TECH
WE MAKE
ENHANCED
EXPERIENCES
HAPPEN
WE MAKE
FASTER
CONNECTIONS
HAPPEN
WE MAKE
HIGH-QUALITY
LIFESTYLES
HAPPEN
WHAT WE DO We bring technology elements
together to create elevated experiences.
HOW WE DO IT Whether it’s stadium concerts,
trading floors, wind farms or restaurants, the world
needs more and more ways to store and display
information. Pro Tech takes care of the design and
installation of big screens, touchscreens, servers
and professional AV – and makes them work as
part of a user-friendly experience.
WHAT WE DO We put the latest technology
in people’s hands, quickly.
HOW WE DO IT From laptops to mobile phones,
tablets to trackpads. When the world decides
it needs the latest piece of tech kit, it needs it
immediately. We serve B2C and B2B markets
with consumer technology, swiftly and eciently.
WHAT WE DO We provide technology solutions
that enrich people’s lives.
HOW WE DO IT Applied intelligently, technology
has the power to improve lifestyles in many ways
– from the pleasure of using smart kitchen
appliances to the excitement of playing advanced
musical instruments. Life Tech oers products and
services designed to enhance our quality of life.
KEY BRANDS Allen & Heath,
Barco, Chauvet, Dell, Focusrite,
HP, LG, Poly, Samsung, Sharp
NEC, Sonos
KEY BRANDS Acer, Apple,
Asus, Dell, Epson, HP, Huawei,
Lenovo, LG, Logitech,
Microsoft, Netgear, Meta,
Samsung, Toshiba
KEY BRANDS Electrolux
(Frigidaire), LG, Marshall,
Midea, On Stage, Samsung,
Washburn, Zephyr
35DCC plc \ Annual Report and Accounts 2023
PERFORMANCE FOR THE YEAR ENDED 31 MARCH 2023
DCC Technology recorded revenues of £5.264 billion,
up 13.3% (8.5% constant currency), with the growth driven
by the acquisition of Almo.
North America
In North America, we have a leading market position
across the sales, marketing and distribution of Pro Tech
and Life Tech technology products.
Our North American Pro Tech (Pro Audio and AV)
operations grew strongly during the year. Business
investment and demand for these products held up
well, despite the inflationary environment and higher
interest rates. We saw strong performances from the
hospitality and entertainment sectors in particular.
We integrated Almo’s AV business with our existing
business in the first quarter of FY23 without disruption,
during the year to create the region’s largest specialist
distributor of AV equipment.
Performance of our Life Tech (lifestyle and home comfort
technology) operations in the region was mixed.
Premium appliance categories performed well, with
good underlying demand. Consumers in this segment
are less impacted by cost of living pressures. Demand
for appliances, music and consumer products
weakened as the year progressed, with softer consumer
confidence impacting demand and dealers cautious
with regards to their inventory holding. As previously
reported, our online fulfilment segment within Almo,
which provides Life Tech products to e-tailers and online
services for traditional retailers, experienced reduced
demand for air conditioning and other home comfort
equipment during the first half of the financial year.
We are focused on delivering increased contribution
from this segment going forward.
Europe
As in North America, performance in Europe was mixed.
Our consumer-focused businesses in continental Europe
experienced very weak demand during the year. The
rise in the cost of living impacted consumer demand for
technology products. As a result, we recorded revenue
and operating profit declines. Conversely, our Pro Tech
businesses in Europe performed well. There was good
post-Covid recovery in our continental European AV
business, with good growth in Germany and Italy and
general B2B demand was robust.
Our business in Ireland performed well and recorded
another year of good profit growth. In the UK we
delivered an improved performance this year. Although
the technology market in the UK was dicult, driven by a
weak economic outlook and our UK revenues declined,
the operational and cost performance of the business
was much improved year on year following a very
dicult prior year. Our UK business, which operates
predominantly in the high volume, lower margin Info
Tech market, is well placed to continue to improve and is
a key focus to drive an improvement in divisional return
on capital employed (ROCE).
2023
2022
£5.3bn
£4.6bn
Revenue
£5.3bn
2021 £4.5bn
+13.3%
9.8%
7.0%
10-year adj. operating profit CAGR
9.8%
7.2%
2023
2022
2021
£106.1m
£81.7m
Adjusted operating profit
£106.1m
£72.4m
+29.9%
2023
2022
2021
£184.4m
£3.2m
Operating cash flow
£184.4m
£118.6m
2023
2022
2021
2.0%
1.8%
Operating margin
2.0%
1.6%
2023
2022
2021
8.7%
9.1%
Return on capital employed
8.7%
12.3%
2023
2022
2021
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
STRATEGY
Strategy in Action
GROWING OUR MARGINS,
SCALING OUR PLATFORMS
DCC Technology’s strategy is to provide
progressive technology the world needs.
We do this by making progress happen
across three sectors: Pro Tech, Info Tech
and Life Tech.
TO ACHIEVE THIS WE FOCUS ON:
–
Creating an integrated, multi-country
operating model, with best-in-class
people, operating processes and
infrastructure, giving our partners the
benefits of our scale, while retaining
our local market knowledge and
agility.
– Reinforcing our position in attractive
market segments such as Pro Tech
in North America and Europe and
Life Tech in North America both
organically and through acquisition.
– Expanding our capabilities in key
areas like digital through investment in
people and systems.
FY2017
Turnover
Gross
Margin
£3.1b
12%
7.6%
11.6%
5%
£5.4b
FY2022
Platform
Stampede
Jam Industries
Comm-Tec
Amacom
Bconnected
JB&A
The Music
People
Almo
Azenn
Bolt-on
BUSINESS REVIEW CONTINUED
36 DCC plc \ Annual Report and Accounts 2023
PRO TECH
We serve people and businesses who
use technology as part of their work,
installing complex, high-profile and
critical solutions. Our partners rely on us
to provide sophisticated product and
technical knowledge and first class
service.
INFO TECH
We serve consumers and businesses
who need reliable access to technology
products and services and the
manufacturers of those products who
need ecient routes to market.
LIFE TECH
We provide ecient routes to market for
a wide variety of products that enhance
our everyday lives, from kitchen
appliances to musical instruments.
Strategy in Action
EXERTIS JAM
SUPPORTING CHAUVET
The provision of complex high-tech
lighting systems is a key part of DCC
Technology’s Pro Tech business.
Exertis Jam works with installers
and integrators providing solutions
to projects around the world.
During the year, Exertis Jam worked
with Chauvet, a leading Canadian
provider of pro-audio, lighting
and production equipment, and
a Spanish production company to
provide a lighting package for live,
interactive experiences based on
internationally-successful TV and
film franchises such as Bridgerton
and Harry Potter. These productions
were staged in various cities around
the world with great success.
Exertis Jam, in partnership with
Chauvet, delivered thousands of
light fixtures, in multiple countries in
the summer of 2022. Chauvet relied
on the Exertis Jam team to work
as a trusted extension of their
own team, providing expertise
and support, combined with
excellent customer service.
This level of value-add and
expertise is critical to achieving
the higher returns which are a key
feature of our Pro Tech business.
37DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
DCC Technology partners with many of the world’s leading
technology brands to market and sell a range of Pro Tech,
Info Tech and Life Tech products to a broad customer base.
Our scale and strong relationships with suppliers and
customers allow us to win business on both a national and
international basis. Our customers include retailers, e-tailers,
resellers and integrators.
We are the leading distributor of Pro Tech products in North
America with a strong presence in Europe.
We are the fourth largest distributor of Info Tech in Europe with
leading positions in the UK and Ireland.
We are the leading distributor of Life Tech in North America
with a strong portfolio of market leading brands, many with
channel exclusivity, supplemented by a growing range of own
brand products.
MARKETS AND MARKET POSITION
Strategy in Action
STREAMLINING OUR AV OFFERING
IN NORTH AMERICA
DCC Technology has a leading position in Pro Tech in
North America. Consolidating and streamlining the
business’s AV oering through the integration of Exertis
North America and Almo has cemented this position
and provides a consistent market-leading oering to
suppliers and customers.
The AV divisions of Exertis North America and Almo
were merged during the year to form Exertis Almo AV.
Harnessing the collective sales, service, marketing and
technical expertise of both companies, Exertis Almo AV
is now the largest specialised AV distributor in North
America with annual revenue of $1 billion. Its 250 team
members include 100 sales and 70 business
development and services specialists.
The integration project was jointly undertaken by the
management teams within the two companies and
completed on schedule in April 2022. Throughout this
period the combined business continued to trade
strongly and all key customer and vendor relationships
were maintained. The integration included the
successful migration of the Exertis warehouses and
support sta on to the Almo enterprise resource
planning and warehouse management systems. The
integrated sales teams are now led by a combination
of former Exertis and Almo managers with a common
sales incentive structure.
Exertis Almo AV now provides unrivaled expertise and
service to its customers, vendors and channel partners.
The integration of the two companies provides 13
warehouses across the United States with specialised
logistics, inventory staging and just-in-time shipping
for commercial and residential projects.
DCC Technology total sales by geography
North America
UK & Ireland
EME
36%
47%
17%
DCC Technology total sales by specialism
Pro Tech
Info Tech
Life Tech
54%
16%
30%
38 DCC plc \ Annual Report and Accounts 2023
BUSINESS REVIEW CONTINUED
The last year saw an easing in global supply chains following
the pandemic, resulting in oversupply of products in certain
markets with consequent negative impact on demand. Market
demand was also adversely aected by inflationary pressures
exacerbated by the war in Ukraine. This had a particular
impact on consumer demand in Europe. Pro Tech markets were
generally more resilient and we experienced good growth in AV
and Pro Audio in North America and in our Pro Tech businesses
in Europe.
DCC Technology focused on limiting the impact of cost
inflation. We continued to make progress on the digitisation
of our operations and this helped provide vital operational
eciencies while enhancing customer experience.
DCC Technology provides technology brand owners and
manufacturers with an exceptionally broad customer reach
and proactively markets their products through product and
customer focused sales teams. The business provides a range
of value-added services to its customers and suppliers,
including end-user fulfilment, digital distribution, product
lifecycle solutions, category management and merchandising.
DCC Technology also provides product customisation and
cross supplier bundling, third-party logistics and website/
web-shop development and management. Key to the provision
of these services is access to, and interpretation of, relevant
data from across the technology supply chain.
DCC Technology has become the leading specialist
distributor of Pro Tech in North America with a strong presence
in major European markets. The business is also the leading
distributor of premium appliances in North America with a
growing portfolio of lifestyle products many of which are
own brand and attract higher margins. We are the leading
distributor of Pro Audio and musical instruments in North
America with a strong portfolio of vendor relationships, many
with channel exclusivity, supplemented by a growing range of
own brand products. We believe that there is scope to build
on these strong positions through action on working capital,
ecommerce capability and leadership and bringing on board
bolt-on and platform acquisitions.
DRIVING BACK-OFFICE
AUTOMATION
Operational eciency is key to the
success of DCC Technology’s Info Tech
business which is characterised by high
volume, low margin activity. We have
been investing in process
improvements and back-oce
automation which improve processing
speed and accuracy while also freeing
up scarce resources for more value
adding tasks.
Exertis UK has successfully introduced
robotic process automation (RPA),
nicknamed ‘Betty’, to automate some
high-volume processes in its accounts
receivable and pricing teams. Areas
addressed to date include customer
statements, reporting, credit note
matching and processing of supplier
discounts. This has enabled the
provision of greater consistency,
accuracy and more timely information
to our customers and suppliers while
saving more than 6,000 hours of
manual processing and reducing
investment in working capital.
Strategy in Action
39DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Description and basis of calculation
The change in adjusted operating profit
achieved in the current year compared to
the prior year.
Strategic linkage
Adjusted operating profit measures the
underlying operating performance of the
Group’s businesses and is an indicator of
our revenue generation, margin
management, cost control and
performance eciency.
FY23 comment
DCC Energy and DCC Healthcare recorded
profit growth versus the prior year. The
growth was mainly driven by acquisitions
completed in the prior year (most materially
Almo) and in the year under review
(principally Medi-Globe and PVO).
Organic operating profit growth was
modest and was driven by the strong
organic performance of DCC Energy.
DCC Energy had an excellent trading
performance, with operating profit
increasing by 12.4% (10.0% constant
currency). Both our Solutions and Mobility
businesses recorded strong growth.
DCC Healthcare had a more challenging
year following excellent performance in
recent years. Operating profit declined by
8.6% (11.1% constant currency).
DCC Technology delivered very strong
operating profit growth of 29.9% (19.7%
constant currency), driven by the prior year
acquisition of Almo.
FY24 outlook and aims
Notwithstanding the uncertain economic
environment, the Group expects that the
year ending 31 March 2024 will be another
year of profit growth and continued
development activity.
– READ MORE
FINANCIAL REVIEW ON PAGES 45 TO 46
BUSINESS REVIEWS ON PAGES 16 TO 39
Description and basis of calculation
Return on capital employed (‘ROCE’)
is defined as adjusted operating profit
expressed as a percentage of the average
capital employed. The Group calculates
ROCE both including and excluding the
impact of IFRS 16 Leases as detailed
in the Group’s ‘Alternative Performance
Measures’ on page 244.
Strategic linkage
ROCE is the key financial benchmark
we use when evaluating both the
performance of existing businesses
and potential investments and is a
key component of our executive bonus
plans and Long-Term Incentive Plan.
FY23 comment
The Group continued to generate strong
returns on capital employed,
notwithstanding the substantial increase
in the scale of the Group in recent years.
The decrease in ROCE versus the prior
year primarily reflected the substantial
acquisition spend during the prior year
and the year under review of £1.1 billion,
primarily in DCC Healthcare and DCC
Technology, which had a dilutive impact
on Group returns. In the year under review
ROCE was also aected by the organic
decline in operating profit in DCC
Healthcare and DCC Technology which
we expect to recover in the coming years.
FY24 outlook and aims
The achievement of returns on capital
employed well in excess of the Group’s
cost of capital will continue to be a key
focus in order to ensure the ecient
generation of cash to fund organic growth,
acquisitions and dividend growth.
– READ MORE
FINANCIAL REVIEW ON PAGE 50
Description and basis of calculation
The change in adjusted EPS achieved
in the current year compared to the
prior year.
Strategic linkage
Adjusted EPS is a widely accepted metric
used in determining corporate profitability.
It also represents an important metric in
determining the generation of superior
shareholder returns and is a key
component of our Long-Term Incentive Plan.
FY23 comment
The increase in adjusted EPS of 6.1% (3.0%
constant currency) reflects the factors
mentioned under the adjusted operating
profit KPI and also the increase in profit
before exceptional items and goodwill
amortisation.
FY24 outlook and aims
The main driver of growth in EPS is the
Group’s operating profit performance
which, as noted above, is expected to
continue to grow.
– READ MORE
FINANCIAL REVIEW ON PAGES 46 TO 47
FINANCIAL
The Group employs financial key performance indicators
(‘KPIs’) to measure progress against strategy. Each division
has its own KPIs which are in direct alignment with those of
the Group and are included in the divisional Business
Reviews on pages 16 to 39.
RETURN ON CAPITAL EMPLOYED
(EXCL. IFRS 16)
2023
2022
2021
16.5%
15.1%
17.1%
15.1%
2023
2022
2021
£589.2m
£655.7m
530.2m
GROWTH IN ADJUSTED
OPERATING PROFIT
£655.7m
+11.3% (+7.8% constant currency)
2023
2022
2021
430.1p
456.3p
386.6p
GROWTH IN ADJUSTED
EARNINGS PER SHARE
456.3p
+6.1% (+3.0% constant currency)
40 DCC plc \ Annual Report and Accounts 2023
KEY PERFORMANCE INDICATORS
Description and basis of calculation
Cash generated from operations before
exceptional items and after net capital
expenditure.
Strategic linkage
Free cash flow represents the funds
available for reinvestment, acquisitions
and dividends, so maintaining a high level
of free cash flow is key to maintaining a
strong, liquid balance sheet.
FY23 comment
The Group’s free cash flow amounted to
£570.4 million versus £382.6 million in the
prior year. The Group’s cumulative
conversion of operating profit into free
cash flow was strong at 87%.
There was a modest increase in working
capital during the year of £14.0 million, a
strong performance given the continued
volatile supply chain environment. Working
capital decreased in DCC Technology,
driven by a focus on reducing inventory
levels through the year. This was achieved
despite a decrease in the utilisation of
supply chain financing. There was a net
investment in working capital in both DCC
Energy and DCC Healthcare.
Net capital expenditure amounted to
£206.6 million for the year. This reflects
continued investment in organic initiatives
across the Group.
FY24 outlook and aims
Cash generation and working capital
management will remain a key focus of
the Group.
– READ MORE
FINANCIAL REVIEW ON PAGES 47 TO 48
Description and basis of calculation
Cash spent and acquisition-related
consideration committed during the year.
Strategic linkage
The Group constantly seeks to add
value-enhancing acquisitions in order to
provide shareholders with returns on
capital well in excess of our cost of capital.
FY23 comment
The Group committed £361.7 million to
acquisition expenditure during the year
which principally comprised the
acquisitions of Medi-Globe in DCC
Healthcare and PVO in DCC Energy.
FY24 outlook and aims
The Group will continue to pursue
attractive opportunities in our traditional
markets as well as looking to extend our
business into selected new geographic
markets. We continue to pursue a strong
pipeline of opportunities, but acquisition
targets must meet our demanding criteria
and we will remain disciplined in our
approach to acquisition spend.
– READ MORE
FINANCIAL REVIEW ON PAGES 49 TO 50
2023
2022
2021
£382.6m
£570.4m
£687.8m
FREE CASH FLOW
£570.4m
2023
2022
2021
£603.4m
£361.7m
£374.6m
COMMITTED ACQUISITION
EXPENDITURE
£361.7m
STRATEGIC LINKAGES
Market leading
positions
Operational
excellence
Innovation Extend our
geographic footprint
Development of
our people
Financial
discipline
Linked to Directors’
remuneration
41DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Description and basis of calculation
Total Scope 1 and 2 (location basis) carbon
emissions expressed in kilotonnes (kts)
of CO
e.
Strategic linkage
The Group has put in place Scope 1 and 2
carbon reduction targets to achieve net
zero by 2050 or sooner.
FY23 comment
Overall, there was a 9.3% decrease in
absolute carbon emissions. This decrease
was driven primarily through an increase
in the use of HVO in our HGV fleet and
energy eciency measures across
the Group.
FY24 outlook and aims
The Group will continue to focus on energy
eciency initiatives to reduce energy
consumption and carbon emissions. In
addition, increased use of renewable fuels
for transport will further reduce Scope 1
emissions.
– READ MORE
SUSTAINABILITY REVIEW ON PAGES 62 TO 63
Description and basis of calculation
The Group’s carbon intensity metric is
calculated by dividing total Scope 3
emissions in a given period (as defined in
the Greenhouse Gas Criteria document
at www.dcc.ie) by the energy content of
energy products sold, calculated using
standard conversion factors. The result
is expressed in grams of CO
e per
megajoule of energy sold.
Strategic linkage
The carbon intensity metric is one of the
key measures the Group uses to measure
progress in energy transition.
FY23 comment
The reduction in the carbon intensity of
the energy we sell was driven by increased
biogenic content in liquid fuels, a rise in the
sale of low and zero carbon fuels such as
HVO, and an increase in renewable energy
as part of the overall mix of energy sales.
FY24 outlook and aims
The Group has set a target to reach net
zero across Scopes 1, 2 and 3 by 2050 or
sooner. The reduction in carbon intensity
will be a key indicator of progress in
this area.
– READ MORE
SUSTAINABILITY REVIEW ON PAGES 62 TO 63
Description and basis of calculation
The percentage split of the overall
workforce between female and male
employees.
Strategic linkage
The Group benefits from attracting and
developing a workforce with diverse skills,
qualities and experiences.
FY23 comment
At 31 March 2023, female employees
accounted for 37% of the overall workforce,
20% of senior management and 33% of
Board members. The gender diversity
metric for senior management improved
in FY23.
FY24 outlook and aims
The Group is committed to better gender
balance at all levels and actively supports
the development of high potential female
talent. We continue to focus on supporting
the progress of our female talent through
our annual talent review process which
creates visibility of talent across the Group.
– READ MORE
SUSTAINABILITY REVIEW ON PAGE 72
NON-FINANCIAL
The Group employs non-financial KPIs to assess
activities that are important in conducting our
operations responsibly and achieving our strategic
objective of building a sustainable business which
delivers long-term value to stakeholders.
2023
2022
2021
76.4
72.1
76.5
CARBON INTENSITY
(SCOPE 3)
72.1
gCOe/MJ
2023
2022
2021
104kts
96kts
96kts
CARBON EMISSIONS
(SCOPE 1 AND 2)
96kts
2023
2022
2021
63
63
65
37
37
35
Male Female
GENDER DIVERSITY
63%/37%
Refer to Independent Assurance Statement on page 239
42 DCC plc \ Annual Report and Accounts 2023
KEY PERFORMANCE INDICATORS CONTINUED
Market leading
positions
Operational
excellence
Innovation Extend our
geographic footprint
Development of
our people
Financial
discipline
Linked to Directors’
remuneration
Description and basis of calculation
Lost Time Injury Frequency Rate (‘LTIFR’)
measures the number of days lost due
to injury per 200,000 hours worked.
Strategic linkage
The safety of our employees and the wider
community is one of our core values and
central to everything we do. A continually
improving occupational and process
safety culture is a key element in delivering
on our strategic objectives.
FY23 comment
The maintenance of an LTIFR of less than
1.0 maintains a long-term downward trend
in frequency rate across the Group over
the past number of years. Whilst the
majority of our businesses achieved a
reduction in LTIFR, or maintained a rate of
zero, some experienced an increase. Our
commitment to performance improvement
through robust risk controls, a proactive
safety culture and learning from events
remains strong, both for established
operations and those that are in the
process of developing their safety culture
and processes.
FY24 outlook and aims
The Group will continue to strengthen risk
control measures through cross-business
collaboration, sharing of good practice
and Group standards. Our promotion of a
strong safety culture will also continue, with
the development of a cultural framework
and programme supported by our Safety
F1rst toolkit. We will aim to reduce the LTIFR
level further and to remain below 1.0, and
to further mitigate the impact of accidents
when they do happen.
– READ MORE
SUSTAINABILITY REVIEW ON PAGES 68 TO 69
Description and basis of calculation
Lost Time Injury Severity Rate (‘LTISR’)
measures the number of days lost due
to injury per 200,000 hours worked.
Strategic linkage
The safety of our employees and the wider
community is one of our core values and
central to everything we do. A continually
improving occupational and process
safety culture is a key element in delivering
on our strategic objectives.
FY23 comment
The LTISR increased with respect to the
prior year. This was influenced by a small
number of incidents in our Energy and
Technology divisions, which resulted in
prolonged periods of absence. These
cases alone contributed 4 days/200,000
hours to the overall Group LTISR. Slip, trip,
fall and musculoskeletal injuries represent
the majority of cases. Most continue to
be relatively minor and involve short
recovery times.
FY24 outlook and aims
The Group will continue to strengthen risk
control measures, focusing on leading
indicators and identifying further
improvement opportunities. We have
undertaken to better understand our
accident profile through our Safety
Working Groups and have a renewed
focus on employee education and
awareness. Our promotion of employee
empowerment and accident prevention
through robust risk assessment and
controls will continue. We will aim to further
mitigate the impact of accidents when
they do happen.
– READ MORE
SUSTAINABILITY REVIEW ON PAGES 68 TO 69
2023
2022
2021
0.96
0.97
1.04
HEALTH AND SAFETY
LTIFR
0.97
2023
2022
2021
25 days
32 days
25 days
HEALTH AND SAFETY
LTISR
32 days
STRATEGIC LINKAGES
43DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
agility of our devolved business model
and how our teams feel real ownership
to deliver results. The resilience of this
model was again demonstrated as our
businesses managed these challenges
well, combating these inflationary
pressures to deliver the growth
mentioned above.
We announced our revised strategy for
the Energy division in May 2022. Central
to the strategy is our belief that we have
a vital role to play in bringing cleaner
energy to everyone. In particular,
the o-grid gas sector, where we
predominantly operate, has a challenge
to decarbonise. But we have solutions
which customers can deploy with our
help. We have chosen a cleaner energy
future today by using these solutions in
our own business to decarbonise our
own operations. We reduced our Scope
1 and 2 carbon emissions by 9.3%, which
is a 32.8% reduction against our 2019
baseline.
During the year, Fabian Ziegler joined
the Group as CEO of DCC Energy. He
and his team are working diligently and
ambitiously through the next phase of
development for our energy business.
And the team are making real progress
DCC delivered another year of strong
growth in the year ended 31 March 2023.
And it was a year of significant strategic
progress and continued development
for the Group. In what was a volatile
economic environment, exacerbated by
an energy crisis in Europe, our teams
right around the Group again delivered
for all our stakeholders. Amongst the
financial highlights for the year were:
– Strong growth in adjusted operating
profit, up 11.3% (7.8% on a constant
currency basis), driven by an excellent
performance in DCC Energy and
acquisitions completed in the current
and prior year
– Free cash flow conversion of 87%,
another year of very strong
cash generation
– Proposed increase in the total
dividend for the year of 6.5%, DCC’s
29th consecutive year of
dividend growth
These results were achieved despite
what was a dicult operating
environment for all businesses, not just
DCC. Inflationary pressures were
pervasive during the year, from the cost
of energy, to labour, to transport and
freight. We talk frequently about the
in delivering cleaner energy for
everyone. During the year our Energy
division reduced its customer Scope 3
carbon emissions by 5.1%. Also, 28%
of our profits in energy now come
from services, renewables and other
non-fossil activities up from 22% in the
prior year. We progressed through
a mix of organic initiatives and capital
deployment in M&A, again a hallmark
of the DCC business model.
From a development perspective we
committed £362 million on M&A during
the period. In typical DCC fashion this
was spread across a large number
of transactions during the year. The
material developments for us were the
acquisition of Medi-Globe in October
2022, which expands our medical
devices operations in DCC Vital into
Europe, and the acquisition of PVO by
DCC Energy. PVO brings with it real
in-depth supply chain capability
in the solar energy market, further
strengthening our capability in this
important and developing energy
solutions product. DCC Energy also
completed multiple bolt-on transactions
during the year, the majority of which
add cleaner energy capability to our
businesses.
The economic environment remains
volatile, and, at time of writing, central
banks continue to tighten policy, to
stem inflationary pressures. We expect
that inflationary pressures and
economic policy will remain headwinds
for businesses in the year ahead.
However, DCC is very well positioned to
continue its track record of growth and
development. We invest in what the
world needs, we generate strong cash
flow through our operational capability,
and we have a strong balance
sheet. These will be real competitive
advantages for DCC in the year ahead.
STRONG GROWTH,
CONTINUED DEVELOPMENT
& PROGRESS IN
SUSTAINABILITY
44 DCC plc \ Annual Report and Accounts 2023
FINANCIAL REVIEW
Year ended 31 March
2023
£’m
2022
£’m % change
Revenue , , +.%
Adjusted operating profit
1
DCC Energy . . +.%
DCC Healthcare . . -.%
DCC Technology . . +.%
Group adjusted operating profit
1
. . +.%
Finance costs (net) and other (.) (.)
Profit before net exceptionals, amortisation of intangible assets and tax . . +.%
Net exceptional charge before tax and non-controlling interests (.) (.)
Amortisation of intangible assets (.) (.)
Profit before tax . . +.%
Taxation (.) (.)
Profit after tax . .
Non-controlling interests (.) (.)
Attributable profit . .
Adjusted earnings per share
1
.p .p +.%
1. Excluding net exceptionals and amortisation of intangible assets
INCOME STATEMENT REVIEW
Group revenue
Group revenue increased by 25.2% (23.2% on a constant currency basis) to £22.2 billion, driven by the higher energy commodity
prices that prevailed during the year and the impact that this had on DCC Energy’s revenues.
Revenue in DCC Energy was £16.1 billion, an increase of 30.8% (29.8% on a constant currency basis). With like-for-like volumes
modestly behind the prior year, the significant increase in revenue was as a result of the higher wholesale cost of energy
commodities during the year.
DCC Healthcare recorded revenues of £821.5m, an increase of 7.4% (4.3% on a constant currency basis). The constant currency
growth was driven by the acquisition of Medi-Globe during the second half of the year and organically revenues declined
by 2.2%.
Revenue in DCC Technology was £5.3 billion, an increase of 13.3% (8.5% on a constant currency basis). The increase was driven
by the acquisition of Almo which completed in December 2021. Organically revenue declined by 5.1%, reflecting weaker demand
for consumer products in Europe.
Group adjusted operating profit
Group adjusted operating profit increased by 11.3% to £655.7 million. The impact on reported Group adjusted operating profit of
foreign exchange (FX) translation, M&A growth and organic was as follows:
Period FX translation M&A Organic Reported growth
2023 +3.5% +7. 6% +0.2% 11.3%
2022 -4.0% + 9. 0 % +6.1% 11.1%
5-year average -0.2% +8.5% +3.4% 11.8%
Average sterling exchange rates weakened against most relevant currencies during the year, including the US dollar and euro,
a reversal of what was experienced in the prior year. The net impact of currency translation in the current year was a benefit of
3.5%, or £20.7 million, in the reported growth in adjusted operating profit
Acquisitions completed in the prior year (most materially Almo) and in the current year (principally Medi-Globe and PVO)
contributed 7.6% of the reported operating profit growth.
Set against very strong prior year comparatives, organic operating profit growth was modest, and was driven by the strong
organic performance of DCC Energy. As reported during the year, DCC Healthcare and DCC Technology experienced more
dicult market conditions and declined organically. The inflationary environment was a significant feature of the year across
each division, with the overall organic profit growth achieved despite the 8.7% (or £130.4 million) increase in the Group’s like for
like cost base. Further commentary on the trading performances of each of the three divisions is included in the Business
Reviews on pages 16 to 39.
45DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Profit before net exceptional items,
amortisation of intangible assets
and tax
Profit before net exceptional items,
amortisation of intangible assets and
tax increased by 7.3% to £574.3 million.
Net exceptional charge and
amortisation of intangible assets
The Group incurred a net exceptional
charge after tax and non-controlling
interests of £28.7 million (2022: net
exceptional charge of £43.8 million)
as follows:
£’m
Adjustments to contingent
acquisition consideration (.)
Restructuring and integration
costs and other (.)
Acquisition and related costs (.)
IAS 39 mark-to-market gain .
(.)
Tax attaching to exceptional
items and non-controlling
interest .
Net exceptional charge (.)
There was a net cash outflow of
£23.8 million relating to exceptional
items.
Adjustments to contingent acquisition
consideration of £8.5 million reflects
movements in provisions associated
with the expected earn-out or other
deferred arrangements that arise
through the Group’s corporate
development activity. The charge in the
year primarily reflects an increase in
contingent consideration payable in
respect of an acquisition in DCC Energy
where the trading performance has
been very strong and ahead of
expectations.
Restructuring and integration costs and
other of £13.4 million relates to the
restructuring and integration of
operations across a number of
businesses and acquisitions. The
significant items during the year were
Finance costs (net) and other
Net finance costs and other, which
includes the Group’s net financing costs,
lease interest and the share of profit/
loss of associated businesses, increased
to £81.4 million (2022: £53.8 million). The
increase in the year primarily reflects
increased net financing costs due to
higher average gross debt and the
increasing interest rate environment.
The Group’s average gross debt
(including private placement notes and
the Group’s revolving credit facility),
increased versus the prior year,
reflecting the substantial acquisition
activity of the Group in the current and
prior year and the weakening of sterling
against the euro and US dollar. This
accounted for approximately £11 million
of the cost increase in the year.
The substantial change in the global
interest rate environment from summer
2022 onwards impacted the cost of the
floating rate element of the Group’s
gross debt, oset somewhat by an
increased return on the Group’s gross
cash. During the year approximately
64% of the Group’s gross debt was at
floating rates. The net impact of the
increased interest rate environment
accounted for approximately £15 million.
Presently, approximately 45% of the
Group’s gross debt is at floating rates.
Average net debt, excluding lease
creditors, was £1.0 billion, compared to
an average net debt of £428 million in
the prior year, and reflects the very
substantial acquisition activity during
the prior and current years. Interest was
covered 11.2 times
(using the definitions
contained in the Group’s lending
arrangements) by Group adjusted
operating profit before depreciation
and amortisation of intangible assets
(2022: 16.1 times).
primarily within DCC Energy and include
costs related to a realignment of the
organisation structures in the UK and
France to reflect acquisitions and the
changing operational environment.
Acquisition and related costs include
the professional fees and tax costs
relating to the evaluation and
completion of acquisition opportunities
and amounted to £10.6 million.
The level of ineectiveness calculated
under IAS 39 on the hedging instruments
related to the Group’s US private
placement debt is charged or credited
as an exceptional item. In the year
ended 31 March 2023, this amounted to
an exceptional non-cash gain of
£0.9 million. The cumulative net
exceptional credit taken in respect IAS
39 ineectiveness is £1.4 million. This, or
any subsequent similar non-cash
charges or gains, will net to zero over
the remaining term of this debt and the
related hedging instruments.
The charge for the amortisation of
acquisition-related intangible assets
increased to £111.1 million from
£84.4 million in the prior year reflecting
acquisitions completed during the
second half of the prior year and in the
current year.
Profit before tax
Profit before tax increased by 6.4% to
£431.6 million.
Taxation
The eective tax rate for the Group
increased to 19.3% (2022: 18.3%). The
Group’s eective tax rate is influenced
by the geographical mix of profits
arising in any year and the tax rates
attributable to the individual territories.
The increase in the year was driven by
the expansion of the Group in recent
years into certain higher tax
geographies and the increasing
corporate tax rate environment
generally.
Adjusted Operating Profit and Earnings per Share
FY23 FY22 % change
Adjusted operating profit
1
H1
£’m
H2
£’m
FY
£’m
H1
£’m
H2
£’m
FY
£’m
H1
%
H2
%
FY
%
DCC Energy . . . . . . +.% +.% +.%
DCC Healthcare . . . . . . -.% -.% -.%
DCC Technology . . . . . . +.% +.% +.%
Group . . . . . . +.% +.% +.%
Adjusted EPS
1
(pence) . . . . . . +.% +.% +.%
1. Excluding net exceptionals and amortisation of intangible assets
46 DCC plc \ Annual Report and Accounts 2023
FINANCIAL REVIEW CONTINUED
Performance Metrics
2023 2022
Growth
DCC Energy adjusted operating profit growth (%) +.% +.%
DCC Healthcare adjusted operating profit growth (%) -.% +.%
DCC Technology adjusted operating profit growth (%) +.% +.%
Group adjusted operating profit growth (%) +.% +.%
Group adjusted operating profit growth (constant currency) (%) +.% +.%
Adjusted earnings per share growth (%) +.% +.%
Adjusted earnings per share growth (constant currency) (%) +.% +.%
Return:
Return on capital employed - excluding IFRS 16 (%) .% .%
Return on capital employed - including IFRS 16 (%) .% .%
Operating cash flow (before add-back for depreciation on right-of-use leased assets) (£’m) . .
Free cash flow (after IFRS 16) (£’m) . .
Conversion of adjusted operating profit to free cash flow (%) % %
Working capital days (days) . .
Debtor days (days) . .
Financial Strength/Liquidity/Financial Capacity for Development:
EBITDA: net interest (times) .x .x
Cash balances (net of overdrafts and short-term debt) (£’m) ,. ,.
Net debt - excluding lease creditors (£’m) (.) (.)
Net debt - including lease creditors (£’m) (,.) (.)
Net debt (excluding lease creditors) as a % of total equity (%) .% .%
Net debt: EBITDA (times) .x .x
CASH FLOW AND
CAPITAL DEPLOYMENT
Free cash flow generation
and conversion
The Group’s free cash flow amounted to
£570.4 million versus £382.6 million in the
prior year. The conversion of adjusted
operating profit into free cash flow was
strong at 87%.
The material components of the
conversion of adjusted operating profit
to free cash flow are set out below.
Working capital
There was a modest increase in working
capital during the year of £14.0 million
(2022: £168.7 million), a strong
performance given the continued
volatile supply chain environment.
Working capital decreased in DCC
Technology driven by a focus on
reducing inventory levels through the
year. This strong working capital
performance in DCC Technology was
achieved despite a decrease in the
utilisation of supply chain financing as
set out below. There was a net
investment in working capital across
both DCC Healthcare and DCC Energy.
Adjusted earnings per share
Adjusted earnings per share increased
by 6.1% (3.0% on a constant currency
basis) to 456.3 pence, reflecting the
increase in profit before exceptional
items and goodwill amortisation.
Dividend
The Board is proposing a 6.5% increase
in the final dividend to 127.17 pence per
share, which, when added to the interim
dividend of 60.04 pence per share, gives
a total dividend for the year of 187.21
pence per share. This represents a 6.5%
increase over the total prior year
dividend of 175.78 pence per share. The
dividend is covered 2.4 times by
adjusted earnings per share (2022: 2.4
times). It is proposed to pay the final
dividend on 20 July 2023 to
shareholders on the register at the close
of business on 26 May 2023.
Over its 29 years as a listed company,
DCC has an unbroken record of
dividend growth at a compound annual
rate of 13.5%.
The prior year-end saw energy prices
at an elevated position following the
beginning of the conflict in Ukraine and
so the fall in energy prices towards the
end of this financial year led to an
increase in working capital in DCC
Energy as the division has a negative
working capital profile.
DCC Technology selectively uses supply
chain financing solutions to sell, on a
non-recourse basis, a portion of its
receivables relating to certain higher
volume supply chain/sales and
marketing activities. The level of
supply chain financing at 31 March
2023 decreased by £16.9 million to
£151.1 million (2022: £168.0 million). Supply
chain financing had a positive impact
on Group working capital days of
2.3 days (31 March 2022: 2.3 days).
The absolute value of working capital
in the Group at 31 March 2023 was
£274.4 million. Overall working capital
days were 4.1 days sales, compared to
2.8 days sales in the prior year, reflecting
the mix impact of acquisition activity
during the year in DCC Energy and DCC
Healthcare.
47DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Net capital expenditure
2023
£’m
2022
£’m
DCC Energy . .
DCC Healthcare . .
DCC Technology . .
Total . .
Cash flow
The Group generated very strong operating and free cash flow during the year as set out below:
Year ended 31 March
2023
£’m
2022
£’m
Group adjusted operating profit . .
Increase in working capital (.) (.)
Depreciation (excluding ROU leased assets) and other . .
Operating cash flow (pre add-back for depreciation on ROU leased assets) . .
Capital expenditure (net) (.) (.)
. .
Depreciation on ROU leased assets . .
Repayment of lease creditors (.) (.)
Free cash flow . .
Interest and tax paid, net of dividend from equity accounted investments (.) (.)
Free cash flow (after interest and tax) . .
Acquisitions (.) (.)
Dividends (.) (.)
Exceptional items/disposals (.) (.)
Share issues . .
Net outflow (.) (.)
Opening net debt (.) (.)
Translation and other (.) .
Closing net debt (including lease creditors) (,.) (.)
Net capital expenditure
As illustrated in the table below, net
capital expenditure amounted to
£206.6 million for the year (2022:
£170.9 million) and was net of disposal
proceeds of £22.6 million (2022:
£23.5 million). The level of net capital
expenditure reflects continued
investment in organic initiatives across
the Group, supporting the Group’s
continued growth and development.
Net capital expenditure for the Group
exceeded the depreciation charge of
£144.4 million (excluding right-of-use
leased assets) in the period by
£62.1 million.
Capital expenditure in DCC Energy
primarily comprised expenditure on
tanks, cylinders, depot infrastructure
and installations and the continued
rollout of ‘Click and Collect’ services,
supporting new and existing customers
in Energy Solutions. There was also
continued development spend in
relation to the Avonmouth LPG storage
facility in the UK which is now
substantially complete and will be
operational in the coming months. In
Mobility, there was investment in retail
sites and upgrades across the business,
including adding further lower emission
product capability such as EV fast
charging and related services in
the Nordics.
In DCC Healthcare, the capital
expenditure primarily related to
increased manufacturing capability and
capacity across DCC Health & Beauty
Solutions. The business has been
investing in adding gummy capability in
Europe and the US and will have
commercial production in both regions
in the coming financial year. In addition,
the business has also been investing to
increase capacity at its eervescent
facility in Minnesota.
Capital expenditure in DCC Technology
included a new fleet of electric forklift
trucks in North America along with
warehouse and IT developments across
the division as part of the programme of
continuous system improvement.
Impact of climate-related
issues on investments
The Group has a clear process and set
of priorities for the deployment of
capital, both for organic growth and
acquisitions, which takes account of
the impact of climate-related risks
and opportunities. As a Group, our
key priorities when making capital
deployment decisions are:
– Continuing to scale DCC Health
& Beauty Solutions and building
DCC Vital into an international
healthcare solutions leader.
– Growing in high value-add sectors,
such as Pro Tech and Life Tech,
in DCC Technology.
– Accelerating decarbonisation
for customers by investment in
renewable energy products
and services in DCC Energy.
The Group continues to enhance
its processes for the assessment
of climate-related risks in individual
investment proposals to take account
of, for instance, the risk of more frequent
extreme weather events over the
medium to long term.
48 DCC plc \ Annual Report and Accounts 2023
FINANCIAL REVIEW CONTINUED
Total cash spend on acquisitions for the year ended 31 March 2023
The total cash spend on acquisitions in the year was £318.5 million. The spend primarily reflects acquisitions committed to and
completed during the current year, but also includes DCC Energy’s investment in Frijsenborg Biogas in Denmark and a small
DCC Healthcare bolt-on in Germany which were announced in the prior year Results Announcement in May 2022. Payment
of deferred and contingent acquisition consideration previously provided amounted to £22.0 million.
Committed acquisitions
DCC has committed £361.7 million to new acquisitions since the prior year Results Announcement. An analysis of these
commitments by division is set out below:
Committed acquisitions
2023
£’m
2022
£’m
DCC Energy . .
DCC Healthcare . .
DCC Technology – .
Total . .
As can be seen from the table above, DCC continues to be very active from a development perspective, committing
approximately £360 million to 19 new acquisitions during the period. Recent acquisition activity of the Group includes:
DCC Healthcare
Medi-Globe
In October 2022, DCC Healthcare completed the acquisition of Medi-Globe Technologies GmbH (‘Medi-Globe’), an
international medical devices business focused on minimally invasive procedures. The acquisition was based on an enterprise
value of approximately €245 million (£213 million) on a cash-free, debt-free basis.
Medi-Globe, founded in 1990, is involved in the development, manufacture and distribution of single-use devices for endoscopy
in diagnostic and therapeutic procedures. The business has grown organically and through bolt-on acquisitions to become a
leading global player in its focus areas of gastroenterology and urology. These are large and growing therapeutic areas,
benefiting from strong demographic and treatment trends. Medi-Globe has revenues of approximately €120 million
(£104 million) and employs approximately 600 people. Its products are sold to hospitals and procurement organisations in over
120 countries through direct sales operations in Germany, France, Austria, Netherlands, Czechia and Brazil, and an international
network of distributors.
DCC Energy
Accelerating cleaner energy oerings
As set out in its ‘Leading with Energy’ strategy, DCC Energy has been adding complementary capabilities to accelerate the
decarbonisation oering it has for customers. During the period DCC Energy completed ten transactions in services and
renewables which have contributed to this enhanced service oering and contribute to the increasing share of the division’s
profits which come from non-fossil energy products and services. The largest of these transactions was the acquisition of PVO,
which is set out in further detail below. In addition, the division completed the following acquisitions:
– In May 2023, DCC Energy completed the acquisitions of AEI, a leading solar installation and services business in Ireland, and
Hafod Renewables, a supplier and installer of renewable energy sources in the UK and O’sitoit, a solar installer in central and
eastern France.
– In February 2023, DCC Energy completed the acquisition of Søberg Energi in Denmark, a nationwide energy services business.
– DCC Energy acquired solar installer Sys EnR in France in January 2023. Sys EnR provides design, construction and
maintenance services for solar panel and solar thermal installations.
– In October 2022, DCC Energy completed the acquisition of Freedom Heat Pumps, a distributor of air source heat pumps and
accessories in the UK.
– In June 2022, DCC Energy acquired Protech Group, which provides a range of renewable and energy ecient heating
solutions to commercial and industrial customers across the UK.
PVO
In November 2022, DCC completed the acquisition of PVO International BV (‘PVO’), a leading distributor of solar panels,
invertors, batteries and accessories used in the commercial, industrial and domestic energy sectors across continental Europe.
PVO was established in 2014 and has grown rapidly to become one of the leading solar solutions suppliers in Europe, with
a market-leading position in the Benelux region, and growing positions in eight other European countries including Germany,
Poland and Finland. The business is headquartered in Rosmalen, the Netherlands, and employs approximately 50 people. PVO
is an excellent strategic fit for DCC. It will leverage PVO’s established market position in the fast-growing solar PV market and
DCC Energy’s knowledge and experience in transitioning customers to cleaner energy products and services including solar
solutions. The majority of the consideration for PVO was payable in cash on completion, followed by earn out payments over
three years based on PVO’s future trading.
49DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Carbon and emissions 2023 2022 % change
% change vs.
2019 baseline
Scope 1 & 2 carbon
emissions* Group . . -.% -.%
Customer Scope 3
carbon emissions*
DCC Energy
. . -.% -.%
Renewable share of
energy sold (GJ) .% .%
* mtCO
2
e
DCC Energy bolt-ons
DCC Energy also completed a number of small complementary bolt-on acquisitions
in the period in Norway, Denmark, Germany and Sweden as well as a lubricants
business in Ireland.
RETURN ON CAPITAL EMPLOYED
The creation of shareholder value through the delivery of consistent, sustainable
long-term returns well in excess of its cost of capital is one of DCC’s core strategic
aims. The return on capital employed by division was as follows:
2023
excl. IFRS 16
2022
excl. IFRS 16
2023
incl. IFRS 16
2022
incl. IFRS 16
DCC Energy .% .% .% .%
DCC Healthcare .% .% .% .%
DCC Technology .% .% .% .%
Group .% .% .% .%
The Group continued to generate strong returns on capital employed,
notwithstanding the substantial increase in the scale of the Group in recent years.
The decrease in return on capital employed versus the prior year primarily reflects
the substantial acquisition spend during the prior and current years of a cumulative
£1.1 billion, primarily in DCC Healthcare and DCC Technology, which had a dilutive
impact on Group returns. In the current year it also reflects the organic decline in
operating profit in DCC Healthcare and DCC Technology, which we expect will
recover in the coming years.
FINANCIAL STRENGTH
DCC has always maintained a strong balance sheet and it remains an important
enabler of the Group’s strategy. A strong balance sheet provides many strategic
and commercial benefits, including enabling DCC to take advantage of acquisitive
or organic development opportunities as they arise. At 31 March 2023, the Group
had net debt (including lease creditors) of £1.1 billion, net debt (excluding lease
creditors) of £767.3 million, cash resources (net of overdrafts) of £1.4 billion and total
equity of £3.1 billion. Substantially all of the Group’s term debt has been raised in
the US private placement market and has an average maturity of 5.0 years.
Post the year-end, in April 2023, DCC repaid £223.3 million of maturing US private
placement notes.
SUSTAINABILITY
DCC’s ambition is to make progress
across the four pillars of our
sustainability framework: Climate
Change and Energy Transition, Safety
and Environmental Protection, People
and Social, and Governance and
Compliance.
Last year, the Group set an increased
target to reduce Scope 1 and 2 carbon
emissions by 50% by 2030, having
achieved the previous interim target
ahead of expectations. During the
current year DCC lowered its Scope 1
and 2 emissions by 9.3%.
The vast majority of the Group’s Scope
3 carbon emissions derive from DCC
Energy’s sales of products to customers.
In the year, DCC Energy reduced these
emissions by 5.1%. DCC’s progress
towards net zero has been recognised
by CDP with an improved B rating for
the Group.
Related to Scope 3, the Group
increased the renewable content
of energy supplied to customers
(in GigaJoules (GJ)) to 6.3%, up from 4.0%
in 2022 and 3.2% in 2019. This figure is
a subset of the very low or zero carbon
sales of the Group.
DCC Energy’s operating profit share of
services and renewables (with less than
10kg of CO
e per GJ sold) increased by
six percentage points to 28% from 22%
in 2022. This broader category adds
operating profit from services such as
solar installations and other very low or
zero carbon services to DCC Energy’s
profit from sales of renewable energy
(namely, the 6.3% GJ share above). Due
to strong growth in operating profit and
the 5.1% decline in Scope 3 carbon
emissions DCC Energy’s operating profit
to carbon ratio increased by 18%.
Looking at sustainability beyond climate
change and energy transition, DCC
retained an AAA rating from MSCI,
remaining among the top 10% of peer
companies.
KEVIN LUCEY
Chief Financial Ocer
15 May 2023
Key financial ratios
2023
Actual
Lender
covenants
2022
Actual
Net debt: EBITDA (times) .x .x .x
EBITDA: net interest (times) .x .x .x
Total equity (£’m) ,. . ,.
50 DCC plc \ Annual Report and Accounts 2023
FINANCIAL REVIEW CONTINUED
Financial Risk Management
Group financial risk management is
governed by policies and guidelines
which are reviewed and approved
annually by the Board of Directors, most
recently in April 2023. These policies and
guidelines primarily cover credit risk,
liquidity risk, foreign exchange risk,
interest rate risk and commodity price
risk. The principal objective of these
policies and guidelines is the
minimisation of financial risk at
reasonable cost. The Group does not
trade in financial instruments, nor does
it enter into any leveraged derivative
transactions. DCC’s Group Treasury
function centrally manages the Group’s
funding and liquidity requirements.
Divisional and subsidiary management,
in conjunction with Group Treasury,
manage foreign exchange, and, in
conjunction with Group Commodity Risk
Management, manage commodity
price exposures, within approved
policies and guidelines. Compliance
with the policies and guidelines is
subject to review by the Group Internal
Audit function.
Further detail in relation to the Group’s
financial risk management and its
derivative financial instrument position
is provided in note 5.7 to the financial
statements.
Foreign Exchange Risk Management
DCC’s presentation currency is sterling.
Exposures to other currencies,
principally euro and US dollar, arise in
the course of ordinary trading.
A significant proportion of the Group’s
profits is denominated in currencies
other than sterling. Approximately 73%
of the Group’s adjusted operating profit
for the year ended 31 March 2023 was
denominated in currencies other than
sterling, primarily euro, US dollar and
Scandinavian currencies. DCC does not
hedge the translation exposure on the
profits of non-sterling subsidiaries. The
weakening of the average translation
rate of sterling against most currencies,
in particular the euro and the US dollar,
resulted in a positive impact of
approximately £24.2 million on the
Group’s adjusted operating profit in the
year ended 31 March 2023.
The Group has investments in
non-sterling, primarily euro and US
dollar denominated, operations which
are cash-generative, and a significant
proportion of the cash generated from
these operations is reinvested in
development activities rather than
being repatriated into sterling. The
Group seeks to manage the resultant
foreign currency translation risk through
borrowings denominated in (or
swapped utilising cross currency
interest rate swaps into) the relevant
currency or through currency swaps
related to intercompany funding,
although these hedges are oset by the
strong ongoing cash flow generated
from the Group’s non-sterling
operations, leaving DCC with a net
investment in non-sterling assets. The
gain of £43.3 million arising on the
translation of DCC’s non-sterling
denominated net asset position at
31 March 2023 as set out in the Group
Statement of Comprehensive Income
mainly reflects the weakening in the
value of sterling against the US dollar,
with the impact of movements against
other currencies largely osetting
against each other.
Where sales or purchases are invoiced
in currencies other than the local
currency and there is not a natural
hedge with other activities within the
Group, DCC generally hedges between
50% and 90% of those transactions for
the subsequent two months.
Credit Risk Management
DCC transacts with a variety of high
credit-rated financial institutions for the
purpose of placing deposits and
entering into derivative contracts. The
Group actively monitors its credit
exposure to each counterparty to
ensure compliance with limits approved
by the Board.
Interest Rate Risk and Debt/ Liquidity
Management
DCC maintains a strong balance sheet
with long-term debt funding and cash
balances with deposit maturities up to
three months. In addition, the Group
maintains both committed and
uncommitted credit lines with our
relationship banks and borrows at both
fixed and floating rates of interest. At
31 March 2023, 49% of the Group’s term
debt, including drawn committed credit
lines, was at or swapped to floating
interest rates, using interest rate and
cross currency interest rate swaps which
qualify for fair value hedge accounting
under IAS 39. The Group mitigates
interest rate risk on its borrowings by
matching, to the extent possible, the
maturity of its cash balances with the
interest rate reset periods on the swaps
related to its borrowings.
Commodity Price Risk Management
DCC, through its activities in the energy
sector, procures, markets and sells LPG,
natural gas, electricity and oil products
and, as such, is exposed to changes in
commodity cost prices.
In general, market dynamics are such
that commodity cost price movements
are promptly reflected in sales prices.
In certain markets, short-term or
seasonal price stability is preferred by
certain customer segments which
requires hedging a proportion of
forecasted transactions, with such
transactions qualifying as ‘highly
probable’ for IAS 39 hedge accounting
purposes. DCC uses both forward
purchase contracts and derivative
commodity instruments to support its
pricing strategy for a portion of
expected future sales, typically for
periods of less than 12 months.
Fixed price supply contracts may be
provided to certain customers for
periods typically less than 12 months in
duration. DCC fixes its cost of sales on
contracted future volumes where the
customer contract contains a
take-or-pay arrangement that permits
the customer to purchase a fixed
amount of product for a fixed price
during a specified period and requires
payment even if the customer does not
take delivery of the product.
Where a take-or-pay clause is not
included in the customer contract, DCC
hedges a portion of forecasted sales
volume recognising that certain sales,
such as natural gas and electricity in
particular, are exposed to volumetric
risk in the form of an uncertain
consumption profile arising from a
range of factors, including supply
dynamics and the weather.
DCC does not hold significant amounts
of commodity inventory relative to
purchases and sales; however, for
certain inventory, such as fuel oil and
natural gas, DCC may enter hedge
contracts to manage price exposures.
Across its energy activities, DCC enters
into commodity hedges to fix a portion
of own fuel costs.
The net debt balance at 31 March 2023
includes a mark-to-market liability
relating to the fair value of the
derivative financial instruments used by
the Group to hedge commodity price
risk exposures.
Certain activities of individual
businesses are centralised under the
supervision of the DCC Group
Commodity Risk Management function.
Divisional and subsidiary management,
in conjunction with the Group’s
Commodity Risk Management function,
manage commodity price exposures
within approved policies and guidelines.
All commodity hedging counterparties
are approved by the Chief Executive
and the Chief Financial Ocer and are
reviewed by the Board.
51DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
WE ENABLE STAKEHOLDERS
TO GROW AND PROGRESS
We work closely with our stakeholders to generate
sustainable growth. We listen, discuss and collaborate
to ensure we progress together.
We know that the sustainability of our
business is enhanced by stakeholders’ views.
So listening to our stakeholders is essential.
We want stakeholders to feel heard and,
ultimately, to benefit from their dealings
with Group businesses.
OUR KEY
STAKEHOLDERS
CUSTOMERS
SUPPLIERS
INVESTORS
GOVERNMENTS
AND
REGULATORS
TRADE
ASSOCIATIONS
COMMUNITIES
AND THE
ENVIRONMENT
OUR PEOPLE
52 DCC plc \ Annual Report and Accounts 2023
STAKEHOLDER ENGAGEMENT
Our customers, whether businesses
or consumers, look to us for advice
on a wide range of essential products
and services. They rely on us to provide
those products and services sustainably,
on time and at a competitive price,
even when supply chains are disrupted.
What matters to our customers?
Our customers are interested in supply
chain reliability, the identification of
opportunities that oer sustainable
growth for their businesses, technical
expertise and excellent customer
service.
Customers of DCC Energy also want us
to support their energy transition and
achieve net zero carbon emissions.
We are moving our customers’ homes
and businesses to low-carbon energy
to achieve this. At the same time, we
ensure their existing energy supplies
are safe, reliable and ecient.
The environmental and social impacts
of our goods and services matter
increasingly to our customers.
What matters to our suppliers?
Strong, mutually beneficial commercial
partnerships matter to our suppliers,
as do responsible supply chain
management, open engagement
and fair payment terms. Our financial
strength is a key factor for many of
our suppliers.
How our businesses engage
We work closely with suppliers to ensure
reliable and ecient supply chains. We
hold regular meetings with our supply
partners to discuss product and service
innovation. And we engage closely with
them on responsible supply chain
management.
How our Board engages
Our extensive customer engagement
shapes our divisional strategies and
business plans, which are reviewed
in detail, and on a regular basis,
by the Board.
How we respond
We provide reliable supplies of essential
products and services to millions of
businesses and consumers. Our supply
chain expertise ensured minimal
disruption during the pandemic and
more recent supply chain disruption.
How our Board engages
The Board receives frequent updates on
trading performance across the Group,
including on any material changes in
supplier relationships. We also monitor
sustainability in our supply chains and
the results are reported to the Audit
Committee and the Board. The Board
considers and approves our Modern
Slavery Act Statement annually.
How we respond
The year under review saw continued
disruption to supply chains. Businesses
across the Group worked closely with
suppliers over the year to maintain
supplies of key products in the markets
they serve.
How our businesses engage
Our teams across the Group actively
engage with customers to ensure
we meet their expectations and
consistently identify ways to improve
performance. Members of divisional
management teams also meet with
key customers during the year to
reinforce these relationships.
Our suppliers rely on us to provide
an ecient route to market for their
products and to advise them on how
those markets are evolving. Through
collaboration with them, we maximise
our collective impact, ensuring a
tailored, reliable and sustainable
source of supply for customers.
CUSTOMERS
SUPPLIERS
HELPING OUR CUSTOMERS
IN THE ENERGY CRISIS
Significant increases in wholesale
energy prices during the year had
a big impact on many of our domestic
energy customers.
Businesses in DCC Energy responded
with a series of additional customer
supports, moderating price increases
where they could, advising customers
about government supports, changing
payment terms and generally looking
out for vulnerable customers.
These measures helped a lot of people
in a small way at a dicult time.
53DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Our investors include individual and
institutional shareholders and debt
providers. We maintain an active
dialogue with them through our
extensive investor relations programme.
What matters to our investors?
Our investors rely on DCC to operate
a sustainable business that delivers
returns on capital employed significantly
ahead of the Group’s cost of capital,
converts profits from those operations
to cash, shares some of those returns
through a progressive dividend policy,
and retains a further proportion of them
to improve existing operations and
generate further growth, including
through acquisitions. They also demand
high standards of corporate
governance, led and overseen by
our Board.
How our businesses engage
Management team members meet
regularly with equity investors and
analysts, including as part of the
presentation of our annual and interim
results, our AGM, at investor roadshows
and capital market conferences.
We also engage regularly with debt
investors, notably in the private
placement market. We had detailed
engagement with these investors during
the year as we renewed some our of
existing debt.
How our Board engages
Our Chief Executive, Chief Financial
Ocer and Head of Group Investor
Relations regularly update the Board
on investor relations issues.
In addition, our Chairman invites our
principal shareholders to engage with
him over the course of the year. This
year, he held ten calls with shareholders.
More detail on our engagement with
investors is set out on page 103.
How we respond
During the year we again increased our
dividend, representing our 29th year of
unbroken dividend growth. We also held
separate capital market events on our
Energy and Healthcare businesses.
This year, management team members
presented at 14 conferences and
conducted 477 investor meetings.
Our greatest asset is our experienced,
diverse and dedicated workforce.
Our relationship with our people is
open and honest. We invest in and
develop our people within a culture
that values diversity, innovation and
community. And we support and
reward employee success so they
feel valued in all that they do.
What matters to our people?
Our people are interested in opportunities
to grow and develop their careers in line
with fair pay and reward expectations.
They seek an open and diverse
workplace and management practices
that enable them to achieve their full
potential. They want to work in a place
where they are accepted and valued
for who they are, regardless of their
background.
How our businesses engage
At business, divisional and Group level,
we communicate with our employees
through various channels, including
team meetings, town halls, regular
surveys and employee recognition
programmes.
How our Board engages
Our non-executive Workforce
Engagement Director Mark Ryan holds
regular discussions with management
on matters related to the Group’s
workforce. His report is set out on
page 102. Our Employee Engagement
Survey provides a valuable perspective
on our culture and ‘lived experience’
of our colleagues. The Board considers
Employee Engagement Survey results
and discusses responses with
management. Progress against
our overall people strategy is discussed
at Board meetings during the year.
How we respond
During the year we undertook a second
Group-wide Employee Engagement
Survey and our businesses and
management teams are responding
to the feedback obtained from this
with relevant action plans. We further
developed our talent and performance
management structures and provided
extensive learning and development
opportunities, both in person and online.
Embedding our Inclusion and Diversity
Policy, ‘You Belong Here,’ remained a key
part of our employee engagement
during the year.
OUR PEOPLE
INVESTORS
EMPLOYEE
ENGAGEMENT
SURVEY
This year, we carried
out our second
Group-wide Employee
Engagement Survey.
It provided detailed
insights into the
experience of working
at DCC and a solid
basis for further
improvements.
54 DCC plc \ Annual Report and Accounts 2023
STAKEHOLDER ENGAGEMENT CONTINUED
How our businesses engage
We engage with governments and
regulators both directly and through
business and trade associations on
matters like product quality, product
availability and aordability, supply
chain eciency, safety, carbon
emissions reduction and corporate
governance.
How our Board engages
The Board discusses changes in
regulation and corporate governance
reforms where they are material to
the Group. The Board also reviews
a detailed report twice a year on
notable dealings with regulators and
governments. During the year, the
Board considered reports on relevant
regulatory developments, including
new sustainability reporting obligations
and proposals for a new UK Corporate
Governance Code.
We seek to engage constructively
with governments and regulators to
achieve the best outcomes for all our
stakeholders. In some cases, we work
with governments and regulators to
shape our industries to help ensure
the right outcomes for customers
and society.
What matters to governments
and regulators?
Reliable and ecient availability of
the essential products and services
provided by businesses across the
Group is crucial to the smooth running
of the societies we serve. Governments
expect our businesses to provide
reliable employment for thousands
of people, often in rural locations.
They rightly expect organisations like
ours to operate to high standards of
safety, quality and compliance and
that we support a just transition to
a low-carbon society.
How we respond
We provide thousands of jobs directly,
and support many more indirectly.
In the year under review, we contributed
£88 million in corporate taxes in the
countries where we operate. We also
continued to operate to high standards
of safety, quality and compliance, with
no notable safety, product quality or
compliance breaches recorded during
the year. We engaged constructively
with regulators on several relevant
policy proposals.
GOVERNMENTS AND REGULATORS
WORKING WITH GOVERNMENT TO
DECARBONISE OFF-GRID INDUSTRY
Today, many large o-grid industrial sites like food
manufacturing or distillery sites use oil to power their activities.
They need to move to new, low carbon sources of energy.
Flogas Britain is leading a partnership of businesses
participating in a UK Government scheme to support the
development of innovative solutions for o-grid industrial
customers.
With some initial government support, Flogas Britain and its
partners are developing clean ammonia-fed steam boilers
which can be used o-grid.
Following successful initial testing last year, Flogas Britain will
now seek support for further development work.
Partnerships like this will form an important part of the journey
to net zero. Because of its expertise in engineering, safety and
supporting business customers, Flogas Britain will make a
strong contribution to this process.
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We aim to be a force for good in the
communities we serve. The transition
to lower carbon forms of energy and
achieving net zero emissions is an
issue of critical importance for every
community we serve. We are actively
working on reducing our Scope 1 and 2
emissions to achieve our 50% reduction
target by 2030. We are also working on
reducing the carbon emissions from the
energy we sell. We are committed to
achieving net zero by 2050 or sooner.
In addition, we help a range of community
groups through financial support and
our employee giving programmes.
What matters to our communities
and the environment?
Climate adaptation and moving to net
zero emissions by 2050 or sooner is a
primary concern for our communities
and is critical for the environment.
Protection of the environment in other
ways, for instance by eliminating oil
spills, is also essential. Our communities
expect us to provide reliable, safe jobs
and support community organisations
where we can.
How our businesses engage
We continue to reduce our carbon
emissions and support our customers
in moving to lower carbon energies.
Our total Scope 1 and 2 emissions
were 9.3% lower in the year under review
compared to the previous year. More
detail on our transition to low-carbon
energy is contained in the DCC Energy
Business Review on page 16 and in
the Sustainability Review on page 58.
Our businesses also support a range
of community organisations, such as
Social Entrepreneurs Ireland and the
Laura Lynn Foundation in Ireland.
How our Board engages
The Board has been centrally involved
in the development of DCC Energy’s
strategy to deliver continued growth
while also moving to lower carbon forms
of energy. The Board receives regular
updates on progress in the
implementation of that strategy.
The Board receives a quarterly report
from the Head of Group Sustainability
on progress in reducing Scope 1 and 2
carbon emissions across the Group.
The Board is also briefed on DCC’s
support for selected community
organisations.
COMMUNITIES AND THE ENVIRONMENT
OUR COLLEAGUES
SUPPORTING THEIR
COMMUNITIES
With the support of the Group
businesses where they work, many
of our colleagues actively support
charitable organisations in the
communities we serve.
Examples this year included colleagues
in DCC Propane volunteering with a
children’s charity in Chicago, a team
from Exertis UK fitting out a sensory
area for a school near London and
employees in Exertis Almo providing
support for a variety of local charities
in Philadelphia.
These are a small sample of the ways
our colleagues support the good work
of local organisations. We are proud of
their eorts!
56
DCC plc \ Annual Report and Accounts 2023
STAKEHOLDER ENGAGEMENT CONTINUED
We recognise the impact that
regulatory and legislative bodies
have on our activities and on the
communities we serve. When proposals
for new public policies in relevant areas
are formulated, we contribute to the
debate through membership of trade
associations. We take this approach
because regulatory changes tend to
aect whole industries rather than
individual businesses.
At country and regional levels, we
support leading trade associations in
the industries where we operate. Trade
associations add value through
discussion and debate, which leads to
better policy positions.
Examples of the trade associations
to which we belong are given below
by division.
Energy
– At European level we are members
of UPEI, the trade association for
independent fuel operators. A DCC
employee has previously held the role
of UPEI President.
– At country level our energy businesses
are members of trade associations,
such as the United Kingdom and
Ireland Fuel Distributors Association
(‘UKIFDA’). A member of the Certas
Energy management team currently
sits on the UKIFDA Management
Committee.
– In addition to our membership of UPEI
and UKIFDA, we are members of other
trade associations such as the Tank
Storage Association (‘TSA’). A Certas
Energy representative is the incoming
President of the TSA.
Healthcare
Businesses in DCC Healthcare actively
participate in relevant industry bodies.
Listed below are the main trade
associations to which our Healthcare
businesses belong. On those marked
with an asterisk, a DCC employee is
a board or membership committee
representative:
– The Cosmetic, Toiletry and Perfumery
Association (‘CTPA’).
– Health Food Manufacturers
Association (‘HFMA’)*.
– Pet Food Manufacturers
Association (‘PFMA’).
– The European Specialist Sports
Nutrition Alliance (‘ESSNA’).
– Association of British HealthTech
Industries (‘ABHI’)*.
– Medicines for Ireland.
– HealthTech Ireland.
Technology
Our Technology business follows
a similar pattern of regional and
in-country membership.
The Global Technology Distribution
Council (‘GTDC’) is the primary trade
association of which DCC Technology
is a member. DCC has two members
on the Board of GTDC.
TRADE ASSOCIATIONS
57DCC plc \ Annual Report and Accounts 2023
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HIGHLIGHTS OF THE YEAR
External Ratings
Energy Transition and
Climate Change
Safety and Environmental Protection People and Social
Governance and Compliance
Maintained our AAA rating with MSCI
on process safety
our lost time injury frequency rate
(‘LTIFR’) below 1 day lost for every
200,000 hours worked
employee engagement scores
a Group-wide diversity and
inclusion survey
very high standards of corporate
governance with full compliance with
the UK Corporate Governance Code
colleagues’ awareness of key supply
chain, human rights, corruption and
privacy risks
a Group-wide talent planning
and development process for HSE
professionals
Maintained our B rating with CDP
Reduced our Scope 1 and 2 carbon
emissions by 9.3%
Reduced the proportion of carbon in
the energy sold by DCC Energy by 5.6%
AAA rated Strong
performance
Maintained
Increased
Undertook
Maintained
Maintained
Developed
B rated
9. 3%
5.6%
MATERIALITY ASSESSMENT
We updated our materiality assessment
during the year on a double-materiality
basis. This involved looking outwards to
assess the sustainability impact of our
actions in the wider world and inwards
to assess how sustainability-related
issues might aect our performance.
The assessment also considered how
these factors should influence our
future strategic direction.
Double materiality considers two
parameters:
– Financial materiality: the assessment
of sustainability matters that create
or erode enterprise value.
Our purpose, strategy and business
model aim to generate returns. Not just
financial returns for our investors, but
also returns to our stakeholders in the
form of reduced carbon emissions, safe
operations, diverse and vibrant
workplaces and high standards of
governance and compliance.
The four pillars of our sustainability
framework are directly aligned to our
purpose and strategy. They are based
on a clear view of the sustainability
questions that are most material to
DCC, which we updated this year. They
give focus to our sustainability activities
and allow us to measure the progress
that we make across our Group and at
divisional and individual business level.
INTRODUCTION
THE WORLD NEEDS
PROGRESS FOR ALL
We want to enable the growth and progress of all our
stakeholders. We are clear on the best ways in which
we can achieve this and how we measure the progress
we make.
– Impact materiality: the assessment
of our impact on the economy,
environment and people.
Through extensive engagement with
employees and key stakeholders,
complemented by research and expert
interviews, we identified 20 subjects that
are important to DCC’s sustainability
and ranked these according to their
financial and impact materiality.
58 DCC plc \ Annual Report and Accounts 2023
SUSTAINABILITY REVIEW
PROCESS
We took the following approach to
our recent materiality assessment:
Step 1: Universe of topics review
– Compiling standards and frameworks,
sector context, business activities,
business risks, relationships with
stakeholders and our previous
materiality assessment to inform
the identification of relevant topics.
Step 2: Research and engagement
– Online survey on impact materiality
completed by a range of DCC
employees, investors and other
stakeholders. Desk research and more
detailed interviews with stakeholders
to further discuss DCC’s impact and
areas of financial materiality.
Step 3: Significance assessment
– Scoring of impact and financial
significance through research,
engaging with our employees, impact
and finance experts, investors and
other external stakeholders.
Step 4: Topic analysis and prioritisation
– Analysis of impact and financial
materiality to inform topic
prioritisation from a double
materiality perspective.
Step 5: Results and recommendations
– Collating and summarising results
and recommendations of the review;
further consultation to test
conclusions.
– Data Security & Privacy
– Circular Product Design &
Materials
– Human Capital
– Climate Change
– Energy Transition
– Supply Chain Sustainability
– Health & Safety
– Technological Innovation
– Just Transition to
Low-Carbon Economy
– Waste Management
– Competitive Behaviour
– Product Quality & Safety
– Workforce Human Rights
& Labour Practices
– Corporate Governance
& Ethics
– Diversity, Equity & Inclusion
– Equitable Healthcare
– Responsible Marketing
Practices
– Local Community
& Economy Support
– Water & Wastewater
Management
– Nature & Biodiversity
LOW PRIORITY
IMPACT MATERIALITY
MEDIUM PRIORITY HIGH PRIORITY
LOW PRIORITY
FINANCIAL MATERIALITY
MEDIUM PRIORITY HIGH PRIORITY
MATERIAL TOPICS
The diagram above summarises the
results of our materiality assessment.
The most material topics identified from
this materiality assessment align very
closely with our existing sustainability
priorities, as set out in the four pillars
of our Sustainability Framework. This
reinforces our view that we are working
on the right areas. But this most recent
assessment will also guide the future
development of our sustainability
programme and confirms that areas
such as the development of more
renewable technology products
will become more important as our
Technology division continues to grow.
59DCC plc \ Annual Report and Accounts 2023
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OUR SUSTAINABILITY FRAMEWORK
Our Sustainability Framework summarises the
sustainability topics that are most material to our
activities today and how we measure progress against
them. They are directly related to our purpose and
strategic objectives.
CLIMATE CHANGE
AND ENERGY
TRANSITION
The world needs to transition to
lower carbon forms of energy.
We are working to achieve net zero
across our Group. In particular,
DCC Energy is reducing the
carbon in the energy it sells to
its customers.
Why this is important
to DCC and our stakeholders
We are actively helping our customers
move their homes and businesses to low
and zero-carbon energy. While this happens,
we ensure their existing energy supplies are
safe, reliable and ecient.
Material topics
– Climate Change
– Energy Transition
– READ MORE
DCC ENERGY BUSINESS REVIEW
ON PAGE 16
Our objectives
We will reduce our Scope 3
emissions to net zero by 2050
or sooner.
Key metrics
Carbon intensity of energy sold (gCO
2
e/MJ).
Biogenic content of energy sold (%).
Scope 3 emissions (mtCO
2
e).
Our progress
Reduced the carbon intensity of the
energy sold by DCC Energy by 5.6%.
Increased the biogenic content of energy
sold by DCC Energy from 4% to 6.3%.
Reduced our absolute Scope 3 emissions
from DCC Energy by 5.1% compared
to 2022.
We will decarbonise our
operations to net zero by 2050
or sooner and by 50%, against
an FY19 baseline, by 2030.
Scope 1 and 2 carbon emissions,
adjusted to reflect acquisitions.
Reduced our absolute Scope 1 and 2
emissions by 35% against an FY19
baseline.
PEOPLE
AND SOCIAL
We support the development
of our people and society.
Why this is important
to DCC and our stakeholders
DCC is a people business. Developing our
people is critical to our current and future
success. We do this by investing in training,
actively developing careers and building a
supportive culture that values diversity and
innovation. We also value the relationships
that we have with the many local
communities where we operate and that we
serve. Our businesses will thrive if they help
these communities prosper too.
Material topics
– Diversity, Equity & Inclusion
– Human Capital
– READ MORE
SUSTAINABILITY REVIEW ON PAGE 70
Our objectives
We actively support the
development of our people.
Key metrics
Employee turnover.
Performance reviews completed.
Our progress
Our employee turnover rate during the
year was 25%, in line with expectations.
We actively support inclusion
and diversity.
Senior management gender diversity.
Incidents of discrimination.
Progress made in supporting gender
diversity across the Group.
Since 1 May 2023, Board of Directors at
40% gender diversity.
No material incidents of discrimination.
60 DCC plc \ Annual Report and Accounts 2023
SUSTAINABILITY REVIEW CONTINUED
Our framework consists of four pillars.
These pillars help to shape our decision
making and drive sustainable business
development. They demonstrate
our alignment with the relevant UN
Sustainable Development Goals
(‘SDGs’) and help us meet reporting
standards such as GRI, SASB and TCFD.
This framework is consistent with
the results of our recent materiality
assessment, reflecting the environmental,
social and governance (‘ESG’) issues that
are most material to our stakeholders
and the long-term success of the Group.
The Group’s overall governance,
including how the Board oversees our
sustainability activities, is described in
the Corporate Governance Statement
on page 92.
SAFETY AND
ENVIRONMENTAL
PROTECTION
We keep our people, communities
and environment safe.
Why this is important
to DCC and our stakeholders
Our people drive trucks and operate
machinery. They work in energy facilities and
warehouses. Some of our products can be
dangerous if not stored and transported
carefully. We are focused on keeping our
people and the communities where we
operate safe at all times.
Material topics
– Circular Product Design & Materials
– Health & Safety
– READ MORE
SUSTAINABILITY REVIEW ON PAGE 68
Our objectives
We keep our people safe.
Key metrics
Lost Time Injuries (‘LTIs’).
Serious Safety Events.
Our progress
Maintained an LTI Frequency Rate below
1 lost days for every 200,000 hours
worked and continued good
performance on process safety.
We protect the environment in
communities we serve.
Spills requiring remediation. One material hydrocarbon spill that
reached a water body. Remediation not
required.
GOVERNANCE
AND COMPLIANCE
We embed and uphold high
standards of governance
and compliance across all
our operations
Why this is important
to DCC and our stakeholders
Good governance and compliance
with the laws and ethical standards that
apply to our activities are fundamental
to how we do business. We also recognise
the positive contribution to society that
can be made by working with suppliers
and customers who share our values.
Material topics:
– Corporate Governance & Ethics
– Data Security & Privacy
– Product Quality & Safety
– Supply Chain Sustainability
– Workforce Human Rights & Labour
Practices
– READ MORE
GOVERNANCE REPORT ON PAGE 86
SUSTAINABILITY REVIEW ON PAGE 75
Our objectives
We protect human rights.
Key metrics
Human rights issues in our operations or our
supply chain.
Our progress
No breaches of human rights identified
within the Group’s operations or supply
chains. Modern Slavery Act Statement
published containing more detail on
our activities in this area. Available at
www.dcc.ie.
We sell safe products. Product safety failures. No material product safety failures
across the Group.
We prevent corruption. Incidents of bribery and corruption in our
operations or our supply chain.
No incidents of bribery and corruption
identified.
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62 DCC plc \ Annual Report and Accounts 2023
SUSTAINABILITY REVIEW CONTINUED
ENERGY AND CARBON
EMISSIONS
OUR APPROACH
Energy Strategy
We recognise that reaching net zero
carbon is essential for a sustainable
future. This means that we decarbonise
our own operations and help our
stakeholders to do the same where we
can. In particular, in DCC Energy, we are
moving our customers’ homes and
businesses to low-carbon energy while
ensuring their existing supplies are safe,
reliable and ecient.
This aligns our energy operations with
our long-term energy strategy of
achieving net zero, while maintaining
supplies of energy for our customers
and returns for investors. Further details
on the progress being made by DCC
Energy in implementing its strategy
are available in its Business Review
on page 16.
OUR PROGRESS AND KEY INITIATIVES
Energy Use and Scope 1 and 2 Emissions
Decreasing our energy use is an
essential element in reducing our Scope
1 and 2 greenhouse gas (‘GHG’)
emissions. We used 1.591 million
gigajoules of energy during the year,
which was a 3.3% decrease over the
prior year. This decrease reflects a
mix of energy eciency initiatives
and changes in the level of business
activity across our businesses.
We have also made significant progress
in the procurement of renewable
electricity in our European operations
and Renewable Energy Certificates
(‘RECs’) in the United States.
We have committed to achieving net
zero carbon emissions across Scopes 1,
2 and 3 by 2050 or sooner and
decarbonising our operations by 50%
by 2030 (against an FY19 baseline).
The chart below shows DCC’s absolute
Scope 1 and 2 GHG emissions (‘000s
tonnes) against our yearly targets.
Scope 1 and 2 emissions
(’000 tonnes)
FY19 FY20 FY21 FY22 FY23
FY24
16
27
16
106
101
97
110
115
121
78
78
77
14
77
84
2
1
Target Line
Scope 1
Scope 2
Re-base for acquisitions
Refer to EY report on page 239
In FY23, our total Scope 1 and 2
emissions reduced by 9.3%
against
the prior year and we achieved a 35%
reduction against the FY19 baseline,
making good progress towards our
target of a 50% reduction by FY30.
Scope 3 Emissions
To meet our net zero target, we are
working towards removing Scope 3
emissions and only using osets for
residual emissions.
For most organisations, Scope 3
emissions account for the majority of
total value chain emissions, and DCC
is no exception. While it is important
to continue to reduce Scope 1 and 2
emissions, we are also focused on
working in partnership with our suppliers
and customers to identify opportunities
to reduce emissions in the wider
value chain.
Two categories account for
approximately 90% of our Scope 3
emissions:
– Category 3: fuel and energy-related
activities not included in Scope 1
and 2. These are the upstream
(often called well-to-tank) emissions
associated with the energy sold
by DCC Energy.
– Category 11: Use of sold products.
These are the emissions generated
when customers use the energy
products sold by DCC Energy.
CLIMATE
CHANGE
& ENERGY
TRANSITION
The world needs to transition to
lower carbon forms of energy.
We are working to achieve net
zero across our Group. In
particular, DCC Energy is
reducing the carbon in the
energy it sells to its customers.
OUR GOALS
– Achieve net zero carbon
emissions across Scopes 1, 2
and 3 by 2050 or sooner
– Decarbonise our operations
by 50% by 2030 (against an
FY19 baseline)
PILLAR ONE
Three key metrics measure our Scope 3 emissions performance:
– Absolute Scope 3 emissions (Category 3 and 11 emissions from DCC Energy).
– Carbon intensity of the energy we sell.
– Biogenic content of the energy we sell.
The table below shows how each of these metrics has developed over the last
five years:
Metric Unit FY19 FY20 FY21 FY22 FY23
Absolute DCC
Energy Scope 3
Emissions
mtCO
e 41.5 39.8 35.9 41.2 39.1
Carbon intensity gCO
e/MJ 81.2 79.3 76.5 76.4 72.1
Biogenic content % biogenic energy
content of energy sold
3.2% 3.2% 4.0% 4.0% 6.3%
Our absolute Scope 3 emissions decreased by 5.1% in the year under review,
reflecting an increase in sales of renewable fuels as a percentage of overall
sales volumes.
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Reducing these emissions while
continuing to meet our customers’
need for reliable and ecient forms
of energy, is a core component of
our energy strategy.
Even though the sale of energy
generates most of our Scope 3
emissions, these are also important
in our Healthcare and Technology
divisions. During the year, we undertook
projects in each division to produce
a profile of Scope 3 emissions across
the 15 sub-categories of Scope 3
emissions. This work enabled a
better understanding of the relative
importance of Scope 3 categories so
that reduction eorts can be focused
on the most material categories.
CDP Reporting
In the year under review, DCC’s B
rating by CDP was maintained.
This compares to a sector-level
and global average CDP score of C.
Our higher rating reflects recent
improvements in our reporting
on carbon emissions. These
improvements include setting
targets and making progress
against them, the Group’s overall
focus on climate change, and
TCFD reporting.
Refer to EY report on page 239
SUCCESSFUL CERTAS ENERGY UK HVO
FLEET TRIAL SCALES UP
A trial of Hydrotreated Vegetable Oil (‘HVO’) in Certas Energy
UK’s vehicles proved so successful in contributing to the
company’s 20% carbon reduction target (‘CO
e’) by 2025 that
HVO is being rolled out to more depots.
Like many companies reliant on fleet logistics, fuel is the most
significant contributor to Certas’s carbon emissions. HVO is a
drop-in fuel made from 100% renewable and sustainable
waste vegetable fats and oils that can reduce GHG emissions
by up to 90% compared to conventional diesel.
Emma Wordsworth, Operations Director, says, “We’re viewing
HVO as a transitional fuel, an immediate way to reduce CO
e
emissions from our operations whilst we explore longer-term
clean energy alternatives for our fleet and operations. It’s one
of many decarbonisation initiatives we are implementing.”
Simply changing to HVO has delivered impressive and
immediate carbon savings. After a year on the trial, tanker
diesel fuel usage has been reduced by 16%, saving 6,032
tonnes of CO
e emissions.
CLIMATE CHANGE
OUR APPROACH
Climate risks and opportunities
are assessed and managed as a
fundamental part of our governance
and business management processes.
Our updated materiality assessment,
outlined on pages 58 and 59, confirms
climate change as a key risk and
opportunity for the DCC Group.
Central to our response to this has been
the definition of an updated growth
and net zero strategy for our energy
activities and setting Scope 1, 2 and 3
carbon emission reduction targets.
Governance and Management
of Climate-Related Risks and
Opportunities
In the Corporate Governance
Statement on page 92, we describe the
Board’s oversight of climate-related
issues and the role of management
in assessing and managing
climate-related issues. In the Risk
Report on page 77, we explain how
climate-related risk is integrated
into the risk processes that operate
throughout the Group. In the table
on pages 66 and 67, we describe
our assessment of the physical and
transitional impacts of climate change
on the Group’s operations in terms of
both risks and opportunities.
Assessment of Climate-Related Risks
and Opportunities
We assess the impact of climate
change on our activities principally
by considering both transitional and
physical eects over short-term (within
three years), medium-term (between
three and ten years) and long-term
(more than ten years) periods. Within
this framework, we consider scenarios,
using reasonable assumptions as to
how certain factors, such as regulation,
product availability and customer
demand, are likely to develop to
estimate the impact of climate change
on our activities. This analysis informs
the strategic choices we make
regarding the future development
of the Group and our three divisions.
Our assessment of climate risks is
primarily based on our climate scenario
analysis (‘CSA’). We began this work in
2022 by conducting a qualitative
study to identify our most material
climate risks and opportunities. We then
undertook further quantitative analysis
to develop our understanding of a
carefully selected group of those risks
and opportunities. The CSA process
looked at climate-related eects on
our business under two scenarios,
both consistent with the scenario
assumptions used by the IPCC
(Intergovernmental Panel on Climate
Change). The first was a scenario where
decarbonisation is achieved in line with
a 1.5°C temperature rise. The second
scenario assumed a temperature rise
of 4°C to help illustrate physical
climate-related risks.
These scenarios align with the two key
frameworks used by the climate science
community: Shared Socioeconomic
Pathways (’SSP‘), which describe
dierent socioeconomic futures, and
Representative Concentration Pathways
(’RCP‘), which model dierent emission
pathways and the associated impact
on climate. The first scenario we used is
based on SSP1 and RCP1.9. Our second
scenario is based on SSP5 and RCP8.5.
We also undertook a detailed
assessment of the likely evolution of the
principal energy markets we work in. We
identified a significant opportunity to
support existing and new customers as
they reduce their use of fossil fuels over
the coming decades. We also identified
several material climate risks, such as
the impact of an extreme 4°C warming
scenario on the operation of two of our
energy facilities, an LPG import terminal
and an oil import terminal located in
coastal regions.
The risks identified covered both the
transitional risk associated with energy
transition and our response to it, as well
as physical risks from assets that could
be aected by changing weather
conditions.
The CSA process also assessed the
opportunity available to our Technology
division as the market for recycled
technology products develops.
The results of the CSA were assessed
within our wider Group risk management
framework, which is used to determine
the potential impact of risks of all types
across the Group.
TCFD also recommends the
development of relevant metrics and
targets. The targets and metrics we
have selected form a prominent part
of the Sustainability Framework covered
on pages 60 and 61. Further detail on
our approach to reporting on Scope 1, 2
and 3 carbon emissions is set out on
pages 62 and 63.
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TCFD Reference Table
Core elements Recommended Disclosures Principal Section of Annual Report
Governance Disclose the
organisation’s
governance around
climate-related risks
and opportunities.
a) Describe the Board’s oversight
of climate-related risks and
opportunities.
Corporate Governance Statement pages
92 to 107
Governance and Sustainability Committee
Report pages 108 to 111
b) Describe management’s role
in assessing and managing
climate-related risks and
opportunities.
Corporate Governance Statement pages
92 to 107
Risk Report pages 77 to 84
DCC Energy Business Review pages 16 to 23
Strategy Disclose the actual
and potential impacts
of climate-related risks
and opportunities on
the organisation’s
businesses, strategy,
and financial planning
where such information
is material.
a) Describe the climate-related
risks and opportunities the
organisation has identified
over the short, medium, and
long term.
Chief Executive's Review pages 8 to 11
Sustainability Review pages 58 to 76
b) Describe the impact of
climate-related risks and
opportunities on the
organisation’s businesses,
strategy, and financial planning.
Financial Review pages 44 to 51
DCC Energy Business Review pages 16 to 23
Audit Committee Report pages 112 to 117
Financial Statements pages 160, 161, 177
and 180
Remuneration Report page 131
c) Describe the resilience of
the organisation’s strategy,
considering dierent
climate-related scenarios,
including a 2°C or lower scenario.
Sustainability Review pages 66 and 67
Risk
Management
Disclose how the
organisation identifies,
assesses, and manages
climate-related risks.
a) Describe the organisation’s
processes for identifying and
assessing climate-related risks.
Risk Report pages 77 to 84
b) Describe the organisation’s
processes for managing
climate-related risks.
Risk Report pages 77 to 84
c) Describe how processes for
identifying, assessing, and
managing climate-related risks
are integrated into the
organisation’s overall risk
management.
Risk Report pages 77 to 84
Metrics
& Targets
Disclose the metrics
and targets used to
assess and manage
relevant climate-related
risks and opportunities
where such information
is material.
a) Disclose the metrics used by
the organisation to assess
climate-related risks and
opportunities in line with its
strategy and risk management
process.
Sustainability Review pages 58 to 76
b) Disclose Scope 1, Scope 2,
and, if appropriate, Scope 3
greenhouse gas (‘GHG’)
emissions and the related risks.
Sustainability Review pages 58 to 76
c) Describe the organisation’s
targets to manage
climate-related risks,
opportunities, and performance
against targets.
Sustainability Review pages 58 to 76
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Analysis of Key Climate Scenarios
We analysed the resilience of our Group and divisional
strategies against various climate-related scenarios.
This process involved an initial qualitative assessment
of climate-related risks and opportunities, which informed
our revised energy strategy. More detailed qualitative
assessments were then undertaken on four relevant
scenarios. In each case, our analysis was supported
by suitable external expert advice. The results of this
are summarised in the following table.
Risk/Opportunity Principal Scenario Impact Assessment Actions
Transitional
impacts of climate
change on our
energy activities.
We undertook a detailed
assessment of the likely evolution
of each of the principal energy
markets where we operate
(geographic and customer
markets), including a transition
compatible with 1.5°C warming.
This scenario was based on
SSP1/RCP 1.9. This work included
an assessment of the evolution
of our policy and legal
environment (such as the
level of carbon pricing), the
development of technology
(such as improvements in EV
technology) and the introduction
of new forms of energy (such as
biofuels and hydrogen). We also
considered how these and other
relevant factors would influence
the markets where we operate
over the short, medium and
long term.
We concluded that there is a
significant opportunity available
to the Group to support existing
and new customers as they
reduce their use of fossil fuels
over the next few decades.
We can achieve this by adding
to the range of products and
services we oer while continuing
to use our current assets to serve
existing markets. The transition to
lower carbon forms of energy will,
over the medium to long term,
see a reduction in demand for
fossil fuels. A failure to adapt
to this change would create
a material risk to our existing
energy operations in the
long term.
Businesses in our
Energy division are
decarbonising their
operations and helping
their customers move
to lower-carbon forms
of energy. We continued
to refine our energy
strategy over the
course of the year
under review to support
and accelerate this.
Physical impacts
of climate change
on our energy
activities.
We assessed the impact of an
extreme 4°C warming scenario
on the operation of two of our
energy facilities, an LPG import
terminal and an oil import
terminal, both located in coastal
regions. This scenario was based
on SSP5/RCP8.5. This work
focused on assessing the risk of
physical damage to those
assets. We also considered the
disruption to our wider
operations that could be caused
if they were inoperable for a
certain period.
In the medium to long term,
these facilities are slightly more
likely to experience acute
physical impacts because of
adverse weather and sea level
rise. If no mitigation measures
were taken and no insurance
was in place, the financial
implications of one of these
sites being rendered wholly
inoperable will likely be less than
£10 million in current value. This is
not a material amount in the
context of the Group. Assuming
mitigation measures are taken,
and insurance is in place, the
financial impact of these events
will be substantially less. DCC
Energy’s wider strategic resilience
to climate change is addressed
above and in the DCC Energy
Business Review on page 16.
Within the timeframes
considered, these
impacts can be fully
mitigated through
increased physical
mitigation measures
and business continuity
planning. In particular,
alternative means of
obtaining product are
likely to be available.
In addition, the Group
maintains insurance
against physical
damage and business
interruption.
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Risk/Opportunity Principal Scenario Impact Assessment Actions
Physical impacts
of climate change
on our healthcare
activities.
We assessed the impact that an
extreme 4°C warming scenario
would have on the operation of
one of our healthcare businesses
in the USA which operates from
two sites. This scenario was
based on SSP5/RCP8.5. This
work focused on assessing the
risk of physical damage to the
business due to wind or flooding.
We also considered the
disruption to our operations
that could be caused if either
site was inoperable for a
certain period.
This facility is more likely to
experience acute physical
impacts from adverse weather
and sea level rises in the medium
to long term. If no mitigation
measures were taken and no
insurance was in place, the
financial impact of one of these
sites being rendered wholly
inoperable is likely to be less
than £10 million in current value.
This is not a material amount in
the context of the Group.
Assuming mitigation measures
are taken, and insurance is in
place, the financial impact of
these events will be substantially
less. DCC Healthcare’s strategy is
considered highly resilient to
climate-related risks and
opportunities.
Within the timeframes
considered, these
impacts can be fully
mitigated through
increased physical
mitigation measures
and business continuity
planning. In addition,
the Group maintains
insurance against
physical damage and
business interruption.
Transitional
impacts of a move
to a circular use of
technology
products.
As steps are taken to increase
the reuse of the materials used in
manufacturing technology
products, we assessed the
possible timing and scale of a
change in the global technology
market from purchasing products
to their supply as a service. This
scenario was based on SSP1/
RCP 1.9. This work included an
assessment of the evolution of
the relevant policy and legal
environment (such as more
compulsory recycling of
technology products) and the
development of technology
(including manufacturers
designing products to support
increased reuse of materials). We
also considered how these and
other relevant factors, such as
demand from retailers and end
users, would influence the
technology markets where we
operate over the short, medium
and long term.
We consider that a significant
market for recycled technology
products and related services
will likely develop over the
medium to long term. The
evolution of this market
represents an opportunity for our
Technology division because
technology suppliers and
customers are likely to need
support in moving products back
up the supply chain for reuse.
However, the scale and timing of
this change, particularly within
individual geographic markets,
are subject to very high levels of
uncertainty. DCC Technology’s
strategy is considered highly
resilient to climate-related risks
and opportunities.
We will continue to
closely monitor
developments in the
markets where we
operate, including
through discussions
with our suppliers,
customers and relevant
policymakers.
HEALTH AND SAFETY
OUR APPROACH
Safety Governance
Safety is a core value of DCC. We
believe that a successful approach to
safety must be grounded in a culture
that encourages every DCC employee
and contractor to identify and raise
concerns, whether it is about safety or
any other aspect of operating
responsibly. We have governance
structures and management processes
in place to ensure a safe working
environment for all our colleagues and
partners and the management and
mitigation of potentially negative
environmental impacts from our
operations.
HSE Three-Year Plan
Our three-year plan for HSE outlines our
priorities and objectives in specific
areas such as leadership, culture and
governance, operational execution,
competence and training, knowledge
sharing and management reporting.
This year, good progress was made
in line with the plan.
Process Safety
Process safety management is a
framework for managing the integrity
of hazardous operating systems and
processes by applying sound design
principles, engineering controls and
operating practices. It deals with the
prevention and control of incidents
involving the release of hazardous
materials or energy, such as fire or
explosion during the movement of fuel,
fire within fuel vapour recovery systems,
loss of containment leading to the
formation of a vapour cloud or a
hydrocarbon spill.
Culture of Safety
For DCC, a strong safety culture is key
to everything we do. It starts with the
declaration from our Chief Executive
that “nothing is so important that it
cannot be done safely”. Our Employee
Engagement surveys provide feedback
on safety leadership within each
business. Training in risk assessment
and incident investigation includes
considering human, organisational and
cultural factors, both in terms of how the
process is conducted and, in the case
of incident investigation, considering
causal factors.
Employees are expected to play an
active role in maintaining a safe
workplace, including the proactive
reporting of near misses, unsafe acts
and unsafe conditions, which they do
through our HSE IT reporting platform.
They are empowered to stop work when
they consider it unsafe to continue.
We use technology to support our
processes where we can. For instance,
our HGV fleet operations in the Energy
division employ in-vehicle technology to
monitor driver actions and performance,
to record vital information in the event of
an incident, and provide opportunities
for driver coaching.
OUR PROGRESS AND KEY INITIATIVES
Occupational Safety
DCC is committed to striving for zero
harm to our people. This means a
sustained reduction in Lost Time Injury
(‘LTI’) and recordable injury rates, no Tier
1 or Tier 2 process safety incidents (as
defined in API-754), and no employee or
contractor fatalities. In this regard, DCC
has performed well, with no adverse
incidents described above in the year
under review.
LTIs, defined as an accident resulting in
at least one day lost after the date of
the accident, remain an essential
indicator of occupational safety
performance. Most LTIs recorded across
the Group are relatively minor, including
slips, trips, and manual handling injuries
such as sprains and strains. Our LTI
frequency rate remains below 1 per
200,000 hours worked at 0.97, a level
that is comparable to the prior year. Our
total recordable injury rate this year was
1.46, compared to 1.43 in the prior year. A
recordable injury for this purpose is one
that results in a fatality, days away from
SAFETY &
ENVIRONMENTAL
PROTECTION
We keep our people,
communities and
environment safe.
OUR GOALS
– Keep our people safe
– Protect the environment in
the communities we serve
PILLAR TWO
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work, restricted work or job transfer,
medical treatment beyond first aid, loss
of consciousness, or a diagnosed
significant injury/illness. The LTI severity
rate increased versus the prior year from
25 to 32 per 200,000 hours worked,
reflecting the influence of a small
number of incidents resulting in lengthy
absences. We had 44 occupational
illness cases this year, which included
musculoskeletal conditions, employee
mental health and workplace
exposures. The Near Miss Frequency
Rate per 200,000 hours worked was
27.12.
In the year under review, there were no
work-related employee or contractor
fatalities.
All incidents, including personal injuries,
road trac accidents and near misses,
are recorded to evaluate potential
consequences, identify underlying
causes, control weaknesses and
learnings. The figures reported above
include DCC employees, temporary
workers and agency-supplied sta, but
do not include third-party contractors.
There were 14 accidents at our facilities
resulting in personal injury to third-party
contractors during the reporting period.
Lost Time Injury (’LTI’) Rates
2019 2020 2021 2022 2023
2525
32
18
24
LTI severity rate LTI frequency rate
1.20
1.07
0.96
1.04
0.97
Environmental Protection
DCC strives for zero harm to the
environment and communities in which
we operate. The most material risk to
the environment in the communities
where Group businesses operate is the
occurrence of a material spill of liquid
fuel, such as home heating oil, petrol
or diesel.
Asset management and employee
training and competence are critical
to spill prevention, as is our ability to
respond quickly and appropriately
to such incidents should they occur.
We have actions in place to assess,
maintain and upgrade our fixed and
mobile assets, including storage
facilities and delivery infrastructure.
In contrast to liquid fuels, the loss of LPG
can present a significant safety risk, but
does not typically damage the local
environment.
Similarly, operations in our Healthcare
and Technology divisions do not
generate material risks of local
environmental damage.
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FLOGAS BRITAIN AVONMOUTH
STORAGE FACILITY
Flogas Britain is running a unique project in Avonmouth to
convert an old liquefied natural gas (‘LNG’) storage facility into
a modern terminal for storing liquefied petroleum gas (‘LPG’),
a cleaner energy source. The project aligns with DCC’s energy
strategy as LPG produces fewer CO
emissions overall, and its
impact on air pollution is lower than LNG.
The conversion has presented some unique safety and
regulatory challenges, and the approach taken by DCC
exemplifies how seriously the company takes HSE. The latest
safety measures and technology have been used in the
facility’s conversion. For example, 3D modelling walk-throughs
were used to identify potential safety issues, such as poor
access to plant areas and valves and equipment at
appropriate heights. Greater use of automation will become
integral across the new facility, with automated fire and gas
detection systems in place throughout. Once the Avonmouth
facility is open and running, we will approach HSE with the
same attention to detail that has gone into its design and
construction.
– READ MORE IN OUR SUSTAINABILITY REVIEW ON PAGE 58.
PILLAR THREE
PEOPLE
& SOCIAL
We support the development
of our people and society.
OUR GOALS
– Support the development
of our people
– Support inclusion
and diversity
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DCC plc \ Annual Report and Accounts 2023
OUR PEOPLE
ENABLING AN ENGAGED
AND DIVERSE TEAM
DCC is a people business, and our
success relies on our 16,100 people
across 22 countries. We strive to create
a workforce that is as diverse as our
customers and communities and build
inclusive work environments where
everyone has the same opportunity
to develop and progress.
The development of our people is
a strategic objective for the Group.
We focus on growing our talent, finding
better ways of working, building
partnerships and supporting innovation.
All of our divisions and businesses
have highly experienced and ambitious
management teams with deep
knowledge of the markets in which
they operate. As the Group continues
to grow, the depth and quality of
our talent is a key contributor to
our future success.
At 31 March 2023, we employed 16,100
people, which is a 4% increase on the
prior year. Our employee turnover
rate during the year was 25% and
new joiners amounted to 24% of all
employees. These turnover numbers
are in line with expectations and are
a reflection of the wider employee
environment, albeit lower than last year.
Both of these figures include our
seasonal workforce, who support our
businesses in peak periods of trading,
many of whom return year after year
to work with us.
Employee engagement
We strive to provide an employee
experience where everyone can feel
safe, valued and included, and where
every colleague can make their unique
contribution.
Our Employee Engagement Survey
provides a valuable perspective on the
culture and ‘lived experience’ of our
colleagues. In 2022, all of our colleagues
across 22 countries in 71 businesses
were given the opportunity to have
their voices heard by participating in
the survey.
OUR VALUES
Safety
Our first priority is the safety of our colleagues,
contractors, customers and other persons who may be
aected by our business activities.
Nothing we do is so important that it cannot be done
safely, every time.
We believe safety to be a foundation of our
sustainable business success and that is why we
continuously look for ways to improve our safety
culture, systems and processes.
Integrity
Being honest, open, accountable and fair is in our
nature. These traits are the pillars on which our
business has been built.
We believe in doing the right thing and inspiring others
by being true to ourselves and treating people with
respect and dignity.
We are committed and responsible employers. We
lead by example and take pride in delivering on our
promises.
Partnership
Our business is all about creating sustainable
partnerships. By working together as a team with
those stakeholders who share our values, our passion
and our drive - we become stronger.
We seek to develop mutually beneficial, long-term
relationships, founded on trust and respect and place
significant value on commitment and loyalty.
Excellence
We believe great performance comes from
preparation, focus on the detail, relentless
determination, a sense of urgency and a genuine
hunger for success.
These are the hallmarks of our people. We have a
passion for accuracy and getting it right first time,
every time. We share a collective entrepreneurial spirit.
We are agile, responsive and continuously looking for
ways to improve what we do.
16,100
EMPLOYEES
22
COUNTRIES
We achieved an excellent participation
rate of 83%, which is reflective of how
much our colleagues value the chance
to share their insights and feedback.
We are delighted to report that we have
seen a year-on-year improvement in our
overall engagement score across the
Group with material progress in the
engagement levels for some of our
larger colleague populations.
Colleagues gave us feedback on a
number of areas which allows us to
identify common themes across the
Group, as well as compare progress
year-on-year and gain insights where
our action planning is making a
dierence and where we need to
continue to improve. In line with our
devolved operating model, our process
enables our businesses to seek
feedback on additional areas that are
of particular importance to that
business, division or country.
Every people manager across our
business with five or more team
members receives the feedback and
results for their team. In 2022, managers
had the insights to lead these important
conversations with their teams, actively
listening to what matters most. To
support our managers share results with
their teams, lead conversations and
agree actions, training and materials
were rolled out across the Group. The
ability to monitor the impact of the
actions we take through the improved
engagement scores is a great step
forward and builds confidence with our
colleagues that action will be taken as
a result of their feedback.
This annual initiative continues to
reinforce the strengths of our devolved
business model. The results highlighted
that our colleagues have a strong sense
of purpose and understand why their
work matters. Our people are also
invested in the future of the Company
and feel fairness and respect are at
the heart of our working relationships.
Encouragingly, our people also feel
real accountability for our safety culture,
a core value for DCC. While the results
were very positive overall, we also
identified a number of areas that need
improvement. Our businesses and
managers have implemented action
plans at a local and team level to
ensure that DCC businesses continue
to be great places to work.
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CREATING A FUTURE OF
EQUITY AND BELONGING
IN THE WORKPLACE
Diversity and inclusion have an immense
impact at a professional and personal
level in the workplace. When truly built
into our culture, they help all our
colleagues feel welcomed, represented,
and empowered.
Since the beginning of 2022, DCC
Technology has implemented numerous
new measures to create a sense of
empowerment and connectedness
among every member of the workforce.
Through mental health initiatives,
company-wide surveys, education
and training, and new Diversity, Equity
and Inclusion (‘DE&I’) policies, DCC
Technology is reinforcing a culture of
fairness and inclusivity, where diversity
is not just respected but celebrated.
In updated company guidelines for
inclusive leadership and coaching, DCC
Technology has detailed the harmful
eects of unconscious biases,
micro-iniquities and micro-armations
– and how to recognise and eliminate
these from the workplace. By providing
colleagues in leadership roles with
education on facilitating diverse teams
– including gender, race, ethnicity,
religious beliefs, age, mental health and
physical abilities – DCC Technology is
laying the foundation for an equitable
experience for every member of the
workforce.
As part of these activities, in October
2022 DCC Technology celebrated
World Mental Health Day, creating a
safe space for open conversations
about attaining and maintaining good
mental health. By providing colleagues
with support, positive activities and
key resources, these sessions helped
break down the stigma of mental health
discussions and improve the well-
being of team members across DCC
Technology businesses – not only on
World Mental Health Day, but every day.
Additionally, DCC Technology
developed a ‘Spotlight on Diversity’
series of communications, which
provides colleagues with monthly
sessions on topics like neurodiversity,
religion, allyship, identity and culture.
This programme creates a further safe
space for these important discussions.
After a successful year of implementing
DE&I practices, we are inspired by the
important conversations with team
members, and we look forward to
more of these meaningful initiatives
in the future.
Building an inclusive and diverse
culture
We aim to create an environment
where every individual feels a sense
of belonging and can thrive and
contribute to their fullest in our
businesses. That means embracing
diversity in the broadest possible sense,
including gender, ethnicity, ability, age,
sexual orientation, education, and
ways of thinking. We believe that to
reap the benefits of our diverse and
talented workforce we need inclusive
work environments where all of our
colleagues have the freedom to achieve
their ambitions and a culture that
cultivates the energy and passion our
colleagues bring to work.
Our focus has been on targeting greater
gender diversity, with a particular focus
on developing a diverse pipeline of
talented future leaders for the Group.
Our Inclusion and Diversity Policy, ‘You
Belong Here’, lays firm foundations to
bring our inclusion and diversity strategy
to life in a meaningful way. We remain
committed to increasing diversity and
inclusion within our workforce at all
levels. 37% of the people we employ
across our global business are women.
We continued to make progress on
inclusive initiatives throughout the year.
In 2022, we launched our Inclusive
Recruitment Practices Guide and rolled
out a female mentoring programme
to create visibility and sponsorship
of diverse talent. DCC Technology
piloted Inclusive Leadership training
and workshops and there are plans
to roll this out across the entire Group.
As a Group, we recognise the
importance of workforce turnover as
a sustainability metric and, like most
companies, we are experiencing strong
competition for talent. Our employee
turnover rate during this financial year
was 25%. We continue to place great
emphasis on our ability to attract,
develop and retain talent and identify
this as a key risk, as highlighted in the
Risk Report on page 77. We will continue
to further enhance our diversity-led
activities including the requirement for
diverse candidate lists for senior open
roles, providing unconscious bias
training for thousands of our colleagues
across the Group, taking opportunities
to celebrate diversity and most
importantly listening to the views of our
people.
Celebrating diverse cultures and
traditions
DCC is committed to having a
workplace culture where everyone feels
welcomed, respected and valued and
has the freedom to achieve their
ambitions.
With over 16,100 colleagues across 22
countries, DCC is a multinational and
multicultural organisation. We recognise
the opportunity that global cultural
events provide, to raise awareness and
understanding of our dierences, as well
as our common interests. These global
awareness days create visibility and
instill a sense of pride to ensure all our
colleagues feel respected and valued.
Over the course of the year, we held
activities to mark celebrations such as
World Mental Health Day, International
Women’s Day, International Men’s Day
and Black History Month.
Group
Gender diversity as at 31 March 2023
37%
63%
Senior Management
20%
80%
Board
33%
67%
Male
Female
We recognise the benefits of diversity at
Board level as well. Our Board is fully
compliant with the requirements of the
UK Listing Rules in regard to gender
diversity and more detail on this is
contained in the Governance Report.
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Employees by geography
UK
Continental Europe
27%
18%
8%
1%
North America
Ireland
Rest of World
46%
Employees by division
DCC Energy
DCC Healthcare
48%
1%
21%
30%
DCC Technology
DCC Corporate
DEVELOPING OUR DIVERSE
WORKFORCE
DCC Graduate Programme
The DCC Graduate Programme is
an integral part of the Group’s talent
development process, designed to
create a pipeline of high potential,
internationally mobile, early career
talent for the Group. Each year, we
select graduates from a broad range of
backgrounds and nationalities ensuring
diversity in this talent pool at this early
career stage. Graduates have the
opportunity to develop their careers
in the areas of Business Management,
Commercial & Sales, IT, Logistics
and Marketing. DCC is a fast-paced
environment and graduates on our two-
year programme are provided with a
wide range of opportunities to support
their learning and development. Many
are given the opportunity to undertake
international work placements and
assignments where they benefit
from the diversity of markets and
geographies in which we operate. We
have a commitment to continuous on-
the-job training and coaching for all
graduates, maximising the benefits of
this programme. Find out more at
www.dccgraduateprogramme.com.
Talent planning and career pathing
DCC has a strong record of developing
its talent; most of our senior leadership
have progressed their careers through
a succession of exciting roles in
diverse businesses across the Group.
Throughout the year, we continued to
identify and develop talent to meet the
future needs of our businesses through
our annual talent planning process.
All our businesses actively engage
in the annual talent process and use
a consistent approach to focus
on succession planning for high
impact roles and identify talent for
development purposes. Through this
annual process we ensure a continued
focus on the visibility and development
of our diverse talent on an ongoing
basis. This will lead to greater diversity
and balance in our management teams
over time. The number of roles in scope
for succession planning has grown
considerably over the past number of
years in line with our growth over the
same period. We strive to make talent
visible and identify career paths for
people within their own business as well
as across the Group. About 82% of our
management team positions currently
have internally identified successors
from within our Group. Of those, all
identified critical positions have
succession coverage and we have
worked hard to create visibility of our
internal talent options.
GLOBAL INCLUSION AND
DIVERSITY SURVEY
In February 2023, we launched our
first global Inclusion and Diversity
pulse survey to establish how people
from all backgrounds feel about their
work and their experience working
for our businesses. The survey was
open to all employees, and over
9,000 of our colleagues completed
the survey.
We are pleased that 85% feel they
can be themselves at work, and over
80% of the respondents think their
managers strongly support inclusion
and diversity. While we still have to
work to ensure our workforce is more
diverse, our colleagues gave us
invaluable insight into how each
business can be a better place to
work for everyone.
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Talent management system
We continue to invest in our Group-wide
talent platform to help us identify
internal talent and ensure talent
management processes are embedded
consistently across the Group. The
platform currently supports the
automation of succession planning,
reward and performance management
processes and in 2022 we agreed
Group-wide alignment of Personal
Development Plans. As more of our
businesses have recognised the value of
the system, we have had an 8% increase
in the number of users over the last year.
High-performance culture
Our people are driven to achieve and
have an unwavering focus on results.
We are open and transparent on
performance and constantly measure
our progress. Every member of our
business management teams actively
engages in our annual performance
review process. To support and drive
our high-performance culture, we oer
regular coaching skills training to our
business management teams at key
points during the performance cycle.
Developing leaders
We strive to foster a culture of
continuous development for our people,
ensuring we have the talent and
capabilities we need, now and in the
future. With the phasing out of Covid-19
restrictions over the last year, we have
been able to return to in-person training
combined with virtual sessions.
In 2022, we added to our suite of
development programmes by rolling
out a coaching programme to help shift
the dial on creating a coaching and
feedback culture across our businesses.
This programme complements the
existing Group-wide training including
DCC Management Essentials
programme, the DCC Finance for
Non-Finance Managers programme
and our flagship DCC Business
Leadership Development programme.
Mentoring diverse talent
We have mentoring programmes in
place to support the development of
diverse talent. Mentees are supported
with their personal development
through seasoned advice and guidance
provided by their mentors to progress
their careers. The programme also
increases awareness in our mentors of
the challenges facing diverse talents
in our businesses so that they can
influence change from a leadership
perspective in their own businesses.
We will continue to bring diverse talent
through this programme over the
coming year.
WE AIM TO CREATE AN
ENVIRONMENT WHERE
EVERY INDIVIDUAL FEELS
A SENSE OF BELONGING
AND CAN THRIVE AND
CONTRIBUTE TO THEIR
FULLEST IN OUR BUSINESS.
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Our Approach
DCC is committed to operating to
the highest standards of corporate
governance. For more detail on our
governance structure, please see the
Corporate Governance Statement on
page 92.
We seek to operate to the highest legal
and ethical standards. And we want to
benefit society by working with suppliers
and customers who share our values.
Code of Conduct
Our current Group Code of Conduct,
which is available on our website, sets
out the standards that are expected
of our employees in a range of areas,
including anti-bribery and corruption,
supply chain integrity, the protection of
personal information and competition
law. The Code also explains how
employees can ask questions about
compliance issues and raise concerns
if they believe that something wrong
is happening. A copy of the Code is
provided to every employee when
they join.
Whistleblowing
Employees across the Group are
required to raise a concern if any of
our activities are being undertaken in
a manner that may not be legal or
ethical and are supported if they do so.
Concerns can be raised with a member
of management in the business where
the employee works, with the General
Counsel & Company Secretary or
externally with SafeCall, a third-party
facility which is independent of DCC
and available in multiple languages
on a 24-hour basis. Employees may
raise concerns anonymously if they
wish. The Audit Committee has oversight
responsibility for our whistleblowing
facilities and how they operate.
This is covered in more detail in the
Audit Committee Report on page 112.
Bribery and Corruption Prevention
DCC has a detailed Anti-Bribery and
Corruption Policy in place, which states
that no employee or representative of
any Group business is to oer or accept
any bribe, including small facilitation
payments, or engage in any other form
of corrupt practice. During the year, over
3,000 employees completed training on
the prevention of bribery and corruption.
No Group business was involved in any
public legal case regarding corruption
during the year under review.
Inclusion and Diversity
The Group actively supports the
development of a diverse and inclusive
workplace. Details on our Inclusion and
Diversity Policy, ‘You Belong Here’, and
the other measures we take in this area
are set out in the People and Social
section of the Sustainability Review
on page 70. Where allegations of
discrimination are made, they are
investigated, and suitable action is
taken in response. In the year under
review, there were no findings by any
court or similar body that any DCC
Group businesses had engaged in
discrimination.
PILLAR FOUR
GOVERNANCE
& COMPLIANCE
We embed and uphold high
standards of governance and
compliance across all our
operations
OUR GOALS
– Protect Human Rights
– Prevent Bribery
and Corruption
– Sell Safe Products
We provided training
covering the importance of
protecting human rights to
almost 4,000 employees
across the Group over the
course of the year.
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Data Security & Privacy
DCC’s privacy statement outlines
the Group’s policy on managing the
personal data of individuals we deal
with. In the year under review, we
identified and monitored several
cyber-attacks on Group businesses,
but no leaks, thefts, or losses of
customer data were identified as a
result of these. In the same period,
no substantiated complaints were
received concerning breaches of
customer privacy.
Workforce Human Rights & Labour
Practices
We have clear internal policies and
procedures for protecting human rights
within our operations and supply chains.
These include measures to identify and
prevent slavery, forced and compulsory
labour, child labour and human
tracking. During the year no breaches
of human rights were identified in our
operations or supply chains. The Board
approved DCC’s Modern Slavery Act
statement for the year and it is available
on our website.
Product Quality and Safety
Group businesses have suitable
processes and procedures in place
that are designed to ensure that
the products that they sell are safe
and meet applicable regulatory
requirements. There was no monetary
loss from legal proceedings associated
with product safety during the year.
Compliance Monitoring
All businesses in the Group report in
detail twice a year on their compliance
controls. A report on these controls is
provided to the Executive Risk
Committee and the Audit Committee.
In addition to these self-assessment
reports, the Group Internal Audit team
and the Group Legal & Compliance
team consider a range of compliance
risks as part of their audit programmes.
More information on how compliance
risks are addressed within the Group is
set out in the Corporate Governance
Statement on page 92.
ETHICS WEEK IN
BUTAGAZ AND CERTAS
Butagaz and Certas, which serve
customers across France and the UK
respectively, are two of the largest
businesses in the Group. Recognising
the fundamental importance of
ethical business practices to their
culture, commercial success and
long-term term sustainability, both
Butagaz and Certas held very
successful Ethics Weeks during the
year. Each every involved hundreds
of colleagues and provided an
opportunity to openly discuss and
reinforce the importance of good
business practices across their
operations.
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SUSTAINABILITY REVIEW CONTINUED
RISK MANAGEMENT STRATEGY
DCC’s strategy, diversified business
activities and devolved operating
model support the eective
management of risks and make the
Group resilient to a wide range of
adverse events.
– We are a broadly-diversified Group,
with operations in three growing
industries across 22 countries. This
protects the Group against many
local market cycles and
adverse events.
– We operate a devolved management
structure, with talented, experienced
and highly-motivated teams
leading businesses across the Group.
This means we remain close to our
customers and trends in individual
markets and can respond rapidly
to changes.
– We have a strong culture focused on
our core values of Safety, Integrity,
Partnership and Excellence – and
work hard to maintain and monitor
this culture in every area of
our operations.
– Our financial strength, built on the
profitable and cash-generative
nature of the businesses in the Group,
our focus on returns from all capital
invested, and our strong and liquid
balance sheet, create
additional resilience.
– We focus on maintaining robust
internal controls that are aligned to
the principal risks facing the Group
and each of the businesses within it.
This Risk Report concentrates on the
final of these elements of our risk
management strategy – formal risk
management processes and related
internal controls. Our Group and
divisional strategies and business
models are addressed in more detail in
the Strategy section on page 12, the
summary of our Business Model on
page 14 and the Business Reviews on
pages 16 to 39. Our culture is covered in
the People and Social part of the
Sustainability Review on page 58 and in
the Governance Report on page 92. Our
financial position is addressed in the
Financial Review on page 44.
CLIMATE RISK
We assess the impact of climate
change on our activities principally by
considering both transitional and
physical eects over short-term (within
three years), medium-term (between
three and ten years) and long-term
(more than ten years) periods.
Within this framework, we consider
scenarios, using reasonable
assumptions as to how certain factors,
such as regulation, product availability
and customer demand, are likely to
develop, to estimate the impact of
climate change on our activities. This
analysis informs the strategic choices
we make regarding the future
development of the Group and its
divisions.
Directly informed by our assessment
of climate-related risks and
opportunities, we announced an
updated strategy for our energy
activities – Leading with Energy – in
May 2022 at a dedicated capital
markets day.
There are three principal elements to
our process for identifying, assessing,
and managing climate-related risks:
– Each business in the Group
considers climate risks (including
physical risks and transitional risks
such as changes in regulation) as
part of our general risk
management processes;
– Businesses in the Group then reflect
their assessment of climate (and
other risks) in their strategic
planning; and
– The impact of climate risks,
including their potential scale and
scope and their significance relative
to other risks, are also considered
when risk and strategy are
considered at divisional and Group
levels.
We have put in place common risk
definitions as part of our overall risk
process (covering both the likelihood
and impact/materiality of particular
risks), which are applied to
climate-related risks.
Responses to climate-related risks
(including their mitigation, transfer,
acceptance, or control) are
considered as part of our strategic
planning processes, which involve an
annual review of strategy at business,
divisional and Group level. Progress
against strategy and the
implementation of specific actions are
monitored as an integrated part of
our wider management processes.
The Board maintains oversight of the
Company’s response to climate
change. The overall role of the Board
in this respect is summarised on the
following page in the section of this
report dealing with Risk Management
Governance and in the Governance
Report on page 92.
Progress being made in the
implementation of our Leading with
Energy strategy is included in the DCC
Energy Business Review on page 16.
Climate risk is also considered as part
of our capital expenditure approval
process. More information on that
subject is contained in the Financial
Review on page 44. The need to
respond to climate change – most
notably by reducing our carbon
emissions – is a fundamental
component of our Sustainability
Strategy. The Sustainability Review on
page 62 summarises the progress we
are making in that area.
77DCC plc \ Annual Report and Accounts 2023
RISK REPORT
MANAGING RISK THROUGH
STRATEGY, CULTURE AND
EFFECTIVE INTERNAL CONTROLS
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATIONSTRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
RISK MANAGEMENT GOVERNANCE
DCC plc Board
The Board is ultimately responsible for ensuring that appropriate risk management and internal control structures are in place
across the Group. The Board has approved a Risk Management Policy and Risk Appetite Statement which respectively set out the
Group’s approach to the overall assessment and management of risk and appetite for specific forms of risk. The Board receives
regular reports from management on the Group’s principal current and emerging risks, on mitigation actions and internal controls,
on the eectiveness of existing controls and opportunities for their development. Strategic risks and opportunities and HSE risks
are overseen by the Board directly. Other risks are considered by the Audit Committee before also being considered by the Board.
Executive Risk Committee
Chaired by the Chief Executive and comprised of senior
members of Group management, this Committee
oversees the Group’s risk management processes in
detail, including through the review of detailed reports
from relevant Group functions such as Group HSE,
Group Legal & Compliance, Group Risk and Group
Internal Audit.
First Line of Defence
Management teams in divisions and
Group businesses are responsible for
day-to-day risk management
activity including maintaining risk
registers, identifying emerging risks
and designing, implementing and
maintaining eective internal
controls. Divisional management
regularly review and consider the
status of risks with subsidiary
management.
Second Line of Defence
Group functional teams ensure the
first line of defence is operating as
designed. They advise on Group
policies, provide oversight of
operations, and give technical
support and advice to colleagues in
Group businesses. These Group
functions include Finance, HSE, Legal
& Compliance, IT and Risk.
Third Line of Defence
The Group Internal Audit function
(including IT Assurance) provides
independent assurance over the
Group’s control environment. The
team reviews risk management and
control processes in businesses
across the Group, in accordance with
a risk-based audit plan approved by
the Audit Committee. The team then
reports on those audits to the
Executive Risk Committee and the
Audit Committee.
Audit Committee
The Audit Committee assists the Board in assessing
relevant risks and by reviewing the Group’s risk
management and internal control systems in detail. The
Committee considers for this purpose reports from
management on relevant areas of risk, including from the
Group Internal Audit, Group Risk and Group Legal &
Compliance functions. Strategic risks and opportunities
and HSE risks are considered by the Board.
Group Management Team
The Group Management Team oversees the operations of the Group. This includes ensuring that existing and emerging risks
are assessed, managed and reported on eectively in line with the Risk Management Policy and Risk Appetite Statement
approved by the Board.
78 DCC plc \ Annual Report and Accounts 2023
RISK REPORT CONTINUED
Risk Management
Processes
Identify and
Analyse Risks
Determine
Risk Appetite
Manage
Risks
Monitor and
Report
RISK MANAGEMENT PROCESSES
Risk management processes are in place across the Group to enable risk-informed decision making. The principal
elements of these processes are summarised below.
Risk Identification and Analysis
Risk identification and analysis is built into the Group’s core
management processes. This facilitates the frequent
review and updating of subsidiary and divisional risk
registers and, in turn, the Group Risk Register.
The risk process involves an assessment and evaluation of
the impact and likelihood of occurrence of each risk. New
or emerging risks are added to risk registers when they are
considered to have become material.
The principal risks and uncertainties relating to the Group’s
strategic priorities, based on this risk identification and
analysis process, are set out on pages 80 to 83.
Determination of Risk Appetite
The assessment of risk appetite involves setting tolerance
levels for each principal area of risk and then agreeing and
monitoring relevant key risk indicators in those areas.
Risk appetite and key risk indicators are reviewed and
updated periodically to reflect changes in the Group’s risk
environment.
Risk Management
Individual risks are managed as part of the Group’s core
management processes, including the strategy review
process and the oversight of operations within Group
businesses.
Internal controls are designed to ensure that risks are
managed within the risk appetite defined for each area
of risk.
Compliance with internal controls is reviewed by the
functions that operate in the second and third lines of
defence as outlined on the previous page. The Group has
a process in place to track the completion of actions
agreed as part of internal audits.
The Group’s culture, based on our Values, is an important
part of our risk management framework. It supports
good decision making by management teams across
the Group, within the context of the Group’s internal
control framework. Further details on how culture is
monitored are set out on page 101 of the Corporate
Governance Statement.
Risk Monitoring and Reporting
Risk reporting includes reports from first, second and
third-line functions, using the key risk indicators defined for
each key risk area.
The Executive Risk Committee considers detailed reports
on risks and related internal controls, in particular reports
from the Group HSE, Group Legal & Compliance, Group
Risk, and Group Internal Audit teams. It meets five times
annually.
In addition, the Group Management Team considers the
development of the Group’s overall risk environment and
related mitigating actions, including internal controls, on
a regular basis. This process is supported by reports from
and discussions with the Group’s key second and third line
functions and discussions on the Group Risk Register.
The work of the Executive Risk Committee and the Group
Management Team on risks and internal controls is then
presented to the Audit Committee and the Board, as part
of the Risk Management Governance structures outlined
on the previous page. Relevant risks are considered further
as part of the Group’s strategy processes.
Communications to support risk management include
guidance on risk management frameworks and processes
for Group businesses, alerts issued by first, second and
third line functions, the publication of learnings from events
and discussions at management meetings and
conferences on relevant areas of risk.
Emerging Risks
The Group recognises that it faces certain emerging risks that have the potential to become principal risks in the future. In some
cases, there may be insucient information to understand or quantify the impact, scale or likelihood of a risk. This uncertainty
may limit management’s ability to define a response to the risk. Emerging risks are regularly reviewed and reported on as part
of our overall risk process.
Examples of emerging risks are the impact that artificial intelligence will have on the activities of the Group, the development of
regulation in some markets where Group businesses operate, and how geopolitical tensions may evolve over the next few years.
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PRINCIPAL RISKS AND UNCERTAINTIES
The following table summarises the principal risks and uncertainties to the successful achievement of the Group’s
strategic objectives.
Risk and Link to Strategy Trend Principal Mitigation Measures Developments and Areas of Focus
STRATEGIC RISKS
Changing Markets
and Supply Chains
External factors outside the direct
influence of the Group, such as
economic cycles and technological
changes, can significantly impact
on performance. Specifically, the
impact of inflation, rising energy
prices, and geopolitical
developments can result in
changes in customer demand and
to supply chains.
The impact of changing market forces is
mitigated through the Group’s diversified
activities and devolved operating model,
a focus on financial management, strong
culture and careful geographic
expansion.
Increasing geopolitical tensions,
economic pressures and climate
change eects somewhat
increase the risk of market
and supply chain disruption
over the next few years. Artificial
intelligence will impact some
markets where Group businesses
operate, but presents
opportunities as well as risks.
The Group’s diversity of sectoral
focus, customer and supplier
breadth and geographic mix
contribute to our resilience as
these market dynamics evolve.
Climate Change
Transitional climate change risks
and opportunities, including
changes in policy, regulation,
technologies and societal views,
may impact demand for some of
the Group’s products.
Physical climate change risks, such
as extreme weather events and
the related loss of biodiversity
could aect the activities of a
large proportion of Group
businesses.
DCC Energy is putting relationships and
structures in place to enable our
customers’ energy transition, including
introducing lower carbon forms of energy.
This will help reduce Scope 3 carbon
emissions. Progress in the implementation
of our strategy for the energy sector is set
out in the DCC Energy Business Review on
page 16.
The Group is also making progress in
reducing our Scope 1 and 2 carbon
emissions. The Sustainability Review on
page 62 covers this in more detail.
The Board, the Governance and
Sustainability Committee and the Group
Management Team oversee key
sustainability initiatives.
The Group’s businesses have appropriate
business continuity and crisis
management plans in place.
DCC has undertaken a Climate
Scenario Analysis (‘CSA’) to
assess the transitional and
physical implications of
climate change on the Group’s
operations. More detail on
this is contained on page 64.
Management will continue to
monitor transitional and physical
climate change risks to consider
their impact on the Group and
ensure appropriate mitigation
measures are maintained.
Team, Audit Committee and Board
review the eectiveness of the Group’s
risk management and internal control
systems annually.
Opportunities to enhance our risk
management processes are considered
regularly. In the year under review, this
included the formation of a separate
Group Risk function, separate from our
Group Internal Audit team. We also
made some updates to our key risk
indicators at divisional level and to the
processes followed for reporting on how
we learn from events. In addition, we
took steps during the year to further
integrate our strategic planning and risk
management processes.
The review of the Group’s risk
management and internal control
ASSESSMENT OF THE
EFFECTIVENESS OF RISK
MANAGEMENT AND INTERNAL
CONTROLS
The risk management governance
framework and processes summarised
above support the Directors and senior
management in assessing the Group’s
risks and ensuring that suitable
mitigating measures and controls are in
place in respect of them.
As well as receiving reports on specific
areas of risk and internal control, the
Group Management Team and Audit
Committee receive reports from the
Group Risk function on the Group’s
overall risk environment, mitigation
measures and internal controls. As part
of this process, the Group Management
processes that was undertaken during
the year concluded that our risk
management and internal control
framework continues to operate
eectively. As usual, it identified some
opportunities for enhancement, notably
in the area of project and change
management controls. Those
enhancements will be actioned over the
course of the year, and reported to the
Group Management Team, Audit
Committee and Board in due course.
80 DCC plc \ Annual Report and Accounts 2023
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Risk and Link to Strategy Trend Principal Mitigation Measures Developments and Areas of Focus
Recruitment and Retention
of Talented People
The Group’s devolved
management structure has been
fundamental to the Group’s
success. A failure to attract, retain
and develop talent, particularly in
new markets and in recent
acquisitions, could impact the
attainment of strategic objectives.
The Group maintains a constant focus on
this area in line with our purpose and
strategy, supporting the development of
our people and ensuring that our
workplaces are inclusive and diverse.
Key mitigation measures include our:
– Annual succession planning cycle
which focuses on business continuity
risk;
– Talent review process which identifies
high-performing and high-potential
talent for the future;
– International mobility practices which
support the transfer of talent across
our Group for professional
development purposes as well as
business need, particularly supporting
the integration of new acquisitions;
– Core leadership development
programmes which support
development at key career stages;
– Annual remuneration cycle, which
ensures incentives are competitive
from a retention perspective and
aligned with the Group’s culture of
long-term performance.
These programmes form part of the
overall Group Talent and People Strategy,
which is reviewed regularly by the Chief
People Ocer, divisional management,
the Chief Executive and the Board.
The Group will continue to focus
on developing and embedding
its HR programmes in the current
financial year, particularly in
recently-acquired businesses,
and on adapting to new ways of
working.
The Group focuses on ensuring
that DCC continues to be a
great place to work for all of our
colleagues. HR initiatives support
key areas of culture and
engagement, inclusion and
diversity, and employee
experience.
The talent requirements resulting
from recent acquisitions have
been assessed and addressed.
The development of our people
is described in more detail in the
Sustainability Review on
page 70.
Acquisitions and Disposals
A failure to identify and execute
suitable acquisitions and disposals
could impact profit targets, returns
targets and impede the strategic
development of the Group.
Group and divisional management teams
engage in a continuous and active review
of potential acquisitions and disposals.
Potential acquisitions are subject to an
assessment of their ability to generate
a return on capital employed well in
excess of the Group’s cost of capital and
of their strategic fit within the Group.
The Group conducts a stringent internal
evaluation process and due diligence
before completing any acquisition or
disposal.
Performance against original acquisition
proposals is reported to the Board
annually and account is taken of lessons
learned from this.
The Group continues to be
active from a development
perspective, including the
acquisitions of Medi-Globe and
PVO.
Acquisition and disposal activity
in the current financial year will
continue to be subject to robust
internal evaluation processes
and due diligence.
M&A execution remains a core
competency of the Group. The
Group has published clear
priorities for capital allocation,
including as part of the
implementation of DCC Energy’s
Leading with Energy strategy.
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Risk and Link to Strategy Trend Principal Mitigation Measures Developments and Areas of Focus
OPERATIONAL RISKS
Project and Change
Management
A failure to eectively complete
change management programmes
or other significant projects,
including the integration of
acquisitions could impact profit
targets, returns targets and
impede the strategic development
of the Group.
Projects and change management
programmes including the integration of
acquisitions are resourced by dedicated
and appropriately qualified internal
personnel and supported by external
expertise. Significant projects or
programmes are subject to oversight by
steering groups as well as by divisional
and Group management and the Board.
A number of important change
management initiatives and
other projects will be underway
across the Group at any stage.
The implementation of DCC
Energy’s strategy will continue to
be a priority in the current year.
More detail on that subject is
contained in the DCC Energy
Business Review on page 16.
Major Safety or
Environmental Incident
The Group is subject to safety and
environmental laws, regulations
and standards across multiple
jurisdictions.
Principal HSE risks relate to fire,
explosion or multiple vehicle
accidents, an incident resulting in
significant environmental damage
and an HSE or security event
requiring the activation of our crisis
management plan.
Such risks may give rise to injuries
or fatalities, legal liability,
significant costs and damage to
the Group’s reputation.
HSE management systems are
maintained in proportion to the nature
and scale of applicable risks. Inspection
and auditing processes concerning HSE
management systems are conducted by
subsidiary management, by the Group
HSE team, and by external assurance
providers, as appropriate.
There is a strong focus on process safety
and ongoing communication with the
relevant safety authorities, particularly
within the Energy Division.
Emergency response and business
continuity plans are in place and tested
to minimise the impact of any significant
incidents.
Insurance cover is maintained at the
Group level for significant insurable risks.
While there have been no
significant changes to the
assessment of these risks,
management continued to
evolve HSE practices during the
year. For more detail, see the
Sustainability Review on page 68.
Further development of HSE
controls and management
systems will continue in the
current year in line with our Three
Year HSE Plan, including
completing the implementation
of a new HSE reporting system
across all Group businesses.
Major IT Failure, Cybercrime
Incident or Data Loss
Our IT systems and infrastructure
may be aected by the loss of
service or system availability,
significant system changes or
upgrades or cybercrime, which
could result in financial or
reputational damage.
The personal data we hold may be
aected by accidental exposure or
deliberate theft of sensitive or
personal information, which could
result in a regulatory breach or
financial or reputational damage.
Dedicated IT personnel in Group
subsidiaries implement IT standards,
oversee IT security and are provided with
technical expertise and support from
Group IT.
Cybersecurity reviews are performed by a
dedicated internal IT Assurance team and
external technical experts to provide
independent assurance over the Group’s
controls in this area.
Group businesses maintain appropriate
business continuity, IT disaster recovery
and crisis management plans. DCC
maintains a level of cyber insurance.
Our Group Data Protection Policy,
supported by detailed guidelines, requires
Group businesses to ensure appropriate
controls over personal data.
The devolved structure of the
Group limits the potential impact
of IT system failure or cybercrime.
As global cybercrime trends
continue to evolve, the Group
strengthens its mitigation
measures and resources in this
area.
Group IT and Group IT Assurance
will continue to focus on raising
awareness of cyber threats in
the current financial year. We will
ensure that the Group’s IT
standards and policies are
consistently applied.
Geopolitical and
Naturally-Occurring Events
Geopolitical confrontation, military
conflict, systemic financial crises,
major adverse public policy
change, or the emergence of a
new public health emergency such
as a further pandemic could have
a significant impact on the Group’s
operations.
The Group’s crisis management and
business continuity plans would be
implemented in response to sudden
adverse events, taking lessons learned
during the Covid-19 crisis into account.
Key elements of the Group’s business
model including our diversified operations
and financial strength add to our
resilience to manage these events should
they occur.
Management monitor emerging
risks in this area on a continuous
basis. Changes to the Group’s
risk environment will continue to
be reflected in changes to the
Group’s operations as they arise.
The Group has and will continue
to adapt to new ways of working
and doing business while
protecting the safety of our
employees, customers, suppliers,
and other stakeholders.
82 DCC plc \ Annual Report and Accounts 2023
RISK REPORT CONTINUED
Risk and Link to Strategy Trend Principal Mitigation Measures Developments and Areas of Focus
FINANCIAL AND COMPLIANCE RISKS
Corporate Reporting and
Financial Management
Failure to accurately report
financial or non-financial
performance through error or fraud
could result in regulatory sanctions
and damage the Group’s
reputation.
Failure to manage exposure to
financial risks resulting from the
Group’s transactions, such as tax
or foreign exchange risks, could
negatively impact on financial
performance.
Group financial risks are managed by
experienced Group finance teams and
governed by policies reviewed and
approved annually by the Board.
Standard reporting packs are prepared,
including weekly forecasts and monthly
submissions, and are subject to review by
local, divisional and Group management
as well as Group Internal Audit.
We will continue to develop our
internal processes and reporting
systems so that the Group can
eciently meet additional
corporate reporting and
assurance requirements,
including the EU Corporate
Sustainability Reporting
Directive.
Compliance with Legal and
Ethical Standards
A material failure to comply with
applicable legal and ethical
standards could result in penalties,
costs, reputational harm and
damage to relationships with
suppliers or customers.
The Group promotes a culture of
compliance and ‘Doing the Right Thing’ in
all activities, consistent with our value of
Integrity.
Sta surveys include an assessment of the
Group’s compliance culture.
A Code of Conduct is in place and is
supported by more detailed policies
where needed, including a Supply Chain
Integrity Policy, a Human Rights Policy, an
Anti-Bribery and Corruption Policy and a
Data Protection Policy.
Training programmes are provided for
employees on key compliance risks.
All employees can raise concerns using
the Group’s whistleblowing facilities.
The Group Legal & Compliance function
performs compliance audits, and Group
Internal Audit reviews a range of
compliance controls as part of their
audits.
Group businesses actively
manage compliance with
relevant requirements within the
framework of our existing
compliance procedures.
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again, with regard to ongoing economic
and political uncertainty globally.
Period of Viability Statement
In accordance with Provision 31 of the
UK Corporate Governance Code, the
Directors have considered the length of
time to be reviewed in the context of the
Viability Statement.
The Directors believe that the
three-year period to 31 March 2026
represents an appropriate period. The
length of this period aligns with the
Group’s annual strategic review period,
which is a bottom-up review prepared
business by business, which considers
the risks, opportunities and
development plans for each business
and is ultimately approved by the
Board. The period also aligns with the
period used for a number of other
Group matters, including the
performance period for the Group’s
Long-Term Incentive Plan. Finally,
inherent uncertainty increases with
regard to longer-term financial
forecasting as time horizons extend. A
three-year period is deemed to provide
an appropriate balance between
near-term and medium- to long-term
influences.
Approach to Assessing Viability
In making a viability statement, the
Directors are required to consider DCC’s
ability to meet its liabilities as they fall
due, taking into account the Group’s
current position and principal risks.
The Group operates a devolved
operational structure and has sales,
marketing and support services
operations across a diverse mix of
industry sectors. The Group has an
extensive spread of customers and
suppliers across 22 countries, four
continents and distinct market sectors.
Importantly, the Group is supported by
a very well-funded, liquid balance sheet
and strong operational cash flows.
A robust financial model of the Group is
built on a business-by-business basis.
This model is subjected to sensitivity
analysis, and those sensitivities are
reviewed periodically to ensure they
remain appropriate given changing
circumstances in the business, markets
and economies. This sensitivity review
focuses on the Group’s liquidity,
solvency and gearing metrics, with
particular consideration given to the
Group’s principal debt covenants,
including its Net Debt:EBITDA and
Interest Cover covenants.
GOING CONCERN AND
VIABILITY STATEMENT
In accordance with the relevant
provisions set out in the UK Corporate
Governance Code, the Board has taken
account of the principal risks and
uncertainties, as set out in the table on
pages 80 to 83, in considering the
statements to be made in regard to the
going concern basis of accounting and
the viability statement. These
statements are set out below:
Going Concern
The Company’s business activities,
together with the factors likely to aect
its future development, performance
and position, are set out in the Strategic
Report.
The financial position of the Company,
its cash flows, liquidity position and
borrowing facilities are described in
the Financial Review on page 44. In
addition, note 5.7 to the financial
statements includes the Company’s
objectives, policies and processes for
managing its capital, its financial risk
management objectives, details of its
financial instruments and hedging
activities and its exposures to credit
risk and liquidity risk.
The Company has very considerable
financial resources and a broad spread
of businesses with a large number of
customers and suppliers across dierent
geographic areas and industries.
Having assessed the relevant business
risks, the Directors believe that the
Company is well placed to manage its
business risks successfully.
The Directors have a reasonable
expectation that the Company, and the
Group as a whole, have adequate
resources to continue in operational
existence for the foreseeable future. For
this reason, they continue to adopt the
going concern basis in preparing the
financial statements, notwithstanding
the turbulent economic and political
environment.
Viability Statement
The Directors confirm that they have a
reasonable expectation that the Group
will continue to operate and meet its
liabilities, as they fall due, for the next
three years to 31 March 2026. The
Directors’ assessment has been made
with reference to the resilience of the
Group and its strong financial position,
the Group’s current strategy, the Board’s
risk appetite and the Group’s principal
risks and how these are managed and,
Given the diverse nature of the Group’s
activities, the principal sensitivities
considered in the review are those
where negative economic and other
impacts could be experienced across
the entire range of the Group’s activities.
These sensitivities consider situations
from depressed activity levels globally
to material and persistent rebasing of
the Group’s profitability due to a range
of factors. The Group also reviewed a
sensitivity to consider the potential
impact of a very material ‘shock’ which
would have a significant and immediate
impact on profitability and cash flows
and where recovery would take a
number of years. Finally, the review
considered a ‘reverse’ stress test to
determine what level of disruption would
need to be experienced before a
breach of the Group’s debt covenants
was unavoidable.
This review and analysis also considers
the principal risks facing the Group, as
described on pages 80 to 83, and the
potential impacts these risks would
have on the Group’s business model,
future performance, solvency or liquidity
over the assessment period.
The Board considers that the diverse
nature of the sectors and geographies
in which the Group operates acts
significantly to mitigate the impact any
of these risks might have on the Group.
84 DCC plc \ Annual Report and Accounts 2023
RISK REPORT CONTINUED
CHAIRMAN’S INTRODUCTION
The Board and myself as Chairman
have ultimate responsibility for the
long-term sustainability of DCC. We
have clear governance structures in
place to support our work in this rapidly-
developing area. These are set out in
detail in the report of the Governance
and Sustainability Committee on
page 108. More information on DCC’s
sustainability generally, including its
relationship to our strategy, is provided
in the Sustainability Review on page 58.
Stakeholder Engagement
DCC’s purpose – enabling people and
businesses to grow and progress –
applies to our stakeholders as much as
it does to the people and businesses
that make up the DCC Group. At the
heart of our approach to sustainability
is the importance of adding value to all
of our stakeholders, whether they are
shareholders, employees, suppliers or
customers. And our commitment to the
health of the planet – including by
decarbonising over time the energy we
sell – is clear. More detail on our
stakeholders and how we add value for
them is set out in the Stakeholder
Engagement section on page 52 and in
the Sustainability Review on page 58.
Culture and Values
Our clear purpose and strong culture
and values are the foundation for the
Group’s activities. Our commitment to
our values of Safety, Integrity,
Partnership and Excellence are an
essential part of the success of the
Group to date and its future
development. The Board spent a good
deal of time during the year reviewing
aspects of the Group’s culture. More
detail on this is provided on page 101.
– Increased engagement with
stakeholders was a key feature of the
year. We had more contact with our
shareholders. We also had more
opportunities to meet members of the
Group’s workforce after the removal of
restrictions imposed during the
pandemic.
Strategy and Sustainability
We have made considerable progress in
the strategic development of the Group
in recent years.
We set out a revised strategy for the
energy sector – Leading with Energy – in
May 2022, following detailed analysis
and discussions at management and
Board level. The implementation of that
strategy is now being overseen by the
Board. More detail on the progress
being made in this important area is set
out in the DCC Energy Business Review
on page 16.
The Board also spent considerable time
during the year looking at the strategic
development of our Healthcare and
Technology divisions and the Group as
a whole. Again, more detail is provided
in the Business Reviews on pages 24 to
32 respectively.
The appointment of a Chief Strategy &
Sustainability Ocer during the year will
support the continued evolution and
implementation of strategy and is a
recognition of the intrinsic relationship
between strategy and sustainability in
DCC.
Dear Shareholder,
On behalf of the Board, I am pleased to
present our Governance Report for the
year ended 31 March 2023.
This Report summarises our corporate
governance framework, including how
we apply the principles and provisions
of the UK Corporate Governance Code
(‘the Code’). We complied fully with the
Code during the year under review.
Priorities and Progress
Our governance framework is focused
on generating long-term value for the
Group’s investors and other
stakeholders through clear strategic
development, robust risk management
and operational excellence.
We made further progress in all of these
areas during the year. Highlights
included:
– A strong focus on the strategic
development of the Group and its
three divisions. The Board devoted
considerable time to the strategies of
our three divisions and of the Group
generally during the year.
– The continued integration of
sustainability into Group and
divisional strategies, supported by the
appointment of a member of the
Group Management Team as the
Group’s Chief Strategy & Sustainability
Ocer.
– Monitoring the Group’s culture was
also a priority subject. The Board
invested time in reviewing various
aspects of the Group’s culture over
the course of of the year.
86 DCC plc \ Annual Report and Accounts 2023
VALUE
CREATION AND
ROBUST RISK
MANAGEMENT
Review of Board Meeting Structures
We undertook a detailed review of the
structure of Board and Committee
meetings over the course of the year.
That review took account of previous
Board evaluations and wider good
practice in corporate governance.
The objectives of the review were to
maximise the quality of the Group’s
governance, including Board and
Committee meetings, while also
allowing Directors to spend more time
in Group businesses. As a result of
this review, from the financial year
commencing 1 April 2023 we will hold
six scheduled Board meetings annually,
a reduction of two. More time will be
allocated to these six meetings and the
Board will continue to cover all the
subjects it considers at present. The
additional time will be used by the
Board to visit more Group businesses,
spending time with members of
management and the wider workforce.
These changes will enhance the
governance of the Group and the work
of the Board at an important time in
DCC’s growth and development.
Priorities for the Year Ahead
As a Board, we have a busy year ahead.
Key objectives include overseeing the
continued implementation of DCC
Energy’s strategy, continued progress
on sustainability and maintaining robust
internal controls. The evolution of our
Board and wider governance processes
are designed to support this.
MARK BREUER
Chairman
15 May 2023
the Company’s website. Specifically,
I am very pleased that from 1 May 2023,
40% of the Board are women. The Board
meets the requirements of the UK Listing
Rules on diversity.
Board and Committee Meetings
In the year under review, the majority of
Board and Committee meetings were
held in person.
All of our Board Committees continued
to perform very eectively during the
year. The reports from each Committee
contained in this Report provide details
on their activities over this period and
their priorities for the current year.
Board Visits to Group Businesses
After a number of years where physical
visits were curtailed because of pandemic
restrictions, the Board undertook a
number of visits to Group businesses
during the year. These visits typically
included a tour of facilities at the
business in question as well as a
discussion with colleagues on strategy,
development areas, risks and
opportunities, safety, compliance and
people. Members of the Board found
this additional engagement with the
workforce, after a number of years
where visits took place virtually,
extremely useful.
Board Evaluation
The Board and its Committees review
their performance each year and
consider where improvements can be
made. The process this year was, as
always, very useful and provided some
further areas for development in our
governance processes. A summary of
the process, the areas for improvement
identified and the steps we are taking in
relation to them are set out on page 98.
Risk Management
The eective but ecient management
of risks remains a core component of
our governance framework. Health,
Safety and Environment (‘HSE’) matters
are overseen directly by the Board.
The management of other risks is
considered by the Audit Committee
and then by the Board.
More detail on the Group’s processes in
this area, and how they are developing,
is contained in the Audit Committee’s
Report on page 112 and in the Risk
Report on page 77.
Board Composition and Diversity
At our AGM in 2022, Pamela Kirby
retired as a non-executive Director
and member of the Remuneration
Committee and Governance and
Sustainability Committee. Tufan
Erginbilgic retired from the Board,
Remuneration Committee and
Governance and Sustainability
Committee on 31 December 2022.
On 1 May 2023, we welcomed Katrina
Clie as a non-executive Director and
as a member of the Remuneration
Committee.
On behalf of the Board, I wish to
extend my sincere appreciation to
Pamela and Tufan for their contribution
to the Board during their time as
Directors and I wish them all the best for
the future. Katrina’s board experience,
as outlined on page 89, complements
and expands the skills of the Board in
important areas.
The Board recognises the benefits that
diversity of thought and perspective
bring to our discussions and decision
making. We updated our Board
Diversity Policy during the year to
underline this and it is available on
87DCC plc \ Annual Report and Accounts 2023
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Our governance framework is focused on
generating long-term value for the Group’s
investors and other stakeholders through
clear strategic development, robust risk
management, and operational excellence.
MARK BREUER
Chairman
GOVERNANCE CONTINUED
88 DCC plc \ Annual Report and Accounts 2023
KEVIN LUCEY
Chief Financial Ocer
Date of appointment: July 2020
Expertise: Kevin joined DCC in 2010 as
Finance & Development Director of the
Technology division and since then has held
a number of senior Group finance roles,
including, most recently, Head of Capital
Markets. Kevin is a Chartered Accountant
and has extensive international M&A,
capital markets and operational finance
experience. Prior to joining DCC, Kevin was
CFO and a principal of a leading Irish
private equity firm.
Kevin was appointed Chief Financial Ocer
in July 2020.
Key external appointments: None.
MARK BREUER
Non-executive Chairman
Date of appointment: Mark joined the Board
in November 2018 and was appointed
non-executive Chairman in July 2021.
Expertise: Mark is a highly experienced
corporate financier and has operated at
senior levels in the UK and abroad. He
worked in investment banking for 30 years,
the last 20 of which were for J. P. Morgan,
where he served in numerous client facing
and management roles, delivering mergers
and acquisitions and broader corporate
finance advice to both domestic and
international clients. Mark’s wide-ranging
corporate finance experience is particularly
relevant given DCC’s acquisition focus.
Key external appointments: Chairman
and non-executive director of Derwent
London plc.
DONAL MURPHY
Chief Executive
Date of appointment: December 2008
Expertise: Donal joined DCC in 1998 and has
a detailed knowledge of the operations of
the Group, having held a number of senior
leadership roles, including Managing
Director of DCC Technology from 2004 to
2006 and Managing Director of DCC Energy
from 2006 to 2017. He led the very significant
growth of the Energy division and its
transition from a small UK and Irish business
to a substantial international business
operating in 12 countries.
Donal was appointed Chief Executive in
July 2017.
Key external appointments: None.
Committee Membership Key:
A
Audit Committee member
G
Governance and Sustainability Committee member
R
Remuneration Committee member
C
Committee Chair
BOARD OF
DIRECTORS
The Board continues to evolve and develop to
reflect the current and future needs of
the Group.
LAURA ANGELINI
Non-executive Director
Date of appointment: July 2021
Expertise: Laura has extensive knowledge of
the healthcare sector in Europe and the US.
She has more than 30 years of experience in
medical devices across multiple therapies
and business models, including hospital
products, consumer MedTech and home
therapies. In 2021, Laura retired as General
Manager of Baxter International’s global
Renal Care business, having joined Baxter in
2016 in this role. She previously held
senior roles in Johnson & Johnson from 1991
to 2016.
Laura’s leadership experience, healthcare
expertise and knowledge of the North
American markets enhances the Board’s
knowledge in key areas.
Key external appointments: Non-executive
director of Identiv, Inc. and member of the
Board of Trustees of Jacksonville University.
RG
G
C
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KATRINA CLIFFE
Non-executive Director
Date of appointment: May 2023
Expertise: Katrina is an experienced
business leader and non-executive director
and has held senior executive roles in a
number of financial institutions, including
American Express and Lloyds TSB, where she
had a particular focus on product
development, sales and operations. She
was previously Senior Independent Director
and Chair of the Remuneration Committee
at HomeServe plc. She was also previously a
non-executive director of Naked Wines plc.
Katrina’s business leadership and board
experience, together with her expertise in
the development and marketing of
consumer services enhances the Board’s
knowledge in key areas.
Key external appointments: Non-executive
director of International Personal
Finance plc and Vue International.
MARK RYAN
Non-executive Director
Date of appointment: November 2017
Expertise: Mark is a highly experienced
board director and business leader who
has successfully operated at senior
management levels in Ireland and
internationally. Mark was Country Managing
Director of Accenture in Ireland between
2005 and 2014. During his career with
Accenture, he spent extended periods
working in the US and UK. Mark served in
numerous management and executive roles
in delivering major strategy, IT and business
change programmes both locally and
internationally. Mark was previously a
non-executive director of Immedis, Econiq
and Wells Fargo Bank International.
Mark brings a strong understanding of
commercial leadership and business
perspective to the Board.
Key external appointments: Chairman of
Publicis and Kefron Group and non-executive
director of St. Vincent’s Healthcare Group.
DAVID JUKES
Non-executive Director
Date of appointment: March 2015
Expertise: David has over 40 years of
international chemical distribution
experience. In May 2018, he was appointed
President and CEO and a director of Univar
Solutions Inc. Prior to this appointment, he
held a number of senior positions with
Univar across global locations including
President and Chief Operating Ocer. Other
previous roles include Senior Vice President
of Global Sales, Marketing and Industry
Relations for Omnexus and VP Business
Development for Ellis & Everard Plc.
David’s distribution experience brings
valuable perspective to the Board.
Key external appointments: President
and Chief Executive Ocer of Univar
Solutions Inc.
CAROLINE DOWLING
Non-executive Director,
Senior Independent Director
Date of appointment: May 2019
Expertise: Caroline is a highly experienced
business leader with extensive global
knowledge in the technology sector, specifically
electronic, technical and logistic services.
Caroline was, until her retirement in February
2018, the Business Group President of Flex,
an industry-leading, Fortune Global 500
company with operations in 30 countries.
In this role, she led the Telecommunications,
Enterprise Compute, Networking and Cloud
Data Centre and was also responsible for
managing the Global Services Division,
supporting complex supply chains. Caroline
was previously a non-executive director of
the Irish Industrial Development Agency.
Caroline’s leadership experience and areas
of expertise are particularly relevant to key
sectors in which DCC operates.
Key external appointments: Non-executive
director of CRH plc and IMI plc.
RA
ALAN RALPH
Non-executive Director
Date of appointment: November 2021
Expertise: Alan is a very experienced
business and finance leader having spent
almost 20 years with UDG Healthcare plc
(formerly United Drug plc). Alan spent 10
years leading UDG’s largest business unit
before supporting its strategic
transformation as Chief Financial Ocer for
five years.
Alan’s financial expertise, business
leadership experience and knowledge of
the healthcare sector complements the
Board’s knowledge.
Key external appointments: Non-executive
director of Origin Enterprises plc and J & E
Davy.
LILY LIU
Non-executive Director
Date of appointment: July 2021
Expertise: Lily has more than 20 years’
experience in finance roles and is the
current Chief Financial Ocer of Synthomer
plc, a leading global provider of chemical
solutions and a member of the FTSE 250. Lily
joined Synthomer plc in 2022 as Chief
Financial Ocer, having previously been
Chief Financial Ocer of Essentra plc, Xaar
plc and Smiths Detection.
Lily’s current role as CFO in a global business
brings international financial experience to
the Board and Audit Committee.
Key external appointments: Chief Financial
Ocer of Synthomer plc.
A
A
C
R
C
R
A G
GOVERNANCE CONTINUED
90 DCC plc \ Annual Report and Accounts 2023
GROUP
MANAGEMENT
TEAM
CONOR COSTIGAN
Chief Executive Ocer,
DCC Healthcare
Conor has been the Chief Executive
Ocer of DCC Healthcare since 2006.
Conor joined DCC in 1997 and has held a
number of senior leadership roles within
the Group, including in the Food &
Beverage division and Investor Relations.
Conor moved into the Healthcare
division in 2003, initially as Finance &
Development Director before being
appointed Managing Director in 2006.
DONAL MURPHY
Chief Executive
See Donal’s biography on page 88.
KEVIN LUCEY
Chief Financial Ocer
See Kevin’s biography on page 88.
FABIAN ZIEGLER
Chief Executive Ocer, DCC Energy
Fabian joined DCC in November 2022 as
Chief Executive Ocer of DCC Energy.
Fabian has extensive senior leadership
experience in the energy sector having
held various senior management roles in
Shell plc during his 26-year career. Prior
to joining DCC, Fabian was Country
Chair of Shell Germany and Chair of the
Management Board with responsibility
for Shell’s businesses (upstream,
downstream, power and renewables) in
the DACH region. Fabian is at the
forefront of energy transition having
developed and driven Shell’s net zero
emissions plans for the region.
TBC
91DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
HENRY CUBBON
President LPG, DCC Energy*
Henry was appointed President LPG of
DCC Energy in June 2022 and retired on
31 March 2023. Henry had been
Managing Director of DCC’s LPG division
since 2018, having joined DCC in 2008 as
Managing Director of Flogas Britain. Prior
to joining DCC, he was Managing
Director of Antalis from 2000 to 2008,
overseeing its paper distribution business
in the UK, Ireland and South Africa.
Previously, he held a strategic planning
role at paper manufacturer Arjo Wiggins
Appleton and was a senior manager at
Barclays Bank, Paris, having started his
career on their graduate programme.
PETER QUINN
Chief Information Ocer
Peter has been Chief Information Ocer
since he joined DCC in 2004. He also
spent three years as Chief Operating
Ocer of DCC’s largest oil distribution
business, Certas Energy UK. Prior to
joining DCC, Peter worked as an IT
consultant with an international firm
where he specialised in the delivery of
complex IT solutions across a range of
business sectors. He had previously
worked in the food and transport
industries in a variety of IT leadership
roles.
DARRAGH BYRNE
General Counsel & Company Secretary
Darragh has been the Group’s General
Counsel and Company Secretary since
October 2020, having previously been
Head of Group Legal & Compliance.
Darragh joined DCC in 2012. Before that,
he held a number of senior in-house
legal positions in other organisations and
worked in private practice.
Darragh is qualified as a solicitor in
Ireland and in England and Wales.
CLIVE FITZHARRIS
Chief Executive Ocer,
DCC Technology
Clive was appointed as Chief Executive
Ocer of DCC Technology in September
2022 having previously been the
Managing Director of Exertis operations
in North America and Continental Europe
since May 2020. Clive joined DCC in 2009
and has held a number of senior
leadership roles within the Group,
including in the Energy division as
Development Director and Managing
Director of Oil Europe. Clive was the
Head of Group Strategy & Development
for the DCC Group from 2017 to 2020.
Prior to joining DCC, Clive held a variety
of banking and investment roles at AIB
and in private equity.
EDDIE O’BRIEN
Chief Strategy & Sustainability Ocer
Eddie was appointed Chief Strategy &
Sustainability Ocer in November 2022.
Eddie had been the Managing Director
of DCC Retail & Oil since 2018. Eddie
joined DCC in 2012 as the Managing
Director of Oil and was subsequently
Managing Director of Retail & Fuel Cards.
Prior to joining DCC, Eddie was CEO at
Topaz Energy, Ireland’s largest fuel and
convenience brand. Before this, he spent
13 years at Statoil across a number of
finance, pricing, commercial and
leadership roles, including Vice President
Finance and Vice President Retail
Operations at Statoil Fuel and Retail
in Oslo.
NICOLA MCCRACKEN
Chief People Ocer
Nicola has been the Chief People Ocer
since she joined DCC in May 2016. Prior to
joining DCC, Nicola was the HR Director
responsible for Talent and Reward at
CRH plc from 2007 to 2016. Prior to that,
she enjoyed a consulting career with
PricewaterhouseCoopers in Europe and
North America, where she helped global
organisations from multiple industry
sectors adapt their human capital
strategies to improve business
performance.
* Henry retired as President LPG, DCC Energy on 31 March 2023
92 DCC plc \ Annual Report and Accounts 2023
GOVERNANCE CONTINUED
CORPORATE
GOVERNANCE
STATEMENT
DCC is subject to the UK Corporate Governance Code.
This statement details how DCC applied the principles and
met the provisions of the Code during the year under review.
opportunities, future plans and culture.
These visits also provide an important
opportunity for Directors to engage with
members of the Company’s workforce.
Climate Change
Ensuring that DCC’s strategy and
operations constructively address
climate change is a priority for the
Board and an important element of our
corporate governance.
The development of the Group’s
updated strategy for the energy sector
– Leading with Energy – which was
announced at a dedicated capital
markets event in May 2022, following
approval by the Board, was based on
a detailed assessment of how DCC’s
energy customers will transition to low
carbon forms of energy over time.
That strategy provided the foundation
for DCC’s commitment that the Group
would reach net zero – across Scopes 1,
2 and 3 – by 2050 or sooner. That
commitment was also announced in
May 2022, again following approval by
the Board.
Board Site Visits
During the year ended 31 March 2023,
the Board re-commenced physical site
visits to Group businesses after several
years where site visits were conducted
virtually because of pandemic-related
restrictions.
In October 2022, the Board visited Almo
Corporation in Philadelphia, Amerilab
Technologies in Minnesota and DCC
Propane in Chicago.
In February 2023, the Directors visited
Williams Medical Supplies and EuroCaps
in Wales.
In addition, individual Directors also
spent time in several other Group
businesses, learning more about their
operations and future development
plans.
These site visits provided an opportunity
for the Directors to meet with
management teams and other
colleagues in the businesses in question,
to visit their operations and learn more
about their current activities, risks and
GOVERNANCE AT A GLANCE
Highlights
Key Activities
Full compliance
with the UK Corporate
Governance Code.
Continued focus
on refining Group and divisional
strategy and implementation of key
initiatives, including the Group’s
strategy for the energy sector –
Leading with Energy – announced in
May 2022.
Deeper integration
of sustainability with strategy and
progress made on several key
sustainability metrics.
– Continued Board renewal, with the
appointment of Katrina Clie as a
non-executive Director from 1 May
2023.
– Review of Board processes,
including number of meetings, to
both maximise the use of Board
meetings and allow more time for
Directors to visit Group businesses
and engage with the workforce.
– Site visits to three US businesses
and two UK businesses.
– Internally-led Board evaluation
process, informing governance
activities in the current year.
93DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
UK Corporate Governance Code –
Statement of Compliance
The Board continues to assess its
approach to corporate governance by
reference to the UK Corporate
Governance Code (‘the Code’).
This Corporate Governance Statement
has been structured to allow
shareholders to consider how the
Code’s Principles have been applied.
The Board believes that the spirit
of the Code continues to be
upheld throughout its work and
that of its Committees and can
confirm full compliance for the year
under review.
Board independence
Independent
Non-independent
(Chairman and
Executive Directors)
67%
33%
Executive and Non-executive Directors
Executive
Non-executive
22%
78%
Gender diversity
Female
Male
33%
67%
Geographic location of Directors
Ireland
UK
US
56%
22%
22%
Experience and Skills of the Non-executive Directors
Enterprise Leadership
Other Supply Chain
⁄ Distribution
Sustainability
⁄ ESG
Financial Expertise
Capital Markets
Mergers & Acquisitions
Digital
Remuneration
Other Board Experience
Relevant Industry
9
6
4
5
5
6
7
4
4
7
Executive and
Non-executive Directors
Gender
diversity
Geographic location
of Directors
Board
independence
Board independence
Independent
Non-independent
(Chairman and
Executive Directors)
67%
33%
Executive and Non-executive Directors
Executive
Non-executive
22%
78%
Gender diversity
Female
Male
33%
67
%
Geographic location of Directors
Ireland
UK
US
56
%
22%
22%
All of the above charts are as at 31 March 2023.
Details of the progress we are making in
reducing our carbon emissions are set
out in the Sustainability Review on
page 58.
The Board continues to invest time in
overseeing the implementation of DCC
Energy’s strategy and the wider
reduction in the Group’s carbon
emissions as part of our sustainability
activities. Climate issues are considered
when making investment decisions and
as part of the strategic planning
process. In addition, the Board receives
updates on sustainability and
climate-related developments more
generally to ensure Board awareness of
such issues is kept up to date.
CORPORATE GOVERNANCE STATEMENT CONTINUED
94 DCC plc \ Annual Report and Accounts 2023
CORPORATE GOVERNANCE FRAMEWORK
Board of Directors
The Board is collectively responsible for the long-term success of the Group. Its role is to provide
leadership, to establish purpose, values and strategy, to oversee management and to ensure that the
Company provides its stakeholders with a balanced and understandable assessment of the Group’s
current position and prospects.
It is also responsible for establishing a framework to assess and manage risk, including climate risk.
The Board receives reports at its meetings from the Chairmen of each of the Committees and from
the Workforce Engagement Director on their current activities.
Chief Executive
The responsibilities of the Chief Executive are set out on page 95.
Governance and
Sustainability Committee
– Considers the composition
and structure of the Board
and succession planning
– Reviews leadership needs
of the organisation, both
executive and non-executive
– Monitors the Company’s
compliance with legal and
regulatory requirements in
relation to corporate
governance
– Supports the Board’s
oversight of the Group’s
sustainability activities
READ MORE
Further details of the activities of
the Governance and Sustainability
Committee are set out in its Report
on pages 108 to 111.
Executive
Risk Committee
The responsibilities of the
Executive Risk Committee are
set out in the Risk Report on
pages 77 to 84.
Group
Management Team
Supports the Chief Executive in
executing his responsibilities.
Reports to the Chief Executive
at weekly management
meetings.
Executive
Sustainability Committee
Supervises and makes operational
decisions in relation to the
Group’s sustainability activities.
Remuneration
Committee
– Monitors the Company’s
Remuneration Policy
– Determines the
remuneration packages of
the Chairman, executive
Directors and senior
management
– Oversees the remuneration
of other Group and
subsidiary remuneration
structures
– Oversees the operation of
the Company’s long-term
incentive schemes
READ MORE
Further details of the activities of
the Remuneration Committee are
set out in the Remuneration Report
on pages 118 to 141.
Audit
Committee
– Assists the Board in
assessing the principal and
emerging risks facing the
Company and monitoring
the eectiveness of risk
management and internal
control systems
– Monitors the integrity of the
Group’s financial statements,
including reviewing
significant financial
reporting judgements
contained in them
– Reviews the operation of the
Group Internal Audit
function
– Oversees the relationship
with the external auditor
READ MORE
Further details of the activities of
the Audit Committee are set out
in its Report on pages 112 to 117.
95DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
BOARD OF DIRECTORS
Composition
The Board of DCC currently comprises
the non-executive Chairman, seven
other non-executive Directors and two
executive Directors, including the Chief
Executive.
Independence
The Board carried out an evaluation of
the independence of each of its
non-executive Directors, taking account
of the relevant provisions of the Code,
namely whether the Directors are
independent in character and
judgement and free from relationships or
circumstances which are likely to aect,
or could appear to aect, the Directors’
judgement.
The Board is satisfied that each of the
current non-executive Directors fulfils
the independence requirements of
the Code.
Mark Breuer was appointed Chairman
of the Company on 16 July 2021. On his
appointment as a non-executive
Director in 2019, the Board was satisfied
he was independent. While Mr Breuer
holds another directorship outside of
the DCC Group, the Board is satisfied
that it has not interfered with the
performance of his duties to DCC.
Leadership
The Board’s leadership responsibilities
involve working with management to
monitor the Group’s purpose and values,
and to develop strategy, including
deciding which risks it is prepared to
take in pursuing its strategic objectives.
Oversight
The Board’s oversight responsibilities
involve it constructively challenging the
management team in relation to
operational aspects of the business,
including the approval of budgets, and
probing whether risk management and
internal controls are sound. It is also
responsible for ensuring that accurate,
timely and understandable information
is provided about the Group to
investors, regulators and the Group’s
other stakeholders.
Strategy
DCC’s Group strategy is set out on
pages 12 and 13, with detail on divisional
strategies provided on pages 16 to 39.
The Board’s responsibilities in regard to
strategy are summarised on page 96.
Board meetings
The table of Board attendance is set
out on page 97. All of the Board
meetings held during the year were
in person.
Site visits
Board members visit Group businesses
each year in order to meet local
management teams, members of the
wider workforce, see operations and
experience the culture of the business
in question.
These visits include a tour of the
business as well as a presentation from
local management teams, allowing time
for questions and answers.
In advance of a visit, the Directors are
provided with information on the
business covering financial
performance, development areas,
risks and opportunities, safety and
compliance and employee
engagement.
Details of the principal site visits
undertaken by the Board during the
year are set out on page 92.
Chairman
A clear division of responsibility exists between
the Chairman, who is non-executive, and the
Chief Executive.
The Chairman’s primary responsibility is to lead
the Board, to ensure that it has a common
purpose, is eective as a group and at
individual Director level, and that it upholds
and promotes high standards of integrity,
probity and corporate governance.
Senior Independent Director
The Senior Independent Director acts as an
intermediary for other Directors, if necessary, and is
available to shareholders who may have concerns
that cannot be addressed through the Chairman or
Chief Executive.
The Senior Independent Director had an
active role in the annual Board evaluation
process, as detailed under ‘Board
Performance Evaluation’ on page 98.
Chief Executive and
Chief Financial Ocer
The Chief Executive is responsible for
day-to-day management of the Group’s
operations, for the implementation of
Group and divisional strategy, and instilling
the Company’s purpose, values and
culture standards throughout the Group.
Company Secretary
The Directors have access to the advice and
services of the Company Secretary, whose
responsibilities include, assisting the Chairman
in relation to corporate governance matters
and ensuring compliance by the Company with
applicable legal and regulatory requirements.
Non-Executive Directors
The Board consists of an appropriate
combination of a non-executive Chairman,
two executive Directors and seven
independent non-executive Directors,
such that no one individual or small group
of individuals dominates the Board’s
decision making.
There is a clear division of responsibilities
between the leadership of the Board and the
executive leadership of the business.
Non-executive Directors scrutinise and hold to account
the performance of management and individual executive
Directors against agreed performance objectives.
The Chairman holds meetings with the non-executive
Directors without the executive Directors present.
ROLES AND RESPONSIBILITIES
I
n
d
e
p
e
n
d
e
n
t
O
v
e
r
s
i
g
h
t
L
e
a
d
e
r
s
h
i
p
Non-Executive
Directors
Executive
Directors
CORPORATE GOVERNANCE STATEMENT CONTINUED
96 DCC plc \ Annual Report and Accounts 2023
Appointment of Directors
The Governance and Sustainability
Committee agrees criteria for new
non-executive Director appointments,
including experience of the industry
sectors and geographies in which the
Group operates, and professional
background, and has regard to the
need for a balance in relation to
diversity. More detail on the
appointment process is set out in the
Governance and Sustainability
Committee Report on page 108.
Following appointment by the Board, all
Directors are, in accordance with the
Articles of Association, subject to
election at the following AGM.
Schedule of Matters Reserved for Board Decision
The Schedule of Matters Reserved for Board Decision is regularly reviewed to ensure it meets the needs of the Group and
current best practice.
The table below summarises the key matters that are required to be considered by the Board:
In accordance with the provisions of the
Code, all Directors submit to re-election
at each AGM. Pamela Kirby did not
submit to re-election at the 2022 AGM
as she was due to retire at the AGM.
The expectation is that non-executive
Directors serve for a term of six years
and may also be invited to serve an
additional period after that, generally
not extending beyond nine years in
total.
After three years’ service, and again
after six years’ service, each
non-executive Director’s performance is
reviewed by the Governance and
Sustainability Committee, with a view to
recommending to the Board whether a
further period of service is appropriate,
subject to the usual annual approval by
shareholders at the AGM.
The terms and conditions of
appointment of non-executive Directors
are set out in their letters of
appointment, which are available for
inspection at the Company’s registered
oce during normal oce hours and at
the AGM of the Company.
Details of the length of tenure of each
Director on the Board as at 31 March
2023 are set out in the chart on page 97.
Group strategy
and investment
–
The Group’s strategic objectives
– Annual operating and capital expenditure budgets
– Material acquisitions
Structure and capital
–
Changes to the Group’s capital structure including reduction of capital, share
issues and share buybacks
– Changes to the Company’s listing arrangements
Corporate reporting
– Final and interim results announcements
– Annual Report and Accounts
– Dividends
– Significant changes in accounting policies or practices
– Oversight of internal control and risk management frameworks, including to
reflect climate-related risks
Sustainability, including
climate change
– Oversight of the Group Sustainability Programme, including considering
recommendations from the Governance and Sustainability Committee in
respect of the sustainability issues and related objectives that are material to
the Group as a whole, including climate change and energy transition
– Considering climate-related issues when reviewing and guiding Group and
divisional strategy, investment proposals, budgets, and management objectives
Leadership
and people
– Composition of the Board, including the CEO and CFO
– Succession planning for the Board and senior management
– Board Committee constitution
– Appointment of the Company Secretary
Shareholders
and stakeholders
– Oversight of engagement with shareholders and other stakeholders
– Reviewing mechanisms for engagement with other stakeholders
– Designating a non-executive Director for engagement with the workforce
97DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
External experts are invited to attend
certain Board meetings to address the
Directors on relevant matters, including
developments in relevant product or
geographic markets, corporate
governance, investor relations, risk
management and executive
remuneration.
The Chairman and Company Secretary
review Directors’ training needs, in
conjunction with individual Directors, at
least annually, and match those needs
with appropriate external seminars and
speakers. The Chairman also discusses
individual training and development
requirements for each Director as part
of the annual evaluation process, and
Induction and Development
New non-executive Directors undertake
a structured induction process which
includes a series of meetings with Group
and divisional management, detailed
divisional presentations, visits to key
subsidiary locations and a briefing with
the external auditor.
The Board encourages visits to Group
businesses, including meetings with
local management and meetings with
members of the wider workforce, as
these are instrumental in gaining a
better understanding of the Group’s
diverse businesses, their culture and the
environments in which they operate.
Board of Directors: Attendance at meetings during the year ended 31 March 2023
Board
Audit
Committee
Remuneration
Committee
Governance and
Sustainability
Committee
Meetings held during the
year ended 31 March 2023
Mark Breuer – –
Laura Angelini
1
–
Caroline Dowling –
Tufan Erginbilgic
2
–
David Jukes
3
– –
Pamela Kirby
4
–
Lily Liu – –
Kevin Lucey – – –
Donal Murphy – – –
Alan Ralph – –
Mark Ryan –
1. Laura Angelini was appointed as a member
of the Remuneration Committee on 6
September 2022.
2. Tufan Erginbilgic retired as non-executive
Director and as a member of the
Remuneration Committee and the
Governance and Sustainability Committee
on 31 December 2022.
3. David Jukes was unable to attend one
Board meeting during the year.
4. Pamela Kirby retired as non-executive
Director and as a member of the
Remuneration Committee and the
Governance and Sustainability Committee
on 15 July 2022.
There was full attendance at all Board and
Committee meetings during the year, other
than as stated.
Directors are encouraged to undertake
appropriate training on relevant
matters. In addition, all Directors have
access to online resources, which are
regularly updated to include relevant
publications.
All Directors are encouraged to avail of
opportunities to hear the views of and
meet with the Group’s shareholders and
analysts.
There is an established procedure for
Directors to take independent
professional advice in the furtherance of
their duties, if they consider this to be
necessary.
Length of Tenure on Board (Years) as at 31 March 2023
Mark Breuer
Non-executive
Executive
Caroline Dowling
David Jukes
Lily Liu
Alan Ralph
Mark Ryan
Donal Murphy
Kevin Lucey
Laura Angelini
4.4
3.8
8.0
14.3
5.5
2.7
1.7
1.7
1.4
CORPORATE GOVERNANCE STATEMENT CONTINUED
98 DCC plc \ Annual Report and Accounts 2023
BOARD PERFORMANCE EVALUATION
The Board conducts an annual evaluation of its own performance, that of each of its principal Committees, the Audit,
Remuneration and Governance and Sustainability Committees, and that of the Chairman, Committee Chairmen and individual
Directors.
In 2021, the evaluation was conducted by Heidrick & Struggles, in accordance with the requirement under the Code to have it
externally facilitated every three years.
In 2022 and 2023, the performance evaluation process was conducted internally.
2023 Board Evaluation
Progress against 2022
Topic Area identified for action Action/progress
Board Diversity Continue to improve diversity at
Board and senior management
levels.
The Board has continued to develop to reflect the current
and emerging needs of the Group. Since 1 May 2023, 40%
of the Directors are female. A new Board Diversity Policy
was approved during the year and is available on our
website. The Board, advised by the Governance and
Sustainability Committee will continue to look for
additional Directors whose skills, experience and
background can enhance the governance of the Group.
Agenda Items Ensure that Board discussions are
focused on issues of strategic
importance to the Group,
supported by external inputs where
beneficial.
The Board invested a considerable proportion of its time,
not limited to the Strategy Board meeting in December, to
Group and divisional strategies and performance against
them. These discussions were based on suitably detailed
papers and on discussions with management. External
perspectives on a range of relevant subjects were
provided to enhance the Board’s work in this area.
All of the items covered by the Board Agenda Planner for
the year ended 31 March 2022 were addressed at Board
meetings. A detailed plan is also in place for the year
commencing 1 April 2023.
Board Papers Continue the practice of providing
detailed pre-read materials in
advance of Board meetings, with
shorter papers being presented at
meetings.
This practice was continued during the year under review.
This has allowed the Directors more opportunities for
engagement with management and discussion of key
questions.
Senior Management
Succession
Place a particular focus on
succession planning for senior
Group executives.
The Group has a well-developed process for senior
management development and succession, based on an
annual review of succession options for all key roles and a
structured approach to developing future leaders.
The Chief People Ocer provides a detailed report on the
subject and discusses its contents with the Board annually.
2023 Evaluation
Topic Area identified for action
Focus on Strategy Continue to allow suitable Board time for the review and discussion of Group and divisional
strategy and performance against existing strategic objectives.
Board Composition
and Renewal
Continue to identify Directors with the skills, experience and background to enhance the Board’s
assessment of current emerging risks and opportunities facing the Group, in line with the updated
Board Diversity Policy.
Senior Management
Succession Planning
Ensure clear long-term succession plans are in place for every member of senior management,
including all members of the Group Management Team.
Board Papers and
Discussions
Continue to enhance the format of Board papers and their presentation to the Board, based on a
clear calendar for discussions at Board meetings. Identify additional external speakers on relevant
subjects.
99DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
The various phases of the internal performance evaluation process, which
commenced in early January 2023 and concluded in April 2023, were:
A questionnaire covering key
aspects of Board eectiveness,
including the composition of the
Board, the content and conduct of
Board and Committee meetings,
and the Directors’ continuing
education process, was circulated
to all Directors.
The Senior Independent Director
conducted an evaluation of the
performance of the Chairman.
The non-executive Directors
also evaluated the performance
of each executive Director.
Completed questionnaires,
including views on performance and
recommendations for improvement,
were returned to both Mark Breuer,
Chairman and Caroline Dowling,
Senior Independent Director.
The Chairman, on behalf of the
Board, conducted evaluations of
performance individually with each
of the non-executive and
executive Directors.
Each of the Audit Committee, the
Remuneration Committee and the
Governance and Sustainability
Committee considered the summary
report as part of the review of its
own performance and terms of
reference and recommended any
changes it considered necessary to
the Board for approval.
Further discussions were
held with each of the
Directors individually.
The Chairman then prepared
separate summary reports on the
Board and its Committees. The
Senior Independent Director
prepared a report on the
Chairman’s appraisal.
Arising from the evaluation
process, a number of actions were
agreed by the Board which are set
out on the previous page and will
be implemented during the
current year.
CORPORATE GOVERNANCE STATEMENT CONTINUED
100 DCC plc \ Annual Report and Accounts 2023
Board activities during the year
A detailed calendar of subjects for discussion at Board meetings is in place to ensure that the Directors discuss a suitable
range of topics throughout the year, linked to the key opportunities and risks facing the Group. This is reviewed by the
Governance and Sustainability Committee and by the Board in advance of the commencement of the financial year. Board
papers are circulated one week in advance of meetings.
The Board met eight times during the year. Additional meetings are arranged if necessary for the Board to properly discharge
its duties.
Areas of focus Activities
Strategy and financing
– Reviewed the strategy of each of the Group’s divisions during the year, with a particular focus on
the implementation of DCC Energy’s Leading with Energy strategy.
– Group strategy was considered in detail during the year, including during a two-day Board
meeting in December.
– Reviewed the Group’s financing structure and considered options for its future development.
– Approved the renewal of a portion of the Group’s debt financing in the private placement market.
– Approved the formation of a sustainability-linked Revolving Credit Facility (‘RCF’).
– Considered key risks to the Group’s operations and strategic development and related internal
controls.
Acquisitions and
development
– Approved the Group’s largest healthcare acquisition to date – Medi-Globe.
– Approved the acquisition of PVO International.
– Received a detailed presentation from the Corporate Finance team on the Group’s development
priorities.
– Received regular updates on the Group’s pipeline of corporate development opportunities.
– Reviewed the post-acquisition performance of acquisitions.
Risk management and
internal control
– Received reports from the Chairman of the Audit Committee on its risk management activities.
– Considered reports on the Group’s principal and emerging risks, including climate-related risks,
including a review of the Group Risk Register and Integrated Assurance Report.
– Received a quarterly report from the Head of Group Sustainability covering sustainability and HSE
matters.
– Received regular reports from the General Counsel & Company Secretary on relevant legal and
regulatory matters, including the operation of the Group Compliance Programme.
– Considered and approved the Statement of Principal Risks and Uncertainties to be set out in the
Annual Report.
Leadership and
succession planning
– Approved the appointment of Katrina Clie as a non-executive Director.
– Reviewed the Board’s composition, diversity and succession plans.
– Received reports from the Chairman of the Governance and Sustainability Committee on its
activities.
– Considered detailed presentations from the Chief Executive and Chief People Ocer on
management development and succession planning.
– Supported the professional development of Board members.
Stakeholder
engagement
– Held an in-person Annual General Meeting on 15 July 2022.
– The Chairman held discussions with a number of the Company’s largest shareholders during the
year.
– Received regular reports from the Group Investor Relations function.
– Reviewed regular reports from the Company’s brokers and from analysts.
– Reviewed the results of a Group-wide Employee Engagement Survey.
– Met with members of management and the workforce as part of Board and Committee meetings
and site visits.
Governance
– Received reports on and discussed relevant regulatory developments, such as changes to
non-financial reporting requirements and proposals for the introduction of a new UK Corporate
Governance Code.
– Oversaw an internally-facilitated Board evaluation process and the implementation of actions from
previous evaluation processes.
– Received a report at each meeting from the Chairman of each Board Committee on the activities
of that Committee.
– Received reports from the Workforce Engagement Director on his activities.
– Reviewed the structure of Board and Board Committees against good corporate governance
practices and the current and future needs of the Group. Approved related changes to apply in the
year commencing 1 April 2023, including holding six Board meetings to allow additional time for
Directors to visit Group businesses, while continuing to cover all the existing work of the Board.
101DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Monitoring Culture
The Board monitors the Group’s culture
to ensure it is aligned with DCC’s
purpose, values and strategy.
During the year, the Board considered
detailed reports on the results of the
second Group-wide Employee
Engagement Survey. These included a
detailed presentation from the Group’s
Chief People Ocer and discussions
with divisional management teams on
the steps being taken within their
divisions on foot of the survey. Visits by
the Board and individual Directors to
Group companies also allowed the
Directors to engage with local
management teams and members of
the workforce. The additional work of
Mark Ryan, as Workforce Engagement
Director, provides a further insight for
the Board on the Group’s culture.
Purpose and Values
The Board promotes the Group’s
purpose and values through its
interactions with management,
including discussions as part of Board
and Committee meetings, and site
visits to Group companies throughout
the year.
The Board supports and operates in
accordance with the Group’s purpose
and values at all times. Specifically,
discussions and decisions made by the
Board and its Committees are based
on the fulfilment of the Group’s purpose
and compatibility with our culture
and values.
PURPOSE, VALUES AND CULTURE
DCC’s purpose is to enable people and
businesses to grow and progress.
Reports on the following matters are provided
to the Board to provide insights on the
Group’s culture:
– Employee Engagement Surveys
– Compliance surveys
– Reports from and discussions with
management, both in Board meetings
and on site visits
– Reports from the Workforce Engagement
Director
– Audits conducted by Group Internal Audit,
Group Sustainability (on HSE) and Group
Compliance teams
– Whistleblowing reports
– Training completion rates, including training
on the Code of Conduct
– Succession and talent development, with a
focus on diversity
– Safety incidents and performance
– Disputes and regulatory investigations
HOW
THE BOARD
MONITORS
CULTURE
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CORPORATE GOVERNANCE STATEMENT CONTINUED
102 DCC plc \ Annual Report and Accounts 2023
For some businesses in the Group, we
have now completed the survey for a
second time which has enabled us to
compare the survey scores from last
year. I am happy to report that we
have seen an improvement in scores
in the areas where we focused on,
based on the survey feedback from
last year. This is a very important step
forward for the Group in employee
engagement, as not only does the
survey provide us with a better
overall understanding of how
employees are feeling, but we can
also see that when we take action to
deliver improvements, we can
monitor the impact through the
improved survey engagement scores.
The data provided by the survey has
been a ‘game changer’ for our
businesses and Human Resources
teams, as for the first time they now
have comprehensive feedback and
data from employees right across the
Group. In addition, they now have a
basis for measuring the success and
eectiveness of HR and People
initiatives. This survey information has
also enabled Nicola McCracken,
Chief People Ocer, and I as
Workforce Engagement Director to
provide the Board with a much
greater level of information and
insight into employee engagement
across the Group. We report not only
on the details of the survey’s results,
but also on the actions which are
being taken to address the areas
The last 12 months have seen a
number of developments with our
employee engagement eorts. For
the first time all current employees in
the Group had the opportunity to
complete the Global Employee
Survey. This is a detailed survey
which is structured around several
key themes, including: Purpose,
Enablement, Autonomy, Reward and
Leadership. The employees are
asked a range of questions under
these key themes, which enables us
to get real feedback and
information about their business,
jobs, roles, career paths, training,
development and how their
leadership supports them.
The survey is ‘score’ based which
enables us to identify the areas
where the Group is doing well, and
more importantly, areas where there
is room for improvement. The survey
process also provides us with
external benchmarks around key
engagement scores against which
we can measure ourselves. The
survey provides a huge amount of
employee engagement data across
the Group which can be broken
down across geographies, divisions,
businesses, career levels, genders
etc. This has provided us with real
insight into how employees are
feeling about the Company and
their jobs and what are the key
actions we need to focus on in the
year ahead to better support them.
The participation rate for the survey
is over 83% which is very significant
and I think underlines the
importance which management
right across the Group have placed
on ensuring the survey is completed.
Strengthening engagement with our employees
Mark Ryan, Workforce Engagement Director
identified for improvement. This is the
first time that the Board has ever had
such broad and comprehensive
employee feedback across all of the
businesses on our employee
engagement.
The last 12 months have also seen the
Board being able, for the first time
since the pandemic, to meet directly
with employees from across the
Group. The Board travelled to the US
in October and met with employees
in three of our main businesses. As
part of these visits, I met with the
local HR management to talk about
their survey results, their local people
initiatives, and any HR and people
challenges they faced. In addition
to the US visit, the Board visited
companies in the UK in February.
A number of other Board members
have also made separate visits to
a range of other companies in the
Group over the past 12 months.
I meet with Nicola McCracken on an
ongoing basis throughout the year
and focus on our overall employee
engagement plans and initiatives. I
also discuss any other employee
issues or challenges which I believe
are for Board attention.
I formally update the Board at every
meeting on the status of employee
engagement matters.
During the year, the Board visited Williams Medical Supplies and
EuroCaps in Wales and met with management and employees.
103DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
REFLECTING STAKEHOLDER
VIEWS IN OUR BOARD
DECISION MAKING
Stakeholder Engagement
The Board recognises the importance of
clear communication and engagement
with all of DCC’s stakeholders. Details
on how both the Company and Board
engaged with stakeholders and
outcomes as a result of that
engagement during the year are
outlined on pages 52 to 57 of the
Strategic Report. We give a more
detailed account of how stakeholder
interests were reflected in Board
decision making during the year on
page 104.
How the Board engaged with
investors during the year
The Board actively seeks and
encourages engagement with investors,
including the Company’s major
institutional shareholders and
shareholder representative bodies. The
Group engaged with investors in a very
active manner during the year. The
charts opposite set out the number of
meetings held with investors by the
Chairman and General Counsel, Group
Management and our Investor Relations
team. These meetings include
one-to-one meetings, group and
conference meetings.
The Group also held two separate
capital markets events over the last
year. The first, held in May 2022 focused
on our Energy division, which outlined
our progress in the energy transition,
including an updated strategy for
our energy activities. The second event
was for our Healthcare division in
September 2022, following its largest
acquisition to date, Medi-Globe. These
events were well attended and oered
an important opportunity for investors
to fully understand DCC’s approach
in the sectors where we operate.
In addition to these meetings with
management, the Chairman wrote
to the Company’s top 13 shareholders
following the Company’s AGM in July
2022 and oered a meeting. Ten
meetings were held on foot of those
invitations. The Chairman briefed the
Board on the key points of those
discussions.
ENGAGEMENT DURING THE YEAR
The Board was kept informed of the views of shareholders through the
executive Directors’ attendance at the investor relations events held
during the year. Relevant feedback from investor meetings, investor
relations reports, and brokers notes were provided to the Board.
The Chairman wrote to the Company’s top 13 shareholders following
the Company’s AGM in July 2022 and oered a meeting. Ten meetings
were held. The Chairman briefed the Board on the key points of those
discussions.
The Board received briefings from the Company’s brokers and the
Investor Relations team on topics such as fundraising, market
perception and shareholder activism.
The Company Secretary engaged with proxy advisors in advance of the
Company’s AGM which provides shareholders with the opportunity to
question the Chairman, the Committee Chairmen and the Board. All of
the resolutions put to shareholders at the 2022 AGM were strongly
supported.
Number of meetings
held during the year
Group management and Investor Relations
Investor Relations
Chairman and General Counsel
67%
5%
28%
Meetings 477
Capital market conferences 14
Sales desk briefings 12
Engagements with
institutional investors
104 DCC plc / Annual Report and Accounts 2023
CORPORATE GOVERNANCE STATEMENT CONTINUED
HOW THE BOARD CONSIDERED
STAKEHOLDERS DURING THE
DECISION-MAKING PROCESS AND HOW
THE STAKEHOLDER ENGAGEMENT
INFORMED THIS PROCESS
The Board had regard to the Company’s stakeholders when
overseeing and making decisions on the Group’s strategic
development, risk management, operations and reporting.
Workers in the Group’s supply chains
can be directly aected by the
decisions of the Group to source
products from certain suppliers and
the standards that are expected of
those suppliers.
The Group has clear policies and
related internal controls on supply
chain integrity and the protection
of human rights. A related Supplier
Code of Practice is also in place.
As part of these controls, due
diligence is carried out on new and
existing suppliers to ensure that the
risk of human rights abuses, including
modern slavery and human tracking,
in the Group’s supply chains is
considered and abuses prevented.
A key element of the updated strategy
for the Group’s energy activities that
was announced in May 2022 was the
integration of two former divisions of
the Group – DCC LPG and DCC Retail
& Oil – into DCC Energy.
The Board discussed with management
the impact that this change would
have on the Group’s employees within
DCC LPG and DCC Retail & Oil. These
discussions covered the design of DCC
Energy’s management structure, its
communication to aected employees,
and steps to ensure that there was no
loss of talent from the Group because
of the change.
The Audit Committee and the Board
considered a number of reports on
these questions during the year. The
Board also approved DCC plc’s annual
statement under the UK Modern
Slavery Act.
In addition, the Board considered
supply chain and human rights risks
in the context of acquisition
opportunities. Detailed reports from
external advisors were provided to the
Board to support those discussions.
For more information on the Group’s
approach to the protection of human
rights in our supply chains see page 75.
The integration of the two divisions is
now well underway. The level of
engagement with employees across
the division has been extremely strong
throughout this process. The formation
of DCC Energy has also created
numerous opportunities for employees
to be promoted into new roles.
For more information on the progress
that DCC Energy is making in
implementing its Leading with Energy
strategy see page 16.
SUPPLY CHAIN
PROTECTING
HUMAN RIGHTS IN
THE SUPPLY CHAIN
EMPLOYEES
TREATMENT OF
EMPLOYEES IN THE
CREATION OF
DCC ENERGY
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
105DCC plc / Annual Report and Accounts 2023
The second Group-wide employee
engagement survey was carried out
during the year. This provided further
very valuable insights into the views of
the Group’s employees on a wide
range of questions.
The results of the survey and the key
actions being taken as a result were
discussed with the Board by the Chief
People Ocer during the year. The
Workforce Engagement Director
received a more detailed briefing
from the Chief People Ocer on the
same subject.
DCC’s record of unbroken dividend
growth has few peers and reflects
the Group’s operational excellence
and disciplined approach to
capital allocation.
Reflecting both our strong financial
performance in the year ended
31 March 2023 and the importance
of our progressive dividend policy to
shareholders, the Board recommended
a final dividend of 127.17 pence per
share, which when added to the
interim dividend of 60.04 pence per
share, resulted in a total dividend for
the year of 187.21 pence per share.
The results of the survey and these
discussions then inform wider
discussions at Board level on the
Group’s HR priorities and initiatives,
including management development
and supporting inclusion and diversity.
For more information on employee
engagement and the steps being
taken in response to this year’s
Engagement Survey see page 70.
Our record of 29 years of uninterrupted
dividend growth illustrates the
Group’s longstanding and continuing
commitment to delivering for
shareholders.
The Group’s dividend policy, which is
set by the Board, is based on regular
engagement with investors at Board
and management level.
For more information on our dividend
see page 47.
For detail on our interaction with
investors see page 103.
EMPLOYEES
UNDERSTANDING
OUR EMPLOYEES’
VIEWS
INVESTORS
GROWING OUR
DIVIDEND
FOR 29 YEARS
CORPORATE GOVERNANCE STATEMENT CONTINUED
106 DCC plc \ Annual Report and Accounts 2023
Whistleblowing
Employees across the Group are
required to raise a concern if any of our
activities are being undertaken in a
manner that may not be legal or ethical
and are supported if they do so.
Concerns can be raised with a member
of management in the business where
the employee works, with the General
Counsel & Company Secretary or
externally with SafeCall, a third-party
facility which is independent of DCC
and available in multiple languages on
a 24-hour basis. Employees may raise
concerns anonymously if they wish. Our
internal policies make clear that
retaliation against any employee who
raises a concern is prohibited.
Our Human Rights Policy also sets out
the ways in which non-employees can
raise concerns in relation to any breach
of human rights that may have occurred
within our operations or our supply
chains. Where concerns are raised, they
are investigated in an appropriate and
independent manner.
The Audit Committee has oversight
responsibility for our whistleblowing
facilities and how they operate. This is
referred to on page 114, as part of the
Audit Committee Report.
COMPLIANCE
Compliance Programme
The key message of the Group
compliance programme is that
directors, managers and employees
across the Group should be ‘Doing the
Right Thing’ at all times. This means not
merely following the laws and policies
that apply to their work, but also
ensuring that their actions are fair and
ethical.
Code of Conduct
Our current Group Code of Conduct,
which is available on our website, was
introduced in 2017. The Code sets out
the standards that are expected in a
range of areas, including anti-bribery
and corruption, supply chain integrity,
the protection of personal information
and competition law. The Code also
explains how employees can ask
questions about compliance issues and
raise concerns if they believe that
something wrong is happening,
including through a confidential and
independent service available 24 hours
a day, every day of the year. A copy of
the Code is provided to every employee
when they join.
Compliance Policies and Training
The Group also maintains more detailed
policies on a range of relevant areas,
complementing the general
requirements set out in the Code of
Conduct. The areas covered by more
detailed policies include health and
safety, anti-bribery and corruption,
supply chain integrity, human rights,
competition law, data protection,
information security, diversity and
inclusion and share dealing. Depending
on the nature of their role, employees of
the Group may receive more detailed
training on those policies.
Share Ownership and Dealing
Details of the Directors’ interests in DCC
shares are set out in the Remuneration
Report on page 136.
The DCC Share Dealing Code (‘the
Dealing Code’) applies to dealings in
DCC shares by the Directors and
Company Secretary of DCC and certain
employees. Under the Dealing Code,
Directors and relevant executives are
required to obtain clearance from the
Chairman or Chief Executive before
dealing in DCC shares and are
prohibited from dealing in the shares
during prohibited periods, as defined by
the Dealing Code.
In addition, the Dealing Code specifies
preferred periods for share dealing by
Directors and relevant executives, being
the four 21-day periods following the
updating of the market on the Group’s
trading position through the preliminary
results announcement in May, the
Interim Management Statement in July
(at the AGM), the interim results
announcement in November and the
Interim Management Statement in
February.
107DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Risk Management and Internal Control
The Board is responsible for the Group’s
system of risk management and
internal control. It is designed to
manage rather than eliminate the risk
of failure to achieve business objectives
and provides reasonable but not
absolute assurance against material
misstatement or loss. Details on the
Group’s risk management structures are
set out in the Risk Report on page 77.
The Board has delegated responsibility
for the detailed monitoring of the
eectiveness of this system to the
Audit Committee. Details on the Audit
Committee’s work in this regard are set
out in the Audit Committee Report on
page 112.
There is an ongoing process for
identifying, evaluating and managing
any significant risks faced by the Group,
including climate-related risks, which
was in place for the year under review
and up to the date of approval of the
financial statements. This process is
regularly reviewed by the Board.
Compliance Statement
DCC has complied, throughout the year
ended 31 March 2023, with the provisions
set out in the Code.
Mark Breuer, Donal Murphy
Directors
15 May 2023
The Board has considered a report from
the Audit Committee on the conduct of
and the findings and agreed actions
from the annual assessment of risk
management and internal control.
Further details on this annual
assessment are set out in the Risk
Report on page 77 and in the Audit
Committee Report on page 112.
The consolidated financial statements
are prepared subject to the oversight
and control of the Chief Financial
Ocer, ensuring correct data is
captured from Group locations and all
required information for disclosure in the
consolidated financial statements is
provided. A control framework has been
put in place around the recording of
appropriate eliminations and other
adjustments. The consolidated financial
statements are reviewed by the Audit
Committee and approved by the Board.
108 DCC plc \ Annual Report and Accounts 2023
Board Composition
In the year under review, there were a
number of important changes to the
Board. Pamela Kirby retired following the
conclusion of the AGM on 15 July 2022
and Tufan Erginbilgic retired with eect
from 31 December 2022.
The Board oversaw processes for the
appointment of one new non-executive
Director to the Board. Following a
detailed search process and interviews
with a number of candidates, the
Committee were pleased to
recommend the appointment of Katrina
Clie to the Board. Katrina joined the
Board and the Remuneration
Committee on 1 May 2023.
Board Diversity
The Board supports and values the
benefits of diversity and the evolution of
the Board during the year reinforced our
commitment in this area. Since 1 May
2023, DCC meets the requirements of
the UK Listing Rules with 40% female
directors on the Board and one director
from an ethnic minority background.
Board Evaluation
Following an externally-facilitated
evaluation in 2021, the Committee
oversaw an internal evaluation of the
eectiveness of the Board and its
Committees in 2023. More information
on the Board evaluation, including an
update on actions identified last year
and further improvements to be
implemented this year, is set out on
page 98 as part of the Corporate
Governance Statement.
The Governance and Sustainability
Committee is responsible for monitoring
the composition and development of
the Board, reviewing the leadership
needs of the Group, supporting the
Group’s sustainability activities and
monitoring the Company’s compliance
with corporate governance
requirements. This report summarises
the Committee’s activities during the
year ended 31 March 2023 and sets out
the Committee’s priorities for the current
year ending 31 March 2024.
Mark Breuer (Chairman)
Laura Angelini
Mark Ryan
Length of Tenure on the Governance
and Sustainability Committee
as at 31 March 2023 (years)
1.7
1.7
1.4
GOVERNANCE CONTINUED
GOVERNANCE AND
SUSTAINABILITY
COMMITTEE REPORT
109DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Sustainability
There are four pillars to DCC’s
sustainability framework. These address
the sustainability questions that are
most important to the Group and our
stakeholders:
– Climate Change and Energy
Transition;
– Health and Safety;
– People and Social; and
– Governance and Compliance.
During the year under review, the
Committee considered reports on work
undertaken in each of these areas.
Detailed reports were also provided to
the Board on activities within each pillar.
This reflects the materiality of each of
the subjects to the Group and the
overall responsibility of the Board for
sustainability matters.
The Board also reviewed the results of
the updated sustainability materiality
assessment conducted during the year.
This assessment will reform our
sustainability activities and reporting
over the next few years.
More details on the governance of
sustainability, including climate
change, are set out on page 111. The
Sustainability Review on page 58
addresses our progress in those key
areas in more detail.
We measure our overall sustainability
by the value we generate for our
stakeholders and the Corporate
Governance Statement on pages 104 to
105 sets out how the Board considered
stakeholder interests during the year.
Corporate Governance
In addition to considering emerging
regulatory developments in relation to
sustainability reporting, the Committee
and the Board also considered
developments in relation to corporate
governance more generally. These
included the proposed changes to the
UK Corporate Governance Code
expected to commence in 2024.
Priorities
The priorities for the Committee in the
financial year ending 31 March 2024
will be:
– Implementing the recommendations
of this year’s Board evaluation
process;
– Supporting the development of the
Group’s sustainability reporting, with
oversight by the Board;
– Monitoring the continued evolution of
the Board and its Committees; and
– Monitoring developments in the
Group’s corporate governance
environment, notably any changes
introduced following UK Code
proposals.
On behalf of the Governance and
Sustainability Committee.
MARK BREUER
Chairman
Governance and Sustainability
Committee
15 May 2023
A strong Board, a talented management team
and a commitment to sustainability remain key
to the future success of the Group.
MARK BREUER
Chairman
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
GOVERNANCE AND SUSTAINABILITY COMMITTEE REPORT CONTINUED
110 DCC plc \ Annual Report and Accounts 2023
This requirement has been included in
all letters of appointment and in the list
of Matters Reserved for Board Decision.
Before the Board approves any
additional external appointment, the
Committee considers the impact on the
Company, including the time required
for the role and any conflicts of interest
that might arise from it.
The Committee is satisfied that the
existing external commitments of the
Directors do not conflict in any way with
their duties and commitments to the
Company and that all Directors
dedicate appropriate time to their
responsibilities to the Company and are
also available at short notice for any
unscheduled Board meetings.
Diversity
In reviewing the composition of the
Board and giving consideration to the
appointment of new non-executive
Directors, the Committee takes into
account the benefits that diverse skills,
experience and backgrounds,
including gender and ethnic diversity,
bring to the Board.
Since 1 May 2023, the Board is
comprised of 40% female Directors and
has one Director from an ethnic minority
background. This meets the current
requirements of the UK Listing Rules.
A table detailing the diversity of the
Board and senior management is set
out on page 111.
The Board Diversity Policy was reviewed
and updated during the year and is
available on our website.
Succession Planning
In addition to its work on the
development of the Board, the
Governance and Sustainability
Committee considers succession
planning for executive Director positions.
This is done within the context of the
Group’s overall talent development and
succession planning structures. Those
structures have been developed over
the last few years to reflect the Group’s
greater scale. The Directors receive
a detailed update annually from the
Chief People Ocer on Group talent
development and succession planning
process. This covers succession planning
for senior management roles in detail.
Tenure of Directors
A number of recommendations in
respect of renewed Board and
Committee membership were made
to the Board by the Committee during
the year.
The Committee’s Terms of Reference
were updated with a number of
changes, following this review.
Reporting
The Chairman of the Governance and
Sustainability Committee reports to the
Board at each meeting on the activities
of the Committee.
Consultation with Shareholders
The Chairman of the Committee is
available at the Annual General
Meeting to answer questions on the
report on the Committee’s activities
and matters within the scope of the
Committee’s responsibilities.
PRINCIPAL ACTIVITIES
Board Composition and Renewal
The Governance and Sustainability
Committee reviews the composition of
the Board and its Committees to ensure
that they have an appropriate balance
of skills, knowledge, experience, gender,
and ethnicity, taking account of the
nature, scale, and location of the
Group’s operations and the tenure of
existing Directors.
On 4 February 2023, Katrina Clie was
appointed to the Board with eect from
1 May 2023. This followed an extensive
search led by the Committee, with
advice from MWM Consulting. Members
of the Committee reviewed a list of
potential candidates and conducted
interviews with a number of them before
making a recommendation to the
Board. Ms Clie brings financial services
expertise and experience as
non-executive director to her role.
Extensive and tailored induction
programmes for each new Director are
put in place at the time of their
appointment. These inductions include
reviewing information on the Company,
meetings with fellow Directors, members
of the Group Management Team and
the senior management in significant
Group businesses.
MWM Consulting do not have any
connection with the Directors or the
Company.
External Commitments
Directors can bring valuable
perspectives to the Board as a result
of other appointments, such as
directorships of other companies. In
accordance with the UK Corporate
Governance Code, Directors must seek
the prior approval of the Board in
advance of accepting any additional
external appointments.
ROLE OF THE COMMITTEE
Responsibilities
The responsibilities of the Committee
are set out in full in its Terms of
Reference which are available on the
Company’s website.
Committee Composition,
Attendance and Tenure
The members of the Governance and
Sustainability Committee are Mark
Breuer (Chairman) and two independent
non-executive Directors: Laura Angelini
and Mark Ryan.
Biographical details for the members of
the Committee are set out on pages 88
to 89.
The General Counsel and Company
Secretary is the Secretary to the
Governance and Sustainability
Committee.
Meetings
The Governance and Sustainability
Committee met five times during the
year ended 31 March 2023. Attendance
details are set out in the table on
page 97 of the Corporate Governance
Statement.
The Chief Executive is invited to
attend all meetings of the Committee.
Other Directors, executives and
external advisors are invited to attend
as necessary.
The Committee may also meet
separately, as required, to discuss
matters in the absence of any invitees.
No such meetings took place during
the year under review.
Annual Evaluation of Performance
The Board conducts an annual
evaluation of its own performance and
that of its Committees, Committee
Chairmen and individual Directors in
accordance with the UK Corporate
Governance Code. In 2022, this
evaluation was internally-facilitated.
The last external evaluation was
conducted by Heidrick & Struggles
in 2021.
A report on the implementation of
recommendations of the evaluation
undertaken in 2022 and the principal
findings of the 2023 evaluation is
contained on page 98, as part of the
Corporate Governance Statement.
The Committee as part of the Board
evaluation process reviewed its own
performance and Terms of Reference
during the year.
111DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
of previous Board evaluations and
wider good practice in corporate
governance. The objectives of the
review were to maximise the quality
of the Group’s governance, including
Board and Committee meetings, while
also allowing the Directors more time in
Group businesses.
As a result of this review, from the
financial year commencing 1 April 2023
the Board will hold six scheduled
meetings annually, a reduction of two.
More time will be allocated to these six
meetings and the Board will continue
to cover all the subjects it considers at
present. The additional time will be used
by the Board to visit Group businesses,
spending time with members of
management and the wider workforce.
These changes will enhance the
governance of the Group and the work
of the Board at an important time in
DCC’s growth and development.
The Company operated in full
compliance with the Code during the
year ended 31 March 2023.
Chief People Ocer and from the
General Counsel.
In addition the Board devoted
considerable time during the year to
climate change and energy transition
matters, including the implementation
of DCC Energy’s strategy.
Our 2023 Annual Report includes
disclosures that meet all recommended
disclosures of the TCFD reporting
framework.
Corporate Governance
The Committee advises the Board on
significant developments in corporate
governance and monitors the
Company’s compliance with corporate
governance best practice.
During the year, the Committee
considered a number of corporate
governance developments, including
proposals for a new UK Corporate
Governance Code and more detailed
sustainability reporting requirements.
The Committee oversaw a detailed
review of the structure of Board and
Committee meetings over the course
of the year. That review took account
The tenure of the Directors on the Board
is set out on page 97. The tenure of
members of Committees is dealt with
in the relevant Committee reports.
Sustainability, including
Climate Change
The Board oversees sustainability
matters, including climate-related
issues. The Governance and
Sustainability Committee supports the
work of the Board by reviewing the
development of the Group’s
sustainability activities, including steps
taken to meet regulatory requirements.
The Governance and Sustainability
Committee is updated at every meeting
on sustainability-related work within the
Group, including the work of the
Executive Sustainability Committee.
The Chairman of the Governance and
Sustainability Committee briefs the
Board on the work of the Committee
after each meeting.
The Board receives a report every
quarter from the Head of Group
Sustainability on key developments in
the Group Sustainability Programme.
The Board also receives separate
updates on People matters from the
Gender representation as at 31 March 2023
The following tables set out the information required to be included in the Annual Report under the UK Listing Rule 9.8.6R(10),
as set out in Annex 2 to UKLR 9, as at 31 March 2023.
For the purposes of these tables, executive management is as defined in the UK Listing Rules, being the executive committee or
most senior executive or managerial management body below the board (or where there is no such formal committee or body,
the most senior level of managers reporting to the chief executive), including the company secretary but excluding
administrative and support sta. For DCC, this is the Group Management Team.
As at 31 March 2023, there were 33% female directors on the Board. On 1 May 2023, Katrina Clie was appointed to the Board
which meets the target of having 40% female directors on the Board. Caroline Dowling has held the position of Senior
Independent Director with eect from 16 July 2021. The Company has also met the requirement to have one Board member
from an ethnic minority background since 16 July 2021.
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
Men 6 67% 3 9 90%
Women 3 33% 1 1 10%
Other - - - - -
Not specified/prefer not to say - - - - -
Number of
Board members
Percentage
of the Board
Number of
senior positions
on the Board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other White (including minority-white groups) 8 89% 4 10 100%
Mixed/Multiple Ethnic Groups – – – – –
Asian/Asian British 1 11% – – –
Black/African/Caribbean/Black British – – – – –
Other ethnic group, including Arab – – – – –
Not specified/prefer not to say – – – – -
112 DCC plc \ Annual Report and Accounts 2023
Risk Management and Internal Control
The Committee supports the Board in
considering the principal risks and
uncertainties, including emerging risks,
facing the Group. These include the
impact of climate change, IT and cyber
risks and changes in the Group’s legal
and regulatory environment. Safety
matters are addressed directly by
the Board.
As part of this, the Committee
considered during the year regular and
detailed reports on key aspects of the
Group’s internal control framework,
including financial reporting and control,
compliance and IT security. The
Committee and the Board considered
specifically in this regard the Group’s
readiness to meet more extensive
sustainability reporting obligations
which will come into eect in the
coming years.
In addition, the Committee reviewed
a report on the eectiveness of the
Group’s overall internal controls in the
year under review.
More details on the Group’s risk
management processes are set out in
the Risk Report on page 77.
Reporting
Monitoring the integrity of the
Company’s reporting processes and its
external reporting is a core component
of the Committee’s work. During the
year, the Committee considered these
subjects in detail with members of
management and KPMG.
I am pleased to present the report of
the Audit Committee for the year ended
31 March 2023. The report summarises
the work of the Committee during the
year and sets out our priorities for the
year ahead.
Role of the Committee
The Committee supports the Board in
meeting a number of its principal
corporate governance responsibilities,
including reviewing the Group’s risk
management and internal control
processes, overseeing the activities of
the Group Internal Audit (‘GIA’) team and
the external auditor KPMG, and
monitoring the Company’s external
reporting.
Alan Ralph (Chairman)
Caroline Dowling
Lily Liu
Mark Ryan
Length of Tenure on the
Audit Committee
as at 31 March 2023 (years)
1.4
2.8
1.7
5.0
GOVERNANCE CONTINUED
AUDIT COMMITTEE
REPORT
Strong internal controls provide a foundation for
the Group’s continued growth and development.
113DCC plc \ Annual Report and Accounts 2023
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This included a detailed assessment by
the Committee of the work done to
support the Company’s Going Concern
and Viability Statements, including the
impacts of increased economic
uncertainty, the war in Ukraine and
climate change.
The Committee also reviewed the
principal accounting judgements and
estimates reflected in the Company’s
consolidated financial statements. More
detail on the principal matters
considered as part of this process are
set out on page 117.
As a result of this work, the Committee is
satisfied, and has advised the Board
accordingly, that the Annual Report and
Financial Statements, are fair, balanced
and understandable and provide the
information necessary for shareholders
to assess the Group’s performance,
business model and strategy.
External Audit
The Committee oversees the
relationship with and work of the
Company’s external auditor on behalf of
the Board. This includes the approval of
their remuneration and audit plan and
an ongoing assessment of their
performance and independence. A
detailed review of the audit process is
undertaken in July each year by
management and considered by the
Committee with the auditors and
management.
The Committee approved KPMG’s audit
plan in November 2022. This discussion
focused on the key audit risks identified
by KPMG, materiality thresholds, and the
oversight and review by the Irish firm of
audits undertaken in Group businesses.
We then discussed progress against
that plan with KPMG at Committee
meetings in January and April 2023. At
our meeting in May we received a
detailed report from KPMG on their
audit findings. Further details on the
audit process, including the principal
areas considered, are set out on
page 114 and 115.
Internal Audit
The Committee received detailed
reports from the Group Internal Audit
team at each of its meetings over the
course of the year. These included a
summary of key themes emerging from
the team’s audit work, progress in
completing audit actions and the results
of recent audits, including steps agreed
with management to improve controls
where needed. The Group Internal Audit
plan for the year under review was
implemented in full and a suitable plan
for the year commencing 1 April 2023
has been approved by the Committee.
The Head of Group Internal Audit meets
with the Committee in private session
several times over the course of the year
and has a direct reporting line to me as
Committee Chairman.
Priorities for the Year Ahead
The priorities of the Committee for the
year ahead will remain consistent with
those for the year under review:
maintaining robust systems of risk
management and internal control,
monitoring the Group’s external
reporting, preparations for increased
sustainability reporting, and supporting
the work of the Group’s internal and
external auditors.
To support the work of the Committee,
we have invited the management
teams of each of the Group’s three
divisions to report to the Committee
on the principal risks and quality of
internal controls within their areas of
responsibility. These reports will
complement the reports we also
receive from relevant functions such as
Finance, Risk & Compliance and Group
Internal Audit.
I trust this report is helpful for
shareholders in understanding the
activities of the Committee and
welcome comments on it.
On behalf of the Audit Committee.
ALAN RALPH
Chairman
Audit Committee
15 May 2023
The Committee’s primary focus for the year
ahead will remain the Group’s risk management
and internal control processes.
ALAN RALPH
Chairman
AUDIT COMMITTEE REPORT CONTINUED
114 DCC plc \ Annual Report and Accounts 2023
The Committee meets a number of
times each year with the Company’s
external auditor and with the Head of
Group Internal Audit without other
members of management being
present. The Committee also holds
discussions after most of its meetings in
the absence of any invitees.
Evaluation of Performance
The 2023 Board evaluation process,
which was internally facilitated,
concluded that the Audit Committee
and the Chairman of the Committee are
operating eectively.
The Committee as part of the Board
evaluation process reviewed its Terms of
Reference during the year. The
Committee’s Terms of Reference were
updated with a number of changes,
following this review.
All actions from the 2022 Board
evaluation process in relation to the
Committee were fully implemented
during the year.
Reporting to the Board
The Chairman of the Audit Committee
reports to the Board at each meeting
on the activities of the Committee since
the previous Board meeting.
Consultation with Shareholders
The Chairman of the Audit Committee
also attends the Annual General
Meeting to answer questions from
shareholders on the report on the
Committee’s activities and matters
within the Committee’s areas of
responsibility.
PRINCIPAL ACTIVITIES
Risk Management and Internal Control
The Committee reviews on behalf of the
Board the key processes by which risks
are managed across the Group. These
include the use of risk registers at
Group-, divisional- and business-level,
regular reports from relevant functions
such as Finance, Compliance and GIA,
and wider Group Risk Reports from the
Head of Group Risk and Compliance.
The Committee monitors a range of
emerging risks as part of this process.
The Committee’s work in this area
includes an assessment of whether
relevant risks are subject to suitable
internal controls and where existing
internal controls should be adjusted to
reflect new or emerging risks.
ROLE OF THE COMMITTEE
Responsibilities
The responsibilities of the Committee
are set out in its Terms of Reference,
which are available on the Company
website.
Composition, Attendance and Tenure
The Audit Committee comprises four
independent non-executive Directors:
Alan Ralph (Chairman), Caroline
Dowling, Lily Liu, and Mark Ryan.
Biographical details for the members of
the Committee are set out on pages 88
and 89. The tenure of the members of
the Committee is set out the start of
this report.
The Board is satisfied that the members
of the Committee bring a suitably
diverse range of skills, expertise and
experience in commercial, financial and
audit matters arising from the senior
positions they hold or held in other
organisations and that the Committee
as a whole has competence relevant to
the sectors in which DCC operates. The
Board is also satisfied that Alan Ralph
and Lily Liu meet the specific
requirements of the UK Corporate
Governance Code for recent and
relevant financial experience.
The General Counsel and Company
Secretary is the Secretary to the Audit
Committee.
Meetings
The Committee met five times during
the year ended 31 March 2023 and there
was full attendance by all members of
the Committee.
The Chief Executive, Chief Financial
Ocer, General Counsel and Company
Secretary, Group Financial Controller,
Head of Group Internal Audit, Head of
Group IT Assurance, Head of Group Risk
and Compliance, and representatives of
the external auditor are typically invited
to attend all meetings of the
Committee. The Chairman of the Board
also attends a number of the
Committee’s meetings every year. Other
Directors and executives are invited to
attend as necessary.
Stephen Johnston was appointed
Group Financial Controller with eect
from 1 July 2022. He replaced Conor
Murphy, formerly Director of Group
Finance, on Conor’s appointment as
CFO of DCC Energy.
An annual review of the Group’s risks
and related internal controls, including
recommendations for development,
is prepared by management and
reviewed by the Committee each year.
The Chairman of the Committee reports
to the Board on risk management and
internal controls after each Committee
meeting. In addition the Board receives
and considers the Group Risk Reports
referred to above.
More details on the Group’s system of
risk management and internal control
are set out in the Risk Report on
pages 77 to 84. The Board’s statement
on Risk Management and Internal
Control is included in the Corporate
Governance Statement on page 92.
Whistleblowing
The Board has delegated responsibility
to the Audit Committee for ensuring
that the Group maintains suitable
whistleblowing arrangements for its
workforce. Those arrangements are
outlined in the Corporate Governance
Statement on page 92 and are also
described in our Code of Conduct,
which is available on the Company’s
website.
The Committee reviewed the operation
of the Group’s whistleblowing facilities,
including the matters raised and how
they were resolved, during the year.
A summary of whistleblowing reports
received is provided to the Committee
each April and November. A detailed
report on concerns raised and the steps
taken to address them is also presented
to the Committee in May.
External Audit
The Audit Committee oversees the
relationship with the Company’s
external auditor, KPMG, including
approval of the audit fee and annual
audit plan. Details of the areas
considered as part of the approval of
the audit plan for the year under review
are set out in the Chairman’s
Introduction on page 112.
The Audit Committee meets with the
external auditor without the presence
of management during the year.
KPMG were appointed as the Group’s
external auditor on 17 July 2015. The
Audit Committee is required to make
a recommendation to the Board on
the appointment, reappointment and
removal of the external auditor.
115DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Eectiveness
As part of its annual review of the
eectiveness of an external audit
process, the Committee reviews the
results of an external audit eectiveness
questionnaire. This process involves the
Chief Financial Ocer obtaining the
views of finance executives at Group
level and across Group businesses.
Their responses and recommendations
for improvements in future audits are
summarised in a report to the Audit
Committee.
Based on its consideration of this report
and its own interactions with KPMG the
Audit Committee considers whether
the audit process remains eective.
Its conclusions are then conveyed to
the Board.
The Committee concluded on the basis
of this process that the audit process in
respect of the year ended 31 March
2022 was eective.
Independence
The Audit Committee has processes in
place to ensure that the independence
of the audit is not compromised. These
include monitoring the nature and
extent of services provided by the
external auditor through an annual
review of fees paid to the external
auditor for non-audit work, which is
described in more detail below. In
addition, the Committee obtains
confirmation from the external auditor
that they are in compliance with
relevant ethical and professional
guidance and that, in their professional
judgement, they remain independent.
On the basis of these processes, the
Committee was satisfied that KPMG
remain independent and have
communicated this to the Board.
The Audit Committee has also
approved a policy on the employment
of employees or former employees of
the external auditor. This policy provides
that the Chief Executive will consult with
the Chairman of the Audit Committee
prior to appointing to a senior financial
reporting position, to a senior
management role or to a Company
ocer role any employee or former
employee of the external auditor, where
such a person was a member of the
external audit team in the previous
two years.
Internal Audit
Group Internal Audit
The Audit Committee approves the
Group Internal Audit annual plan and
reviews reports on audits undertaken by
the GIA team. The Head of GIA and the
Head of IT Assurance, together with
other executives from the GIA team as
needed, report at each meeting of the
Committee on:
– the findings from each audit, IT audit
and any special investigations
completed;
– reviews undertaken on
newly-acquired businesses;
– audits in progress;
– the timely implementation of agreed
audit actions; and
– progress on other projects including
the implementation of improvements
agreed under the most recent
External Quality Assessment.
Actions agreed as part of GIA team
audits are tracked. The timely
completion of audit actions is then
tracked as part of the normal
management process and is also linked
to management bonuses. The Audit
Committee reviews progress on the
completion of these actions with the
Head of GIA and other members of
management at each of its meetings.
External Quality Assessments (‘EQAs’) by
independent external consultants are
conducted at least every five years to
confirm compliance by the GIA team
with the International Standards for the
Professional Practice of Internal Auditing
(IIA Standards). An internal review
against the same standards is
completed on an annual basis. The
most recent EQA was completed in 2021
by EY.
One former member of the KPMG audit
team was appointed to a role in the
Group Internal Audit team over the
course of the year under review.
However, he was not appointed to a role
that falls within the provisions of the
policy requiring consultation as to his
appointment.
Non-Audit Services
The Audit Committee has approved a
policy on the engagement of the
external auditor to provide non-audit
services. This provides that the external
auditor is permitted to provide
non-audit services that are not, or are
not perceived to be, in conflict with
auditor independence, providing they
have the competence to carry out the
work and are the most appropriate to
undertake it. A number of specific types
of non-audit services are prohibited
under the policy.
The policy also provides that any
non-audit services that would result in
the aggregate of non-audit fees paid
to the external auditor exceeding 50%
of annual audit fees must be approved
in advance by the Chief Executive and
the Chairman of the Audit Committee.
The Committee is kept informed by
management of all non-audit
assignments being undertaken by the
external auditor and the aggregate
level of fees to be paid for such
assignments is pre-approved by the
Chairman of Audit Committee.
Details of the amounts paid to the
external auditor during the year for
non-audit services are set out in note
2.3 on page 167. The chart above sets
out the audit and non-audit fees paid
to the external auditor over the
five-year period from 2019 to 2023
inclusive.
Audit vs Non-Audit Fees
Non-Audit
as % of Audit
4%
4%
3%
3%
3%
2023 3,671
3,594
3,267
2,930
2,740
46
86
111
140
159
2022
2021
2020
2019
Audit £’000
Non-Audit £’000
AUDIT COMMITTEE REPORT CONTINUED
116 DCC plc \ Annual Report and Accounts 2023
At the request of the Board, the
Committee considered whether the
2023 Annual Report and Accounts met
these requirements.
The Committee considered and
discussed with management the
processes followed in the preparation of
the 2023 Annual Report and Accounts,
in particular planning, co-ordination
and review processes. The Committee
also noted the formal review of the
Annual Report and Accounts
undertaken by KPMG. This enabled the
Committee and then the Board to
conclude that the Annual Report and
Accounts, taken as a whole, is fair,
balanced and understandable and that
it provides the necessary information for
shareholders to assess the Group’s
performance, business model and
strategy.
In relation to the 2023 Annual Report
and Accounts, the Committee assessed
whether suitable accounting policies
had been adopted and whether
management had made appropriate
estimates and judgements. The
Committee obtained support from the
external auditor in making these
assessments.
The Committee focused on matters it
considered to be important by virtue of
their impact on the Group’s results and
particularly those which involved a
relatively higher level of complexity,
judgement or estimation by
management. The table on page 117
sets out the significant matters
considered by the Committee in relation
to the financial statements for the year
ended 31 March 2023.
Management confirmed to the
Committee that they were not aware of
any material misstatements in the
financial statements for the year ended
31 March 2023 and KPMG confirmed that
they had found no material
misstatement in the course of their work.
Distributable Reserves
The Committee reviews the position
regarding distributable reserves in order
to recommend payment of the interim
and final dividends.
Going Concern and Viability
Statement
The Audit Committee reviews the draft
Going Concern and Viability Statements
prior to recommending them for
approval by the Board. These
statements are included in the Risk
Report on page 84.
Fair, Balanced and Understandable
As required by the Code, the Board
should present a fair, balanced and
understandable assessment of the
Company’s position and prospects, and
specifically confirm that it considers that
the Annual Report and Accounts, taken
as a whole, is fair, balanced and
understandable and provides the
information necessary for shareholders
to assess the Company’s performance,
business model and strategy.
The Audit Committee ensures
co-ordination between GIA and the
external auditor, with regular meetings
held each year between them to
maximise the benefits of clear
communication and co-ordination
of their activities.
The Head of GIA has direct access to
the Chairman of the Audit Committee
and the Audit Committee meets with
the Head of GIA on a regular basis
without other members of management.
IT Assurance
The IT Assurance team forms part of
the wider GIA team. In addition to IT
audit reports, the Head of GIA and
Head of IT Assurance report to the
Audit Committee on initiatives being
undertaken around the Group in
relation to cyber security and IT
project management. This includes
compliance with the Group Information
Security Policy.
Reporting
Reporting Processes
An important part of the Committee’s
role is to ensure that the Company’s
reporting, including its half-year
unaudited accounts and Annual Report
and Accounts, are supported by
suitably detailed records and analysis.
The Committee reports its findings and
makes recommendations to the Board
on the Company’s external reporting
accordingly.
KPMG, as the Company’s external
auditor, supports the Committee in this
role. In the course of its annual audit, it
considers whether accounts have been
prepared in accordance with IFRS and
whether adequate accounting records
have been kept. The auditor’s report to
shareholders can be found on pages 147
to 153.
The GIA team also contributes to this
assurance process by reviewing
compliance with internal financial
reporting processes.
117DCC plc \ Annual Report and Accounts 2023
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Significant Matters in relation to the Financial Statements for the Year Ended 31 March 2023
Goodwill and Intangible Assets
As set out in note 3.3 to the financial
statements, the Group had
goodwill and intangible assets of
£2,957.6 million at 31 March 2023. To
satisfy itself that this balance was
appropriately stated, the Committee
considered the impairment reviews
carried out by management. The
Group’s annual impairment review
was carried out using the carrying
values of subsidiaries at 28 February
2023 and the latest three-year
business plans prepared for the
subsidiaries in question.
In performing their impairment reviews,
management determined the
recoverable amount of each cash
generating unit (‘CGU’) and compared
this to the carrying value at the date
of testing. The recoverable amount of
each CGU is the higher of its fair value
less costs to sell and its value in use.
Management uses the present value
of future cash flows to determine the
value in use. In calculating the value
in use, management judgement is
required in forecasting cash flows of
CGUs, in determining the long-term
growth rate and selecting an
appropriate discount rate.
Management reported to the
Committee that future cash flows of
each CGU had been estimated based
on the most up to date three-year
plan for the business in question and
discounted using discount rates that
reflected the risks associated with
each CGU. Sensitivity analysis was
performed by adjusting the discount
rate, cash flows and the long-term
growth rate. The Committee
considered and discussed with
management the key assumptions
used in this review to understand their
impact on the CGUs’ recoverable
amounts. The Committee in particular
considered and discussed with
management the assumptions in
relation to one CGU where the
sensitivity analysis, under certain
scenarios, indicated that the value in
use was lower than the carrying value.
The Committee was satisfied that the
significant assumptions used for
determining the recoverable amounts
had been appropriately scrutinised,
challenged and were suciently
robust. The Committee agreed with
management’s conclusion that the
cash flow forecasts supported the
carrying value of goodwill and
intangible assets.
Business Combinations
As set out in note 5.2 to the Group
financial statements, the Group
completed a number of acquisitions
during the year, the most significant
of which were the acquisitions of
Medi-Globe and PVO. The Group
deployed £365.1 million in total
consideration to acquisitions
completed during the year. This total
consideration was satisfied by a net
cash outflow of £318.5 million and
acquisition related liabilities of
£46.6 million.
Business combinations are accounted
for using the acquisition method which
requires that the assets and liabilities
assumed are recorded at their
respective fair values at the date of
acquisition, being the date the Group
obtains control of the business being
acquired. The application of this
method requires certain estimates
and assumptions, particularly
concerning the determination of the
fair values of the acquired assets
and liabilities assumed at the date
of acquisition.
Management reported to the
Committee that in conducting
their review of the fair values of the
acquired assets and liabilities at
the date of acquisition, identifiable
net assets of £134.6 million,
non-controlling interests of £0.2 million
and goodwill of £230.8 million were
acquired. Management engaged
independent experts to assist with the
valuation of intangible assets on the
Medi-Globe and PVO acquisitions. In
addition, the Committee discussed
and agreed with management’s
recommendations on the estimated
useful lives of intangible assets arising
on the Group’s acquisitions.
The Committee considered and
discussed with management the key
assumptions used in determining the
fair value of assets and liabilities
acquired and was satisfied that the
process and assumptions used in
determining the fair values of assets
and liabilities had been appropriately
scrutinised and challenged and were
suciently robust. The Committee
agreed with management’s
assessment of the fair values of assets
and liabilities acquired through
business combinations and was
satisfied that the related disclosures
required under IFRS 3 were complete,
accurate and understandable.
Impact of Climate Change
The Committee considered the
Company’s approach to the reporting
of the impact of climate change on its
activities in the financial statements
for the year ended 31 March 2023,
including compliance with the
recommendations of the Taskforce on
Climate-related Financial Disclosures
(‘TCFD’). More detail on compliance
with TCFD is contained in the
Sustainability Review on page 65.
Other Matters
The Committee considered and is
satisfied with a number of other
judgements which have been made
by management including revenue
recognition, exceptional items, lease
accounting, provisioning for
impairment of trade receivables and
inventories, tax provisioning and the
carrying amounts of the parent
company’s investments in subsidiary
undertakings and the amounts owed
by these subsidiary undertakings.
118 DCC plc \ Annual Report and Accounts 2023
GOVERNANCE CONTINUED
REMUNERATION
REPORT
Executive remuneration continues to reward
strong company performance and strategic
contribution.
CHAIRMAN’S INTRODUCTION
I am pleased to present the
Remuneration Report for the year
ended 31 March 2023.
The Report includes the following
sections:
– This Chairman’s Introduction
– Remuneration at a Glance (page 122)
– Remuneration Policy Report
(pages 123 to 129)
– Annual Report on Remuneration
(pages 130 to 141)
The purpose of DCC’s Remuneration
Policy, which was renewed at the 2021
AGM with strong shareholder support, is
to incentivise executive Directors and
other senior Group executives to create
shareholder value on a consistent and
sustainable basis. Consequently, their
remuneration is weighted towards
performance, both in terms of financial
and non-financial objectives.
PERFORMANCE FOR THE YEAR
DCC delivered a strong performance in
the year ended 31 March 2023:
– Group adjusted operating profit was
11.3% ahead of the prior year.
– Adjusted earnings per share grew by
6.1%, and it is proposed that the total
dividend for the year will be increased
by 6.5%.
– Return on capital employed, a key
metric for DCC, was 15.1% and was
again substantially in excess of the
Group’s cost of capital.
DCC has generated a strong
shareholder return over the last ten
years, as illustrated in the chart on
the left.
David Jukes (Chairman)
Caroline Dowling
Laura Angelini
Length of Tenure on the
Remuneration Committee
as at 31 March 2023 (years)
0.5
4.5
3.8
DCC
0
2013
2014 2015 2016 2017 2018 2019 2020 2021 2022
2023
FTSE 100
£400
£350
£250
£300
£200
£150
£100
£50
DCC’s 10 year TSR performance versus
the FTSE 100
Value of £100 invested on 31 March 2013
119DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
were appropriate at that level and that
no discretion should be exercised when
approving the bonus outcome.
Further details of the performance
targets and achievement against those
targets are set out on pages 130 to 132.
Long-Term Incentives
The extent of vesting of the Long-Term
Incentive Plan (‘LTIP’) awards granted in
November 2020 was based on DCC’s
Return on Capital Employed (‘ROCE’),
Earnings per Share (‘EPS’) and Total
Shareholder Return (‘TSR’) performance
over the three-year period ended
31 March 2023. The earliest exercise date
of these options will be November 2025.
The Committee has considered the
outcome of the 2020 LTIP cycle against
the original targets. As originally set,
vesting of the EPS component was
based on outperforming UK RPI, a
benchmark that was subsequently
removed from EPS targets for LTIP
cycles, as it has been also for the
majority of other FTSE 100 companies,
given the lack of correlation between
DCC earnings and UK RPI. The very
significant increase in RPI, particularly
over the last two years, meant that the
inflationary benchmark to our earnings
growth was far in excess of that
expected when the 2020 LTIP EPS
targets were originally set.
The Committee agreed that, whilst the
formulaic outcomes against the ROCE
and TSR measures were a fair reflection
of shareholder experience, the EPS
outcome distorts DCC’s strong
underlying annualised EPS growth of
8.0% p.a. over the three years ended
31 March 2023.
The Committee is satisfied that the
executive Directors’ remuneration
reflects the Group’s strong performance
in the year.
REMUNERATION OF EXECUTIVE
DIRECTORS FOR THE YEAR
Salaries
For the year ended 31 March 2023, the
Chief Executive’s salary increased by 3%.
In agreeing this increase, the Committee
considered the average salary increase
for the general workforce. The CFO’s
salary increased by 8% in recognition of
his demonstrated development in role
and full contribution at Board level.
Further details regarding remuneration
arrangements for the year ended
31 March 2023 are set out on page 130.
Bonuses
The annual bonuses for the executive
Directors in respect of the year ended
31 March 2023 were based on
performance against targets for growth
in adjusted earnings per share (up to
70% of maximum potential), along with
overall contribution and attainment of
strategic and sustainability targets (up
to 30% of maximum potential).
Group and individual Director
performance against these targets has
been reflected in a bonus outcome for
the Chief Executive of 110.8% of salary
(compared to a maximum potential of
200%). For the CFO the bonus outcome
is 88.6% of salary (compared to a
maximum potential of 160%).
The Committee reviewed the calculated
outcomes in the context of the strong
performance of the Group and
determined that the bonus payouts
The Committee unanimously agreed
that the nil vesting of the EPS
component, as suggested by the
formulaic outcome against the inflation-
linked targets, was not a fair reflection of
the strong underlying earnings growth
over this period and concluded the
most appropriate basis on which to
determine vesting of the EPS
component, which accounts for 40% of
the 2020 LTIP award, is to use the EPS
range set for the 2021 LTIP (i.e. 3% to 9%
p.a.), which delivers LTIP vesting of 35%,
compared to nil vesting had the original
targets been used.
The Remuneration Committee is
engaging with major shareholders on
the approach taken in relation to the
vesting of the 2020 LTIP award, as
described above.
Regarding the prior year, the
Remuneration Committee determined
that the LTIP awards granted in
November 2019 would vest at 64.5%,
based on DCC’s ROCE, EPS and TSR
performance over the three-year period
ended 31 March 2022. This was
consistent with the estimated vesting
of 64.5% disclosed in last year’s Report.
The earliest exercise date for the
awards granted in November 2019 will
be November 2024.
Further details on these vestings are set
out on page 132.
Details of LTIP awards granted to the
executive Directors in November 2022
are contained in the table on page 133.
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
The review of our Remuneration Policy
will be a priority for the year ahead.
DAVID JUKES
Chairman
REMUNERATION REPORT CONTINUED
120 DCC plc \ Annual Report and Accounts 2023
SHAREHOLDER ENGAGEMENT
The Committee engages with major
shareholders on remuneration matters,
particularly on significant policy
changes, and considers the views of
shareholder organisations and proxy
voting agencies.
Last year, the Committee consulted with
major shareholders on the approach
taken in relation to the vesting of the
2019 LTIP award, as described in detail
in last year’s Report. The Committee
considered that the application of
discretion at the end of the three-year
performance period, considering all
relevant information, including
adjustments guidance provided by
major shareholders and their
representative bodies, was fair and
appropriate. While the Committee was
disappointed with the relatively low vote
of 89% in favour of the Remuneration
Report in 2022, it was pleased that
most shareholders saw the change as
intended – an adjustment for an
exceptional and unforeseen event.
The Committee acknowledges that
shareholders have a right to a ‘say on
pay’ by putting the Remuneration
Report and the Remuneration Policy, as
required, to advisory votes at the AGM.
At the 2023 AGM, an advisory resolution
on the Remuneration Report, excluding
the Remuneration Policy, will again be
put to shareholders. As we are not
making any changes to the
Remuneration Policy, which shareholders
approved at the 2021 AGM, we will not
put this to a shareholder vote until 2024.
Long-Term Incentives
In the year ending 31 March 2024, the
executive Directors will be granted
LTIP awards consistent with the
Remuneration Policy. The performance
conditions will be based on ROCE, EPS
and TSR performance over three years.
The grant value will be consistent with
the year ended 31 March 2023 at up to
200% of salary for the Chief Executive
and CFO.
Non-executive Director Fees
As outlined in detail on page 139, the
Chairman and Chief Executive
undertook a thorough review of the
structure and competitiveness of our
non-executive Director fees relative to
our peers. This revealed two areas of
divergence from standard market
practice, firstly in relation to the
payment of Committee membership
fees which we have now consolidated
into one base fee, and secondly in
relation to our base fees and typical
market levels for roles at companies of
similar scale. We have also taken the
opportunity to introduce an additional
fee for the role of Workforce
Engagement Director, as is common
for companies of our scale, and have
increased the additional fee for
chairing the Audit Committee and for
the role of Senior Independent Director
to reflect the growing time required to
fulfil these roles.
Taking the loss of Committee
membership fees into account, these
changes will result in a modest overall
uplift to each of our non-executive
Directors’ actual fees and one which is
less than the average increase
expected to be awarded to the Group’s
employees overall. Full details of the new
fee structure are included on page 140.
REMUNERATION FOR THE YEAR AHEAD
Salaries
For the year ending 31 March 2024, the
Committee agreed to increase the Chief
Executive’s salary by 4% and the CFO’s
salary by 9%.
In reaching this decision, the Committee
was mindful of the current shareholder
sentiment that executive director salary
increases should be in line with or below
those granted to the rest of the
workforce. However, we believe that the
circumstances surrounding our CFO’s
salary are exceptional, and warrant a
higher increase.
When Kevin was appointed in 2020, his
salary was set approximately 15% lower
than that of his predecessor to reflect
his level of experience at the time, with
the Committee agreeing to review the
matter regularly as he developed in
his role.
Since then Kevin has performed at the
highest level and made a significant
contribution to the success of the
business. In light of his contribution, we
believe that a salary increase of 9% is
fair, apporpriate and commensurate
with the levels of pay seen elsewhere in
the market and the need to retain key
talent for the benefit of the business
and all of its stakeholders.
Bonuses
For the year ending 31 March 2024, the
bonuses for the executive Directors will,
consistent with the Remuneration Policy,
be based 70% on growth in Group
adjusted operating profit and 30% on
strategic objectives. The maximum
award opportunity for the year will
remain 200% of the salary for the Chief
Executive and 160% for the CFO.
121DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
COMMITTEE MEMBER CHANGES
As noted in last year’s report, Pamela
Kirby retired from the Committee in July
2022. Tufan Erginbilgic resigned from the
Committee in December 2022. The
Committee welcomed Laura Angelini as
a new member of the Committee in
September 2022, having joined the
Board in July 2021. The Committee also
welcomed Katrina Clie as a new
member of the Committee, from the
date of her appointment to the Board
on 1 May 2023.
CONCLUSION
I am satisfied that the Remuneration
Committee has implemented the
Group’s Remuneration Policy in the year
ended 31 March 2023 in a manner that
properly reflects the performance of the
Group in the year. I strongly recommend
that shareholders vote in favour of the
2023 Remuneration Report at the
2023 AGM.
We welcome and will consider any
shareholder feedback on the
implementation of the Remuneration
Policy and the 2023 Remuneration
Report.
On behalf of the Remuneration
Committee
DAVID JUKES
Chairman
Remuneration Committee
15 May 2023
EMPLOYEE ENGAGEMENT
The Committee is mindful of the
provisions in the UK Corporate
Governance Code in setting policy for
executive Director remuneration. The
Remuneration Committee considers
broader company pay policies at
various meetings throughout the year.
The Committee considers these and
more general pay practices and trends
when making compensation decisions
for executive Directors. A copy of the
Annual Report is issued to every
business in the Group. Internal
communication events, such as town
halls, then allow employees to raise any
questions that they may have on this
and other issues. Further details on the
Committee’s approach to employee
engagement are included on page 126.
ENERGY STRATEGY
The Group continues to implement its
strategy for the Energy division by
leading the sales, marketing and
distribution of low-carbon energy
solutions for customers. The Group is
progressing with its target of getting to
net zero at Scope 1, 2 and 3 by 2050 or
sooner. The implementation of our
energy strategy was reflected in
executive Director bonuses for the year
under review.
UK COMPANIES (MISCELLANEOUS
REPORTING) REGULATIONS 2018 AND
SHAREHOLDERS RIGHTS DIRECTIVE II
As an Irish-incorporated company, DCC
is not subject to the 2018 Regulations.
However, given our listing on the London
Stock Exchange, we continue our
practice of substantially applying these
regulations voluntarily.
Following the implementation of the EU
Shareholder Rights Directive II (SRD II)
into Irish law in March 2020, Irish
company law now requires an advisory
shareholder vote on remuneration
reports and remuneration policies at
AGMs. However, the SRD II requirements
only apply to companies whose shares
are admitted to trading on an
EU-regulated market, which, following
Brexit, does not include DCC.
Nonetheless, in this year’s Report we
have substantially reported against SRD
II requirements as a matter of good
practice.
REMUNERATION REPORT CONTINUED
122 DCC plc \ Annual Report and Accounts 2023
REMUNERATION AT A GLANCE
HOW HAVE WE PERFORMED?
2023
2022
2021
430.1p
456.27p
386.6p
Adjusted EPS +6.1%
2023
2022
2021
£589.2m
£655.7m
£530.2m
Adjusted operating profit +11.3%
2023
2022
2021
16.5%
15.1%
17.1%
Return on capital employed 15.1%
HOW WAS THIS REFLECTED IN EXECUTIVE DIRECTOR PAY?
Annual bonus outcome for year ended 31 March 2023
Donal Murphy
Base Salary €909,510
Kevin Lucey
Base Salary €510,300
+ +
Bonus Potential (200% of salary) Bonus Potential (160% of salary)
Group EPS
70% of Bonus
Potential
Strategic Objectives
15% of Bonus
Potential
ESG Objectives
15% of Bonus
Potential
Group EPS
70% of Bonus
Potential
Strategic Objectives
15% of Bonus
Potential
ESG Objectives
15% of Bonus
Potential
Performance
in Year 44.3%
Performance
in Year 100%
Performance
in Year 62.5%
Performance
in Year 44.3%
Performance
in Year 100%
Performance
in Year 62.5%
Performance in Year = 55.4%
= 110.8% of salary = €1,007,555
Performance in Year = 55.4%
= 88.6% of salary = €452,248
1/3 Deferred and
Converted to
DCC Shares
2/3 Paid in Year
1/3 Deferred and
Converted to
DCC Shares
2/3 Paid in Year
CEO
CFO
E
XECUTIVE DIRECTORS’ TOTAL REMUNERATION
Fixed (Salary, Benefits, Retirement Benefit Expense)
Further details on remuneration are set out on page 130.
2023
€’000
2022
3,697
3,106
1,566
1,528
2023 2022
LTIPAnnual Bonus
0
1,000
2,000
3,000
4,000
Donal Murphy Kevin Lucey
E
XECUTIVE DIRECTORS’ SHAREHOLDINGS
Policy requirement
Further details on shareholding are set out on page 138.
Multiple of salary
Holding = 9.3x
Holding = 1.7x
Multiple of salary
0
1
2
3
4
5
6
7
8
9
10
0
1
2
3
4
5
Further details on bonus outcomes are set out on page 130.
2020 LTIP award outcome based on results for three-year period ended 31 March 2023
13%
MIN
Actual: 16.2%
MAX
ROCE
17%
3%
MIN
MAX
EPS Growth
9%
Actual: 8%
Below index
MIN
MAX
TSR Outperformance of FTSE 100
8%
Index
Actual: nil
Extent of vesting Extent of vesting Extent of vesting
% % %
Total amount of 2020 LTIP awards that will vest in November 2025: 69%
Further details on LTIP are set out on page 132.
123DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
REMUNERATION POLICY REPORT
DCC’s Remuneration Policy (‘the Policy’) is set out below. As an
Irish-incorporated company, DCC is not required to comply
with UK regulations that require UK companies to submit their
remuneration policies to a binding shareholder vote. In
addition, following Brexit, requirements under Irish company
law implemented to give eect to the Shareholders Rights
Directive II only apply to companies whose shares are
admitted to trading on an EU-regulated market. However,
the Board recognises the need for our remuneration policies,
practices and reporting to reflect best corporate governance
practice and has substantially applied these regulations.
The Remuneration Policy was submitted to an advisory,
non-binding vote at the 2021 AGM.
The Policy is designed and managed to support a
high-performance and entrepreneurial culture, taking into
account competitive market positioning.
The Board seeks to align the interests of executive Directors
and other senior executives with those of shareholders within
the framework set out in the UK Corporate Governance Code
(‘the Code’). Central to this Policy is the Group’s belief in
long-term, performance-based incentivisation and the
encouragement of share ownership.
The primary Policy objective is to have overall remuneration
reflect performance and contribution, while maintaining
salary rates and the short-term element of incentive
payments that are broadly in line with arrangements for
companies of similar size, scale and complexity.
DCC’s strategy of fostering entrepreneurship requires
well-designed incentive plans that reward the creation of
shareholder value through organic and acquisitive growth
while maintaining high returns on capital employed, strong
cash generation and a focus on sound risk management.
The typical elements of the remuneration package for
executive Directors are base salary, pension and other
benefits, annual performance-related bonuses and
participation in long-term performance plans, which promote
the creation of sustainable shareholder value.
The Remuneration Committee seeks to ensure:
– that the Group will attract, motivate and retain individuals
of the highest calibre;
– that executives are rewarded in a fair and balanced way for
their individual and team contributions to the Group’s
performance;
– that executives receive a level of remuneration that is
appropriate to their scale of responsibility and individual
performance;
– that the overall approach to remuneration aligns with the
sectors and geographies within which the Group operates
and the markets from which it draws its executives; and
– that risk is properly considered in setting remuneration
policy and determining remuneration packages.
The Remuneration Committee takes external advice from
remuneration consultants on market practice within
similar-sized UK-listed and Irish companies to ensure that
remuneration remains competitive and structures continue to
support the key remuneration policy objectives. Benchmarking
data is used to inform remuneration decisions, but does not
drive changes.
The Committee is mindful of managing any conflicts of
interest. No individual was involved in determining their own
remuneration arrangements.
The design of executive Director remuneration concerning the application of the Code is laid out in the table below:
Clarity
Our Remuneration Policy and the approach to its implementation are clearly communicated to shareholders
and well understood by participants.
Simplicity
We operate a simple market-aligned salary and benefits structure, with annual and long-term
performance-based incentives with payouts linked to only a small number of performance measures.
Risk
We manage risk by carefully setting performance targets in the context of a wide range of reference points.
The Committee retains the discretion to moderate outcomes in the context of underlying performance. The
senior executive remuneration structure is heavily weighted to longer-term or deferred elements of pay,
helping to ensure our pay structure reinforces a long time horizon.
Predictability
There are defined threshold and maximum pay scenarios described on page 128.
Proportionality
Remuneration is weighted towards financial and non-financial performance, measures for which are selected
to align with strategy. We set challenging performance targets that are commensurate with the incentive
opportunities awarded.
Alignment to
culture
The remuneration design aligns closely with DCC’s performance culture and values, which reinforce
longer-term decision-making and collective eorts. Our annual bonus plan includes sustainability/
ESG targets.
REMUNERATION REPORT CONTINUED
124 DCC plc \ Annual Report and Accounts 2023
Element and link to strategy Operation Maximum opportunity
BASE SALARY
Attract and retain skilled
and experienced senior
executives.
Base salaries are reviewed annually on 1 April.
The factors taken into account include:
– Role and experience
– Company performance
– Personal performance
– Competitive market practice
– Salary increases across the Group
– Benchmarking versus companies of similar size and
complexity within the UK and Irish markets
When setting pay policy, account is taken of movements
in pay generally across the Group.
There is no prescribed maximum
base salary or maximum annual
increase.
The general intention is that any
increases will align with the increase
across the Group’s workforce.
Increases may be higher in certain
circumstances, such as role and
responsibility changes or significant
market practice changes.
BENEFITS
To provide market competitive
benefits.
Benefits include the use of a company car, life/disability
cover, health insurance and club subscriptions.
No maximum level has been set as
payments depend on individual
circumstances.
ANNUAL BONUS
To reward the achievement of
annual performance targets.
Bonus payments to executive Directors are based upon
meeting pre-determined targets for several key
measures, including Group adjusted operating profit
and overall contribution and attainment of strategic
objectives. The strategic targets focus on areas such as
delivery of strategy, organisational development, IT,
investor relations, financing, risk management,
sustainability/ESG and talent development/succession
planning.
The measures, their weighting and the targets are
reviewed annually.
The Committee determines bonus levels based on
actual performance after the year end. The Committee
can apply appropriate discretion in specific
circumstances regarding determining the bonuses to be
awarded. In particular, the Committee has the
discretion to reduce bonuses if a pre-determined target
return on capital employed is not achieved.
Regarding the executive Directors, 33% of any bonus
earned, once the appropriate tax and social security
deductions have been made, will be invested in DCC
shares and made available to them, with accrued
dividends, after three years or earlier if their employment
terminates.
A formal clawback policy is in place for the executive
Directors, under which bonuses are subject to clawback
for three years in the event of a material restatement of
financial statements or other specified events. Further
details on the clawback policy are set out on page 126.
The Committee has discretion in relation to bonus
payments to joiners and leavers.
The maximum bonus potential for
the executive Directors, permitted
under the Policy, is 200% of base
salary.
The Remuneration Committee will
set a maximum to apply for each
financial year, which will be
disclosed in the Annual Report on
Remuneration.
A defined target level of
performance has been set for which
50% of the maximum bonus is
payable.
125DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Element and link to strategy Operation Maximum opportunity
LONG-TERM INCENTIVE PLAN (‘LTIP’)
To align the interests of
executives with those of the
Group’s shareholders and to
reflect the Group’s culture of
long-term performance-
based incentivisation.
The LTIP provides for the Remuneration Committee to
grant nominal cost (€0.25) options to acquire shares to
Group employees, including executive Directors.
The vesting period is typically three years from the date
of grant, with the extent of vesting being determined
over three years, based on the performance conditions
set out in the Annual Report on Remuneration.
The executive Directors have a two-year hold period as
a post-vest sale restriction.
In addition to the detailed performance conditions, an
award will not vest unless the Remuneration Committee
is satisfied that the Company’s underlying financial
performance has shown a sustained improvement in the
three-year period since the award date.
Vesting will be determined by the Remuneration
Committee, in its absolute discretion, based on the
performance conditions set out in the Annual Report on
Remuneration each year.
No re-testing of the performance conditions is
permitted.
The performance conditions and their relative weighting
may be modified by the Remuneration Committee in
accordance with the Rules of the LTIP, provided that
they remain no less challenging and are aligned with
the interests of the Company’s shareholders.
A formal clawback policy is in place, under which
awards are subject to clawback in the event of a
material restatement of financial statements or other
specified events. Further details on this clawback policy
are set out on page 126.
The market value of the shares
subject to the options granted in
respect of any accounting period
may not normally exceed 200% of
base salary.
In exceptional circumstances, the
market value of the shares subject
to the options granted in respect of
any accounting period may not
exceed 300% of base salary. This
higher limit will only be used in
exceptional circumstances, for
example, in the case of external
recruitment.
PENSION
To reward sustained
contribution.
The executive Directors are eligible to participate in a
defined contribution pension scheme (or receive cash in
lieu of contributions to a defined contribution pension
scheme).
Pension contributions (paid into the
defined contribution scheme or
paid as cash in lieu) for existing
executive Directors are capped at
15% of base salary, in line with the
broader workforce.
Newly appointed executive
Directors will receive pension
contributions in line with the
broader workforce.
Pensionable salary is defined as
base salary.
REMUNERATION REPORT CONTINUED
126 DCC plc \ Annual Report and Accounts 2023
Remuneration Policy for Other Employees
While the Remuneration Committee’s specific oversight of
individual executive remuneration packages extends only to
the executive Directors and a number of senior Group
executives, it aims to create a broad policy framework, to be
applied by management to senior executives throughout the
Group, through its oversight of remuneration structures for
other Group and subsidiary senior management and of any
major changes in employee benefits structures throughout
the Group.
DCC employs 16,100 people in 22 countries. Remuneration
arrangements across the Group dier depending on the
specific role being undertaken, the industry in which the
business operates, the level of seniority and responsibilities,
the location of the role and local market practice.
Consultation with Employees
The Remuneration Committee considers wider company pay
policies at various meetings throughout the year. The
Committee considers these and broader pay practices and
trends into account when making executive Directors’
compensation decisions. The Annual Report sets out the
relationship between executive Director pay and Group
employees average remuneration and how executive
Directors’ salary increases, and pension contributions align
with the broader workforce. A copy of the Annual Report is
issued to every business in the Group. Internal communication
events, such as town halls, then allow employees to raise any
questions that they may have on this and other issues.
Each of our businesses is responsible for engaging with their
respective workforces in relation to remuneration. The
Committee believes such an approach is suitable in light of
DCC’s decentralised business model. However, the
Committee has oversight of workforce pay and policies at a
Group level and at a business unit executive level, which
enables it to ensure that the approach taken to executive
remuneration is consistent with those workforces.
Given the divergent nature of our businesses, the Committee
does not believe that a standardised approach to
remuneration is appropriate. However, it does pay particular
attention to whether each element of remuneration is
consistent with the Company’s remuneration philosophy.
Consultation with Shareholders
The Committee engages in dialogue with major shareholders
on remuneration matters, particularly in relation to planned
significant changes to the Policy. The Committee also takes
into account the views of shareholder organisations and
proxy voting agencies.
The Committee acknowledges that shareholders have a right
to a ‘say on pay’ by putting the Remuneration Report and
the Remuneration Policy, as required, to advisory votes at
the AGM.
Remuneration Committee Discretion
The discretion available to the Committee in respect of the
various elements of executive remuneration is summarised
below.
Pay element Discretion available
Bonus The Committee can apply appropriate
discretion regarding the financial and
non-financial/strategic targets in specific
circumstances. In particular, the Committee has
the discretion to reduce bonuses if a
pre-determined target return on capital
employed is not achieved.
LTIP Vesting is determined by the Remuneration
Committee, at its absolute discretion, based on
certain performance conditions.
Payments from Existing Awards
Subject to the achievement of the applicable performance
conditions, executive Directors are eligible to receive payment
from any award made prior to the approval and
implementation of the Remuneration Policy detailed in this
Report.
Clawback Policy
Bonus payments may be subject to clawback for three years
from payment in certain circumstances, including:
– a material restatement of the Company’s audited financial
statements;
– a material breach of applicable health and safety
regulations; or
– business or reputational damage to the Company or a
subsidiary arising from a criminal oence, serious
misconduct or gross negligence by the individual executive.
The LTIP allows the Remuneration Committee to reduce or
impose further conditions on awards prior to vesting in some
circumstances as outlined above.
Remuneration Policy for Recruitment of New Executive
Directors
In determining the remuneration package for a new executive
Director, the Remuneration Committee would be guided by
the principle of oering such remuneration as is required to
attract, retain and motivate a candidate with the particular
skills and experience required for a role. Provided the
remuneration package oered is in the best interests of the
Company and the shareholders. The Remuneration
Committee will generally set a remuneration package in
accordance with the terms of the approved Remuneration
Policy in force at the time of the appointment. However, the
Committee may make payments outside of the Policy if
required in particular circumstances and if in the Company’s
and the shareholders’ best interests. Any such payments
related to the buyout of variable pay (bonuses or awards)
from a previous employer will be based on matching the
estimated fair value of that variable pay and will take
account of the performance conditions and the time until
vesting of that variable pay.
For an internal appointment, any variable pay element
awarded in respect of the prior role and any other ongoing
remuneration obligations existing prior to appointment would
be honoured.
127DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Exit Payments Policy
The provisions on exit in respect of each of the elements of pay are as follows:
Salary and Benefits
Exit payments are made only in respect of base salary for the relevant notice period. The Committee may, at its discretion, also
allow for the payment of benefits (such as payments in lieu of defined contribution pension) for the notice period. The notice
period applies to both the Company and the executive in all cases.
Annual Bonus
The Remuneration Committee can apply appropriate discretion in determining the bonuses to be awarded based on actual
performance achieved and the period of employment during the financial year.
In relation to deferred bonuses which have been invested in DCC shares, they will be made available on the participant’s
cessation date, together with accrued dividends.
Long-Term Incentive Plan
To the extent that a share award or option has vested on the participant’s cessation date, the participant may exercise the
share award or option during a specified period following such a date. In no event may the share award or option be exercised
later than the expiry date as defined in the award certificate.
Generally, a share award or option that has not vested on the participant’s cessation date immediately lapses.
The Committee would typically exercise its discretion when dealing with a participant who ceases to be an employee because
of certain exceptional circumstances e.g. death, injury or disability, redundancy, retirement or any other exceptional
circumstances. In such circumstances, any share award or option that has not already vested on the participant’s cessation
date would be eligible for vesting on a date determined by the Remuneration Committee. The number of shares, if any, in
respect of which the share award or option vests would be determined by the Remuneration Committee.
The approach for ‘good leavers’ is to pro-rate awards based on time served as a proportion of the three-year vesting period.
The extent of vesting under the performance conditions will be determined in the usual way at the end of the three-year
vesting period.
If a participant ceases to be an employee due to termination of his employment for serious misconduct, each share award and
option held by the participant, whether or not vested, will automatically lapse immediately upon the service of notice of such
termination, unless the Committee in its sole discretion, determines otherwise.
Pension
The rules of the Company’s defined contribution pension scheme contain detailed provisions in respect of the termination of
employment.
Service Contracts
Donal Murphy has a service agreement with the Company with a notice period of six months. This service agreement provides
that either he or the Company could terminate his employment by giving six months’ notice in writing. At its sole discretion, the
Company may require that Mr Murphy ceases employment immediately instead of working out the notice period, in which case
he would receive compensation in the form of base salary only in respect of the notice period. The service contract also
provides for summary termination (i.e. without notice) in a number of circumstances, including material breach or grave
misconduct. The service agreement does not include any provisions for compensation due to loss of oce, other than the
notice period provisions set out above.
Kevin Lucey has a letter of appointment which provides for a six-month notice period. This letter of appointment provides that
either he or the Company could terminate his employment by giving six months’ notice in writing. At its sole discretion, the
company may require that Mr Lucey ceases employment immediately instead of working out the period of notice, in which case
he would receive compensation in the form of base salary only in respect of the notice period. The letter of appointment also
provides for summary termination (i.e. without notice) in a number of circumstances, including material breach or grave
misconduct. The letter of appointment does not include any provisions for compensation for loss of oce, other than the notice
period provisions set out above.
REMUNERATION REPORT CONTINUED
128 DCC plc \ Annual Report and Accounts 2023
Scenario Charts
Set out below is an illustration of the potential future remuneration that each executive Director could receive for the year ending
31 March 2024 at minimum, median and maximum performance (assuming (i) a constant share price and (ii) an uplift of 50% in the
share price).
As the Directors are paid in euro, the Remuneration Committee considers it appropriate that the figures disclosed in this Report
continue to be presented in euro.
Donal Murphy, Chief Executive
Kevin Lucey, Chief Financial Ocer
Fixed
Minimum
€
Median Maximum
(constant
share price)
Maximum
(share price
+50%
Minimum Median Maximum
(constant
share price)
Maximum
(share price
+50%
Long-Term Incentive PlanAnnual Bonus
100%
€1.16m
€3.05m
€4.94m
€5.88m
€0.68m
€1.68m
€2.68m
€3.23m
38%
31%
31%
24%
38%
38%
20%
48%
32%
6.0m
5.5m
5.0m
4.5m
4.0m
3.5m
3.0m
2.5m
2.0m
1.5m
1.0m
0.5m
0m
€
6.0m
5.5m
5.0m
4.5m
4.0m
3.5m
3.0m
2.5m
2.0m
1.5m
1.0m
0.5m
0m
100%
40%
27%
33%
25%
42%
33%
20%
52%
28%
Notes:
Minimum Performance comprises:
– Fixed pay – base salary, benefits and retirement benefit
expense.
– No annual bonus payout.
– No LTIP vesting.
Median Performance comprises:
– Fixed pay – base salary, benefits and retirement benefit
expense.
– 50% annual bonus payout, i.e. 100% of salary for CE and 80%
of salary for CFO.
– 50% vesting of LTIP i.e. 100% of salary.
Maximum Performance (constant share price) comprises:
– Fixed pay – base salary, benefits and retirement benefit
expense.
– 100% annual bonus payout, i.e. 200% of salary for CE and
160% of salary for CFO.
– 100% vesting of LTIP, i.e. 200% of salary.
Maximum Performance (share price + 50%) comprises:
– Fixed pay – base salary, benefits and retirement benefit
expense.
– 100% annual bonus payout, i.e. 200% of salary for CE and
160% of salary for CFO.
– 100% vesting of LTIP and 50% uplift in share price, equating
to 300% of salary.
Share Ownership Guidelines
DCC’s Remuneration Policy has at its core a recognition that the spirit of ownership and entrepreneurship is essential to
creating long-term high performance. DCC also acknowledges that share ownership is important in aligning the interests of
executive Directors and other senior Group executives with those of shareholders.
A set of share ownership guidelines is in place under which the Chief Executive, other executive Directors and other senior
Group executives are encouraged to build, over a five-year period from appointment, a shareholding in the Company with
a valuation relative to base salary as follows:
Executive
Share ownership guideline
(multiple of base salary)
Chief Executive x
Other Executive Directors x
Senior Group Executives x
Compliance with the Share Ownership Guidelines is reviewed annually by the Remuneration Committee. The executive
Directors’ position as at 31 March 2023 is set out in the Annual Report on Remuneration on page 138.
129DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Post-Employment Share Ownership Requirements
In accordance with the requirements of Provision 36 of the UK Corporate Governance Code, the Remuneration Committee has
introduced, with eect from 1 April 2019, Post-Employment Share Ownership Requirements under which the Chief Executive and
other executive Directors are required, after leaving the Group, including through retirement, to maintain a shareholding in the
Company for a two-year period, as below:
Executive Ratio of Share Ownership to Base Salary
Chief Executive 3 x
Other executive Directors 2 x
Base salary will be the Director’s base salary in eect at the date of ceasing employment.
For the purposes of these Requirements, share ownership will include shares, vested share options, unvested options no longer
subject to performance conditions, deferred bonus share awards, restricted stock awards and any other vested or unvested
share awards made under incentive plans operated by the Company which are not subject to performance conditions.
Shares held by a Director’s spouse and/or minor children and shares held in any trust for the benefit of the Director and/or their
spouse and minor children will be counted towards the share ownership requirement.
The valuation of the shareholdings in the Company will be reviewed at the end of each year based on the closing market price
of the Company’s shares. If the required ratio fails to be met due to factors other than a decrease in the market price of the
Company’s shares, the Director will be allowed an additional period of 12 months or such other period as the Remuneration
Committee may determine, to bring the shareholding back to the required level.
Policy on External Board Appointments
Executive Directors may accept external non-executive directorships with the Board’s prior approval. The Board recognises
the benefits that such appointments can bring to the Company and the Director in terms of broadening their knowledge and
experience. The executive Directors may retain the fees received for such roles.
Mr Murphy and Mr Lucey do not currently hold any external board appointments.
Policy for non-executive Directors
Fees Operation Maximum Opportunity
The fees paid to non-executive Directors
reflect their experience and ability and
the time demands of their Board and
Board Committee duties.
A basic non-executive Director fee is
paid for Board membership. Additional
fees are paid to the chairs of Board
Committees, to the Board Chair, to the
Senior Independent Director and to the
Workforce Engagement Director.
Additional fees may be paid in respect of
Company advisory boards.
The remuneration of the Board Chair is
determined by the Remuneration
Committee for approval by the Board.
The Board Chair absents himself from
the Committee meeting while this matter
is being considered.
The remuneration of the other
non-executive Directors is determined by
the Board Chair and the Chief Executive
for approval by the Board.
The fees are reviewed annually, taking
account of any changes in
responsibilities and the level of fees in a
range of comparable Irish and UK
companies.
No prescribed maximum annual
increase.
In accordance with the Articles of
Association, shareholders set the
maximum aggregate ordinary
remuneration (basic fees, excluding fees
for committee membership and chair
fees). The current limit of €850,000 was
set at the 2019 AGM.
Non-executive Directors do not
participate in the Company’s LTIP or
receive any pension benefits from the
Company.
Non-executive Directors’ Letters of Appointment
The terms and conditions of appointment of non-executive Directors are set out in their letters of appointment. The letters of
appointment are available for inspection at the Company’s registered oce during normal oce hours and at the AGM of the
Company.
REMUNERATION REPORT CONTINUED
130 DCC plc \ Annual Report and Accounts 2023
ANNUAL REPORT ON REMUNERATION
This section of the Remuneration Report gives details of remuneration outcomes for the year ended 31 March 2023. It also sets
out how the Remuneration Policy will operate in the year ending 31 March 2024, and provides additional information on the
operation of the Remuneration Committee.
Remuneration Outcomes for the Year Ended 31 March 2023
The table below sets out the total remuneration and breakdown of the elements received by each serving Director in relation to
the year ended 31 March 2023, together with prior year comparatives. An explanation of how the figures are calculated follows
the table.
Executive Directors’ Remuneration Details
Salary Benefits Bonus
Retirement
Benefit
Expense LTIP Audited Total
Sub-
Total of
Fixed
Pay
Sub-
Total of
Variable
Pay
Sub-
Total of
Fixed
Pay
Sub-
Total of
Variable
Pay
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2023
€’000
2022
€’000
2022
€’000
Donal Murphy , , , , , , , ,
Kevin Lucey , ,
, , , , , , , , , , , ,
Fixed remuneration comprises Salary, Benefits and Retirement Benefit Expense. Variable remuneration comprises Bonus and
LTIP. The proportion of fixed and variable remuneration for the year ended 31 March 2023 for Mr Murphy was 36:64 and for
Mr Lucey was 41:59.
Salary
The executive Directors’ salaries for the year ended 31 March 2023 were increased from the prior year, as shown in the table
below.
In agreeing the increase to the Chief Executive’s salary of 3%, the Committee took into account the average salary increase for
the general workforce. The increase in the CFO’s salary of 8% reflected his demonstrated development in role and full
contribution at Board level.
Salary
€
Increase
%
Donal Murphy , %
Kevin Lucey , %
Benefits
Benefits include the use of a company car and related costs, life/disability cover, health insurance and club subscriptions.
Determination of Bonuses for the Year Ended 31 March 2023
For the year ended 31 March 2023, the executive Directors participated in the bonus plan, as per the Remuneration Policy,
as set out below:
Executive Director Maximum bonus potential Deferral of bonus
Donal Murphy 200% of salary
33% of any bonus earned will be deferred
into DCC shares for three years.
Kevin Lucey 160% of salary
Bonuses were based 70% on growth in Group adjusted EPS (‘Group EPS’) and 30% on strategic and ESG objectives.
Financial targets – Group EPS
Growth in Group EPS was measured against a pre-determined range, with zero payment below the threshold up to full
payment at the maximum of the range. The table below sets out the performance in the year ended 31 March 2023 in terms
of growth in Group EPS compared to the performance target range set for the year.
Target
Minimum (below
which nil payout)
Maximum
(full payout) Outcome
Group EPS % % .%
Based on the Group EPS outcome, the Remuneration Committee determined that 44.3% of the bonuses related to this
performance target should be paid.
131DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Non-financial targets – Strategic and ESG
Regarding the achievement of targets set for strategic and ESG objectives, the Remuneration Committee carefully considered
the achievement of the objectives outlined in the table below. It concluded that 81% of this element of the bonus should be
awarded to both the Chief Executive and CFO.
CHIEF EXECUTIVE – DONAL MURPHY
Category Objective Measure of success Outcome
Strategic Objectives
Maximum of 15%
bonus payable
Implement the Group’s updated strategy
for the energy sector, outlined in a
Capital Markets Day in May 2022
Financial Performance of DCC Energy
Carbon Intensity and Scope 3 Carbon Emissions
Development of DCC Energy
Management Structures
Ensure continued strategic development of
DCC Healthcare, DCC Technology and key
Group functions to build the capabilities
needed to support the Group’s development
Implementation of a range of strategic
development initiatives in DCC Healthcare
and Technology and key Group functions
ESG Objectives
Maximum of 15%
bonus payable
Reduce Scope 1 and 2 carbon emissions in
line with the Group’s updated 50%
reduction target
Scope 1 and 2 mtCO
2
e
Continue to improve HSE performance
across the Group
Lost time injury frequency rate (‘LTIFR’)
Safety leadership initiatives
Continue to improve the Group’s culture,
including by actively encouraging diversity
Employee engagement
Diversity of future talent
CFO – KEVIN LUCEY
Category Objective Measure of success Outcome
Strategic Objectives
Maximum of 15%
bonus payable
Implement the Group’s updated strategy
for the energy sector, outlined in a Capital
Markets Day in May 2022
Financial Performance of DCC Energy
Carbon Intensity and Scope 3 Carbon
Emissions
Development of DCC Energy
Management Structures
Ensure continued strategic development of
DCC Healthcare, DCC Technology and key
Group functions to build the capabilities
needed to support the Group’s development
Implementation of a range of strategic
development initiatives in DCC Healthcare
and Technology and key Group functions,
including Group Finance
ESG Objectives
Maximum of 15%
bonus payable
Reduce Scope 1 and 2 carbon emissions
in line with the Group’s updated 50%
reduction target
Scope 1 and 2 mtCO
2
e
Continue to improve HSE performance
across the Group
Lost time injury frequency rate (‘LTIFR’)
Safety leadership initiatives
Continue to improve the Group’s culture,
including by actively encouraging diversity
Employee engagement
Diversity of future talent
Fully met Partially met Not met
REMUNERATION REPORT CONTINUED
132 DCC plc \ Annual Report and Accounts 2023
The resultant bonus payout levels for the year ended 31 March 2023 were therefore calculated as follows:
Chief Executive – % of Salary CFO – % of Salary
Component % of Max % of Salary % of Max % of Salary
Group EPS .% .% .% .%
Strategic Performance .% .% .% .%
.% .% .% .%
In accordance with the Remuneration Policy, 33% of bonuses for the Chief Executive and CFO, net of tax and social security
deductions, will be invested in DCC shares. These shares and accrued dividends will be made available to them after three
years or earlier if their employment terminates.
The Remuneration Committee considered the outcomes as set out above and determined that they were appropriate in the
circumstances, reflected the Group’s strong performance in the year and no discretion was applied.
Retirement Benefit Expense
Retirement Benefit Expense for Donal Murphy comprised 15% of base salary in the form of a cash allowance, in lieu of
contribution to a defined contribution pension scheme. Kevin Lucey is part of a defined contribution pension scheme in which a
14% employer contribution is in place.
Vesting under Long-Term Incentive Plan
The value of the LTIP, as shown in the table on page 130 for 2023, is explained in further detail below.
The LTIP award granted in November 2020 was subject to performance over the three-year period ended 31 March 2023. The
performance conditions attached to this award and actual performance against these conditions were as follows:
Performance
condition
% of total award
(potential) Vesting rule Threshold target Maximum target
Actual
performance Vesting level
ROCE
1
40% Threshold vesting is 25% of maximum,
with vesting determined on a
straight-line basis between 25% and
100% for performance between
threshold and maximum.
13% 17% 16.2% 34%
EPS 40% 3% 9% 8% 35%
TSR 20% Median of
FTSE 100
Upper quartile
of FTSE 100
Below median 0%
Total vesting 69%
1. ROCE targets exclude the impact of IFRS 16 Leases.
As a result, vesting of the 2020 LTIP award is 69%. The earliest exercise date will be November 2025.
As outlined in detail in the Chairman’s Introduction on page 119, the Remuneration Committee concluded that the most
appropriate basis on which to determine vesting of the EPS component was to use the EPS range set for the 2021 LTIP (i.e. 3% to
9% p.a.), replacing the original inflation-linked targets in light of the significant change in UK RPI, particularly over the final two
years of the performance period.
The value of the LTIP as recorded in the table on page 130 for the year ended 31 March 2023 is based on the vesting
percentage of 69% and the share price at 31 March 2023 of €53.66 (£47.18) less the amount payable to purchase the shares (i.e.
the exercise cost). As the share price at the end of the performance period on 31 March 2023 was lower than the share price at
the date of grant, there is no value attributable to a share price uplift to be disclosed.
133DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Grants under Long-Term Incentive Plan
The following awards were granted during the year ended 31 March 2023 under the 2021 LTIP.
Executive Director Date of grant % of salary
Market price at
date of award
Number of
shares
Face value of
award £’000
% vesting at
threshold
performance
Vesting determined by
performance period
Chief Executive 10 November
2022
200% £45.53 35,068 £1,596 25% Three years to
31 March 2025, with a
2-year post-vest sale
restriction
CFO 10 November
2022
200% £45.53 19,675 £895 25%
The extent of vesting of these awards will be determined in the table below.
Performance condition % of total award (potential) Vesting rule Threshold target Maximum target
ROCE
1
40% Threshold vesting is 25%
of maximum, with
vesting determined on a
straight-line basis
between 25% and 100%
for performance
between threshold and
maximum.
11.5% 15.5%
EPS 40% 3% 9%
TSR 20% Median of FTSE 100 Upper quartile of FTSE
100
1. ROCE targets include the impact of IFRS 16 Leases.
Further details of previous year’s awards are set out on page 137.
Changes in Remuneration of the Directors
Details of the percentage change in the salary, benefits and annual bonus of each individual who served as a Director during
the year under review, along with the average total remuneration of Group employees, for each of the last three years, are set
out in the table below.
Those Directors who did not serve as a Director at any point during the year under review have not been included. The
percentage changes in their remuneration for prior years (and in which they were a Director) are disclosed in the relevant
previous Annual Reports.
% change between
FY22 and FY23
% change between
FY21 and FY22
% change between
FY20 and FY21
Salary/Fees Benefits Bonus Salary/Fees Benefits Bonus Salary/Fees Benefits Bonus
Executive Directors
Donal Murphy +% % -% +% +% +% % -% +%
Kevin Lucey +% % -% +% +% +% n/a n/a n/a
Non-executive Directors
1,2
Mark Breuer +% +% +%
Laura Angelini +% n/a n/a
Caroline Dowling +% +% +%
Tufan Erginbilgic +% +% n/a
David Jukes +% +% +%
Pamela Kirby +% +% %
Lily Liu +% n/a n/a
Alan Ralph +% n/a n/a
Mark Ryan +% +% %
Average remuneration of
Group employees
3
+% +% +%
1. The increases for the non-executive Directors primarily reflect Committee membership and role changes and to a lesser extent fee increases.
2. For Directors who served for a part of a year (due to joining or leaving), their remuneration is annualised to allow a like for like comparison.
3. This is the average increase for all Group employees as a whole.
REMUNERATION REPORT CONTINUED
134 DCC plc \ Annual Report and Accounts 2023
Comparison of Company Performance and Chief Executive Remuneration
The chart below shows the trend in EPS, and DCC’s TSR relative to the FTSE 100 Index and the median of DCC’s selected peer
group, over the last ten years (using a base of 100 for 2013 for comparative purposes).
The table underneath the chart summarises the Chief Executive’s single figure of remuneration, annual bonus and LTIP payouts
as a percentage of the maximum opportunity for the year ended 31 March 2023 and the previous nine years.
The Committee is satisfied that, over time, there is a reasonable correlation between Chief Executive pay and returns to
shareholders.
DCC plc
0
2013 2014 2015 2016 2017 2018 2019 2020 20222021 2023
FTSE 100 Index
£
400
300
200
350
250
150
100
50
Peer median EPS
Years Ended 31 March 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Total remuneration €3.16m €4.78m €4.29m €5.32m €2.92m €3.09m €2.61m €3.73m €3.70m €3.11m
Bonus payout (% max) 91% 62% 100% 100% 84% 88% 53% 100% 98% 55%
LTIP vesting (% max) 59% 100% 100% 100% 100% 80% 63% 64% 64% 69%
Chief Executive Pay Ratio
Taking account of the UK Companies (Miscellaneous Reporting) Regulations, we are voluntarily disclosing the ratio of the Chief
Executive’s total pay to the median UK employee’s total pay, of 83 times. The median employee for this analysis was selected
based on UK gender pay gap data.
135DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Relative Importance of Spend on Pay
The chart below shows the amount paid in remuneration to all Group employees compared to dividends to shareholders for
2023 and 2022.
2023
Dividends
£’000
Remuneration received
by all employees
2022
0
100
200
300
400
500
600
700
800
177.8
160.6
759.7
650.5
Non-executive Directors’ Remuneration Details
The remuneration paid to the non-executive Directors for the year ended 31 March 2023 is set out below. Non-executive
Directors were paid a basic fee, with additional fees paid to the Board Chair, Board Committee Chairs and members, and the
Senior Independent Director.
Basic Fee
Committee Chair and
Membership Fees
Chairman/Senior
Independent Director Fees Audited Total
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
2023
€’000
2022
€’000
Mark Breuer
1
Laura Angelini
2
- –
Caroline Dowling
Tufan Erginbilgic
3
- –
David Jukes - –
Pamela Kirby
4
- –
Lily Liu
2
- –
Alan Ralph
5
- –
Mark Ryan - –
Total
1. Mark Breuer was appointed Chairman on 16 July 2021.
2. Laura Angelini and Lily Liu were appointed as Directors on 16 July 2021.
3. Tufan Erginbilgic resigned from the Board on 31 December 2022.
4. Pamela Kirby retired from the Board on 15 July 2022.
5. Alan Ralph was appointed as a Director on 8 November 2021.
6. Compares to the current shareholder limit of €850,000.
7. The figure of €859,000 does not include €210,000 in respect of fees paid to
Jane Lodge, Cormac McCarthy and John Moloney for 2022.
All the above fees are considered fixed remuneration under the Shareholders Rights Directive II.
REMUNERATION REPORT CONTINUED
136 DCC plc \ Annual Report and Accounts 2023
Total Directors’ Remuneration
Audited Total
2023
€’000
2022
€’000
Executive Directors
Salary , ,
Benefits
Bonus , ,
Retirement Benefit Expense
LTIP , ,
Total executive Directors’ remuneration , ,
Non-executive Directors
Fees
Total non-executive Directors’ remuneration
Total Directors’ remuneration , ,
1. The figure of €859,000 does not include €210,000 in respect of fees paid to Jane Lodge, Cormac McCarthy and John Moloney for 2022.
Executive and Non-executive Directors’ and Company Secretary’s Interests
The interests of the Directors and the Company Secretary (including shares held by connected persons) in the share capital of
DCC plc at 31 March 2023, or at the date of leaving the Board if earlier, (together with their interests at 31 March 2022) are set
out below:
No. of Ordinary
Shares at
31 March 2023
No. of Ordinary
Shares at
31 March 2022
Directors
Mark Breuer , ,
Donal Murphy
1
, ,
Laura Angelini – –
Caroline Dowling
Tufan Erginbilgic
2
– –
David Jukes
Pamela Kirby
3
, ,
Lily Liu – –
Kevin Lucey
4
, ,
Alan Ralph , ,
Mark Ryan , ,
Company Secretary
Darragh Byrne , ,
1. Donal Murphy’s 2023 and 2022 holdings include 9,011 and 7,768 shares, respectively held under the deferred bonus arrangement as detailed on page 124.
2. Tufan Erginbilgic resigned from the Board on 31 December 2022.
3. Pamela Kirby retired from the Board on 15 July 2022.
4. Kevin Lucey’s 2023 and 2022 holdings include 2,789 and 1,035 shares held under the deferred bonus arrangement as detailed on page 124.
All of the above interests were beneficially owned. Apart from the interests disclosed above, the Directors and the Company
Secretary had no interests in the Company’s share capital or loan stock or any other Group undertaking at 31 March 2023.
There were no changes in the above Directors’ and Secretary’s interests between 31 March 2023 and 15 May 2023.
Details of the share ownership guidelines that apply to the executive Directors are on page 128 of this Report.
The Company’s Register of Directors’ Interests (which is open to inspection) contains full details of the Directors’ shareholdings
and share options.
137DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Executive Directors’ and Company Secretary’s Long-Term Incentives
DCC plc Long-Term Incentive Plan
Details of the executive Directors’ and the Company Secretary’s awards, in the form of nominal cost (€0.25) options, under the
Company’s LTIP are set out below:
Number of options
Market
price at
date of
exercise
£
At
31 March
2022
Granted
in year
Exercised
in year
Lapsed
in year
At
31 March
2023
Date
of grant
Market
price on
grant
Three-year
performance
period end Normal exercise period
Executive Directors
Donal Murphy
, – (,) – – .. . 31 Mar 2018 17 Nov 2020–16 Nov 2022 .
, – – – , .. . 31 Mar 2019 10 Feb 2022–09 Feb 2024
, – – – , .. . 31 Mar 2020 16 Nov 2022–15 Nov 2024
, – – – , .. . 31 Mar 2021 15 Nov 2023–14 Nov 2025
, – – (,) , .. . 31 Mar 2022 14 Nov 2024–13 Nov 2026
, – – , .. . 31 Mar 2023 12 Nov 2025–11 Nov 2027
, – – – , .. . 31 Mar 2024 11 Nov 2024–10 Nov 2028
1
– , – – , .. . 31 Mar 2025 10 Nov 2025–9 Nov 2029
1
, , (,) (,) ,
Kevin Lucey
, – (,) – – .. . 31 Mar 2019 10 Feb 2022–09 Feb 2024 .
, – – – , .. . 31 Mar 2020 16 Nov 2022–15 Nov 2024
, – – – , .. . 31 Mar 2021 15 Nov 2023–14 Nov 2025
, – – (,) , .. . 31 Mar 2022 14 Nov 2024–13 Nov 2026
, – – , .. . 31 Mar 2023 12 Nov 2025–11 Nov 2027
, – – – , .. . 31 Mar 2024 11 Nov 2024–10 Nov 2028
1
– , – – , .. . 31 Mar 2025 10 Nov 2025–9 Nov 2029
1
, , (,) (,) ,
Company Secretary
Darragh Byrne
, – (,) – – .. . 31 Mar 2019 10 Feb 2022–09 Feb 2024 .
, – (,) – – .. . 31 Mar 2020 16 Nov 2022–15 Nov 2024 .
, – – – , .. . 31 Mar 2021 15 Nov 2023–14 Nov 2025
, – – (,) , .. . 31 Mar 2022 14 Nov 2024–13 Nov 2026
, – – – , .. . 31 Mar 2023 12 Nov 2025–11 Nov 2027
, – – – , .. . 31 Mar 2024 11 Nov 2024–10 Nov 2028
1
– , – – , .. . 31 Mar 2025 10 Nov 2025–9 Nov 2029
1
, , (,) (,) ,
1. The LTIP awards made on 10 November 2022 and 11 November 2021 were granted under the DCC plc Long-Term Incentive Plan 2021. Previous years’ awards
(up to and including awards granted on 12.11.20) were granted under the DCC plc Long-Term Incentive Plan 2009. The primary change with the 2021 LTIP
was that awards have a three-year vesting period, with a two-year post-vest sale restriction for the executive Directors.
The extent of vesting of the LTIP awards granted in November 2022 will be based on the three-year performance period from
1 April 2022 to 31 March 2025. The requirements/ranges set by the Remuneration Committee regarding these performance
conditions are summarised on page 133.
As at 31 March 2023, the total number of options granted under the LTIP, net of options lapsed, amounted to 1.9% of issued share
capital, of which 0.8% is currently outstanding.
Other Information
The market price of DCC shares on 31 March 2023 was £47.18 and the range during the year was £40.30 to £62.68.
Additional information in relation to the DCC plc Long-Term Incentive Plan 2009 and the DCC plc Long-Term Incentive Plan 2021
appears in note 2.5 to the financial statements on pages 168 to 170.
For the purposes of Section 305 of the Companies Act 2014 (Ireland), the aggregate gains by Directors on the exercise of share
options during the year ended 31 March 2023 was €0.9 million (2022: €0.3 million).
REMUNERATION REPORT CONTINUED
138 DCC plc \ Annual Report and Accounts 2023
Share Ownership Guidelines
The executive Directors’ shareholdings as of 31 March 2023 are shown below.
Executive
Number of shares
held as at
31 March 2023
Shareholding as a
multiple of base salary
for the year ended
31 March 2023
Share ownership
guideline
(multiple of salary)
Donal Murphy , .
Kevin Lucey , .
The shareholdings in the table comprise the shares held by the executive Directors (including those shares held in trust as part
of the deferred bonus arrangement), valued based on the share price at 31 March 2023 of £47.18 (€53.66). Unvested and
unexercised share options are not included. Under the Guidelines, Mr Lucey has five years from his appointment as CFO in July
2020 to achieve the level set out.
OPERATION OF REMUNERATION POLICY IN THE YEAR ENDING 31 MARCH 2024
Salary
The Committee approved the following increases to the executive Directors’ salaries for the year ending 31 March 2024:
Executive Director
Year ending
31 March 2024
€ Increase %
Year ended
31 March 2023
€
Donal Murphy , % ,
Kevin Lucey , % ,
In agreeing to increase the Chief Executive’s salary by 4%, the Committee took into account the expected workforce salary
increase. The Committee was mindful of the current shareholder sentiment that executive director salary increases should be in
line with or below those granted to the rest of the workforce. However, we believe that the circumstances surrounding our CFO’s
salary are exceptional, and warrant a higher increase.
When Kevin was appointed in 2020, his salary was set approximately 15% lower than that of his predecessor to reflect his level
of experience at the time, with the Committee agreeing to review the matter regularly as he developed in his role.
Since then Kevin has performed at the highest level and made a significant contribution to the success of the business. In light
of his contribution, we believe that a salary increase of 9% is fair, apporpriate and commensurate with the levels of pay seen
elsewhere in the market and the need to retain key talent for the benefit of the business and all of its stakeholders.
Benefits
Benefits payable to the executive Directors for the year ending 31 March 2024 include the use of a company car and related
costs, life/disability cover, health insurance and club subscriptions.
Bonus
For the year ending 31 March 2024, the bonuses for the executive Directors will, consistent with the Remuneration Policy, be
based as follows:
Executive Director Maximum bonus potential Deferral of bonus
Donal Murphy 200% of salary
33% of any bonus earned will be deferred
into DCC shares for three years.
Kevin Lucey 160% of salary
Bonuses will be based 70% on growth in Group adjusted operating profit and 30% on strategic objectives. In addition, the
Committee has the discretion to reduce bonuses in the event that a pre-determined target return on capital employed is not
achieved. Growth in Group adjusted operating profit will be measured against a pre-determined range, with zero payment
below threshold up to full payment at the maximum of the range. The strategic objectives are aligned with DCC’s short-term
and medium-term strategic objectives that promote long-term performance and include sustainability/ESG targets.
The adjusted operating profit range and details of the strategic objectives are commercially confidential, but, to the extent no
longer commercially confidential, will be disclosed on a retrospective basis in next year’s Annual Report.
The Committee will keep the performance targets under review in light of acquisition and other development activity during the
year ending 31 March 2024.
Retirement Benefits
Donal Murphy’s retirement benefits comprise a cash allowance, paid in lieu of contributions to a defined contribution pension
plan, at a rate of 15% of base salary. Kevin Lucey is entitled to contributions to a defined contribution pension plan at a rate of
14% of base salary.
139DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Long-Term Incentives
For the year commencing 1 April 2023, LTIP awards of up to 200% of salary will be granted to the executive Directors, with
vesting based on performance over the three financial years ending 31 March 2026. Vesting will be based 40% on ROCE, 40% on
Adjusted EPS growth, and 20% on TSR vs the FTSE 100. The ranges are set out in the table below. The Committee reviewed the
TSR benchmark during the year and concluded that the FTSE 100 remains the most credible and robust set of comparators.
Performance condition % of total award (potential) Vesting rule Threshold target Maximum target
ROCE
1
40%
Threshold vesting is
25% of maximum, with
vesting determined on
a straight-line basis
between 25% and
100% for performance
between threshold
and maximum.
11.5% 15.5%
EPS 40% 3% 9%
TSR 20% Median of FTSE 100 Upper quartile of
FTSE 100
1. ROCE targets include the impact of IFRS 16 Leases.
Non-executive Directors’ Remuneration
DCC periodically reviews the fees paid to its non-executive Directors to ensure that these are suciently competitive to attract
and motivate talented individuals. The Remuneration Committee reviews the fee for the Board Chairman. The Chief Executive
and the Board Chairman review the fees for the other non-executive Directors. This means that no Director is involved in
reviewing his/her own remuneration.
In keeping with our normal practice, a periodic review of the non-executive Director fee structure and levels was conducted
during the year. This revealed two areas of divergence from standard market practice.
The first of these was the payment of Committee membership fees. This is rare among companies of similar size to DCC and
introduces complication, with significant potential disparity in the fees paid to each non-executive director according to the
number of Committees they sit on. In order to simplify our arrangements, therefore, we are consolidating these fees into the
base fee, in line with market practice.
As a result of consolidating Committee membership fees into the base fee, the base fee for the year ending 31 March 2024 has
been set at €87,500.
We have also taken the opportunity to introduce an additional fee for the role of Workforce Engagement Director to reflect the
time commitment expected of the Director fulfilling this role. We have also increased the additional fee for chairing the Audit
Committee and for the role of Senior Independent Director, to reflect market levels and the increasing time and commitment
required to fulfil these roles.
These changes result in a modest uplift to each of our non-executive Directors’ actual fees but which, excluding the impact of
adjustments made to reflect the increasing time commitment of certain roles, are generally less than the average increase
expected to be paid to the Group’s employees overall.
The following table set out the changes in aggregate fees over the year ended 31 March 2023.
Non-executive Director
Total fee
Year ending 31 March 2024
Total fee
Year ended 31 March 2023 % increase
Mark Breuer €363,900 €350,200 3.9%
Laura Angelini €87,500 €84,890
1
3.1%
Katrina Clie €87,500 n/a n/a
Caroline Dowling €108,500 €104,890 3.4%
David Jukes €102,500 €96,890 5.8%
Lily Liu €87,500 €84,890 3.1%
Alan Ralph €107,500 €99,980 7. 6%
Mark Ryan €100,000 €87,890 13.8%
1. The actual amount paid to Laura Angelini in the year ended 31 March 2023 was €82,750, reflecting only half a year as member of the Remuneration
Committee.
We believe that the proposed fees are appropriate and commensurate with the experience and time commitment required of
DCC’s non-executive Directors and will allow us to recruit and retain the best candidates in an increasingly competitive market.
REMUNERATION REPORT CONTINUED
140 DCC plc \ Annual Report and Accounts 2023
Finally, the following table compares the new fee structure for the year ending 31 March 2024 with that of the current year.
Total fee
Year ending
31 March 2024
Total fee
Year ended
31 March 2023
Chairman , €,
Basic Fee , €,
Committee Membership Fees:
Audit n/a €,
Governance and Sustainability n/a €,
Remuneration n/a €,
Additional Fees:
Audit Committee Chairman , €,
Remuneration Committee Chairman , €,
Senior Independent Director Fee , €,
Workforce Engagement Director Fee , n/a
GOVERNANCE
Committee Composition, Attendance and Tenure
At the date of this Report, the Remuneration Committee comprised four independent non-executive Directors: David Jukes
(Chairman), Caroline Dowling, Laura Angelini and Katrina Clie.
The members of the Committee have significant financial and business experience, including in executive remuneration. Each
member’s length of tenure at 31 March 2023 (excluding Katrina Clie’s who joined after 31 March 2023) is set out in the chart on
page 97. Further biographical details regarding the members of the Remuneration Committee are set out on pages 88 and 89.
The Committee met four times during the year ended 31 March 2023 and attendance details are set out in the table on page 97
of the Corporate Governance Statement.
The Company Secretary is the Secretary to the Remuneration Committee.
Meetings
The main activities of the Committee during the year ended 31 March 2023 included (i) reviewing remuneration trends and
market practice, (ii) approving salary/fee increases for the executive Directors/Chairman, (iii) approving incentive outcomes for
the year ended 31 March 2022, (iv) approving incentive performance ranges for the year ended 31 March 2023, (v) keeping
abreast of general developments, (vi) approving awards under the Company’s LTIP, (vii) reviewing the Company’s gender pay
gap reporting and (viii) approval of this Report.
Typically, the Chief Executive, the Chief People Ocer and representatives of advisors to the Committee are invited to attend
all meetings of the Committee. Other Directors and executives may be invited to attend meetings of the Committee, except
when their remuneration is being discussed. No Director is involved in the consideration of their remuneration. Other external
advisors are invited to attend meetings when required.
The Committee also meets separately, as required, to discuss matters in the absence of any invitees.
141DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Reporting
The Chairman of the Remuneration Committee reports to the Board at each meeting on the activities of the Committee.
The Chairman of the Remuneration Committee attends the AGM to answer questions on the Report and the Committee’s
activities and matters within the scope of its responsibilities. The Committee welcomes any feedback from shareholders on this
Report, the remuneration structure and Policy, and decisions taken by the Committee.
Role and Responsibilities
The role and responsibilities of the Committee are set out in full in its Terms of Reference, which are available on the Company’s
website.
Annual Evaluation of Performance
The 2023 Board evaluation process concluded that the performance of the Remuneration Committee and of the Chairman of
the Committee was satisfactory. The Committee will focus on a small number of agreed actions arising from the 2023 Board
evaluation process.
Gender Pay Gap Reporting
Under the UK Gender Pay Gap Regulations, UK employers with more than 250 employees must publish key metrics on their
gender pay gap. The Remuneration Committee reviewed the work carried out in our aected UK businesses, subject to these
Regulations. They received a full briefing before publishing their reports on the businesses’ websites.
External Advice
During the year under review, Ellason advised the Remuneration Committee in relation to market trends, competitive positioning
and developments in remuneration policy and practice. Ellason is a signatory to the Remuneration Consultants Group Code of
Conduct and any advice was provided in accordance with this code. In light of this and the nature of the service received, the
Committee was satisfied that the advice was objective and independent.
In the year ended 31 March 2023, Ellason received fees of €97,440 in respect of advice provided to the Committee regarding
executive Director remuneration. They also provided services to the Group on incentive design.
In the year ended 31 March 2023, Mercer received fees of €1,230 as pension advisors to the Committee. Mercer also provides
specific advice on pension practice and developments and act as actuaries and pension advisors to a number of companies
in the Group.
AGM Votes on Annual Report on Remuneration (2022) and Remuneration Policy (2021)
This table shows the voting outcome at the 2022 AGM in relation to the Annual Report on Remuneration as well as the voting
outcome at the 2021 AGM in relation to the Remuneration Policy
Vote Total votes cast Total votes for Total votes against Total abstentions
Advisory vote on 2022 Annual Report on Remuneration ,, ,, ,, ,,
(%) (%)
Advisory vote on 2021 Remuneration Policy ,, ,, , ,
(.%) (.%)
142 DCC plc \ Annual Report and Accounts 2023
REPORT OF THE DIRECTORS
5% of the issued share capital
(excluding treasury shares) of the
Company.
– In addition, the Directors were given
authority to allot additional shares for
cash other than strictly pro-rata to
existing shareholdings. This authority
was limited to the allotment of shares
for cash up to approximately 5% of the
issued share capital (excluding
treasury shares) and would only be
used in connection with an acquisition
or other capital investment of a kind
contemplated by the Statement of
Principles for the disapplication of
pre-emption rights most recently
published by the Pre-Emption Group
prior to the date of the notice of the
2022 AGM.
These authorities have not been
exercised and will expire on 13 July 2023,
the date of the next AGM of the
Company.
At the 2023 AGM:
– The Directors will seek authority to
purchase up to 10% of its own shares
(the issued share capital (excluding
treasury shares)) with a nominal value
of €2.47 million.
– The Directors will seek authority to
exercise all the powers of the
Company to allot shares up to an
aggregate amount of €8.23 million,
representing approximately one-third
of the issued share capital (excluding
treasury shares).
– The Directors will also seek authority
to allot shares for cash, other than
strictly pro-rata to existing
shareholdings. This proposed
authority is limited to the allotment of
shares in specific circumstances
relating to rights issues and other
issues up to approximately 5% of the
issued share capital (excluding
treasury shares).
– In addition, the Directors will seek
authority to allot additional shares for
cash other than strictly pro-rata to
existing shareholdings. This proposed
authority is limited to the allotment of
shares for cash up to approximately
5% of the issued share capital
(excluding treasury shares) and will
only be used in connection with an
acquisition or other capital investment
of a kind contemplated by the
Statement of Principles for the
disapplication of pre-emption rights
most recently published by the
Pre-Emption Group prior to the date
of that the notice of the 2023 AGM.
The profit attributable to owners of the
Parent Company, which has been
transferred to reserves, and the
dividends paid during the year ended
31 March 2023 are shown in note 4.3 on
page 201.
Share Capital and Treasury Shares
DCC’s authorised share capital is
152,368,568 ordinary shares of €0.25
each, of which 98,747,206 shares
(excluding treasury shares) and
2,586,698 treasury shares were in issue
at 31 March 2023. All of these shares are
of the same class. With the exception of
treasury shares, which have no voting
rights and no entitlement to dividends,
they all carry equal voting rights and
rank for dividends.
The number of shares held as treasury
shares at the beginning of the year (and
the maximum number held during the
year) was 2,688,004 (2.72% of the then
issued share capital (excluding treasury
shares)) with a nominal value of
€0.672 million.
A total of 101,306 shares (0.1% of the
issued share capital (excluding treasury
shares)) with a nominal value of
€0.025 million were re-issued during the
year consequent to the exercise of
share options under the DCC plc Long
Term Incentive Plan 2009 (95,658 shares
at a price of €0.25 per share) and the
deferred bonus arrangements for
executive Directors (5,648 shares at a
price of €67.22 per share), leaving a
balance held as treasury shares at
31 March 2023 of 2,586,698 shares (2.62%
of the issued share capital (excluding
treasury shares)) with a nominal value of
€0.647 million.
At the Annual General Meeting (‘AGM’)
held on 15 July 2022:
– The Company was granted authority
to purchase up to 9,869,185 of its own
shares (10% of the issued share capital
(excluding treasury shares)) with a
nominal value of €2.467 million.
– The Directors were given authority to
exercise all the powers of the
Company to allot shares up to an
aggregate amount of €8.22 million,
representing approximately one-third
of the issued share capital (excluding
treasury shares) of the Company. They
were also given authority to allot
shares for cash, other than strictly
pro-rata to existing shareholdings.
This authority was limited to the
allotment of shares in specific
circumstances relating to rights issues
and other issues up to approximately
The Directors of DCC plc present
their report and the audited financial
statements for the year ended
31 March 2023.
Principal Activities
DCC plc is an international sales,
marketing and support services group
headquartered in Dublin with
operations in Europe, North America,
South America and Asia. DCC has three
divisions – DCC Energy, DCC Healthcare
and DCC Technology. DCC employs
16,100 people in 22 countries. DCC plc’s
shares are listed on the London Stock
Exchange and are included in the FTSE
100 Index.
Results and Review of Activities
Revenue for the year amounted to
£22,205.0 million (2022: £17,732.0 million).
The profit for the year attributable to
owners of the Parent Company
amounted to £334.0 million (2022:
£312.3 million). Adjusted earnings per
share amounted to 456.27 pence (2022:
430.11 pence). Further details of the
results for the year are set out in the
Group Income Statement on page 154.
The Chairman’s Statement on pages 6
and 7, the Chief Executive’s Review on
pages 8 to 11, the Business Reviews on
pages 16 to 39 and the Financial Review
on pages 44 to 51 contain a review of
the development and performance of
the Group’s business during the year, of
the state of aairs of the business at
31 March 2023, of recent events and of
likely future developments. Key
Performance Indicators are set out on
pages 40 to 43. Information in respect
of events since the year end is included
in these sections and in note 5.8 on
page 213.
Dividends
An interim dividend of 60.04 pence per
share, amounting to £59.1 million, was
paid on 9 December 2022. The Directors
recommend the payment of a final
dividend for the year ended 31 March
2023 of 127.17 pence per share,
amounting to £125.5 million (based on
the number of shares in issue at 15 May
2023). Subject to shareholders’ approval
at the AGM on 13 July 2023, this dividend
will be paid on 20 July 2023 to
shareholders on the register at the close
of business on 26 May 2023. The total
dividend for the year ended 31 March
2023 amounts to 187.21 pence per share,
a total of £184.6 million. This represents
an increase of 6.5% on the prior year’s
total dividend per share.
143DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
All other general meetings are called
Extraordinary General Meetings (‘EGM’).
An EGM called for the passing of a
special resolution must be called by at
least 21 clear days’ notice.
A quorum for an AGM or an EGM of the
Company is constituted by two persons
entitled to vote upon the business to be
transacted, each being a member or a
proxy for a member or a duly authorised
representative of a corporate member.
The passing of resolutions at a general
meeting, other than special resolutions,
requires a simple majority of the votes
cast. To be passed, a special resolution
requires a majority of at least 75% of the
votes cast.
Shareholders have the right to attend,
speak, ask questions and vote at
general meetings. In accordance with
Irish company law, the Company
specifies record dates for general
meetings, by which date shareholders
must be registered in the Register of
Members of the Company to be entitled
to attend, speak, ask questions and
vote. Record dates are specified in the
notes to the Notice convening the
meeting.
Shareholders may exercise their right to
vote by appointing a proxy/proxies, by
electronic means or in writing, to vote on
some or all of their shares. The
requirements for the receipt of valid
proxy forms are set out in the notes to
the Notice convening the meeting.
A shareholder or a group of
shareholders, holding at least 10% of the
issued share capital of the Company,
has the right to requisition a general
meeting.
The AGM will be held at 2.00 pm on
13 July 2023 at The Powerscourt Hotel,
Powerscourt Estate, Enniskerry, Co.
Wicklow, A98 DR12. Shareholders should
monitor the Company’s website for
further information in this regard.
Memorandum and Articles
of Association
The Company’s Memorandum of
Association sets out the objects and
powers of the Company. The Articles of
Association detail the rights attaching
to shares, the method by which the
Company’s shares can be purchased or
re-issued, the provisions which apply to
the holding of and voting at general
meetings and the rules relating to the
Directors, including their appointment,
retirement, re-election, duties and
powers.
These are addressed in the Risk Report
on pages 77 to 84.
Directors
The names of the Directors and a short
biographical note on each Director
appear on pages 88 and 89. In
accordance with the UK Corporate
Governance Code, all Directors submit
to re-election at each AGM. Donal
Murphy has a service agreement with
the Company with a notice period of six
months. Kevin Lucey has a letter of
appointment which provides for a
six-month notice period. Details of the
Directors’ and Company Secretary’s
interests in the share capital of the
Company are set out in the
Remuneration Report on pages 118
to 141.
Corporate Governance
The Corporate Governance Statement
on pages 92 to 107 sets out the
Company’s appliance of the principles
and compliance with the provisions of
the UK Corporate Governance Code
and the Group’s system of risk
management and internal control.
The Corporate Governance Statement
shall be treated as forming part of
this Report.
DCC plc is fully compliant with the 2018
version of the UK Corporate Governance
Code, which applied to the Company
for the year ended 31 March 2023.
Details concerning the appointment
and the re-election of Directors are set
out in the Corporate Governance
Statement.
General Meetings
The Company’s AGM provides
shareholders the opportunity to
question the Chairman, the Board and
the Chairmen of the Audit,
Remuneration and Governance and
Sustainability Committees. The Chief
Executive presents at the AGM on the
Group’s business and its performance
during the prior year and answers
questions from shareholders.
Notice of the AGM, the Form of Proxy
and the Annual Report are sent to
shareholders at least 20 working days
before the AGM. At the AGM, resolutions
are voted on a poll. The votes of
shareholders present and voting at the
AGM are added to the proxy votes
received in advance of the AGM and the
total number of votes for, against and
withheld for each resolution are
announced.
The Directors will have due regard to the
Pre-Emption Group 2022 Statement of
Principles for the dis-application of
pre-emption rights in relation to any
exercise of this power and in particular:
– As regards the first 5%, the Directors
will take account of the requirement
for advance consultation and
explanation before making any
non-pre-emptive cash issue pursuant
to this resolution which exceeds 7.5%
of the Company’s issued share capital
in any rolling three-year period; and
– As regards the second 5%, the Directors
confirm that they intend to use this
power only in connection with an
acquisition or specified capital
investment of a kind contemplated by
the most recent Statement of Principles
for the disapplication of pre-emption
rights most recently published by the
Pre-Emption Group.
Details of the share capital of the
Company are set out in note 4.1 on
page 199 and are deemed to form part
of this Report.
Non-Financial Information
Pursuant to the European Union
(Disclosure of Non-Financial and
Diversity Information by certain large
undertakings and groups) Regulations
2017, the Group is required to report on
certain non-financial information to
provide an understanding of its
development, performance, position
and the impact of its activities, relating
to, at least, environmental matters,
social matters, employee matters,
respect for human rights, and bribery
and corruption. Information on these
matters can be found in the following
sections of the Annual Report, which are
deemed to form part of this Report: the
Sustainability Review on pages 58 to 76,
the Business Model on pages 14 and 15,
the Risk Report on pages 77 to 84 and
the Key Performance Indicators on
pages 40 to 43.
The Board has approved a formal Board
Policy on Diversity, which applies to the
Board of DCC plc. Details of the policy,
its objectives and its application in the
current financial year are set out in the
Governance and Sustainability
Committee Report on pages 108 to 111.
Principal Risks and Uncertainties
Under Section 327(1)(b) of the
Companies Act 2014 and Rule 4.1.8 R of
the UK Disclosure Guidance and
Transparency Rules, DCC is required to
give a description of the principal risks
and uncertainties facing the Group.
REPORT OF THE DIRECTORS CONTINUED
144 DCC plc \ Annual Report and Accounts 2023
acknowledge that they are responsible
for the Company’s compliance with the
relevant obligations. In discharging their
responsibilities under Section 225, the
Directors relied on the advice of persons
employed by the Company and of third
parties, whom the Directors believe
have the requisite knowledge and
experience to advise the Company on
compliance with its relevant obligations.
Audit Committee
The Company has an Audit Committee,
the members of which are set out on
page 112.
Disclosure of Information to the
Auditors
Each of the Directors individually
confirms that:
– In so far as they are aware, there is no
relevant audit information of which
the Company’s auditors are unaware;
and
– That they have taken all the steps
that they ought to have taken (as
defined in Section 330(3) of the
Companies Act 2014) as Directors in
order to make themselves aware of
any relevant audit information and to
establish that the Company’s auditors
are aware of such information.
Auditors
The auditors, KPMG, who were
appointed on 17 July 2015, will continue
in oce in accordance with the
provisions of Section 383 of the
Companies Act 2014.
As required under Section 381(1) (b) of
the Companies Act 2014, a resolution
authorising the Directors to determine
the remuneration of the auditors will be
proposed at the 2023 AGM.
Mark Breuer, Donal Murphy
Directors
15 May 2023
records, as outlined in Section 281 to 285
of the Companies Act, 2014, are kept by
the Company. The Directors believe that
they have complied with this
requirement by providing adequate
resources to maintain proper books and
accounting records throughout the
Group, including the appointment of
personnel with appropriate
qualifications, experience and expertise.
The books and accounting records of
the Company are maintained at the
Company’s registered oce, DCC
House, Leopardstown Road, Foxrock,
D18 PK00, Ireland.
Takeover Regulations
The Company has certain financing
facilities which may require repayment
in the event that a change in control
occurs with respect to the Company.
In addition, the Company’s long-term
incentive plans contain change-of-
control provisions, which can allow for
the acceleration of the exercise of share
options or awards in the event that a
change-of-control occurs with respect
to the Company.
Directors’ Compliance Statement
It is the policy of the Company to
comply with its relevant obligations (as
defined in the Companies Act 2014). The
Directors confirm that there is a
Compliance Policy Statement in place,
as defined in Section 225(3)(a) of the
Companies Act 2014.
The Directors confirm that the
arrangements and structures that have
been put in place are, in the Directors’
opinion, designed to secure a material
compliance with the Company’s
relevant obligations and that these
arrangements and structures were
reviewed by the Company during the
financial year.
As required by Section 225(2) of the
Companies Act 2014, the Directors
The Company’s Articles of Association
may be amended by a special
resolution passed by the shareholders
at an AGM or EGM of the Company.
A copy of the Memorandum and Articles
of Association can be obtained from the
Company’s website, www.dcc.ie.
UK Disclosure Guidance and
Transparency Rules
The UK Disclosure Guidance and
Transparency Rules require certain
information to be included within this
Annual Report and Accounts. That
information can be found in the
following sections: the Chairman’s
Statement on pages 6 to 7, the Chief
Executive’s Review on pages 8 to 11, the
Business Reviews on pages 16 to 39, the
Financial Review on pages 44 to 51, the
Principal Risks and Uncertainties on
pages 80 to 83, the Transparency
Report in the Statement of Directors’
Responsibilities on page 146, the
earnings per ordinary share in note 2.11
on page 174, the Key Performance
Indicators on pages 40 to 43 and the
derivative financial instruments in note
3.10 on pages 184 and 185.
Principal Subsidiaries
Details of the Company’s principal
operating subsidiaries are set out on
pages 232 to 235.
Research and Development
Certain Group companies are involved
in ongoing development work aimed at
improving the quality, competitiveness,
technology and range of their products.
Political Contributions
There were no political contributions which
require to be disclosed under the
Electoral Act, 1997.
Accounting Records
The Directors are responsible for
ensuring that adequate accounting
Substantial Holdings
The Company has been notified of the following shareholdings of 3% or more in the issued share capital (excluding treasury
shares) of the Company as at 31 March 2023 and 15 May 2023.
As at 31 March 2023 As at 15 May 2023
No. of €0.25
Ordinary Shares
% of Issued Share
Capital (excluding
treasury shares)
No. of €0.25
Ordinary Shares
% of Issued Share
Capital (excluding
treasury shares)
BlackRock, Inc. ,, .% ,, .%
FMR LLC and FIL Limited on behalf of its direct and indirect
subsidiaries ,, .% ,, .%
Allianz Global Investors GmbH ,, .% ,, .%
Setanta Asset Management ,, .% ,, .%
Ameriprise Financial, Inc. ,, .% ,, .%
T. Rowe Price Associates, Inc. ,, .% ,, .%
These entities have indicated that the shareholdings are not ultimately beneficially owned by them.
145DCC / Annual Report and Accounts 2023
146 Statement of Directors’ Responsibilities
147 Independent Auditor’s Report
154 Group Income Statement
155 Group Statement of Comprehensive Income
156 Group Balance Sheet
157 Group Statement of Changes in Equity
158 Group Cash Flow Statement
159 Notes to the Financial Statements
159 Section 1 Basis of Preparation
162 Section 2 Results for the Year
176 Section 3 Assets and Liabilities
200 Section 4 Equity
202 Section 5 Additional Disclosures
224 Company Balance Sheet
225 Company Statement of Changes in Equity
226 Company Cash Flow Statement
227 Section 6: Notes to the Company
Financial Statements
FINANCIAL
STATEMENTS
146 DCC plc \ Annual Report and Accounts 2023
STATEMENT OF DIRECTORS’ RESPONSIBILITIES
The Directors are responsible for preparing the Annual Report
and the Group and Parent Company financial statements, in
accordance with applicable law and regulations.
Company law requires the Directors to prepare Group and
Company financial statements for each financial year. Under
that law, the Directors are required to prepare the Group
financial statements in accordance with IFRS as adopted by
the European Union and applicable law including Article 4 of
the IAS Regulation. The Directors have elected to prepare the
Company financial statements in accordance with IFRS as
adopted by the European Union as applied in accordance
with the provisions of Companies Act 2014.
Under company law the Directors must not approve the
Group and Company financial statements unless they are
satisfied that they give a true and fair view of the assets,
liabilities and financial position of the Group and Company
and of the Group’s profit or loss for that year.
In preparing the Group and Company financial statements,
the Directors are required to:
– select suitable accounting policies and then apply
them consistently;
– make judgements and estimates that are reasonable
and prudent;
– state whether applicable Accounting Standards have been
followed, subject to any material departures disclosed and
explained in the financial statements;
– assess the Group and Company’s ability to continue as a
going concern, disclosing, as applicable, matters related to
going concern; and
– use the going concern basis of accounting unless they
either intend to liquidate the Group or Company or to cease
operations, or have no realistic alternative but to do so.
The Directors are responsible for keeping adequate
accounting records which disclose with reasonable accuracy
at any time the assets, liabilities, financial position and profit
or loss of the Company and which enable them to ensure that
the financial statements comply with the provision of the
Companies Act 2014. The Directors are also responsible for
taking all reasonable steps to ensure such records are kept by
its subsidiaries which enable them to ensure that the financial
statements of the Group comply with the provisions of the
Companies Act 2014 including Article 4 of the IAS Regulation.
They are responsible for such internal controls as they
determine is necessary to enable the preparation of financial
statements that are free from material misstatement, whether
due to fraud or error, and have general responsibility for
safeguarding the assets of the Group, and hence for taking
reasonable steps for the prevention and detection of fraud
and other irregularities. The Directors are also responsible for
preparing a Directors’ report that complies with the
requirements of the Companies Act 2014.
The Directors are responsible for the maintenance and
integrity of the corporate and financial information included
on the Group’s and Company’s website (www.dcc.ie).
Legislation in the Republic of Ireland concerning the
preparation and dissemination of financial statements may
dier from legislation in other jurisdictions.
Responsibility statement of the Directors in respect of
the annual financial report
We confirm that to the best of our knowledge:
– the financial statements, prepared in accordance with the
applicable set of accounting standards, give a true and fair
view of the assets, liabilities, financial position and profit or
loss of the Company and the undertakings included in the
consolidation taken as a whole; and
– the Directors’ report includes a fair review of the
development and performance of the business and the
position of the issuer and the undertakings included in the
consolidation taken as a whole, together with a description
of the principal risks and uncertainties that they face. We
consider the annual report and accounts, taken as a whole,
is fair, balanced and understandable and provides the
information necessary for shareholders to assess the
group’s position and performance, business model
and strategy.
On behalf of the Board
Mark Breuer Donal Murphy
Non-executive Chairman Chief Executive
FINANCIAL STATEMENTS CONTINUED
147DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DCC PLC
Report on the audit of the financial statements
Opinion
We have audited the financial statements of DCC Plc (‘the Company’) and its consolidated undertakings (‘the Group’) for the
year ended March 31, 2023 set out on pages 154 to 230, which comprise the Group and Company Balance Sheet, the Group
Income Statement, the Group Statement of Comprehensive Income, the Group and Company Statement of Cash Flows, the
Group and Company Statements of Changes in Equity and related notes, including the summary of significant accounting
policies set out in note 5.9.
The financial reporting framework that has been applied in their preparation is Irish Law and International Financial Reporting
Standards (IFRS) as adopted by the European Union and, as regards the Company financial statements, as applied in
accordance with the provisions of the Companies Act 2014.
In our opinion:
– the financial statements give a true and fair view of the assets, liabilities and financial position of the Group and Company as
at 31 March 2023 and of the Group’s profit for the year then ended;
– the Group financial statements have been properly prepared in accordance with IFRS as adopted by the European Union;
– the Company financial statements have been properly prepared in accordance with IFRS as adopted by the European
Union, as applied in accordance with the provisions of the Companies Act 2014; and
– the Group and Company financial statements have been properly prepared in accordance with the requirements of the
Companies Act 2014.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (Ireland) (‘ISAs (Ireland)’) and applicable law.
Our responsibilities under those standards are further described in the ‘auditor’s responsibilities for the audit of the financial
statements’ section of our report. We have fulfilled our ethical responsibilities under, and we remained independent of the
Group in accordance with ethical requirements that are relevant to our audit of financial statements in Ireland, including the
Ethical Standard issued by the Irish Auditing and Accounting Supervisory Authority (IAASA), as applied to listed entities.
We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion.
Conclusions relating to going concern
In auditing the financial statements, we have concluded that the Director’s use of the going concern basis of accounting in the
preparation of the financial statements is appropriate. Our evaluation of the Director’s assessment of the Group’s and
Company’s ability to continue to adopt the going concern basis of accounting included:
– Obtaining and assessing management’s viability statement, assessing the stress tests included and drawing conclusions
from its results.
– Reviewing business performance, the Groups’ increase in EBITA and the Group’s Cash Flow Statement.
– Obtaining and inspecting Board minutes.
– Recalculating covenants compliance.
– Inquiring about any legal claims with those charged with Governance, Head of Legal, management, as well as local finance
teams.
– Inquiring as to any subsequent events from those charged with Governance, management, and local finance teams.
– Reviewing the disclosures set out in the Annual Report for both going concern and viability.
Based on the work we have performed, we have not identified any material uncertainties relating to events or conditions that,
individually or collectively, may cast significant doubt on the Group or the Company’s ability to continue as a going concern for
a period of at least twelve months from the date when the financial statements are authorised for issue.
Our responsibilities and the responsibilities of the Directors with respect to going concern are described in the relevant sections
of this report.
In relation to the Group and the Company’s reporting on how they have applied the UK Corporate Governance Code, we have
nothing material to add or draw attention to in relation to the Directors’ statement in the financial statements about whether
the Directors considered it appropriate to adopt the going concern basis of accounting.
Detecting irregularities including fraud
We identified the areas of laws and regulations that could reasonably be expected to have a material eect on the financial
statements and risks of material misstatement due to fraud, using our understanding of the entity’s industry, regulatory
environment and other external factors and inquiry with the Directors. In addition, our risk assessment procedures included:
– Inquiring with the Directors and other management as to the Group’s policies and procedures regarding compliance with
laws and regulations, identifying, evaluating, and accounting for litigation and claims, as well as whether they have
knowledge of non-compliance or instances of litigation or claims.
148 DCC plc \ Annual Report and Accounts 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DCC PLC
CONTINUED
– Inquiring of Directors, the audit committee, internal audit and inspection of policy documentation as to the Group’s policies
and procedures to prevent and detect fraud, including the internal audit function, and the Group’s channel for
“whistleblowing”, as well as whether they have knowledge of any actual, suspected or alleged fraud.
– Inquiring of Directors, the Audit Committee, internal audit regarding their assessment of the risk that the financial statements
may be materially misstated due to irregularities, including fraud.
– Inspecting the Group’s regulatory and legal correspondence.
– Reading Board and sub-committee meeting minutes.
– Considering remuneration incentive schemes and performance targets for management and Directors including the earnings
per share target for management remuneration.
– Performing planning analytical procedures to identify any usual or unexpected relationships.
We discussed identified laws and regulations, fraud risk factors and the need to remain alert among the audit team. This
included communication from the Group to component audit teams of relevant laws and regulations and any fraud risks
identified at the Group level and request to component audit teams to report to the Group audit team any instances of fraud
that could give rise to a material misstatement at Group.
Firstly, the Group is subject to laws and regulations that directly aect the financial statements including companies and
financial reporting legislation, taxation legislation and distributable profits legislation. We assessed the extent of compliance
with these laws and regulations as part of our procedures on the related financial statement items, including assessing the
financial statement disclosures and agreeing them to supporting documentation when necessary.
Secondly, the Group is subject to many other laws and regulations where the consequences of non-compliance could have a
material eect on amounts or disclosures in the financial statements, for instance through the imposition of fines or litigation.
We identified the following areas as those most likely to have such an eect: health and safety, anti-bribery, employment law,
environmental law, regulatory capital and liquidity and certain aspects of company legislation recognising the financial and
regulated nature of the Group’s activities and its legal form.
Auditing standards limit the required audit procedures to identify non-compliance with these non-direct laws and regulations
to inquiry of the Directors and other management and inspection of regulatory and legal correspondence, if any. These limited
procedures did not identify actual or suspected non-compliance.
We assessed events or conditions that could indicate an incentive or pressure to commit fraud or provide an opportunity to
commit fraud. As required by auditing standards, we performed procedures to address the risk of management override of
controls and the risk of fraudulent revenue recognition. We did not identify any additional fraud risks.
In response to the fraud risks, we also performed procedures including:
– Identifying journal entries to test based on risk criteria and comparing the identified entries to supporting documentation.
– Evaluating the business purpose of significant unusual transactions;
– Assessing significant accounting estimates for bias; and
– Assessing the disclosures in the financial statements.
As the Group is regulated, our assessment of risks involved obtaining an understanding of the legal and regulatory framework
that the Group operates in and gaining an understanding of the control environment including the entity’s procedures for
complying with regulatory requirements.
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected some material
misstatements in the financial statements, even though we have properly planned and performed our audit in accordance with
auditing standards. For example, the further removed non-compliance with laws and regulations (irregularities) is from the
events and transactions reflected in the financial statements, the less likely the inherently limited procedures required by
auditing standards would identify it.
In addition, as with any audit, there remains a higher risk of non-detection of irregularities, as these may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal controls. We are not responsible for preventing
non-compliance and cannot be expected to detect non-compliance with all laws and regulations.
FINANCIAL STATEMENTS CONTINUED
149DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Key audit matters: our assessment of risks of material misstatement
Key audit matters are those matters that, in our professional judgment, were of most significance in the audit of the financial
statements and include the most significant assessed risks of material misstatement (whether or not due to fraud) identified by
us, including those which had the greatest eect on: the overall audit strategy; the allocation of resources in the audit; and
directing the eorts of the engagement team. These matters were addressed in the context of our audit of the financial
statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
In arriving at our audit opinion above, the key audit matters, in decreasing order of audit significance and which were
unchanged from 2022, were as follows:
Valuation of goodwill and intangible assets £2,958 million (2022: £2,634 million)
Refer to note 5.9 (accounting policy) and note 3.3 (financial disclosures)
The key audit matter How the matter was addressed in our audit
The Group has significant goodwill and
intangible assets arising
from acquisitions.
There is a risk that the carrying amounts
of goodwill and intangible assets will be
more that the estimated
recoverable amount.
The recoverable amount of goodwill
and intangible assets is arrived at by
forecasting and discounting future cash
flows to determine value in use
calculations for each Cash Generating
Unit (‘CGU’).
These cash flows are inherently highly
judgemental and rely on certain
significant assumptions including future
trading performance, future long term
growth rates and CGU specific
discount rates.
We have assessed the significant judgements made by the Directors in the cash
flow forecasts used in the determinations of the values in use for each CGU. We also
assessed the manner in which CGUs were identified.
To assess the Group’s cash flow forecast models’ calculations we:
– performed inquiries of Group management to develop an understanding of the
process for goodwill impairment assessment and tested the design and
implementation of key controls in this process;
– evaluated the mathematical accuracy of the cash flow forecasts;
– reviewed the accuracy of management’s cash flow estimates in previous years by
comparing historical forecasts to actual outturns;
– assessed the appropriateness of the CGU specific discount rates applied in
determining the value in use of each CGU with the assistance of an in-house
valuation specialist;
– evaluated and challenged the significant assumptions used to develop the
projected financial information regarding future profitability and the long term
economic growth rates applied;
– assessed and challenged the significant assumptions used by management in
relation to the possible impact of longer-term energy trends on the projected
financial information of specific CGUs most sensitive to changes in
these assumptions;
– performed an overall evaluation of the individual CGU discounted cash flow
models based on our knowledge of the Group and our reading of the Group’s
Three Year Plan combined with external data which we considered relevant;
– compared the value in use for the Group as a whole to the Group’s
market capitalisation;
– evaluated the sensitivity analysis carried out by management in relation to the
significant assumptions used in developing the projections; and
– read the description of the impairment testing of goodwill and intangible assets
performed by the Directors, set out in note 3.3 to the financial statements to
assess the accuracy of the Group’s disclosures relating to estimation uncertainty,
significant judgements and assumptions made.
Our procedures in respect of this risk were performed as planned. We found that the
assumptions applied in management’s cash flow forecast models used in the
determination of value in use were appropriate. We read the disclosures of
significant judgements made and found them to be appropriate.
150 DCC plc \ Annual Report and Accounts 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DCC PLC
CONTINUED
Acquisition accounting on business combinations total consideration £365 million (2022: £716 million)
Refer to note 5.9 (accounting policy) and note 5.2 (financial disclosures)
The key audit matter How the matter was addressed in our audit
The Group made a number of
acquisitions in the year ended 31 March
2023 including a number of individually
significant transactions.
Due to the overall level of acquisitions
during the year we have included
acquisition accounting as a key audit
matter. The total cost of acquisitions
completed during the year ended
March 2023 totalled £365 million.
Significant judgement has been
exercised by management in
establishing the initial purchase price
allocation between intangible assets
and goodwill for significant acquisitions.
We determined that key assumptions
including specific discount rates and
projected recurring cashflows give rise
to these significant judgements.
For significant acquisitions completed during the year, our audit engagement team
supported by valuation specialists performed procedures which included but were
not limited to the following:
– We made inquiries of Group management to develop an understanding of the
process for accounting for business combinations and tested the design and
implementation of key controls in this process;
– With the assistance of our valuation specialists, we assessed the appropriateness
of the valuation methods used by comparing the methods to the methods most
commonly used in valuing similar assets;
– With the assistance of our valuation specialists, we compared the key discount
rates and recurring cashflow projections to independent data when available and
challenged management on these assumptions;
– We read the underlying legal agreements and other transaction-related
documents and assessed the appropriateness of the date of acquisition
determined by management and if all potential accounting implications have
been considered and appropriately accounted for.
Based on the evidence obtained, we found management’s judgements relating to
the key assumptions used in the purchase price allocation to be appropriate.
Investment in subsidiary undertakings £1,174 million (2022: £1,130 million)
Refer to note 5.9 (accounting policy) and note 6.4 (financial disclosures)
The key audit matter How the matter was addressed in our audit
The carrying amount of the Parent
Company’s investments in subsidiary
undertakings represents 79% (2022: 83%)
of the Parent Company’s total assets.
The investment in subsidiary
undertakings is carried in the Balance
Sheet of the Company at cost less
impairment. At 31 March 2023, the
investment carrying value was
£1,174 million.
There is a significant risk in respect of
the carrying value of these investments
if the future cash flows and trading
performance of these subsidiaries are
not sucient to support the balance
sheet value. We focus on this area due
to the significance of the balance to the
Company Balance Sheet and the
inherent uncertainty involved in the key
assumptions used including discount
rates and forecasting future cash flows
for the subsidiary businesses.
– We obtained and documented our understanding of the process surrounding
impairment considerations and tested the design and implementation of the
relevant control.
– We reviewed management’s assessment of impairment indicators across
the Group;
– We compared the carrying value of investments in the Company’s Balance Sheet
to the net assets of the subsidiary financial statements;
– We assessed the audit work performed in respect of the current year results of
subsidiaries and the valuation of goodwill and intangible assets which included
consideration of the key assumptions used including discount rates and forecast
future cashflows; and
– We compared the carrying value of subsidiaries to the market capitalisation of
the Company at 31 March 2023.
Based on evidence obtained, we found management’s assessment of the key
assumptions used in assessing the carrying value of investments in subsidiary
undertakings to be appropriate.
FINANCIAL STATEMENTS CONTINUED
151DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Our application of materiality and an overview of the scope of our audit
Materiality for the Group financial statements as a whole was set at £21.5 million. This has been calculated based on 5% of the
Group profit before taxation of £431.6 million which we consider to be one of the principal considerations for members of the
Company in assessing the financial performance of the Group. The materiality for the prior year Group financial statements as
a whole was set at £21.4 million. This was calculated based on 5% of the Group profit before taxation. In applying our
judgement in determining the percentage to be applied to the benchmark, the following qualitative factors had the most
significant impact:
– The Group has a high public profile and operates in a regulated environment.
– The stability of the business environment in which it operates.
Performance materiality for the Group financial statements was set at 75% (2022: 75%) of materiality for the financial statements
as a whole, which equates to £16.1m (2022: £16.0m). We use performance materiality to reduce to an appropriately low level the
probability that the aggregate of uncorrected and undetected misstatements exceeds overall materiality. In applying our
judgement in determining performance materiality, we considered a number of factors including; the low number and value of
misstatements detected and the low number and severity of deficiencies in control activities identified in the prior year financial
statement audit.
We report to the Audit Committee all corrected and uncorrected misstatements we identified through our audit with a value in
excess of £1 million (2022: £1 million), in addition to other audit misstatements below that threshold that we believe warranted
reporting on qualitative grounds.
Materiality for the Company financial statements as a whole was set at £12 million (2022: £12 million), determined with reference
to a benchmark of Company total assets of which it represents 0.9% (2022: 0.9%). Our approach to audit scoping is consistent
with that applied in previous years. In applying our judgement in determining the percentage to be applied to the benchmark,
the following qualitative factors had the most significant impact:
– The Company has a high public profile and operates in a regulated environment.
– The stability of the business environment in which its underlying investments operate.
Performance materiality for the Company financial statements was set at 75% (2022: 75%) of materiality for the financial
statements, which equates to £9 million (2022: £9 million).
The components subjected to full scope audit contributed 99.8% (2022: 99.9%) of total revenues and 99.5% (2022: 99.2%) of
total assets.
We applied materiality to assist us determine what risks were significant risks and the Group audit team instructed component
auditors as to the significant areas to be covered, including the relevant risks detailed above and the information to be
reported back. The Group audit team approved the materiality for components, which ranged from £2.2 million to £6.0 million,
having regard to the mix of size and risk profile of the Group across the components. The work on fifty-five in scope
components was performed by the Group team and component auditors. Four component audits were performed by KPMG
Dublin, twenty-four performed by KPMG overseas oces and nine performed by non-KPMG member firms. The remaining
eighteen components including the audit of the parent company, was performed by the Group team.
The Group audit team liaised extensively with all significant component auditors in order to assess the audit risk and strategy
and work undertaken. Video and telephone conference meetings were held with these component auditors, as well as with
auditors of other components across the Group. At these meetings, the findings reported to the Group audit team were
discussed in more detail, and any further work required by the Group audit team was then performed by the
component auditor.
Other information
The Directors are responsible for the preparation of the other information presented in the Annual Report together with the
financial statements. The other information comprises the information included in the Directors’ report and the Strategic Report
and Governance sections of the Annual Report and Supplemental Information.
The financial statements and our auditor’s report thereon do not comprise part of the other information. Our opinion on the
financial statements does not cover the other information and, accordingly, we do not express an audit opinion or, except as
explicitly stated below, any form of assurance conclusion thereon.
Our responsibility is to read the other information and, in doing so, consider whether, based on our financial statements audit
work, the information therein is materially misstated or inconsistent with the financial statements or our audit knowledge. Based
solely on that work we have not identified material misstatements in the other information.
152 DCC plc \ Annual Report and Accounts 2023
INDEPENDENT AUDITOR’S REPORT TO THE MEMBERS OF DCC PLC
CONTINUED
Based solely on our work on the other information undertaken during the course of the audit, we report that, in those parts of
the Directors’ report specified for our consideration:
– we have not identified material misstatements in the Directors’ report;
– in our opinion, the information given in the Directors’ report is consistent with the financial statements; and
– in our opinion, the Directors’ report has been prepared in accordance with the Companies Act 2014.
Corporate governance statement
We have reviewed the Directors’ statement in relation to going concern, longer-term viability, that part of the Corporate
Governance Statement relating to the Company’s compliance with the provisions of the UK Corporate Governance Code
specified for our review by the Listing Rules of the UK Listing Authority.
Based on the work undertaken as part of our audit, we have concluded that each of the following elements of the Corporate
Governance Statement is materially consistent with the financial statements and our knowledge obtained during the audit:
– Directors’ statement with regards the appropriateness of adopting the going concern basis of accounting and any material
uncertainties identified set out on page 84;
– Directors’ explanation as to their assessment of the Group’s prospects, the period this assessment covers and why the period
is appropriate set out on page 84;
– Director’s statement on whether it has a reasonable expectation that the Group will be able to continue in operation and
meets its liabilities set out on page 84;
– Directors’ statement on fair, balanced and understandable and the information necessary for shareholders to assess the
Group’s position and performance, business model and strategy set out on page 84;
– Board’s confirmation that it has carried out a robust assessment of the emerging and principal risks and the disclosures in the
annual report that describe the principal risks and the procedures in place to identify emerging risks and explain how they
are being managed or mitigated set out on pages 84;
– Section of the annual report that describes the review of eectiveness of risk management and internal control systems set
out on page 80; and;
– Section describing the work of the audit committee set out on page 110-111.
Our opinions on other matters prescribed by the Companies Act 2014 are unmodified
We have obtained all the information and explanations which we consider necessary for the purpose of our audit.
In our opinion, the accounting records of the Company were sucient to permit the financial statements to be readily and
properly audited and the financial statements are in agreement with the accounting records.
We have nothing to report on other matters on which we are required to report by exception
The Companies Act 2014 requires us to report to you if, in our opinion:
– the disclosures of Directors’ remuneration and transactions required by Sections 305 to 312 of the Act are not made.
– the Company has not provided the information required by section 5(2) to (7) of the European Union (Disclosure of
Non-Financial and Diversity Information by certain large undertakings and groups) Regulations 2017 for the year ended
31 March 2022 as required by the European Union (Disclosure of Non-Financial and Diversity Information by certain large
undertakings and groups) (amendment) Regulations 2018.
We have nothing to report in this regard.
Respective responsibilities and restrictions on use
Directors’ responsibilities
As explained more fully in their statement set out on page 146, the Directors are responsible for: the preparation of the financial
statements including being satisfied that they give a true and fair view; such internal control as they determine is necessary to
enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error;
assessing the Group and Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern; and using the going concern basis of accounting unless they either intend to liquidate the Group or the Company or
to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material
misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance
is a high level of assurance but is not a guarantee that an audit conducted in accordance with ISAs (Ireland) will always detect
a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually
or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these
financial statements.
A fuller description of our responsibilities is provided on IAASA’s website at
https://iaasa.ie/publications/description-of-the-auditors-responsibilities-for-the -audit-of-the-financial-statements/.
FINANCIAL STATEMENTS CONTINUED
153DCC plc \ Annual Report and Accounts 2023
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The purpose of our audit work and to whom we owe our responsibilities
Our report is made solely to the Company’s members, as a body, in accordance with Section 391 of the Companies Act 2014.
Our audit work has been undertaken so that we might state to the Company’s members those matters we are required to state
to them in an auditor’s report and for no other purpose. To the fullest extent permitted by law, we do not accept or assume
responsibility to anyone other than the Company and the Company’s members, as a body, for our audit work, for our report, or
for the opinions we have formed.
Patricia Carroll
for and on behalf of KPMG
Chartered Accountants, Statutory Audit Firm
1 Stokes Place
St. Stephen’s Green
Dublin 2
Ireland
15 May 2023
154 DCC plc \ Annual Report and Accounts 2023
2023 2022
Note
Pre-
exceptionals
£’000
Exceptionals
(note 2.6)
£’000
Total
£’000
Pre-
exceptionals
£’000
Exceptionals
(note 2.6)
£’000
Total
£’000
Revenue 2.1 22,204,846 – 22,204,846 17,732,020 – 17,732,020
Cost of sales (19,800,114 ) – (19,800,114 ) (15,694,347 ) – (15,694,347 )
Gross profit 2,404,732 – 2,404,732 2,037,673 – 2,037,673
Administration expenses (629,510 ) – (629,510 ) (517,128 ) – (517,128 )
Selling and distribution expenses (1,157,642 ) – (1,157,642 ) (965,489 ) – (965,489 )
Other operating income/(expenses) 2.2 38,082 (32,528 ) 5,554 34,178 (46,534 ) (12,356 )
Adjusted operating profit 2.1 655,662 (32,528 ) 623,134 589,234 (46,534 ) 542,700
Amortisation of intangible assets 3.3 (111,146 ) – (111,146 ) (84,340 ) – (84,340 )
Operating profit 544,516 (32,528 ) 511,988 504,894 (46,534 ) 458,360
Finance costs 2.7 (96,735 ) – (96,735 ) (77,205 ) – (77,205 )
Finance income 2.7 16,111 892 17,003 23,075 1,192 24,267
Share of equity accounted
investments’ (loss)/profit after tax 2.8 (692 ) – (692 ) 314 – 314
Profit before tax 463,200 (31,636 ) 431,564 451,078 (45,342 ) 405,736
Income tax expense 2.9 (87,526 ) 2,764 (84,762 ) (81,235 ) 1,501 (79,734 )
Profit after tax for the financial year 375,674 (28,872 ) 346,802 369,843 (43,841 ) 326,002
Profit attributable to:
Owners of the Parent Company 362,683 (28,661 ) 334,022 356,214 (43,841 ) 312,373
Non-controlling interests 12,991 (211 ) 12,780 13,629 – 13,629
Earnings per ordinary share
Basic earnings per share 2.11 338.40 p 316.78 p
Diluted earnings per share 2.11 338.04 p 316.36 p
GROUP INCOME STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
FINANCIAL STATEMENTS CONTINUED
155DCC plc \ Annual Report and Accounts 2023
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Note
2023
£’000
2022
£’000
Group profit for the financial year 346,802 326,002
Other comprehensive income:
Items that may be reclassified subsequently to profit or loss
Currency translation 43,280 26,549
Movements relating to cash flow hedges (164,422 ) 88,776
Movement in deferred tax liability on cash flow hedges 2.9 30,374 (16,138 )
(90,768 ) 99,187
Items that will not be reclassified to profit or loss
Group defined benefit pension obligations:
– remeasurements 3.15 2,811 (748 )
– movement in deferred tax asset 2.9 (800 ) 210
Other comprehensive income for the financial year, net of tax (88,757 ) 98,649
Total comprehensive income for the financial year 258,045 424,651
Attributable to:
Owners of the Parent Company 243,242 411,485
Non-controlling interests 14,803 13,166
GROUP STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 MARCH 2023
156 DCC plc \ Annual Report and Accounts 2023
Note
2023
£’000
2022
£’000
ASSETS
Non-current assets
Property, plant and equipment 3.1 1,354,806 1,253,349
Right-of-use leased assets 3.2 336,221 327,551
Goodwill 3.3 2,029,620 1,765,961
Intangible assets 3.3 928,009 868,488
Equity accounted investments 3.4 47,789 26,843
Deferred income tax assets 3.14 69,053 54,494
Derivative financial instruments 3.10 89,199 118,578
Current assets
Inventories 3.5 1,192,803 1,133,666
Trade and other receivables 3.6 2,312,269 2,508,613
Derivative financial instruments 3.10 59,258 107,361
Cash and cash equivalents 3.9 1,421,749 1,394,272
Total assets 9,840,776 9,559,176
EQUITY
Capital and reserves attributable to owners of the Parent Company
Share capital 4.1 17,422 17,422
Share premium 4.1 883,669 883,321
Share based payment reserve 4.2 54,596 47,436
Cash flow hedge reserve 4.2 (48,280 ) 85,768
Foreign currency translation reserve 4.2 128,529 87,272
Other reserves 4.2 932 932
Retained earnings 4.3 1,941,223 1,783,033
Equity attributable to owners of the Parent Company 2,978,091 2,905,184
Non-controlling interests 4.4 80,219 65,379
Total equity 3,058,310 2,970,563
LIABILITIES
Non-current liabilities
Borrowings 3.11 1,933,759 1,933,482
Lease creditors 3.12 275,388 273,164
Derivative financial instruments 3.10 40,585 10,330
Deferred income tax liabilities 3.14 263,623 259,796
Post-employment benefit obligations 3.15 (11,721 ) (7,745 )
Provisions for liabilities 3.17 301,067 284,191
Acquisition related liabilities 3.16 86,172 72,650
Government grants 3.18 446 356
Current liabilities
Trade and other payables 3.7 3,279,898 3,468,705
Current income tax liabilities 85,324 59,963
Borrowings 3.11 320,856 67,668
Lease creditors 3.12 71,158 63,538
Derivative financial instruments 3.10 42,341 28,634
Provisions for liabilities 3.17 52,349 50,279
Acquisition related liabilities 3.16 41,221 23,602
Total liabilities 6,782,466 6,588,613
Total equity and liabilities 9,840,776 9,559,176
Mark Breuer, Donal Murphy
Directors
GROUP BALANCE SHEET
AS AT 31 MARCH 2023
FINANCIAL STATEMENTS CONTINUED
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Attributable to owners of the Parent Company
Non-
controlling
interests
(note 4.4)
£’000
Total
equity
£’000
Share
capital
(note 4.1)
£’000
Share
premium
(note 4.1)
£’000
Retained
earnings
(note 4.3)
£’000
Other
reserves
(note 4.2)
£’000
Total
£’000
At 1 April 2022 17,422 883,321 1,783,033 221,408 2,905,184 65,379 2,970,563
Profit for the financial year – – 334,022 – 334,022 12,780 346,802
Other comprehensive income:
Currency translation – – – 41,257 41,257 2,023 43,280
Group defined benefit pension obligations:
– remeasurements – – 2,811 – 2,811 – 2,811
– movement in deferred tax asset – – (800 ) – (800 ) – (800 )
Movements relating to cash flow hedges – – – (164,422 ) (164,422 ) – (164,422 )
Movement in deferred tax liability on cash flow
hedges – – – 30,374 30,374 – 30,374
Total comprehensive income – – 336,033 (92,791 ) 243,242 14,803 258,045
Re-issue of treasury shares – 348 – – 348 – 348
Share based payment – – – 7,160 7,160 – 7,160
Dividends – – (177,843 ) – (177,843 ) (129 ) (177,972 )
Non-controlling interest arising on acquisition – – – – – 166 166
At 31 March 2023 17,422 883,669 1,941,223 135,777 2,978,091 80,219 3,058,310
FOR THE YEAR ENDED 31 MARCH 2022
Attributable to owners of the Parent Company
Non-
controlling
interests
(note 4.4)
£’000
Total
equity
£’000
Share
capital
(note 4.1)
£’000
Share
premium
(note 4.1)
£’000
Retained
earnings
(note 4.3)
£’000
Other
reserves
(note 4.2)
£’000
Total
£’000
At 1 April 2021 17,422 882,924 1,631,797 115,291 2,647,434 58,210 2,705,644
Profit for the financial year – – 312,373 – 312,373 13,629 326,002
Other comprehensive income:
Currency translation – – – 27,012 27,012 (463 ) 26,549
Group defined benefit pension obligations:
– remeasurements – – (748 ) – (748 ) – (748 )
– movement in deferred tax asset – – 210 – 210 – 210
Movements relating to cash flow hedges – – – 88,776 88,776 – 88,776
Movement in deferred tax liability on cash flow
hedges – – – (16,138 ) (16,138 ) – (16,138 )
Total comprehensive income – – 311,835 99,650 411,485 13,166 424,651
Re-issue of treasury shares – 397 – – 397 – 397
Share based payment – – – 6,467 6,467 – 6,467
Dividends – – (160,599 ) – (160,599 ) (6,909 ) (167,508 )
Non-controlling interest arising on acquisition – – – – – 912 912
At 31 March 2022 17,422 883,321 1,783,033 221,408 2,905,184 65,379 2,970,563
GROUP STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
158 DCC plc \ Annual Report and Accounts 2023
Note
2023
£’000
2022
£’000
Operating activities
Cash generated from operations before exceptionals 5.3 860,746 628,433
Exceptionals (23,780 ) (30,270 )
Cash generated from operations 836,966 598,163
Interest paid (including lease interest) (82,576 ) (70,103 )
Income tax paid (97,485 ) (76,292 )
Net cash flow from operating activities 656,905 451,768
Investing activities
Inflows:
Proceeds from disposal of property, plant and equipment 22,643 23,524
Government grants received in relation to property, plant and equipment 3.18 216 –
Disposal of equity accounted investments – 772
Interest received 15,535 22,759
Outflows:
Purchase of property, plant and equipment (229,440 ) (194,353 )
Acquisition of subsidiaries 5.2 (318,486 ) (668,123 )
Payment of accrued acquisition related liabilities 3.16 (21,987 ) (52,006 )
(569,913 ) (914,482 )
Net cash flow from investing activities (531,519 ) (867,427 )
Financing activities
Inflows:
Proceeds from issue of shares 4.1 348 397
Net cash inflow on derivative financial instruments – 30,936
Increase in interest-bearing loans and borrowings 603,054 372,426
Outflows:
Repayment of interest-bearing loans and borrowings (393,469 ) (149,182 )
Net cash outflow on derivative financial instruments (57,902 ) –
Repayment of lease creditors (principal) (74,219 ) (65,580 )
Dividends paid to owners of the Parent Company 2.10 (177,843 ) (160,599 )
Dividends paid to non-controlling interests 4.4 (129 ) (6,909 )
(703,562 ) (382,270 )
Net cash flow from financing activities (100,160 ) 21,489
Change in cash and cash equivalents 25,226 (394,170 )
Translation adjustment 19,376 3,878
Cash and cash equivalents at beginning of year 1,326,604 1,716,896
Cash and cash equivalents at end of year 3.9 1,371,206 1,326,604
Cash and cash equivalents consist of:
Cash and short-term bank deposits 3.9 1,421,749 1,394,272
Overdrafts 3.9 (50,543 ) (67,668 )
GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
FINANCIAL STATEMENTS CONTINUED
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165
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167
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169
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171
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173
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175
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177
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179
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181
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183
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185
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187
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189
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191
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193
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195
3.15 POST-EMPLOYMENT BENEFIT OBLIGATIONS continued
196 DCC plc \ Annual Report and Accounts 2023196
FINANCIAL STATEMENTS CONTINUED
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197
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199
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201
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203
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205
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207
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209
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211
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213
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215
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FINANCIAL STATEMENTS CONTINUED
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217
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FINANCIAL STATEMENTS CONTINUED
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219
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FINANCIAL STATEMENTS CONTINUED
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221
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FINANCIAL STATEMENTS CONTINUED
223DCC plc \ Annual Report and Accounts 2023
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223
224 DCC plc \ Annual Report and Accounts 2023224
Note
2023
£’000
2022
£’000
ASSETS
Non-current assets
Investments in subsidiary undertakings 6.4 ,, ,,
Current assets
Trade and other receivables 6.5 , ,
Cash and cash equivalents 6.7 , ,
, ,
Total assets ,, ,,
EQUITY
Capital and reserves
Share capital 4.1 , ,
Share premium 4.1 , ,
Other reserves 6.8 , ,
Retained earnings 6.9 , ,
Total equity ,, ,,
LIABILITIES
Current liabilities
Trade and other payables 6.6 , ,
Total equity and liabilities ,, ,,
Mark Breuer, Donal Murphy
Directors
COMPANY BALANCE SHEET
AS AT 31 MARCH 2023
FINANCIAL STATEMENTS CONTINUED
225DCC plc \ Annual Report and Accounts 2023
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225
COMPANY STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDED 31 MARCH 2023
Share capital
(note 4.1)
£’000
Share premium
(note 4.1)
£’000
Retained earnings
(note 6.9)
£’000
Other reserves
(note 6.8)
£’000
Total equity
£’000
At 1 April 2022 , , , , ,,
Profit for the financial year – – , – ,
Other comprehensive income:
Currency translation – – – , ,
Total comprehensive income – – , , ,
Re-issue of treasury shares – – –
Share based payment – – – , ,
Dividends – – (,) – (,)
At 31 March 2023 , , , , ,,
FOR THE YEAR ENDED 31 MARCH 2022
Share capital
(note 4.1)
£’000
Share premium
(note 4.1)
£’000
Retained earnings
(note 6.9)
£’000
Other reserves
(note 6.8)
£’000
Total equity
£’000
At 1 April 2021 , , , , ,,
Profit for the financial year – – , – ,
Other comprehensive income:
Currency translation – – – (,) (,)
Total comprehensive income – – , (,) ,
Re-issue of treasury shares – – –
Share based payment – – – , ,
Dividends – – (,) – (,)
At 31 March 2022 , , , , ,,
226 DCC plc \ Annual Report and Accounts 2023226
Note
2023
£’000
2022
£’000
Operating activities
Cash generated from operations 6.10 (,) ()
Net cash flow from operating activities (,) ()
Investing activities
Inflows:
Interest received , ,
Proceeds on disposal – ,
Dividends received from subsidiaries , ,
Net cash flow from investing activities , ,
Financing activities
Inflows:
Proceeds from issue of shares
Outflows:
Dividends paid 2.10 (,) (,)
Net cash flow from financing activities (,) (,)
Change in cash and cash equivalents (,) ,
Translation adjustment ()
Cash and cash equivalents at beginning of year , ,
Cash and cash equivalents at end of year 6.7 , ,
COMPANY CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 MARCH 2023
FINANCIAL STATEMENTS CONTINUED
227DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
227
NOTES TO THE COMPANY FINANCIAL STATEMENTS
SECTION 6 NOTES TO THE COMPANY FINANCIAL STATEMENTS
In accordance with the Companies Act 2014, information regarding the ultimate Parent
Company, DCC plc, is presented below.
6.1
BASIS OF PREPARATION
The financial statements which are presented in sterling, rounded to the nearest thousand, have been prepared in accordance
with International Financial Reporting Standards (‘IFRS’) as adopted by the European Union.
The Company applies consistent accounting policies to those applied by the Group. To the extent that an accounting policy is
relevant to both Group and Parent Company financial statements, please refer to the Group financial statements for disclosure
of the relevant accounting policy.
6.2
AUDITOR STATUTORY DISCLOSURE
The audit fee for the Parent Company is £15,450 and is payable to KPMG, Ireland, the statutory auditor (2022: £15,450).
6.3
PROFIT ATTRIBUTABLE TO DCC PLC
Profit after taxation for the year attributable to owners of the Parent Company amounting to £220.258 million (2022:
£170.109 million) has been accounted for in the financial statements of the Company. In accordance with Section 304(2) of the
Companies Act, 2014, the Company is availing of the exemption from presenting its individual Income Statement to the Annual
General Meeting. The Company has also availed of the exemption from filing its individual Income Statement with the Registrar
of Companies as permitted by Section 304(2) of the Companies Act, 2014.
6.4
INVESTMENTS IN SUBSIDIARY UNDERTAKINGS
2023
£’000
2022
£’000
At 1 April ,, ,,
Disposals – ()
Impairment () (,)
Exchange and other , (,)
At 31 March ,, ,,
Details of the Group’s principal operating subsidiaries are included in the Supplementary Information section on pages 232 to
246. Non-wholly owned subsidiaries principally comprises DCC Holding Denmark A/S (60%) (which owns 100% of DCC Energi
Danmark A/S and DCC Energi Retail A/S).
The Group’s principal overseas holding company subsidiaries are DCC Limited, a company operating, incorporated and
registered in England and Wales and DCC International Holdings B.V., a company operating, incorporated and registered in
The Netherlands. The registered oce of DCC Limited is at Hill House, 1 Little New Street, London, EC4A 3TR, England. The
registered oce of DCC International Holdings B.V. is Zuiderzeestraatweg 1, 3882 NC, Putten, The Netherlands.
6.5
TRADE AND OTHER RECEIVABLES
2023
£’000
2022
£’000
Amounts owed by subsidiary undertakings , ,
All amounts owed by subsidiary undertakings are interest-free and repayable on demand. There were no past due or impaired
trade receivables in the Company at 31 March 2023 (31 March 2022: nil). The Company does not expect any material loss in
relation to trade and other receivables at 31 March 2023.
228 DCC plc \ Annual Report and Accounts 2023228
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
6.6
TRADE AND OTHER PAYABLES
2023
£’000
2022
£’000
Amounts due to subsidiary undertakings , ,
Other creditors and accruals
, ,
6.7
CASH AND CASH EQUIVALENTS
2023
£’000
2022
£’000
Cash at bank and in hand , ,
6.8
OTHER RESERVES
Share based
payment
reserve
1
£’000
Foreign currency
translation
reserve
2
£’000
Other
reserves
3
£’000
Total
£’000
At 1 April 2021 , , ,
Share based payment , – – ,
Currency translation – (,) – (,)
At 31 March 2022 , , ,
Share based payment , – – ,
Currency translation – , – ,
At 31 March 2023 , , ,
1. The share based payment reserve comprises capital contributions to subsidiaries in connection with share based payments.
2. The Company’s foreign currency translation reserve represents all foreign exchange dierences from 1 April 2004 arising from the translation of the net
assets of the Company’s euro denominated operations into sterling (the presentation currency), including the translation of the profits and losses of the
Company from the average rate for the year to the closing rate at the balance sheet date.
3. The Company’s other reserves is a capital conversion reserve fund.
6.9
RETAINED EARNINGS
2023
£’000
2022
£’000
At 1 April , ,
Total comprehensive income for the financial year , ,
Dividends (,) (,)
At 31 March , ,
6.10
CASH GENERATED FROM OPERATIONS
2023
£’000
2022
£’000
Profit for the financial year , ,
Add back non-operating income:
– net operating exceptionals (,)
– net finance income (,) (,)
– dividend income (,) (,)
Operating profit before exceptionals
Changes in working capital:
– trade and other receivables (,)
– trade and other payables , (,)
Cash generated from operations (,) ()
FINANCIAL STATEMENTS CONTINUED
229DCC plc \ Annual Report and Accounts 2023
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
229
6.11
RELATED PARTY TRANSACTIONS
SUBSIDIARIES AND ASSOCIATES
The Company’s Income Statement includes dividends from its subsidiary companies DCC Financial Services Holdings Unlimited
Company (£143.643 million), DCC Management Services Limited (£34.492 million) and DCC Energy Limited (£32.446 million).
Details of loan balances to/from subsidiaries are provided in the Company Balance Sheet on page 224, in note 6.5 ‘Trade and
Other Receivables’ and in note 6.6 ‘Trade and Other Payables’.
6.12
FINANCIAL RISK MANAGEMENT
A description of the Group’s financial risk management objectives and policies is provided in note 5.7 to the Group financial
statements. These financial risk management objectives and policies also apply to the Parent Company.
(I) CREDIT RISK MANAGEMENT
Credit risk arises from credit exposure to intercompany receivables and cash and cash equivalents including deposits with
banks and financial institutions.
As detailed in note 6.5, the Group’s intercompany receivables at 31 March 2023 amount to £293.884 million (2022: £204.611 million).
None of these balances include a provision for impairment and all amounts are expected to be recoverable in full.
Risk of counterparty default arising on cash and cash equivalents is controlled within a framework of dealing with high-quality
institutions and, by policy, limiting the amount of credit exposure to any one bank or institution. DCC plc transacts with a variety
of high credit quality financial institutions for the purpose of placing deposits. The Group actively monitors its credit exposure to
each counterparty to ensure compliance with the counterparty risk limits of the Board approved treasury policy. The cash and
cash equivalents balance at 31 March 2023 of £10.691 million was held with financial institutions with minimum short-term ratings
of A-2 (Standard and Poor’s) or P-1 (Moody’s).
(II) LIQUIDITY RISK MANAGEMENT
The tables below show the expected undiscounted total cash outflows (principal and interest) arising from the Company’s
trade and other payables. These projections are based on the interest and foreign exchange rates applying at the end of the
relevant financial year.
As at 31 March 2023
Less than
1 year
£’000
Between
1 and 2 years
£’000
Between
2 and 5 years
£’000
Over
5 years
£’000
Total
£’000
Financial liabilities – cash outflows
Trade and other payables , – – – ,
, – – – ,
As at 31 March 2022
Less than
1 year
£’000
Between
1 and 2 years
£’000
Between
2 and 5 years
£’000
Over
5 years
£’000
Total
£’000
Financial liabilities – cash outflows
Trade and other payables , – – – ,
, – – – ,
The Company has sucient cash resources and liquid assets to enable it to meet its trade and other payables.
(III) MARKET RISK MANAGEMENT
Foreign exchange risk management
The Company does not have any material assets or liabilities denominated in any currency other than euro at 31 March 2023 or
at 31 March 2022 which would give rise to a significant transactional currency exposure. However, as the presentation currency
for the Company is sterling, it is exposed to fluctuations in the sterling/euro exchange rate. A change in the value of euro by 10%
against sterling would have a £0.9 million (2022: £1.2 million) impact on the Company’s profit before tax, would change the
Company’s equity by £124.9 million and change the Company’s net cash by £0.9 million (2022: £120.7 million and
£3.2 million respectively).
Interest rate risk management
Based on the composition of net cash at 31 March 2023 a one percentage point (100 basis points) change in average floating
interest rates would have a £0.1 million (2022: £0.3 million) impact on the Company’s profit before tax. Finance income principally
comprises guarantee fees charged at fixed rates on intergroup loans. Finance costs comprise interest on intergroup loans
payable at variable market rates.
230 DCC plc \ Annual Report and Accounts 2023230
NOTES TO THE COMPANY FINANCIAL STATEMENTS CONTINUED
Commodity price risk management
The Company has no exposure to commodity price risk.
Fair values of financial assets and financial liabilities
The following is a comparison by category of book values and fair values of the Company’s financial assets and
financial liabilities:
2023 2022
Book value
£’000
Fair value
£’000
Book value
£’000
Fair value
£’000
Financial assets
Trade and other receivables , , , ,
Cash and cash equivalents , , , ,
, , , ,
Financial liabilities
Trade and other payables , , , ,
, , , ,
As at 31 March 2023 and 31 March 2022 the Company had no financial assets or financial liabilities which were carried at
fair value.
6.13
CONTINGENCIES
Guarantees given in respect of borrowings and other obligations are detailed in note 5.5 to the Group financial statements.
6.12 FINANCIAL RISK MANAGEMENT continued
FINANCIAL STATEMENTS CONTINUED
232 DCC plc \ Annual Report and Accounts 2023232
DCC ENERGY
Company name Company address Principal activity
Incorporated
and operating in
Group
shareholding %
DCC Energy Limited DCC House,
Leopardstown Road, Foxrock,
Dublin 18, D18 PK00, Ireland
Holding and divisional
management company
Ireland 100
ENERGY SOLUTIONS
Benegas BV Zuiderzeestraatweg 1, 3882NC,
Putten, The Netherlands
Procurement, sales, marketing and
distribution of liquefied petroleum
gas
The
Netherlands
100
Butagaz SAS 47-53 Rue Raspail, 92300
Levallois – Perret, Paris, France
Procurement, sales, marketing and
distribution of liquid gas fuels and
the provision of lower carbon
energy products and services
France 100
Certa Ireland Limited Clonminam Industrial Estate,
Portlaoise, Co. Laois, R32 YY26,
Ireland
Procurement, sales, marketing and
distribution of liquid fuels and the
provision of lower carbon energy
products and services
Ireland 100
Certas Energy UK Limited 1st Floor, Allday House,
Warrington Road, Birchwood,
Warrington WA3 6GR, England
Procurement, sales, marketing and
distribution of liquid fuels and the
provision of lower carbon energy
products and services
Britain 100
DCC Energi Danmark A/S Naerum Hovedgade 8,
2850 Naerum, Denmark
Procurement, sales, marketing and
distribution of liquid fuels and the
provision of lower carbon energy
products and services
Denmark 60
DCC Germany Holding
GmbH
Werner-von Siemens-Str. 18,
97076 Würzburg, Germany
Holding company Germany 100
DCC Propane LLC 1001 Warrenville Road, Suite 350
Lisle, IL 6053, USA
Procurement, sales, marketing and
distribution of liquefied petroleum
gas
USA 100
DSG Energy Limited Suites 2201-2, 22nd Floor,
AIA Kowloon Tower, Landmark
East, 100 How Ming Street,
Kwun Tong, Kowloon, Hong Kong
Procurement, sales, marketing and
distribution of liquefied petroleum
gas
Hong Kong 100
Energie Direct Austria GmbH Alte Poststraße 400,
A-8055 Graz, Austria
Procurement, sales, marketing and
distribution of petroleum and
lubricant products and natural gas
Austria 100
Flogas Britain Limited 81 Rayns Way, Syston, Leicester
LE7 1PF, England
Procurement, sales, marketing and
distribution of liquid gas fuels and
the provision of lower carbon
energy products and services
Britain 100
Flogas Ireland Limited Knockbrack House,
Matthew’s Lane, Donore Road,
Drogheda, Co. Louth, A92 T803,
Ireland
Procurement, sales, marketing and
distribution of liquid gas fuels,
natural gas and the provision of
lower carbon & renewable energy
products and services
Ireland 100
Flogas Norge AS Sandakerveien 116, 0484 Oslo,
Norway
Procurement, sales, marketing and
distribution of liquefied petroleum
gas
Norway 100
Flogas Sverige AB Brännkyrkagatan 63,
11822 Stockholm, Sweden
Procurement, sales, marketing and
distribution of liquefied petroleum
gas
Sweden 100
Gaz de Paris SAS (trading
as Gaz Européen)
47-53 Rue Raspail, 92300
Levallois – Perret, Paris, France
Procurement, sales, marketing and
distribution of natural gas
France 100
TEGA – Technische Gase
und Gasetechnik GmbH
Werner-von-Siemens-Str. 18,
97076 Würzburg, Germany
Procurement, sales, marketing and
distribution of liquefied petroleum
gas and refrigerant gases
Germany 100
PRINCIPAL SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES
1
1. The information in this section relates only to the Group’s principal subsidiaries, joint ventures and associates. A full list of subsidiaries and associates will be
annexed to the Annual Return of the Company to be filed with the Irish Registrar of Companies.
SUPPLEMENTARY INFORMATION CONTINUED
233DCC plc \ Annual Report and Accounts 2023 233
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
DCC ENERGY continued
MOBILITY
Company name Company address Principal activity
Incorporated
and operating in
Group
shareholding %
Certas Energy France SAS 9 Avenue Edouard Belin, 92500
Rueil Malmaison, Paris, France
Procurement, sales and marketing
of petroleum products
France 100
Certas Energy Norway AS Elias Smiths vei 24, 1337 Sandvika,
Norway
Procurement, sales and marketing
of petroleum products
Norway 100
Energy Procurement Ireland
2013 Limited
DCC House,
Leopardstown Road, Foxrock,
Dublin 18, D18 PK00, Ireland
Procurement, sales and marketing
of petroleum products
Ireland 100
Fuel Card Services Limited Alexandra House,
Lawnswood Business Park,
Redvers Close, Leeds LS16 6QY,
England
Sale and administration of
petroleum products through the use
of fuel cards
Britain 100
Qstar Försäljning AB Spårgatan 5, Box 633,
601 14 Norrköping, Sweden
Procurement, sales and marketing
of petroleum products
Sweden 100
DCC HEALTHCARE
Company name Company address Principal activity
Incorporated
and operating in
Group
shareholding %
DCC Healthcare Limited DCC House,
Leopardstown Road, Foxrock,
Dublin 18, D18 PK00, Ireland
Holding and divisional
management company
Ireland 100
DCC VITAL
DCC Vital Limited Fannin House,
South County Business Park,
Leopardstown, Dublin 18,
D18 Y0C9, Ireland
Holding company for the
operations of the DCC Vital group
of companies
Ireland 100
Fannin Limited Fannin House,
South County Business Park,
Leopardstown, Dublin 18,
D18 Y0C9, Ireland
Sales, marketing and distribution of
medical and pharmaceutical
products to healthcare providers
Ireland 100
Fannin (UK) Limited Westminster Industrial Estate,
Repton Road, Measham,
Swadlincote, Derbyshire
DE12 7DT, England
Sales, marketing and distribution of
medical devices to healthcare
providers
Britain 100
Medi-Globe Technologies
GmbH
Medi-Globe-Straße 1-5, 83101,
Achenmühle, Germany
Development, manufacture and
distribution of single use medical
devices
Germany 100
Medilab Medical
Equipments AG
Hauptstrasse 160a,
8274 Tägerwilen, Switzerland
Sales, marketing and distribution of
medical and laboratory supplies
and services to the Swiss primary
care healthcare market
Switzerland 100
Williams Medical Supplies
Limited
Craiglas House,
The Maerdy Industrial Estate,
Rhymney, Gwent NP22 5PY,
Wales
Sales, marketing and distribution of
medical supplies and services to UK
healthcare market, primarily GPs
and primary care organisations
Britain 100
Wörner Medizinprodukte
und Logistik GmbH
Ferdinand-Lassalle-Str. 37,
72770 Reutlingen, Germany
Sales, marketing and distribution of
medical and laboratory supplies
and services to the German primary
care healthcare market
Germany 100
234 DCC plc \ Annual Report and Accounts 2023234
DCC HEALTHCARE continued
HEALTH & BEAUTY SOLUTIONS
Company name Company address Principal activity
Incorporated
and operating in
Group
shareholding %
DCC Health & Beauty
Solutions Limited
9-12 Hardwick Road,
Astmoor Industrial Estate,
Runcorn, Cheshire WA7 1PH,
England
Outsourced solutions for the health
and beauty industry
Britain 100
Amerilab Technologies, Inc. 2765 Niagara Lane,
North Plymouth, MN 55447, USA
Development, contract
manufacture and packing of
eervescent nutritional products in
powder and tablet formats
USA 100
Design Plus Holdings Limited Rowan House, 3 Stevant Way,
White Lund, Morecambe,
Lancashire LA3 3PU, England
Development, contract
manufacture and packing of liquids
and creams for the beauty and
consumer healthcare sectors
Britain 100
EuroCaps Limited Crown Business Park, Dukestown,
Tredegar, Gwent NP22 4EF,
Wales
Development and contract
manufacture of nutritional products
in softgel capsule format
Britain 100
Ion Nutritional Labs 8031 114th Ave, Suite 4000,
Largo, FL 33773, USA
Development, contract
manufacture and packing of
nutritional products across a range
of formats including tablets,
capsules, powders and liquids
USA 100
Laleham Health and Beauty
Limited
Sycamore Park, Mill Lane, Alton,
Hampshire GU34 2PR, England
Development, contract
manufacture and packing of liquids
and creams for the beauty and
consumer healthcare sectors
Britain 100
Thompson & Capper Limited 9-12 Hardwick Road,
Astmoor Industrial Estate,
Runcorn, Cheshire WA7 1PH,
England
Development, contract
manufacture and packing of
nutritional products in tablet and
hard shell capsule format
Britain 100
DCC TECHNOLOGY
Company name Company address Principal activity
Incorporated
and operating in
Group
shareholding %
DCC Technology Limited DCC House,
Leopardstown Road, Foxrock,
Dublin 18, D18 PK00, Ireland
Holding and divisional
management company
Ireland 100
Almo Corporation 2709 Commerce Way,
Philadelphia, PA19154, USA
Sales, marketing and distribution of
technology, appliances and lifestyle
products
United States 100
Amacom Holding BV De Tweeling 24-A,
5215 MC ‘s-Hertogenbosch,
The Netherlands
Sales, marketing and distribution of
technology products and consumer
electronics
The
Netherlands
100
Azenn SAS 23 Rue du Champ Morin, 35360,
Montauban-de-Bretagne,
France
Sales, marketing and distribution of
technology products and services
France 100
Comm-Tec GmbH
(trading as Exertis AV)
Siemensstraße 14, 73066 Uhingen,
Germany
Sales, marketing and distribution of
professional audiovisual and IT
products
Germany 100
CUC SAS
(trading as Exertis Connect)
Zone Industrielle Buchelay 3000,
BP 1126, 78204 Mantes en Yvelines
Cedex, France
Sales, marketing and distribution of
technology products and
connecting solutions
France 100
Exertis Arc Telecom Limited Unit No. 702, X3 Building,
Jumeirah Lake Towers, Dubai,
UAE
Sales, marketing and distribution of
technology products
Ireland and
operating in
Dubai
100
Exertis CapTech AB Aminogatan 17, SE- 43153
Mölndal, Gotëborg, Sweden
Sales, marketing and distribution of
technology products
Sweden 100
PRINCIPAL SUBSIDIARIES, JOINT VENTURES AND ASSOCIATES CONTINUED
SUPPLEMENTARY INFORMATION CONTINUED
235DCC plc \ Annual Report and Accounts 2023 235
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
DCC TECHNOLOGY continued
Company name Company address Principal activity
Incorporated
and operating in
Group
shareholding %
Exertis France SAS 5 Rue Pleyel, 93200 Saint Denis,
France
Sales, marketing and distribution of
technology peripherals and
accessories
France 100
Exertis Ireland Limited Unit 21, Fonthill Business Park,
Fonthill Road, Dublin 22,
D22 FR82, Ireland
Sales, marketing and distribution of
technology products
Ireland 100
Exertis Supply Chain
Services Limited
Unit 21, Fonthill Business Park,
Fonthill Road, Dublin 22,
D22 FR82, Ireland
Provision of supply chain
management and outsourced
procurement services
Ireland 100
Exertis (UK) Ltd Technology House,
Magnesium Way, Hapton,
Burnley BB12 7BF, England
Sales, marketing and distribution of
technology products
Britain 100
Jam Industries Ltd. 21000 Trans-Canada Highway,
Baie-D’Urfe, QC H9X 4B7,
Canada
Sales, marketing and distribution of
professional audio products,
musical instruments and consumer
electronics
Canada 100
JOINT VENTURES AND ASSOCIATES
Company name Company address Principal activity
Incorporated
and operating in
Group
shareholding %
Vicus Biogas ApS Ny Kongensgade 1, 1472
København K, Denmark
Operates biogas plants Denmark 50
KSG Dining Limited McKee Avenue, Finglas, Dublin 11,
D11 NY90, Ireland
Restaurant and hospitality service
provider
Ireland 47. 5
Geogaz Lavera SA 2 Rue des Martinets,
92500 Rueil Malmaison, Paris,
France
Owns and operates an LPG storage
facility
France 25
Norgal (GIE) Route de la Chimie, 76700
Gonfreville L’Orcher, France
Receiving, storage and distribution
site for LPG products
France 18
236 DCC plc \ Annual Report and Accounts 2023236
SHARE LISTING
DCC’s shares have a Premium Listing on the Ocial List of the United Kingdom Listing Authority (‘UKLA Ocial List’) and are
traded solely on the London Stock Exchange in sterling.
Share Price Data
2023
£
2022
£
Share price at 15 May . –
Market capitalisation at 15 May ,m –
Share price at 31 March . .
Market capitalisation at 31 March ,m ,m
Share price movement during the year
– High . .
– Low . .
DCC plc’s ordinary share price information can be accessed on the Company’s website under the ‘Investors’ tab.
Geographic division
1
Number of
shares
2
% of shares
UK ,, .%
North America ,, .%
Continental Europe ,, .%
Ireland ,, .%
Asia/Rest of World ,, .%
Retail
3
,, .%
Total ,, .%
Notes:
1. This represents the best estimate of the number of shares controlled by fund managers
resident in the relevant geographic regions.
2. Excludes 2,586,698 shares held as Treasury Shares.
3. Retail includes shareholdings of less than 5,000 shares.
Details of shareholdings in excess of 3% in the Company are set out on page 144.
DIVIDENDS
DCC normally pays dividends twice yearly, in July and in December, to shareholders on the register of members on the record
date for the dividend. An interim dividend of 60.04 pence per share was paid on 9 December 2022.
Subject to shareholders’ approval at the Annual General Meeting, a final dividend of 127.17 pence per share will be paid on
20 July 2023 to shareholders on the register of members at the close of business on 26 May 2023.
Dividends are declared in sterling and shareholders have the option to elect to receive dividends in either sterling or euro.
Shareholders may also elect to receive dividend payments by electronic funds transfer directly into their bank accounts, rather
than by cheque. Shareholders should contact the Company’s Registrar for details of these options.
From 1 January 2020, the Company is obliged to deduct Dividend Withholding Tax (‘DWT’) at the rate of 25% from dividends
paid to its shareholders, unless a particular shareholder is entitled to an exemption from DWT and has completed and returned
to the Company’s Registrar a declaration form claiming entitlement to the particular exemption. Exemption from DWT may be
available to shareholders resident in another EU Member State or in a country with which the Republic of Ireland has a double
taxation agreement in place and to non-individual shareholders resident in Ireland (for example companies, pension funds and
charities). If shares are held via Euroclear Bank or CREST, the owners of the shares will need to contact the intermediary through
whom the shares are held to ascertain arrangements for tax relief to be applied at source.
The Irish Revenue Commissioners have published a tax and duty manual entitled ‘Dividend Withholding Tax – Details of
Scheme’, which was updated in January 2023 and can be obtained by contacting the Company’s Registrar.
SHAREHOLDER INFORMATION
Shareholdings as at 31 March 2023
UK
By location
North America
Continental Europe
Ireland
Asia/Rest of World
Retail
3
34.63%
23.90%
18.47%
12.83%
2.26%
7.91%
SUPPLEMENTARY INFORMATION CONTINUED
237DCC plc \ Annual Report and Accounts 2023 237
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
FINANCIAL CALENDAR
16 May 2023 Final results announcement for 2023
25 May 2023 Ex-dividend date – final dividend
26 May 2023 Record date – final dividend
13 July 2023 Interim Management Statement
13 July 2023 Annual General Meeting
20 July 2023 Proposed payment date – final dividend
14 November 2023 Interim results announcement
December 2023 Proposed payment date – interim dividend
February 2024 Interim Management Statement
ANNUAL GENERAL MEETING, ELECTRONIC PROXY VOTING AND EUROCLEAR BANK VOTING
The Annual General Meeting will be held at 2.00 pm on 13 July 2023 at The Powerscourt Hotel, Powerscourt Estate, Enniskerry,
Co. Wicklow, A98 DR12, Ireland. The Notice of Meeting together with an explanatory letter from the Chairman and a Form of
Proxy accompany this Annual Report.
Shareholders (being registered members) may lodge a Form of Proxy for the 2023 Annual General Meeting electronically.
Shareholders who wish to submit their proxy in this manner may do so by accessing the Company’s Registrar’s website,
www.eproxyappointment.com, and following the instructions that are set out on the Form of Proxy or in the email broadcast
that you will have received if you have elected to receive communications via electronic means.
Persons who hold their interests in ordinary shares as Belgian law rights through the Euroclear system or as CDIs through the
CREST System should consult with their stockbroker or other intermediary for information on the processes and timelines for
submitting proxy votes for the Annual General Meeting through the respective systems. Further details are contained in the
notes to the Notice of Annual General Meeting.
DCC WEBSITE
Our corporate website, www.dcc.ie, provides access to share price information through downloadable reports and interactive
share price tools. The site also provides access to information on the Group’s activities, results, annual reports, stock exchange
announcements and investor presentations.
ELECTRONIC COMMUNICATIONS
The use of electronic communications enables the faster receipt of documents, in an environmentally friendly and
cost-eective manner. Shareholders who wish to alter the method by which they receive communications should contact the
Company’s Registrar.
REGISTRAR
All administrative queries about the holding of DCC shares should be addressed to the Company’s Registrar, Computershare
Investor Services (Ireland) Limited, 3100 Lake Drive, Citywest Business Campus, Dublin 24, D24 AK82, Ireland.
Tel: + 353 1 247 5698
Fax: + 353 1 447 5571
www.investorcentre.com/ie/contactus
INVESTOR RELATIONS
For investor enquiries, please contact Rossa White, Head of Group Investor Relations, DCC plc, DCC House, Leopardstown
Road, Foxrock, Dublin 18, D18 PK00, Ireland.
Tel: + 353 1 2799 400
email: investorrelations@dcc.ie
238 DCC plc \ Annual Report and Accounts 2023238
SOLICITORS
William Fry
2 Grand Canal Square
Dublin 2
D02 A342
Ireland
Pinsent Masons
1 Park Row
Leeds LS1 5AB
England
STOCKBROKERS
Davy
49 Dawson Street
Dublin 2
D02 PY05
Ireland
J.P. Morgan Cazenove
25 Bank Street
Canary Wharf
London E14 5JP
England
UBS
5 Broadgate
London EC2M 2QS
England
WEBSITE
www.dcc.ie
COMPANY SECRETARY
Darragh Byrne
REGISTERED AND HEAD OFFICE
DCC House
Leopardstown Road
Foxrock
Dublin 18
D18 PK00
Ireland
AUDITOR
KPMG
1 Stokes Place
St. Stephen’s Green
Dublin 2
D02 DE03
Ireland
REGISTRAR
Computershare Investor Services
(Ireland) Limited
3100 Lake Drive
Citywest Business Campus
Dublin 24
D24 AK82
Ireland
CORPORATE INFORMATION
SUPPLEMENTARY INFORMATION CONTINUED
239DCC plc \ Annual Report and Accounts 2023 239
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
DCC PLC
Scope
We have been engaged by DCC plc (‘DCC’) to perform a
‘limited assurance engagement,’ as defined by International
Standards on Assurance Engagements, here after referred to
as the Engagement, to report on DCC’s selected subject
matter information marked with the symbol (the ‘Subject
Matter’) in the DCC Annual Report (‘the Report’) as of 15 May
2023 for the year ended 31 March 2023.
The Subject Matter comprises the following:
–Scope 1 greenhouse gas (‘GHG’) emissions (‘tCO
2
e’);
–Scope 2 GHG emissions (location and market
based) (‘tCO
2
e’);
–Scope 1 and 2 GHG emissions target reduction on 2019
baseline (%);
–Scope 3 GHG emissions (‘tCO
2
e’) limited to the categories
listed below:
- Category 3: upstream emissions associated with the
extraction, refining, storage and distribution of products; and
- Category 11: downstream emissions from the use of sold
products by customers;
–Total biogenic content of energy sold (‘% GJ’); and
–Carbon intensity per megajoule of energy sold (‘gCO
2
e/MJ’).
Other than as described in the preceding paragraph, which
sets out the scope of our engagement, we did not perform
assurance procedures on the remaining information included
in the Report, and accordingly, we do not express a
conclusion on this information.
Criteria applied by DCC
In preparing the Subject Matter, DCC applied their internally
developed General Reporting Boundaries and Carbon
Criteria (‘Criteria’). Such Criteria were specifically designed by
DCC for the purposes of reporting on the Subject Matter. As a
result, the subject matter information may not be suitable for
another purpose.
DCC’s responsibilities
DCC’s management is responsible for selecting the Criteria,
and for presenting the Subject Matter in accordance with
that Criteria, in all material respects. This responsibility
includes establishing and maintaining internal controls,
maintaining adequate records and making estimates that are
relevant to the preparation of the subject matter, such that it
is free from material misstatement, whether due to fraud
or error.
EY’s responsibilities
Our responsibility is to express a conclusion on the
presentation of the Subject Matter based on the evidence we
have obtained.
We conducted our Engagement in accordance with the
International Standard for Assurance Engagements Other
Than Audits or Reviews of Historical Financial Information (‘ISAE
3000 Revised’), the International Standard for Assurance
Engagements on Greenhouse Gas Statements (‘ISAE 3410’),
and the terms of reference for this Engagement as agreed
with DCC on 19 December 2022. Those standards require that
we plan and perform our Engagement to obtain limited
assurance about whether, in all material respects, the Subject
INDEPENDENT ASSURANCE STATEMENT
Matter is presented in accordance with the Criteria, and to
issue a report. The nature, timing, and extent of the
procedures selected depend on our judgment, including an
assessment of the risk of material misstatement, whether due
to fraud or error.
We believe that the evidence obtained is sucient and
appropriate to provide a basis for our limited
assurance conclusions.
Our Independence and Quality Control
We have maintained our independence and confirm that we
have met the requirements of the Code of Ethics for
Professional Accountants issued by the International Ethics
Standards Board for Accountants and have the required
competencies and experience to conduct this
assurance engagement.
EY also applies International Standard on Quality
Management 1, Quality Management for Firms that Perform
Audit or Reviews of Financial Statements, or Other Assurance
or Related Services Engagements and accordingly maintains
a comprehensive system of quality control including
documented policies and procedures regarding compliance
with ethical requirements, professional standards and
applicable legal and regulatory requirements.
Description of procedures performed
Procedures performed in a limited assurance engagement
vary in nature and timing, and are less in extent than, for a
reasonable assurance engagement. Consequently the level
of assurance obtained in a limited assurance engagement is
substantially lower than the assurance that would have been
obtained had a reasonable assurance engagement been
performed. Our procedures were designed to obtain a limited
level of assurance on which to base our conclusion and do
not provide all the evidence that would be required to provide
a reasonable level of assurance.
Although we considered the eectiveness of management’s
internal controls when determining the nature and extent of
our procedures, our assurance engagement was not
designed to provide assurance on internal controls. Our
procedures did not include testing controls or performing
procedures relating to checking aggregation or calculation of
data within IT systems.
The green house gas (‘GHG’) quantification process is subject
to scientific uncertainty, which arises because of incomplete
scientific knowledge about the measurement of GHGs.
Additionally, GHG procedures are subject to estimation (or
measurement) uncertainty resulting from the measurement
and calculation processes used to quantify emissions within
the bounds existing scientific knowledge.
A limited assurance engagement consists of making enquiries,
primarily of persons responsible for preparing the Subject
Matter and related information and applying analytical and
other appropriate procedures.
Our procedures included:
–Interviewed management to understand the key processes,
systems and controls in place for the preparation of the
Subject Matter.
240 DCC plc \ Annual Report and Accounts 2023240
INDEPENDENT ASSURANCE STATEMENT CONTINUED
–Performed a review of the data management systems,
tested reasonableness of conversion factors applied,
reviewed alignment with the Criteria and conducted
analytical review procedures over the Subject Matter.
–Undertook a remote desktop review to two selected DCC
operations to understand the process of data collection
and reporting from site level to head oce.
–Agreed sample selection to supporting documentation and
re-performed calculations.
–Assessed the appropriateness of the Criteria for the
Subject Matter.
–Reviewed the Report for the appropriate presentation of
the Subject Matter, including the discussion of limitations
and assumptions relating to the data presented. We also
performed such other procedures as we considered
necessary in the circumstances.
Conclusion
Based on our procedures and the evidence obtained, we are
not aware of any material modifications that should be made
to the Subject Matter as of 15 May 2023 for the year ended
31 March 2023, in order for it to be in accordance with
the Criteria.
Use of our Assurance Statement
We disclaim any assumption of responsibility for any reliance
on this assurance report or its conclusions to any persons
other than DCC, or for any purpose other than that for which
it was prepared. Accordingly, we accept no liability
whatsoever, whether in contract, tort or otherwise, to any third
party for any consequences of the use or misuse of this
assurance report or its conclusions.
Ernst & Young
15 May 2023
Dublin, Ireland
SUPPLEMENTARY INFORMATION CONTINUED
241DCC plc \ Annual Report and Accounts 2023 241
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
The Group reports certain alternative performance measures (‘APMs’) that are not required under International Financial
Reporting Standards (‘IFRS’) which represent the generally accepted accounting principles (‘GAAP’) under which the Group
reports. The Group believes that the presentation of these APMs provides useful supplemental information which, when viewed
in conjunction with our IFRS financial information, provides investors with a more meaningful understanding of the underlying
financial and operating performance of the Group and its divisions.
These APMs are primarily used for the following purposes:
–to evaluate the historical and planned underlying results of our operations;
–to set Director and management remuneration; and
–to discuss and explain the Group’s performance with the investment analyst community.
None of the APMs should be considered as an alternative to financial measures derived in accordance with GAAP. The APMs
can have limitations as analytical tools and should not be considered in isolation or as a substitute for an analysis of our results
as reported under GAAP. These performance measures may not be calculated uniformly by all companies and therefore may
not be directly comparable with similarly titled measures and disclosures of other companies.
The principal APMs used by the Group, together with reconciliations where the non-GAAP measures are not readily identifiable
from the financial statements, are as follows:
ADJUSTED OPERATING PROFIT (‘EBITA’)
Definition
This comprises operating profit as reported in the Group Income Statement before net operating exceptional items and
amortisation of intangible assets. Net operating exceptional items and amortisation of intangible assets are excluded t5.9o
assess the underlying performance of our operations. In addition, neither metric forms part of Director or management
remuneration targets.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Operating profit Income Statement , ,
Net operating exceptional items Income Statement , ,
Amortisation of intangible assets Income Statement , ,
Adjusted operating profit (EBITA) , ,
ADJUSTED OPERATING PROFIT BEFORE DEPRECIATION (‘EBITDA’)
Definition
EBITDA represents earnings before net interest, tax, depreciation on property, plant and equipment, amortisation of intangible
assets, share of equity accounted investments’ profit after tax and net exceptional items. This metric is used to compare
profitability between companies by eliminating the eects of financing, tax environments, asset bases and business
combinations history. It is also utilised as a proxy for a company’s cash flow.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Adjusted operating profit (EBITA) Per above , ,
Depreciation of property, plant and equipment Note 3.1 , ,
Adjusted operating profit before depreciation (EBITDA) , ,
NET INTEREST BEFORE EXCEPTIONAL ITEMS
Definition
The Group defines net interest before exceptional items as the net total of finance costs and finance income before interest
related exceptional items as presented in the Group Income Statement.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Finance costs before exceptional items Income Statement (,) (,)
Finance income before exceptional items Income Statement , ,
Net interest before exceptional items (,) (,)
ALTERNATIVE PERFORMANCE MEASURES
242 DCC plc \ Annual Report and Accounts 2023242
INTEREST COVER – EBITDA INTEREST COVER
Definition
The EBITDA interest cover ratio measures the Group’s ability to pay interest charges on debt from cash flows. To maintain
comparability with the definitions contained in the Group’s lending arrangements, EBITDA and net interest exclude the impact
arising from the adoption of IFRS 16.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
EBITDA Per above , ,
Less: impact of IFRS 16 (,) (,)
EBITDA for covenant purposes , ,
Net interest before exceptional items Per above (,) (,)
Less: impact of IFRS 16 Note 2.7 , ,
Net interest for covenant purposes (,) (,)
EBITDA interest cover (times) .x .x
EFFECTIVE TAX RATE
Definition
The Group’s eective tax rate expresses the income tax expense before exceptionals and deferred tax attaching to the
amortisation of intangible assets as a percentage of adjusted operating profit less net interest before exceptional items.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Adjusted operating profit Per above , ,
Net interest before exceptional items Per above (,) (,)
, ,
Income tax expense Income Statement , ,
Income tax attaching to exceptional items Note 2.9 , ,
Deferred tax attaching to amortisation of intangible assets Note 2.9 , ,
Total Income tax expense before exceptionals and deferred tax
attaching to amortisation of intangible assets , ,
Eective tax rate (%) .% .%
DIVIDEND COVER
Definition
The dividend cover ratio measures the Group’s ability to pay dividends from earnings.
Calculation Reference in Financial Statements
2023
pence
2022
pence
Adjusted earnings per share Note 2.11 . .
Dividend Note 2.10 . .
Dividend cover (times) .x .x
CONSTANT CURRENCY
Definition
The translation of foreign denominated earnings can be impacted by movements in foreign exchange rates versus sterling, the
Group’s presentation currency. To present a better reflection of underlying performance in the period, the Group retranslates
foreign denominated current year earnings at prior year exchange rates.
Revenue (constant currency)
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Revenue Income Statement ,, ,,
Currency impact (,) –
Revenue (constant currency) ,, ,,
ALTERNATIVE PERFORMANCE MEASURES CONTINUED
SUPPLEMENTARY INFORMATION CONTINUED
243DCC plc \ Annual Report and Accounts 2023 243
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Adjusted operating profit (constant currency)
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Adjusted operating profit Per above , ,
Currency impact (,) –
Adjusted operating profit (constant currency) , ,
Adjusted earnings per share (constant currency)
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Adjusted profit after taxation and non-controlling interests Note 2.11 , ,
Currency impact (,) –
Adjusted profit after taxation and non-controlling interests
(constant currency) , ,
Weighted average number of ordinary shares in issue (‘000) Note 2.11 , ,
Adjusted earnings per share (constant currency) .p .p
NET CAPITAL EXPENDITURE
Definition
Net capital expenditure comprises purchases of property, plant and equipment, proceeds from the disposal of property, plant
and equipment and government grants received in relation to property, plant and equipment.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Purchase of property, plant and equipment Group Cash Flow Statement , ,
Government grants received in relation to property, plant and
equipment Group Cash Flow Statement () –
Proceeds from disposal of property, plant and equipment Group Cash Flow Statement (,) (,)
Net capital expenditure , ,
FREE CASH FLOW
Definition
Free cash flow is defined by the Group as cash generated from operations before exceptional items as reported in the Group
Cash Flow Statement after repayment of lease creditors and net capital expenditure.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Cash generated from operations before exceptionals Group Cash Flow Statement , ,
Repayment of lease creditors Note 3.12 (,) (,)
Net capital expenditure Per above (,) (,)
Free cash flow , ,
FREE CASH FLOW (AFTER INTEREST AND TAX PAYMENTS)
Definition
Free cash flow (after interest and tax payments) is defined by the Group as free cash flow after interest paid (excluding interest
relating to lease creditors), income tax paid, dividends received from equity accounted investments and interest received. As
noted in the definition of free cash flow, interest amounts relating to the repayment of lease creditors has been deducted in
arriving at the Group’s free cash flow and are therefore excluded from the interest paid figure in arriving at the Group’s free
cash flow (after interest and tax payments).
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Free cash flow Per above , ,
Interest paid (including interest relating to lease creditors) Group Cash Flow Statement (,) (,)
Interest relating to lease creditors Note 3.12 , ,
Income tax paid Group Cash Flow Statement (,) (,)
Interest received Group Cash Flow Statement , ,
Free cash flow (after interest and tax payments) , ,
244 DCC plc \ Annual Report and Accounts 2023244
ALTERNATIVE PERFORMANCE MEASURES CONTINUED
CASH CONVERSION RATIO
Definition
The cash conversion ratio expresses free cash flow as a percentage of adjusted operating profit.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Free cash flow Per above , ,
Adjusted operating profit Per above , ,
Cash conversion ratio (%) % %
RETURN ON CAPITAL EMPLOYED (‘ROCE’)
Definition
ROCE represents adjusted operating profit expressed as a percentage of the average total capital employed.
The Group adopted IFRS 16 Leases on the transition date of 1 April 2019 using the modified retrospective approach, meaning
that comparatives were not restated. To assist comparability with prior years, the Group presents ROCE excluding the impact
of IFRS 16 (‘ROCE excl. IFRS 16’) as well as ROCE including the impact of IFRS 16 (‘ROCE incl. IFRS 16’). Total capital employed (excl.
IFRS 16) represents total equity adjusted for net debt/cash (including lease creditors), goodwill and intangibles written o,
right-of-use leased assets, acquisition related liabilities and equity accounted investments whilst total capital employed (incl.
IFRS 16) includes right-of-use leased assets.
Similarly, adjusted operating profit is presented both excluding and including the impact of IFRS 16. Net operating exceptional
items and amortisation of intangible assets are excluded in order to assess the underlying performance of our operations. In
addition, neither metric forms part of Director or management remuneration targets.
ROCE (excl. IFRS 16)
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Total equity Group Balance Sheet ,, ,,
Net debt (including lease creditors) Note 3.13 ,, ,
Goodwill and intangibles written o , ,
Right-of-use leased assets Note 3.2 (,) (,)
Equity accounted investments Group Balance Sheet (,) (,)
Acquisition related liabilities (current and non-current) Note 3.16 , ,
Closing total capital employed (excl. IFRS 16) ,, ,,
Average total capital employed (excl. IFRS 16) ,, ,,
Adjusted operating profit Per above , ,
Less: impact of IFRS 16 on operating profit (,) (,)
, ,
Return on capital employed (%) excl. IFRS 16 .% .%
ROCE (incl. IFRS 16)
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Total capital employed Per above ,, ,,
Right-of-use leased assets Note 3.2 , ,
Closing total capital employed (incl. IFRS 16) ,, ,,
Average total capital employed (incl. IFRS 16) ,, ,,
Adjusted operating profit Per above , ,
Return on capital employed (%) incl. IFRS 16 .% .%
SUPPLEMENTARY INFORMATION CONTINUED
245DCC plc \ Annual Report and Accounts 2023 245
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
COMMITTED ACQUISITION EXPENDITURE
Definition
The Group defines committed acquisition expenditure as the total acquisition cost of subsidiaries as presented in the Group
Cash Flow Statement (excluding amounts related to acquisitions which were committed to in previous years) and future
acquisition related liabilities for acquisitions committed to during the year.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Net cash outflow on acquisitions during the year Group Cash Flow Statement , ,
Cash outflow on acquisitions which were committed to in the
previous year (,) (,)
Acquisition related liabilities arising on acquisitions during the year Note 3.16 , ,
Acquisition related liabilities which were committed to in the
previous year () (,)
Amounts committed in the current year , ,
Committed acquisition expenditure , ,
NET WORKING CAPITAL
Definition
Net working capital represents the net total of inventories, trade and other receivables (excluding interest receivable), and trade
and other payables (excluding interest payable, amounts due in respect of property, plant and equipment and current
government grants).
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Inventories Note 3.5 ,, ,,
Trade and other receivables Note 3.6 ,, ,,
Less: interest receivable () ()
Trade and other payables Note 3.7 (,,) (,,)
Less: interest payable Note 3.7 , ,
Less: amounts due in respect of property, plant and equipment Note 3.7 , ,
Less: government grants Note 3.7
Net working capital , ,
WORKING CAPITAL (DAYS)
Definition
Working capital days measures how long it takes in days for the Group to convert working capital into revenue.
Calculation Reference in Financial Statements
2023
£’000
2022
£’000
Net working capital Per above , ,
March revenue ,, ,,
Working capital (days) . days . days
246 DCC plc \ Annual Report and Accounts 2023246
Group Income Statement
Year ended 31 March
2019
£’m
2020
£’m
2021
£’m
2022
£’m
2023
£’m
Revenue ,. ,. ,. ,. ,.
Adjusted operating profit . . . . .
Exceptional items (.) (.) (.) (.) (.)
Amortisation of intangible assets (.) (.) (.) (.) (.)
Operating profit . . . . .
Finance costs (net) (.) (.) (.) (.) (.)
Share of equity accounted investments . . . . (.)
Profit before tax . . . . .
Income tax expense (.) (.) (.) (.) (.)
Non-controlling interests (.) (.) (.) (.) (.)
Profit attributable to owners of the Parent Company . . . . .
Earnings per share
– basic (pence) .p .p .p .p .p
– basic adjusted (pence) .p .p .p .p .p
Dividend per share (pence) .p .p .p .p .p
Dividend cover (times) .x .x .x .x .x
Interest cover (times)* .x .x .x .x .x
* excludes exceptional items.
Group Balance Sheet
As at 31 March
2019
£’m
2020
£’m
2021
£’m
2022
£’m
2023
£’m
Non-current and current assets:
Property, plant and equipment . ,. ,. ,. ,.
Right-of-use leased assets – . . . .
Intangible assets ,. ,. ,. ,. ,.
Equity accounted investments . . . . .
Cash/derivatives ,. ,. ,. ,. ,.
Other assets ,. ,. ,. ,. ,.
Total assets ,. ,. ,. ,. ,.
Equity ,. ,. ,. ,. ,.
Non-current and current liabilities:
Borrowings/derivatives ,. ,. ,. ,. ,.
Lease creditors – . . . .
Retirement benefit obligations (.) (.) (.) (.) (.)
Other liabilities ,. ,. ,. ,. ,.
Total liabilities ,. ,. ,. ,. ,.
Total equity and liabilities ,. ,. ,. ,. ,.
Net (debt)/cash included above (excl. lease creditors) (.) (.) . (.) (.)
Group Cash Flow
Year ended 31 March
2019
£’m
2020
£’m
2021
£’m
2022
£’m
2023
£’m
Operating cash flow . . . . .
Capital expenditure . . . . .
Acquisitions . . . . .
Other Information 2019 2020 2021 2022 2023
Return on capital employed (%) .% .% .% .% .%
Working capital (days) (.) (.) (.) . .
5 YEAR REVIEW
SUPPLEMENTARY INFORMATION CONTINUED
247DCC plc \ Annual Report and Accounts 2023 247
STRATEGIC REPORT \ GOVERNANCE \ FINANCIAL STATEMENTS \ SUPPLEMENTARY INFORMATION
Finance Costs and Finance Income 171
Financial Calendar 237
Financial Review 44
Financial Risk and Capital Management 51, 206, 229
Five Year Review 246
Foreign Currency 202
Foreign Exchange Risk Management 51
General Meetings 143, 237
Going Concern 84
Governance 85
Governance and Sustainability Committee Report 108
Government Grants 198
Greenhouse Gas Emissions 62, 65
Group Balance Sheet 156
Group Cash Flow Statement 158
Group Income Statement 154
Group Management Team 90
Group Profit for the Year 167
Group Statement of Changes in Equity 157
Group Statement of Comprehensive Income 155
Health & Safety 58
Highlights of the Year 2
Inclusion and Diversity 72
Income Tax Expense 172
Intangible Assets and Goodwill 178
Interest Rate Risk and Debt/ Liquidity Management 51
Inventories 181
Investments in Subsidiary Undertakings 227
Investor Relations 237
Key Performance Indicators 40
Lease Creditors 187
Long Term Incentive Plan 125, 137
Markets and Market Position 21, 30, 38
Movement in Working Capital 183
Net Zero 11, 56, 60, 62
Non-Controlling Interests 201
Non-Executive Directors’ Remuneration 135
Non-Financial Reporting 42, 58
Notes to the Financial Statements 159
Other Operating Income/Expenses 167
Other Reserves 200, 228
People 54, 70
Post-Employment Benefit Obligations 191
Principal Risks and Uncertainties 80
Principal Subsidiaries 232
Profit Attributable to DCC plc 227
Property, Plant and Equipment 176
Provisions for Liabilities 196
Purpose 9, 58, 86, 101
Registrar 237
Related Party Transactions 206, 229
Remuneration Policy Report 123
Remuneration Report 118
Report of the Directors 142
Report of the Independent Auditors 147
Accounting Policies 213
Acquisition Related Liabilities 195
Alternative Performance Measures 241
Analysis of Net Debt 188
Annual General Meeting 237
Approval of Financial Statements 223
Audit Committee Report 112
Auditors 114, 115
Basis of Consolidation 160
Basis of Preparation 159
Board Committees 108, 112, 118
Board of Directors 88
Board Performance Evaluation 98
Borrowings and Lease Creditors 185
Business Combinations 202
Business Model 14
Business Reviews
– DCC Energy 16
– DCC Healthcare 24
– DCC Technology 32
Carbon Emissions 16, 42, 58
Cash and Cash Equivalents 183, 228
Cash Generated from Operations 205, 228
Chairman’s Statement 6
Chief Executive’s Remuneration 134
Chief Executive’s Review 8
Clawback Policy 126
Commitments 205
Commodity Price Risk Management 51
Company Balance Sheet 224
Company Cash Flow Statement 226
Company Statement of Changes in Equity 225
Compliance 106
Contingencies 205, 230
Corporate Governance Statement 92
Corporate Information 238
Credit Risk Management 51
Critical Accounting Estimates and Judgements 160
Deferred Income Tax 190
Derivative Financial Instruments 184
Directors 143
Directors’ and Company Secretary’s Interests 136
Directors’ Compliance Statement 144
Diversity 72, 75
Dividends 174, 236
Earnings per Ordinary Share 174
Electronic Communications 237
Employee Share Options and Awards 169
Emerging Risks 79
Employment 168
Energy Strategy 11, 62, 121
Energy Transition 20, 60, 62
Engagement with Stakeholders 52
Equity Accounted Investments 172
Events After the Balance Sheet Date 213
Exceptionals 170
Executive Directors’ Remuneration 130
Executive Risk Committee 78, 94
Exit Payments Policy 127
INDEX
248 DCC plc \ Annual Report and Accounts 2023248
Retained Earnings 201, 228
Return on Capital Employed 40
Right-Of-Use Leased Assets 177
Risk Management and Internal Control 107
Risk Report 77
Segment Information 162
Share Capital and Share Premium 199
Share of Equity Accounted Investments’ Profit/(Loss)
after Tax 172
Shareholder Information 236
Share Listing 236
Share Ownership and Dealing 106
Share Price and Market Capitalisation 236
Stakeholder Engagement 52
Statement of Compliance 159
Statement of Directors’ Responsibilities 146
Strategy 12
Substantial Holdings 144
Summary of Significant Accounting Policies 213
Sustainability Review 58
Takeover Regulations 144
Task Force on Climate-Related Disclosures 58, 65, 77
Trade and Other Payables 182, 228
Trade and Other Receivables 182, 227
Transparency Rules 144
Values 70, 75, 101
Viability Statement 84
Website 237
INDEX CONTINUED
SUPPLEMENTARY INFORMATION CONTINUED
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DCC plc,
Tel: + 353 1 279 9400
Email: info@dcc.ie
www.dcc.ie