1 OVERVIEW BUSINESS PERFORMANCE GOVERNANCE FINANCIAL STATEMENTS INFORMATION Annual Report and Accounts 2012 WorldReginfo - 461fc97f-62a1-4bbe-a67e-a3188c7c219b DCC ANNUAL REPORT AND ACCOUNTS 2012 DCC iS A SALES, mARkETiNg, DiSTRibUTiON CONTENTS AND bUSiness SUPPORT SERviCES gROUP, ORgANiSED AND mANAgED across fivE DiviSiONS wiTh REvENUES Of OvER €10 biLLiON AND EmployiNg OvER 8,800 PEOPLE iN 15 COUNTRiES. OVERVIEW 01 Financial Highlights 02 Group At A Glance DCC’S ObjectivE iS to bUiLD A gROwiNg, 04 Business Model And Strategy 06 Chairman’s Statement sustaiNAbLE AND cash generativE 08 Chief Executive’s Review bUSiness whiCh CONSiSTENTLy PROviDES RETURNS ON total capital EmployED SigNificantly AhEAD Of iTS COST Of capital. BUSINESS PERFORMANCE 12 Group KPIs 14 Energy Review DCC iS hEADqUARTERED iN DUbLiN, iRELAND 20 SerCom Review 26 Healthcare Review AND iS LiSTED UNDER SUPPORT SERviCES ON 32 Environmental Review ThE iRiSh AND LONDON stock ExChANgES. 36 Food & Beverage Review 40 Financial Review 47 Sustainability Report GOVERNANCE 56 Board Of Directors 58 Senior Management 60 Report Of The Directors 62 Principal Risks And Uncertainties 64 Corporate Governance 74 Report On Directors’ Remuneration And Interests 84 Statement Of Directors’ Responsibilities FINANCIAL STATEMENTS 85 Report Of The Independent Auditors 87 Financial Statements INFORMATION 158 Group Directory 163 Shareholder Information 165 Corporate Information 166 Index 168 Five Year Review WorldReginfo - 461fc97f-62a1-4bbe-a67e-a3188c7c219b 01 OVERVIEW BUSINESS PERFORMANCE GOVERNANCE FINANCIAL STATEMENTS INFORMATION FINANCIAL HIGHLIGHTS Revenue Operating profit* 2012 €10,690.3m 2012 €185.0m 2011 €8,680.6m 2011 €229.6m Reported: +23.2% Reported: -19.4% Constant currency†: +24.9% Constant currency†: -18.3% Adjusted earnings per share* Dividend per share 2012 163.51 cent 2012 77.89 cent 2011 203.15 cent 2011 74.18 cent Reported: -19.5% Constant currency†: -18.4% Reported: +5.0% Operating cash flow Return on total capital employed 2012 €277.3m 2012 14.2% 2011 €269.6m 2011 19.9% * excluding net exceptionals and amortisation of intangible assets † constant currency figures quoted are based on retranslating 2011/12 figures at prior year translation rates WorldReginfo - 461fc97f-62a1-4bbe-a67e-a3188c7c219b 02 DCC ANNUAL REPORT AND ACCOUNTS 2012 GROUP AT A GLANCE Revenue Operating profit Customers Principal DCC Energy (% of Group) (% of Group) operating Sales, marketing and distribution of oil locations and liquefied petroleum gas (LPg). Commercial, retail, domestic, britain, ireland, industrial, agricultural, Sweden, Denmark aviation and marine. and Austria. For more information see pages 14 to 19 73.2% 45.1% Revenue Operating profit Customers Principal DCC SerCom (% of Group) (% of Group) operating SerCom Distribution: Sales, marketing SerCom Distribution: locations and distribution of iT, communications iT and mobile resellers, dealers, retailers, and home entertainment products. etailers, grocers and catalogue retailers. britain, ireland, SerCom Solutions: france, Spain, SerCom Solutions: Supply chain iT equipment manufacturers, Portugal, belgium, management services. outsourced equipment manufacturers, the Netherlands, consumer electronics companies Luxembourg, and telecommunications equipment Poland, China, For more information see pages 20 to 25 20.4% 28.8% manufacturers. mexico and the USA. DCC Healthcare Revenue Operating profit Customers Principal hospitals Supplies & Services: medical (% of Group) (% of Group) operating device and pharma products sales, locations marketing and distribution and value hospitals, retail pharmacy, pharma britain and ireland. added logistics services to hospitals. wholesalers, homecare channel, brand health & beauty Solutions: Outsourced owners, mail order companies, specialist services to brand owners in the health and health and beauty retailers and private beauty sector. label suppliers. For more information see pages 26 to 31 3.1% 12.7% DCC Environmental Revenue Operating profit Customers Principal Provider of a broad range of (% of Group) (% of Group) operating recycling, waste management and locations resource recovery services. industrial, commercial, britain and ireland. construction and public sector, in the hazardous and non- hazardous markets. For more information 1.2% 7.7% see pages 32 to 35 Revenue Operating profit Customers Principal DCC Food & Beverage (% of Group) (% of Group) operating Sales, marketing and distribution of food locations and beverage products. grocery multiples, symbol and britain and ireland. independent retailers including pharmacies, off-licenses, hotels, restaurants and cafes. For more information see pages 36 to 39 2.1% 5.7% WorldReginfo - 461fc97f-62a1-4bbe-a67e-a3188c7c219b 03 OVERVIEW BUSINESS PERFORMANCE GOVERNANCE FINANCIAL STATEMENTS INFORMATION Employees Market leadership positions DCC Energy is the largest oil distributor in britain and in DCC Energy is the second largest LPg sales, marketing and 4,174 Sweden and a leading oil distributor in ireland, in Denmark distribution business in britain and in ireland. and in Austria. it is also one of the leading sales and marketing businesses for branded fuel cards in britain. Employees Market leadership positions in the Uk, SerCom Distribution is the largest distributor in home SerCom Distribution is now the fifth largest distributor ofi T entertainment products (including games consoles and software, and home entertainment products in Europe. 1,743 consumer electronics and Av accessories and peripherals) and a leading distributor of iT and communications products (including SerCom Solutions is a strategic supply chain partner for some PCs, printers, smartphones, peripherals, consumables and of the world’s leading technology and telecommunications networking products). companies. in ireland, it is the largest distributor of home entertainment products and a leading distributor of iT products. in france, it is also a leading distributor of iT products. Employees Market leadership positions DCC healthcare is the largest distributor of medical devices it is a leading provider of value added logistics services in 1,169 and pharma products in ireland with a developing presence britain. in britain and is also the largest provider of outsourced compounding services in ireland. DCC healthcare is the leading british based outsourced provider to the health and beauty sector. Employees Market leadership positions DCC Environmental is the leading recycling, waste DCC Environmental is the largest hazardous waste 896 management and resource recovery services provider treatment business in ireland. in Scotland. it owns the largest material recycling facility in the East midlands at Nottingham. it also owns the leading national waste oil and hazardous waste collection, processing and recycling business in britain. Employees Market leadership positions in ireland, DCC food & beverage is the leading supplier in britain, DCC food & beverage is a leading supplier of 886 of healthy foods and beverages, fine foods and vitamins, branded and exclusive retail solutions to the multiple off- minerals and supplements. it is also a leading value added trade sector of the Uk wine market. distributor of indulgence products in the grocery, impulse and food service sectors. it is also a leading distributor of wine in ireland to both the on and off-trade. WorldReginfo - 461fc97f-62a1-4bbe-a67e-a3188c7c219b 04 DCC ANNUAL REPORT AND ACCOUNTS 2012 Business MODEL AND Strategy DIVISION MARKET Sector DCC Energy • Oil and LPG sales, marketing and distribution DCC SERCOM • IT, communications and home entertainment products sales, OUR Business MODEL marketing and distribution • Supply chain management DCC iS A SALES, mARkETiNg, services DiSTRibUTiON AND bUSiness DCC Healthcare • Medical device and pharma products sales, marketing and SUPPORT SERviCES gROUP. distribution and value added ThE gROUP iS ORgANiSED logistics services to hospitals AND mANAgED iN fivE • Outsourced services to brand owners in the health & beauty separate DiviSiONS, each sector fOCUSED ON SPECifiC DCC Environmental • Waste management and mARkET sectors. recycling services to commercial, industrial and public sector customers DCC Food & Beverage • Food & beverage product sales, marketing and distribution OUR OBjective TO bUiLD A gROwiNg, sustaiNAbLE AND cash generativE bUSiness whiCh CONSiSTENTLy PROviDES RETURNS ON total capital EmployED SigNificantly AhEAD Of iTS COST Of capital. WorldReginfo - 461fc97f-62a1-4bbe-a67e-a3188c7c219b 05 OVERVIEW BUSINESS PERFORMANCE GOVERNANCE FINANCIAL STATEMENTS INFORMATION OUR Strategy creating AND sustaining Maintaining FINANCIAL LEADING POSITIONS IN each strength THROUGH A OF THE MARKETS IN WHICH WE DISCIPLINED approach to operate BALANCE SHEET management DCC aims to be the number 1 or 2 operator in It is core to our strategy that in pursuing our each of its markets. This is achieved through a objectives, we will only do so in the context of consistent focus on increasing market shares maintaining relatively low levels of financial organically and via value enhancing acquisitions. risk in the Group. We believe that this not only DCC has a long and successful track record of provides the greatest likelihood of generating bolt-on acquisitions which have strengthened our value for shareholders in the long term but also market positions and generated attractive returns leaves the Group best placed to react quickly to on capital invested. commercial opportunities as they arise.