DCC H2 Earnings Call Highlights

Key Points

• DCC delivered stronger profits despite lower revenue, with adjusted operating profit up 3.6% to £634 million and adjusted EPS up 9.9% to 438.1 pence. Revenue fell 2.9% to £15.4 billion, mainly due to lower volumes in the energy business.
• The company is continuing its shift toward energy, having sold DCC Healthcare, exited its infotech business, and returned £700 million to shareholders through buybacks and a tender offer. DCC also plans to ask shareholders to approve renaming the company to DCC Energy plc.
• Energy operations were mixed but generally resilient: DCC Energy profit rose 3.5% even as volumes declined, Mobility profit increased 8.6%, and Technology profit grew 4.3%. However, Energy Services remained under pressure as weak transition demand and cautious customer spending weighed on performance.

DCC LON: DCC reported higher operating profit and earnings for the year ended March 31, 2026, as the company continued to reshape itself around energy distribution and services while disposing of non-core businesses and returning capital to shareholders.

Chief Executive Donal Murphy said the company delivered “a good financial performance” in its 50th year despite “substantial transformation and volatility.” DCC said total adjusted operating profit rose 3.6% to £634 million, while adjusted earnings per share from continuing operations increased 9.9% to 438.1 pence. Revenue declined 2.9% on a reported basis to £15.4 billion, mainly reflecting lower volumes in DCC Energy.

The board recommended a 5% increase in the dividend to 216.72 pence per share, which Murphy said would mark DCC’s 32nd consecutive year of dividend growth. Free cash flow conversion was 108% at the group level, and return on capital employed was 16.8% for the group and 18.8% for DCC Energy. Net debt at year-end was £690 million, equal to 0.9 times EBITDA.

DCC Advances Shift Toward Energy

Murphy said DCC has “reshaped” the group over the past year to focus on energy, where management sees the best opportunity for sustainable long-term growth and attractive returns. During the period, DCC completed the sale of DCC Healthcare, exited DCC Technology’s infotech business and returned £700 million to shareholders.

The company completed a £100 million on-market share buyback in September 2025 and subsequently completed a £600 million tender offer. Murphy said a further £100 million is expected to be returned to shareholders after DCC receives unconditional deferred consideration related to the DCC Healthcare sale, anticipated in autumn 2027.

DCC’s remaining technology business was rebranded as Nexora during the year. Murphy said the sale process for Nexora has formally commenced and is progressing in line with expectations, with DCC still intending to reach an agreement for the sale by the end of calendar 2026.

Reflecting the company’s planned sole focus on energy, DCC said it will ask shareholders to approve a name change from DCC plc to DCC Energy plc at its annual general meeting on July 16, 2026.

Energy Business Delivers Growth Despite Lower Volumes

Chief Operating Officer Kevin Lucey said DCC Energy delivered a “good result” for the year, with operating profit up 3.5%. The performance improved in the second half, after operating profit declined about 5% in the first half and then rose 7.9% in the second half. Energy volumes fell 3.2% for the full year and 1.8% in the second half.

Lucey said the year was marked by difficult macroeconomic conditions, slower transition-related demand and, near year-end, a new energy crisis and sharp commodity cost inflation. He said a limited pull-forward of demand in March, driven by commodity volatility and concerns about product availability following the conflict in Iran, supported short-term demand from domestic fuel and mobility customers.

DCC Energy’s Solutions division reported operating profit up 1.9% to €419.8 million. Within Solutions, energy products delivered 11% profit growth, particularly in the second half. Lucey said profit growth was strong in North America, the U.K. and Ireland, and Germany, supported by pricing discipline, procurement benefits and cost control. He also cited a modest contribution from the Austrian liquid gas acquisition.

Volumes in energy products were lower year over year, which Lucey attributed mainly to lower-margin commercial activity in the Nordic region, milder weather and the prior-year disposal of the Hong Kong and Macau business.

Energy Services Weighs on Performance

Energy services had a difficult year, particularly in the U.K. Lucey said the operating environment was challenging as some governments pulled back transition commitments and commercial customers delayed discretionary sustainability spending amid cost and capital discipline.

Murphy said energy transition “is not going to be a smooth path,” noting that corporate ESG pressure had eased and that government incentives had shifted in some markets. He said these factors, along with a challenging macroeconomic environment, affected demand for DCC’s services.

Lucey said DCC took actions to protect long-term value in the business, including strengthening leadership, focusing on priority activities and investing in systems and operational capability. The company also incurred mid-single-digit millions of euros in one-off costs in the second half to rationalize parts of the business, mainly in the U.K. Management said the actions were intended to streamline operations rather than reduce capacity or capability.

Mobility and Technology Post Gains

DCC’s Mobility division reported operating profit up 8.6% to €134.4 million. Lucey said the performance was driven by disciplined pricing, procurement improvements and network optimization, with particularly strong profit growth in the Nordic region. Non-fuel gross profit rose more than 17%, reflecting growth in fleet services such as fuel and EV cards, telematics and digital parking solutions.

Chief Financial Officer Conor Murphy said DCC Technology, now largely represented by Nexora, delivered operating profit growth of 4.3% to £79.8 million. He said the business was affected early in the year by lower customer confidence and market disruption in North America following the introduction of U.S. tariffs, but performance improved as core markets recovered. Self-help initiatives included margin enhancement programs, cost controls and freight and warehousing consolidation in North America.

Management Highlights M&A Runway and Balance Sheet Strength

DCC committed £110 million to acquisitions during the year, primarily focused on expanding liquid gas businesses in Europe. Lucey said the company completed and integrated a liquid gas acquisition in Austria and is preparing to complete further liquid gas acquisitions in Central and Eastern Europe during the summer, opening four new markets.

Murphy said DCC has significant scope for further consolidation. In liquid gas, he said the company has about a 5% share of an estimated total addressable market of 74 billion liters across Europe and the U.S. He cited opportunities in markets where DCC has limited or no presence, including Italy, Iberia and parts of Central and Eastern Europe, as well as in the U.S., where DCC has less than 2% share.

DCC also noted it is currently in an offer period and said Irish Takeover Rules restrict management from commenting on the offer or providing certain forward-looking information. Murphy said DCC expects “ongoing strategic progress, growth and continued development activity” in the year ahead, while emphasizing that the company’s 2030 ambition should not be construed as a profit forecast.

About DCC LON: DCC

DCC is a customer-focused energy business, specialising in the sales, marketing, and distribution of secure, cleaner and competitive energy solutions to commercial, industrial, domestic, and transport customers. Headquartered in Dublin, DCC is listed on the London Stock Exchange and is a constituent of the FTSE 100.

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