On 12 November, Donal Murphy, Chief Executive of DCC plc – owner of and parent of Exertis, announced an update on the strategic direction of DCC as part of the DCC Interim Results update to the City.
DCC announced a focus on its Energy activities, focusing solely on its compelling opportunity in this sector. The business will simplify its portfolio and has begun preparations for the sale of DCC Healthcare. The Technology division will focus on delivering its growth and transformation agenda while exploring strategic options for the future. DCC will continue to support the Technology business financially and ensure a smooth transition to the right partner.
Exertis’ top priority remains serving its specialised vendor partners and ensuring it provides the best technology solutions and added value for its customers. DCC continues to invest in operational improvements, digital advancements and integration programmes across its division.
Tim Griffin, CEO of Exertis IT, said: “We’re excited by the opportunities that DCC’s strategic update presents. This is a great opportunity for our Technology division as we explore the possibility of new ownership. Our focus remains as ever on delivering for our customers and vendor partners. DCC’s strategic update provides another opportunity for us all to grow and progress, and we’d like to reassure our customers and vendors of our commitment to them, to adding value, to delighting all our partners and enabling their success.”
The company statement made on 12 November reads:
Focus on the energy sector
Sale of DCC Healthcare
Today we are announcing decisive actions to simplify our Group, pursue our largest growth and returns opportunity and unlock substantial shareholder value. Reflecting the scale of our opportunity, we will focus DCC solely on the energy sector.
There are three elements to our strategic plan to focus DCC on energy:
- We have begun preparations for the sale of DCC Healthcare, expected to complete in 2025
- We’ll review our strategic options for DCC Technology, following the completion of our operational improvement programme, within the next 24 months; and
- We’ll return surplus cash arising from the simplification of the Group to shareholders
Why focus on energy? DCC Energy has consistently grown faster than the rest of the Group and now accounts for 74% of the Group’s operating profits. It has the highest returns of all three divisions at 18.7% return on capital employed. It is a business of real scale, with market-leading positions in 12 countries and supports the needs of 10 million customers annually, across commercial, industrial, domestic and transport energy uses.
We are a determined driver of the energy transition. We have already made significant progress to reduce the carbon intensity of our customers’ energy: in 2024 35% of DCC Energy’s profits came from renewable products and services up from 22% in 2022 when we launched our new energy strategy. We are very excited about the prospects of this business and believe the time is right to focus on this significant growth opportunity.
We have begun preparations for the sale of our Healthcare division which is expected to complete in 2025. DCC Healthcare is an excellent business with a long-term record of growth. It has market-leading positions across both the patient health and consumer health businesses. Each of these businesses play in attractive end markets with significant consolidation opportunities. A sale of the division has the clear potential to enhance the focus and success of the business, while unlocking substantial value for DCC’s shareholders.
Within the next 24 months, following the completion of our operational improvement programme, we will review the strategic options for DCC Technology. This division has also grown strongly over the last decade. In DCC Technology, we distribute products and services across three areas: Pro Tech (high-end audio-visual (AV) and audio equipment), Info Tech (consumer products) and Life Tech (lifestyle products).
As ever, we are committed to maintaining a strong balance sheet and our investment grade credit rating. Given the significant cash generation of the Group, we expect that any surplus cash arising from our actions will be returned to our shareholders.