If you are dialing to the audio through the conference call, rather than the webcast, you can select the phone option under the cargill I must advise that the conference is recorded today. I would now like to hand the conference to your speaker, Donald Murphy, CEO of DCC to start today's conference call. Please go ahead, sir.
Thank you. Well, good morning and welcome to DCC's results presentation for the year ended 31 March 2021. I'm Donald Murphy, Chief Executive of DCC and I'm joined here by Kevin Lucey, Chief Financial Officer. It's great to be with you all this morning. Just our disclaimer.
So thankfully, I don't have to read it and we'll move on and look at the agenda for today. I'm going to cover off the highlights of the year and what a year it has been. Kevin will take you through the business and financial review. I'll give you an update on what has been another strong year of development activity for the group. I'll update you on the excellent progress we've been making in leading an energy transition.
Kevin will give you an update on our capital framework and our financial strategy. And after a summary and our outlook statement, we'll open up the session for questions and answers. So despite the very challenging and uncertain environment created by the COVID-nineteen pandemic, DCC delivered a very strong trading performance during the year. DCC's developed business model empowers our teams to react quickly To changing market dynamics such as the impact of the COVID-nineteen pandemic, our business model was really tested over the last year, but the results speak for themselves. Group adjusted operating profit increased by 7.3 percent to £530,000,000 We maintained our consistent track record of organic growth With circa half our constant currency growth organic, pleasingly all four divisions achieved operating profit growth over the prior year.
Driven by a very strong working capital performance, we continued our trend of generating very strong free cash flow with an excellent 130% conversion Of operating profit to cash, our return on capital employed, DCC's key operating metric increased to 17.1%. The Board proposed to increase the total dividend for the year by 10%. This will be DCC's 27th consecutive year of dividend growth. Despite travel restrictions, DCC remained very active on the development front with $375,000,000 committed to new acquisitions, With acquisitions in each of our divisions and across 9 different countries and with $55,000,000 of new acquisitions announced today. The notable larger acquisitions were Werner, which creates a platform for DCC Healthcare in Continental Europe and the material expansion of our U.
S. LPG business through the acquisitions of UPG and NES, but more about that later. Finally, DCC is absolutely committed to driving excellence and sustainability across the group and to leading our customers through the energy transition. During the year, we set net zero target for 2,050 or sooner for the group, with an interim target of 20% reduction in our emissions by 2025 and we are well on track to achieve this target. We retained our MSCI AAA ESG rating And we've made really good progress in leading our customers through the energy transition journey.
And I'll take you through some of our developments in this area a little bit later in the presentation. The strength of the performance demonstrates the resilience in DCC's business model, the benefit of our diverse sectors of energy, Healthcare and Technology, and most importantly, the essential nature of the products and services that DCC provides to its customers. The COVID-nineteen pandemic really highlighted the essential nature of the products and services that DCC provides to its customers every day. Whether it is the energy to heat their homes, to harvest their crops or to produce their products, DCC supplies the essential energy. The fuel to transport goods and services to businesses and especially direct to homes as shops closed and more and more goods were purchased online.
The personal protective equipment and other COVID related medical products to allow our medical practitioners to care for their sick patients and fight the virus. The nutritional products that help strengthen people's immune systems or the technology that forms such a central part of our lives today, enabling millions of people to work from home and create a seamless interface between business and consumers. Throughout the year, DCC provided millions of consumers with the essential products and services to support their everyday lives and to keep our economies moving. BCC's purpose is to enable people and businesses to grow and progress. And during the year, our people, our greatest assets, demonstrated our purpose in action.
The strong performance in the year was a result of the phenomenal capability, agility and commitment Of our 13,700 colleagues who work across the 20 countries that DCC operates in, I'd like to say a big thank you To all of my colleagues for delivering such a wonderful performance in the most challenging environment we have ever experienced in our lifetimes. They lived our core values of safety, integrity, partnership and excellence every day. They always put the customer first to ensure our customers receive the essential products and services that they required. They worked tirelessly to keep each other safe throughout the pandemic. Despite the challenging environment, we made great strides in delivering for all our stakeholders as outlined here.
I'll now hand you over to Kevin, who will take you through the business and financial highlights. Kevin?
Thanks, Domhnall, and good morning, everyone. So as Tunel has mentioned, we delivered strong growth in financial year 2021, and there are many highlights in the year. We'll talk through a selection of them for the next few minutes and also get into the performance in the year by divisions. To start with, adjusted operating profit was up 7.3 percent €530,200,000 with growth in profits across each division of DCC, a very strong result for the year, particularly given that we were behind the prior year at the end of Q1. Adjusted earnings per share was up 6.6 percent to 386.6p per share.
The Board is proposing a 10% increase in the dividend for the year as a whole, Reflecting the strong underlying performance and our progressive approach, it's our 27th year of unbroken dividend growth. The free cash flow performance was excellent with CHF687,800,000 generated, driven by a really strong working capital performance, and I'll talk about that in more detail shortly. Importantly, our return on capital employed, DCC's key metric, increased to 17.1%, reflecting the strong profit growth and that free cash flow performance. In terms of balance sheet, we ended the year with a very strong balance sheet position. Net debt was $150,000,000 or net cash of $165,000,000 if you exclude the lease creditors of IFRS 16.
That net cash position is before a sizable acquisition spend outflow just after the year end. We completed the acquisition of Werner and a number of other acquisitions in April. Donald will talk about those later on. Approximately €130,000,000 of spend on acquisitions post the balance sheet days. So that spend, therefore, gets us back to a modest net cash position of approximately $40,000,000 pro form a for the acquisition spend.
In terms of the operating profit performance, overall, we're up 7.3% or 6.6% on a constant currency basis, a very modest translation benefit in the year. As usual, currencies did move around during the year. So the average sterling euro rate for the year for the income statement was 1.12 and the sterling dollar rate was 1.30. Within that, sterling was weaker earlier in the year and then All divisions recorded growth in operating profit, as Donlin said. LPG up 1.3 percent retail and oil up 3.3 percent healthcare, a really strong performance, up 35% on a reported basis.
But obviously, the prior year had a contribution in there from the generic pharma business, which we disposed of in the prior year. So on a continuing basis, the growth in Healthcare was 45.9% And technology also very strong growth, up 11%. So the overall shape of the group on the back of the very strong growth you see in healthcare and technology Combined, they increased to 29% of the group's profits, up from 25% in the prior year. The other notable point on the slide here really is that the geographic shape of the group continues to evolve. Again, we'll talk on this later in the talk about it later in the presentation, but roughly UK and Ireland now accounts for approximately 40% of the group, Continental Europe for 40% and the rest of the world for 20%, the majority of which is in North America.
So just to dig into the divisional performance in a little more detail. Our LPG division traded resiliently throughout the year. The lockdowns did impact many of our commercial and industrial customers as you'll know. You'll remember that LPG was behind at the half year by 7%, strong performances in France and the U. S.
In particular. We have a strong weighting to cylinder and domestic in France and domestic business in the U. S. For the year as a whole, volumes were back modestly organically. The restrictions curtailed activity in the industrial and commercial sectors, particularly, we obviously saw weakness in the hospitality, leisure and construction industries.
Things did improve as the year progressed, either as restrictions eased somewhat or as some of our customers adapted to the new working environments. So very pleased to get growth overall for the year. In retail and oil, we recorded good profit growth, Up 3.3 percent with a good organic performance underlying thus. The really notable thing about the performance, I guess, is that it was set against a lot of volume weakness, Particularly in the first half when volumes were back 18% and back 12.3% for the year as a whole. We saw strong demand in the domestic and agri sectors in the first half And weaker commercial and transport fuel volumes.
The continued success we've had in the penetration of cleaner premium products, Lower emission fuels and the continued growth in services and non fuel profits was helpful in compensating for the lower activity levels. On the retail side of the business, it recovered throughout the year following a very weak Q1 when the pervasive lockdowns meant retail volume fell substantially. The most notable performer geographically was in Scandinavia, where we recorded a very strong performance. Overall, the operating margin increased from 1.2p per liter to 1.4p per liter, reflects the substantial slowdown in volumes and the different mix on the back of that, but also the good procurement and cost control performance, particularly in the first half. We're very pleased with the performance in TCC Healthcare, obviously, with excellent profit growth and continuing activities of 45.9%, 2 thirds of which was organic.
We have benefited in Healthcare from the strength of our established market positions, but also the sharpening of the strategic focus in DCC Vital in recent years And particularly from the decision to enter the U. S. Market in Health and Beauty and build out from our strong base in Europe. In DCC Health and Beauty Solutions, We again had a strong performance in Europe in both beauty, where our focus on more complex products continues to bear fruit and also in nutrition, where we now have a sizable business, we're getting traction on the broader offering we have for customers in that market. For DCC Vital, this was a very different year for the healthcare systems in Britain and Ireland obviously.
Our business responded very effectively To market the different demand patterns, clearly, there was less in person GP consultations and less elective surgery procedures. But on the other hand, there was increased demand for respiratory ICU or PPE products. We delivered good growth in revenue and profits in the year. Again, in technology, we are very happy with our performance. Very strong profit growth of 11%, approximately 3 quarters of which was organic.
At the half year point, although seasonally less significant, we were just about line ball with the prior year. So again, a very good performance in the second half. Throughout the year, we saw really strong demand for consumer and working from home products. It won't be a surprise that the B2B market was more challenging. ProAV, for example, there was little to no spend in large events arenas or conference centers or large offices during the year with a lot of projects postponed.
Regionally, we had very strong performances in North America and in Continental Europe, driven by the consumer focused areas in those regions. Finally, for this slide of the presentation, we'll just zoom out or this part of the presentation, we'll just zoom out again to the overall group performance. So on the left hand side of this slide and on the waterfall, you see we have prior year profits of €494,000,000 In terms of the growth this year, you can see that currency contributed 0.7%, Organic contributed just over 3% and then acquisitions were the balance. We're pleased with the organic performance for the year, particularly given that we were behind organically after Q1. In terms of how that profit converted into cash flow, you'll see that we had $134,000,000 of depreciation and $155,000,000 of net CapEx and leasing.
The working capital performance clearly was very, very strong. There are a couple of things to call out in terms of the working capital inflow of just under CHF 180,000,000. Firstly, we have a modest amount of supply chain financing solely within the tech division. Given the sales mix in DCC technology and weighting to large retail customers throughout the year, Our utilization of supply chain financing, where this is used, was mechanically higher, benefiting working capital. Secondly, our year end position benefited from a very strong cash collection performance.
We believe a large portion of which was driven by the fall of year end just prior to the Easter weekend holiday And a lot of customers paid us a little earlier than might be usual, around $75,000,000 We'd expect this to reverse over the first half. And then finally, and most importantly really, we always are focused on driving underlying improvement in our working capital if we can. We did focus a lot during the year on a number of stock efficiency measures in technology and healthcare and a number of material supply positions in the energy businesses where we managed to get underlying improvements. All told about €80,000,000 of improvements. The combination of all of these drove the very strong working capital performance.
So terrific free cash flow performance, some temporary benefits in there that we would expect to reverse. But even allowing for that and allowing for the committed acquisition spend That went out just after year end. On a pro form a basis for both acquisition spend and timing benefits and working capital, you're still looking at our balance sheets with just a very, very modest net debt position.
Thanks, Kevin. Just moving on to development. And while organic growth is our number one growth objective, acquisitions are also a key pillar for DCC's growth strategy. And FY 2021 was an early year of strong development for the group. Despite travel restrictions, DCC remained very active on the development front With $375,000,000 committed to new acquisitions, including further bolt on acquisitions of $55,000,000 announced today, We acquired businesses across each of our 4 divisions and across 9 different countries.
During the year, we significantly strengthened our position in many markets, added new service capabilities, increased our range of renewable energy products and services and created new platforms for growth. A few of the highlights. We significantly expanded the scale of our presence in the U. S. LPG market through the acquisitions of UPG in January 2021 And NES in September 2020, bringing our total capital committed to the U.
S. LPG market to $445,000,000 since our initial entry in 2018. We now have a business of real scale in the market. It has a presence in 21 states, Employees over 800 people and serves the energy needs of over 230,000 customers. While we are now the 6th largest player in the U.
S. Market, we still have a modest market share and lots of opportunity for further growth and development. DCC Healthcare expands its activities into Continental Europe through the acquisition of Werner. Werner is a leading supplier of medical and laboratory products To the primary care sector in Germany and Switzerland, the acquisition represents a significant scaling up of our primary care business, Building on our leadership position in the UK market, it also provides a platform for expansion of DCC Vital's broader activities into Continental Europe, particularly in Germany, which is a large well funded and growing healthcare market. We also completed a number of exciting deals in technology and new energies.
In technology, we expanded our North American business through the acquisition of JB and A, a leading distributor of broadcast, post production and ProAV technologies And through the acquisition of the Music People, which strengthened our business in the Pro Audio segments of the market. I'll pick up on our developments in new energies in the next section. The level of development activity during a very challenging year coupled with our platforms, opportunities and capability give us real confidence that we can build the group into a global leader in our chosen sectors. So moving on now to look at how DCC is leading In Energy Transition, DCC is very well enabled well positioned to enable energy transition and support our customers We have grown and evolved our energy business into a very broadly based provider of energy products and services To millions of customers across 12 countries, we provide the energy that is required for mobility, for heating and to support commercial and industrial activities. Despite the progress made to date on energy transition, the pace of Change and the imperative to decarbonize must continue to accelerate.
The coming years in energy transition are the most critical And the most challenging for societies as the world will have to balance the dual complexity of moving to sustainable fuels in decentralized hard to abate uses, while also making the transition equitable and affordable. DCC is focused on the energy transition from the point of view of the customer. We are not a producer of energy. Our role is to support our customers to transition to cleaner energy products and services. The evolution of the energy mix plays to DCC's strengths as an agile, experienced, multi energy business With leadership positions in the markets we operate in backed by our scale and industry partnerships.
We have leveraged this position to drive Energy transition during the year and we'll continue to do so in the years to come. Let's look at a few examples. We've been investing in rolling out EV fast chargers across our retail network. And during the year, we increased the number of EV fast chargers by 50%. We are seeing firsthand how attractive investing in fast charging is in Norway, the country with the highest penetration of EVs in the world.
We've recently rolled out fast charges across 7 locations. Our sites are very well located to attract high throughputs, while also providing a range of additional products and services for We are generating very attractive returns and fast paybacks. There is significant opportunity for growth as demand for well located Fast charging continues to increase. We have a pipeline to double the number of locations and chargers in this year. Biofuels have a key role to play in the energy transition.
Biofuels have carbon footprints 80% to 90% lower than conventional fuels. Most importantly, they require no infrastructure investment unlike most other renewable energies. DCC has been selling biofuels for many years And during the year, we increased our penetration of biofuels to 11% of our total road transport fuels. In Sweden, as an example, we've been accelerating the growth of HBO in the market. We're supporting customers in the transport, Construction, marine and municipality sectors to significantly reduce their carbon emissions by converting to HVO.
We're also rolling out HBO at the pump on our retail network and increased the number of locations to 37 during the year. Looking at a few other energy transition initiatives, we continue to convert commercial and industrial customers to LPG, Reducing their emissions by 20% and also now are converting residential customers to LPG. We're significantly reducing the amount of carbon for these customers. We are also supplying renewable electricity to over 100,000 customers in Ireland. We've acquired 2 solar PV businesses in France recently.
The businesses help customers design, build and manage their solar installations and provide ongoing energy management services. Following the acquisitions, DCC now provides transport fuels, LPG, bio LPG, natural gas, power, solar And wood pellets to our customer base in France, a truly multi energy business. We've recently launched sustainable aviation fuel in Denmark, Leveraging our leadership position in aviation fuels in the market and our partnership with Shell and Neste, we are the 1st company to do so. And finally, we've launched a new BioSil LPG cylinder in France. Hopefully, these examples demonstrate the real progress DCC is making an energy transition.
DCC is a leading provider of the energy that is needed today And we will be a leading provider of the energy of the future. I'll hand you back now to Kevin to take us through our capital framework and financial strategy. Kevin?
Thanks, Donald. So we're going to spend a couple of minutes here talking a little bit about the capital base in DTC and the related financial strategy of the group. As you know, the group is substantially larger than it was just 7 years ago. We've increased the scale, but sharpened our strategic focus around our core sectors of energy, healthcare And we've become substantially more international. The shift across just 7 years is reasonably dramatic.
First, the scale up of our business in Continental Europe the really successful market entry into North America. We think it's important to highlight this for a couple of reasons. Firstly, our return on capital employed is actually a little higher now at over 17% than it was at the start of this reshaping in 2014 when it was 16%. Notwithstanding $2,400,000,000 of acquisition spend or $1,500,000,000 since 2017, We've executed very well on integration and driven good organic growth within our existing and acquired businesses. That is despite the significant acquisition spend being initially dilutive to the standing group returns.
For example, our expansion in North America, which only started in 2018 and where we have deployed capital every year since. Despite most of that capital being deployed at very early teens in terms of return on capital And our LPG entry, for example, being at 10%. We now have 15% return on capital employed in North America, Very good progress in just 3 years. Secondly, the market entries into Europe and most recently in North America have opened Substantial new horizons of growth for us, large markets, much larger than where we used to operate with consolidation opportunities, where we can bring our sector expertise in technology, healthcare and energy and the DCC focus and detailed management disciplines to bear on building bigger and better businesses. The increasingly geographically diverse cash flows from the business, the spread of the business, all increases the earnings resilience Alphadeh is, from a business model perspective, already very resilient, as demonstrated this year above all.
This improvement in the quality and spread of the business On our very strong financial position, the variety of capital deployment opportunities we have all enable us to look forward with confidence. So what are we hoping to do with those cash flows from the business? Our first priority is investing behind the organic growth of our business. Our business is growing well organically as it has done consistently over our history. We will invest in CapEx ahead of depreciation and in working capital as it provides great risk adjusted returns.
And it also enables us to expand quickly into new and adjacent areas where we leverage our infrastructure and add new capability to our business. As we've done recently in expanding our products and form factor capability in our fast growing health and beauty operations or as Domo mentioned earlier in building out our EV capability in our retail network. We clearly also want to deploy capital and acquisitions at returns well ahead of our cost of capital. We're not one eyed when it comes to returns. We are prepared to accept lower initial returns as we did when entering North America, as long as we are confident of growing those returns over time as we have delivered.
Deploying capital and acquisitions remains a core competence in DCC. During a pandemic year, we've committed $375,000,000 to acquisitions across 9 countries. And as I've already mentioned, in recent years, we have built substantial new platforms for development across new regions for the group That will allow us to be synergistic acquirers in those markets in the future. Finally, we believe our progressive dividend approach has been an important driver of value Our shareholders over the years and is a core part of our capital allocation framework. We believe our strategy and framework will drive both capital and income appreciation We expect to continue our progressive approach to dividends, and we believe our focus on returns on capital employed And deploying primarily the remainder of our cash flows and our balance sheet and our organic and acquisition deployments will drive strong and consistent long term returns for shareholders.
I won't read out our strategic objective on the left hand side here, which you will all recognize as it has been consistent for many, many years. Our financial approach is designed to be consistent with this long term objective. We believe a strong balance sheet will build bigger and better businesses over the long term. A strong balance sheet also enables our business model. It provides a very solid foundation to enable our partnerships with customers and suppliers.
It also means we can respond quickly to commercial opportunities as they arise and be fleet of foot when it comes to acquisitions. A strong balance sheet appropriately funded helps us deliver on our strategy. So what does that mean in more practical application terms? We would not like to see net debt EBITDA move beyond 2 times. Our business has grown substantially.
That growth and internationalization gives us the scale to evolve our approach as we grow. We expect to broaden the funding options available to us Over time and also to focus on the efficiency of the balance sheet position, reducing the relative levels of gross cash we hold. By way of example, we have €135,000,000 of debt repayments in FY 2022, which we don't need to refinance and will lower the amount of gross cash we hold. Clearly, we are in a very strong financial position today. We do expect that our leverage levels will rise given our ambition to deploy capital and the opportunity set and capability we have.
That really is the key point. We are confident we will deploy the excellent balance sheet position we have in acquisitions that are going to create considerable value for the company and for shareholders. Of course, if over a sustained period, Our average acquisition spend were to lag our expectation of, say, dollars 300,000,000 to $400,000,000 per annum, we do have the option of increasing returns to shareholders to manage our overall position. So our priorities, as we mentioned earlier, remain investing in the organic growth of our business, Deploying capital and acquisitions that returns well ahead of our cost of capital, growing our returns to shareholders and evolving our financial approach as we grow. I'll hand you back now to Domino.
Thanks, Kevin. So in summary, We've had a really excellent performance despite the very challenging environment we've all had to live through. We delivered strong growth, Excellent cash flows and a high return on capital employed. Our acquisition momentum continues. Sustainability and energy transition is at Part of everything we do and we are making really good progress.
We continue to drive both organic and acquisitive growth while increasing the efficiency of our balance sheet. And finally, our outlook statement. Although the uncertainty created by the COVID-nineteen pandemic continues, DCC expects that the year ended 31 March 2022 will be another year of profit growth and development. We leave you with our favorite slide to highlight DCC's strategy continues to deliver. This strategy over 27 years as a public company Has delivered a consistent track record of growth with operating profit growing 14.2% year on year, EPS growth of 11.9% year And unbroken both in dividends increasing 13.9% year on year, free cash flow conversion of 104% And consistently high returns on capital employed significantly ahead of our cost of capital.
Thank you all for listening and we look forward to your questions.
We have the first question from the line of Alan Meili from Davy. Please go ahead.
Yes, good morning guys. It's Alan here at Davy. Thanks for taking my questions. Congrats on an excellent data for you that's just gone. I got 2 just to quick off.
The first is a shorter term question on organic growth. And obviously, it was an excellent performance given the backdrop during the year. But given the various moving parts across the divisions, Can you help us perhaps with the cadence of group organic growth as you progress through peak trading in Q3 and Q4? What I'm really trying to get at is do you think that positions you for fiscal year 'twenty two from an organic perspective as you hopefully return to some form of normality? And then just my second question is on energy transition, I felt the comments on incremental returns on EV charges was very interesting.
But as you also acquire the space, and I recognize it's early days, but as you're buying kind of solar PV assets and you acquired budget energy, what type of incremental returns on capital are you expecting from these type of assets? Thank you.
Yes. Alan, the organic actually trajectory was very good As we went through the year, as we went through the quarter, so clearly the Q1 of the year was the most challenging. So we built Momentum and we built momentum across pretty much all our divisions through the year. And we don't see any reason why that momentum is not going to Continue. I suppose there's plenty of companies maybe talking about benefits that they received due to COVID in the year and those benefits Not flowing through into the next year.
And while there were some benefits, clearly, we had from a COVID perspective, there was headwinds we had from a COVID perspective as well. So I think as we look into next year, we certainly don't see any reason why we're not going to continue our track record of organic profit growth. I don't know, Kevin, if you want to add anything to that.
No, I think you've captured most of us. I think from an underlying perspective, Alan, I mean, Q1 clearly was the most Challenging quarter from an underlying trading perspective. And once we began to see things improve last summer, I mean, I think The group underlying has delivered good performances quarter on quarter on quarter. So certainly, as we go into FY 'twenty I think our right look statement this morning reflects the fact that clearly we have some acquisition contribution coming through into next year. Currencies will be a little translation headwind for the group, but all things being told, we expect to be growing our profits organically again into FY 'twenty So things in the business in pretty good shape really?
The investment, Alan, in Energy Transition actually is very interesting always because And I suppose
there's lots of talk about asset values and prices for business in this area. But where we're investing on our existing infrastructure, actually getting very high returns on our capital because we're able to leverage that infrastructure be that the EV investments on our retail networks or indeed actually We can as I talked about earlier, with biofuels, we can actually put that through the existing infrastructure that we have within the businesses. And indeed, Our bio LPG on the cylinder front goes through the existing cylinder infrastructure that we have within the business. So the returns are very strong Where we're investing on our existing assets. Where we buy businesses in new energy areas, Again, we're seeing the opportunities to deploy capital as very good returns.
So We'd be pretty pleased with the returns that we're going to get out of those 2 solar businesses we announced in France today. And not dissimilar to entry level returns that we're achieving in any of the other business areas that we're investing in. Certainly, very encouraging so far from an investment perspective in Renewable Energies.
That's very helpful. Thanks, Donald. Thanks, Kevin.
Thank you for your question. We have the next question from the line of Katie Somerville from UBS. Please go ahead.
Thanks, Laura, and good morning, everyone. So kind of following on from the last question. So as you expand into Clean Energy Solutions. Are you able to explain how overall profitability changes? So if 1 year of energy changes to renewable sorry, less Carbon Intensive Solutions, how that impacts you?
And then it seems to me that you haven't had much impact from changing LPG product prices this year. Does that mean that this is a low risk going forward? And then finally, in terms of the shift to the clean energy sources, And has there been a significant acceleration this year? And if you could provide any details around that, that would be very helpful. Thank you.
Thanks, David. Just the LPG product price, I think that's it's a feature of the market. It's something that we've worked Really hard on to if you like smooth the impact of pretty significant moves and product prices And you look at the year just gone and we had a very significant move in the product price. So we're not immune to it. It's something that we've got to work hard on, but I think we've as the years have gone by, we've managed between our Pricing strategies, our hedging strategies to minimize the risk of movements in that sector.
The new energy and in terms of profitability, again, We're not seeing any kind of negative impact of investments in new energies. As I talked about earlier, No, where we're putting infrastructure in our existing sites, we're getting actually very good returns, very good profitability, very good cash generation Out of those investments, the likes of biofuels, while the underlying products might be more expensive. And again, it varies From market to market between the tax regimes in place, the amount that is That needs to be blended within the product and that finds its way clearly into the market. But again, the profitability on our biofuels is not Lower than it is on our other products as well. So we certainly don't see any drag from a profitability perspective As we invest more in new energies and really our whole focus and our commitment is to help the customer to decarbonize and to bring the products and services to the market to enable the customer To decarbonize and again while they're modest acquisitions, but the acquisitions of the solar PV businesses today in France No, it's important for us because it's bringing another capability in renewable energy to our multi energy business in France.
Thank you for your question. We have the next question from the line of Sam Bland from JPMorgan. Please go ahead.
Hi, good morning. Thank you. I have two questions, please. The first one is, if I look at the sort of profit growth year on year in the first half and then the second, It's actually slowed down slightly in the second half of the year. I was wondering whether the impact of furlough had an impact there, whether you Kind of receiving money in the first half and then net repaying it in the second and what it would look like if you excluded that furlough impact?
And the second question I had is on the technology business, where the profit growth stepped up quite materially in the second half of the year. Just a bit more detail on what was going on there. Maybe you would have expected that some sort of initial work from home type equipment boost would have faded away as the year went on. So Doesn't look like it. A bit more detail that would be helpful.
Thank you.
Yes. Thanks, Alan. Look, 50 and you're right In terms of the second half first half, second half, actually the underlying performance in the second half was very strong. And it was held back a little bit By repayment of the furlough. So furlough, we called it out in our results in November, was relatively modest.
We put it in place at the time, particularly during the Q1, where following government policy to make sure we protect Jobs across a number of our businesses. As the business recovered through the year, We took the decision to repay that. That was repaid in the second half of the year. So you're right. There was an impact, A drag in the second half of the year, but it's modest in the overall scheme of things, Sam.
So not something that we'd The majoring on. Tech has been just super. The performance, we started off, I think as we talked about the business and looking this time last year, there is we worried about the demand profile For the technology business, because elements of our business is clearly in the B2B sector and with Offices not opening with crowds not gathering, so investment in AV and retail and conferences and how is the worship, All that kind of stuff going to have a drag on our business. But we had really strong demand particularly early on from working from home technologies. I think actually what we saw during the year as lockdowns remained in place for very long periods of time, People upgraded the infrastructure that they have at home because they wanted to have better solutions at home.
So the working from home technology has remained Through the year. But the big boost was all around the consumer electronics part of our business and people So not being able to go out, go on holidays, not go to concerts, not go to matches. Where do they invest their money? They invested their money in upgrading their consumer electronics, Finding hobbies to do when they were locked away at home, picking up old hobbies like playing music instruments or whatever. And they were all really Strong and the second half of the year and the run up to Christmas clearly is an important part.
So we had a strong trading season. And indeed our performance Right through the Q4 was very good in tech. And as we look forward, we look forward with confidence because as To pick up now as well. So and the tech business benefits as the economies recover. So we think the technology business is in really good shape.
Yes. And Sam, just to jump in on the H1, H2 thing, just I mean, the H1 growth was 8% in profits. H2 growth is 7% in profits, right? So And the H2 for us clearly is a much bigger profit contributor. So in an overall way, our growth in the second half was very strong at 7% and Represented good underlying organic growth as well as the repayment.
So we're very pleased with the performance in the second half, just to be clear.
Understood. Thank you.
Thank you for your question. We have the next question from the line James Winkler from Jefferies. Please go ahead.
Hey, thanks guys. Just had a couple for me. The first one is Big discussion on labor market disruption, difficulty of hiring workers, particularly in the U. S, which I appreciate is still Fairly small for you guys, but wondering if you're seeing any impact from that. And if so, how you guys work around and offset that?
And another part of that is supply chain issues and availability, but also cost input inflation. Wondering if that's You're seeing any impact there, particularly in the Tech division? And then lastly, from the solar, which you I think you mentioned is Being included in the LPG division for now, I'm just wondering how that complements the LPG services and what the benefit is including in that division? Thanks.
Thanks, James. And look, I think like everyone, we're not immune to challenges In the labor market and clearly there's stimulus and everything in place that Has been impacting on labor availability. That said, we don't have any operational issues Across our businesses, we probably are seeing an element of labor inflation In the in across some of our businesses. But again, We've been through many cycles, James, one of the benefits of Interim for a while. And the nature of our businesses, We have the ability to pass on inflationary increases in our own cost base.
I suppose secondly, the nature of our business, we're buying whether it's commodities or we're buying third party products and product prices move and they get passed on into the market as well. So While we're not immune to it, we don't see any particular challenge for ourselves in dealing with any of the inflationary items. The supply chain piece is interesting because there's an awful lot of noise about supply chain issues at the moment. There's an awful lot of noise about availability at the moment and the impact that that's happening on businesses. And again, within our own business, within the tech business in particular, Practically everything we sell has chips in us nowadays.
And there is some Kind of impact on the supply chain, but nothing material. And it's more about our order cycles getting our POs in, Maybe a little bit earlier, a little bit of increased investment in our working capital through this. But again, no material impact In product availability. Solar, James, like solar, while again modest Investment, I think, is important for us as part of our energy mix. And it's not just Relevant to our LPG activities, it happens to be our if you like our multi energy business in France is within the LPG division.
But if you think about our customer set, we're supplying commercial, industrial customers, Cultural customers in particular that those businesses are targeting with both LPG products and These with oil products and other energy products and our customers generally Solar will be part of the solution. And if I look at our own businesses, in terms of our No, both our net 0, 2,050, our sooner target, but more importantly, our target to reduce our Carbon emissions by 20% by 2025. We're actually investing in solar across many of our businesses to help us in our decarbonization. And again, the things that we're doing within our own business are great case studies for our customers and helping customers on that carbon reduction journey.
Great. Thank you.
Thanks,
Jaeme. Thank you for your question. We have the next question from the line of Rajesh Kumar from HSBC. Please go ahead.
Good morning. Thanks for taking the questions. Just on The retailer and oil business, your decline rate in basically, the one you reported is Better than the first half. Can you give us some flavor on how the trends were shaping up in 2021? And do you what compared to 2019, do you think the volumes would recover to?
The second question is within retail and oil again, you definitely have quite a lot of different products Let me give you the EV charging as well within that. So can you give us some color on which Parts of that business actually offset the petrol station consumption declines In terms of operating profit level? And finally, on the fuel price Fluctuations recently we've seen. Can you just remind us how that Flow through the yield profit and loss account for retail and oil for LPGs, 2 very different dynamics there.
Yes. Okay. Thanks, Rajesh. And maybe I'll start with the last one. So from a pricing perspective, again, we're very much that Pass through business.
So in our oil businesses, the commodity price changes on a daily basis and we effectively pass that through Into the market on a daily basis, we have a small amount of kind of maybe weekly or monthly contracts that we have Customers and data will be hedged out. So we don't take any kind of product price exposure within our oil activities. LPG is a little bit different, Where we have contracted prices with our customers about 50% of our business is formula based. So it kind of gets passed through. The other 50% It's contracted prices with our customers and talked about earlier our pricing policies and then backed off by hedging policies.
So to minimize any risk of commodity movements and timing issues. And I think when you look at the year and the movements that we've had in the year, We've managed that pretty well. Look, in terms of the oil volumes, like it was clearly an incredible year, Rajesh, we started off and literally sitting back kind of in April May last year and looking at Some of the markets that we operate in France in particular where people couldn't drive more than a couple of miles and we're kind of locked away in their houses that fuel volumes was dramatically back. If we look at No, it's more modest in the scale of our business, but even like our aviation business, we have a decent position up in Denmark, miles back in terms of demand profile. And as we came out of the Q1 and economy started to open up again, The fuel volume stands back pretty well.
Transport fuel stands back actually very well because while people couldn't travel abroad, they traveled around their countries more. We quite quickly got back to more normal volumes during the summer months. We came back into the winter months and lockdowns kicked in again. And We had a bit of an impact on volumes on the transport side, a bit less so on commercial and industrial that was more impacted in the first half of the year. So we benefited as Ken talked about earlier, we benefited from A little bit of pull forward in demand on the East side, again in the 1st couple of months of the year, which Created a little bit of a drag in the 2nd part of the year.
So it really was an incredible year in terms of Trying to manage through that and to commence and deliver the profit growth was fantastic. Again, we see those markets bouncing back, Rajesh, as we go forward, so we won't maybe have some of the benefits that we had from Say on the retail side where we have pretty strong margins and certainly in the early part of the year where there was low volumes on the retail side, some of that will normalize. We had expected the volumes to normalize back to kind of levels that we have seen them before. In terms of renewable fees, again, from a kind of An impact on the profitability of the business, everything we're doing, we're generating good returns. We've been focused on cleaner energy products.
This is not something that has just happened within the last 12 months. We've been focused on it for For many years, we've been talking about our premium heating products, our premium fuels at our retail forecourts. Those products Are better for the customer, better for the environment. And thankfully, they're better for us In terms of the margin that we can generate from those products as well. So, as we transition to cleaner energy Products going forward, we certainly don't see that as being a drag in terms of returns or probability of our business.
Yes. In terms of Rajesh, your question meant like the compensation for the kind of the slowdown in retail volumes, I mean, our retail and oil business is very broadly based. We have clearly the profitability that comes from retail forecourts, but even within that, you've got your car wash incomes, you've got your shop income in those countries where we have Where we shop, there's rental income from Click and Collect and all the various services we offer from those retail forecourt and broadly based Oil distribution activities, including lubricants, including truck stop, including some of the services provided around For whole years, you know, mileage counts, fuel card revenue. So there's lots of things that are going on in addition to the cleaner Energy Products that Donal mentioned that kind of support the overall level of profitability in the year. So you're right to call out the fact that Volumes are back and that was a drag for the division.
The fact that it's so broadly based now with lots of different Product streams and profitability streams on the back of that means that we were able to deliver good growth in the year.
Thank you very much. That's reasonably comprehensive. Just on the various product streams you mentioned, could you just give us not The precise split, but a level of a third is from cleaning or fuel cards. Just the exposure, How that splits
up? I didn't quite get all the question, Rajesh. But I think, I mean, in terms of we have So there is retail the retail contribution is about 30% of the Over 30% of the division, if you like. And within that, there's lots of different components. The fuel card, again, will be a sizable proportion of the division, it will be over 15% to 20% Of the profits of the division.
So again, contributing to the spread. And then on the oil activities, which account for half of the profits are thereabouts, That's very, very broadly based from lubricants to home heating to aviation to commercial, industrial, all of which Are individually significant, but they're very broadly spread across that kind of portfolio of products, if you like.
Thank you very
much. Thanks, Ritesh.
Thank you for your question. We have the next question from the line of Gerry Henningam from Good Party. Please go ahead. Your line is open.
Can you hear me?
Hi, Jerry. How are you?
Yes, sorry. So, Donald, pretty broad question here to start with. You mentioned affordability as an issue It says the new energy adoption and you obviously have had a good deal of success in Scandinavia. What do you see are the drivers? I know it's That broad here, but what are the drivers of adoption in some of the other jurisdictions you're operating in to kind of entice people basically to become more environmentally friendly as opposed to just talking about what actually paying first?
Yes. Look, Terry, that comment is really around some of the challenges in terms of the whole kind of approach to energy transition. And that's a kind of DTC can't do this on its own. It needs to be very much A kind of a joined up approach from government policy, the producers of the product, the investors that are investing in the production of cleaner energy products and services, so that the product becomes affordable from a customer perspective. So if there's a significant investment on the customer side, Dan, that's an inhibitor to the decarbonization and that needs to be addressed.
And that's something that we Feel passionately about. We're working very closely with regulators, with government bodies, through industry bodies to make sure Those messages are kind of getting out there into the market. When you look at Countries that have been very proactive. So we talk about, why is EV fast charging really an attractive investment in Norway because the government Have incentivized the customer to buy EVs and EVs are on a parity with ICE vehicles. So Why wouldn't you buy an EV now if you're in the market in Norway because it's a very attractive proposition from a customer perspective.
That drives demand. That drives the investment cycle then to produce the product for the customer. Similarly, when you look at the Government approach to duty and to mandated blending requirements for bioproducts that drives the demand. It is and there's elements of the market. So when you get into segments of the market then in more rural areas with fuel poverty Customers, there's big challenges for governments and for societies in trying to deal with that.
And we have an important part to play In supporting that transition, so it's really something that we feel very strongly about. It goes right to the heart of our purpose. And you'll just see us talking more and more and more about it, Gerry, in terms of what we're doing. But like we're making really good progress. And You go from country to country, you look at what's happening in Scandinavia and the penetration that we have, what we're doing within the markets in Austria, where And oil to LPG has been a great example of it.
It started off where customers, it wasn't price, wasn't driving it. They wanted to reduce their carbon emissions. Not only then as we get greater scale, greater capability, not only can we reduce the carbon emissions, but we can actually save the money in the process of doing that. And that will happen With all the cleaner energy products, they'll become more affordable. And the more affordable they are, then the greater the penetration.
Thanks. Just one other, if I can, on the Healthcare side. Step out recently going to acquire burner in the German DAC region. In the near term, do you see just sort of bolt on type deals in those sort of jurisdictions as well as possibly where you currently have your base? Or do you see similar type opportunities They're basically along the same lines as Werner in other jurisdictions.
Yeah. No, absolutely, Gerry. And Werner is very important for us. We've been looking for a great opportunity to expand out the VASAL business into Continental Europe. If we could Pick the ideal market.
Germany is the ideal market. It's very large. It's very well funded. It's very fragmented in terms of the providers within the It's in Werner is in a real sweet spot for us because we have a leadership position in the UK in the primary care sector of the market. So This business actually that has grown through acquisition.
So the management team there have built that business by bolting on smaller Primary Care Businesses in the German market. So it came which is good. It came with A pipeline of bolt on opportunities as well, which we're actively supporting the management team on and hopefully Not just supporting them, but hopefully being able to accelerate some of that. It gives us well that platform. And We've often talked about this.
When you get into a market, you get a local management team on the ground within the market. That platform creates Further opportunities and I know that we'll be able to accelerate growth within the DACH region and indeed that in Continental Europe will help us accelerate the growth of our Health business throughout Continental Europe. So We feel really good about that acquisition. It is bang in that platform space.
Okay. Thanks, Tim.
Thanks, Jerry.
Thank you for your question. We have the next question from the line of Christopher Marbury from Bill Hunt. Please go ahead.
Good morning, Donald. And I have 3 questions, if I may. Looking at the organic growth in Fatau, was that largely due to the kind of growth in the PPE area being Stronger than the declines in procedural type stuff. And if that's the case, there is some sort of headwind this year from that. Secondly, in the statement you mentioned Some digital initiatives in Scandinavia and retail and oil, could you please elaborate on that?
And similarly, the restructuring of the French consumer gas business, you tell a bit more about that? Thank you.
Okay. Just on the organic piece of Vital, Chris. Yes, there was a benefit clearly from PPE and other COVID related products as Kevin talked about earlier. But there was a significant drag in terms of the normal elective procedures and activities that would happen Within the healthcare system. So, we were and you see this yourself, if you look at a lot of the producers Of medical devices and supplies that weren't COVID related or weren't respiratory related, it's been tough Because the healthcare systems have been haven't really focused on fighting the virus.
So, while PPE will drop off in volumes, Hopefully, we'll see the bounce back in the elective procedure. So Vital is an organic growth business. We expect it to continue to be an organic growth business going forward. And we don't see any changes in that. On the digital side, like there is
Yes. No, I was going to if you want, Chris, I mean, a lot of that is just about increasing the level of engagement we have with our customers. So a lot of it is about launching app and payment technology That is app enabled and can effectively provide the color with greater insights in terms of Pricing at the pump in terms of availability at the pump or at the charger. So ensuring that the customer knows that when they approach 1 of our fuel stations in Norway, for example, that the EV charger is free and can be utilized for them. We're exploring ways to which we can Improve that technology further to kind of allow people to book slots and things like that from an EV charging perspective.
We're looking at ways to Kind of automate some of the feedback we get from customers through kind of net promoter score type information from the customer, again, Through the digital technology that they have. And also, I think, proactively across the group, we're exploring digital opportunities to improve efficiency, Chris. We have in our trucking fees, for example, improving the quality of the onboard computing that we have, improving the telemetry that we have on our customer sites to let us know How their tank levels are such that we can improve the routing and efficiency of our fleets, All of which improves the experience for the customer, but also makes DCC a more efficient business. So the types of things that we're looking at, so really Improving the engagement with our customer, but also trying to drive greater efficiency and innovation across the group.
Yes. Like innovation, Chris, something you've heard us talk about many, many times. And We're investing behind us. We're investing in all the digital tools that Kevin has talked about. That's all about making us more efficient and Closer to our customers.
Your final question just on the B2C business in France. We had So one, our principal focus has been on the B2B segment of the market, the gas European business that we acquired. We had over the last number of years, we have been investing to grow into the B2C sector of the market and making good progress In terms of the customer acquisition and growing that business, we have decided to enter into a partnership with another party to accelerate that growth, but effectively from a de risking it from a DCC Or a booty gas perspective, leveraging the booty gas brand. So it's more repositioning of our B2C activities. Booty gas continues to sell B2C gas and electricity to our customers both in a more risk managed way, Which is just better from a returns perspective.
Thank you very much.
Thanks, Chris.
Thank you for your question. We don't have any other question at the moment.
Super. Great. Well, look, just to thank everyone for the time this morning and thank you and we leave you as I say with a message that PCC is in really good shape and we're very well positioned to continue our growth and development in this year,
That concludes the conference for today. Thank you for participating. You may all disconnect.