DCC PLC
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DCC PLC
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Okay. So good morning, everybody, and welcome to our results presentation today for the year ended 31 March 2023. We're delighted to be here, the DCC team in front of everybody in-person for the first time in -- well, since 2019 was the last time we did an in-person results announcement.
So for the last 3 years, we've been doing virtual presentations. This is a lot more engaging. So thank you to everybody who's come along today to be in the room. And obviously, welcome also to everybody who is joining us online today. We have quite a few people online.
I guess a lot has changed over DCC in the last 3 years, but a lot remains the same. And so I think what you'll hear today is a lot about the continued resilience of DCC and how we've continued to manage to grow and progress over the last 3 years, and in particular, again, in the most recent financial year ended.
You all know this already, but Donal, unfortunately is not with us here this morning. And so we send Donal our best wishes, and we very much look forward to having him back full time in the business in advance of our AGM in July.
So I'm Kevin Lucey, the CFO of DCC, and I'm joined here this morning by my 3 divisional colleagues. So Fabian Ziegler, CEO DCC Energy; Conor Costigan, CEO, DCC Healthcare; and Clive Fitzharris, CEO, DCC Technology. And I think most of you might know Conor Costigan, who's been here with us before. Fabian joined the group last year, a CEO, DCC Energy, and he'll introduce himself later on. And indeed Clive similarly has been with the group for quite some time, 13 years now, I think, 14 years and has done lots of senior roles around the group and stepped up to be CEO, DCC technology during the last financial year.
Obviously, today is all about results, but we are going to use the opportunity to talk about maybe a little bit of the longer-term picture in DCC. And also just to draw everyone's attention to the fact that this morning, we did launch a new website, which hopefully we'll provide people with good additional color and insight into the DCC business and what makes DCC a great place to work and indeed to invest in.
We have significantly refreshed our preliminary announcement this morning, and there's a lot of additional disclosure in there for investors and analysts. And again, hopefully, people will find that welcome. And then finally, in the appendix to our results presentation this morning. Again, you'll find an awful lot more transparency and disclosure about our business. And hopefully, again, that will make things easier for people to understand DCC.
So if I click on. Yes, I guess there's 3 sections to what we want to talk to you about this morning. Firstly, we will spend a good chunk of today talking about the highlights of FY '23 and indeed then delving into a little bit more detail of the performance during the year. Well then, if you will bear with us, take a little bit of a step up and out of the FY '23 performance to talk a little bit more about the medium-term picture in DCC and what we're trying to do at a group level and indeed, then what each of the 3 divisions are trying to do, and we'll talk a little bit about the growth platforms we have in the group. And then finally, we'll finish with outlook and a bit of a wrap up before we open to Q&A.
Okay. So let's begin with getting into FY '23. So I guess the first thing to say is, we're very pleased and happy to report that FY '23 was another year of very strong growth in DCC. I guess that strong financial performance again, demonstrates perhaps the benefit we get from the diversity we have in the group, demonstrates the resilience of DCC. We've made good progress on our development agenda over the course of the year. We'll talk a little bit about that in more detail. And indeed, it's been a good year again of strategic execution in terms of what we've been doing on the energy side and some of the capital we've deployed during the year, and we'll talk about that in more detail.
And again, we're very proud of the performance in terms of sustainability across the group during FY '23. And again, we'll talk a little bit more about that in some detail.
So firstly, say, from a financial performance perspective, operating profit -- adjusted operating profit up 11.3% to just about ₤656 million in the year, strong performance. The free cash flow generation of the group remains very strong. So with free cash flow conversion of 87% in the year. And again, keeping that progressive dividend approach that we've had over very, very many years in DCC with a 6.5% increase in our dividends.
I mentioned earlier that we believe it's been a good year from a strategic execution perspective. So we've made quite a bit of progress in our Energy division, and we've deployed ₤360 million of new capital into new platforms of growth for the group during the year. So I think the notable acquisition during the year, the largest one was the expansion of DCC Vital's medical device operations into Europe for the first time through the acquisition of Medi-Globe, but we completed 19 acquisitions over the course of the year and that ₤360 million spend.
And by number, a lot of them in the energy business, the largest one of those was the PVO solar distribution acquisition that we bought earlier this year. But we've deployed capital into at least 10 acquisitions over the course of the year that expand our capability in newer energy areas.
So again, we'll talk about some of the progress we're making in that later in the presentation.
And related to some of that capital allocation, particularly on the energy side, it's been a very good year for us from a sustainability perspective. So I think a notable feature of our results this morning is that our Scope 3 carbon emissions have reduced further by 5% over the course of the year. That's also contributed to the fact that our services and renewables profits in DCC Energy have grown from 22% of our profits to 28% of our profits over the course of the year. So again, you can see that, that drive for sustainability progress is manifesting itself also in increased profits for the group.
I think when we look at our own operations, which again is very, very important to us, we've had a very substantial reduction in the year in our Scope 1 and 2 carbon emissions, so over 9% reduction there. And we remain well on track to meet our 50% reduction target against our 2019 baseline by 2030. So again, good progress there. And finally, on the people front, be running engagement surveys across the group now for a number of years. And again, pleased to report that even on the people side, we managed to create opportunities for people, some of which you see in front of us, myself and Clive and others included who have grown their careers in DCC and we have improved our engagement scores again across the group, demonstrating that DCC remains a very good place to work.
So if we get into performance in a little bit more detail, we don't talk too much about revenue in DCC, but revenues were up very substantially over the course of the year, up 25%. And really, that was driven by the increased wholesale cost of energy products over the course of the year. So that is driven predominantly by DCC Energy and in DCC Energy predominantly by the fact that the higher wholesale cost of energies were reflected in our revenues. You don't see the same sort of growth in profits, because as you know, our energy business, the profits are not particularly correlated to the volume of energy -- or to the revenue that we produce, but more to the volumetric measurements.
Group adjusted operating profit, ₤655.7 million, up 11.3% and 7.8% constant currency. Adjusted EPS, 456.3p, up 6.1%, a little bit lower growth than on the group adjusted operating profit line, principally driven by a higher tax rate and higher funding costs over the course of the year. And again, we would see those continuing to be a modest headwind for us as we enter FY '24.
From a free cash flow perspective, very strong free cash flow generation in the year already talked about that, but over ₤570 million free cash flow generated or 87% conversion. From a dividend perspective, we're pleased to be proposing another increase in our dividend, our 29th year of consecutive dividend growth for DCC.
And then in talking about return on capital, return on capital remaining strong at 15.1%, reducing a little bit on the prior year, principally reflecting the very substantial acquisition spend we've had across the last 2 years. So we've deployed over ₤1 billion in the last 2 years, and that really is the primary driver of that. It's also impacted a little bit in the current year by organic headwinds in health care and technology.
From a net debt perspective, balance sheet remains very strong. So the ₤767 million of net debt that you see there reflects approximately 0.9x pro forma net debt to EBITDA. And if you were to look forward on an FY '24 basis, that would approximate to about 0.6 or 0.7x net debt EBITDA, assuming we weren't deploying capital on acquisitions, but we don't expect that to be the case. So that's it from a financial highlights perspective.
Just to talk a little bit about the divisional shape of the results over the course of the year. Obviously, as you can see, DCC Energy increased its profits by 12.4% and 10% constant currency. DCC Healthcare declined by 8.6% or 11.1% constant currency. DCC Technology is ₤106 million, an increase of almost 30% year-on-year and 20% constant currency.
In terms of the shape of the group, energy, similar to last year, reflecting about 70% of the profits of the group. And from a geographic perspective, again, the internationalization, I guess, of DCC continues. So many of you will have been following us for a long time and know that our heritage really has been here in the U.K. and in Ireland, but obviously, the greater diversity in the group, the amount of cash flow we now generate in Continental Europe and North America is really quite substantial. So you see Continental Europe representing approximately 40% of the group, U.K. and Ireland, approximately 1/3 and then the balance is 26%, principally in North America.
Okay. We look at each of the divisions now in a little bit more detail. So as you can see in the slide, we have had an excellent performance in DCC Energy over the course of the year. And really, that's been strong right across the division. So we've had good performances from our Energy Solutions business and also from our Energy Mobility business over the course of the year.
The organic profit growth at 8.3%, I think, again, was particularly strong in the year. We experienced pretty robust demand in what was a volatile environment. So notwithstanding the volumes are reduced modestly. That was, I guess, a little bit to be expected. Energy prices were very high during the year. And we had a lot of efforts, particularly in Continental Europe from governments to try and economize and reduce energy consumption over the course of the year, which is understandable.
But notwithstanding that, we saw good demand for our products, particularly on the lower carbon and renewable side of our business over the course of the year. And there was good demand across each of our regions. So we had good profit growth in North America, in the Nordics, in Continental Europe and in U.K. and Ireland, so I say, a pretty strong performance all around.
And similarly, on the mobility side, very strong performance from our fleet business, our digital, where we provide a lot of digital services to large fleets and also on the retail side, where in France and the U.K. in particular, we performed well.
I think one of the notable things that I referred to it already, is that you begin to see the strategy in action here that DCC has been investing quite significantly over the last number of years in growing the proportion of our profits that come from services and renewables in DCC Energy. So from a high single-digit percentage 4 or 5 years ago to now approximately 28% of our profits in the Energy business coming from products or services where we have effectively zero or very close to zero Scope 3 carbon emissions.
The acquisition activity over the course of the year supported some of that. So we have been deploying capital into this area, but it was also as a result of very good organic developments. And again, Fabian will talk a lot about that a little bit later. We completed a lot of acquisitions over the course of the year in DCC Energy. Many of them small, modest acquisitions bolting into our operations, but all of them adding new capability to DCC and particularly in the newer energy areas.
And then finally, and you'll hear more about this later on, but obviously, Fabian joined us over the course of the year. But we have established a new regionalized management structure. So quite a lot of new energy across our management team as we've kind of reorganized and repositioned the team to enable us to grow towards 2030 and Fabian, as I say, will talk about that a little later.
So in DCC Healthcare, obviously, after a couple of record years in DCC Healthcare, where we had exceptionally strong organic growth. Last year was a more challenging year for DCC Healthcare. But notwithstanding that, we continue to make good strategic progress and invested in the business to ensure that we're well positioned into the future.
Operating profit declined by 8.6% or 11% constant currency. And organically, that was down 18.7%, really driven by weak demand in DCC Health & Beauty Solutions, and I'll talk about that in a second.
In DCC Vital, trading was good and performed well in line with expectations, in fact, modestly ahead of our expectations. And that really reflected good performances from our Medical Devices business here in the U.K. and also our primary care business here in the U.K. and in Germany. The Medi-Globe acquisition, which we completed during the year continued to perform well. On the Health & Beauty side, we began the year 12 months ago, if we were standing here, we would have been talking about record levels of demand and a very strong order book. But over the course of the year, we saw that demand weaken as our customers began to try to reduce the amount of inventory that they had and indeed mirroring, I guess, what they were seeing from their customers in retail stores and consumers.
So we have had a period over the second half of the year, in particular, where there's been a large amount of destocking going on in the supply chain. And I guess, that has been reasonably painful for our business. However, I guess, the important point is that we haven't reduced our capacity in any way in this business because we believe it's a fantastic long-term growth opportunity and Conor, again, will talk about that a little bit later on.
We did see that destocking in Europe and in North America. I guess the one bright spot for us through that period was that our effervescent business in the U.S., in particular, performed -- continue to perform very well. So we remain very confident about the outlook for DCC Healthcare and indeed for our DCC Health & Beauty business.
And as we think about FY '24, certainly, our DCC Vital business, we continue to expect will perform well and grow strongly over the course of the year. And on the Health & Beauty side, we do see a recent tick up in our order books. And we do expect that as we enter the second half of the year, the destocking will largely have washed its way out. And so by the time we get to H2, we'd certainly expect to be back in growth mode in DCC Health & Beauty Solutions.
Okay. So on DCC Technology, which was our strongest growth over the course of the year by growing nearly 30%. All of that growth was driven by the acquisition of Almo, and pleasingly to say that the Almo in the second half was very much in line with expectations. And so operating profit of ₤106 million and 30% profit growth were very much in line with what we had been thinking about at the November stage when we were talking to you all.
Operating profits organically declined by 16.9%, really driven by weak demand on the consumer side of our business. So we saw in Europe, and a little bit in North America that the consumer was weaker and consumer expenditure into technology was softer than it had been in the prior couple of years.
Demand for B2B products over the course of the year was pretty robust. And certainly, we continue to see good demand for our Pro solutions, our Pro Tech technologies that we distribute in North America and in Europe.
Our U.K. business performed better this year and grew strongly. And again, in Ireland, actually, we had another year of good strong performance. So as we think about FY '24 in technology, again, I think the market will remain pretty difficult on the consumer side. I think on the B2B side, we'd be reasonably cautious. However, we do think we can grow our profits again in technology organically in FY '24, business is well positioned. We've invested significantly in the division over recent years. And therefore, we think there's plenty we can do to grow our profits next year.
So when you pull all that together and look at it at a group level, obviously, you'll see on the left-hand side of the waterfall that we have grown the profits, as I mentioned earlier, 11%. Constant currency or the FX translation impact of that, if you like, was a tailwind for us in the year of 3.5%, reversing what was a headwind in the prior year. So we had had a strong headwind from currency in the prior year. So you really just see the weakening of sterling over the course of the year there.
From an M&A perspective, M&A added 7.6% to our reported growth over the course of the year, principally the acquisition of Almo in DCC Technology. And organically, 0.2% organic growth over the course of the year, driven obviously by the organic growth in DCC Energy, that 0.2% is in the context of a very strong organic performance in the prior year when organically profits were up 6.1%.
And obviously, also is in the context of an 8% increase in our cost base across the group this year on a like-for-like basis or ₤130 million of increase, if you like, in our cost base over the course of the year like-for-like. So we're pleased with that performance.
From a free cash flow perspective, you can see that, obviously, we converted 87% of our operating profit into free cash flow. And you'll see that we continue to invest really in the CapEx -- on the CapEx line. So CapEx in excess of depreciation being the material move working capital was not a material component of the cash flow in the year. And again, there's investment going into DCC right around the group principally in the year in the energy side, where we've been building new capability throughout the year in the Energy business and 1 or 2 material investments like our LPG storage facility here in the U.K. in Avonmouth, and also on the Health & Beauty side, indeed, I mentioned that earlier, where we continue to invest in our capability across gummy formats and expanding our capacity, setting us up well for growth in the future.
I mentioned earlier as well how we've progressed quite a bit from -- over the period of those virtual presentations in the last 3 years. So in FY '20, the profits of DCC were ₤494 million. And today, 3 years later, there's ₤656 million. And obviously, that DCC ₤656 million from an EBITDA perspective, cumulatively over the course of those 3 years is about ₤2.2 billion. So that really substantial cash generation in DCC has enabled us to deploy about ₤2.4 billion in capital over the course of the 3 years.
Those of you who know us well, again, we'll recognize the right-hand side of the chart here is being really how we set out our capital priorities in terms of investment in DCC. So always investing in making sure that we have well-positioned businesses, well-invested businesses, providing us with organic growth opportunities. So the ₤500 million in CapEx over the course of the 3 years is in excess of a depreciation amount of about ₤400 million. So again, investing in our capability there.
We maintain some agility in terms of how we think about these capital priorities, like a lot of what we do in DCC. And presently, we are investing maybe a little bit more than we have 4 or 5 years ago in the organic development of the group. And that reflects the opportunity that we see, particularly on the energy side and on the healthcare side to add new capability and hopefully take a little bit of share.
Over the course of the year, again, 3 years, we've deployed substantial amounts of capital and M&A. And I guess that's been ever with us in DCC really, but we do believe we have a differentiated M&A capability in the group. It stems right the way back to the heritage of the group in 1976 when it was founded. And you know that when we went public in 1994 to today, we've completed about 400 acquisitions. We've also made -- used that capability occasionally for divestment purposes. And so we really do feel we continue to have a really strong engine from a capital allocation perspective, but also capability to invest -- that has been a driver of approximately 6% to 8% profit growth for DCC over the last decade, and we continue to see that opportunity of being available to DCC into the future.
And finally, we've returned just about ₤500 million to investors over the course of that 3 years, and that remains something that DCC believes is, continues to be the right way in terms of capital framework, how we set out sharing our returns with our shareholder base.
The progressive dividend was again in evidence this morning. So you'll see the continued increase in dividends. And we do understand that we have the optionality. We have the lever of increasing returns to shareholders, if we were not convinced that there wasn't the opportunity in the organic development of the business and particularly on the M&A capability side. So continue to believe that there's very strong opportunities for us to deploy capital across our 2 priority areas from an investment in the business perspective of organically and M&A.
Okay. So we are -- I mentioned this at the start, we are going to just take a little pause from the FY '23 performance to talk a little bit more into the future in DCC. And what it is we're trying to do as a group -- and there's obviously different lenses to look at that through. So there's the group lens, clearly. And then there's each of the 3 divisional lenses, which the guys will articulate and talk about in a minute.
I guess at recent market events, everybody knows that I think we have an ambition in DCC to double our profits by 2030 and make the group substantially larger, more cash generative than it is today. And actually, Fabian will talk a little bit about the ambition of the DCC Energy business in that context of doubling the profits by 2030 that the group has.
I think in DCC, we really focus on owning and operating great businesses and trying to manage them well and really embedding that culture of entrepreneurship and innovation that we believe pervades the group. And we spend a lot of time when we bring new businesses into the group, encouraging them to follow that DCC mindset, if you like.
Those businesses, if we buy the right ones and we execute well and manage them well, they tend to produce really strong cash flow. And that cash flow gives us the license to invest and reinvest those cash flows where we see fit. And where we really believe we have really strong future growth potential. And that always remains the lens we look at when we think forward about DCC, where do we see the potential. If we don't see potential in our current business or indeed in things we're looking at, we won't invest behind them. And indeed, over the course of DCC's history, it has divested of many things that didn't quite fit that future focus.
And so we continue to run the group that way. We think about the future. We look for future potential. And the lens in DCC, the lever we look at and the lens we look through is how -- where is the identifiable need and the sustainable growth potential within businesses we look at. So I guess we talk a lot about in DCC about sustainable cash-generative businesses producing very strong returns on capital. That's what we look for, but always looking forward and identifying that future growth potential.
And that need, if you like, tends to lend itself to businesses where we believe they're providing essential parts of what the world needs that brings us on a little bit to -- when we think about what the world needs presently and into the future, there's no doubt that we have a great position in 3 transformative sectors. So things that are right at the heart of a progressive world, and there's a niche link between how we think about investment opportunity and our purpose in DCC, which is to enable people and businesses to grow and progress.
So as we think about investing and as we think about those 3 transformative sectors, we know that there is a real need for progress in the energy market, where there is a necessity to be able to provide cleaner energy for everyone. And if we execute well in DCC, we will contribute to a cleaner world. Similarly, in healthcare, and Conor will talk about this, how we see the world's necessity for people to live healthier -- to live longer and healthier lives.
And in technology, we believe the technology we can bring to market will help make a more progressive world of reality. So with that little introduction, I'm going to hand over to each of my 3 colleagues who are going to talk to you a little bit about their growth potential within their growth -- within their sectors.
So Fabian, over to you.
Thank you. Thanks so much. Good morning. It's Fabian. I'm delighted to be here. It's a first for me. And it's for me now 6 months that I'm heading DCC Energy. And I just want to briefly say, I know DCC since 2009, and I joined this company because I think it's a great company, and I'm deeply convinced it has all it takes to be a true energy transition winner.
I'm, of course, deeply impressed with the financial delivery of my division this year, the resilience and very excited by what we have done for our customers and even more excited by what I'm deeply convinced we can become a very special energy company.
Three things, ladies and gentlemen, I would like to talk about: first, I would like to introduce our ambition to double our profits and become a recognized carbon leader by 2030. Then secondly, I will try to lay out our 2-pillar approach how we get there. We de-fossilize our carbon intense business becoming a bio leader. And secondly, we established a decentralized electron-based energy management business. And number three, I would like to demonstrate that we are not starting this journey from scratch like many of the big producers.
Now I need to hit the right button. So over the past 6 months, we have built on and sharpened our leading this energy strategy, which we published exactly 1 year ago. Through this sharpened focus, we position ourselves as a decentralized energy company, deeply passionate about our customers that typically are served not by the central energy systems, and we are leading them through their energy transition.
The world needs cleaner energy for everyone and our strategy is geared to delivering this outcome. Energy is clearly a challenging category in today's world, the energy trilemma affordability, availability and cleanliness is difficult for our customers. But this, at the same time, constitute a very positive context for DCC Energy's competitiveness. We are relatively product agnostic. We have very loyal customers and a strong trust in our brands. We truly believe in being the best customer company in energy. We will service our customers exceedingly well, aimed to offer all customers and energy transition solution and act as a net-zero partner in an increasingly decentralized energy system.
From liquids, start locally, to electrons produced and consumed directly at site, our customers become both producers and consumers in nowadays language pursue most. Our strategy contains a detailed growth plan to 2030, while embracing a strong intent to be a recognized carbon leader in our industry. Given the progress we have seen over the last 12 months, we have confidence in our ability to greatly exceed the Scope 3 reduction indicated in leading with energy. Under our plan, we will at least double our profits. This leads to a growth rate of 10.4%, which is in line with DCC Energy's historic growth over the last 5 years of 10.2%. And this is driven by exposure to growth segments of the energy market and of course, our acquisition ambition. There are 2 synergistic growth passes that entail quite different mechanics, but they are connected through our customer orientation.
Firstly, we will reduce the carbon intensity of our fossil core business becoming Europe's leading bio marketer. We view this as change from inside the [car,] this will add around ₤200 million EBIT. And in true DCC fashion, this will be a mix of organic and acquisition development. We build on our success with HVO, Hydrotreated Vegetable Oil, a very profitable, highly differentiated product aiming to be 10% of the HVO market in Europe. This is underpinned by partnerships with the large producers.
Then we keep growing LPG, namely in the U.S., LPG accounts for 50% of our profits but only 15% of our carbon. LPG has the highest profit to carbon ratio of our fossil fuels, and it is around 20% lower carbon than traditional fossil products. We work to position LPG as a highly needed transition fuel for hard-to-serve customer segments.
We deepen our involvement in incubating the production of renewable versions of LPG, seeing a path to 15% renewable content by 2030. We will transition our fossil fuel customers consequently to renewable solutions. And gradually, we will cut some carbon intense activities with lower margin exposure. Also, we have detailed out a mobility strategy to keep it short with 3 components, highly selective EV investments for the top end of our network, we have almost 100 EV enabled sites.
Second, our more rural networks will act as a cash engine. And thirdly, we will then consequently grow in our digital fleet customer formats like Fuel Card services and SNAP. This defossilization pillar we complement with our second growth path, which is building a leading electron-based energy management business.
We regard solar as an ideal first platform, leveraging classic DCC strengths as a consolidator of fragmented markets. Solar plays a big role in any national energy strategy and growth is very strong for long years to come. We can apply our disciplined operations mindset and our decentralized energy distribution capability. We target market leadership across Europe and then in North America.
We will acquire solar installation capability as this is currently the biggest bottleneck. Then we complement it with more central brand management, central procurement of equipment and technology. Our new PVO company is really excellent at this, and we are building digital business models. The design is Solar as a Service, including elements like financing, maintenance, performance management and energy procurement formats. So to steadily increase the proportion of recurring revenues in this space.
Our success in France gives us confidence in this move. This will become a ₤300 million energy management business led by solar, and we rounded out with the locally most suitable propositions such as energy efficiency services, heat pumps or other solutions. This will be a lot about acquisitions enriched with own capability building.
We redirect our exposure to fast-growing segments in energy, and we grow our income per customer. In combination, the 2 pillars will make us a holistic energy services company by 2030 with a sharply reduced carbon footprint and 50% or more income from renewables.
Geography-wise, focus will be on Europe and the U.S., where the regulatory frameworks almost compete with one another for more favorable conditions around renewables. We will invest in our capabilities with the core theme around electrons and carbon. We will constantly improve the quality of our portfolio, especially looking at it from a carbon yield perspective.
We sense a very strong customer pull for this direction. We build on our differentiated positioning as a special energy company following our customer motto, cleaner energy in your power. We aim to give our customers control over energy with a very decentral offer, again, from storage in tanks to production at site and making cleaner energy, much more accessible and affordable. We drive decarbonization not only because it's the right thing, but namely because it is a unique commercial opportunity for a customer company like us.
We worked through a leading carbon reduction story, aiming for leading market practice, our expertise around advising customers and having a multi-energy offer is increasing by the day. In our 2030 plan, we target 50% more customers and equally 50% more margin per customer, both we think is conservative. And the good news is, it's working already. In the carbon intensity reduction sphere, we are making good progress all along the value chain. We just announced a partnership with Oberon to incubate production of clean LPG.
In our own operations, our third half lead in Ireland, we put 100 trucks on HVO. And we landed large supply agreements with key customers like Amazon Web Services, Björneborg Steel in Sweden or Sisk Construction. And important to note, Bio is one of the most affordable passes to lower carbon. Through acquisitions and building own capability, we also broaden out our energy offer. We completed 526 solar installations in France with a total installed capacity of 61-megawatt hours. Bureau Vallée is a French [indiscernible] customer, and they also pioneers in corporate power purchase agreements for renewable energy, matching our corporate customers like Britvic or waving directly with wind farms in the area. This creates even more longevity in our customer relationships. We talk about customer for life, and we grow margins per customer.
Our model is truly customer-led and not dependent on pushing the supply of products we happen to have. I was pushing the wrong button.
So last piece from me. And this chart pictures some of the facts that give us the greatest confidence in our strategy. Since leading with energy, we track the metric SRO, the percentage of operating profit from services, renewable and other income with zero or close to zero emissions. As you can see, firstly, our SRO proportion has grown from 22% to 28%, and this is highly relevant. We are not starting a decarbonization journey from SRO, we have done a good proportion of the journey already and it works.
Further, you see on this chart our renewable acquisitions over the last months. I just list out a few PVO, a leading European supply chain company, procuring panels, inverters, batteries and other equipment. It's very profitable and growing. And importantly, it gives us insights across the whole solar market in Europe.
In France, we have just completed O'SiToiT, our fourth acquisition, making us a leading player in B2B, demonstrating our ability to roll up and build energy management businesses starting with solar. And in the last few weeks, we acquired AEI, the #2 player in Irish solar and Hafod in the U.K. Our existing Energy division delivers high returns. But so is our growing newer business. You can see the high road at time of acquisition and where it is today.
The key point is that they are in line with this year's overall [ROCE] of 19% after a tremendous performance for DCC Energy. So we are confident our renewable investments will be as or more profitable than fossil ones, and we continue to focus on high returning businesses. We see tons of opportunity to craft highly profitable energy solution business models for our customers. And therefore, we have the highest confidence in our double profit ambition acting as a true carbon leader.
And with this, I hand over to Conor.
Okay. So good morning, everyone. I think I know most people in the room, but for those of you who I haven't met, my name is Conor Costigan, with DCC over 20 years, and I've been leading the healthcare business for -- since 2016 -- 2006. So as Kevin said, it's great to be back here in-person. And I suppose to update you on what's been happening in DCC, and we've made a lot of progress over the last 3 years. In fact, over the last 5 years, we have significantly internationalized the DCC Healthcare division in the U.S. and Europe. And we believe we're never -- we've never been as well positioned for growth in the future.
Our vision for DCC Healthcare is to enable people to lead healthier lives throughout their lives. This vision leverages 2 megatrends in the world today. People are living longer, and that's driving demand for healthcare products and services. And consumers are increasingly focused on their own health and well-being, and that's driving demand for self-care products.
DCC Vital, our patient health business supports healthcare providers to improve patient outcomes by providing high-quality medical and diagnostic products for use in hospitals, primary care and other fragmented healthcare settings. DCC Health & Beauty Solutions, which is our consumer health-focused business develops and manufactures health supplements and beauty products for brand owners in this long-term growth market. Through our services, we help consumers to maintain and improve their health and well-being and enable them to lead healthier lives every day.
In addition to these megatrends, DCC Healthcare markets are also underpinned by other strong macro trends, large healthcare providers and consumer healthcare brand owners are looking to strong commercial partners to help them to innovate, to support their growth objectives and to generate efficiencies. And we're also seeing increasing regulation across all of our markets, which favors well-invested, well-resourced businesses and DCC Healthcare is well positioned to benefit from all of these trends.
We've done a lot of work on building exciting growth platforms over the last 3 years. And we believe in our med devices activities, our primary care and health and beauty contract manufacturing activities, we have 3 exciting growth platforms.
In DCC Vital, we've deployed over ₤300 million over the last 2 years in Continental Europe through the acquisitions of Medi-Globe and Wörner, significantly enhancing our growth platforms in med devices and primary care. In med devices, we focus on mid-tech single-use devices for use in minimally invasive diagnostic and surgical procedures in hospitals. And following the significant acquisition of Medi-Globe, our largest acquisition to date, we now have a strong commercial presence in medical devices in 3 of the big 5 European markets, together with developing positions in other European markets and indeed in international markets such as Asia Pacific and South America.
We have enhanced product development capability, enhanced manufacturing and regulatory capability. And combining our existing activities with Medi-Globe is creating new growth opportunities in med devices. In primary care, following the acquisition of Wörner, we now have leading positions in Britain, Germany and Switzerland. Across Europe, at primary care, the landscape in primary care is very fragmented, and customer interactions are increasingly evolving towards e-commerce.
And DCC Vital is one of the few players with the scale and financial strength to play a leading role in the consolidation and digitization of the primary care sector in Europe. Our third growth platform is in the contract manufacturing of Health & Beauty products, especially in health supplements. And as you will have heard earlier from Kevin and I've seen in our results over the last 3 years, we have come through an unusual period with where demand patterns have been unusual.
However, the fundamental drivers of this market are unchanged and health supplements, we believe, will continue to be a long-term growth market. Over recent months, we're seeing renewed interest in innovation from our brand owner customers, and our strength in innovation is a key factor in how we attract customers and how we build long-term partnership relationships.
We continue to pursue acquisition opportunities in contract manufacturing of nutritional supplements, particularly in the U.S. And at the same time, we're investing in our existing manufacturing facilities to enhance capacity and capability. We've got 2 material live projects ongoing at the minute. We're adding nutritional gummy manufacturing capability at our Florida facility, and gummies over the last 10 years has been the fastest-growing form factor in nutritional supplements.
And in our Minnesota facility, the Amerilab business we're investing to significantly expand our capacity in effervescent products to support the growth of customers such as Nestle Health Science and [Helium].
So to wrap up, I want to leave you with 3 key messages. We operate in DCC Healthcare in long-term growth markets, typically growing at 4% to 6% historically and projected to grow at similar rates in the future. We have consistently outperformed those growth rates. Over the last 10 years, DCC Healthcare has grown its reported profits by 15% CAGR per annum. And more than half of that was organic. And we have 3 exciting international growth platforms. Putting all of that together, we believe we've never been as well positioned to deliver strong growth over the next 10 years. Thank you. I hand over to Clive.
Thank you very much, Conor, and good morning to you all. I'm Clive Fitzharris, CEO of DCC Technology. I've been in DCC for 14 years, 8 years within energy. I think my first year, actually, I had many good times with Fabian as we were buying our business in Denmark. I've also been in group roles as Head of Group Strategy and M&A. And for the past 3 years, I've been focused on the growth and development of our technology businesses.
Technology has a central role in improving the world and our lives. Our vision is to bring progressive technologies that enable these enhanced outcomes. Our ambition is to have the leading specialist distributors in our chosen markets. We've articulated our division in a little bit of a different way for you today. We have 3 platform segments that we operate in: Pro Tech, Info Tech and Life Tech. Pro Tech comprises our pro audio, AV, enterprise and related businesses in North America and in Europe. These businesses are focused on specialist solutions to installers and integrators, selling products that are medium to high margin that reflect the service capability and technical competency that we provide to our customers.
Info Tech comprises our information and consumer technology distribution businesses in the U.K., Ireland, Continental Europe and the Middle East. These businesses focus on retailers, e-tailers, B2B resellers and IT integrators with high-volume, low-margin products delivered at speed. Life Tech comprises our North American specialisms within Jam and Almo distributing high-quality products that enhance modern lifestyles, products such as prosumer audio, musical instruments, high-quality appliances and home comfort technologies.
Superior gross margins are generated here with a focus on high services to specialist retailers and e-tailers together with a wide range of own brand and exclusive brand product offerings. In line with our ambition to be the leading specialist distributor in our chosen markets, we're currently #1 globally in AV specialist distribution. We're #1 in North America in pro audio distribution and also #1 in North America in lifestyle technology distribution of appliances and musical instruments.
Technology is a 3% to 5% organic growth market, and our platforms are positioned to grow above this level. Our division has more than doubled profits in the last 5 years, and we've added 4 percentage points to gross margins. This demonstrates the changing mix towards higher value-added platforms in Protech and in Lifetech.
The U.K. business has -- is transitioning through recent operational and market headwinds and is now in strong recovery. Outside of the U.K., if we look at our organic growth elsewhere, it has been in double-digit percentages per annum over the same period. Strategically, we are focused on the organic and acquisitive growth of Protech and Lifetech business, which leverages the leading market positions and capabilities of those platforms. We're also focused on optimizing the Infotech business in the U.K. and Europe after the operational challenges in the U.K. and more recently, the market headwinds post-COVID in Europe.
We have an extensive and granular improvement plan and execution in the U.K. And this leverages the digital investments that we've made in recent years and provides considerable opportunity for improved returns and profits for the division. Following the underperformance in Almo's fulfillment division in half 1 of last year, we've invested in new e-commerce leadership and talent, supported by leading digital tools and systems. We target material improvement in returns and operating profit in the medium term.
And to conclude, I'd like to highlight 3 key takeaways. The first technology distribution is a growth industry, enabling all of our futures. And we see above-market growth for our 3 platforms as we've delivered in recent years. We have clear near-term priorities in execution in the U.K. and Almo's fulfillment e-commerce business. And we also have capital deployment opportunities within Protech and Lifetech.
Thank you all, and back to Kevin.
Great. Thank you, everybody, and thanks for bearing with us. So we'll finish quickly here before opening it to Q&A. So just to touch briefly on our outlook statement for FY '24. So notwithstanding the uncertain economic environment, DCC expects that the year ending 31 March 2024 will be another year of operating profit growth and continued development activity.
Before I get to summary, I just would really like to thank everybody around our group for the excellent performance in FY '23. And we're in great shape to continue to perform into FY '24. Hopefully, what you've heard today is that in FY '23, DCC delivered another very strong performance financially and delivered against our sustainability targets.
We completed ₤360 million of value-creating acquisitions for DCC, things that improve our business today and give us growth today, but also provide us like PVO that Fabian mentioned and like the Medi-Globe acquisition that Conor mentioned, provide us with real growth platforms for the future. I think we've been executing very well against our strategic objectives across the divisions, particularly in DCC Energy, where I think you'll have heard quite a bit of new granular detail today. And we remain very focused on the future. And that investment lens that we talked about earlier is part of the secret sauce of DCC and deploying capital in line with our priorities, and we'd expect to continue that through FY '24.
So thanks for bearing with us, and I think we'll open up now to Q&A. So I know we've got some mics in the room. And if everybody could raise their hand when they've got a question. And if you wouldn't mind, just for the benefit of everybody online, maybe you'd introduce yourself and the institution that you're representing today.
So Rory, you're first in my eye line here. So why don't you get us going?
It's Rory McKenzie from UBS. Just a couple first on the FY '23 performance. Within Energy, I think the division in gross profit per liter was up a very high 18% year-over-year. Can you say how much of that was like-for-like compared to mix? I know there's so much changing in that division at the moment. But within that like-for-like expansion, does some of that benefit from the, I guess, lag effect of price increases that you see. And so should we expect that to unwind into FY '24?
And then on the declines in tech and healthcare. Health & Beauty, I think, was down 25% to 30% organically and tech minus 18%. Is that just operating leverage on the lower volumes that you've seen? Or have you taken any pressure on gross margins as well in what's been quite a challenging price market? Is this, therefore, about waiting for volumes to recover? Or maybe Clive and Conor could talk about in more detail our plans to either reduce the cost base or the product -- or change the product mix to get back to returns targets?
Okay, Rory. Thank you for those questions. And maybe I'll have a go with the energy piece and Fabian, I'll ask you maybe to comment, but just I guess, right around our business, Rory, and it applies to each of the 3 divisions, actually. I mean there's no doubt that we've been through a reasonably unusual inflationary periods. So our like-for-like costs in the group are up 8% year-over-year. So I guess the imperative on us to either be recovering that through efficiency measures or indeed passing those costs through to the market, Rory, is part of normal distribution activity.
So on the energy side, we obviously had significant cost increases which had to be passed through into the market. And similarly, when it comes to the changing mix of the business, you know Rory that a lot of the services and renewables that we're providing are higher-margin products for DCC. So there isn't a substantial appreciation on like-for-like margins, particularly at a product level, but actually the changing mix of the division towards services and renewables produces better returns. And I don't know, if Fabian, if you'd like to add any color to that.
But I mean, from a like-for-like margin perspective, we've small increases, but really to recover the overhead inflation that we see. But the mix part, Fabian, I think as we move strategy forward, we expect that to be margin enhancing.
I would strengthen that and I believe there's an impact, more LPG, less fuel, and we make more profit per liter of LPG than fuel. So there's sort of this macro picture in the mix.
The other piece is we push in particular, bio products, and they have had the minute really, really nice margins. We spoke about HVO and sort of the equivalents in LPG. And I do believe this trend of strength in unit margin, you will keep seeing as we sort of deploy this strategy. There is an element of stock gains and stock losses. I don't have the exact numbers at hand, so I wouldn't speculate about it. But I think this sort of rounds of the story.
Yes. Yes. And always when the product price is variable, Rory, we can go through periods where stock and tank is more valuable or less valuable, pretty much washes out through the period actually. So we had a fall in products in H2 and a rise in product price in H1. So year-on-year, that wouldn't be a significant contributor.
I think on the other 2 divisions, and again, I'll ask each of the guys to comment Rory, but again, I suppose that same macro picture applies, which is we have had cost pressure. I think every business has experienced that. And in both tech and in healthcare, we have organic revenue declines, okay? So we haven't sought to significantly reduce our capacity, particularly in the healthcare side. There's been a little bit I think on the technology, guys, Clive and his team have done a great job of managing the cost base there. But we haven't -- with a couple of exceptions in the technology piece, haven't gone wholeheartedly after the cost base, if you like.
I think there's more of a lead and lag from a cost price pass-through on the Health & Beauty operations within our healthcare business, and that is a feature. It tends to reflect itself reasonably quickly, but it can be months and quarters rather than next week before we get price increases through to our customers, it's contracted. So I don't know, Conor, if you want to add any color or Clive similarly?
I think it's primarily a volume story, delevering story but as Kevin says, there is some lag. There are contractual situations which need to wash through. And we have flex direct labor costs. But obviously, as we've been expanding capacity over the last number of years, we have been adding to our fixed cost base. So I think we -- coming into the new year, we have -- our price increases are through across the piece. So we're in reasonable shape for volume uptick when it comes.
It's a same story in technology. It's operational leverage. It's weaker demand. And as that progressed through the year and overstock within the industry and overstock within our business and we wouldn't discount into that sort of weak market. We've gotten our inventory into a good place at the year-end. So it's principally an operational leverage story.
Okay. Why don't you pass to Oscar, he besides you there?
It's Oscar Val Mas from JPMorgan. I have 3 questions. So the first one on technology. I guess you've talked about technology, you expect profit growth. Could you give us a sense of the phasing H1, H2 and what you're seeing in terms of B2B demand so far in the early months of 2024? The second question is just on M&A. Could you comment on multiples. Have you seen multiples come down? And then which end markets are we still prioritizing? Are we still looking across the group? Are there any areas that you think M&A will be easier going forward?
And then the final question was going back on cost inflation. You saw 8% this year. Could you give us a sense of what you're seeing in terms of cost inflation around drivers or technicians?
Sure. Sure. Thanks, Oscar. On tech, Clive, maybe ask you to comment on the B2B side of it. And from a phasing perspective, Oscar, we would expect that the organic. We would expect to be growing profits organically in tech this year, mostly -- not necessarily because the market is going to provide us with a dramatic headwind or anything like that, it's actually more to do with the fact that we believe we can continue to execute strongly and phasing, therefore, we would expect maybe to be a little bit better towards the second half than in the first half of the year.
Clive, do you want to talk about kind of where you see B2B demand right now?
Yes. So B2B, very strong pro through last year and strong into the year-end into March, opened weaker in April but recovering well in May. We had similar -- we saw something similar early autumn last year as well. So I think as Kevin said, we'd be cautious about the year ahead. It's a difficult macro environment, but with strong momentum out of last year, so planning for that to continue.
Yes. So I don't think the market is going to give us a hold out, Oscar, but I think we've got more than enough opportunities to go after. I think on the M&A side, I mean, we kind of talked a little bit about this earlier. We remain very excited by the growth platforms we have within our group and our capability to bring new opportunities into those growth platforms. So from a DCC plc perspective, certainly, as we think about the 3 divisional sets that we have, we've got lots of opportunity there. In terms of multiples, I think the private M&A market, which is where we play, there's no doubt that the rising cost of capital environment doesn't get reflected the same way it does on a public market. And I think that kind of negotiation periods and talking to vendors about the value of their business is perhaps taking a little longer than it would have 12 or 18 months ago, Oscar. So there's a little bit of a readjustment period, but pipeline remains very interesting right now.
I think, like I said, we have -- we're trying to hunt for fair value, and therefore, that will always take maybe a little bit more time than in a market like this where it's a bit quieter. And there's no doubt that credit conditions are maybe not quite what they were 12 or 18 months ago, similarly. So I think the competitive landscape might be, as we think forward over the next 12 to 18 months, we'd be the optimistic about the opportunity in DCC to continue to deploy capital. I think geographically, it's pretty straightforward for us that Europe and North America are our core markets, and that's where we'd be looking to deploy capital. And I think each of the guys have kind of articulated that they have growth platform opportunities across each of the divisions.
So I wouldn't think that there's any one particular call out, but each of the divisions has an opportunity to deploy capital. And then final piece was just on kind of look forward at a cost environment right now. And I think we're definitely beginning to see an ease in some of those cost caption. So the ones that are typically quicker to react are things like freight, transport, where they're so correlated to energy pricing and as energy pricing falls, maybe there's a little bit of pressure comes out. The labor cost continues to be a challenge. Labor availability is a little bit better than where it was 12 months ago, maybe, but it's still hard to get good people.
So as we look forward, I think we see an abatement in that sort of 8% cost environment, but wouldn't be expecting for it to be dramatically lower. So maybe a couple of percentage points lower into FY '24 around the 5% to 6% level is kind of where we kind of feel cost inflation is right now in our business. And obviously, we're doing our best to manage that carefully, so.
Chris, we'll go along the row.
Chris Bamberry, Peel Hunt. I was just wondering if you could give us a breakdown on the profit growth in services renewables between organic and inorganic. Secondly, Fabian, you mentioned about, I think, by 2030, increasing, was it profit per customer by 50%. Is that primarily due to mix? Or are there some other elements within that? And finally, Conor, you mentioned that you were one of the few people well placed in Vital for that move to e-commerce. Could you just elaborate on that, please?
Okay. So thanks, Chris, for your questions. On the service, I'll take the services and renewables. Maybe, Fabian, you talk a little bit about the kind of the customer focus in the energy business. And then Conor will answer the final piece. I guess on the service and renewables piece, Chris, as ever with us, it's a bit of -- it's a mix of organic and acquisition growth over the course of the year.
So you'll know that the acquisition of PVO, for example, goes straight into that services and renewables box as there's a lot of the other capital we've deployed during the year. Now the capital hasn't been massive, right? So in fact, the mix is about 2/3 organic, 1/3 M&A over the course of the year. But that -- a lot of the organic growth, if you like, is that we're getting increasing momentum around the bio initiatives that we have around the group, the solar businesses that we brought into the group 2, 3 years ago are growing strongly, okay?
So we did call out and if you think back to -- it's a little while ago now our capital allocation priorities and the growth rates we set out in each of the markets, we did say at the time that we did see in the services and renewables area, maybe a 5% plus growth rate in our -- in those markets or that opportunity. And I think that's what the guys are delivering in the energy team right now. So that's been the mix there. Do you want to talk a little bit about the customer, Fabian?
Yes, with pleasure. So at the minute, we have 9.5 million customers. It's obviously a bit of a mixed bag, mobility customer, stationery customers, and we calculate it through the whole 2030 ambition, doubling profits also with customer modeling.
And we see, in principle, 2 things, and it's interesting, solar entrepreneurs are excited to join us because they see phenomenal cross-selling opportunities with our existing customer base. And sort of -- this sort of take your customer on the journey. It often looks like it starts with a conventional fuel. You put bio into it. You then complement it with the solar installation, you can make it more holistic. You can complement it with a heat pump. And the fossil it doesn't go away immediately. I see this with my own house with a solar installation, you keep needing fossil energy.
But as you take your customer on this journey, you can simply make more money per customer. And we have detailed this out quite a bit. And we also keep thinking that there's organic customer growth to be had. So to add 50% to our 9.5 million customers, we believe is eminently doable.
Conor, do you want to talk about the digital opportunity maybe?
Yes. Yes. So we, as you all know, we have a leadership position in GP supplies in the British market. And we've been investing significantly in that business over recent years to really move to a true omnichannel approach with heavy e-commerce content. And so it's one of the kind of revelations as we began to look at the German market, and I think this got exposed kind of generally through COVID is the lack of digitization in the German economy generally, but particularly also in primary care.
So we still got faxed orders in Germany, which is seems incredible. So that is evolving at the pace of that evolution will pick up and leveraging our learnings and expertise from our British position. We are in a very strong position to really be at the forefront of that digitization in Germany and on into other markets as we make further acquisitions.
Thanks, Chris, for that. David?
It's David Brockton from Numis. Can I ask 2 on technology, please. Firstly, going back to Almo, I just wonder if you can just touch on given the issues that you had in terms of fulfillment, et cetera, last year. Can you just kind of confirm that cycle aside, you feel you've resolved all of the issues in terms of search optimization, excess inventory as sort of wash through that. That's the first one.
And then the second one on technology as well. I think you touched on how B2B has sort of started weak in April and improved. I'm just wondering if you can just touch on the consumer side, what you're now seeing there. Is that now sequentially stable and could we therefore start to see the like-for-likes improvement in maybe -- in sort of 2 quarters' time?
Yes, David, thanks. And just to let Clive answer in more detail for you, but -- from a financial performance in FY '23, we obviously had a slightly lower outcome in H1 than we like. But from a H2 perspective, Almo performed exactly where we were. And in fact, was at the top end of the range, I would have given you last November. So we are -- remain 100% convinced that in North America now, we have a fantastic scale platform. We've got coast-to-coast distribution of large products, both from the integration of our Jam business and our Almo business. So we really do see ourselves as being well positioned.
We -- Clive called out some of the optimization opportunities we have, but that's the same for every DCC business. We're constantly looking at ways that we can execute better, you know about our mantra of operational excellence. So those kind of things will continue to be brought to bear on our newer platforms, particularly those businesses in North America.
So Clive, I don't know if you want to...
Yes. So -- from the search optimization perspective and an e-commerce execution perspective, we're very happy with where we are in terms of our listings on the various marketplaces. A lot of that business is heat related, so it's air conditioning units and home comfort units. So you need the weather. And when we've had the weather in short period so far, we're not in the key period. The selling has been very satisfactory. So we're happy with where it's at. There will be a level of discounting so that we have an overhang of inventory. So there's a level of discounting that will mean that the margins will be somewhat depressed as we moved through that during the balance of this year.
We transferred over in terms of digital leadership, our Head of Marketing in the U.K. business that's worked in the U.K. e-commerce environment is leading. So he transferred over just before Christmas. And we've hired into the team, a number of people that are ex-Amazon and other marketplaces and then put the tools around them to make sure that we're sensing where the market is in real time and making adjustments. So we're very happy with where we are from an execution perspective.
Yes. I think more on the outlook point, David, like on the consumer, Clive?
It's stable. To be honest, it's stable. I think the -- what we've seen is -- and a lot of the retailers, they're just ordering to demand. They're not ordering to inventory. So we had quite a slowdown, I suppose, into peak and into the early part of calendar this year. We don't see that as much now. We think they're getting their inventory levels right, but the consumer demand isn't really there, particularly for high-priced products. So as consumer gains confidence, hopefully, the retailers will gain confidence, and we'll see a more positive environment into the back end of the year.
Thanks, David. Colin?
It's Colin Grant here from Davy. Just on the Energy division, you've outlined some very interesting and ambitious plans for 2030 in terms of biofuels and solar and so on. But in terms of service and renewals at the moment, which has grown very substantially, I think it's about ₤128 million of EBITDA in fiscal '23. It's almost a division in itself, it's grown so large. Can you give us some flavor as to what the current mix is within that today so we can then gauge how that kind of ramps up going forward? Maybe to start with that, please?
Yes. Well, it's actually quite a fragmented mix of different types of products and solutions, Colin. So I mean, it's got great breadth and diversity to it, so it extends from everything from renewable power the PPA type services that we sell in the markets like Ireland to the convenience operations that we have in our mobility side, the EV charging that we supply in Norway and carwash and things like that.
But now more materially, it encompasses more biofuel, HVO profitability, which is the bigger -- some of the bigger growth in the year and solar. So we make now approximately about ₤25 million pro forma just in solar, which has grown from nothing 2 years ago. So that's been a significant driver of the growth momentum there. So there's probably not one particular huge area to call out. It's actually just the detailed execution locally market by market. So the reason it isn't one big block is that, as you know, the energy market, market by market is slightly different, and we are adapting and agile to perform the services that will be rewarded locally in those markets.
So in Sweden, for example, we sell lots of HVO, whereas in Norway, we know that's more of an electron opportunity to get the forecourt. So those kind of things are reflected. And therefore, you've got a lot of breadth of different services that we offer. So not one major thing, I would say, Fabian, I don't know if you want to add any color. But from a profit mix perspective, Colin, there's no one single big huge category in there.
I agree with that, and it will be hard to kind of spell it out. There's just one piece I would like to highlight, which is digital fleet formats. We have a company that is called Fuel Card Services. We acquired another company that is called SNAP that is kind of allocating parking lots to drivers. And sort of -- we look at this space at the minute in a quite intense way with sort of this customer back mindset again. And we believe that's an area which is low carbon or no carbon. And it's a great way to grow in this mobility services field, but in particular, with fleet customers, i.e., larger fleets, long haul, hauliers, et cetera. That's a pretty interesting area to.
Could I have a follow-on question?
Yes, sure, Colin.
It's just to do with the return on capital employed, again, on the same area, the services and renewables because -- the whole division saw a 40 bps expansion in ROCE in the year to 19%. And it feels as though services and renewables are contributing to that and actually driving higher and there was a chart in there, and it showed a 24.5%. I don't know if that was just related to the acquisitions you've done last year or if that's across the entire ₤128 million of EBITDA.
Yes, that reflects just the recent acquisition activity over the last 3 years, Colin, really. So it doesn't pick up some of those digital opportunities that Fabian mentioned, I think, it really goes to some of the more energy efficiency businesses or the solar acquisitions that we've made over the last number of years or indeed on the renewable power side, where we've been deploying capital there.
I mean the expansion in the services and renewable profit increases clearly is expansionary from a return on capital perspective at the moment, but we would -- the sample size is small. So relative to the capital employed of DCC Energy, the capital employed in that today remains relatively modest.
From the new -- that new acquisition chart that we showed, you've got about ₤150 million of capital, if you like, deployed in that area, which has expanded from 15% to the over 20%. So that has been helpful, obviously, in the overall return on capital of the division. But I think the division continues to be very cash generative, continues to deploy capital sensibly and therefore, the returns we'd expect to continue to be strong.
But I guess the key message for us is that the services and renewables expansion isn't coming at the detriment of returns, which is a question we get asked quite a bit. Dan?
It's Dan Cowan from HSBC. Just one question for me. On that point, you mentioned, Kevin. Over time, how do you see cash generation and energy changing with the change in mix, I mean more services would HVO have a similar working capital characteristics to what you have in the fossil fuels, how do you see that developing over time?
Yes. Good question, Dan. Thank you. I mean, to be honest, what we see presently, again, a little bit like the returns question is that the expansion into HVO or any of the bio products that we sell are producing good returns down. They have similar working capital characteristics. So when you talk about the renewable products, I mean, I think what we are trying to do a little bit is invest a little bit in our stock position presently on some of these renewable fields to ensure that we have -- that we can fulfill the promises we're making to customers. So we might maintain a slightly longer days position from an inventory perspective and some of the renewable products just to ensure, I guess, the robustness of the supply chain. It's not as perfect as supply chain presently as the very strong commodity type fossil products.
So maybe a little bit more investment in inventory. But on the other hand, that is rewarded by slightly higher margin profile. So again, from a return on capital perspective, no real difference. And the services and renewables side, in general, has that same asset-light DCC model that we are attracted to, Dan. So altogether away from what the energy business is doing to sit here at DCC level. It's asset light, it's recurring revenues with predictability with order books with real customer engagements over a long period. So we don't see the capital or cash flow characteristics changing too much over time.
Gerry, sorry. You're in the back, Gerry, you heard the lights are bright here.
That's okay, Kevin. Gerry Hennigan, Goodbody. Just 2 on energy, if you don't mind. First, can you talk on the outlook or relative stability of LPG in the context of what is a transition you're involving yourself and obviously, the transition is following in the market and whether there's any variation on neither side of the Atlantic. And two, your ambition in terms of bio you're confident that the supply can keep up with that sort of ambition and where you're seeing the most opportunities there?
Okay. Thanks, Gerry. I mean, the there's no doubt -- and I'll ask Fabian to respond in more detail on these, Gerry. But in terms of the LPG piece, LPG is the fuel of choice in many, many hard-to-abate sectors, okay? So in terms of the language, we've been talking about from LPG last year to this year, it doesn't change a whole lot. It remains the lowest carbon of the fossil fuels. It remains used off the grid in hard to abate use cases of a rural domestic customer, rural businesses or in niche manufacturing or manufacturing off the grid indeed.
So that use case doesn't change too much. I mean we do see on the domestic side and more in the U.S., in particular, less substitutable products. But I think at the end of the day, we serve rural communities in both sides of the Atlantic, maybe there's a slightly different policy perspective either side of the Atlantic, but I'll ask Fabian to comment on that in more detail. But no real change to the outlook for it in general. But I guess, keep the longer, longer, longer-term outlook for LPG is the bio piece Fabian, which you might -- and sorry, that just doesn't apply to LPG because I think your question is more broad around bioavailability. So do you want to have a go with that, Fabian?
Let me just add to the first question that the industry is really acting up in terms of engaging with regulators, with policymakers and sort of really making progress in establishing LPG as a transition fuel. And that's also something where I will invest quite a bit of my personal time.
In terms of the bioavailability, I think it's a story of two tails. I mean, there is the liquids market, the fuels market, if you want, where Hydrotreated Vegetable Oil is pretty established. You have sort of leading producers like Neste, like Preem, but you now also have most of the refiners investing in HVO plants, Shell in [indiscernible] Cepsa in Spain. So we believe this market is relatively liquid, the interesting piece is that the top producers, they like us a lot because they see our customer strengths. They see how good we are at generating demand. So the top producers are very interested in deep partnerships with us.
So to my mind, we are well positioned there to get access to the product. The story is a bit different in LPG, the industry is stepping up now. There is a bio LPG, which is a byproduct of the HVO production. But it's very smaller quantities and many other industries compete for the same product streams. So what really needs to happen is the industry needs to invest in the production of renewable DME, which is a product that is more and more talked about. We deem this to be the most likely route. There is small plants in operation already.
Our partnership with Oberon, which we landed a few weeks ago, is designed to coinvest like as a seed investor to start the first plant in Europe. There is another company by the name [indiscernible]. We are also engaged with. So to crack the bio not in LPG is a little bit harder that we are positive to 15% of our portfolio on renewable versions of LPG by 2030 is in reach.
Okay. Thank you, Gerry. Got anything else in the room? No, no nothing online. Okay. Well, I'm very conscious. We've kept everyone probably a little bit longer than we thought we would today. So we'll finish there, but just to thank everybody for coming in the room to us today. And indeed, thank you for everybody online who joined us. We really enjoyed talking to you today about DCC, and we look forward to engaging more with the market over the coming weeks as we roadshow around. So thanks, everybody, and best wishes.