Annual Report and Accounts 2006 - DCC plc
Annual Report and Accounts 2006 - DCC plc
Annual Report and Accounts 2006 - DCC plc
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18operating review<strong>DCC</strong> SerCombusiness reviewDonal MurphyManaging Director<strong>DCC</strong> SerCom<strong>DCC</strong> SerCom comprises two businesses, SerCom Distribution<strong>and</strong> SerCom Solutions. <strong>DCC</strong> SerCom currently employsapproximately 1,350 people.10%30%15%7%18%8%SerCom Distribution -revenue product mixSoftwarePCs & serversPrinters & peripheralsStorageNetworkingOtherSerCom Distribution -geographic revenue splitUKIrel<strong>and</strong>Continental Europe21%67%24%SerCom DistributionSerCom Distribution is a leadingEuropean sales, marketing <strong>and</strong>distribution business for a wide rangeof IT <strong>and</strong> entertainment products toa broad customer base includingretailers, e-tailers, computer stores,value added resellers <strong>and</strong> computerdealers.SerCom Distribution has five businessunits operating across eight countries:• The leading British distributor ofbusiness <strong>and</strong> consumer software,computer games <strong>and</strong> peripheralsto the retail channel.• A leading British distributor of abroad range of IT hardwareproducts to the IT reseller channel.• Irel<strong>and</strong>’s leading distributor of IThardware <strong>and</strong> software productsto the reseller channel.• Irel<strong>and</strong>’s leading distributor ofDVDs, computer games <strong>and</strong>associated accessories to theretail sector.• A leading distributor of enterpriseinfrastructure products operating insix Continental European countries.SerCom Distribution partners with theworld’s leading IT <strong>and</strong> entertainmentcompanies <strong>and</strong> is typically the numberone or the number two distributor in themarket for the br<strong>and</strong>s that it represents.SerCom Distribution distributes manystrong br<strong>and</strong>s including 20th CenturyFox, Canon, Cisco Systems, DisneyHome Video, Entertainment in Video,Epson, Fujitsu Siemens, HP, IBM,Logitech, Microsoft, Netgear, Oracle,Samsung Electronics, Sony, SunMicrosystems, Symantec, TakeTwo,Xbox 360 <strong>and</strong> Xerox.SerCom SolutionsSerCom Solutions is a leading Irishheadquarteredspecialist provider ofoutsourced procurement <strong>and</strong> supplychain management services. Thecompany has expertise in procurement,sourcing, dem<strong>and</strong> management,consigned stock programmes,contract hardware assembly,customisation, fulfilment,pick & pack <strong>and</strong> desktop publishing.The business operates as a globaloutsourcing partner to many of theworld’s leading technology <strong>and</strong>telecommunications companiesincluding Apple, Canon, Microsoft,Nortel <strong>and</strong> Thomson Telecom.Increasingly, these companies areentrusting key aspects of their supplychain to SerCom Solutions, in order toachieve cost effective <strong>and</strong> efficientmanufacturing/distribution, shorterlead times to market, reduced costbases <strong>and</strong> reduced inventory levels.Performance managementThe operational performance metricsof SerCom Distribution are well aheadof industry norms for the ITdistribution business.Through a high turnover of capitalemployed, leveraging the breadth ofproducts, ensuring that margins aremaximised through highly incentivisedsales teams <strong>and</strong> tight control ofoperating costs <strong>and</strong> working capital,the business generates an excellentreturn on capital employed,notwithst<strong>and</strong>ing low operatingmargins in the industry.Over the past ten years, <strong>DCC</strong> SerComhas achieved a compound annualgrowth rate of 10.4% in operatingprofit.
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