Annual Report and Accounts 2006 - DCC plc

21Performance for the year to 31 March 2006Performance of the business for the year to 31 March 2006Change on prior year2006 2005 Reported ConstantcurrencyRevenue €211.7m €162.3m +30.5% +30.5%Operating profit €21.6m €15.4m +40.1% +41.2%Operating margin 10.2% 9.5%Return on capital employed- excluding intangible assets 60.5% 50.3%- including intangible assets 16.7% 13.6%DCC Healthcare achieved excellentrevenue and operating profit growth.Excellent profit growth was achievedin DCC Healthcare’s sales andmarketing activities, benefiting fromthe acquisition of Physio-MedServices in June 2005 and from goodorganic growth. Particularly goodgrowth was achieved in intravenouspharmaceutical products and relateddevices and in DCC’s own brandedrehabilitation and independent livingproducts, which was facilitated byDCC’s procurement and qualitycontrol office in Shenzhen, China.DCC’s contract services to the healthand beauty sector achieved excellentprofit growth, benefiting from a firstfull-year contribution from LalehamHealthcare and from continuingstrong organic growth. The businessdeepened its relationships withexisting customers by providingcontinuing high service levels andsupport in new product development.Additional business developmentpersonnel have been recruited tofurther accelerate the expansion ofits customer base.and community care sectors usingfield, telephone and catalogue saleschannels. DCC Healthcare suppliesthe Irish, British and German marketsdirectly while other markets will initiallybe supplied through distributors.Continued addition of innovativeproducts will enhance the developmentof the business’ portfolio. Througheffective sourcing, particularly inthe Far East, DCC Healthcareplans to improve the quality andcompetitiveness of its product offering.In contract services, DCCHealthcare’s strategy is to be thepreferred provider of services to thefunctional health and beauty sector inEurope. The services provided includeproduct development, manufacturingand packaging. The businessprovides a world-class service toexisting customers and uses itsresponsive product developmentcapability and excellent service levelsto attract new business.Fannin, a DCC Healthcare subsidiary,has a specialist field sales force thatmarkets a wide range of medical,surgical, pharmaceutical and laboratoryproducts.Physio-Med, a DCC Healthcaresubsidiary, is Britain’s leading supplierof a broad range of physiotherapy andrehabilitation equipment.Strategy and development18.521.6In its sales and marketing activities,DCC Healthcare’s strategy is to be asupplier of a broad range of healthcareproducts, both own brand and thirdparty, to the healthcare industry inEurope and to provide outsourcedservices to customers where thisadds value to the product offering.The business sells to a broad rangeof customers in the primary, acute9.06.8 6.814.815.8 15.412.810.797 98 99 00 01 02 03 04 05 06DCC Healthcare - operating profit (€m)1997 - 2006Laleham Healthcare, a DCC Healthcaresubsidiary, manufactures both healthand beauty and pharmaceuticalproducts.