flogas - dcc plc€¢ inland sales is 95% propane, and 5% butane (more suited for indoor storage)...
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Flogas UKCompany overview
17th August 2009
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What is LP Gas?• Produced as part of oil refining process or extracted from gas streams• Inland sales is 95% propane, and 5% butane (more suited for indoor storage) • Transported and stored under pressure in liquid form in tanks / cylinders• Has lowest CO2 and particulate emissions of all available off-mains fossil fuels• Used in petro-chemical production
…. and for home and commercial applications where no mains gas:
– Domestic heating, cooking and leisure – Hotels, pubs and restaurants– Caravan sites, residential parks– Fork lift trucks and warehouse heating – Agriculture – poultry rearing, growing, food processing– Industrial use – brick making, paint spraying, road marking– Cars and trucks as Autogas
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21 Flogas TerminalsNationwide coverageGas storage (2-3 days)Cylinder filling / stockholdingBase for bulk tankersBase for cylinder trucks
9 UK refineriesMossmorran – ShellGrangemouth - IneosImmingham – Conoco & TotalStanlow – ShellCoryton - PetrolplusFawley - EssoMilford Haven - MurcoPembroke - Texaco
LP Gas - Inbound Supply Chain
23 Artic Road TankersFlogas owned fleetDaily sourcing decision:• Refinery’s availability to supply?• Price of gas?• Distance from Flogas location?
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LP Gas - Outbound Supply Chain
65%
35%
170 cylinder trucks
85 bulk tankers
100,000 customers
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Flogas History
1976 – Flogas Greenfield start in Ireland, with DCC owning 29%
1984 – Flogas UK established with the acquisition of Portagas givingan initial share of 0.5% of the British market
1994 - DCC takes 100% ownership of Flogas UK Ltd
Organic expansion takes market share to 6% with activities in thebulk, cylinder and autogas markets
2001 – AltaGas acquisition takes market share to 11%
2002 – British Gas LPGas acquisition accelerates Flogas to no.2position in Britain with market share c.20%
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Organisation5 Regions with Sales and Operational responsibility• Sales teams covering territory by postcode• Customer service centres – in /outbound with 24/7 back up• Filling plant and depots – service and cost KPIs
Central sales teams• Key Account sales management for national accounts• Domestic Bulk customer service team
HQ Functions• Bulk installations and scheduling• Finance, credit control and IT• Marketing• Business development, purchasing• Human Resources
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R
RRR
R
R R
Flogas Network 2009/10
5 Regional centres, (CSC,Bulk, Filling and Depot)
16 Bulk & or Filling and Depot sites
21 Depot only
R Refinery
R
R
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Asset RefurbishmentFlogas at Staveley undertakes refurbishment and re-branding:
• 1.8 million cylinders are tested and refurbished over a 15 year cycle
• 30,000 tanks are to be refurbished and refurbished over a 20 year cycle
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Market Position
10%Others12%Others
>1%Energas3%Energas
10%Shell0%Shell
10%BP7%BP
18%Flogas26%Flogas
51%Calor52%Calor
BulkCylinders
Source: Flogas Estimates
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Flogas Strengths
• Strong nationwide coverage under Flogas brand
• Growth potential behind LPG
• Spread across diverse customer base
• Improved margin management
• Optimised national network
• Strong Relationship with Oil Majors
• Excellent financial dynamics – recurring revenues, cash generative and high ROCE
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Challenges
• Safe management of a highly dangerous product
• Maintaining supply ex refinery at least inbound cost.
• Managing high levels of service whilst seeking efficiencies
• Building returns on fixed capital – cylinders, bulk tanks
• Delivering opportunities for industry consolidation
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Flogas StrategyOrganic• Continuously Improve Heath and Safety performance • Grow LPG market – promote LPG as greener alternative• Grow market share geographically, and by sector• Deliver operational efficiencies so additional margin converts to profit • Implement outcome of network planning review• Reduce purchasing costs through better procurement
Partnerships• Continue to develop the portfolio of suppliers• Evaluate partnership options in importation and storage infrastructure• Work with energy consultants to offer LPG package for new technologies
Acquisitions• Acquire competitors looking to exit, and thereby reduce unit costs • Acquire dealers where Flogas coverage is weak
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Questions?