DGL Group: Questions to Simon Henry | Value Bridge

Archieve - Everything Simon Henry Said

Sep 12, 2025

Business Summary

DGL is a vertically integrated chemical management company operating across Australia and New Zealand with over 40 sites and handling more than 1.1 million tons annually. The business combines formulation, storage, logistics, recycling, and waste treatment, serving industries such as agriculture, mining, and automotive. Growth has been driven by both organic expansion and over 30 acquisitions since its 2021 IPO, when $100 million was raised. The company emphasizes acquiring licensed, hard-to-replicate assets such as hazardous storage and refineries, providing competitive barriers and long-term utility. DGL reports consistent 20%+ compound annual growth over two decades, with a mix of ~55% from M&A and 45% from organic growth.

The balance sheet shows periods of elevated net debt ($66 million at peak), later reduced toward $17 million, with property holdings independently valued at $160 million. Recent CapEx included $21 million in H1 FY24 across land, transport fleet, and plant upgrades. Profitability grew from $15 million NPAT in 2021 to $65 million by 2023, though margins have since normalized due to competition, cost duplication, and ERP rollout. The company avoids near-term dividends, prioritizing reinvestment, but has selectively executed share buybacks at sub-$1 to capture arbitrage potential against prior issuance at $2.

Catalysts & Milestones

1987 - Simon Henry began acquiring distressed property assets after the stock market crash

2008 - GFC forced pivot away from property toward chemical logistics, building resilience with strong cash flow

2021 - IPO raised $100 million, committing to high-velocity acquisition strategy

2021 - Acquisition of Opal in Western Australia; automated plant doubled output from 5–6M liters to 10M liters annually, payback in three years

2021–2023 - Completed 24 acquisitions in 24 months, expanding footprint and capabilities

2023 - Group profit reached $65 million, up from $15 million at IPO

2024 - Invested $21 million CapEx in H1 across property, fleet, and liquid waste projects

2025 - ERP rollout and Parramatta shared services hub targeted for completion by end of FY2025, extending into FY2026

Investment Highlights

Raised $100M at IPO to fund rapid acquisitions across chemical services
Profit rose from $15M in 2021 to $65M in 2023, a more than 4× increase
Property portfolio independently valued at $160M, up $31M on revaluation
Completed 24 acquisitions in 24 months, expanding network across ANZ
Long-term organic and acquisitive growth compounded at 20%+ annually over two decades

Future Growth Drivers

Leveraging licensed hazardous facilities and scarce regulatory approvals to expand capacity
ERP system and Parramatta shared services hub to cut admin duplication and improve efficiency
Organic expansion from 40,000 sqm new warehousing and fleet additions in FY24
Potential U.S. entry with disciplined $5–15M initial acquisition linked to existing customers
Partnerships with BASF, Halliburton, and global chemical majors via tolling agreements

Risk Factors

Competition in lead-acid battery recycling has grown from 2–3 plants in 2022 to 9, eroding margins
Net debt once peaked at $66M, creating repayment and refinancing risks despite later reduction
ERP rollout causes $10M cost duplication during transition, weighing on profitability
Regulatory delays, e.g., NSW Fire Dept approval, slowing completion of liquid waste treatment plant
Share price decline from $4 peak to under $1 limits ability to fund deals with equity

Capital Allocation

05/10/2021 How do you value businesses when making acquisitions?

We typically use a three-year average normalized EBITDA multiple. There are fairly standard ranges, some businesses trade at 4×, others at 7×, depending on their quality. But what matters most is the relationship. Many sellers are looking to retire or want a mix of cash and script. They want their legacy respected and their company to join something meaningful. I have constructive conversations with them, and often we can agree on a deal in five minutes, over the phone.

05/10/2021 What specific terms are considered in your acquisitions?

It varies. Deals might include or exclude property, be cash or script-heavy, include stock or not. One important element in Australia is rollover relief, if a seller takes DGL shares in exchange for their company shares, they defer capital gains tax until they sell those shares. So understanding local tax and legal structures is key to getting deals done efficiently.

05/10/2021 How long does it usually take to complete an acquisition?

From handshake to integration, typically 60 days: 30 days for due diligence, 30 to close. We have a template process broken down into property, legal, accounting, environmental, and compliance streams. Each team does their part, then it all comes together. We’re not a private equity fund, we’re a vertically integrated chemical management company, but we move with fund-like speed. It’s all part of the IPO promise I made to investors when I raised $100 million: to grow through disciplined, high-velocity acquisition. That’s exactly what we’re executing on.

05/10/2021 Do you ever divest businesses, and is that process just as fast?

No, we don’t divest, at least not in the conventional sense. We “feather” companies into DGL very gently. It’s like that painting where ducks slowly morph into fish, you don’t see the change happening. We’re very careful with people during integration. Many M&As fail because the acquirer steamrolls the target’s culture. We don’t do that. We support them, let them operate, and build alignment over time.

05/10/2021 Why did you use equity rather than debt to fund recent acquisitions?

There were several reasons. First, I own 56% of DGL, which limits our eligibility for inclusion in the ASX 200. Issuing more equity and getting diluted over time actually helps with that. Second, using a mix of script, cash, and debt gives us more firepower and flexibility. But the most important factor is being able to tailor each deal. Some vendors prefer cash, some want shares, others want a blend. Script can also offer tax advantages, like rollover relief in Australia. A good example is Chempack: Seamus, the vendor, took $9 million in shares at $1 each. They’re worth $27 million now. He’s so pleased he came out of retirement and works with us again, his son has shares too. That kind of alignment benefits everyone.

05/10/2021 What are the key factors you look for in a new acquisition?

People say when you buy a company, you're really buying time. In this industry, building something like Chempack from scratch could take 10 to 15 years due to regulations and trust. Acquiring it fast-tracks growth and customer confidence. I look for businesses that fill gaps in our footprint, skills, customers, locations, and that can scale across our broader network. I don’t pay a dollar to get a dollar; I pay a dollar expecting to extract two dollars of value by integrating it into DGL. The acquisitions we plan to close by Christmas reflect that approach, they’re strategic pieces of a jigsaw that complete our vertically integrated chemical management model.

05/10/2021 How’s your post-IPO acquisition pipeline progressing?

Very well. We’ve completed several acquisitions already, and more are lined up before Christmas, subject to board approval. These will significantly expand our network, capabilities, and service offerings. We’re doing exactly what I said we would do in the IPO. We haven’t deviated one inch.

05/10/2021 How is your acquisition pipeline progressing post-IPO?

We’ve made three or four acquisitions already and plan several more before Christmas, pending board approval. These will significantly increase our footprint, site count, and service offerings. We’re executing exactly what we said we would when we raised $100 million. No deviation, no delay. The “holiday” period is over, the hard work is now.

25/02/2022 When will DGL consider paying dividends?

At present, we intend to reinvest earnings into growth opportunities and acquisitions. If and when we exhaust high-return investment options, we would consider initiating dividend payments.

There remains considerable opportunity to deploy capital into projects that will drive strong growth for years to come, so dividends are not a near-term priority.

25/02/2022 Will you issue more scrip for future acquisitions?

Yes. We've successfully used a mix of earnings, debt, and scrip to fund acquisitions, and we expect to continue with that blended approach in future deals.

25/02/2022 What is the capital expenditure outlook for H2 FY22?

We expect a slight increase in capex during the second half. We’ve identified several capital projects we intend to advance, although supply chain issues may delay access to equipment and materials.
We’re continuing to evaluate these projects pragmatically and will proceed where we see clear value and feasible timelines.

25/02/2022 What does the M&A pipeline look like over the next six months?

Highly active. There are plenty of opportunities currently under evaluation.

31/08/2022 How much working capital was invested post-acquisition?

Before settlement of the acquisitions, we allocated around $12 million in working capital. One of DGL’s strengths is our ability to improve acquired businesses by holding more inventory. We often raise the inventory base beyond what was originally there to better capture market opportunities.

31/08/2022 What is your current debt position post-acquisition?

Our net debt currently stands at $66 million. We plan to use earnings and available cash to bring this down. We anticipate our debt position to normalize to the mid-$17 million range following integration.

31/08/2022 What are your CapEx expectations for FY23?

Growth CapEx is projected to be between $10 million and $15 million, depending on timing and approvals. Property CapEx is more fluid and may range from $10 million to $20 million, subject to strategic opportunities. We’re not obligated to buy property but will act if opportunities arise.

31/08/2022 Will your U.S. expansion require only modest capital investment?

Yes, absolutely. We're not going to bet the farm on the U.S. market. I'd be comfortable with an initial acquisition in the $5–15 million range. It would need to be in a field we understand well, ideally linked to existing international customers. We'd want to use our engineers to develop the acquisition further and potentially use it as a platform for future expansion. But we're approaching this very cautiously and methodically.

31/08/2022 How many acquisitions can DGL reasonably handle each year?

It’s not unlimited. We’ve acquired 11 businesses and gained valuable experience integrating them. All of them are performing well and culturally aligned. I do intend to continue acquiring, though I can't predict exact numbers, size, or location. There's still a lot of room for rationalization in chemical supply across Australia and New Zealand.

31/08/2022 What is your philosophy on long-term investment?

At DGL, we play the long game. We’re not chasing short-term returns. We're happy to invest in strategic assets that may take years to mature. We consider location, licensing, and infrastructure carefully, and we reinvest heavily in plant, equipment, and fleet. This mindset has been central to our sustained growth.

31/08/2022 How conservative is your $160M property valuation?

Those valuations are independent, conducted by third-party professionals. The latest revaluation added $31 million, and we consider the $160 million figure to be a fair and reasonable market valuation.

14/11/2022 How do you weigh acquisitions versus ground-up developments in your strategy?

It's really a hybrid. We’ve been trying to redevelop our Seven Hills site in Sydney for 3–4 years and still don’t have consent from Blacktown Council to build. Compare that to buying an existing operation where you can hit the ground running. So, on one side, we pursue acquisitions, and on the other, ground-up developments. We balance both in our pipeline.

14/11/2022 Will you be issuing shares to fund future acquisitions?

No, not at the current share price. If we decide to acquire anything, we’ll use cash and some debt. We’re not issuing shares right now.

14/11/2022 Does issuing shares dilute EPS and affect accretion?

Yes, the premise is correct. The more shares you issue, the lower your earnings per share. In Australia, we’d call it accretive if issuing shares improves EPS. If the share price is strong and the business is well-priced, and especially if we want management to have skin in the game, we're open to issuing shares.

14/11/2022 How do you now assess whether an acquisition makes sense?

We used to look mainly at EBITDA and the strategic rationale, plus the multiple paid. Now, we also run a calculation to see if the deal is EPS accretive, particularly when shares are part of the transaction. Then we do a 12-month review to check if it delivered what we expected. So far, it always has.

14/11/2022 Will DGL be issuing dividends in the near future?

No. We believe we can reinvest that capital and earn a much better return for shareholders, which will be reflected in the company’s value and share price. There is no current dividend policy; all funds will be used to create value via reinvestment.

08/11/2023 Which acquisition do you think was your best deal so far?

It's not appropriate to single out specific deals due to commercial sensitivities, but I can say I don’t regret any of them. Out of 25 acquisitions, some are standout performers, others more stable. That’s just math, there’ll always be a top and a bottom performer. We’re only a few months in with some, so time will tell, but our strategy is to support them immediately with capital and resources and let them run.

08/11/2023 Why don’t you have a dedicated M&A team like other acquirers?

Because if you’ve got a full-time M&A team, they need to buy things to justify their jobs, even if nothing should be bought. Our model is lean: if we like a target, I gather 8 or 9 senior team members, assign the due diligence tasks with a deadline, and then compile everything into a board pack. Everyone fits it in around their day jobs. It’s fast, efficient, and collaborative.

08/11/2023 What makes your acquisition pace sustainable?

We moderate our pace. If we’re behind on our P&L budget, we pause acquisitions and focus on internal housekeeping. When things are settled, we move again. And because DGL is broad, sometimes we acquire a business in just one segment, so the impact is contained. We’re not rushing, we feather the pace to fit operational bandwidth.

08/11/2023 How did you manage to complete so many acquisitions so quickly after the IPO?

We did 24 deals in 24 months, and there’s more in the pipeline. I have a strong memory and spend time mapping the industrial landscape of Australia, right down to obscure suburbs like Wagga and Balcatta. We know the terrain and the players. We’ve built a reputation for being fair and easy to deal with, so we get inbound interest. For every 10 targets, we might choose one. We’re disciplined, sometimes we spend heavily on diligence and still walk away.

08/11/2023 How do you make deals move so fast?

We’re nimble. I’ve got a single solicitor in Melbourne who handles all contracts. The board is available whenever I need them. We’ve templated our process, so everything’s straightforward. For example, there was one deal where I didn’t even ask for a tour. I sat in the owner’s scruffy office, surrounded by frog specimens and a beer fridge, we talked literature over a few beers, and the deal got done. You have to understand the human behind the business.

08/11/2023 Do you use a standard playbook for post-acquisition integration?

Never. No one-size-fits-all. Some acquisitions are left to run independently, reporting their own P&L. Others are completely absorbed into DGL from day one. We tailor our approach based on the nature of the business and the strategic fit. Plans often don’t survive first contact, that’s why we remain flexible.

08/11/2023 What does your acquisition pipeline look like going forward?

It’s active. We took a short breather to stabilize operations, but we’re ready to go again. Over the next six months, subject to board and due diligence, I expect we’ll make several significant announcements.

08/11/2023 Do you have a hard cap on how much you’re willing to pay for a target?

No. We don’t have a fixed multiple or price cap. If something’s strategic and offers greater value to DGL, we’ll consider it. That said, we’re cautious. I’ve seen businesses fall apart because they bought something too big and couldn’t culturally integrate it. Ten years later, they still operate as separate entities. That’s not what we want.

08/11/2023 Is the strategy always to integrate acquisitions fully into DGL?

Not at all. Some are merged entirely into DGL and others remain autonomous. We have no template, we decide case by case how to integrate or leave a business post-acquisition.

08/11/2023 Did the Oztech Chemicals deal work out as expected for the vendors, given the share price decline?

We paid $13 million in cash and $14 million in stock. I believe we issued the shares at $2, and when they came out of escrow, they were at $2.20. Now the price is around 80 cents, so yes, I’m sure they’re frustrated. I still talk to Nick from time to time.

08/11/2023 How did Oztech's vendor react to the share price drop post-deal?

It’s not ideal, but there are a few things to consider. He came out of escrow well in the money and chose not to sell, he's actually bought more shares since the price dropped. I stay in touch with him so he knows what I'm doing and what I’m focused on. Ultimately, it's a deal done in good faith, a willing buyer and a willing seller agree on a price on a given day. I’ve bought shares above $2 myself. If I knew they were going to 80 cents, I wouldn’t have bought them. But that’s the nature of markets. My job is to run a good business, keep it growing, and report solid results.

08/11/2023 Has the share price decline made it harder to use stock in future acquisitions?

Yes, it’ll take time to get my currency back, I’m not issuing shares at these levels. But if we’re buying at under 80 cents and can issue at $1.60 later, that becomes a powerful way to create equity for future acquisitions. It’s a passing issue. Over time, with consistent performance, the confidence will return, and I’ll be able to use our script again.

08/11/2023 Are you measuring return on capital from your acquisitions?

We try, but it’s difficult. Some businesses are merged in, some stand alone, and we often inject capital or change how they operate. That distorts return on capital. If we bought one business every three years and left it untouched, measurement would be easier. But that’s not our model. Instead, you need to look at group performance: we listed in 2021 with $15 million profit; by 2023, we hit $65 million. That tells the story.

08/11/2023 Why use cash and stock in deals rather than just debt or cash?

There are several reasons. Berkshire doesn’t use stock to buy companies, but they do use it to buy back their own shares, it gets to the same place. In Australia, vendors get rollover tax relief when moving from share to share, so many prefer stock. Some vendors who took script are still in the business and deeply committed. If we get the multiples right, it's highly accretive. It’s just another strategic tool in our arsenal.

08/11/2023 Are the deal multiples you target still achievable given the rate environment?

Multiples have definitely softened. As rates go up, multiples go down, buyers pay more for debt, so pricing tightens. But I’ve historically performed better in recessions than in booms. I prefer the clarity that comes when there’s less competition for assets. What really bothers me is when someone overleveraged comes in and overpays.

08/11/2023 What’s your dividend policy?

It’s simple: we’ll pay dividends when we no longer see high-return internal investment opportunities. That’s not the case today, or likely for the next three years, maybe not even for 10. I own half the business and have kids to feed, so I understand the appeal of dividends. But right now, I believe we can put that capital to better use inside DGL.

08/11/2023 Do you believe the stock price will eventually reflect the business value?

It should, and I hope it does. But if it doesn’t, I’ll keep buying back shares. I’ve got flexibility on that front. Of course, I’d like to see the price go up.

08/11/2023 Are you canceling the shares you buy back?

Yes, they’re cancelled, rubbed out. It’s a fascinating bit of math: fewer shares, same business. So if the share price recovers and we’ve reduced the float, that creates real value.

08/11/2023 Will you use share issuance again when the stock price recovers?

Absolutely. Once the share price reaches a point where issuing stock is accretive to existing shareholders, I’ll use it again for acquisitions. I’ve got vendors who’d take shares even at these levels, but I won’t give them away.

08/11/2023 Are you trying to replicate an arbitrage model by buying low and issuing high?

Exactly. You want to buy back stock at $1 and reissue it at $2 or $3 to acquire companies at lower multiples. Right now, we’re trading at about five times forward earnings. I’m not issuing shares to buy a company at 4.5x, there’s no arbitrage in that. But if we’re at 9x and buying at 4x, that’s a compelling trade.

08/11/2023 Could the stock still be cheap even at $2 in a few years?

100%. The stock could still be undervalued at $2 in the future. But if we’ve been buying it back at sub-$1 and then it climbs, we’re in the money. That gives us optionality, reissuing that equity later to fund strategic, accretive deals. We bought it with their money and we can recycle it intelligently.

26/02/2024 Can you provide a rough breakdown of where the $21 million CapEx was spent in the first half?

Our CFO Rob is on the call and has the figures. Broadly, over $5 million went into land and buildings, about $3 million into plant and equipment, roughly $8.5 million into expanding our truck and transport fleet, and around $3.7 million into capital work-in-progress, including projects like the liquid waste treatment plant I mentioned earlier.

26/02/2024 What is the CapEx outlook for the second half?

We don’t have any capital-intensive projects requiring funding in the second half. We have ample internal funding for any worthwhile investments that may arise.

26/02/2024 Given the current share price, will the share buyback be reconsidered?

Not at this time. We’re fully committed to driving organic growth this half and reinvesting earnings to expand our asset network, customer base, capabilities, and capacity.

02/09/2024 Will the FY24 buyback be reactivated?

It’s a recurring discussion at Board level. I personally support share buybacks at current prices, but we must weigh that against capital required for organic growth opportunities.

20/11/2024 Is the company preparing to take advantage of a possible recession by reducing debt to acquire distressed assets?

Yes, we’ve already reduced our debt levels somewhat. Proceeds from recent property sales were primarily used to pay down debt, giving us additional capacity within our existing facilities. We're generating cash and are well positioned to pursue attractive investment opportunities if they arise.

20/11/2024 Will CapEx decrease significantly in the next couple of years?

Good question. Our Chairman has indicated we don’t plan to pay dividends in the near future and will reinvest earnings back into the business. Whether that’s through acquisitions or organic site expansions is yet to be finalized. But to be clear, we’re not forced to spend , we choose to invest in building scale.

20/11/2024 Is the company preparing to take advantage of a possible recession by reducing debt to acquire distressed assets?

20/11/2024 Will CapEx decrease significantly in the next couple of years?

20/11/2024 Would DGL accept a lower ROI for unique licenses or assets?

Potentially, yes , if the asset allows us to leverage capabilities across our broader business and improve returns that way. That said, we're becoming increasingly disciplined with acquisition ROI expectations.

27/02/2025 Why did DGL prioritize debt repayment over buybacks, and what is the future intention?

Thank you for the question, Hannah. We regularly discuss this matter in our board meetings. The board has currently elected to pay down debt, but share buybacks remain an option we consider at any time. Should we choose to use proceeds from sales or earnings for buybacks, we are positioned to do so. It’s something we monitor on an ongoing basis.

27/02/2025 What are the plans for non-core property sales, and how much could they raise?

We’re always looking to rationalize our property portfolio. We aim to sell non-core assets and also acquire strategic properties necessary for growth. I’m not willing to put a number on it right now, but there are additional properties under consideration for sale.

27/02/2025 Will you repay or extend debt due in December?

As we’re no longer acquiring businesses at the same pace, our need for additional debt has reduced significantly. So at this time, we don’t require much banking headroom.

05/03/2025 Is your foundation strong enough to support future acquisitions?

Our primary focus now is integration and extracting organic growth from the assets we've acquired over the last 25 years. That said, we're pragmatic, we have a strong balance sheet, and if the right asset comes along at the right price and offers strategic value, we will acquire it.

05/03/2025 How do you determine the right price for an acquisition?

We've acquired over 30 businesses since listing in 2021, so we have a solid sense of what we need to pay. There's no single formula, it depends on the physical asset value, customer base, licenses held, and how hard it is to obtain those licenses. Every acquisition is evaluated on a case-by-case basis. We don’t use a rigid template.

05/03/2025 How important will new acquisitions be in DGL’s future?

Much less important. Hypothetically, even if we never bought another company, which is unlikely, DGL now has the licenses, capacity, knowledge, and customer base to grow strongly through organic operations. We're very focused on extracting more value from what we already have.

05/03/2025 How many operational gaps still need to be filled through acquisitions?

Our environment isn’t like a neat jigsaw puzzle with one missing piece. It's more like a stone dropped in a pond, we ripple outward. We can keep expanding indefinitely. There are areas like pellets, small pills used for precise chemical applications, where we want to do more. We also need additional flammable goods storage in Australia, more chemical tankers, and broader capabilities in end-of-life chemical treatment. But I wouldn’t say we have a glaring hole today.

05/03/2025 What are DGL’s return hurdles for new investments?

I get asked this regularly. If DGL has one dollar, there are four things we can do: buy back shares, pay down debt, pay a dividend, or invest in the business. We’ve reduced debt, bought back shares, though we don’t want to reduce the free float any further, and now we’re focused on internal investment. We’ve slowed acquisitions and are looking at how to fuel organic growth, whether that means more trucks, mixing vessels, or larger sites.

05/03/2025 Can you walk us through a typical investment, entry multiple, capex, and return?

We usually don’t disclose granular details, but I’ll give you two examples. First, we bought a major hazardous facility (MHF) south of Sydney, purpose-built for flammable chemical storage, 12,000-ton capacity. It’s fully licensed and hard to replicate. It’s hitting its profit forecast to the dollar, running at 85% utilization, and being integrated into our wider systems. Second, we acquired Opal in Western Australia in 2021, which produced 5–6 million liters annually. We automated the plant, and now it's producing 10 million liters. We've paid back the acquisition cost in three years. Not every deal is this successful, but these are representative.

05/03/2025 Do you regret the pace of acquisitions now that integration is proving difficult?

No, I don’t regret the acquisitions. If I were doing it again, I’d integrate earlier. You can’t plug businesses into an ERP system on day one, it takes time to evolve. We’re comfortable with what we’ve done since listing, but we now recognize the importance of slowing acquisitions and focusing on full integration and cost efficiency.

Competitive Advantage

05/10/2021 How do you deal with Australia’s fragmented legal system across states?

Yes, each state in Australia really is like its own country, different regulators, rules, even different agencies like WorkSafe vs. the Department of Mines. But that’s also a competitive advantage for us. Because we operate across all states, we can offer customers compliance and reliability from Darwin to Christchurch. That’s difficult for local-only players to match.

05/10/2021 How hard is it to get new chemical storage licenses?

Increasingly difficult. The EPA in Australia has stated they won’t issue new licenses for certain classes of chemical activity. Even if they could, they can certainly make life difficult. So we deliberately target companies with licenses that are hard to replicate. For example, we own a lead refinery in Victoria, good luck getting a new one approved in metro Melbourne today. Or our major hazardous facility in Auckland that stores all the chlorine gas for the city. No one else will get a license for that. So yes, I’m buying licenses as much as I’m buying businesses.

05/10/2021 Have sustainability pressures helped or hindered your business?

You have to separate real sustainability from greenwashing. There’s a lot of false signaling out there. We don’t do PR fluff with daisies on hillsides. What we do is apply actual science to waste reduction, neutralizing waste streams, reconditioning acids from galvanizing and batteries, and extending material lifecycles. These are real innovations with real environmental benefits. And yes, they’re profitable. So we’re not a “green” business in name, but our impact is tangible and material.

05/10/2021 Do you think you risk becoming a monopoly in Australia or New Zealand?

It’s a fair concern, and one I welcome. The day the Commerce Commission or ACCC tells me I can’t buy something because I own too much, I’ll take it as a compliment. By then, we’ll have enough of a footprint to grow organically or expand into the US and Canada. The trigger point will likely be customer complaints, when they try to store a regulated chemical and find that all the licensed facilities are ours. We’re not there yet, but we’re progressing steadily.

05/10/2021 Could DGL eventually face monopoly concerns due to rare license ownership?

Yes, and I’ll take that as a compliment when it happens. One day, a regulator like the Commerce Commission or ACCC will say, “You’ve gone far enough.” That’s fine, I’ll shift the growth focus to the US or Canada at that point. Our license base is expanding, and at some stage, it’ll be clear that we dominate certain storage classes in specific regions. That moment is coming, and we’re ready for it.

31/08/2022 How much pricing risk do you face on inventory health?

We hold raw materials across a diversified product range. Some inventory is tied to prebooked sales, but discussions with our blue-chip manufacturing customers are focused more on supply surety than price. This gives us a competitive edge.

Holding inventory carries risk, but some of it can be offset by forward sales. We closely monitor our inventory levels and use our balance sheet strength and warehousing capability to our advantage. Over the past 12 months, DGL has shown discipline in holding raw materials where others haven’t, and this has directly contributed to our strong results. We’ll continue holding elevated inventory levels until global supply chains normalize, though we have no visibility on when that will occur.

31/08/2022 What is your position on sourcing technical-grade urea?

The global urea market is in chaos. We understand Incitec Pivot is closing its plant in November. We're holding strategic quantities of technical-grade urea as a safeguard against further supply chain disruption.

08/11/2023 Without equity incentives, how do you retain top talent?

Our retention rate is excellent. We focus on providing a fast-growing, positive work culture with minimal bureaucracy. It’s a flat organization where people have access to the capital they need to fund projects and grow internally. So far, that approach has worked well. To quote Buffett again, just because 1,000 people do something one way and we do it differently doesn’t mean we’re wrong.

08/11/2023 Why do you emphasize internal promotion and delegation so much?

Because we want young talent to grow within the business. If a manager clings to their turf and doesn’t delegate, then others below them don’t have a path forward. Once someone’s got control of their business unit, I look to move them into development, due diligence, or M&A, and have them pick and elevate their own successor. Once it’s rolling, it’s powerful.

26/02/2024 Can you give an update on tolling agreements with offshore manufacturers?

There’s some commercial sensitivity around this, but we’re pleased to have become accredited tollers. A good example is BASF, the world’s largest chemical company. Halliburton is another. DGL now has the internal controls and disciplines in place to demonstrate to international chemical companies that we are qualified to handle their tolling requirements in Australia and New Zealand.

In many ways, this is a sign that DGL has come of age.

02/09/2024 How do you plan to defend market share and margins?

By staying reliable and easy to do business with, being responsive, agile, and well capitalized. Customers need a partner who can consistently deliver materials and services, and that's where we focus.

20/11/2024 When will the liquid waste treatment facility be completed, and what is causing the delays?

We’re waiting for one final sign-off to complete development, specifically from the New South Wales Fire Department. It’s been a very long, slow, and frustrating process. I’ve made predictions in past presentations that didn’t materialize, so I won’t repeat that mistake. But we remain fully committed to completing the plant as soon as possible

The delays are entirely due to increasingly complex regulatory hurdles, which are outside our control. Ironically, while these delays are a burden now, they create a long-term advantage. Once licensed, our network of facilities becomes significantly more valuable given how difficult it is for others to establish similar operations.

20/11/2024 When will the liquid waste treatment facility be completed, and what is causing the delays?

20/11/2024 How challenging is the insurance renewal process in such a regulated industry?

It’s a significant challenge for any chemical business. Fortunately, DGL’s scale allows us to negotiate competitive rates across our network. Smaller operators would likely struggle. We’ve invested in the systems and disciplines to maintain safety and secure favorable insurance terms.

27/02/2025 Has the ULab experience shifted DGL’s focus toward high-barrier businesses?

There are significant barriers to entry in the lead business, though competition has increased. That’s one reason we favor chemical formulation, where quality and licensing are essential. While anyone can technically recycle lead, demonstrating credibility and compliance is crucial. Yes, DGL will be very careful about entering low-barrier markets.

27/02/2025 Will DGL focus more on licensed, high-barrier businesses going forward?

Yes. While recycling lead does require multiple licenses, competition still grows. That said, we strongly prefer being on the regulated side of the industry. Obtaining new chemical-related licenses today is incredibly difficult, so yes, we’ll focus future acquisitions and growth on high-barrier industries.

05/03/2025 What would happen if DGL stopped operating for a week?

It’s a bit of an ego check to ask that, but honestly, the impact would be significant. We handle a lot of critical materials, and a one-week halt would damage trust irreparably. We're a 24/7 operation. If you stop, people don’t rely on you again.

05/03/2025 What similarities and differences exist between DGL and Mainfreight in terms of culture and operations?

Mainfreight gives each site full P&L ownership. We’re moving toward that model, our site managers, or “ship captains,” are responsible for everything on-site, from environment and staff to customer interaction. In Sydney, we’ve built a shared services hub, not a head office, to support, not dictate to, the plants. I tell our senior staff: we serve the sites, not the other way around. It’s not identical to Mainfreight, but we’re adopting similar principles.

05/03/2025 What long-term culture and incentive structures are you building inside DGL?

We emphasize individual responsibility and recognition. We want people to feel their contribution matters. DGL offers career growth, training, and an environment people want to be part of. My mantra is: fewer people, working better, better paid. We invest in automation and modern systems so staff can produce more and earn more. It's all about boosting productivity.

Operations

05/10/2021 How do you handle legal work if you’re moving that fast?

We don’t have any lawyers on staff. Instead, we use a few boutique firms, one each in Melbourne, Sydney, and Christchurch. My main lawyer, Alfonso in Melbourne, handles most of our work. He’s unique in that he doesn’t nickel-and-dime every clause, he negotiates clean, fair deals. We often work weekends, and I’ve promised vendors a painless process. That’s what they get. So much so, I now have past vendors calling prospective sellers to assure them the integration will be smooth. That kind of reputation is invaluable.

05/10/2021 How much of your business growth is driven by referrals vs. active development?

Almost all of it is organic and referral-based. We don’t have a marketing department. Our reputation, licenses, and infrastructure drive demand. For example, we do work for Veolia in Australia. They used to send material to a plant 200km away for formulation, but we offered to handle it locally, formulate and store it in Sydney. That’s how growth happens: people see what we can do and ask us to do more. It’s driven by assets, trust, and capability.

25/02/2022 What impact has the stronger lead price had on EBITDA?

The lead price has had a positive impact on EBITDA. However, the benefit is tempered by significant shipping challenges, including container availability, pallet shortages, and limited vessel access for exports.

We've mitigated some of this by commissioning our Smousa smelter in June, which converts raw materials into higher-value products for export. This has contributed positively to results. Our broader strategy is to stay agile and responsive, which has helped us navigate these difficult conditions.

31/08/2022 How has the team responded to recent operational challenges?

We thrive on challenges. Over the past year, we’ve faced disruptions in shipping and raw material availability. Our capital, physical assets, and tanker fleet allowed us to adapt quickly and continue operations. It’s a testament to our team’s responsiveness and resilience.

31/08/2022 Has recent CapEx already started contributing to growth?

Yes, we’re continually investing in expanding our fleet, setting up greenfield plants, and enhancing manufacturing facilities. Some of these are partially commissioned and will ramp up in FY23. These investments let us move production closer to customers and optimize site efficiency as we grow.

31/08/2022 Which industries or products saw the largest inventory build-up?

We don't disclose individual clients or products, but the focus has been in agriculture and automotive. Across over 1,000 products, the bulk of investment has been in raw materials used to produce finished goods in those sectors.

31/08/2022 How does current asset and labor utilization compare to last year?

We’re operating at historically high utilization levels across the group. Like many, we face labor shortages. Some newly acquired businesses are bringing in capacity that we’re absorbing quickly. But overall, we’re running flat out.

14/11/2022 Will DGL need to hold more inventory as it grows?

Not materially. Current stock levels are sufficient, but every acquisition brings its own inventory, so there will be marginal increases. We deliberately built up inventory over the last six months to meet strong customer demand, but that level is now stable. We may reduce it over time, but for now, it benefits our service levels.

14/11/2022 Is customer service the main reason behind higher inventory levels?

Yes, exactly. We built inventory to ensure we could meet customer demand and maintain satisfaction. Initially, I didn’t fully appreciate the impact, but we’ve seen that higher stock levels supported increased sales and profits. At the same time, we’ve worked to keep our cash conversion healthy, targeting 80% to 90%, so it’s a balanced approach.

02/09/2024 When will the new wastewater treatment facility be operational?

We expect it to come online in the second half of FY25.

02/09/2024 Can the Mount Isa plant model be scaled to other regional areas?

The plant will go live in the next couple of months. Once operational, we’ll assess its economics. If profitable, we may expand. That said, local councils in Australia now have ACCC approval to collaborate on chlorine purchases, adding competitive pressure. We need to evaluate the plant’s performance before scaling further.

20/11/2024 What are the main challenges in integrating acquired companies?

We're not facing any issues beyond what you'd expect in acquisitions. Operational integration tends to be straightforward, but consolidating back-office systems and aligning platforms takes more time and effort. It’s standard work, and we’re making progress, but it does require sustained focus to fully unlock efficiencies.

20/11/2024 Has the Mount Isa plant begun operations?

Not yet. The plant is currently in the commissioning phase, and everything is progressing well. We’ve already had some product output, but it’s not fully operational yet. That said, the commissioning process is advancing steadily.

20/11/2024 What are the main challenges in integrating acquired companies?

20/11/2024 Has the Mount Isa plant begun operations?

20/11/2024 When will the integration and system transitions be completed?

We expect significant improvements over the next 12 months. ERP systems are already being rolled out, and we're seeing benefits. By the end of FY2025, most of the heavy lifting on the ERP and Parramatta head office buildout will be done, though ERP rollout will extend into FY2026.

20/11/2024 Beyond financials, what metrics does the board use to measure success?

We track a wide range of operational and financial metrics , plant and fleet utilization, warehouse throughput, volume, margins , all of which are increasingly central to how we measure performance.

27/02/2025 Of the $7.6M increase in employee costs, how much was for shared services in Parramatta?

At a high level, we’ve spent $1.75 million on an annualized basis on the shared services development in Parramatta. The rest is split between staff across existing operations and new acquisitions.

27/02/2025 Can DGL support cross-selling with existing capacity, or will more hiring be needed?
It’s a mix. The ERP rollout will give us better transparency and help reduce admin costs. But in some areas, we’ll still need more staff, for example, one truck needs one driver. Still, the ERP, logistics software, and unified payroll systems will significantly cut administrative expenses.

27/02/2025 Why are occupancy costs up 46% despite having fewer properties?

I’m not sure we have fewer properties. As I’ve said, we’re transitioning from small, inefficient, dated sites to larger, more efficient ones. That transition comes with significant one-off relocation costs, mainly because we’re paying double rent during the overlap.

27/02/2025 How much will costs drop once shared services duplication ends, and when will that be?

I won’t put a dollar figure on it, but the savings will be significant. Most of the integration and shared services rollout will be completed this calendar year. It’s a top priority for our board and senior management to keep this on budget and on schedule.

05/03/2025 What are the current bottlenecks DGL is facing?

We face several bottlenecks. Australia’s unemployment rate is low, about 4.1% compared to the long-term average of 5.5%, so finding qualified staff, especially to drive chemical tankers or operate plants, is difficult and expensive. Some of our plants are running at over 100% capacity, and securing new licensed sites is tough. Since listing in 2021, we've grown several hundred percent, and with that comes catch-up work. We're rolling out an ERP system across the group, but for now, we operate multiple clunky software platforms that don't talk to each other. That requires a significant investment to unify and integrate operations.

05/03/2025 How are you making DGL faster and more efficient?

DGL is fundamentally a logistics company, though we do more than just move goods. We source material in China, bring it to Australia, formulate and pack it, warehouse it, and deliver it to customers. Everything we do is logistics and planning. I often compare it to a railway marshalling yard, with different tracks, trains, and carriages. To operate efficiently, everything needs to be aligned on the same track. It's all about orchestrating that complexity to keep things moving smoothly and quickly.

05/03/2025 How are you using technology to improve order fulfilment speed and efficiency?

I go into the business and talk directly with the staff, how they receive an order, where it goes, how instructions are processed, and when the customer gets the material. We're improving things through automation: customers now place orders on their phones or tablets, which go straight into our logistics system and are fulfilled and signed off digitally. That automation is crucial to increasing speed

Competition

05/10/2021 Why do you think DGL succeeded in Australia where others failed?

I took small, measured steps. I worked in Australia in the ’80s and have been building DGL there for over a decade. Now, 85% of our business is Australian. I’m essentially an Australian CEO living in Auckland. It’s a big market, you deal with unions, stamp duties, and other challenges because the opportunity is worth it. I genuinely enjoy operating there.

05/10/2021 Has Australia’s litigious environment posed issues for DGL?

Not really. People say it’s highly litigious, second only to the US, but I haven’t seen that. What I like is the speed of the courts. If something happens, you’re in front of a judge in six weeks. In New Zealand, it might take 18 months. We’ve had minor environmental prosecutions, things like odour complaints, but no litigation against us. I also find Australians hard-working, direct, and easy to deal with.

05/10/2021 Some Kiwi companies fail in Australia. Why do you think that’s changing?

I think we’ve learned from earlier failures. Companies like The Warehouse or Michael Hill struggled, but others, like Infratil, EBOS, have done very well. There seems to be a shift in how Kiwi firms approach Australian expansion: more thoughtful, better prepared, more local expertise. Maybe that’s why the trend is improving.

14/11/2022 Is there a strategy in place to improve DGL’s current market valuation?

Yes, absolutely. We're not satisfied with the current share price. We're working with our brokers to understand the decline, and we think today's presentation addressed some concerns. Fundamentally, the most important lever is performance. We must deliver on our forecast profits and continue growing the business. Simon will spend the next few months in Australia, focusing on organic growth with division heads. We will still pursue acquisitions, but selectively, ideally, fewer than this year. We believe that consistent execution across both fronts will lift the share price.

02/09/2024 In which areas are you facing increased competition?

Primarily in our environmental services, particularly in the ULAB space, we're seeing more domestic competition around battery procurement. That’s the main pressure point for our environmental division.

02/09/2024 In which areas is competition intensifying?

As Frank noted, our lead-acid battery operations in Australia face increased competition, domestic processing capacity has nearly doubled. Additionally, some illicit exporters are circumventing legal restrictions on scrap exports, impacting our environmental division. Post-COVID, other sectors like crop protection and automotive are also seeing rising competition as supply chains normalize.

20/11/2024 Is Redox considered a competitor in any area?

No. We have a strong, mutually beneficial relationship with Redox. We buy from them, sell to them, formulate for them, and provide logistics services. It’s a very healthy commercial relationship, not a competitive one.

20/11/2024 Is Redox considered a competitor in any area?

20/11/2024 What is the impact of Elders acquiring Delta AG on DGL?

We don't see this as a negative for DGL. In fact, it could be a positive. We're positioned at the back of the supply chain and already work with both Elders and Delta. We expect our relationship with Elders to deepen as they focus on sales. This is consistent with the broader trend of industry consolidation , fewer but larger players, which benefits scaled operators like DGL.

20/11/2024 Can you provide an update on the lead acid battery recycling business?

We're facing strong competition for scrap batteries. In 2022, there were two or three plants in Australia; soon, there will be nine. This added competition has materially impacted profitability. It's an area under active review by the Board regarding its future within the group.

27/02/2025 Is it confirmed that competitors in ULab are operating at a loss?

Let me explain. A standard car battery contains a known quantity of lead, which trades at a known price on the London Metal Exchange. If someone buys a battery for more than the value of the lead inside it, we can reasonably assume they’re operating at a loss. I don’t see how one could profit under those conditions.

27/02/2025 Why invest in ERP and head office now instead of cutting costs?

That’s a really good question. As painful as it is, we must invest in these group-wide systems and a centralized shared services hub. This investment is critical to unlocking the full value of our acquired assets.

27/02/2025 Will gross margins remain over 40% or return to pre-COVID levels?

I’ll be cautious not to forecast future profits, but I want shareholders to know DGL’s management is fully committed to reducing operating costs and streamlining operations. These efforts should support maintaining or growing our margins.

27/02/2025 Revenues softened in December. Is H1 still broadly in line with AGM guidance?

Frank, I’ll pass that to you.

27/02/2025 [Frank Izzo] Did H1 results meet AGM expectations despite softer December revenues?

Yeah, we did see a slight softening, but we expect a catch-up in H2. Most current activity is strong, especially in our manufacturing division, driven by the recovery in the cropping season. So we anticipate some recovery through Q3.

05/03/2025 Has competition intensified or softened in DGL’s markets?

Competition has intensified since the end of COVID because supply chains have reopened and mobility has increased. I focus on three pillars to stay ahead: being the most efficient operator with the lowest overheads, not in a discount sense, but structurally cheaper than competitors; having the best quality, in both product and service; and being the fastest. People now expect near-instant service, even in chemicals. If you order on Monday morning, you want delivery by that afternoon. The expectations set by companies like Amazon have changed customer behavior across industries.

05/03/2025 If you had a silver bullet, which competitor would you eliminate?

All of them, ideally. But to be honest, I admire Mainfreight, a New Zealand-based international logistics company operating throughout Europe. They’re exceptionally good at what they do, with a strong culture and a slick operation. I wouldn’t be comfortable with the bullet, it’s more admiration than rivalry. They do have a subsidiary, ChemCouriers, which overlaps with our space, although they don’t handle formulation or bulk chemical transfers like we do.

Growth

05/10/2021 How did the business scale from those first few sites?

Initially, I dreamed of owning three sites. I started with Auckland, then Christchurch. Now we have 41 sites and expect to reach 50 by Christmas, spanning from Darwin to Christchurch. We’ve gone from a 20,000-ton throughput in year one to 1.1 million tons today, growing at around 20% annually. And if anything, that growth is accelerating.

05/10/2021 Are you planning to expand internationally beyond Australia and New Zealand?

Yes, definitely. There’s still room to grow here, but I’ve long had an interest in the US, having lived there during the Reagan era. I admire its commercial dynamism and would love to be part of that. Some of the Australian companies we’re looking at acquiring already operate in Indonesia, Thailand, and Malaysia, so international exposure is happening organically. As soon as travel restrictions ease, I’ll be expanding further.

05/10/2021 Does this business model require a growth economy to succeed?

Not at all. Whether an economy is growing or stagnant, the chemicals we handle are still needed. That’s one of the strengths of the model. Of course, it’s easier to operate in jurisdictions like Australia, the US, Canada, or the UK, places with familiar tax and legal frameworks. But we're also active in Asia, with a sourcing office in China and increasing supply relationships in India. Japan, however, is too complex legally, we’ll form partnerships there, but won’t own assets directly.

31/08/2022 Are you concerned about replicating FY22 growth?

FY22 was a standout year for DGL. While I’m committed to continued growth, it’s unrealistic to expect the same growth rate in FY23. Sustainable growth requires that we fully integrate acquisitions, align systems, manage capital effectively, and ensure strong bench strength and operational safety.

31/08/2022 What is your long-term view on organic revenue growth?

DGL has grown at over 20% compound annually for more than two decades. While the growth isn’t uniform year-to-year, we’ve historically seen about 55% from acquisitions and 45% from organic expansion. FY22 showed strong organic growth, and I see no reason that ratio won’t continue.

31/08/2022 How do you view the opportunity across all three divisions?

The opportunity is enormous, limited only by the hours in the day. We’re increasingly integrating offerings across divisions. We don’t operate in silos. Resources are shared, which enhances the value we provide to customers across geographies. This unified structure unlocks more service potential across all areas.

31/08/2022 How is DGL positioned for further growth?

We’re exposed to resilient industries in Australia and New Zealand. With our capital and assets, we’re well positioned to expand our service offering and continue growing our customer base.

14/11/2022 What are your expansion plans for Melbourne?

We’ll continue to expand in Victoria, it’s a great place to work. When the sun comes out, if it comes out, we’ll grow here. That’s why I’m here.

8/11/2023 How big do you want DGL to become?

I don’t have a defined endgame. I like to quote Lucian Freud, who said he’d paint himself to death, and he did. I feel the same about work. We’ve compounded growth at over 20% annually for more than two decades. I believe we can keep that up for years, even if it becomes harder to double as we scale. I can see us doubling again in the next 3–4 years, but beyond that, we’ll keep going year by year, just as we always have.

08/11/2023 Is 20% annual growth still your long-term benchmark?

Yes, it’s our reference point. We’ve consistently grown at over 20% annually, and when we analyze the split, about 55% of that comes from M&A and 45% from organic growth. We don’t see any reason that mix or rate should slow in the near term. So yes, 20%+ per annum remains our target.

26/02/2024 What is the outlook for organic growth by division?

That’s a good question. I expect some current competitors in chemical logistics in Australia to exit the market. We've expanded by around 40,000 square meters of space and hardstand in the first half, so we’re in a good position to take over abandoned business. So we see strong growth opportunities there

Our warehousing and logistics operations also showed strong growth in the first half, and as Alex, our COO, mentioned, we’re seeing a large number of tenders and business opportunities coming our way in the second half.

02/09/2024 Why is revenue flat despite multiple acquisitions?

We saw volume growth driven by a broader customer base. However, we’re exposed to commodity price swings, cropping chemicals and technical grade urea in particular, which impacted our crop protection products and ad valuing products. These pricing pressures offset volume gains, resulting in flat revenue in dollar terms.

02/09/2024 With profit down 20% after acquisitions, is organic earnings growth negative?

We faced several challenges: unexpected weather dampened demand for Ag Protection products, commodity prices softened, and there was limited ULAB supply. Additionally, we made significant investments in FY24, including organic growth initiatives, integration costs, and shared services setup, that were expensed during the year. We expect returns from these investments going forward.

20/11/2024 What are the top 2–3 growth opportunities over the next 3–5 years?

The biggest opportunity is fully leveraging our licensed facilities and existing network for organic growth. That means engaging more directly with customers and expanding the scope of services we offer from our current asset base.

We’re also seeing continued industry consolidation. Fewer players remain in this highly regulated space, and those who can operate at scale , with the capital and expertise to navigate complexity , are positioned for meaningful growth. We’re in that category.

20/11/2024 What are the top 2–3 growth opportunities over the next 3–5 years?
The biggest opportunity is fully leveraging our licensed facilities and existing network for organic growth. That means engaging more directly with customers and expanding the scope of services we offer from our current asset base.

20/11/2024 What partnerships or collaborations are being explored to drive growth?

We already work closely with many industry partners across Australia. While joint ventures aren’t on the table currently, we continue to look for acquisitions that expand our product sets and customer base. Additionally, we’ve recently been accredited by major global chemical companies, and these new relationships are expected to drive future growth.

20/11/2024 Will DGL expand beyond Australia and New Zealand?

Yes, but cautiously. We're already exporting internationally and engaging with global chemical companies. While there are no imminent plans to establish a physical presence abroad, we’re exploring partnerships or future formulation and packing operations in Asia , possibly in Thailand or China , over the longer term.

27/02/2025 Is revenue growth driven by acquisitions or organic performance?

It's a split of both.

27/02/2025 Is the focus shifting from acquisitions to integration, and what cost efficiencies are expected?

We believe we now have the necessary assets and licenses to build an integrated network unique to the chemical industry in Australia and New Zealand. While we’re not actively pursuing more acquisitions, we remain open if the right asset appears at the right price. I won’t quantify the profit from efficiency efforts just yet, but it is significant.

05/03/2025 Are there plans to expand beyond Australia and New Zealand?

We already trade globally, Europe, North Africa, Asia, India. I don’t rule out a chemical formulation facility in Asia, especially Thailand. We’ve also looked at businesses in Texas, which is the heart of the U.S. chemicals industry. America, despite political changes, remains business-friendly. By contrast, Western Europe is becoming more difficult to operate in. That said, we still have plenty of work here, and I believe in deeply understanding your home market. But yes, we're actively evaluating partnerships in Asia and opportunities in the U.S.

Financials

05/10/2021 Has DGL proven to be recession-proof?

Yes, without question. Most of our chemicals support agriculture, mining, and construction. While construction and mining can dip in a downturn, agriculture is largely recession-resistant. Herbicides and farm chemicals remain essential. Today, our company has solid cash flow, low debt, and no dependency on financing. We're a proper operating business now, and I feel confident going into any future recession. In fact, I’m not even sure this current period counts as a recession, parts of the economy are hot, others are not, but either way, we’re in a strong position.

25/02/2022 When do you expect working capital to normalize?

We're entering peak production, and inventory levels are rising in preparation for the sales period. Inventory values are also up due to higher raw material prices. That said, we expect to unwind some of that buildup and return to normalized levels by June.
Given our growth in size, we now evaluate inventory and dealer performance in days rather than absolute values. These metrics should return to more typical levels as we approach June. Additionally, our strong balance sheet allows us to maintain stable supply chains while some competitors struggle, which gives us an advantage.

25/02/2022 How much headroom remains on your borrowing facility?

As of December, we had utilized approximately 75% of our current debt facilities. We have a strong relationship with our bank and will work with them to extend those facilities as needed.
We have a covenant in place that allows debt up to 3x EBITDA, and our trailing 12-month ratio as of December was around 2x. This gives us ample headroom if additional funding is required.

25/02/2022 What is your current debt-to-EBITDA ratio?

At this time, our debt is approximately 2.2x EBITDA.

31/08/2022 When do you expect operating cash flow to normalize?
FY21 was exceptional with 100% cash conversion. FY22 saw slightly lower conversion due to modest working capital drag and a strategic inventory build. We expect conversion to normalize in FY23, targeting around 80–90%, as we grow and remain agile in deciding how we deploy capital, whether into inventory or elsewhere, to support customers.

31/08/2022 Can you disclose the EBITDA contribution from acquisitions?

We don’t break out EBITDA by acquisition. Once integrated, acquisitions draw on group-wide resources and are often merged into existing entities. Some subsidiaries are wound up, with operations consolidated. What we can say is that all three divisions performed strongly in FY22, and we expect this to continue.

31/08/2022 Can you quantify FY22’s opportunistic sales?

No, we can’t precisely break that out. It’s been discussed and well recognized that some FY22 earnings were opportunistic. But our ability to deploy assets, use our fleet, and execute efficiently was a key driver. The strong result was due to all components working in sync, not any single factor.

14/11/2022 What's your current leverage position compared to IPO targets?

When we IPO’d DGL, we talked about using up to 3x EBITDA in debt, but we’ve pulled back. We currently sit just above 1x, and we’re quite comfortable at that level.

08/11/2023 Are executive bonuses tied to share price performance?

Never. We’re not big on bonuses and we don’t have an ESOP or employee share option scheme in place. That’s quite unusual, but it's how we operate.

08/11/2023 How do you measure the fair value of DGL?

Our net tangible asset backing per share is $1.17. I think we’re trading around 78 cents, so there’s clear disconnect. I get monthly reports from Bell Potter with comps like Cleanaway and others. I believe a fair multiple for us is around 9 to 12 times EBITDA, but the market needs time and consistency to rebuild confidence.

26/02/2024 What was the revenue and EBITDA performance for the chemical manufacturing division, specifically agricultural?
In the first half, crop protection products in Australia were challenged due to widespread media coverage of a pending drought, which led to significantly lower orders. However, with the good rains we’ve seen, our order books are now full, and our plants are working at full capacity to meet demand.

The other channel, auto chemicals, AdBlue, and materials for mining and water treatment, remains strong across the board.

02/09/2024 Why did employee costs increase by $30M versus FY23, and how much was due to head office relocation?

We're still working through the breakdown, but the bulk of the increase relates to headcount growth from the shared services team in Parramatta and our acquired businesses. Wage inflation has also played a significant role.

02/09/2024 Why is EBITDA flat but cash flow down 37%?

Primarily due to higher financing costs this year. In FY23, working capital and provisions moved more favorably, contributing to stronger cash flow then.

02/09/2024 Why do expenses on Slides 13–16 show a $29.6M increase, while overall expenses are up $37M?

Slides 13 to 16 exclude depreciation, whereas Slide 15 includes it. That’s the difference in the figures.

02/09/2024 Why did the site cleanup provision drop significantly, was it a reversal or utilization?

It was a reversal. We had taken a conservative position on one of our sites, but after extensive internal review and feedback, including from Simon and environmental auditors, we felt comfortable releasing that provision.

02/09/2024 Why was there no audit opinion attached to the financial statements

We faced challenges: transitioning shared services to Australia, a late CFO appointment, and tight reporting timelines. Despite this, we delivered results we stand by, and we expect the audit opinion shortly.

20/11/2024 When will spending on ERP, tech, and trucks decline so profitability normalizes?

We’re currently investing in system upgrades and infrastructure enhancements to support the scale we’ve achieved through rapid growth. These are heavier costs now, but we expect that to moderate over the next one to two years, at which point the benefits should begin to flow through.

20/11/2024 When will spending on ERP, tech, and trucks decline so profitability normalizes?

27/02/2025 Was the Wellington facility sold at a profit?

It was sold at a profit relative to what we paid for it, but at a loss to its book value. However, I’d point out that across all properties DGL has sold since listing, the net result is above book value.

27/02/2025 Why is tax payable despite no accounting profit?

That’s due to differences between tax and accounting book values. We’ve used accelerated depreciation for tax purposes, which caused a disparity between taxable and accounting income for the period.

27/02/2025 Why does the environmental segment show a negative EBIT despite $278M in assets?

We work closely with our auditors to assess the value of all our cash-generating units. If we ever felt an asset needed to be impaired, we would take action accordingly.

05/03/2025 How is DGL addressing cost increases and protecting margins?

We pass on cost increases where possible, but that’s not always feasible. Instead, we focus on controlling expenses. Our ERP system and shared services hub will lower unit production costs, making operations more efficient. Streamlined systems reduce overheads, helping us preserve margins while remaining competitive.

05/03/2025 Were the most recent results in line with expectations? If not, why?

Three factors drove what we consider a weak result. First, we’re duplicating costs during the transition to the shared services hub, we have both central and local finance functions in place. That duplication could cost up to $10 million. Second, our battery recycling division, once earning up to $12 million annually, is now running at a loss due to increased competition. Third, new accounting standards require us to recognize rental holidays as expenses, inflating short-term costs even when we’re not paying rent. These pressures all hit the bottom line.

Outlook & Guidance

05/10/2021 How did you conclude chemicals were the right sector after your experience with debt?

It was more luck than planning. I bought a 3.6-hectare former ICI site in Seaview, Wellington, purpose-built for chemical formulation and logistics. As a developer, I only wanted the land. But when I looked into shutting it down, the council asked me not to, they said it was the only licensed chemical storage site in the lower North Island. That got my attention. I’d also been reading about funds specializing in niche assets, marinas, dry stacks, car parks. Chemical storage seemed like a similar underexploited niche, and I thought, why not focus on that?

05/10/2021 Do you invest in R&D, or is it secondary to acquisitions?

We do invest, about $1 million a year. That funds several senior engineers and our three Australian labs. It’s highly targeted. For example, we’re currently working on a specific emerging contaminant. Rather than buy a company for $150 million, I told our team to spend half a million and crack the problem ourselves. R&D is great fun and essential for us. But for now, acquisitions take precedence. We're filling strategic gaps quickly, once we hit critical mass, we’ll expand R&D more aggressively.

25/02/2022 What organic revenue growth rate is assumed for the second half?

We've assumed a similar growth rate to the first half, with additional contribution from acquisitions, which will be fully reflected in the second half. Trading conditions have remained strong, supported by favorable climate and well-utilized distribution assets. Overall, we expect organic growth to continue in line with recent trends.

Historically, about 45% of our growth has come from organic initiatives, and the remainder from acquisitions. We don't see this balance changing materially in the years ahead.

31/08/2022 Do you expect seasonality in earnings to remain consistent?

On a normalized basis, we expect seasonality to continue as it has in the past, typically a 45%/55% split between the first and second half. This pattern is largely driven by the agricultural season and the associated inventory build-up and drawdown during that period.

31/08/2022 Can you clarify your FY23 earnings outlook?

In FY22, we benefited from opportunistic earnings due to high stock holdings and expanded capabilities. That level of growth is unlikely to repeat in FY23. We expect flat earnings in the core business, though the acquisitions announced today and earlier this month will contribute positively to FY23 performance.

31/08/2022 How has trading been in the first two months of FY23?

All divisions are trading in line with forecast, and we have no concerns across any part of the business at this time.

31/08/2022 Will opportunistic earnings continue?

Those earnings were driven by our ability to meet customer needs under unique market conditions, procurement, supply, and delivery during a turbulent period. We don’t expect that to recur given the unpredictable environment.

31/08/2022 What exactly do you mean by “flat earnings” in your outlook?

The comment refers specifically to the underlying business as of 30 June 2022. The acquisitions announced today, including Flexichem, and those earlier in the month will be additive to that earnings base in FY23.

31/08/2022 Do you have forward visibility over customer orders?

Yes, our forward order books are strong. We’ve traded well over the past two months, and we see no immediate issues on the horizon. Customers recognize that we invest in raw materials and rely on us as a dependable supply partner.

31/08/2022 What signals justify your guidance of flat EBITDA?

There haven’t been any negative signals. FY22 was simply a fantastic year, and we want to temper expectations. While the company will continue growing, it’s unlikely to match the same rate we saw in FY22.

14/11/2022 Can you explain the confidence behind your narrow EBITDA guidance range of $70M–$72M?

That confidence stems from Ben, our CFO, who is extremely precise with forecasting. Last year, for example, we forecast $66M in February and delivered exactly that five months later. My background is also in finance, and I believe forecasting is more valuable than looking backward. We understand our businesses well. Of course, external risks remain, like volatile markets or supply shocks, urea for AdBlue was one example, but we’ve accounted for those. We're comfortable with the range and believe it reflects realistic upside and downside.

08/11/2023 What are the biggest misconceptions investors have about the business?

You’re right about the share price, it peaked post-IPO around $4, and now it's under a dollar. Obviously, that’s disappointing, but I’m not worried. We’re buying back shares now at 78 cents after issuing them at $2 to acquire great businesses. The market punished us for saying we’d slow growth, for building inventory due to supply chain volatility, and for not replicating FY22 results in FY23, despite delivering a solid year. Warren Buffett once said the IPO stage is like a casino, but long term it becomes a weighing machine. I believe we’re in between. If we keep delivering strong, consistent results every six months, I believe the market will re-rate us appropriately.

26/02/2024 Can you explain the acquisition strategy? Is it aimed at building scale for stronger future performance?

When we look at a company to acquire, we assess its strategic value across the broader group. What customers will it bring into our network? What licenses come with it? What is the caliber of its people, and what geographic coverage does it offer? We also look at its share capacity and how it fits into our existing capacity. So it’s very much a holistic view of the benefits that the acquisition brings.

26/02/2024 With higher interest payments, are you planning to accelerate debt repayment?

No, not at this time. We’re fully comfortable with where our debt stands. That said, we are making a strategic shift: rather than continuing to acquire companies at the same pace as we have since listing, we’re now focusing on organic growth, which typically requires far less debt.

26/02/2024 Is the second half growth outlook based on organic expansion or more M&A?

It’s based entirely on organic growth, not M&A. We're focused on making full use of the 40,000 square meters of space and the increased fleet we invested in during the first half. Favorable growing conditions across key agricultural regions in Australia are also driving strong demand in our Crop Protection Products segment. So all the growth we’re seeing now is organic.

26/02/2024 Slide 15 mentions “Australia, New Zealand and beyond.” Can you elaborate on “beyond”?

We’ve got various commercial activities in North America, but we don’t own assets or employ staff there. We manage those activities well from Australia. We also formulate chemicals in Australia and export them to Asia. So while our global commercial reach is increasing, we have no plans to invest capital outside Australia and New Zealand. Instead, we’ll continue leveraging the capabilities we’ve already built.

26/02/2024 What’s your message to shareholders in light of today’s share price and the company’s ongoing growth? Is more M&A coming or is the focus on organic growth?

To the shareholder who asked: management and staff at DGL are fully committed to running the company well, maintaining profitability, and extracting organic growth from our existing assets.

02/09/2024 Is the FY24 margin expansion sustainable?

Yes. We've improved customer and product mix, leaning toward higher-margin segments. More importantly, we've gained sustainable economies of scale over the last few years. We've also seen some relief in raw material pricing, though we remain exposed to commodity volatility.

02/09/2024 With heavy investment and flat revenue, what revenue growth is expected in FY25?

As CEO and Founder, I don’t focus on revenue, it’s not meaningful in our context. Net profit after tax is what matters. Given the pass-through nature of many of our costs, our priority is maximizing net profit after tax, not chasing topline growth for its own sake.

20/11/2024 What is being done to improve revenue, profit, and the share price?

That's clearly a focus for the board and senior executives. DGL hasn't been immune to the factors affecting many Australian companies , including cost pressures, higher interest rates, and commodity and supply chain volatility. Our profitability has also normalized after elevated earnings during the COVID period, which we believe contributed to the share price adjustment. We're executing a focused strategy to become a leading provider of specialized chemicals, materials, and services, and have completed integration of our recent acquisitions. Significant benefits are expected from those integrations, as well as from investments in systems and shared services.

While many of these initiatives have near-term cost impacts, we are confident they will enhance profitability over the medium to long term. We're all very focused on performance improvement. As Simon mentioned, everyone from senior management to site managers is committed to cost control and sales growth , which we expect will lead to improved profitability going forward.

20/11/2024 What is being done to improve revenue, profit, and the share price?

20/11/2024 Why has inorganic growth stalled if the split was previously around 45/55?

Cost pressures from inflation and interest rates have impacted the gains from recent acquisitions. We are now heavily focused on organic growth. Many of our current investments are organic in nature, and we expect them to drive stronger organic performance, especially in the second half and into FY202

05/03/2025 What is your 10-year vision for DGL?

I want DGL to be larger, delivering sustainable profit growth, and to become a fixture in the industrial landscape of Australia and New Zealand, an indispensable, integral provider of chemical services and materials. If we get there in 10 years, I’ll quietly say to myself: it worked.

05/03/2025 Where do you see the biggest opportunities and risks for DGL?

Opportunities lie in partnering with the world’s largest chemical companies, BASF, Bayer, Syngenta, Mitsui, and becoming their logistics or tolling partner in Australia and New Zealand. As for risks, we’re in the chemical business, so inherent risks exist, but I don’t see existential threats like Amazon disrupting us. As long as we stay agile, well-capitalized, and ahead in technology, I don’t see significant business risk.

05/03/2025 Was DGL’s 20% annual growth over two decades a smooth ride?

Not at all. If you drew a line from beginning to end, it’s 20%, but the ride was more like the Southern Alps, ups and downs. Good years and bad years. It’s never smooth, but persistence pays off if you stay committed to the long-term trajectory.

Risks & Macro

05/10/2021 Was the crash ultimately an opportunity to buy undervalued assets?

Absolutely. Throughout my career, I've generally done better in recessions than in booms. Booms are noisy and irrational, too much capital chasing too few assets. I prefer recessions: they're cold, hard, and efficient. They strip away the fluff and create clarity, which allows you to make real progress quickly.

05/10/2021 Have other crises, like the GFC or dot-com bubble, also been opportunities for you?

2008 was catastrophic. I was heavily exposed to property with debt, though I also had cash. That period taught me the danger of relying on leveraged assets. Property crashes and banking crises seem inevitable, and they expose fragility in balance sheets. We have a saying: bankers are “fine weather umbrella boys”, they lend when you don’t need it, and pull it back when you do. That experience pushed me to build a business with strong cash flow and resilience. I pivoted toward chemical logistics, sold down property, and invested in DGL to create an old-fashioned operating company, one with real utility and recession resistance.

05/10/2021 How do you approach compliance and regulation in your industry?

Kevin, the more regulation, the better. It forces out the hobbyists and weak competitors, which creates an environment where companies like ours can thrive. I might be one of the only CEOs who genuinely welcomes increased regulation. If the government mandates lead testing every 12 hours or bans a certain type of tanker, great, because we know half the market won’t be able to adapt. We’re large, experienced, and built for this. We’ve got compliance departments across the business, we know the legislation, and even the EPA in Canberra consults us on how to implement things. When we go to councils, like in Hawke’s Bay, we show them that we’ve already built 40 of these facilities and know exactly how to keep people and the environment safe. That expertise builds trust and wins support.

05/10/2021 What is the insurance market like for high-risk chemical facilities?

It’s difficult. Our premiums have reached $3 million annually, and there are currently two sites we can’t insure at all. So yes, it’s a real issue. The market is tight, and some facilities are effectively uninsurable.

05/10/2021 How do insurance companies impact your business and the broader industry?

We work with Berkshire Hathaway now and do a lot of insurance. Because we’re compliant and diversified, we get coverage. Smaller operators can’t, they don’t have the clean asset base to balance the risk. After a few major industrial fires in Victoria, insurers started conducting their own warehouse audits. Unlike government agencies, which might give you 60 days to fix something, insurance companies will cancel a landlord's cover by Friday if things aren’t resolved. As a result, we’re winning business from generic warehouse operators who’ve been flagged. The insurance industry is pushing standards up, which helps us.

05/10/2021 What is the insurance landscape like for high-risk sites?

It’s challenging. Our premiums are around $3 million annually, and there are two sites we can’t insure at all. The abattoir fire in Australia that cost $450 million shook the industry. One welding spark caused a total loss, including income. That’s why we’ve got a full-time insurance manager and highly disciplined compliance systems. It’s all part of the same strategy: take on hard problems fast, and turn difficulty into competitive advantage.

05/10/2021 Can you elaborate on your view of greenwashing and ESG-driven investments?

There’s greenwashing at every level. I’ve had fund managers ask if we’re recycling lithium-ion batteries, and I tell them, if I ever do that, sell your shares and run. It’s a feel-good topic with very little economic basis right now. Take Lithium Australia, $10 million in revenue, $8 million loss. That’s not a business model I’m interested in. I focus on profitable, tangible environmental impact. For example, we reduce landfill by chemically neutralizing waste streams or reconditioning acids from galvanizing and batteries. These are real gains, not PR spin.

05/10/2021 How do you see the circular economy fitting into DGL’s business model?

It’s a noble idea, designing systems where nothing is wasted. But the reality is difficult. We produce astonishing amounts of rubbish, especially with online shopping and disposable packaging. Even in Australia, a lot of what’s collected for recycling isn’t actually recycled. The economics don’t stack up. Plastics are so cheap due to fracking that there's no viable way to separate and recycle them profitably at scale. So while we aim to contribute, we're still at the beginning of solving this problem, and we don’t pretend otherwise.

25/02/2022 What has been the impact of the AdBlue supply issue?

The urea market is extremely volatile, especially after Russia's invasion of Ukraine, which caused prices to spike overnight. It's difficult to predict where prices will go, but it's unlikely they will decline soon.
DGL is well positioned with what we believe is the largest stockpile of technical-grade urea in Australia, along with strong forward orders. We're confident in our ability to supply AdBlue to both Australian and New Zealand markets for the foreseeable future.

31/08/2022 Are you seeing early signs of supply chain normalization?

Shipping rates have eased, which helps. But events like the drought in China and geopolitical instability, such as Russia’s invasion of Ukraine, add new layers of uncertainty. I think we’re at peak inventory levels now, and they may decline over 12 months, but I don’t expect a return to historical norms.

08/11/2023 What could go wrong over the next 10 years that would cause DGL to fail?

Great question, I haven’t been asked that before. The industries we operate in will always evolve, but chemicals aren’t going out of fashion. Usage is growing and becoming more sophisticated, with tighter regulation and higher stakes for getting it wrong. So the core rationale for DGL remains sound. Risks? Sure, an idiot CEO can destroy a business. Warren Buffett said that, and it’s true. We also operate hazardous sites; accidents are possible. Debt mismanagement is another. But we’re disciplined, and I don’t see any single threat that would end the business. The share price isn’t existential, it doesn’t affect how we perform.

02/09/2024 Has DGL considered investing in ammonia fuel like other Australian companies?

We’re monitoring the space. But today, long-distance freight still relies almost entirely on diesel. We're not positioning ourselves as an R&D company, but we’ll adopt clean technology quickly once it becomes proven and commercially viable.

20/11/2024 Are companies leaving the industry due to low profitability under regulatory pressure?

Not necessarily due to low profitability. More often, it’s frustration, lack of capital to upgrade sites, or founder retirement without succession. Many of these businesses are looking to sell, and DGL is often the only serious buyer in the formulation space.

20/11/2024 What happened at Seven Hills involving a creek?

A creek near our Seven Hills site turned blue and triggered a visit from the EPA. They inspected several local businesses, including ours, and identified areas for improvement, which we've since addressed. At this point, no further action is being taken against DGL, and there’s no confirmed link between our operations and the creek incident.

05/03/2025 Have you had any major setbacks or adversities?

The Global Financial Crisis in 2008 was brutal. I had $15 million in the bank, and the bank took it back, saying they wanted to reduce debt. I was in the middle of development work. It was tough, I even moved funds to my accountant’s bank for safety. That was the hardest period. Other than that, it’s been about managing the daily grind and navigating challenges year by year.

Personal Questions

05/10/2021 How did the 1987 stock market crash lead to your first business?

I grew up through the boom of the 1980s, during the Roger Douglas reform era, and was very interested in property. When the crash hit in 1987, I didn’t own any property, which turned out to be an advantage. Most property owners ended up with negative equity, while I was in a position to approach banks that had repossessed assets and structure deals to acquire them. I was buying property for 25 to 30 cents on the dollar of what had been lent on it. That’s how it all started.

05/10/2021 What other lessons have you taken from past crises?

You can't fully grasp the impact of a downturn until you've lived through one. It’s a loss of innocence. Training helps, but battle hardens you. Crises sort people, they separate those who crumble from those who adapt and fight. Personally, I thrive on that challenge. It’s hard to teach that in a classroom; experience is the only real teacher.

05/10/2021 Do you see yourself as someone who pushes through challenges?

I can’t really say that about myself, but those around me know it. If something gets in our way, I take pride in breaking through it. I’ve always admired people like Shackleton, facing impossible odds with no communications, stuck in the ice during wartime, yet leading through it. That mindset resonates with me. I like a good fight.

05/10/2021 How do you think about leadership and culture in acquired companies?

Good people can turn around bad companies. Bad people can destroy good ones. It’s all about people. I didn’t go to university, but I’ve learned how to listen, how to show respect, and how to build companies people are proud to work in, companies that are legal, profitable, and offer share ownership. When employees go home happy and well-paid, their families benefit. That’s the foundation of a functioning, modern society in my view.

05/10/2021 Would you walk away from a deal if the culture was wrong, even if the numbers were right?

Absolutely. Sometimes you don't want to retain the existing management. We assess that on a case-by-case basis. My only rigid principle is pragmatism. Sometimes older managers want to wind down,

05/10/2021 Why don’t more people want to work in industrial businesses like yours?

Industrial companies are underappreciated and undervalued, especially by younger generations. Chemicals sound unglamorous, but they’re fundamental to every aspect of life. That’s one reason I can buy quality businesses at fair prices, there aren’t many buyers. Founders are aging, their children have moved on, and there’s no succession. These companies are built over decades, but few want to take them over. That’s an opportunity.

05/10/2021 What failures have you faced, and what have you learned from them?

I’ve forgotten most of them. I’ve never gone broke, but I’ve taken hits, everyone who builds companies gets knocked around. You buy a few duds, have sleepless nights thinking you’ve lost $20 or $30 million. But somehow I’ve always bounced back. I say 51% of my decisions have been right, and that’s enough to keep going. Ted Turner once wrote, “It’s not as easy as it looks,” and that’s spot on. But I’ve enjoyed every day of it. Compared to real hard work, farmers behind horses or coal miners in Victorian England, my job is a breeze.

08/11/2023 What are your personal goals with the business?

It would be disingenuous to say it’s not about money, we all come to work to make money. But for me, it’s about the satisfaction and pride of building a solvent, profitable organization that offers good jobs and solid services across our sectors. I get immense personal reward from growing something significant and enduring.

08/11/2023 Do you see yourself as running a different kind of company compared to traditional CEOs?

Absolutely. I don’t have formal CEO training. I’m not a career executive from an accounting or operations background. I probably see the world quite differently from traditional CEOs. We’re running our own race, and that’s intentional.

08/11/2023 Aside from Buffett, are there other CEOs or companies you admire?

I wouldn’t say I actively look up to many, not even Buffett all the time. But I respect him, he applies basic, practical business rules with consistency, and he writes in a humorous, readable way. His success is undeniable. I do pay attention to serial acquirers like Constellation Software, and I’ve recently taken interest in a Belgian-listed company called Azelis, they make me look slow by comparison. Then there’s Terry Peabody of Cleanaway; he was acquiring too fast, one deal a week. That’s not our style.

08/11/2023 How do you view recent board turnover, positive or negative?

Overall, it’s been positive. The board was formed during lockdown; we met virtually and didn’t really know each other. Some changes were natural, Ben Holly was a great young finance talent from Christchurch, but the stress of market-facing work without training or local support made the role hard. Rob Perkins, our new CFO, has been excellent. Our former chairman, Peter Lowe, retired at his wife’s insistence at 70. Bob McKinnon had serious health issues. We needed a refresh. New directors like John West and Tim Hosking bring experience, market knowledge, and growth focus. We now meet in person, it’s a major improvement.

08/11/2023 Is your board a true check on strategy or just a formality given your majority ownership?

They’re absolutely not yes-men. I wouldn’t tolerate that. I know what I’m good at, and what I’m not. So I surround myself with people who know more than I do in critical areas. Tim Hosking brings 30–40 years of market-facing experience and helps guide me step-by-step with investors. John West has run chemical logistics for decades and challenges us on safety and operations. I build consensus before meetings, so nothing gets rubber-stamped. It’s an independent, experienced board that adds real value.

08/11/2023 How do you handle toxic or misaligned employees from acquisitions?

We exit them, simple as that. When you bring in 400 new people over two years, you’ll inevitably have a few cultural misfits. It’s important that everyone in the business is aligned, we need people singing from the same hymn sheet. If someone doesn’t fit, we all know it, and they go.

08/11/2023 What kind of car do you drive?

I don’t drive much, maybe 35,000 kilometers a year. I have two cars: a Mercedes-Benz sedan I bought during the first week of lockdown at a 30% discount when dealers panicked, and a 911 Carrera 4S Turbo Porsche that I absolutely love. It’s a timeless classic, about 18 months old. But it doesn’t get out of the garage enough, unfortunately.

08/11/2023 Is there anything else you’d like to say to the market?

I lean on the guidance of Tim Hoskins, our chairman. He’s spent his life in the markets and his advice to me is: keep your head down, communicate clearly, and deliver results. That’s exactly what I’m doing.

02/09/2024 Are there plans to appoint more independent directors to the Board?

Yes, we’re currently seeking an independent director with a finance background. We've identified a candidate and are working through scheduling logistics. I expect an appointment within the next few weeks or months.

20/11/2024 Are there plans to take the company private, especially given Simon’s recent share purchases?

No, that’s not something under consideration. Simon may want to comment on his share purchases, but they were based on a valuation decision, not any intention to privatize the company.

20/11/2024 Do you have any intention of taking the company private?

I'm passionate about DGL and intend to stay here for many years running and growing this publicly listed company. I have absolutely no intention of taking it private.

20/11/2024 Are there plans to take the company private, especially given Simon’s recent share purchases?

No, that’s not something under consideration. Simon may want to comment on his share purchases, but they were based on a valuation decision, not any intention to privatize the company.

20/11/2024 Do you have any intention of taking the company private?

I'm passionate about DGL and intend to stay here for many years running and growing this publicly listed company. I have absolutely no intention of taking it private.

05/03/2025 How do you ensure everyone in the business is aligned and working towards the same goal?

It's a great question, and probably one of the biggest challenges for a CEO, getting all employees aligned and interacting with customers in a consistent, positive way. I relish the challenge. I stay close to the business and hold regular Town Hall broadcasts across the group. We also maintain a flat management structure and gather regular feedback from all sites, which I use to shape a unified culture across the group. It's a constant effort and there's no easy fix, but I enjoy the process.

05/03/2025 Can you discuss recent leadership changes and the role of culture in retaining talent?

DGL was a New Zealand business, but now only 7% of our activity is in NZ. We moved our head office to Sydney, where most of our operations are, and needed a CFO with Australian experience. Our former NZ CFO was excellent but lacked that exposure. We also formalized the COO role, Alex Wing now holds that position and is doing well. The changes reflect our growth and the need for leadership with listed-company experience. It's a natural evolution.

05/03/2025 Why do markets value leadership consistency even in dynamic businesses?

Businesses are like governments, if you change your prime minister every two weeks, you look unstable. The same goes for companies. Employees, suppliers, and shareholders all value stability. Think of Warren Buffett or companies like Microsoft and Apple, few leadership changes, and that’s seen as strength. That said, because we’ve grown so quickly, many of our original senior managers had no listed-company experience. As we mature, we need specialists who do.

05/03/2025 Do you see yourself in this role in 5, 10, or even 20 years?

I turn 60 this year, which surprises even me. But I’m very happy in my role. I enjoy running the company and working with a great team. I delegate daily operations to the CFO and COO, which allows me to focus on growth and integration. I’m comfortable staying in this role for at least another 10 years.

05/03/2025 What motivates you, and what is your long-term vision for the company?

I believe working hard is healthy. I enjoy it, and I want to set that example for my children. I like tennis, but not 40 hours a week. I genuinely enjoy the camaraderie and challenge of business, and I want to keep improving what we do. That’s my long-term vision, doing things better, continuously.

05/03/2025 Was there a moment when you felt, “It really worked”?

On day one, when I bought my first chemical storage facility, I was fascinated by the industry. I enjoyed science in high school and was intrigued by how chemicals are stored and moved. But I’d say the journey’s been incremental, there hasn’t been one single moment. It’s been a gradual realization of how essential this business is to modern life.

05/03/2025 What drew you into the chemical industry in the first place?

A whole new world opened up for me. I was intrigued by how chemicals move around the world, how they're used, and how much physical work goes into their management. I enjoy the industrial side of the business. Despite global change, chemical consumption is rising, not falling. At the same time, regulation is getting more complex, and community expectations have shifted. We like being at the forefront, it’s challenging, but we embrace it.

05/03/2025 What was your childhood like?

I was born in 1965 in Christchurch. My dad was an electrician, and my mum was a lab technician. We had a small farm and a city house. My parents instilled independence and the importance of thinking for ourselves. I’ve never been to a rock concert, my father viewed them as mass adulation, and I don’t disagree. I enjoyed school, especially science, didn’t go to university, but became a keen reader. I’ve always loved working hard and traveling. Reading history helps me see that most challenges aren’t new, overpopulation, traffic, even 500 years ago.

05/03/2025 What did you mean when you said you “work too hard”?

There were times I thought I could work all day and night, until my body rejected it. Your immune system suffers. As I’ve aged, I’ve learned to balance things. At DGL, we have a rule: no work contact on weekends unless it’s an emergency. At 5:00 p.m. Friday, we turn off our phones. Monday 8:00 a.m., we’re back. It’s important to keep work and life separate, especially in today’s always-on world.

05/03/2025 Why did you decide to build DGL specifically?

I was looking for an industry where I could make an impact without needing billions in capital. I started in the honey export business and did well in property, but chemicals, specifically chemical logistics, was a space where I could enter modestly and grow. You can’t just say, “I want to own office buildings” without huge capital. Chemicals offered growth potential and market command at a manageable entry point.

05/03/2025 How does it feel to be a multimillionaire?

It’s wonderful in one sense, but it also makes you reflect on what really matters. I’ve worked to live a low-key life. I have one house, one car. I cook simple meals at home, and I value sitting at the dinner table with my family, it’s one of life’s greatest pleasures, and it's free. I like to travel, sure, but I don’t need luxury to be happy. I stopped drinking after COVID. I play tennis at the local club, it’s €300 a year. If you’ve got money, you don’t need to spend it. If you need wealth to impress someone, you're already in trouble.

05/03/2025 Do you have any regrets?

Yes. I separated from my son's mother. She’s a barrister, and we both worked too hard and didn’t invest enough in the marriage. We never even went to a supermarket together, it might sound small, but time is the real currency of relationships. You spell love “T-I-M-E.” I put ambition before the relationship, and I paid a price for it.

05/03/2025 What advice would you give young ambitious people?

Read widely, biographies, history, not management books. Apply the golden rule: treat others how you’d like to be treated. Build a reputation for being reliable. Show up on time. If you borrow something, return it better than you found it. If you take out a loan, repay it. Start building goodwill and credibility early. That reputation will carry you far.

Other

31/08/2022 Have inventory investments led to tangible commercial benefits?

Yes. A key factor in our FY22 success was our foresight and discipline in holding raw materials when competitors didn’t. I can’t name specific customers, but this approach significantly contributed to our outstanding performance.

20/11/2024 When will the employee share plan be launched?

Subject to shareholder approval, the plan will be implemented as soon as possible. This includes both a general share purchase plan for all employees and a performance rights component.

20/11/2024 Have there been any takeover offers for DGL?

From time to time, we've received early-stage approaches, but nothing has advanced meaningfully. We’re not pursuing such discussions. We have strong internal growth opportunities and remain focused on delivering shareholder value through our current strategies.

20/11/2024 When will the employee share plan be launched?
Subject to shareholder approval, the plan will be implemented as soon as possible. This includes both a general share purchase plan for all employees and a performance rights component.

20/11/2024 Have there been any takeover offers for DGL?
From time to time, we've received early-stage approaches, but nothing has advanced meaningfully. We’re not pursuing such discussions. We have strong internal growth opportunities and remain focused on delivering shareholder value through our current strategies.

Disclaimer:

The following transcript and Q&A have been generated with the assistance of Artificial Intelligence (AI). While we strive for accuracy, completeness, and clarity, the content may contain errors, inaccuracies, or misinterpretations. Neither the company featured in this document nor ValueBridge assumes any responsibility or liability for the accuracy, reliability, or completeness of the information presented.

This material is for informational purposes only and should not be construed as official company communication, financial advice, or a definitive representation of the company's views. Readers should independently verify any information before making decisions based on it.

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