Ann: Q1 FY23 Market Update, page-72

"With higher inflation, I think it is important to scrutinise costs as well as revenues. How well is DDR controlling costs?"

An important question, indeed, in current times.

Looking at nominal levels of operating expenses is unhelpful because of the acquisitions the company has made in recent years.

So best to look at Expenses as a function of Revenue.

Unsurprising for a "Catch-and-pass" business model, Cost of Goods has been very consistent around that 90.5% to 91.0% range over time, which is actually quite a statement, given some of the supply chain and inflationary issues that have prevailed over the past few reporting periods:




For Employee Expenses-to-Sales, the long-run downward trend is evident (unsurprisingly given the scale benefits), although this metric did tick up a bit in DH2022, which is something to be monitored going forward:



(Note: a 60bp or 70bp reduction in Employee Expenses-to-Revenue over a period of 9 or so years might not sound meaningful, but when you're dealing in Revenues in excess of $3.0bn, then it translates into a couple of tens of millions of dollars in EBIT)


So, all up, from those pictures, I'd say the control over costs gets a pass mark.
Maybe not a high distinction, but certainly a "B" or "B+", I feel.

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