Bunzl Plc · LSE:BNZL
Bunzl — FY2022 Earnings Presentation
39 slides from Bunzl's earnings presentation, Feb 23, 2023
Slide 1: Bunzl 2022 Full Year Results
BUNZL 2022 FULL YEAR RESULTS
Slide 2: Introduction
INTRODUCTION Frank van Zanten, Chief Executive Officer 2022 FULL YEAR RESULTS 2
Slide 3: Full Year 2022 Financial Highlights
FULL YEAR 2022 FINANCIAL HIGHLIGHTS Very strong performance highlights operational and financial resilience Due to successful Adjusted Very strong profit Revenue growth inflation driven price operating year-on-year 9.8% 1 increases, acquisitions, profit2 growth 11.1% 1 growth, supported by y-o-y mar
Slide 4: Full Year 2022 Performance Achievements
FULL YEAR 2022 PERFORMANCE ACHIEVEMENTS Continued success in pursuing our purpose-driven strategic goals Successful management of 12 acquisitions signed in 2022; inflation and supply chain total committed spend of £322m disruption reflected in results Increased the percentage of SBTi approval of our
Slide 5: Financial Results
FINANCIAL RESULTS Richard Howes, Chief Financial Officer 2022 FULL YEAR RESULTS 5
Slide 6: Revenue Growth
REVENUE GROWTH Strong underlying growth, driven by base business inflation and volume recovery Revenue growth: 9.8%1 Revenue growth vs 2021 £m 13,000 9.8%1 12,000 11.6% 3.2% (5.0)% 11,000 Underlying revenue growth2 vs 2021 10,000 6.6% 12,040 1 9,000 10,961 Underlying revenue growth2 : 6.6% 8,000 7,0
Slide 7: Income Statement
INCOME STATEMENT Very strong adjusted operating profit growth and improved margin REPORTED CONSTANT Adjusted operating £m 2022 2021 GROWTH EXCHANGE profit1 growth Revenue 12,039.5 10,285.1 17.1% 9.8% 11.1% 2 Adjusted operating profit1 885.9 752.8 17.7% 11.1% Operating margin1 7.4% 7.3% with operatin
Slide 8: Cash Flow
CASH FLOW Strong cash generation, supported by working capital improvement and disposal Cash conversion over the last 10 years Cash conversion1 £m 2022 2021 107% Operating cash flow1,2 925.0 741.6 107% 103% 102% 102% 101% Net interest (excluding lease liabilities) (45.7) (34.8) 99% 97% 97% 95% 94% I
Slide 9: Balance Sheet
BALANCE SHEET Substantial capacity for continued self-funded acquisitions Net debt : EBITDA1,2 DECEMBER DECEMBER Net debt : EBITDA1,2,3 £m 2022 2021 1.2x 2.3x Intangibles 3,093.9 2,766.8 2.1x Right-of-use assets 529.6 448.3 TARGET 2.0x 2.0x Due to strong cash Property, plant and equipment 137.2 120.
Slide 10: Three Decades of Consecutive Dividend Growth
THREE DECADES OF CONSECUTIVE DIVIDEND GROWTH Maintained dividend growth through periods of uncertainty 10.0% 62.7 y-o-y dividend growth, in line with 30-year CAGR Dividend per share CAGR 9.6% 30 years of consecutive annual dividend increases 4.0 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09
Slide 11: Business Review and Outlook
BUSINESS REVIEW AND OUTLOOK Frank van Zanten, Chief Executive Officer 2022 FULL YEAR RESULTS 11
Slide 12: Business Mix Normalising Post-Pandemic
BUSINESS MIX NORMALISING POST-PANDEMIC Base business ahead of 2019 levels Underlying revenue1 Base Business2 Inflation strongly – Base business contribution to 2022 underlying supportive to base £m revenue growth 11.6% business growth year- 12,000 – Base business revenue well ahead of 2019 on-year 1
Slide 13: Sector Performance
SECTOR PERFORMANCE Supportive medium-term drivers to healthcare, safety and cleaning & hygiene Sector commentary 2022 revenue as Underlying revenue1 Underlying revenue1 % of Group total 2022 vs 2019 2022 vs 2021 Healthcare • Healthcare base business performing well, with the growing backlog of elect
Slide 14: Inflation Dynamics
INFLATION DYNAMICS Successful pass through of inflation in 2022 Product cost inflation Operating cost inflation Product cost inflation strongly supportive to • Significant product cost inflation strongly North America supported revenue growth through 2022 • Fuel and freight costs drove inflation in
Slide 15: North America / Continental Europe
NORTH AMERICA / CONTINENTAL EUROPE Inflation, acquisitions and volume recovery supportive to performance North America Continental Europe CONSTANT CONSTANT £m 2022 2021 REPORTED EXCHANGE1 UNDERLYING1 2022 2021 REPORTED EXCHANGE1 UNDERLYING1 Revenue 7,366.0 6,144.7 19.9% 8.1% 6.1% 2,173.4 1,972.9 10.
Slide 16: UK & Ireland / Rest of the World
UK & IRELAND / REST OF THE WORLD UK&I margins driven by recovery; Asia Pacific strength offset by LatAm Covid reduction UK & Ireland Rest of the World CONSTANT CONSTANT £m 2022 2021 REPORTED EXCHANGE1 UNDERLYING1 2022 2021 REPORTED EXCHANGE1 UNDERLYING1 Revenue 1,442.5 1,254.2 15.0% 15.0% 12.2% 1,05
Slide 17: 2023 Outlook
2023 OUTLOOK Unchanged from pre-close statement – While we see continued uncertainty relating to the macroeconomic environment, our 2023 guidance remains unchanged from that published in our pre-close statement – We expect slight revenue growth1 in 2023, driven by both organic growth and announced a
Slide 18: Strategy Update
STRATEGY UPDATE Frank van Zanten, Chief Executive Officer 2022 FULL YEAR RESULTS 18
Slide 19: Bunzl's Strategy Proven by Successful Track Record
BUNZL’S STRATEGY PROVEN BY SUCCESSFUL TRACK RECORD Consistent compounding growth model Historic building Customer-focused business model blocks of performance – Deep category knowledge Organic Driven by activity in our markets Growth • Attractive end markets with structural growth c.1/3 – Customer s
Slide 20: Driving Organic Growth – North America Case Study
DRIVING ORGANIC GROWTH – NORTH AMERICA CASE STUDY Supply chain management a critical factor in key food processor contract expansion Bunzl’s value-added services and ability to serve as a true strategic partner to a complex and growing organisation has allowed us to materially expand our contract wi
Slide 21: Improving Operational Efficiency
IMPROVING OPERATIONAL EFFICIENCY Delivering an ongoing program of incremental improvement 2022 Group-wide CASE STUDY: North America warehouse consolidation warehouse relocations – Consolidation of one warehouse into another & consolidations larger warehouse in California in 2022 15 – Reduced unused
Slide 22: Continued Acquisition Strategy Success in 2022
CONTINUED ACQUISITION STRATEGY SUCCESS IN 2022 Acquisitions of high-quality businesses improve Group margin and capabilities 2022 acquisitions 12 – Variety of acquisitions highlights breadth of opportunity acquisitions in 2022; Acquisitions £322m committed 9 5 announced since 2004 spend Countries Se
Slide 23: Disciplined Approach to Capital Allocation
DISCIPLINED APPROACH TO CAPITAL ALLOCATION Highly cash generative model continues to drive stakeholder value Capital allocation Progressive dividend Value accretive acquisitions priorities £2.0bn of dividend payments since 2004 £4.7bn of committed spend since 2004 Sustainable annual dividend growth
Slide 24: Group Packaging Snapshot and Sustainability Progress
GROUP PACKAGING SNAPSHOT AND SUSTAINABILITY PROGRESS Further success in supporting customers transition to alternative products £0.2bn (2%) Consumables facing regulation £7.7bn (64%) Only 2% of revenue generated by consumables facing £1.2bn (10%) Non-packaging products regulation Consumables likely
Slide 25: Case Study: Sustainability Focused Value-Added Services
CASE STUDY: SUSTAINABILITY FOCUSED VALUE-ADDED SERVICES Helping navigate a complex legislative environment in Australia and New Zealand The challenge in the market Bunzl’s solution Enhancing Bunzl’s competitive advantage • Complex patchwork of constantly • In depth understanding of changing EXAMPLE:
Slide 26: Climate Change Ambitions Increased
CLIMATE CHANGE AMBITIONS INCREASED SBTi approval and Scope 3 targets set Our climate change commitments: Emissions targets approved by 2020 SBTi in 2022 TODAY SBTi 1 approved targets with Scope 3 emissions included Memberships and commitments – Committed to the Business Ambition for 1.5⁰ campaign 20
Slide 27: Bunzl's Agility Is a Key Asset and Differentiator
BUNZL’S AGILITY IS A KEY ASSET AND DIFFERENTIATOR Achieving growth through periods of disruption demonstrates resilience ADJUSTED OPERATING PROFIT1,2 (£m) Resilience proven during historic challenges Operational resilience Portfolio resilience Agile decentralised model Diversified portfolio of essen
Slide 28: Q&A – Proven Compounding Growth Strategy
Q&A Revenue (£bn) Adjusted operating profit1 (£m) Proven compounding 12.0 886 growth strategy CAGR 2.4 169 c.9-10% 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 22 Adjusted EPS1 (p) Dividend per Share (p) 184.3 62.7 57.0 31.7 13.3 04 0
Slide 29: Appendices
Appendices 2021 FULL 2022 FULL YEAR YEAR RESULTS RESULTS 29
Slide 30: Alternative Performance Measures
APPENDIX 1 Alternative performance measures This presentation includes various performance measures defined under International Financial Reporting Standards (‘IFRS’) as well as a number of alternative performance measures. The principal alternative performance measures used in this presentation are
Slide 31: Statutory P&L
APPENDIX 2 Statutory P&L £m 2022 2021 Revenue 12,039.5 10,285.1 Adjusted operating profit1 885.9 752.8 Operating margin1 7.4% 7.3% Adjusting items (184.3) (129.5) Operating profit 701.6 623.3 Net finance expense (67.9) (54.6) Disposal of business 0.9 - Profit before income tax 634.6 568.7 Reported t
Slide 32: Acquisitions Agreed in 2022 (1)
APPENDIX 3.1 Acquisitions agreed in 2022 • USL acquired in May 2022 • hygi.de acquired in July 2022 • Containit acquired in August 2022 • Distributor of medical consumables to the healthcare • Fast growing, market leading online distributor of • Fast-growing Australian distributor of warehouse stora
Slide 33: Acquisitions Agreed in 2022 (2)
APPENDIX 3.2 Acquisitions agreed in 2022 • Enviropack acquired in October 2022 • PM Pack acquired in November 2022 • GRC announced in December 2022 • Online distributor of reusable, recyclable and • Distributor of packaging products in Denmark to food • Distributor of innovative medical technology d
Slide 34: Acquisition Growth
APPENDIX 4 Acquisition growth 195 Number of 04 7 05 7 06 9 07 8 08 7 09 2 10 9 11 10 12 13 13 11 14 17 15 22 16 14 17 15 18 6 19 3 20 9 21 14 22 12 announced acquisitions acquisitions1 Committed acquisition 302 129 162 197 123 6 126 185 277 295 211 327 184 616 183 124 445 508 322 spend (£m) £366m An
Slide 35: Significant Opportunities Remain to Expand Sector Presence
APPENDIX 5 Significant opportunities remain to expand our sector presence remain COUNTRY FOODSERVICE GROCERY C&H SAFETY RETAIL HEALTHCARE COUNTRY FOODSERVICE GROCERY C&H SAFETY RETAIL HEALTHCARE USA ● ● ● ● ● Hungary ● ● ● ● Canada ● ● ● ● ● Romania ● ● ● Mexico ● ● ● Slovakia ● ● UK ● ● ● ● ● ● Isr
Slide 36: Revenue by Customer Market in 2022
APPENDIX 6 Revenue by customer market in 2022 Safety Foodservice Personal protection and safety equipment, including 15% 30% Non-food consumables, including food packaging, gloves, boots, hard hats, ear and eye protection and disposable tableware, guest amenities, catering other workwear, as well as
Slide 37: Packaging Categorisations
APPENDIX 7 Packaging categorisations Packaging1 categories Description 1. Consumable products Plastic products most commonly being addressed by facing regulation legislation in our markets 2. Consumable products likely to Plastic products that have measures in place (driven by legislation or volunta
Slide 38: Progress Against Our Sustainability Commitments
APPENDIX 8 Progress against our sustainability commitments Better packaging solutions Responsible supply chain Investing in our people Focus on Climate Change We are committed to supporting our Our supply chain in Asia2 is covered by direct We are focused on engagement and diverse Our consolidation
Slide 39: Disclaimer
DISCLAIMER This document has been prepared by Bunzl plc (the ‘Company’) solely for use at the presentation of the Company’s results announcement in respect of the year ended 31 December 2022. For the purposes of this disclaimer, “Presentation” shall mean this document, the oral presentation of the s