Bunzl Plc · LSE:BNZL
Bunzl — FY2010 Earnings Presentation
39 slides from Bunzl's earnings presentation, Feb 24, 2011
Slide 1: Annual Results 2010
ANNUAL RESULTS 2010 - 0- 2010 Annual Results Presentation
Slide 2: Agenda
A Agenda d 1 Philip Rogerson, 1. Rogerson Chairman: Welcome 2 Brian May 2. May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A - 1- 2010 Annual Results Presentation
Slide 3: Highlights
Hi hli ht Highlights • Financial results • Group revenue and operating profit* profit up 4% • Adjusted earnings per share* up 8% • Continued strong operating cash flow • Continued track record of dividend growth – up 8% • Acquisitions • Acquisition spend of £126m adding annualised revenue off £154m
Slide 4: Agenda
A Agenda d 1 Philip Rogerson, 1. Rogerson Chairman: Welcome 2 Brian May, 2. May FD: Financial Results 3 Michael Roney 3. Roney, CEO: Business Review 4. Q&A - 3- 2010 Annual Results Presentation
Slide 5: Income Statement
I Income Statement St t t Growth % Constant £m 2010% 2009% Reported Exchange Revenue 4,829.6% 4,648.7% 4 3) % Operating profit* 306.7% 295.7% 4 3) Margin* 6.4% 6.4% Operating p g profit* p p 6%† ex-H1N1 up *Before intangible amortisation and acquisition related costs †At constant exchange - 4- 2010
Slide 6: Income Statement
I Income Statement St t t Growth % Constant £ £m 2010) 2009) Reported Exchange Operating profit* 306.7) 295.7) 4 3) Net finance cost (30.5) (37.9) P fit before Profit b f tax* t * 276 2) 276.2) 257 8) 257.8) 7 6) Effective tax rate (%) 29.0) 30.5) Adjusted earnings per share* (p) 60.6) 55.9) 8 7) Di
Slide 7: Balance Sheet
B l Balance Sh Sheett £m 2010) 2009) I t Intangibles ibl 1 244 6) 1,244.6) 1 196 6) 1,196.6) Tangibles 118.1) 102.8) W ki capital Working it l 411 1) 411.1) 363 6) 363.6) Other liabilities (208.3) (212.3) 1 565 5) 1,565.5) 1 450 7) 1,450.7) Pension deficit (52.3) (59.8) N t debt* Net d bt* (716 8) (
Slide 8: Cash Flow
C h Fl Cash Flow £m 2010)% 2009%) Operating cash flow* flow 285 5)% 285.5)% 301 9)% 301.9)% Interest (31.2)% (35.4)% T Tax (79 7)% (79.7)% (75 0)% (75.0)% Free cash flow 174.6)% 191.5)% Dividends (66.1)% (62.3)% Acquisitions (110.6)% (6.4)% Share proceeds 11.8)% 3.5)% Net cash flow 9.7)% 126.3)% Ope
Slide 9: Cash Generation and Utilisation
C h Generation Cash G ti and d Utili Utilisation ti Average Cash Conversion* 96% Uses of Free Cash† - 2010 (£m) Acquisitions 103% 102% Dividends Reduction in net debt 95% 93% 92% 92% 93% 9.7 66.1 110.6 2004 2005 2006 2007 2008 2009 2010 †Free cash flow after inflow from employee share schemes p * Op
Slide 10: Financing
Fi Financing i £m Committed Facilities Maturity Profile Bank Facilities - Undrawn Bank Facilities - Drawn US Dollar and Sterling Bonds • Renewed c.£160m of bank facilities • USPP £95m (7, 10 & 12 yr maturities) • Facilities’ F ili i ’ h headroom d iincreased d to £557 £557m Financial strength to tak
Slide 11: Financial Summary
Fi Financial i lSSummary • Profit before tax* up 7% • Adjusted EPS* growth 8% • Continued strong operating capital management • Cash conversion remains strong at 93% • £111m cash outflow on acquisitions with net debt to EBITDA improving to 2.1x • Dividend increase 8% *Before intangible amortisation
Slide 12: Dividend per Share (p)
Di id d per Sh Dividend Share ((p)) Divided per share (p) 23.4 CAGR = 9% 21.6 20.6 18.7 17.0 15.7 13.3 12.1 11.2 10.4 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Consistently strong dividend growth -11- 2010 Annual Results Presentation
Slide 13: Agenda
A Agenda d 1 Philip Rogerson, 1. Rogerson Chairman: Welcome 2 Brian May 2. May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -12- 2010 Annual Results Presentation
Slide 14: Business Review
B i Business Review R i 1. Operations Review 2. Strategy 3 3. Market Development Examples 4. Prospects p -13- 2010 Annual Results Presentation
Slide 15: Revenue Growth Bridge
R Revenue G Growth th Bridge B id £m (1.0)% 1.8% 1.9% 2.7% 4,704 4,830 Revenue Impact of Underlying Acquisitions Revenue FY 09 H1N1 FY 10 (FX adjusted) -14- 2010 Annual Results Presentation
Slide 16: Markets We Serve
M k t We Markets W Serve S Other Healthcare 4% 7% Grocery Non-Food Retail 31% 8% Cleaning & Safety 20% Foodservice 30% Diversified by customer markets -15- 2010 Annual Results Presentation
Slide 17: Business Area Analysis
B i Business A Area Analysis A l i Revenue Operating profit* 6% 7% 19% 25% 54% 50% 21% 18% North America UK & Ireland Continental Europe Rest of the World Diversified by geography *Before intangible amortisation and acquisition related and corporate costs -16- 2010 Annual Results Presentation
Slide 18: Overview
O Overview i • Overall strong management focus • New business wins • Margin management • Operating cost reductions • Working capital management • Encouraging performance • North America – strong underlying revenue growth • UK & Ireland – improvement in operating margins • Continental Europe – market
Slide 19: North America
N th A North America i Growth % Constant £m 2010% 2009% Reported Exchange Revenue 2,621.0% 2,454.1% 7 4) p gp Operating profit* 160.2% 155.3% 3 1)) Margin* 6.1% 6.3% Return on operating capital 63 6% 63.6% 64 3% 64.3% • Strong underlying growth has continued (5% ex-H1N1) • Some mix driven margin pre
Slide 20: UK & Ireland
UK & IIreland l d Growth % Constant £m 2010% 2009% Reported Exchange Revenue 1,007.1% 1,068.4% (6) (5) p gp Operating profit* 59.5% 57.8% 3)) 3)) Margin* 5.9% 5.4% Return on operating capital 53 8% 53.8% 44 4% 44.4% • Persisting difficult economic conditions affected sales • Cost reductions improved
Slide 21: Continental Europe
C ti Continental t lEEurope Growth % Constant £m 2010% 2009% Reported Exchange Revenue 936.4% 910.2% 3) 7) p gp Operating profit* 79.9% 81.7% ((2)) 2)) Margin* 8.5% 9.0% Return on operating capital 46 6% 46.6% 54 2% 54.2% • Absence of the significant impact of H1N1 from 2009 • France cleaning & hygi
Slide 22: Rest of the World
R t off the Rest th World W ld Growth % Constant £m 2010% 2009% Reported Exchange Revenue 265.1% 216.0% 23) 4) p gp Operating profit* 23.8% 17.0% 40)) 19)) Margin* 9.0% 7.9% Return on operating capital 61 8% 61.8% 54 8% 54.8% • Australasia • Substantial improvement in operating margin • Largest busi
Slide 23: Strategy
St t Strategy Organic Growth Operating Model Efficiencies Acquisition Growth Consistent and proven strategy -22- 2010 Annual Results Presentation
Slide 24: Acquisition Growth - 2010
A Acquisition i iti Growth G th - 2010 Business Acquired Country Sector Revenue* Clean Care January Denmark Cleaning & Hygiene £6m* Hamo February Denmark Foodservice £4m* Weita March Switzerland All £44m* £44m Silco April Israel Foodservice £11m* Juba May Spain Safety £21m* Global Net July Belgium C
Slide 25: Acquisition Growth – Track Record
A Acquisition i iti G Growth th – Track T k Record R d 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 Number of Acquisitions 4 5 6 2 7 7 9 8 7 2 9 Acquisition Spend (£m) 156 89 77 29 302 129 162 197 123 6 126 Annualised Acquisition 248 112 145 51 430 270 386 225 151 27 154 Revenue (£m) 2000-
Slide 26: Acquisition Growth - Continental Europe Opportunities
A Acquisition i iti G Growth th - Continental C ti t l Europe E O Opportunities t iti Existing presence Foodservice Retail Cleaning Healthcare Safety G Germany France Spain Netherlands Belgium Denmark Czech Romania Hungary g y Slovakia Switzerland Israel Others e.g. Sweden, Norway, Finland, Austria,
Slide 27: Acquisition Growth - Benelux
A Acquisition i iti G Growth th - Benelux B l 1994 – Market Entry • First move into Continental Europe • Acquisition A i iti off Hopa H 1994 • Entry into Dutch foodservice market 2005 2007 2005 – Gelpa • Entry into Dutch grocery market • Integrated business by mid 2005 2007 2007 2007 – King Ki B Ben
Slide 28: Acquisition Growth - Benelux
A Acquisition i iti G Growth th - Benelux B l 2008 – Worldpack • Expansion in Dutch non-food 2010 retail market. 2008 2010 – Global Net • Expansion in Belgian cleaning & 2010 hygiene market 2010 – Van’t V ’t Veer V • Expansion in Dutch healthcare market. -27- 2010 Annual Results Presentation
Slide 29: Acquisition Growth - Benelux
A Acquisition i iti G Growth th - Benelux B l Van t Veer Van’t Revenue Global Net Worldpack King Benelux Gelpa Hopa 1994 2004 2005 2006 2007 2008 2010 Foodservice Retail Cleaning Healthcare Safety -28- 2010 Annual Results Presentation
Slide 30: Acquisition Growth - Denmark
A Acquisition i iti G Growth th - Denmark D k 2000 – Market Entry • Acquisition of Greenham (UK), which had operations in Denmark • Entry into Danish safety market 2010 2001 – DKI Group • Entry into Danish grocery retail market 2003 2003 – MultiLine 2010 • Entry into Danish foodservice market 2003 2
Slide 31: Acquisition Growth - Denmark
A Acquisition i iti G Growth th - Denmark D k Clean Care Revenue Hamo Multiline DKI Group Greenham 2000 2001 2003 2004 2009 2010 Foodservice Retail Cleaning Healthcare Safety -30- 2010 Annual Results Presentation
Slide 32: Acquisition Growth - Summary
A Acquisition i iti G Growth th - Summary S Benelux • CAGR of 24% since 1994 • Five further acquisitions since market entry • Beginning of the Continental Europe business area Denmark • CAGR of 22% since 2000 • Four further acquisitions since market entry Models for future growth -31- 2010 Annual Re
Slide 33: Financial Track Record
Fi Financial i lTTrack kRRecord d Revenue (£bn) Operating profit (£m) 323 01-05 continuing operations only 4.8 Before amortisation and acquisition related 312 4.6 297 and corporate costs 42 4.2 01-05 continuing operations only 259 3.6 241 3.3 218 2.9 183 2.3 24 2.4 171 2.2 158 164 2.1 2001 2002 2003
Slide 34: Prospects
P Prospects t North • Good underlying revenue growth America • Stable margins UK & • Continuing difficult economic conditions Ireland • Improved performance Continental • Better underlying revenue growth E Europe • Full year impact from acquisitions Rest of • Good underlying revenue growth the World
Slide 35: Summary
Summary • Organic revenue growth plus acquisitions • Substantial financial headroom • High internal cash generation • P Promising i i acquisition i iti pipeline i li • High return on capital Increase shareholder value -34- 2010 Annual Results Presentation
Slide 36: Annual Results 2010
ANNUAL RESULTS 2010 -35- 2010 Annual Results Presentation
Slide 37: Appendix 1 - Net Debt
A Appendix di 1 - Net N t Debt D bt £m 2010) 2009 Opening net debt (716.8) (870.7) Net cash inflow 9 7) 9.7) 126 3) 126.3) Currency (9.7) 27.6) Cl i nett d Closing debt bt (716 8) (716.8) (716 8) (716.8) -36- 2010 Annual Results Presentation
Slide 38: Appendix 2 - Cash Flow
A Appendix di 2 - Cash C h Flow Fl £m 2010)% 2009)% Operating profit* 306.7)% 295.7)% Depreciation 25.5)% 25 5)% 23.5)% 23 5)% Working capital movement (12.7)% 17.5)% Other ((11.9)% ) ((13.9)% ) Cash flow from operations 307.6%) 322.8%) Net capital expenditure (22 1)% (22.1)% (20 9)% (20.9)% Operati
Slide 39: Disclaimer
Di l i Disclaimer This document has been prepared by Bunzl plc (the “Company”) solely for use at the presentation of the Company’s annual results announcement in respect of the year ended 31 December 2010. For the purposes of this disclaimer, “Presentation” shall mean this document, the oral present