Slide 1: 2020 Half Year Results
2020 HALF YEAR RESULTS AUGUST 2020
Slide 2: Introduction
INTRODUCTION FRANK VAN ZANTEN CEO
Slide 3: Thank you to our colleagues
THANK YOU TO OUR COLLEAGUES OUR PEOPLE HAVE BEEN INSTRUMENTAL DURING THE PANDEMIC DELIVERING ESSENTIAL PRODUCTS TO FRONTLINE HEROES ALL OF OUR DISTRIBUTION CENTRES REMAINED OPEN OUR SOURCING TEAMS WENT ABOVE AND BEYOND TO SOURCE QUALITY PRODUCTS THAT WERE NEEDED THANK YOU TO ALL OUR OUTSTANDING TEAM
Slide 4: Highlights
HIGHLIGHTS PEOPLE SAFETY AND WELLBEING IS A PRIORITY ADJUSTED OPERATING PROFIT* +13%◊, WITH MIX SUPPORTIVE TO MARGINS (+40BPS◊) STRONG AND RESILIENT PERFORMANCE DURING A CHALLENGING PERIOD STRONG CASH GENERATION; NET DEBT / EBITDA 1.6x DIVERSIFICATION OFFSETS (debt covenant basis) WEAKNESS IN SOME S
Slide 5: Financial Results
FINANCIAL RESULTS: RICHARD HOWES CFO
Slide 6: Revenue Growth
REVENUE GROWTH Revenue growth*: 6.7% Revenue £m 13.6% growth* 5,000 0.8% 3.1% 6.7% 4,500 (10.8%) 4,000 3,500 Underlying Underlying 4,541 4,577 growth*: 2.8% 4,846 growth* 3,000 2.8% 2,500 2,000 Revenue HY19* Trading days Rebased HY19 Top Covid-19 related Underlying growth, Acquisitions Revenue HY20
Slide 7: Income Statement
INCOME STATEMENT Adjusted operating CONSTANT £m JUNE 2020 JUNE 2019 REPORTED EXCHANGE profit* growth◊ Revenue 4,846.3 4,528.4 7.0% 6.7% 13.0% Adjusted operating profit* 340.8 302.7 12.6% 13.0% Operating margin* 7.0% 6.7% Adjusting items** (61.4) (63.7) Finance expense Operating profit 279.4 239.0 re
Slide 8: Income Statement (continued)
INCOME STATEMENT (CONTINUED) Adjusted earnings CONSTANT £m JUNE 2020 JUNE 2019 REPORTED EXCHANGE per share* growth◊ Effective tax rate* 23.8% 23.8% 16.4% Adjusted profit for the period* Weighted average number of shares (m) 233.8 333.5 201.3 333.3 16.1% 16.6% Adjusted earnings per share* 70.1p 60.4p
Slide 9: Balance Sheet
BALANCE SHEET £m JUNE 2020 DECEMBER 2019 Net debt : EBITDA** Intangibles 2,358.9 2,290.9 Right-of-use assets 440.5 432.9 1.6x Tangibles Working capital 122.5 977.1 118.3 943.4 Substantial capacity Other net liabilities (277.7) (278.2) for self-funded 3,621.3 3,507.3 acquisitions Net pension deficit
Slide 10: Cash Flow
CASH FLOW £m JUNE 2020 JUNE 2019 Cash conversion*† Operating cash flow* 367.0 278.4 Net interest excluding interest on lease liabilities (30.1) (30.8) 112% Tax (68.6) (60.8) Free cash flow 268.3 186.8 Dividends (51.7) (50.7) Cash conversion Acquisitions◊ (75.2) (144.8) excluding net Employee share s
Slide 11: Cash Conversion
CASH CONVERSION 110% 112% ◊ Average cash 103% 102% 102% 99% 97% 101% conversion* 93% 95% 92% 92% 93% 93% 95% 97% 94% TARGET 98% 90% 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 HY20 * Alternative performance measure – see Appendix 2 ◊ Cash conversion for the half year was 112%, helped by a net £6
Slide 12: Dividend Per Share
DIVIDEND PER SHARE (p) 51.3 27 years of consecutive dividend increases CAGR 10 % 2019 ‘final dividend’* (to be paid as an additional interim dividend) 35.8p 2020 interim dividend 4.0 per share 15.8p 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 * Equivalent to t
Slide 13: Financial Summary
FINANCIAL SUMMARY Strong performance driven by demand for ADJUSTED OPERATING PROFIT* Covid-19 related products and Bunzl’s sector AND OPERATING MARGIN* GROWTH◊ £341m mix and diversification +13%; +40bps margin CASH CONVERSION* Strong cash conversion 112% DIVIDEND Interim 2020 dividend announced, plu
Slide 14: Business Review
BUSINESS REVIEW: FRANK VAN ZANTEN CEO • Operations review • Prospects • Navigating Covid-19 • Long-term strategic focus
Slide 15: Trusted Provider of Covid-19 Related Products
TRUSTED PROVIDER OF COVID-19 RELATED PRODUCTS Bunzl a key provider Covid-19 related products* of own-brand imported Covid-19 related products c.£1.0bn of revenue in H1 20 Top 8 Covid-19 ― 2.5x prior year related products* ― Sold across all sectors generated 22% of H1 revenue * Top 8 Covid-19 related
Slide 16: Diversification Benefits Bunzl
DIVERSIFICATION BENEFITS BUNZL Constant exchange H1 Revenue as % Regional revenue exposure growth over H1 of Group total to sectors Significant shift • Rest of the World benefited (c.70% of mix) towards higher Safety • Continental Europe saw largest orders margin market Healthcare Cleaning & £m: +29
Slide 17: North America
NORTH AMERICA GROWTH CONSTANT £m JUNE 2020 JUNE 2019 REPORTED EXCHANGE Revenue 2,728.4 2,634.5 3.6%. 1.5%. Adjusted operating profit* 154.2 157.1 (1.8%) (3.7%) Operating margin* 5.7% 6.0% Return on operating capital*∆ 35.3% • Underlying revenue down 3.9% with adjusted operating profit* also down due
Slide 18: Continental Europe
CONTINENTAL EUROPE GROWTH CONSTANT £m JUNE 2020 JUNE 2019 REPORTED EXCHANGE Revenue 1,088.7 906.4 20.1% 20.0% Adjusted operating profit* 123.9 91.1 36.0% 36.3% Operating margin* 11.4% 10.1% Return on operating capital*∆ 53.7% • Substantial increases in revenue and adjusted operating profit* with str
Slide 19: UK & Ireland
UK & IRELAND GROWTH CONSTANT £m JUNE 2020 JUNE 2019 REPORTED EXCHANGE Revenue 626.1 602.5 3.9% 3.8% Adjusted operating profit* 29.4 37.4 (21.4)% (21.4)% Operating margin* 4.7% 6.2%. Return on operating capital*∆ 45.1% • Underlying revenue growth of 2.5% but adjusted operating profit* down significan
Slide 20: Rest of the World
REST OF THE WORLD GROWTH CONSTANT £m JUNE 2020 JUNE 2019 REPORTED EXCHANGE Revenue 403.1 385.0 4.7% . 17.6% Adjusted operating profit* 47.3 28.7 64.8% 90.0% Operating margin* 11.7% 7.5% Return on operating capital*∆ 38.3% • Strong underlying revenue growth of 13.2% with substantial increase in adjus
Slide 21: Prospects
PROSPECTS CAUTIOUS ON THE SHORT-TERM OUTLOOK BUNZL MODEL REINFORCED Although difficult to assess with any certainty, Group revenue is expected to Bunzl opportunity remains attractive grow slightly over 2020* • Customer proposition and strength of supply chain • Covid-19 related orders expected to sl
Slide 22: Navigating Covid-19
NAVIGATING COVID-19 INHERENT RESILIENCE OF BUSINESS FINANCIAL STRENGTH OF THE BUSINESS MODEL AND GOOD FINANCIAL CONTROLS DIVERSIFIED SECTOR PORTFOLIO DIGITAL INFRASTRUCTURE ACROSS GEOGRAPHIES INVESTMENTS CAPABLE OF SUPPORTING ONLINE SHIFT DEDICATED AND HARDWORKING COLLEAGUES STRONG SUPPLY CHAIN A KE
Slide 23: Supply Chain Operations
SUPPLY CHAIN OPERATIONS Supply chain SHANGHAI OFFICE A KEY ASSET KEY DIFFERENTIATOR IN COVID-19 ENVIRONMENT team in Asia is a • Team of c.50 people: • Sourced own-brand products for customers across the globe ― Sourcing • A preferred partner to suppliers given strong relations key competitive ― Qual
Slide 24: Examples of Products Sourced
EXAMPLES OF PRODUCTS SOURCED 2020 HALF YEAR RESULTS AUGUST 2020 24
Slide 25: Critical Supplier Status
CRITICAL SUPPLIER STATUS Critical supplier ―Supported customers to ensure continued deliveries of essential products status across In safe hands ―Sourced new essential Covid-19 related products for the regions we customers operate ―Seconded employees to government task force in Europe ―Provided peac
Slide 26: Local Responsiveness
LOCAL RESPONSIVENESS Excellent responsiveness driven by ― Two businesses in the Netherlands ― Bunzl’s UK catering businesses were entrepreneurialism seconded employees to the Dutch contacted to help equip a conference and government PPE special task force center that was being converted into an dece
Slide 27: Maintaining Focus on the Longer-Term
MAINTAINING FOCUS ON THE LONGER-TERM Successful Remain focused on developing Bunzl’s unique business model for the future implementation of consistent UNIQUE, CUSTOMER BALANCED BUSINESS ATTRACTIVE CUSTOMER strategy FOCUSED BUSINESS PORTFOLIO MARKETS MODEL Trusted partner in global sourcing GLOBAL SO
Slide 28: Sustainability Remains a Key Focus
SUSTAINABILITY REMAINS A KEY FOCUS Bunzl is accelerating its sustainability We recognise our responsibility to help Sustainable agenda in support of customers the world transition to a circular economy products and We believe sustainability is even more • We are working to ensure materials solutions
Slide 29: Acquisition Snapshot
ACQUISITION SNAPSHOT MCR • Completion expected at the end of August • Based in Memphis Tennessee with annual revenue of US$248m • Predominantly a North America business • Sells into distributors operating in a number of end markets • Well established company with strong own-brands • Strong strategic
Slide 30: Summary
SUMMARY STRONG FIRST HALF PERFORMANCE CAUTIOUS ON H2 OUTLOOK GIVEN UNCERTAINTIES EXCELLENT CASH CONVERSION AND 30 STRONG BALANCE SHEET CONTINUE TO IMPLEMENT SUPPORTS DIVIDEND CONSISTENT AND DECISIONS SUCCESFUL STRATEGY RESILIENCE OF BUSINESS MODEL SUSTAINABILITY AND DIGITAL SUPPORTED BY SECTOR AND M
Slide 31: Appendices
APPENDICES
Slide 32: Exchange Rates
APPENDIX 1 EXCHANGE RATES HY 2020 HY 2019 Average rate US$ 1.26 1.29 Euro 1.14 1.15 Canadian$ 1.72 1.73 Brazilian real 6.18 4.97 Australian$ 1.92 1.83 Closing rate US$ 1.24 1.27 Euro 1.10 1.12 Canadian$ 1.68 1.66 Brazilian real 6.78 4.87 Australian$ 1.79 1.81 2020 HALF YEAR RESULTS AUGUST 2020 32
Slide 33: Alternative Performance Measures
APPENDIX 2 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 34: Adjusted Operating Profit
APPENDIX 3 ADJUSTED OPERATING PROFIT ALTERNATIVE PERFORMANCE MEASURES £m JUNE 2020 JUNE 2019 Operating profit 279.4 239.0 Adjusted for: Customer relationships amortisation 48.8 54.4 Acquisition related items 12.6 9.3 Total adjusting items 61.4 63.7 Adjusted operating profit 340.8 302.7 Operating mar
Slide 35: Adjusted Profit Before Income Tax
APPENDIX 4 ADJUSTED PROFIT BEFORE INCOME TAX ALTERNATIVE PERFORMANCE MEASURES £m JUNE 2020 JUNE 2019 Profit before income tax 245.4 200.5 Adjusted for: Customer relationships amortisation 48.8 54.4 Acquisition related items 12.6 9.3 Adjusted profit before income tax 306.8 264.2 2020 HALF YEAR RESULT
Slide 36: Adjusted Profit for the Period
APPENDIX 5 ADJUSTED PROFIT FOR THE PERIOD ALTERNATIVE PERFORMANCE MEASURES £m JUNE 2020 JUNE 2019 Profit for the period 185.5 155.1 Adjusted for: Customer relationships amortisation 48.8 54.4 Acquisition related items 12.6 9.3 Tax on adjusting items (13.1) (17.5) Adjusted profit for the period 233.8
Slide 37: Net Debt
APPENDIX 6 NET DEBT SIX MONTHS TO YEAR TO SIX MONTHS TO £m JUNE 2020 DECEMBER 2019 JUNE 2019 Opening net debt (1,247.0) (1,386.5) (1,386.5) Net cash inflow/(outflow) 143.4 99.1 (38.0) Exchange (73.6) 40.4 1.7 Closing net debt excluding lease liabilities (1,177.2) (1,247.0) (1,422.8) Lease liabilitie
Slide 38: Cash Flow and Cash Conversion
APPENDIX 7 CASH FLOW AND CASH CONVERSION £m JUNE 2020 JUNE 2019 Adjusted operating profit* 340.8 302.7 Adjusted for: Non-cash items** 93.1 80.6 Working capital movement 26.8 (15.4) Cash flow from operations◊ 460.7 367.9 Net capital expenditure (14.3) (14.4) Payment of lease liabilities (79.4) (75.1)
Slide 39: Sustainable Product Solutions
APPENDIX 8 SUSTAINABLE PRODUCT SOLUTIONS Proactively SINGLE USE PLASTICS working with • Essential food and beverage packaging for practical, safe customers, and hygienic transit suppliers and other • Actively promoting sustainable alternatives stakeholders to • Unique position at the centre of the s
Slide 40: Acquisition Growth
APPENDIX 9 ACQUISITION GROWTH 20 165 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 YTD* acquisitions* Number of 7 7 9 8 7 2 9 10 13 11 17 22 14 15 6 3 5 acquisitions Committed acquisition 302 129 162 197 123 6 126 185 277 295 211 327 184 616 183 124 335◊ c. £300m spend (£m) Annualised average spen
Slide 41: Financial Track Record 2004 - 2019
APPENDIX 10 FINANCIAL TRACK RECORD 2004 - 2019 REVENUE (£bn) ADJUSTED OPERATING PROFIT* (£m) Proven long term 9.3 631 compounding growth strategy 2.4 169 CAGR 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 c. 9 - 10% ADJUSTED EPS* (p) 04-12 restated o
Slide 42: H1 Revenue by Customer Markets
APPENDIX 11 H1 REVENUE BY CUSTOMER MARKETS Diversified customer exposure Other Healthcare 3% 10% 25% Foodservice Retail 9% 13% 26% 14% Cleaning & hygiene Grocery Safety 2020 HALF YEAR RESULTS AUGUST 2020 42
Slide 43: 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 period ended 30 June 2020. For the purposes of this disclaimer, “Presentation” shall mean this document, the oral presentation of the sli