Bunzl plc · LSE:BNZL
Bunzl — H1 2009 Earnings Presentation
30 slides from Bunzl's earnings presentation, 2009
Slide 1: Half Year Results 2009
HALF YEAR RESULTS 2009 -0- 2009 Half Year Results Presentation
Slide 2: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -1- 2009 Half Year Results Presentation
Slide 3: Highlights
Highlights • Underlying revenue growth of 2% in North America at Revenue H1 07 and H1 08 levels • Operating margins in North America and Continental Europe Operating (73% Group revenue) have held up well margin • Cost reduction initiatives implemented throughout Group Cash flow • Continued strong ca
Slide 4: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -3- 2009 Half Year Results Presentation
Slide 5: Exchange Rates
Exchange Rates Half year Half year Full year 2009 2008 2008 US$ 1.49 1.97 1.85 €S$ 1.12 1.29 1.26 • Translation impact +15% to 18% • At current spot rates expect less impact in H2 • Unusually large adverse transactional impact -4- 2009 Half Year Results Presentation
Slide 6: Income Statement
Income Statement Growth % Constant £m June 09% June 08% Reported Exchange Revenue 2,293.3% 1,964.2% 17 -1 % Operating profit* 132.1% 128.6% 3 -13 Margin* 5.8% 6.5% *Before intangible amortisation -5- 2009 Half Year Results Presentation
Slide 7: Income Statement
Income Statement Growth % Constant £m June 09) June 08) Reported Exchange Operating profit* 132.1) 128.6) 3 -13 Net finance cost (16.6) (17.8) Profit before tax* 115.5) 110.8) 4 -11 Effective tax rate (%) 30.5) 31.6) Adjusted earnings per share* (p) 25.1) 23.7) 6 -10 Dividend per share (p) 6.65) 6.4
Slide 8: Balance Sheet
Balance Sheet £m June 09) Dec 08) June 08) Intangibles 1,183.2) 1,301.3) 1,092.2) Tangibles 101.4) 111.3) 97.3) Working capital 354.0) 405.2) 343.2) Other liabilities (265.6) (282.6) (272.2) 1,373.0) 1,535.2) 1,260.5) Pension deficit (68.2) (55.9) (36.8) Net debt (754.3) (870.7) (730.5) Equity 550.5
Slide 9: Cash Flow
Cash Flow £m June 09)% June 08)% Operating profit* 132.1)% 128.6)% Depreciation 11.2)% 9.3)% Working capital movement 17.3)% ((9.3)% Other (2.7)% (4.2)% Cash flow from operations 157.9%) 124.4%) Net capital expenditure (8.8)% (9.8)% Operating cash flow 149.1%) 114.6%) Operating cash flow to operatin
Slide 10: Cash Flow
Cash Flow £m June 09) June 08) Operating cash flow 149.1) 114.6) Interest (18.1) (21.1) Tax (35.0) (27.3) Free cash flow 96.0) 66.2) Dividends (20.6) (18.6) Acquisitions (6.6) (75.2) Other 0.7) 1.2 Net cash flow 69.5) (26.4) -9- 2009 Half Year Results Presentation
Slide 11: Financing
Financing • Additional USPP funding £200m Debt Maturity Profile with maturities between 5 and 10 H2 Dec 2015 - £m 2009 2010 2011 2012 2013 2014 2019 years Bank facilities - 160 193 260 164 - - • Renewed £140m of bank facilities USPP - - 48 - 143 35 275 Total 0 160 241 260 307 35 275 • Funding headro
Slide 12: Summary
Summary • Largely robust results • Good working capital management • Strong cash flow • Funding headroom £453m • Dividend growth 3% -11- 2009 Half Year Results Presentation
Slide 13: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -12- 2009 Half Year Results Presentation
Slide 14: Business Review
Business Review 1. Operations Review 2. Group Operating Cost Reduction 3. Strategy 4. Prospects -13- 2009 Half Year Results Presentation
Slide 15: Revenue Growth Bridge
Revenue Growth Bridge £m (1.6)% 0.9% (0.7)% 2,300 2,250 2,200 2,310 2,293 2,150 2,100 2,050 2,000 Revenue Underlying Acquisitions Revenue H1 08 and other H1 09 (FX adjusted) -14- 2009 Half Year Results Presentation
Slide 16: H1 Business Area Analysis
H1 Business Area Analysis Revenue Operating profit* 4% 4% 20% 26% 53% 53% 23% 17% North America UK & Ireland Continental Europe Rest of the World Diversified by geography *Before intangible amortisation and corporate costs -15- 2009 Half Year Results Presentation
Slide 17: North America
North America Growth % Constant £m June 09% June 08% Reported Exchange Revenue 1,222.3% 931.7% 31 1 Operating profit* 74.3% 58.6% 27 -3 Margin* 6.1% 6.3% Return on operating capital 63.5% 72.8% • Most resilient business area • Underlying revenue growth of 2% • New business wins and more business wit
Slide 18: UK & Ireland
UK & Ireland Growth % Constant £m June 09% June 08% Reported Exchange Revenue 523.0% 537.7% -3 -4 Operating profit* 24.2% 37.8% -36 -37 Margin* 4.6% 7.0% Return on operating capital 46.2% 61.5% • Least resilient business area • Resilient businesses held up well • Poor economic conditions in Ireland
Slide 19: UK & Ireland - Operating Profit Bridge
UK & Ireland - Operating Profit Bridge £m 40 30 (15.4) 20 (4.0) 5.3 38.3 24.2 10 0 Operating profit* Revenue / Transactional Headcount Operating profit* H1 08 operations FX reductions H1 09 (FX adjusted) *Before intangible amortisation -18- 2009 Half Year Results Presentation
Slide 20: UK & Ireland - Transactional FX
UK & Ireland - Transactional FX GBP/USD 2.10 2.00 • Sharp weakening of sterling 36% product cost impact in H2 08 1.90 1.80 • Difficult to pass on fully product cost increases 1.70 1.60 1.50 • H1 09 impact in UK & Ireland 1.40 estimated at c.£4m 1.30 Jan 08 Aug 08 Nov 08 Jun 09 -19- 2009 Half Year Re
Slide 21: Continental Europe
Continental Europe Growth % Constant £m June 09% June 08% Reported Exchange Revenue 449.2% 401.5% 12 -2 Operating profit* 36.0% 32.5% 11 -3 Margin* 8.0% 8.1% Return on operating capital 45.6% 48.5% • Revenue performance in line with expectations • Strong margin management • France cleaning & hygiene
Slide 22: Rest of the World
Rest of the World Growth % Constant £m June 09% June 08% Reported Exchange Revenue 98.8% 93.3% 6 4 Operating profit* 6.0% 7.9% -24 -25 Margin* 6.1% 8.5% Return on operating capital 51.8% 55.7% • Brazil • Revenue affected by decline in construction & industrial markets • Margins improved • Australasi
Slide 23: Australasia - Transactional FX
Australasia - Transactional FX AUD/USD 1.00 0.95 • Sharp weakening of AUD in 0.90 52% product cost impact H2 08 0.85 0.80 • High proportion of product 0.75 imports 0.70 0.65 0.60 • H1 09 impact in Australasia 0.55 estimated at c.£1.5m 0.50 Jan 08 Aug 08 Oct 08 Jun 09 -22- 2009 Half Year Results Pres
Slide 24: Group Operating Cost Reduction
Group Operating Cost Reduction H1 09 vs H1 08 £m (8) 2 1 = (5) 2 0 -2 -4 -6 -8 Headcount Restructuring Net other Net change in reductions costs operating costs operating costs* • Headcount reduced by c.9%* in last 12 months • H1 09 vs H1 08 costs reduced by £8m from headcount reductions • Savings in
Slide 25: Strategy
Strategy Organic Growth Acquisition Growth Operating Model Efficiencies Consistent strategy -24- 2009 Half Year Results Presentation
Slide 26: Organic Growth - Resilient Markets
Organic Growth - Resilient Markets Foodservice Grocery 31% 29% Cleaning & Hygiene Healthcare 9% 7% GDP-plus business c.75% revenue from resilient markets -25- 2009 Half Year Results Presentation
Slide 27: Acquisition Growth
Acquisition Growth • Fragmented markets with many opportunities • Proven track record of value creation • Currently difficult market for acquisitions of non-distressed companies • Acquisition of WK Thomas and Industrial Supplies Business Acquired Country Sector Revenue WK Thomas March UK Horeca £25m
Slide 28: Operating Model Efficiencies
Operating Model Efficiencies • Significant headcount reductions implemented in last 12 months • Ongoing initiatives: • Investment in IT • Warehouse consolidations • Northeast US • Australia • France Ongoing focus on cost efficiencies -27- 2009 Half Year Results Presentation
Slide 29: Prospects
Prospects North • New business wins and further business with existing customers America • Cost reductions will support margin UK & • Revenue affected by poor economic environment Ireland • Margins expected to improve Continental • Continued pressure on underlying revenue Europe • Margins expected t
Slide 30: Half Year Results 2009
HALF YEAR RESULTS 2009 -29- 2009 Half Year Results Presentation