Bunzl plc · LSE:BNZL
Bunzl — FY2009 Earnings Presentation
39 slides from Bunzl's earnings presentation, 2010
Slide 1: Annual Results 2009
ANNUAL RESULTS 2009 -0- 2009 Annual 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 Annual Results Presentation
Slide 3: Highlights
Highlights Group • Delivered robust results especially in second half Revenue • Underlying revenue growth of 2.6% in North America Operating • All business areas improved operating margins in second half margins • Significant improvement in Continental Europe Cash • Operating cash flow to operating
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 Annual Results Presentation
Slide 5: Income Statement
Income Statement Growth % Constant £m 2009% 2008% Reported Exchange Revenue 4,648.7% 4,177.3% 11 0) % Operating profit* 295.7% 280.5% 5 (6) Margin* 6.4% 6.7% *Before intangible amortisation -4- 2009 Annual Results Presentation
Slide 6: H2 vs. H1 – Operating Margin
H2 vs. H1 – Operating Margin Operating Margin* 6.9% 6.9% 7% 6.5% 6% 5.8% 2008 2009 2008 2009 5% 4% H1 H2 Strong recovery in operating margin *Before intangible amortisation -5- 2009 Annual Results Presentation
Slide 7: H2 vs. H1
H2 vs. H1 At constant exchange H1 09 H2 09 Operating profit* growth vs. 08 -13% +1% Operating margin* 5.8% 6.9% • Benefit of cost reduction measures • Improved gross margin • H1N1 product sales • Slightly improved market conditions *Before intangible amortisation -6- 2009 Annual Results Presentation
Slide 8: Exchange Rates
Exchange Rates Closing Rate Average Rate PBTA impact 2009 2009 2008 of +/- 1c (£m) US$ 1.61 1.57 1.85 0.8 €S$ 1.13 1.12 1.26 0.6 • Group translation impact +11% to +12% • Unusually large adverse transactional impact in H1 -7- 2009 Annual Results Presentation
Slide 9: Income Statement
Income Statement Growth % Constant £m 2009) 2008) Reported Exchange Operating profit* 295.7) 280.5) 5 (6) Net finance cost (37.9) (37.6) Profit before tax* 257.8) 242.9) 6 (5) Effective tax rate (%) 30.5) 30.8) Adjusted earnings per share* (p) 55.9) 52.7) 6 (6) Dividend per share (p) 21.55) 20.6) 5
Slide 10: Balance Sheet
Balance Sheet £m 2009) 2008)* Intangibles 1,196.6) 1,301.3) Tangibles 102.8) 111.3) Working capital 363.6) 405.2) Other liabilities (212.3) (262.0) 1,450.7) 1,555.8) Pension deficit (59.8) (55.9) Net debt** (716.8) (870.7) Equity 674.1) 629.2) Net debt/EBITDA (x) 2.2) 2.8) Return on operating capita
Slide 11: Cash Flow
Cash Flow £m 2009)% 2008)% Operating profit* 295.7)% 280.5)% Depreciation 23.5)% 19.7)% Working capital movement 17.5)% ((15.9)% Other (13.9)% (12.0)% Cash flow from operations 322.8%) 272.3%) Net capital expenditure (20.9)% (15.2)% Operating cash flow 301.9%) 257.1%) Operating cash flow to operatin
Slide 12: Cash Flow
Cash Flow £m 2009) 2008) Operating cash flow 301.9) 257.1) Interest (35.4) (41.4) Tax (75.0) (66.4) Free cash flow 191.5) 149.3) Dividends (62.3) (59.9) Acquisitions (6.4) (116.4) Other 3.5) (7.2) Net cash flow 126.3) (34.2) -11- 2009 Annual Results Presentation
Slide 13: Cash Conversion Track Record
Cash Conversion Track Record Cash Conversion* 103% 102% 95% 93% 92% 92% 2004 2005 2006 2007 2008 2009 *Operating cash flow to operating profit before intangible amortisation and after capex 04-05 continuing operations only Average 96% cash conversion -12- 2009 Annual Results Presentation
Slide 14: Financing
Financing £m Committed Facilities Maturity Profile US Private Placements (USPP) 300 Bank Facilities 200 100 - Dec 2011 2012 2013 2014 2015 2016 2017 2018 2019 2010 • Additional USPP funding c.£200m • Renewed c.£140m of bank facilities • Facilities headroom increased to £541m Financial strength to ta
Slide 15: Summary
Summary • Strong second half performance • Good working capital management • Cash flow conversion at 102% • Net debt to EBITDA reduced to 2.2x • Adjusted EPS growth 6% • Dividend increase 5% -14- 2009 Annual Results Presentation
Slide 16: Agenda
Agenda 1. Michael Roney, CEO: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -15- 2009 Annual Results Presentation
Slide 17: Business Review
Business Review 1. Operations Review 2. Group Operating Cost Reduction 3. Strategy 4. Prospects -16- 2009 Annual Results Presentation
Slide 18: Revenue Growth Bridge
Revenue Growth Bridge £m (1.1)% 1.0% (0.1)% 4,600 4,500 4,653 4,649 4,400 4,300 4,200 Revenue Underlying Acquisitions Revenue FY 08 and other FY 09 (FX adjusted) -17- 2009 Annual Results Presentation
Slide 19: Markets We Serve 2009
Markets We Serve 2009 Other 5% Healthcare 7% Grocery Non-Food Retail 29% 8% Cleaning & Safety 21% Foodservice 30% Diversified by customer markets -18- 2009 Annual Results Presentation
Slide 20: 2009 Business Area Analysis
2009 Business Area Analysis Revenue Operating profit* 4% 5% 20% 26% 53% 50% 23% 19% North America UK & Ireland Continental Europe Rest of the World Diversified by geography *Before intangible amortisation and corporate costs -19- 2009 Annual Results Presentation
Slide 21: Overview
Overview • Overall strong management focus • New business wins • Margin management • Operating cost reductions • Working capital management • Good results in North America and Continental Europe • Encouraging second half performance • North America - positive underlying growth • Continental Europe -
Slide 22: North America
North America Growth % Constant £m 2009% 2008% Reported Exchange Revenue 2,454.1% 2,055.1% 19 2) Operating profit* 155.3% 134.0% 16 (1) Margin* 6.3% 6.5% Return on operating capital 64.3% 69.5% • Most resilient business area • Underlying revenue growth of 2.6% • Supplier product price declines • New
Slide 23: UK & Ireland
UK & Ireland Growth % Constant £m 2009% 2008% Reported Exchange Revenue 1,068.4% 1,100.0% (3) (4) Operating profit* 57.8% 78.0% (26) (27) Margin* 5.4% 7.1% Return on operating capital 44.4% 56.0% • Least resilient business area • Significant second half improvement in operating margin to 6.2% • Grew
Slide 24: UK & Ireland – Operating Profit Bridge
UK & Ireland – Operating Profit Bridge £m 80 (29.6) 60 (3.0) 11.7 40 78.7 57.8 20 0 Operating profit* Revenue / Transactional Headcount Operating profit* FY 08 operations FX reductions FY 09 (FX adjusted) *Before intangible amortisation -23- 2009 Annual Results Presentation
Slide 25: UK & Ireland – H2 vs. H1
UK & Ireland – H2 vs. H1 Operating margin* H1 H2 FY 2008 7.0% 7.1% 7.1% 2009 4.6% 6.2% 5.4% • Significant improvement in H2 09 operating margin • Benefit from cost reduction measures • Minimal impact of transactional FX in H2 *Before intangible amortisation -24- 2009 Annual Results Presentation
Slide 26: Continental Europe
Continental Europe Growth % Constant £m 2009% 2008% Reported Exchange Revenue 910.2% 822.8% 11 (1) Operating profit* 81.7% 67.2% 22 9) Margin* 9.0% 8.2% Return on operating capital 54.2% 48.9% • Strong performance in second half • Operating margin improvement particularly in France • H1N1 prevention
Slide 27: Rest of the World
Rest of the World Growth % Constant £m 2009% 2008% Reported Exchange Revenue 216.0% 199.4% 8) (1) Operating profit* 17.0% 17.6% (3) (12) Margin* 7.9% 8.8% Return on operating capital 54.8% 58.9% • Australasia • Negative transaction impact from currency in H1 • Significant improvement in operating ma
Slide 28: Group Operating Cost Reduction
Group Operating Cost Reduction 2009 Decrease/(Increase) in Operating Costs vs. 2008 £m 26 25 18 15 12 5 (4) -5 Headcount Restructuring Reduction in other Net reduction in reductions costs operating costs operating costs* • Headcount reduced by c.10%* since July 2008 • Further savings expected in 201
Slide 29: Strategy
Strategy Organic Growth Operating Model Efficiencies Acquisition Growth Consistent strategy -28- 2009 Annual Results Presentation
Slide 30: Organic Growth - Resilient Markets
Organic Growth - Resilient Markets Foodservice Grocery Cleaning & Healthcare Hygiene Exposure to resilient markets -29- 2009 Annual Results Presentation
Slide 31: Organic Growth - Drivers
Organic Growth - Drivers Growing market sectors Fragmented competitors • Exposed to growing sectors e.g. • None do what we do, on our scale • Foodservice – away from home trend and across our markets • Cleaning & Hygiene – away from home • Bunzl’s national footprint • Healthcare – demographics • Saf
Slide 32: Operating Model Efficiencies
Operating Model Efficiencies • Significant headcount reductions implemented in last 18 months • Ongoing initiatives: • Investment in IT • Warehouse consolidations • Northeast US • Australia • France Ongoing focus on cost efficiencies -31- 2009 Annual Results Presentation
Slide 33: Acquisition Growth
Acquisition Growth Business Acquired Country Sector Revenue WK Thomas Mar 2009 UK Horeca £25m Industrial Supplies Mar 2009 UK Cleaning & Hygiene Clean Care Jan 2010 Denmark Cleaning & Hygiene DKK60m Hamo Feb 2010 Denmark Horeca DKK43m • Fragmented markets with many opportunities • Improving market f
Slide 34: Acquisition Growth – Track Record
Acquisition Growth – Track Record 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 Number of Acquisitions 4 5 6 2 7 7 9 8 7 2 Acquisition Spend (£m) 156 89 77 29 302 129 162 197 123 6 Annualised Acquisition 248 112 145 51 430 270 386 225 151 27 Revenue (£m) 2000-2005 continuing operations only Aver
Slide 35: Continental Europe - Acquisition Opportunities
Continental Europe - Acquisition Opportunities Existing presence Foodservice Retail Cleaning Healthcare Safety Germany France Spain Netherlands Belgium Poland Denmark Czech Romania Hungary Slovakia Others Scandinavia, Italy, Austria, Switzerland, Portugal -34- 2009 Annual Results Presentation
Slide 36: Financial Track Record
Financial Track Record Revenue (£bn) Operating profit (£m) 312 4.6 00-05 continuing operations only Before amortisation and corporate costs 297 4.2 00-05 continuing operations only 259 3.6 241 3.3 218 2.9 183 2.4 171 2.3 158 164 2.1 2.2 1.8 128 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2000
Slide 37: Prospects
Prospects North • Underlying revenue growth led by new business wins and America additional business with existing customers • Continued difficult economic conditions UK & Ireland • Positive impact from cost reduction initiatives and stronger sterling Continental • Lower sales of H1N1 prevention pro
Slide 38: Annual Results 2009
ANNUAL RESULTS 2009 -37- 2009 Annual Results Presentation
Slide 39: Appendix - Net Debt
Appendix 1 - Net Debt £m 2009) 2008 Opening net debt (870.7) (667.6) Net cash inflow/(outflow) 126.3) (34.2) Currency movement 27.6) (168.9) Closing net debt (716.8) (870.7) -38- 2009 Annual Results Presentation