Bunzl Plc · LSE:BNZL
Bunzl — H1 2021 Earnings Presentation
35 slides from Bunzl's earnings presentation, August 2021
Slide 1: 2021 Half Year Results
2021 HALF YEAR RESULTS August 2021
Slide 2: Introduction
INTRODUCTION FRANK VAN ZANTEN CEO 2
Slide 3: First Half 2021 Highlights
FIRST HALF 2021 HIGHLIGHTS Strong H1 performance demonstrates Diversification supports growth resilience of Bunzl model Significant reduction in larger Covid-19 related sales more than offset by partial Revenue +6%◊ and adjusted operating recovery in base business profit* +15%◊ year-on-year Underlyi
Slide 4: Confidence in Long-Term Growth
CONFIDENCE IN LONG-TERM GROWTH ADJUSTED OPERATING PROFIT* (£m) • Quality and consistency of business model reinforced 755 • Customer proposition and strength of supply chain proven over a challenging period • Attractive growth outlook 169 − Continued base business recovery 04 05 06 07 08 09 10 11 12
Slide 5: Accelerating Sustainable Priorities
ACCELERATING SUSTAINABLE PRIORITIES Continued focus on climate change Providing sustainable solutions • Carbon benefits from product consolidation • Play a proactive role in the supply chain as an advisor to customers on the shift to sustainable solutions • Bunzl has meaningfully improved efficiency
Slide 6: Financial Results
FINANCIAL RESULTS RICHARD HOWES CFO 6
Slide 7: Revenue Growth
REVENUE GROWTH Revenue growth◊ Revenue growth◊: 6.3% 6.3% £m 5,000 4.3% Underlying growth (0.8%) 6.7% (3.9%) vs 2020◊ 4,500 2.8% 4,867 4,000 4,580 4,544 Underlying Underlying growth growth◊ : 2.8% vs 2019◊ 5.7% 3,500 Revenue HY 2020 ◊ Trading days Rebased HY 2020 Top Covid-19 related products⌂ Ω Bas
Slide 8: Income Statement
INCOME STATEMENT Adjusted operating CONSTANT profit* growth◊ £m JUNE 2021 JUNE 2020 REPORTED EXCHANGE Revenue 4,866.6 4,846.3 0.4% 6.3% 14.7% Adjusted operating profit* 366.8 340.8 7.6% 14.7% Operating margin* 7.5% 7.0% Increase in operating Adjusting items (62.7) (61.4) margin Operating profit 304.
Slide 9: Income Statement (Continued)
INCOME STATEMENT (CONTINUED) Adjusted earnings per CONSTANT share* growth◊ £m JUNE 2021 JUNE 2020 REPORTED EXCHANGE Effective tax rate* 23.5% 23.8% 18.1% Adjusted profit for the period* 258.9 233.8 10.7% 17.9% Weighted average number of shares (m) 333.4 333.5 Adjusted earnings per share* 77.7p 70.1p
Slide 10: Balance Sheet
BALANCE SHEET £m JUNE 2021 DECEMBER 2020 Net debt : EBITDA*◊ Intangibles 2,453.1 2,441.9 1.4x Right-of-use assets Property, plant and equipment 458.2 118.1 453.4 122.7 Substantial capacity for self- Working capital* 1,020.3 1,021.4 funded acquisitions Other net liabilities (429.5) (323.0) 3,620.2 3,
Slide 11: Cash Flow
CASH FLOW Cash conversion* £m JUNE 2021 JUNE 2020 Operating cash flow*∆ 353.6 367.0 100% Net interest paid excluding interest on lease liabilities (19.3) (30.1) Income tax paid (109.1) (68.6) Free cash flow* 225.2 268.3 Free cash flow* Dividends paid (52.8) (51.7) ahead of 2019 Acquisitions◊ (93.0)
Slide 12: Cash Conversion
CASH CONVERSION Average cash ◊ conversion* 98% TARGET 90% * Alternative performance measure – see Appendix 1 ◊ Cash conversion for the half year was 100% despite an adverse movement in advance payments from customers net of upfront payments to suppliers of £26m. Excluding this 2021 HALF YEAR RESULTS
Slide 13: Financial Summary
FINANCIAL SUMMARY Strong underlying growth vs. 2019, demonstrates Underlying revenue growth vs. 2019◊ the strength and resilience of the Bunzl business model +5.7% Adjusted operating profit* Operating margin supported by inflation on growth vs. 2020◊ certain Covid-19 related products and mix +14.7%
Slide 14: Business Review
BUSINESS REVIEW FRANK VAN ZANTEN CEO 14
Slide 15: Diversification Drives Resilience
DIVERSIFICATION DRIVES RESILIENCE Diversification has H1 revenue as % of Underlying revenue Underlying revenue Group total H1 21 vs. H1 20 H1 21 vs. H1 19 supported the business over a multi-year period 35% Safety vs 32% in H1 19 Recovery of base Healthcare Cleaning & £m: (9)% y-o-y +12% vs 2019 Hyg
Slide 16: Covid-19 Related Sales
COVID-19 RELATED SALES Absolute Covid-19 related revenue • Larger Covid-19 related sales significantly lower, as Significant decline in expected larger Covid-19 related £m • Impacting Continental Europe and UK & sales, as expected 1,200 Ireland business areas in particular Smaller Covid-19 1,000 • Y
Slide 17: Strong Recovery in the Base Business
STRONG RECOVERY IN THE BASE BUSINESS Base business∆ revenue in H1 21 vs H1 19 Base business is Absolute base business revenue Base business revenue H1 21 as a percentage of H1 19 recovering 110% £m Pre-pandemic level North America driven 4,500 100% by volume and inflation 90% in foodservice and reta
Slide 18: Inflation in the Bunzl Context
INFLATION IN THE BUNZL CONTEXT COVID-19 RELATED PRODUCTS – INFLATION AND DEFLATION Inflation in Covid-19 • Inflation on certain Covid-19 products continued in H1 related products • Deflation started in Q2; revenue and margin impact anticipated in H2 supportive to H1 BASE BUSINESS - INFLATION Experie
Slide 19: Business Area Analysis
BUSINESS AREA ANALYSIS 31 countries NORTH AMERICA CONTINENTAL EUROPE 59% Revenue 20% Revenue 53% Operating profit* 24% Operating profit* 6 sectors UK & IRELAND REST OF WORLD 12% Revenue 9% Revenue 6% Operating profit* 17% Operating profit* * Adjusted operating profit (alternative performance measure
Slide 20: North America
NORTH AMERICA GROWTH CONSTANT £m JUNE 2021 JUNE 2020 REPORTED EXCHANGE Revenue 2,857.7 2,728.4 4.7%. 14.4%. Adjusted operating profit* 199.9 154.2 29.6% 41.0% Operating margin* 7.0% 5.7% Return on average operating capital* 46.8% 35.3% • Underlying revenue growth of 10.6% driven by continued recover
Slide 21: Continental Europe
CONTINENTAL EUROPE GROWTH CONSTANT £m JUNE 2021 JUNE 2020 REPORTED EXCHANGE Revenue 971.8 1,088.7 (10.7)% (8.7)% Adjusted operating profit* 91.8 123.9 (25.9)% (22.3)% Operating margin* 9.4% 11.4% Return on average operating capital* 50.1% 53.7% • Underlying revenue declined by 11.2%, driven by the r
Slide 22: UK & Ireland
UK & IRELAND GROWTH CONSTANT £m JUNE 2021 JUNE 2020 REPORTED EXCHANGE Revenue 579.6 626.1 (7.4)% (7.3)% Adjusted operating profit* 22.8 29.4 (22.4)% (22.2)% Operating margin* 3.9% 4.7% Return on average operating capital* 34.3% 45.1% • Underlying revenue declined by 10.3%, driven by the reduction in
Slide 23: Rest of the World
REST OF THE WORLD GROWTH CONSTANT £m JUNE 2021 JUNE 2020 REPORTED EXCHANGE Revenue 457.5 403.1 13.5% . 16.9% Adjusted operating profit* 64.8 47.3 37.0% 45.3% Operating margin* 14.2% 11.7% Return on average operating capital* 54.6% 38.3% • Very strong underlying revenue growth of 12.3% driven by Lati
Slide 24: H1 Acquisition Snapshot
H1 ACQUISITION SNAPSHOT Six acquisitions in Obex Medical Holdings H1 with • Medical distribution business serving hospitals and other healthcare providers in New Zealand committed spend • Supplies a broad range of healthcare equipment and devices of • Revenue in 2020 of c.NZD 51 million (c.£ 27 mill
Slide 25: Acquisitions Announced Today
ACQUISITIONS ANNOUNCED TODAY Acquisitions since Proin Pinilla 2004 • Largest independent safety distributor to end-users in Spain, with a focus on PPE and specialising in workwear 177 • Revenue in 2020 of c.€17m (c.£ 15m) • Supportive to enhanced safety offering in the Spanish market Arprosa Total a
Slide 26: 2021 Outlook
2021 OUTLOOK 2021 OUTLOOK UNCHANGED • The Group’s revenue guidance◊ for the year remains unchanged from that published in our pre close statement − Underlying revenue is expected to be moderately higher in 2021 compared to 2019, demonstrating the resilience of the Bunzl business model − Recent acqui
Slide 27: Capital Markets Day October 2021
CAPITAL MARKETS DAY 11 October 2021 Update on strategic priorities which will support Bunzl’s continued compounding track record - Value-added customer proposition - Sustainability a growing competitive advantage - Strength of Bunzl’s compounding growth model 2021 HALF YEAR RESULTS AUGUST 2021 27
Slide 28: Confidence in Long-Term Growth
CONFIDENCE IN LONG-TERM GROWTH ADJUSTED OPERATING PROFIT* (£m) • Quality and consistency of business model reinforced 755 • Customer proposition and strength of supply chain proven over a challenging period • Attractive growth outlook 169 − Continued base business recovery 04 05 06 07 08 09 10 11 12
Slide 29: Q&A
Q&A REVENUE (£bn) ADJUSTED OPERATING PROFIT* (£m) 755 10.1 2.4 169 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 ADJUSTED EPS* (p) DIVIDEND PER SHARE (p) 04-12 restated on adoption 54.1 of IAS 19 (revised 2011) 164.7 13.3 31.7 04 05 06 07 08 09
Slide 30: Appendices
APPENDICES 30
Slide 31: 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 32: Acquisition Growth
APPENDIX 2 ACQUISITION GROWTH 177 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18 19 20 21 YTD acquisitions* Number of 7 7 9 8 7 2 9 10 13 11 17 22 14 15 6 3 9 8 acquisitions Committed acquisition 302 129 162 197 123 6 126 185 277 295 211 327 184 616 183 124 445 134 £310m spend (£m) average spend in An
Slide 33: Dividend Per Share
APPENDIX 3 DIVIDEND PER SHARE 54.1 28 years of consecutive dividend growth CAGR 9.7% 2021 Interim dividend growth 2.5%, reflecting commitment to sustainable growth 4.0 2021 HALF YEAR RESULTS AUGUST 2021 33
Slide 34: Revenue by Customer Markets
APPENDIX 4 REVENUE BY CUSTOMER MARKETS Diversified customer exposure Other +2% YoY Healthcare -2% YoY 4% 8% Grocery 25% -1% YoY Retail 9% 0% YoY 11% 16% 27% Cleaning & hygiene Foodservice -2% YoY +1% YoY Safety 2021 HALF YEAR RESULTS AUGUST 2021 +2% YoY 34
Slide 35: 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 2021. For the purposes of this disclaimer, “Presentation” shall mean this document, the oral presentation of the sli