Bunzl Plc · LSE:BNZL
Bunzl — Investor Day (October 2021)
76 slides from Bunzl's investor day presentation, Oct 11, 2021
Slide 1: The difference is ESSENTIAL: Capital Markets Day
The difference is ESSENTIAL Capital Markets Day 11th October 2021
Slide 2: The difference is ESSENTIAL
Js Runningona renewable uel that reduces greenhouse gas emissions by up to. 90%
Slide 3: The Bunzl World
THE BUNZL WORLD A specialist business with scale Presence in Utilising >10,000 Supporting 31 countries supplier c.800,000 relationships customers with globally multiple locations With c.150 c.20,000 employees, Across 6 core Providing a operating c.6,000 are market sectors tailored service customer s
Slide 4: Intro film
Intro film CAPITAL MARKETS DAY 2021 4
Slide 5: Agenda
AGENDA Part 1 Part 2 VALUE-ADDED Compounding business model GROWTH strategy with Tailored SOLUTIONS for a better world CAPITAL MARKETS DAY 2021 5
Slide 6: Today's Presenting Team
TODAY’S PRESENTING TEAM Frank van Zanten Richard Howes Diana Breeze Andrew Mooney James Pitcher Chief Executive Officer Chief Financial Officer Director of Group HR Director of Corporate Group Head of Development Sustainability Jim McCool Alberto Grau Andrew Tedbury Helen Cockerham Business Area Hea
Slide 7: Value-added business model
VALUE-ADDED business model CAPITAL MARKETS DAY 2021 7
Slide 8: Our value-added proposition has driven strong and consistent results
OUR VALUE-ADDED PROPOSITION HAS DRIVEN STRONG AND CONSISTENT RESULTS Customer-focused business model Consistent compounding strategy Proven track record – Tailored offerings and service-led Use competitive Revenue (£bn) Profitable model that provides customers with advantage to 10.1 value-added solu
Slide 9: Tailored service-led proposition
TAILORED SERVICE-LED PROPOSITION Our business is to enhance our customers’ businesses SOURCE BUNZL PROVIDES A CUSTOMISED SERVICE THAT OFFERS: – CATEGORY EXPERTISE and advice from c.6000 CUSTOMER SERVICE INDIVIDUAL CUSTOMER SPECIALISTS AND SALES EXPERTS NEEDS – SUSTAINABLE SOLUTIONS that support cust
Slide 10: Local expertise combined with benefits of scale
LOCAL EXPERTISE COMBINED WITH BENEFITS OF SCALE Unique offering drives a strong customer proposition LOCAL GLOBAL – LOCAL relationships and expertise crucial in distribution – GLOBAL SCALE is a strong advantage – INDIVIDUAL NEEDS AND COMPLEXITIES of customers vary – Strength of SUPPLIER RELATIONSHIP
Slide 11: Customer-centric focus evidenced during pandemic
CUSTOMER-CENTRIC FOCUS EVIDENCED DURING PANDEMIC The strength of the Bunzl model highlighted – CRITICAL SUPPLIER STATUS granted, business remaining open throughout the pandemic – Strong GLOBAL SUPPLY CHAINS allowed Bunzl to continue to source essential products despite the challenging conditions – B
Slide 12: Enhancing our value-added proposition
ENHANCING OUR VALUE-ADDED PROPOSITION Capabilities that support growth Key strategic focus areas – DIGITAL SOLUTIONS that enhance customer experience and retention – Continual INNOVATION that goes beyond the physical product – A focus on SUSTAINABILITY to support the differing needs of our customers
Slide 13: Digital solutions which engage our customers
DIGITAL SOLUTIONS WHICH ENGAGE OUR CUSTOMERS Solutions that support our customers – Complex customer journeys often necessitate tailored processes – By digitising ordering through bespoke solutions, we simplify ordering for our customers and enhance retention – In addition, we provide tools that go
Slide 14: Product innovation that meets a need
PRODUCT INNOVATION THAT MEETS A NEED Working with our customers to customise products for their needs Rotisserie chicken packaging innovation • Chicken domes for hot chicken sales have a high plastic footprint, with black plastic being a significant contributing factor INDIVIDUAL CUSTOMER • Bunzl wo
Slide 15: Innovative solutions that go beyond the product
INNOVATIVE SOLUTIONS THAT GO BEYOND THE PRODUCT Continually innovating to support our customers WandaNEXT • Bunzl Canada has implemented ConfidentClean, a cleaning protocol system to ensure high cleaning standards 1 . Assess • The system includes the use of WandaNEXT, a digital cleaning and manageme
Slide 16: Further differentiating ourselves with sustainability
FURTHER DIFFERENTIATING OURSELVES WITH SUSTAINABILITY Business win example: Bunzl’s value-added capabilities supported Andron contract win in the UK Closed loop solution provided for 5lt containers Prior distributor Bunzl Footprint – One central – Nationwide warehouse footprint warehouse – Enhanced
Slide 17: Summary: competitive advantage enhanced
SUMMARY: COMPETITIVE ADVANTAGE ENHANCED – Bunzl track record supported by value- VALUE-ADDED added business model with tailored local service supported by the benefits of Bunzl’s business model global scale – Customer proposition is strengthened by continual innovation in services, expertise and pro
Slide 18: Tailored solutions for a better world
Tailored SOLUTIONS for a better world CAPITAL MARKETS DAY 2021 18
Slide 19: Sustainability is core to Bunzl's strategy
SUSTAINABILITY IS CORE TO BUNZL’S STRATEGY Making responsible decisions across our operations Key themes Our contribution Benefits – Supplier education Responsible Respecting human rights with our industry-leading – Supporting worker conditions supply chains sourcing and auditing function in Shangha
Slide 20: Further driving our existing track record
FURTHER DRIVING OUR EXISTING TRACK RECORD Accelerating our investment in sustainable solutions A feature of Bunzl’s recent history: With more progress made since the start of 2020: Ethical auditing across our Asia supply Ensuring that sustainability is embedded at base since 2008 the heart of our st
Slide 21: Tailored Solutions for a Better World
Tailored Solutions for a Better World CAPITAL MARKETS DAY 2021 21
Slide 22: Better packaging solutions
TAILORED SOLUTIONS FOR A BETTER WORLD Better packaging SOLUTIONS CAPITAL MARKETS CAPITAL MARKETS DAY DAY 2021 2021 22 22
Slide 23: Leading the shift to alternative materials
LEADING THE SHIFT TO ALTERNATIVE MATERIALS The transition of packaging to alternative materials will be net positive to Bunzl • Very limited exposure to the single-use plastic Tailored consumable products where volume reduction can be expected SOLUTIONS • The transition to packaging and products mad
Slide 24: An unrivalled range of essential products
AN UNRIVALLED RANGE OF ESSENTIAL PRODUCTS Majority of Group revenue is generated outside of packaging categories £6.0bn (64%) Non-packaging products 1 Group revenue 2019 £9.3bn Note 1. Packaging refers to packaging and other products within the foodservice, grocery and retail sectors which are facin
Slide 25: Helping customers with better packaging solutions
HELPING CUSTOMERS WITH BETTER PACKAGING SOLUTIONS Being experts in products, legislation and customer requirements is essential Role in supporting a more circular economy Bunzl’s competitive advantage • Supporting smart material choices Proprietary data – Developing new packaging strategies for cust
Slide 26: Packaging in its various forms
PACKAGING IN ITS VARIOUS FORMS Different choices and customer requirements create a complex environment Packaging categories Description 1. Consumable products Single-use plastic products facing restriction in some markets where we facing regulation might see some volume decline as customers transit
Slide 27: Strong track record of transitioning customers
STRONG TRACK RECORD OF TRANSITIONING CUSTOMERS Within packaging, majority is recyclable, compostable, renewable or reusable £0.8bn (9%) £0.2bn (3%) Consumables likely Consumables facing regulation – Only 3% of revenue in “consumables facing regulation” to transition – 9% of revenue in “consumables l
Slide 28: Packaging categories
PACKAGING CATEGORIES Proactively leading the transition to products made from alternative materials Packaging Category Consumable products facing regulation Consumable products likely to transition 2019 revenue £0.2bn (3%) £0.8bn (9%) (proportion of total) Products Plastic straws, stirrers, cutlery,
Slide 29: Consumable products facing regulation
CONSUMABLE PRODUCTS FACING REGULATION Our historic success in leading the transition Paper Transition of Single-Use Plastics Continental Europe - 2019 vs. 2018 – We are well placed to provide customers with trusted Bamboo and objective advice on alternative products – Total sales increased by 2% • S
Slide 30: Consumable products likely to transition
CONSUMABLE PRODUCTS LIKELY TO TRANSITION Our historic success when transitioning customers away from plastic bags Continental Europe and UK & Ireland carrier bag sales 2015-19 Impact of the EU Plastic Bags Directive (adopted in 2015) Between 2015 and 2019: – Directive required member states to apply
Slide 31: Packaging categories
PACKAGING CATEGORIES Providing innovative packaging that meets customers’ needs Packaging Category Packaging with an important purpose Packaging and products made from alternative materials 2019 revenue (proportion of £0.6bn (6%) £1.7bn (18%) total) Example packaging products: Fresh meat, fruit, veg
Slide 32: Packaging with an important purpose
PACKAGING WITH AN IMPORTANT PURPOSE Our experts help customers to navigate the trade-offs in important categories Example options for food packaging: Pallet wrap customer example: Recycled Polyethylene Terephthalate (rPET) Working with customers to rationalise their use of plastic – Pallet wrap prot
Slide 33: Packaging and products made from alternative materials
PACKAGING AND PRODUCTS MADE FROM ALTERNATIVE MATERIALS Bunzl ensures selected alternative products have the correct properties Example: Food containers Example: Independent advice when – Food containers are the largest packaging category transitioning from one material to (c.54% of total packaging s
Slide 34: Driving change with our investments and capabilities
DRIVING CHANGE WITH OUR INVESTMENTS AND CAPABILITIES Enabling faster transition to responsible options with Bunzl own-brand Leveraging our scale Providing customers with choice Providing more than just products – One of our Netherlands businesses – Leveraged the strength of our supply – In 2021 we l
Slide 35: Expert advice and proprietary data and tools
EXPERT ADVICE AND PRORIETARY DATA AND TOOLS Using expert advice and data to support customers meet their targets Expert independent advice Proprietary data and tools EXAMPLE OUTPUT RISK STATUS 2020 Supporting customers to meet industry-leading Using our footprint tools to support customers 21% 31% c
Slide 36: Customer Testimonial
Customer Testimonial CAPITAL MARKETS DAY 2021 36 36
Slide 37: Taking further action on packaging transition
TAKING FURTHER ACTION ON PACKAGING TRANSITION We will continue to drive the transition to better solutions Our new packaging commitments: TODAY TOMORROW BEYOND We will support our customers to remove, We will significantly increase the amount of Every single packaging product and replace and reduce
Slide 38: Responsible supply chain
TAILORED SOLUTIONS FOR A BETTER WORLD Responsible SUPPLY CHAIN CAPITAL MARKETS CAPITAL MARKETS DAY DAY 2021 2021 38 38
Slide 39: Global Supply Chain Solutions
GLOBAL SUPPLY CHAIN SOLUTIONS Supporting ethical supply and quality assurance – Our auditing process is our FIRST LINE OF DEFENCE to prevent defective products being shipped and to ensure products comply with our ethical standards – All products supplied directly from Asia are through suppliers that
Slide 40: A huge asset during the pandemic
A HUGE ASSET DURING THE PANDEMIC A key enabler to our businesses being able to support customers – Sourced an unprecedent amount of Covid-19 related products – Provided innovative product solutions needed for new social distance measures and enhanced hygiene – Provided customers with reassurance to
Slide 41: Taking further action on our supply chain
TAKING FURTHER ACTION ON OUR SUPPLY CHAIN Expanding our programming to give even more assurance over our supply chain Our responsible sourcing commitments: TODAY TOMORROW BEYOND Our supply chain in Asia is currently covered Expanding our programme to ensure products Continuing to take a proactive, r
Slide 42: Investing in our people
TAILORED SOLUTIONS FOR A BETTER WORLD INVESTING in our people CAPITAL MARKETS CAPITAL MARKETS DAY DAY 2021 2021 42 42
Slide 43: Investing in our people
INVESTING IN OUR PEOPLE A focus on engagement and leadership succession is integral to Bunzl’s DNA – Our people feel valued, with STRONG EMPLOYEE ENGAGEMENT – HEALTH AND SAFETY of employees is a key focus, with clear group-wide governance – Planning for SUCCESSION is integral to Bunzl’s business mod
Slide 44: A locally-driven approach to supporting colleagues
A LOCALLY-DRIVEN APPROACH TO SUPPORTING COLLEAGUES The pandemic example – Our voluntary EMPLOYEE TURNOVER has been relatively stable over 2020/21 and remains low for our industry – “PULSE SURVEY” in November 2020 conducted to understand how our employees were feeling – Our people have told us that t
Slide 45: Diversity, Equity and Inclusion
Diversity, Equity and Inclusion CAPITAL MARKETS DAY 2021 45
Slide 46: Taking further action for our people
TAKING FURTHER ACTION FOR OUR PEOPLE Expanding our diversity programme Our focus to drive diversity in Bunzl forward – Encouraging more women into LEADERSHIP ROLES through focused and targeted activities – Focusing on building a truly inclusive culture by: • Achieving PARITY OF ENGAGEMENT SCORES acr
Slide 47: Focus on climate change
TAILORED SOLUTIONS FOR A BETTER WORLD Focus on CLIMATE CHANGE CAPITAL MARKETS CAPITAL MARKETS DAY DAY 2021 2021 47 47
Slide 48: Consolidation model reduces carbon significantly
CONSOLIDATION MODEL REDUCES CARBON SIGNIFICANTLY Carbon efficiency is inherent in our business model A long-established focus on carbon intensity Comparing Bunzl to other companies with logistics networks – Consolidating products into one drop is significantly more efficient Global Companies - tonne
Slide 49: Joining the largest global alliance on climate change
JOINING THE LARGEST GLOBAL ALLIANCE ON CLIMATE CHANGE Committing to ambitious climate action and working towards net zero New memberships and commitments – Committed to the Business Ambition for 1.5⁰ campaign – Race to Zero membership – Net zero target is inclusive of Scope 3 Initiatives to 2025 – T
Slide 50: Taking further action on climate change
TAKING FURTHER ACTION ON CLIMATE CHANGE Our carbon roadmap and new targets Committing to SBTi 1 TODAY approved targets with Scope 3 emissions included 25% more efficient by 2025 and 40% by 20302 TOMORROW 100% Group-wide renewable energy procurement by 2030 BEYOND Net zero by 2050 at the latest3 Note
Slide 51: Summary: sustainable solutions have become essential for customers
SUMMARY: SUSTAINABLE SOLUTIONS HAVE BECOME ESSENTIAL FOR CUSTOMERS – Bunzl is successfully transitioning customers to Tailored products made from alternative materials – Our consolidation model is carbon efficient and SOLUTIONS we commit to being net zero by 2050 for a better world – Our supply chai
Slide 52: Break
The difference is ESSENTIAL Break – 15 minutes CAPITAL MARKETS DAY 2021 52
Slide 53: Compounding growth strategy
Compounding GROWTH strategy CAPITAL MARKETS DAY 2021 53
Slide 54: Our value-added proposition has driven strong and consistent results
OUR VALUE-ADDED PROPOSITION HAS DRIVEN STRONG AND CONSISTENT RESULTS Customer-focused business model Consistent compounding strategy Proven track record – Tailored offerings and service-led Use competitive Revenue (£bn) Profitable model that provides customers with advantage to 10.1 value-added solu
Slide 55: Our organic growth model
Profitable organic growth OUR ORGANIC GROWTH MODEL How our model drove success during pandemic Our organic growth drivers Covid-19 example (2020) – c.£1.6 billion of smaller Covid-19 related orders, VOLUME PRICE MIX generally made to existing customers across sectors – Fulfilled c.£550 million of la
Slide 56: Transition to normalisation
Profitable organic growth TRANSITION TO NORMALISATION Expect normalisation in the near-term Absolute top 8 Covid-19 related revenue1 (£m) Base business road to normalisation – varying speeds expected 1,200 – Expect sales of Covid- 1,000 19 related products to 800 remain higher than Safety Cleaning H
Slide 57: Beyond the pandemic base market trends
Profitable organic growth BEYOND THE PANDEMIC BASE MARKET TRENDS Organic growth is driven by activity in our markets Safety Cleaning Healthcare Grocery Foodservice Retail & Hygiene Trends – Growth supported by – Enhanced cleaning – Growth of care at – Willingness to – Eating outside of – Omnichannel
Slide 58: E-commerce shift - grocery
Profitable organic growth E-COMMERCE SHIFT - GROCERY Supporting our customers’ omnichannel strategies Online orders Omnichannel world • Online orders are largely picked in-store In-store orders Online orders • Store footfall reduced given a single picker can pick multiple orders for customers Increa
Slide 59: Digital ordering in foodservice and non-food retail
Profitable organic growth DIGITAL ORDERING IN FOODSERVICE AND NON-FOOD RETAIL Packaging plays a vital role Foodservice Retail • Bunzl supports traditional restaurants but also newer delivery platforms • Bunzl supplies packaging for use in-store and to support fulfillment of e-commerce orders • Packa
Slide 60: Essential products for e-commerce businesses
ESSENTIAL PRODUCTS FOR E-COMMERCE BUSINESSES Bunzl is a reliable partner With an unrivalled value-added offering Length of partnership Level of account manager interaction: 14 years Daily interaction, with monthly KPI meetings and quarterly strategic meetings focused on innovation, performance and m
Slide 61: Operating model improvements
Operating model improvements OPERATING MODEL IMPROVEMENTS Continually and proactively targeting internal improvements Operating cost efficiencies continually assessed UK grocery and non-food retail efficiencies over the last 5 years • Consolidating warehouses – 71 warehouses consolidated in the last
Slide 62: A strong track record of acquisition growth
Acquisition growth A STRONG TRACK RECORD OF ACQUISITION GROWTH Focused and disciplined approach Success of acquisition strategy Transformation of Bunzl’s scale Disciplined formula supported success during pandemic • 179 acquisitions since 2004 • Three quarters of revenue growth • c.£835 million of c
Slide 63: Our approach to acquisitions
Acquisition growth OUR APPROACH TO ACQUISITIONS Well established and consistent model Key acquisition parameters Growth through acquisitions Strong discipline selecting the right businesses for Bunzl – ANCHOR acquisitions into new geographies and sectors Consolidated product – BOLT-ON acquisitions i
Slide 64: Acquisitions and Integration
Acquisitions and Integration CAPITAL MARKETS DAY 2021 64
Slide 65: A strong process supports our success
Acquisition growth A STRONG PROCESS SUPPORTS OUR SUCCESS Organisation and valuation discipline key to performance Organisation and process Returns and multiples • Local origination; relationships built locally • A strong focus on ROIC, with strong discipline around multiples paid – Majority of EV/EB
Slide 66: Growing the safety vertical
Acquisition growth GROWING THE SAFETY VERTICAL Strong success in diversifying into this attractive sector Expansion of the safety sector Example: MCR Acquisition (September 2020) – 49 safety acquisitions since 2000 – MCR is a North America PPE business with a strong own brand portfolio – Attractive
Slide 67: Adjacent safety markets
Acquisition growth ADJACENT SAFETY MARKETS Plenty of opportunity for Bunzl to continue to grow FRSA (acquired November 2019) McCue Corporation (signed September 2021) • Safety and emergency response supplies • Safety and asset protection solutions, such as business in Australia specialising in emerg
Slide 68: Sizeable growth opportunities remain
Acquisition growth SIZEABLE GROWTH OPPORTUNITIES REMAIN Strong runway for growth in existing sectors and geographies Based on UK & Ireland penetration we have the opportunity Implied revenue growth opportunity based on to increase our presence across our countries meaningfully, as well as growing be
Slide 69: Disciplined capital allocation
Acquisition growth DISCIPLINED CAPITAL ALLOCATION Potential to increase annual spend on acquisitions Illustrative cash movements £1.0bn £2.2bn – Group delivers STRONG AND RESILIENT CASH FLOW annually • Bunzl generates c.£500m of free cash flow per annum, driving c.£300m of cash post dividend and emp
Slide 70: Our value-added proposition has driven strong and consistent results
OUR VALUE-ADDED PROPOSITION HAS DRIVEN STRONG AND CONSISTENT RESULTS Customer-focused business model Consistent compounding strategy Proven track record – Tailored offerings and service-led Use competitive Revenue (£bn) Profitable model that provides customers with advantage to 10.1 value-added solu
Slide 71: Bunzl's resilience is a key asset
BUNZL’S RESILIENCE IS A KEY ASSET Resilience in the two greatest dislocations of modern times Financial crisis Covid-19 REVENUE (£bn) Resilient business model demonstrated again through CAGR: +9% 10.1 2020 – Strength of sector and geographic diversification 2.4 – Agile response through decentralised
Slide 72: Consistent and proven compounding strategy
CONSISTENT AND PROVEN COMPOUNDING STRATEGY Strong total shareholder returns Proven track record Organic – Driven by economic activity Adjusted EPS* (p) – Bunzl's drivers include – +9% revenue CAGR growth exposure to growing sectors, since 2004 164.7 winning new customers, own brand mix and sustainab
Slide 73: Summary: strong growth opportunity
SUMMARY: STRONG GROWTH OPPORTUNITY – Good organic growth opportunity driven Compounding by recovery in markets and supportive medium-term trends GROWTH strategy – Significant M&A opportunity remains and Bunzl’s strength as a consolidator has been reinforced – Financial headroom provides opportunity
Slide 74: Concluding remarks
Concluding remarks CAPITAL MARKETS DAY 2021 74
Slide 75: Conclusion
CONCLUSION VALUE-ADDED – Continual improvement in value-added solutions is enhancing Bunzl’s customer proposition and business model competitive advantage – Sustainability offering is essential for customers Tailored • We are transitioning products to more sustainable solutions with expert advice, d
Slide 76: Q&A
The difference is ESSENTIAL Q&A CAPITAL MARKETS DAY 2021 76