Bunzl plc · LSE:BNZL
Bunzl — H1 2007 Earnings Presentation
30 slides from Bunzl's earnings presentation, 2007
Slide 1: Interim Results 2007
BUNZL Interim Results 2007
Slide 2: Highlights – Interim Results 2007
Highlights – Interim Results 2007 J Strong growth at constant exchange rates in revenue and operating profit J Underlying operating margin* improvement from 6.5% to 6.8% J Adjusted earnings per share* up 14% at constant exchange rates J Acquisitions in 2006 are integrating well J Year-to-date acquis
Slide 3: Brian May, Finance Director
-» @ fs is Brian May =, Finance Director
Slide 4: US Dollar Exchange Rate
US Dollar Exchange Rate $/£ 2.0 Average H1 07 1.97 $/£ 1.9 Average H1 06 Average FY 06 1.8 1.79 $/£ 1.84 $/£ 1.7 Dec 2005 Jun 2006 Dec 2006 Jun 2007 Bunzl – Interim Results 2007 4
Slide 5: Income Statement (£m)
Income Statement (£m) Growth % Constant June 07 June 06 Reported Exchange Revenue 1,725.6 1,603.2 8 14 Operating profit* 111.7 104.8 7 13 Margin* 6.5% 6.5% Underlying margin* 6.8% 6.5% * Before intangible amortisation Bunzl – Interim Results 2007 5
Slide 6: Income Statement (£m)
Income Statement (£m) Growth % Constant June 07 June 06 Reported Exchange Operating profit* 111.7 104.8 7 13 Net finance cost (11.4) (7.0) ___________ ___________ Profit before tax* 100.3 97.8 3 9 Intangible amortisation (11.2) (9.7) Income tax (28.2) (28.1) ___________ ___________ Profit after tax
Slide 7: Earnings and Dividends (p)
Earnings and Dividends (p) Growth % Constant June 07 June 06 Reported Exchange Weighted average shares (m) 333.1 343.7 Earnings per share 18.3 17.5 5 12 Adjusted earnings per share* 20.7 19.3 7 14 Dividend per share 5.8 5.3 9 * Before intangible amortisation Bunzl – Interim Results 2007 7
Slide 8: Balance Sheet (£m)
Balance Sheet (£m) June 07 June 06 Dec 06 Intangibles 784.4 699.1 776.7 Tangibles 76.3 72.7 74.3 Working capital 315.9 262.1 305.1 Other liabilities (212.3) (191.9) (199.9) Net assets excluding pensions 964.3 842.0 956.2 Pension deficit (13.8) (39.9) (37.5) 950.5 802.1 918.7 Equity 455.1 503.6 488.0
Slide 9: Cash Flow (£m)
Cash Flow (£m) June 07 June 06 Cash flow from operations 102.6 90.4 Capital expenditure (8.5) (7.7) Operating cash flow 94.1 82.7 Interest (12.3) (2.6) Tax (32.9) (11.4) Dividends (17.6) (16.5) Acquisitions (19.2) (24.0) Share buy back (72.6) - Employee share schemes 3.7 5.1 Special pension contribu
Slide 10: Summary
Summary J Revenue up 14% † J Operating profit* up 13% † J Underlying operating margin* up 30bp to 6.8% J Adjusted eps* up 14% † J Dividend per share up 9% J Return on operating capital 61% * Before intangible amortisation † Constant exchange rates Bunzl – Interim Results 2007 10
Slide 11: Michael Roney, Chief Executive
Michael Roney Chief Executive
Slide 12: By Business Area - H1
By Business Area - H1 07 Revenue Operating profit * 4% 4% 17% 20% 52% 49% 27% 27% North America Continental Europe UK & Ireland Australasia * Before intangible amortisation and corporate Bunzl – Interim Results 2007 12
Slide 13: North America
North America Growth % Constant June 07 June 06 Reported Exchange Revenue (£m) 905.1 934.3 (3) 7 Operating profit* (£m) 58.5 62.0 (6) 4 Margin* (%) 6.5 6.6 Return on operating capital (%) 70.4 69.5 * Before intangible amortisation Bunzl – Interim Results 2007 13
Slide 14: North America
North America J Dollar revenue rose 7% - weaker underlying growth vs very strong H1 2006 - mixed input pricing environment J Dollar operating profit rose 4% - underlying margin slightly ahead despite continued competitive pricing pressures - improvement in return on operating capital J Progress on a
Slide 15: North America
North America J Redistribution - substantial growth in recent years - establishment of R3 - more efficient and cost effective - customer focused business J Other operational highlights - further progress with our environmental initiatives - expansion of radio frequency technology in our warehouses B
Slide 16: UK & Ireland
UK & Ireland Growth % Constant June 07 June 06 Reported Exchange Revenue (£m) 467.2 334.3 40 40 Operating profit* (£m) 32.1 25.5 26 26 Margin* (%) 6.9 7.6 Return on operating capital (%) 64.4 73.3 * Before intangible amortisation Bunzl – Interim Results 2007 16
Slide 17: UK & Ireland
UK & Ireland J Revenue up 40% - strong underlying growth - impact of Southern Syringe and Keenpac acquisitions J Operating profit rose 26% - strong improvement in underlying margin - impact of lower margin Southern Syringe business J Another strong period for retail business - account wins - renewed
Slide 18: UK & Ireland
UK & Ireland J Improvement in horeca - new contract wins - good results from 2006 operating initiatives - roll out of new vehicle routing and loading system J Integration of Southern Syringe - largest independent distributor in the healthcare sector - cost reductions and systems investment - operati
Slide 19: Continental Europe
Continental Europe Growth % Constant June 07 June 06 Reported Exchange Revenue (£m) 291.4 278.3 5 6 Operating profit* (£m) 24.4 20.9 17 18 Margin* (%) 8.4 7.5 Return on operating capital (%) 49.7 45.7 * Before intangible amortisation Bunzl – Interim Results 2007 19
Slide 20: Continental Europe
Continental Europe J Revenue and operating profit up 6% and 18% respectively - improved performance in all countries - good underlying growth - significant margin improvement - tight control of costs J France - continued growth and improved performance - significant margin improvements resulting fro
Slide 21: Continental Europe
Continental Europe J Strong growth in rest of Europe - new contract wins in the Netherlands - very good performance in Denmark - Germany also ahead - Central Europe continues to perform strongly J Acquisition of King Benelux - substantial business in Netherlands - significant expansion into Belgium
Slide 22: Australasia
Australasia Growth % Constant June 07 June 06 Reported Exchange Revenue (£m) 61.9 56.3 10 12 Operating profit* (£m) 4.5 3.9 15 15 Margin* (%) 7.3 6.9 Return on operating capital (%) 48.8 51.6 * Before intangible amortisation Bunzl – Interim Results 2007 22
Slide 23: Australasia
Australasia J Revenue and operating profit up 12% and 15% respectively - strong underlying growth - new contract wins J 2006 acquisitions - expanded business into new sectors - integrating well J Introduction of VIP sales training Bunzl – Interim Results 2007 23
Slide 24: Strategy
Strategy J Pursue organic growth J Continue to make operating model more efficient J Increase international sourcing and consolidation in country of origin J Further develop product offering J Acquire in similar market sectors with opportunities for further consolidation J Extend global footprint Bu
Slide 25: Acquisitions
Acquisitions J Important source of additional growth and value creation J Five acquisitions announced year-to-date - North America (2), UK & Ireland (1), Continental Europe (2) J Total spend > £140m J Total annualised revenue > £150m J Opportunities in pipeline Bunzl – Interim Results 2007 25
Slide 26: 2007 Acquisitions
2007 Acquisitions Business Country Sector Revenue Tec Products USA Jan/san $14m Westgate USA PPE $18m Iberlim Spain Cleaning & Hygiene €9m Coffee Point UK Vending £45m King Benelux Netherlands/ Cleaning & Hygiene, Retail €125m Belgium & Healthcare Bunzl – Interim Results 2007 26
Slide 27: Prospects
Prospects J North America - lower underlying growth than other business areas - margin improvement from larger 2005 and 2006 acquisitions - 2007 acquisitions integrating well J UK & Ireland - good organic growth from increased volumes and new customers - Southern Syringe well ahead of plan - Keenpac
Slide 28: Prospects
Prospects J Continental Europe - strong organic growth - continuing business improvement in France J Australasia - strong organic growth - recent acquisitions integrating well Bunzl – Interim Results 2007 28
Slide 29: Prospects
Prospects J FX rates - US$/£ negative translation effect on 2007 results if current rate holds - lesser impact in the second half - other currency impacts minor J Confident that the Group will develop positively - good opportunities to grow organically and by acquisition - continued operating effici
Slide 30: Summary
Summary J Double digit growth at constant exchange rates in revenue, operating profit and adjusted earnings per share* J Underlying operating margin* up 30bp to 6.8% J Prior years’ acquisitions integrating well J 2007 acquisitions to date add over £150m of annualised revenue * Before intangible amor