Bunzl plc · LSE:BNZL
Bunzl — H1 2012 Earnings Presentation
35 slides from Bunzl's earnings presentation, 2012
Slide 1: Half Year Results 2012
HALF YEAR RESULTS 2012 -0- 2012 Half Year Results Presentation
Slide 2: Agenda
Agenda 1. Philip Rogerson, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -1- 2012 Half Year Results Presentation
Slide 3: Highlights
Highlights Six Strong set of Proven acquisitions results strategy announced Adjusted Dividend up earnings per 9% share up 10%* *Before intangible amortisation, acquisition related costs and disposal of business -2- 2012 Half Year Results Presentation
Slide 4: Agenda
Agenda 1. Philip Rogerson, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -3- 2012 Half Year Results Presentation
Slide 5: Income Statement
Income Statement Growth % Constant £m June 12% June 11% Reported Exchange Revenue 2,612.2% 2,442.0% 7 7 Operating profit* 165.1% 152.2% 8 9 Margin* 6.3% 6.2% *Before intangible amortisation and acquisition related costs -4- 2012 Half Year Results Presentation
Slide 6: Income Statement
Income Statement Growth % Constant £m June 12) June 11) Reported Exchange Operating profit* 165.1) 152.2) 8 9 Net finance cost (13.4) (13.4) Profit before tax† 151.7) 138.8) 9 10 ) Interest cover (x) 12.3) 11.4) Effective tax rate (%) 27.7) 27.7) Adjusted earnings per share† (p) 33.7) 31.0) 9 10 Div
Slide 7: Balance Sheet
Balance Sheet £m June 12) Dec 11) June 11) Intangibles 1,252.3) 1,256.8) 1,291.7) Tangibles 112.5) 109.0) 120.6) Working capital 464.0) 403.3) 445.6) Other liabilities (301.5) (235.2) (262.2) 1,527.3) 1,533.9) 1,595.7) Pension deficit (66.0) (74.3) (52.1) Net debt* (685.3) (652.9) (726.5) Equity 776
Slide 8: Cash Flow
Cash Flow £m June 12)% June 11)% Operating cash flow* 122.3)% 130.6)% Interest (15.3)% (14.1)% Tax (29.8)% (29.1)% Free cash flow 77.2%) 87.4)% Dividends (26.1)% (16.6)% Acquisitions (77.2)% (56.0)% Employee share schemes (15.5)% (24.4)% Net cash flow (41.6)% (9.6)% ) *See Appendix 2 -7- 2012 Half Y
Slide 9: Financial Summary
Financial Summary Revenue • Revenue growth 7%†, organic growth 4%† and • Operating profit* up 9%† Profit • Operating margin* up 10bp • Return on average operating capital up 360bp to 58.4% Capital management • Net debt to EBITDA ratio 1.8x with £77m cash outflow on acquisitions • Facilities’ headroo
Slide 10: Agenda
Agenda 1. Philip Rogerson, Chairman: Welcome 2. Brian May, FD: Financial Results 3. Michael Roney, CEO: Business Review 4. Q&A -9- 2012 Half Year Results Presentation
Slide 11: Business Review
Business Review 1. Operations Review 2. Strategy 3. Acquisitions 4. Prospects -10- 2012 Half Year Results Presentation
Slide 12: Revenue Growth Bridge
Revenue Growth Bridge £m 4.3% (1.4)% 7.2% 2,700 4.3% 2,500 2,300 2,294 2,442 2,100 2,612 2,437 1,900 1,700 1,500 Revenue HY 11 Organic Acquisitions Disposal Revenue HY 12 (FX adjusted) -11- 2012 Half Year Results Presentation
Slide 13: H1 Business Area Analysis
H1 Business Area Analysis Revenue Operating profit* 7% 9% 21% 18% 16% 28% 53% 48% 49% 54% 21% 26% North America Continental Europe UK & Ireland Rest of the World *Before intangible amortisation and acquisition related and corporate costs -12- 2012 Half Year Results Presentation
Slide 14: Overview
Overview • Continued strong results • Strong organic revenue growth in North America and ROW • Acquisition-led growth in Continental Europe • Improved performance in UK & Ireland • Improvement in Group operating margin • Resilient business model • Annualised revenue from 2012 acquisitions of £157m -
Slide 15: North America
North America Growth % Constant £m June 12% June 11% Reported Exchange Revenue 1,403.4% 1,286.7% 9 7 Operating profit* 85.8% 78.2% 10 7 Margin* 6.1% 6.1% Return on operating capital 67.1% 62.4% • Strong organic revenue growth • Strong growth in Grocery, our largest sector • Expansion in imports and
Slide 16: Continental Europe
Continental Europe Growth % Constant £m June 12% June 11% Reported Exchange Revenue 545.6% 526.1% 4 10 Operating profit* 45.6% 44.8% 2 8 Margin* 8.4% 8.5% Return on operating capital 46.2% 47.3% • Revenue growth bolstered by acquisitions • France • Pressure in the cleaning and hygiene sector • Good
Slide 17: UK & Ireland
UK & Ireland Growth % Constant £m June 12% June 11% Reported Exchange Revenue 479.4% 485.6% (1) (1) Operating profit* 27.4% 25.8% 6 6) Margin* 5.7% 5.3% Return on operating capital 77.3% 58.2% • Improved organic growth and overall performance • Continued focus on costs and improvement in operating m
Slide 18: Rest of the World
Rest of the World Growth % Constant £m June 12% June 11% Reported Exchange Revenue 183.8% 143.6% 28 29 Operating profit* 15.3% 12.2% 25 29 Margin* 8.3% 8.5% Return on operating capital 59.0% 61.1% • Excellent organic growth • Australasia • Strong performance in largest business • First entry into th
Slide 19: Strategy: Acquisition ROIC
Strategy Operating Model Efficiencies GDP+ Acquisition Organic Growth Growth AcquisitionROIC Growth 18.0% Consistent and proven strategy -18- 2012 Half Year Results Presentation
Slide 20: Acquisition Growth
Acquisition Growth Business Acquired Country Sector Revenue* CDW Merchants Feb 2012 USA Non-food retail £10m Star Services April 2012 Australia Foodservice £8m Zahav April 2012 Israel Foodservice £12m Foodhandler April 2012 USA Foodservice £68m Service Paper June 2012 USA Grocery / Foodservice £39m
Slide 21: Acquisition Track Record
Acquisition Track Record 2012 2004 2005 2006 2007 2008 2009 2010 2011 ytd Number of Acquisitions 7 7 9 8 7 2 9 10 6 Acquisition Spend (£m) 302 129 162 197 123 6 126 185 77 Annualised Acquisition 430 270 386 225 151 27 154 204 157 Revenue (£m) Average spend £154m p.a. - promising pipeline 04-05 conti
Slide 22: Key Acquisition Parameters
Key Acquisition Parameters Consolidated B2B Goods not for product offering resale (“one stop shop”) Fragmented Further market Sectors with growth consolidation and customer base synergies Opportunity for Attractive financial Small % of total “own label” returns customer spend products (ROIC, ROACE)
Slide 23: Strategic Direction: BIG and STRONG in the middle
Strategic Direction “BIG and Supplier STRONG in the Customers base middle” Strong competitive position -22- 2012 Half Year Results Presentation
Slide 24: Potential New Countries
Potential New Countries Europe South America Austria Chile Baltic States Colombia Croatia Peru Finland Norway Poland Asia/ROW Slovenia Sweden Singapore Turkey -23- 2012 Half Year Results Presentation
Slide 25: Why Invest in Bunzl?
Why Invest in Bunzl? “…. because Bunzl is the leader in the market with consistent growth, stable operating margins, a very high return on operating capital and it turns on average more than 90% of the operating profit into cash which can be reinvested at a rate in excess of the cost of capital.” -2
Slide 26: Financial Track Record
Financial Track Record Revenue (£bn) Operating profit (£m) 353 04-05 continuing operations only 5.1 Before amortisation and acquisition 4.8 323 related and corporate costs 312 4.6 297 4.2 04-05 continuing operations only 259 3.6 241 3.3 218 2.9 183 2.4 2004 2005 2006 2007 2008 2009 2010 2011 2004 20
Slide 27: Prospects
Prospects North • Continued good growth America • Stable operating margin Continental • Difficult market conditions, expect revenue growth driven Europe principally by impact from acquisitions UK & Ireland • Improved performance despite sluggish economy Rest of • Continued strong results the World G
Slide 28: Half Year Results 2012
HALF YEAR RESULTS 2012 -27- 2012 Half Year Results Presentation
Slide 29: Appendix 1 - Net Debt
Appendix 1 - Net Debt £m Six months) Year to) to June 12) Dec 11) Opening net debt (652.9) (716.8) Net cash (outflow)/inflow (41.6) 63.0) Currency 9.2) 0.9) Closing net debt (685.3) (652.9) -28- 2012 Half Year Results Presentation
Slide 30: Appendix 2 - Cash Flow
Appendix 2 – Cash Flow £m June 12)% Dec 11)% June 11)% Operating profit* 165.1)% 335.7)% 152.2)% Depreciation 11.4)% 25.4)% 13.2)% Working capital movement (41.7)% 31.4)% (19.6)% Other (1.4)% (2.4)% (4.2)% Cash flow from operations 133.4%) 390.1%) 141.6%) Net capital expenditure (11.1)% (20.9)% (11.
Slide 31: Appendix 3 - Historical Cash Flow
Appendix 3 – Historical Cash Flow Average Cash Conversion* 98% 110% 103% 102% 95% 93% 92% 92% 93% 2004** 2005** 2006 2007 2008 2009 2010 2011 * Operating cash flow after capex to operating profit before intangible amortisation and acquisition related costs ** 04-05 continuing operations only -30- 20
Slide 32: Appendix 4 - Exchange Rates
Appendix 4 - Exchange Rates June December June 2012 2011 2011 Average rate US$ 1.58 1.60 1.62 € 1.22 1.15 1.15 Closing rate US$ 1.57 1.55 1.61 € 1.24 1.20 1.11 -31- 2012 Half Year Results Presentation
Slide 33: Appendix - 2011 Markets We Serve
Appendix 5 - 2011 Markets We Serve Other 4% Healthcare 7% Non-Food Retail 8% Grocery 30% Safety 8% Cleaning & Hygiene 14% Foodservice 29% Diversified by customer markets – 80% resilient -32- 2012 Half Year Results Presentation
Slide 34: Appendix 6 - Historical Data
Appendix 6 - Historical Data 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Revenue (£m) 1,783 2,129 2,231 2,276 2,439 2,924 3,333 3,582 4,177 4,649 4,830 5,109 Operating profit* (£m) 117 147 152 158 169 203 226 243 281 296 307 336 Margin* (%) 6.6 6.9 6.8 6.9 6.9 7.0 6.8 6.8 6.7 6.4 6.4
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 half year ended 30 June 2012. For the purposes of this disclaimer, “Presentation” shall mean this document, the oral presentation of the